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GS Paper: Government Scheme/Policies

  • Anganwadi scheme

    Context

    • The economic fallout of COVID-19 makes the necessity of quality public welfare services more pressing than ever.
    • The Integrated Child Development Services (ICDS) programme is one such scheme.

    What is ICDS?

    • ICDS caters to the nutrition, health and pre-education needs of children till six years of age as well as the health and nutrition of women and adolescent girls.

    What is anganwadi scheme?

    • The scheme was started in 1975 and aims at the holistic development of children and empowerment of mother.
    • It is a Centrally-Sponsored scheme. The scheme primarily runs through the Anganwadi centre. The scheme is under the Ministry of Women and Child Development.

    Need for focus on early childhood care and education (ECCE)

    • Low enrolment: The National Family Health Survey-5 (NFHS-5) finds only 13.6 per cent of children enrolled in pre-primary schools.
    • Weakest link: With its overriding focus on health and nutrition, ECCE has hitherto been the weakest link of the anganwadi system.
    • Low awareness: Unfortunately, due to a lack of parental awareness compounded by the daily stresses of poverty, disadvantaged households are unable to provide an early learning environment.

    Data to remember

    According to government data, the country has 13.77 lakh Anganwadi centres (AWCs).

    A meaningful ECCE programme in anganwadis

    • Activity-based framework which reflect local context: To design and put in place a meaningful activity-based ECCE framework that recognises the ground realities with autonomy to reflect the local context and setting.
    • Remove non-ICDS work: Routine tasks of anganwadi workers can be reduced and non-ICDS work, such as surveys, removed altogether.
    • Extend Anganwadi time: Anganwadi hours can be extended by at least three hours by providing staff with an increase in their present remuneration, with the additional time devoted for ECCE.
    • Change in policy mindset: ICDS needs a change in policy mindset, both at central and state levels, by prioritising and monitoring ECCE.
    • Engagement with parents: Anganwadi workers must be re-oriented to closely engage with parents, as they play a crucial role in the cognitive development of young children.

     

    Case study / value addition

    In Andhra Pradesh and Telangana, anganwadi centres have been geotagged to improve service delivery.

    Gujarat has digitised the supply chain of take-home rations and real-time data is being used to minimise stockouts at the anganwadi centres.

    Way forward

    • Government must act on the three imperatives. First, while infrastructure development and capacity building of the anganwadi remains the key to improving the programme, the standards of all its services need to be upscaled.
    • Second, states have much to learn from each other’s experiences.
    • Third, anganwadi centres must cater to the needs of the community and the programme’s workers.

    Conclusion

    • Nearly 1.4 million anganwadis of the Integrated Child Development Services (ICDS) across India must provide ECCE for the millions of young children in low-income households.

    Mains question

    Q. Some educationists have suggested that owing to the high workload of anganwadi workers, ECCE in anganwadis would remain a non-starter. Critically examine this statement and give dynamic suggestions to improve EECE in anganwadis.

     

     

     

  • Deciding the terms of debate on freebies, subsidies and compensation

    Context

    The Reserve Bank of India, in a report published in June, linked the precarious state of state finances to “freebies”, particularly power subsidies, and last week, the Supreme Court, waded into the debate, recommending the creation of an expert body to examine the matter.

    Political, economic and institutional context

    • The determination of what is a good or bad freebie is and always will be a political choice.
    • A constructive debate must necessarily locate itself in the underlying political, economic and institutional context in which these so-called freebies are a feature of our electoral politics.
    • In the Public Interest Litigation filed in the Supreme Court, the petitioner has argued that “irrational freebies… is analogous to bribery”.
    • Commodification of electoral process: The problem with this framing is that it commodifies the electoral process and strips voters of their agency.
    • Voters, in this framing, are passive, unsophisticated actors who can be bought and therefore there is a need to be vigilant.
    • The honourable court had gone a step further, arguing for an expert, independent body, rather than Parliament, to tackle the issue.
    • This is judicial overreach and it privileges “experts” over legitimate democratic negotiation and strikes at the core of the political bargain.
    • Politics is central to welfare, not experts.

    Economic context

    • In that spirit, a debate on the merits and demerits of freebies is important but this debate cannot be divorced from the economic context.
    • India’s structural transformation, particularly since 1991, has been slow and unique.
    • Despite abundant low-skilled labour, our growth trajectory has mostly skipped manufacturing, growing instead on the back of a far smaller, high-skilled services sector.
    • Consequently, as economist Amit Basole has shown the bulk of jobs our economy generated even in its peak growth years were in the largely informal, low value add construction sector.
    • The distributional consequences of this have been significant.
    • Under-employment and low inter-generational mobility have been persistent features of the Indian economy resulting in deep inequalities.
    • Growth lifted a large population out of poverty.
    • However, as the World Bank data show, most of those who escaped poverty between 2005-2012 moved into the vulnerable group — one income shock away from falling below the poverty line.
    • Somewhat reassuringly, democracy created pressure on our politics to respond to these economic failures.
    • It is in this context that the demand for so-called freebies has found legitimate place in our democracy.

    Challenges

    • While democratic pressures led to the halting creation of limited social protection in the form of PDS and MGNREGA, they did not translate into investments in core public and merit goods — health and education being the most critical.
    • It is these accumulated failures that have created the new political logic that we confront today.
    • A logic where welfare freebies are being offered to compensate citizens for what economic growth has failed to do.

    Conclusion

    The answer does not lie in rapping state governments on the knuckles for being profligate. It lies in building a renewed democratic consensus on our economic and institutional growth path.

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  • Open Network for Digital Commerce (ONDC)

    US firm Microsoft has become the first big tech company to join the Open Network for Digital Commerce (ONDC).

    What does Microsoft joining ONDC mean?

    • Microsoft getting on board the ONDC wagon means the project gets its first international marquee name ahead of its Bengaluru launch.
    • A number of participants are currently live on the ONDC network, offering a number of services in the e-commerce supply chain such as buying, selling and offering logistics services.

    Who else is on board

    • Among those that are live are Paytm, which has joined the platform as a buyer, and Reliance-backed Dunzo, which is offering logistics services for hyperlocal deliveries.
    • Companies like Kotak, PhonePe, Zoho and Snapdeal are in the “advanced stage of development”, according to the ONDC website.
    • Axis Bank, HDFC Bank and Airtel have already initiated integration with the network.
    • According to some media reports, e-commerce giants Flipkart and Amazon are also considering joining the network.

    What is ONDC?

    • ONDC seeks to promote open networks, which are developed using the open-source methodology.
    • The project is aimed at curbing “digital monopolies”.
    • This is a step in the direction of making e-commerce processes open-source, thus creating a platform that can be utilized by all online retailers.
    • They will encourage the usage of standardized open specifications and open network protocols, which are not dependent on any particular platform or customized one.

    What does one mean by ‘Open-sourcing’?

    • An open-source project means that anybody is free to use, study, modify and distribute the project for any purpose.
    • These permissions are enforced through an open-source licence easing adoption and facilitating collaboration.

    What processes are expecting to be open-sourced with this project?

    • Several operational aspects including onboarding of sellers, vendor discovery, price discovery and product cataloguing could be made open source on the lines of Unified Payments Interface (UPI).
    • If mandated, this could be problematic for larger e-commerce companies, which have proprietary processes and technology deployed for these segments of operations.

    What is the significance of making something open-source?

    • Making a software or a process open-source means that the code or the steps of that process is made available freely for others to use, redistribute and modify.
    • If the ONDC gets implemented and mandated, it would mean that all e-commerce companies will have to operate using the same processes.
    • This could give a huge booster shot to smaller online retailers and new entrants.

    What does the DPIIT intend from the project?

    • ONDC is expected to digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for stakeholders and consumers.

    Countering ‘Digital Monopoly’

    • Digital monopolies refer to a scenario wherein e-commerce giants or Big Tech companies tend to dominate and flout competition law pertaining to monopoly.
    • The Giants have built their own proprietary platforms for operations.
    • In March, India moved to shake up digital monopolies in the country’s $ 1+ trillion retail market by making public a draft of a code of conduct — Draft Ecommerce Policy, reported Bloomberg.
    • The government sought to help local start-ups and reduce the dominance of giants such as Amazon and Walmart-Flipkart.
    • The rules sought to define the cross-border flow of user data after taking into account complaints by small retailers.

    Processes in the ONDC

    • Sellers will be onboarded through open networks. Other open-source processes will include those such as vendor and price discovery; and product cataloging.
    • The format will be similar to the one which is used in the Unified Payments Interface (UPI).
    • Mega e-commerce companies have proprietary processes and technology for these operations.
    • Marketplaces such as Amazon, Flipkart, Zomato, BigBasket and Grofers will need to register on the ONDC platform to be created by DPIIT and QCI.
    • The task of implementing DPIIT’s ONDC project has been assigned to the Quality Council of India (QCI).

    Why such a move by the govt?

    • This COVID pandemic has made every business to go digital.
    • India is a country with 700 million internet users of whom large crunch of population are active buyers on e-coms.
    • There are 9 platforms in the world which are billion user platform and all are private. This is the monopoly which the govt aims to hit.
    • No country would ever want a few (foreign) companies to control their domestic e-commerce ecosystem.
    • Countries like US are struggling to control their monopoly over the e-commerce giants leaving no space for Indian legislations to control these overseas companies.
    • In India Amazon, Walmart, Uber are controlling larger crunch of share in the market leaving very less scope for domestic companies to cope up with.

    Scope for ONDCs success

    • Over last 50 years India is dealing with Big Tech companies with responsibility and pragmatic manner. Now it is also coming with new policies to control them.
    • The drafting panel has extraordinary persons like Mr. Nandan Nilekani and others who were in Aadhar, NPCI, MyGov, Retail industry and these make it inclusive and innovative.
    • India has successfully executed various public digital platforms like JAM Trinity, Aadhar linked projects. India for sure can handle its digital ecosystem better in e-coms too.
    • Open-sourcing will benefit society at large as did the UPI.

    Issues that can be raised

    • Draft E-Commerce policy can raise resistance from companies like Amazon, Flipkart, Walmart etc.
    • They may raise hues over operability and ease of doing business.
    • MSMEs have already raised the growing compliance burden for e-commerce.
    • They have argued that the govt is technologically and digitally motivating everybody to get online and on the other hand it is culling their very ability to reach out to the consumer to get more people on board.

    Possible issues with ONDC

    • Every platform has its own challenges so would the ONDC may have.
    • While UPI was ruled out (BHIM being the first) people were reluctant in using it due to transaction failures.
    • With subsequent improvements and openness people and businesses are using it in every walks of life. So it would work with ONDC.

    Conclusion

    • Once adopted, ONDC will make sure consumer and seller interest will be protected as the UPI did.
    • Best is yet to come and we are in 4th industrial revolution where the Govt should strengthen itself accordingly and make businesses inclusive and restrict the monopolies.

     

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  • Panel moots district-level survey to bring more children into adoption ambit

    A report recently tabled on “Review of Guardianship and Adoption Laws” in Parliament has stated that- India despite a country with millions of orphans, there are only 2,430 children available for adoption.

    What is the news?

    • There are many enthusiastic parents who are ready to adopt children.
    • To address this paradox, a Parliamentary panel has recommended district-level surveys to proactively identify orphaned and abandoned children.
    • According to the report, there were 27,939 prospective parents registered with the Child Adoption Resource Authority (CARA) as on December 2021, up from nearly 18,000 in 2017.

    What is CARA?

    • Central Adoption Resource Authority (CARA) is an autonomous and statutory body of the Ministry of Women and Child Development. It was set up in 1990.
    • It functions as the nodal body for the adoption of Indian children and is mandated to monitor and regulate in-country and inter-country adoptions.
    • CARA is designated as the Central Authority to deal with inter-country adoptions in accordance with the provisions of the 1993 Hague Convention on Inter-country Adoption, ratified India in 2003.
    • It primarily deals with the adoption of orphaned, abandoned and surrendered children through its associated and recognized adoption agencies.

    Adoption Process

    • The eligibility of prospective adoptive parents living in India, duly registered on the Child Adoption Resource Information and Guidance System (CARINGS), irrespective of marital status and religion, is Procedure for adoption adjudged by specialised adoption agencies preparing home study reports.
    • The specialized adoption agency then secures court orders approving the adoption.
    • All non-resident persons approach authorized adoption agencies in their foreign country of residence for registration under CARINGS.
    • Their eligibility is adjudged by authorised foreign adoption agencies through home study reports.
    • CARA then issues a pre-adoption ‘no objection’ certificate for foster care, followed by a court adoption order.
    • A final ‘no objection’ certificate from CARA or a conformity certificate under the adoption convention is mandatory for a passport and visa to leave India.

    What else regulates child adoption?

    • The Juvenile Justice (Care and Protection of Children) Act, 2015 permits the adoption of same-sex children, allowing biological or adopted parents to adopt a child of the same gender.
    • A single or divorced person can adopt under the JJ Act, but a single male cannot adopt a girl child.
    • According the Hindu Adoption and Maintenance Act, 1956 (HAMA), a Hindu parent or guardian can place a child for adoption with another Hindu parent under the Act.
    • A prospective parent can also adopt a male child if he has no other male children or grandchildren, or a female child if he has no other female children or grandchildren.

    Issues with child adoption in India

    • Parent-centrism: The current adoption approach is very parent-centred, but parents must make it child-centred.
    • Age of child: Most Indian parents also want a child between the ages of zero and two, believing that this is when the parent-child bond is formed.
    • Institutional issues: Because the ratio of abandoned children to children in institutionalised care is lopsided, there are not enough children available for adoption.
    • Lineage discrimination: Most Indians have a distorted view of adoption because they want their genes, blood, and lineage to be passed down to their children.
    • Red-tapism: Child adoption is also not so easy task after the Juvenile Justice Rules of 2016 and the Adoption Regulations of 2017 were launched.

     

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  • SMILE-75 scheme to rehabilitate Beggars

    The Social Justice and Empowerment Ministry has launched the ‘SMILE-75’ initiative for comprehensive rehabilitation of persons engaged in begging in 75 identified municipalities as a part of the celebrations of 75 years of Independence.

    SMILE Scheme

    • SMILE is an acronym for Support for Marginalised Individuals for Livelihood and Enterprise.
    • This scheme is a sub-scheme under the ‘Central Sector Scheme for Comprehensive Rehabilitation of persons engaged in the act of Begging’.
    • It also focuses on rehabilitation, provision of medical facilities and intervention, counselling, education, skill development, economic linkages to transgender persons.
    • It covers several comprehensive measures including welfare measures for persons who are engaged in the act of begging.
    • The focus of the scheme is extensively on rehabilitation, provision of medical facilities, counselling, basic documentation, education, skill development, economic linkages and so on.

    Its implementation

    • The scheme would be implemented with the support of State/UT Governments/Local Urban Bodies, Voluntary Organizations, Community Based Organizations (CBOs), institutions and others.
    • The scheme provides for the use of the existing shelter homes available with the State/UT Governments and Urban local bodies for rehabilitation of the persons engaged in the act of Begging.
    • In case of the non-availability of existing shelter homes, new dedicated shelter homes are to be set up by the implementing agencies.

     

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  • Govt. extends PMAY-Urban scheme

    The Union Cabinet approved an extension to the Pradhan Mantri Awas Yojana-Urban up to December 31, 2024 so that the houses sanctioned under the scheme can be completed.

    PMAY-Urban scheme

    • The PMAY-U, a flagship Mission of GoI being implemented by Ministry of Housing and Urban Affairs (MoHUA), was launched on 25th June 2015.
    • The Mission addresses urban housing shortage among the EWS/LIG and MIG categories including the slum dwellers by ensuring a pucca house to all eligible urban households by the year 2022.
    • It adopts a demand-driven approach wherein the Housing shortage is decided based on demand assessment by States/Union Territories.
    • State Level Nodal Agencies (SLNAs), Urban Local Bodies (ULBs)/ Implementing Agencies (IAs), Central Nodal Agencies (CNAs) and Primary Lending Institutions (PLIs) are main stakeholders.

    Coverage area

    The Mission covers the entire urban area consisting of:

    • Statutory Towns
    • Notified Planning Areas
    • Development Authorities
    • Special Area Development Authorities
    • Industrial Development Authorities or
    • Any such authority under State legislation which is entrusted with the functions of urban planning & regulations

    Key features of PMAY (U)

    • All houses under PMAY (U) have basic amenities like toilet, water supply, electricity and kitchen.
    • The Mission promotes women empowerment by providing the ownership in name of female member or in joint name.
    • Here, preference is given to differently abled persons, senior citizens, SCs, STs, OBCs, Minority, single women, transgender and other weaker & vulnerable sections of the society.

    Categorization within the scheme

    • PMAY (U) adopts a cafeteria approach to suit the needs of individuals based on the geographical conditions, topography, economic conditions, availability of land, infrastructure etc.
    • The scheme has hence been divided into four verticals as given:

    1. In-situ Slum Redevelopment (ISSR): Central Assistance of Rs. 1 lakh per house is admissible for all houses built for eligible slum dwellers under the component of ISSR using land as Resource with participation of private developers.
    2. Credit Linked Subsidy Scheme (CLSS): Beneficiaries of Economically Weaker Section (EWS)/Low Income Group (LIG), Middle Income Group (MIG)-I and Middle Income Group (MIG)-II seeking housing loans from Banks, Housing Finance Companies and other such institutions for acquiring, new construction or enhancement* of houses are eligible for an interest subsidy of 6.5%, 4% and 3% on loan amount upto Rs. 6 Lakh, Rs. 9 Lakh and Rs. 12 Lakh respectively.
    3. Affordable Housing in Partnership (AHP): Under AHP, Central Assistance of Rs. 1.5 Lakh per EWS house is provided by the Government of India. An affordable housing project can be a mix of houses for different categories but it will be eligible for Central Assistance, if at least 35% of the houses in the project are for EWS category.
    4. Beneficiary-led Individual House Construction/ Enhancement (BLC-N/ BLC-E): Central Assistance upto Rs. 1.5 lakh per EWS house is provided to eligible families belonging to EWS categories for individual house construction/ enhancement. The Urban Local Bodies validate the information and building plan submitted by the beneficiary.

     

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  • Centre launches ‘Ration Mitra’ Portal to register for Rations

    The Centre has launched a common facility to register names in ration cards on a pilot basis for 11 States and Union Territories.

    Ration Mitra

    • Ration Mitra’ Portal aims to enable these States to identify and verify the eligible beneficiaries for coverage under the National Food Security Act.
    • Named as Ration Mitr, this software developed by the National Informatics Centre can be used to enrol people of any State.
    • The portal is an enabler for States/UTs to complete their inclusion exercise under NFSA.
    • The NFSA provides food security coverage for 81.35 crore persons in the country. The present NFSA coverage is about 79.74 crore.

    About National Food Security (NFS) Act

    • The NFS Act, 2013 aims to provide subsidized food grains to approximately two-thirds of India’s 1.2 billion people.
    • It converts into legal entitlements for existing food security programs of the GoI.
    • It includes the Midday Meal Scheme, Integrated Child Development Services (ICDS) scheme and the Public Distribution System (PDS).
    • Further, the NFSA 2013 recognizes maternity entitlements.
    • The Midday Meal Scheme and the ICDS are universal in nature whereas the PDS will reach about two-thirds of the population (75% in rural areas and 50% in urban areas).
    • Pregnant women, lactating mothers, and certain categories of children are eligible for daily free cereals.

    Key provisions of NFSA

    • The NFSA provides a legal right to persons belonging to “eligible households” to receive foodgrains at a subsidised price.
    • It includes rice at Rs 3/kg, wheat at Rs 2/kg and coarse grain at Rs 1/kg — under the Targeted Public Distribution System (TPDS). These are called central issue prices (CIPs).

     

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  • Making sense of the ‘freebies’ issue

    Context

    Concern over ‘freebies’ in Indian politics has recently been expressed by those in the highest offices in the country.

    Issue of irrational freebies

    • Challenge in defining freebies: There is often confusion on what constitutes ‘freebies’, with a number of services that the Government provides to meet its constitutional obligations towards citizens also being clubbed in this category.
    • Distortion of electoral process: A Bench headed by the Chief Justice of India recently heard a public interest litigation in which the petitioner argued against the promise of ‘irrational freebies’ by claiming that these distort the electoral process.
    • The bench asked the Central government to take a stand on the need to control the announcement of ‘freebies’ by political parties during election campaigns.
    • The Court also suggested that the Finance Commission could be involved to look into the matter and propose solutions.
    • The basic argument is that these are a waste of resources and place a burden on already stressed fiscal resources.
    • Discussions on ‘freebies’ not only include the free distribution of what may be considered ‘club goods’ such as televisions but also welfare schemes such as free or subsidised rations under the Public Distribution System (PDS) and work provided through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

    Can we term foodgrain distribution under PDS as freebies?

    • It ensures food security: Subsidised foodgrains distributed under the PDS not only contribute to ensuring basic food security but also act as an implicit income transfer allowing the poor to afford commodities that they otherwise could not.
    • Price support for farmers: Further, the PDS also plays an important role in our country where public procurement at minimum support prices (MSPs) is one of the main instruments of support to farmers.
    • The PDS allows foodgrains to be available for cheap for consumers while assuring remunerative prices to farmers.
    • Food security during emergency: The PMGKAY is probably what kept many away from the brink of starvation during the novel coronavirus pandemic.
    • From around the mid-2000s, the PDS increasingly became a political issue, with State governments expanding coverage and reducing prices.
    •  This ultimately led to the National Food Security Act being passed by Parliament unanimously in 2013.
    • Despite its shortcomings, it cannot be denied that the PMGKAY and the support that it provided during the pandemic would have been impossible had it not been for the NFSA which expanded the coverage of the PDS to about two thirds of the population.
    • In its absence, a much smaller number of people would have had ration cards with high errors in identification.

    Other welfare schemes

    •  At a time when there are few employment opportunities, working under MGNREGA can guarantee some assured wages; if implemented in the true spirit of the legislation this is also demand-based and, therefore, responds to as much need as there is.
    • Similarly, mid-day meals in schools have been proven to contribute to increased enrolment and retention in schools and addressing classroom hunger.
    • A number of other schemes such as old age, single women and disabled pensions, community kitchens in urban areas, free uniforms and textbooks for children in government schools, and free health-care services play a critical role in providing social security and access to basic entitlements in our country.

    Way forward

    • Building public pressure towards making welfare delivery an electoral issue is the need of the hour.
    • It is important to recognise that most welfare schemes contribute to improving human development outcomes, which also results in higher economic growth in future.
    • As suggested by the Supreme Court, the Finance Commission could be tasked with formulating the criterion to come up with the criterion for freebies.
    • Sometimes, this process throws up initiatives that seem ‘wasteful’ — while these must be discussed, one cannot deny them completely.

    Conclusion

    There are a number of lacunae in these programmes which call for expansion in coverage, allocation of greater resources, along with putting in place mechanisms for greater accountability and grievance redress.

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  • From freebies to welfare

    Context

    In a recent address, the prime minister shared his anguish on what he called the “revdi” or the freebies culture.

    Populist policies and its impact over the states’ finances

    • What are freebies? N K Singh defined freebies as “something that is given to you without having to pay for them, especially as a way of attracting your support for or interest in something.”
    • A recent report of the RBI on states’ finances highlighted the perilous condition of states’ finances and enhanced debt stress on account of flawed policies.
    •  Nothing undercuts more irresponsibly India’s abiding international and national commitments than the perils of this reckless populism.

    Factors that need to be considered in devising welfare policies

    1] Quest for sustainable development

    • The initiatives undertaken at COP21 in Paris, the International Solar Alliance and subsequently at the COP26 in Glasgow represent India’s national consensus to forge a path of growth geared towards intergenerational equity and to exponentially increase development.
    • Our ability to adhere to this commitment depends on two other commitments.
    • 1] An increase in the percentage of renewable energy in our energy consumption.
    • While subsidies are being promised in one form or the other by way of free electricity, the deteriorating health of state distribution companies seriously undercuts their financial viability.
    • Lowering the price for some consumers, offset through overcharging industrial and commercial contracts, reduces competitiveness, ushers slower growth both in incomes and employment.
    • 2] The inability of discoms to actively encourage solar power is stymied by their financial condition and the inability to evolve tariff structures.
    •  Regulatory capture, a fixation on unrealistic tariffs and cross-subsidy in energy utilisation prevent a credible coal plan, which is central to our energy planning.

    2] Challenges in providing basic facilities

    • The government seeks to address the challenge of inequity by ensuring access to a wide range of basic facilities.
    • These include banking, electricity, housing, insurance, water and clean cooking fuel, to mention a few.
    • Removing this inequity to access helps boost the productivity of our population.

    3] Issue of access

    • Benefits under various welfare schemes such as PM Awas Yojana, Swachh Bharat Mission and Jal Jeevan Mission have eliminated the biggest barrier for citizens — the exorbitant upfront cost of access.
    • Moreover, they are leading to irreversible empowerment and self-reliance.
    • For instance, a house built under the PM Awas Yojana is a lifelong asset for the beneficiary household that cannot be taken back by any government.

    4] Use of technology in direct benefit transfer

    • Identification of beneficiaries through the SECC and prioritisation based on deprivation criteria has enabled the government to assist those who need it the most.
    • Governments that end up taking the shortcut of universal subsidies or freebies often end up ignoring the poor and transferring public resources to the affluent.

    5] Expenditure prioritisation

    • The next issue that needs to be considered is of expenditure prioritisation being distorted away from growth-enhancing items, leading to intergenerational inequity.
    • Investors, both domestic and foreign, and credit rating agencies look to macro stability in terms of sustainable levels of debt and fiscal deficit.
    • After years of fiscal profligacy, we returned to the path of fiscal rectitude in 2014.
    • The last time such an effort was made was by enacting the first FRBM Act on August 26, 2003.

    6] Impact on future of manufacturing and employment

    • The next factor that need to be considered is the debilitating effect of freebies on the future of manufacturing and employment.
    • Freebies lower the quality and competitiveness of the manufacturing sector by detracting from efficient and competitive infrastructure.
    • They stymie growth and, therefore, gainful employment because there is no substitute for growth if we wish to increase employment.

    Conclusion

    The poor state finance position should serve as a timely reminder to those promising fiscally imprudent and unsustainable subsidies.

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  • Only 4 States adopt Model Tenancy Law

    More than a year since the Union Housing and Urban Affairs Ministry circulated the Model Tenancy Act (MTA), only four States had revised their tenancy laws to be in line with the MTA.

    What is the Model Tenancy Act?

    • MTA is aimed at opening up of the vacant housing stock for rental housing purposes and helping bridge the trust deficit that exists between tenants and landlords by clearly delineating their obligations.
    • The housing and urban affairs ministry had floated the draft model tenancy law in July 2019.

    Major provisions of MTA

    (1) Rent Court and Rent Tribunal:

    • To ensure speedy redressal of disputes, the Act calls for establishing a separate Rent Court and Rent Tribunal in every state/UTs to hear appeals for matters connected to rental housing.
    • Only the rent court and no civil court will have the jurisdiction to hear and decide the applications relating to disputes between landowner and tenant and matters connected with it.
    • It calls for the disposal of complaints and appeals by the Rent Court and Rent Tribunals within 60 days.

    (2) Tenancy Agreements:

    • It also seeks to establish an independent authority in every state and Union Territory for the registration of tenancy agreements.
    • Under the Act, unless otherwise agreed in the tenancy agreement, the landlord will be responsible for activities like structural repairs except those necessitated by damage caused by the tenant etc.
    • On his part, a tenant will be responsible for drain cleaning, switches and socket repairs, kitchen fixtures repairs, replacement of glass panels in windows, doors and maintenance of gardens and open spaces, among others.

    For residential and commercial properties

    • The Act will apply to premises let out for residential, commercial or educational use, but not for industrial use. It also won’t cover hotels, lodging houses, inns, etc.
    • This model law will be applied prospectively and will not affect existing tenancies.
    • It seeks to cover both urban as well as rural areas.
    • The Act says that a security deposit equal to a maximum of two month’s rent in the case of residential premises and a maximum of six month’s rent in the case of non-residential premises would have to be paid by the tenants.

    How will states implement it?

    • As per the MoU signed under PMAY-U, the states and union territories would legislate or amend the existing rental laws on the lines of the MTA.

    Why was a need felt to bring this on?

    (1) For a rental economy

    • Without a well-rounded rental policy and the proper implementation of the rental contracts, there was no sound mechanism to resolve tenant-landlord conflicts.
    • Property owners find it challenging to evict tenants if they misuse the property.
    • To steer clear of such complications, such property owners often chose to keep these homes vacant instead of renting them out.

    (2) Unattractive rental yield

    • In India, the rental yield for residential property is quite low, even in bigger cities. It is in the range of 1.5% to 3% of the capital values.
    • This has disincentivized people from investing in second or third homes which could be rented out.
    • Often, they also prefer to leave their properties vacant in case they return to India.
    • NRIs avoid leasing their residential properties for fear of squatters and dealing with the legalities of eviction.

    How will MTA help?

    (1) Unlocking homes

    • It will unlock vacant houses for rental purposes
    • It will enable the creation of adequate rental housing stock for all the income groups thereby addressing the issue of homelessness.

    (2) Helping migrants

    • Rental housing is a preferred option for students and migrants.
    • It will balance the rights of both landlords and tenants.

    (3) Effective negotiations

    • There is no monetary ceiling under MTA, which enables parties to negotiate and execute the agreement on mutually agreed terms.
    • It will give confidence to landlords to let out their vacant premises, the housing ministry said.
    • The Act also tries to address how a renter can legitimately increase the rent.

    (4) Control over encroachments

    • It has proposed limiting the advance security deposits to two months’ rent and has also suggested heavy penalties for tenants who decide to overstay.
    • Those who do may have to shell out double the rent for two months and even four months.

    (5) Rights of tenants

    • The landowner cannot cut power and water supplies in case of a dispute and would have to provide a 24-hour notice to tenants to carry out repair work.
    • Should the landlords wish to increase the rent, they will need to provide a three-months notice to the tenants.
    • These measures would go a long way in protecting the rights of a tenant as it regulates the rent hikes that tenants have had to face.

    Challenges ahead

    While the proposals of the Act have been widely welcomed, their implementation may not be very simple.

    (1) Not binding nature

    • The Act is not binding on the states as land and urban development remain state subjects.
    • Like in the case of RERA, the fear is that states may choose not to follow guidelines, diluting the essence of the Model Act.

    (2) Issues over paltry rents

    • Also, the Model Act is prospectively applicable and will not affect the existing tenancies.
    • The repeal of rent control Acts can be governed by political exigencies.
    • This may be a complicated process in cities like Mumbai, where tenants have occupied residential properties in prime areas for absurdly low rents.

     

     

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