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  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    Court’s nudge on Hospital charges, a reform opportunity

    Explained | Governance | Mains Paper 2: Health & Education

    Why in the news? 

    The SC while hearing a PIL in February’24, directed the Central Government to find ways to regulate the rates of Hospital Procedures in the Private sector.

    • The SC also warned against applying Central Government Health Scheme (CGHS) rates for treatment services at private healthcare facilities until standardized rates are set.

    About Central Government Health Scheme (CGHS) Rates:

    CGHS is a health care scheme provided by the Indian Government for its central government employees and pensioners.

    • Commencement Year: 1954
    • Objective: To provide comprehensive health coverage to Central Government Employees (Allopathy/Homoeopathy)
    • Present change: The rates of the Central Government Health Scheme (CGHS) for general surgery have been revised since February 2024.

    Benchmark for Pricing:

    • Standard Treatment Guidelines (STGs): These can establish relevant clinical needs, the nature and extent of care, and the costs of total inputs required.
      • They address confounders and ensure clinical autonomy while enabling the valuation of healthcare resources consumed for precise cost determination.
    • Pooled payments by government: Formulating and adopting STGs require providers’ revenues to be tied to fewer payers.
      • This necessitates reimbursements from pooled payments with low Out-Of-Pocket (OOP) payment levels, supported by the government.
    • Coordination between payers and providers: Governments can support the agreement on pricing that provides a reasonable and sustainable surplus over input costs.
      • However, the ability of providers to access markets with OOP payments could hinder this effort.

    Challenges faced during benchmarking of the price:

    • Private sector issues 
        • Private sector dominance: In India, over half of the total health expenditure is OOP, with the private sector predominantly composed of small-scale providers. Standardizing rates faces implementation uncertainties, and enforcement mechanisms for adherence remain unclear.
        • Resistance from providers: Concerns arise about the feasibility of regulatory measures if providers do not adhere to prescribed procedure rates, as seen in various health schemes.
    • Weak implementation
      • Limitations of regulations: While price caps can influence behavior in the short term, weak enforcement mechanisms lead to temporary effects as the overall environment remains unchanged.
      • Enforcement challenges: Despite suggested measures, enforcement remains weak, with only a fraction of states and union territories implementing the Clinical Establishment Act.
    • Data-related issues: Although the insurance industry initiated STGs for hospitals in 2010, progress was hindered by a lack of representative and accurate costing data due to limited participation from private hospitals.

    Government Initiatives:

    • Developing STGs: The Pradhan Mantri Jan Arogya Yojana and the Department of Health Research have made significant strides in developing STGs for common conditions and adopting a comprehensive costing framework.
    • Efforts are also ongoing to create an Indian version of Diagnostics-Related Groups (DRGs)

    Way Forward:

    • Addressing anticipated challenges: Anticipated challenges in implementing rate standardization policies need to be identified and addressed proactively to ensure successful outcomes.
    • Evidence-based policy: Conduct rigorous research and evaluation to generate evidence on the impact of regulatory measures on affordability, care quality, and provider behavior, informing future policy decisions.
    • Ensuring broader stakeholder participation: It is essential to involve a wide range of stakeholders in the development and implementation of rate standardization policies to increase their effectiveness and acceptance.

    Mains PYQ 

    Q Public health system has limitation in providing universal health coverage. Do you think that private sector can help in bridging the gap? What other viable alternatives do you suggest? (UPSC IAS/2015)

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  • Tribes in News

    Chin-Kuki-Zo Tribes: Backdrop of Ethnic Conflict in Manipur

    Prelims Only | Trivia | Mains Paper 1: Population & Associated Issues

    Why in the news?

    Manipur CM took it to social media where he alleged an “unnatural growth” in the population of the “Chin-Kuki-Zo” tribes in the state, posing a perceived threat to indigenous communities and national security.

    About Chin-Kuki-Zo Tribes

    Chin Tribe Kuki Tribe Zo Tribe
    Ethnic Composition Major ethnic group in Myanmar’s Chin State; known for distinct customs and language. Heterogeneous group in Northeast India; recognized for diverse subtribes. Diverse ethnic group in Northeast India, Myanmar, and parts of Bangladesh.
    Geographical Distribution Primarily in Myanmar’s Chin State; significant populations in Indian states like Mizoram. Mainly in Northeast India; also found in Chin State, Myanmar. Inhabits Northeast India, particularly Mizoram and Manipur; also in parts of Myanmar and Bangladesh.
    Language Chin language, part of Kuki-Chin subgroup of Tibeto-Burman family. Kuki-Chin languages; various dialects with distinct variations. Mizo-Kuki-Chin languages; different dialects within Tibeto-Burman family.
    Culture and Traditions Vibrant music, dance, festivals; celebrates Chin National Day. Rich oral traditions, folk music; celebrates festivals like Chavang Kut. Rich oral literature, vibrant festivals; celebrates Chapchar Kut and Mim Kut.
    Livelihood Historically practiced subsistence agriculture; now diversified livelihoods. Historically practiced shifting (Jhum) cultivation; now engaged in various occupations. Historically practiced shifting (Jhum) cultivation; now diverse livelihood patterns.
    Religion Predominantly Christianity with some traditional animistic beliefs. Predominantly Christianity with traditional animistic practices. Predominantly Christianity with remnants of traditional beliefs.
    Socio-Political Organization Advocates for cultural identity and rights; e.g., Chin National Front. Promotes Kuki identity; active organizations like Kuki National Organization. Promotes Zo identity; e.g., Zomi Council and Mizo Zirlai Pawl.

    Issues with their migration

    The Chin-Kuki-Zo tribes in Manipur are contributing to the conflict in the state due to various factors.

    • There have been longstanding demands from various tribal groups for greater recognition of their ethnic identity and autonomy within Manipur.
    • Land ownership and control are significant issues among the Chin-Kuki-Zo tribes in Manipur.
    [2016]  Consider the following pairs: (2016)

    Community sometimes  mentioned in the news In the affairs of
    1. Kurd Bangladesh
    2. Madhesi Nepal
    3. Rohingya Myanmar

    Which of the pairs given above is/are correctly matched?

    (a) 1 and 2
    (b) 2 only
    (c) 2 and 3
    (d) 3 only

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  • RBI Notifications

    RBI’s New Guidelines for Asset Reconstruction Companies (ARCs)

    Prelims Only | Economics | Mains Paper 3: Indian Economy

    Why in the news?

    The RBI has introduced updated guidelines for Asset Reconstruction Companies (ARCs) through a master direction, effective from April 24, 2024.

    What is an Asset Reconstruction Company (ARC)?

    Description
    About ARC is a special financial institution that acquires debtors from banks at a mutually agreed value and attempts to recover the debts or associated securities.
    Regulation
    • ARCs are registered under the RBI.
    • Regulated under the SARFAESI Act, 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act).
    Objective ARCs take over a portion of the bank’s non-performing assets (NPAs) and engage in asset reconstruction or securitization, aiming to recover the debts.
    Functions
    • Asset Reconstruction: Acquisition of bank loans or other credit facilities for realization.
    • Securitization: Acquisition of financial assets by issuing security receipts.
    Foreign Investment 100% FDI allowed in ARCs under the automatic route.
    Limitiations
    • ARCs are prohibited from undertaking lending activities.
    • They can only engage in securitization and reconstruction activities.
    Working
    • Bank with NPA agrees to sell it to ARC at a mutually agreed value.
    • ARC transfers assets to trusts under SARFAESI Act.
    • Upfront payment made to bank, rest through Security Receipts.
    • Recovery proceeds shared between ARC and bank.
    Security Receipts Issued to Qualified Institutional Buyers (QIBs) for raising funds to acquire financial assets.
    Significance
    • Banks can clean up their balance sheets and focus on core banking activities.
    • Provides a mechanism for resolution of NPAs and debt recovery.

    What are the new guidelines laid out by the RBI?

    • Enhanced Capital Requirements:
        • Minimum Capital Requirement Increase: ARCs are now mandated to maintain a minimum capital requirement of Rs 300 crore, a significant increase from the previous Rs 100 crore stipulation established on October 11, 2022.
        • Transition Period for Compliance: Existing ARCs are granted a transition period to reach the revised Net Owned Fund (NOF) threshold of Rs 300 crore by March 31, 2026.
        • Interim Requirement: However, by March 31, 2024, ARCs must possess a minimum capital of Rs 200 crore to comply with the new directives.
    • Supervisory Actions for Non-Compliance:
        • ARCs failing to meet the prescribed capital thresholds will face supervisory action, potentially including restrictions on undertaking additional business until compliance is achieved.
    • Expanded Role for Well-Capitalized ARCs:
      • Empowerment of Well-Capitalized ARCs: ARCs with a minimum NOF of Rs 1000 crore are empowered to act as resolution applicants in distressed asset scenarios.
      • Investment Opportunities: These ARCs are permitted to deploy funds in government securities, scheduled commercial bank deposits, and institutions like SIDBI and NABARD, subject to RBI specifications. Additionally, they can invest in short-term instruments such as money market mutual funds, certificates of deposit, and corporate bonds commercial papers.
      • Investment Cap: Investments in short-term instruments are capped at 10% of the NOF to mitigate risk exposure.

    PYQ:

    [2018] With reference to the governance of public sector banking in India, consider the following statements:

    1. Capital infusion into public sector banks by the Government of India has steadily increased in the last decade.
    2. To put the public sector banks in order, the merger of associate banks with the parent State Bank of India has been affected.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

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  • Coal and Mining Sector

    [pib] Critical Minerals Summit

    PIBPrelims Only | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    Why in the news?

    The Ministry of Mines has organized a pivotal summit in New Delhi aimed at fostering collaboration, sharing knowledge, and driving innovation in Critical Mineral beneficiation and processing.

    What are Critical Minerals?

    • Critical Minerals are indispensable for economic development and national security, with their scarcity or concentration in specific regions posing potential supply chain vulnerabilities.
    • The declaration and identification of Critical Minerals is an ongoing process, influenced by technological advancements, market dynamics, and geopolitical factors.

    Critical Minerals in India:

    • India has identified 30 Critical Minerals (July 2023) based on factors like disruption potential, import reliance, and cross-sectoral usage.
      • Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, Rare Earth Elements, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.

    Critical Minerals

    Global Perspective:

    Various nations have outlined their lists of Critical Minerals based on unique circumstances:

    • The US recognizes 50 minerals critical for national security and economic development.
    • Japan has identified 31 minerals crucial for its economy.
    • The UK, EU, and Canada have their respective lists, reflecting their strategic priorities.

    India became the 14th member of the Mineral Security Partnership (MSP) in June 2023. 

    • MSP seeks to bolster critical minerals supply chains to support economic prosperity and climate objectives.
    • It seeks to ensure that critical minerals are produced, processed and recycled by catalyzing investments from governments and private sector across the full value chain.
    • Members: The other member countries are United States, Australia, Canada, Finland, France, Germany, Italy, Japan, Norway, the Republic of Korea, Sweden, the United Kingdom and the European Commission.

    Note: Copper, gold and silver are not on the list of minerals under MSP (Wiki).

    Various Government Initiatives:

    • MMDR Act Amendment (2023):   24 minerals were designated as critical and strategic under the Mines and Minerals (Development and Regulation) Act.
    • National Mineral Policy (2019): The updated policy emphasizes the exploration and exploitation of Critical Minerals to harness India’s mineral potential effectively.
    • Khanij Bidesh India Ltd (KABIL): A joint venture comprising National Aluminium Company Ltd (NALCO), Hindustan Copper Ltd (HCL), and Mineral Exploration Corporation Ltd (MECL), KABIL aims to secure a consistent supply of Critical Minerals by acquiring and developing assets overseas.
    • Indian Rare Earths Limited (IREL): It is a PSU that plays a significant role in the research and production of rare earth minerals.

    India’s Critical Mineral Imports:

    • Lithium Imports: In FY23, India imported 2,145 tonnes of lithium carbonate and lithium oxide, costing Rs 732 crore.
    • Nickel and Copper Imports: The country imported 32,000 tonnes of unwrought nickel and 1.2 million tonnes of copper ore, costing Rs 6,549 crore and Rs 27,374 crore, respectively.
    • Import Dependence: India relies entirely on imports for lithium and nickel, and 93% for copper.

    Country-wise dependence:

    1. China: India heavily relies on China for the import of critical minerals like lithium, cobalt, nickel, and graphite.
    2. Australia: India is actively engaged with Australia for acquiring mineral assets, particularly lithium and cobalt, to secure its supply chain for critical minerals.
    3. Argentina, Bolivia, and Chile: India is engaging with these countries, known for their reserves of battery metals like lithium and cobalt, to diversify its sources for critical minerals.

     

    PYQ:

    [2019] With reference to the management of minor minerals in India, consider the following statements:

    1. Sand is a ‘minor mineral’ according to the prevailing law in the country.
    2. State governments have the power to grant mining leases of minor minerals, but the powers regarding the formation of rules related to the grant of minor minerals lie with the Central Government.
    3. State Governments have the power to frame rules to prevent illegal mining of minor minerals.

    Which of the statements given above is/are correct?

    (a) 1 and 3

    (b) 2 and 3

    (c) 3 only

    (d) 1, 2 and 3

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  • Climate Change Impact on India and World – International Reports, Key Observations, etc.

    Why the Thar Desert on the borders of India and Pakistan is getting greener?

    National Parks/WSPrelims Only | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    Why in the News?

    Rajasthan’s barren Thar Desert may turn green, says a recent study in the journal Earth’s Future.

    Thar Desert

    • The Thar Desert is the 18th largest subtropical desert globally and is one of the most densely populated deserts.
    • Approximately 40% of the human population in Rajasthan resides in the Thar Desert.
    • It extends from the Sutlej River and is bounded by the Rann of Kutch, the Aravalli Mountains, and the Indus River.
    • About 85% of the Thar Desert is located in India, with the remainder in Pakistan.
    • In India, it spans across Rajasthan, Gujarat, Haryana, and Punjab as well.
    • Civilizations are believed to have thrived in the Thar region around 50,000 years ago across the extinct Saraswati River.
    • The Desert National Park (home to the endangered Great Indian Bustard, desert fox, desert cat, blackbuck, and Indian gazelle) is situated in the Thar Desert in the northwest Indian state of Rajasthan.

    Why is the Thar desert getting greener?

    • Climate Change Effects:
        • Alteration of Weather Patterns: Climate change is causing shifts in rainfall distribution in the thar desert area.
        • Potential for Vegetation Growth: The increased precipitation could provide favorable conditions for vegetation growth, contributing to the greening of the desert.
    • Indian Monsoon Dynamics:
        • Westward Extension of Indian Monsoon: The Indian monsoon, known for bringing heavy rainfall to eastern India, is now extending further westward into regions like the Thar Desert.
        • Impact on Moisture and Rainfall: This change in monsoon dynamics could lead to increased moisture and rainfall in the desert region, facilitating the growth of vegetation.
    • Expansion of Indian Ocean Warm Pool (IOWP):
        • Influence on Monsoon Patterns: The Indian Ocean Warm Pool (IOWP) influences monsoon patterns and rainfall distribution over the Indian subcontinent.
        • Westward Expansion due to Climate Change: Climate change is causing the IOWP to expand westward, potentially resulting in increased rainfall over semi-arid regions like the Thar Desert and promoting greening.
    • Water Management Practices:
        • Contribution to Greening: Effective water management practices, such as rainwater harvesting and irrigation techniques like johad, kuis, and kunds, may be playing a role in the greening of the Thar Desert.
        • Utilization of Water Resources: By harnessing and efficiently utilizing available water resources, local communities and authorities can support vegetation growth and ecosystem restoration efforts in the desert.
    • Introduction of Irrigation  
      • Commercial Cropping: Irrigation was introduced during British colonial rule in the 19th and 20th centuries to convert arid and semi-arid ecosystems into cropland.
      • Restrictions on Grazing: The right to graze animals was restricted to landowners who cultivated crops, leading to the transformation of nomadic pastoralists into sedentary agro-pastoralists.

    PYQ:

    [2018] Which of the following leaf modifications occur(s) in the desert areas to inhibit water loss?

    1. Hard and waxy leaves
    2. Tiny leaves
    3. Thorns instead of leaves

    Select the correct answer using the code given below:

    (a) 2 and 3 only

    (b) 2 only

    (c) 3 only

    (d) 1, 2 and 3

    [2020] The process of desertification does not have climate boundaries. Justify with examples.

    [2013] Major hot deserts in northern hemisphere are located between 20-30 degree north and on the western side of the continents. Why?

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  • Indian Navy Updates

    [pib] Launching of LSAM 20 (Yard 130)  

    PIBPrelims Only | Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates

    Why in the News?

    The Indian Navy has inducted the ‘Ammunition Cum Torpedo Cum Missile Barge, LSAM 20 (Yard 130) into its fleet.

    What is LSAM 20?

    • LSAM 20 (Yard 130) is the Ammunition Cum Torpedo Cum Missile Barge (Storage) inducted by the Indian Navy.  (built by MSME Shipyard, M/s Suryadipta Projects Pvt Ltd, Thane).
    • LSAM 20 facilitates transportation, embarkation, and disembarkation of articles/ammunition to IN Ships.
    • These Barges are indigenously designed and built under relevant Naval Rules and Regulations of the Indian Register of Shipping.

    Objective 

    • A Torpedo Cum Missile Barge is a specialized vessel used by the Indian Navy to transport various types of ammunition, torpedoes, and missiles to operational areas.
    • These barges play a crucial role in providing logistical support to naval vessels by ensuring the uninterrupted transportation of essential military supplies. 

    PYQ:

    [2016] Which one of the following is the best description of ‘INS Astradharini’, that was in the news recently?

    (a) Amphibious warfare ship

    (b) Nuclear-powered submarine

    (c) Torpedo launch and recovery vessel

    (d) Nuclear-powered aircraft carrier

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  • RBI Notifications

    Towards a Green Growth: On the RBI and a Green Taxonomy

    DOMRExplained | Economics | Mains Paper 3: Indian Economy

    Why in the news?

    Extreme weather conditions may pose a risk to inflation, along with prolonged geopolitical tensions that could keep crude oil prices volatile, the Reserve Bank’s April Bulletin said on April 23.

    RBI’s Monetary Policy Report on the impact of climate shock and extreme weather events on food inflation:

    • Effects of Food Inflation: The report highlights the significance of extreme weather events and climate shocks in affecting not only food inflation but also the broader impact on the natural Rate of Interest and Financial Stability.
    • Broader Economic Impact: Climate shocks and extreme weather events are mentioned to have a broader impact on the economy’s financial stability, indicating that disruptions in food production and supply chains due to these events can lead to inflationary pressures beyond just the food sector.
    • Use of Economic Modeling: The report mentions the utilization of a New-Keynesian model incorporating a physical climate risk damage function to estimate the macroeconomic impact of climate change. This likely includes projections on how climate shocks affect food production and subsequently food inflation.
    • Warning on Long-Term Output Reduction: The report warns that without climate mitigation policies, the long-term economic output could be lower by around 9% by 2050. This suggests that climate shocks and extreme weather events could have lasting effects on food production and inflation.
    • Potential for Inflation Hysteresis: There’s a warning about the potential for inflation hysteresis to become entrenched, which could lead to a de-anchoring of inflation expectations. This implies that persistent disruptions caused by climate shocks could lead to sustained increases in food inflation.

    Way Forward:

    • Need Investment in Climate Resilience: Governments and businesses can invest in climate-resilient agriculture practices and infrastructure to mitigate the adverse effects of extreme weather events on food production.
    • Need Diversification of Food Sources: Diversifying food sources can help reduce reliance on regions prone to climate-related disruptions. This could involve promoting local food production, supporting small-scale farmers, and investing in alternative food production methods such as vertical farming or hydroponics.

    Mains PYQ 

    Q What policy instruments were deployed to contain the great economic depression?

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  • Global Geological And Climatic Events

    Anticyclones, hanging even now over India, link warming to heat | Explained

    Explained | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    Why in the news?

    The record warming of 2023 has so far not been fully explained since it was much warmer than expected just from the superposition of El Nino on global warming.

    About Anticyclone:

    • An anticyclone is a weather phenomenon defined as a large-scale circulation of winds around a central region of high atmospheric pressure, clockwise in the Northern Hemisphere and counterclockwise in the Southern Hemisphere.

    The link between ElNino and Anticyclone: 

    • El Nino events can lead to the formation of anticyclone events. During El Niño, the weakening or reversal of the Walker circulation and strengthening of the Hadley circulation caused warm ocean water to develop in the central and east-central equatorial Pacific.

    The link between anticyclone and heat 

    • Stability and Weather Patterns: Anticyclones are areas of high pressure in the atmosphere characterized by descending air, which stop the cloud formation and precipitation. This stable air mass tends to promote clear skies and can lead to prolonged periods of hot and dry weather.
    • Amplification by Global Warming: Studies suggest that global warming can intensify anticyclones, making them stronger and more persistent. Warmer temperatures due to climate change can enhance the evaporation of moisture from land and water surfaces, further reinforcing the stability of anticyclonic conditions.
    • Feedback Loop: Anticyclones can create a feedback loop with global warming. As anticyclones persist, they can exacerbate heatwaves by trapping heat near the surface, preventing it from escaping into the upper atmosphere. This trapped heat can then further strengthen the anticyclone, leading to a self-reinforcing cycle of heat and stability.

    What are the stages of early warnings?

    The stages of early warnings on the ‘ready-set-go’ system for disaster management

    • Ready: This stage involves providing a seasonal outlook based on background states and external factors like global warming and El Niño. The aim is to maximize the accuracy of longer-lead forecasts, enabling organizations like the National Disaster Management Agency (NDMA) and local governments to prepare their disaster response systems accordingly.
    • Set: In this stage, subseasonal predictions for weeks two to four are utilized. Resource allocations are made, and potential hotspots are identified to ensure that disaster preparedness is in place. This step involves moving resources, including personnel, to areas that are identified as at risk based on the extended range forecasts.
    • Go: The final stage, based on short- and medium-range forecasts (days 1-10), involves the activation of disaster response efforts. This includes implementing rescue operations, setting up hydration centers, heat shelters, and other necessary measures to manage the disaster effectively.

    Conclusion: All evidence suggests India’s prediction system and early warning systems continue to improve and the NDMA has worked these details well into its ‘ready-set-go’ system.The remaining challenges are to build resilience for the future by better predicting the trajectory of the weather at every location over India.

    Mains PYQ 

    Q Drought has been recognized as a disaster in view of its spatial expanse, temporal duration, slow onset and lasting effects on vulnerable sections. With a focus on the September 2010 guidelines from the National Disaster Management Authority (NDMA), discuss the mechanisms for preparedness to deal with likely El Nino and La Nina fallouts in India.

    https://www.thehindu.com/sci-tech/science/anticyclones-hanging-even-now-over-india-link-warming-to-heat/article68117359.ece

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

    Inequality can no longer be ignored

    Explained | Indian Society | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

    Why in the news?

    The Congress’s party’s election manifesto, the Nyay Patra, has triggered a debate on inequality, concentration of wealth and the measures to address these.

    The reason behind the inequality in India:

      • Taxation Disparities: India’s tax-GDP ratio is comparatively low, standing at 17% as opposed to 25% in Brazil, indicating room for improvement in revenue generation. The taxation structure in India leans towards indirect taxes, which contribute significantly (about two-thirds) to overall tax revenue collection.
      • Regressive Taxation Structure: India’s tax system is described as regressive, indicating that it disproportionately impacts low-income individuals compared to high-income individuals. Indirect taxes, which are a significant component of overall tax revenue, tend to burden lower-income groups more than higher-income groups.
      • Lack in Tax Progressivity: There are concerns about the lack of progressivity in India’s direct tax regime, where higher-profit companies enjoy relatively lower effective tax rates compared to lower-profit companies.

    Welfare spending is low

      • Low Spending on Welfare and Social Sector: India’s expenditure on welfare and the social sector is significantly lower compared to other countries. Public spending on health remains low, approximately 1.3% of GDP, falling short of the National Health Policy (NHP) target of 2.5% of GDP by 2025.
      • Eventual decline Budget Allocations: Major budgetary allocations for programs like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), education, and budgets for children have either declined as a proportion of total expenditure or GDP.

    Way forward

    • Revenue Mobilization and Spending Priorities: There’s a pressing need to improve revenue mobilization progressively, ensuring that the burden of taxation is distributed fairly and equitably.
      • Simultaneously, increasing spending on areas that directly affect the lives of the poor is crucial. This includes healthcare, education, social protection programs, and employment generation schemes like MGNREGA.
    • Achieving Policy Targets: Meeting targets set by policies like the NHP requires a concerted effort to ramp up healthcare spending in line with national goals.

    Mains PYQ 

    Q) Despite the consistent experience of high growth, India still goes with the lowest indicators of human development. Examine the issues that make balanced and inclusive development elusive.  (UPSC IAS/2019)

    Q) Critically discuss the objectives of Bhoodan and Gramdan movements initiated by Acharya Vinoba Bhave and their success.  (UPSC IAS/2013)

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  • Digital India Initiatives

    [PREMIUM] An Overview of the Digitalization in Indian Economy

    Explained | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    Why in the news?

    As per RBI findings, India’s core digital economy saw a rise from constituting 8.5% of GVA in 2019 to 12.5% in 2023, marking a growth rate of 15.6% over the span of 2019-2023.

    What is digitisation?

    • Digitization refers to the process of converting information, data, or physical objects into digital format. Digitization enables information to be stored, accessed, and manipulated electronically, often leading to increased efficiency, accessibility, and flexibility compared to traditional analog methods.

    Origin in World 

    • The origin of digitalization can be traced back to the late 19th century when Herman Hollerith developed a punch card system for tabulating data.
    • Alan Turing’s theoretical work on computation in the early 20th century laid the foundation for the development of the first electronic computers in the 1940s, which were pivotal in digitizing various forms of information.

    Origin in India 

    • Late 20th century: The origins of digitalization in India can be traced back to the late 20th century, with the advent of personal computers and the internet.
    • Early 2000s:The government’s concerted efforts to drive digital transformation in the country began in the early 2000s with the launch of the National e-Governance Plan (NeGP) in 2006
    • 2015: The NeGP aimed to make government services available to citizens electronically by improving online infrastructure and connectivity. This laid the foundation for the more comprehensive “Digital India” initiative, which was launched by Prime Minister Narendra Modi in 2015

    Status of Digitalization in the Indian Economy

    • Enhancement of E-Governance: The Digital India initiative has brought about substantial enhancements in e-governance services. Programs such as e-visas and the Digital Locker system have effectively modernized government services, leading to a reduction in paperwork and greater accessibility for citizens.
    • E-Commerce market: India’s e-commerce market is expected to reach $200 billion by 2026. Major players like Flipkart and Amazon have expanded their reach, with the COVID-19 pandemic accelerating online shopping adoption.
    • Digital transaction: The BHIM (Bharat Interface for Money) app, utilizing the Unified Payments Interface (UPI), has garnered immense popularity, enabling secure peer-to-peer transactions. By August 2023, UPI had processed more than 10 billion monthly transactions, amounting to INR 18 trillion ($204.77 billion).
    • Startup Ecosystem in India: India’s rapidly growing startup ecosystem currently encompasses 110 unicorns valued at $347 billion, featuring prominent companies such as Paytm, Ola, and Zomato. These unicorns exemplify India’s prowess as a technology-driven entrepreneurial center.
    • Digital Financial Inclusion: Digital financial services, propelled by programs such as Jan Dhan Yojana, have advanced financial inclusion by facilitating the opening of millions of bank accounts for those previously excluded from or underrepresented in the banking system.
    • Surge in Broadband and Internet Usage: India has experienced a notable surge in broadband adoption, boasting 825 million mobile broadband subscribers as of July 2023. This uptick has resulted in heightened data consumption and escalated online engagement, especially among Generation Z.

    Key challenges related to digitalisation in India:

    • Lack of skills: Rapid technological change increase the demand of skilled workforce. Only 42% of India’s workforce possesses digital skills, highlighting the need for digital literacy and upskilling.
    • Regulatory challenges: For businesses, especially startups, grappling with intricate digital regulations, e-commerce taxation, and intellectual property matters continues to present significant challenges.
    • Privacy issues:The surge in digital transactions and data exchange has sparked notable concerns regarding privacy and data security. These concerns are being tackled by the Personal Data Protection Bill, which introduces regulatory intricacies.
    • Cybersecurity: As digitization increases, the risk of cyber threats and attacks grows. India faced 91 lakh cybersecurity incidents in 2022, ranking third globally in the average cost of data breaches.
    • Digital Divide: Despite advancements, there remains a digital gap, with rural areas experiencing restricted internet and technology accessibility, resulting in approximately 50% of the population being offline.

    Measures to address these challenges:

    • Digital Skills Development: Implement comprehensive digital literacy programs to enhance the skills of the workforce.
    • Regulatory Simplification:Streamline digital regulations, especially for startups, to reduce complexities and facilitate smoother operations.Provide guidance and support to businesses on e-commerce taxation and intellectual property matters.
    • Privacy and Data Security: Enforce the Personal Data Protection Bill to address privacy concerns and ensure data security.Enhance awareness campaigns to educate the public about data privacy and protection measures.
    • Cybersecurity Measures: Strengthen cybersecurity infrastructure to combat the increasing cyber threats and attacks.Invest in advanced cybersecurity technologies and training programs to build a resilient defense system.
    • Closing the Digital Divide:Expand digital infrastructure in rural areas to improve internet and technology accessibility.

     Steps taken by government:

    • Cybersecurity Framework: Enhance cybersecurity infrastructure and awareness, emphasizing collaboration between government agencies and the private sector under National Cyber Security Policy of 2021.
    • Data Protection Laws: Enacted data protection laws and regulations, like the Digital Personal Data Protection Act, of 2023, to ensure privacy and responsible data handling.
    • Expansion of Broadband : Accelerate efforts to expand broadband connectivity in rural and remote areas, leveraging public-private partnerships like the BharatNet project.
    • Digital initiative: Comprehensive digital literacy initiatives targeting both urban and rural communities, exemplified by programs like the Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA).

    Conclusion: 

    Need to Implement widespread digital literacy programs to equip individuals with the necessary skills to navigate the digital landscape and emphasize upskilling and reskilling initiatives to meet the demands of rapid technological advancements.Encourage collaboration between the government and the private sector to drive digitization initiatives.

     

    Mains PYQ

    Q Implementation of Information and Communication Technology (ICT) based projects/programmes usually suffers in terms of certain vital factors. Identify these factors and suggest measures for their effective implementation. (UPSC IAS/2019)

    Q Has digital illiteracy, particularly in rural areas, coupled with lack of Information and Communication Technology (ICT) accessibility hindered socio-economic development? Examine with justification.(UPSC IAS/2021)

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