Prelims Only | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Key facts and figures about Indian exports
PC: LiveMinit
Why in the News?
During fiscal year 2023-24, the Netherlands emerged as India’s third-largest export market, with a trade surplus expanding to $17.4 billion.
India’s Trade with the Netherlands
Key Export Commodities: Notable export items to the Netherlands include petroleum products ($14.29 billion), electrical goods, chemicals, and pharmaceuticals, showcasing robust growth in these sectors.
Continual Expansion: India’s exports to the Netherlands have steadily risen by approximately 3.5% to reach $22.36 billion in 2023-24, illustrating sustained growth momentum.
Mutual Investment: The Netherlands is a significant investor in India, with foreign direct investment (FDI) amounting to about $5 billion during the last fiscal.
Corporate Presence: Over 200 Dutch companies, including industry giants like Philips, Akzo Nobel, and KLM, operate in India, while Indian firms like TCS, HCL, and Sun Pharmaceuticals have a substantial presence in the Netherlands.
Shift in Trade Dynamics
Outpacing Major Destinations: The Netherlands has surpassed traditional trade partners such as the U.K., Hong Kong, Bangladesh, and Germany in terms of India’s export focus.
Long-term Growth: Export figures have shown consistent growth since 2000-01 when India’s exports to the Netherlands were a mere $880 million.
Significance: Gateway to Europe
Strategic Positioning: The Netherlands’ efficient ports and extensive connectivity with the EU via roads, railways, and waterways have positioned it as a vital gateway to the European market.
Strong Ties: Diplomatic relations between India and the Netherlands, established in 1947, have evolved into robust political, economic, and commercial partnerships.
India’s Trade Dynamics
Export Figures:
Forecasted to reach approximately US$776.68 billion in FY 2023–24.
Slightly surpassed the US$776.40 billion recorded in the previous fiscal year.
Concluded with the highest monthly merchandise exports of US$41.68 billion in March 2024.
Import Figures:
Total goods imports decreased by 5.66 percent to US$675.44 billion.
Global Merchandise Export Ranking:
India advanced from 19th to 17th place.
Marginal increase in share from 1.70 percent in 2014 to 1.82 percent in 2023.
Exported to 115 countries out of a total of 238 destinations during FY 2023-24.
Key Export Markets:
Include the US, UAE, Netherlands, China, UK, Saudi Arabia, Singapore, Bangladesh, Germany, and Italy.
Represent 46.5 percent of India’s export portfolio.
Diversification Strategy:
Focus on expanding beyond traditional sectors like iron ore and agricultural commodities.
Target sectors include electronics, pharmaceuticals, engineering products, and food items.
Plan to introduce goods such as alcoholic beverages, prepared meals, confectioneries, jackfruit, and bananas.
Emphasis on market research and analysis for product customization.
Trade Partners:
China emerged as India’s largest trading partner, surpassing the US.
Bilateral trade with China totalled US$118.4 billion in FY 2023-24.
Bilateral trade with the US amounted to US$118.3 billion in the same period.
India’s exports to China increased by 8.7 percent in FY24, driven by various sectors.
Imports from China rose moderately, totalling US$101.7 billion.
(Source of Data:Ministry of Commerce and Industry, Department of Commerce)
PYQ:
[2013] The balance of payments of a country is a systematic record of:
(a) All import and export transactions of a country during a given period of time, normally a year.
(b) Goods exported from a country during a year.
(c) Economic transaction between the governments of one country to another.
(d) Capital movements from one country to another.
From UPSC perspective, the following things are important :
Prelims level: Tele MANAS, National Mental Health Programme (NMHP)
Why in the News?
The Ministry of Health and Family Welfare (MoHFW) and the Ministry of Defence (MoD) have entered into a Memorandum of Understanding (MoU) to foster collaboration in operating a special cell of Tele MANAS.
This collaboration, spanning two years, aims to establish a pilot project at the Armed Forces Medical College in Pune.
Suicides and Fratricides in Armed Forces: A Global Issue
As per information given in Parliament in April 2022, there were two cases of fratricide each year from 2019 to 2021 and one case in 2021.
In an older reply in Rajya Sabha on suspected suicide cases in the Army, the Government informed that during the years 2016 to 2018 there were 104, 75 and 80 cases, respectively.
A 2018 study correlated extended deployment to a 15% increased suicide risk in the U.S. military, the U.S. Department of Defence recorded 503 suicides among active-duty personnel in 2019.
Common reasons that forces an individual to take extreme steps are:
Family issues,
Family separation,
Prolonged deployment in difficult areas,
Continuous exposure to hazardous situations,
Traumas originated in Counter Insurgency or Counter Terrorism operations and
Wide range of Human Resource management issues.
Preventive Measures: The Army in its latest advisory issued in August 2023 stated that officers and religious teachers – at least one Pandit, Maulvi, Granthi or Pastor – are posted in each unit and selected other ranks are being trained on the nuances of counselling.
What is the Tele MANAS Initiative?
Tele MANAS, or Tele Mental Health Assistance and Networking across States, stands as India’s National Tele Mental Health Programme.
It is envisioned as the digital extension of the District Mental Health Programme (DMHP).
Its announcement came in the Union Budget of 2022.
The Ministry of Health and Family Welfare (MoHFW) serves as the nodal agency overseeing its implementation.
The primary aim is to ensure universal access to equitable, accessible, affordable, and high-quality mental health care through round-the-clock tele-mental health services.
The International Institute of Information Technology, Bengaluru, serves as the technology partner.
The nodal centre for Tele MANAS operations is located at NIMHANS, Bengaluru.
The National Health Systems Resource Centre operates within the health system domain.
Helpline numbers for assistance are 14416 and 18008914416.
The implementation structure comprises two tiers:
Tier 1: Consists of State Tele MANAS cells comprising trained counsellors and mental health specialists,
Tier 2: Comprises resources from the District Mental Health Program (DMHP) and medical colleges.
Reach and Impact
Nationwide Presence: Currently, 51 operational Tele MANAS cells operate across all 36 States and UTs, delivering services in 20 diverse languages.
Remarkable Response: Since its inception in October 2022, Tele MANAS has received over 10 lakh calls and manages a daily average of more than 3,500 calls.
National Mental Health Programme (NMHP):
The NMHP was launched by the Government of India in 1982.
It was initiated to address the significant burden of mental disorders in the population.
Mental disorders affect approximately 6-7% of the population in India.
Objectives of NMHP: Ensuring the availability and accessibility of minimum mental healthcare to all, particularly the vulnerable and underprivileged sections of the population.
As part of NMHP, the District Mental Health Program (DMHP) was introduced in 1996 during the IX Five Year Plan based on the ‘Bellary Model’:
The Bellary Model emphasizes the importance of early detection, short-term training for physicians, and health worker training in identifying individuals with mental health issues.
PYQ:
[2023] Why suicide among young women is increasing in Indian society?
From UPSC perspective, the following things are important :
Mains level: Need of Federalism in India
Why in the news?
The outcome of the Lok Sabha elections surprised those who had relied on the flawed exit polls.
The visible message from the general elections of 2024 emphasized two main points:
Revival of Federalism: The elections underscored the importance of revitalizing federalism, moving away from the centralized control that had characterized the previous decade. It highlighted the need for state governments to have more autonomy and the ability to deliver public services without excessive interference from the central government.
Constructive and Inclusive Political Approach: The results indicated that political parties need to adopt a more constructive and inclusive approach to nation-building. This includes a stronger focus on social justice, addressing economic issues such as unemployment and low wages, and ensuring that policies cater to the needs and rights of various segments of the population, including youth, women, farmers, and workers. The electorate showed a preference for parties that prioritize livelihood and employment issues along with social justice.
Need to revive the Federalism
Decentralization of Power: Federalism ensures a more balanced distribution of power between the central and state governments. This decentralization allows states to manage their affairs more effectively, tailoring policies and programs to their specific needs and circumstances.
Enhanced Public Service Delivery: State governments are primarily responsible for delivering essential public services such as health, education, and infrastructure. A revived federalism would enable states to perform these functions without undue interference from the central government, leading to more efficient and responsive governance.
Cultural and Regional Autonomy: India is a diverse country with varied cultural, linguistic, and regional identities. Federalism respects and accommodates this diversity by allowing states to preserve and promote their unique identities and traditions within the framework of a united nation.
Political Parties need to be more constructive, and inclusive in their approach to nation-building
Addressing Economic Challenges: Parties must focus on pressing economic issues such as unemployment, low wages, and the rising cost of living. Constructive policies that create jobs, support small businesses, and address economic disparities are crucial for national progress.
Social Justice and Inclusion: Inclusivity involves addressing the needs and rights of marginalized and disadvantaged groups. This includes ensuring social justice for various castes, genders, and socio-economic backgrounds. Emphasizing social justice can help reduce inequality and promote a more cohesive society.
Responsive to Public Needs: Political parties need to listen to and address the genuine needs and concerns of the populace. This involves creating policies that reflect the realities faced by people in different regions and socio-economic conditions.
Conclusion: The 2024 Lok Sabha elections underscored the need for revitalized federalism and a constructive, inclusive political approach focused on economic issues and social justice to address diverse public needs effectively.
Mains PYQ
Q How far do you think cooperation, competition and confrontation have shaped the nature of federation in India? Cite some recent examples to validate your answer. (UPSC IAS/2020)
From UPSC perspective, the following things are important :
Prelims level: About Mission Karmayogi and Gati Shakti
Mains level: What is Needed to Achieve the $30 Trillion Economy by 2047?
Why in the news?
The” Indian Institute of Public Administration” evaluated the impact by gathering feedback from supervisors on recently trained staff, and reported enhanced proficiency in data analytics and e-governance tools.
Observations Assessed by the Indian Institute of Public Administration
Increased Proficiency: The Indian Institute of Public Administration (IIPA) observed increased proficiency in data analytics and e-governance tools among recently trained staff.
Skill Development: Section officers and administration assistants across the country have completed 15 lakh online learning modules on data analytics, Government e Marketplace (GeM) modules, and advanced software tools like Excel, leading to enhanced skill levels.
Supervisor Feedback: Feedback from supervisors indicated noticeable improvements in the capabilities and efficiency of the trained staff, reflecting the positive impact of the training programs.
About Mission Karmayogi and Gati Shakti
Mission Karmayogi: Launched by Prime Minister Narendra Modi, this initiative aims to transform India’s three million civil servants into citizen-centric, future-ready, and result-oriented professionals. It includes digital training courses and the use of an online learning portal, iGOT Karmayogi Bharat.
Capacity Building Commission (CBC): Constituted in 2021, the CBC provides policy guidance and tools to enhance the capabilities of all levels of India’s civil services, collaborating with various ministries and training institutions.
PM Gati Shakti: This platform integrates legal and geographic layers to plan and execute mega infrastructure projects efficiently. It promotes a “whole of government” approach for de-siloed, harmonized national priorities.
Training and Certification: Over 24,000 officials have completed PM Gati Shakti learning modules, and over 3,88,000 personnel have been certified in emerging technologies through iGOT Karmayogi Bharat.
Issues and challenges
Resistance to Change: Bureaucracy often resists change due to a preference for the status quo, which can hinder the adoption of new approaches and technologies.
Shift from Generalist to Specialist Approach: Moving from generalist to specialist roles can encounter resistance despite the need for domain expertise, which may slow down the development of specialized skills.
Technical Governance Demands: Effective governance today requires technical proficiency, necessitating skilled personnel. The lack of such skills can hinder the effective implementation of the mission
What is Needed to Achieve the $30 Trillion Economy by 2047?
Improved Governance: Efficient and competent civil services are essential for achieving India’s ambitions. Civil servants must be trained to be citizen-centric, future-ready, and result-oriented.
Infrastructure Development: Speed up the construction of mega infrastructure projects such as railways and highways.Overcome delays caused by inter-ministerial permissions through integrated planning.
Skill Development and Training: Equip civil servants with skills in emerging technologies like AI, IoT, and Big Data. Ensure continuous learning and skill enhancement for civil servants through platforms like iGOT Karmayogi Bharat.
Citizen-Centric Approaches: Promote citizen-centric approaches among civil servants to improve public service delivery.Enhance the capacity of police personnel and other frontline workers to address citizen concerns effectively.
State and Municipal Roles: Strengthen the role of state governments and municipal corporations in delivering services and infrastructure.Implement capacity-building programs at the municipal level for better service delivery.
Tax System Reforms:Develop a tax system that is painless and rewards honest taxpayers. Train tax personnel to address systemic taxpayer grievances effectively.
Way forward:
Continuous Training and Development: Expand online learning platforms like iGOT Karmayogi Bharat to offer specialized courses in emerging technologies, leadership, and governance for civil servants at all levels.
Performance Evaluation and Feedback Mechanisms: Establish robust performance evaluation systems to assess the effectiveness of training programs and identify areas for improvement.
Mains PYQ:
Q Initially Civil Services in India were designed to achieve the goals of neutrality and effectiveness, which seems to be lacking in the present context. Do you agree with the view that drastic reforms are required in Civil Services. Comment (UPSC IAS/2017)
From UPSC perspective, the following things are important :
Prelims level: Real GDP Growth
Mains level: The Centre has to Work Through the States for Reforms
Why in the news?
India’s general election results were surprising, defying exit poll predictions. Despite high economic growth, voters, especially informal workers earning under ₹10,000 monthly, expressed economic concerns.
About the 8% Real GDP Growth in FY24:
Growth Not Inclusive: The 8% real GDP growth has not reached the majority of the population, especially informal-sector workers.
Rural Wages: There’s a contraction in real rural wages, highlighting the dire state of the rural economy.
Income Inequality: High economic growth has not alleviated income inequality, which is reflected in the election results.
The Plight of Taking the Masses into Consideration:
Economic Concerns: Despite the hype around economic growth, voters expressed deep concerns over the state of the economy.
Low Incomes: Over 90% of informal-sector workers registered on the e-Shram portal have a monthly income of ₹10,000 or less.
Election Results: Voters in poorer states have different perceptions; some still support the incumbent government in the hope of better employment and future prospects.
Policy Priorities: The new government must prioritize creating employment opportunities and addressing the economic challenges faced by the masses.
CASE STUDY: Bangladesh:
Role of NGOs: In Bangladesh, NGOs have significantly contributed to social development, especially for women.
Employment Generation: NGOs have provided skilled women power to the apparel industry, enhancing employment opportunities.
NGOs in India: The NGO sector in India has faced scrutiny and high-handedness. The new government should collaborate with NGOs for development programs and employment generation activities.
The Centre has to Work Through the States for Reforms:
Agricultural Sector: With a significant workforce employed in agriculture but contributing minimally to the GVA, reforms in agriculture and allied sectors are essential.
Animal Husbandry and Fisheries: Encouraging growth in animal husbandry, fisheries, and poultry can provide additional income to farmers.
Employment in Other Sectors: To address the surplus workforce in agriculture, employment opportunities must be created in other sectors like textiles, leather, construction, and food processing.
Incentives for Investment: Correcting past policy mistakes and providing incentives for investment in key sectors is crucial.
Infrastructure Development: Improving infrastructure in smaller towns can boost the handicraft, tourism, and hospitality sectors, generating higher incomes and better market access.
Open Network for Digital Commerce (ONDC): Utilizing ONDC to provide new opportunities for craftsmen to access broader markets.
Government Vacancies: Filling government vacancies transparently can address educated unemployment and prevent demotivation among young people.
Conclusion: Develop schemes that specifically cater to informal-sector workers, ensuring they benefit from economic growth. This could include social security measures, skill development programs, and financial inclusion initiatives.
Mains PYQ:
Q ”Economic growth in the recent past has been led by increase in labour productivity.” Explain this statement. Suggest the growth pattern that will lead to creation of more jobs without compromising labour productivity. (UPSC IAS/2022)
From UPSC perspective, the following things are important :
Prelims level: World Environment Day 2024
Mains level: How COVID-19 Shows Us the Way Forward
Why in the news?
World Environment Day (WED) on June 5th is a global event where people come together to celebrate the importance of environmental conservation and sustainability, emphasizing the urgent need to tackle environmental challenges.
World Environment Day 2024 Theme
Theme: “Land Restoration, Desertification, and Drought Resilience”
Highlighting Critical Issues: Focuses on the significant threats posed by land degradation and desertification, which impact food security, biodiversity, and climate change. For example, the United Nations estimate that about 30% of land is degraded worldwide
The urgency for Action: Emphasizes the need for immediate actions in the face of the triple planetary crisis: Climate Change, Nature and Biodiversity Loss, and Pollution and Waste.
Shared Responsibility: Stresses collective action and individual responsibility in restoring ecosystems, urging everyone to contribute to solutions.
Empowering Youth: Encourages young people to lead the change towards a sustainable future with the #GenerationRestoration slogan.
Alignment with Global Goals: Supports the UN Decade on Ecosystem Restoration (2021-2030) and the Sustainable Development Goals, promoting a comprehensive approach to environmental protection.
India’s Ambitious Renewable Targets
Renewable Energy Goals: India aims to achieve 450 GW of renewable energy capacity by 2030, emphasizing solar and wind energy.
Solar Energy Initiatives: Major solar projects, including the world’s largest solar park in Karnataka and the International Solar Alliance (ISA), aim to promote solar energy adoption.
Wind Energy: India is one of the world’s largest producers of wind energy, with significant wind farms in Tamil Nadu and Gujarat.
Policy Support: The government has introduced various policies and incentives to encourage investment in renewable energy, including subsidies, tax benefits, and easier land acquisition processes.
Sustainable Development: These initiatives align with India’s commitments under the Paris Agreement to reduce carbon emissions and promote sustainable development.
How COVID-19 Shows Us the Way Forward
Environmental Awareness: The pandemic has heightened awareness of the interconnectedness between human health and the environment, highlighting the importance of preserving natural habitats to prevent zoonotic diseases.
Reduction in Pollution: Lockdowns and reduced industrial activities during the pandemic led to significant decreases in air and water pollution, demonstrating the impact of human activities on the environment.
Green Recovery: The concept of building back better suggests incorporating green recovery strategies into post-pandemic economic plans, focusing on sustainable practices and renewable energy investments.
Resilient Systems: Emphasizes the need for resilient and adaptive systems that can withstand future shocks, including those caused by climate change and environmental degradation.
Global Cooperation: COVID-19 underscored the importance of international cooperation and collective action to tackle global challenges, a principle that is equally applicable to environmental issues.
Conclusion: By embracing the lessons from the pandemic, setting ambitious renewable energy targets, and focusing on land restoration and resilience, the global community can work towards a sustainable and resilient future. World Environment Day 2024 serves as a pivotal moment to reflect on these goals and renew our commitment to environmental stewardship.
Mains PYQ:
Q Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve Sustainable Development Goals (SDGs)”.Comment on the progress made in India in this regard. (150 Words, 10 Marks) (UPSC IAS/2018)
From UPSC perspective, the following things are important :
Prelims level: PI-CHeCK Project, Phenomes
Why in the News?
The Council of Scientific and Industrial Research (CSIR) celebrated the completion of the initial phase of its groundbreaking health monitoring project, ‘Phenome India-CSIR Health Cohort Knowledgebase’ (PI-CHeCK).
What is Phenome?
The human phenome refers to the comprehensive set of observable physical and biochemical traits, behaviours, and characteristics exhibited by an individual as influenced by genetics, environment, and lifestyle.
It encompasses a wide range of attributes, including but not limited to:
Physical characteristics such as height, weight, eye colour, hair colour, facial features, and body shape.
Biological functions and processes like metabolism, hormone levels, blood pressure, and immune response.
Behavioral traits include personality traits, cognitive abilities, temperament, and mental health conditions.
Disease susceptibility and health outcomes, such as the presence or absence of genetic disorders, chronic illnesses, and response to medical treatments.
Environmental factors such as diet, exercise habits, exposure to toxins, socioeconomic status, and cultural influences.
What isthe PI-CHeCK Project?
PI-CHeCK launched on Dec 7, 2023, assesses risk factors for cardio-metabolic disorders in the Indian population.
‘Phenome India’ health check-up camp targets CSIR employees, pensioners, and spouses across 17 states, and 24 cities.
Nearly 10,000 volunteers provide comprehensive health data.
Objectives:
Developing India-Specific Algorithms: The project highlights the necessity of developing risk prediction algorithms tailored to India’s diverse genetic and lifestyle landscape, as existing algorithms may not accurately represent the Indian population.
Advancing Precision Medicine: CSIR’s commitment to advancing precision medicine is evident through the project’s focus on Predictive, Personalized, Participatory, and Preventive healthcare.
Catalyzing Nationwide Initiatives: By generating a comprehensive phenome database, PI-CHeCK aims to catalyze similar initiatives nationwide, ensuring more accurate risk prediction algorithms for India’s diverse population.
PYQ:
[2021] “Besides being a moral imperative of a Welfare State, primary health structure is a necessary precondition for sustainable development.” Analyse.
[2018] Appropriate local community-level healthcare intervention is a prerequisite to achieve ‘Health for All’ in India. Explain.
[2011] Aspartame is an artificial sweetener sold in the market. It consists of amino acids and provides calories like other amino acids. Yet, it is used as a low-calorie sweetening agent in food items. What is the basis of this use?
(a) Aspartame is as sweet as table sugar, but unlike table sugar, it is not readily oxidized in human body due to the lack of requisite enzymes.
(b) When aspartame is used in food processing, the sweet taste remains, but it becomes resistant to oxidation.
(c) Aspartame is as sweet as sugar, but after ingestion into the body, it is converted into metabolites that yield no calories.
(d) Aspartame is several times sweeter than table sugar, hence food items made with small quantities of aspartame yield fewer calories on oxidation.
From UPSC perspective, the following things are important :
Prelims level: FSSAI and its Functions, Various initiatives led
Why in the News?
FSSAI has mandated the immediate removal of any claims stating ‘100% fruit juices’ from labels and advertisements of reconstituted fruit juices by all Food Business Operators (FBOs).
FBOs must utilize existing pre-printed packaging materials before September 1, 2024, to comply with the directive.
Compliance Guidelines on Fruit Juices
Products falling under this standard must be labelled as per the Food Safety and Standards (Labelling and Display) Regulations, 2020.
The term “reconstituted” must be specified in the ingredient list for juices reconstituted from concentrate.
Additionally, if the product contains added nutritive sweeteners exceeding 15 gm/kg, it must be labelled as ‘Sweetened juice’.
Issues with such ‘Sweetened juice’
Misleading Marketing Practices: FSSAI has observed numerous FBOs inaccurately labelling various types of reconstituted fruit juices as 100% fruit juices.
Regulatory Assessment: Upon evaluation, FSSAI determined that such claims are misleading, especially when the major ingredient is water, and the primary ingredient is present in limited concentrations or when the juice is reconstituted using water and fruit concentrates or pulp.
About Food Safety and Standards Authority of India (FSSAI)
The FSSAI is an autonomous body established under the Ministry of Health & Family Welfare, Government of India.
It was established under the Food Safety and Standards Act, of 2006, which consolidates various acts and orders that have hitherto handled food-related issues in various ministries and departments.
FSSAI is responsible for protecting and promoting public health through the regulation and supervision of food safety.
Functions of FSSAI include:
Setting Standards: FSSAI sets standards for food products and regulates their manufacture, storage, distribution, sale, and import, to ensure that food items are safe for consumption.
Licensing and Registration: FSSAI grants licenses and registrations to food businesses based on their compliance with food safety standards and regulations.
Inspections and Monitoring: FSSAI conducts inspections, surveillance, and monitoring of food products and food businesses to ensure compliance with food safety standards.
Awareness and Education: FSSAI works towards creating awareness about food safety and hygiene among food businesses and consumers. It provides information and education programs to promote safe food handling practices.
Research and Development: FSSAI undertakes research and development activities related to food safety and standards.
Health Awareness Initiatives by FSSAI
“Heart Attack Rewind”: This is FSSAI’s inaugural mass media campaign, designed to support its goal of eliminating trans-fat from India by 2022.
FSSAI-CHIFSS Collaboration: FSSAI has partnered with the CII-HUL Initiative on Food Safety Sciences to foster collaborations between industry, the scientific community, and academia to enhance food safety.
State Food Safety Index (SFSI): Developed by FSSAI, the SFSI evaluates states’ performance on five key parameters of food safety: Human Resources and Institutional Data, Compliance, Food Testing Infrastructure and Surveillance, Training & Capacity Building, and Consumer Empowerment.
Eat Right India Movement: This is a joint initiative by the Government of India and FSSAI aimed at revolutionizing the country’s food system to ensure safe, healthy, and sustainable food for all citizens.
Eat Right Station Certification: FSSAI awards this certification to railway stations that meet the benchmarks outlined in the Food Safety and Standards Act, 2006, ensuring the provision of safe and wholesome food to passengers.
PYQ:
[2018] Consider the following statements:
The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954.
The Food Safety and Standards Authority of India (FSSAI) is under the charge of Director General of Health Services in the Union Ministry of Health and Family Welfare.
Which of the statements given above is/are correct?
From UPSC perspective, the following things are important :
Prelims level: Greedflation, Wage-price spiral
Why in the News?
Political campaigns highlight inequality in India. Accusations suggest billionaires amass wealth through monopolistic control, dictating prices and suppressing real wages.
Monopoly Power and Economic Dynamics
Monopoly Influence: Billionaires often amass wealth through monopolistic control, enabling them to dictate prices and suppress real wages.
Consumption Conundrum: Higher mark-ups under monopolies lead to reduced real wages and diminished consumption power, hindering economic growth and investment.
Greedflation Impact: The phenomenon of “Greedflation,” where companies raise prices to bolster profit margins amidst multiple demand-and-supply shocks, exacerbates inflationary pressures, particularly observed in developed economies.
So what is Greedflation?
Definition: Greedflation, in essence, signifies that corporate greed is driving inflation, rather than the traditional wage-price spiral, leading to a profit-price spiral.
Corporate Exploitation: Companies exploit inflation by significantly raising prices, surpassing the need to cover increased costs, thereby maximizing profit margins and perpetuating inflation.
Profit-Price Spiral: Unlike the wage-price spiral, it involves companies exploiting inflation by excessively raising prices to maximize profit margins, triggering a cycle of inflation.
Illustrative Scenario
Crisis Dynamics: During crises such as natural disasters or pandemics, businesses often raise prices due to increased input costs.
Exploitative Practices: However, some businesses exploit the situation by engaging in excessive profit-making through significantly inflated price mark-ups.
Impact of Greedflation
Disproportionate Impact: Greedflation disproportionately affects low-income and middle-class individuals, diminishing their consumption and lowering living standards.
Wealth Disparities: While benefiting the wealthy by inflating asset values, it widens the wealth gap and exacerbates income inequality.
Market Instability: Sharp price increases and speculative activities driven by greed can create bubbles and unsustainable market conditions, heightening the risk of financial market crashes and crises.
Global Implications
Divergent Policies: Inflationary pressures from greedflation may lead to divergent policy responses among nations.
Trade and Geopolitical Risks: Conflicting strategies to combat inflation can exacerbate global imbalances, trade tensions, and geopolitical conflicts as countries prioritize their interests and competitiveness.
PYQ:
[2015] Which reference to inflation in India, which of the following statements is correct?
(a) Controlling the inflation in India is the responsibility of the Government of India only.
(b) The Reserve Bank of India has no role in controlling the inflation.
(c) Decreased money circulation helps in controlling the inflation.
(d) Increased money circulation helps in controlling the inflation.
From UPSC perspective, the following things are important :
Prelims level: RobiNOweed Variety of Rice
Why in the News?
Indian Agricultural Research Institute (IARI) launched India’s inaugural non-GM herbicide-tolerant Basmati rice varieties for commercial farming, ensuring improved weed control, cost-effectiveness, and addressing water scarcity and methane emissions in cultivation.
About the Indian Council of Agricultural Research (ICAR)
ICAR is an autonomous organisation under the Department of Agricultural Research and Education (DARE), Ministry of Agriculture and Farmers Welfare.
It is headquartered in New Delhi.
ICAR was formerly known as the Imperial Council of Agricultural Research.
It was established in 1929 as a registered society under the Societies Registration Act, 1860 on the basis of the report of the Royal Commission on Agriculture.
Functions of ICAR:
Its primary mandate is to coordinate agricultural education and research in India and provide leadership in agriculture and allied sectors.
It is the apex body for coordinating, guiding and managing research and education in agriculture including horticulture, fisheries and animal sciences in the entire country.
Structure and Organization:
ICAR operates under the Department of Agricultural Research and Education (DARE), Ministry of Agriculture and Farmers Welfare, Government of India.
It consists of a network of research institutes, national bureaus, project directorates, and agricultural universities across the country.
The council is governed by a Governing Body and an Executive Committee, which oversee its functioning and activities.
Recognition and Awards:
ICAR confers prestigious awards, such as: the Rafi Ahmed Kidwai Award, the Borlaug Award, and the Hari Om Ashram Trust Award, to recognize excellence in agricultural research and education.
About RobiNOweed
Dubbed as ‘RobiNOweed,’ these varieties are developed by ICAR-IARI and named as:
Pusa Basmati 1979 and
Pusa Basmati 1985
They are tailor-made for farmers employing the direct seeded rice (DSR) method, where weed management is crucial.
Benefits Offered
Effective Weed Management: These new varieties offer an effective solution to weed issues and promote the success of the DSR method, potentially saving up to 33% of the total water requirement.
Water Conservation: DSR significantly reduces water usage compared to traditional flooding methods, addressing concerns of water depletion, especially in northwest India.
Market Impact: With IARI already holding a dominant 95% share in Basmati exports, these new varieties are expected to further boost production and export.
Critical Assessment of Herbicide-Tolerant Varieties
Weed Management Alternatives: Some scientists argue against the necessity of Ht rice, advocating for eco-friendly weed management methods based on climatic factors.
Potential Risks: Concerns arise regarding the limited efficacy of the herbicide, its impact on genetic diversity, and the evolution of herbicide-resistant weeds.
Lessons from Past: Lessons from the Bt Cotton experience highlight the risks associated with overreliance on specific agricultural technologies.
What is the Direct Seeding of Rice (DSR) technique?
Transplantation Method: In the conventional transplantation method, seeds are sown in nurseries, grown into seedlings, and then transplanted into puddled fields.
Direct Seeding: DSR involves directly drilling pre-germinated seeds into the field using tractor-powered machinery.
Simplicity and Efficiency: DSR eliminates the need for nursery preparation and transplantation, simplifying the cultivation process.
Resource Management: DSR offers benefits such as water savings and reduced labor requirements compared to conventional methods.
Higher Requirements: However, DSR requires higher seed quantities and levelled land, posing challenges for adoption.
PYQ:
[2018] With reference to the Genetically Modified mustard (GM mustard) developed in India, consider the following statements:
GM mustard has the genes of a soil bacterium that give the plant the property of pest-resistance to a wide variety of pests.
GM mustard has the genes that allow the plant cross-pollination and hybridization.
GM mustard has been developed jointly by the IARI and Punjab Agricultural University.
Which of the statements given above is/are correct?
From UPSC perspective, the following things are important :
Mains level: Private Healthcare System in India
Why in the news?
With growing health disparities and inconsistent access to medical services, the need for fair and sustainable healthcare policies has never been more pressing.
Private Healthcare System in India
Private hospitals in India, especially those accredited by the Joint Commission International (JCI) and National Accreditation Board for Hospitals (NABH), are hubs of specialised care and innovation.
These institutions invest heavily in top-tier infrastructure and advanced technologies, significantly enhancing patient outcomes, particularly in complex procedures. Integration of telemedicine and remote care is common, broadening access and building patient trust.
Price Caps, Quality, and Innovation
Affordability vs. Quality: The Supreme Court’s deliberation on standardising medical procedure rates across government and private sectors highlights the tension between affordability and quality. A study indicates a 15% increase in patient dissatisfaction in hospitals under financial pressure from price caps
Impact on Innovation: Price caps could slow the development of new treatments and technologies, particularly in high-investment fields like cancer research and robotic surgery. Value-based pricing, where payments reflect health outcomes rather than service volume, is proposed as a potential solution.
Economic Implications: Properly implemented rate standardisation can alleviate healthcare disparities but must avoid destabilising providers’ economic health. Dynamic pricing models, which adjust based on medical complexity and patient financial status, are recommended. Thailand’s tiered pricing system is cited as a successful example.
Legal and regulatory challenges
No regulation on Rate Fixation: States like Rajasthan and Tamil Nadu have identified significant gaps in the provisions for rate fixation, indicating a need for more robust legal frameworks to ensure fair and standardised pricing across different regions.
Inadequate Laws as per Local Conditions: Current laws may not adequately consider local demographic and economic conditions, necessitating reforms that allow for more customised approaches to healthcare cost management.
Lack in uniform regulation: Moreover,” the Clinical Establishment Act of 2011″, aimed at setting standards for quality, transparency, and accountability, has been adopted by only a few states, and its implementation remains lax. This lack of uniform regulation allows for wide disparities in service costs and quality.
Role of Data in Shaping Policies
Data-Driven Insights: Predictive analytics can foresee the long-term impacts of rate fixation on healthcare innovations, helping policymakers adjust regulations to encourage innovation and accessibility.
Pilot Projects: Implementing pilot projects in select districts can gauge the impact of rate caps on healthcare quality and innovation.
Way Forward
Balanced Pricing Models: Implement value-based pricing where payments are linked to health outcomes rather than the volume of services provided.
Supporting Innovation: Allocate government subsidies and grants for research and development in private hospitals.
Mains PYQ
Q Appropriate local community-level healthcare intervention is a prerequisite to achieve ‘Health for All’ in India. Explain. (UPSC IAS/2018)
From UPSC perspective, the following things are important :
Prelims level: Missing Data and Limitations of Disaster Databases
Why in the news?
The Food and Agriculture Organization (FAO) of the United Nations noted a rise in global disasters from roughly 100 yearly in the 1970s to about 400 in recent years, influenced partly by reporting biases.
Recent Observations
Increase in Disaster Events: The number of disaster events reported worldwide has risen from 100 events per year in the 1970s to around 400 per year in the last 20 years. Patterns in disaster data reveal factors such as increased resilience, climate change, and improved humanitarian response.
Improved Reporting: Reporting of small events, particularly those with fewer than 200 deaths, has increased significantly since the 1980s and 1990s. Historical data mainly included major events due to limited interest and capacity for data collection in earlier periods.
Missing Data and Limitations of Disaster Databases
Biases and Gaps in Historical Records: Earlier records predominantly captured major disasters, with smaller events often missing. Data coverage is particularly poor in low-income regions such as Sub-Saharan Africa and South Asia, where economic losses from disasters are frequently underreported.
Missing Economic Damage and Insured Losses: More than 40% of disasters between 1990 and 2020 lacked estimates of monetary damages. Insured damages were missing in 88% of disaster reports, and 96% needed records of reconstruction costs.
No coverage of Heat Events and Health Impacts: Reporting of heat events is concentrated in a few countries, suggesting underreporting in other regions. Indirect health effects of extreme temperatures, such as increased cardiovascular disease risk, are challenging to quantify and often underestimated.
Need for Data (Way Forward)
Improving Data Coverage: Enhanced data collection in low-income regions and better integration of smaller events into disaster databases are crucial.
Accurate Health Impact Quantification: Improved methods for estimating indirect health effects of extreme temperatures and other disaster-related conditions are needed. Utilising statistical methods to capture the broader health impacts of disasters can aid in better policy formulation.
Policy and Resilience Planning: Reliable and comprehensive disaster data are essential for effective policy-making and resilience planning. Data-driven insights and predictive analytics can help foresee the long-term impacts of disasters and guide regulatory measures to enhance disaster preparedness and response.
Mains PYQ:
Q Discuss the recent measures initiated in disaster management by the Government of India departing from the earlier reactive approach. (UPSC IAS/2020)
From UPSC perspective, the following things are important :
Prelims level: Credit rating agencies
Mains level: How to ensure the benefits of high growth trickle down to the lower income categories?
Why in the news?
The release of India’s GDP data was eagerly anticipated, especially following the recent upgrade in the “sovereign rating outlook” by S&P. It comes just days before the announcement of the union election results.
Back2Basics: Rating Agency
A rating agency is a company that assesses the financial strength of companies and government entities, especially their ability to meet principal and interest payments on their debts.
Fitch Ratings, Moody’s Investors Service and Standard & Poor’s (S&P) are the big three international credit rating agencies controlling approximately 95% of the global rating business.
In India, six credit rating agencies are registered under the Securities and Exchange Board of India (SEBI): CRISIL, ICRA, CARE, SMERA, Fitch India and Brickwork Ratings.
What does the data say?
India’s GDP growth for 2023-24 is 8.2%, exceeding market expectations and surpassing the previous year’s growth of 7%.
Fourth-quarter growth is particularly robust at 7.8%, with upward revisions in previous quarters contributing to overall growth.
Notable divergence of 1 percentage point between GDP and GVA growth in 2023-24, mainly due to increased net taxes.
Sectoral analysis reveals mixed performance, with manufacturing and construction showing strong growth, while agriculture remains subdued.
Expenditure-side breakdown highlights a slower growth rate in private consumption but healthy growth in investment, led mainly by government spending.
Pillars need to be sustained:
Private Consumption: Ensuring sustained consumer spending, particularly by addressing high inflation and low wage growth, to maintain economic momentum.
Investment: Continuously stimulating both government and private sector investment to drive economic expansion and foster innovation and productivity.
Exports: Maintaining competitiveness in global markets and promoting export-oriented growth to leverage external demand and diversify revenue sources.
How to ensure the benefits of high growth trickle down to the lower-income categories?
Improving Private Consumption: Focus on reviving private consumption, especially among lower-income groups. Address concerns of high inflation and low wage growth affecting consumer confidence.
Enhancing Employment Opportunities: Prioritize improving the employment scenario, particularly in sectors generating significant employment like IT and the unorganized sector. Recognize the importance of employment in sustaining consumption growth and overall economic stability.
Investment in Rural Development: Ensure spatial and temporal distribution of rainfall for rural demand recovery. Moderating food inflation and improving employment conditions crucial for rural consumption revival.
Boosting Private Capex Cycle: Create an environment conducive to private investment, focusing on policy certainty and confidence in economic stability. Encourage private sector investment through favourable policies and supportive regulatory frameworks.
Policy Focus on Inclusive Growth: Direct policy attention towards ensuring that the benefits of high growth extend to lower-income categories. Implement targeted social welfare programs and initiatives to support vulnerable groups and reduce income inequality.
Monitoring Global Developments: Stay vigilant of global economic trends and developments that could impact the Indian economy, such as geopolitical tensions and supply shocks. Adapt policies accordingly to mitigate risks and capitalize on opportunities for sustained economic growth.
Conclusion: The Indian government aims to bolster equitable growth through measures such as stimulating private consumption, enhancing employment prospects, and fostering a conducive investment environment, supported by targeted policies and proactive global monitoring.
Mains PYQ:
Q Explain the difference between the computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (UPSC IAS/2021)
From UPSC perspective, the following things are important :
Prelims level: Gold Reserves of RBI
Why in the News?
The RBI has repatriated over 100 tonnes of gold from the UK to its domestic vaults, the largest transfer since at least 1991.
What are Gold Reserves?
A gold reserve is the gold held by a country’s central bank, acting as a backup for financial promises and a store of value.
India, like other nations, stores some of its gold reserves in foreign vaults to spread out risk and facilitate international trading.
India’s Gold Reserves:
As of the end of March 2024, the RBI held 822.10 tonnes of gold, with 408.31 tonnes stored domestically.
The share of gold in the total forex of India is around 7-8% as of 2023.
Where does the RBI store its gold?
India’s gold reserves are primarily stored in the Bank of England, which is known for its stringent security protocols.
The RBI also stores a portion of its gold reserves at the:
Bank for International Settlements (BIS) in Basel, Switzerland, and the
Federal Reserve Bank of New York in the United States.
During India’s foreign exchange crisis in 1990-91, the country pledged some of its gold reserves to the Bank of England to secure a $405 million loan, according to reports.
Even though the loan was paid back by November 1991, India decided to keep the gold in the UK for convenience.
Why does the RBI store its gold in foreign banks?
Convenience: Storing gold overseas makes it easier for India to trade, engage in swaps and earn returns.
Averting Risks: There are risks involved, especially during times of geopolitical tensions and war.
The recent freezing of Russian assets by Western nations has raised worries about the safety of assets kept abroad and the RBI decision to shift a portion of the gold reserve to India could be prompted by these concerns.
Stable Prices: Unlike fiat currencies, which can be subject to inflation or devaluation due to various economic factors, the value of gold tends to be relatively stable over time, which makes it an attractive asset for central banks to hold as a reserve.
Benefits Offered by Gold Reserves
Control domestic gold prices: With its big stash of gold, the RBI can help control local gold prices by using some of it in India. Last financial year, the RBI added about 27.47 tonnes of gold to the total reserve, bringing it to 794.63 tonnes.
Security buffer: The increased gold reserve works as a hedge against any financial crisis and to take measures to control inflation as well as currency devaluation.
Why is the recent move significant?
Efficiency and Confidence: Bringing gold back to India reduces storage fees and signals confidence in the stability of the Indian economy.
Logistical Efficiency: Moving gold to India saves on storage fees paid to foreign custodians, such as the Bank of England.
Diversified Storage: Repatriation ensures diversified storage, enhancing security and reducing dependency on foreign storage.
Has the RBI made similar purchases or transfers of gold in the past?
RBI started buying gold in 2018 and had previously bought 200 tonnes during the global financial crisis in 2009.
In the first quarter of 2024, the RBI bought 19 tonnes of gold, surpassing the 16 tonnes purchased throughout 2023.
PYQ:
[2015] The problem of international liquidity is related to the non-availability of:
From UPSC perspective, the following things are important :
Prelims level: Hunga Tonga Volcano
Why in the News?
Hunga Tonga-Hunga Ha’apai (Hunga Tonga) erupted in Tonga, triggering a tsunami and global seismic waves.
About Hunga Tonga Volcano
The Hunga Tonga-Hunga Ha’apai volcano is situated in the western South Pacific Ocean, west of the main inhabited islands in the Kingdom of Tonga. It lies on the Pacific Ring of Fire.
It forms part of the Tofua Arc, within the larger Tonga-Kermadec volcanic arc, resulting from the subduction of the Pacific Plate beneath the Indo-Australian Plate.
It comprises two small uninhabited islands, Hunga-Ha’apai and Hunga-Tonga.
Hunga Tonga is one of 12 confirmed submarine volcanoes along the Tofua Arc.
Key Findings on Hunga Tonga Eruption
The Hunga Tonga eruption primarily emitted water vapour, which reached the stratosphere, affecting ozone depletion and acting as a potent greenhouse gas. Minimal smoke was produced.
Impact on Weather
Ozone Hole: The study reveals that Hunga Tonga contributed to the exceptionally large ozone hole in the preceding year and the unexpectedly wet summer of 2024.
Global Mean Temperatures: While the eruption had a negligible effect on global temperatures, it induced lasting regional disruptions in atmospheric wave patterns.
Traditionally, massive volcanic eruptions reduce temperatures by emitting sulfur dioxide, which forms sulphate aerosols reflecting sunlight.
Regional Effects: Anticipated changes include colder and wet winters in northern Australia, warmer winters in North America, and colder winters in Scandinavia until approximately 2029.
Do you know?
Previous volcanic eruptions, such as Tamborain 1815 and Samalasin 1257, have significantly impacted global climate, leading to phenomena like the “year without a summer” and the onset of the Little Ice Age.
PYQ:
[2021] Discuss about the vulnerability of India to earthquake-related hazards. Give examples including the salient features of major disasters caused by earthquakes in different parts of India during the last three decades.
From UPSC perspective, the following things are important :
Prelims level: PraVaHa Tool
Why in the News?
The Indian Space Research Organisation (ISRO) has launched the Computational Fluid Dynamics (CFD) software named Parallel RANS Solver for Aerospace Vehicle Aero-thermo-dynamic Analysis (PraVaHa).
About PraVaHa
PraVaHa was developed at ISRO’s Vikram Sarabhai Space Centre (VSSC), showcasing India’s prowess in aerospace technology.
It can simulate both external and internal flows on various aerospace vehicles, including launch vehicles, and winged, and non-winged re-entry vehicles.
It facilitates initial aerodynamic design studies by evaluating numerous configurations, crucial for optimizing vehicle performance and safety.
Role of Computational Fluid Dynamics (CFD)
CFD predicts aerodynamic and aerothermal loads by solving governing equations. It has matured to offer high accuracy and fast simulations, addressing aerospace challenges like high pressure and intense heat flux.
Integration in Gaganyaan Program
Key Applications: PraVaHa plays a pivotal role in the Gaganyaan program, facilitating aerodynamic analysis of human-rated launch vehicles such as HLVM3, Crew Escape System (CES), and Crew Module (CM).
Scalability and Collaboration: Designed to leverage both CPU and GPU architectures, PraVaHa ensures compatibility with existing and future supercomputing facilities, fostering collaboration with academic and government institutions.
PYQ:
[2010] In the context of space technology, what is “Bhuvan”, recently in the news?
(a) A mini satellite launched by ISRO for promoting the distance education in India.
(b) The name given to the next Moon Impact Probe, for Chandrayaan-II.
(c) A geoportal of ISRO with 3D imaging capabilities of India.
From UPSC perspective, the following things are important :
Prelims level: Colombo Process
Why in the News?
India has become chair of the regional grouping “Colombo Process” for the first time since its inception in 2003.
What isthe Colombo Process?
The Colombo Process, established on March 19, 2003, in Colombo, Sri Lanka, is a regional consultative initiative addressing challenges faced by migrant workers from South and Southeast Asia.
Objective:
Primary Goal: The Colombo Process aims to enhance the management of contractual labour migration from Asian countries.
Focus: It seeks to safeguard the rights and welfare of migrant workers while maximizing the benefits of labour migration for both sending and receiving countries.
The Process is non-binding and decision-making is by consensus.
Membership:
Initial Composition: Initially comprising 11 member countries, including Afghanistan, Bangladesh, China, India, Indonesia, Nepal, Pakistan, the Philippines, Sri Lanka, Thailand, and Vietnam.
Expansion: The Process has since expanded to include additional countries like Cambodia and Myanmar.
Five Thematic Area Working Groups (TAWGs) i.e.
Skills and Qualification Recognition (chaired by Sri Lanka);
Fostering Ethical Recruitment (chaired by Bangladesh);
Pre-Departure Orientation and Empowerment (chaired by the Philippines);
Remittances (chaired by Pakistan) and
Labour Market Analysis (chaired by Thailand).
Key Focus Areas:
Policy Development: Addressing various aspects of labour migration, including policy development, capacity building, data collection, and sharing best practices.
Rights Protection: Ensuring the protection of migrant workers’ rights, skills recognition, ethical recruitment, and combating human trafficking and irregular migration.
Activities and Initiatives:
Dialogue Platforms: Regular meetings, conferences, and workshops serve as platforms for dialogue and cooperation among member countries.
Guidelines and Toolkits: Development of guidelines, toolkits, and policy frameworks to assist member countries in effectively managing labour migration.
Collaboration: Collaboration with international organizations such as the International Labour Organization (ILO) and the International Organization for Migration (IOM) to implement joint initiatives and projects.
PYQ:
[2022] ‘India is an age-old friend of Sri Lanka.’ Discuss India’s role in the recent crisis in Sri Lanka in light of the preceding statement.
Q Public health system has limitations in providing universal health coverage. Do you think that the private sector can help in bridging the gap? What other viable alternatives do you suggest? (UPSC IAS/2015)
Q The increase in life expectancy in the country has led to newer health challenges in the community. What are those challenges and what steps need to be taken to meet them? (UPSC IAS/2022)
Mentor Comment: Health insurance, now central to India’s UHC policy, is being enhanced by digital advancements, enabling reforms akin to the U.S. but with cost-effective local adaptations. A South Indian healthcare chain recently integrated insurance and care provision, forming an Indian-style MCO. This prompts reflection on MCOs’ potential to extend universal health care in India significantly.
Let’s learn_ _
Why in the news?
Universal healthcare poses a multifaceted challenge, yet managed care organizations may offer a piece of the solution that Indian healthcare requires.
What is a Managed Care Organization?
A Managed Care Organization (MCO) is a health care company or a health plan that is focused on managed care as a model to limit costs, while keeping quality of care high.
The background of Managed Care Organizations (MCOs) in the United States and India:
Evolution of MCOs in the United States:
MCOs have their origins in rudimentary prepaid healthcare practices in the 20th century.
The mainstreaming of MCOs gained momentum in the 1970s due to concerns over healthcare costs.The economic slowdown post-1970s made high insurance premiums less attractive to purchasers.
A shift occurred towards integrating insurance and healthcare provisioning functions. Focus areas included prevention, early management, and cost control, all under a fixed premium paid by enrollees.
MCOs have evolved through multiple generations and forms, deeply penetrating the health insurance market. While evidence of their effectiveness in improving health outcomes and prioritizing preventive care is mixed, they have been effective in reducing costly hospitalizations and associated costs.
Evolution of MCOs in India:
The first public commercial health insurance emerged in the 1980s.The focus has primarily been on indemnity insurance and covering hospitalization costs.
There is a significant market for outpatient consultations, valued at nearly $26 billion.
Health insurance in India has traditionally lagged behind life and general insurance. The sector faces issues such as lack of innovation and high, often unsustainable, operational costs.
As per Thomas (2011), Health insurance has played a secondary role to other forms of insurance. The industry’s operational inefficiencies and high costs have been persistent issues.
Challenges in India:
Lack of Natural Incentives for Cost Control: The evolutionary trajectory of Indian health insurance has not incentivized consumer-driven cost control.
Target Demographic: Health insurance has mainly targeted a thin, urban, well-off segment, neglecting broader demographics.
Informality in Outpatient Practices: There is widespread informality among outpatient practices, complicating efforts to standardize and regulate care.
Lack of Clinical Protocols: The absence of widely accepted clinical protocols hampers the quality and consistency of care.
Economic Viability: Unprofitable operations and unaffordable premiums pose significant economic challenges, preventing sustainable growth and systemic improvement.
Limited Impact on UHC: Private initiatives, despite their potential, are unlikely to significantly contribute to Universal Health Coverage (UHC) without public support.
Insufficient Control Over Patient Journeys: Health insurers have little control over the patient’s journey before hospitalization, limiting their ability to manage early interventions and reduce costs through comprehensive outpatient care.
Prospective Solutions and Remaining Issues:
Potential for Big Healthcare Brands: Large healthcare brands with loyal urban patient bases and substantial resources may initiate successful managed care projects.
Need for Public Patronage: Exploring managed care with cautious and incremental public patronage could be promising, indicating a need for government involvement to achieve broader impacts.
Underutilization of Outpatient Insurance: Given the low share of insurance in outpatient care spending and the average of three consultations per year per person, there is significant potential to reduce healthcare costs through early interventions and comprehensive outpatient care coverage.
NITI Aayog Report:
Outpatient care insurance scheme: In 2021, NITI Aayog released a report advocating for an outpatient care insurance scheme based on a subscription model to enhance savings through improved care integration.
Yield significant benefits: A well-functioning managed care system can yield significant benefits, including consolidating practices, streamlining management protocols, and emphasizing preventive care in the private sector.
Catering for the beneficiaries of PMJAY: The report highlights the potential of incentives under the Ayushman Bharat Mission to encourage the establishment of hospitals in underserved areas catering to beneficiaries of the Pradhan Mantri Jan Arogya Yojana (PMJAY).
Conclusion: While Managed Care Organizations are not a perfect solution, they can play a role in addressing the complexities of achieving Universal Health Coverage (UHC) in India by being part of a broader strategy.
From UPSC perspective, the following things are important :
Prelims level: Lancet Report;
Mains level: Women Issues in Indian Society; Health Issues;
Why in the news?
Over 30 years, a study examining 20 diseases revealed minimal advancements in narrowing the disparity between genders as per “the Lancet Public Health Journal”.
What does the New Lancet report say?
On Health Disparities: The study highlights that women tend to suffer more from lower back pain, depression, and headaches, while men have shorter life expectancies due to higher rates of road accidents, cardiovascular diseases, and, recently, COVID-19.
On Health Burden: Women spend more time in poor health, while men are more likely to die prematurely from severe conditions.
Overall Global Analysis: The analysis examines differences in the 20 leading causes of illness and death globally, considering all ages and regions.
What Causes the Differences in Diseases Between Women and Men? (Observations)
Biological Factors:
Hormonal Differences: Hormonal fluctuations in women, such as during menstrual cycles, pregnancy, and menopause, can influence susceptibility to certain conditions like migraines, depression, and autoimmune diseases.
Genetic Variations: Variations in genes and genetic predispositions may contribute to differences in disease susceptibility and severity between sexes.
Anatomical Variances: Physiological differences, such as in skeletal structure and hormonal regulation, can affect the manifestation of certain diseases like lower back pain and reproductive disorders.
Societal and Gender Norms:
Healthcare-Seeking: Societal norms and gender roles may influence healthcare-seeking behaviors, with men often less likely to seek medical attention for mental health issues due to perceived notions of masculinity.
Occupational Hazards: Occupational differences between genders can lead to varying exposures to health risks, with certain professions associated with higher rates of injury or exposure to harmful substances.
Socioeconomic Factors: Disparities in socioeconomic status can impact disease prevalence and outcomes differently for women and men.
Healthcare System Bias:
Diagnostic Bias: Gender biases in healthcare may result in underdiagnosis or misdiagnosis of certain conditions in women, leading to delays in treatment and poorer health outcomes.
Treatment Disparities: Differences in treatment approaches and responses may exist between sexes, with women sometimes receiving less aggressive treatment for cardiovascular diseases or being undertreated for pain conditions.
Research Bias: Historically, medical research has often focused on male subjects, leading to a lack of understanding of how diseases manifest and progress differently in women.
No Improvement in Care for Women Over Time
Stable Gender Gap: Despite overall health improvements, the disparity between male and female health conditions remains stable.
Conditions Affecting Women: Conditions like lower back pain and depressive disorders have shown little to no decrease over time compared to male-dominated conditions.
Reproductive Focus: Global health systems have historically focused on women’s reproductive health, neglecting other significant health issues affecting women.
What Needs to Be Done (Way Forward)
Better Data Collection: Governments should consistently collect and categorize health data by sex and gender to better understand and address health disparities.
Targeted Health Interventions: Specific health interventions should be developed and implemented based on detailed sex and gender data.
Increased Funding: More financial resources should be allocated to underfunded conditions that disproportionately affect women, such as mental health.
Addressing Healthcare Bias: Efforts should be made to eliminate biases in healthcare to ensure women receive appropriate and timely treatment for their conditions.
Mains PYQ:
Q Can the vicious cycle of gender inequality, poverty and malnutrition be broken through microfinancing of women SHGs? Explain with examples. (UPSC IAS/2021)
From UPSC perspective, the following things are important :
Prelims level: Function of SEBI
Mains level: Market Regulations in India;
Why in the news?
SEBI issued a consultation paper, proposing a framework to enable domestic Mutual Funds (MFs) to invest in their overseas counterparts or Unit Trusts (UTs) that allocate a portion of their assets to Indian securities.
About the Framework for Facilitating Investments by Domestic Mutual Funds (MFs)
Aim: To clarify the process and regulations surrounding such investments to encourage domestic MFs to diversify globally while maintaining limited exposure to Indian securities.
About the Proposals:
On Investment Cap: SEBI proposes that overseas instruments being considered for investment by domestic MFs must not have more than 20% exposure to Indian securities.
This cap is intended to balance facilitating global investments while preventing excessive exposure to Indian markets.
On Pooling of Contributions: Indian MFs must ensure that all investors of the overseas MF/UT pool their contributions into a single investment vehicle. This ensures fair distribution of gains among investors, proportional to their contributions, without any preferential treatment.
On Autonomous Management: Investments must be made autonomously by the manager of the overseas instrument, without influence from investors or undisclosed parties, to avoid conflicts of interest.
About Transparency and Disclosure: SEBI requires periodic public disclosures of the portfolios of such overseas MF/UTs for transparency.
No Advisory Agreements: SEBI warns against any advisory agreement between the Indian MF and the overseas MF/UT to prevent conflicts of interest and avoid undue advantage.
On Observance Period: If an overseas instrument breaches the 20% limit, the Indian MF scheme will enter a six-month observance period for rebalancing the portfolio.
Further investments will only be allowed when the exposure is below the limit. If not rebalanced within six months, the MF must liquidate its investment in the overseas instrument.
Impacts of the Regulation
Diversification of Opportunities: The framework provides a structured path for Indian MFs to invest in overseas instruments, enhancing diversification opportunities for Indian investors.
Market Transparency: The requirement for periodic public disclosures of portfolios will increase transparency and investor confidence in overseas investments.
Risk Management: The 20% exposure cap and autonomous management of investments help mitigate risks associated with excessive exposure to Indian securities and conflicts of interest.
Compliance Burden: The need to adhere to strict regulations and rebalance portfolios within specified periods may increase the compliance burden on domestic MFs.
Potential for Growth: By facilitating global investments, the framework can potentially attract more investors to Indian mutual funds, contributing to the growth of the mutual fund industry in India.
What are the concerns associated with this framework?
RBI’s Upper Limit: The Reserve Bank of India’s (RBI) upper limit for overseas investment by mutual funds poses a concern. RBI Governor Shaktikanta Das indicated there are no plans to increase this limit, which means the overall industry limit for overseas investments is already exhausted.
Practical Impact: As the industry limit for overseas investments is effectively exhausted, the changes to regulations may not have an immediate practical impact, limiting the diversification opportunities for Indian investors.
Implementation and Compliance: Ensuring compliance with the 20% exposure cap and other regulations may pose challenges for domestic MFs, requiring careful monitoring and management of their overseas investments.
Conclusion: Need to establish collaborations with global investment firms to gain insights and best practices in managing overseas investments. Learning from established global players can help Indian mutual funds navigate the complexities of international markets more effectively.
Mains PYQ:
Q The product diversification of financial institutions and insurance companies, resulting in overlapping of products and services strengthens the case for the merger of the two regulatory agencies, namely SEBI and IRDA. Justify. (UPSC IAS/2013)
