Type: Schemes

Introduction

• Revival of NYAY: A mainstream political party has revived its 2019 manifesto center-piece, the NYAY scheme (Nyuntam Aay Yojana or Minimum Income Scheme), ahead of the 2024 general election.
• Promised Benefits: The party announced that if elected, the party would implement NYAY, providing women with an annual income of Rs 60,000-70,000.

Background of NYAY and PM-KISAN

• NYAY’s 2019 Proposal: Its 2019 manifesto promised NYAY to the poorest 20% of Indian families, guaranteeing Rs 72,000 annually to each eligible family.
• Comparison with PM-KISAN: Around the same time, the incumbent government launched PM-KISAN, providing Rs 6,000 per year to farmer families, showcasing the appeal of direct benefit transfers (DBTs).

Understanding Universal Basic Income (UBI) vs. Targeted Schemes

• UBI Definition: UBI involves providing a basic income to every citizen, from the wealthiest to the poorest, with the simultaneous removal of all subsidies.
• Differences with NYAY/PM-KISAN: These schemes are not UBI as they don’t remove existing subsidies, offer a smaller amount than a basic income, and are targeted rather than universal.

Challenges and Questions Surrounding UBI and DBTs

• Affordability: No country has been able to afford UBI due to its high costs and the population size, especially in countries like India.
• Political Backlash: Removing existing subsidies to fund UBI could lead to significant political backlash.
• Effectiveness of DBTs: Despite criticisms of being mere doles or freebies, DBTs have been seen as effective in alleviating economic distress in various situations.

Rationale behind Direct Benefit Transfers

• Economic Arguments: Direct cash transfers can stimulate local economies and create a virtuous cycle of development.
• Empowerment: Providing cash can empower individuals to make their own decisions and invest in their futures.

A Radical Policy Solution: Direct Cash Transfers

• Provocative Proposition: In their 2010 book, “Just give money to the poor: The Development Revolution from the Global South,” authors Joseph Hanlon, Armando Barrientos, and David Hulme advocate for unconditional cash transfers to the poor.
• Historical Shifts in Welfare Thinking: The book outlines four paradigm shifts in welfare policies:
  1. 16th-century England’s collective responsibility for subsistence.
  2. Increased social spending and introduction of pensions in late-19th-century Europe.
  3. Mid-20th-century recognition of an adequate standard of living as a human right.
  4. Early 21st-century trend in the Global South of using cash transfers to combat poverty and promote development.

Case for Unconditional Cash Transfers

• Argument for Simplicity and Effectiveness: The authors argue that providing money directly to the poor, without conditions, is a promising approach for reducing poverty and fostering long-term development.
• Global Examples: They cite successful examples from Mexico, South Africa, Namibia, Brazil, Indonesia, and India (NREGA), where governments have implemented such policies.

Implementation Challenges and Principles

• Effective Implementation: Successful DBT programs require fairness, assurance, practicality, sufficient payment size, and political acceptability.
• International Examples: Developed countries have implemented various forms of cash transfers, indicating the potential benefits of such policies.

Public Perception and Political Strategy

• Rejection of Higher Cash Transfers: The public’s rejection of 2019 NYAY offer suggests that implementation and trust are as crucial as the policy itself.
• Political Discourse: The debate over DBTs often gets mired in political rhetoric, overshadowing the policy’s potential benefits and challenges.

Conclusion

• Balancing Act: India must balance the immediate relief provided by DBTs with long-term strategies for poverty alleviation and economic empowerment.
• Learning from the Past: The revival of NYAY and the ongoing debate on DBTs provide an opportunity to learn from past experiences and design more effective and inclusive policies.
• Future of Welfare Policies: As India approaches the 2024 general election, the discourse on NYAY, PM-KISAN, and similar schemes will play a crucial role in shaping the country’s welfare policies.

Central Idea

• The Minister of State for Social Justice and Empowerment recently informed about the Pradhan Mantri Anusuchit Jaati Abhyuday Yojana (PM-AJAY) Scheme during 2023 year-end review.

About PM-AJAY Scheme

	Details
Launch	Implemented since 2021-22
Aim	To reduce poverty of SC communities through employment generation, skill development, income generation, and infrastructure development.
Nature	100% Centrally Sponsored Scheme
Components	Development of SC dominated villages into ‘Adarsh Gram’ Grants-in-aid for District/State-level Projects for socio-economic betterment of SCs Construction of Hostels in Higher Educational Institutions
Merged Schemes	Pradhan Mantri Adarsh Gram Yojana (PMAGY) Special Central Assistance to Scheduled Caste Sub Plan (SCA to SCSP) Babu Jagjivan Ram Chatrawas Yojana (BJRCY)
Developments in Grants-in-Aid Component	Financial assistance enhanced from Rs. 10,000 to Rs. 50,000 or 50% of the asset cost, whichever is lesser, for beneficiary/household. Web-based portal developed for submission, appraisal, approval, and monitoring of Annual Action Plan.

Central Idea

• The Union Women and Child Development Ministry aims to establish 17,000 creches in Anganwadi centres across the country out of which 5,222 have been approved to date under the ‘Palna’ scheme.

What is Palna Scheme?

	Details
Objective	To provide quality childcare facilities through Anganwadi-cum-Crèches, enabling women’s participation in the workforce
Integration	Part of the Samarthya sub-component of Mission Shakti, starting from April 2022 National Creche Scheme (NCS) was revised and subsumed as part of the ‘Palna’ scheme under Mission Shakti.
Focus	Establishing combined Anganwadi and crèche facilities for comprehensive childcare
Target Demographic	Primarily urban areas where family-based childcare support is less available
Standard Operating Procedure	SOP released to outline administrative framework, roles, responsibilities, and monitoring mechanisms

 

About National Crèche Scheme (NCS)

	Details
Launch	Rajiv Gandhi National Crèche Scheme (RGNCS) launched in 2006; From 2017, implemented as the National Crèche Scheme (NCS).
Legal Provisions	MGNREGA; Maternity Benefit (Amendment) Act 2017.
Objective	To provide daycare facilities for children aged 6 months to 6 years of working mothers
Target Group	Children of working mothers, especially from economically weaker sections of society
Childcare Services	Daycare, supplementary nutrition, early childhood education, health check-ups
Operational Hours	Typically 7 to 8 hours a day, 26 days a month
Age Group	Children aged 6 months to 6 years
Administration	Ministry of Women and Child Development, Government of India
Execution	Through state governments, NGOs, and community-based organizations

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Try this PYQ from CSP 2019:

Which of the following statements is/are correct regarding the Maternity Benefit (Amendment) Act, 2017?

1. Pregnant women are entitled for three months pre-delivery and three months post-delivery paid leave.
2. Enterprises with creches must allow the mother minimum six creche visits daily.
3. Women with more than two children get reduced entitlements.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 only

(c) 3 only

(d) 1, 2 and 3

[wpdiscuz-feedback id=”9dvaju3ugn” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

Central Idea

• The Department of Food and Public Distribution has proposed a plan to source rice from the Food Corporation of India (FCI) under the Open Market Sale Scheme (OMSS) for consumer sales.
• The FCI is providing quality rice under OMSS at a reserve price of ₹29 per kg.

About Open Market Sale Scheme (OMSS)

	Details
Purpose of OMSS	To sell government-owned food grains (wheat and rice) in the open market to enhance supply and moderate prices, especially during lean seasons and in deficit regions.
Implementing Agency	Food Corporation of India (FCI)
Components of OMSS	1. Sale of wheat to bulk consumers/private traders through e-auction. 2. Sale of wheat through e-auction by dedicated movement. 3. Sale of Raw Rice Grade ‘A’ to bulk consumers/private traders through e-auction.
Method of Selling	Through e-auction for transparency, conducted weekly using the platform of NCDEX (National Commodity and Derivatives Exchange Limited).
Participants	State Governments/Union Territory Administrations and private entities can participate in the e-auction. States procure additional food grains through OMSS for distribution under the National Food Security Act,2013 (NFSA).

Impact on Rice Inflation

• Current Inflation Rate: The annual inflation rate of rice has been around 12% for the past two years, accumulating over time and raising concerns.
• Objective: The department aims to reduce this inflation rate and make rice more affordable for consumers.

Significances of OMSS

• Enhance the supply of food grains: The OMSS helps to enhance the supply of food grains, especially wheat, during the lean season and moderates the open market prices, especially in deficit regions.
• Prevent wastage and deterioration of food grains: The OMSS also helps to prevent wastage and deterioration of food grains in FCI godowns due to a lack of storage space and proper maintenance.
• Provides an alternative source of food grains: The OMSS provides an alternative source of food grains for bulk consumers, state governments, UTs and private parties who participate in various schemes and programmes such as ethanol production under biofuel policy.
• Generates revenue for the FCI: The OMSS generates revenue for the FCI and reduces its subsidy burden on the central government. The FCI sells food grains under OMSS at pre-determined prices which are higher than the minimum support prices (MSPs) paid to farmers for procurement.

Challenges faced by OMSS

• Low demand from the buyers: The OMSS faces low demand from buyers due to high reserve prices fixed by the FCI, which are often above the market prices.
• Logistical challenges: The OMSS also faces logistical challenges such as transportation, handling and quality issues of food grains, which affect the timely delivery and customer satisfaction. 
• Limited impact on stabilizing the market prices: The OMSS has a limited impact on stabilizing the market prices as it accounts for a small share of the total food grain supply and demand in the country. 
• Does not address the structural problems: The OMSS does not address the structural problems of food grain management such as procurement, distribution and buffer stocking policies, which need to be reformed to ensure food security and fiscal prudence. 

Way forward

• Revise the reserve prices of food grains: The FCI should revise the reserve prices of food grains under OMSS based on the prevailing market conditions and demand-supply situation to attract more buyers and clear the excess stocks.
• Improve logistics and quality management: The FCI should improve its logistics and quality management system to ensure timely delivery and good quality of food grains under OMSS. 
• Diversify product portfolio: The FCI should diversify its product portfolio under OMSS to include coarse grains, pulses and oilseeds, which are also essential for nutrition security and have a higher demand in the market.
• Coordinate with state governments: The FCI should coordinate with state governments, UTs and other stakeholders to ensure effective implementation and monitoring of OMSS and address any grievances or complaints arising from it. 

Back2basics

Food Corporation of India (FCI) It is a statutory body set up in 1965 (under the Food Corporation Act, 1964) under the Ministry of Consumer Affairs, Food and Public Distribution, Government of India. It was set up against the backdrop of a major shortage of grains, especially wheat, in the country. Currently, FCI is mandated with three basic objectives: To provide effective price support to farmers; To procure and supply grains to PDS for distributing subsidised staples to economically vulnerable sections of society; and Keep a strategic reserve to stabilise markets for basic foodgrains.