IASbaba’s Daily Current Affairs – 31st August, 2016

IASbaba's Daily Current Affairs Analysis, IASbaba's Daily Current Affairs Aug 2016, National, UPSC

IASbaba’s Daily Current Affairs – 31st August, 2016

NATIONAL

TOPIC: General Studies 2

Statutory, regulatory and various quasi-judicial bodies.

Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Issues relating to development and management of Social Sector or Services relating to Health, Education, Human Resources.

Managing the medical professionals in India

Medical care in India

India still spends only around 4.2% of its national GDP towards healthcare goods and services (compared to 18% by the US).
Government spends only about 30% of the country’s total healthcare budget for primary healthcare.
Many reports commissioned by Government of India highlights one fact of lack of accessibility and affordability of medical care by large number of Indians.
Thus, the system of health-care delivery and medical education in India are poorly regulated, expensive, opaque and corrupt.
Double blow: India has to deal with burden of infectious and chronic diseases on one hand and concentration of medical professionals in urban areas on other hand.

Draft National Medical Commission Bill, 2016 (Prepared by NITI Aayog)

The recommendations are:

Medical Council of India (MCI) to be replaced by National Medical Commission (NMC).
‘For-profit’ organizations be permitted to establish medical colleges.
Creation of a Medical Advisory Council (MAC) by the central government to articulate the national agenda for medical education.
Creating a statutory basis for common entrance examinations (NEET) for admission to undergraduate and postgraduate courses in medical colleges.
It was discussed to insert an additional enabling provision of voluntary recertification/renewal of licence exam once every 10 year. However, it was concluded that it was not an appropriate time for such radical step in India.

Two recommendations that have attracted debate are:

Replace MCI

Why?

It has become inflexible and opaque
It has failed to provide leadership role in educating a cadre of medical professionals that is trained and willing to deal with the medical problems of the people of India.
Large scale corruption has plagued MCI while granting approvals for establishing medical colleges.

Thus,

A new National Medical Commission to replace MCI to serve as the policy-making body for medical education.
To improve the standard of medical education in the country
The regulators who were elected to be replaced with broad-based search-cum-selection committee. However, there should be a mix of nominated and elected members which will encourage a healthy tension between various points of view rather than only nominated members who would want to please the government of the day.
NMC provides for four autonomous boards for Under Graduate Medical Education, Post Graduate Medical Education, Medical Assessment and Rating and Registration and Ethics.

Hence, a new institution is expected to utilise the opportunity to correct the inaccuracies and create a visionary framework to train medical professionals and equip them to deal with needs of people.

Allow ‘For profit’ entities to establish medical colleges

Why?

Micromanagement encouraged rent-seeking behaviour in the process of approval of new medical colleges by the MCI.
Rent seeking: increase one’s share of existing wealth without creating new wealth which results in poor economic efficiency.
A cap on fees in private colleges discouraged their entry which runs contrary to the objective of a rapid expansion of medical education.
Enforcing regulation on fees was difficult.
Thus, government was not able to enforce rule of law.

Criticism

It will severely damage the objective of providing cadre of medical professionals who are able and willing to work in small towns and villages.
The sale of medical seats in private colleges for capitation fees going up to Rs.50 lakh.
The medical professionals will want to recover the cost spent on medical education and thus encourage them to work in urban areas and private clinics only.

Conclusion- India’s healthcare needs:

Primary care doctors:

There is a need for primary care physicians, equally in cities, towns and villages.
On ground, most lives are saved and pain is alleviated by the primary care physician.
Throughout the developed world, there is a great emphasis on primary care doctors but in India the role model of aspiring medical students is the emergency care physician and surgeons performing highly complex surgeries.
Thus, the career as a primary care physician has to be made attractive for the aspiring medical professionals.
The medical aspirants have to be made aware of India’s primary healthcare professional needs and it needs to be ensured that only those with an outlook in tune with the requirements of medical professionals enter medical colleges.

Cadre of medical teachers

There is a shortage of suitable qualified teachers, especially, specialities like forensic science, community medicine, tuberculosis and radio diagnosis which are facing severe teacher crisis.
In such scenario, opening new medical colleges will not serve the purpose as the faculty will be eventually called from government colleges.
MCI for years failed to address this problem by taking adequate steps nor provided leadership and guidance on faculty shortage.
Thus, there is a need to train enough teachers and it will take considerate time.

Inclusive stakeholders

Medical education is not the sole tool for dealing with India’s health challenges.
Inducting non-medical professionals of integrity and community health experts to regulatory bodies would help advance public interest.

Following a larger goal

To evolve a process where MBBS doctors get their due at a time when hinterland India does not have enough doctors. The sole focus should not be on specialists and super specialists.
The larger goal of a revamp should be to produce medical professionals in such numbers that would improve the doctor to population ratio and ensure their availability across the country.
The commercialisation of health education has to be removed.
This field requires empathy, altruism and high ideal which are greatly prized by the general public and should be encouraged.

Connecting the dots:

Does India need more primary health care doctors than tertiary care specialists? Examine.

Related articles:

Getting Medical Education on track

A case of public health in India

Why not a right to primary healthcare?

ECONOMICS

TOPIC: General Studies 3

Indian economy and issues relating to planning, mobilization of resources, growth, development and employment

Strengthening the Bond market

In a country like India, an effective and a vibrant corporate bond market is not only a requirement but a necessity as an alternative platform to fuel the growth of the economy.
It would not only be a good transition in the financial landscape to have this platform to raise debt finance and reduce dependence on the banking system but will supercharge the economy with a diverse set of options and the ‘issuance’.
Many committees have come along citing the various impediments that the ‘corporate bond market’ are characterised with—policy and regulatory hurdles mostly— R. H. Patil Committee (2005), Percy Mistry Committee (2007), Raghuram Rajan Committee (2009) came up with significant recommendations but not much has been done yet.

The existence of Debt Capital

Here, in India, it’s the banks which have largely been responsible for providing debt capital. And, to be specific, this has resulted into—

Accumulation of non-performing assets
Lack of discipline among large borrowers
Inability of the banking sector to provide credit to small enterprises
Market lacks a reliable benchmark yield curve making pricing of corporate bonds difficult

More importantly, the corporate bond market never really took off in India because of—

High fiscal deficit
Government’s funding needs

…leading to the combined fiscal deficit remaining on the higher side and affecting the availability of funds while also crowding out private sector issuance

Shifting Odds—In favour of a strong corporate bond market

In 2015, the Financial Stability and Development Council sub-committee constituted a working group under the then RBI Deputy Governor H. R. Khan with representation from the government and other regulating authorities.
They reviewed the recommendations of the previous committees and came up with ways for implementation of the same, as well as made further recommendations.
RB has, currently, came up with a number of steps aimed to strengthen the corporate bond market—
- Increased the limit for the partial credit enhancements that banks can offer to corporate bonds
- Measures to discourage banks from lending to large borrowers after a point and signed off on the idea of accepting corporate bonds while lending under the liquidity adjustment facility
- Eased restrictions for foreign investors
- Frequent issuances by the same company can be clubbed together to create liquidity and re-issuance is not to be considered a new issue
- Market also lacks a reliable benchmark yield curve making the ‘pricing’ of corporate bonds difficult

Expected benefits—

Generation of activities in the market
Pushing large borrowers to raise funds from the market leading to increase in issuance thereby, attracting more investors and more liquidity in the market

Government’s commitment to maintain fiscal discipline—

Constituted an expert committee N.K. Singh (veteran policymaker) to suggest new fiscal rules—consider all aspects of government finance, including the ability of the financial market to fund fiscal deficit without crowding out private investment

Looking out for alternatives: Since banks are dealing with a high level of non-performing assets, they are not in a position to service the borrowing needs of the corporate sector, and this is forcing companies to look for alternatives. According to Citi Research, less than 45% of incremental debt financing happened through the banking system last fiscal.

IASbaba’s Views:

Stakeholders support is extremely important in developing a vibrant corporate bond market and it is thus, reasonable to expect that other stakeholders will complement RBI and address all outstanding issues.
Increasing investment in the infrastructure space will require massive funding and we know for a fact that banks are not suited to fund such investments. The implementation of the Bankruptcy Code will also help improve confidence and participation.
Government needs to strengthen its will to give a regulatory and a policy push at this stage to address issues and usher in an era of strengthened bond market for India’s economy.