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Subject: CareXMonetized Economy

  • Insurers seek first third party premium hike in four years

    Why in News?

    Non life insurers are pressing for their first motor third party premium hike in four years, citing a Supreme Court judgment recognising the economic value of homemakers’ unpaid domestic work.

    Key Highlights

    • In its 11 June 2026 judgment, the Supreme Court held that unpaid domestic work performed by homemakers has measurable economic value and must be fairly considered while awarding compensation under the Motor Vehicles Act, 1988.
    • Insurers argue that the ruling is likely to increase compensation payouts, adding to existing underwriting losses.
    • They have requested an upward revision in motor third party insurance premiums, the first such increase in four years.
    • The Central Government, in consultation with the Insurance Regulatory and Development Authority of India (IRDAI), notifies third party premium rates.

    Motor Third Party (TP) Insurance

    • Mandatory under the Motor Vehicles Act, 1988 for all motor vehicles operating in India.
    • Covers death, bodily injury, or property damage caused to a third party due to the insured vehicle.
    • Does not cover damage to the insured vehicle; that requires comprehensive motor insurance.
    • Premium rates are regulated by the Central Government, based on recommendations from IRDAI.

    Value Addition

    • IRDAI: Statutory regulator established under the Insurance Regulatory and Development Authority Act, 1999.
    • Motor Accident Claims Tribunal (MACT): Adjudicates compensation claims arising from road accidents under the Motor Vehicles Act, 1988.
    • Significance of the Supreme Court ruling: Strengthens recognition of the economic contribution of unpaid care work, advancing substantive gender equality and ensuring more equitable compensation in accident claims.

    [2026] With reference to different Committees in India, consider the following details :

    Sl. No.CommitteeObjectiveOrganization under which it was formed
    1R.N. Malhotra CommitteeComprehensive reforms of Insurance sector in IndiaInsurance Regulatory and Development Authority of India
    2L.C. Gupta CommitteePreparing a roadmap for the introduction of derivatives trading in IndiaSecurities and Exchange Board of India
    3Urjit R. Patel CommitteePreparing a roadmap for reforming bank lending to the Housing sectorReserve Bank of India
    4Y.H. Malegam CommitteePreparing a roadmap for reforms in Microfinance sector in IndiaReserve Bank of India


    In which of the above rows are all the details correctly matched ?

    [A] 2 only

    [B] 2 and 3

    [C] 1, 3 and 4

    [D] 2 and 4

  • Distinguish between ‘care economy’ and ‘monetized economy’. How can care economy be brought into monetized economy through women empowerment?

    Care economy refers to the unpaid or underpaid activities performed within households and communities such as childcare, elderly care, household maintenance, and emotional labour. In contrast, the monetized economy includes all paid economic activities that generate income

    Key Features of the Care Economy:

    Human-Centered

    Labour-Intensive

    Majorly Informal Sector

    Bringing Care Economy into Monetized Economy through Women Empowerment

    Raising investment in the care economy to 2% (>1% current) can generate 11 million jobs for women.

    Draw lessons from Japan’s womenomics for boosting female labour participation.

    Encourage PPP models and CSR initiatives to expand affordable care infrastructure.

    Skill Development and Certification in childcare, geriatric care, nursing, early education, nutrition.

    Formalisation of Care Services by expanding creches, Anganwadis, elderly care centres, community caregiving services.

    Promotion of Women-led Care Entrepreneurship such as day-care centres, tiffin services by providing credit, digital platforms, SHG support, and market linkages.

    Social Protection- Recognising care work under minimum wage laws and social security frameworks.

    Digital platforms like online caregiving services, home-nursing apps, domestic work registries help women monetise care skills.

    Investments in time-saving infrastructure such as clean cooking fuel, piped water, and public transport can increase FLFPR in the formal economy.

    Adopting the 3R Framework (Recognize, Reduce and Redistribute) can help realise SDG 5.4.

    Economic Growth and Macroeconomic Stability