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GS Paper: GS3-02.Inclusive growth and issues therein

  • NPCI Unveils Innovative UPI Features

    upi

    Central Idea

    • The National Payments Corporation of India (NPCI) has introduced a range of groundbreaking features on the popular Unified Payments Interface (UPI) platform.

    Hello! UPI: Voice-Enabled UPI Payments

    • Hello! UPI, a remarkable addition, facilitates voice-enabled UPI payments in Hindi and English.
    • Users can make UPI payments through voice commands via apps, telecom calls, and IoT devices.
    • Future plans include expanding this feature to support several regional languages, further enhancing accessibility.

    Credit Line on UPI:  Streamlined Access to Credit

    • The RBI Governor introduced Credit Line on UPI, an initiative aimed at promoting financial inclusion and innovation.
    • This offering allows users to access pre-sanctioned credit from banks via UPI, simplifying the credit acquisition process.
    • Features include interest-free credit periods, defined charges, and seamless customer engagement channels.
    • The goal is to expedite the credit access process, driving economic growth and digital banking efficiency.

    UPI LITE X:  Offline Money Transfers

    • UPI LITE X introduces offline money transfers, enabling users to send and receive funds even without internet connectivity.
    • This feature empowers transactions in areas with poor network coverage.
    • UPI LITE payments are known for their speed and efficiency, making them a preferred choice for users.

    UPI Tap & Pay:  Convenience Redefined

    • UPI Tap & Pay offers a new way to complete payments at merchant locations.
    • In addition to traditional scan-and-pay, users can now tap Near Field Communication (NFC)-enabled QR codes.
    • This feature enhances convenience, making transactions swift and effortless.

    Conversational Payments:  AI-Enabled Transactions

    • Conversational UPI Payments and Conversational Bill Payments represent a paradigm shift in human-machine interaction.
    • These AI-enabled transactions aim to deepen the adoption of digital payments across India.
    • Users can make voice-enabled UPI payments through UPI Apps, telecom calls, and IoT devices in Hindi, English, and regional languages.
    • NPCI has collaborated with AI4Bharat at IIT Madras to develop language models for Hindi and English payments.

    BillPay Connect:  Simplified Bill Payments

    • BillPay Connect introduces a nationalized number for bill payments across India.
    • Customers can conveniently fetch and pay bills through messaging apps with a simple ‘Hi.’
    • Even users without smartphones or immediate data access can pay bills via a missed call, followed by a verification call.
    • Voice Assisted Bill Payments via smart home devices offer added convenience and instant confirmation.
    • This innovation enhances security and reassurance for both customers and collection centers.

    Conclusion

    • These pioneering features unveiled by NPCI mark a significant leap in India’s digital payment landscape.
    • They not only enhance accessibility but also redefine convenience, making digital transactions more user-friendly.
    • With innovative offerings like voice-enabled payments and streamlined credit access, NPCI continues to play a pivotal role in India’s technological advancement.
    • The journey towards a digitally empowered India takes a giant stride forward with these game-changing UPI features.

  • Urban Cooperative Banks (UCBs): Concerns and Considerations

    Central Idea

    • The Reserve Bank of India (RBI) Governor recently addressed the issues and vulnerabilities surrounding Urban Cooperative Banks (UCBs), highlighting the importance of addressing these concerns.

    What are Urban Cooperative Banks (UCBs)?

    • UCBs are primary cooperative banks primarily situated in urban and semi-urban areas, catering to the financial needs of small borrowers and businesses.
    • They are governed by the Banking Regulations Act, 1949, the Banking Laws (Cooperative Societies) Act, 1955, and registered under the Cooperative Societies Act of the respective State.
    • Initially, UCBs were permitted to lend exclusively for non-agricultural purposes; however, they have diversified their size and operations since 1996.
    • Approximately 79% of UCBs are concentrated in five states: Andhra Pradesh, Gujarat, Karnataka, Maharashtra, and Tamil Nadu.

    Types of UCBs

    UCBs are categorized into different tiers by the RBI based on their deposit size:

    • Tier 1: Deposits up to Rs 100 crore.
    • Tier 2: Deposits ranging from Rs 100 to 1,000 crore.
    • Tier 3: Deposits between Rs 1,000 to Rs 10,000 crore.
    • Tier 4: Deposits exceeding Rs 10,000 crore.

    Key concerns/addresses raised by RBI

    (1) Operational Stability

    • UCBs must enhance their financial and operational resilience to contribute to the overall stability of the financial and banking sector.
    • The quality of governance within UCBs plays a pivotal role in ensuring the stability of these individual banks.

    (2) Setting up right priorities

    • Boards and directors of UCBs must prioritize integrity and transparency in financial reporting, refraining from innovative accounting practices that obscure the actual financial position.
    • Proactive management of Asset Liability is essential to manage liquidity risk systematically.
    • Establishing robust IT and cybersecurity infrastructure, along with the availability of necessary skills at the bank level, is crucial.
    • Governance practices, especially those related to Compliance, Risk Management, and Internal Audit, need strengthening.

    (3) Functioning of Boards

    • Ensuring directors possess adequate skills and expertise.
    • Constituting a professional board of management.
    • Considering the diversity and tenure of board members.
    • Promoting transparent and participatory board discussions.
    • Ensuring the effective functioning of board-level Committees.

    (4) Credit Risk Management

    • Upholding risk management through robust underwriting standards.
    • Implementing effective post-sanction monitoring.
    • Timely recognition and mitigation of emerging stress.
    • Pursuing follow-ups with large Non-Performing Asset (NPA) borrowers to facilitate recovery and maintain adequate provisioning.

    Conclusion

    • Addressing the concerns and vulnerabilities in Urban Cooperative Banks is vital for the overall stability and resilience of the banking sector.
    • The RBI’s recommendations highlight the importance of governance, risk management, and transparency in ensuring the health of UCBs.

  • UPI-CBDC Interoperability: Advancing Retail Digital Rupee Adoption

    upi-cbdc

    Central Idea

    • The convergence of Unified Payments Interface (UPI) Quick Response (QR) codes with Central Bank Digital Currency (CBDC) applications is set to revolutionize digital transactions in India.
    • This strategic integration enables users of the retail digital rupee to seamlessly transact using UPI QR codes, making transactions convenient for both customers and merchants.

    Understanding Interoperability

    • Interoperability refers to the technical compatibility that allows different payment systems to function together.
    • It empowers various payment systems to process transactions across platforms, contributing to efficiency, innovation, and adoption for end-users.

    UPI QR Code-CBDC Interoperability: Explained

    The Reserve Bank of India (RBI) is driving this interoperability between UPI and CBDC as part of its ongoing pilot project for the retail digital rupee (e₹-R).

    • Initially, e₹-R users required a specific QR code for transactions.
    • With UPI-CBDC interoperability, any UPI QR code becomes compatible with CBDC apps.
    • The digital rupee, issued by RBI, is a tokenized digital version of the rupee stored in a digital wallet linked to a savings bank account.
    • UPI, directly linked to a user’s account, can now transact seamlessly with CBDC.

    Benefits for Customers and Merchants

    The convergence of UPI and CBDC yields several advantages:

    • Customers can use a single QR code for various transactions, eliminating the need for multiple platforms.
    • Daily essentials like groceries and medicines can be purchased using any UPI QR code.
    • Merchants can accept CBDC payments without creating separate QR codes.
    • Transactions are streamlined and efficient, enhancing the user experience.

    Enhancing CBDC Adoption

    The UPI-CBDC interoperability leverages the widespread use of UPI to boost digital rupee adoption.

    • More than 70 mobile apps and 50 million merchants already accept UPI payments.
    • Integrating UPI with CBDC simplifies transactions, increasing the digital rupee’s utility.
    • Prominent banks like State Bank of India, HDFC Bank, and Axis Bank have introduced UPI interoperability on their digital rupee platforms.
    • This seamless integration is expected to transform the digital currency landscape, driving its acceptance and utilization.

    Conclusion

    • The UPI-CBDC interoperability marks a significant milestone in India’s digital payment ecosystem.
    • By merging the familiarity of UPI with the innovation of CBDC, the retail digital rupee becomes more accessible, user-friendly, and efficient.
    • This strategic integration is poised to accelerate the adoption of digital currencies, reshaping the way transactions are conducted in the country.

  • The State Hunger Index (SHI)

    What’s the news?

    • Despite boasting the world’s largest public distribution system and comprehensive food security schemes, India’s standing on the Global Hunger Index (GHI) remains alarming.

    Central idea

    • The 2022 GHI ranked India a staggering 107 out of 121 nations, trailing behind Nigeria (103) and Pakistan (99). The GHI, encompassing calorie undernourishment, child malnutrition, and under-five mortality dimensions, highlights India’s ongoing battle against these challenges.

    Extent of the Issue

    • The State of Food Security and Nutrition in the World report for 2022 reveals a staggering statistic – India is home to approximately 224.3 million undernourished individuals.
    • Alarming disparities surface among various states, prompting the utilization of subnational data to develop a more nuanced and localized hunger index.
    • By harnessing such data, India can assess the extent of undernourishment at the state and union territory level, a crucial step towards achieving the Sustainable Development Goals aimed at eradicating hunger and malnutrition.

    The State Hunger Index (SHI)

    • Indicators: The SHI is derived from the Global Hunger Index (GHI) framework, utilizing four main indicators:
      • Prevalence of stunting, wasting, and under-five mortality among children below five years of age.
      • Body Mass Index (BMI) undernourishment among the working-age population.
    • Calorie Undernourishment Replacement: Calorie undernourishment, a GHI indicator, is replaced by BMI undernourishment due to data unavailability post-2012.
    • Data Sources: SHI calculations involve data from various sources, including:
      • National Family Health Survey (NFHS-5)
      • Longitudinal Ageing Study in India (LASI)
    • Calculation: Normalized values of the indicators are combined using techniques recommended by the GHI.
    • Score Range and Categories:
      • SHI scores range from 0 to 100.
      • Higher scores indicate higher hunger levels.
      • The categories of SHI scores are as follows:
        • Below 10: Low hunger
        • 10-20: Moderate hunger
        • 20-30: Serious hunger
        • 30-40: Alarming hunger
        • 50 or above: Extremely alarming hunger

    Findings of the State Hunger Index (SHI)

    • Alarming Hunger Levels: States like Bihar, Jharkhand, and Chhattisgarh have alarmingly high SHI scores of 35, indicating significant hunger levels.
    • Moderate Hunger Levels: States such as Gujarat, Uttar Pradesh, Assam, Odisha, Madhya Pradesh, Tripura, Maharashtra, and West Bengal score above the national average (29), indicating moderate hunger levels.
    • Lower Hunger Levels: Chandigarh stands out with a notably low SHI score of 12, suggesting relatively lower hunger levels.
    • Moderate Hunger Category: States like Sikkim, Puducherry, and Kerala have SHI scores below 16, placing them in the ‘moderate hunger’ category.
    • Serious Hunger Concerns: Several states score below the national average but above 20, pointing to serious hunger challenges in these regions.

    Calorie Undernourishment: A Critical Challenge

    • Deteriorating GHI Score: Over the past few years, India’s Global Hunger Index (GHI) score has worsened primarily due to the increasing prevalence of calorie undernourishment. This underscores the urgent need to address this challenge effectively.
    • Escalating Proportions: Data from the Food and Agriculture Organization reveals that the proportion of calorie undernourishment has been on the rise since 2017, reaching a concerning 16.3% in 2020. This trend mirrors statistics from over a decade ago, such as those from 2009.
    • Government Disputes and Data Concerns: Despite these alarming figures, the Indian government has raised doubts about the accuracy of the data and methodologies employed in calculating the GHI. However, the absence of empirical evidence to support these disputes leaves room for further clarity.
    • Data Limitations: Notably, a challenge in understanding the scale of calorie undernourishment stems from the lack of recent National Sample Survey (NSS) rounds on nutritional intake since 2011-12. This survey previously offered insights into the prevalence of undernourishment at both national and subnational levels.
    • Impact on Health and Development: Calorie undernourishment directly affects health and development, leading to weakened immune systems, stunted growth, impaired cognitive development, and increased susceptibility to diseases.
    • Economic and Social Implications: The persistence of calorie undernourishment has far-reaching socio-economic consequences, hindering productivity, reducing human capital potential, and perpetuating the cycle of poverty.

    Way forward

    • Urgent Focus on Calorie Undernourishment: Recognize the urgent need to address calorie undernourishment, which has contributed to India’s declining GHI score.
    • Reviving NSS Rounds: Prioritize conducting new National Sample Survey (NSS) rounds on nutritional intake to obtain updated and accurate data on undernourishment levels.
    • Evidence-Based Approach: Encourage the Indian government to substantiate their concerns about GHI data accuracy with empirical evidence.
    • Collaborative Efforts: Collaborate between government agencies, NGOs, researchers, and communities to formulate and implement targeted strategies.
    • Alignment with SDGs: Align efforts with Sustainable Development Goals (SDGs), particularly Goal 2 focused on eradicating hunger and malnutrition.

    Conclusion

    • While the GHI is not immune to criticism regarding its methodology and aggregation techniques, it remains a critical tool for gauging undernourishment and child nutrition. Despite strides in reducing extreme poverty, disparities persist in addressing food insecurity, hunger, and child malnutrition. India must prioritize targeted interventions to overcome these challenges and fulfill its commitment to sustainable development.

  • Progress track: PM Jan Dhan Yojana’s Milestones

    jan dhan

    Central Idea

    • As the PM Jan Dhan Yojana (PMJDY) completes 9 years, its remarkable journey is marked by over 50 crore bank accounts and deposits exceeding ₹2 lakh crore.
    • The scheme’s success lies in its commitment to financial inclusion, creating avenues for underprivileged segments to access banking services and government schemes.

    What is PM Jan Dhan Yojana (PMJDY)?

    • The PMJDY is a financial inclusion program launched by the Indian government in 2014.
    • It is National Mission for Financial Inclusion to ensure access to financial services, namely, a basic savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner.
    • Under the scheme, a basic savings bank deposit (BSBD) account can be opened in any bank branch or Business Correspondent (Bank Mitra) outlet, by persons not having any other account.

    Benefits under PMJDY

    • One basic savings bank account is opened for unbanked person.
    • There is no requirement to maintain any minimum balance in PMJDY accounts.
    • Interest is earned on the deposit in PMJDY accounts.
    • Rupay Debit card is provided to the account holder.
    • Accident Insurance Cover of Rs.1 lakh (enhanced to Rs. 2 lakh to new PMJDY accounts opened after 28.8.2018) is available with RuPay card issued to the PMJDY account holders.
    • An overdraft (OD) facility up to Rs. 10,000 to eligible account holders is available.

    Is PMJDY a success?

    • Dormancy of accounts: The PMJDY scheme has led to an increase in the number of bank accounts in rural areas. The percentage of zero-balance accounts has significantly decreased from 58% in March 2015 to a mere 8%, indicating a more active engagement with banking services.
    • Low or no transactions: Insurance coverage for the account holder is linked to their transaction history, and many accounts remain frozen due to lack of transactions, taking several weeks or months to reactivate.
    • False promise of overdraft: The promised overdraft facility of Rs 5000 for new account holders has not been provided as promised, leading to scepticism about the scheme’s success.
    • Payments bottleneck: The lack of proper connectivity, electricity, internet, and ATM facilities in rural areas has hindered the activation of RuPay cards and PIN numbers, which should have been considered before implementing such a large-scale program.

    Future prospects

    • Voluntary Participation: The government aims to persuade PMJDY account holders to opt for voluntary micro-insurance schemes like PMJJBY and Pradhan Mantri Suraksha Bima Yojana.
    • Persuasion over Compulsion: The focus is on financial literacy campaigns, special drives, and awareness programs conducted by banks to help account holders make informed choices.
    • Multi-Level Coordination: Collaboration with line ministries, including Anganwadi and Asha workers, enhances awareness campaigns and ensures wider coverage.
    • Leveraging Databases: Utilization of databases like the E-Shram portal for labour-related information aids in identifying potential beneficiaries.

  • Needed, a well-crafted social security net for all

    What’s the news?

    • Over half of India’s salaried workforce lacks social security benefits, revealing stark inequality and a deficient system ranked poorly internationally, prompting calls for urgent reforms to ensure equitable coverage and protection for all segments of the workforce.

    Central idea

    • Recent statistics from the Periodic Labour Force Survey Annual Report 2021–22 highlight a grim reality: approximately 53% of India’s salaried workforce lacks access to social security benefits, including provident funds, pensions, health care, and disability insurance. This dire situation extends to the informal sector, where around 91% of the workforce operates without social security. Meanwhile, India’s social security system ranks dismally low, according to Mercer CFS.

    Plight of gig workers and the informal sector

    • Gig Workers: Approximately 1.3% of India’s active labor force comprises gig workers, yet they rarely have access to any form of social security benefit. This absence of coverage leaves them without essential protections such as provident funds, pensions, health care, and disability insurance.
    • Informal Sector: A staggering 91% of India’s workforce operates within the informal sector, where access to social security remains severely limited. This lack of coverage extends to essentials like provident funds, pensions, health care, and disability insurance, contributing to a vulnerable and marginalized workforce.

    Failures within existing social security schemes

    • Underutilization of Funds: The National Social Assistance Programme, which aimed to support elderly individuals without able-bodied earners, suffered from stagnant contributions and poor funding allocation. The Center’s contribution to old-age pension schemes remained below minimum wage levels.
    • Mismanagement of Funds: Instances of mismanagement are evident in various schemes. The CAG audit revealed that the National Social Security Fund had accumulated Rs. 1,927 crore since its inception, yet the entire amount remained unutilized. Similarly, funds collected for the social security of construction workers in Delhi were poorly utilized, with a significant portion going unspent.
    • Beneficiary Mismanagement: The CAG identified instances of funds being transferred to deceased beneficiaries, indicating flaws in the implementation of social security schemes.

    Lessons from Brazil’s General Social Security Scheme

    • Comprehensive Coverage: Brazil’s General Social Security Scheme offers a contribution-based approach that covers a wide range of situations, including accidents, disabilities, illness, family burdens, and even unemployment. This comprehensive coverage provides income support for workers and their families in various circumstances.
    • Government Backing: Brazil’s scheme is designed with provisions for government intervention. In cases where funds are lacking, the National Treasury steps in to ensure that social security benefits are sustained, providing a safety net for workers.
    • Ease of Access: The scheme in Brazil allows easy access to social security benefits through simple processes such as phone calls or bank visits. This user-friendly approach reduces bureaucratic hurdles for beneficiaries.
    • Inclusivity: The Brazilian scheme extends its coverage to even low-income insured individuals who face incarceration. This inclusive approach ensures that marginalized groups are not left without support.

    The Way Forward: Urgent reforms are needed

    • Addressing India’s social security crisis necessitates immediate and strategic reforms. Three fundamental principles guide this transformation:
    • Expanded Contribution: Enhancing contributions under the Employees’ Provident Fund Organization (EPFO) system for formal workers, coupled with partial contributions from informal workers with meaningful income, could lay the foundation for a more inclusive system.
    • Government Intervention: The government must intervene to support those who are unemployed or earning insufficiently. Providing social protection to the poorest 20% of the workforce, including elderly, pregnant, and disabled individuals, could amount to approximately ₹1.37 trillion, or approximately 0.69% of GDP in FY20.
    • Streamlined Framework: Reforms should streamline and simplify existing schemes, ensuring coverage of all sectors. Establishing a pan-India labor force card and extending successful schemes like the Building and Other Construction Workers Schemes could substantially improve coverage.

    Conclusion

    • As India transitions towards an aging society, ensuring social security for all workers becomes paramount. The focus must shift from rhetoric to tangible actions. Reforming social security will not only provide a safety net for workers but also contribute to equitable growth. By embracing comprehensive and inclusive policies, India can propel itself towards a more secure and prosperous future.

     

     

  • Public Tech Platform for Frictionless Credit

    Central Idea

    • The Reserve Bank of India (RBI) has unveiled a Public Tech Platform for Frictionless Credit to transform credit accessibility and lending efficiency.

    About the Public Tech Platform 

    • It is developed by the RBI’s subsidiary Reserve Bank Innovation Hub (RBIH).
    • It aims to streamline the credit delivery process by enabling seamless digital information flow to lenders.
    • It intends to simplify the credit assessment by providing an end-to-end digital ecosystem that facilitates the smooth exchange of essential digital data among stakeholders.

    Features of the Platform

    • Open Architecture: The platform adopts an open architecture model, fostering interoperability and collaboration among various financial sector players.
    • Plug and Play Model: The open Application Programming Interfaces (APIs) and standards enable seamless integration and interaction among participating entities.
    • Efficiency and Scalability: The platform aims to enhance lending efficiency, reduce costs, expedite disbursement, and scale up lending operations.

    Launch and Scope

    • Calibrated Rollout: The platform is set to launch as a pilot project on August 17, 2023, with gradual access to information providers and use cases.
    • Initial Focus: The pilot phase will focus on credit products like Kisan Credit Card loans, dairy loans, collateral-free MSME loans, personal loans, and home loans.
    • Integration and Services: The platform will integrate services such as Aadhaar e-KYC, state government land records, satellite data, PAN validation, Aadhaar e-signing, account aggregation, and more.

  • Where India lags in science, research fields, and can National Research Foundation help fix it?

    Central Idea

    • The government’s recent approval of the National Research Foundation (NRF) has been widely hailed by the scientific community in India. The establishment of the NRF presents a significant opportunity to tackle long-standing deficiencies within the country’s scientific research sector.

    *Relevance of the topic

    *Despite possessing a vast pool of science and engineering graduates, extensive research institutions, and active involvement in cutting-edge scientific research, India has lagged behind several nations in research indicators.

    *While the spending on research has increased over the years, it has not kept pace with the rapid growth of India’s GDP.

    *It is crucial for India to harness the potential of demographic dividend

    Insufficient expenditure on research and development

    • Inadequate Allocation: The Indian government has failed to meet its stated objective of allocating at least two percent of the national GDP for research and development (R&D) activities. Despite this objective being set for over two decades, the current expenditure on research as a proportion of GDP stands at only around 0.65 percent, a decline from 0.8 percent at the beginning of the millennium.
    • Stagnant Growth: The share of research expenditure as a percentage of GDP has remained stagnant for the past decade, indicating a lack of significant progress in increasing investment in R&D.
    • Falling Behind Global Standards: In comparison to other countries, India’s expenditure on R&D falls short. According to the 2021 UNESCO Science Report, at least 37 countries spent more than one percent of their GDP on R&D in 2018, with 15 of them surpassing the two percent mark. Globally, the average percentage of GDP spent on R&D is 1.79 percent, indicating that India lags behind in research investment.
    • Insufficient Funding per Researcher: The amount allocated per researcher in India is significantly lower compared to other nations. In 2020, India spent only $42 (in purchasing power parity terms) per researcher. In contrast, countries like Israel, South Korea, and the United States invested substantially higher amounts per researcher, highlighting the need for increased financial support to facilitate quality research.
    • Disproportionate Growth: While funding for research in India has increased over the years, it has not kept pace with the country’s economic growth. As a result, the share of research expenditure as a proportion of GDP has declined, indicating a mismatch between the growth of the research sector and overall economic development.

    Significance of sufficient allocation for research and development (R&D) activities in India

    • Promoting Innovation and Technological Advancement: Adequate funding for R&D fosters innovation and technological advancement in various sectors. It allows scientists, researchers, and institutions to conduct groundbreaking research, develop new technologies, and create intellectual property.
    • Addressing Societal Challenges: Sustained investment in R&D enables the exploration of solutions to pressing societal challenges. It supports research in areas such as healthcare, agriculture, energy, climate change, and infrastructure development.
    • Enhancing Global Competitiveness: Adequate funding for R&D is crucial for India to remain globally competitive. It allows the country to stay at the forefront of scientific advancements, technological breakthroughs, and innovation. By investing in R&D, India can nurture a skilled workforce, attract talent, foster collaborations with international partners, and build a strong knowledge-based economy.
    • Driving Economic Growth and Job Creation: R&D stimulates demand for goods and services, creates employment opportunities, and contributes to overall economic development. Robust R&D investment promotes entrepreneurship, encourages startups, and facilitates the commercialization of research outcomes, leading to job creation and economic prosperity.
    • Strengthening Academic Institutions: Sufficient allocation for R&D enables universities and research institutions to enhance their research infrastructure, attract top talent, and engage in cutting-edge research. This strengthens the academic ecosystem, promotes interdisciplinary collaboration, and facilitates knowledge transfer between academia and industry.
    • Leveraging Global Collaboration: Adequate investment in R&D enables India to actively participate in global collaborations and leverage international expertise. It encourages knowledge sharing, joint research projects, and scientific collaborations with renowned institutions worldwide.

    India’s research output and collaboration

    • Doctorates and Research Output: India produces a significant number of science and engineering doctorates. In the year 2020-21, India produced 25,550 doctorates, with 14,983 in science and engineering disciplines. In terms of absolute numbers, India ranks among the top countries globally. However, considering India’s large population, the number of researchers per million is relatively low compared to other developing nations.
    • Publications: Indian researchers have shown improvement in publishing articles in international science and engineering journals. In 2020, they published 149,213 articles, which is almost two and a half times more than a decade earlier. However, Indian publications only constituted 5 percent of all articles published globally. China contributed 23 percent, while the United States accounted for 15.5 percent.
    • Patents: In 2021, India filed a total of 61,573 patents, making it the sixth-largest in the world in terms of patent filings. However, this number is significantly lower compared to countries like China and the United States, which filed millions of patents in the same year.

    Necessity of National Research Foundation (NRF)

    • Addressing Funding Issues: The NRF has the potential to address the issue of insufficient funding for research and development (R&D) activities in India. By providing a centralized funding mechanism, the NRF can streamline and optimize the allocation of resources, ensuring that sufficient funds are directed towards scientific research.
    • Coupling Education and Research: One of the key areas where India faces an anomaly is the disconnect between education and research. The NRF places emphasis on rectifying this by coupling education and research.
    • Strengthening Research in Universities: The NRF aims to enhance research capabilities in universities. Currently, only a small percentage of Indian universities engage in active research. The NRF’s focus on rectifying this anomaly can lead to the establishment of robust research ecosystems within universities, making them centres for research and development activities.
    • Promoting Collaboration and Innovation: By providing a platform for interdisciplinary collaborations, facilitating knowledge-sharing, and encouraging industry-academia partnerships, the NRF can foster innovation, accelerate the translation of research outcomes into practical applications, and promote entrepreneurship.
    • Addressing Gender Disparity: The NRF can also contribute to addressing the gender disparity in the scientific research sector. By prioritizing gender diversity and inclusivity in research funding and initiatives, the NRF can work towards increasing the representation of women in scientific research, fostering an environment that is more equitable and diverse.

    Conclusion

    • The establishment of the National Research Foundation holds tremendous promise for rectifying deficiencies in India’s scientific research sector. It is imperative for the government, scientific community, and relevant stakeholders to collaborate and provide the necessary support to ensure the success of the NRF in transforming India’s research landscape

  • KFON: Kerala’s internet connectivity scheme

    internet

    Central Idea

    • Digital poverty and exclusion persist despite the era of hyper-connectivity, leaving millions marginalized even in the wealthiest nations. In the United States, approximately 14.5 million people in rural areas lack access to broadband, exposing the stark reality of digital absence and leaving over 3 billion individuals on the fringes of the digital age. However, the state of Kerala in India has embarked on a pioneering initiative called the Kerala Fibre Optical Network (KFON) to bridge this digital divide.

    Relevance of this topic:

    *Although efforts are being made to bridge the gap, the digital divide in India remains a significant challenge. You can use the features of the KFON project as examples in your answer.

    Kerala’s Progressive Digital Initiative: Kerala Fibre Optical Network (KFON)

    • Recognizing Internet as a Citizen’s Right: In 2016, the communist-led state government of Kerala acknowledged internet access as a fundamental right, following the example of progressive nations like Finland, Costa Rica, and France.
    • Establishment of the KFON Project: The KFON project aims to provide affordable and reliable internet connectivity to every household, government institution, and business entity in Kerala through the deployment of a fiber-optic broadband network.
    • Targeting Economically Disadvantaged Households: The KFON project adopts a focused approach, starting with approximately 14,000 economically disadvantaged households in the state. These households will receive internet connectivity in the initial phase, addressing the digital divide from the grassroots level.
    • Extending Connectivity to Remote Areas: Kerala’s KFON project goes beyond urban centers, reaching even the most remote regions and tribal hamlets, such as those in Wayanad. This ensures that connectivity reaches marginalized communities that have historically faced barriers to digital access.
    • Free Internet Connections for Economically Disadvantaged: Over the course of the next 12 to 18 months, the KFON project aims to provide free internet connections to 2 million economically disadvantaged households, enabling them to access the benefits of digital connectivity without financial burden.
    • Affordable Data Packages: Apart from free connections, the KFON project offers a range of affordable data packages for the remaining 6 million households in Kerala. These packages cater to different affordability levels, starting from as low as 300 rupees (£2.86) per month for a 20 Mbps connection, making digital access more accessible to a broader population.
    • Infrastructure Development in Schools and Government Buildings: The KFON project includes the installation of necessary infrastructure in schools and government buildings. This ensures that educational institutions and public entities are equipped with the means to leverage digital connectivity effectively.
    • Digital Literacy Campaigns: To ensure the effective utilization of digital connectivity, the Kerala government has initiated digital literacy campaigns at the grassroots level. Collaborating with local bodies, the aim is to empower individuals from marginalized communities with the necessary skills to navigate the online world and leverage digital resources for personal and professional development.

    internet

    Impact of KFON project on Society

    • Enhanced Healthcare Services: The availability of reliable internet connectivity through KFON enables improved access to telemedicine and remote healthcare services. People in remote areas can connect with healthcare professionals, receive consultations, and access medical information without the need for physical travel, leading to better healthcare outcomes, especially in underserved regions.
    • Empowerment through Education: KFON’s connectivity in schools and educational institutions facilitates digital learning, e-learning platforms, and access to online educational resources. This empowers students with equal opportunities for quality education, regardless of their geographical location, and equips them with essential digital skills for the future.
    • Skill Development and Employment Opportunities: Access to the internet provided by KFON opens doors to online skill development programs, vocational training, and employment opportunities. It enables individuals, especially from marginalized communities, to enhance their skills, access job portals, and explore entrepreneurial ventures, contributing to economic growth and reducing unemployment.
    • Business and Entrepreneurship: KFON’s internet connectivity creates a conducive environment for businesses to thrive. Small and medium enterprises can expand their reach, engage in e-commerce, and access digital marketing channels. It also fosters entrepreneurship by providing a platform for aspiring entrepreneurs to launch and promote their startups.
    • Digital Governance and E-Government Services: KFON’s connectivity strengthens digital governance and e-government initiatives. Citizens can access online government services, submit applications, pay bills, and participate in e-governance processes conveniently. This streamlines administrative procedures, reduces bureaucracy, and enhances transparency and efficiency in service delivery.
    • Bridging Social and Economic Divides: By providing affordable and reliable internet connectivity to economically disadvantaged households, KFON plays a significant role in bridging social and economic divides. It ensures that individuals from marginalized communities have equal opportunities to access information, resources, and services, thus reducing inequality and promoting social inclusion.

    Prevalence of the digital divide in India

    • Limited Digital Literacy and Access: The Oxfam India report highlights that only about one-fifth of the Indian population can operate a computer or use the internet. This limited digital literacy and access contribute to the digital divide across different segments of society.
    • Rural-Urban Divide: There is a significant disparity in internet usage between rural and urban areas. The report mentions that around 31 percent of the rural population in India uses the internet compared to 67 percent of the urban population, indicating a notable urban-rural divide.
    • Educational Divide: The report points out the challenges faced by students in accessing digital resources for education. Only a small percentage of enrolled students have access to computers with internet connectivity, limiting their ability to leverage digital platforms for learning.
    • Financial Inclusion Disparities: The report highlights disparities in digital payment facility usage, indicating that the richest 60 percent of Indians are four times more likely to use digital payment services than the poorest 40 percent. Financial inclusion gaps exacerbate the digital divide, particularly among economically disadvantaged groups.
    • Household Disparities: The report highlights significant differences in computer and internet access between the poorest and richest households. The poorest 20 percent of households have limited access to computers and the internet, while the richest 20 percent enjoy higher rates of access.
    • Gender Divide: The gendered digital divide in India is prominent, with a wide gap of 40.4 percent between internet usage among men and women. This gender disparity limits digital access and opportunities for women, particularly in rural areas.

    internet

    How KFON project can contribute to address the digital divide in India?

    • Bridging the Connectivity Gap: The KFON project aims to provide affordable and reliable internet connectivity to every household, government institution, and business entity in Kerala. By ensuring widespread access to high-speed internet, KFON helps bridge the connectivity gap that exists between urban and rural areas, as well as economically disadvantaged communities.
    • Rural Outreach: The KFON project extends its network to even the most remote areas, including tribal hamlets in Kerala. By bringing internet connectivity to these underserved rural regions, KFON addresses the urban-rural digital divide and ensures that residents in these areas can access the same digital opportunities as their urban counterparts.
    • Affordability and Inclusion: KFON’s approach includes providing free internet connections to economically disadvantaged households and offering affordable data packages to others. This helps address the affordability barrier that often limits digital access for marginalized communities. By making internet services accessible and affordable, KFON ensures that more people can participate in the digital ecosystem.
    • Digital Literacy Initiatives: KFON complements its infrastructure development with digital literacy campaigns at the grassroots level. By addressing digital literacy gaps, KFON enables users to make the most of the connectivity provided and enhances their overall digital inclusion.
    • Multi-sector Impact: The KFON project’s extensive infrastructure and connectivity have a multiplier effect on various sectors, including education, healthcare, skill development, and business opportunities. By promoting digital inclusion in these sectors, KFON contributes to reducing the disparities caused by the digital divide. It helps ensure that individuals and communities have equal access to educational resources, healthcare services, employment opportunities, and digital tools for economic growth.
    • Role Model for Replication: The KFON project’s success and approach can serve as a role model for addressing the digital divide in other parts of India. By showcasing the benefits of bridging the digital divide, KFON encourages other entities to prioritize digital inclusion and work towards reducing disparities in digital access and opportunities.

    Conclusion

    • Digital poverty and exclusion persist worldwide, hindering access to crucial resources and opportunities. As discussions on digital public infrastructure gain momentum, Kerala’s achievements demonstrate the power of political will and innovative thinking in bridging the digital divide and fostering equitable development.

    Also read:

    Digital Public Infrastructure (DPI): New Backbone of India’s Economy

     

  • National Pension Scheme (NPS)

    pension

    Central Idea

    • The Pension Fund Regulatory and Development Authority (PFRDA) has introduced a new feature for systematic withdrawal from the National Pension Scheme (NPS).

    National Pension Scheme (NPS): A Brief Overview

    • The National Pension Scheme (NPS) is a voluntary retirement savings scheme launched by the Government of India in 2004.
    • It is regulated and administered by the Pension Fund Regulatory and Development Authority (PFRDA).
    • The primary objective of the NPS is to provide a pension income to individuals upon their retirement.

    Key Features of the NPS:

    • Contributions: Subscribers make regular contributions to their NPS account during their working years. These contributions accumulate and grow over time.
    • Investment Options: The NPS offers two investment options: a) Auto Choice: where the funds are invested based on the subscriber’s age, and b) Active Choice: where the subscriber can select the asset classes (equity, corporate bonds, and government securities) and the fund manager.
    • Portable Account: The NPS account is portable, allowing subscribers to maintain their account even if they change jobs or locations.
    • Withdrawal Options: Upon retirement, subscribers have the flexibility to withdraw a portion of their accumulated corpus as a lump sum and use the remaining amount to purchase an annuity, which provides a regular pension income.
    • Tax Benefits: NPS offers tax benefits at different stages. Contributions made by subscribers are eligible for tax deductions under Section 80C, while withdrawals are subject to certain tax exemptions.
    • Regulated and Transparent: The NPS is regulated by the PFRDA, ensuring transparency and oversight of the scheme. It follows strict investment guidelines and has mechanisms in place to safeguard the interests of subscribers.
    • Wide Coverage: The NPS is available to all Indian citizens, including salaried employees, self-employed individuals, and non-resident Indians (NRIs).

    Benefits of the NPS

    • Retirement Income: The NPS provides a retirement income to subscribers, ensuring financial security during their post-retirement years.
    • Long-term Wealth Creation: The investment component of the NPS allows subscribers to accumulate wealth over time, potentially generating higher returns and building a substantial retirement corpus.
    • Flexibility and Control: Subscribers have the flexibility to choose their investment options and actively manage their NPS accounts, providing a level of control over their retirement savings.
    • Tax Efficiency: The NPS offers tax benefits both on contributions and withdrawals, making it a tax-efficient retirement savings option.
    • Portability: The portability feature of the NPS allows subscribers to continue their account irrespective of job changes or relocations.
    • Regulated and Secure: The NPS is regulated by the PFRDA, ensuring a secure and transparent framework for retirement savings.

    Changes introduced: Systematic Withdrawal Plan

    • NPS subscribers will be allowed to withdraw 60% of their contributions systematically post-retirement.
    • The current system of one-time withdrawal will be replaced.
    • 40% of the contributions must be in annuity.
    • Systematic withdrawals can be customized by the subscriber based on their needs.
    • Withdrawals can be made in lump sum or on a monthly, quarterly, half-yearly, or annual basis.
    • This feature is applicable to individuals aged 60-75.

    Benefits offered by this change

    • Flexibility: Subscribers can customize their withdrawals based on their financial needs.
    • Regular Income: Systematic withdrawals provide a regular income stream post-retirement.
    • Enhanced Financial Planning: Allows for better financial planning and management.