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Internationalisation of India’s Higher Education

The article is based on Education and international relations that was published on ORF (Observer Research Foundation) on 3rd September. It talks...

04 Sep 2019 News Editorials
Big Data

What is Big Data? Big Data simply refers to a large amount of data which is of structured, semi-structured or unstructured nature. The data pool is...

04 Sep 2019 Paper 3
Induction of Apache Helicopter

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04 Sep 2019 News Analysis
Svalbard: Fastest Warming Town on the Earth

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Secondary Market For Corporate Loans

The Reserve Bank of India (RBI) constituted Panel, headed by T.N. Manoharan, has given some suggestions for developing the secondary market for...

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MUDRA Scheme and Employment

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Shortage of Anti-Rabies Vaccine

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Steering Committee on Fintech

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04 Sep 2019 News Analysis
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03 Sep 2019 News Editorials
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The South Asian Association for Regional Cooperation (SAARC) was established with the signing of the SAARC Charter in Dhaka on 8 December...

03 Sep 2019 International Institutions
Express Governance Awards

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Food Wastage and its Impact

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In Depth - Blue Revolution

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Terracotta Grinder

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OMG- Ocean’s Melting Greenland

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G7 Summit

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02 Sep 2019 News Analysis
Hurricane Dorian

Recently the Hurricane Dorian became the strongest storm in modern records to hit the northwestern Bahamas (a country in the Caribbean...

02 Sep 2019 News Analysis

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			'title' => 'Internationalisation of India’s Higher Education',
			'catname' => 'News Editorials',
			'desc' => '<div class="border">
<p>The article is based on <strong><a href="https://www.orfonline.org/expert-speak/education-international-relations-55076/" target="_blank" rel="noopener">Education and international relations</a></strong> that was published on ORF (Observer Research Foundation) on 3rd September. It talks about the prospects and initiatives regarding internationalisation of India&rsquo;s higher education.</p>
</div>
<h3>Context</h3>
<ul style="list-style-type: square;">
<li>India has an inspirational history of Nalanda, Takshashila and Vikramashila that served as the melting pot of scholars from across the world.</li>
<li>Unfortunately, no Indian University is ranked in the top 150 universities globally. Only three Indian institutions &ndash; IIT Bombay, IISc Bangalore and IIT Delhi- find a place in the top-200 of the <a href="/daily-updates/daily-news-analysis/qs-world-university-rankings" target="_blank" rel="noopener">QS World University Ranking for 2020</a>.</li>
<li>Indian education system is on its way to reconstruct itself. Several initiatives have been taken by the government to attract a large number of foreign scholars to study in Indian universities and enriching our system through ideas and diversity.</li>
<li>To achieve this objective, India&rsquo;s Higher Education needs to be reformed to first provide wholesome education for Indian students, before we cater to foreign students in large numbers.</li>
<li>Without urgent systemic reforms, internationalisation of India&rsquo;s higher education will remain a distant dream.</li>
</ul>
<h3>Favourable Factors attracting foreign students to India</h3>
<ul style="list-style-type: square;">
<li>The Indian economy is doing well and has progressed to become the world's seventh-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). The image of the third-world poor country is being shed slowly.</li>
<li>India has developed the image of being <strong>home to successful tech companies</strong>. Bengaluru has become synonymous with startups. It is stirring quite a lot interest among the globally mobile youngsters.</li>
<li>Our top institutions, especially the IITs, are world class and feature in the top-200 of world rankings.</li>
<li><strong>Indian origin CEOs</strong> such as Sundar Pichai and Satya Nadella, have bolstered the image of Indian scholars.</li>
<li>Top-200 of the Fortune 500 companies recruit from Indian universities in large numbers.</li>
<li>Experiences in emerging markets are placed at a premium in developed countries that want to establish a business presence here.</li>
<li>India offers a rich milieu of culture and arts for the students to engage with.</li>
<li><strong>Popularity of English as a spoken language</strong> places India at an advantage vis-a-vis China.</li>
<li>The <strong>cost of higher education is relatively cheap in India,</strong> offering an interesting place in the cost-value matrix.</li>
</ul>
<h3>Efforts to attract foreign students and faculties</h3>
<ul style="list-style-type: square;">
<li><strong>Study in India Programme:</strong>
<ul style="list-style-type: circle;">
<li>Primary objective is to target foreign students by branding India as an attractive education destination.</li>
<li>India is home to around 70,000 foreign students. The &lsquo;Study in India&rsquo; programme has an ambition of increasing it to two lakh by 2022.</li>
</ul>
</li>
<li><strong>Fee Waivers and scholarship:</strong> Indian higher educational institutions are waking up to the opportunities of having an internationally diverse student body. Many universities are offering fee waivers and scholarships to attract foreign students to boost their image and rankings.</li>
<li><strong>GIAN (Global Initiative for Academic Networks) programme</strong> was initiated in 2015 to invite distinguished academicians, entrepreneurs, scientists, and experts from premier institutions from across the world, to teach in the higher educational institutions in India.</li>
<li>The<a href="/daily-updates/daily-news-analysis/scheme-for-promotion-of-academic-and-research-collaboration-sparc" target="_blank" rel="noopener"><strong> SPARC (Scheme for Promotion of Academic and Research Collaboration)</strong></a> programme was initiated in to facilitate research and academic collaboration with top academic institutions in the world.
<ul style="list-style-type: circle;">
<li>The Government plans to fund collaboration of top Indian institutions with foreign institutions figuring in the top-500 of the QS world ranking.</li>
</ul>
</li>
<li>The <strong>&lsquo;Institutes of Eminence&rsquo;</strong> was conceptualised with a goal of making a few prestigious Indian Higher Education Institutions rank within the top 100 in globally-renowned rankings.</li>
</ul>
<h3>Education as Soft Power</h3>
<ul style="list-style-type: square;">
<li>Hamid Karzai, Aung San Suu Kyi and other leaders who have studied in India speak endearingly about their experiences as students in India.</li>
<li>Indian students studying abroad in the US or the UK feel attached to their alma mater and develop a bond with the host countries.</li>
<li>The American education system is among its biggest sources of soft power. The home to some of the best universities in the world, it attracts the brightest minds from across the world.</li>
</ul>
<h3>Issues and Challenges before Higher Education in India</h3>
<ul style="list-style-type: square;">
<li><strong>Shortage of resources:</strong> State universities and their affiliated colleges that handle bulk of enrollment in higher education receive a very small amount of grants and thus lacks basic infrastructure.</li>
<li><strong>Teacher vacancies:</strong> According to UGC, Out of the total sanctioned teaching posts, 35% professor posts, 46% associate professor posts and 26% assistant professor posts are vacant.</li>
<li><strong>Accountability and performance of teachers:</strong> At present, there is no mechanism for ensuring the accountability and performance of professors in universities and colleges. This is unlike foreign universities where the performance of college faculty is evaluated by their peers and students.</li>
<li><strong>Lack of employable skills:</strong> A recent employability report has found that over 80 percent of engineers in India are unemployable as they lack the technological skills required by employers now.</li>
<li><strong>Outdated Curriculum:</strong> Eminent scientist and Bharat Ratna awardee CNR Rao once said, 90 per cent of the universities and higher educational institutions in the country have outdated curriculum.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>Allowing India&rsquo;s online <a href="/daily-updates/daily-news-analysis/massive-open-online-courses" target="_blank" rel="noopener"><strong>MOOCs (Massive Open Online Courses)</strong></a> such as those on <strong>SWAYAM</strong> (Study Webs of Active Learning for Young Aspiring Minds) Platform to be used in neighbouring countries will <strong>strengthen our soft power</strong>.</li>
<li>Enhancing investment in higher education, especially in research and development, is urgently required to raise the standard of higher education in India.
<ul style="list-style-type: circle;">
<li><strong>HEFA (Higher Education Finance Agency)</strong> is a welcome step in providing finance to premier educational institutions for creation of high quality infrastructure and innovation ecosystem.</li>
</ul>
</li>
<li>Taking measures to allow foreign universities to set up campuses in India to increase inflow of foreign funding in India&rsquo;s Higher Education system and to reduce &ldquo;Brain Drain&rdquo; from India.</li>
<li>Activities mandated under the &lsquo;Study in India&rsquo; programme should be executed.
<ul style="list-style-type: circle;">
<li>The process of making visa procedures simpler</li>
<li>Sprucing up facilities in host institutions</li>
<li>Marketing Indian universities in target countries</li>
<li>Target-marketing student groups through social media</li>
<li>Signing international agreements with institutions and universities abroad</li>
</ul>
</li>
<li>Education can be an important source of soft power if it is pursued in the right direction. Lessons can be learnt from our Yoga culture which has gained tremendous recognition worldwide.</li>
</ul>
<table border="1" style="border-collapse: collapse; background-color: #bff5ee; border-color: #037062; border-style: dotted;">
<tbody>
<tr>
<td style="width: 100%;"><em><strong>Drishti Input:</strong></em><br /><br />&ldquo;Education can be an important source of soft power. Elaborate. Discuss the initiatives taken by the government to attract foreign students in Indian universities and to stop Brain Drain from India.&rdquo;</td>
</tr>
</tbody>
</table>',
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		(int) 1 => [
			'title' => 'Big Data',
			'catname' => 'Paper 3',
			'desc' => '<h3>What is Big Data?</h3>
<p><strong>Big Data</strong> simply refers to a <strong>large amount of data</strong> which is of structured, semi-structured or unstructured nature. The data pool is so voluminous that it becomes difficult for an organization to manage and process it using traditional databases and software techniques. Therefore, big data not only implies the enormous amount of available data but it also refers to the entire process of gathering, storing, and analyzing that data.</p>
<p>Big Data is characterized by <strong>6Vs</strong> as described in the following figure:</p>
<p><a href="http://www.drishtiias.com/images/uploads/714drishti_ias_big_data.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/714drishti_ias_big_data.jpg" width="776" height="435" style="display: block; margin-left: auto; margin-right: auto;" /></a></p>
<h3>Evolution of Big Data</h3>
<ul style="list-style-type: square;">
<li>In today&rsquo;s world where data is the new oil, big data can hypothetically be assumed as a system that acquires crude oil and makes fuel out of it.</li>
<li>With the advent of the <strong>Internet of Things (IoT)</strong>, data is now readily available. According to <strong>DOMO&rsquo;s report</strong>, "Over 2.5 quintillion bytes of data are created every single day, and it&rsquo;s only going to grow from there. By 2020, it is estimated that 1.7 MB of data will be created every second for every person on earth."</li>
</ul>
<h3>Significance of Big Data in India</h3>
<ul style="list-style-type: square;">
<li>With a population of around 1.3 billion, Big Data holds a significant position in the Indian context.</li>
<li>As per the study conducted by <strong>NASSCOM</strong>, &ldquo;the Indian analytics industry is predicted to reach $16 billion mark by 2025.&rdquo;</li>
</ul>
<h3>Applications of Big Data</h3>
<ul style="list-style-type: square;">
<li><strong>Governance:</strong> Big data is used in governance for the following purposes:<br />
<ul style="list-style-type: circle;">
<li><strong>Power Discoms</strong> use data collected from last-mile to cut down their <em>Aggregate Technical &amp; Commercial losses</em>.</li>
<li><strong>Security agencies and Police forces</strong> use big data to, <br />
<ul style="list-style-type: disc;">
<li>Prevent cyber-attacks</li>
<li>Enhance security systems</li>
<li>Detect card-related fraud cases</li>
<li>Predict criminal activities, e.g &ndash; <em>Crime and Criminal Tracking Networks and Systems (CCTNS)</em></li>
</ul>
</li>
<li>In improving the quality of <strong>education</strong>.</li>
<li><a href="/daily-updates/daily-news-analysis/big-data-to-mitigate-the-impact-of-disasters" target="_blank" rel="noopener"><strong>Disaster Management:</strong></a> In understanding and mitigating the risks of disasters.</li>
</ul>
</li>
<li><strong>Economy:</strong> Big data can provide huge benefits to various sectors of the economy like, <br />
<ul style="list-style-type: circle;">
<li>In <strong>Insurance Sector</strong> to improve customer experience &amp; ensure their right to claim</li>
<li>In <strong>Banking Sector</strong> to manage financial data</li>
<li>To capture the production, price statistics, &amp; <strong>calculate</strong> the resultant <strong>GDP</strong></li>
<li><strong>Evade risks &amp; minimize losses</strong> for financial firms</li>
<li><strong>Tax officials</strong> catching hold the tax evaders using <strong>Project Insight</strong></li>
<li><strong>Deregistration</strong> of lakhs of <strong>shell companies</strong></li>
<li>In preventing <strong>money laundering</strong> &amp; curbing <strong>terrorism financing</strong> by identifying the safe havens</li>
</ul>
</li>
<li><strong>Health Care:</strong> Big Data in health care caters the following benefits:<br />
<ul style="list-style-type: circle;">
<li>Predicting diseases,</li>
<li>Prescribing medicines,</li>
<li>Optimizing treatment,</li>
<li>Using clinical data to improve patient care,</li>
<li>In critical Diagnostic tests,</li>
<li>Finding new cures (R&amp;D)</li>
</ul>
</li>
<li><strong>Agriculture and Food:</strong><br />
<ul style="list-style-type: circle;">
<li>Seed Selection</li>
<li>Geo-Tagging to keep the track record of agricultural assets in the country</li>
<li>Weather Forecasting</li>
<li>Irrigation &amp; effective water management</li>
<li>Food Processing</li>
<li>Identification of Crop Diseases</li>
</ul>
</li>
<li><strong>Digital Space:</strong><br />
<ul style="list-style-type: circle;">
<li>In the <strong>telecom</strong> sector- connecting the hinterland areas and bringing them to the mainstream,</li>
<li>On <strong>Social Media</strong> for targeting platform users,</li>
<li><strong>Artificial Intelligence &ndash;</strong> Controlling home appliances,</li>
<li>Analyzing &amp; Improving individual performance (at work, sports, or home) using wearable devices.</li>
</ul>
</li>
</ul>
<h3>Government Initiatives &amp; Interventions</h3>
<ul style="list-style-type: square;">
<li><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/niti-aayog-national-institution-for-transforming-india" target="_blank" rel="noopener"><strong>NITI Aayog</strong></a> is currently working on a plan in collaboration with the private players to develop the <strong>&lsquo;National Data &amp; Analytics Platform&rsquo;</strong>, which will act as a single source of sectoral data for citizens, policymakers, and researchers.</li>
<li><strong>&lsquo;Big Data Management Policy&rsquo;</strong> drafted by <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/comptroller-and-auditor-general-of-india-cag" target="_blank" rel="noopener"><strong>CAG</strong></a> for auditing large chunks of data generated by the public sector in the states and the union territories, is a great start.</li>
<li><strong>Ministry of Statistics and Programme Implementation</strong> has proposed to establish a <strong>&lsquo;National Data Warehouse on Official Statistics&rsquo;</strong> which will leverage technology and use big data analytical tools to improve the quality of <strong>macro-economic aggregates</strong>.</li>
<li>Use of <a href="/daily-updates/daily-news-analysis/conference-on-digital-cashless-economy" target="_blank" rel="noopener"><strong>Direct Benefit Transfer in MGNREGA &amp; Aadhaar</strong></a> for <strong>authentication</strong> &amp; availing welfare scheme benefits helps in the filtering of ghost beneficiaries.</li>
<li>The Ministry of Agriculture has signed a deal with the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/indian-space-research-organisation-isro" target="_blank" rel="noopener">ISRO</a> to use satellites for <strong>mapping of agricultural assets</strong>.</li>
<li>Smart City Mission, Digital India, digital economy proposals like BHIM app, inter alia are important government initiatives that are using Big Data for achieving good governance in the country.</li>
</ul>
<h3>Challenges</h3>
<ul style="list-style-type: square;">
<li><strong>Invasion of Privacy:</strong> Big Data Analytics leads to the <strong>twin problems of digitization, which are, <a href="/daily-updates/daily-news-editorials/privacy-judgement-and-the-aftermath" target="_blank" rel="noopener">Data privacy</a> and <a href="/daily-updates/daily-news-editorials/challenges-of-digitisation-and-way-forward" target="_blank" rel="noopener">Net neutrality</a></strong>.</li>
<li><strong>Data Security:</strong> Several <a href="/daily-updates/daily-news-analysis/supreme-court-upholds-aadhaars-constitutional-validity" target="_blank" rel="noopener">incidents of leakage of Aadhaar data</a> underlined the need for the government to increase the security and safety of virtual data it collects from its citizens. </li>
<li><strong>Technical Challenges:</strong> As the name suggests, Big data involves several inherent limitations like,<br />
<ul style="list-style-type: circle;">
<li>Inefficient infrastructure for data collection &amp; management of such humongous data,</li>
<li>Storage &amp; computational problems,</li>
<li>Scalability &amp; streaming issues.</li>
</ul>
</li>
<li><strong>Challenges related to Governance:</strong> For effective policymaking using Big Data, the government needs to adopt a consistent dynamic approach. Constant evaluation of the generated feedback and flexibly changing the related policy structures will percolate the benefits to the lowest level.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Ethical issues</strong> related to data privacy need to get addressed.<br />
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-editorials/cyber-crime-data-deprivation-and-data-localisation" target="_blank" rel="noopener">Data protection law</a> must incorporate some of the best practices followed in the World.</li>
<li>It must <strong>strengthen cybersecurity</strong> in order to safely utilize the large pool of virtually available data.</li>
</ul>
</li>
<li><strong>Economically,</strong> the alliance of big data with blockchain technology will potentially change the way we see big data for now.</li>
<li><strong>Infrastructural Requirement:</strong> To effectively analyze the large chunks of available data, well-equipped <strong>data centers</strong> are needed. It is essential to segregate the relevant data from the irrelevant data pool.</li>
<li>In a world where most of the governments &amp; businesses rely more on new-age data sources such as satellite imagery, parking images, and night lights, Big Data governance could be a game-changer for India, where policies have for long been under-implemented.</li>
</ul>
<p>Big Data is like a double-edged sword. It will be wise to handle it with utmost care and conscience.</p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/to-the-points/paper3/big-data-1'
		],
		(int) 2 => [
			'title' => 'Induction of Apache Helicopter',
			'catname' => 'News Analysis',
			'desc' => '<p>Recently, Indian Air Force has formally inducted the <strong>AH-64E Apache Attack Helicopter</strong> into its inventory at Air Force Station Pathankot.</p>
<h3>AH-64E Apache Attack Helicopter</h3>
<ul style="list-style-type: square;">
<li>Better known as an <strong>attack helicopter</strong> are received from the <strong>Boeing production facility in Mesa, Arizona, USA</strong>.</li>
<li>Apache will <strong>replace Russian origin MI-35</strong> helicopters that are on the verge of retirement.</li>
<li>These are all-weather <strong>capable, easily maintainable and have high agility and survivability against battle damage</strong>.</li>
<li>The <strong>capabilities of the AH-64E Apache Attack Helicopter</strong> includes:<br />
<ul style="list-style-type: circle;">
<li>It can carry out precision attacks at standoff ranges and operate in hostile airspace with threats from the ground.</li>
<li>It can transmit and receive battlefield picture through data uplinking and networking.</li>
<li>It can also shoot fire and forget anti-tank guided missiles, air to air missiles, rockets while providing versatility to helicopter in network-centric aerial warfare.</li>
<li>It also carries fire control radar, which has a 360&deg; coverage and nose-mounted sensor suite for target acquisition and night vision systems.</li>
</ul>
</li>
<li>The addition of Apache Attack Helicopter is a significant step towards modernisation of Indian Air Force helicopter fleet.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/985drishti_apache.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/985drishti_apache.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="520" height="390" caption="false" /></a></p>
<p><a href="https://pib.gov.in/PressReleseDetail.aspx?PRID=1583956" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/induction-of-apache-helicopter'
		],
		(int) 3 => [
			'title' => 'Svalbard: Fastest Warming Town on the Earth',
			'catname' => 'News Analysis',
			'desc' => '<p>Svalbard located in Norway is facing extreme consequences of <a href="/daily-updates/daily-news-editorials/climate-change-and-development-in-india" target="_blank" rel="noopener"><strong>climate change</strong></a>.</p>
<ul style="list-style-type: square;">
<li>It is the result of <a href="/daily-updates/daily-news-analysis/rising-sea-level" target="_blank" rel="noopener">rising sea level</a> of Arctic sea due to <a href="/daily-updates/daily-news-analysis/earth-at-risk-of-becoming-hothouse" target="_blank" rel="noopener">Global Warming</a>.<a href="http://www.drishtiias.com/images/uploads/660image1.gif" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/660image1.gif" width="256" height="175" style="float: right;" /></a></li>
<li>Since 1970, average annual temperatures have risen by 4 degrees Celsius in Svalbard, with winter temperatures rising more than 7 degrees.</li>
<li>The <strong>&ldquo;Climate in Svalbard 2100&rdquo;</strong> report also warns that the annual mean air temperature in Svalbard is projected to increase by 7 to 10 degrees Celsius by the end of this century.</li>
<li>Since 1979, the Arctic sea ice extent has declined by nearly 12% per decade, with the most pronounced winter reduction in Svalbard and the Barents Sea area.</li>
<li><strong>Svalbard&rsquo;s main town, Longyearbyen with a population of slightly more than 2,000 people, it is the northernmost town on the planet and also the fastest-warming town on the earth.</strong></li>
</ul>
<div class="border-bg">
<p><strong>Note:</strong> Svalbard Global Seed Vault is the world&rsquo;s largest seed storage facility situated at Norway.</p>
</div>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/svalbard-fastest-warming-town-on-the-earth'
		],
		(int) 4 => [
			'title' => 'Secondary Market For Corporate Loans',
			'catname' => 'News Analysis',
			'desc' => '<p>The <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"><strong>Reserve Bank of India (RBI)</strong></a> constituted Panel, headed by <strong>T.N. Manoharan</strong>, has given some suggestions for <strong>developing the secondary market for corporate loans in the country</strong>. Suggestions are as follows:</p>
<ul style="list-style-type: square;">
<li>Setting up a <strong>Self-Regulatory Body (SRB)</strong> of participants to finalise details for the secondary market for corporate loans, including the standardisation of documents.</li>
<li>Creating a <strong>Loan Contract Registry</strong> to remove information asymmetries between buyers and sellers.</li>
<li>Creating an <strong>online loan sales platform</strong> to conduct auctions and sale of loans.</li>
<li><strong>Widening the Spectrum:</strong> Enabling participation of non-banking entities such as mutual funds, insurance companies, and pension funds.<br />
<ul style="list-style-type: circle;">
<li>Banks and the <a href="/daily-updates/daily-news-editorials/A%20nuanced%20understanding%20of%20the%20NBFC%20sector" target="_blank" rel="noopener"><strong>Non-Banking Financial Companies (NBFCs)</strong></a> are currently the only participants in the primary and secondary loan markets.</li>
</ul>
</li>
<li><strong>Single loan securitisation</strong> can be considered to incentivise investors to acquire loans through the secondary market mechanism. <br />
<ul style="list-style-type: circle;">
<li>Securitisation is currently permitted only for a pool of homogenous assets.</li>
<li>Securitization is a process by which a company clubs it's different financial assets/debts to <strong>form a consolidated financial instrument</strong> which is issued to investors. In return, the investors in such securities get interest.</li>
</ul>
</li>
<li>Allowing <a href="/daily-updates/daily-news-analysis/investments-through-p-notes" target="_blank" rel="noopener"><strong>Foreign Portfolio Investors (FPIs)</strong></a> to directly purchase distressed loans from banks.<br />
<ul style="list-style-type: circle;">
<li>Currently, FPIs have to come through the <strong>Asset Reconstruction Companies (ARCs)</strong> to participate in the distressed loan market.</li>
</ul>
</li>
<li>Linking the pricing of all loans to an external benchmark as the current <a href="/daily-updates/daily-news-analysis/sbi-linked-its-interest-rate-to-the-repo-rate" target="_blank" rel="noopener"><strong>Marginal Cost of Funds Based Lending Rate (MCLR)</strong></a> may not be comparable across banks.</li>
</ul>
<div class="border-bg">
<p><strong>Asset Reconstruction Companies</strong></p>
<ul style="list-style-type: square;">
<li>An Asset Reconstruction Company is a special type of financial institution that buys the debtors of the bank at a mutually agreed value and attempts to recover the debts or associated securities by itself.</li>
<li>The ARCs are registered under the RBI and regulated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002).</li>
<li>The ARCs take over a portion of the debts of the bank that qualify to be recognised as <a href="/daily-updates/daily-news-editorials/solving-the-npa-crisis-in-india" target="_blank" rel="noopener"><strong>Non-Performing Assets</strong></a>.</li>
</ul>
</div>
<h3>Secondary Market for Corporate Loans</h3>
<ul style="list-style-type: square;">
<li><strong>Secondary loan market in India</strong> is largely <strong>restricted to</strong> the sale of loans to <strong>Asset Reconstruction Companies</strong> and no formalised mechanism has been developed to deepen the market. <br />
<ul style="list-style-type: circle;">
<li><strong>The secondary market</strong> is the market where investors buy and sell securities they already own.</li>
</ul>
</li>
<li>A vibrant, deep and liquid secondary market for debt would go a long way in increasing the efficiencies of the debt market in general and would aid in the resolution of stressed assets in particular.</li>
<li>A well-developed secondary market for debt would also aid in transparent price discovery of the inherent riskiness of the debt being traded.</li>
<li>The secondary market for loans can also be an important mechanism for credit intermediaries to <strong>manage credit risk and liquidity risk on their balance-sheets</strong>, especially for distressed assets.</li>
</ul>
<p><a href="https://www.livemint.com/news/india/rbi-panel-recommends-self-regulatory-agency-for-secondary-markets-1567534541141.html" target="_blank" rel="noopener"><strong>Source: Mint</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/secondary-market-for-corporate-loans'
		],
		(int) 5 => [
			'title' => 'MUDRA Scheme and Employment',
			'catname' => 'News Analysis',
			'desc' => '<p>Recently, <a href="/daily-updates/daily-news-analysis/rbi-panel-s-recommendations-on-msme" target="_blank" rel="noopener"><strong>Pradhan Mantri Mudra Yojana</strong></a> Survey has been conducted by the <strong>Labour Bureau</strong> under the <strong>Ministry of Labour and Employment</strong>.</p>
<ul style="list-style-type: square;">
<li>The survey studied as many as 97,000 beneficiaries and was conducted between April-November 2018. Its <strong>salient findings</strong> are:<br />
<ul style="list-style-type: square;">
<li>Just <strong>one out of five beneficiaries i.e. 20.6%</strong> from the sample survey availed Mudra loan for setting up a new establishment, the <strong>rest used the funds for expanding their existing business</strong>.<a href="http://www.drishtiias.com/images/uploads/245image2.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/245image2.jpg" style="float: right;" width="508" height="442" /></a></li>
<li>A total of Rs 5.71 lakh crore in loans was sanctioned under three categories of <strong>Mudra &mdash; Shishu, Kishor and Tarun</strong>, whereas the average size of a loan was Rs 46,536.</li>
<li>The <strong>share of three types of loans out of total loan sanctioned</strong> under MUDRA in 2018-17 is as follows: <br />
<ul style="list-style-type: square;">
<li>Shishu loans: 42%</li>
<li>Kishor loans: 34%</li>
<li>Tarun loans: 24%</li>
</ul>
</li>
<li>The <strong>share for creation of new jobs by three types of loans</strong> under MUDRA in 2018-17 is as follows<br />
<ul style="list-style-type: square;">
<li>Shishu loans: 66%</li>
<li>Kishor loans: 18.85%</li>
<li>Tarun loans: 15.51%</li>
</ul>
</li>
<li>The loan extended for every additional job created works out to Rs 5.1 lakh.</li>
<li>Sector-wise additional job creation under MUDRA is:<br />
<ul style="list-style-type: square;">
<li>Services: 34.34 %</li>
<li>Trading: 33.23%</li>
<li>Allied agriculture: 20.33%</li>
<li>Manufacturing: 11.7 %</li>
<li><strong>Services and trading accounted for more than two-thirds of the additional jobs created.</strong></li>
</ul>
</li>
<li>The survey defines <strong>&ldquo;Self Employed&rdquo;</strong> as persons who <strong>engaged independently</strong> in a profession or trade.</li>
<li><strong>Employees or hired workers</strong> refer to persons engaged, excluding self-employed, by the unit whether for wages or not, in work connected directly or indirectly with the process including all administrative, technical and clerical staff.</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/india/just-1-in-5-mudra-beneficiaries-started-new-business-half-of-extra-jobs-were-self-employment-govt-survey-5963553/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/mudra-scheme-and-employment'
		],
		(int) 6 => [
			'title' => 'Shortage of Anti-Rabies Vaccine',
			'catname' => 'News Analysis',
			'desc' => '<p>Recently, the <strong>National Pharmaceutical Pricing Authority (NPPA)</strong> has asked manufacturers and marketers to increase the stocks of anti-rabies vaccine to address its shortage.</p>
<ul style="list-style-type: square;">
<li>The shortage is due to lack of firm orders from government and late payments.</li>
<li>According to the Health Ministry&rsquo;s data, <strong>India is the hotbed of human rabies</strong>.<br />
<ul style="list-style-type: square;">
<li>India accounts for more than <strong>one-third of the world&rsquo;s rabies deaths</strong>.</li>
<li>Each year, as many as 20,000 people die due to the vaccine-preventable fatality.</li>
<li>India has a population of <strong>30 million stray dogs</strong> which cause <strong>96% of rabies</strong> <strong>in humans</strong>.</li>
</ul>
</li>
<li><strong>Rabies</strong><br />
<ul style="list-style-type: circle;">
<li>It is caused by a Ribonucleic Acid(RNA) virus that is <strong>present in the saliva</strong> of a rabid animal (dog, cat, monkey, etc).</li>
<li>It is invariably transmitted following a bite of a rabid animal that leads to deposition of the saliva and the virus in the wound.</li>
<li>The death invariably occurs in <strong>four days</strong> to <strong>two weeks due to cardio-respiratory failure</strong>.</li>
<li>However, the time interval between the bite and occurrence of symptoms/signs of rabies i.e. <strong>incubation period varies from four days to two years or rarely even more</strong>.</li>
<li>Thus, it is important to remove the virus from the wound as early as possible by <strong>immediately washing</strong> the wound with water and soap followed by application of antiseptics that reduce/eliminate chances of nerve infection.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>National Pharmaceuticals Pricing Authority</strong></p>
<ul style="list-style-type: square;">
<li>NPPA is an organization under <strong>Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers</strong> which was <strong>set up in 1997</strong> to revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order (DPCO), 1995.</li>
<li>The prices are <strong>now fixed/revised</strong> under <strong>Drugs (Prices Control) Order (DPCO), 2013</strong>.</li>
<li>It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/news/cities/Delhi/manufacturers-told-to-rush-rabies-vaccines-to-areas-facing-shortage/article29326664.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/shortage-of-anti-rabies-vaccine'
		],
		(int) 7 => [
			'title' => 'Steering Committee on Fintech',
			'catname' => 'News Analysis',
			'desc' => '<p>Recently, the Steering Committee on <a href="/daily-updates/daily-news-editorials/daily-updates-news-editorials-the-challenges-for-fintech-adoption-in-India" target="_blank" rel="noopener"><strong>Fintech</strong></a> has submitted its final report to the Ministry of Finance.</p>
<ul style="list-style-type: square;">
<li>The Committee was constituted in pursuance to the announcement made in Budget Speech 2018-19.</li>
</ul>
<h3>Recommendations of the Report</h3>
<ul style="list-style-type: square;">
<li>The Committee has recommended Fintech can be leveraged to <strong>enhance financial inclusion of <a href="/to-the-points/paper3/micro-small-and-medium-enterprises-msme" target="_blank" rel="noopener">Micro, Small and Medium Enterprises (MSMEs)</a></strong>.<br />
<ul style="list-style-type: circle;">
<li>In this pursuit, it is recommended that the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener">Reserve Bank of India (RBI)</a> may consider the development of a <strong>cash-flow based financing</strong> for MSMEs.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Cash flow-based financing</strong></p>
<ul style="list-style-type: square;">
<li>In cash flow lending, a financial institution <strong>grants a loan that is backed by the recipient&rsquo;s past and future cash flows</strong>.</li>
<li>This means a company borrows money from expected revenues they anticipate they will receive in the future.</li>
<li>Credit ratings are also used in this form of lending as an important criterion.</li>
<li>The advantage of this method is that a company can possibly obtain financing much faster, <strong>as an appraisal of collateral is not required</strong>.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li>To support risk reduction in the insurance business, it recommended that insurance companies and lending agencies to be <strong>encouraged to use drone and remote sensing </strong>technology for crop area, damage and location assessments.</li>
<li>The Department of Financial Services can work with public sector banks to bring in <strong>more efficiency</strong> to their work and reduce fraud and security risks.<br />
<ul style="list-style-type: circle;">
<li>Significant opportunities can be explored to <strong>increase the levels of automation</strong> using <strong>Artificial Intelligence (AI)</strong>, cognitive analytics &amp; machine learning in their back-end processes.</li>
</ul>
</li>
<li><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/national-bank-for-agriculture-and-rural-development-nabard" target="_blank" rel="noopener">National Bank for Agriculture and Rural Development (NABARD)</a> to take immediate steps to <strong>create a credit registry for farmers</strong> with special thrust for use of fintech.</li>
<li>A <strong>comprehensive legal framework for consumer protection</strong> in the context of the rise of fintech and digital services.</li>
<li>The adoption of <strong>Regulation Technology (RegTech) and Supervisory technology (SupTech)</strong> by all financial sector regulators.</li>
</ul>
<div class="border-bg">
<p><strong>RegTech</strong></p>
<ul style="list-style-type: square;">
<li>It is the management of regulatory processes within the financial industry <strong>through technology</strong>.</li>
<li>The main functions of Regtech include regulatory monitoring, reporting, and compliance.</li>
<li>RegTech uses cloud computing technology through software-as-a-service (SaaS) to help businesses comply with regulations efficiently and less expensively.</li>
<li>The rise in digital products has increased data breaches, cyber hacks, money laundering, and other fraudulent activities.</li>
</ul>
<p><strong>SupTech</strong></p>
<ul style="list-style-type: square;">
<li>It helps supervisory agencies to digitize reporting and regulatory processes, resulting in more efficient and proactive monitoring of risk and compliance at financial institutions.</li>
<li>Suptech is currently found in two areas of applications: <strong>data collection and data analytics</strong>.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li>The Department of Financial Services and the Reserve Bank of India may examine the <strong>suitability of virtual banking system</strong>.<br />
<ul style="list-style-type: circle;">
<li><strong>The virtual banking system</strong> is a system where banks do not need to set up branches and yet deliver the full-scale retail banking services ranging from extending loans, savings accounts, issuing cards and offering payment services <strong>through their app or website</strong>.</li>
</ul>
</li>
<li>The <strong>usage of common fintech platform</strong> for <a href="/daily-updates/daily-news-analysis/rbi-panel-s-recommendations-on-msme" target="_blank" rel="noopener"><strong>Micro Units Development and Refinance Agency (MUDRA)</strong></a> loans, small saving schemes, pension schemes and provident fund.</li>
<li><strong>Reforming the current <a href="/daily-updates/daily-news-analysis/fintech-conclave-2019" target="_blank" rel="noopener">peer-to-peer (P2P) lending</a></strong> platforms.</li>
<li>Further, an Inter-Ministerial Steering Committee will be set up on fintech applications by Ministry of Finance, to continue to carry on the tasks of implementing this report.</li>
</ul>
<p><a href="https://www.business-standard.com/article/news-cm/steering-committee-on-fintech-related-issues-submits-final-report-to-finance-minister-119090300140_1.html" target="_blank" rel="noopener"><strong>Source: BS</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/steering-committee-on-fintech'
		],
		(int) 8 => [
			'title' => 'Global Fund for AIDS, TB, and Malaria',
			'catname' => 'News Analysis',
			'desc' => '<p>India has recently announced a contribution of <strong>$22 million</strong> to the Global Fund for AIDS, TB, and Malaria <strong>(GFTAM)</strong>.</p>
<ul style="list-style-type: square;">
<li>India has stepped an inch closer by enhancing the Global Fund efforts to strengthen health systems and save 16 million more lives across the globe.</li>
<li>The Global Fund to fight AIDS, Tuberculosis, and Malaria was created to raise, manage and invest the world&rsquo;s money in eliminating <strong>three of the deadliest infectious diseases</strong> the world has ever known.</li>
<li>India shares a sustained partnership with the Global Fund since its formation, both as a recipient and as a donor.</li>
</ul>
<h3>Global Funds</h3>
<ul style="list-style-type: square;">
<li>Global Fund (with a total investment of <strong>$2 billion</strong>) was created in 2002 to pool the world&rsquo;s resources &amp; invest them strategically in programs to <a href="/daily-updates/daily-news-editorials/daily-updates-news-editorials-end-tb-in-india-to-boost-its-health-diplomacy-profile" target="_blank" rel="noopener"><strong>end Tuberculosis (TB)</strong></a>, Acquired Immuno-Deficiency Syndrome (AIDS), and Malaria as epidemics.</li>
<li>It is a partnership of governments, civil society, technical agencies, the private sector and people affected by the diseases.</li>
<li>India has set a precedent for other donors to contribute generously to the cause.</li>
</ul>
<div class="border-bg">
<p><strong>Tuberculosis (TB)</strong></p>
<ul style="list-style-type: square;">
<li>Tuberculosis (TB) is caused by <strong>bacteria (Mycobacterium tuberculosis)</strong> that most often affect the lungs. Tuberculosis is curable and preventable.</li>
<li>TB is spread from person to person through the air. When people with lung TB cough, sneeze or spit, they propel the TB germs into the air.</li>
<li>About <strong>one-third</strong> of the world's population has <strong>latent TB</strong>, which means people have been infected by TB bacteria but are not (yet) ill with the disease and cannot transmit the disease.</li>
<li><strong>World TB Day is observed on 24 March</strong> to earmark the discovery of Mycobacterium tuberculosis, a bacterium due to which TB is caused, by German microbiologist Dr. Robert Koch in 1882.</li>
<li>The<strong> Universal Immunization Programme (UIP)</strong> launched by the Government of India in 1985 includes vaccination for 12 diseases including TB.</li>
</ul>
<p><strong>Human Immuno-Deficiency Virus, Acquired Immuno-Deficiency Syndrome (HIV-AIDS)</strong></p>
<ul style="list-style-type: square;">
<li>HIV is a type of virus called a retrovirus, and the combination of drugs used to treat it is called Antiretroviral Therapy (ART).</li>
<li>HIV attacks <strong>CD4, a type of White Blood Cell (T cells)</strong> in the body&rsquo;s immune system. T cells are those cells that move around the body detecting anomalies and infections in cells.</li>
<li>With neither a vaccine nor a cure in sight, Antiretroviral Therapy (ART) is the only option available for people living with HIV-AIDS.</li>
<li><strong>World AIDS Day</strong> is observed on <strong>1<sup>st</sup> December</strong>.</li>
<li><strong>&ldquo;Mission Sampark&rdquo;</strong> was <strong>launched in 2017</strong> to bring back People Living with HIV who have left treatment after starting Anti Retro Viral Treatment (ART).</li>
<li><strong>'Project Sunrise'</strong> was launched in <strong>2016 to tackle the rising HIV prevalence</strong> in <strong>north-eastern states</strong>, especially among people injecting drugs.</li>
</ul>
<p><strong>Malaria</strong></p>
<ul style="list-style-type: square;">
<li>Malaria is caused by <strong>Plasmodium parasites</strong>.</li>
<li>The parasites are spread to people through the bites of infected <strong>female Anopheles mosquitoes</strong>, called "malaria vectors",</li>
<li><strong>World Malaria Day</strong> is observed on <strong>25<sup>th</sup> April</strong>.</li>
<li>It can be noted that only for <strong>four diseases viz. HIV-AIDS, TB, Malaria, and Hepatitis (28 July),</strong> the World Health Organization (WHO) officially endorses disease-specific global awareness days.</li>
</ul>
</div>
<p><a href="https://pib.gov.in/PressReleseDetailm.aspx?PRID=1583960" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/global-fund-for-aids-tb-and-malaria'
		],
		(int) 9 => [
			'title' => 'Economic slowdown: Cyclical or Structural?',
			'catname' => 'News Editorials',
			'desc' => '<p><strong><em>The article is based on <a href="https://www.business-standard.com/article/economy-policy/cyclical-or-structural-decoding-the-nature-of-india-s-economic-slowdown-119090300158_1.html" target="_blank" rel="noopener">&ldquo;Cyclical or structural? Decoding the nature of India's economic slowdown&rdquo;</a> that was published in Business Standard on 3rd September. It talks about the nature of the current economic slowdown and the way ahead.</em></strong></p>
<h3>Context</h3>
<ul style="list-style-type: square;">
<li>India is <strong>undergoing an economic slowdown.</strong> Its GDP grew at 5% in the first quarter of FY20, <a href="/daily-updates/daily-news-analysis/indian-economy-slowest-growth-in-six-years" target="_blank" rel="noopener">marking the slowest growth</a> since the fourth quarter of FY13.</li>
<li>In its <a href="/daily-updates/daily-news-analysis/domestic-demand-and-economy-s-animal-spirits" target="_blank" rel="noopener">annual report for 2018-19</a> released on 29<sup>th</sup> August, the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener">Reserve Bank of India</a> (RBI) had said that the <strong>slowdown was cyclical, rather than structural,</strong> which would have required deeper reforms.</li>
<li>However, some experts believe that the current slowdown is more than a cyclical one and of the structural type which is evident from the fact that the successive rate cuts by the Central Bank have not yielded the desired results.</li>
</ul>
<h3>What is a Cyclical slowdown?</h3>
<ul style="list-style-type: square;">
<li>A cyclical slowdown is a <strong>period of lean economic activity that occurs at regular intervals.</strong> Such slowdowns last over the <strong>short-to-medium term</strong>, and are based on the changes in the business cycle.</li>
<li><strong>Measures to recover from cyclical slowdown:</strong>
<ul style="list-style-type: circle;">
<li>Generally, interim fiscal and monetary measures, temporary recapitalisation of credit markets, and need-based regulatory changes are required to revive the economy.</li>
</ul>
</li>
</ul>
<h3>What is a structural slowdown?</h3>
<ul style="list-style-type: square;">
<li>A structural slowdown, on the other hand, is a <strong>more deep-rooted phenomenon</strong> that occurs due to a one-off shift from an existing paradigm.</li>
<li>The changes, which last over a long-term, are<strong> driven by disruptive technologies, changing demographics</strong>, and/or <strong>change in consumer behaviour.</strong></li>
<li>In such a scenario, a monetary and fiscal stimulus won't be enough to revive the economy.</li>
<li>Fixing such problems would require the government to undertake some structural policies. The best example in this regard would be the reforms that were carried out to address the crisis in 1991.</li>
</ul>
<h3>Major Factors Affecting India&rsquo;s Growth</h3>
<ul style="list-style-type: square;">
<li><strong>Consumption:</strong> Private consumption, which contributes nearly 55-60% to India&rsquo;s GDP, has been slowing down. <br />
<ul style="list-style-type: circle;">
<li>While the <strong>reduced income growth of households has reduced urban consumption</strong>, drought/near-drought conditions in three of the past five years coupled with the collapse of food prices have taken a heavy toll on rural consumption.</li>
</ul>
</li>
<li><strong>Savings:</strong> Savings by household sector &ndash; which are used to extend loans for investment -- have gone down from 35% (FY12) to 17.2% (FY18). <br />
<ul style="list-style-type: circle;">
<li>Households, including MSMEs, make 23.6% of the total savings in the GDP.</li>
</ul>
</li>
<li><strong>Investment:</strong> Gross Fixed Capital Formation (GFCF), a metric to gauge investment in the economy, too has declined from 34.3 per cent in 2011 to 28.8 per cent in 2018, government data show. Similarly, in the private sector, it has declined from 26.9% in 2011 to 21.4% in 2018.</li>
<li><a href="/loksabha-rajyasabha-discussions/the-big-picture-what-ails-nbfcs" target="_blank" rel="noopener">NBFC crisis</a> triggered by IL&amp;FS default led to a <strong>liquidity crunch</strong> in the economy.</li>
<li>RBI&rsquo;s Annual report highlighted that there are still <strong>structural issues in land, labour, agricultural marketing</strong> and the like that need to be addressed.</li>
</ul>
<div class="border-bg">
<p><strong>Gross Fixed Capital Formation</strong></p>
<ul style="list-style-type: square;">
<li>Gross fixed capital formation (GFCF) refers to the <strong>net increase in physical assets</strong> (investment minus disposals). It does not account for the consumption (depreciation) of fixed capital.</li>
<li>It is a component of expenditure approach to calculating Gross Domestic Product (GDP).</li>
<li>GFCF is not a measure of total investment, because only the value of net additions to fixed assets is measured, and all kinds of financial assets, as well as stocks of inventories and other operating costs are excluded.</li>
</ul>
</div>
<h3>Recent Steps Taken</h3>
<ul style="list-style-type: square;">
<li>Subsequent<strong> rate cuts by RBI</strong> to lower the interest rate.The RBI has cut the repo rate by 110 basis points so far in 2019 to 5.4% &ndash; its lowest level since 2010.</li>
<li><a href="/daily-updates/daily-news-analysis/stimulus-package-to-reverse-economic-slowdown-1" target="_blank" rel="noopener">Stimulus package</a> announced by the government along with <a href="/daily-updates/daily-news-analysis/economic-measures-to-boost-economy" target="_blank" rel="noopener">other measures</a> may propel demand and thus help to recover the economy.</li>
<li><a href="/daily-updates/daily-news-analysis/transfer-of-surplus-from-rbi" target="_blank" rel="noopener">Surplus transfer by the RBI</a> to the government can help boost planned-spending of the government without compromising fiscal deficit targets. It would also help in <br />Recapitalising Public sector Banks to tackle the NPA crisis.</li>
<li><a href="/daily-updates/daily-news-analysis/amalgamation-of-national-banks" target="_blank" rel="noopener">Merger of Public sector Banks</a> would enhance the credit culture and thus spur investment in the economy.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>RBI, in its annual report, called for <strong>counter-cyclical actions</strong> in terms of monetary and fiscal policies, <strong>along with deep-seated reforms</strong> for the structural slowdown.</li>
<li>Stimulating domestic demand and reducing supply costs to maintain the Indian industry&rsquo;s export competitiveness.</li>
<li><a href="/gist-of-economic-survey/gist-of-economic-survey-2018-19/gist-of-economic-survey2018-19" target="_blank" rel="noopener">Economic Survey 2018-19</a> asked for <strong>taking measures to boost investment</strong>, especially private investment, that is the 'key driver' that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction, and generates jobs.</li>
<li>Much needed structural reforms in land, labour and agrarian policies to tackle structural dimension of the slowdown.</li>
</ul>
<table border="1" style="border-collapse: collapse; background-color: #f7f4da; border-color: #0e388c; border-style: dashed;">
<tbody>
<tr>
<td style="width: 1256px;">
<p><em><strong>Drishti Input:</strong></em><br /><br />&ldquo;Comment whether the present economic slowdown being faced by Indian Economy is Cyclical or structural. Critically examine the measures taken by the government to recover from the slowdown.&rdquo;</p>
</td>
</tr>
</tbody>
</table>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-editorials/economic-slowdown-cyclical-or-structural'
		],
		(int) 10 => [
			'title' => 'South Asian Association for Regional Cooperation (SAARC)',
			'catname' => 'International Institutions',
			'desc' => '<p>The South Asian Association for Regional Cooperation (SAARC) was established with the signing of the <strong>SAARC Charter</strong> in Dhaka on 8 December 1985.</p>
<ul style="list-style-type: square;">
<li>The idea of regional cooperation in South Asia was first raised in November 1980. After consultations, the foreign secretaries of the seven founding countries&mdash;Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka&mdash;met for the first time in Colombo in April 1981. <br />
<ul style="list-style-type: square;">
<li>Afghanistan became the newest member of SAARC at the 13th annual summit in 2005.</li>
<li>The <strong>Headquarters and Secretariat</strong> of the Association are at <strong>Kathmandu, Nepal</strong>.</li>
</ul>
</li>
</ul>
<h3>Principles</h3>
<ul style="list-style-type: square;">
<li>Cooperation within the framework of the SAARC shall be based on:<br />
<ul style="list-style-type: circle;">
<li>Respect for the principles of <strong>sovereign equality, territorial integrity, political independence, non-interference</strong> in the internal affairs of other States and mutual benefit.</li>
<li>Such cooperation shall not be a substitute for bilateral and multilateral cooperation but shall complement them.</li>
<li>Such cooperation shall not be inconsistent with bilateral and multilateral obligations.</li>
</ul>
</li>
</ul>
<h3>Members of SAARC</h3>
<ul style="list-style-type: square;">
<li>SAARC comprises of eight member States: <a href="http://www.drishtiias.com/images/uploads/828sm-830x587.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/828sm-830x587.png" width="618" height="437" style="float: right;" /></a><br />
<ul style="list-style-type: circle;">
<li>Afghanistan</li>
<li>Bangladesh</li>
<li>Bhutan</li>
<li>India</li>
<li>Maldives</li>
<li>Nepal</li>
<li>Pakistan</li>
<li>Sri Lanka</li>
</ul>
</li>
<li>There are currently nine Observers to SAARC, namely: (i) Australia; (ii) China; (iii) the European Union; (iv) Iran; (v) Japan; (vi) the Republic of Korea; (vii) Mauritius; (viii) Myanmar; and (ix) the United States of America.</li>
</ul>
<h3>Areas of Cooperation</h3>
<ul style="list-style-type: square;">
<li>Human Resource Development and Tourism</li>
<li>Agriculture and Rural Development</li>
<li>Environment, Natural Disasters and Biotechnology</li>
<li>Economic, Trade and Finance</li>
<li>Social Affairs</li>
<li>Information and Poverty Alleviation</li>
<li>Energy, Transport, Science and Technology</li>
<li>Education, Security and Culture and Others</li>
</ul>
<h3>The Objectives of the SAARC</h3>
<ul style="list-style-type: square;">
<li>To <strong>promote the welfare</strong> of the people of South Asia and to improve their quality of life.</li>
<li>To <strong>accelerate economic growth,</strong> social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potentials.</li>
<li>To <strong>promote and strengthen collective self-reliance</strong> among the countries of South Asia.</li>
<li>To <strong>contribute to mutual trust,</strong> understanding and appreciation of one another&rsquo;s problems..</li>
<li>To <strong>promote active collaboration</strong> and mutual assistance in the economic, social, cultural, technical and scientific fields.</li>
<li><strong>To strengthen cooperation with other developing countries.</strong></li>
<li>To <strong>strengthen cooperation among themselves in international forums</strong> on matters of common interests; and</li>
<li>To cooperate with international and regional organizations with similar aims and purposes.</li>
</ul>
<h3>Principal Organs</h3>
<ul style="list-style-type: square;">
<li><strong>Meeting of Heads of State or Government</strong><br />
<ul style="list-style-type: circle;">
<li>Meetings are held at the Summit level, usually on an annual basis.</li>
</ul>
</li>
<li><strong>Standing Committee of Foreign Secretaries</strong><br />
<ul style="list-style-type: circle;">
<li>The Committee provides overall monitoring and coordination, determines priorities, mobilizes resources, and approves projects and financing.</li>
</ul>
</li>
<li><strong>Secretariat</strong><br />
<ul style="list-style-type: circle;">
<li>The SAARC Secretariat was established in Kathmandu on 16 January 1987. Its role is to coordinate and monitor the implementation of SAARC activities, service the meetings of the association and serve as a channel of communication between SAARC and other international organizations.</li>
<li>The Secretariat comprises the secretary-general, seven directors, and the general services staff. The secretary-general is appointed by the Council of Ministers on the principle of rotation, for a non-renewable tenure of three years.</li>
</ul>
</li>
</ul>
<h3>SAARC Specialized Bodies</h3>
<ul style="list-style-type: square;">
<li><strong>SAARC Development Fund (SDF):</strong> Its primary objective is funding of project-based collaboration in social sectors such as poverty alleviation, development, etc.<br />
<ul style="list-style-type: circle;">
<li>SDF is governed by a Board consisting of representatives from the Ministry of Finance of the Member States. The Governing Council of SDF (Finance Ministers of MSs) oversees the functioning of the Board.</li>
</ul>
</li>
<li><strong>South Asian University</strong><br />
<ul style="list-style-type: circle;">
<li><strong>South Asian University (SAU)</strong> is an international university, located in India. Degrees and Certificates awarded by the SAU are at par with the respective Degrees and Certificates awarded by the National Universities/ Institutions.</li>
</ul>
</li>
<li><strong>South Asian Regional Standards Organization</strong><br />
<ul style="list-style-type: circle;">
<li><strong>South Asian Regional Standards Organization</strong> (SARSO) has its Secretariat at <strong>Dhaka, Bangladesh</strong>.</li>
<li>It was established <strong>to achieve and enhance coordination and cooperation among SAARC member states</strong> in the fields of standardization and conformity assessment and is aimed to develop harmonized Standards for the region to facilitate intra-regional trade and to have access in the global market.</li>
</ul>
</li>
<li><strong>SAARC Arbitration Council</strong><br />
<ul style="list-style-type: circle;">
<li>It is an <strong>inter-governmental body</strong> having its office in <strong>Pakistan</strong> is mandated to provide a legal framework/forum within the region for fair and efficient settlement of commercial, industrial, trade, banking, investment and such other disputes, as may be referred to it by the member states and their people.</li>
</ul>
</li>
</ul>
<h3>SAARC and its Importance</h3>
<ul style="list-style-type: square;">
<li>SAARC <strong>comprises 3% of the world's area, 21% of the world's population</strong> and <strong>3.8%</strong> (US$2.9 trillion) <strong>of the global economy</strong>.</li>
<li><strong>Creating synergies:</strong> It is the world&rsquo;s most densely populated region and one of the most fertile areas. SAARC countries have common tradition, dress, food and culture and political aspects thereby synergizing their actions.</li>
<li><strong>Common solutions:</strong> All the SAARC countries have common problems and issues like poverty, illiteracy, malnutrition, natural disasters, internal conflicts, industrial and technological backwardness, low GDP and poor socio-economic condition and uplift their living standards thereby creating common areas of development and progress having common solutions.</li>
</ul>
<h3>SAARC Achievements</h3>
<ul style="list-style-type: square;">
<li><strong>Free Trade Area (FTA):</strong> SAARC is comparatively a new organization in the global arena. The member countries have established a <strong>Free Trade Area (FTA)</strong> which will increase their internal trade and lessen the trade gap of some states considerably.</li>
<li><strong>SAPTA: South Asia Preferential Trading Agreement</strong> for promoting trade amongst the member countries came into effect in 1995.</li>
<li><strong>SAFTA: A Free Trade Agreement</strong> confined to goods, but excluding all services like information technology. Agreement was signed to reduce customs duties of all traded goods to zero by the year 2016.</li>
<li><strong>SAARC Agreement on Trade in Services (SATIS):</strong> SATIS is following the GATS-plus 'positive list' approach for trade in services liberalization.</li>
<li><strong>SAARC University:</strong> Establish a SAARC university in India, a food bank and also an energy reserve in Pakistan.</li>
</ul>
<h3>Significance for India</h3>
<ul style="list-style-type: square;">
<li><strong>Neighbourhood first:</strong> Primacy to the country&rsquo;s immediate neighbours.</li>
<li><strong>Geostrategic significance:</strong> Can counter China (OBOR initiative) through engaging Nepal, Bhutan, the Maldives and Sri Lanka in development process and economic cooperation.</li>
<li><strong>Regional stability:</strong> SAARC can help in creation of mutual trust and peace within the region.</li>
<li><strong>Global leadership role:</strong> It offers India a platform to showcase its leadership in the region by taking up extra responsibilities.</li>
<li><strong>Game changer for India&rsquo;s Act East Policy:</strong> by linking South Asian economies with South East asian will bring further economic integration and prosperity to India mainly in the Services Sector.</li>
</ul>
<h3>Challenges</h3>
<ul style="list-style-type: square;">
<li><strong>Low frequency of meetings:</strong> More engagement is required by the member states and instead of meeting biennial meetings should be held annually.</li>
<li><strong>Broad area of cooperation</strong> leads to diversion of energy and resources.</li>
<li><strong>Limitation in SAFTA:</strong> The implementation of SAFTA has not been satisfactory a Free Trade Agreement confined to goods, excluding all services like information technology.</li>
<li><strong>Indo-Pak Relations:</strong> Escalated tension and conflict between India and Pakistan have severely hampered the prospects of SAARC.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>In a region increasingly targeted by Chinese investment and loans, SAARC could be a common platform to demand more sustainable alternatives for development, or to oppose trade tariffs together, or to demand better terms for South Asian labour around the world.</li>
<li>SAARC, as an organisation, reflects the South Asian identity of the countries, historically and contemporarily. This is a naturally made geographical identity. Equally, there is a cultural, linguistic, religious and culinary affinity that defines South Asia.</li>
<li>The potential of organisation to maintain peace and stability in the region should be explored by all the member countries.</li>
<li>SAARC should be allowed to progress naturally and the people of South Asia, who make up a quarter of the world&rsquo;s population should be offered more people-to-people contact.</li>
</ul>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/important-institutions/drishti-specials-important-institutions-international-institution/south-asian-association-for-regional-cooperation-saarc'
		],
		(int) 11 => [
			'title' => 'Express Governance Awards',
			'catname' => 'News Analysis',
			'desc' => '<p>Recently, a total of 16 district magistrates have been honoured with <strong>The Indian Express Excellence in Governance Awards</strong> for their pioneering work across a wide range of categories.</p>
<ul style="list-style-type: square;">
<li>Some of the <strong>unique initiatives</strong> are:</li>
</ul>
<h3>Category : Left Wing Extremism District</h3>
<ul style="list-style-type: square;">
<li>District : East Godavari (Andhra Pradesh)</li>
<li>Initiative :<strong> Digital Connectivity</strong> through <strong>FSOC.</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Google&rsquo;s X FSOC or Free Space Optical Communication (FSOC)</strong> has enabled the remote tribal villages located in the hills to get connected with the outside world.</li>
<li>It provides services like mobile connectivity, internet, and wireless landline connectivity to the villages.</li>
<li>The initiative has made facilities like <strong>telemedicine, public grievances redressal, online education</strong> etc. accessible for remote villages.</li>
<li>Availability of connectivity will help to eradicate <strong><a href="/daily-updates/daily-news-analysis/left-wing-extremism-in-india" target="_blank" rel="noopener">Left Wing Extremism.</a></strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Free Space Optical Communication (FSOC)</strong></p>
<ul style="list-style-type: square;">
<li>FSOC is an <strong>optical communication technology that uses light</strong> to wirelessly transmit data to telecommunication and internet applications.</li>
<li>FSOC links use <strong>beams of light</strong> to deliver high-speed, high-capacity connectivity over long distances but without the cable.</li>
<li>FSOC boxes can simply be placed kilometres apart on roofs or towers, with the signal beamed directly between the boxes to easily traverse common obstacles like rivers, roads and railways.</li>
</ul>
</div>
<h3>Category : Women Development</h3>
<ul style="list-style-type: square;">
<li>District : Jhabua (Madhya Pradesh)</li>
<li>Initiative : <strong>Sathidar Abhiyan</strong><br />
<ul style="list-style-type: circle;">
<li>It is an initiative for <a href="/mains/model-essays/the-new-emerging-women-power-ground-realities" target="_blank" rel="noopener"><strong>empowerment of women</strong></a> and children through <strong>eradication of social evils.</strong></li>
<li>The campaign intends to bring an end to the reserve <a href="/to-the-points/Paper2/violence-against-women" target="_blank" rel="noopener"><strong>dowry system</strong></a> by social leaders aware of the adversities.</li>
<li>It is not easy to end the practice in a go, so administration <strong>capped the dowry amount to Rs 50,000 or less initially</strong> as against the conventional Rs 2, 3 lakhs.</li>
<li>Eventually,administration succeeded to eliminate dowry system completely in targeted villages.</li>
</ul>
</li>
</ul>
<h3>Category : Child Development</h3>
<ul style="list-style-type: square;">
<li>District : Nagpur (Maharashtra)</li>
<li>Initiative : <strong>Jivhala</strong><br />
<ul style="list-style-type: circle;">
<li>The initiative aims for Creating Awareness About Child Rights And Prevention of <a href="/loksabha-rajyasabha-discussions/crime-against-minors" target="_blank" rel="noopener"><strong>Sexual Harassment</strong> </a>in Tribal Ashram schools.</li>
<li>It provides training and orientation through video and reading material to students which made children open about these sensitive issues.</li>
<li>The initiative helped to empower children and also sensitized the school administration about their responsibilities.</li>
</ul>
</li>
</ul>
<h3>Category : Inclusive Innovation</h3>
<ul style="list-style-type: square;">
<li>District : Valsad (Gujarat)</li>
<li>Initiative : <strong>E-Megh</strong><br />
<ul style="list-style-type: circle;">
<li>The initiative provides <strong>Early <a href="/loksabha-rajyasabha-discussions/the-big-picture-floods-river-linking" target="_blank" rel="noopener">Flood</a> Warning System.</strong></li>
<li>It also provides effective and efficient real-time data</li>
<li>It enhances the co-ordination between the officials and the beneficiaries by using Communication tools like Auto-generated calls &amp; SMS to the authorities.</li>
<li>It also comes up with the flood maps to co-relate threats to various towns and villages.</li>
</ul>
</li>
</ul>
<h3>Category : Skill Development</h3>
<ul style="list-style-type: square;">
<li>District- East Godavari (Andhra Pradesh)</li>
<li>Initiative : <strong>Kaushal Godavari (KG)</strong><br />
<ul style="list-style-type: circle;">
<li>The initiative focuses on <a href="/summary-of-important-reports/strategy-for-new-india-at-75" target="_blank" rel="noopener"><strong>Skill Development</strong></a> and Entrepreneurship Promotion.</li>
<li>The district administration arranged facilities for skill development, skill enhancement and job placement.</li>
<li>Job placements under the programme aided private companies which have hired 16,000 youths from tribal area till now.</li>
</ul>
</li>
</ul>
<h3>Category : Border Districts</h3>
<ul style="list-style-type: square;">
<li>District- Cachar (Assam)</li>
<li>Initiative : <strong>Debo Na Nebo Na</strong> <br />
<ul style="list-style-type: circle;">
<li>It is an <strong>Anti-Corruption Movement</strong> along with <strong>Mobile Phone Application</strong> by the District Administration</li>
<li><strong>&ldquo;Debo Na, Nebo Na&rdquo;</strong> means <strong>&ldquo;Won&rsquo;t Give, Won&rsquo;t Take&rdquo;</strong></li>
<li>Complaints can be lodged through forms dropped in drop-boxes kept outside every government office,phone calls or directly through the app.</li>
<li>The motive behind the project is to ensure that there is no absence of facilities to communicate about a corrupt practice .</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/india/express-governance-awards-live-updates-16-dms-to-be-honoured-for-finest-work-5924223/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/express-governance-awards'
		],
		(int) 12 => [
			'title' => 'Food Wastage and its Impact',
			'catname' => 'News Analysis',
			'desc' => '<p>According to the report <strong>&ldquo;Reducing Food Loss and Waste&rdquo;</strong> by the <strong>World Resources Institute (WRI)</strong>, uneaten food is impacting the economy and the environment negatively.</p>
<h3>Key Findings</h3>
<ul style="list-style-type: square;">
<li><strong>Defined Food Loss and Wastage:</strong> <br />
<ul style="list-style-type: circle;">
<li><strong>Food loss</strong> refers to food that spills, spoils, incurs an abnormal reduction in quality such as bruising or wilting, or otherwise gets lost before it reaches the consumer. It is the unintended result of an agricultural process or technical limitation in storage, infrastructure, packaging, or marketing.</li>
<li><strong>Food waste</strong> refers to food that is of good quality and fit for human consumption but that does not get consumed because it is discarded&mdash;either before or after it spoils. It is the result of negligence or a conscious decision to throw food away.</li>
</ul>
</li>
<li><strong>Impact of Uneaten Food:</strong> <br />
<ul style="list-style-type: circle;">
<li>Nearly one-third of the food that is produced each year goes uneaten, <strong>costing the global economy over $940 billion.</strong></li>
<li>Uneaten food is responsible for <strong>emitting about 8% of <a href="/daily-updates/daily-news-analysis/greenhouse-gas-levels-reach-record-highs-un-report" target="_blank" rel="noopener">planet-warming greenhouse gases</a></strong> into the atmosphere.</li>
</ul>
</li>
<li><strong>Place of Food Loss and Wastage:</strong><br />
<ul style="list-style-type: circle;">
<li>Most of the food loss happens <strong>&ldquo;near the farm&rdquo;</strong> predominantly in lower-income countries.</li>
<li>Most of the food waste happens <strong>&ldquo;near the plate&rdquo;</strong> predominantly in higher-income countries.</li>
</ul>
</li>
<li><strong>Share of Food Group Lost or Wasted:</strong> <br />
<ul style="list-style-type: circle;">
<li>Roots and tubers are the food group that face the maximum wastage, at over 62% in the year 2007. Fruits and vegetables follow, with over 41% in the year 2007.</li>
<li>By weight, fruits and vegetables make up the largest share of total annual food loss and waste.</li>
</ul>
</li>
<li><strong>Solution:</strong> <br />
<ul style="list-style-type: circle;">
<li>Developing national strategies for food loss and waste reduction.</li>
<li>Creating national <strong>public-private partnerships</strong> to deal with food losses and wastage.</li>
<li>Tackling food loss and waste across the entire supply chain.</li>
<li><strong>Shifting consumer social norms</strong> so that wasting food is seen as unacceptable.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>World Resources Institute</strong></p>
<ul style="list-style-type: square;">
<li>WRI is a global research organization that spans more than 60 countries, with <strong>international offices in Brazil, China, India, Indonesia, Mexico and the United States.</strong></li>
<li>It was <strong>established in 1982.</strong> Headquartered in Washington, US.</li>
<li>It aspires to create a world where the actions of government, business, and communities combine to eliminate poverty and sustain the natural environment for all people.</li>
</ul>
</div>
<p><a href="https://indianexpress.com/article/explained/telling-numbers-the-food-we-waste-and-what-it-costs-the-global-economy-5960689/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/food-wastage-and-its-impact'
		],
		(int) 13 => [
			'title' => 'In Depth - Blue Revolution',
			'catname' => 'Lok Sabha & Rajya Sabha Discussions',
			'desc' => '<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/TaHFT9Iyg2k" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>The Vice-President on 30<sup>th</sup> August 2019, inaugurated the<a href="/daily-updates/daily-news-analysis/5th-aqua-aquaria-india-2019" target="_blank" rel="noopener"><strong> fifth edition of the Aqua Aquaria India</strong> </a>in Hyderabad. It is an event that is held every year. This time, the <strong>theme</strong> was <strong>&lsquo;Taking Blue Revolution to India&rsquo;s Hinterland&rsquo;.</strong></p>
<p>The Blue Revolution is part of the Government's efforts to promote fishing as an allied activity for farmers in order to double their incomes. It refers to an explosive growth in the aquaculture industry. As part of its efforts to raise seafood output and exports and promote sustainable aquaculture, <strong>the Government has constituted an independent Ministry for Fisheries.</strong> In the <a href="/daily-updates/daily-news-analysis/highlights-of-budget-2019" target="_blank" rel="noopener"><strong>budget</strong></a> 2019-20, the government allocated an estimated 3,737 crore rupees for the newly carved out Ministry of Fisheries, Animal Husbandry and Dairying.</p>
<h3>Blue Revolution</h3>
<ul style="list-style-type: square;">
<li>It refers to the time of intense growth of the worldwide aquaculture industry from the mid-1960s to the present day.<br />
<ul style="list-style-type: circle;">
<li>The aquaculture industry has been growing at an average rate of 9% a year and India is one of the fastest growers.</li>
</ul>
</li>
<li>In other words, the <strong>rapid increase in the production of fish and marine product</strong> through a package program is known as the Blue Revolution.</li>
<li>The Blue Revolution, <strong>first began in China</strong> where fishing is an ancient activity. China accounts for around two-thirds of the total aquaculture production worldwide by weight and roughly half by market value.</li>
</ul>
<div class="border-bg">
<p><strong>Fisheries and Aquaculture</strong></p>
<ul style="list-style-type: square;">
<li>Worldwide, aquaculture production has now reached 50 million tonnes, up from 2 million tonnes in 1950.<br />
<ul style="list-style-type: circle;">
<li><strong>Asian countries contribute over 90% to aquaculture worldwide.</strong> China, itself, contributes more than 70%.</li>
</ul>
</li>
<li>Aquaculture <strong>provides employment to people</strong> throughout the world. <br />
<ul style="list-style-type: circle;">
<li>Some 880 million people are employed in fish farming from salmon cages in Norway to Prawn Ponds in Thailand.</li>
<li>Employment in the fisheries sector has grown faster than the world&rsquo;s population as well as employment in traditional agriculture.</li>
</ul>
</li>
<li>Fisheries and aquaculture <strong>provide 4.3 billion people with over 15% of their annual animal protein consumption</strong> and are a vital source of micronutrients and essential lipids.</li>
<li>Fish and seafood are one of the <strong>most traded food commodities.</strong> Over 53% of the trade originates in developing countries.</li>
<li>The top ten species of fish caught with aquaculture include carbs and other oysters, salmons, trouts, shrimps and prawns among others.</li>
</ul>
</div>
<h3>Blue Revolution in India</h3>
<ul style="list-style-type: square;">
<li>It was <strong>launched in India during the 7<sup>th</sup> Five Year Plan (FYP)</strong> that went from 1985 to 1990, during which the government sponsored the <strong>Fish Farmers Development Agency (FFDA).</strong></li>
<li>During the 8<sup>th</sup> FYP, from 1992-97, the <strong>Intensive Marine Fisheries Program</strong> was launched in which collaboration with MNCs was encouraged.</li>
<li>Over a period of time, <strong>fishing harbours</strong> in Tuticorin, Porbandar, Visakhapatnam, Kochi and Port Blair were established.</li>
<li>A number of <strong>research centres</strong> have also been set up to increase the production as well as to do improvement in species.</li>
</ul>
<h3>Outcomes</h3>
<ul style="list-style-type: square;">
<li>The FFDA brought <strong>improvement in aquaculture</strong> by adopting <strong>new techniques of fish breeding,</strong> rearing, marketing and export.</li>
<li>The Indian Fisheries Sector which produced only 60,000 tonnes of fish 50 years ago <strong>produces 4.7 million tonnes</strong> including 1.6 million tonnes from freshwater aquaculture today.</li>
<li>India recorded an <strong>average annual growth of 14.8%</strong> in production of fish and fish products in the last decade as compared to the global average of 7.5% in the same period.<br />
<ul style="list-style-type: circle;">
<li><strong>Fisheries, are in fact, India&rsquo;s single largest agricultural export</strong> with a growth rate of 6-10% in the last five years. In comparison, the growth rate of the farm sector in the same period is around 2.5%.</li>
</ul>
</li>
<li>Fishing is the primary source of livelihood for several communities in India and the country is the <strong>world&rsquo;s second largest fish producer</strong> with exports worth more than 47,000 crore rupees.<br />
<ul style="list-style-type: circle;">
<li>Currently, the USA is the largest market for Indian seafood products with a share of 26.46% in terms of India&rsquo;s exports of marine products followed by South East Asian Countries- 25.71% and the European Union Nations- 20.08%.</li>
</ul>
</li>
<li>The fisheries and aquaculture production <strong>contribute around 1% to India&rsquo;s GDP</strong> and over 5% to the agricultural GDP.</li>
</ul>
<h3>Unutilized Potential</h3>
<ul style="list-style-type: square;">
<li>It is a matter of great concern that India is <strong>able to exploit only a fraction of the aquaculture potential available</strong> to it.</li>
<li>India uses only about 40% of the available ponds, tanks and other water bodies for freshwater aquaculture and 15% of total potential of brackish water resources.</li>
</ul>
<h3>Recent Steps Taken By the Government</h3>
<p><strong>Blue Revolution 2.0/ Neel Kranti Mission</strong></p>
<ul style="list-style-type: square;">
<li>The focus of the Blue Revolution 2.0 is on <strong>development and management of fisheries.</strong> This covers inland fisheries, aquaculture, marine fisheries including deep sea fishing, mariculture and all activities undertaken by the National Fisheries Development Board.<br />
<ul style="list-style-type: circle;">
<li>The <strong>National Fisheries Development Board (NFDB)</strong> was established in 2006 as an autonomous organization under the administrative control of the Department of Fisheries, Ministry of Agriculture and Farmers Welfare, to enhance fish production and productivity in the country and to coordinate fishery development in an integrated and holistic manner.</li>
<li>Now, the Board works under the Ministry of Fisheries, Animal Husbandry and Dairying.</li>
</ul>
</li>
<li>It aims to <strong>achieve economic prosperity of fishers and fish farmers.</strong> The same will be done by developing fisheries in a sustainable manner keeping in view biosecurity and environmental concerns.</li>
<li>The Program has certain <strong>objectives</strong> which includes:<br />
<ul style="list-style-type: circle;">
<li>Fully tapping the total fish potential of the country, both in the inland and the marine sector and triple production by 2020.</li>
<li>Transforming the fisheries sector as a modern industry with special focus on new technologies and processes.</li>
<li>Doubling the income of fishers and fish farmers with special focus on increasing productivity and better post harvest marketing infrastructure including e-commerce and other technologies and global best innovations.</li>
<li>Ensuring inclusive participation of fishers and fish farmers in the income enhancement.</li>
<li>Tripling export earnings by 2020 with focus on benefits flow to fishers and fish farmers.</li>
<li>Enhancing food and nutritional security of the country.</li>
</ul>
</li>
</ul>
<h3>Pradhan Mantri Matsya Sampada Yojana</h3>
<ul style="list-style-type: square;">
<li>The Scheme is aimed <strong>to turn India into a hotspot for fish and aquatic products</strong> through appropriate policy, marketing and infrastructure support.</li>
<li>With the Scheme, the government intends to bring all fishermen under the ambit of farmer welfare programmes and social security schemes.</li>
<li>Through this scheme, the Department of Fisheries will establish a robust fisheries management framework. This will <strong>address a critical gap in the value chain</strong> including infrastructure modernisation, traceability, production, productivity, post harvest management and quality control.</li>
</ul>
<h3>Financial Allocation</h3>
<ul style="list-style-type: square;">
<li>The government has allocated <strong>804.75 crore rupees</strong> for the fisheries sector in the current fiscal.</li>
<li>It&rsquo;s aim is to augment fish production to achieve its target of 15 million tonnes by 2020 under the Blue Revolution and raise it thereafter to about 20 million tonnes by 2022-23.</li>
</ul>
<h3>Initiative Taken under the MGNREGA</h3>
<ul style="list-style-type: square;">
<li>The government under the MGNREGA has started to <strong>develop the farm ponds,</strong> where pisciculture is taking place.</li>
</ul>
<h3>Challenges</h3>
<ul style="list-style-type: square;">
<li>The Food and Agriculture Organization (FAO) points out that nearly <strong>90% of the global marine fish stocks have either been fully exploited</strong> or overfished or depleted to the extent that recovery may not be biologically possible.</li>
<li><strong>Discharge of harmful substances</strong> like plastics and other waste into water bodies that cause devastating consequences for aquatic life.</li>
<li><a href="/loksabha-rajyasabha-discussions/in-depth-melting-himalayas" target="_blank" rel="noopener"><strong>Changing climate.</strong></a></li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>India&rsquo;s long coastline has the potential of becoming the strength of the economy particularly through the exploitation of the Blue Revolution.</li>
<li>India can grow to the extent of 10 trillion dollar economy as against 2.7 trillion dollar today with the help of the Blue Economy.</li>
<li>India <strong>needs to develop more scientifically its fishing system</strong> and other related aspects such as freezing, packaging, etc.</li>
</ul>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/loksabha-rajyasabha-discussions/in-depth-blue-revolution'
		],
		(int) 14 => [
			'title' => 'Terracotta Grinder',
			'catname' => 'News Analysis',
			'desc' => '<p>The <strong>Khadi and Village Industries Commission (KVIC)</strong> has launched the first-ever <strong>&lsquo;Terracotta Grinder&rsquo;</strong> at Varanasi.</p>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/important-facts-for-prelims-7th-may-2019" target="_blank" rel="noopener"><strong>Khadi and Village Industries Commission (KVIC)</strong></a> has also started manufacturing of <strong>plastic-mixed handmade paper.</strong> <br />
<ul style="list-style-type: circle;">
<li>It is being manufactured under KVIC&rsquo;s project <strong>REPLAN (REducing PLAstic in Nature).</strong></li>
<li>In this project, the waste plastic is collected, cleaned, chopped, beaten and treated for softness.</li>
<li>Later it is mixed with the paper raw material in a ratio of 80 % (pulp) and 20% (plastic waste).</li>
</ul>
</li>
</ul>
<h3>Terracotta Grinder</h3>
<ul style="list-style-type: square;">
<li>It will grind the wasted and broken pottery items for re-using in pottery-making.</li>
<li>It will reduce the cost of production, and will also help to solve the problem of shortage of clays for pottery making.</li>
</ul>
<div class="border-bg">
<p><strong>Project REPLAN</strong></p>
<ul style="list-style-type: square;">
<li>The initiative is launched by Khadi and Village Industries Commission (KVIC).</li>
<li>REPLAN stands for <strong>REducing PLastic in Nature.</strong></li>
<li>It aims to make carry bags by mixing processed and treated plastic waste with cotton fibre rags in the ratio 20:80.</li>
<li>The made paper is found to have good strength and durability</li>
<li>It can be used to make paper bags, fine tissues and other paper-based items.</li>
</ul>
<p><strong>Terracotta</strong></p>
<ul style="list-style-type: square;">
<li>Terracotta is a type of ceramic pottery.</li>
<li>Terracotta is made by baking terracotta clay.</li>
<li>In fact, the word &ldquo;terracotta&rdquo; comes from the Italian words for &ldquo;baked earth.&rdquo;</li>
<li>It is often used for making pipes, bricks, and sculptures.</li>
</ul>
</div>
<p><a href="https://pib.gov.in/PressReleseDetail.aspx?PRID=1583877" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/terracotta-grinder'
		],
		(int) 15 => [
			'title' => 'Gist of Economic Survey 2018-19',
			'catname' => 'Gist of Economic Survey 2018-19',
			'desc' => '<p style="text-align: left;"><a href="/images/uploads/1567511623_Economic%20Survey%202018-19.pdf" target="_blank" rel="noopener"><span style="font-size: 24px;"><img class="content-img" src="http://www.drishtiias.com/images/uploads/908Economic Survey 2018-19 Banner (Web).png" width="361" height="361" style="display: block; margin-left: auto; margin-right: auto;" /></span></a></p>
<h1 style="text-align: left;"><span style="font-size: 24px;">Chapter 1</span></h1>
<h1 style="text-align: left;"><span style="font-size: 24px;">Shifting Gears: Private Investment as the Key of Growth, Jobs, Exports and Demand</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>This chapter provides a brief overview of the Economic Survey and talks about India&rsquo;s achievement in the past five years and shares a blueprint for the next five years.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>To achieve the objective of becoming a <strong>$5 trillion economy by 2024-25,</strong> India needs to <strong>sustain a real GDP growth rate of 8%.</strong></li>
<li>This growth rate can only be sustained by a<strong> &lsquo;virtuous cycle&rsquo; of savings, investment and exports catalysed and supported by a favourable demographic phase.</strong></li>
<li>Investment, especially <strong>private investment,</strong> is the <strong>key driver that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction, and generates jobs.</strong></li>
<li>The <strong>Survey</strong> departs from the <strong>traditional Anglo-Saxon</strong> thinking by advocating a growth model that views the economy as being in a virtuous cycle or a vicious cycle.</li>
</ul>
<h2>Last Five Years : The Accomplishments</h2>
<ul style="list-style-type: square;">
<li>Indian Economy has performed fairly well in the past five years. It has <strong>opened several pathways</strong> for<em><strong> trickle-down</strong> </em>so that the benefits of growth and macroeconomic stability reach the bottom of the pyramid.</li>
<li><strong>Macroeconomic Stability</strong>
<ul style="list-style-type: circle;">
<li>India has become the <strong>6<sup>th</sup></strong> largest economy by sustaining growth rates higher than China, and has been regarded as the fastest growing major economy.</li>
<li><strong>Average Inflation</strong> has reached the <strong>lowest level</strong> since independence and was less than half of the level of the preceding 5 years.
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/rbi-keeps-policy-rates-unchanged" target="_blank" rel="noopener"><strong>Monetary Policy Committee (MPC)</strong></a> constituted in 2015 has been successful in containing inflation. It sets a target of 4% (+/- 2) for headline inflation.</li>
</ul>
</li>
<li><strong>Current Account Deficit (CAD)</strong> has remained within manageable limits.</li>
<li><strong>Foreign Reserves</strong> have reached the <strong>highest</strong> levels.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/341image29.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/341image29.jpg" width="636" height="405" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>Beneficiary Focus &amp; Targeted Delivery</strong>
<ul style="list-style-type: circle;">
<li>In order to ensure the benefits of growth and macroeconomic stability reach the bottom of the socio-economic ladder, the govt. has developed the ability to provide <strong>targeted support</strong> through:
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/aadhar-and-its-voluntary-use" target="_blank" rel="noopener"><strong>Aadhar Act 2016:</strong></a> more than 90% population coverage.</li>
<li><strong>Pradhan Mantri Jan Dhan Yojna:</strong> financial inclusion</li>
<li><a href="/daily-updates/daily-news-analysis/factors-preventing-financial-inclusion" target="_blank" rel="noopener"><strong>Direct Benefit Transfer:</strong></a> 370 cash-based schemes transferring benefits.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Infrastructure</strong>
<ul style="list-style-type: circle;">
<li>The creation of physical infrastructure accelerated significantly in the last 5 years.</li>
<li>All villages have been electrified</li>
<li><a href="/daily-updates/daily-news-editorials/boosting-regional-air-connectivity" target="_blank" rel="noopener"><strong>Udan Scheme</strong></a> is extending flight connectivity to tier-3 and tier-4 cities</li>
<li>Out of total, <strong>20% national highways</strong> have been constructed in the last 4 years.</li>
<li>Infrastructure project in North-East has gained huge momentum.</li>
</ul>
</li>
<li><strong>Federalism</strong>
<ul style="list-style-type: circle;">
<li>On the recommendation of <strong>14<sup>th</sup> <a href="/daily-updates/daily-news-analysis/need-to-set-up-state-finance-commission" target="_blank" rel="noopener">Finance Commission</a></strong>, the devolution of funds to States has increased from <strong>32% to 42%</strong> from the pool of central taxes</li>
<li><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/niti-aayog-national-institution-for-transforming-india" target="_blank" rel="noopener"><strong>NITI Ayog</strong></a> has institutionalized cooperative federalism by incorporating both Centre and State in jointly evolving strategies for addressing development challenges.</li>
<li>Introduction of GST has promoted cooperative federalism as almost all decisions are taken by consensus among members of GST Council.</li>
</ul>
</li>
<li><strong>Corporate Exits</strong>
<ul style="list-style-type: circle;">
<li><a href="/loksabha-rajyasabha-discussions/in-depth-insolvency-and-bankruptcy-code-act" target="_blank" rel="noopener"><strong>Insolvency and Bankruptcy Code (2016)</strong></a> has improved the overall business culture by consolidating the insolvency resolution process into a single law.</li>
</ul>
</li>
</ul>
<h3>Next Five Years: A Blueprint for Growth and Jobs</h3>
<ul style="list-style-type: square;">
<li><strong>Emphasising Growth</strong>
<ul style="list-style-type: circle;">
<li>India aims to grow into a <strong>$5 trillion economy by 2024-25,</strong> which will make India the <strong>third-largest economy</strong> in the world. To achieve this aim, the Indian economy requires a real annual growth rate in GDP of 8%.</li>
</ul>
</li>
<li><strong>Ingredients required for generating such growth</strong>
<ul style="list-style-type: circle;">
<li>Experience from high growth <strong>East Asian</strong> economies, like <strong>China&rsquo;s explosive growth</strong> over 4 decades and post war development of Hong Kong, Singapore, South Korea and Taiwan, suggest that high growth rates can only be sustained by a <strong>virtuous cycle</strong> of <strong>savings, investment, exports</strong> and <strong>growth</strong> catalysed by a <strong>favourable demographic phase.</strong></li>
<li>Investment (especially private investment), is the key driver that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction and generates jobs.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Why a virtuous cycle over a vicious cycle?</strong></p>
<ul style="list-style-type: square;">
<li>When the economy is in a <strong>virtuous cycle</strong>, investment, productivity, growth, job creation, demand and exports, <strong>feed into each other and enable animal spirits</strong> in the economy to thrive.</li>
<li>In contrast, when the economy is in a <strong>vicious cycle,</strong> moderation in these variables <strong>dampen each other</strong> and thereby kill the animal spirits in the economy.</li>
</ul>
<p><strong>How to enable self sustaining virtuous cycle?</strong></p>
<ul style="list-style-type: square;">
<li>Investment as key driver</li>
<li>Presenting data as public good</li>
<li>Ensuring policy consistency</li>
<li>Encouraging behavioural change</li>
<li>Emphasizing legal reforms</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li><strong>Importance of Savings</strong>
<ul style="list-style-type: circle;">
<li>High investment effort must be backed by domestic savings. This phenomenon has been referred to as <strong>&ldquo;Feldstein-Horioka Puzzle&rdquo;</strong></li>
<li><strong>Savings</strong> and <strong>growth</strong> are <strong>positively correlated</strong> but this positive correlation is stronger than that exists between growth and investment.</li>
<li>Entrepreneurs are exposed to idiosyncratic business failures due to the risky nature of investment which leads to loss of invested capital. Therefore, savings have to increase more than investment to allow for the accumulation of precautionary savings.</li>
</ul>
</li>
<li><strong>Jobs</strong>
<ul style="list-style-type: circle;">
<li>It is often claimed that <strong>&lsquo;investment&rsquo;</strong> displaces job, which has led to debate of <strong>labour-intensive</strong> versus <strong>capital-intensive</strong> mode of production.</li>
<li>Chinese economic model illustrates that <strong>high investment rates also creates jobs.</strong> Capital investment fosters job creation as capital goods production, R&amp;D and supply chain also produces jobs.</li>
<li>International experience from East Asia and Pacific have shown that <strong>unemployment rate decreases with greater capital formation,</strong> therefore it can be conclusively said that <strong>capital</strong> and <strong>labour</strong> are <strong>complementary</strong> in a high investment rate scenario.</li>
</ul>
</li>
<li><strong>Exports</strong>
<ul style="list-style-type: circle;">
<li>In a <strong>high income growth scenario, domestic consumption only acts as a force multiplier,</strong> which may be constrained by high level of savings, therefore <strong>real demand for large capacities came from exports.</strong></li>
<li>East Asian economies illustrates that there is a strong correlation between growth in exports and GDP growth.</li>
<li>India&rsquo;s share in global exports is quite low and current disruptive environment poses an opportunity for India to insert itself into global supply chain.</li>
<li>Therefore, recommendations of High Level Advisory Group led by <strong>DR. Surjit Bhalla (2019)</strong> must be taken into consideration to <strong>enhance exports.</strong></li>
</ul>
</li>
</ul>
<h2>Going Beyond the Economics of Equilibrium in the Blueprint</h2>
<ul style="list-style-type: square;">
<li>The <strong>traditional Anglo-saxon view</strong> considers the <strong>concept of equilibrium</strong> as a key tenet. Secondly, the traditional view often attempts to solve job creation, demand, exports, and economic growth as <strong>separate problems.</strong></li>
<li>However, following the Global Financial Crisis this view has come under significant challenge. Hence, economists are slowly departing from the traditional Anglo-saxon view to a growth model that views the economy as being in <strong>constant disequilibrium.</strong></li>
<li>Also, economists believe that the macro-economic phenomena <strong>(job creation, demand, exports, and economic growth) exhibit significant complementarities.</strong></li>
</ul>
<h2>Navigating a World of Constant Dis-Equlilbrium</h2>
<ul style="list-style-type: square;">
<li>Earlier, our economic policies such as Five Year Plans, were framed on the concept of equilibrium, which largely failed due to non predictive nature of world scenario.</li>
<li>Therefore, navigating this uncertain world of dis-equilibrium requires 3 elements:
<ul style="list-style-type: circle;">
<li>a clear vision</li>
<li>a general strategy to achieve the vision</li>
<li>the flexibility and willingness to continuously recalibrate tactics in response to unanticipated situations.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/253image13.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/253image13.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="772" height="453" /></a></p>
<h2>Way Forward</h2>
<ul style="list-style-type: square;">
<li>The <strong>creation of an ecosystem for private investment,</strong> especially in the new economy, is therefore critical to enable the virtuous cycle of investment, demand, exports, growth and jobs.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Creative Destruction:</strong> Dismantling of long standing practices in order to make way for innovations</li>
<li><strong>Feldstein-Horioka Puzzle:</strong> It concerns about correlation between investment and savings. It says high investment efforts must be backed by domestic savings.</li>
<li><strong>Butterfly Effect :</strong> It means compounding impact of small changes. As a consequence, it is nearly impossible to make accurate predictions for the future or to identify the precise cause of an inexplicable change.</li>
<li><strong>Multi-Dimensional Well-Being :</strong> Refer to the figure given above.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>In the past five years, <strong>average inflation</strong> has reached the <strong>lowest levels</strong> since independence.</li>
<li>Aadhar coverage stands at more than <strong>90%</strong> of total population.</li>
<li>Of all existing national highways, more than <strong>20%</strong> have been constructed in the past <strong>4 years.</strong></li>
<li>India became the <strong>6<sup>th</sup></strong> largest economy.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 81px;">
<h3><span style="color: #ff0000;">Questions For Mains</span></h3>
<p><strong>Q1. Explain the correlation between savings and investment in a high growth economies.</strong></p>
<p><strong>Q2. Critically analyse the traditional anglo-saxon model of economics.</strong></p>
<p><strong>Q3. Examine the factors that are essential for India to realise the aim of $5 trillion economy by 2024-25.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter 2</span></h1>
<h1><span style="font-size: 24px;">Policy For Homo Sapiens, Not Homo Economicus: Leveraging the Behavioural Economics of &ldquo;Nudge&rdquo;</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>This chapter deals with behavioural economics and its application in the government policies to achieve socially relevant outcomes and also lays out an ambitious agenda for social change.</p>
<h2>Purpose of Public Policy</h2>
<ul style="list-style-type: square;">
<li>Public policy influences people to act in a socially desirable way, be it conserving natural resources, educating children, respecting the human rights of fellow citizens or saving for retirement.</li>
<li>Therefore, public policies can be graded on a spectrum capturing how strongly they <strong>influence behaviour.</strong></li>
</ul>
<h2>Behavioural Economics</h2>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-editorials/behavioural-economics-for-new-india" target="_blank" rel="noopener"><strong>Behavioral Economics</strong></a> is the study of psychology as it relates to the economic decision-making processes of individuals and institutions.
<ul style="list-style-type: circle;">
<li>People&rsquo;s behaviour is influenced significantly by social norms and understanding the drivers of these social norms can enable social change.</li>
<li>People suffer from tremendous inertia while making a choice, they prefer to anchor on to the default option.</li>
<li>People find it difficult to sustain good habits, repeated reinforcements and reminders of successful past actions can help sustain changed behaviour.</li>
</ul>
</li>
<li>Behavioural economists have discovered the efficacy of a new class of <strong>&ldquo;nudge&rdquo;</strong> policies that lie between laissez faire and incentive.</li>
<li><strong>Note:</strong> <strong>Nudge policies</strong> are those policies which gently steer people towards desirable behaviour even while preserving their liberty to choose.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/448image19.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/448image19.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="613" height="118" /></a></p>
<h3>Classical Economics Vs Behavioural Economic</h3>
<ul style="list-style-type: square;">
<li><strong>Adam Smith,</strong> in his book the <strong>&lsquo;Theory of Moral Sentiment&rsquo;,</strong> noted that a wide range of <strong>human choices</strong> are driven and limited by our mental resources i.e., cognitive ability, attention and motivation.</li>
<li><strong>Behavioural economics</strong> relies on this essential insight from human psychology that real people do not always behave like robots, rational and unbiased individuals that form the basis of classical economic theory called <strong>&ldquo;homo economicus&rdquo;</strong></li>
</ul>
<h3>Principles of Behavioural Economics</h3>
<ul style="list-style-type: square;">
<li>Behavioural Economics provides ample scope for leveraging the efficacy of public programmes in India. The seven principles of behavioural economics that are used to overcome cognitive bias have been described below:</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/414image21.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/414image21.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="609" height="607" /></a></p>
<h2>Successful Implementation of Behavioural Insights in India</h2>
<ul style="list-style-type: square;">
<li><strong>Swachh Bharat Mission (SBM)</strong>
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/swachh-bharat-mission-reduced-groundwater-contamination-unicef" target="_blank" rel="noopener"><strong>SBM</strong></a> was launched on 2<sup>nd</sup> October 2014 to achieve universal sanitation coverage.</li>
<li><strong><a href="/daily-updates/daily-news-analysis/Swachh%20Bharat%20Mission" target="_blank" rel="noopener">SBM</a></strong> relies on community based approach to sanitation, thereby <strong>creating a mass movement on the lines of &lsquo;satyagraha&rsquo; for cleaner India.</strong></li>
<li>It is the first one to emphasize behavioural change, not only in construction of toilet but also to increase their usability on the regular basis.</li>
<li>To initiate behavioural change in use of toilets, more than 5 lakh <strong>swachhagrahis</strong> i.e., foot soldiers of the SBM were recruited. These swachhagrahis were able to leverage their social ties within their villages to effect change.</li>
<li>The act of provoking disgust or shaming people for open defecation elicit emotional reactions that are more effective than those that deliver plain messages.</li>
<li>According to <strong>National Annual Rural Sanitation Survey (NARSS) 2018-19:</strong>
<ul style="list-style-type: disc;">
<li>93.1% of rural households had access to toilets and 96.5% of these households use them regularly.</li>
</ul>
</li>
<li>Female literacy and early marriage of girls correlate strongly with access and usage of toilets therefore use of behavioural insights in SBM can be effectively used to improve the social indicators.</li>
</ul>
</li>
</ul>
<h3 style="text-align: center;"><a href="http://www.drishtiias.com/images/uploads/384image6.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/384image6.jpg" width="596" height="283" caption="false" /></a></h3>
<p><a href="http://www.drishtiias.com/images/uploads/196image8.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/196image8.jpg" width="425" height="439" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>Beti Bachao, Beti Padhao (BBBP)</strong>
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/important-facts-for-prelims-25th-january-2019" target="_blank" rel="noopener"><strong>BBBP Scheme</strong></a> was launched from <strong>Panipat</strong> to address the issue of <strong>decline in <a href="/daily-updates/daily-news-analysis/improvement-in-sex-ratio-at-birth" target="_blank" rel="noopener">Child Sex Ratio</a></strong> and related issues of empowerment of girls and women.</li>
<li>India&rsquo;s child sex ratio at birth has been <strong>consistently falling</strong> for decades untill the first decade of 21<sup>st</sup> century. Between 2001 and 2011(census), 21 out of 29 states registered a decline in child sex ratio.</li>
<li>To emphasize behavioural change, the campaign was launched from Panipat, which is famous for various battles in the history, as a symbolic gesture in the fight against this socially ingrained bias against the girl child. Panipat also had the worst child sex ratio at 834 as compared with the national average of 919 (Census, 2011).</li>
<li>To change people&rsquo;s attitude towards the girl child they needed to stop viewing girls as burdens and start celebrating them instead. With the <strong>'Selfie with Daughter'</strong> campaign the celebration of the girl child quickly became the norm. Most people wanted to conform, and more and more parents posted selfies with their girls.</li>
<li>The strategy <strong>addresses failure bias,</strong> therefore focus must be on people who treat their girls fairly.</li>
<li>BBBP has had an impact particularly on <strong>large states</strong> like UP, MP Rajasthan, Chhatisgarh, Andhra Pradesh and Jharkhand which had very poor child sex ratio.</li>
</ul>
</li>
</ul>
<h2>Power of Clear Messaging</h2>
<ul style="list-style-type: square;">
<li>Several other programmes have successfully employed the power of messaging as evident from the names used for various recent schemes.</li>
<li>The <strong><a href="/daily-updates/daily-news-analysis/ganga-vriksharopan-abhiyan" target="_blank" rel="noopener">Namami Gange scheme</a></strong> seeks to arrest the pollution of Ganga River and revive it wherein Namami Gange means &lsquo;I pray to Ganga&rsquo; as the river Ganga is revered in our culture.</li>
<li><strong><a href="/daily-updates/daily-news-analysis/poshan-abhiyaan" target="_blank" rel="noopener">POSHAN Abhiyan</a></strong> is a multi-ministerial convergence mission to ensure a malnutrition free India by 2022 wherein Poshan means holistic nutrition.</li>
<li><a href="/daily-updates/daily-news-editorials/ayushmanbharat" target="_blank" rel="noopener"><strong>Ayushman Bharat</strong></a> envisages universal and affordable access to good quality health care services wherein Ayushman means &lsquo;Being Blessed with long life&rsquo;.</li>
</ul>
<h2>An Aspirational Agenda for Path-Breaking Change</h2>
<ul style="list-style-type: square;">
<li><strong>From BBBP to BADLAV (Beti Aapki Dhan Lakshmi Aur Vijay Laxmi)</strong>
<ul style="list-style-type: circle;">
<li>In India, gender inequality needs a revolutionary campaign which must be aligned with the principles of behavioural economics.</li>
<li>The campaign must draw on social and cultural norms because they play a dominant role in influencing behaviour.</li>
<li>Therefore, the campaign under BBBP can be labelled as BADLAV to represent change towards gender equality.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #05bbf7; border-color: #000000;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 70.5232%; height: 19px; background-color: #05bbf7; border-color: #000000;"><span style="color: #ffffff;"><strong>Applying the Principle for BADLAV</strong></span></td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">1. Make it easy to choose</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Simplifying procedure for women.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">2. Emphasize Social norms</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Projecting positive social norms and highlighting prominent personalities or even mythological characters so that people can relate to them.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">3. Disclose Outcomes</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Publishing gender reports or audits in public domain.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Reinforce Repeatedly</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">People&rsquo;s memories are short-lived, they need to be reminded of what is socially acceptable. Therefore, regular visual or print advertisement can reinforce positive attitude.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">5. Leverage Loss Aversion</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Modifying reward structure to prevent higher aversion of women to competition.eg: reducing application fees for women.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">6. Make Message Match Mental Model</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">All gender stereotypes can be removed to provide more flexibility to women.</td>
</tr>
</tbody>
</table>
<ul style="list-style-type: square;">
<li><strong>From Swach Bharat and Ayushman Bharat to Sundar Bharat</strong>
<ul style="list-style-type: circle;">
<li>A strong way to reinforce behaviour is by getting people to <strong>pre-commit</strong> to a certain course of action. Studies suggest that if people are pre-committed to doing something, they are much more likely to do it.</li>
<li>Taking our learning from the power of behavioural economics in the Swachh Bharat scheme, the way forward is to develop an all-encompassing behavioural economics architecture for the entire health sector.</li>
<li>Due to information asymmetry between the doctor and the patient, hyperbolic tendencies of health consumers, and high variability of health care expenditures, people often make decisions that are not in their best interest. This ranges from failing to enrol in health insurance, engaging in harmful behaviour like smoking.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 69.5519%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Applying Principle for Sundar Bharat</strong></span></td>
</tr>
<tr style="height: 51px;">
<td style="width: 30.4481%; height: 10px; background-color: #dcf5f4; vertical-align: top;">1. Leverage the Default Rule</td>
<td style="width: 69.5519%; height: 10px; background-color: #dcf5f4; vertical-align: top;">Providing default insurance plan may significantly improve the insurance coverage.</td>
</tr>
<tr style="height: 83px;">
<td style="width: 30.4481%; height: 10px; background-color: #dcf5f4; vertical-align: top;">2. Make it Easy to Choose</td>
<td style="width: 69.5519%; height: 10px; background-color: #dcf5f4; vertical-align: top;">Customising health plan according to customer needs and minor alterations to the school menus may promote healthy food habits among children.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">3. Emphasize Social Norms</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Highlighting incidents of death of celebrities from drugs may help to contain drug menace among youth.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Disclose Outcomes</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Disclosing the tangible benefit of handwashing &amp; family planning practice experienced by other people may promote healthy practices.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">5. Reinforce Repeatedly</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Periodic reminders to people to plan their vaccination or taking medicines regularly by means of messages or social media.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">6. Leverage Loss Aversion</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">People often find it difficult to achieve goals like weight loss or ceasing to smoke. People voluntarily made to post bonds (deposit contracts) or lottery tickets on a website that will be returned to them if they achieve their goals, but are forfeited otherwise, can help them achieve these difficult goals.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">7. Make Message Match Mental Models</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Awareness Campaigns to correct flawed mental model.</td>
</tr>
</tbody>
</table>
<ul style="list-style-type: square;">
<li><strong>&lsquo;Think about the Subsidy&rsquo;</strong>
<ul style="list-style-type: circle;">
<li><strong>&lsquo;Give It Up&rsquo;</strong> encouraged Above Poverty Line (APL) households to voluntarily surrender their LPG subsidies but due to lack of economic incentives, the program mainly relied on better judgement to voluntarily give up their subsidy. However, still there is a huge scope to expand the campaign.</li>
<li>Even if people are truly interested in giving up their subsidies; their actions may differ from their intent as they need to be moved to action with a gentle nudge. A good choice architecture can aid in closing this gap between intention and action.</li>
<li>People have a strong tendency to go with the status quo. &lsquo;Give It Up&rsquo; needs to employ this insight.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 35px;">
<td style="width: 26.7279%; height: 21px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 73.2721%; height: 21px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Applying Principle for &lsquo;Think about the Subsidy&rsquo;</strong></span></td>
</tr>
<tr style="height: 51px;">
<td style="width: 26.7279%; height: 10px; background-color: #dcf5f4; vertical-align: top;">1. Leverage Default Rules</td>
<td style="width: 73.2721%; height: 10px; background-color: #dcf5f4; vertical-align: top;">Modifying default option so that people need to opt-in to continue their subsidy.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">2. Make it Easy to Choose</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Utilizing impulsive behaviour for giving up subsidy through mobile apps etc.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">3. Emphasize Social Norms</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Making people feel good about giving up subsidies can help establish the correct social norms.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Disclose Outcomes</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Advertising the people who gave up subsidy, so as to motivate others.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">5. Reinforce Repeatedly</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Videos such as beneficiary thanking subsidy givers must be circulated to reinforce the feelings.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">6. Leverage Loss Aversion</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Motivating individuals to pledge a certain amount of subsidy when they feel most inspired.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">7. Match Message to Mental Model</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Fiscal Subsidies can be made cost effective by frequently reminding people so that they can plan their schedule.eg: taking up vaccination etc.</td>
</tr>
</tbody>
</table>
<ul style="list-style-type: square;">
<li><strong>Jan Dhan Yojana</strong>
<ul style="list-style-type: circle;">
<li>Jan Dhan Yojana opened a large number of bank accounts in a short span of time, but its success relies on people using these accounts regularly. The programme&rsquo;s mandate includes access to services like credit, insurance etc. The programme offers tremendous scope to employ behavioural insights.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 70.5561%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Applying the Principle</strong></span></td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">1. Leverage Default Rules</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Make auto enrollment into a saving plans</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">2. Make it Easy to Choose</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Minimizing complexities in opting for schemes for common people.</td>
</tr>
<tr style="height: 41px;">
<td style="width: 29.4439%; height: 10px; background-color: #dcf5f4; vertical-align: top;">3. Emphisize Social Norms</td>
<td style="width: 70.5561%; height: 10px; background-color: #dcf5f4; vertical-align: top;">
<p>Using information campaigns to highlight the number of people using bank accounts.</p>
<p>Sending regular messages about account details etc can increase usability.</p>
</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Disclose Outcomes</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Periodically reminding holders of dormant account about the number of people using accounts.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">5. Reinforce Repeatedly</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Reminding people about their past savings can reinforce good saving behaviour.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">6. Leverage Loss Aversion</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Using favourable time such as harvest season or increase in salary to increase the savings of people</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">7. Make Message Match Mental Model.</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Customising saving plan according to customers needs like home saving plan, educational saving plan etc.</td>
</tr>
</tbody>
</table>
<ul style="list-style-type: square;">
<li><strong>From Tax Evasion to Tax Compliance</strong>
<ul style="list-style-type: circle;">
<li>In order to enhance tax compliance, behavioural insights need to be employed to modify the social norm from &lsquo;evading taxes is acceptable&rsquo; to &lsquo;paying taxes honestly is honourable&rsquo;.</li>
<li>The intrinsic motivation of taxpayers to pay taxes is driven primarily by two perceptive factors - <strong>vertical fairness and horizontal fairness.</strong></li>
<li>Citizens perceive <strong>vertical fairness</strong> to be low if they find their tax payments being squandered in wasteful public expenditure or by corruption. Similarly, perceptions of <strong>horizontal fairness</strong> suffer when the employee class is forced to contribute more than the self-employed class.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 27.4798%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 72.5202%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Applying the Principle</strong></span></td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 24px; background-color: #dcf5f4; vertical-align: top;">1. Leveraging the Default Rule</td>
<td style="width: 72.5202%; height: 24px; background-color: #dcf5f4; vertical-align: top;">Automatic deduction of taxes and directing refunds into saving accounts</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 23px; background-color: #dcf5f4; vertical-align: top;">2. Make it Easy to Choose</td>
<td style="width: 72.5202%; height: 23px; background-color: #dcf5f4; vertical-align: top;">Making tax filing process simpler</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 26px; background-color: #dcf5f4; vertical-align: top;">3. Emphisize Social Norms</td>
<td style="width: 72.5202%; height: 26px; background-color: #dcf5f4; vertical-align: top;">Promoting tax paying as honourable</td>
</tr>
<tr style="height: 19px;">
<td style="width: 27.4798%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Disclose Outcome</td>
<td style="width: 72.5202%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Public shaming of eligible individuals who do not pay taxes.</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 23px; background-color: #dcf5f4; vertical-align: top;">5. Reinforce Repeatedly</td>
<td style="width: 72.5202%; height: 23px; background-color: #dcf5f4; vertical-align: top;">Periodically informing people about neighbours or people living around paying taxes honestly.</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 26px; background-color: #dcf5f4; vertical-align: top;">6. Leverage Loss Aversion</td>
<td style="width: 72.5202%; height: 26px; background-color: #dcf5f4; vertical-align: top;">Refunds at the time of tax filing may increase compliance.</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 22px; background-color: #dcf5f4; vertical-align: top;">7. Match Messages to Mental Models</td>
<td style="width: 72.5202%; height: 22px; background-color: #dcf5f4; vertical-align: top;">Making reciprocity appeal to boost morale of tax compliance.</td>
</tr>
</tbody>
</table>
<h2>Using Behavioural Economics to Avoid the Seven Social Sins</h2>
<ul style="list-style-type: square;">
<li style="text-align: justify;"><a href="/daily-updates/daily-news-analysis/strategy-for-new-india-75" target="_blank" rel="noopener"><strong>India @75</strong></a> is envisaged as a <strong>&lsquo;New India&rsquo;</strong> where every individual realizes his or her full potential and looks for opportunities to contribute rather than claim entitlements.</li>
<li style="text-align: justify;"><strong>Mahatma Gandhi&rsquo;s Seven Social Sins,</strong> published in <strong>Young India</strong> on October 22, 1925, provide deep insights into the role of social and political conditions shaping human behavior. Each of these is a statement of principle that can be interpreted and utilized for nudging people towards desirable behaviour.</li>
</ul>
<h2><a href="http://www.drishtiias.com/images/uploads/792image22.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/792image22.jpg" width="431" height="314" caption="false" style="display: block; margin-left: auto; margin-right: auto;" /></a></h2>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 35px;">
<td style="width: 47.1948%; height: 35px; background-color: #05bbf7; text-align: center;"><span style="color: #ffffff;"><strong>Social Sins of Gandhiji</strong></span></td>
<td style="width: 52.8052%; height: 35px; background-color: #05bbf7; text-align: center;"><span style="color: #ffffff;"><strong>Applying the Principles of Behavioural Economics</strong></span></td>
</tr>
<tr style="height: 334px;">
<td style="width: 47.1948%; height: 10px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>1. Politics without Principles</strong></p>
<ul style="list-style-type: square;">
<li>Principles in politics act like a compass needle pointing north i.e. giving a dependable direction to move on.</li>
<li>Holding power without principles distorts realities, promotes a culture of suspicion and biases and negates the inherent values of society.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 10px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p style="text-align: justify;"><strong>Leverage Loss Aversion</strong></p>
<ul style="list-style-type: square;">
<li>Growing perceptions of criminalisation of politics, misuse of public office etc. has led to increased apathy towards participation in political processes.</li>
<li>Policy makers and legislators exhibit loss-aversion in decision-making and seemingly harsh policy decisions do not garner enough support.</li>
<li>Addressing the loss aversion of policymakers can improve policy and legislative outcomes and would also enhance broader participation in politics.</li>
</ul>
</td>
</tr>
<tr style="height: 10px; text-align: justify;">
<td style="width: 47.1948%; height: 10px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>2. Wealth without Work</strong></p>
<ul style="list-style-type: square;">
<li>The practice of getting something for nothing; for example making money without paying taxes, acts trafficking, malpractices which offer short cuts for minting money.</li>
<li>Wealth must be obtained through hard work and by using fair means. This is because sacrifice in the form of energy, effort, personal resources, prestige and position brings wealth which satisfies our soul beyond just the body.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 10px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>Disclose Outcomes</strong></p>
<ul style="list-style-type: square;">
<li>The perception of getting things for &lsquo;free&rsquo; as an entitlement has to be reoriented towards discharging our obligations towards society.</li>
<li>Disclosing the realised benefits of good behaviour and the adverse outcomes</li>
<li>of bad behaviour, on the one hand, and emphasizing social norms, on the other hand, offer insights towards enhancing productivity and tax compliance.</li>
</ul>
</td>
</tr>
<tr style="height: 19px; text-align: justify;">
<td style="width: 47.1948%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>3. Pleasure without Conscience</strong></p>
<ul style="list-style-type: square;">
<li>It refers to the pursuit of sensuality and gratification without responsibility to God, others, or one&rsquo;s self. It ultimately costs in terms of reputation and in terms of wounding the hearts and minds of other people who are adversely affected by such want of gratification.</li>
<li>To learn to be responsible, to live selflessly, to be sensitive, and to be considerate shall be the driving force behind pleasurable activities.</li>
<li>Moreover, acts like helping the needy, saving a person from possible violence etc. invite self-induced pain, but with pleasure beneath it. No one without a clear conscience have courage to take such risks to attain the pleasure.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 19px; vertical-align: top; text-align: left; background-color: #dcf5f4;">
<p><strong>Leverage Default Rules</strong></p>
<ul style="list-style-type: square;">
<li>When less deserving people claim benefits of a development programme, it is an act of pleasure without conscience or a sense of responsibility.</li>
<li>To learn to give and take, to live selflessly, to be sensitive, to be considerate, is our challenge.</li>
<li>Leveraging default rules like making the default &lsquo;opt-out&rsquo; for availing subsidy, etc. can be employed to nudge people towards confident displays and conduct of altruism.</li>
</ul>
</td>
</tr>
<tr style="height: 16px; text-align: justify;">
<td style="width: 47.1948%; height: 16px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>4. Knowledge without Character</strong></p>
<ul style="list-style-type: square;">
<li>Knowledge is neutral by nature but can be used for both positive and negative purposes. When knowledge is without character it is used to harm someone, to attain power, to gain control and the like.</li>
<li>Purely intellectual development without commensurate internal character development is like putting a high-powered sports car in the hands of a teenager who is high on drugs.</li>
<li>Character gives strength to do what is right, to hold ourselves and others accountable. It prevents us from taking unethical decisions.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 16px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>Match Messages to Mental Models</strong></p>
<ul style="list-style-type: square;">
<li>Societies are witnessing an information explosion.</li>
<li>Gender based violence, internet trolling, and the rise of drug show how people, while mindlessly becoming more aware about the world around them, are ironically becoming less self-aware of their actions.</li>
<li>People can be nudged with messages matching their mental models to make them realise that soft skills like self-control, altruism, patience, and trust are as important as cognitive skills.</li>
</ul>
</td>
</tr>
<tr style="height: 19px; text-align: justify;">
<td style="width: 47.1948%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>5. Commerce without Morality</strong></p>
<ul style="list-style-type: square;">
<li>Commerce without morality endorses acts of cheating, lying, stealing, and selling harmful or inferior products. It ultimately results in spoiling and abusing of natural and human resources.</li>
<li>Every business transaction is a moral challenge to see that both parties come out fairly. Economic systems operating without moral foundation will create a society and business which does not serve the interests of all the stakeholders.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>Emphasising Social Norms</strong></p>
<ul style="list-style-type: square;">
<li>Ethics are the moral principles that govern a person&rsquo;s actions and these morals are shaped by social and cultural norms and religious practices.</li>
<li>Emphasising social norms is a powerful way of shaping choices and navigating human actions towards desired behaviour.</li>
<li>The National Corporate Social Responsibility Awards of Ministry of Corporate Affairs emphasise ethical behaviour and acknowledge companies that have positively impacted both business and society.</li>
</ul>
</td>
</tr>
<tr style="height: 19px; text-align: justify;">
<td style="width: 47.1948%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>6. Science without Humanity</strong></p>
<ul style="list-style-type: square;">
<li>Science without humanity is like turning men into material and machines into decision makers.</li>
<li>If there is very little understanding of the higher human purposes that the technology is striving to serve we become victims of our own technocracy. Science must regard the feelings and fate of individuals.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>Making it Easy to Choose</strong></p>
<ul style="list-style-type: square;">
<li>Science and Technology has a huge potential to simplify and benefit human lives.</li>
<li>Using the behavioral principle of &lsquo;Making it easy to choose&rsquo;, technology can make things simple to understand, cut through layers of processes and target the benefit to the actual beneficiary.</li>
</ul>
</td>
</tr>
<tr style="height: 19px;">
<td style="width: 47.1948%; height: 19px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<p><strong>7. Worship without Sacrifice</strong></p>
<ul style="list-style-type: square;">
<li>Worship is not only reciting hymns and going by rituals to impress the almighty. One needs to offer unconditional surrender from one&rsquo;s position, prestige, ego and possessions when sitting for worship.</li>
<li>Functioning under the social facade of religious practices without the sacrifice to serve the needs of other people &ndash; the sacrifice of our own pride and prejudice, among other things &ndash; will not result in the union of man and god.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p style="text-align: justify;"><strong>Reinforce Repeatedly</strong></p>
<ul style="list-style-type: square;">
<li style="text-align: justify;">Across all religions, gender and caste equality as well as universal brotherhood have been deeply understood.</li>
<li style="text-align: justify;">Repeatedly reinforcing examples of people following these positive sentiments as truly spiritual people can help establish the correct social norm that &lsquo;serving man is serving God&rsquo;.</li>
<li style="text-align: justify;">The Good Samaritan guidelines that appreciates people who help road accident victims, leverage behavioural insights to reinforce the correct social norm of selfless service of mankind.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h2>Implementing The Aspirational Agenda For Behavioural Change</h2>
<ul style="list-style-type: square;">
<li>In India, social and religious norms play a dominant role in influencing behaviour of the society therefore the possibilities of employing behavioural economics to policy making are enormous.. To avail these benefits, following measures are suggested for implementation.
<ul style="list-style-type: circle;">
<li>Behavioural economics unit in the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/niti-aayog-national-institution-for-transforming-india" target="_blank" rel="noopener"><strong>NITI Aayog.</strong></a></li>
<li>Behavioural economics audit for every government program</li>
<li>Appropriate coordination with state government to implement principles of behavioural economics in state policies and programs.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Laissez Faire:</strong> The policy of leaving things to their own course, without interfering.</li>
<li><strong>Homo economicus:</strong> Individuals who always make optimal choices irrespective of the way the choices are presented to them. They do not respond to choice architecture while real people do.</li>
<li><strong>Anchoring Bias:</strong> The tendency of people to rely heavily on default options.</li>
<li><strong>Failure Bias:</strong>&nbsp;The tendency to focus on failures rather than success because failures have greater visibility.</li>
<li><strong>Choice Architecture:</strong>&nbsp;It refer to presentation of choices to an individual.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>India&rsquo;s <strong>child sex ratio at birth</strong> has been <strong>consistently falling</strong> for decades untill the first decade of 21st century. Between 2001 and 2011(census), <strong>21</strong> out of <strong>29</strong> states registered a decline in child sex ratio.</li>
<li><strong>BBBP</strong> had significant impact on <strong>large states</strong> with very poor child sex ratio</li>
<li><strong>Smaller States</strong> like MIzoram, Nagaland and Manipur, have a <strong>higher rate</strong> of <strong>subsidy surrender</strong> as compared to larger states.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 88px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Briefly explain the principles of behavioural economics and analyse its application in Swachh Bharat Mission.</strong></p>
<p><strong>Q2. &ldquo;What is honoured in a country is cultivated there.&rdquo;- PLATO<br /></strong><strong>In the context of the above statement, explain how principles of behavioural economics can be used to increase tax compliance in the country.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter 3</span></h1>
<h1><span style="font-size: 24px;">Nourishing Dwarfs to become Giants: Reorienting Policies for MSME Growth</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>This chapter examines how policies followed over the last seven decades stifle the growth of <a href="/to-the-points/paper3/micro-small-and-medium-enterprises-msme" target="_blank" rel="noopener"><strong>Micro, Small &amp; Medium Enterprises (MSMEs)</strong></a> in the economy. It lays out the policy map for re-orienting the policy stance to foster the growth of MSMEs and thereby greater job creation and productivity in the economy.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>Job creation in large numbers remains an urgent imperative to provide financial and social inclusion for our young population.</li>
<li>Job creation in India, however, suffers from policies that foster <strong>dwarfs</strong> instead of <strong>infant</strong> firms that have the potential to grow and become giants rapidly.</li>
<li>According to the Survey, if we consider our <a href="/daily-updates/daily-news-analysis/state-divide-in-unemployment" target="_blank" rel="noopener"><strong>labour force participation rate</strong></a> (LFPR) would remain at 60% in the next two decades, about 55-60 lakhs jobs needs to be created annually over the next decade.</li>
<li>It, thus, becomes imperative to reorient the policy stance to foster the growth of MSMEs and thereby greater job creation and productivity in the economy.</li>
</ul>
<h2>Categorization of Firms</h2>
<ul style="list-style-type: square;">
<li><strong>Small Firm:</strong> Firms employing less than 100 workers.</li>
<li><strong>Large Firm:</strong> Firms employing more than 100 workers</li>
<li><strong>Young Firm:</strong> Firms which are small when young but on aging becomes large</li>
<li><strong>Dwarfs Firm:</strong> Firms which are both small and aged more than 10 years having stunted growth</li>
</ul>
<h2>The Bane of Dwarfism</h2>
<ul style="list-style-type: square;">
<li><strong>Dwarfs are small firms that never grow beyond their small size,</strong> dominate the Indian Economy and hold back job creation and productivity.</li>
<li>Dwarfs are <strong>lowest</strong> contributors to employment and productivity while firms that grow over time are the biggest contributors.</li>
<li>Inspite of aging, small firms have <strong>low productivity</strong> and<strong> value addition</strong> while infants disproportionately increase their share and productivity</li>
<li>Dwarfs account for <strong>half</strong> of all the firms in organised manufacturing by number, their share in employment is 14.1% and in NVA is 7.6%.</li>
<li>There is a common perception that small firms generate a higher number of new jobs. But higher levels of job creation in small firms co-exist with job destruction, thereby leading to lower levels of net job creation.</li>
<li>The notion that small firms create jobs has prevailed because it is the young firms, who also happen to be small, create the most jobs.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/937image12.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/937image12.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="640" height="314" /></a><a href="http://www.drishtiias.com/images/uploads/433image20.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/433image20.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="446" height="263" caption="false" /></a></p>
<h2>Size vs Age Effect</h2>
<ul style="list-style-type: square;">
<li>Compared to small firms,<strong> young firms contribute significantly to employment</strong> and value addition.</li>
<li>Firm with less than 10 years accounts for about <strong>30% of employment</strong> and about <strong>half of NVA</strong> shows a <strong>downward trend</strong> with with an increase in firms age.</li>
<li>The average 40 years old firms in USA generate <strong>5 times</strong> more employment and are <strong>2.5 times</strong> more productive as compared to 40 years old Indian Firms.</li>
<li>The average employment level for 40-year old enterprises in the U.S. was more than <strong>7 times</strong> that of the employment when it was newly set up while it is just <strong>40% greater</strong> for Indian Firms.</li>
</ul>
<h2>The Role of Policy in Fostering Dwarfism</h2>
<ul style="list-style-type: square;">
<li><strong>Our policies protect and foster dwarfs rather than infants.</strong> The key distinction here is that while infant firms are small and young, dwarfs are small but old. Thus, while infant firms can grow to become large firms that are not only more productive and generate significant employment, dwarfs remain small and contribute neither to productivity nor to jobs.</li>
<li>These policies create a<strong> &lsquo;perverse&rsquo; incentive</strong> for firms to remain small. If the firms grow beyond the threshold, then they will be unable to obtain the said benefits. Therefore, entrepreneurs find it <strong>optimal to start a new firm</strong> to continue availing these benefits. But these small firms are not able to enjoy the benefits, which the large firms get from economy of scale and therefore remain unproductive.</li>
</ul>
<h3>Factors Contributing</h3>
<ul style="list-style-type: square;">
<li><strong>Labour Regulation</strong>
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-editorials/rebooting-labour-reforms" target="_blank" rel="noopener"><strong>India has a plethora of labour laws,</strong></a> regulations and rules, both at the centre and the state levels that govern the employer employee relationship.</li>
<li>The <strong>transaction cost</strong> inherent in complying with such regulation creates <strong>perverse incentives</strong> for firms to remain small.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/959image5.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/959image5.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="617" height="303" /></a></p>
<ul style="list-style-type: circle;">
<li><strong>Flexibility of Labour Laws</strong> creates a conducive environment for growth and employment generation.</li>
<li>Flexible States contribute <strong>disproportionately more</strong> to labour, capital and productivity while inflexibility promotes substitution of labour with capital.</li>
<li>Inflexible states are suffering in almost all dimensions, be it employment, capital attractiveness, productivity or wages.</li>
</ul>
<div class="border-bg">
<p><strong>Unique Case of Rajasthan</strong></p>
<p>Prior, to labour reforms of 2014-15, the growth story of Rajasthan has been similar to rest of India. But after reforms both number of <strong>large firms and Compound Annual Growth Rate</strong> increased significantly.</p>
</div>
<ul style="list-style-type: square;">
<li><strong>Small Scale Reservation Policy</strong>
<ul style="list-style-type: circle;">
<li>The Small Scale Industries (SSI) reservation policy was <strong>introduced in 1967</strong> to promote employment growth and income redistribution.</li>
<li>Policy promotes reservation of products for manufacturing for firms on the basis of size.</li>
</ul>
</li>
</ul>
<p style="text-align: center;"><a href="http://www.drishtiias.com/images/uploads/869image28.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/869image28.jpg" caption="false" width="611" height="302" /></a></p>
<p><strong>Impact of SSI</strong></p>
<ul style="list-style-type: square;">
<li>The policy resulted in substantial <strong>misallocation of resources</strong> and <strong>productivity losses</strong> which resulted in:
<ul style="list-style-type: circle;">
<li>Substantially lower the avg. capital to labour ratio.</li>
<li>The overall demand for labour and market wage rate are much lower due to lower capital accumulation.</li>
<li>It resulted in inefficient allocation of managerial talent.</li>
<li>The economic restrictions resulted in higher price for manufactured product which in-turn makes them uncompetitive in the global economy.</li>
</ul>
</li>
<li>It also created <strong>perverse incentives</strong> for firms to remain small and unproductive</li>
</ul>
<h2>De-Reservation of Products</h2>
<ul style="list-style-type: square;">
<li>The de-reservation of several product categories during the period 1997 to 2007 resulted as:
<ul style="list-style-type: circle;">
<li><strong>Job Creation:</strong> Net job creation was monotonically increased with firm size and was maximum among large firms (500+ employees)</li>
<li><strong>Job Destruction:</strong> Maximum for small firms.</li>
</ul>
</li>
<li>De-regulation suggested that infants, not dwarfs, contribute significantly to job creation and productivity in the economy.</li>
</ul>
<h2>Need for Review</h2>
<ul style="list-style-type: square;">
<li>Increased competition due to liberalization and globalisation.</li>
<li>Resulted in monopoly like situation in production of some consumer good by large firms.</li>
</ul>
<h2>Way Forward</h2>
<p>To unshackle MSMEs and thereby enable them to grow, all size-based incentives must have a sunset clause of less than ten years with necessary grand-fathering. Deregulating labour law restrictions can bring significant thrust to jobs creation. Following suggestions are made:</p>
<ul style="list-style-type: square;">
<li>Incentivizing <strong>&lsquo;infant&rsquo;</strong> firms rather than &lsquo;small&rsquo; firms</li>
<li>Re-orienting Priority Sector Lending</li>
<li><strong>Sunset Clause</strong> for Incentives</li>
<li>Focus on <strong>High Employment Elastic Sectors</strong> such as rubber manufacturing, plastic products, textiles and leather etc.</li>
<li>Focus on Service Sectors with high <strong>Spillover Effects. For example:</strong> developing tourist centres will have ripple effect on job creation in different areas.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Perverse Incentives:</strong> An incentive that produces an adverse consequence due to the actions undertaken to receive the incentive and are contrary to incentive maker.</li>
<li><strong>Sunset Clause:</strong> A provision of a law that it will automatically be terminated after a <strong>fixed period</strong> unless it is extended by law.</li>
<li><strong>Spillover Effect:</strong> It refers to events that occurred in <strong>one context</strong> affecting events in a <strong>different context.</strong></li>
<li><strong>Employment Elasticity:</strong> It is a measure of how <strong>employment</strong> varies with <strong>economic output.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li><strong>Small Firms</strong> in organised manufacturing accounts for <strong>85%</strong> (in terms of number) but contribute only <strong>23%</strong> and <strong>11.5%</strong> toward total <strong>employment</strong> and <strong>NVA</strong> respectively..
<ul style="list-style-type: circle;">
<li><strong>Dwarf firms,</strong> in terms of number, account for <strong>half</strong> of all the firms in organised manufacturing but contribute only <strong>14.1</strong>% and <strong>7.6</strong>% toward <strong>employment</strong> and <strong>NVA</strong> respectively.</li>
</ul>
</li>
<li><strong>Large Firms</strong> accounts for <strong>15%</strong> (in terms of number) in organised manufacturing but contributes <strong>77%</strong> and <strong>88.5%</strong> toward total <strong>employment</strong> and <strong>NVA</strong> respectively.</li>
<li>Firm less than 10 years accounts for about <strong>30% of employment</strong> and about <strong>half of NVA,</strong> which shows a <strong>downward trend</strong> with with an increase in firms age.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 120px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1.With the help of an example, briefly explain the impact of labour regulation on growth of firms in Indian economy.</strong></p>
<p><strong>Q2 Critically analyse the government policies to support small industries that stagnated growth and suggest policy measures to arrest the &lsquo;bane of dwarfism&rsquo;.</strong></p>
<p><strong>Q3.&lsquo;There is a perception that small firms create the largest number of jobs in Indian economy&rsquo;. Critically analyse.</strong></p>
</td>
</tr>
</tbody>
</table>
<p></p>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter: 4</span></h1>
<h1><span style="font-size: 24px;">Data Of the People, By the People, For the People</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter highlights the importance of data in today&rsquo;s digital economy and how democratisation of data for public welfare can transform India. It talks about issues related to data and suggests a pathway for building a resilient data ecosystem.</p>
<h2>The Economics of Data and Social Welfare</h2>
<ul style="list-style-type: square;">
<li>In recent years, the world has witnessed an information explosion. As people shift their day-to-day activities online, they leave digital footprints of these activities i.e. they produce data about themselves and store this data on public and private servers.</li>
<li>A few decades ago, gathering data requires a laborious survey but today it is accumulating online at a near-zero cost. Thus, the marginal cost of data has declined exponentially and the marginal benefit to society of using this data is higher than ever.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/587image27.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/587image27.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="483" height="263" caption="false" /></a></p>
<p style="text-align: center;"><a href="http://www.drishtiias.com/images/uploads/732image7.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/732image7.jpg" width="608" height="367" caption="false" /></a></p>
<div class="border-bg">
<p><strong>What is data?</strong></p>
<ul style="list-style-type: square;">
<li>It can be defined as an information in digital form that can be transmitted or processed.</li>
</ul>
<p><strong>How data is being generated?</strong></p>
<ul style="list-style-type: square;">
<li>As people increasingly use digital services to talk to each other, look up information, purchase goods and services, pay bills, transact in financial markets, file taxes, avail welfare services and engage with local leaders, data is being generated at an unprecedented scale.</li>
</ul>
<p><strong>Types of Data</strong></p>
<ul style="list-style-type: square;">
<li><strong>Anonymized Data:</strong> Data that is not linked to a specific individual but is still available at an individual level of granularity.</li>
<li><strong>Public Data:</strong> Data neither linked to an individual, nor at an individual level of granularity. Eg: Census.</li>
</ul>
<p><strong>Utility of data for government</strong></p>
<ul style="list-style-type: square;">
<li>enhance ease of living for citizens,</li>
<li>enable truly evidence-based policy,</li>
<li>improve targeting in welfare schemes,</li>
<li>uncover unmet needs,</li>
<li>integrate fragmented markets,</li>
<li>bring greater accountability in public services,</li>
<li>generate greater citizen participation in governance, etc</li>
</ul>
</div>
<h2>Why Must Data Be Treated as a Public Good?</h2>
<ul style="list-style-type: square;">
<li><a href="/to-the-points/paper3/Data-Localisation" target="_blank" rel="noopener"><strong>Data</strong></a> are generated by the people, of the people and should be used for the people.</li>
<li><strong>Data carries some of the characteristics of public goods.</strong>
<ul style="list-style-type: circle;">
<li>It is <strong>non-rivalrous,</strong> i.e., consumption by one individual does not reduce the quantum available for others.</li>
<li>It can be made <strong>excludable</strong>, i.e., it is possible to exclude people from accessing data, as many database firms do by erecting pay walls.</li>
</ul>
</li>
<li>Robust data mechanism system <strong>can empower every stakeholder in society,</strong> from the Central Government to a local government body, from citizens to the private sector.</li>
<li>It offers potential to <strong>reduce targeting error by minimising inclusion and exclusion errors</strong> in welfare schemes and has the potential to integrate markets nationally, reduce the need for middlemen, reduce prices for end consumers and increase returns for farmers.</li>
<li>Data is <strong>not being harnessed equally in all segments.</strong> Private companies lack their footprint in harnessing data for social sector because they do not internalize the benefit of social welfare, the optimal amount of data that the private companies gather and disseminate falls short of the social optimum.</li>
<li>As data for social welfare may not be generated by the private sector in optimal quantity, government needs to view data as a public good and make the necessary investments</li>
<li>However, there are some kinds of data &ndash; particularly data gathered by governments on issues of social interest &ndash; that should be democratised in the interest of social welfare.</li>
</ul>
<h2>Building the Data System</h2>
<ul style="list-style-type: square;">
<li>The Government of India collects four distinct sets of data about people&ndash;
<ul style="list-style-type: circle;">
<li><strong>Administrative Data:</strong> It is used mainly for non-statistical purposes and include birth and death records, crime reports, land and property registrations, vehicle registrations etc.</li>
<li><strong>Survey Data:</strong> It is used predominantly for statistical purposes.In these surveys, identity of participant is irrelevant and unreported. Eg: Census.</li>
<li><strong>Institutional Data:</strong> It refers to data held by public institutions about people. Eg:medical records in govt. hospitals, student information in govt. schools.</li>
<li><strong>Transactions Data:</strong> It is the data of an individual&rsquo;s transactions such as those executed on the United Payment Interface (UPI) or BHIM Aadhaar Pay</li>
</ul>
</li>
</ul>
<h3>Issues with Present Data System</h3>
<ul style="list-style-type: square;">
<li>Currently, <a href="/daily-updates/daily-news-editorials/data-localisation-and-undivided-internet" target="_blank" rel="noopener"><strong>data</strong></a> collection in India is <strong>highly decentralised.</strong> For each indicator of social welfare, responsibility to gather data lies with the corresponding union ministry and its state counterparts.
<ul style="list-style-type: circle;">
<li><strong>For example,</strong> data on an individual&rsquo;s vehicle registrations is maintained by one ministry, whereas the same individual&rsquo;s property ownership records lie with another ministry. When these different pieces could be put together, the whole is greater than the sum of the parts.</li>
</ul>
</li>
<li><strong>Administrative</strong> and <strong>Survey data</strong> are <strong>comprehensively</strong> and <strong>robustly</strong> maintained while <strong>transactional</strong> and <strong>institutional data</strong> are in a <strong>fledgling state.</strong></li>
<li><strong>The lack of common identifiers</strong> i.e single identity for every administrative unit. Every ministries or department uses different codes for the same administrative units.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/505image26.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/505image26.jpg" width="812" height="292" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li>Therefore, there is a need to integrate the separate dataset.</li>
<li>The efficacy of integrated system relies on three critical features.
<ul style="list-style-type: circle;">
<li>First, the <strong>ministries should be able to view the complete database,</strong> while they can manipulate only those data fields for which it is responsible.</li>
<li>Second, <strong>updating of data</strong> should happen in real time and in such a way that one ministry&rsquo;s engagement with the database does not affect other ministries&rsquo; access.</li>
<li>Third and most importantly, the <strong>database should be secure</strong> with absolutely no room for tampering.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Initiatives for Integrating Data</strong></p>
<ul style="list-style-type: square;">
<li><strong>Local Government Directory:</strong>
<ul style="list-style-type: circle;">
<li>It is an initiative of the <strong>Ministry of Panchayati Raj</strong></li>
<li>It aims to address the problem of common identifier.</li>
<li>It maps each land region entity to a local government body (like villages with their respective gram panchayats) and assigns location codes compliant with Census 2011.</li>
</ul>
</li>
<li><strong>Samagra Vedika Initiative:</strong>
<ul style="list-style-type: circle;">
<li>It is an initiative of Telangana government.</li>
<li>It links around 25 existing government datasets using a common identifier &ndash; the name and address of an individual.</li>
<li>Seven categories of information about each individual were linked in this aggregation exercise &ndash; crimes, assets, utilities, subsidies, education, taxes and identity information. Each individual was then further linked to relatives such as spouse, siblings, parents and other known associate.</li>
</ul>
</li>
</ul>
</div>
<h2>Eliminating all Privacy Concerns</h2>
<ul style="list-style-type: square;">
<li>The prospect of empowering the government with such comprehensive, exhaustive information about every citizen may sound alarming at first. However, this is far from the truth.
<ul style="list-style-type: circle;">
<li>Large quantities of data already exist in government records, and the objective is to use this data in a more efficient way.</li>
<li>People can always opt out of divulging data to the government, where possible.</li>
<li>If there is no viable private market choice of certain public services, the choice to share the individually linked data from such services will always be with the citizen under the <strong>Data Access Fiduciary Architecture.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Data Access Fiduciary Architecture</strong></p>
<ul style="list-style-type: square;">
<li>Each department of the government is responsible for making available the data they hold as a data provider.</li>
<li>These departments must take care to appropriately treat private data and public data with the standards they require.</li>
<li>This data is then made available through a Data Access Fiduciary to the Data Requestors. Data Requestors may be public or private institutions but can only access the data if they have appropriate user consent.</li>
<li>The Data Access Fiduciary themselves have no visibility on the data due to end-to-end encryption.</li>
</ul>
</div>
<h2>Transforming India&rsquo;s Data Infrastructure</h2>
<ul style="list-style-type: square;">
<li>Harnessing data consists of four steps &ndash; gathering, storing, processing and disseminating data, each of which offers room for improvement in India.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/454image16.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/454image16.jpg" width="497" height="319" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<h2>Applications</h2>
<ul style="list-style-type: square;">
<li>A robust data backbone can empower every stakeholder in society, from the Central Government to a local government body, from citizens to the private sector
<ul style="list-style-type: circle;">
<li><strong>Government:</strong> It can improve targeting in welfare schemes and subsidies by reducing both inclusion and exclusion errors and can significantly improve public service delivery.</li>
<li><strong>Private Sector:</strong> Within the statutory limits, data can be monetised to private sector to ease the pressure on government finances and while it carries huge potential to transform health and education sector.</li>
<li><strong>Citizens:</strong> They are the largest beneficiary of this data revolution. For eg: DigiLocker makes all their documents available, in a verified format in one place on the cloud.
<ul style="list-style-type: disc;">
<li>The Reserve Bank of India has announced the Non-Banking Financial Company-Account Aggregator (NBFC-AA) which enables the users to pull their financial data spreading along various institutions.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h2>Way Forward</h2>
<p>A truly digital ecosystem is achievable only when all layers of information that constitute the ecosystem are digitized. The benefits of creating data as a public good can be generated within the legal framework of data privacy. The data and information highway must be viewed as equally important infrastructure as the physical highways which can help India leapfrog to utilise the benefits of technological advances for the welfare of its people.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>The <strong>marginal cost</strong> of data has <strong>declined exponentially</strong> while the <strong>marginal benefit</strong> to society of using this data is higher than ever.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 26px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Data can be used as a ladder for optimum social welfare. Critically analyse the implication of treating data as &lsquo;public good&rsquo;.</strong></p>
<p><strong>Q2. Explain with the help of an example, how India&rsquo;s data infrastructure can be transformed.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter: 5</span></h1>
<h1><span style="font-size: 24px;">Ending Matsyanyaya: How to Ramp up Capacity in the Lower Judiciary</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter deals with judicial administration in the country especially <strong>District and Subordinate Courts (D&amp;S courts)</strong> and evaluate its performance on parameters such as disposal time, pendency time, case types and case clearance rate. The chapter further analyses the requirement of additional judges and efficiency gains across the various levels of courts to achieve <strong>100%</strong> clearance rate as well as to eliminate the stock of pendency in the next <strong>five years.</strong></p>
<h2>Introduction</h2>
<ul style="list-style-type: square;">
<li>There are about <strong>3.5 crore</strong> <a href="/loksabha-rajyasabha-discussions/the-big-picture-strengthening-judicial-apparatus" target="_blank" rel="noopener"><strong>cases pending in the judicial system</strong></a>, especially in district and subordinate courts</li>
<li>The <strong>Preamble to the Constitution of India</strong> defines that the first role of the State is &lsquo;to secure Justice i.e,social, economic, and political&rsquo; for all its people.</li>
<li>Enforcement of contracts &amp; dispute resolution have direct bearing on economic success &amp; prosperity. Therefore, contract enforcement and dispute resolution remains the biggest constraint to ease of doing business.</li>
</ul>
<div class="border-bg"><strong>Indian Judicial System at Glance</strong>
<ul style="list-style-type: square;">
<li><strong>Pendency</strong>
<ul style="list-style-type: circle;">
<li>The pendency of a case on a given date is the <strong>time since the date of filing.<a href="http://www.drishtiias.com/images/uploads/334image24.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/334image24.jpg" style="float: right;" width="321" height="303" caption="false" /></a></strong></li>
<li>More than <strong>64%</strong> of all cases are pending for more than 1 year.</li>
<li><strong>Odisha, Bihar, West Bengal, Uttar Pradesh and Gujarat</strong> have <strong>higher</strong> average pendency for both civil and criminal cases as compared to the national averages.</li>
<li><strong>Punjab</strong> and <strong>Delhi</strong> have the <strong>least</strong> average pendency of cases.</li>
</ul>
</li>
<li><strong>Disposal</strong>
<ul style="list-style-type: circle;">
<li>Disposal time is measured as the time span between the date of filing and the date when the decision is passed.</li>
<li>Nearly, 74.7% of the civil cases and 86.5% of the criminal cases are disposed off within three years.</li>
<li><strong>Bihar, Odisha &amp; WB</strong> have <strong>higher</strong> average time than the <strong>national average</strong> for both civil and criminal cases.</li>
<li><strong>Punjab and Delhi</strong> have the <strong>lowest</strong> average disposal time.</li>
<li>The average disposal time for civil and criminal cases in Indian D&amp;S courts in 2018 was <strong>4.4 fold</strong> and <strong>6 fold higher</strong> respectively when compared with the average of <strong>Council of Europe members (2016).</strong></li>
</ul>
</li>
<li><strong>Case Clearance Rate (CCR)</strong>
<ul style="list-style-type: circle;">
<li>The Case Clearance Rate (CCR) is the ratio of the number of cases disposed off in a given year to the number of cases instituted in that year, expressed as a percentage.</li>
<li>CCR had increased from <strong>86.1%</strong> in 2015 to <strong>90.5%</strong> in 2017, but then declined to <strong>88.7%</strong> in 2018.</li>
<li>CCR for civil and criminal cases in India was <strong>94.76%</strong> and <strong>87.41%</strong> respectively in 2018 while the <strong>Council of European (CoE)</strong> member has already achieved the CCR above 100% in 2016 for both civil and criminal cases.</li>
</ul>
</li>
</ul>
</div>
<h2>Clearing the Legal Logjam</h2>
<ul style="list-style-type: square;">
<li><a href="/current-affairs-news-analysis-editorials/news-editorials/17-11-2018" target="_blank" rel="noopener"><strong>A well-functioning legal system</strong></a> is the need of the hour for India for its <strong>potential economic and social multiplier effect.</strong> The key issues which need to be dealt urgently to make judiciary more efficient are:
<ul style="list-style-type: circle;">
<li>Achieve 100% CCR to prevent further accumulation of cases.</li>
<li>Clearing the existing pendency of cases.</li>
</ul>
</li>
<li>Using the simple input-output model at current efficiency, following calculations have been made:</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #05bbf7;"></td>
<td style="width: 25%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Supreme Court</strong></span></td>
<td style="width: 25%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>High Court</strong></span></td>
<td style="width: 25%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>D&amp;S Court</strong></span></td>
</tr>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #dcf5f4;"><strong>Pendency</strong></td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">56.2 Lakh</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">40.22 Lakh</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">3.04 Crore</td>
</tr>
<tr style="height: 35px;">
<td style="width: 25%; height: 35px; background-color: #dcf5f4;"><strong>Case Clearance Rate</strong></td>
<td style="width: 25%; height: 35px; background-color: #dcf5f4;">98%</td>
<td style="width: 25%; height: 35px; background-color: #dcf5f4;">88%</td>
<td style="width: 25%; height: 35px; background-color: #dcf5f4;">89%</td>
</tr>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #dcf5f4;"><strong>Annual Disposal Rate (per judge)</strong></td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">1,179 case</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">2,348 case</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">746 case</td>
</tr>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #dcf5f4;"><strong>Additional Judges required to achieve 100% Clearance in a year</strong></td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">1</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">93</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">2279</td>
</tr>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #dcf5f4;"><a href="/daily-updates/daily-news-analysis/increasing-the-strength-of-sc-judges" target="_blank" rel="noopener"><strong>Additional Judges</strong></a> <strong>required to clear all backlog in 5 years.</strong></td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">8</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">361</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">8,152</td>
</tr>
</tbody>
</table>
<h2><a href="/daily-updates/daily-news-editorials/wish-list-for-judiciary" target="_blank" rel="noopener">Making Indian Courts More Productive</a></h2>
<p>Efficiency and vacancies are the two crucial issues affecting the performance of Indian Judicial System and there is ample scope for improvement. Apart from them, some of the suggestions to improve the performance has been discussed below.</p>
<ul style="list-style-type: square;">
<li><strong>Increasing the number of working days:</strong> Indian courts close down for significant periods due to vacations as Supreme Court works only for 190 days in a year. Significant improvement can be made in the performance of Supreme Court and some High Courts while lower court are most likely to remain unaffected as their average working days are almost the same as government departments.</li>
<li><strong>Establishment of Indian Court and Tribunal Services:</strong> Most judicial reforms tend to focus only on the quality and quantity of judges, but a major problem lies with the quality of the administration of the court system. The main responsibility for administration in Indian courts is assigned to the <strong>Chief Judicial Officer</strong> which is not conducive to the time demands of his judicial duties. The major roles to be played by ICTS would be:
<ul style="list-style-type: circle;">
<li>provide administrative support functions needed by the judiciary</li>
<li>identify process inefficiencies and advise the judiciary on legal reforms</li>
<li>implement the process re-engineering.</li>
</ul>
</li>
<li><strong>Deployment of technology</strong>
<ul style="list-style-type: circle;">
<li><strong><a href="/daily-updates/daily-news-analysis/e-courts-3" target="_blank" rel="noopener">eCourts Project</a></strong>
<ul style="list-style-type: disc;">
<li>Implemented by Ministry of Law &amp; Social Justice under National e-governance mission.</li>
<li>Digitisation of district and subordinate courts as well as upgradation of ICT at the higher level.</li>
</ul>
</li>
<li><a href="/loksabha-rajyasabha-discussions/the-big-picture-pending-cases:-way-forward" target="_blank" rel="noopener"><strong>National Judicial Data Grid</strong></a>
<ul style="list-style-type: disc;">
<li>Monitoring tool to identify, manage and reduce pendency of cases.</li>
</ul>
</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Matsyanyaya Theory :</strong> In periods of chaos, when there is no ruler, <strong>the strong devour the weak,</strong> just as in periods of drought big fish eat little fish. Thus, the need for a ruler was viewed as absolute. Simply, we call it <strong>law of fish/jungle.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li><strong>D&amp;S courts</strong> accounts for <strong>87.54%</strong> of all pending cases.
<ul style="list-style-type: circle;">
<li>The pendency of <strong>criminal cases (71.62%)</strong> is about 2.5 fold higher than <strong>civil cases(28.38)</strong> and criminal cases also have lower <strong>CCR</strong> in <strong>D&amp;S courts</strong></li>
</ul>
</li>
<li>CCR had increased from <strong>86.1%</strong> in 2015 to <strong>90.5%</strong> in 2017, but then declined to 88.7% in 2018.</li>
<li><strong>Gujarat &amp; Chhatisgarh</strong> have clearance rate of <strong>above 100%</strong> in 2018.</li>
</ul>
<p><strong>Note: Focus on trends and not on exact figures.</strong></p>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 120px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. &ldquo;The single biggest constraint to ease of doing business in India is now the ability to enforce contracts and resolve disputes.&rdquo; In the context of the above statement, examine how the legal logjam can be cleared in our country.</strong></p>
<p><strong>Q2. Economic success and prosperity of the country are closely linked to it&rsquo;s judicial and legal landscape. Discuss the implications of pendency of cases on the economy?</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"><br />Chapter: 6</span></h1>
<h1><span style="font-size: 24px;">How does Policy Uncertainty affect Investment?</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter deals with policy uncertainty and its impact on investment and economic activity in the country and suggest policy recommendations for decoupling policy uncertainty in Indian economy.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li><strong>Economic Policy Uncertainty (EPU) in India has reduced significantly</strong> over the last decade.<a href="http://www.drishtiias.com/images/uploads/410image2.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/410image2.jpg" style="float: right;" caption="false" width="222" height="149" /></a></li>
<li>Inspite of the increase in economic policy uncertainty in major countries, <strong>India has witnessed a continued decrease in economic policy uncertainty since 2015.</strong></li>
<li><strong>EPU correlates strongly with the macroeconomic environment, business conditions and other economic variables that affect investment.</strong></li>
<li>Surges in economic policy uncertainty <strong>increases the systematic risk, and thereby the cost of capital in the economy</strong></li>
<li>Increase in EPU also dampens investment.</li>
</ul>
<h2>Economic Policy Uncertainty</h2>
<p><a href="http://www.drishtiias.com/images/uploads/137image15.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/137image15.jpg" style="float: right;" caption="false" width="312" height="323" /></a></p>
<ul style="list-style-type: square;">
<li>The policy making relies on <strong>judgement</strong> which involves <strong>discretion</strong> and such discretion generates uncertainty which can impact economic activity.</li>
<li>To gauge the policy impact, it is critical to understand the difference between<strong> risk</strong> and <strong>uncertainty</strong> as both fundamentally affect the economic activity.</li>
<li><strong>Risk</strong> can be <strong>quantified</strong> while <strong>uncertainty</strong> is inherently <strong>hard to measure.</strong></li>
<li>However, advances in data analytics have made it possible to quantify uncertainty.</li>
<li>Globally, an EPU index has been developed to measure economic policy uncertainty.</li>
</ul>
<h3>How Economic Policy Uncertainty affect Investment?</h3>
<ul style="list-style-type: square;">
<li>Investment is forward-looking activity and future expectations plays a critical role in decision-making.</li>
<li>Investors prefer to invest in projects with high returns and low risks.</li>
<li>According to the <strong>Capital Asset Pricing model,</strong> the returns on investment correlates positively with the systematic risk.</li>
<li>An increase in uncertainty in the economy increases this systematic risk and thereby increases the rate of return required to justify the investment.</li>
<li>As a result, projects that generate a return lower than this required return become unviable when uncertainty increases in the economy.</li>
<li>Also, as fixed investment is <strong>irreversible,</strong> uncertainty exacerbates risk aversion, increases the premium demanded for assuming risk, and eventually dampens investment.</li>
</ul>
<h3>Economic Policy Uncertainty in India</h3>
<ul style="list-style-type: square;">
<li>As per the EPU Index, economic policy uncertainty peaked in India during the late 2011 and early 2012 and has since been <strong>declining</strong> with <strong>intermittent increases</strong> in between and peaking during taper tantrum period of 2013.</li>
<li>In spite of increasing global uncertainty due to factors such as increasing trade tensions, Brexit, slower world growth; India&rsquo;s economic policy uncertainty has been falling and is more stable.</li>
<li>Global Financial Crisis had direct bearing on the<strong> fixed investment rate</strong> which fell from <strong>37% in 2007-08 to 27%</strong> in the following 10 years and had recently improved to <strong>28%.</strong></li>
<li>The continued resolution of the <strong>twin balance sheet problem</strong> following implementation of <a href="/loksabha-rajyasabha-discussions/in-depth-insolvency-and-bankruptcy-code-act" target="_blank" rel="noopener"><strong>Insolvency and Bankruptcy Code 2016</strong></a> and <strong>recapitalization of banks</strong> has helped to promote investment in the country.</li>
</ul>
<h2>Policy Recommendations</h2>
<p>The following policy changes are recommended:</p>
<ul style="list-style-type: square;">
<li><strong>First,</strong> policymakers&rsquo; must make their actions predictable, provide forward guidance on the stance of policy, and reduce ambiguity/arbitrariness in policy implementation.</li>
<li><strong>Second,</strong> &ldquo;what gets measured gets acted upon&rdquo;. So, economic policy uncertainty index must be tracked at the highest level on a quarterly basis.</li>
<li><strong>Finally,</strong> quality assurance of processes in policy making must be implemented in government via international quality certifications.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Taper Tantrum:</strong> It refers to the <strong>2013 collective reactionary panic</strong> that triggered a spike in U.S. Treasury yields, after investors learned that the Federal Reserve was slowly putting the breaks on its quantitative easing (QE) program.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li><strong>Economic Policy Uncertainty</strong> in India has <strong>reduced significantly</strong> over the <strong>last decade.</strong></li>
<li><strong>Gross Fixed Capital Formation</strong> as a proportion of GDP (fixed investment rate) fell from <strong>37% in 2007-08 to 27% in 2017</strong> and recently improved to <strong>28%.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 22px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Q1. Briefly explain economic policy uncertainty. What factors led to a decrease in policy uncertainty in India since 2015.</strong></li>
<li><strong>Q2. Examine how policy uncertainty impacts an economy.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1></h1>
<h1><br /><span style="font-size: 24px;">Chapter: 7</span></h1>
<h1><span style="font-size: 24px;">India&rsquo;s Demography at 2040: Planning Public Good Provision for the 21st Century</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter gave an insightful view of demography of India and projects the changes that are expected in the next two decades. It also laid out a future strategy to deal with demographic changes.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>India will witness a <strong>sharp slowdown</strong> in population growth in the next <strong>two decades.<a href="http://www.drishtiias.com/images/uploads/999image4.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/999image4.jpg" width="342" height="201" caption="false" style="float: right;" /></a></strong></li>
<li>India as a whole will enjoy the<strong><a href="/to-the-points/paper1/india-s-demographic-dividend" target="_blank" rel="noopener"> &ldquo;demographic dividends&rdquo;</a> </strong>phase while some states will start transitioning to an ageing society by the 2030&rsquo;s.</li>
<li><a href="/daily-updates/daily-news-analysis/indias-falling-fertility-rate" target="_blank" rel="noopener"><strong>Total Fertility Rate (TFR)</strong></a> had shown a <strong>steady decline</strong> since the mid 1980&rsquo;s and expected to be below replacement level by 2021 (after adjusted for skewed gender ratio).</li>
<li>India&rsquo;s working age population will grow by roughly <strong>9.7 million per year by 2021-31 and 4.2 million by 2031-41.</strong></li>
<li>The proportion of elementary school going children i.e 5-14 age group will witness a significant <strong>decline.</strong></li>
</ul>
<h2>Recent Demographic Trends</h2>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/population-explosion-and-fertility-rates" target="_blank" rel="noopener"><strong>Population growth in India</strong></a> has been slowing in recent decades from an annual growth rate of 2.5% during 1971-81 to an estimated 1.3% as of 2011-16 .</li>
<li>All major states have <strong>witnessed a marked deceleration in population growth</strong> particularly high population growth states like Bihar, Uttar Pradesh, Rajasthan and Haryana.<a href="http://www.drishtiias.com/images/uploads/220image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/220image3.jpg" style="float: right;" width="390" height="229" caption="false" /></a></li>
<li>It has been mainly due to <a href="/daily-updates/daily-news-analysis/inverted-j-pattern-in-education-and-fertility" target="_blank" rel="noopener"><strong>steady decline in India&rsquo;s TFR</strong></a> which halved from <strong>4.5 in 1984 to 2.3 as of 2016</strong> and is now below replacement level by fertility in 13 out of the 22 major states which suggest that India has entered the phase of <strong>&ldquo;demographic dividend&rdquo;.</strong></li>
<li>Himachal Pradesh, Punjab, West Bengal and Maharashtra along with Southern states have made rapid advancement in demographic transition, with
<ul style="list-style-type: circle;">
<li>TFR already below replacement level fertility</li>
<li>population growth mainly due to momentum</li>
<li>more than 10% of the population over the age of 59 and</li>
<li>at most one-third of the population below the age of 20.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Total Fertility Rate :</strong> It refers to the <strong>total number of children born</strong> or likely to be born to a woman of <strong>child-bearing age</strong> in her lifetime. It is highest for Bihar followed by UP and lowest for Delhi</p>
<p><a href="http://www.drishtiias.com/images/uploads/371image17.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/371image17.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="508" height="302" caption="false" /></a></p>
<p><strong>Replacement Level Fertility:</strong> TFR of <strong>2.1</strong> children per woman is called the replacement level fertility, which is the average number of children a woman would need to have in order for the population to replace itself.</p>
<p><strong>Effective Replacement Level Fertility:</strong> Replacement Level Fertility adjusted for skewed sex ratio.</p>
</div>
<h2>Projecting National and State Level Population (2021-2041)</h2>
<p>Following projections and analysis has been done for 22 major states which accounts for 98.4% of India&rsquo;s population as per Census 2011.</p>
<ul style="list-style-type: square;">
<li><strong>Declining Fertility Rate</strong>
<ul style="list-style-type: circle;">
<li><strong>National Level:</strong> TFR will continue to <strong>decline rapidly</strong> and will lie below replacement level fertility at 1.8 as early as 2021 and is expected to stabilize thereafter for some time at around 1.7.</li>
<li><strong>State Level:</strong> All states are expected to be below replacement level fertility by 2031.
<ul style="list-style-type: disc;">
<li>States such as <strong>WB, Punjab, Maharashtra, HP and southern states,</strong> which are already below replacement level are expected to reach lower level of 1.5-1.6.</li>
</ul>
</li>
<li><strong>Sex Ratio:</strong> Sex ratio at birth remains <strong>higher</strong> than the <strong>normal range of 1.02-1.076</strong> at the <strong>national level</strong> and in<strong> 17</strong> out of 22 major states.
<ul style="list-style-type: disc;">
<li>The average value of sex ratio at birth is around <strong>1.05,</strong> i.e. 105 boys born per every 100 girls which means that there are more males than females.</li>
<li>This implies that the required <strong>replacement level fertility</strong> at the national and state level is <strong>higher</strong> than the usual benchmark of <strong>2.1</strong>, i.e., due to the skewed sex ratio, a woman would have to give birth to more than 2.1 children in order for the population to replace itself.</li>
<li>The effective replacement level fertility after accounting for skewed sex ratio could be around <strong>2.15-2.2</strong> for India with a sex ratio of <strong>1.11</strong></li>
</ul>
</li>
<li><strong>Reason for Declining Fertility</strong>
<ul style="list-style-type: disc;">
<li>rising female education</li>
<li>postponement of marriage</li>
<li>access to family planning methods and</li>
<li>continued decline in infant mortality.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Population Growth Trajectory</strong>
<ul style="list-style-type: circle;">
<li><strong>National Level:</strong> India&rsquo;s population growth will <strong>continue to slow rapidly</strong> over the next two decades, <strong>growing less than 1%</strong> during 2021- 31 and under 0.5% during 2031-41. However, the positive population growth will be due to population momentum and the continued rise in life expectancy.</li>
<li><strong>State Level:</strong> States ahead in the demographic transition will see a <strong>continued deceleration</strong> in population growth and reach near-zero <strong>growth rates</strong> by 2031-41. Population will start declining in Tamil Nadu by 2031.
<ul style="list-style-type: disc;">
<li>States lagging behind in demographic transition will also witness a marked slowdown. <strong>Bihar</strong> and <strong>UP</strong> will account for over <strong>40% increase.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Changing Age Composition</strong>
<ul style="list-style-type: circle;">
<li><strong>Young Population (0-19 year):</strong> It has started declining from <strong>41% in 2011</strong> and expected to reach <strong>25% by 2041.</strong></li>
<li><strong>Elderly Population (60 and above):</strong> It will rise steadily and expected to double from 8.6% in 2011 to 16% by 2041.</li>
<li>India&rsquo;s demographic dividend will <strong>peak around 2041,</strong> when the share of <strong>working-age,</strong> i.e.<strong> 20-59</strong> years, population is expected to hit <strong>59%.</strong></li>
</ul>
</li>
<li><strong>Implication for Working-Age Population</strong>
<ul style="list-style-type: circle;">
<li>India&rsquo;s working-age population will rise by <strong>96.5 million during 2021-31</strong> and by <strong>41.5 million during 2031-41.</strong></li>
<li>As per the <strong>NSSO</strong> <a href="/daily-updates/daily-news-analysis/state-divide-in-unemployment" target="_blank" rel="noopener"><strong>Periodic Labour Force Survey 2017-18,</strong></a> India&rsquo;s labour force participation rate for the age-group 15-59 years is around <strong>53% (80% for males, 25% for females)</strong> and following this trajectory India needs to create jobs at the rate of 9.7 million per year during 2021-31 and 4.2 million per year during 2031-41.</li>
<li>Working-age population will start declining in 11 out of the 22 major states during 2031-41, including in the southern states, Punjab, Maharashtra, West Bengal and Himachal Pradesh.</li>
<li>It will continue to rise through 2041 in states lagging behind in the demographic transition, particularly Bihar, Uttar Pradesh, Madhya Pradesh and Rajasthan.</li>
</ul>
</li>
</ul>
<h2>Policy Implication of Ageing</h2>
<ul style="list-style-type: square;">
<li><strong>Elementary Schools</strong>
<ul style="list-style-type: circle;">
<li>The number of school-going children (5-14 year) in India will <strong>decline</strong> by 18.4% between 2021 and 2041.</li>
<li>The number of <strong>schools per capita</strong> will <strong>rise</strong> significantly in India across all major states even if no more schools are added.</li>
<li>The states need to pay greater attention in <strong>consolidating/merging</strong> schools to make them viable rather than building new ones and states will need a policy shift from quantity to quality and efficiency of education.</li>
</ul>
</li>
<li><strong>Healthcare Facilities</strong>
<ul style="list-style-type: circle;">
<li>The per capita availability of hospital beds will <strong>sharply reduce</strong> in India across all major states. India already fares poorly relative to other emerging and developed economies in terms of per capita availability of hospital beds.</li>
<li>States which are in the advanced stage of demographic transition, greater provision of <a href="/to-the-points/Paper2/elderly-in-india" target="_blank" rel="noopener"><strong>geriatric care</strong></a> are required due to rapidly changing age structure.</li>
<li>Availability of specific data is the major hindrance in planning for the provision of medical facilities and will require a greater emphasis.</li>
</ul>
</li>
<li><strong>Retirement Age</strong>
<ul style="list-style-type: circle;">
<li>India&rsquo;s healthy life expectancy at the age of 60, which is the average number of years a 60-year old person is expected to live in full health taking into account the impact of diseases and injuries, has <strong>continually increased</strong> over the years for both men and women.</li>
<li>The retiring workforce with increasing life expectancy is increasing the burden of pensions.</li>
<li>Therefore, experience from other emerging and developed countries suggest that increasing retirement age would ease pressure on pension funding.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li><strong>TFR</strong> had <strong>steadily declined</strong> in India since 1980&rsquo;s.<a href="http://www.drishtiias.com/images/uploads/925image14.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/925image14.jpg" width="284" height="167" style="float: right;" caption="false" /></a></li>
<li>The share of <strong>India&rsquo;s young (0-19 years)</strong> population has <strong>already started to decline</strong> and is projected to drop from as high as 41 per cent in 2011 to 25 per cent by 2041.</li>
<li>The elementary school going children <strong>(5-14 age group)</strong> has <strong>already begun declining</strong> in India and across <strong>all major states</strong> except Jammu &amp; Kashmir.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 17px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. How demographic changes are likely to impact economic scenario in the country.</strong></p>
<p><strong>Q2. India's demographic dividends could be a boon or bane. Discuss the policy measures required to encash the benefits of demographic dividends?</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter:8</span></h1>
<h1><span style="font-size: 24px;">From Swachh Bharat to Sundar Bharat via Swasth Bharat : An Analysis of the Swachh Bharat Mission</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter focuses on Gandhi's vision of clean India and highlights our phenomenal journey towards sanitation through Swachh Bharat Mission. The mission emphasizes on behavioural change as its key component and highlights its impact on various health outcomes.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>The <a href="/daily-updates/daily-news-analysis/Swachh%20Bharat%20Mission" target="_blank" rel="noopener"><strong>Swachh Bharat Mission (SBM)</strong> </a>was initiated in 2014 to achieve universal sanitation coverage by October 2, 2019 i.e. 150<sup>th</sup> birth anniversary of Gandhiji.</li>
<li>The flagship programme is the largest cleanliness drive as well as an attempt to effect behavioural change in the world ever.</li>
<li>All over the country, around <strong>9.5 crore</strong> toilets have been built and more than <strong>5.6 lakh</strong> villages have been declared Open Defecation Free (ODF).</li>
<li>Till June 2019, <strong>30 States/ UT&rsquo;s</strong> are <strong>100%</strong> covered with Individual Household Latrine (IHHL).</li>
<li>The evidence suggests that SBM has significantly <strong>improved health outcomes</strong> like <strong>reduced</strong> diarrhoea and malaria among children below 5 years, still-birth and low birth weight and these outcomes are more pronounced in districts where <strong>IHHL</strong> coverage was lower in 2015.</li>
<li>Financial savings from a household toilet exceed the financial costs to the household by <strong>1.7 times</strong> on average and <strong>2.4 times</strong> for poorest households</li>
<li>Poor sanitation costs India around<strong> 5.2 per cent of its GDP.</strong></li>
</ul>
<h2>Swachh Bharat Mission-Gramin (SBM)</h2>
<ul style="list-style-type: square;">
<li>Under SBM, an incentive of <span>₹</span><strong>12,000</strong> is provided for construction of <strong>Individual Household Latrines (IHHL)</strong> to eligible beneficiaries in <strong>rural areas</strong> and covers for provision of water storage.</li>
<li>A total of <strong>51,314.3 crore</strong> has been allocated since <strong>2014-15</strong> for SBM, out of which, <strong>48,909.2 crore (95.3%)</strong> has been released.</li>
</ul>
<h3>Multi-Facet Approach of SBM</h3>
<ul style="list-style-type: square;">
<li><strong>Community Participation:</strong> It promotes ownership and sustained use by financially involving beneficiaries/ communities.</li>
<li><strong>Flexibility in Choice:</strong> It provides flexibility to the poor/disadvantaged families to upgrade their toilets on the basis of their need and financial suitability.</li>
<li><strong>Capacity Building:</strong> It augments the institutional capacity of districts to change behaviour at the grassroot level and strengthen the capacities of implementing agencies so that the programme could be rolled in a time-bound manner and collective outcomes could be measured.</li>
<li><strong>Instil Behaviour Change:</strong> It provides <strong>incentives to State-level institutions</strong> to implement activities for behavioural change which emphasizes on awareness generation, triggering mind-set changes and demand generation for sanitary facilities in houses, schools, anganwadis, places of community congregation and for solid and liquid waste management activities.</li>
<li><strong>Broad-based Engagement: Swachh Bharat Kosh</strong> set up to encourage <strong><a href="/daily-updates/daily-news-analysis/injeti-srinivas-committee-report-on-csr" target="_blank" rel="noopener">Corporate Social Responsibility</a></strong> and accept contributions from private organizations, individuals and philanthropists.</li>
<li><strong>Use of Technology:</strong> Many mobile applications have been launched to both government and private individuals to enable citizens to keep a check on the availability of toilets and nearly 90% of toilets have already been geo-tagged.</li>
</ul>
<h3>Outcomes of SBM</h3>
<ul style="list-style-type: square;">
<li>Under SBM, around <strong>98.9% of India</strong> has been covered.
<ul style="list-style-type: circle;">
<li><strong>Open Defecation Free (ODF):</strong> Till May 2019, around 93.41% of villages and 88.41% (618) districts have been declared ODF.
<ul style="list-style-type: disc;">
<li><strong>Goa</strong> has the <strong>lowest ODF coverage</strong> followed by <strong>Odisha, Telangana &amp; Bihar</strong> while <strong>WB</strong> and <strong>Sikkim</strong> are close to <strong>100%</strong> ODF coverage.</li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>ODF</strong> would mean the<strong> termination of faecal-oral transmission</strong> and defined by</p>
<ul style="list-style-type: square;">
<li>no visible faeces found in the environment/village and</li>
<li>every household as well as public/community institution(s) using safe technology option for disposal of faeces.</li>
</ul>
</div>
<ul style="list-style-type: circle;">
<li><strong>Individual Household Latrines (IHHL): Most</strong> of the states have achieved the status of <strong>100%</strong> IHHL coverage.
<ul style="list-style-type: disc;">
<li><strong>Goa</strong> has <strong>lowest</strong> IHHL coverage followed by Odisha and Telangana.</li>
</ul>
</li>
<li><strong>Behavioural Change:</strong> According to the <strong>National Annual Rural Sanitation Survey (NARSS) 2018-19,</strong> conducted by an independent Verification Agency (IVA) has found:
<ul style="list-style-type: disc;">
<li>93.1% households had access to toilets</li>
<li>96..5% of households in rural India had access to toilets and use them.</li>
<li>confirmed the ODF status of 90.7% of villages.</li>
</ul>
</li>
<li><a href="/daily-news-editorials/solid-waste-management-in-india" target="_blank" rel="noopener"><strong>Solid and Liquid Waste Management:</strong></a> Many states have undertaken various activities such as construction of waste collection centres, menstrual hygiene management activities, installation of bio-gas plants, construction of compost pits, installation of dustbins etc.</li>
<li><strong>Social Change:</strong> This mission acts as a <strong>driver for eliminating the gender disparity</strong> through the construction of gender-specific latrines in public areas such as schools, roads and parks.
<ul style="list-style-type: disc;">
<li>This public movement will have the indirect positive impact on society by increasing the <strong>enrolment ratio of girls</strong> in schools and improving health standards</li>
<li>It is also aligned with the 2030 global <strong>sustainable development agenda</strong> and <a href="/loksabha-rajyasabha-discussions/in-depth-indias-sustainable-development-goals" target="_blank" rel="noopener"><strong>SDGs</strong></a> especially the <strong>SDG 6.2.</strong></li>
</ul>
</li>
</ul>
<h2>Analysis of SBM on Health Issues</h2>
<ul style="list-style-type: square;">
<li>SBM has helped in reducing the <strong>diarrhoea</strong> and <strong>malaria</strong> among children below five years, <strong>still-birth</strong> and<strong> low birth weight</strong> (new-born with weight less than 2.5 kgs).</li>
<li>Districts with <strong>low IHHL coverage</strong> suffered more from <strong>diarrhoea, malaria, still-birth</strong> and <strong>low birth weight</strong> as compared to districts with <strong>higher</strong> IHHL coverage.</li>
</ul>
<h2>Independent Studies</h2>
<ul style="list-style-type: square;">
<li><strong>The <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-bank-group" target="_blank" rel="noopener">World Bank</a></strong> (2011) report estimates the economic impacts of inadequate sanitation in India in the year 2006 was around US$ 53 billion, implying a per capita annual loss of $48 or 6.4% of GDP</li>
<li>The report<strong> &ldquo;Sanitation Health Impact Assessment&rdquo;</strong> conducted by the <strong><a href="/daily-updates/daily-news-analysis/jal-shakti-mantralaya" target="_blank" rel="noopener">Ministry of Drinking Water and Sanitation (MoDWS)</a></strong>, found that the health and nutritional indicators of the children and mothers belonging to the ODF areas were comparatively <strong>better than</strong> their non-ODF counterparts.</li>
<li>The study <strong>&ldquo;Swachh Bharat Mission &ndash; Preliminary estimations of potential health impacts from increased sanitation coverage&rdquo;</strong> conducted by the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-health-organization-who" target="_blank" rel="noopener"><strong>World Health Organization (WHO)</strong></a> estimates a <strong>decline</strong> in diarrhoeal deaths attributable to unsafe sanitation from <strong>1,40,000 in 2014</strong> to <strong>50,000 in 2017-18.</strong></li>
<li>Study conducted by <strong><a href="/important-institutions/drishti-specials-important-institutions-international-institution/united-nations-1" target="_blank" rel="noopener">UNICEF</a></strong> on behalf of the <strong>MoDWS</strong> that on an average, every household in an ODF village saved about <strong>Rs.50,000</strong> an account of financial savings due to lower likelihood of disease from using a toilet and practicing hand washing and value of time saved due to closer toilets.
<ul style="list-style-type: circle;">
<li>When costs and benefits are compared over a <strong>10-year time period,</strong> assuming 100% usability, the financial savings, time saving and benefits of life saved are included, the <strong>benefits to the households</strong> exceed the <strong>financial cost</strong> of constructing toilets by <strong>4.7 times.</strong></li>
</ul>
</li>
</ul>
<h2>Way Forward</h2>
<ul style="list-style-type: square;">
<li>SBM has led to a sea change in the dignity of people and has brought remarkable transformation of society as a whole but still a lot needs to be done.</li>
<li>The dream of clean India can only be realized by addressing these multiple facets:
<ul style="list-style-type: circle;">
<li>maintaining a culture of swachhata at public places beyond individual houses</li>
<li>cleaning water bodies</li>
<li>scientific waste management</li>
<li>dealing with plastic menace</li>
<li>controlling air pollution, etc</li>
</ul>
</li>
<li>To <strong>sustain the momentum</strong> created and behavioural change, a number of actions would have to be taken on a continuous basis, such as:
<ul style="list-style-type: circle;">
<li>motivation of <strong>&lsquo;agents of change&rsquo;</strong> at the ground level</li>
<li>impart training to field agents</li>
<li>appointment of <strong>sanitation ambassadors</strong> to campaign and create awareness especially on health benefits</li>
<li>obtain <strong>systematic feedback</strong> from users.</li>
</ul>
</li>
<li>The availability of financial resources is also of utmost importance. Hence, there is a need to facilitate and sustain innovative financing mechanisms by exploring various financial instruments such as micro-financing, concessional loans, crowd funding etc.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>Almost <strong>98.9%</strong> of India has been covered under SBM.</li>
<li>Around <strong>93.41% villages</strong> and <strong>88.41% districts</strong> has been declared ODF.</li>
<li><strong>Goa</strong> has the <strong>lowest ODF and IHHL</strong> coverage followed by <strong>Odisha</strong> and <strong>Telangana.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 94px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Mahatma Gandhi once said, &ldquo;Sanitation is more important than independence.&rdquo; Examine the relevance of this statement.</strong></p>
<p><strong>Q2. The success of Swachh Bharat Abhiyan is more dependent on attitudinal change than financial resources. Discuss the steps taken by the government in this regard.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter: 9</span></h1>
<h1><span style="font-size: 24px;">Enabling Inclusive Growth Through Affordable, Reliable and Sustainable Energy</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The Chapter provides insights about energy sector, especially <a href="/infographics/info-paper3/renewable-energy" target="_blank" rel="noopener"><strong>renewable energy</strong></a> and discusses various issues related to electric vehicles penetration in India.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>India <strong>lags</strong> behind significantly in energy usage, despite accounting for 18% of world&rsquo;s population and uses only around <strong>6%</strong> of the world&rsquo;s primary energy.</li>
<li>India has a <strong>per-capita energy consumption</strong> of only about <strong>one-third</strong> of the global average.</li>
<li>The share of renewables in total generation has increased from <strong>6% in 2014-15 </strong>to<strong> 10% in 2018-19.</strong></li>
<li><strong>Access to energy</strong> directly affect various social indicators and contributes to <a href="/daily-updates/daily-news-analysis/hdi-ranking-by-undp" target="_blank" rel="noopener"><strong>Human Development Index (HDI).</strong></a></li>
<li>India, therefore, needs to quadruple its per-capita energy consumption to meet the rising aspirations of its citizens.</li>
</ul>
<h2>Energy For Prosperity</h2>
<ul style="list-style-type: square;">
<li>Developed countries followed a path of <strong>energy-intensive industrial growth</strong> to reach the high standards of living.</li>
<li>India&rsquo;s <strong>per capita energy consumption</strong> equals <strong>0.6 tonnes of oil equivalent (toe)</strong> as compared to the <strong>global per capita average of 1.8 toe.</strong></li>
<li>During initial phases of economic development, <strong>increase in per capita GDP</strong> requires a <strong>large increase in primary energy per capita.</strong></li>
<li>India <strong>cannot</strong> become an <strong>upper-middle-income</strong> country without:
<ul style="list-style-type: circle;">
<li>Rapidly raising its share of the global energy consumption commensurate with its share of the global population.</li>
<li>Ensuring universal access to adequate modern commercial energy at affordable prices.</li>
</ul>
</li>
<li>India&rsquo;s <strong>energy intensity of GDP</strong> started <strong>declining</strong> at a much lower level of <strong>per capita GDP</strong> as compared to the developed world and <strong>decrease</strong> in <strong>energy intensity</strong> is the reflective of increase in the <strong><a href="/daily-updates/daily-news-editorials/energy-efficiency-and-climate-change" target="_blank" rel="noopener">efficiency of energy use.</a></strong></li>
<li><strong>Access to energy</strong> is also important due to its linkages with other social indicators like the <a href="/loksabha-rajyasabha-discussions/in-depth-indias-sustainable-development-goals" target="_blank" rel="noopener"><strong>Sustainable Development Goal (SDG)</strong></a> <strong>No.7 on Affordable and Clean Energy.</strong></li>
<li>There is also a <strong>strong relationship</strong> between <a href="/summary-of-important-reports/human-development-index-by-undp-2018" target="_blank" rel="noopener"><strong>Human Development Index (HDI)</strong></a> and per capita energy consumption. A country with 100 Gigajoules of per capita energy consumption has, on an average, HDI of around 0.8, a very high human development. India had a per capita energy consumption of 24 Gigajoules and an HDI of 0.64 in 2017.</li>
<li>Therefore, to enter the group of high human development countries, India needs to <strong>quadruple</strong> its <strong>per capita energy consumption.</strong></li>
</ul>
<h2>Access To Energy- Energy Poverty</h2>
<ul style="list-style-type: square;">
<li>In India, there is a wide disparity between <strong>urban</strong> and <strong>rural</strong> areas in <strong>access to energy</strong> as well as variation between <strong>households at different economic strata.</strong></li>
<li>There has been a <strong>considerable increase in LPG</strong> users, particularly in <strong>urban areas.</strong> A large proportion of the population, especially in <strong>rural areas</strong> relies on non-commercial biomass such as firewood and dung cakes, thereby exacerbating health concerns due to poor indoor air quality.</li>
<li>As per <strong>National Survey (2011-12),</strong> around <strong>81% of rural households</strong> and <strong>59% of urban households</strong> in lowest five percentile classes of expenditure reported firewood and chips as their primary source of energy for cooking and as we climb up the economic strata ladder, their reliance on firewood and chips <strong>decreases</strong> and that of <strong>LPG increases.</strong></li>
<li>Even at the<strong> top five percentile classes in rural areas,</strong> only <strong>50%</strong> use LPG which indicates that the problem of energy poverty has been more pervasive than income poverty.</li>
<li>As per <a href="/daily-updates/daily-news-analysis/world-energy-outlook-2018" target="_blank" rel="noopener"><strong>International Energy Agency (2018),</strong></a> in 2017,<strong> 53%</strong> of the population in India <strong>did not</strong> have access to clean cooking when compared with <strong>68% in 2010.</strong></li>
<li>Government Efforts to increase LPG penetration:
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/important-facts-for-prelims" target="_blank" rel="noopener"><strong>PM Ujjwala Yojana:</strong></a> It was launched in 2016 with the aim to safeguard the health of women and children by providing them with clean energy fuel. Under the scheme, around <strong>7 Crore LPG connections</strong> have been provided till April 2019.</li>
<li><strong>Pahal Scheme:</strong> It is a <strong>direct benefit transfer</strong> scheme for LPG consumers launched to<strong> rationalize subsidies</strong> based on approach to cut subsidy leakages. It has been recognized by the <strong>&ldquo;Guinness Book of World Record&rdquo;</strong> as the <strong>World&rsquo;s Largest Direct Benefit Scheme.</strong></li>
</ul>
</li>
</ul>
<h2>Energy Efficiency</h2>
<ul style="list-style-type: square;">
<li>Along with increasing its energy production and consumption, ensuring access to electricity for all and improving living standards, India also strives to ensure that it follows a growth path that delivers sustainable development and protect the environment.<a href="http://www.drishtiias.com/images/uploads/522image11.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/522image11.jpg" width="306" height="140" style="float: right;" caption="false" /></a></li>
<li>India&rsquo;s <strong>primary energy intensity of GDP</strong> has followed a <strong>declining trend</strong> and has fallen from <strong>0.0004 toe in 1990 to 0.0002 toe in 2017.</strong></li>
<li>The institutional and legal framework in the country for energy efficiency has been strengthened through the <strong>Energy Conservation Act in 2001,</strong> which created the <a href="/daily-updates/daily-news-analysis/star-rating-program" target="_blank" rel="noopener"><strong>Bureau of Energy Efficiency</strong></a> <strong>(BEE).</strong> The overall size of the <a href="/daily-updates/daily-news-editorials/energy-efficiency-and-climate-change" target="_blank" rel="noopener"><strong>energy efficiency</strong></a> market in India is estimated to be US$ 22.81 billion.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/934image25.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/934image25.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="739" height="420" /></a></p>
<table border="1" style="border-collapse: collapse;">
<tbody>
<tr style="height: 19px;">
<td style="width: 1318px; vertical-align: top; background-color: #dcf5f4; height: 19px; text-align: center;" colspan="2"><strong>Energy Efficiency Programs</strong></td>
</tr>
<tr style="height: 199px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>1. Standards &amp; Labelling Programme</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It was launched in May 2006 to provide the consumer an informed choice about the energy and cost saving potential of the labelled appliances.</li>
<li>It lays down minimum energy performance norms for appliances.</li>
</ul>
</td>
</tr>
<tr style="height: 133px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>2. Energy Conservation Building Code (ECBC)</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It sets minimum standards for commercial buildings.</li>
<li>BEE has also launched the <a href="/daily-updates/daily-news-analysis/eco-niwas-samhita-2018" target="_blank" rel="noopener"><strong>Eco-Niwas Samhita</strong></a> for residential buildings.</li>
</ul>
</td>
</tr>
<tr style="height: 155px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>3. Corporate Average Fuel Efficiency (CAFE)</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It prescribes fuel efficiency norms for passengers cars and Heavy Duty Vehicles.</li>
<li>Norms for light &amp; medium commercial vehicles and tractors are under stage of finalization.</li>
</ul>
</td>
</tr>
<tr style="height: 111px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>4. Demand Side Management Programme</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It is launched by BEE for agricultural, Municipal and Distribution Companies (DISCOMS).</li>
</ul>
</td>
</tr>
<tr style="height: 177px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>5. Perform, Achieve and Trade (PAT) Scheme</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It is launched for energy intensive industries with the aim to reduce energy consumption.</li>
<li>Excess energy savings are converted into tradable instruments called Energy Saving Certificates.</li>
</ul>
</td>
</tr>
<tr style="height: 19px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>6. Unnati Jyoti by Affordable LEDS for All (UJALA)</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It was launched in January, 2015 by EESL to reduce energy requirements through LED lamps.</li>
<li>LED bulbs are distributed at subsidized rates.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3>Impact of Energy Efficiency Programmes</h3>
<ul style="list-style-type: square;">
<li>Various energy efficiency programmes like <strong>Perform Achieve Trade (PAT), UJALA, <a href="/daily-updates/daily-news-analysis/star-rating-program" target="_blank" rel="noopener">Standards &amp; Labelling</a></strong> etc have witnessed exceptional performance leading to lower greenhouse gas emissions and cost savings of <strong>Rs 53,000 Crore in 2017-18</strong> and overall electricity savings due to energy efficiency measures is <strong>7.21%</strong> of the net electricity consumption in 2017-18.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/869image23.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/869image23.jpg" width="690" height="387" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<h3>Saving Potential of Various Sectors</h3>
<ul style="list-style-type: square;">
<li>According to BEE estimates, India&rsquo;s energy saving potential stands at around 10% (moderate savings) to 15% (aspirational saving) by 2031. <strong>Industrial sector</strong> stands out with <strong>maximum</strong> energy saving potential.</li>
</ul>
<h2>Sustainability of Energy Generation</h2>
<ul style="list-style-type: square;">
<li>According to IEA, the focus has been gradually shifting to <strong>non-fossil fuel sources</strong> for electricity generation but still the coal remains the largest source of electricity generation mix globally with <strong>38% market share</strong> in 2018.</li>
<li>It may not be advisable to effect a sudden abandonment of coal based power plants without <strong>complete utilisation</strong> of their useful lifetimes as it would lead to <strong>stranding of assets</strong> that can have further <strong>adverse impact on the banking sector.</strong></li>
<li>Global renewable generation capacity constituted around a<strong> third</strong> of total installed electricity capacity (IRENA, 2019).</li>
<li>Almost <strong>60%</strong> of India&rsquo;s installed capacity is in thermal power particularly coal based thermal power plants. India&rsquo;s <a href="/daily-updates/daily-news-analysis/co2-level-hit-record-high" target="_blank" rel="noopener"><strong>Nationally Determined Contribution (NDC)</strong></a> under the <strong>Paris Agreement</strong> states that India will achieve <strong>40% installed capacity</strong> of power from non-fossil fuels by 2030.</li>
</ul>
<h2>Potential of Renewable Energy</h2>
<ul style="list-style-type: square;">
<li>Renewable energy sources are a strategic national resource and harnessing these resources is a part of India&rsquo;s vision to achieve social equity and energy transition with energy security, a stronger economy, and climate change mitigation.</li>
<li>Various financial incentives for off-grid and decentralized renewable energy system have progressively reduced cost and improved efficiency and reliability which have made renewable energy an attractive option for meeting the energy needs in a sustainable manner and helping India pursue its low carbon development pathway.</li>
<li>India has been undertaking one of the world&rsquo;s largest renewable energy expansion programmes in the world to achieve an installed capacity of renewable based power of 175 GW by the year 2022.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 36.8967%; height: 19px; text-align: center; background-color: #05bbf7;"><span style="color: #ffffff;"><a href="/to-the-points/paper3/solar-energy" target="_blank" rel="noopener" style="color: #ffffff;"><strong>Solar Sector</strong></a></span></td>
<td style="width: 36.075%; height: 19px; text-align: center; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Hydro Sector</strong></span></td>
<td style="width: 27.0282%; height: 19px; text-align: center; background-color: #05bbf7;"><span style="color: #ffffff;"><strong><a href="/loksabha-rajyasabha-discussions/policy-watch-indias-wind-energy-potential" target="_blank" rel="noopener" style="color: #ffffff;">Wind Sector</a></strong></span></td>
</tr>
<tr style="height: 19px;">
<td style="width: 36.8967%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<ul style="list-style-type: square;">
<li>Globally, India stands <strong>5<sup>th</sup></strong> in solar power.</li>
<li>The solar power installed capacity has increased around <strong>1000 times</strong> from 25 MW in 2011 to 28.18 GW in March 2019.</li>
<li>Due to reverse auctioning process, solar tariff has declined from Rs 18/kWh in 2010 to Rs 2.44/kWh in 2018.</li>
</ul>
<p><strong>Initiatives Taken</strong></p>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-editorials/annadata-to-urjadata" target="_blank" rel="noopener"><strong>KUSUM scheme</strong></a> for providing financial and water security to framers and for de-dieselization of farm sector.</li>
<li><strong>Green Energy Corridor Project</strong> for integration of renewables into national grid.</li>
</ul>
</td>
<td style="width: 36.075%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<ul style="list-style-type: square;">
<li>India has a hydro potential of around <strong>1,45320 MW,</strong> out of which <strong>45,400 MW</strong> has been utilized.</li>
<li><a href="/daily-updates/daily-news-analysis/new-hydro-policy" target="_blank" rel="noopener"><strong>New Hydro Policy</strong></a> recognizes large hydro power projects as renewable energy source.</li>
</ul>
<p><strong></strong></p>
<p><strong>Reforms in Hydro Sector</strong></p>
<ul style="list-style-type: square;">
<li>Tariff rationalization</li>
<li>Increasing debt repayment period to 18 months</li>
<li>Introducing escalating tariff of 2% .</li>
<li>Budgetary support for funding flood moderation component of hydropower projects.</li>
</ul>
</td>
<td style="width: 27.0282%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<ul style="list-style-type: square;">
<li>India stands <strong>4<sup>th</sup></strong> in wind power.</li>
<li>The wind cumulative capacity has exceeded 35.6 GW.</li>
<li>Tarifs in wind sector had declined from Rs 4.2/kWh in 2013-14 to 2.43/kWh in 2017.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h2><a href="/to-the-points/paper3/electric-vehicles-evs" target="_blank" rel="noopener">Electric Vehicles (EVs) in India</a></h2>
<ul style="list-style-type: square;">
<li>Transport sector is the second largest sector contributor to CO<sub>2</sub> emission after the industrial sector, out of which road transport accounts for <strong>90%</strong> of the total emission in transport sector in India (MoEF&amp;CC).</li>
<li>Increasing vehicle ownership is resulting in huge oil imports. Therefore, shifting to electric mobility in road transport can lead to beneficial results.</li>
</ul>
<h3>Initiatives taken by Government</h3>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/national-electric-mobility-mission-2020" target="_blank" rel="noopener"><strong>National Electric Mobility Mission Plan 2020 (NEMMP)</strong></a>: It was conceived with an objectives to achieve sales of 60-70 lakhs units of total EVs by 2020.</li>
<li><strong>Faster Adoption and Manufacturing of Electric Vehicles (FAME):</strong> It was launched to fast track the goals of NEMMP and <a href="/daily-updates/daily-news-analysis/fame-india-phase-ii" target="_blank" rel="noopener"><strong>FAME II</strong></a>, launched in April 2019, focuses on electrification of public transport.</li>
</ul>
<h3>EV&rsquo;s Penetration in India</h3>
<ul style="list-style-type: square;">
<li>Globally, the sales of electric cars have been rising at a fast pace and <strong>China</strong> accounts for <strong>more than half</strong> of the sales.</li>
<li>India&rsquo;s market share of electric vehicles is around <strong>0.06%</strong> and <strong>U.P.</strong> topped the list among states with highest EV sales in 2017-18, followed by Haryana &amp; Gujarat.</li>
</ul>
<h3>Issues with EV in India</h3>
<ul style="list-style-type: square;">
<li><strong>Charging Infrastructure:</strong> The market share of EVs is positively related to the availability of chargers therefore, it becomes important that adequate charging stations are made available throughout the road networks.</li>
<li><strong>Charging Time:</strong> The fast chargers can take around <strong>half an hour</strong> to charge an electric car while slow chargers could take even <strong>8 hours.</strong> It is, therefore, an important <strong>policy issue</strong> to come up with universal charging standards for the country as a whole to enable increased investment in creation of such infrastructure.</li>
<li><strong>Batteries:</strong> The battery is the heart of any EV, development of appropriate <strong><a href="/daily-updates/daily-news-analysis/national-mission-on-transformative-mobility-and-battery-storage" target="_blank" rel="noopener">battery</a></strong> technologies that can function efficiently in the high temperature conditions in India need to be given utmost importance.</li>
</ul>
<p>It is important that these policies not only focus on <strong>reducing the upfront costs</strong> of owning an EV but also <strong>reduce the overall lifetime costs of ownership.</strong></p>
<h2>Way Forward</h2>
<ul style="list-style-type: square;">
<li>Energy is the mainstay of the development process of any economy. Therefore India&rsquo;s economic future and prosperity is dependent on her ability to provide <strong>affordable, reliable</strong> and <strong>sustainable energy</strong> to all her citizens.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Reverse Auctioning:</strong> A reverse auction is an <strong>opposite</strong> of a forward auction. Here <strong>traditional roles</strong> of buyers and sellers are <strong>reversed.</strong>
<ul style="list-style-type: circle;">
<li>A reverse auction is a type of auction in which sellers bid for the prices at which they are willing to sell their goods and services.</li>
<li>In a regular auction, a seller puts up an item and buyers place bids until the close of the auction, at which time the item goes to the highest bidder.</li>
<li>In a reverse auction, the buyer puts up a request for a required good or service. Sellers then place bids for the amount they are willing to be paid for the good or service, and at the end of the auction the seller with the lowest amount wins.</li>
</ul>
</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>India has a <strong>per capita energy consumption</strong> of only about <strong>one-third</strong> of global average.</li>
<li><strong>Energy intensity of India&rsquo;s GDP</strong> has been <strong>declining</strong> since 1991.</li>
<li>Globally, India stands <strong>5<sup>th</sup></strong> in <strong>renewable power</strong> installed capacity, <strong>4<sup>th</sup></strong> in wind power and <strong>5<sup>th</sup></strong> in solar power.</li>
<li>The solar power installed capacity has increased around <strong>1000 times</strong> from <strong>25 MW (2011)</strong> to <strong>28 GW (2019)</strong></li>
<li>Almost <strong>60%</strong> of India&rsquo;s installed capacity is in <strong>thermal power.</strong></li>
</ul>
<p><strong><a href="http://www.drishtiias.com/images/uploads/775image1.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/775image1.jpg" width="487" height="358" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></strong></p>
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<p></p>
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<td style="width: 100%; background-color: #fde9e4; height: 102px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. &ldquo;Energy poverty has been more pervasive in India than income poverty&rdquo;. Examine the factors responsible and suggest the policy measures needed to tackle the scenario.</strong></p>
<p><strong>Q2. Electric vehicles can be regarded as the future of transport sector. Critically analyse the growth of EV&rsquo;s in India.</strong><strong></strong></p>
</td>
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<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter: 10</span></h1>
<h1><span style="font-size: 24px;">Effective Use of Technology for Welfare scheme- Case of MGNREGS</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter deals with technological interventions taken by the government in course correcting the pathway for MGNREGS and has evaluated the impact of these interventions.</p>
<h2>Introduction</h2>
<ul style="list-style-type: square;">
<li><strong>&ldquo;Food for Work&rdquo;</strong> is first referred in <strong>Kautilya&rsquo;s Arthashastra</strong> and later in 1784, <strong>Nawab Asaf-ud-Daula</strong> started a <strong>&ldquo;food for work&rdquo;</strong> programme to help the famine-stricken people of Lucknow.</li>
<li><strong>The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA),</strong> enacted through an Act of Parliament in 2005, represents the modern version of such <strong>&ldquo;food for work&rdquo;</strong> programmes in India.</li>
<li>It was initiated to ameliorate rural distress by providing at least <strong>100 days</strong> of manual labour at <strong>minimum wages</strong> to <strong>anyone</strong> who seeks employment. Creation of productive assets for prescribed quality and durability, social inclusion, gender parity, social security and equitable growth form the founding pillars of the programme</li>
<li>During initial phases, <strong>MGNREGS</strong> had been saddled with several inefficiencies, including widespread corruption, political interference, leakage, and significant delay in wage payments. But post 2015 reforms used technology and emphasised on bringing in more transparency and accountability, robust planning and creation of durable productive assets.</li>
</ul>
<h2>Use of Technology in Implementing of MGNREGS</h2>
<ul style="list-style-type: square;">
<li>Prior to DBT implementation, MGNREGS wages were transferred to the panchayat bank accounts and workers had to collect wages in cash from the gram panchayat office. But the government attempts to implement a system of <a href="/to-the-points/paper3/public-distribution-system-1" target="_blank" rel="noopener"><strong>DBT</strong></a> faced <strong>two serious constraints i.e unbanked population and verification of genuine beneficiary.</strong></li>
</ul>
<h2>Steps Taken by Government to Counter Structural Constraints</h2>
<ul style="list-style-type: square;">
<li><strong>JAM Trinity</strong> i.e <strong>Jan Dhan, Aadhaar</strong> and <strong>Mobile</strong> enabled the role-out of DBT by streamlining the validation/ verification of beneficiaries as well as the process of release of funds.
<ul style="list-style-type: circle;">
<li><strong>Jan Dhan:</strong> <strong>Pradhan Mantri Jan DhanYojana (PMJDY)</strong> was launched in 2015 to ensure universal access to banking facilities with at least one basic banking account for every household.</li>
<li><strong>Aadhaar:</strong> Aadhar enrollment exceeds <strong>100 crore in 2015,</strong> thereby covering major portion of adult population and linking the unique aadhaar number to an active bank account was the key to implementing the income transfers.</li>
<li><strong>Mobile:</strong> It eases the connectivity issues by enabling people to access banking facilities using their mobile phones.</li>
</ul>
</li>
<li><strong>National electronics Fund Management System (NeFMS)</strong>
<ul style="list-style-type: circle;">
<li>NeFMS was implemented in the year 2016 to streamline the system of fund flow and to ensure timely payment of wages.<a href="http://www.drishtiias.com/images/uploads/875image10.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/875image10.jpg" width="219" height="350" style="float: right;" caption="false" /></a></li>
<li>Under the system, the Central Government directly credits the wages of the MGNREGS workers, on a real time basis, to a specific bank account opened by the State Governments</li>
<li>NeFMS is implemented in 24 States and 1 Union Territory wherein payment of wages is being credited directly to the bank/post office accounts of MGNREGS workers by the Central Government.</li>
</ul>
</li>
<li><strong>Aadhar Linked Payments (ALP)</strong>
<ul style="list-style-type: circle;">
<li>ALP could speed up the wage payment cycle in the following two ways.
<ul style="list-style-type: disc;">
<li><strong>Ghost beneficiary elimination,</strong> thereby reducing time to verify and audit claims.</li>
<li><strong>Cutting the bureaucratic red tape</strong> by directly transferring wages to the bank accounts of beneficiaries by the Central Government.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h2>Benefits of DBT</h2>
<ul style="list-style-type: square;">
<li>Timely release of payments.</li>
<li>Ensuring correct funds are transferred to correct beneficiaries, reducing corruption &amp; leakages in the system.</li>
<li>Reduction in delays in system for funds transfer (improving programme performance and instilling trust and confidence in the system by beneficiaries).</li>
<li>Strong focus on security, tracking and monitoring of funds (through the use of digital sign/signatures and convergence/interoperability).</li>
<li>Reconciliation process during payments between intermediate agencies involved in funds transfer (near real time tracking, accountability and transparency).</li>
<li>Streamline the verification process and end to end funds release process in all the beneficiary oriented scheme.</li>
</ul>
<div class="border-bg"><strong>Initiatives to Streamline MGNREGS</strong>
<ul style="list-style-type: square;">
<li><strong>NREGAsoft:</strong> It is a local language enabled work flow based e-Governance system to capture all the activities under MGNREGS at Center/State/District/Block and Panchayat level.</li>
<li><strong>GeoMGNREGA:</strong> It uses space technology to develop a database of assets created under MGNREGS using technological interventions like mobile based photo geo-tagging and a GIS based information system for online recording and monitoring.</li>
<li><strong>Natural Resource Management (NRM) - Mission Water Conservation (MWC):</strong> It is the planned and systematic development of land to improve its productivity and harnessing of water through development of watersheds, have become the central focus of MGNREGS work across the country.
<ul style="list-style-type: circle;">
<li>It was made <strong>mandatory</strong> to spend <strong>65%</strong> of total MGNREGS expenditure on NRM work which includes building check dams, trenches, ponds, renovation of traditional water bodies/tanks, dug wells etc.</li>
</ul>
</li>
<li>Mobile Apps like <strong>Gram Samvaad</strong> and <strong>JanMnREGA</strong> (an asset tracking and feedback app for MGNREGS assets) have been developed, which aim to empower the rural citizens by providing direct access to information and improve accountability to the people.</li>
</ul>
</div>
<h2>Impact of DBT on Effectiveness of MGNREGS</h2>
<ul style="list-style-type: square;">
<li><strong>Coverage:</strong> There was a significant increase in filled <strong>muster rolls</strong> (form of attendance) after the implementation of DBT which indicates that more people are reporting for work, especially vulnerable section i.e women, SCs &amp; STs.</li>
<li><strong>Timely Payments of Wages:</strong> Post ALP, delay in payments has been reduced by one-third from around <strong>35%</strong> to less than 10%. The <strong>NREGASoft</strong> monitors generation of payment of wages within 15 days.</li>
<li><strong>Demand for Work:</strong> Prior to implementation of ALP, the rural poor treated MGNREGS as an option to earn <strong>additional income</strong> during good times rather than a shock absorber during bad times. <strong>Post ALP,</strong> there was a <strong>reversal of trend,</strong> wherein an <strong>increase</strong> in demand for work under MGNREGS has been observed in drought affected areas.
<ul style="list-style-type: circle;">
<li>Reduction in delay of payments has an immediate positive effect on the demand of work in distressed areas.</li>
</ul>
</li>
<li><strong>Supply of Work:</strong> The <strong>difference -in -difference estimate,</strong> i.e. the before- after difference in the blocks affected by drought versus the same difference in blocks not affected by drought, shows very little change due to implementation of ALP in the blocks not affected by drought.
<ul style="list-style-type: circle;">
<li>However, there was around 20% increase in the supply of work in blocks affected by drought.</li>
<li>ALP has increased state capacity to implement anti-poverty programmes and can potentially bridge the demand supply gap in MGNREGS.</li>
</ul>
</li>
<li><strong>Work Done under MGNREGS:</strong> The actual work done under MGNREGS increased significantly in blocks affected by drought due to the use of ALP. This increase was <strong>more than double</strong> the increase in blocks that were unaffected by drought.</li>
</ul>
<h2>Impact on Vulnerable Sections</h2>
<ul style="list-style-type: square;">
<li>Post implementation of ALP, women, SC and ST workforce<strong> increased</strong> under MGNREGS during the times of economic distress.</li>
</ul>
<h2>Way Forward</h2>
<ul style="list-style-type: square;">
<li><strong>Probable Indicator of Distress:</strong> Real time indicators of distress at the district / panchayats level such as dashboards, can be created for flashing alerts for areas which are under local distress.</li>
<li><strong>Expansion of Work under MGNREGS:</strong> For increasing effectiveness of the scheme, the definition of &lsquo;work&rsquo; should be regularly reviewed.</li>
<li><strong>Up-skilling the MGNREGS Workers:</strong> The focus needs to be on the diversification of livelihoods with multiple sources of income for them to come out of poverty.</li>
<li><strong>Expanding use of JAM to other Welfare Scheme:</strong> To make public spending more efficient and effective, the success of <strong>JAM trinity</strong> in MGNREGS has made a strong case for its implementation in other welfare scheme. <strong>JAM trinity</strong> has the proven potential to arrest the major loopholes i.e <strong>inclusion</strong> and <strong>exclusion</strong> errors.</li>
<li><strong>Use of Digital Infrastructure for Micro-Benefits:</strong> A huge digital infrastructure of JAM trinity can be used to expand the reach of programmes through provision of micro-insurance, micro-pensions and micro-credits to people in every corner of the country.
<ul style="list-style-type: circle;">
<li>Its wide use can lead to <strong>financial</strong> and economic inclusion benefitting the vulnerable and marginalized sections of the society.</li>
</ul>
</li>
</ul>
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<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>According to <strong>Reserve Bank of India,</strong> the bank outlets have <strong>increased</strong> around <strong>5 times</strong> from 2014 level.</li>
</ul>
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<p></p>
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<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has played an important role in ensuring social justice in India. Discuss how technological and administrative initiatives have helped in the smooth rollout of MGNREGA.</strong></p>
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<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter:11</span></h1>
<h1><span style="font-size: 24px;">Redesigning a Minimum Wage System in India for Inclusive Growth</span></h1>
<h2></h2>
<h2>Overview</h2>
<ul style="list-style-type: square;">
<li>The chapter reviews the situation pertaining to <a href="/daily-updates/daily-news-analysis/the-code-on-wages-bill" target="_blank" rel="noopener"><strong>minimum wages in India</strong></a> and suggests the way forward for rationalising and streamlining the policy for minimum wages.</li>
</ul>
<h2>Introduction</h2>
<ul style="list-style-type: square;">
<li>The <strong>Mesopotamian</strong> code of ancient law i.e <strong>the Code of Hammurabi</strong> and the ancient Indian text of <strong>Arthashastra</strong> mentions minimum wages.</li>
<li>Despite India&rsquo;s outstanding growth in the last two decades, <strong>low pay</strong> and <strong>wage inequality</strong> remain serious obstacles towards achieving <strong>inclusive growth.</strong></li>
<li>Minimum wages promote <strong>social justice</strong> without any major negative implications for employment if wages are set at an adequate level.</li>
<li>In recent times, Indian economy is fuelled by <strong>domestic consumption,</strong> which comprises of around <strong>93% of workers</strong> in the <strong>informal sector</strong> therefore a well designed minimum wage system can reduce inequalities in incomes, bridge gender gaps in wages and alleviate poverty.</li>
</ul>
<h2>Minimum Wage System In India</h2>
<ul style="list-style-type: square;">
<li>India was one of the first developing countries to introduce minimum wages but the whole minimum wage system in India is extremely complex with a plethora of issues.
<ul style="list-style-type: circle;">
<li><strong>The Minimum Wage Act 1948:</strong> The Act protects both regular and casual workers and empowers both Central and State Governments to fix minimum wage rate for employees working in selected &lsquo;scheduled&rsquo; employment.
<ul style="list-style-type: disc;">
<li>Minimum wages have been set for different categories of workers according to skill levels, location and occupations.</li>
<li>The Act did not prescribe norms for fixing the level of the minimum wage.</li>
<li>It provides for <strong>tripartite advisory boards</strong> consisting of employers, employees of scheduled employments, and independent persons to advise the Government in fixing minimum wages.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h2>Steps Towards National Level Minimum Wage</h2>
<p><a href="/daily-updates/daily-news-analysis/redesigning-minimum-wage-system" target="_blank" rel="noopener"><strong>National Level Minimum Wage</strong></a> has always been the <strong>debated idea</strong> due to the existence of wide disparities in economic development and large <strong>variations</strong> in <strong>cost of living</strong> between regions and states.<a href="http://www.drishtiias.com/images/uploads/201image9.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/201image9.jpg" style="float: right;" caption="false" width="346" height="398" /></a></p>
<ul style="list-style-type: square;">
<li>The <strong>Indian Labour Conference (ILC) of 1957</strong> recommended determining the minimum wage based on the principle of a household&rsquo;s needs.</li>
<li>The <strong>First National Commission on Labour (1969)</strong> recommended that National Minimum Wage is neither <strong>&lsquo;feasible nor desirable&rsquo;.</strong></li>
<li>The <strong>Bhoothalingam Committee (1978)</strong> argued for adoption of <strong>National Floor Level Minimum Wage (NFLMW)</strong> to ensure a uniform wage for all workers and eliminate arbitrariness in the determination of level of minimum wages for different States and occupations. Recommendations were mainly for the organised sector.</li>
<li>The <strong>Labour Minister&rsquo;s Conference (1988)</strong> made recommendations for linking minimum wage with the cost of living index, which became mandatory in 1991.</li>
<li>The <strong>National Commision on Rural Labour (1991)</strong> recommended for a National Floor Level Minimum Wage as wide disparities were prevalent in minimum wages across States.</li>
<li>In 1992, the <strong>Supreme Court of India</strong> ruled that minimum wage should also be linked with aspects such as children&rsquo;s education, medical requirements etc.</li>
<li>In 1996, the Central Government adopted <a href="/daily-updates/daily-news-analysis/inflation-in-india" target="_blank" rel="noopener"><strong>non-statutory National Floor Level Minimum Wage (NFLMW)</strong></a> - Rs. 35 per day was notified. This NFLMW is updated regularly as per Consumer Price Index (CPI). NFLMW is Rs. 176 per day since 01.06.2017.</li>
</ul>
<h2>Complex Minimum Wage System in India</h2>
<ul style="list-style-type: square;">
<li>Over the last 70 years, the minimum wage system in India has expanded and has become complex. The complexities arises from following issues:</li>
<li><strong>Number of Wage Categories:</strong> The present minimum wage system in India is extremely complex with <strong>1,915 minimum wages</strong> defined for various <strong>&lsquo;scheduled&rsquo;</strong> job categories for <strong>unskilled workers.</strong> This expansion in job categories and wage rates has led to variations not only across states but also within states.</li>
<li><strong>Lack of Uniform Criteria:</strong> In some states or in specific scheduled employments, minimum wages are linked to the cost of living, through a Variable Dearness Allowance (VDA) whereas other states do not include the VDA component.</li>
<li><strong>Variation among Regions:</strong> The <strong>number</strong> of <strong>scheduled employments</strong> varies from 3 in Mizoram to 102 in Assam. Similarly, the notified lowest minimum wage rate (per day) varies from Rs. 115 in Nagaland to Rs. 538 in Delhi.</li>
<li><strong>Vulnerable Categories:</strong> The Minimum Wages Act <strong>does not cover all wage workers. One in every three</strong> wage workers in India is not protected by the minimum wage law. Some major vulnerable categories &ndash; such as domestic workers &ndash; are presently covered only in 18 States and Union Territories.</li>
</ul>
<h2>Issues with Complex Minimum Wages</h2>
<ul style="list-style-type: square;">
<li><strong>Levels of Economic Development:</strong> The main justification for persisting with different levels of minimum wages across states is that they reflect different levels of economic development.</li>
<li><strong>Heterogeneous Labour Force:</strong> Multiple minimum wages usually exist to take care of the needs of a heterogeneous labour force. <strong>For example:</strong> The case of India and the Latin American Countries that have a high diversity of labourers.</li>
<li><strong>Gender Discrimination:</strong> An analysis of minimum wages for different occupations shows <strong>persistence of systematic bias. For example,</strong> domestic workers and security guards fall within the category of unskilled workers, but the minimum wage rate for domestic workers (dominated by women) within a state is consistently lower than that for security guards (dominated by men). Such differences can only be attributed to <strong>gender bias.</strong></li>
<li><strong>Low Compliance:</strong> The proliferation of minimum wage rates and scheduled employments is a strong <strong>deterrent for compliance.</strong> Different statutory minimum wage rates for the same occupation between states can <strong>trigger migration</strong> of the industry to lower wage regions/state. Moreover, a complex system of minimum wages shows lack of coherence about wage levels and wages being set in an arbitrary fashion.</li>
</ul>
<h2>Impact of Minimum Wages</h2>
<p>A well designed minimum wage system can have significant impact in reducing inequality and poverty complemented by other institutional mechanisms.</p>
<ul style="list-style-type: square;">
<li><strong>Wage Levels:</strong> The minimum wage seems to have shaped wage bargaining i.e showed the presence of<strong> &lsquo;lighthouse effect&rsquo;,</strong> thereby leading to rise in actual wages. The studies suggests that increase in compliance in India showed the following effects:
<ul style="list-style-type: circle;">
<li><strong>Stronger impact on male wages compared to female wages.</strong></li>
<li><strong>Stronger impact on regular wages compared to casual wages.</strong></li>
</ul>
</li>
<li><strong>Wage Inequality:</strong> International experience suggests that greater compliance with minimum wages has led to the reduction in wage inequality. According to the <a href="/daily-updates/daily-news-analysis/100th-anniversary-of-ilo" target="_blank" rel="noopener"><strong>International Labour Organisation (ILO)</strong></a> <strong>report,</strong> between 1993 and 2011, the <strong>average real wages increased</strong> in India with <strong>fastest growth</strong> recorded for<strong> casual labour, women&rsquo;s labour</strong> and <strong>rural/agricultural labour.</strong> However, the existing <strong>wage inequality</strong> measured by the <strong><a href="/daily-updates/daily-news-analysis/lorenz-curve-and-gini-coefficient" target="_blank" rel="noopener">Gini Coefficient</a></strong> remains very high by international standards.
<ul style="list-style-type: circle;">
<li>The inequality has <strong>increased amongst regular workers</strong> and <strong>decreased among casual workers.</strong></li>
</ul>
</li>
<li><strong>Employment:</strong> Minimum wages have only a <strong>minimal (or no) impact</strong> on employment in emerging economies. A study suggests a <strong>positive effect</strong> of minimum wages on employment level for both men and women and finds that a <strong>10% rise</strong> in minimum wages raised the employment level by <strong>6.34%</strong> in rural areas having insignificant impact in urban areas.</li>
</ul>
<div class="border-bg">
<p><strong>Drishti Input</strong></p>
<p><strong>Report on Determining Methodology for Fixing National Minimum Wage</strong></p>
<ul style="list-style-type: square;">
<li>Earlier in 2019, the seven-member expert committee under the <strong>Chairmanship of Dr. Anoop Satpathy</strong> had submitted its report on <strong>&lsquo;Determining the Methodology for Fixation of the National Minimum Wage&rsquo;.</strong></li>
<li>Apart from proposing a <strong>single national minimum wage</strong> at an all-India level, the report had also recommended <strong>different national minimum wages for different geographical regions.</strong> It, thus, had grouped the states<strong> into five regions.</strong></li>
<li><strong>Key Recommendations</strong>
<ul style="list-style-type: circle;">
<li><strong>Calorie Intake:</strong> Elaborate a nationally representative and culturally palatable food basket with focus on a balanced diet (comprising of calories, protein and fats) rather than merely its calorie intake.
<ul style="list-style-type: disc;">
<li>Set the minimum wage at a level that would allow for a minimum recommended intake (per adult person per day) of 2,400 calories, 50 grams of protein and 30 grams of fat.</li>
</ul>
</li>
<li><strong>Non-Food Items:</strong> Ensure that the required expenditure of essential non-food items (namely clothing, fuel and light, house rent, education, medical, footwear, and transport) be equal to the median class of the expenditure distribution.</li>
<li><strong>Single Value:</strong> Set the single value of the NMW (National Minimum Wage) for India at Rs. 375 per day (or Rs. 9,750 per month), irrespective of sectors, skills, occupations and rural-urban locations.</li>
<li><strong>House Rent Allowance:</strong> Introduce an additional house rent allowance (city compensatory allowance), averaging up to Rs. 55 per day i.e., Rs. 1,430 per month for urban workers over and above the NMW.</li>
<li><strong>Region Based:</strong> Establish the NMW for five different regions with diverse socio-economic and labour market situations, ranging from a low of Rs. 342 per day (or Rs. 8,892 per month) to a high of Rs. 447 per day(Rs. 11,622 per month).</li>
<li><strong>Periodic Review:</strong> Review the consumption basket every five years, subject to the availability of <a href="/daily-updates/daily-news-analysis/restructuring-of-indian-statistical-system" target="_blank" rel="noopener"><strong>NSSO</strong></a>-CES data, and revise the basic minimum wage in line with the consumer price index (CPI) every six months, to reflect changes in the cost of living.</li>
</ul>
</li>
</ul>
</div>
<h2>Way Forward</h2>
<p><strong>Policy recommendations</strong> for an effective design of minimum wages system are as follows:</p>
<ul style="list-style-type: square;">
<li><strong>Simplification and Rationalisation:</strong> The Code on Wages Bill amalgamates the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 into a single piece of legislation. The definition of wages in the new legislation should subsume the present situation of 12 different definitions of wages in different Labour Acts.</li>
<li><strong>Setting a National Floor Level Minimum Wage:</strong> Central Government should notify a <strong>&lsquo;national floor minimum wage&rsquo;</strong> that can vary across the five geographical regions. Thereafter, states can fix the minimum wage, which shall not be less than the &lsquo;floor wage&rsquo;. This would bring some uniformity across the country and would make all states almost equally attractive from the point of view of labour cost for investment as well as reduce distress migration.</li>
<li><strong>Criteria for Setting Minimum Wage:</strong> Further, the Code on Wages Bill should consider fixing minimum wages based on either of the two factors viz; (i) the skill category i.e unskilled, semi-skilled, skilled and highly skilled; and (ii) the geographical region, or else both. This key change would substantially reduce the number of minimum wages in the country.</li>
<li><strong>Coverage:</strong> The Code on Wages Bill should extend applicability of minimum wages to all employments/workers in all sectors and should cover both the organised as well as the unorganised sector.</li>
<li><strong>Regular Adjustment:</strong> A mechanism should be developed to adjust minimum wages regularly and more frequently, say, every six months. A dashboard needs to be set up which shows the date of the last revision in the minimum wage adjunct to the mandated period. This would enable dissemination of information and increased transparency in the system.</li>
<li><strong>Role of Technology:</strong> Information should be made available in a simple and clear manner with the help of technology. Use of a variety of online, mobile phone and networking technologies have the potential to facilitate the collection and analysis of labour statistics, assist with the dissemination of information about labour laws and policies, reduce costs and improve transparency. A <strong>national level dashboard</strong> can be created to provide updates regarding minimum wages. This portal must be made easily accessible so that the workers are well-informed and their bargaining skills and decision-making power are strengthened.</li>
<li><strong>Grievance redressal:</strong> There should be an easy to remember toll-free number for anybody to register his/her grievance on non-payments of the statutory minimum wages. Swift action should be taken against the offenders and this action should be flashed on the dashboard.<strong></strong></li>
</ul>
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<tbody>
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<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Lighthouse Effect:</strong> Wages in the informal sector increase after a minimum wage hike which is contrary to the predictions of traditional economic theory. The minimum wage acts as a <strong>benchmark that pulls up wages</strong> in the low-paid and informal sector by enhancing the <strong>bargaining power</strong> of vulnerable workers.</li>
<li><strong>Gini Coefficient:</strong> It is a statistical measure to gauge the <strong>rich-poor income or wealth divide.</strong> It measures <strong>inequality</strong> of a distribution &mdash; be it of income or wealth &mdash; within nations or States.
<ul style="list-style-type: circle;">
<li>Its value varies anywhere from <strong>zero to one; 0</strong> indicating<strong> perfect equality</strong> and <strong>1</strong> indicating <strong>perfect inequality.</strong></li>
</ul>
</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 131px;">
<td style="width: 100%; background-color: #fffddf; height: 131px;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>The inequality has <strong>increased amongst regular workers </strong>and<strong> decreased among casual workers.</strong></li>
<li>In India, <strong>increased compliance</strong> to minimum wages has shown the following effects:
<ul style="list-style-type: circle;">
<li>Stronger impact on <strong>male wages</strong> compared to <strong>female wages.</strong></li>
<li>Stronger impact on <strong>regular wages</strong> compared to <strong>casual wages.</strong></li>
</ul>
</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 10px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Despite India&rsquo;s outstanding growth in the last two decades, low pay and wage inequality remain serious obstacles towards achieving inclusive growth. Discuss.</strong></p>
</td>
</tr>
</tbody>
</table>
<p></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/gist-of-economic-survey/gist-of-economic-survey-2018-19/gist-of-economic-survey2018-19'
		],
		(int) 16 => [
			'title' => 'Environmental Conservation with Grassroot Governance',
			'catname' => 'News Editorials',
			'desc' => '<div class="border">
<p>The article is based on <a href="https://www.thehindu.com/opinion/op-ed/a-bottom-up-approach-to-conservation/article29253850.ece" target="_blank" rel="noopener">A Bottom-Up Approach to Conservation</a> that was published in The Hindu on 26 August. It talks about the interweaving relation of grassroots democracy and environmental conservation.</p>
</div>
<h3>Context</h3>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/ecosystems-under-threat" target="_blank" rel="noopener">Flood and landslides (Kerala) of 2018</a> caused huge financial losses and the same repeated in <strong>2019</strong>.</li>
<li>Considering the above scenario, powers and responsibilities conferred on citizens under provisions such as the <strong>73<sup>rd</sup> and 74<sup>th</sup> Amendments to the Constitution,</strong> and the <strong>Biological Diversity Act, 2002</strong> are being sidelined.</li>
</ul>
<h3>Background</h3>
<ul style="list-style-type: square;">
<li>The Western Ghats are regarded as <a href="/daily-updates/daily-news-analysis/ecosystems-under-threat" target="_blank" rel="noopener"><strong>one of the eight &lsquo;hottest&rsquo; biodiversity hotspots in the world</strong></a>.</li>
<li>Kerala accounts for nearly <strong>18%</strong> of the biodiversity-rich and fragile ecosystem of Western Ghats.</li>
<li><a href="/daily-updates/daily-news-analysis/green-tribunal-steps-in-to-conserve-ghats" target="_blank" rel="noopener"><strong>Western Ghats Ecology Expert Panel (WGEEP) chaired by Madhav Gadgil (2011)</strong></a> had suggested interweaving of the existing laws relating to environmental protection and devolution of powers, right down to the gram sabha to be followed.</li>
<li>But, almost all policy recommendations by the Gadgil committee were <strong>not accepted</strong>.</li>
<li>In August 2012, the government constituted another panel called the <strong>Kasturirangan committee</strong>, which recommended:
<ul style="list-style-type: circle;">
<li>To <strong>balance</strong> the two concerns of <strong>development and environment</strong> protection.</li>
<li>To bring just <strong>37% of the Western Ghats under the Ecologically Sensitive Area (ESA) zones &mdash; down from the 64%</strong> suggested by the Gadgil report.</li>
</ul>
</li>
</ul>
<h3>Gadgil Committee Recommendations</h3>
<p>Though the maximum of its recommendations were not accepted, but it could be used to safeguard global biodiversity hotspot and water tower of peninsular India. Few of the recommendations were:</p>
<ul style="list-style-type: square;">
<li>Replacement of the prevailing <strong>&lsquo;Develop Recklessly, Conserve Thoughtlessly&rsquo;</strong> pattern with one of <strong>&lsquo;Develop Sustainably, Conserve Thoughtfully&rsquo;</strong>.</li>
<li>The fine-tuning of development practices to the local context would have required the full involvement of local communities.</li>
<li>Recommendations regarding <strong>ecological sensitivity</strong> are the starting point for a bottom-up democratic process:
<ul style="list-style-type: circle;">
<li>To demarcate areas within the Western Ghats Region which need to be notified as ecologically sensitive and further as ecologically sensitive zones under the <strong>Environment (Protection) Act, 1986</strong>.</li>
<li>The zone of highest ecological sensitivity would be <strong>'ESZ1'</strong>.</li>
<li>The indicators of sensitivity would be:
<ul style="list-style-type: disc;">
<li>Elevation</li>
<li>Slope</li>
<li>Natural Vegetation</li>
</ul>
</li>
<li>The interrelation among the above indicators would be:
<ul style="list-style-type: disc;">
<li><strong>Rainfall increases</strong> rapidly with <strong>elevation</strong>, and high rainfall and steep slopes render localities vulnerable to landslides.</li>
<li>Landslides are under check, in the areas with intact natural vegetation because the roots bind the soil.</li>
<li>Any disturbance to such vegetation would render any locality that has steep slopes and experiences high rainfall, susceptible to landslides.</li>
<li>Such disturbances may include:
<ol style="list-style-type: lower-alpha;">
<li>Quarrying or mining</li>
<li>Replacement of natural vegetation by new plantations</li>
<li>Levelling of the land using heavy machinery</li>
<li>Construction of houses and roads.</li>
</ol>
</li>
</ul>
</li>
</ul>
</li>
</ul>
<p>Hence, <strong>areas prone to landslides would come under ESZ1</strong>.</p>
<h3>Kerala and Participatory Governance</h3>
<p>Kerala has been a leading state in participatory governance across the country and so in <strong>democratic devolution</strong>.</p>
<ul style="list-style-type: square;">
<li>It also pioneered <strong>Panchayat Level Resource Mapping</strong>. This is essentially a participatory programme which involves the mapping of assets, land use and water resources of individual survey plots by trained volunteers.</li>
<li>Its <strong>People&rsquo;s Planning campaign</strong> was also success which attempted to involve every panchayat in the preparation of a Panchayat Development Report.</li>
<li><strong>Plachimada Panchayat Case:</strong>
<ul style="list-style-type: circle;">
<li>The Kerala High Court cancelled Coca-Cola&rsquo;s licence because the company polluted and depleted groundwater reserves, drying up wells and adversely impacting agriculture and livelihoods.</li>
<li>While doing so, the panchayat invoked its <strong>constitutional rights</strong>, arguing that it had the duty to protect the well-being of its citizens and had the right to cancel &mdash; or refuse permission for &mdash; anything that affected its citizens adversely.</li>
<li>The company&rsquo;s <strong>counter-argument</strong> was that the <strong>panchayat was subordinate to the State government, which had granted it the licence</strong>.</li>
<li>The Kerala High Court rejected this contention, <strong>affirming that grass-roots institutions have the authority to decide on the course of development in their own locality</strong>.</li>
<li>Furthermore, the Kerala legislature unanimously passed a law asking Coca-Cola to pay Plachimada Panchayat due compensation for losses inflicted on them.</li>
</ul>
</li>
</ul>
<h3>Grassroot Governance and Environment Conservation</h3>
<ul style="list-style-type: square;">
<li>Local bodies having the authority to decide on the course of development in their own localities should be made genuinely operational across the country.</li>
<li>Full advantage of powers and responsibilities conferred on citizens under provisions such as the <strong>73<sup>rd</sup> and 74<sup>th</sup> Amendments to the Constitution,</strong> and the <strong>Biological Diversity Act, 2002</strong> must be taken.</li>
<li>Conservation prescriptions should not be merely regulatory but include <strong>positive incentives such as conservation service charges</strong>.</li>
<li>Economic activities like quarrying should be given to agencies like the Kudumbashree groups that are accountable to local communities.</li>
</ul>
<h3>Way Forward</h3>
<p>The <strong>sovereign people of the country,</strong> are the <strong>real rulers of India</strong> and must engage themselves more actively in the governance of the country and lead it on to a path of <strong>people-friendly and nature-friendly development</strong>.</p>
<table border="1" style="border-collapse: collapse; background-color: #c1f7ef; border-color: #047a69; border-style: double;">
<tbody>
<tr>
<td style="width: 1256px;"><strong><em>Drishti Input:<br /><br /></em></strong>&ldquo;The strengthened grassroot democracy would pave the way for enhanced environmental conservation.Comment.&rdquo;</td>
</tr>
</tbody>
</table>
<p></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-editorials/environmental-conservation-with-grassroot-governance'
		],
		(int) 17 => [
			'title' => 'OMG- Ocean’s Melting Greenland',
			'catname' => 'News Analysis',
			'desc' => '<ul style="list-style-type: square;">
<li>Over a <strong>five-year campaign,</strong> OMG will observe changing water temperatures on the continental shelf surrounding <strong>Greenland.</strong></li>
<li>It will study how marine glaciers react to the presence of warm &amp; salty <strong>Atlantic Water.</strong></li>
<li>OMG will pave the way for improved estimates of sea-level rise by addressing the question of to <strong>what extent are the oceans melting Greenland&rsquo;s ice from below.</strong></li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/868image4.jpg" target="_blank" rel="noopener"><strong><img class="content-img" src="http://www.drishtiias.com/images/uploads/868image4.jpg" width="264" height="183" style="float: right;" caption="false" /></strong></a></p>
<ul style="list-style-type: square;">
<li>The diagram above represents a typical glacier in Greenland.<br />
<ul style="list-style-type: circle;">
<li>Below the cold-fresh layer near the surface, a layer of warm &amp; salty water reaches into the<strong> fjords</strong> (a long, narrow, deep inlet of the sea between high cliffs, typically formed by submergence of a glaciated valley) to melt the glacier's edge.</li>
<li>OMG will measure the volume and extent of this warm layer each year and relate it to thinning and retreat of the glaciers.</li>
</ul>
</li>
<li>OMG will use <strong>NASA&rsquo;</strong>s <strong>G-III</strong> to fly the <em>Glacier and Ice Surface Topography Interferometer</em> (GLISTIN-A).<br />
<ul style="list-style-type: circle;">
<li>GLISTIN-A is a Ka-band single-pass interferometer. It generates high resolution, high precision elevation measurements which can be used for the study of Greenland&rsquo;s coastal glaciers.</li>
</ul>
</li>
</ul>
<p><strong><a href="https://www.hindustantimes.com/world-news/high-above-greenland-glaciers-nasa-looks-into-melting-ocean-ice/story-MzQbyfM4kKPxIDUlwGrnFL.html" target="_blank" rel="noopener">Source: HT</a></strong></p>',
			'postdate' => object(Cake\I18n\FrozenTime) {},
			'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/omg-ocean-s-melting-greenland'
		],
		(int) 18 => [
			'title' => 'G7 Summit',
			'catname' => 'News Analysis',
			'desc' => '<p>The three days G7 summit was concluded on August 26, 2019, at Biarritz, Nouvelle-Aquitaine, France.</p>
<ul style="list-style-type: square;">
<li>Although <strong>no joint communique</strong> was issued at the end of the summit, the French President released a statement stating that the seven industrialized nations were committed to open and fair world trade, and global economic stability.</li>
</ul>
<h3>Key Takeaways</h3>
<ul style="list-style-type: square;">
<li>Discussion on forest fires in the <a href="/daily-updates/daily-news-analysis/amazon-rainforest" target="_blank" rel="noopener"><strong>Amazon rainforests</strong></a>. G7 countries pledged $20 million help to fight fires in the Amazon rainforests.</li>
<li>US trade conflicts with France over <a href="/daily-updates/daily-news-analysis/data-protection-law-in-the-united-states" target="_blank" rel="noopener"><strong>GAFA tax</strong></a> &amp; other related issues, Iran over the <a href="/daily-updates/daily-news-analysis/us-reimposes-sanctions-on-iran" target="_blank" rel="noopener"><strong>Joint Comprehensive Plan of Action (JCPOA)</strong></a>, US-China <a href="/to-the-points/paper3/trade-war-6" target="_blank" rel="noopener"><strong>trade wars.</strong></a></li>
<li>G7 leaders backed the existence and importance of the <strong>Sino-British Joint Declaration of 1984</strong> on Hong Kong and called for violence to be avoided.</li>
<li>The United States of America offered a better deal after UK&rsquo;s <a href="/loksabha-rajyasabha-discussions/brexit-deal-what-lies-ahead" target="_blank" rel="noopener"><strong>Brexit.</strong></a></li>
<li>There was a call for <strong>reinstating Russia</strong> back into the group. Russia was removed from the group after it <a href="/daily-updates/daily-news-analysis/elections-in-ukraine" target="_blank" rel="noopener"><strong>annexed Crimea in 2014.</strong></a> But the consensus for the same was not achieved.</li>
<li>As a reflection of <a href="/daily-updates/daily-news-editorials/india-france-relations" target="_blank" rel="noopener"><strong>strong bilateral relations between India &amp; France</strong></a>, a <strong>special invitation</strong> was sent to India to become a part of this summit.<br />
<ul style="list-style-type: circle;">
<li>On the sidelines of this summit, India highlighted its large-scale efforts to address various environmental issues like, reducing biodiversity, climate change, water stress &amp; ocean pollution. <br />
<ul style="list-style-type: disc;">
<li>India highlighted the steps taken in this regard which include, vow to <a href="/daily-updates/daily-news-analysis/plastic-ban-incentivise-options-for-single-use-plastic-to-make-a-national-ban-possible" target="_blank" rel="noopener"><strong>eliminate single-use plastic</strong></a>, harnessing solar energy, saving water, and protecting flora and fauna.</li>
<li>On a session on <strong>Digital transformation</strong> at G7 Summit, Indian PM remarked, &ldquo;India&rsquo;s usage of technology for enhanced &amp; innovative digital payment initiatives.&rdquo; India is putting enormous efforts in leveraging digital technology to fight social inequalities through empowerment and inclusion.</li>
</ul>
</li>
<li>Indian Prime Minister also had a brief discussion with the US President over the <a href="/loksabha-rajyasabha-discussions/in-depth-jammu-and-kashmir" target="_blank" rel="noopener"><strong>Kashmir</strong> </a>issue, reiterating that,<em> &lsquo;it is an internal matter of India &amp; any related issues on it will be resolved bilaterally with Pakistan&rsquo;.</em></li>
</ul>
</li>
<li>The need for a dedicated multilateral <strong>Green Bank was</strong> demanded. The purpose of this bank would solely be to finance the projects supporting renewable energies and mitigating environmental challenges. <br />
<ul style="list-style-type: circle;">
<li>This bank will complement and collaborate with other existing multilateral- regional &amp; national institutions in co-financing the projects.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>G7</strong></p>
<ul style="list-style-type: square;">
<li>The Group of Seven (G7) is a forum of the <strong>world's seven largest developed economies</strong> whose government leaders <strong>meet annually</strong> to discuss international economic and monetary issues.</li>
<li>The G-7 has its roots in an <strong>informal meeting of the finance ministers</strong> of France, West Germany, the U.S, Great Britain, and Japan (the <strong>Group of Five</strong>) in the wake of the <strong>1973 oil crisis.</strong> That, in turn, inspired the French President to invite the leaders of those countries, and <strong>Italy,</strong> to Rambouillet in 1975 for further discussions on global oil.</li>
<li>The next year, <strong>Canada</strong> was also invited to join the group and the first meeting with all <strong>G-7 nations was hosted by the United States which was held in Puerto Rico in 1976.</strong></li>
<li>Summits are held annually and hosted on a rotation basis by the group's members.</li>
<li>The 2018 summit was hosted by Canada in Quebec from June 8-9.</li>
<li>The 45th G7 summit was hosted by France from August 24-26, 2019, in Biarritz in Nouvelle-Aquitaine, France.</li>
</ul>
<p><strong>Members</strong></p>
<p>The G7 members are recognized as the seven <strong>wealthiest</strong> and <strong>most advanced</strong> nations in the world. The members are:</p>
<ul style="list-style-type: square;">
<li>France,</li>
<li>Germany,</li>
<li>The United Kingdom,</li>
<li>Italy,</li>
<li>The United States of America,</li>
<li>Canada,</li>
<li>Japan</li>
<li>The <a href="/important-institutions/drishti-specials-important-institutions-international-institution/european-union" target="_blank" rel="noopener"><strong>European Union</strong></a> is sometimes considered an eighth member of the G-7, since it holds all the rights and responsibilities of full members except to chair or host the meeting.</li>
</ul>
<p><strong>Expansion to G-8 (the Group of Eight)</strong></p>
<ul style="list-style-type: square;">
<li>The G-7 responded as the global economy evolved. In 1991, the Soviet Union pledged to create an economy with freer markets and held its first direct presidential election.</li>
<li>Following the 1994 G7 meeting in Naples, Russian President held meetings with G-7 member countries, in what became known as the P-8 <strong>(Political 8).</strong></li>
<li>In 1998, after urging from leaders including U.S. President, Russia was added to the G-7 group as a full-time member, creating a formal G-8.</li>
<li>However, in 2014, Russia was suspended from the group after the annexation of Crimea and tensions in Ukraine.</li>
</ul>
<p><strong>Purpose</strong></p>
<ul style="list-style-type: square;">
<li>The major purpose of the G-7 is to discuss and deliberate on <strong>international economic issues.</strong> It sometimes acts in concert to help resolve other global problems, with a special focus on economic issues.</li>
<li>G7 fills out numerous global top lists:<br />
<ul style="list-style-type: circle;">
<li>Leading export countries,</li>
<li>Largest gold reserves,</li>
<li>Largest nuclear energy producers,</li>
<li>Top contributors to the UN budget.</li>
</ul>
</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/opinion/editorial/message-delivered/article29282081.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		],
		(int) 19 => [
			'title' => 'Hurricane Dorian',
			'catname' => 'News Analysis',
			'desc' => '<p>Recently the Hurricane Dorian became the strongest storm in modern records to hit the northwestern <strong>Bahamas (a country in the Caribbean Islands).</strong></p>
<h3>Hurricane Dorian</h3>
<ul style="list-style-type: square;">
<li>It is an extremely powerful tropical cyclone currently affecting the Bahamas and threatening the Southeastern United States.</li>
<li>It is developed from a tropical wave in the Central Atlantic.</li>
<li>It is categorised as a <strong>Category 5 storm on Saffir&ndash;Simpson hurricane wind scale (SSHWS)</strong> with maximum sustained winds of 285 km per hour.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/161image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/161image3.jpg" width="635" height="521" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<div class="border-bg">
<p><strong>Hurricanes</strong></p>
<ul style="list-style-type: square;">
<li>A Hurricane is a <a href="/daily-updates/daily-news-analysis/cyclone-idai" target="_blank" rel="noopener"><strong>tropical cyclone</strong></a> that occurs in the Atlantic Ocean and the northeastern Pacific Ocean.</li>
<li>These are formed over the warm ocean waters near the equator.</li>
<li>Hurricanes typically form between 5 to 15 degrees latitude north and south of the equator.</li>
<li>Hurricanes are known to be one of nature's most destructive storms as they bring heavy rains, deadly waves and fierce winds.</li>
</ul>
<p><strong>Saffir-Simpson Hurricane Wind Scale</strong></p>
<ul style="list-style-type: square;">
<li>The Saffir-Simpson Hurricane Wind Scale is a 1 to 5 rating based on a hurricane's sustained wind speed. This scale estimates potential property damage.</li>
</ul>
<table border="1" style="width: 100%; border-collapse: collapse; background-color: #f29b7e;">
<tbody>
<tr style="height: 35px;">
<td style="width: 11.088%; height: 35px;"><strong>Category</strong></td>
<td style="width: 16.3894%; height: 35px;"><strong>Sustained Winds</strong></td>
<td style="width: 45.2876%; height: 35px;"><strong>Types of Damage Due to Hurricane Winds</strong></td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">1</td>
<td style="width: 16.3894%; height: 19px;">119-153 km/h</td>
<td style="width: 45.2876%; height: 19px;">Very dangerous winds will produce some damage</td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">2</td>
<td style="width: 16.3894%; height: 19px;">154-177 km/h</td>
<td style="width: 45.2876%; height: 19px;">Extremely dangerous winds will cause extensive damage</td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">3&nbsp;(major)</td>
<td style="width: 16.3894%; height: 19px;">178-208 km/h</td>
<td style="width: 45.2876%; height: 19px;">Devastating damage will occur</td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">4 (major)</td>
<td style="width: 16.3894%; height: 19px;">209-251 km/h</td>
<td style="width: 45.2876%; height: 19px;">Catastrophic damage will occur</td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">5&nbsp;(major)</td>
<td style="width: 16.3894%; height: 19px;">252 km/h or higher</td>
<td style="width: 45.2876%; height: 19px;">Catastrophic damage will occur</td>
</tr>
</tbody>
</table>
</div>
<p><br /><a href="https://www.thehindu.com/news/international/catastrophic-hurricane-dorian-hits-bahamas/article29316410.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'title' => 'Internationalisation of India’s Higher Education',
		'catname' => 'News Editorials',
		'desc' => '<div class="border">
<p>The article is based on <strong><a href="https://www.orfonline.org/expert-speak/education-international-relations-55076/" target="_blank" rel="noopener">Education and international relations</a></strong> that was published on ORF (Observer Research Foundation) on 3rd September. It talks about the prospects and initiatives regarding internationalisation of India&rsquo;s higher education.</p>
</div>
<h3>Context</h3>
<ul style="list-style-type: square;">
<li>India has an inspirational history of Nalanda, Takshashila and Vikramashila that served as the melting pot of scholars from across the world.</li>
<li>Unfortunately, no Indian University is ranked in the top 150 universities globally. Only three Indian institutions &ndash; IIT Bombay, IISc Bangalore and IIT Delhi- find a place in the top-200 of the <a href="/daily-updates/daily-news-analysis/qs-world-university-rankings" target="_blank" rel="noopener">QS World University Ranking for 2020</a>.</li>
<li>Indian education system is on its way to reconstruct itself. Several initiatives have been taken by the government to attract a large number of foreign scholars to study in Indian universities and enriching our system through ideas and diversity.</li>
<li>To achieve this objective, India&rsquo;s Higher Education needs to be reformed to first provide wholesome education for Indian students, before we cater to foreign students in large numbers.</li>
<li>Without urgent systemic reforms, internationalisation of India&rsquo;s higher education will remain a distant dream.</li>
</ul>
<h3>Favourable Factors attracting foreign students to India</h3>
<ul style="list-style-type: square;">
<li>The Indian economy is doing well and has progressed to become the world's seventh-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). The image of the third-world poor country is being shed slowly.</li>
<li>India has developed the image of being <strong>home to successful tech companies</strong>. Bengaluru has become synonymous with startups. It is stirring quite a lot interest among the globally mobile youngsters.</li>
<li>Our top institutions, especially the IITs, are world class and feature in the top-200 of world rankings.</li>
<li><strong>Indian origin CEOs</strong> such as Sundar Pichai and Satya Nadella, have bolstered the image of Indian scholars.</li>
<li>Top-200 of the Fortune 500 companies recruit from Indian universities in large numbers.</li>
<li>Experiences in emerging markets are placed at a premium in developed countries that want to establish a business presence here.</li>
<li>India offers a rich milieu of culture and arts for the students to engage with.</li>
<li><strong>Popularity of English as a spoken language</strong> places India at an advantage vis-a-vis China.</li>
<li>The <strong>cost of higher education is relatively cheap in India,</strong> offering an interesting place in the cost-value matrix.</li>
</ul>
<h3>Efforts to attract foreign students and faculties</h3>
<ul style="list-style-type: square;">
<li><strong>Study in India Programme:</strong>
<ul style="list-style-type: circle;">
<li>Primary objective is to target foreign students by branding India as an attractive education destination.</li>
<li>India is home to around 70,000 foreign students. The &lsquo;Study in India&rsquo; programme has an ambition of increasing it to two lakh by 2022.</li>
</ul>
</li>
<li><strong>Fee Waivers and scholarship:</strong> Indian higher educational institutions are waking up to the opportunities of having an internationally diverse student body. Many universities are offering fee waivers and scholarships to attract foreign students to boost their image and rankings.</li>
<li><strong>GIAN (Global Initiative for Academic Networks) programme</strong> was initiated in 2015 to invite distinguished academicians, entrepreneurs, scientists, and experts from premier institutions from across the world, to teach in the higher educational institutions in India.</li>
<li>The<a href="/daily-updates/daily-news-analysis/scheme-for-promotion-of-academic-and-research-collaboration-sparc" target="_blank" rel="noopener"><strong> SPARC (Scheme for Promotion of Academic and Research Collaboration)</strong></a> programme was initiated in to facilitate research and academic collaboration with top academic institutions in the world.
<ul style="list-style-type: circle;">
<li>The Government plans to fund collaboration of top Indian institutions with foreign institutions figuring in the top-500 of the QS world ranking.</li>
</ul>
</li>
<li>The <strong>&lsquo;Institutes of Eminence&rsquo;</strong> was conceptualised with a goal of making a few prestigious Indian Higher Education Institutions rank within the top 100 in globally-renowned rankings.</li>
</ul>
<h3>Education as Soft Power</h3>
<ul style="list-style-type: square;">
<li>Hamid Karzai, Aung San Suu Kyi and other leaders who have studied in India speak endearingly about their experiences as students in India.</li>
<li>Indian students studying abroad in the US or the UK feel attached to their alma mater and develop a bond with the host countries.</li>
<li>The American education system is among its biggest sources of soft power. The home to some of the best universities in the world, it attracts the brightest minds from across the world.</li>
</ul>
<h3>Issues and Challenges before Higher Education in India</h3>
<ul style="list-style-type: square;">
<li><strong>Shortage of resources:</strong> State universities and their affiliated colleges that handle bulk of enrollment in higher education receive a very small amount of grants and thus lacks basic infrastructure.</li>
<li><strong>Teacher vacancies:</strong> According to UGC, Out of the total sanctioned teaching posts, 35% professor posts, 46% associate professor posts and 26% assistant professor posts are vacant.</li>
<li><strong>Accountability and performance of teachers:</strong> At present, there is no mechanism for ensuring the accountability and performance of professors in universities and colleges. This is unlike foreign universities where the performance of college faculty is evaluated by their peers and students.</li>
<li><strong>Lack of employable skills:</strong> A recent employability report has found that over 80 percent of engineers in India are unemployable as they lack the technological skills required by employers now.</li>
<li><strong>Outdated Curriculum:</strong> Eminent scientist and Bharat Ratna awardee CNR Rao once said, 90 per cent of the universities and higher educational institutions in the country have outdated curriculum.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>Allowing India&rsquo;s online <a href="/daily-updates/daily-news-analysis/massive-open-online-courses" target="_blank" rel="noopener"><strong>MOOCs (Massive Open Online Courses)</strong></a> such as those on <strong>SWAYAM</strong> (Study Webs of Active Learning for Young Aspiring Minds) Platform to be used in neighbouring countries will <strong>strengthen our soft power</strong>.</li>
<li>Enhancing investment in higher education, especially in research and development, is urgently required to raise the standard of higher education in India.
<ul style="list-style-type: circle;">
<li><strong>HEFA (Higher Education Finance Agency)</strong> is a welcome step in providing finance to premier educational institutions for creation of high quality infrastructure and innovation ecosystem.</li>
</ul>
</li>
<li>Taking measures to allow foreign universities to set up campuses in India to increase inflow of foreign funding in India&rsquo;s Higher Education system and to reduce &ldquo;Brain Drain&rdquo; from India.</li>
<li>Activities mandated under the &lsquo;Study in India&rsquo; programme should be executed.
<ul style="list-style-type: circle;">
<li>The process of making visa procedures simpler</li>
<li>Sprucing up facilities in host institutions</li>
<li>Marketing Indian universities in target countries</li>
<li>Target-marketing student groups through social media</li>
<li>Signing international agreements with institutions and universities abroad</li>
</ul>
</li>
<li>Education can be an important source of soft power if it is pursued in the right direction. Lessons can be learnt from our Yoga culture which has gained tremendous recognition worldwide.</li>
</ul>
<table border="1" style="border-collapse: collapse; background-color: #bff5ee; border-color: #037062; border-style: dotted;">
<tbody>
<tr>
<td style="width: 100%;"><em><strong>Drishti Input:</strong></em><br /><br />&ldquo;Education can be an important source of soft power. Elaborate. Discuss the initiatives taken by the government to attract foreign students in Indian universities and to stop Brain Drain from India.&rdquo;</td>
</tr>
</tbody>
</table>',
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	],
	(int) 1 => [
		'title' => 'Big Data',
		'catname' => 'Paper 3',
		'desc' => '<h3>What is Big Data?</h3>
<p><strong>Big Data</strong> simply refers to a <strong>large amount of data</strong> which is of structured, semi-structured or unstructured nature. The data pool is so voluminous that it becomes difficult for an organization to manage and process it using traditional databases and software techniques. Therefore, big data not only implies the enormous amount of available data but it also refers to the entire process of gathering, storing, and analyzing that data.</p>
<p>Big Data is characterized by <strong>6Vs</strong> as described in the following figure:</p>
<p><a href="http://www.drishtiias.com/images/uploads/714drishti_ias_big_data.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/714drishti_ias_big_data.jpg" width="776" height="435" style="display: block; margin-left: auto; margin-right: auto;" /></a></p>
<h3>Evolution of Big Data</h3>
<ul style="list-style-type: square;">
<li>In today&rsquo;s world where data is the new oil, big data can hypothetically be assumed as a system that acquires crude oil and makes fuel out of it.</li>
<li>With the advent of the <strong>Internet of Things (IoT)</strong>, data is now readily available. According to <strong>DOMO&rsquo;s report</strong>, "Over 2.5 quintillion bytes of data are created every single day, and it&rsquo;s only going to grow from there. By 2020, it is estimated that 1.7 MB of data will be created every second for every person on earth."</li>
</ul>
<h3>Significance of Big Data in India</h3>
<ul style="list-style-type: square;">
<li>With a population of around 1.3 billion, Big Data holds a significant position in the Indian context.</li>
<li>As per the study conducted by <strong>NASSCOM</strong>, &ldquo;the Indian analytics industry is predicted to reach $16 billion mark by 2025.&rdquo;</li>
</ul>
<h3>Applications of Big Data</h3>
<ul style="list-style-type: square;">
<li><strong>Governance:</strong> Big data is used in governance for the following purposes:<br />
<ul style="list-style-type: circle;">
<li><strong>Power Discoms</strong> use data collected from last-mile to cut down their <em>Aggregate Technical &amp; Commercial losses</em>.</li>
<li><strong>Security agencies and Police forces</strong> use big data to, <br />
<ul style="list-style-type: disc;">
<li>Prevent cyber-attacks</li>
<li>Enhance security systems</li>
<li>Detect card-related fraud cases</li>
<li>Predict criminal activities, e.g &ndash; <em>Crime and Criminal Tracking Networks and Systems (CCTNS)</em></li>
</ul>
</li>
<li>In improving the quality of <strong>education</strong>.</li>
<li><a href="/daily-updates/daily-news-analysis/big-data-to-mitigate-the-impact-of-disasters" target="_blank" rel="noopener"><strong>Disaster Management:</strong></a> In understanding and mitigating the risks of disasters.</li>
</ul>
</li>
<li><strong>Economy:</strong> Big data can provide huge benefits to various sectors of the economy like, <br />
<ul style="list-style-type: circle;">
<li>In <strong>Insurance Sector</strong> to improve customer experience &amp; ensure their right to claim</li>
<li>In <strong>Banking Sector</strong> to manage financial data</li>
<li>To capture the production, price statistics, &amp; <strong>calculate</strong> the resultant <strong>GDP</strong></li>
<li><strong>Evade risks &amp; minimize losses</strong> for financial firms</li>
<li><strong>Tax officials</strong> catching hold the tax evaders using <strong>Project Insight</strong></li>
<li><strong>Deregistration</strong> of lakhs of <strong>shell companies</strong></li>
<li>In preventing <strong>money laundering</strong> &amp; curbing <strong>terrorism financing</strong> by identifying the safe havens</li>
</ul>
</li>
<li><strong>Health Care:</strong> Big Data in health care caters the following benefits:<br />
<ul style="list-style-type: circle;">
<li>Predicting diseases,</li>
<li>Prescribing medicines,</li>
<li>Optimizing treatment,</li>
<li>Using clinical data to improve patient care,</li>
<li>In critical Diagnostic tests,</li>
<li>Finding new cures (R&amp;D)</li>
</ul>
</li>
<li><strong>Agriculture and Food:</strong><br />
<ul style="list-style-type: circle;">
<li>Seed Selection</li>
<li>Geo-Tagging to keep the track record of agricultural assets in the country</li>
<li>Weather Forecasting</li>
<li>Irrigation &amp; effective water management</li>
<li>Food Processing</li>
<li>Identification of Crop Diseases</li>
</ul>
</li>
<li><strong>Digital Space:</strong><br />
<ul style="list-style-type: circle;">
<li>In the <strong>telecom</strong> sector- connecting the hinterland areas and bringing them to the mainstream,</li>
<li>On <strong>Social Media</strong> for targeting platform users,</li>
<li><strong>Artificial Intelligence &ndash;</strong> Controlling home appliances,</li>
<li>Analyzing &amp; Improving individual performance (at work, sports, or home) using wearable devices.</li>
</ul>
</li>
</ul>
<h3>Government Initiatives &amp; Interventions</h3>
<ul style="list-style-type: square;">
<li><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/niti-aayog-national-institution-for-transforming-india" target="_blank" rel="noopener"><strong>NITI Aayog</strong></a> is currently working on a plan in collaboration with the private players to develop the <strong>&lsquo;National Data &amp; Analytics Platform&rsquo;</strong>, which will act as a single source of sectoral data for citizens, policymakers, and researchers.</li>
<li><strong>&lsquo;Big Data Management Policy&rsquo;</strong> drafted by <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/comptroller-and-auditor-general-of-india-cag" target="_blank" rel="noopener"><strong>CAG</strong></a> for auditing large chunks of data generated by the public sector in the states and the union territories, is a great start.</li>
<li><strong>Ministry of Statistics and Programme Implementation</strong> has proposed to establish a <strong>&lsquo;National Data Warehouse on Official Statistics&rsquo;</strong> which will leverage technology and use big data analytical tools to improve the quality of <strong>macro-economic aggregates</strong>.</li>
<li>Use of <a href="/daily-updates/daily-news-analysis/conference-on-digital-cashless-economy" target="_blank" rel="noopener"><strong>Direct Benefit Transfer in MGNREGA &amp; Aadhaar</strong></a> for <strong>authentication</strong> &amp; availing welfare scheme benefits helps in the filtering of ghost beneficiaries.</li>
<li>The Ministry of Agriculture has signed a deal with the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/indian-space-research-organisation-isro" target="_blank" rel="noopener">ISRO</a> to use satellites for <strong>mapping of agricultural assets</strong>.</li>
<li>Smart City Mission, Digital India, digital economy proposals like BHIM app, inter alia are important government initiatives that are using Big Data for achieving good governance in the country.</li>
</ul>
<h3>Challenges</h3>
<ul style="list-style-type: square;">
<li><strong>Invasion of Privacy:</strong> Big Data Analytics leads to the <strong>twin problems of digitization, which are, <a href="/daily-updates/daily-news-editorials/privacy-judgement-and-the-aftermath" target="_blank" rel="noopener">Data privacy</a> and <a href="/daily-updates/daily-news-editorials/challenges-of-digitisation-and-way-forward" target="_blank" rel="noopener">Net neutrality</a></strong>.</li>
<li><strong>Data Security:</strong> Several <a href="/daily-updates/daily-news-analysis/supreme-court-upholds-aadhaars-constitutional-validity" target="_blank" rel="noopener">incidents of leakage of Aadhaar data</a> underlined the need for the government to increase the security and safety of virtual data it collects from its citizens. </li>
<li><strong>Technical Challenges:</strong> As the name suggests, Big data involves several inherent limitations like,<br />
<ul style="list-style-type: circle;">
<li>Inefficient infrastructure for data collection &amp; management of such humongous data,</li>
<li>Storage &amp; computational problems,</li>
<li>Scalability &amp; streaming issues.</li>
</ul>
</li>
<li><strong>Challenges related to Governance:</strong> For effective policymaking using Big Data, the government needs to adopt a consistent dynamic approach. Constant evaluation of the generated feedback and flexibly changing the related policy structures will percolate the benefits to the lowest level.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Ethical issues</strong> related to data privacy need to get addressed.<br />
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-editorials/cyber-crime-data-deprivation-and-data-localisation" target="_blank" rel="noopener">Data protection law</a> must incorporate some of the best practices followed in the World.</li>
<li>It must <strong>strengthen cybersecurity</strong> in order to safely utilize the large pool of virtually available data.</li>
</ul>
</li>
<li><strong>Economically,</strong> the alliance of big data with blockchain technology will potentially change the way we see big data for now.</li>
<li><strong>Infrastructural Requirement:</strong> To effectively analyze the large chunks of available data, well-equipped <strong>data centers</strong> are needed. It is essential to segregate the relevant data from the irrelevant data pool.</li>
<li>In a world where most of the governments &amp; businesses rely more on new-age data sources such as satellite imagery, parking images, and night lights, Big Data governance could be a game-changer for India, where policies have for long been under-implemented.</li>
</ul>
<p>Big Data is like a double-edged sword. It will be wise to handle it with utmost care and conscience.</p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/to-the-points/paper3/big-data-1'
	],
	(int) 2 => [
		'title' => 'Induction of Apache Helicopter',
		'catname' => 'News Analysis',
		'desc' => '<p>Recently, Indian Air Force has formally inducted the <strong>AH-64E Apache Attack Helicopter</strong> into its inventory at Air Force Station Pathankot.</p>
<h3>AH-64E Apache Attack Helicopter</h3>
<ul style="list-style-type: square;">
<li>Better known as an <strong>attack helicopter</strong> are received from the <strong>Boeing production facility in Mesa, Arizona, USA</strong>.</li>
<li>Apache will <strong>replace Russian origin MI-35</strong> helicopters that are on the verge of retirement.</li>
<li>These are all-weather <strong>capable, easily maintainable and have high agility and survivability against battle damage</strong>.</li>
<li>The <strong>capabilities of the AH-64E Apache Attack Helicopter</strong> includes:<br />
<ul style="list-style-type: circle;">
<li>It can carry out precision attacks at standoff ranges and operate in hostile airspace with threats from the ground.</li>
<li>It can transmit and receive battlefield picture through data uplinking and networking.</li>
<li>It can also shoot fire and forget anti-tank guided missiles, air to air missiles, rockets while providing versatility to helicopter in network-centric aerial warfare.</li>
<li>It also carries fire control radar, which has a 360&deg; coverage and nose-mounted sensor suite for target acquisition and night vision systems.</li>
</ul>
</li>
<li>The addition of Apache Attack Helicopter is a significant step towards modernisation of Indian Air Force helicopter fleet.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/985drishti_apache.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/985drishti_apache.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="520" height="390" caption="false" /></a></p>
<p><a href="https://pib.gov.in/PressReleseDetail.aspx?PRID=1583956" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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	],
	(int) 3 => [
		'title' => 'Svalbard: Fastest Warming Town on the Earth',
		'catname' => 'News Analysis',
		'desc' => '<p>Svalbard located in Norway is facing extreme consequences of <a href="/daily-updates/daily-news-editorials/climate-change-and-development-in-india" target="_blank" rel="noopener"><strong>climate change</strong></a>.</p>
<ul style="list-style-type: square;">
<li>It is the result of <a href="/daily-updates/daily-news-analysis/rising-sea-level" target="_blank" rel="noopener">rising sea level</a> of Arctic sea due to <a href="/daily-updates/daily-news-analysis/earth-at-risk-of-becoming-hothouse" target="_blank" rel="noopener">Global Warming</a>.<a href="http://www.drishtiias.com/images/uploads/660image1.gif" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/660image1.gif" width="256" height="175" style="float: right;" /></a></li>
<li>Since 1970, average annual temperatures have risen by 4 degrees Celsius in Svalbard, with winter temperatures rising more than 7 degrees.</li>
<li>The <strong>&ldquo;Climate in Svalbard 2100&rdquo;</strong> report also warns that the annual mean air temperature in Svalbard is projected to increase by 7 to 10 degrees Celsius by the end of this century.</li>
<li>Since 1979, the Arctic sea ice extent has declined by nearly 12% per decade, with the most pronounced winter reduction in Svalbard and the Barents Sea area.</li>
<li><strong>Svalbard&rsquo;s main town, Longyearbyen with a population of slightly more than 2,000 people, it is the northernmost town on the planet and also the fastest-warming town on the earth.</strong></li>
</ul>
<div class="border-bg">
<p><strong>Note:</strong> Svalbard Global Seed Vault is the world&rsquo;s largest seed storage facility situated at Norway.</p>
</div>',
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		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/svalbard-fastest-warming-town-on-the-earth'
	],
	(int) 4 => [
		'title' => 'Secondary Market For Corporate Loans',
		'catname' => 'News Analysis',
		'desc' => '<p>The <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"><strong>Reserve Bank of India (RBI)</strong></a> constituted Panel, headed by <strong>T.N. Manoharan</strong>, has given some suggestions for <strong>developing the secondary market for corporate loans in the country</strong>. Suggestions are as follows:</p>
<ul style="list-style-type: square;">
<li>Setting up a <strong>Self-Regulatory Body (SRB)</strong> of participants to finalise details for the secondary market for corporate loans, including the standardisation of documents.</li>
<li>Creating a <strong>Loan Contract Registry</strong> to remove information asymmetries between buyers and sellers.</li>
<li>Creating an <strong>online loan sales platform</strong> to conduct auctions and sale of loans.</li>
<li><strong>Widening the Spectrum:</strong> Enabling participation of non-banking entities such as mutual funds, insurance companies, and pension funds.<br />
<ul style="list-style-type: circle;">
<li>Banks and the <a href="/daily-updates/daily-news-editorials/A%20nuanced%20understanding%20of%20the%20NBFC%20sector" target="_blank" rel="noopener"><strong>Non-Banking Financial Companies (NBFCs)</strong></a> are currently the only participants in the primary and secondary loan markets.</li>
</ul>
</li>
<li><strong>Single loan securitisation</strong> can be considered to incentivise investors to acquire loans through the secondary market mechanism. <br />
<ul style="list-style-type: circle;">
<li>Securitisation is currently permitted only for a pool of homogenous assets.</li>
<li>Securitization is a process by which a company clubs it's different financial assets/debts to <strong>form a consolidated financial instrument</strong> which is issued to investors. In return, the investors in such securities get interest.</li>
</ul>
</li>
<li>Allowing <a href="/daily-updates/daily-news-analysis/investments-through-p-notes" target="_blank" rel="noopener"><strong>Foreign Portfolio Investors (FPIs)</strong></a> to directly purchase distressed loans from banks.<br />
<ul style="list-style-type: circle;">
<li>Currently, FPIs have to come through the <strong>Asset Reconstruction Companies (ARCs)</strong> to participate in the distressed loan market.</li>
</ul>
</li>
<li>Linking the pricing of all loans to an external benchmark as the current <a href="/daily-updates/daily-news-analysis/sbi-linked-its-interest-rate-to-the-repo-rate" target="_blank" rel="noopener"><strong>Marginal Cost of Funds Based Lending Rate (MCLR)</strong></a> may not be comparable across banks.</li>
</ul>
<div class="border-bg">
<p><strong>Asset Reconstruction Companies</strong></p>
<ul style="list-style-type: square;">
<li>An Asset Reconstruction Company is a special type of financial institution that buys the debtors of the bank at a mutually agreed value and attempts to recover the debts or associated securities by itself.</li>
<li>The ARCs are registered under the RBI and regulated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002).</li>
<li>The ARCs take over a portion of the debts of the bank that qualify to be recognised as <a href="/daily-updates/daily-news-editorials/solving-the-npa-crisis-in-india" target="_blank" rel="noopener"><strong>Non-Performing Assets</strong></a>.</li>
</ul>
</div>
<h3>Secondary Market for Corporate Loans</h3>
<ul style="list-style-type: square;">
<li><strong>Secondary loan market in India</strong> is largely <strong>restricted to</strong> the sale of loans to <strong>Asset Reconstruction Companies</strong> and no formalised mechanism has been developed to deepen the market. <br />
<ul style="list-style-type: circle;">
<li><strong>The secondary market</strong> is the market where investors buy and sell securities they already own.</li>
</ul>
</li>
<li>A vibrant, deep and liquid secondary market for debt would go a long way in increasing the efficiencies of the debt market in general and would aid in the resolution of stressed assets in particular.</li>
<li>A well-developed secondary market for debt would also aid in transparent price discovery of the inherent riskiness of the debt being traded.</li>
<li>The secondary market for loans can also be an important mechanism for credit intermediaries to <strong>manage credit risk and liquidity risk on their balance-sheets</strong>, especially for distressed assets.</li>
</ul>
<p><a href="https://www.livemint.com/news/india/rbi-panel-recommends-self-regulatory-agency-for-secondary-markets-1567534541141.html" target="_blank" rel="noopener"><strong>Source: Mint</strong></a></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/secondary-market-for-corporate-loans'
	],
	(int) 5 => [
		'title' => 'MUDRA Scheme and Employment',
		'catname' => 'News Analysis',
		'desc' => '<p>Recently, <a href="/daily-updates/daily-news-analysis/rbi-panel-s-recommendations-on-msme" target="_blank" rel="noopener"><strong>Pradhan Mantri Mudra Yojana</strong></a> Survey has been conducted by the <strong>Labour Bureau</strong> under the <strong>Ministry of Labour and Employment</strong>.</p>
<ul style="list-style-type: square;">
<li>The survey studied as many as 97,000 beneficiaries and was conducted between April-November 2018. Its <strong>salient findings</strong> are:<br />
<ul style="list-style-type: square;">
<li>Just <strong>one out of five beneficiaries i.e. 20.6%</strong> from the sample survey availed Mudra loan for setting up a new establishment, the <strong>rest used the funds for expanding their existing business</strong>.<a href="http://www.drishtiias.com/images/uploads/245image2.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/245image2.jpg" style="float: right;" width="508" height="442" /></a></li>
<li>A total of Rs 5.71 lakh crore in loans was sanctioned under three categories of <strong>Mudra &mdash; Shishu, Kishor and Tarun</strong>, whereas the average size of a loan was Rs 46,536.</li>
<li>The <strong>share of three types of loans out of total loan sanctioned</strong> under MUDRA in 2018-17 is as follows: <br />
<ul style="list-style-type: square;">
<li>Shishu loans: 42%</li>
<li>Kishor loans: 34%</li>
<li>Tarun loans: 24%</li>
</ul>
</li>
<li>The <strong>share for creation of new jobs by three types of loans</strong> under MUDRA in 2018-17 is as follows<br />
<ul style="list-style-type: square;">
<li>Shishu loans: 66%</li>
<li>Kishor loans: 18.85%</li>
<li>Tarun loans: 15.51%</li>
</ul>
</li>
<li>The loan extended for every additional job created works out to Rs 5.1 lakh.</li>
<li>Sector-wise additional job creation under MUDRA is:<br />
<ul style="list-style-type: square;">
<li>Services: 34.34 %</li>
<li>Trading: 33.23%</li>
<li>Allied agriculture: 20.33%</li>
<li>Manufacturing: 11.7 %</li>
<li><strong>Services and trading accounted for more than two-thirds of the additional jobs created.</strong></li>
</ul>
</li>
<li>The survey defines <strong>&ldquo;Self Employed&rdquo;</strong> as persons who <strong>engaged independently</strong> in a profession or trade.</li>
<li><strong>Employees or hired workers</strong> refer to persons engaged, excluding self-employed, by the unit whether for wages or not, in work connected directly or indirectly with the process including all administrative, technical and clerical staff.</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/india/just-1-in-5-mudra-beneficiaries-started-new-business-half-of-extra-jobs-were-self-employment-govt-survey-5963553/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/mudra-scheme-and-employment'
	],
	(int) 6 => [
		'title' => 'Shortage of Anti-Rabies Vaccine',
		'catname' => 'News Analysis',
		'desc' => '<p>Recently, the <strong>National Pharmaceutical Pricing Authority (NPPA)</strong> has asked manufacturers and marketers to increase the stocks of anti-rabies vaccine to address its shortage.</p>
<ul style="list-style-type: square;">
<li>The shortage is due to lack of firm orders from government and late payments.</li>
<li>According to the Health Ministry&rsquo;s data, <strong>India is the hotbed of human rabies</strong>.<br />
<ul style="list-style-type: square;">
<li>India accounts for more than <strong>one-third of the world&rsquo;s rabies deaths</strong>.</li>
<li>Each year, as many as 20,000 people die due to the vaccine-preventable fatality.</li>
<li>India has a population of <strong>30 million stray dogs</strong> which cause <strong>96% of rabies</strong> <strong>in humans</strong>.</li>
</ul>
</li>
<li><strong>Rabies</strong><br />
<ul style="list-style-type: circle;">
<li>It is caused by a Ribonucleic Acid(RNA) virus that is <strong>present in the saliva</strong> of a rabid animal (dog, cat, monkey, etc).</li>
<li>It is invariably transmitted following a bite of a rabid animal that leads to deposition of the saliva and the virus in the wound.</li>
<li>The death invariably occurs in <strong>four days</strong> to <strong>two weeks due to cardio-respiratory failure</strong>.</li>
<li>However, the time interval between the bite and occurrence of symptoms/signs of rabies i.e. <strong>incubation period varies from four days to two years or rarely even more</strong>.</li>
<li>Thus, it is important to remove the virus from the wound as early as possible by <strong>immediately washing</strong> the wound with water and soap followed by application of antiseptics that reduce/eliminate chances of nerve infection.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>National Pharmaceuticals Pricing Authority</strong></p>
<ul style="list-style-type: square;">
<li>NPPA is an organization under <strong>Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers</strong> which was <strong>set up in 1997</strong> to revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order (DPCO), 1995.</li>
<li>The prices are <strong>now fixed/revised</strong> under <strong>Drugs (Prices Control) Order (DPCO), 2013</strong>.</li>
<li>It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/news/cities/Delhi/manufacturers-told-to-rush-rabies-vaccines-to-areas-facing-shortage/article29326664.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/shortage-of-anti-rabies-vaccine'
	],
	(int) 7 => [
		'title' => 'Steering Committee on Fintech',
		'catname' => 'News Analysis',
		'desc' => '<p>Recently, the Steering Committee on <a href="/daily-updates/daily-news-editorials/daily-updates-news-editorials-the-challenges-for-fintech-adoption-in-India" target="_blank" rel="noopener"><strong>Fintech</strong></a> has submitted its final report to the Ministry of Finance.</p>
<ul style="list-style-type: square;">
<li>The Committee was constituted in pursuance to the announcement made in Budget Speech 2018-19.</li>
</ul>
<h3>Recommendations of the Report</h3>
<ul style="list-style-type: square;">
<li>The Committee has recommended Fintech can be leveraged to <strong>enhance financial inclusion of <a href="/to-the-points/paper3/micro-small-and-medium-enterprises-msme" target="_blank" rel="noopener">Micro, Small and Medium Enterprises (MSMEs)</a></strong>.<br />
<ul style="list-style-type: circle;">
<li>In this pursuit, it is recommended that the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener">Reserve Bank of India (RBI)</a> may consider the development of a <strong>cash-flow based financing</strong> for MSMEs.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Cash flow-based financing</strong></p>
<ul style="list-style-type: square;">
<li>In cash flow lending, a financial institution <strong>grants a loan that is backed by the recipient&rsquo;s past and future cash flows</strong>.</li>
<li>This means a company borrows money from expected revenues they anticipate they will receive in the future.</li>
<li>Credit ratings are also used in this form of lending as an important criterion.</li>
<li>The advantage of this method is that a company can possibly obtain financing much faster, <strong>as an appraisal of collateral is not required</strong>.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li>To support risk reduction in the insurance business, it recommended that insurance companies and lending agencies to be <strong>encouraged to use drone and remote sensing </strong>technology for crop area, damage and location assessments.</li>
<li>The Department of Financial Services can work with public sector banks to bring in <strong>more efficiency</strong> to their work and reduce fraud and security risks.<br />
<ul style="list-style-type: circle;">
<li>Significant opportunities can be explored to <strong>increase the levels of automation</strong> using <strong>Artificial Intelligence (AI)</strong>, cognitive analytics &amp; machine learning in their back-end processes.</li>
</ul>
</li>
<li><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/national-bank-for-agriculture-and-rural-development-nabard" target="_blank" rel="noopener">National Bank for Agriculture and Rural Development (NABARD)</a> to take immediate steps to <strong>create a credit registry for farmers</strong> with special thrust for use of fintech.</li>
<li>A <strong>comprehensive legal framework for consumer protection</strong> in the context of the rise of fintech and digital services.</li>
<li>The adoption of <strong>Regulation Technology (RegTech) and Supervisory technology (SupTech)</strong> by all financial sector regulators.</li>
</ul>
<div class="border-bg">
<p><strong>RegTech</strong></p>
<ul style="list-style-type: square;">
<li>It is the management of regulatory processes within the financial industry <strong>through technology</strong>.</li>
<li>The main functions of Regtech include regulatory monitoring, reporting, and compliance.</li>
<li>RegTech uses cloud computing technology through software-as-a-service (SaaS) to help businesses comply with regulations efficiently and less expensively.</li>
<li>The rise in digital products has increased data breaches, cyber hacks, money laundering, and other fraudulent activities.</li>
</ul>
<p><strong>SupTech</strong></p>
<ul style="list-style-type: square;">
<li>It helps supervisory agencies to digitize reporting and regulatory processes, resulting in more efficient and proactive monitoring of risk and compliance at financial institutions.</li>
<li>Suptech is currently found in two areas of applications: <strong>data collection and data analytics</strong>.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li>The Department of Financial Services and the Reserve Bank of India may examine the <strong>suitability of virtual banking system</strong>.<br />
<ul style="list-style-type: circle;">
<li><strong>The virtual banking system</strong> is a system where banks do not need to set up branches and yet deliver the full-scale retail banking services ranging from extending loans, savings accounts, issuing cards and offering payment services <strong>through their app or website</strong>.</li>
</ul>
</li>
<li>The <strong>usage of common fintech platform</strong> for <a href="/daily-updates/daily-news-analysis/rbi-panel-s-recommendations-on-msme" target="_blank" rel="noopener"><strong>Micro Units Development and Refinance Agency (MUDRA)</strong></a> loans, small saving schemes, pension schemes and provident fund.</li>
<li><strong>Reforming the current <a href="/daily-updates/daily-news-analysis/fintech-conclave-2019" target="_blank" rel="noopener">peer-to-peer (P2P) lending</a></strong> platforms.</li>
<li>Further, an Inter-Ministerial Steering Committee will be set up on fintech applications by Ministry of Finance, to continue to carry on the tasks of implementing this report.</li>
</ul>
<p><a href="https://www.business-standard.com/article/news-cm/steering-committee-on-fintech-related-issues-submits-final-report-to-finance-minister-119090300140_1.html" target="_blank" rel="noopener"><strong>Source: BS</strong></a></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/steering-committee-on-fintech'
	],
	(int) 8 => [
		'title' => 'Global Fund for AIDS, TB, and Malaria',
		'catname' => 'News Analysis',
		'desc' => '<p>India has recently announced a contribution of <strong>$22 million</strong> to the Global Fund for AIDS, TB, and Malaria <strong>(GFTAM)</strong>.</p>
<ul style="list-style-type: square;">
<li>India has stepped an inch closer by enhancing the Global Fund efforts to strengthen health systems and save 16 million more lives across the globe.</li>
<li>The Global Fund to fight AIDS, Tuberculosis, and Malaria was created to raise, manage and invest the world&rsquo;s money in eliminating <strong>three of the deadliest infectious diseases</strong> the world has ever known.</li>
<li>India shares a sustained partnership with the Global Fund since its formation, both as a recipient and as a donor.</li>
</ul>
<h3>Global Funds</h3>
<ul style="list-style-type: square;">
<li>Global Fund (with a total investment of <strong>$2 billion</strong>) was created in 2002 to pool the world&rsquo;s resources &amp; invest them strategically in programs to <a href="/daily-updates/daily-news-editorials/daily-updates-news-editorials-end-tb-in-india-to-boost-its-health-diplomacy-profile" target="_blank" rel="noopener"><strong>end Tuberculosis (TB)</strong></a>, Acquired Immuno-Deficiency Syndrome (AIDS), and Malaria as epidemics.</li>
<li>It is a partnership of governments, civil society, technical agencies, the private sector and people affected by the diseases.</li>
<li>India has set a precedent for other donors to contribute generously to the cause.</li>
</ul>
<div class="border-bg">
<p><strong>Tuberculosis (TB)</strong></p>
<ul style="list-style-type: square;">
<li>Tuberculosis (TB) is caused by <strong>bacteria (Mycobacterium tuberculosis)</strong> that most often affect the lungs. Tuberculosis is curable and preventable.</li>
<li>TB is spread from person to person through the air. When people with lung TB cough, sneeze or spit, they propel the TB germs into the air.</li>
<li>About <strong>one-third</strong> of the world's population has <strong>latent TB</strong>, which means people have been infected by TB bacteria but are not (yet) ill with the disease and cannot transmit the disease.</li>
<li><strong>World TB Day is observed on 24 March</strong> to earmark the discovery of Mycobacterium tuberculosis, a bacterium due to which TB is caused, by German microbiologist Dr. Robert Koch in 1882.</li>
<li>The<strong> Universal Immunization Programme (UIP)</strong> launched by the Government of India in 1985 includes vaccination for 12 diseases including TB.</li>
</ul>
<p><strong>Human Immuno-Deficiency Virus, Acquired Immuno-Deficiency Syndrome (HIV-AIDS)</strong></p>
<ul style="list-style-type: square;">
<li>HIV is a type of virus called a retrovirus, and the combination of drugs used to treat it is called Antiretroviral Therapy (ART).</li>
<li>HIV attacks <strong>CD4, a type of White Blood Cell (T cells)</strong> in the body&rsquo;s immune system. T cells are those cells that move around the body detecting anomalies and infections in cells.</li>
<li>With neither a vaccine nor a cure in sight, Antiretroviral Therapy (ART) is the only option available for people living with HIV-AIDS.</li>
<li><strong>World AIDS Day</strong> is observed on <strong>1<sup>st</sup> December</strong>.</li>
<li><strong>&ldquo;Mission Sampark&rdquo;</strong> was <strong>launched in 2017</strong> to bring back People Living with HIV who have left treatment after starting Anti Retro Viral Treatment (ART).</li>
<li><strong>'Project Sunrise'</strong> was launched in <strong>2016 to tackle the rising HIV prevalence</strong> in <strong>north-eastern states</strong>, especially among people injecting drugs.</li>
</ul>
<p><strong>Malaria</strong></p>
<ul style="list-style-type: square;">
<li>Malaria is caused by <strong>Plasmodium parasites</strong>.</li>
<li>The parasites are spread to people through the bites of infected <strong>female Anopheles mosquitoes</strong>, called "malaria vectors",</li>
<li><strong>World Malaria Day</strong> is observed on <strong>25<sup>th</sup> April</strong>.</li>
<li>It can be noted that only for <strong>four diseases viz. HIV-AIDS, TB, Malaria, and Hepatitis (28 July),</strong> the World Health Organization (WHO) officially endorses disease-specific global awareness days.</li>
</ul>
</div>
<p><a href="https://pib.gov.in/PressReleseDetailm.aspx?PRID=1583960" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/global-fund-for-aids-tb-and-malaria'
	],
	(int) 9 => [
		'title' => 'Economic slowdown: Cyclical or Structural?',
		'catname' => 'News Editorials',
		'desc' => '<p><strong><em>The article is based on <a href="https://www.business-standard.com/article/economy-policy/cyclical-or-structural-decoding-the-nature-of-india-s-economic-slowdown-119090300158_1.html" target="_blank" rel="noopener">&ldquo;Cyclical or structural? Decoding the nature of India's economic slowdown&rdquo;</a> that was published in Business Standard on 3rd September. It talks about the nature of the current economic slowdown and the way ahead.</em></strong></p>
<h3>Context</h3>
<ul style="list-style-type: square;">
<li>India is <strong>undergoing an economic slowdown.</strong> Its GDP grew at 5% in the first quarter of FY20, <a href="/daily-updates/daily-news-analysis/indian-economy-slowest-growth-in-six-years" target="_blank" rel="noopener">marking the slowest growth</a> since the fourth quarter of FY13.</li>
<li>In its <a href="/daily-updates/daily-news-analysis/domestic-demand-and-economy-s-animal-spirits" target="_blank" rel="noopener">annual report for 2018-19</a> released on 29<sup>th</sup> August, the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener">Reserve Bank of India</a> (RBI) had said that the <strong>slowdown was cyclical, rather than structural,</strong> which would have required deeper reforms.</li>
<li>However, some experts believe that the current slowdown is more than a cyclical one and of the structural type which is evident from the fact that the successive rate cuts by the Central Bank have not yielded the desired results.</li>
</ul>
<h3>What is a Cyclical slowdown?</h3>
<ul style="list-style-type: square;">
<li>A cyclical slowdown is a <strong>period of lean economic activity that occurs at regular intervals.</strong> Such slowdowns last over the <strong>short-to-medium term</strong>, and are based on the changes in the business cycle.</li>
<li><strong>Measures to recover from cyclical slowdown:</strong>
<ul style="list-style-type: circle;">
<li>Generally, interim fiscal and monetary measures, temporary recapitalisation of credit markets, and need-based regulatory changes are required to revive the economy.</li>
</ul>
</li>
</ul>
<h3>What is a structural slowdown?</h3>
<ul style="list-style-type: square;">
<li>A structural slowdown, on the other hand, is a <strong>more deep-rooted phenomenon</strong> that occurs due to a one-off shift from an existing paradigm.</li>
<li>The changes, which last over a long-term, are<strong> driven by disruptive technologies, changing demographics</strong>, and/or <strong>change in consumer behaviour.</strong></li>
<li>In such a scenario, a monetary and fiscal stimulus won't be enough to revive the economy.</li>
<li>Fixing such problems would require the government to undertake some structural policies. The best example in this regard would be the reforms that were carried out to address the crisis in 1991.</li>
</ul>
<h3>Major Factors Affecting India&rsquo;s Growth</h3>
<ul style="list-style-type: square;">
<li><strong>Consumption:</strong> Private consumption, which contributes nearly 55-60% to India&rsquo;s GDP, has been slowing down. <br />
<ul style="list-style-type: circle;">
<li>While the <strong>reduced income growth of households has reduced urban consumption</strong>, drought/near-drought conditions in three of the past five years coupled with the collapse of food prices have taken a heavy toll on rural consumption.</li>
</ul>
</li>
<li><strong>Savings:</strong> Savings by household sector &ndash; which are used to extend loans for investment -- have gone down from 35% (FY12) to 17.2% (FY18). <br />
<ul style="list-style-type: circle;">
<li>Households, including MSMEs, make 23.6% of the total savings in the GDP.</li>
</ul>
</li>
<li><strong>Investment:</strong> Gross Fixed Capital Formation (GFCF), a metric to gauge investment in the economy, too has declined from 34.3 per cent in 2011 to 28.8 per cent in 2018, government data show. Similarly, in the private sector, it has declined from 26.9% in 2011 to 21.4% in 2018.</li>
<li><a href="/loksabha-rajyasabha-discussions/the-big-picture-what-ails-nbfcs" target="_blank" rel="noopener">NBFC crisis</a> triggered by IL&amp;FS default led to a <strong>liquidity crunch</strong> in the economy.</li>
<li>RBI&rsquo;s Annual report highlighted that there are still <strong>structural issues in land, labour, agricultural marketing</strong> and the like that need to be addressed.</li>
</ul>
<div class="border-bg">
<p><strong>Gross Fixed Capital Formation</strong></p>
<ul style="list-style-type: square;">
<li>Gross fixed capital formation (GFCF) refers to the <strong>net increase in physical assets</strong> (investment minus disposals). It does not account for the consumption (depreciation) of fixed capital.</li>
<li>It is a component of expenditure approach to calculating Gross Domestic Product (GDP).</li>
<li>GFCF is not a measure of total investment, because only the value of net additions to fixed assets is measured, and all kinds of financial assets, as well as stocks of inventories and other operating costs are excluded.</li>
</ul>
</div>
<h3>Recent Steps Taken</h3>
<ul style="list-style-type: square;">
<li>Subsequent<strong> rate cuts by RBI</strong> to lower the interest rate.The RBI has cut the repo rate by 110 basis points so far in 2019 to 5.4% &ndash; its lowest level since 2010.</li>
<li><a href="/daily-updates/daily-news-analysis/stimulus-package-to-reverse-economic-slowdown-1" target="_blank" rel="noopener">Stimulus package</a> announced by the government along with <a href="/daily-updates/daily-news-analysis/economic-measures-to-boost-economy" target="_blank" rel="noopener">other measures</a> may propel demand and thus help to recover the economy.</li>
<li><a href="/daily-updates/daily-news-analysis/transfer-of-surplus-from-rbi" target="_blank" rel="noopener">Surplus transfer by the RBI</a> to the government can help boost planned-spending of the government without compromising fiscal deficit targets. It would also help in <br />Recapitalising Public sector Banks to tackle the NPA crisis.</li>
<li><a href="/daily-updates/daily-news-analysis/amalgamation-of-national-banks" target="_blank" rel="noopener">Merger of Public sector Banks</a> would enhance the credit culture and thus spur investment in the economy.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>RBI, in its annual report, called for <strong>counter-cyclical actions</strong> in terms of monetary and fiscal policies, <strong>along with deep-seated reforms</strong> for the structural slowdown.</li>
<li>Stimulating domestic demand and reducing supply costs to maintain the Indian industry&rsquo;s export competitiveness.</li>
<li><a href="/gist-of-economic-survey/gist-of-economic-survey-2018-19/gist-of-economic-survey2018-19" target="_blank" rel="noopener">Economic Survey 2018-19</a> asked for <strong>taking measures to boost investment</strong>, especially private investment, that is the 'key driver' that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction, and generates jobs.</li>
<li>Much needed structural reforms in land, labour and agrarian policies to tackle structural dimension of the slowdown.</li>
</ul>
<table border="1" style="border-collapse: collapse; background-color: #f7f4da; border-color: #0e388c; border-style: dashed;">
<tbody>
<tr>
<td style="width: 1256px;">
<p><em><strong>Drishti Input:</strong></em><br /><br />&ldquo;Comment whether the present economic slowdown being faced by Indian Economy is Cyclical or structural. Critically examine the measures taken by the government to recover from the slowdown.&rdquo;</p>
</td>
</tr>
</tbody>
</table>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-editorials/economic-slowdown-cyclical-or-structural'
	],
	(int) 10 => [
		'title' => 'South Asian Association for Regional Cooperation (SAARC)',
		'catname' => 'International Institutions',
		'desc' => '<p>The South Asian Association for Regional Cooperation (SAARC) was established with the signing of the <strong>SAARC Charter</strong> in Dhaka on 8 December 1985.</p>
<ul style="list-style-type: square;">
<li>The idea of regional cooperation in South Asia was first raised in November 1980. After consultations, the foreign secretaries of the seven founding countries&mdash;Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka&mdash;met for the first time in Colombo in April 1981. <br />
<ul style="list-style-type: square;">
<li>Afghanistan became the newest member of SAARC at the 13th annual summit in 2005.</li>
<li>The <strong>Headquarters and Secretariat</strong> of the Association are at <strong>Kathmandu, Nepal</strong>.</li>
</ul>
</li>
</ul>
<h3>Principles</h3>
<ul style="list-style-type: square;">
<li>Cooperation within the framework of the SAARC shall be based on:<br />
<ul style="list-style-type: circle;">
<li>Respect for the principles of <strong>sovereign equality, territorial integrity, political independence, non-interference</strong> in the internal affairs of other States and mutual benefit.</li>
<li>Such cooperation shall not be a substitute for bilateral and multilateral cooperation but shall complement them.</li>
<li>Such cooperation shall not be inconsistent with bilateral and multilateral obligations.</li>
</ul>
</li>
</ul>
<h3>Members of SAARC</h3>
<ul style="list-style-type: square;">
<li>SAARC comprises of eight member States: <a href="http://www.drishtiias.com/images/uploads/828sm-830x587.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/828sm-830x587.png" width="618" height="437" style="float: right;" /></a><br />
<ul style="list-style-type: circle;">
<li>Afghanistan</li>
<li>Bangladesh</li>
<li>Bhutan</li>
<li>India</li>
<li>Maldives</li>
<li>Nepal</li>
<li>Pakistan</li>
<li>Sri Lanka</li>
</ul>
</li>
<li>There are currently nine Observers to SAARC, namely: (i) Australia; (ii) China; (iii) the European Union; (iv) Iran; (v) Japan; (vi) the Republic of Korea; (vii) Mauritius; (viii) Myanmar; and (ix) the United States of America.</li>
</ul>
<h3>Areas of Cooperation</h3>
<ul style="list-style-type: square;">
<li>Human Resource Development and Tourism</li>
<li>Agriculture and Rural Development</li>
<li>Environment, Natural Disasters and Biotechnology</li>
<li>Economic, Trade and Finance</li>
<li>Social Affairs</li>
<li>Information and Poverty Alleviation</li>
<li>Energy, Transport, Science and Technology</li>
<li>Education, Security and Culture and Others</li>
</ul>
<h3>The Objectives of the SAARC</h3>
<ul style="list-style-type: square;">
<li>To <strong>promote the welfare</strong> of the people of South Asia and to improve their quality of life.</li>
<li>To <strong>accelerate economic growth,</strong> social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potentials.</li>
<li>To <strong>promote and strengthen collective self-reliance</strong> among the countries of South Asia.</li>
<li>To <strong>contribute to mutual trust,</strong> understanding and appreciation of one another&rsquo;s problems..</li>
<li>To <strong>promote active collaboration</strong> and mutual assistance in the economic, social, cultural, technical and scientific fields.</li>
<li><strong>To strengthen cooperation with other developing countries.</strong></li>
<li>To <strong>strengthen cooperation among themselves in international forums</strong> on matters of common interests; and</li>
<li>To cooperate with international and regional organizations with similar aims and purposes.</li>
</ul>
<h3>Principal Organs</h3>
<ul style="list-style-type: square;">
<li><strong>Meeting of Heads of State or Government</strong><br />
<ul style="list-style-type: circle;">
<li>Meetings are held at the Summit level, usually on an annual basis.</li>
</ul>
</li>
<li><strong>Standing Committee of Foreign Secretaries</strong><br />
<ul style="list-style-type: circle;">
<li>The Committee provides overall monitoring and coordination, determines priorities, mobilizes resources, and approves projects and financing.</li>
</ul>
</li>
<li><strong>Secretariat</strong><br />
<ul style="list-style-type: circle;">
<li>The SAARC Secretariat was established in Kathmandu on 16 January 1987. Its role is to coordinate and monitor the implementation of SAARC activities, service the meetings of the association and serve as a channel of communication between SAARC and other international organizations.</li>
<li>The Secretariat comprises the secretary-general, seven directors, and the general services staff. The secretary-general is appointed by the Council of Ministers on the principle of rotation, for a non-renewable tenure of three years.</li>
</ul>
</li>
</ul>
<h3>SAARC Specialized Bodies</h3>
<ul style="list-style-type: square;">
<li><strong>SAARC Development Fund (SDF):</strong> Its primary objective is funding of project-based collaboration in social sectors such as poverty alleviation, development, etc.<br />
<ul style="list-style-type: circle;">
<li>SDF is governed by a Board consisting of representatives from the Ministry of Finance of the Member States. The Governing Council of SDF (Finance Ministers of MSs) oversees the functioning of the Board.</li>
</ul>
</li>
<li><strong>South Asian University</strong><br />
<ul style="list-style-type: circle;">
<li><strong>South Asian University (SAU)</strong> is an international university, located in India. Degrees and Certificates awarded by the SAU are at par with the respective Degrees and Certificates awarded by the National Universities/ Institutions.</li>
</ul>
</li>
<li><strong>South Asian Regional Standards Organization</strong><br />
<ul style="list-style-type: circle;">
<li><strong>South Asian Regional Standards Organization</strong> (SARSO) has its Secretariat at <strong>Dhaka, Bangladesh</strong>.</li>
<li>It was established <strong>to achieve and enhance coordination and cooperation among SAARC member states</strong> in the fields of standardization and conformity assessment and is aimed to develop harmonized Standards for the region to facilitate intra-regional trade and to have access in the global market.</li>
</ul>
</li>
<li><strong>SAARC Arbitration Council</strong><br />
<ul style="list-style-type: circle;">
<li>It is an <strong>inter-governmental body</strong> having its office in <strong>Pakistan</strong> is mandated to provide a legal framework/forum within the region for fair and efficient settlement of commercial, industrial, trade, banking, investment and such other disputes, as may be referred to it by the member states and their people.</li>
</ul>
</li>
</ul>
<h3>SAARC and its Importance</h3>
<ul style="list-style-type: square;">
<li>SAARC <strong>comprises 3% of the world's area, 21% of the world's population</strong> and <strong>3.8%</strong> (US$2.9 trillion) <strong>of the global economy</strong>.</li>
<li><strong>Creating synergies:</strong> It is the world&rsquo;s most densely populated region and one of the most fertile areas. SAARC countries have common tradition, dress, food and culture and political aspects thereby synergizing their actions.</li>
<li><strong>Common solutions:</strong> All the SAARC countries have common problems and issues like poverty, illiteracy, malnutrition, natural disasters, internal conflicts, industrial and technological backwardness, low GDP and poor socio-economic condition and uplift their living standards thereby creating common areas of development and progress having common solutions.</li>
</ul>
<h3>SAARC Achievements</h3>
<ul style="list-style-type: square;">
<li><strong>Free Trade Area (FTA):</strong> SAARC is comparatively a new organization in the global arena. The member countries have established a <strong>Free Trade Area (FTA)</strong> which will increase their internal trade and lessen the trade gap of some states considerably.</li>
<li><strong>SAPTA: South Asia Preferential Trading Agreement</strong> for promoting trade amongst the member countries came into effect in 1995.</li>
<li><strong>SAFTA: A Free Trade Agreement</strong> confined to goods, but excluding all services like information technology. Agreement was signed to reduce customs duties of all traded goods to zero by the year 2016.</li>
<li><strong>SAARC Agreement on Trade in Services (SATIS):</strong> SATIS is following the GATS-plus 'positive list' approach for trade in services liberalization.</li>
<li><strong>SAARC University:</strong> Establish a SAARC university in India, a food bank and also an energy reserve in Pakistan.</li>
</ul>
<h3>Significance for India</h3>
<ul style="list-style-type: square;">
<li><strong>Neighbourhood first:</strong> Primacy to the country&rsquo;s immediate neighbours.</li>
<li><strong>Geostrategic significance:</strong> Can counter China (OBOR initiative) through engaging Nepal, Bhutan, the Maldives and Sri Lanka in development process and economic cooperation.</li>
<li><strong>Regional stability:</strong> SAARC can help in creation of mutual trust and peace within the region.</li>
<li><strong>Global leadership role:</strong> It offers India a platform to showcase its leadership in the region by taking up extra responsibilities.</li>
<li><strong>Game changer for India&rsquo;s Act East Policy:</strong> by linking South Asian economies with South East asian will bring further economic integration and prosperity to India mainly in the Services Sector.</li>
</ul>
<h3>Challenges</h3>
<ul style="list-style-type: square;">
<li><strong>Low frequency of meetings:</strong> More engagement is required by the member states and instead of meeting biennial meetings should be held annually.</li>
<li><strong>Broad area of cooperation</strong> leads to diversion of energy and resources.</li>
<li><strong>Limitation in SAFTA:</strong> The implementation of SAFTA has not been satisfactory a Free Trade Agreement confined to goods, excluding all services like information technology.</li>
<li><strong>Indo-Pak Relations:</strong> Escalated tension and conflict between India and Pakistan have severely hampered the prospects of SAARC.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>In a region increasingly targeted by Chinese investment and loans, SAARC could be a common platform to demand more sustainable alternatives for development, or to oppose trade tariffs together, or to demand better terms for South Asian labour around the world.</li>
<li>SAARC, as an organisation, reflects the South Asian identity of the countries, historically and contemporarily. This is a naturally made geographical identity. Equally, there is a cultural, linguistic, religious and culinary affinity that defines South Asia.</li>
<li>The potential of organisation to maintain peace and stability in the region should be explored by all the member countries.</li>
<li>SAARC should be allowed to progress naturally and the people of South Asia, who make up a quarter of the world&rsquo;s population should be offered more people-to-people contact.</li>
</ul>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/important-institutions/drishti-specials-important-institutions-international-institution/south-asian-association-for-regional-cooperation-saarc'
	],
	(int) 11 => [
		'title' => 'Express Governance Awards',
		'catname' => 'News Analysis',
		'desc' => '<p>Recently, a total of 16 district magistrates have been honoured with <strong>The Indian Express Excellence in Governance Awards</strong> for their pioneering work across a wide range of categories.</p>
<ul style="list-style-type: square;">
<li>Some of the <strong>unique initiatives</strong> are:</li>
</ul>
<h3>Category : Left Wing Extremism District</h3>
<ul style="list-style-type: square;">
<li>District : East Godavari (Andhra Pradesh)</li>
<li>Initiative :<strong> Digital Connectivity</strong> through <strong>FSOC.</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Google&rsquo;s X FSOC or Free Space Optical Communication (FSOC)</strong> has enabled the remote tribal villages located in the hills to get connected with the outside world.</li>
<li>It provides services like mobile connectivity, internet, and wireless landline connectivity to the villages.</li>
<li>The initiative has made facilities like <strong>telemedicine, public grievances redressal, online education</strong> etc. accessible for remote villages.</li>
<li>Availability of connectivity will help to eradicate <strong><a href="/daily-updates/daily-news-analysis/left-wing-extremism-in-india" target="_blank" rel="noopener">Left Wing Extremism.</a></strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Free Space Optical Communication (FSOC)</strong></p>
<ul style="list-style-type: square;">
<li>FSOC is an <strong>optical communication technology that uses light</strong> to wirelessly transmit data to telecommunication and internet applications.</li>
<li>FSOC links use <strong>beams of light</strong> to deliver high-speed, high-capacity connectivity over long distances but without the cable.</li>
<li>FSOC boxes can simply be placed kilometres apart on roofs or towers, with the signal beamed directly between the boxes to easily traverse common obstacles like rivers, roads and railways.</li>
</ul>
</div>
<h3>Category : Women Development</h3>
<ul style="list-style-type: square;">
<li>District : Jhabua (Madhya Pradesh)</li>
<li>Initiative : <strong>Sathidar Abhiyan</strong><br />
<ul style="list-style-type: circle;">
<li>It is an initiative for <a href="/mains/model-essays/the-new-emerging-women-power-ground-realities" target="_blank" rel="noopener"><strong>empowerment of women</strong></a> and children through <strong>eradication of social evils.</strong></li>
<li>The campaign intends to bring an end to the reserve <a href="/to-the-points/Paper2/violence-against-women" target="_blank" rel="noopener"><strong>dowry system</strong></a> by social leaders aware of the adversities.</li>
<li>It is not easy to end the practice in a go, so administration <strong>capped the dowry amount to Rs 50,000 or less initially</strong> as against the conventional Rs 2, 3 lakhs.</li>
<li>Eventually,administration succeeded to eliminate dowry system completely in targeted villages.</li>
</ul>
</li>
</ul>
<h3>Category : Child Development</h3>
<ul style="list-style-type: square;">
<li>District : Nagpur (Maharashtra)</li>
<li>Initiative : <strong>Jivhala</strong><br />
<ul style="list-style-type: circle;">
<li>The initiative aims for Creating Awareness About Child Rights And Prevention of <a href="/loksabha-rajyasabha-discussions/crime-against-minors" target="_blank" rel="noopener"><strong>Sexual Harassment</strong> </a>in Tribal Ashram schools.</li>
<li>It provides training and orientation through video and reading material to students which made children open about these sensitive issues.</li>
<li>The initiative helped to empower children and also sensitized the school administration about their responsibilities.</li>
</ul>
</li>
</ul>
<h3>Category : Inclusive Innovation</h3>
<ul style="list-style-type: square;">
<li>District : Valsad (Gujarat)</li>
<li>Initiative : <strong>E-Megh</strong><br />
<ul style="list-style-type: circle;">
<li>The initiative provides <strong>Early <a href="/loksabha-rajyasabha-discussions/the-big-picture-floods-river-linking" target="_blank" rel="noopener">Flood</a> Warning System.</strong></li>
<li>It also provides effective and efficient real-time data</li>
<li>It enhances the co-ordination between the officials and the beneficiaries by using Communication tools like Auto-generated calls &amp; SMS to the authorities.</li>
<li>It also comes up with the flood maps to co-relate threats to various towns and villages.</li>
</ul>
</li>
</ul>
<h3>Category : Skill Development</h3>
<ul style="list-style-type: square;">
<li>District- East Godavari (Andhra Pradesh)</li>
<li>Initiative : <strong>Kaushal Godavari (KG)</strong><br />
<ul style="list-style-type: circle;">
<li>The initiative focuses on <a href="/summary-of-important-reports/strategy-for-new-india-at-75" target="_blank" rel="noopener"><strong>Skill Development</strong></a> and Entrepreneurship Promotion.</li>
<li>The district administration arranged facilities for skill development, skill enhancement and job placement.</li>
<li>Job placements under the programme aided private companies which have hired 16,000 youths from tribal area till now.</li>
</ul>
</li>
</ul>
<h3>Category : Border Districts</h3>
<ul style="list-style-type: square;">
<li>District- Cachar (Assam)</li>
<li>Initiative : <strong>Debo Na Nebo Na</strong> <br />
<ul style="list-style-type: circle;">
<li>It is an <strong>Anti-Corruption Movement</strong> along with <strong>Mobile Phone Application</strong> by the District Administration</li>
<li><strong>&ldquo;Debo Na, Nebo Na&rdquo;</strong> means <strong>&ldquo;Won&rsquo;t Give, Won&rsquo;t Take&rdquo;</strong></li>
<li>Complaints can be lodged through forms dropped in drop-boxes kept outside every government office,phone calls or directly through the app.</li>
<li>The motive behind the project is to ensure that there is no absence of facilities to communicate about a corrupt practice .</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/india/express-governance-awards-live-updates-16-dms-to-be-honoured-for-finest-work-5924223/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/express-governance-awards'
	],
	(int) 12 => [
		'title' => 'Food Wastage and its Impact',
		'catname' => 'News Analysis',
		'desc' => '<p>According to the report <strong>&ldquo;Reducing Food Loss and Waste&rdquo;</strong> by the <strong>World Resources Institute (WRI)</strong>, uneaten food is impacting the economy and the environment negatively.</p>
<h3>Key Findings</h3>
<ul style="list-style-type: square;">
<li><strong>Defined Food Loss and Wastage:</strong> <br />
<ul style="list-style-type: circle;">
<li><strong>Food loss</strong> refers to food that spills, spoils, incurs an abnormal reduction in quality such as bruising or wilting, or otherwise gets lost before it reaches the consumer. It is the unintended result of an agricultural process or technical limitation in storage, infrastructure, packaging, or marketing.</li>
<li><strong>Food waste</strong> refers to food that is of good quality and fit for human consumption but that does not get consumed because it is discarded&mdash;either before or after it spoils. It is the result of negligence or a conscious decision to throw food away.</li>
</ul>
</li>
<li><strong>Impact of Uneaten Food:</strong> <br />
<ul style="list-style-type: circle;">
<li>Nearly one-third of the food that is produced each year goes uneaten, <strong>costing the global economy over $940 billion.</strong></li>
<li>Uneaten food is responsible for <strong>emitting about 8% of <a href="/daily-updates/daily-news-analysis/greenhouse-gas-levels-reach-record-highs-un-report" target="_blank" rel="noopener">planet-warming greenhouse gases</a></strong> into the atmosphere.</li>
</ul>
</li>
<li><strong>Place of Food Loss and Wastage:</strong><br />
<ul style="list-style-type: circle;">
<li>Most of the food loss happens <strong>&ldquo;near the farm&rdquo;</strong> predominantly in lower-income countries.</li>
<li>Most of the food waste happens <strong>&ldquo;near the plate&rdquo;</strong> predominantly in higher-income countries.</li>
</ul>
</li>
<li><strong>Share of Food Group Lost or Wasted:</strong> <br />
<ul style="list-style-type: circle;">
<li>Roots and tubers are the food group that face the maximum wastage, at over 62% in the year 2007. Fruits and vegetables follow, with over 41% in the year 2007.</li>
<li>By weight, fruits and vegetables make up the largest share of total annual food loss and waste.</li>
</ul>
</li>
<li><strong>Solution:</strong> <br />
<ul style="list-style-type: circle;">
<li>Developing national strategies for food loss and waste reduction.</li>
<li>Creating national <strong>public-private partnerships</strong> to deal with food losses and wastage.</li>
<li>Tackling food loss and waste across the entire supply chain.</li>
<li><strong>Shifting consumer social norms</strong> so that wasting food is seen as unacceptable.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>World Resources Institute</strong></p>
<ul style="list-style-type: square;">
<li>WRI is a global research organization that spans more than 60 countries, with <strong>international offices in Brazil, China, India, Indonesia, Mexico and the United States.</strong></li>
<li>It was <strong>established in 1982.</strong> Headquartered in Washington, US.</li>
<li>It aspires to create a world where the actions of government, business, and communities combine to eliminate poverty and sustain the natural environment for all people.</li>
</ul>
</div>
<p><a href="https://indianexpress.com/article/explained/telling-numbers-the-food-we-waste-and-what-it-costs-the-global-economy-5960689/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/food-wastage-and-its-impact'
	],
	(int) 13 => [
		'title' => 'In Depth - Blue Revolution',
		'catname' => 'Lok Sabha & Rajya Sabha Discussions',
		'desc' => '<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/TaHFT9Iyg2k" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>The Vice-President on 30<sup>th</sup> August 2019, inaugurated the<a href="/daily-updates/daily-news-analysis/5th-aqua-aquaria-india-2019" target="_blank" rel="noopener"><strong> fifth edition of the Aqua Aquaria India</strong> </a>in Hyderabad. It is an event that is held every year. This time, the <strong>theme</strong> was <strong>&lsquo;Taking Blue Revolution to India&rsquo;s Hinterland&rsquo;.</strong></p>
<p>The Blue Revolution is part of the Government's efforts to promote fishing as an allied activity for farmers in order to double their incomes. It refers to an explosive growth in the aquaculture industry. As part of its efforts to raise seafood output and exports and promote sustainable aquaculture, <strong>the Government has constituted an independent Ministry for Fisheries.</strong> In the <a href="/daily-updates/daily-news-analysis/highlights-of-budget-2019" target="_blank" rel="noopener"><strong>budget</strong></a> 2019-20, the government allocated an estimated 3,737 crore rupees for the newly carved out Ministry of Fisheries, Animal Husbandry and Dairying.</p>
<h3>Blue Revolution</h3>
<ul style="list-style-type: square;">
<li>It refers to the time of intense growth of the worldwide aquaculture industry from the mid-1960s to the present day.<br />
<ul style="list-style-type: circle;">
<li>The aquaculture industry has been growing at an average rate of 9% a year and India is one of the fastest growers.</li>
</ul>
</li>
<li>In other words, the <strong>rapid increase in the production of fish and marine product</strong> through a package program is known as the Blue Revolution.</li>
<li>The Blue Revolution, <strong>first began in China</strong> where fishing is an ancient activity. China accounts for around two-thirds of the total aquaculture production worldwide by weight and roughly half by market value.</li>
</ul>
<div class="border-bg">
<p><strong>Fisheries and Aquaculture</strong></p>
<ul style="list-style-type: square;">
<li>Worldwide, aquaculture production has now reached 50 million tonnes, up from 2 million tonnes in 1950.<br />
<ul style="list-style-type: circle;">
<li><strong>Asian countries contribute over 90% to aquaculture worldwide.</strong> China, itself, contributes more than 70%.</li>
</ul>
</li>
<li>Aquaculture <strong>provides employment to people</strong> throughout the world. <br />
<ul style="list-style-type: circle;">
<li>Some 880 million people are employed in fish farming from salmon cages in Norway to Prawn Ponds in Thailand.</li>
<li>Employment in the fisheries sector has grown faster than the world&rsquo;s population as well as employment in traditional agriculture.</li>
</ul>
</li>
<li>Fisheries and aquaculture <strong>provide 4.3 billion people with over 15% of their annual animal protein consumption</strong> and are a vital source of micronutrients and essential lipids.</li>
<li>Fish and seafood are one of the <strong>most traded food commodities.</strong> Over 53% of the trade originates in developing countries.</li>
<li>The top ten species of fish caught with aquaculture include carbs and other oysters, salmons, trouts, shrimps and prawns among others.</li>
</ul>
</div>
<h3>Blue Revolution in India</h3>
<ul style="list-style-type: square;">
<li>It was <strong>launched in India during the 7<sup>th</sup> Five Year Plan (FYP)</strong> that went from 1985 to 1990, during which the government sponsored the <strong>Fish Farmers Development Agency (FFDA).</strong></li>
<li>During the 8<sup>th</sup> FYP, from 1992-97, the <strong>Intensive Marine Fisheries Program</strong> was launched in which collaboration with MNCs was encouraged.</li>
<li>Over a period of time, <strong>fishing harbours</strong> in Tuticorin, Porbandar, Visakhapatnam, Kochi and Port Blair were established.</li>
<li>A number of <strong>research centres</strong> have also been set up to increase the production as well as to do improvement in species.</li>
</ul>
<h3>Outcomes</h3>
<ul style="list-style-type: square;">
<li>The FFDA brought <strong>improvement in aquaculture</strong> by adopting <strong>new techniques of fish breeding,</strong> rearing, marketing and export.</li>
<li>The Indian Fisheries Sector which produced only 60,000 tonnes of fish 50 years ago <strong>produces 4.7 million tonnes</strong> including 1.6 million tonnes from freshwater aquaculture today.</li>
<li>India recorded an <strong>average annual growth of 14.8%</strong> in production of fish and fish products in the last decade as compared to the global average of 7.5% in the same period.<br />
<ul style="list-style-type: circle;">
<li><strong>Fisheries, are in fact, India&rsquo;s single largest agricultural export</strong> with a growth rate of 6-10% in the last five years. In comparison, the growth rate of the farm sector in the same period is around 2.5%.</li>
</ul>
</li>
<li>Fishing is the primary source of livelihood for several communities in India and the country is the <strong>world&rsquo;s second largest fish producer</strong> with exports worth more than 47,000 crore rupees.<br />
<ul style="list-style-type: circle;">
<li>Currently, the USA is the largest market for Indian seafood products with a share of 26.46% in terms of India&rsquo;s exports of marine products followed by South East Asian Countries- 25.71% and the European Union Nations- 20.08%.</li>
</ul>
</li>
<li>The fisheries and aquaculture production <strong>contribute around 1% to India&rsquo;s GDP</strong> and over 5% to the agricultural GDP.</li>
</ul>
<h3>Unutilized Potential</h3>
<ul style="list-style-type: square;">
<li>It is a matter of great concern that India is <strong>able to exploit only a fraction of the aquaculture potential available</strong> to it.</li>
<li>India uses only about 40% of the available ponds, tanks and other water bodies for freshwater aquaculture and 15% of total potential of brackish water resources.</li>
</ul>
<h3>Recent Steps Taken By the Government</h3>
<p><strong>Blue Revolution 2.0/ Neel Kranti Mission</strong></p>
<ul style="list-style-type: square;">
<li>The focus of the Blue Revolution 2.0 is on <strong>development and management of fisheries.</strong> This covers inland fisheries, aquaculture, marine fisheries including deep sea fishing, mariculture and all activities undertaken by the National Fisheries Development Board.<br />
<ul style="list-style-type: circle;">
<li>The <strong>National Fisheries Development Board (NFDB)</strong> was established in 2006 as an autonomous organization under the administrative control of the Department of Fisheries, Ministry of Agriculture and Farmers Welfare, to enhance fish production and productivity in the country and to coordinate fishery development in an integrated and holistic manner.</li>
<li>Now, the Board works under the Ministry of Fisheries, Animal Husbandry and Dairying.</li>
</ul>
</li>
<li>It aims to <strong>achieve economic prosperity of fishers and fish farmers.</strong> The same will be done by developing fisheries in a sustainable manner keeping in view biosecurity and environmental concerns.</li>
<li>The Program has certain <strong>objectives</strong> which includes:<br />
<ul style="list-style-type: circle;">
<li>Fully tapping the total fish potential of the country, both in the inland and the marine sector and triple production by 2020.</li>
<li>Transforming the fisheries sector as a modern industry with special focus on new technologies and processes.</li>
<li>Doubling the income of fishers and fish farmers with special focus on increasing productivity and better post harvest marketing infrastructure including e-commerce and other technologies and global best innovations.</li>
<li>Ensuring inclusive participation of fishers and fish farmers in the income enhancement.</li>
<li>Tripling export earnings by 2020 with focus on benefits flow to fishers and fish farmers.</li>
<li>Enhancing food and nutritional security of the country.</li>
</ul>
</li>
</ul>
<h3>Pradhan Mantri Matsya Sampada Yojana</h3>
<ul style="list-style-type: square;">
<li>The Scheme is aimed <strong>to turn India into a hotspot for fish and aquatic products</strong> through appropriate policy, marketing and infrastructure support.</li>
<li>With the Scheme, the government intends to bring all fishermen under the ambit of farmer welfare programmes and social security schemes.</li>
<li>Through this scheme, the Department of Fisheries will establish a robust fisheries management framework. This will <strong>address a critical gap in the value chain</strong> including infrastructure modernisation, traceability, production, productivity, post harvest management and quality control.</li>
</ul>
<h3>Financial Allocation</h3>
<ul style="list-style-type: square;">
<li>The government has allocated <strong>804.75 crore rupees</strong> for the fisheries sector in the current fiscal.</li>
<li>It&rsquo;s aim is to augment fish production to achieve its target of 15 million tonnes by 2020 under the Blue Revolution and raise it thereafter to about 20 million tonnes by 2022-23.</li>
</ul>
<h3>Initiative Taken under the MGNREGA</h3>
<ul style="list-style-type: square;">
<li>The government under the MGNREGA has started to <strong>develop the farm ponds,</strong> where pisciculture is taking place.</li>
</ul>
<h3>Challenges</h3>
<ul style="list-style-type: square;">
<li>The Food and Agriculture Organization (FAO) points out that nearly <strong>90% of the global marine fish stocks have either been fully exploited</strong> or overfished or depleted to the extent that recovery may not be biologically possible.</li>
<li><strong>Discharge of harmful substances</strong> like plastics and other waste into water bodies that cause devastating consequences for aquatic life.</li>
<li><a href="/loksabha-rajyasabha-discussions/in-depth-melting-himalayas" target="_blank" rel="noopener"><strong>Changing climate.</strong></a></li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>India&rsquo;s long coastline has the potential of becoming the strength of the economy particularly through the exploitation of the Blue Revolution.</li>
<li>India can grow to the extent of 10 trillion dollar economy as against 2.7 trillion dollar today with the help of the Blue Economy.</li>
<li>India <strong>needs to develop more scientifically its fishing system</strong> and other related aspects such as freezing, packaging, etc.</li>
</ul>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/loksabha-rajyasabha-discussions/in-depth-blue-revolution'
	],
	(int) 14 => [
		'title' => 'Terracotta Grinder',
		'catname' => 'News Analysis',
		'desc' => '<p>The <strong>Khadi and Village Industries Commission (KVIC)</strong> has launched the first-ever <strong>&lsquo;Terracotta Grinder&rsquo;</strong> at Varanasi.</p>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/important-facts-for-prelims-7th-may-2019" target="_blank" rel="noopener"><strong>Khadi and Village Industries Commission (KVIC)</strong></a> has also started manufacturing of <strong>plastic-mixed handmade paper.</strong> <br />
<ul style="list-style-type: circle;">
<li>It is being manufactured under KVIC&rsquo;s project <strong>REPLAN (REducing PLAstic in Nature).</strong></li>
<li>In this project, the waste plastic is collected, cleaned, chopped, beaten and treated for softness.</li>
<li>Later it is mixed with the paper raw material in a ratio of 80 % (pulp) and 20% (plastic waste).</li>
</ul>
</li>
</ul>
<h3>Terracotta Grinder</h3>
<ul style="list-style-type: square;">
<li>It will grind the wasted and broken pottery items for re-using in pottery-making.</li>
<li>It will reduce the cost of production, and will also help to solve the problem of shortage of clays for pottery making.</li>
</ul>
<div class="border-bg">
<p><strong>Project REPLAN</strong></p>
<ul style="list-style-type: square;">
<li>The initiative is launched by Khadi and Village Industries Commission (KVIC).</li>
<li>REPLAN stands for <strong>REducing PLastic in Nature.</strong></li>
<li>It aims to make carry bags by mixing processed and treated plastic waste with cotton fibre rags in the ratio 20:80.</li>
<li>The made paper is found to have good strength and durability</li>
<li>It can be used to make paper bags, fine tissues and other paper-based items.</li>
</ul>
<p><strong>Terracotta</strong></p>
<ul style="list-style-type: square;">
<li>Terracotta is a type of ceramic pottery.</li>
<li>Terracotta is made by baking terracotta clay.</li>
<li>In fact, the word &ldquo;terracotta&rdquo; comes from the Italian words for &ldquo;baked earth.&rdquo;</li>
<li>It is often used for making pipes, bricks, and sculptures.</li>
</ul>
</div>
<p><a href="https://pib.gov.in/PressReleseDetail.aspx?PRID=1583877" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/terracotta-grinder'
	],
	(int) 15 => [
		'title' => 'Gist of Economic Survey 2018-19',
		'catname' => 'Gist of Economic Survey 2018-19',
		'desc' => '<p style="text-align: left;"><a href="/images/uploads/1567511623_Economic%20Survey%202018-19.pdf" target="_blank" rel="noopener"><span style="font-size: 24px;"><img class="content-img" src="http://www.drishtiias.com/images/uploads/908Economic Survey 2018-19 Banner (Web).png" width="361" height="361" style="display: block; margin-left: auto; margin-right: auto;" /></span></a></p>
<h1 style="text-align: left;"><span style="font-size: 24px;">Chapter 1</span></h1>
<h1 style="text-align: left;"><span style="font-size: 24px;">Shifting Gears: Private Investment as the Key of Growth, Jobs, Exports and Demand</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>This chapter provides a brief overview of the Economic Survey and talks about India&rsquo;s achievement in the past five years and shares a blueprint for the next five years.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>To achieve the objective of becoming a <strong>$5 trillion economy by 2024-25,</strong> India needs to <strong>sustain a real GDP growth rate of 8%.</strong></li>
<li>This growth rate can only be sustained by a<strong> &lsquo;virtuous cycle&rsquo; of savings, investment and exports catalysed and supported by a favourable demographic phase.</strong></li>
<li>Investment, especially <strong>private investment,</strong> is the <strong>key driver that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction, and generates jobs.</strong></li>
<li>The <strong>Survey</strong> departs from the <strong>traditional Anglo-Saxon</strong> thinking by advocating a growth model that views the economy as being in a virtuous cycle or a vicious cycle.</li>
</ul>
<h2>Last Five Years : The Accomplishments</h2>
<ul style="list-style-type: square;">
<li>Indian Economy has performed fairly well in the past five years. It has <strong>opened several pathways</strong> for<em><strong> trickle-down</strong> </em>so that the benefits of growth and macroeconomic stability reach the bottom of the pyramid.</li>
<li><strong>Macroeconomic Stability</strong>
<ul style="list-style-type: circle;">
<li>India has become the <strong>6<sup>th</sup></strong> largest economy by sustaining growth rates higher than China, and has been regarded as the fastest growing major economy.</li>
<li><strong>Average Inflation</strong> has reached the <strong>lowest level</strong> since independence and was less than half of the level of the preceding 5 years.
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/rbi-keeps-policy-rates-unchanged" target="_blank" rel="noopener"><strong>Monetary Policy Committee (MPC)</strong></a> constituted in 2015 has been successful in containing inflation. It sets a target of 4% (+/- 2) for headline inflation.</li>
</ul>
</li>
<li><strong>Current Account Deficit (CAD)</strong> has remained within manageable limits.</li>
<li><strong>Foreign Reserves</strong> have reached the <strong>highest</strong> levels.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/341image29.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/341image29.jpg" width="636" height="405" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>Beneficiary Focus &amp; Targeted Delivery</strong>
<ul style="list-style-type: circle;">
<li>In order to ensure the benefits of growth and macroeconomic stability reach the bottom of the socio-economic ladder, the govt. has developed the ability to provide <strong>targeted support</strong> through:
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/aadhar-and-its-voluntary-use" target="_blank" rel="noopener"><strong>Aadhar Act 2016:</strong></a> more than 90% population coverage.</li>
<li><strong>Pradhan Mantri Jan Dhan Yojna:</strong> financial inclusion</li>
<li><a href="/daily-updates/daily-news-analysis/factors-preventing-financial-inclusion" target="_blank" rel="noopener"><strong>Direct Benefit Transfer:</strong></a> 370 cash-based schemes transferring benefits.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Infrastructure</strong>
<ul style="list-style-type: circle;">
<li>The creation of physical infrastructure accelerated significantly in the last 5 years.</li>
<li>All villages have been electrified</li>
<li><a href="/daily-updates/daily-news-editorials/boosting-regional-air-connectivity" target="_blank" rel="noopener"><strong>Udan Scheme</strong></a> is extending flight connectivity to tier-3 and tier-4 cities</li>
<li>Out of total, <strong>20% national highways</strong> have been constructed in the last 4 years.</li>
<li>Infrastructure project in North-East has gained huge momentum.</li>
</ul>
</li>
<li><strong>Federalism</strong>
<ul style="list-style-type: circle;">
<li>On the recommendation of <strong>14<sup>th</sup> <a href="/daily-updates/daily-news-analysis/need-to-set-up-state-finance-commission" target="_blank" rel="noopener">Finance Commission</a></strong>, the devolution of funds to States has increased from <strong>32% to 42%</strong> from the pool of central taxes</li>
<li><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/niti-aayog-national-institution-for-transforming-india" target="_blank" rel="noopener"><strong>NITI Ayog</strong></a> has institutionalized cooperative federalism by incorporating both Centre and State in jointly evolving strategies for addressing development challenges.</li>
<li>Introduction of GST has promoted cooperative federalism as almost all decisions are taken by consensus among members of GST Council.</li>
</ul>
</li>
<li><strong>Corporate Exits</strong>
<ul style="list-style-type: circle;">
<li><a href="/loksabha-rajyasabha-discussions/in-depth-insolvency-and-bankruptcy-code-act" target="_blank" rel="noopener"><strong>Insolvency and Bankruptcy Code (2016)</strong></a> has improved the overall business culture by consolidating the insolvency resolution process into a single law.</li>
</ul>
</li>
</ul>
<h3>Next Five Years: A Blueprint for Growth and Jobs</h3>
<ul style="list-style-type: square;">
<li><strong>Emphasising Growth</strong>
<ul style="list-style-type: circle;">
<li>India aims to grow into a <strong>$5 trillion economy by 2024-25,</strong> which will make India the <strong>third-largest economy</strong> in the world. To achieve this aim, the Indian economy requires a real annual growth rate in GDP of 8%.</li>
</ul>
</li>
<li><strong>Ingredients required for generating such growth</strong>
<ul style="list-style-type: circle;">
<li>Experience from high growth <strong>East Asian</strong> economies, like <strong>China&rsquo;s explosive growth</strong> over 4 decades and post war development of Hong Kong, Singapore, South Korea and Taiwan, suggest that high growth rates can only be sustained by a <strong>virtuous cycle</strong> of <strong>savings, investment, exports</strong> and <strong>growth</strong> catalysed by a <strong>favourable demographic phase.</strong></li>
<li>Investment (especially private investment), is the key driver that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction and generates jobs.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Why a virtuous cycle over a vicious cycle?</strong></p>
<ul style="list-style-type: square;">
<li>When the economy is in a <strong>virtuous cycle</strong>, investment, productivity, growth, job creation, demand and exports, <strong>feed into each other and enable animal spirits</strong> in the economy to thrive.</li>
<li>In contrast, when the economy is in a <strong>vicious cycle,</strong> moderation in these variables <strong>dampen each other</strong> and thereby kill the animal spirits in the economy.</li>
</ul>
<p><strong>How to enable self sustaining virtuous cycle?</strong></p>
<ul style="list-style-type: square;">
<li>Investment as key driver</li>
<li>Presenting data as public good</li>
<li>Ensuring policy consistency</li>
<li>Encouraging behavioural change</li>
<li>Emphasizing legal reforms</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li><strong>Importance of Savings</strong>
<ul style="list-style-type: circle;">
<li>High investment effort must be backed by domestic savings. This phenomenon has been referred to as <strong>&ldquo;Feldstein-Horioka Puzzle&rdquo;</strong></li>
<li><strong>Savings</strong> and <strong>growth</strong> are <strong>positively correlated</strong> but this positive correlation is stronger than that exists between growth and investment.</li>
<li>Entrepreneurs are exposed to idiosyncratic business failures due to the risky nature of investment which leads to loss of invested capital. Therefore, savings have to increase more than investment to allow for the accumulation of precautionary savings.</li>
</ul>
</li>
<li><strong>Jobs</strong>
<ul style="list-style-type: circle;">
<li>It is often claimed that <strong>&lsquo;investment&rsquo;</strong> displaces job, which has led to debate of <strong>labour-intensive</strong> versus <strong>capital-intensive</strong> mode of production.</li>
<li>Chinese economic model illustrates that <strong>high investment rates also creates jobs.</strong> Capital investment fosters job creation as capital goods production, R&amp;D and supply chain also produces jobs.</li>
<li>International experience from East Asia and Pacific have shown that <strong>unemployment rate decreases with greater capital formation,</strong> therefore it can be conclusively said that <strong>capital</strong> and <strong>labour</strong> are <strong>complementary</strong> in a high investment rate scenario.</li>
</ul>
</li>
<li><strong>Exports</strong>
<ul style="list-style-type: circle;">
<li>In a <strong>high income growth scenario, domestic consumption only acts as a force multiplier,</strong> which may be constrained by high level of savings, therefore <strong>real demand for large capacities came from exports.</strong></li>
<li>East Asian economies illustrates that there is a strong correlation between growth in exports and GDP growth.</li>
<li>India&rsquo;s share in global exports is quite low and current disruptive environment poses an opportunity for India to insert itself into global supply chain.</li>
<li>Therefore, recommendations of High Level Advisory Group led by <strong>DR. Surjit Bhalla (2019)</strong> must be taken into consideration to <strong>enhance exports.</strong></li>
</ul>
</li>
</ul>
<h2>Going Beyond the Economics of Equilibrium in the Blueprint</h2>
<ul style="list-style-type: square;">
<li>The <strong>traditional Anglo-saxon view</strong> considers the <strong>concept of equilibrium</strong> as a key tenet. Secondly, the traditional view often attempts to solve job creation, demand, exports, and economic growth as <strong>separate problems.</strong></li>
<li>However, following the Global Financial Crisis this view has come under significant challenge. Hence, economists are slowly departing from the traditional Anglo-saxon view to a growth model that views the economy as being in <strong>constant disequilibrium.</strong></li>
<li>Also, economists believe that the macro-economic phenomena <strong>(job creation, demand, exports, and economic growth) exhibit significant complementarities.</strong></li>
</ul>
<h2>Navigating a World of Constant Dis-Equlilbrium</h2>
<ul style="list-style-type: square;">
<li>Earlier, our economic policies such as Five Year Plans, were framed on the concept of equilibrium, which largely failed due to non predictive nature of world scenario.</li>
<li>Therefore, navigating this uncertain world of dis-equilibrium requires 3 elements:
<ul style="list-style-type: circle;">
<li>a clear vision</li>
<li>a general strategy to achieve the vision</li>
<li>the flexibility and willingness to continuously recalibrate tactics in response to unanticipated situations.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/253image13.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/253image13.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="772" height="453" /></a></p>
<h2>Way Forward</h2>
<ul style="list-style-type: square;">
<li>The <strong>creation of an ecosystem for private investment,</strong> especially in the new economy, is therefore critical to enable the virtuous cycle of investment, demand, exports, growth and jobs.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Creative Destruction:</strong> Dismantling of long standing practices in order to make way for innovations</li>
<li><strong>Feldstein-Horioka Puzzle:</strong> It concerns about correlation between investment and savings. It says high investment efforts must be backed by domestic savings.</li>
<li><strong>Butterfly Effect :</strong> It means compounding impact of small changes. As a consequence, it is nearly impossible to make accurate predictions for the future or to identify the precise cause of an inexplicable change.</li>
<li><strong>Multi-Dimensional Well-Being :</strong> Refer to the figure given above.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>In the past five years, <strong>average inflation</strong> has reached the <strong>lowest levels</strong> since independence.</li>
<li>Aadhar coverage stands at more than <strong>90%</strong> of total population.</li>
<li>Of all existing national highways, more than <strong>20%</strong> have been constructed in the past <strong>4 years.</strong></li>
<li>India became the <strong>6<sup>th</sup></strong> largest economy.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 81px;">
<h3><span style="color: #ff0000;">Questions For Mains</span></h3>
<p><strong>Q1. Explain the correlation between savings and investment in a high growth economies.</strong></p>
<p><strong>Q2. Critically analyse the traditional anglo-saxon model of economics.</strong></p>
<p><strong>Q3. Examine the factors that are essential for India to realise the aim of $5 trillion economy by 2024-25.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter 2</span></h1>
<h1><span style="font-size: 24px;">Policy For Homo Sapiens, Not Homo Economicus: Leveraging the Behavioural Economics of &ldquo;Nudge&rdquo;</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>This chapter deals with behavioural economics and its application in the government policies to achieve socially relevant outcomes and also lays out an ambitious agenda for social change.</p>
<h2>Purpose of Public Policy</h2>
<ul style="list-style-type: square;">
<li>Public policy influences people to act in a socially desirable way, be it conserving natural resources, educating children, respecting the human rights of fellow citizens or saving for retirement.</li>
<li>Therefore, public policies can be graded on a spectrum capturing how strongly they <strong>influence behaviour.</strong></li>
</ul>
<h2>Behavioural Economics</h2>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-editorials/behavioural-economics-for-new-india" target="_blank" rel="noopener"><strong>Behavioral Economics</strong></a> is the study of psychology as it relates to the economic decision-making processes of individuals and institutions.
<ul style="list-style-type: circle;">
<li>People&rsquo;s behaviour is influenced significantly by social norms and understanding the drivers of these social norms can enable social change.</li>
<li>People suffer from tremendous inertia while making a choice, they prefer to anchor on to the default option.</li>
<li>People find it difficult to sustain good habits, repeated reinforcements and reminders of successful past actions can help sustain changed behaviour.</li>
</ul>
</li>
<li>Behavioural economists have discovered the efficacy of a new class of <strong>&ldquo;nudge&rdquo;</strong> policies that lie between laissez faire and incentive.</li>
<li><strong>Note:</strong> <strong>Nudge policies</strong> are those policies which gently steer people towards desirable behaviour even while preserving their liberty to choose.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/448image19.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/448image19.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="613" height="118" /></a></p>
<h3>Classical Economics Vs Behavioural Economic</h3>
<ul style="list-style-type: square;">
<li><strong>Adam Smith,</strong> in his book the <strong>&lsquo;Theory of Moral Sentiment&rsquo;,</strong> noted that a wide range of <strong>human choices</strong> are driven and limited by our mental resources i.e., cognitive ability, attention and motivation.</li>
<li><strong>Behavioural economics</strong> relies on this essential insight from human psychology that real people do not always behave like robots, rational and unbiased individuals that form the basis of classical economic theory called <strong>&ldquo;homo economicus&rdquo;</strong></li>
</ul>
<h3>Principles of Behavioural Economics</h3>
<ul style="list-style-type: square;">
<li>Behavioural Economics provides ample scope for leveraging the efficacy of public programmes in India. The seven principles of behavioural economics that are used to overcome cognitive bias have been described below:</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/414image21.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/414image21.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="609" height="607" /></a></p>
<h2>Successful Implementation of Behavioural Insights in India</h2>
<ul style="list-style-type: square;">
<li><strong>Swachh Bharat Mission (SBM)</strong>
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/swachh-bharat-mission-reduced-groundwater-contamination-unicef" target="_blank" rel="noopener"><strong>SBM</strong></a> was launched on 2<sup>nd</sup> October 2014 to achieve universal sanitation coverage.</li>
<li><strong><a href="/daily-updates/daily-news-analysis/Swachh%20Bharat%20Mission" target="_blank" rel="noopener">SBM</a></strong> relies on community based approach to sanitation, thereby <strong>creating a mass movement on the lines of &lsquo;satyagraha&rsquo; for cleaner India.</strong></li>
<li>It is the first one to emphasize behavioural change, not only in construction of toilet but also to increase their usability on the regular basis.</li>
<li>To initiate behavioural change in use of toilets, more than 5 lakh <strong>swachhagrahis</strong> i.e., foot soldiers of the SBM were recruited. These swachhagrahis were able to leverage their social ties within their villages to effect change.</li>
<li>The act of provoking disgust or shaming people for open defecation elicit emotional reactions that are more effective than those that deliver plain messages.</li>
<li>According to <strong>National Annual Rural Sanitation Survey (NARSS) 2018-19:</strong>
<ul style="list-style-type: disc;">
<li>93.1% of rural households had access to toilets and 96.5% of these households use them regularly.</li>
</ul>
</li>
<li>Female literacy and early marriage of girls correlate strongly with access and usage of toilets therefore use of behavioural insights in SBM can be effectively used to improve the social indicators.</li>
</ul>
</li>
</ul>
<h3 style="text-align: center;"><a href="http://www.drishtiias.com/images/uploads/384image6.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/384image6.jpg" width="596" height="283" caption="false" /></a></h3>
<p><a href="http://www.drishtiias.com/images/uploads/196image8.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/196image8.jpg" width="425" height="439" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>Beti Bachao, Beti Padhao (BBBP)</strong>
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/important-facts-for-prelims-25th-january-2019" target="_blank" rel="noopener"><strong>BBBP Scheme</strong></a> was launched from <strong>Panipat</strong> to address the issue of <strong>decline in <a href="/daily-updates/daily-news-analysis/improvement-in-sex-ratio-at-birth" target="_blank" rel="noopener">Child Sex Ratio</a></strong> and related issues of empowerment of girls and women.</li>
<li>India&rsquo;s child sex ratio at birth has been <strong>consistently falling</strong> for decades untill the first decade of 21<sup>st</sup> century. Between 2001 and 2011(census), 21 out of 29 states registered a decline in child sex ratio.</li>
<li>To emphasize behavioural change, the campaign was launched from Panipat, which is famous for various battles in the history, as a symbolic gesture in the fight against this socially ingrained bias against the girl child. Panipat also had the worst child sex ratio at 834 as compared with the national average of 919 (Census, 2011).</li>
<li>To change people&rsquo;s attitude towards the girl child they needed to stop viewing girls as burdens and start celebrating them instead. With the <strong>'Selfie with Daughter'</strong> campaign the celebration of the girl child quickly became the norm. Most people wanted to conform, and more and more parents posted selfies with their girls.</li>
<li>The strategy <strong>addresses failure bias,</strong> therefore focus must be on people who treat their girls fairly.</li>
<li>BBBP has had an impact particularly on <strong>large states</strong> like UP, MP Rajasthan, Chhatisgarh, Andhra Pradesh and Jharkhand which had very poor child sex ratio.</li>
</ul>
</li>
</ul>
<h2>Power of Clear Messaging</h2>
<ul style="list-style-type: square;">
<li>Several other programmes have successfully employed the power of messaging as evident from the names used for various recent schemes.</li>
<li>The <strong><a href="/daily-updates/daily-news-analysis/ganga-vriksharopan-abhiyan" target="_blank" rel="noopener">Namami Gange scheme</a></strong> seeks to arrest the pollution of Ganga River and revive it wherein Namami Gange means &lsquo;I pray to Ganga&rsquo; as the river Ganga is revered in our culture.</li>
<li><strong><a href="/daily-updates/daily-news-analysis/poshan-abhiyaan" target="_blank" rel="noopener">POSHAN Abhiyan</a></strong> is a multi-ministerial convergence mission to ensure a malnutrition free India by 2022 wherein Poshan means holistic nutrition.</li>
<li><a href="/daily-updates/daily-news-editorials/ayushmanbharat" target="_blank" rel="noopener"><strong>Ayushman Bharat</strong></a> envisages universal and affordable access to good quality health care services wherein Ayushman means &lsquo;Being Blessed with long life&rsquo;.</li>
</ul>
<h2>An Aspirational Agenda for Path-Breaking Change</h2>
<ul style="list-style-type: square;">
<li><strong>From BBBP to BADLAV (Beti Aapki Dhan Lakshmi Aur Vijay Laxmi)</strong>
<ul style="list-style-type: circle;">
<li>In India, gender inequality needs a revolutionary campaign which must be aligned with the principles of behavioural economics.</li>
<li>The campaign must draw on social and cultural norms because they play a dominant role in influencing behaviour.</li>
<li>Therefore, the campaign under BBBP can be labelled as BADLAV to represent change towards gender equality.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #05bbf7; border-color: #000000;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 70.5232%; height: 19px; background-color: #05bbf7; border-color: #000000;"><span style="color: #ffffff;"><strong>Applying the Principle for BADLAV</strong></span></td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">1. Make it easy to choose</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Simplifying procedure for women.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">2. Emphasize Social norms</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Projecting positive social norms and highlighting prominent personalities or even mythological characters so that people can relate to them.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">3. Disclose Outcomes</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Publishing gender reports or audits in public domain.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Reinforce Repeatedly</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">People&rsquo;s memories are short-lived, they need to be reminded of what is socially acceptable. Therefore, regular visual or print advertisement can reinforce positive attitude.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">5. Leverage Loss Aversion</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Modifying reward structure to prevent higher aversion of women to competition.eg: reducing application fees for women.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4768%; height: 19px; background-color: #dcf5f4; vertical-align: top;">6. Make Message Match Mental Model</td>
<td style="width: 70.5232%; height: 19px; background-color: #dcf5f4; vertical-align: top;">All gender stereotypes can be removed to provide more flexibility to women.</td>
</tr>
</tbody>
</table>
<ul style="list-style-type: square;">
<li><strong>From Swach Bharat and Ayushman Bharat to Sundar Bharat</strong>
<ul style="list-style-type: circle;">
<li>A strong way to reinforce behaviour is by getting people to <strong>pre-commit</strong> to a certain course of action. Studies suggest that if people are pre-committed to doing something, they are much more likely to do it.</li>
<li>Taking our learning from the power of behavioural economics in the Swachh Bharat scheme, the way forward is to develop an all-encompassing behavioural economics architecture for the entire health sector.</li>
<li>Due to information asymmetry between the doctor and the patient, hyperbolic tendencies of health consumers, and high variability of health care expenditures, people often make decisions that are not in their best interest. This ranges from failing to enrol in health insurance, engaging in harmful behaviour like smoking.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 69.5519%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Applying Principle for Sundar Bharat</strong></span></td>
</tr>
<tr style="height: 51px;">
<td style="width: 30.4481%; height: 10px; background-color: #dcf5f4; vertical-align: top;">1. Leverage the Default Rule</td>
<td style="width: 69.5519%; height: 10px; background-color: #dcf5f4; vertical-align: top;">Providing default insurance plan may significantly improve the insurance coverage.</td>
</tr>
<tr style="height: 83px;">
<td style="width: 30.4481%; height: 10px; background-color: #dcf5f4; vertical-align: top;">2. Make it Easy to Choose</td>
<td style="width: 69.5519%; height: 10px; background-color: #dcf5f4; vertical-align: top;">Customising health plan according to customer needs and minor alterations to the school menus may promote healthy food habits among children.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">3. Emphasize Social Norms</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Highlighting incidents of death of celebrities from drugs may help to contain drug menace among youth.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Disclose Outcomes</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Disclosing the tangible benefit of handwashing &amp; family planning practice experienced by other people may promote healthy practices.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">5. Reinforce Repeatedly</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Periodic reminders to people to plan their vaccination or taking medicines regularly by means of messages or social media.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">6. Leverage Loss Aversion</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">People often find it difficult to achieve goals like weight loss or ceasing to smoke. People voluntarily made to post bonds (deposit contracts) or lottery tickets on a website that will be returned to them if they achieve their goals, but are forfeited otherwise, can help them achieve these difficult goals.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 30.4481%; height: 19px; background-color: #dcf5f4; vertical-align: top;">7. Make Message Match Mental Models</td>
<td style="width: 69.5519%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Awareness Campaigns to correct flawed mental model.</td>
</tr>
</tbody>
</table>
<ul style="list-style-type: square;">
<li><strong>&lsquo;Think about the Subsidy&rsquo;</strong>
<ul style="list-style-type: circle;">
<li><strong>&lsquo;Give It Up&rsquo;</strong> encouraged Above Poverty Line (APL) households to voluntarily surrender their LPG subsidies but due to lack of economic incentives, the program mainly relied on better judgement to voluntarily give up their subsidy. However, still there is a huge scope to expand the campaign.</li>
<li>Even if people are truly interested in giving up their subsidies; their actions may differ from their intent as they need to be moved to action with a gentle nudge. A good choice architecture can aid in closing this gap between intention and action.</li>
<li>People have a strong tendency to go with the status quo. &lsquo;Give It Up&rsquo; needs to employ this insight.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 35px;">
<td style="width: 26.7279%; height: 21px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 73.2721%; height: 21px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Applying Principle for &lsquo;Think about the Subsidy&rsquo;</strong></span></td>
</tr>
<tr style="height: 51px;">
<td style="width: 26.7279%; height: 10px; background-color: #dcf5f4; vertical-align: top;">1. Leverage Default Rules</td>
<td style="width: 73.2721%; height: 10px; background-color: #dcf5f4; vertical-align: top;">Modifying default option so that people need to opt-in to continue their subsidy.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">2. Make it Easy to Choose</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Utilizing impulsive behaviour for giving up subsidy through mobile apps etc.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">3. Emphasize Social Norms</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Making people feel good about giving up subsidies can help establish the correct social norms.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Disclose Outcomes</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Advertising the people who gave up subsidy, so as to motivate others.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">5. Reinforce Repeatedly</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Videos such as beneficiary thanking subsidy givers must be circulated to reinforce the feelings.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">6. Leverage Loss Aversion</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Motivating individuals to pledge a certain amount of subsidy when they feel most inspired.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 26.7279%; height: 19px; background-color: #dcf5f4; vertical-align: top;">7. Match Message to Mental Model</td>
<td style="width: 73.2721%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Fiscal Subsidies can be made cost effective by frequently reminding people so that they can plan their schedule.eg: taking up vaccination etc.</td>
</tr>
</tbody>
</table>
<ul style="list-style-type: square;">
<li><strong>Jan Dhan Yojana</strong>
<ul style="list-style-type: circle;">
<li>Jan Dhan Yojana opened a large number of bank accounts in a short span of time, but its success relies on people using these accounts regularly. The programme&rsquo;s mandate includes access to services like credit, insurance etc. The programme offers tremendous scope to employ behavioural insights.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 70.5561%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Applying the Principle</strong></span></td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">1. Leverage Default Rules</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Make auto enrollment into a saving plans</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">2. Make it Easy to Choose</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Minimizing complexities in opting for schemes for common people.</td>
</tr>
<tr style="height: 41px;">
<td style="width: 29.4439%; height: 10px; background-color: #dcf5f4; vertical-align: top;">3. Emphisize Social Norms</td>
<td style="width: 70.5561%; height: 10px; background-color: #dcf5f4; vertical-align: top;">
<p>Using information campaigns to highlight the number of people using bank accounts.</p>
<p>Sending regular messages about account details etc can increase usability.</p>
</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Disclose Outcomes</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Periodically reminding holders of dormant account about the number of people using accounts.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">5. Reinforce Repeatedly</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Reminding people about their past savings can reinforce good saving behaviour.</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">6. Leverage Loss Aversion</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Using favourable time such as harvest season or increase in salary to increase the savings of people</td>
</tr>
<tr style="height: 19px;">
<td style="width: 29.4439%; height: 19px; background-color: #dcf5f4; vertical-align: top;">7. Make Message Match Mental Model.</td>
<td style="width: 70.5561%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Customising saving plan according to customers needs like home saving plan, educational saving plan etc.</td>
</tr>
</tbody>
</table>
<ul style="list-style-type: square;">
<li><strong>From Tax Evasion to Tax Compliance</strong>
<ul style="list-style-type: circle;">
<li>In order to enhance tax compliance, behavioural insights need to be employed to modify the social norm from &lsquo;evading taxes is acceptable&rsquo; to &lsquo;paying taxes honestly is honourable&rsquo;.</li>
<li>The intrinsic motivation of taxpayers to pay taxes is driven primarily by two perceptive factors - <strong>vertical fairness and horizontal fairness.</strong></li>
<li>Citizens perceive <strong>vertical fairness</strong> to be low if they find their tax payments being squandered in wasteful public expenditure or by corruption. Similarly, perceptions of <strong>horizontal fairness</strong> suffer when the employee class is forced to contribute more than the self-employed class.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 27.4798%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Principle</strong></span></td>
<td style="width: 72.5202%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Applying the Principle</strong></span></td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 24px; background-color: #dcf5f4; vertical-align: top;">1. Leveraging the Default Rule</td>
<td style="width: 72.5202%; height: 24px; background-color: #dcf5f4; vertical-align: top;">Automatic deduction of taxes and directing refunds into saving accounts</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 23px; background-color: #dcf5f4; vertical-align: top;">2. Make it Easy to Choose</td>
<td style="width: 72.5202%; height: 23px; background-color: #dcf5f4; vertical-align: top;">Making tax filing process simpler</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 26px; background-color: #dcf5f4; vertical-align: top;">3. Emphisize Social Norms</td>
<td style="width: 72.5202%; height: 26px; background-color: #dcf5f4; vertical-align: top;">Promoting tax paying as honourable</td>
</tr>
<tr style="height: 19px;">
<td style="width: 27.4798%; height: 19px; background-color: #dcf5f4; vertical-align: top;">4. Disclose Outcome</td>
<td style="width: 72.5202%; height: 19px; background-color: #dcf5f4; vertical-align: top;">Public shaming of eligible individuals who do not pay taxes.</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 23px; background-color: #dcf5f4; vertical-align: top;">5. Reinforce Repeatedly</td>
<td style="width: 72.5202%; height: 23px; background-color: #dcf5f4; vertical-align: top;">Periodically informing people about neighbours or people living around paying taxes honestly.</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 26px; background-color: #dcf5f4; vertical-align: top;">6. Leverage Loss Aversion</td>
<td style="width: 72.5202%; height: 26px; background-color: #dcf5f4; vertical-align: top;">Refunds at the time of tax filing may increase compliance.</td>
</tr>
<tr style="height: 35px;">
<td style="width: 27.4798%; height: 22px; background-color: #dcf5f4; vertical-align: top;">7. Match Messages to Mental Models</td>
<td style="width: 72.5202%; height: 22px; background-color: #dcf5f4; vertical-align: top;">Making reciprocity appeal to boost morale of tax compliance.</td>
</tr>
</tbody>
</table>
<h2>Using Behavioural Economics to Avoid the Seven Social Sins</h2>
<ul style="list-style-type: square;">
<li style="text-align: justify;"><a href="/daily-updates/daily-news-analysis/strategy-for-new-india-75" target="_blank" rel="noopener"><strong>India @75</strong></a> is envisaged as a <strong>&lsquo;New India&rsquo;</strong> where every individual realizes his or her full potential and looks for opportunities to contribute rather than claim entitlements.</li>
<li style="text-align: justify;"><strong>Mahatma Gandhi&rsquo;s Seven Social Sins,</strong> published in <strong>Young India</strong> on October 22, 1925, provide deep insights into the role of social and political conditions shaping human behavior. Each of these is a statement of principle that can be interpreted and utilized for nudging people towards desirable behaviour.</li>
</ul>
<h2><a href="http://www.drishtiias.com/images/uploads/792image22.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/792image22.jpg" width="431" height="314" caption="false" style="display: block; margin-left: auto; margin-right: auto;" /></a></h2>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 35px;">
<td style="width: 47.1948%; height: 35px; background-color: #05bbf7; text-align: center;"><span style="color: #ffffff;"><strong>Social Sins of Gandhiji</strong></span></td>
<td style="width: 52.8052%; height: 35px; background-color: #05bbf7; text-align: center;"><span style="color: #ffffff;"><strong>Applying the Principles of Behavioural Economics</strong></span></td>
</tr>
<tr style="height: 334px;">
<td style="width: 47.1948%; height: 10px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>1. Politics without Principles</strong></p>
<ul style="list-style-type: square;">
<li>Principles in politics act like a compass needle pointing north i.e. giving a dependable direction to move on.</li>
<li>Holding power without principles distorts realities, promotes a culture of suspicion and biases and negates the inherent values of society.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 10px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p style="text-align: justify;"><strong>Leverage Loss Aversion</strong></p>
<ul style="list-style-type: square;">
<li>Growing perceptions of criminalisation of politics, misuse of public office etc. has led to increased apathy towards participation in political processes.</li>
<li>Policy makers and legislators exhibit loss-aversion in decision-making and seemingly harsh policy decisions do not garner enough support.</li>
<li>Addressing the loss aversion of policymakers can improve policy and legislative outcomes and would also enhance broader participation in politics.</li>
</ul>
</td>
</tr>
<tr style="height: 10px; text-align: justify;">
<td style="width: 47.1948%; height: 10px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>2. Wealth without Work</strong></p>
<ul style="list-style-type: square;">
<li>The practice of getting something for nothing; for example making money without paying taxes, acts trafficking, malpractices which offer short cuts for minting money.</li>
<li>Wealth must be obtained through hard work and by using fair means. This is because sacrifice in the form of energy, effort, personal resources, prestige and position brings wealth which satisfies our soul beyond just the body.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 10px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>Disclose Outcomes</strong></p>
<ul style="list-style-type: square;">
<li>The perception of getting things for &lsquo;free&rsquo; as an entitlement has to be reoriented towards discharging our obligations towards society.</li>
<li>Disclosing the realised benefits of good behaviour and the adverse outcomes</li>
<li>of bad behaviour, on the one hand, and emphasizing social norms, on the other hand, offer insights towards enhancing productivity and tax compliance.</li>
</ul>
</td>
</tr>
<tr style="height: 19px; text-align: justify;">
<td style="width: 47.1948%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>3. Pleasure without Conscience</strong></p>
<ul style="list-style-type: square;">
<li>It refers to the pursuit of sensuality and gratification without responsibility to God, others, or one&rsquo;s self. It ultimately costs in terms of reputation and in terms of wounding the hearts and minds of other people who are adversely affected by such want of gratification.</li>
<li>To learn to be responsible, to live selflessly, to be sensitive, and to be considerate shall be the driving force behind pleasurable activities.</li>
<li>Moreover, acts like helping the needy, saving a person from possible violence etc. invite self-induced pain, but with pleasure beneath it. No one without a clear conscience have courage to take such risks to attain the pleasure.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 19px; vertical-align: top; text-align: left; background-color: #dcf5f4;">
<p><strong>Leverage Default Rules</strong></p>
<ul style="list-style-type: square;">
<li>When less deserving people claim benefits of a development programme, it is an act of pleasure without conscience or a sense of responsibility.</li>
<li>To learn to give and take, to live selflessly, to be sensitive, to be considerate, is our challenge.</li>
<li>Leveraging default rules like making the default &lsquo;opt-out&rsquo; for availing subsidy, etc. can be employed to nudge people towards confident displays and conduct of altruism.</li>
</ul>
</td>
</tr>
<tr style="height: 16px; text-align: justify;">
<td style="width: 47.1948%; height: 16px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>4. Knowledge without Character</strong></p>
<ul style="list-style-type: square;">
<li>Knowledge is neutral by nature but can be used for both positive and negative purposes. When knowledge is without character it is used to harm someone, to attain power, to gain control and the like.</li>
<li>Purely intellectual development without commensurate internal character development is like putting a high-powered sports car in the hands of a teenager who is high on drugs.</li>
<li>Character gives strength to do what is right, to hold ourselves and others accountable. It prevents us from taking unethical decisions.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 16px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>Match Messages to Mental Models</strong></p>
<ul style="list-style-type: square;">
<li>Societies are witnessing an information explosion.</li>
<li>Gender based violence, internet trolling, and the rise of drug show how people, while mindlessly becoming more aware about the world around them, are ironically becoming less self-aware of their actions.</li>
<li>People can be nudged with messages matching their mental models to make them realise that soft skills like self-control, altruism, patience, and trust are as important as cognitive skills.</li>
</ul>
</td>
</tr>
<tr style="height: 19px; text-align: justify;">
<td style="width: 47.1948%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>5. Commerce without Morality</strong></p>
<ul style="list-style-type: square;">
<li>Commerce without morality endorses acts of cheating, lying, stealing, and selling harmful or inferior products. It ultimately results in spoiling and abusing of natural and human resources.</li>
<li>Every business transaction is a moral challenge to see that both parties come out fairly. Economic systems operating without moral foundation will create a society and business which does not serve the interests of all the stakeholders.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>Emphasising Social Norms</strong></p>
<ul style="list-style-type: square;">
<li>Ethics are the moral principles that govern a person&rsquo;s actions and these morals are shaped by social and cultural norms and religious practices.</li>
<li>Emphasising social norms is a powerful way of shaping choices and navigating human actions towards desired behaviour.</li>
<li>The National Corporate Social Responsibility Awards of Ministry of Corporate Affairs emphasise ethical behaviour and acknowledge companies that have positively impacted both business and society.</li>
</ul>
</td>
</tr>
<tr style="height: 19px; text-align: justify;">
<td style="width: 47.1948%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>6. Science without Humanity</strong></p>
<ul style="list-style-type: square;">
<li>Science without humanity is like turning men into material and machines into decision makers.</li>
<li>If there is very little understanding of the higher human purposes that the technology is striving to serve we become victims of our own technocracy. Science must regard the feelings and fate of individuals.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p><strong>Making it Easy to Choose</strong></p>
<ul style="list-style-type: square;">
<li>Science and Technology has a huge potential to simplify and benefit human lives.</li>
<li>Using the behavioral principle of &lsquo;Making it easy to choose&rsquo;, technology can make things simple to understand, cut through layers of processes and target the benefit to the actual beneficiary.</li>
</ul>
</td>
</tr>
<tr style="height: 19px;">
<td style="width: 47.1948%; height: 19px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<p><strong>7. Worship without Sacrifice</strong></p>
<ul style="list-style-type: square;">
<li>Worship is not only reciting hymns and going by rituals to impress the almighty. One needs to offer unconditional surrender from one&rsquo;s position, prestige, ego and possessions when sitting for worship.</li>
<li>Functioning under the social facade of religious practices without the sacrifice to serve the needs of other people &ndash; the sacrifice of our own pride and prejudice, among other things &ndash; will not result in the union of man and god.</li>
</ul>
</td>
<td style="width: 52.8052%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<p style="text-align: justify;"><strong>Reinforce Repeatedly</strong></p>
<ul style="list-style-type: square;">
<li style="text-align: justify;">Across all religions, gender and caste equality as well as universal brotherhood have been deeply understood.</li>
<li style="text-align: justify;">Repeatedly reinforcing examples of people following these positive sentiments as truly spiritual people can help establish the correct social norm that &lsquo;serving man is serving God&rsquo;.</li>
<li style="text-align: justify;">The Good Samaritan guidelines that appreciates people who help road accident victims, leverage behavioural insights to reinforce the correct social norm of selfless service of mankind.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h2>Implementing The Aspirational Agenda For Behavioural Change</h2>
<ul style="list-style-type: square;">
<li>In India, social and religious norms play a dominant role in influencing behaviour of the society therefore the possibilities of employing behavioural economics to policy making are enormous.. To avail these benefits, following measures are suggested for implementation.
<ul style="list-style-type: circle;">
<li>Behavioural economics unit in the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/niti-aayog-national-institution-for-transforming-india" target="_blank" rel="noopener"><strong>NITI Aayog.</strong></a></li>
<li>Behavioural economics audit for every government program</li>
<li>Appropriate coordination with state government to implement principles of behavioural economics in state policies and programs.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Laissez Faire:</strong> The policy of leaving things to their own course, without interfering.</li>
<li><strong>Homo economicus:</strong> Individuals who always make optimal choices irrespective of the way the choices are presented to them. They do not respond to choice architecture while real people do.</li>
<li><strong>Anchoring Bias:</strong> The tendency of people to rely heavily on default options.</li>
<li><strong>Failure Bias:</strong>&nbsp;The tendency to focus on failures rather than success because failures have greater visibility.</li>
<li><strong>Choice Architecture:</strong>&nbsp;It refer to presentation of choices to an individual.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>India&rsquo;s <strong>child sex ratio at birth</strong> has been <strong>consistently falling</strong> for decades untill the first decade of 21st century. Between 2001 and 2011(census), <strong>21</strong> out of <strong>29</strong> states registered a decline in child sex ratio.</li>
<li><strong>BBBP</strong> had significant impact on <strong>large states</strong> with very poor child sex ratio</li>
<li><strong>Smaller States</strong> like MIzoram, Nagaland and Manipur, have a <strong>higher rate</strong> of <strong>subsidy surrender</strong> as compared to larger states.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 88px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Briefly explain the principles of behavioural economics and analyse its application in Swachh Bharat Mission.</strong></p>
<p><strong>Q2. &ldquo;What is honoured in a country is cultivated there.&rdquo;- PLATO<br /></strong><strong>In the context of the above statement, explain how principles of behavioural economics can be used to increase tax compliance in the country.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter 3</span></h1>
<h1><span style="font-size: 24px;">Nourishing Dwarfs to become Giants: Reorienting Policies for MSME Growth</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>This chapter examines how policies followed over the last seven decades stifle the growth of <a href="/to-the-points/paper3/micro-small-and-medium-enterprises-msme" target="_blank" rel="noopener"><strong>Micro, Small &amp; Medium Enterprises (MSMEs)</strong></a> in the economy. It lays out the policy map for re-orienting the policy stance to foster the growth of MSMEs and thereby greater job creation and productivity in the economy.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>Job creation in large numbers remains an urgent imperative to provide financial and social inclusion for our young population.</li>
<li>Job creation in India, however, suffers from policies that foster <strong>dwarfs</strong> instead of <strong>infant</strong> firms that have the potential to grow and become giants rapidly.</li>
<li>According to the Survey, if we consider our <a href="/daily-updates/daily-news-analysis/state-divide-in-unemployment" target="_blank" rel="noopener"><strong>labour force participation rate</strong></a> (LFPR) would remain at 60% in the next two decades, about 55-60 lakhs jobs needs to be created annually over the next decade.</li>
<li>It, thus, becomes imperative to reorient the policy stance to foster the growth of MSMEs and thereby greater job creation and productivity in the economy.</li>
</ul>
<h2>Categorization of Firms</h2>
<ul style="list-style-type: square;">
<li><strong>Small Firm:</strong> Firms employing less than 100 workers.</li>
<li><strong>Large Firm:</strong> Firms employing more than 100 workers</li>
<li><strong>Young Firm:</strong> Firms which are small when young but on aging becomes large</li>
<li><strong>Dwarfs Firm:</strong> Firms which are both small and aged more than 10 years having stunted growth</li>
</ul>
<h2>The Bane of Dwarfism</h2>
<ul style="list-style-type: square;">
<li><strong>Dwarfs are small firms that never grow beyond their small size,</strong> dominate the Indian Economy and hold back job creation and productivity.</li>
<li>Dwarfs are <strong>lowest</strong> contributors to employment and productivity while firms that grow over time are the biggest contributors.</li>
<li>Inspite of aging, small firms have <strong>low productivity</strong> and<strong> value addition</strong> while infants disproportionately increase their share and productivity</li>
<li>Dwarfs account for <strong>half</strong> of all the firms in organised manufacturing by number, their share in employment is 14.1% and in NVA is 7.6%.</li>
<li>There is a common perception that small firms generate a higher number of new jobs. But higher levels of job creation in small firms co-exist with job destruction, thereby leading to lower levels of net job creation.</li>
<li>The notion that small firms create jobs has prevailed because it is the young firms, who also happen to be small, create the most jobs.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/937image12.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/937image12.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="640" height="314" /></a><a href="http://www.drishtiias.com/images/uploads/433image20.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/433image20.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="446" height="263" caption="false" /></a></p>
<h2>Size vs Age Effect</h2>
<ul style="list-style-type: square;">
<li>Compared to small firms,<strong> young firms contribute significantly to employment</strong> and value addition.</li>
<li>Firm with less than 10 years accounts for about <strong>30% of employment</strong> and about <strong>half of NVA</strong> shows a <strong>downward trend</strong> with with an increase in firms age.</li>
<li>The average 40 years old firms in USA generate <strong>5 times</strong> more employment and are <strong>2.5 times</strong> more productive as compared to 40 years old Indian Firms.</li>
<li>The average employment level for 40-year old enterprises in the U.S. was more than <strong>7 times</strong> that of the employment when it was newly set up while it is just <strong>40% greater</strong> for Indian Firms.</li>
</ul>
<h2>The Role of Policy in Fostering Dwarfism</h2>
<ul style="list-style-type: square;">
<li><strong>Our policies protect and foster dwarfs rather than infants.</strong> The key distinction here is that while infant firms are small and young, dwarfs are small but old. Thus, while infant firms can grow to become large firms that are not only more productive and generate significant employment, dwarfs remain small and contribute neither to productivity nor to jobs.</li>
<li>These policies create a<strong> &lsquo;perverse&rsquo; incentive</strong> for firms to remain small. If the firms grow beyond the threshold, then they will be unable to obtain the said benefits. Therefore, entrepreneurs find it <strong>optimal to start a new firm</strong> to continue availing these benefits. But these small firms are not able to enjoy the benefits, which the large firms get from economy of scale and therefore remain unproductive.</li>
</ul>
<h3>Factors Contributing</h3>
<ul style="list-style-type: square;">
<li><strong>Labour Regulation</strong>
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-editorials/rebooting-labour-reforms" target="_blank" rel="noopener"><strong>India has a plethora of labour laws,</strong></a> regulations and rules, both at the centre and the state levels that govern the employer employee relationship.</li>
<li>The <strong>transaction cost</strong> inherent in complying with such regulation creates <strong>perverse incentives</strong> for firms to remain small.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/959image5.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/959image5.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="617" height="303" /></a></p>
<ul style="list-style-type: circle;">
<li><strong>Flexibility of Labour Laws</strong> creates a conducive environment for growth and employment generation.</li>
<li>Flexible States contribute <strong>disproportionately more</strong> to labour, capital and productivity while inflexibility promotes substitution of labour with capital.</li>
<li>Inflexible states are suffering in almost all dimensions, be it employment, capital attractiveness, productivity or wages.</li>
</ul>
<div class="border-bg">
<p><strong>Unique Case of Rajasthan</strong></p>
<p>Prior, to labour reforms of 2014-15, the growth story of Rajasthan has been similar to rest of India. But after reforms both number of <strong>large firms and Compound Annual Growth Rate</strong> increased significantly.</p>
</div>
<ul style="list-style-type: square;">
<li><strong>Small Scale Reservation Policy</strong>
<ul style="list-style-type: circle;">
<li>The Small Scale Industries (SSI) reservation policy was <strong>introduced in 1967</strong> to promote employment growth and income redistribution.</li>
<li>Policy promotes reservation of products for manufacturing for firms on the basis of size.</li>
</ul>
</li>
</ul>
<p style="text-align: center;"><a href="http://www.drishtiias.com/images/uploads/869image28.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/869image28.jpg" caption="false" width="611" height="302" /></a></p>
<p><strong>Impact of SSI</strong></p>
<ul style="list-style-type: square;">
<li>The policy resulted in substantial <strong>misallocation of resources</strong> and <strong>productivity losses</strong> which resulted in:
<ul style="list-style-type: circle;">
<li>Substantially lower the avg. capital to labour ratio.</li>
<li>The overall demand for labour and market wage rate are much lower due to lower capital accumulation.</li>
<li>It resulted in inefficient allocation of managerial talent.</li>
<li>The economic restrictions resulted in higher price for manufactured product which in-turn makes them uncompetitive in the global economy.</li>
</ul>
</li>
<li>It also created <strong>perverse incentives</strong> for firms to remain small and unproductive</li>
</ul>
<h2>De-Reservation of Products</h2>
<ul style="list-style-type: square;">
<li>The de-reservation of several product categories during the period 1997 to 2007 resulted as:
<ul style="list-style-type: circle;">
<li><strong>Job Creation:</strong> Net job creation was monotonically increased with firm size and was maximum among large firms (500+ employees)</li>
<li><strong>Job Destruction:</strong> Maximum for small firms.</li>
</ul>
</li>
<li>De-regulation suggested that infants, not dwarfs, contribute significantly to job creation and productivity in the economy.</li>
</ul>
<h2>Need for Review</h2>
<ul style="list-style-type: square;">
<li>Increased competition due to liberalization and globalisation.</li>
<li>Resulted in monopoly like situation in production of some consumer good by large firms.</li>
</ul>
<h2>Way Forward</h2>
<p>To unshackle MSMEs and thereby enable them to grow, all size-based incentives must have a sunset clause of less than ten years with necessary grand-fathering. Deregulating labour law restrictions can bring significant thrust to jobs creation. Following suggestions are made:</p>
<ul style="list-style-type: square;">
<li>Incentivizing <strong>&lsquo;infant&rsquo;</strong> firms rather than &lsquo;small&rsquo; firms</li>
<li>Re-orienting Priority Sector Lending</li>
<li><strong>Sunset Clause</strong> for Incentives</li>
<li>Focus on <strong>High Employment Elastic Sectors</strong> such as rubber manufacturing, plastic products, textiles and leather etc.</li>
<li>Focus on Service Sectors with high <strong>Spillover Effects. For example:</strong> developing tourist centres will have ripple effect on job creation in different areas.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Perverse Incentives:</strong> An incentive that produces an adverse consequence due to the actions undertaken to receive the incentive and are contrary to incentive maker.</li>
<li><strong>Sunset Clause:</strong> A provision of a law that it will automatically be terminated after a <strong>fixed period</strong> unless it is extended by law.</li>
<li><strong>Spillover Effect:</strong> It refers to events that occurred in <strong>one context</strong> affecting events in a <strong>different context.</strong></li>
<li><strong>Employment Elasticity:</strong> It is a measure of how <strong>employment</strong> varies with <strong>economic output.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li><strong>Small Firms</strong> in organised manufacturing accounts for <strong>85%</strong> (in terms of number) but contribute only <strong>23%</strong> and <strong>11.5%</strong> toward total <strong>employment</strong> and <strong>NVA</strong> respectively..
<ul style="list-style-type: circle;">
<li><strong>Dwarf firms,</strong> in terms of number, account for <strong>half</strong> of all the firms in organised manufacturing but contribute only <strong>14.1</strong>% and <strong>7.6</strong>% toward <strong>employment</strong> and <strong>NVA</strong> respectively.</li>
</ul>
</li>
<li><strong>Large Firms</strong> accounts for <strong>15%</strong> (in terms of number) in organised manufacturing but contributes <strong>77%</strong> and <strong>88.5%</strong> toward total <strong>employment</strong> and <strong>NVA</strong> respectively.</li>
<li>Firm less than 10 years accounts for about <strong>30% of employment</strong> and about <strong>half of NVA,</strong> which shows a <strong>downward trend</strong> with with an increase in firms age.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 120px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1.With the help of an example, briefly explain the impact of labour regulation on growth of firms in Indian economy.</strong></p>
<p><strong>Q2 Critically analyse the government policies to support small industries that stagnated growth and suggest policy measures to arrest the &lsquo;bane of dwarfism&rsquo;.</strong></p>
<p><strong>Q3.&lsquo;There is a perception that small firms create the largest number of jobs in Indian economy&rsquo;. Critically analyse.</strong></p>
</td>
</tr>
</tbody>
</table>
<p></p>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter: 4</span></h1>
<h1><span style="font-size: 24px;">Data Of the People, By the People, For the People</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter highlights the importance of data in today&rsquo;s digital economy and how democratisation of data for public welfare can transform India. It talks about issues related to data and suggests a pathway for building a resilient data ecosystem.</p>
<h2>The Economics of Data and Social Welfare</h2>
<ul style="list-style-type: square;">
<li>In recent years, the world has witnessed an information explosion. As people shift their day-to-day activities online, they leave digital footprints of these activities i.e. they produce data about themselves and store this data on public and private servers.</li>
<li>A few decades ago, gathering data requires a laborious survey but today it is accumulating online at a near-zero cost. Thus, the marginal cost of data has declined exponentially and the marginal benefit to society of using this data is higher than ever.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/587image27.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/587image27.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="483" height="263" caption="false" /></a></p>
<p style="text-align: center;"><a href="http://www.drishtiias.com/images/uploads/732image7.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/732image7.jpg" width="608" height="367" caption="false" /></a></p>
<div class="border-bg">
<p><strong>What is data?</strong></p>
<ul style="list-style-type: square;">
<li>It can be defined as an information in digital form that can be transmitted or processed.</li>
</ul>
<p><strong>How data is being generated?</strong></p>
<ul style="list-style-type: square;">
<li>As people increasingly use digital services to talk to each other, look up information, purchase goods and services, pay bills, transact in financial markets, file taxes, avail welfare services and engage with local leaders, data is being generated at an unprecedented scale.</li>
</ul>
<p><strong>Types of Data</strong></p>
<ul style="list-style-type: square;">
<li><strong>Anonymized Data:</strong> Data that is not linked to a specific individual but is still available at an individual level of granularity.</li>
<li><strong>Public Data:</strong> Data neither linked to an individual, nor at an individual level of granularity. Eg: Census.</li>
</ul>
<p><strong>Utility of data for government</strong></p>
<ul style="list-style-type: square;">
<li>enhance ease of living for citizens,</li>
<li>enable truly evidence-based policy,</li>
<li>improve targeting in welfare schemes,</li>
<li>uncover unmet needs,</li>
<li>integrate fragmented markets,</li>
<li>bring greater accountability in public services,</li>
<li>generate greater citizen participation in governance, etc</li>
</ul>
</div>
<h2>Why Must Data Be Treated as a Public Good?</h2>
<ul style="list-style-type: square;">
<li><a href="/to-the-points/paper3/Data-Localisation" target="_blank" rel="noopener"><strong>Data</strong></a> are generated by the people, of the people and should be used for the people.</li>
<li><strong>Data carries some of the characteristics of public goods.</strong>
<ul style="list-style-type: circle;">
<li>It is <strong>non-rivalrous,</strong> i.e., consumption by one individual does not reduce the quantum available for others.</li>
<li>It can be made <strong>excludable</strong>, i.e., it is possible to exclude people from accessing data, as many database firms do by erecting pay walls.</li>
</ul>
</li>
<li>Robust data mechanism system <strong>can empower every stakeholder in society,</strong> from the Central Government to a local government body, from citizens to the private sector.</li>
<li>It offers potential to <strong>reduce targeting error by minimising inclusion and exclusion errors</strong> in welfare schemes and has the potential to integrate markets nationally, reduce the need for middlemen, reduce prices for end consumers and increase returns for farmers.</li>
<li>Data is <strong>not being harnessed equally in all segments.</strong> Private companies lack their footprint in harnessing data for social sector because they do not internalize the benefit of social welfare, the optimal amount of data that the private companies gather and disseminate falls short of the social optimum.</li>
<li>As data for social welfare may not be generated by the private sector in optimal quantity, government needs to view data as a public good and make the necessary investments</li>
<li>However, there are some kinds of data &ndash; particularly data gathered by governments on issues of social interest &ndash; that should be democratised in the interest of social welfare.</li>
</ul>
<h2>Building the Data System</h2>
<ul style="list-style-type: square;">
<li>The Government of India collects four distinct sets of data about people&ndash;
<ul style="list-style-type: circle;">
<li><strong>Administrative Data:</strong> It is used mainly for non-statistical purposes and include birth and death records, crime reports, land and property registrations, vehicle registrations etc.</li>
<li><strong>Survey Data:</strong> It is used predominantly for statistical purposes.In these surveys, identity of participant is irrelevant and unreported. Eg: Census.</li>
<li><strong>Institutional Data:</strong> It refers to data held by public institutions about people. Eg:medical records in govt. hospitals, student information in govt. schools.</li>
<li><strong>Transactions Data:</strong> It is the data of an individual&rsquo;s transactions such as those executed on the United Payment Interface (UPI) or BHIM Aadhaar Pay</li>
</ul>
</li>
</ul>
<h3>Issues with Present Data System</h3>
<ul style="list-style-type: square;">
<li>Currently, <a href="/daily-updates/daily-news-editorials/data-localisation-and-undivided-internet" target="_blank" rel="noopener"><strong>data</strong></a> collection in India is <strong>highly decentralised.</strong> For each indicator of social welfare, responsibility to gather data lies with the corresponding union ministry and its state counterparts.
<ul style="list-style-type: circle;">
<li><strong>For example,</strong> data on an individual&rsquo;s vehicle registrations is maintained by one ministry, whereas the same individual&rsquo;s property ownership records lie with another ministry. When these different pieces could be put together, the whole is greater than the sum of the parts.</li>
</ul>
</li>
<li><strong>Administrative</strong> and <strong>Survey data</strong> are <strong>comprehensively</strong> and <strong>robustly</strong> maintained while <strong>transactional</strong> and <strong>institutional data</strong> are in a <strong>fledgling state.</strong></li>
<li><strong>The lack of common identifiers</strong> i.e single identity for every administrative unit. Every ministries or department uses different codes for the same administrative units.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/505image26.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/505image26.jpg" width="812" height="292" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li>Therefore, there is a need to integrate the separate dataset.</li>
<li>The efficacy of integrated system relies on three critical features.
<ul style="list-style-type: circle;">
<li>First, the <strong>ministries should be able to view the complete database,</strong> while they can manipulate only those data fields for which it is responsible.</li>
<li>Second, <strong>updating of data</strong> should happen in real time and in such a way that one ministry&rsquo;s engagement with the database does not affect other ministries&rsquo; access.</li>
<li>Third and most importantly, the <strong>database should be secure</strong> with absolutely no room for tampering.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Initiatives for Integrating Data</strong></p>
<ul style="list-style-type: square;">
<li><strong>Local Government Directory:</strong>
<ul style="list-style-type: circle;">
<li>It is an initiative of the <strong>Ministry of Panchayati Raj</strong></li>
<li>It aims to address the problem of common identifier.</li>
<li>It maps each land region entity to a local government body (like villages with their respective gram panchayats) and assigns location codes compliant with Census 2011.</li>
</ul>
</li>
<li><strong>Samagra Vedika Initiative:</strong>
<ul style="list-style-type: circle;">
<li>It is an initiative of Telangana government.</li>
<li>It links around 25 existing government datasets using a common identifier &ndash; the name and address of an individual.</li>
<li>Seven categories of information about each individual were linked in this aggregation exercise &ndash; crimes, assets, utilities, subsidies, education, taxes and identity information. Each individual was then further linked to relatives such as spouse, siblings, parents and other known associate.</li>
</ul>
</li>
</ul>
</div>
<h2>Eliminating all Privacy Concerns</h2>
<ul style="list-style-type: square;">
<li>The prospect of empowering the government with such comprehensive, exhaustive information about every citizen may sound alarming at first. However, this is far from the truth.
<ul style="list-style-type: circle;">
<li>Large quantities of data already exist in government records, and the objective is to use this data in a more efficient way.</li>
<li>People can always opt out of divulging data to the government, where possible.</li>
<li>If there is no viable private market choice of certain public services, the choice to share the individually linked data from such services will always be with the citizen under the <strong>Data Access Fiduciary Architecture.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Data Access Fiduciary Architecture</strong></p>
<ul style="list-style-type: square;">
<li>Each department of the government is responsible for making available the data they hold as a data provider.</li>
<li>These departments must take care to appropriately treat private data and public data with the standards they require.</li>
<li>This data is then made available through a Data Access Fiduciary to the Data Requestors. Data Requestors may be public or private institutions but can only access the data if they have appropriate user consent.</li>
<li>The Data Access Fiduciary themselves have no visibility on the data due to end-to-end encryption.</li>
</ul>
</div>
<h2>Transforming India&rsquo;s Data Infrastructure</h2>
<ul style="list-style-type: square;">
<li>Harnessing data consists of four steps &ndash; gathering, storing, processing and disseminating data, each of which offers room for improvement in India.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/454image16.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/454image16.jpg" width="497" height="319" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<h2>Applications</h2>
<ul style="list-style-type: square;">
<li>A robust data backbone can empower every stakeholder in society, from the Central Government to a local government body, from citizens to the private sector
<ul style="list-style-type: circle;">
<li><strong>Government:</strong> It can improve targeting in welfare schemes and subsidies by reducing both inclusion and exclusion errors and can significantly improve public service delivery.</li>
<li><strong>Private Sector:</strong> Within the statutory limits, data can be monetised to private sector to ease the pressure on government finances and while it carries huge potential to transform health and education sector.</li>
<li><strong>Citizens:</strong> They are the largest beneficiary of this data revolution. For eg: DigiLocker makes all their documents available, in a verified format in one place on the cloud.
<ul style="list-style-type: disc;">
<li>The Reserve Bank of India has announced the Non-Banking Financial Company-Account Aggregator (NBFC-AA) which enables the users to pull their financial data spreading along various institutions.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h2>Way Forward</h2>
<p>A truly digital ecosystem is achievable only when all layers of information that constitute the ecosystem are digitized. The benefits of creating data as a public good can be generated within the legal framework of data privacy. The data and information highway must be viewed as equally important infrastructure as the physical highways which can help India leapfrog to utilise the benefits of technological advances for the welfare of its people.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>The <strong>marginal cost</strong> of data has <strong>declined exponentially</strong> while the <strong>marginal benefit</strong> to society of using this data is higher than ever.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 26px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Data can be used as a ladder for optimum social welfare. Critically analyse the implication of treating data as &lsquo;public good&rsquo;.</strong></p>
<p><strong>Q2. Explain with the help of an example, how India&rsquo;s data infrastructure can be transformed.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter: 5</span></h1>
<h1><span style="font-size: 24px;">Ending Matsyanyaya: How to Ramp up Capacity in the Lower Judiciary</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter deals with judicial administration in the country especially <strong>District and Subordinate Courts (D&amp;S courts)</strong> and evaluate its performance on parameters such as disposal time, pendency time, case types and case clearance rate. The chapter further analyses the requirement of additional judges and efficiency gains across the various levels of courts to achieve <strong>100%</strong> clearance rate as well as to eliminate the stock of pendency in the next <strong>five years.</strong></p>
<h2>Introduction</h2>
<ul style="list-style-type: square;">
<li>There are about <strong>3.5 crore</strong> <a href="/loksabha-rajyasabha-discussions/the-big-picture-strengthening-judicial-apparatus" target="_blank" rel="noopener"><strong>cases pending in the judicial system</strong></a>, especially in district and subordinate courts</li>
<li>The <strong>Preamble to the Constitution of India</strong> defines that the first role of the State is &lsquo;to secure Justice i.e,social, economic, and political&rsquo; for all its people.</li>
<li>Enforcement of contracts &amp; dispute resolution have direct bearing on economic success &amp; prosperity. Therefore, contract enforcement and dispute resolution remains the biggest constraint to ease of doing business.</li>
</ul>
<div class="border-bg"><strong>Indian Judicial System at Glance</strong>
<ul style="list-style-type: square;">
<li><strong>Pendency</strong>
<ul style="list-style-type: circle;">
<li>The pendency of a case on a given date is the <strong>time since the date of filing.<a href="http://www.drishtiias.com/images/uploads/334image24.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/334image24.jpg" style="float: right;" width="321" height="303" caption="false" /></a></strong></li>
<li>More than <strong>64%</strong> of all cases are pending for more than 1 year.</li>
<li><strong>Odisha, Bihar, West Bengal, Uttar Pradesh and Gujarat</strong> have <strong>higher</strong> average pendency for both civil and criminal cases as compared to the national averages.</li>
<li><strong>Punjab</strong> and <strong>Delhi</strong> have the <strong>least</strong> average pendency of cases.</li>
</ul>
</li>
<li><strong>Disposal</strong>
<ul style="list-style-type: circle;">
<li>Disposal time is measured as the time span between the date of filing and the date when the decision is passed.</li>
<li>Nearly, 74.7% of the civil cases and 86.5% of the criminal cases are disposed off within three years.</li>
<li><strong>Bihar, Odisha &amp; WB</strong> have <strong>higher</strong> average time than the <strong>national average</strong> for both civil and criminal cases.</li>
<li><strong>Punjab and Delhi</strong> have the <strong>lowest</strong> average disposal time.</li>
<li>The average disposal time for civil and criminal cases in Indian D&amp;S courts in 2018 was <strong>4.4 fold</strong> and <strong>6 fold higher</strong> respectively when compared with the average of <strong>Council of Europe members (2016).</strong></li>
</ul>
</li>
<li><strong>Case Clearance Rate (CCR)</strong>
<ul style="list-style-type: circle;">
<li>The Case Clearance Rate (CCR) is the ratio of the number of cases disposed off in a given year to the number of cases instituted in that year, expressed as a percentage.</li>
<li>CCR had increased from <strong>86.1%</strong> in 2015 to <strong>90.5%</strong> in 2017, but then declined to <strong>88.7%</strong> in 2018.</li>
<li>CCR for civil and criminal cases in India was <strong>94.76%</strong> and <strong>87.41%</strong> respectively in 2018 while the <strong>Council of European (CoE)</strong> member has already achieved the CCR above 100% in 2016 for both civil and criminal cases.</li>
</ul>
</li>
</ul>
</div>
<h2>Clearing the Legal Logjam</h2>
<ul style="list-style-type: square;">
<li><a href="/current-affairs-news-analysis-editorials/news-editorials/17-11-2018" target="_blank" rel="noopener"><strong>A well-functioning legal system</strong></a> is the need of the hour for India for its <strong>potential economic and social multiplier effect.</strong> The key issues which need to be dealt urgently to make judiciary more efficient are:
<ul style="list-style-type: circle;">
<li>Achieve 100% CCR to prevent further accumulation of cases.</li>
<li>Clearing the existing pendency of cases.</li>
</ul>
</li>
<li>Using the simple input-output model at current efficiency, following calculations have been made:</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #05bbf7;"></td>
<td style="width: 25%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Supreme Court</strong></span></td>
<td style="width: 25%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>High Court</strong></span></td>
<td style="width: 25%; height: 19px; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>D&amp;S Court</strong></span></td>
</tr>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #dcf5f4;"><strong>Pendency</strong></td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">56.2 Lakh</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">40.22 Lakh</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">3.04 Crore</td>
</tr>
<tr style="height: 35px;">
<td style="width: 25%; height: 35px; background-color: #dcf5f4;"><strong>Case Clearance Rate</strong></td>
<td style="width: 25%; height: 35px; background-color: #dcf5f4;">98%</td>
<td style="width: 25%; height: 35px; background-color: #dcf5f4;">88%</td>
<td style="width: 25%; height: 35px; background-color: #dcf5f4;">89%</td>
</tr>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #dcf5f4;"><strong>Annual Disposal Rate (per judge)</strong></td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">1,179 case</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">2,348 case</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">746 case</td>
</tr>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #dcf5f4;"><strong>Additional Judges required to achieve 100% Clearance in a year</strong></td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">1</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">93</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">2279</td>
</tr>
<tr style="height: 19px;">
<td style="width: 25%; height: 19px; background-color: #dcf5f4;"><a href="/daily-updates/daily-news-analysis/increasing-the-strength-of-sc-judges" target="_blank" rel="noopener"><strong>Additional Judges</strong></a> <strong>required to clear all backlog in 5 years.</strong></td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">8</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">361</td>
<td style="width: 25%; height: 19px; background-color: #dcf5f4;">8,152</td>
</tr>
</tbody>
</table>
<h2><a href="/daily-updates/daily-news-editorials/wish-list-for-judiciary" target="_blank" rel="noopener">Making Indian Courts More Productive</a></h2>
<p>Efficiency and vacancies are the two crucial issues affecting the performance of Indian Judicial System and there is ample scope for improvement. Apart from them, some of the suggestions to improve the performance has been discussed below.</p>
<ul style="list-style-type: square;">
<li><strong>Increasing the number of working days:</strong> Indian courts close down for significant periods due to vacations as Supreme Court works only for 190 days in a year. Significant improvement can be made in the performance of Supreme Court and some High Courts while lower court are most likely to remain unaffected as their average working days are almost the same as government departments.</li>
<li><strong>Establishment of Indian Court and Tribunal Services:</strong> Most judicial reforms tend to focus only on the quality and quantity of judges, but a major problem lies with the quality of the administration of the court system. The main responsibility for administration in Indian courts is assigned to the <strong>Chief Judicial Officer</strong> which is not conducive to the time demands of his judicial duties. The major roles to be played by ICTS would be:
<ul style="list-style-type: circle;">
<li>provide administrative support functions needed by the judiciary</li>
<li>identify process inefficiencies and advise the judiciary on legal reforms</li>
<li>implement the process re-engineering.</li>
</ul>
</li>
<li><strong>Deployment of technology</strong>
<ul style="list-style-type: circle;">
<li><strong><a href="/daily-updates/daily-news-analysis/e-courts-3" target="_blank" rel="noopener">eCourts Project</a></strong>
<ul style="list-style-type: disc;">
<li>Implemented by Ministry of Law &amp; Social Justice under National e-governance mission.</li>
<li>Digitisation of district and subordinate courts as well as upgradation of ICT at the higher level.</li>
</ul>
</li>
<li><a href="/loksabha-rajyasabha-discussions/the-big-picture-pending-cases:-way-forward" target="_blank" rel="noopener"><strong>National Judicial Data Grid</strong></a>
<ul style="list-style-type: disc;">
<li>Monitoring tool to identify, manage and reduce pendency of cases.</li>
</ul>
</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Matsyanyaya Theory :</strong> In periods of chaos, when there is no ruler, <strong>the strong devour the weak,</strong> just as in periods of drought big fish eat little fish. Thus, the need for a ruler was viewed as absolute. Simply, we call it <strong>law of fish/jungle.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li><strong>D&amp;S courts</strong> accounts for <strong>87.54%</strong> of all pending cases.
<ul style="list-style-type: circle;">
<li>The pendency of <strong>criminal cases (71.62%)</strong> is about 2.5 fold higher than <strong>civil cases(28.38)</strong> and criminal cases also have lower <strong>CCR</strong> in <strong>D&amp;S courts</strong></li>
</ul>
</li>
<li>CCR had increased from <strong>86.1%</strong> in 2015 to <strong>90.5%</strong> in 2017, but then declined to 88.7% in 2018.</li>
<li><strong>Gujarat &amp; Chhatisgarh</strong> have clearance rate of <strong>above 100%</strong> in 2018.</li>
</ul>
<p><strong>Note: Focus on trends and not on exact figures.</strong></p>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 120px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. &ldquo;The single biggest constraint to ease of doing business in India is now the ability to enforce contracts and resolve disputes.&rdquo; In the context of the above statement, examine how the legal logjam can be cleared in our country.</strong></p>
<p><strong>Q2. Economic success and prosperity of the country are closely linked to it&rsquo;s judicial and legal landscape. Discuss the implications of pendency of cases on the economy?</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"><br />Chapter: 6</span></h1>
<h1><span style="font-size: 24px;">How does Policy Uncertainty affect Investment?</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter deals with policy uncertainty and its impact on investment and economic activity in the country and suggest policy recommendations for decoupling policy uncertainty in Indian economy.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li><strong>Economic Policy Uncertainty (EPU) in India has reduced significantly</strong> over the last decade.<a href="http://www.drishtiias.com/images/uploads/410image2.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/410image2.jpg" style="float: right;" caption="false" width="222" height="149" /></a></li>
<li>Inspite of the increase in economic policy uncertainty in major countries, <strong>India has witnessed a continued decrease in economic policy uncertainty since 2015.</strong></li>
<li><strong>EPU correlates strongly with the macroeconomic environment, business conditions and other economic variables that affect investment.</strong></li>
<li>Surges in economic policy uncertainty <strong>increases the systematic risk, and thereby the cost of capital in the economy</strong></li>
<li>Increase in EPU also dampens investment.</li>
</ul>
<h2>Economic Policy Uncertainty</h2>
<p><a href="http://www.drishtiias.com/images/uploads/137image15.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/137image15.jpg" style="float: right;" caption="false" width="312" height="323" /></a></p>
<ul style="list-style-type: square;">
<li>The policy making relies on <strong>judgement</strong> which involves <strong>discretion</strong> and such discretion generates uncertainty which can impact economic activity.</li>
<li>To gauge the policy impact, it is critical to understand the difference between<strong> risk</strong> and <strong>uncertainty</strong> as both fundamentally affect the economic activity.</li>
<li><strong>Risk</strong> can be <strong>quantified</strong> while <strong>uncertainty</strong> is inherently <strong>hard to measure.</strong></li>
<li>However, advances in data analytics have made it possible to quantify uncertainty.</li>
<li>Globally, an EPU index has been developed to measure economic policy uncertainty.</li>
</ul>
<h3>How Economic Policy Uncertainty affect Investment?</h3>
<ul style="list-style-type: square;">
<li>Investment is forward-looking activity and future expectations plays a critical role in decision-making.</li>
<li>Investors prefer to invest in projects with high returns and low risks.</li>
<li>According to the <strong>Capital Asset Pricing model,</strong> the returns on investment correlates positively with the systematic risk.</li>
<li>An increase in uncertainty in the economy increases this systematic risk and thereby increases the rate of return required to justify the investment.</li>
<li>As a result, projects that generate a return lower than this required return become unviable when uncertainty increases in the economy.</li>
<li>Also, as fixed investment is <strong>irreversible,</strong> uncertainty exacerbates risk aversion, increases the premium demanded for assuming risk, and eventually dampens investment.</li>
</ul>
<h3>Economic Policy Uncertainty in India</h3>
<ul style="list-style-type: square;">
<li>As per the EPU Index, economic policy uncertainty peaked in India during the late 2011 and early 2012 and has since been <strong>declining</strong> with <strong>intermittent increases</strong> in between and peaking during taper tantrum period of 2013.</li>
<li>In spite of increasing global uncertainty due to factors such as increasing trade tensions, Brexit, slower world growth; India&rsquo;s economic policy uncertainty has been falling and is more stable.</li>
<li>Global Financial Crisis had direct bearing on the<strong> fixed investment rate</strong> which fell from <strong>37% in 2007-08 to 27%</strong> in the following 10 years and had recently improved to <strong>28%.</strong></li>
<li>The continued resolution of the <strong>twin balance sheet problem</strong> following implementation of <a href="/loksabha-rajyasabha-discussions/in-depth-insolvency-and-bankruptcy-code-act" target="_blank" rel="noopener"><strong>Insolvency and Bankruptcy Code 2016</strong></a> and <strong>recapitalization of banks</strong> has helped to promote investment in the country.</li>
</ul>
<h2>Policy Recommendations</h2>
<p>The following policy changes are recommended:</p>
<ul style="list-style-type: square;">
<li><strong>First,</strong> policymakers&rsquo; must make their actions predictable, provide forward guidance on the stance of policy, and reduce ambiguity/arbitrariness in policy implementation.</li>
<li><strong>Second,</strong> &ldquo;what gets measured gets acted upon&rdquo;. So, economic policy uncertainty index must be tracked at the highest level on a quarterly basis.</li>
<li><strong>Finally,</strong> quality assurance of processes in policy making must be implemented in government via international quality certifications.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Taper Tantrum:</strong> It refers to the <strong>2013 collective reactionary panic</strong> that triggered a spike in U.S. Treasury yields, after investors learned that the Federal Reserve was slowly putting the breaks on its quantitative easing (QE) program.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li><strong>Economic Policy Uncertainty</strong> in India has <strong>reduced significantly</strong> over the <strong>last decade.</strong></li>
<li><strong>Gross Fixed Capital Formation</strong> as a proportion of GDP (fixed investment rate) fell from <strong>37% in 2007-08 to 27% in 2017</strong> and recently improved to <strong>28%.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 22px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Q1. Briefly explain economic policy uncertainty. What factors led to a decrease in policy uncertainty in India since 2015.</strong></li>
<li><strong>Q2. Examine how policy uncertainty impacts an economy.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1></h1>
<h1><br /><span style="font-size: 24px;">Chapter: 7</span></h1>
<h1><span style="font-size: 24px;">India&rsquo;s Demography at 2040: Planning Public Good Provision for the 21st Century</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter gave an insightful view of demography of India and projects the changes that are expected in the next two decades. It also laid out a future strategy to deal with demographic changes.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>India will witness a <strong>sharp slowdown</strong> in population growth in the next <strong>two decades.<a href="http://www.drishtiias.com/images/uploads/999image4.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/999image4.jpg" width="342" height="201" caption="false" style="float: right;" /></a></strong></li>
<li>India as a whole will enjoy the<strong><a href="/to-the-points/paper1/india-s-demographic-dividend" target="_blank" rel="noopener"> &ldquo;demographic dividends&rdquo;</a> </strong>phase while some states will start transitioning to an ageing society by the 2030&rsquo;s.</li>
<li><a href="/daily-updates/daily-news-analysis/indias-falling-fertility-rate" target="_blank" rel="noopener"><strong>Total Fertility Rate (TFR)</strong></a> had shown a <strong>steady decline</strong> since the mid 1980&rsquo;s and expected to be below replacement level by 2021 (after adjusted for skewed gender ratio).</li>
<li>India&rsquo;s working age population will grow by roughly <strong>9.7 million per year by 2021-31 and 4.2 million by 2031-41.</strong></li>
<li>The proportion of elementary school going children i.e 5-14 age group will witness a significant <strong>decline.</strong></li>
</ul>
<h2>Recent Demographic Trends</h2>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/population-explosion-and-fertility-rates" target="_blank" rel="noopener"><strong>Population growth in India</strong></a> has been slowing in recent decades from an annual growth rate of 2.5% during 1971-81 to an estimated 1.3% as of 2011-16 .</li>
<li>All major states have <strong>witnessed a marked deceleration in population growth</strong> particularly high population growth states like Bihar, Uttar Pradesh, Rajasthan and Haryana.<a href="http://www.drishtiias.com/images/uploads/220image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/220image3.jpg" style="float: right;" width="390" height="229" caption="false" /></a></li>
<li>It has been mainly due to <a href="/daily-updates/daily-news-analysis/inverted-j-pattern-in-education-and-fertility" target="_blank" rel="noopener"><strong>steady decline in India&rsquo;s TFR</strong></a> which halved from <strong>4.5 in 1984 to 2.3 as of 2016</strong> and is now below replacement level by fertility in 13 out of the 22 major states which suggest that India has entered the phase of <strong>&ldquo;demographic dividend&rdquo;.</strong></li>
<li>Himachal Pradesh, Punjab, West Bengal and Maharashtra along with Southern states have made rapid advancement in demographic transition, with
<ul style="list-style-type: circle;">
<li>TFR already below replacement level fertility</li>
<li>population growth mainly due to momentum</li>
<li>more than 10% of the population over the age of 59 and</li>
<li>at most one-third of the population below the age of 20.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Total Fertility Rate :</strong> It refers to the <strong>total number of children born</strong> or likely to be born to a woman of <strong>child-bearing age</strong> in her lifetime. It is highest for Bihar followed by UP and lowest for Delhi</p>
<p><a href="http://www.drishtiias.com/images/uploads/371image17.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/371image17.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="508" height="302" caption="false" /></a></p>
<p><strong>Replacement Level Fertility:</strong> TFR of <strong>2.1</strong> children per woman is called the replacement level fertility, which is the average number of children a woman would need to have in order for the population to replace itself.</p>
<p><strong>Effective Replacement Level Fertility:</strong> Replacement Level Fertility adjusted for skewed sex ratio.</p>
</div>
<h2>Projecting National and State Level Population (2021-2041)</h2>
<p>Following projections and analysis has been done for 22 major states which accounts for 98.4% of India&rsquo;s population as per Census 2011.</p>
<ul style="list-style-type: square;">
<li><strong>Declining Fertility Rate</strong>
<ul style="list-style-type: circle;">
<li><strong>National Level:</strong> TFR will continue to <strong>decline rapidly</strong> and will lie below replacement level fertility at 1.8 as early as 2021 and is expected to stabilize thereafter for some time at around 1.7.</li>
<li><strong>State Level:</strong> All states are expected to be below replacement level fertility by 2031.
<ul style="list-style-type: disc;">
<li>States such as <strong>WB, Punjab, Maharashtra, HP and southern states,</strong> which are already below replacement level are expected to reach lower level of 1.5-1.6.</li>
</ul>
</li>
<li><strong>Sex Ratio:</strong> Sex ratio at birth remains <strong>higher</strong> than the <strong>normal range of 1.02-1.076</strong> at the <strong>national level</strong> and in<strong> 17</strong> out of 22 major states.
<ul style="list-style-type: disc;">
<li>The average value of sex ratio at birth is around <strong>1.05,</strong> i.e. 105 boys born per every 100 girls which means that there are more males than females.</li>
<li>This implies that the required <strong>replacement level fertility</strong> at the national and state level is <strong>higher</strong> than the usual benchmark of <strong>2.1</strong>, i.e., due to the skewed sex ratio, a woman would have to give birth to more than 2.1 children in order for the population to replace itself.</li>
<li>The effective replacement level fertility after accounting for skewed sex ratio could be around <strong>2.15-2.2</strong> for India with a sex ratio of <strong>1.11</strong></li>
</ul>
</li>
<li><strong>Reason for Declining Fertility</strong>
<ul style="list-style-type: disc;">
<li>rising female education</li>
<li>postponement of marriage</li>
<li>access to family planning methods and</li>
<li>continued decline in infant mortality.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Population Growth Trajectory</strong>
<ul style="list-style-type: circle;">
<li><strong>National Level:</strong> India&rsquo;s population growth will <strong>continue to slow rapidly</strong> over the next two decades, <strong>growing less than 1%</strong> during 2021- 31 and under 0.5% during 2031-41. However, the positive population growth will be due to population momentum and the continued rise in life expectancy.</li>
<li><strong>State Level:</strong> States ahead in the demographic transition will see a <strong>continued deceleration</strong> in population growth and reach near-zero <strong>growth rates</strong> by 2031-41. Population will start declining in Tamil Nadu by 2031.
<ul style="list-style-type: disc;">
<li>States lagging behind in demographic transition will also witness a marked slowdown. <strong>Bihar</strong> and <strong>UP</strong> will account for over <strong>40% increase.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Changing Age Composition</strong>
<ul style="list-style-type: circle;">
<li><strong>Young Population (0-19 year):</strong> It has started declining from <strong>41% in 2011</strong> and expected to reach <strong>25% by 2041.</strong></li>
<li><strong>Elderly Population (60 and above):</strong> It will rise steadily and expected to double from 8.6% in 2011 to 16% by 2041.</li>
<li>India&rsquo;s demographic dividend will <strong>peak around 2041,</strong> when the share of <strong>working-age,</strong> i.e.<strong> 20-59</strong> years, population is expected to hit <strong>59%.</strong></li>
</ul>
</li>
<li><strong>Implication for Working-Age Population</strong>
<ul style="list-style-type: circle;">
<li>India&rsquo;s working-age population will rise by <strong>96.5 million during 2021-31</strong> and by <strong>41.5 million during 2031-41.</strong></li>
<li>As per the <strong>NSSO</strong> <a href="/daily-updates/daily-news-analysis/state-divide-in-unemployment" target="_blank" rel="noopener"><strong>Periodic Labour Force Survey 2017-18,</strong></a> India&rsquo;s labour force participation rate for the age-group 15-59 years is around <strong>53% (80% for males, 25% for females)</strong> and following this trajectory India needs to create jobs at the rate of 9.7 million per year during 2021-31 and 4.2 million per year during 2031-41.</li>
<li>Working-age population will start declining in 11 out of the 22 major states during 2031-41, including in the southern states, Punjab, Maharashtra, West Bengal and Himachal Pradesh.</li>
<li>It will continue to rise through 2041 in states lagging behind in the demographic transition, particularly Bihar, Uttar Pradesh, Madhya Pradesh and Rajasthan.</li>
</ul>
</li>
</ul>
<h2>Policy Implication of Ageing</h2>
<ul style="list-style-type: square;">
<li><strong>Elementary Schools</strong>
<ul style="list-style-type: circle;">
<li>The number of school-going children (5-14 year) in India will <strong>decline</strong> by 18.4% between 2021 and 2041.</li>
<li>The number of <strong>schools per capita</strong> will <strong>rise</strong> significantly in India across all major states even if no more schools are added.</li>
<li>The states need to pay greater attention in <strong>consolidating/merging</strong> schools to make them viable rather than building new ones and states will need a policy shift from quantity to quality and efficiency of education.</li>
</ul>
</li>
<li><strong>Healthcare Facilities</strong>
<ul style="list-style-type: circle;">
<li>The per capita availability of hospital beds will <strong>sharply reduce</strong> in India across all major states. India already fares poorly relative to other emerging and developed economies in terms of per capita availability of hospital beds.</li>
<li>States which are in the advanced stage of demographic transition, greater provision of <a href="/to-the-points/Paper2/elderly-in-india" target="_blank" rel="noopener"><strong>geriatric care</strong></a> are required due to rapidly changing age structure.</li>
<li>Availability of specific data is the major hindrance in planning for the provision of medical facilities and will require a greater emphasis.</li>
</ul>
</li>
<li><strong>Retirement Age</strong>
<ul style="list-style-type: circle;">
<li>India&rsquo;s healthy life expectancy at the age of 60, which is the average number of years a 60-year old person is expected to live in full health taking into account the impact of diseases and injuries, has <strong>continually increased</strong> over the years for both men and women.</li>
<li>The retiring workforce with increasing life expectancy is increasing the burden of pensions.</li>
<li>Therefore, experience from other emerging and developed countries suggest that increasing retirement age would ease pressure on pension funding.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li><strong>TFR</strong> had <strong>steadily declined</strong> in India since 1980&rsquo;s.<a href="http://www.drishtiias.com/images/uploads/925image14.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/925image14.jpg" width="284" height="167" style="float: right;" caption="false" /></a></li>
<li>The share of <strong>India&rsquo;s young (0-19 years)</strong> population has <strong>already started to decline</strong> and is projected to drop from as high as 41 per cent in 2011 to 25 per cent by 2041.</li>
<li>The elementary school going children <strong>(5-14 age group)</strong> has <strong>already begun declining</strong> in India and across <strong>all major states</strong> except Jammu &amp; Kashmir.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 17px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. How demographic changes are likely to impact economic scenario in the country.</strong></p>
<p><strong>Q2. India's demographic dividends could be a boon or bane. Discuss the policy measures required to encash the benefits of demographic dividends?</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter:8</span></h1>
<h1><span style="font-size: 24px;">From Swachh Bharat to Sundar Bharat via Swasth Bharat : An Analysis of the Swachh Bharat Mission</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter focuses on Gandhi's vision of clean India and highlights our phenomenal journey towards sanitation through Swachh Bharat Mission. The mission emphasizes on behavioural change as its key component and highlights its impact on various health outcomes.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>The <a href="/daily-updates/daily-news-analysis/Swachh%20Bharat%20Mission" target="_blank" rel="noopener"><strong>Swachh Bharat Mission (SBM)</strong> </a>was initiated in 2014 to achieve universal sanitation coverage by October 2, 2019 i.e. 150<sup>th</sup> birth anniversary of Gandhiji.</li>
<li>The flagship programme is the largest cleanliness drive as well as an attempt to effect behavioural change in the world ever.</li>
<li>All over the country, around <strong>9.5 crore</strong> toilets have been built and more than <strong>5.6 lakh</strong> villages have been declared Open Defecation Free (ODF).</li>
<li>Till June 2019, <strong>30 States/ UT&rsquo;s</strong> are <strong>100%</strong> covered with Individual Household Latrine (IHHL).</li>
<li>The evidence suggests that SBM has significantly <strong>improved health outcomes</strong> like <strong>reduced</strong> diarrhoea and malaria among children below 5 years, still-birth and low birth weight and these outcomes are more pronounced in districts where <strong>IHHL</strong> coverage was lower in 2015.</li>
<li>Financial savings from a household toilet exceed the financial costs to the household by <strong>1.7 times</strong> on average and <strong>2.4 times</strong> for poorest households</li>
<li>Poor sanitation costs India around<strong> 5.2 per cent of its GDP.</strong></li>
</ul>
<h2>Swachh Bharat Mission-Gramin (SBM)</h2>
<ul style="list-style-type: square;">
<li>Under SBM, an incentive of <span>₹</span><strong>12,000</strong> is provided for construction of <strong>Individual Household Latrines (IHHL)</strong> to eligible beneficiaries in <strong>rural areas</strong> and covers for provision of water storage.</li>
<li>A total of <strong>51,314.3 crore</strong> has been allocated since <strong>2014-15</strong> for SBM, out of which, <strong>48,909.2 crore (95.3%)</strong> has been released.</li>
</ul>
<h3>Multi-Facet Approach of SBM</h3>
<ul style="list-style-type: square;">
<li><strong>Community Participation:</strong> It promotes ownership and sustained use by financially involving beneficiaries/ communities.</li>
<li><strong>Flexibility in Choice:</strong> It provides flexibility to the poor/disadvantaged families to upgrade their toilets on the basis of their need and financial suitability.</li>
<li><strong>Capacity Building:</strong> It augments the institutional capacity of districts to change behaviour at the grassroot level and strengthen the capacities of implementing agencies so that the programme could be rolled in a time-bound manner and collective outcomes could be measured.</li>
<li><strong>Instil Behaviour Change:</strong> It provides <strong>incentives to State-level institutions</strong> to implement activities for behavioural change which emphasizes on awareness generation, triggering mind-set changes and demand generation for sanitary facilities in houses, schools, anganwadis, places of community congregation and for solid and liquid waste management activities.</li>
<li><strong>Broad-based Engagement: Swachh Bharat Kosh</strong> set up to encourage <strong><a href="/daily-updates/daily-news-analysis/injeti-srinivas-committee-report-on-csr" target="_blank" rel="noopener">Corporate Social Responsibility</a></strong> and accept contributions from private organizations, individuals and philanthropists.</li>
<li><strong>Use of Technology:</strong> Many mobile applications have been launched to both government and private individuals to enable citizens to keep a check on the availability of toilets and nearly 90% of toilets have already been geo-tagged.</li>
</ul>
<h3>Outcomes of SBM</h3>
<ul style="list-style-type: square;">
<li>Under SBM, around <strong>98.9% of India</strong> has been covered.
<ul style="list-style-type: circle;">
<li><strong>Open Defecation Free (ODF):</strong> Till May 2019, around 93.41% of villages and 88.41% (618) districts have been declared ODF.
<ul style="list-style-type: disc;">
<li><strong>Goa</strong> has the <strong>lowest ODF coverage</strong> followed by <strong>Odisha, Telangana &amp; Bihar</strong> while <strong>WB</strong> and <strong>Sikkim</strong> are close to <strong>100%</strong> ODF coverage.</li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>ODF</strong> would mean the<strong> termination of faecal-oral transmission</strong> and defined by</p>
<ul style="list-style-type: square;">
<li>no visible faeces found in the environment/village and</li>
<li>every household as well as public/community institution(s) using safe technology option for disposal of faeces.</li>
</ul>
</div>
<ul style="list-style-type: circle;">
<li><strong>Individual Household Latrines (IHHL): Most</strong> of the states have achieved the status of <strong>100%</strong> IHHL coverage.
<ul style="list-style-type: disc;">
<li><strong>Goa</strong> has <strong>lowest</strong> IHHL coverage followed by Odisha and Telangana.</li>
</ul>
</li>
<li><strong>Behavioural Change:</strong> According to the <strong>National Annual Rural Sanitation Survey (NARSS) 2018-19,</strong> conducted by an independent Verification Agency (IVA) has found:
<ul style="list-style-type: disc;">
<li>93.1% households had access to toilets</li>
<li>96..5% of households in rural India had access to toilets and use them.</li>
<li>confirmed the ODF status of 90.7% of villages.</li>
</ul>
</li>
<li><a href="/daily-news-editorials/solid-waste-management-in-india" target="_blank" rel="noopener"><strong>Solid and Liquid Waste Management:</strong></a> Many states have undertaken various activities such as construction of waste collection centres, menstrual hygiene management activities, installation of bio-gas plants, construction of compost pits, installation of dustbins etc.</li>
<li><strong>Social Change:</strong> This mission acts as a <strong>driver for eliminating the gender disparity</strong> through the construction of gender-specific latrines in public areas such as schools, roads and parks.
<ul style="list-style-type: disc;">
<li>This public movement will have the indirect positive impact on society by increasing the <strong>enrolment ratio of girls</strong> in schools and improving health standards</li>
<li>It is also aligned with the 2030 global <strong>sustainable development agenda</strong> and <a href="/loksabha-rajyasabha-discussions/in-depth-indias-sustainable-development-goals" target="_blank" rel="noopener"><strong>SDGs</strong></a> especially the <strong>SDG 6.2.</strong></li>
</ul>
</li>
</ul>
<h2>Analysis of SBM on Health Issues</h2>
<ul style="list-style-type: square;">
<li>SBM has helped in reducing the <strong>diarrhoea</strong> and <strong>malaria</strong> among children below five years, <strong>still-birth</strong> and<strong> low birth weight</strong> (new-born with weight less than 2.5 kgs).</li>
<li>Districts with <strong>low IHHL coverage</strong> suffered more from <strong>diarrhoea, malaria, still-birth</strong> and <strong>low birth weight</strong> as compared to districts with <strong>higher</strong> IHHL coverage.</li>
</ul>
<h2>Independent Studies</h2>
<ul style="list-style-type: square;">
<li><strong>The <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-bank-group" target="_blank" rel="noopener">World Bank</a></strong> (2011) report estimates the economic impacts of inadequate sanitation in India in the year 2006 was around US$ 53 billion, implying a per capita annual loss of $48 or 6.4% of GDP</li>
<li>The report<strong> &ldquo;Sanitation Health Impact Assessment&rdquo;</strong> conducted by the <strong><a href="/daily-updates/daily-news-analysis/jal-shakti-mantralaya" target="_blank" rel="noopener">Ministry of Drinking Water and Sanitation (MoDWS)</a></strong>, found that the health and nutritional indicators of the children and mothers belonging to the ODF areas were comparatively <strong>better than</strong> their non-ODF counterparts.</li>
<li>The study <strong>&ldquo;Swachh Bharat Mission &ndash; Preliminary estimations of potential health impacts from increased sanitation coverage&rdquo;</strong> conducted by the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-health-organization-who" target="_blank" rel="noopener"><strong>World Health Organization (WHO)</strong></a> estimates a <strong>decline</strong> in diarrhoeal deaths attributable to unsafe sanitation from <strong>1,40,000 in 2014</strong> to <strong>50,000 in 2017-18.</strong></li>
<li>Study conducted by <strong><a href="/important-institutions/drishti-specials-important-institutions-international-institution/united-nations-1" target="_blank" rel="noopener">UNICEF</a></strong> on behalf of the <strong>MoDWS</strong> that on an average, every household in an ODF village saved about <strong>Rs.50,000</strong> an account of financial savings due to lower likelihood of disease from using a toilet and practicing hand washing and value of time saved due to closer toilets.
<ul style="list-style-type: circle;">
<li>When costs and benefits are compared over a <strong>10-year time period,</strong> assuming 100% usability, the financial savings, time saving and benefits of life saved are included, the <strong>benefits to the households</strong> exceed the <strong>financial cost</strong> of constructing toilets by <strong>4.7 times.</strong></li>
</ul>
</li>
</ul>
<h2>Way Forward</h2>
<ul style="list-style-type: square;">
<li>SBM has led to a sea change in the dignity of people and has brought remarkable transformation of society as a whole but still a lot needs to be done.</li>
<li>The dream of clean India can only be realized by addressing these multiple facets:
<ul style="list-style-type: circle;">
<li>maintaining a culture of swachhata at public places beyond individual houses</li>
<li>cleaning water bodies</li>
<li>scientific waste management</li>
<li>dealing with plastic menace</li>
<li>controlling air pollution, etc</li>
</ul>
</li>
<li>To <strong>sustain the momentum</strong> created and behavioural change, a number of actions would have to be taken on a continuous basis, such as:
<ul style="list-style-type: circle;">
<li>motivation of <strong>&lsquo;agents of change&rsquo;</strong> at the ground level</li>
<li>impart training to field agents</li>
<li>appointment of <strong>sanitation ambassadors</strong> to campaign and create awareness especially on health benefits</li>
<li>obtain <strong>systematic feedback</strong> from users.</li>
</ul>
</li>
<li>The availability of financial resources is also of utmost importance. Hence, there is a need to facilitate and sustain innovative financing mechanisms by exploring various financial instruments such as micro-financing, concessional loans, crowd funding etc.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>Almost <strong>98.9%</strong> of India has been covered under SBM.</li>
<li>Around <strong>93.41% villages</strong> and <strong>88.41% districts</strong> has been declared ODF.</li>
<li><strong>Goa</strong> has the <strong>lowest ODF and IHHL</strong> coverage followed by <strong>Odisha</strong> and <strong>Telangana.</strong></li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 94px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Mahatma Gandhi once said, &ldquo;Sanitation is more important than independence.&rdquo; Examine the relevance of this statement.</strong></p>
<p><strong>Q2. The success of Swachh Bharat Abhiyan is more dependent on attitudinal change than financial resources. Discuss the steps taken by the government in this regard.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter: 9</span></h1>
<h1><span style="font-size: 24px;">Enabling Inclusive Growth Through Affordable, Reliable and Sustainable Energy</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The Chapter provides insights about energy sector, especially <a href="/infographics/info-paper3/renewable-energy" target="_blank" rel="noopener"><strong>renewable energy</strong></a> and discusses various issues related to electric vehicles penetration in India.</p>
<h2>Key Highlights</h2>
<ul style="list-style-type: square;">
<li>India <strong>lags</strong> behind significantly in energy usage, despite accounting for 18% of world&rsquo;s population and uses only around <strong>6%</strong> of the world&rsquo;s primary energy.</li>
<li>India has a <strong>per-capita energy consumption</strong> of only about <strong>one-third</strong> of the global average.</li>
<li>The share of renewables in total generation has increased from <strong>6% in 2014-15 </strong>to<strong> 10% in 2018-19.</strong></li>
<li><strong>Access to energy</strong> directly affect various social indicators and contributes to <a href="/daily-updates/daily-news-analysis/hdi-ranking-by-undp" target="_blank" rel="noopener"><strong>Human Development Index (HDI).</strong></a></li>
<li>India, therefore, needs to quadruple its per-capita energy consumption to meet the rising aspirations of its citizens.</li>
</ul>
<h2>Energy For Prosperity</h2>
<ul style="list-style-type: square;">
<li>Developed countries followed a path of <strong>energy-intensive industrial growth</strong> to reach the high standards of living.</li>
<li>India&rsquo;s <strong>per capita energy consumption</strong> equals <strong>0.6 tonnes of oil equivalent (toe)</strong> as compared to the <strong>global per capita average of 1.8 toe.</strong></li>
<li>During initial phases of economic development, <strong>increase in per capita GDP</strong> requires a <strong>large increase in primary energy per capita.</strong></li>
<li>India <strong>cannot</strong> become an <strong>upper-middle-income</strong> country without:
<ul style="list-style-type: circle;">
<li>Rapidly raising its share of the global energy consumption commensurate with its share of the global population.</li>
<li>Ensuring universal access to adequate modern commercial energy at affordable prices.</li>
</ul>
</li>
<li>India&rsquo;s <strong>energy intensity of GDP</strong> started <strong>declining</strong> at a much lower level of <strong>per capita GDP</strong> as compared to the developed world and <strong>decrease</strong> in <strong>energy intensity</strong> is the reflective of increase in the <strong><a href="/daily-updates/daily-news-editorials/energy-efficiency-and-climate-change" target="_blank" rel="noopener">efficiency of energy use.</a></strong></li>
<li><strong>Access to energy</strong> is also important due to its linkages with other social indicators like the <a href="/loksabha-rajyasabha-discussions/in-depth-indias-sustainable-development-goals" target="_blank" rel="noopener"><strong>Sustainable Development Goal (SDG)</strong></a> <strong>No.7 on Affordable and Clean Energy.</strong></li>
<li>There is also a <strong>strong relationship</strong> between <a href="/summary-of-important-reports/human-development-index-by-undp-2018" target="_blank" rel="noopener"><strong>Human Development Index (HDI)</strong></a> and per capita energy consumption. A country with 100 Gigajoules of per capita energy consumption has, on an average, HDI of around 0.8, a very high human development. India had a per capita energy consumption of 24 Gigajoules and an HDI of 0.64 in 2017.</li>
<li>Therefore, to enter the group of high human development countries, India needs to <strong>quadruple</strong> its <strong>per capita energy consumption.</strong></li>
</ul>
<h2>Access To Energy- Energy Poverty</h2>
<ul style="list-style-type: square;">
<li>In India, there is a wide disparity between <strong>urban</strong> and <strong>rural</strong> areas in <strong>access to energy</strong> as well as variation between <strong>households at different economic strata.</strong></li>
<li>There has been a <strong>considerable increase in LPG</strong> users, particularly in <strong>urban areas.</strong> A large proportion of the population, especially in <strong>rural areas</strong> relies on non-commercial biomass such as firewood and dung cakes, thereby exacerbating health concerns due to poor indoor air quality.</li>
<li>As per <strong>National Survey (2011-12),</strong> around <strong>81% of rural households</strong> and <strong>59% of urban households</strong> in lowest five percentile classes of expenditure reported firewood and chips as their primary source of energy for cooking and as we climb up the economic strata ladder, their reliance on firewood and chips <strong>decreases</strong> and that of <strong>LPG increases.</strong></li>
<li>Even at the<strong> top five percentile classes in rural areas,</strong> only <strong>50%</strong> use LPG which indicates that the problem of energy poverty has been more pervasive than income poverty.</li>
<li>As per <a href="/daily-updates/daily-news-analysis/world-energy-outlook-2018" target="_blank" rel="noopener"><strong>International Energy Agency (2018),</strong></a> in 2017,<strong> 53%</strong> of the population in India <strong>did not</strong> have access to clean cooking when compared with <strong>68% in 2010.</strong></li>
<li>Government Efforts to increase LPG penetration:
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/important-facts-for-prelims" target="_blank" rel="noopener"><strong>PM Ujjwala Yojana:</strong></a> It was launched in 2016 with the aim to safeguard the health of women and children by providing them with clean energy fuel. Under the scheme, around <strong>7 Crore LPG connections</strong> have been provided till April 2019.</li>
<li><strong>Pahal Scheme:</strong> It is a <strong>direct benefit transfer</strong> scheme for LPG consumers launched to<strong> rationalize subsidies</strong> based on approach to cut subsidy leakages. It has been recognized by the <strong>&ldquo;Guinness Book of World Record&rdquo;</strong> as the <strong>World&rsquo;s Largest Direct Benefit Scheme.</strong></li>
</ul>
</li>
</ul>
<h2>Energy Efficiency</h2>
<ul style="list-style-type: square;">
<li>Along with increasing its energy production and consumption, ensuring access to electricity for all and improving living standards, India also strives to ensure that it follows a growth path that delivers sustainable development and protect the environment.<a href="http://www.drishtiias.com/images/uploads/522image11.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/522image11.jpg" width="306" height="140" style="float: right;" caption="false" /></a></li>
<li>India&rsquo;s <strong>primary energy intensity of GDP</strong> has followed a <strong>declining trend</strong> and has fallen from <strong>0.0004 toe in 1990 to 0.0002 toe in 2017.</strong></li>
<li>The institutional and legal framework in the country for energy efficiency has been strengthened through the <strong>Energy Conservation Act in 2001,</strong> which created the <a href="/daily-updates/daily-news-analysis/star-rating-program" target="_blank" rel="noopener"><strong>Bureau of Energy Efficiency</strong></a> <strong>(BEE).</strong> The overall size of the <a href="/daily-updates/daily-news-editorials/energy-efficiency-and-climate-change" target="_blank" rel="noopener"><strong>energy efficiency</strong></a> market in India is estimated to be US$ 22.81 billion.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/934image25.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/934image25.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="739" height="420" /></a></p>
<table border="1" style="border-collapse: collapse;">
<tbody>
<tr style="height: 19px;">
<td style="width: 1318px; vertical-align: top; background-color: #dcf5f4; height: 19px; text-align: center;" colspan="2"><strong>Energy Efficiency Programs</strong></td>
</tr>
<tr style="height: 199px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>1. Standards &amp; Labelling Programme</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It was launched in May 2006 to provide the consumer an informed choice about the energy and cost saving potential of the labelled appliances.</li>
<li>It lays down minimum energy performance norms for appliances.</li>
</ul>
</td>
</tr>
<tr style="height: 133px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>2. Energy Conservation Building Code (ECBC)</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It sets minimum standards for commercial buildings.</li>
<li>BEE has also launched the <a href="/daily-updates/daily-news-analysis/eco-niwas-samhita-2018" target="_blank" rel="noopener"><strong>Eco-Niwas Samhita</strong></a> for residential buildings.</li>
</ul>
</td>
</tr>
<tr style="height: 155px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>3. Corporate Average Fuel Efficiency (CAFE)</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It prescribes fuel efficiency norms for passengers cars and Heavy Duty Vehicles.</li>
<li>Norms for light &amp; medium commercial vehicles and tractors are under stage of finalization.</li>
</ul>
</td>
</tr>
<tr style="height: 111px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>4. Demand Side Management Programme</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It is launched by BEE for agricultural, Municipal and Distribution Companies (DISCOMS).</li>
</ul>
</td>
</tr>
<tr style="height: 177px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>5. Perform, Achieve and Trade (PAT) Scheme</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It is launched for energy intensive industries with the aim to reduce energy consumption.</li>
<li>Excess energy savings are converted into tradable instruments called Energy Saving Certificates.</li>
</ul>
</td>
</tr>
<tr style="height: 19px;">
<td style="width: 242px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: left;"><strong>6. Unnati Jyoti by Affordable LEDS for All (UJALA)</strong></td>
<td style="width: 1076px; height: 10px; vertical-align: top; background-color: #dcf5f4; text-align: justify;">
<ul style="list-style-type: square;">
<li>It was launched in January, 2015 by EESL to reduce energy requirements through LED lamps.</li>
<li>LED bulbs are distributed at subsidized rates.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3>Impact of Energy Efficiency Programmes</h3>
<ul style="list-style-type: square;">
<li>Various energy efficiency programmes like <strong>Perform Achieve Trade (PAT), UJALA, <a href="/daily-updates/daily-news-analysis/star-rating-program" target="_blank" rel="noopener">Standards &amp; Labelling</a></strong> etc have witnessed exceptional performance leading to lower greenhouse gas emissions and cost savings of <strong>Rs 53,000 Crore in 2017-18</strong> and overall electricity savings due to energy efficiency measures is <strong>7.21%</strong> of the net electricity consumption in 2017-18.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/869image23.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/869image23.jpg" width="690" height="387" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<h3>Saving Potential of Various Sectors</h3>
<ul style="list-style-type: square;">
<li>According to BEE estimates, India&rsquo;s energy saving potential stands at around 10% (moderate savings) to 15% (aspirational saving) by 2031. <strong>Industrial sector</strong> stands out with <strong>maximum</strong> energy saving potential.</li>
</ul>
<h2>Sustainability of Energy Generation</h2>
<ul style="list-style-type: square;">
<li>According to IEA, the focus has been gradually shifting to <strong>non-fossil fuel sources</strong> for electricity generation but still the coal remains the largest source of electricity generation mix globally with <strong>38% market share</strong> in 2018.</li>
<li>It may not be advisable to effect a sudden abandonment of coal based power plants without <strong>complete utilisation</strong> of their useful lifetimes as it would lead to <strong>stranding of assets</strong> that can have further <strong>adverse impact on the banking sector.</strong></li>
<li>Global renewable generation capacity constituted around a<strong> third</strong> of total installed electricity capacity (IRENA, 2019).</li>
<li>Almost <strong>60%</strong> of India&rsquo;s installed capacity is in thermal power particularly coal based thermal power plants. India&rsquo;s <a href="/daily-updates/daily-news-analysis/co2-level-hit-record-high" target="_blank" rel="noopener"><strong>Nationally Determined Contribution (NDC)</strong></a> under the <strong>Paris Agreement</strong> states that India will achieve <strong>40% installed capacity</strong> of power from non-fossil fuels by 2030.</li>
</ul>
<h2>Potential of Renewable Energy</h2>
<ul style="list-style-type: square;">
<li>Renewable energy sources are a strategic national resource and harnessing these resources is a part of India&rsquo;s vision to achieve social equity and energy transition with energy security, a stronger economy, and climate change mitigation.</li>
<li>Various financial incentives for off-grid and decentralized renewable energy system have progressively reduced cost and improved efficiency and reliability which have made renewable energy an attractive option for meeting the energy needs in a sustainable manner and helping India pursue its low carbon development pathway.</li>
<li>India has been undertaking one of the world&rsquo;s largest renewable energy expansion programmes in the world to achieve an installed capacity of renewable based power of 175 GW by the year 2022.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 19px;">
<td style="width: 36.8967%; height: 19px; text-align: center; background-color: #05bbf7;"><span style="color: #ffffff;"><a href="/to-the-points/paper3/solar-energy" target="_blank" rel="noopener" style="color: #ffffff;"><strong>Solar Sector</strong></a></span></td>
<td style="width: 36.075%; height: 19px; text-align: center; background-color: #05bbf7;"><span style="color: #ffffff;"><strong>Hydro Sector</strong></span></td>
<td style="width: 27.0282%; height: 19px; text-align: center; background-color: #05bbf7;"><span style="color: #ffffff;"><strong><a href="/loksabha-rajyasabha-discussions/policy-watch-indias-wind-energy-potential" target="_blank" rel="noopener" style="color: #ffffff;">Wind Sector</a></strong></span></td>
</tr>
<tr style="height: 19px;">
<td style="width: 36.8967%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<ul style="list-style-type: square;">
<li>Globally, India stands <strong>5<sup>th</sup></strong> in solar power.</li>
<li>The solar power installed capacity has increased around <strong>1000 times</strong> from 25 MW in 2011 to 28.18 GW in March 2019.</li>
<li>Due to reverse auctioning process, solar tariff has declined from Rs 18/kWh in 2010 to Rs 2.44/kWh in 2018.</li>
</ul>
<p><strong>Initiatives Taken</strong></p>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-editorials/annadata-to-urjadata" target="_blank" rel="noopener"><strong>KUSUM scheme</strong></a> for providing financial and water security to framers and for de-dieselization of farm sector.</li>
<li><strong>Green Energy Corridor Project</strong> for integration of renewables into national grid.</li>
</ul>
</td>
<td style="width: 36.075%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<ul style="list-style-type: square;">
<li>India has a hydro potential of around <strong>1,45320 MW,</strong> out of which <strong>45,400 MW</strong> has been utilized.</li>
<li><a href="/daily-updates/daily-news-analysis/new-hydro-policy" target="_blank" rel="noopener"><strong>New Hydro Policy</strong></a> recognizes large hydro power projects as renewable energy source.</li>
</ul>
<p><strong></strong></p>
<p><strong>Reforms in Hydro Sector</strong></p>
<ul style="list-style-type: square;">
<li>Tariff rationalization</li>
<li>Increasing debt repayment period to 18 months</li>
<li>Introducing escalating tariff of 2% .</li>
<li>Budgetary support for funding flood moderation component of hydropower projects.</li>
</ul>
</td>
<td style="width: 27.0282%; height: 19px; text-align: left; vertical-align: top; background-color: #dcf5f4;">
<ul style="list-style-type: square;">
<li>India stands <strong>4<sup>th</sup></strong> in wind power.</li>
<li>The wind cumulative capacity has exceeded 35.6 GW.</li>
<li>Tarifs in wind sector had declined from Rs 4.2/kWh in 2013-14 to 2.43/kWh in 2017.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h2><a href="/to-the-points/paper3/electric-vehicles-evs" target="_blank" rel="noopener">Electric Vehicles (EVs) in India</a></h2>
<ul style="list-style-type: square;">
<li>Transport sector is the second largest sector contributor to CO<sub>2</sub> emission after the industrial sector, out of which road transport accounts for <strong>90%</strong> of the total emission in transport sector in India (MoEF&amp;CC).</li>
<li>Increasing vehicle ownership is resulting in huge oil imports. Therefore, shifting to electric mobility in road transport can lead to beneficial results.</li>
</ul>
<h3>Initiatives taken by Government</h3>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/national-electric-mobility-mission-2020" target="_blank" rel="noopener"><strong>National Electric Mobility Mission Plan 2020 (NEMMP)</strong></a>: It was conceived with an objectives to achieve sales of 60-70 lakhs units of total EVs by 2020.</li>
<li><strong>Faster Adoption and Manufacturing of Electric Vehicles (FAME):</strong> It was launched to fast track the goals of NEMMP and <a href="/daily-updates/daily-news-analysis/fame-india-phase-ii" target="_blank" rel="noopener"><strong>FAME II</strong></a>, launched in April 2019, focuses on electrification of public transport.</li>
</ul>
<h3>EV&rsquo;s Penetration in India</h3>
<ul style="list-style-type: square;">
<li>Globally, the sales of electric cars have been rising at a fast pace and <strong>China</strong> accounts for <strong>more than half</strong> of the sales.</li>
<li>India&rsquo;s market share of electric vehicles is around <strong>0.06%</strong> and <strong>U.P.</strong> topped the list among states with highest EV sales in 2017-18, followed by Haryana &amp; Gujarat.</li>
</ul>
<h3>Issues with EV in India</h3>
<ul style="list-style-type: square;">
<li><strong>Charging Infrastructure:</strong> The market share of EVs is positively related to the availability of chargers therefore, it becomes important that adequate charging stations are made available throughout the road networks.</li>
<li><strong>Charging Time:</strong> The fast chargers can take around <strong>half an hour</strong> to charge an electric car while slow chargers could take even <strong>8 hours.</strong> It is, therefore, an important <strong>policy issue</strong> to come up with universal charging standards for the country as a whole to enable increased investment in creation of such infrastructure.</li>
<li><strong>Batteries:</strong> The battery is the heart of any EV, development of appropriate <strong><a href="/daily-updates/daily-news-analysis/national-mission-on-transformative-mobility-and-battery-storage" target="_blank" rel="noopener">battery</a></strong> technologies that can function efficiently in the high temperature conditions in India need to be given utmost importance.</li>
</ul>
<p>It is important that these policies not only focus on <strong>reducing the upfront costs</strong> of owning an EV but also <strong>reduce the overall lifetime costs of ownership.</strong></p>
<h2>Way Forward</h2>
<ul style="list-style-type: square;">
<li>Energy is the mainstay of the development process of any economy. Therefore India&rsquo;s economic future and prosperity is dependent on her ability to provide <strong>affordable, reliable</strong> and <strong>sustainable energy</strong> to all her citizens.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
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<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Reverse Auctioning:</strong> A reverse auction is an <strong>opposite</strong> of a forward auction. Here <strong>traditional roles</strong> of buyers and sellers are <strong>reversed.</strong>
<ul style="list-style-type: circle;">
<li>A reverse auction is a type of auction in which sellers bid for the prices at which they are willing to sell their goods and services.</li>
<li>In a regular auction, a seller puts up an item and buyers place bids until the close of the auction, at which time the item goes to the highest bidder.</li>
<li>In a reverse auction, the buyer puts up a request for a required good or service. Sellers then place bids for the amount they are willing to be paid for the good or service, and at the end of the auction the seller with the lowest amount wins.</li>
</ul>
</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; background-color: #fffddf;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>India has a <strong>per capita energy consumption</strong> of only about <strong>one-third</strong> of global average.</li>
<li><strong>Energy intensity of India&rsquo;s GDP</strong> has been <strong>declining</strong> since 1991.</li>
<li>Globally, India stands <strong>5<sup>th</sup></strong> in <strong>renewable power</strong> installed capacity, <strong>4<sup>th</sup></strong> in wind power and <strong>5<sup>th</sup></strong> in solar power.</li>
<li>The solar power installed capacity has increased around <strong>1000 times</strong> from <strong>25 MW (2011)</strong> to <strong>28 GW (2019)</strong></li>
<li>Almost <strong>60%</strong> of India&rsquo;s installed capacity is in <strong>thermal power.</strong></li>
</ul>
<p><strong><a href="http://www.drishtiias.com/images/uploads/775image1.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/775image1.jpg" width="487" height="358" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></strong></p>
</td>
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</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 102px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. &ldquo;Energy poverty has been more pervasive in India than income poverty&rdquo;. Examine the factors responsible and suggest the policy measures needed to tackle the scenario.</strong></p>
<p><strong>Q2. Electric vehicles can be regarded as the future of transport sector. Critically analyse the growth of EV&rsquo;s in India.</strong><strong></strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter: 10</span></h1>
<h1><span style="font-size: 24px;">Effective Use of Technology for Welfare scheme- Case of MGNREGS</span></h1>
<h2></h2>
<h2>Overview</h2>
<p>The chapter deals with technological interventions taken by the government in course correcting the pathway for MGNREGS and has evaluated the impact of these interventions.</p>
<h2>Introduction</h2>
<ul style="list-style-type: square;">
<li><strong>&ldquo;Food for Work&rdquo;</strong> is first referred in <strong>Kautilya&rsquo;s Arthashastra</strong> and later in 1784, <strong>Nawab Asaf-ud-Daula</strong> started a <strong>&ldquo;food for work&rdquo;</strong> programme to help the famine-stricken people of Lucknow.</li>
<li><strong>The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA),</strong> enacted through an Act of Parliament in 2005, represents the modern version of such <strong>&ldquo;food for work&rdquo;</strong> programmes in India.</li>
<li>It was initiated to ameliorate rural distress by providing at least <strong>100 days</strong> of manual labour at <strong>minimum wages</strong> to <strong>anyone</strong> who seeks employment. Creation of productive assets for prescribed quality and durability, social inclusion, gender parity, social security and equitable growth form the founding pillars of the programme</li>
<li>During initial phases, <strong>MGNREGS</strong> had been saddled with several inefficiencies, including widespread corruption, political interference, leakage, and significant delay in wage payments. But post 2015 reforms used technology and emphasised on bringing in more transparency and accountability, robust planning and creation of durable productive assets.</li>
</ul>
<h2>Use of Technology in Implementing of MGNREGS</h2>
<ul style="list-style-type: square;">
<li>Prior to DBT implementation, MGNREGS wages were transferred to the panchayat bank accounts and workers had to collect wages in cash from the gram panchayat office. But the government attempts to implement a system of <a href="/to-the-points/paper3/public-distribution-system-1" target="_blank" rel="noopener"><strong>DBT</strong></a> faced <strong>two serious constraints i.e unbanked population and verification of genuine beneficiary.</strong></li>
</ul>
<h2>Steps Taken by Government to Counter Structural Constraints</h2>
<ul style="list-style-type: square;">
<li><strong>JAM Trinity</strong> i.e <strong>Jan Dhan, Aadhaar</strong> and <strong>Mobile</strong> enabled the role-out of DBT by streamlining the validation/ verification of beneficiaries as well as the process of release of funds.
<ul style="list-style-type: circle;">
<li><strong>Jan Dhan:</strong> <strong>Pradhan Mantri Jan DhanYojana (PMJDY)</strong> was launched in 2015 to ensure universal access to banking facilities with at least one basic banking account for every household.</li>
<li><strong>Aadhaar:</strong> Aadhar enrollment exceeds <strong>100 crore in 2015,</strong> thereby covering major portion of adult population and linking the unique aadhaar number to an active bank account was the key to implementing the income transfers.</li>
<li><strong>Mobile:</strong> It eases the connectivity issues by enabling people to access banking facilities using their mobile phones.</li>
</ul>
</li>
<li><strong>National electronics Fund Management System (NeFMS)</strong>
<ul style="list-style-type: circle;">
<li>NeFMS was implemented in the year 2016 to streamline the system of fund flow and to ensure timely payment of wages.<a href="http://www.drishtiias.com/images/uploads/875image10.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/875image10.jpg" width="219" height="350" style="float: right;" caption="false" /></a></li>
<li>Under the system, the Central Government directly credits the wages of the MGNREGS workers, on a real time basis, to a specific bank account opened by the State Governments</li>
<li>NeFMS is implemented in 24 States and 1 Union Territory wherein payment of wages is being credited directly to the bank/post office accounts of MGNREGS workers by the Central Government.</li>
</ul>
</li>
<li><strong>Aadhar Linked Payments (ALP)</strong>
<ul style="list-style-type: circle;">
<li>ALP could speed up the wage payment cycle in the following two ways.
<ul style="list-style-type: disc;">
<li><strong>Ghost beneficiary elimination,</strong> thereby reducing time to verify and audit claims.</li>
<li><strong>Cutting the bureaucratic red tape</strong> by directly transferring wages to the bank accounts of beneficiaries by the Central Government.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h2>Benefits of DBT</h2>
<ul style="list-style-type: square;">
<li>Timely release of payments.</li>
<li>Ensuring correct funds are transferred to correct beneficiaries, reducing corruption &amp; leakages in the system.</li>
<li>Reduction in delays in system for funds transfer (improving programme performance and instilling trust and confidence in the system by beneficiaries).</li>
<li>Strong focus on security, tracking and monitoring of funds (through the use of digital sign/signatures and convergence/interoperability).</li>
<li>Reconciliation process during payments between intermediate agencies involved in funds transfer (near real time tracking, accountability and transparency).</li>
<li>Streamline the verification process and end to end funds release process in all the beneficiary oriented scheme.</li>
</ul>
<div class="border-bg"><strong>Initiatives to Streamline MGNREGS</strong>
<ul style="list-style-type: square;">
<li><strong>NREGAsoft:</strong> It is a local language enabled work flow based e-Governance system to capture all the activities under MGNREGS at Center/State/District/Block and Panchayat level.</li>
<li><strong>GeoMGNREGA:</strong> It uses space technology to develop a database of assets created under MGNREGS using technological interventions like mobile based photo geo-tagging and a GIS based information system for online recording and monitoring.</li>
<li><strong>Natural Resource Management (NRM) - Mission Water Conservation (MWC):</strong> It is the planned and systematic development of land to improve its productivity and harnessing of water through development of watersheds, have become the central focus of MGNREGS work across the country.
<ul style="list-style-type: circle;">
<li>It was made <strong>mandatory</strong> to spend <strong>65%</strong> of total MGNREGS expenditure on NRM work which includes building check dams, trenches, ponds, renovation of traditional water bodies/tanks, dug wells etc.</li>
</ul>
</li>
<li>Mobile Apps like <strong>Gram Samvaad</strong> and <strong>JanMnREGA</strong> (an asset tracking and feedback app for MGNREGS assets) have been developed, which aim to empower the rural citizens by providing direct access to information and improve accountability to the people.</li>
</ul>
</div>
<h2>Impact of DBT on Effectiveness of MGNREGS</h2>
<ul style="list-style-type: square;">
<li><strong>Coverage:</strong> There was a significant increase in filled <strong>muster rolls</strong> (form of attendance) after the implementation of DBT which indicates that more people are reporting for work, especially vulnerable section i.e women, SCs &amp; STs.</li>
<li><strong>Timely Payments of Wages:</strong> Post ALP, delay in payments has been reduced by one-third from around <strong>35%</strong> to less than 10%. The <strong>NREGASoft</strong> monitors generation of payment of wages within 15 days.</li>
<li><strong>Demand for Work:</strong> Prior to implementation of ALP, the rural poor treated MGNREGS as an option to earn <strong>additional income</strong> during good times rather than a shock absorber during bad times. <strong>Post ALP,</strong> there was a <strong>reversal of trend,</strong> wherein an <strong>increase</strong> in demand for work under MGNREGS has been observed in drought affected areas.
<ul style="list-style-type: circle;">
<li>Reduction in delay of payments has an immediate positive effect on the demand of work in distressed areas.</li>
</ul>
</li>
<li><strong>Supply of Work:</strong> The <strong>difference -in -difference estimate,</strong> i.e. the before- after difference in the blocks affected by drought versus the same difference in blocks not affected by drought, shows very little change due to implementation of ALP in the blocks not affected by drought.
<ul style="list-style-type: circle;">
<li>However, there was around 20% increase in the supply of work in blocks affected by drought.</li>
<li>ALP has increased state capacity to implement anti-poverty programmes and can potentially bridge the demand supply gap in MGNREGS.</li>
</ul>
</li>
<li><strong>Work Done under MGNREGS:</strong> The actual work done under MGNREGS increased significantly in blocks affected by drought due to the use of ALP. This increase was <strong>more than double</strong> the increase in blocks that were unaffected by drought.</li>
</ul>
<h2>Impact on Vulnerable Sections</h2>
<ul style="list-style-type: square;">
<li>Post implementation of ALP, women, SC and ST workforce<strong> increased</strong> under MGNREGS during the times of economic distress.</li>
</ul>
<h2>Way Forward</h2>
<ul style="list-style-type: square;">
<li><strong>Probable Indicator of Distress:</strong> Real time indicators of distress at the district / panchayats level such as dashboards, can be created for flashing alerts for areas which are under local distress.</li>
<li><strong>Expansion of Work under MGNREGS:</strong> For increasing effectiveness of the scheme, the definition of &lsquo;work&rsquo; should be regularly reviewed.</li>
<li><strong>Up-skilling the MGNREGS Workers:</strong> The focus needs to be on the diversification of livelihoods with multiple sources of income for them to come out of poverty.</li>
<li><strong>Expanding use of JAM to other Welfare Scheme:</strong> To make public spending more efficient and effective, the success of <strong>JAM trinity</strong> in MGNREGS has made a strong case for its implementation in other welfare scheme. <strong>JAM trinity</strong> has the proven potential to arrest the major loopholes i.e <strong>inclusion</strong> and <strong>exclusion</strong> errors.</li>
<li><strong>Use of Digital Infrastructure for Micro-Benefits:</strong> A huge digital infrastructure of JAM trinity can be used to expand the reach of programmes through provision of micro-insurance, micro-pensions and micro-credits to people in every corner of the country.
<ul style="list-style-type: circle;">
<li>Its wide use can lead to <strong>financial</strong> and economic inclusion benefitting the vulnerable and marginalized sections of the society.</li>
</ul>
</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 84px;">
<td style="width: 100%; background-color: #fffddf; height: 36px;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>According to <strong>Reserve Bank of India,</strong> the bank outlets have <strong>increased</strong> around <strong>5 times</strong> from 2014 level.</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 10px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has played an important role in ensuring social justice in India. Discuss how technological and administrative initiatives have helped in the smooth rollout of MGNREGA.</strong></p>
</td>
</tr>
</tbody>
</table>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;"></span></h1>
<h1><span style="font-size: 24px;">Chapter:11</span></h1>
<h1><span style="font-size: 24px;">Redesigning a Minimum Wage System in India for Inclusive Growth</span></h1>
<h2></h2>
<h2>Overview</h2>
<ul style="list-style-type: square;">
<li>The chapter reviews the situation pertaining to <a href="/daily-updates/daily-news-analysis/the-code-on-wages-bill" target="_blank" rel="noopener"><strong>minimum wages in India</strong></a> and suggests the way forward for rationalising and streamlining the policy for minimum wages.</li>
</ul>
<h2>Introduction</h2>
<ul style="list-style-type: square;">
<li>The <strong>Mesopotamian</strong> code of ancient law i.e <strong>the Code of Hammurabi</strong> and the ancient Indian text of <strong>Arthashastra</strong> mentions minimum wages.</li>
<li>Despite India&rsquo;s outstanding growth in the last two decades, <strong>low pay</strong> and <strong>wage inequality</strong> remain serious obstacles towards achieving <strong>inclusive growth.</strong></li>
<li>Minimum wages promote <strong>social justice</strong> without any major negative implications for employment if wages are set at an adequate level.</li>
<li>In recent times, Indian economy is fuelled by <strong>domestic consumption,</strong> which comprises of around <strong>93% of workers</strong> in the <strong>informal sector</strong> therefore a well designed minimum wage system can reduce inequalities in incomes, bridge gender gaps in wages and alleviate poverty.</li>
</ul>
<h2>Minimum Wage System In India</h2>
<ul style="list-style-type: square;">
<li>India was one of the first developing countries to introduce minimum wages but the whole minimum wage system in India is extremely complex with a plethora of issues.
<ul style="list-style-type: circle;">
<li><strong>The Minimum Wage Act 1948:</strong> The Act protects both regular and casual workers and empowers both Central and State Governments to fix minimum wage rate for employees working in selected &lsquo;scheduled&rsquo; employment.
<ul style="list-style-type: disc;">
<li>Minimum wages have been set for different categories of workers according to skill levels, location and occupations.</li>
<li>The Act did not prescribe norms for fixing the level of the minimum wage.</li>
<li>It provides for <strong>tripartite advisory boards</strong> consisting of employers, employees of scheduled employments, and independent persons to advise the Government in fixing minimum wages.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h2>Steps Towards National Level Minimum Wage</h2>
<p><a href="/daily-updates/daily-news-analysis/redesigning-minimum-wage-system" target="_blank" rel="noopener"><strong>National Level Minimum Wage</strong></a> has always been the <strong>debated idea</strong> due to the existence of wide disparities in economic development and large <strong>variations</strong> in <strong>cost of living</strong> between regions and states.<a href="http://www.drishtiias.com/images/uploads/201image9.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/201image9.jpg" style="float: right;" caption="false" width="346" height="398" /></a></p>
<ul style="list-style-type: square;">
<li>The <strong>Indian Labour Conference (ILC) of 1957</strong> recommended determining the minimum wage based on the principle of a household&rsquo;s needs.</li>
<li>The <strong>First National Commission on Labour (1969)</strong> recommended that National Minimum Wage is neither <strong>&lsquo;feasible nor desirable&rsquo;.</strong></li>
<li>The <strong>Bhoothalingam Committee (1978)</strong> argued for adoption of <strong>National Floor Level Minimum Wage (NFLMW)</strong> to ensure a uniform wage for all workers and eliminate arbitrariness in the determination of level of minimum wages for different States and occupations. Recommendations were mainly for the organised sector.</li>
<li>The <strong>Labour Minister&rsquo;s Conference (1988)</strong> made recommendations for linking minimum wage with the cost of living index, which became mandatory in 1991.</li>
<li>The <strong>National Commision on Rural Labour (1991)</strong> recommended for a National Floor Level Minimum Wage as wide disparities were prevalent in minimum wages across States.</li>
<li>In 1992, the <strong>Supreme Court of India</strong> ruled that minimum wage should also be linked with aspects such as children&rsquo;s education, medical requirements etc.</li>
<li>In 1996, the Central Government adopted <a href="/daily-updates/daily-news-analysis/inflation-in-india" target="_blank" rel="noopener"><strong>non-statutory National Floor Level Minimum Wage (NFLMW)</strong></a> - Rs. 35 per day was notified. This NFLMW is updated regularly as per Consumer Price Index (CPI). NFLMW is Rs. 176 per day since 01.06.2017.</li>
</ul>
<h2>Complex Minimum Wage System in India</h2>
<ul style="list-style-type: square;">
<li>Over the last 70 years, the minimum wage system in India has expanded and has become complex. The complexities arises from following issues:</li>
<li><strong>Number of Wage Categories:</strong> The present minimum wage system in India is extremely complex with <strong>1,915 minimum wages</strong> defined for various <strong>&lsquo;scheduled&rsquo;</strong> job categories for <strong>unskilled workers.</strong> This expansion in job categories and wage rates has led to variations not only across states but also within states.</li>
<li><strong>Lack of Uniform Criteria:</strong> In some states or in specific scheduled employments, minimum wages are linked to the cost of living, through a Variable Dearness Allowance (VDA) whereas other states do not include the VDA component.</li>
<li><strong>Variation among Regions:</strong> The <strong>number</strong> of <strong>scheduled employments</strong> varies from 3 in Mizoram to 102 in Assam. Similarly, the notified lowest minimum wage rate (per day) varies from Rs. 115 in Nagaland to Rs. 538 in Delhi.</li>
<li><strong>Vulnerable Categories:</strong> The Minimum Wages Act <strong>does not cover all wage workers. One in every three</strong> wage workers in India is not protected by the minimum wage law. Some major vulnerable categories &ndash; such as domestic workers &ndash; are presently covered only in 18 States and Union Territories.</li>
</ul>
<h2>Issues with Complex Minimum Wages</h2>
<ul style="list-style-type: square;">
<li><strong>Levels of Economic Development:</strong> The main justification for persisting with different levels of minimum wages across states is that they reflect different levels of economic development.</li>
<li><strong>Heterogeneous Labour Force:</strong> Multiple minimum wages usually exist to take care of the needs of a heterogeneous labour force. <strong>For example:</strong> The case of India and the Latin American Countries that have a high diversity of labourers.</li>
<li><strong>Gender Discrimination:</strong> An analysis of minimum wages for different occupations shows <strong>persistence of systematic bias. For example,</strong> domestic workers and security guards fall within the category of unskilled workers, but the minimum wage rate for domestic workers (dominated by women) within a state is consistently lower than that for security guards (dominated by men). Such differences can only be attributed to <strong>gender bias.</strong></li>
<li><strong>Low Compliance:</strong> The proliferation of minimum wage rates and scheduled employments is a strong <strong>deterrent for compliance.</strong> Different statutory minimum wage rates for the same occupation between states can <strong>trigger migration</strong> of the industry to lower wage regions/state. Moreover, a complex system of minimum wages shows lack of coherence about wage levels and wages being set in an arbitrary fashion.</li>
</ul>
<h2>Impact of Minimum Wages</h2>
<p>A well designed minimum wage system can have significant impact in reducing inequality and poverty complemented by other institutional mechanisms.</p>
<ul style="list-style-type: square;">
<li><strong>Wage Levels:</strong> The minimum wage seems to have shaped wage bargaining i.e showed the presence of<strong> &lsquo;lighthouse effect&rsquo;,</strong> thereby leading to rise in actual wages. The studies suggests that increase in compliance in India showed the following effects:
<ul style="list-style-type: circle;">
<li><strong>Stronger impact on male wages compared to female wages.</strong></li>
<li><strong>Stronger impact on regular wages compared to casual wages.</strong></li>
</ul>
</li>
<li><strong>Wage Inequality:</strong> International experience suggests that greater compliance with minimum wages has led to the reduction in wage inequality. According to the <a href="/daily-updates/daily-news-analysis/100th-anniversary-of-ilo" target="_blank" rel="noopener"><strong>International Labour Organisation (ILO)</strong></a> <strong>report,</strong> between 1993 and 2011, the <strong>average real wages increased</strong> in India with <strong>fastest growth</strong> recorded for<strong> casual labour, women&rsquo;s labour</strong> and <strong>rural/agricultural labour.</strong> However, the existing <strong>wage inequality</strong> measured by the <strong><a href="/daily-updates/daily-news-analysis/lorenz-curve-and-gini-coefficient" target="_blank" rel="noopener">Gini Coefficient</a></strong> remains very high by international standards.
<ul style="list-style-type: circle;">
<li>The inequality has <strong>increased amongst regular workers</strong> and <strong>decreased among casual workers.</strong></li>
</ul>
</li>
<li><strong>Employment:</strong> Minimum wages have only a <strong>minimal (or no) impact</strong> on employment in emerging economies. A study suggests a <strong>positive effect</strong> of minimum wages on employment level for both men and women and finds that a <strong>10% rise</strong> in minimum wages raised the employment level by <strong>6.34%</strong> in rural areas having insignificant impact in urban areas.</li>
</ul>
<div class="border-bg">
<p><strong>Drishti Input</strong></p>
<p><strong>Report on Determining Methodology for Fixing National Minimum Wage</strong></p>
<ul style="list-style-type: square;">
<li>Earlier in 2019, the seven-member expert committee under the <strong>Chairmanship of Dr. Anoop Satpathy</strong> had submitted its report on <strong>&lsquo;Determining the Methodology for Fixation of the National Minimum Wage&rsquo;.</strong></li>
<li>Apart from proposing a <strong>single national minimum wage</strong> at an all-India level, the report had also recommended <strong>different national minimum wages for different geographical regions.</strong> It, thus, had grouped the states<strong> into five regions.</strong></li>
<li><strong>Key Recommendations</strong>
<ul style="list-style-type: circle;">
<li><strong>Calorie Intake:</strong> Elaborate a nationally representative and culturally palatable food basket with focus on a balanced diet (comprising of calories, protein and fats) rather than merely its calorie intake.
<ul style="list-style-type: disc;">
<li>Set the minimum wage at a level that would allow for a minimum recommended intake (per adult person per day) of 2,400 calories, 50 grams of protein and 30 grams of fat.</li>
</ul>
</li>
<li><strong>Non-Food Items:</strong> Ensure that the required expenditure of essential non-food items (namely clothing, fuel and light, house rent, education, medical, footwear, and transport) be equal to the median class of the expenditure distribution.</li>
<li><strong>Single Value:</strong> Set the single value of the NMW (National Minimum Wage) for India at Rs. 375 per day (or Rs. 9,750 per month), irrespective of sectors, skills, occupations and rural-urban locations.</li>
<li><strong>House Rent Allowance:</strong> Introduce an additional house rent allowance (city compensatory allowance), averaging up to Rs. 55 per day i.e., Rs. 1,430 per month for urban workers over and above the NMW.</li>
<li><strong>Region Based:</strong> Establish the NMW for five different regions with diverse socio-economic and labour market situations, ranging from a low of Rs. 342 per day (or Rs. 8,892 per month) to a high of Rs. 447 per day(Rs. 11,622 per month).</li>
<li><strong>Periodic Review:</strong> Review the consumption basket every five years, subject to the availability of <a href="/daily-updates/daily-news-analysis/restructuring-of-indian-statistical-system" target="_blank" rel="noopener"><strong>NSSO</strong></a>-CES data, and revise the basic minimum wage in line with the consumer price index (CPI) every six months, to reflect changes in the cost of living.</li>
</ul>
</li>
</ul>
</div>
<h2>Way Forward</h2>
<p><strong>Policy recommendations</strong> for an effective design of minimum wages system are as follows:</p>
<ul style="list-style-type: square;">
<li><strong>Simplification and Rationalisation:</strong> The Code on Wages Bill amalgamates the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 into a single piece of legislation. The definition of wages in the new legislation should subsume the present situation of 12 different definitions of wages in different Labour Acts.</li>
<li><strong>Setting a National Floor Level Minimum Wage:</strong> Central Government should notify a <strong>&lsquo;national floor minimum wage&rsquo;</strong> that can vary across the five geographical regions. Thereafter, states can fix the minimum wage, which shall not be less than the &lsquo;floor wage&rsquo;. This would bring some uniformity across the country and would make all states almost equally attractive from the point of view of labour cost for investment as well as reduce distress migration.</li>
<li><strong>Criteria for Setting Minimum Wage:</strong> Further, the Code on Wages Bill should consider fixing minimum wages based on either of the two factors viz; (i) the skill category i.e unskilled, semi-skilled, skilled and highly skilled; and (ii) the geographical region, or else both. This key change would substantially reduce the number of minimum wages in the country.</li>
<li><strong>Coverage:</strong> The Code on Wages Bill should extend applicability of minimum wages to all employments/workers in all sectors and should cover both the organised as well as the unorganised sector.</li>
<li><strong>Regular Adjustment:</strong> A mechanism should be developed to adjust minimum wages regularly and more frequently, say, every six months. A dashboard needs to be set up which shows the date of the last revision in the minimum wage adjunct to the mandated period. This would enable dissemination of information and increased transparency in the system.</li>
<li><strong>Role of Technology:</strong> Information should be made available in a simple and clear manner with the help of technology. Use of a variety of online, mobile phone and networking technologies have the potential to facilitate the collection and analysis of labour statistics, assist with the dissemination of information about labour laws and policies, reduce costs and improve transparency. A <strong>national level dashboard</strong> can be created to provide updates regarding minimum wages. This portal must be made easily accessible so that the workers are well-informed and their bargaining skills and decision-making power are strengthened.</li>
<li><strong>Grievance redressal:</strong> There should be an easy to remember toll-free number for anybody to register his/her grievance on non-payments of the statutory minimum wages. Swift action should be taken against the offenders and this action should be flashed on the dashboard.<strong></strong></li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-color: #000000; background-color: #e1f4fa;">
<h3><span style="color: #000080;">Keywords For Mains</span></h3>
<ul style="list-style-type: square;">
<li><strong>Lighthouse Effect:</strong> Wages in the informal sector increase after a minimum wage hike which is contrary to the predictions of traditional economic theory. The minimum wage acts as a <strong>benchmark that pulls up wages</strong> in the low-paid and informal sector by enhancing the <strong>bargaining power</strong> of vulnerable workers.</li>
<li><strong>Gini Coefficient:</strong> It is a statistical measure to gauge the <strong>rich-poor income or wealth divide.</strong> It measures <strong>inequality</strong> of a distribution &mdash; be it of income or wealth &mdash; within nations or States.
<ul style="list-style-type: circle;">
<li>Its value varies anywhere from <strong>zero to one; 0</strong> indicating<strong> perfect equality</strong> and <strong>1</strong> indicating <strong>perfect inequality.</strong></li>
</ul>
</li>
</ul>
</td>
</tr>
</tbody>
</table>
<h3></h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 131px;">
<td style="width: 100%; background-color: #fffddf; height: 131px;">
<h3><span style="color: #800000;">Important Facts and Trends</span></h3>
<ul style="list-style-type: square;">
<li>The inequality has <strong>increased amongst regular workers </strong>and<strong> decreased among casual workers.</strong></li>
<li>In India, <strong>increased compliance</strong> to minimum wages has shown the following effects:
<ul style="list-style-type: circle;">
<li>Stronger impact on <strong>male wages</strong> compared to <strong>female wages.</strong></li>
<li>Stronger impact on <strong>regular wages</strong> compared to <strong>casual wages.</strong></li>
</ul>
</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 120px;">
<td style="width: 100%; background-color: #fde9e4; height: 10px;">
<h3><span style="color: #ff0000;">Important Questions For Mains</span></h3>
<p><strong>Q1. Despite India&rsquo;s outstanding growth in the last two decades, low pay and wage inequality remain serious obstacles towards achieving inclusive growth. Discuss.</strong></p>
</td>
</tr>
</tbody>
</table>
<p></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/gist-of-economic-survey/gist-of-economic-survey-2018-19/gist-of-economic-survey2018-19'
	],
	(int) 16 => [
		'title' => 'Environmental Conservation with Grassroot Governance',
		'catname' => 'News Editorials',
		'desc' => '<div class="border">
<p>The article is based on <a href="https://www.thehindu.com/opinion/op-ed/a-bottom-up-approach-to-conservation/article29253850.ece" target="_blank" rel="noopener">A Bottom-Up Approach to Conservation</a> that was published in The Hindu on 26 August. It talks about the interweaving relation of grassroots democracy and environmental conservation.</p>
</div>
<h3>Context</h3>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/ecosystems-under-threat" target="_blank" rel="noopener">Flood and landslides (Kerala) of 2018</a> caused huge financial losses and the same repeated in <strong>2019</strong>.</li>
<li>Considering the above scenario, powers and responsibilities conferred on citizens under provisions such as the <strong>73<sup>rd</sup> and 74<sup>th</sup> Amendments to the Constitution,</strong> and the <strong>Biological Diversity Act, 2002</strong> are being sidelined.</li>
</ul>
<h3>Background</h3>
<ul style="list-style-type: square;">
<li>The Western Ghats are regarded as <a href="/daily-updates/daily-news-analysis/ecosystems-under-threat" target="_blank" rel="noopener"><strong>one of the eight &lsquo;hottest&rsquo; biodiversity hotspots in the world</strong></a>.</li>
<li>Kerala accounts for nearly <strong>18%</strong> of the biodiversity-rich and fragile ecosystem of Western Ghats.</li>
<li><a href="/daily-updates/daily-news-analysis/green-tribunal-steps-in-to-conserve-ghats" target="_blank" rel="noopener"><strong>Western Ghats Ecology Expert Panel (WGEEP) chaired by Madhav Gadgil (2011)</strong></a> had suggested interweaving of the existing laws relating to environmental protection and devolution of powers, right down to the gram sabha to be followed.</li>
<li>But, almost all policy recommendations by the Gadgil committee were <strong>not accepted</strong>.</li>
<li>In August 2012, the government constituted another panel called the <strong>Kasturirangan committee</strong>, which recommended:
<ul style="list-style-type: circle;">
<li>To <strong>balance</strong> the two concerns of <strong>development and environment</strong> protection.</li>
<li>To bring just <strong>37% of the Western Ghats under the Ecologically Sensitive Area (ESA) zones &mdash; down from the 64%</strong> suggested by the Gadgil report.</li>
</ul>
</li>
</ul>
<h3>Gadgil Committee Recommendations</h3>
<p>Though the maximum of its recommendations were not accepted, but it could be used to safeguard global biodiversity hotspot and water tower of peninsular India. Few of the recommendations were:</p>
<ul style="list-style-type: square;">
<li>Replacement of the prevailing <strong>&lsquo;Develop Recklessly, Conserve Thoughtlessly&rsquo;</strong> pattern with one of <strong>&lsquo;Develop Sustainably, Conserve Thoughtfully&rsquo;</strong>.</li>
<li>The fine-tuning of development practices to the local context would have required the full involvement of local communities.</li>
<li>Recommendations regarding <strong>ecological sensitivity</strong> are the starting point for a bottom-up democratic process:
<ul style="list-style-type: circle;">
<li>To demarcate areas within the Western Ghats Region which need to be notified as ecologically sensitive and further as ecologically sensitive zones under the <strong>Environment (Protection) Act, 1986</strong>.</li>
<li>The zone of highest ecological sensitivity would be <strong>'ESZ1'</strong>.</li>
<li>The indicators of sensitivity would be:
<ul style="list-style-type: disc;">
<li>Elevation</li>
<li>Slope</li>
<li>Natural Vegetation</li>
</ul>
</li>
<li>The interrelation among the above indicators would be:
<ul style="list-style-type: disc;">
<li><strong>Rainfall increases</strong> rapidly with <strong>elevation</strong>, and high rainfall and steep slopes render localities vulnerable to landslides.</li>
<li>Landslides are under check, in the areas with intact natural vegetation because the roots bind the soil.</li>
<li>Any disturbance to such vegetation would render any locality that has steep slopes and experiences high rainfall, susceptible to landslides.</li>
<li>Such disturbances may include:
<ol style="list-style-type: lower-alpha;">
<li>Quarrying or mining</li>
<li>Replacement of natural vegetation by new plantations</li>
<li>Levelling of the land using heavy machinery</li>
<li>Construction of houses and roads.</li>
</ol>
</li>
</ul>
</li>
</ul>
</li>
</ul>
<p>Hence, <strong>areas prone to landslides would come under ESZ1</strong>.</p>
<h3>Kerala and Participatory Governance</h3>
<p>Kerala has been a leading state in participatory governance across the country and so in <strong>democratic devolution</strong>.</p>
<ul style="list-style-type: square;">
<li>It also pioneered <strong>Panchayat Level Resource Mapping</strong>. This is essentially a participatory programme which involves the mapping of assets, land use and water resources of individual survey plots by trained volunteers.</li>
<li>Its <strong>People&rsquo;s Planning campaign</strong> was also success which attempted to involve every panchayat in the preparation of a Panchayat Development Report.</li>
<li><strong>Plachimada Panchayat Case:</strong>
<ul style="list-style-type: circle;">
<li>The Kerala High Court cancelled Coca-Cola&rsquo;s licence because the company polluted and depleted groundwater reserves, drying up wells and adversely impacting agriculture and livelihoods.</li>
<li>While doing so, the panchayat invoked its <strong>constitutional rights</strong>, arguing that it had the duty to protect the well-being of its citizens and had the right to cancel &mdash; or refuse permission for &mdash; anything that affected its citizens adversely.</li>
<li>The company&rsquo;s <strong>counter-argument</strong> was that the <strong>panchayat was subordinate to the State government, which had granted it the licence</strong>.</li>
<li>The Kerala High Court rejected this contention, <strong>affirming that grass-roots institutions have the authority to decide on the course of development in their own locality</strong>.</li>
<li>Furthermore, the Kerala legislature unanimously passed a law asking Coca-Cola to pay Plachimada Panchayat due compensation for losses inflicted on them.</li>
</ul>
</li>
</ul>
<h3>Grassroot Governance and Environment Conservation</h3>
<ul style="list-style-type: square;">
<li>Local bodies having the authority to decide on the course of development in their own localities should be made genuinely operational across the country.</li>
<li>Full advantage of powers and responsibilities conferred on citizens under provisions such as the <strong>73<sup>rd</sup> and 74<sup>th</sup> Amendments to the Constitution,</strong> and the <strong>Biological Diversity Act, 2002</strong> must be taken.</li>
<li>Conservation prescriptions should not be merely regulatory but include <strong>positive incentives such as conservation service charges</strong>.</li>
<li>Economic activities like quarrying should be given to agencies like the Kudumbashree groups that are accountable to local communities.</li>
</ul>
<h3>Way Forward</h3>
<p>The <strong>sovereign people of the country,</strong> are the <strong>real rulers of India</strong> and must engage themselves more actively in the governance of the country and lead it on to a path of <strong>people-friendly and nature-friendly development</strong>.</p>
<table border="1" style="border-collapse: collapse; background-color: #c1f7ef; border-color: #047a69; border-style: double;">
<tbody>
<tr>
<td style="width: 1256px;"><strong><em>Drishti Input:<br /><br /></em></strong>&ldquo;The strengthened grassroot democracy would pave the way for enhanced environmental conservation.Comment.&rdquo;</td>
</tr>
</tbody>
</table>
<p></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-editorials/environmental-conservation-with-grassroot-governance'
	],
	(int) 17 => [
		'title' => 'OMG- Ocean’s Melting Greenland',
		'catname' => 'News Analysis',
		'desc' => '<ul style="list-style-type: square;">
<li>Over a <strong>five-year campaign,</strong> OMG will observe changing water temperatures on the continental shelf surrounding <strong>Greenland.</strong></li>
<li>It will study how marine glaciers react to the presence of warm &amp; salty <strong>Atlantic Water.</strong></li>
<li>OMG will pave the way for improved estimates of sea-level rise by addressing the question of to <strong>what extent are the oceans melting Greenland&rsquo;s ice from below.</strong></li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/868image4.jpg" target="_blank" rel="noopener"><strong><img class="content-img" src="http://www.drishtiias.com/images/uploads/868image4.jpg" width="264" height="183" style="float: right;" caption="false" /></strong></a></p>
<ul style="list-style-type: square;">
<li>The diagram above represents a typical glacier in Greenland.<br />
<ul style="list-style-type: circle;">
<li>Below the cold-fresh layer near the surface, a layer of warm &amp; salty water reaches into the<strong> fjords</strong> (a long, narrow, deep inlet of the sea between high cliffs, typically formed by submergence of a glaciated valley) to melt the glacier's edge.</li>
<li>OMG will measure the volume and extent of this warm layer each year and relate it to thinning and retreat of the glaciers.</li>
</ul>
</li>
<li>OMG will use <strong>NASA&rsquo;</strong>s <strong>G-III</strong> to fly the <em>Glacier and Ice Surface Topography Interferometer</em> (GLISTIN-A).<br />
<ul style="list-style-type: circle;">
<li>GLISTIN-A is a Ka-band single-pass interferometer. It generates high resolution, high precision elevation measurements which can be used for the study of Greenland&rsquo;s coastal glaciers.</li>
</ul>
</li>
</ul>
<p><strong><a href="https://www.hindustantimes.com/world-news/high-above-greenland-glaciers-nasa-looks-into-melting-ocean-ice/story-MzQbyfM4kKPxIDUlwGrnFL.html" target="_blank" rel="noopener">Source: HT</a></strong></p>',
		'postdate' => object(Cake\I18n\FrozenTime) {},
		'url' => 'https://www.drishtiias.com/daily-updates/daily-news-analysis/omg-ocean-s-melting-greenland'
	],
	(int) 18 => [
		'title' => 'G7 Summit',
		'catname' => 'News Analysis',
		'desc' => '<p>The three days G7 summit was concluded on August 26, 2019, at Biarritz, Nouvelle-Aquitaine, France.</p>
<ul style="list-style-type: square;">
<li>Although <strong>no joint communique</strong> was issued at the end of the summit, the French President released a statement stating that the seven industrialized nations were committed to open and fair world trade, and global economic stability.</li>
</ul>
<h3>Key Takeaways</h3>
<ul style="list-style-type: square;">
<li>Discussion on forest fires in the <a href="/daily-updates/daily-news-analysis/amazon-rainforest" target="_blank" rel="noopener"><strong>Amazon rainforests</strong></a>. G7 countries pledged $20 million help to fight fires in the Amazon rainforests.</li>
<li>US trade conflicts with France over <a href="/daily-updates/daily-news-analysis/data-protection-law-in-the-united-states" target="_blank" rel="noopener"><strong>GAFA tax</strong></a> &amp; other related issues, Iran over the <a href="/daily-updates/daily-news-analysis/us-reimposes-sanctions-on-iran" target="_blank" rel="noopener"><strong>Joint Comprehensive Plan of Action (JCPOA)</strong></a>, US-China <a href="/to-the-points/paper3/trade-war-6" target="_blank" rel="noopener"><strong>trade wars.</strong></a></li>
<li>G7 leaders backed the existence and importance of the <strong>Sino-British Joint Declaration of 1984</strong> on Hong Kong and called for violence to be avoided.</li>
<li>The United States of America offered a better deal after UK&rsquo;s <a href="/loksabha-rajyasabha-discussions/brexit-deal-what-lies-ahead" target="_blank" rel="noopener"><strong>Brexit.</strong></a></li>
<li>There was a call for <strong>reinstating Russia</strong> back into the group. Russia was removed from the group after it <a href="/daily-updates/daily-news-analysis/elections-in-ukraine" target="_blank" rel="noopener"><strong>annexed Crimea in 2014.</strong></a> But the consensus for the same was not achieved.</li>
<li>As a reflection of <a href="/daily-updates/daily-news-editorials/india-france-relations" target="_blank" rel="noopener"><strong>strong bilateral relations between India &amp; France</strong></a>, a <strong>special invitation</strong> was sent to India to become a part of this summit.<br />
<ul style="list-style-type: circle;">
<li>On the sidelines of this summit, India highlighted its large-scale efforts to address various environmental issues like, reducing biodiversity, climate change, water stress &amp; ocean pollution. <br />
<ul style="list-style-type: disc;">
<li>India highlighted the steps taken in this regard which include, vow to <a href="/daily-updates/daily-news-analysis/plastic-ban-incentivise-options-for-single-use-plastic-to-make-a-national-ban-possible" target="_blank" rel="noopener"><strong>eliminate single-use plastic</strong></a>, harnessing solar energy, saving water, and protecting flora and fauna.</li>
<li>On a session on <strong>Digital transformation</strong> at G7 Summit, Indian PM remarked, &ldquo;India&rsquo;s usage of technology for enhanced &amp; innovative digital payment initiatives.&rdquo; India is putting enormous efforts in leveraging digital technology to fight social inequalities through empowerment and inclusion.</li>
</ul>
</li>
<li>Indian Prime Minister also had a brief discussion with the US President over the <a href="/loksabha-rajyasabha-discussions/in-depth-jammu-and-kashmir" target="_blank" rel="noopener"><strong>Kashmir</strong> </a>issue, reiterating that,<em> &lsquo;it is an internal matter of India &amp; any related issues on it will be resolved bilaterally with Pakistan&rsquo;.</em></li>
</ul>
</li>
<li>The need for a dedicated multilateral <strong>Green Bank was</strong> demanded. The purpose of this bank would solely be to finance the projects supporting renewable energies and mitigating environmental challenges. <br />
<ul style="list-style-type: circle;">
<li>This bank will complement and collaborate with other existing multilateral- regional &amp; national institutions in co-financing the projects.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>G7</strong></p>
<ul style="list-style-type: square;">
<li>The Group of Seven (G7) is a forum of the <strong>world's seven largest developed economies</strong> whose government leaders <strong>meet annually</strong> to discuss international economic and monetary issues.</li>
<li>The G-7 has its roots in an <strong>informal meeting of the finance ministers</strong> of France, West Germany, the U.S, Great Britain, and Japan (the <strong>Group of Five</strong>) in the wake of the <strong>1973 oil crisis.</strong> That, in turn, inspired the French President to invite the leaders of those countries, and <strong>Italy,</strong> to Rambouillet in 1975 for further discussions on global oil.</li>
<li>The next year, <strong>Canada</strong> was also invited to join the group and the first meeting with all <strong>G-7 nations was hosted by the United States which was held in Puerto Rico in 1976.</strong></li>
<li>Summits are held annually and hosted on a rotation basis by the group's members.</li>
<li>The 2018 summit was hosted by Canada in Quebec from June 8-9.</li>
<li>The 45th G7 summit was hosted by France from August 24-26, 2019, in Biarritz in Nouvelle-Aquitaine, France.</li>
</ul>
<p><strong>Members</strong></p>
<p>The G7 members are recognized as the seven <strong>wealthiest</strong> and <strong>most advanced</strong> nations in the world. The members are:</p>
<ul style="list-style-type: square;">
<li>France,</li>
<li>Germany,</li>
<li>The United Kingdom,</li>
<li>Italy,</li>
<li>The United States of America,</li>
<li>Canada,</li>
<li>Japan</li>
<li>The <a href="/important-institutions/drishti-specials-important-institutions-international-institution/european-union" target="_blank" rel="noopener"><strong>European Union</strong></a> is sometimes considered an eighth member of the G-7, since it holds all the rights and responsibilities of full members except to chair or host the meeting.</li>
</ul>
<p><strong>Expansion to G-8 (the Group of Eight)</strong></p>
<ul style="list-style-type: square;">
<li>The G-7 responded as the global economy evolved. In 1991, the Soviet Union pledged to create an economy with freer markets and held its first direct presidential election.</li>
<li>Following the 1994 G7 meeting in Naples, Russian President held meetings with G-7 member countries, in what became known as the P-8 <strong>(Political 8).</strong></li>
<li>In 1998, after urging from leaders including U.S. President, Russia was added to the G-7 group as a full-time member, creating a formal G-8.</li>
<li>However, in 2014, Russia was suspended from the group after the annexation of Crimea and tensions in Ukraine.</li>
</ul>
<p><strong>Purpose</strong></p>
<ul style="list-style-type: square;">
<li>The major purpose of the G-7 is to discuss and deliberate on <strong>international economic issues.</strong> It sometimes acts in concert to help resolve other global problems, with a special focus on economic issues.</li>
<li>G7 fills out numerous global top lists:<br />
<ul style="list-style-type: circle;">
<li>Leading export countries,</li>
<li>Largest gold reserves,</li>
<li>Largest nuclear energy producers,</li>
<li>Top contributors to the UN budget.</li>
</ul>
</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/opinion/editorial/message-delivered/article29282081.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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	],
	(int) 19 => [
		'title' => 'Hurricane Dorian',
		'catname' => 'News Analysis',
		'desc' => '<p>Recently the Hurricane Dorian became the strongest storm in modern records to hit the northwestern <strong>Bahamas (a country in the Caribbean Islands).</strong></p>
<h3>Hurricane Dorian</h3>
<ul style="list-style-type: square;">
<li>It is an extremely powerful tropical cyclone currently affecting the Bahamas and threatening the Southeastern United States.</li>
<li>It is developed from a tropical wave in the Central Atlantic.</li>
<li>It is categorised as a <strong>Category 5 storm on Saffir&ndash;Simpson hurricane wind scale (SSHWS)</strong> with maximum sustained winds of 285 km per hour.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/161image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/161image3.jpg" width="635" height="521" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<div class="border-bg">
<p><strong>Hurricanes</strong></p>
<ul style="list-style-type: square;">
<li>A Hurricane is a <a href="/daily-updates/daily-news-analysis/cyclone-idai" target="_blank" rel="noopener"><strong>tropical cyclone</strong></a> that occurs in the Atlantic Ocean and the northeastern Pacific Ocean.</li>
<li>These are formed over the warm ocean waters near the equator.</li>
<li>Hurricanes typically form between 5 to 15 degrees latitude north and south of the equator.</li>
<li>Hurricanes are known to be one of nature's most destructive storms as they bring heavy rains, deadly waves and fierce winds.</li>
</ul>
<p><strong>Saffir-Simpson Hurricane Wind Scale</strong></p>
<ul style="list-style-type: square;">
<li>The Saffir-Simpson Hurricane Wind Scale is a 1 to 5 rating based on a hurricane's sustained wind speed. This scale estimates potential property damage.</li>
</ul>
<table border="1" style="width: 100%; border-collapse: collapse; background-color: #f29b7e;">
<tbody>
<tr style="height: 35px;">
<td style="width: 11.088%; height: 35px;"><strong>Category</strong></td>
<td style="width: 16.3894%; height: 35px;"><strong>Sustained Winds</strong></td>
<td style="width: 45.2876%; height: 35px;"><strong>Types of Damage Due to Hurricane Winds</strong></td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">1</td>
<td style="width: 16.3894%; height: 19px;">119-153 km/h</td>
<td style="width: 45.2876%; height: 19px;">Very dangerous winds will produce some damage</td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">2</td>
<td style="width: 16.3894%; height: 19px;">154-177 km/h</td>
<td style="width: 45.2876%; height: 19px;">Extremely dangerous winds will cause extensive damage</td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">3&nbsp;(major)</td>
<td style="width: 16.3894%; height: 19px;">178-208 km/h</td>
<td style="width: 45.2876%; height: 19px;">Devastating damage will occur</td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">4 (major)</td>
<td style="width: 16.3894%; height: 19px;">209-251 km/h</td>
<td style="width: 45.2876%; height: 19px;">Catastrophic damage will occur</td>
</tr>
<tr style="height: 19px;">
<td style="width: 11.088%; height: 19px;">5&nbsp;(major)</td>
<td style="width: 16.3894%; height: 19px;">252 km/h or higher</td>
<td style="width: 45.2876%; height: 19px;">Catastrophic damage will occur</td>
</tr>
</tbody>
</table>
</div>
<p><br /><a href="https://www.thehindu.com/news/international/catastrophic-hurricane-dorian-hits-bahamas/article29316410.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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Cake\View\View::element() - CORE/src/View/View.php, line 668
include - ROOT/plugins/Drishti/src/Template/Element/articlebox.ctp, line 5
Cake\View\View::_evaluate() - CORE/src/View/View.php, line 1196
Cake\View\View::_render() - CORE/src/View/View.php, line 1157
Cake\View\View::_renderElement() - CORE/src/View/View.php, line 1554
Cake\View\View::element() - CORE/src/View/View.php, line 668
include - ROOT/plugins/Drishti/src/Template/Search/index.ctp, line 85
Cake\View\View::_evaluate() - CORE/src/View/View.php, line 1196
Cake\View\View::_render() - CORE/src/View/View.php, line 1157
Cake\View\View::render() - CORE/src/View/View.php, line 765
Cake\Controller\Controller::render() - CORE/src/Controller/Controller.php, line 623
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 125
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 93

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