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  • Monetary Policy Committee Notifications

    Challenges ahead for the RBI

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    With the Indian economy showing green shoots, RBI has to face some fundamental challenges while withdrawing the expansionary measures. 

    Expansionary policy as a response to pandemic

    • To manage the financial pressures unleashed by COVID-19, the RBI unleashed several measures.
    • It reduced policy interest rates aggressively.
    • It released an unprecedented amount of liquidity in the market.
    • It instituted a slew of measures for targeted assistance to, especially distressed sectors.

    Time to roll back the expansionary monetary policy

    • As the Indian economy is showing the signs of recovery, the RBI must be planning for a non-disruptive exit out of the easy money regime.
    • Reversing a crisis-driven expansionary policy has to be a deliberative process, with the timing and sequencing carefully planned.
    • A big lesson of the global financial crisis is that any missteps on the exit path by way of commission, omission, or importantly communication, can be costly in macroeconomic terms.

    Challenges RBI will face on the way out of expansionary monetary policy

    1) Restraining inflation while supporting the recovery

    • Inflation remained above the RBI’s target band for the past several months.
    • According to the RBI’s own estimates, inflation is expected to remain above the band for the next several months.
    • Yet, the MPC, in its recent review, decided against any rate action out of concerns for growth and financial stability.
    • The MPC expects inflation to soften on its own in the weeks ahead.
    • That outcome is not inevitable.
    • Inflation could be pressured upwards by several factors even though there could be some apparent softening purely because of base effects.
    • There is the risk that persistent high inflation expectations would result in food inflation getting more generalised.
    • Core inflation could firm up because of rising input prices.
    • ‘Excessive margins’, among the factors cited by the MPC as one of the causes of high inflation, may not disappear.
    • Equally, there are concerns that the recovery, for all the positive signals, is still fragile. 
    • And there is heightened concern about an aggravated unemployment problem caused by big firms retrenching labour to cut costs.

    2) Impact on savings

    • RBI should also be concerned about the plight of savers who are being shortchanged by low-interest rates at a time of high inflation.
    • Low-interest rates, its impact on inflation and economic recovery taken together make a complex cocktail of dilemmas for the RBI as it seeks to normalise the policy rates.

    3) Withdraw excess liquidity at right time and to avoid ‘taper tantrum’

    • Another related challenge will be to withdraw the ‘excess’ liquidity in good time.
    • Banks are routinely depositing trillions of rupees with the RBI every day, evidencing that all the money that the central bank injected into the system is not doing much good anymore.
    • Every financial crisis can be traced back to mispricing of risk.
    • Mispricing of risk results when there is too much liquidity sloshing around the system for too long.
    • It will drive investors into dodgy ventures and threaten financial stability.
    • As the RBI seeks to guard financial stability by normalising liquidity, it will have to contend with possible market tantrums.
    • The lesson from the taper tantrums in the U.S. is that the RBI will have to manage its communication as carefully as it does the liquidity withdrawal.

    4) Stability of the rupee

    • Next challenge for the RBI will be to restrain the rupee from appreciating out of line with fundamentals.
    • Here, the RBI is confronted with a classic case of ‘the impossible trinity’.
    • The impossible trinity deals with allowing free capital flows while simultaneously maintaining a stable exchange rate and restraining inflation.
    • The current account surplus this year together with massive capital flows has meant an excess of dollars in the system putting upward pressure on already overvalued rupee.
    • The RBI has absorbed nearly $90 billion this fiscal year to prevent exchange rate appreciation and to maintain the competitiveness of the rupee.
    • The RBI’s ability to continue to intervene in the forex market will be constrained by its anxiety about how the resultant liquidity might aggravate inflation and the risk to financial stability.

    Consider the question “What are the challenges ahead for the RBI while winding down the expansionary monetary policy measures that were announced to deal with the economic disruption of caused due to pandemic and subsequent lockdown.

    Conclusion

    It is better to be rough right, as Keynes said, than be precisely wrong. That should be the guiding principle for RBI as it navigates its way out of the crisis driven easy money policy.

    Back2Basics: What is taper tantrum?

    • Taper tantrum refers to the 2013 collective reactionary panic that triggered a spike in U.S. Treasury yields, after investors learned that the Federal Reserve was slowly putting the breaks on its quantitative easing (QE) program.
    • The Fed announced that it would be reducing the pace of its purchases of Treasury bonds, to reduce the amount of money it was feeding into the economy.
    • The ensuing rise in bond yields in reaction to the announcement was referred to as a taper tantrum in financial media.

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  • Promoting Science and Technology – Missions,Policies & Schemes

    National Mission on Quantum Technology and Applications (NM-QTA)

    | Science Tech | Mains Paper 3: S&T – Applications In Everyday Life

    The detailed project report for a National Mission on Quantum Technology and Applications (NM-QTA) has been drawn out and finalised.

    Q.Discuss various applications of quantum technology for strategic and economic development.

    Story so far

    • In last year’s budget session, it was proposed that ₹8,000 crores be set aside to develop quantum science and technology.
    • The detailed project report is now ready and in the next couple of months, this mission might get approval.
    • Recognising the importance of quantum technology, the Department of Science and Technology has also initiated a programme called QuEST to explore the possibilities and engage with the researchers.

    About NM-QTA

    • The mission will function under the Department of Science & Technology (DST).
    • It will be able to address the ever-increasing technological requirements of society and take into account the international technology trends.
    • The mission will help prepare next-generation skilled manpower, boost translational research and also encourage entrepreneurship and start-up ecosystem development.

    Why need such a mission?

    • Quantum technologies are rapidly developing globally with hugely disruptive potential.
    • The range of quantum technologies is expected to be one of the major technology disruptions that will change the entire paradigm of computation, communication and encryption.
    • It is perceived that the countries who achieve an edge in this emerging field will have a greater advantage in garnering multifold economic growth and dominant leadership role.
    • It has become imperative both for government and industries to be prepared to develop these emerging and disruptive changes.
    • It will establish standards to be applied to all research and help stimulate a pipeline to support research and applications well into the future.

    Recent applications

    • Recently, DRDO has successfully demonstrated communication between its two labs using Quantum Key Distribution (QKD) technology.
    • In June 2020, China demonstrated quantum communication technology using the satellite Micius, by conducting a secret conference between two ground stations about 1,120 km apart.
    • They used the satellite not to transmit the entire communication, but to simultaneously send a pair of secret keys to the two ground stations.
    • Other potential applications include secure communication, fast computers that established quantum supremacy, sensors and quantum-inspired devices.

    Back2Basics: Quantum Technology

    • Quantum Technology is based on the principles of quantum theory, which explains the nature of energy and matter on the atomic and subatomic level.
    • It concerns the control and manipulation of quantum systems, with the goal of achieving information processing beyond the limits of the classical world.
    • Its principles will be used for engineering solutions to extremely complex problems in computing, communications, sensing, chemistry, cryptography, imaging and mechanics.
    • This key ability makes quantum computers extremely powerful compared to conventional computers when solving certain kinds of problems like finding prime factors of large numbers and searching for large databases.

    What is Quantum Mechanics?

    • It is a fundamental theory in physics which describes nature at the smallest – including atomic and subatomic – scales.
    • At the scale of atoms and electrons, many of the equations of classical mechanics, which describe how things move at everyday sizes and speeds, cease to be useful.
    • In classical mechanics, objects exist in a specific place at a specific time.
    • However, in quantum mechanics, objects instead exist in a haze of probability; they have a certain chance of being at point A, another chance of being at point B and so on.

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  • Banking Sector Reforms

    Payments Infrastructure Development Fund (PIDF) Scheme

    | Economics | Mains Paper 3: Indian Economy

    The RBI has announced operational guidelines to create digital payments acceptance infrastructure across Tier III to Tier VI regions in India.

    Possible prelims question:

    Q. Which of the following is the major aim of Payments Infrastructure Development Fund (PIDF) recently created by the Reserve Bank of India (RBI)?

    a) Promotion of UPI payments

    b) Deploying Points of Sale (PoS) infrastructure

    c) Creation of digital wallets

    d) All of the above

    PIDF Scheme

    • The scheme was first announced in June last year to encourage fintech companies and banks to deploy point of sale (PoS) infrastructure across the country to improve the penetration of card-based and other digital payments.
    • The primary beneficiaries will be merchants providing essential services, such as transport and hospitality, government payments, fuel pumps, healthcare facilities, and groceries.
    • Amid the rapid rise in the volume of payments through the UPI network, the RBI is taking steps to further widen the use of digital payments in the country.
    • The fund will be operational for three years from January 1, 2021, and would help subsidise banks and non-banks for the deployment of payments, subject to them achieving specific targets.

    Why need PIDF?

    • Over the years, the payments ecosystem in the country has evolved with a wide range of options such as bank accounts, mobile phones, cards, etc.
    • To provide further fillip to the digitization of payment systems, it is necessary to give impetus to acceptance infrastructure across the country, more so in under-served areas.

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  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    What is a K-shaped Economic Recovery?

    | Economics | Mains Paper 3: Indian Economy

    The prospects of a K-shaped economic recovery from COVID are increasing both in India and across the world.

    What is K-Shaped Recovery?

    • A K-shaped recovery occurs when, following a recession, different parts of the economy recover at different rates, times, or magnitudes.
    • This is in contrast to an even, uniform recovery across sectors, industries, or groups of people.
    • A K-shaped recovery leads to changes in the structure of the economy or the broader society as economic outcomes and relations are fundamentally changed before and after the recession.
    • This type of recovery is called K-shaped because the path of different parts of the economy when charted together may diverge, resembling the two arms of the Roman letter “K.”

    Try these PYQs:

     

    Q.Economic growth in country X will necessarily have to occur if

    (a) There is technical progress in the world economy

    (b) There is population growth in X

    (c) There is capital formation in X

    (d) The volume of trade grows in the world economy

     

    Q. Economic growth is usually coupled with

    (a) Deflation

    (b) Inflation

    (c) Stagflation

    (d) Hyperinflation

    3 characteristics of India’s economic recovery

    • First, India has broken the link between virus proliferation and mobility earlier and more successfully than many countries.
    • Second, the employment rate gradually improved till September but has weakened since then, even as the economy has progressively opened up.
    • CMIE’s labour market survey still reveals 18 million fewer employed (about 5 per cent of the total employed) compared to pre-pandemic levels.
    • A third phenomenon is large firms have endured the crisis better and are gaining market share at the expense of smaller firms.
    • To the extent there is a migration of activity from the informal/SME firms to larger firms, tax collections and Sensex/Nifty earnings should get a boost, even holding the economic pie constant.
    • Greater scale and formalisation undoubtedly augur well for medium-term productivity but could increase near-term labour market frictions and boost pricing power.

    Increased prospects of K-shaped recovery

    • Above 3 factors increases prospects of a K-shaped recovery from COVID, a phenomenon playing out globally.
    • Households at the top of the pyramid are likely to have seen their incomes largely protected, and savings rates increased.
    • Meanwhile, households at the bottom are likely to have witnessed permanent hits to jobs and incomes.

    3 Implications of K-shaped recovery

    • 1) What we are currently witnessing is pent-up demand from the upper-income households.
    • However, households at the bottom have experienced a permanent loss of income in the forms of jobs and wage cuts, this will be a recurring drag on demand, if the labour market does not heal faster.
    • 2) To the extent that COVID has triggered an effective income transfer from the poor to the rich, this will be demand-impeding in the steady state.
    • This is explained by the fact that marginal propensity to consume at the bottom is higher than that at the top, just as the marginal propensity to import at the top is higher than at the bottom.
    • 3) If COVID-19 reduces competition or increases the inequality of incomes and opportunities, it could impinge on trend growth in developing economies by hurting productivity and tightening political economy constraints.

    Factors that need to be considered to decide the policy response

    • Policy need to look beyond the next few quarters and anticipate the state of the macro economy post this expression of pent-up demand.
    • The key factor is whether private sector starts re-investing and re-hiring.
    • With manufacturing utilisation rates below 70 per cent pre-COVID, an investment revival, in turn, will depend crucially on the demand dynamics
    • Exports should benefit from strengthening global growth as the world gets progressively vaccinated and more US fiscal stimulus.

    Upcoming budget: India’s New Deal moment

    • It’s against this backdrop that the upcoming budget presents India with its New Deal moment.
    • Given the prevailing demand uncertainties, the budget represents an opportune moment for the Centre, in conjunction with the states, to embark on a large physical and social infrastructure push.
    • This will simultaneously boost near-term aggregate demand, crowd in private investment, create jobs to soak up the unemployed, and improve the economy’s external competitiveness.
    • Job creation, health and education, in turn, will be a start to help mitigate COVID-induced inequalities.

    How to finance the investment?

    • Gradual near-term consolidation coupled with a credible medium-term fiscal plan will be key to anchoring the bond market and underscoring an adherence to macro stability.
    • How then can public investment increase meaningfully if the headline deficit (projected above 11 per cent of GDP) must come down?
    • Public investment could be increased only if the public investment push is financed by aggressive asset sales-strategic sales, disinvestment, land and infrastructure monetisation.
    • In this manner, expenditure to GDP can actually rise next year — generating an expansionary fiscal impulse to the economy — while automatic stabilisers are used to reduce the headline fiscal deficit.

    Conclusion

    India’s faster-than-expected rebound is very encouraging. But given labour market pressures and prospects of a K-shaped recovery around the world, the economy will need to be carefully nurtured and stoked. The budget presents a crucial opportunity to make a big down payment towards this end.

     

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  • Gravitational Wave Observations

    ‘Recoiling’ Black Holes

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    A supermassive black hole, which is estimated to weigh up to 100 billion times the mass of the Sun, is seemingly missing, leaving astronomers perplexed.

    Try this PYQ:

    Q.Recently, scientists observed the merger of giant ‘blackholes’ billions of light-years away from the Earth. What is the significance of this observation?

    (a) ‘Higgs boson particles’ were detected.

    (b) ‘Gravitational waves’ were detected.

    (c) Possibility of inter-galactic space travel through ‘wormhole’ was confirmed.

    (d) It enabled scientists to understand ‘singularity’.

    The ‘missing’ black hole

    • The black hole is supposed to be located in Abell 2261, an enormous galaxy cluster that is about 2.7 billion light-years away from our planet.
    • So, when we look at a celestial object, we are looking at how it appeared that long ago in the past.
    • At 2.7 billion light-years away, the Abell galaxy is at an overwhelmingly large distance away from us.

    What could have happened?

    • Every large galaxy in the universe has a supermassive black hole at its centre, whose mass is millions or billions of times that of the Sun, says NASA.
    • The black hole at the centre of our galaxy– the Milky Way– is called Sagittarius A*, and is 26,000 light-years away from Earth.
    • Scientists have been using data gathered in 1999 and 2004 to look for the centre of the Abell galaxy, but have so far been unable to find its black hole.
    • A reason for this could be that Abell’s black hole has been ejected from the centre of the galaxy.

    Recoil of Black Holes

    • When two black holes merge, they release what is known as gravitational waves– invisible ripples travelling at the speed of light, which squeeze and stretch anything in their path.
    • As per the theory of gravitational waves, during such a merger, when the amount of waves generated in one direction is stronger than another, the new big black hole can be sent away from the centre of the galaxy into the opposite direction.
    • This is known as a “recoiling” black hole.
    • So far, though, scientists are yet to find definitive evidence for recoiling black holes and are still to discover whether supermassive black holes can merge and release gravitational waves.
    • As of now, only mergers of significantly smaller black holes have been verified.

    Why it is significant?

    • The researchers assert that this may have happened because of the merging of two smaller galaxies to form Abell– a process in which both of their black holes merged to form an even bigger black hole.
    • If this hypothesis turns out to be true, it would mean a major breakthrough in astronomy.

    Back2Basics:

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  • ISRO Missions and Discoveries

    Mukundpura CM2

    | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    An asteroid which made its landfall in Mukundpura village near Jaipur has been named after the same village and is under the study of Geological Survey of India, Kolkata.

    Try this question from CSP 2014:

    Q.What is a coma, in the content of astronomy?

    (a) Bright half of material on the comet

    (b) Long tail of dust

    (c) Two asteroids orbiting each other

    (d) Two planets orbiting each other

    Mukundpura CM2

    • The meteorite named Mukundpura CM2 was classified to be a carbonaceous chondrite.
    • This is a type of stony meteorite, considered the most primitive meteorite and a remnant of the first solid bodies to accrete in the solar system.
    • The composition of carbonaceous chondrites is also similar to the Sun.
    • Chondrites are silicate-droplet-bearing meteorites, and this Mukundpura chondrite is the fifth carbonaceous meteorite known to fall in India.

    Why it is important to study meteorites?

    • Meteorites are representative of asteroids.
    • Asteroids are the remnant debris of the inner solar system formation process and thus offer the formation history or the building blocks of the planets.
    • Therefore, by studying meteorites in the laboratory and asteroids by exploration and sample return mission we try to reconstruct the activity of early solar system events.
    • Also, asteroids are often rich in volatiles and other minerals and can be exploited for future planetary exploration.

    Do you know?

    Meteorites are broadly classified into three groups – stony (silicate-rich), iron (Fe–Ni alloy), and stony-iron (mixed silicate–iron alloy).

    Details of its study

    • The study revealed that Mukundpura CM2 had experienced varying degrees of alteration during the impact.
    • Some minerals like forsterite and FeO olivine, calcium aluminium rich inclusion (CAI) minerals escaped alteration.
    • Few magnetites, sulphides and calcites were also found.
    • Detailed spectroscopic studies revealed that the meteorite had very high (about 90%) phyllosilicate minerals comprising both magnesium and iron.
    • Further X-ray studies showed it also had aluminium complexes.

    Relevance to asteroids

    • The results of the Mukundpura CM2 study are relevant to the surface composition of near-Earth asteroids Ryugu and Bennu.
    • In October 2020, NASA’s OSIRIS-REx mission collected samples from Bennu and is expected to return in September 2023.
    • Last month, Japan’s Hayabusa-2 mission landed on Earth with samples from Ryugu.

    Back2Basics:

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  • Coal and Mining Sector

    Lithium deposits in Karnataka

    Prelims Only | Science Tech | Mains Paper 1: Distribution Of Key Natural Resources Across The World

    Alongside a move to tap into the global lithium value chain, India has initiated a concerted domestic exploration in Karnataka’s Mandya district.

    Lithium reserves in Karnataka

    • Preliminary surveys by the Atomic Minerals Directorate for Exploration and Research (AMD), an arm of the Department of Atomic Energy has carried out the exploration.
    • AMD is carrying out surface and sub-surface exploration for lithium in potential geological domains of the country.
    • Their research has shown the presence of 1,600 tonnes of lithium resources in the igneous rocks of the Marlagalla-Allapatna region of Karnataka’s Mandya district.

    Must read:

    Global producers of lithium

    • Australia and Chile have swapped positions as the world’s leading lithium-producing country over the past decade. In 2019, the world’s Top 5 lithium producers were:
    1. Australia – 52.9% of global production
    2. Chile – 21.5%
    3. China – 9.7%
    4. Argentina – 8.3%
    5. Zimbabwe – 2.1%
    • The U.S. ranked 7th with 1.2% of the world’s lithium production.

    In 2019, the world’s Top 5 lithium reserves by country were:

    1. Chile – 55.5% of the world’s total

    2. Australia – 18.1%

    3. Argentina – 11.0%

    4. China – 6.5%

    5. U.S. – 4.1%

    Why is the exploration significant?

    • India currently imports all its lithium needs.
    • The find in Mandya is extremely small in quantitative terms, but it marks some initial success in the attempt to domestically mine the silver-white metal by way of hard-rock extraction of the ore.
    • The domestic exploration push comes at a time when India has stepped up its economic offensive against China, a major source of lithium-ion energy storage products being imported into the country.
    • The Marlagalla-Allapatna area is seen as among the most promising geological domains for potential exploration for lithium and other rare metals.

    What lies ahead?

    • India is seen as a late mover in attempts to enter the lithium value chain, coming at a time when EVs are predicted to be a sector ripe for disruption.
    • 2021 is likely to be an inflexion point for battery technology – with several potential improvements to the li-ion technology, and alternatives to this tried-and-tested formulation in advanced stages of commercialization.

    Back2Basic: Li-Ion battery

    • Whittingham developed the first functional lithium-ion battery in 1976, Goodenough brought in a major improvement in 1980, while Yoshino made the first practical-use lithium-ion battery in 1985.
    • Commercially manufactured lithium-ion batteries, based on what Yoshino had developed, made their first appearance in 1991.

    Its’ working

    • Batteries convert chemical energy into electricity.
    • A battery comprises two electrodes, a positive cathode and a negative anode, which is separated by a liquid chemical, called an electrolyte, which is capable of carrying charged particles.
    • The two electrodes are connected through an electrical circuit.
    • When the circuit is on, electrons travel from the negative anode towards the positive cathode, thus generating an electric current, while positively charged ions move through the electrolyte.

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  • Mother and Child Health – Immunization Program, BPBB, PMJSY, PMMSY, etc.

    Improving the diet of low income households to address malnutrition

    | Governance | Mains Paper 2: Government Scheme/Policies,Poverty & Hunger,Schemes For Vulnerable Sections

    The article suggests the ways to deal with the menace of malnutrition in the country.

    Findings of the first phase of NFHS-5

    • Recently, the first phase of the NFHS-5 survey was published.
    • The deteriorating nutrition and anaemia indicators, especially among children is a cause for concern.
    • More deterioration in nutrition indicators following the COVID-19 pandemic is feared in the next phase of NFHS-5.
    • This deterioration would be on account of loss of livelihoods, reduced food consumption among the poor and disruption of government nutrition programmes.

    Challenges

    • Unlike a disease outbreak there may not be any popular demand to address malnutrition — the public, by and large, does not have adequate information about the damage malnutrition causes.
    • Hence, in the Indian context, it becomes the responsibility of the government/civil society to first provide information and awareness to the community about malnutrition.

    Steps to be taken

    • The government should examine the current nutrition-related programmes, and analysing why they are not able to reduce malnutrition faster.
    • Additional interventions could be introduced in pockets, identified as high-burden districts.
    • There should be different norms and more intensive interventions within the ICDS for these chronically malnourished pockets.
    • We need to know if the National Nutrition Policy 1993 is still operational.
    • If not, it seems that we are attempting to address this problem without a policy framework or plan of action.

    Addressing the root cause of malnutrition in India

    The following three deficits are the root cause of malnutrition in India.

    1) Dietary deficit

    • There is a large dietary deficit among at least 40 per cent of our population of all age groups, shown in— the National Nutrition Monitoring Bureau’s Third Repeat Survey (2012), NFHS 4, 2015-16, the NNMB Technical Report Number 27, 2017.
    • Our current interventions are not being able to bridge this protein-calorie-micronutrient deficit.
    • The NHHS-4 and NFHS-5 surveys reveal an acute dietary deficit among infants below two years, and considerable stunting and wasting of infants below six months.
    • Unless this maternal/infant dietary deficit is addressed, we will not see rapid improvement in our nutritional indicators.

    2) Information deficit at household level

    • We do not have a national IEC (information, education and communication) programme that reaches targeted households to bring about the required behavioural change regarding some basic but critical facts.
    • For example, IEC tells about the importance of balanced diets in low-income household budgets, proper maternal, child and adolescent nutrition and healthcare.

    3) Inequitable market conditions

    • The largest deficit, which is a major cause of dietary deficiency and India’s chronic malnutrition, pertains to inequitable market conditions.
    • Such market conditions deny affordable and energy-fortified food to children, adolescents and adults in lower-income families.
    • The market has stacks of expensive fortified energy food and beverages for higher income groups, but nothing affordable for low-income groups.

    Conclusion

    Raising the diet of our people from subsistence level to higher levels of nourishment by overcoming the triple deficit is the only way to improve the nutritional indicators of our population — amongst children, adolescents and adults.

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  • Poverty Eradication – Definition, Debates, etc.

    Social sector: the post-Covid priority

    op-ed snap | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections,Schemes For Vulnerable Sections

    The article highlights the need for more focus on the social sector in the post-Covid society and suggest ways to do the same.

    Why focus on social sector

    • No country has progressed without investing in the social sector.
    • India is committed to achieving the Sustainable Development Goals (SDGs) by 2030, and social sector development is important in reaching them.
    • Progress in this sector has intrinsic (for its own sake) and instrumental (for higher growth) value.
    • It is needed even to build a $5 trillion economy faster.

    India’s social sector expenditure

    • India’s progress in the social sector has been much slower compared to its GDP growth.
    • In the social sector expenditure, the share of education as a percentage of GDP has been stagnant around 2.8-3 per cent during 2014-15 to 2019-20.
    • In the case of health, the expenditure as a percentage of GDP increased from 1.2 per cent to 1.5 per cent.
    • This is lower than the required 2-3 per cent of GDP.
    • An increase in health expenditure is also important to take care of the present and future pandemics.
    • There are supply side problems regarding the health infrastructure.
    • It is essential to have a huge increase in public expenditure on health and provide accessible, affordable and quality health coverage to all.

    Following are some key issues in the social sector India needs to focus on.

    1) The problem of undernutrition

    • The NFHS-5 report shows that malnutrition level has reduced marginally in a few states and has worsened in some other states between 2015-16 and 2019-20.
    • We can’t have a society with 35 per cent of our children suffering from malnutrition.
    • Apart from undernutrition, obesity seems to be increasing in both rural and urban areas.
    • There is a need to raise allocations for ICDS and other nutrition programmes.
    • The determinants of nutrition are agriculture, health, women’s empowerment, including maternal and child practices, social protection, nutrition education, sanitation and drinking water.
    • The Poshan Abhiyan is a good programme, but has to cover all these determinants with a multi-pronged approach to reduce undernutrition.

    2) Quality education

    • Quality education is key for raising human development.
    • The pandemic has enhanced inequalities in education and has revealed the widening digital gap.
    • Equality of opportunity in terms of quality education is the key for raising human development and for reducing inequalities in the labour market.
    • Several committees have recommended that public expenditure on education should be at 6 per cent of GDP.

    3) Social safety nets

    •  It is known that migrant workers were the most affected during the pandemic and that they do not have any safety nets.
    • There is a need to have safety nets like an employment guarantee scheme for the urban poor and facilities for migrants.
    • Similarly in rural areas, allocations to MGNREGA have to be increased because of the reverse migration.

    4) Programs for vulnerable section need to be continued

    • The government has done well in providing cooking gas through Ujjwala Yojana and electricity through Saubhagya Yojana, introducing programmes such as Swachh Bharat Abhiyan and initiatives for housing, financial inclusion and providing loans to the self-employed.
    • These programmes have helped the vulnerable sections, particularly women.
    • Another initiative of the government was to facilitate direct benefit transfers (DBT) for welfare schemes.
    • These initiatives have to be continued.

    Way forward

    • The government should give more focus to the social sector with better policies and implementation.
    • It has to work closely with the states in revitalising the social sector as major expenditures particularly on health and education are met by them.
    • The 15th Finance Commission also seems to have mentioned that health expenditure should be increased to 2.1 per cent of GDP.
    • The Commission may also suggest some incentives for states to increase health expenditure.
    • Both Centre and states should have a five-year vision on the social sector.

    Consider the question “No country has progressed without investing in the social sector. In the post pandemic world India needs to chart the plan to invest more in the sector. In light of this, examine the challenges in the social sector and suggest the ways to deal with them.

    Conclusion

    India, aspiring to be a global power, should have a harmonious and inclusive social sector development. This is also important for achieving the SDGs, reducing inequalities and building a $5 trillion economy faster.

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  • Women empowerment issues – Jobs,Reservation and education

    Salary to women for domestic work

    op-ed snap | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    Recently, a political party promised salaries to housewives as a part of its electoral campaign in Tamil Nadu. This led to the debate on the issue. The article deals with the issue.

    Salary for housework: Historical background

    • Demand for wages against housework was first raised at the third National Women’s Liberation conference in Manchester, England.
    •  In 2012, the then minister for Women and Child development announced that the government was considering mandating a salary for housework to wives, from husbands.
    •  The purpose, once again, was to empower women financially and help them live with dignity.

    Recognising the value of unpaid domestic work

    • Time-use data from 2019 gathered by the National Sample Survey Organisation revealed that only about a quarter of men and boys above six years engaged in unpaid household chores, compared to over four-fifths of women.
    • Every day, an average Indian male spends 1.5 hours per day in unpaid domestic work, compared to about five hours by a female.
    • Housework demands effort and sacrifice, 365 days a year, 24/7.

    Issues with paying for domestic work

    •  Asking men to pay for wives’ domestic work could further enhance their sense of entitlement.
    • It may also put the additional onus on women to perform.
    • There is a risk of formalising the patriarchal Indian family where the position of men stems from their being “providers” in the relationship.

    Way forward

    • Despite a legal provision, equal inheritance rights continue to be elusive for a majority of women.
    • More than creating a new provision of salary for housework, we need to strengthen awareness, implementation and utilisation of other existing provisions.
    • Starting from the right to reside in the marital home, to streedhan and haq meher, to coparcenary and inheritance rights as daughters and to basic services, free legal aid and maintenance in instances of violence and divorce.
    • Women should be helped to reach their full potential through quality education, access and opportunities of work, gender-sensitive and harassment-free workplaces and attitudinal and behaviour change within families to make household chores more participative.

    Conclusion

    Just like we do not want women to commodify their reproductive services because of their inherently exploitative nature — we have, therefore, banned commercial surrogacy in the country — let us not allow commodification of housework and personal care.

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