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IASbaba’s Daily Current Affairs – 20th March 2017

DISABILITY AND INCLUSION

TOPIC:

General Studies 2

Issues relating to development and management of Social Sector/Services relating to Health
Development processes and the development industry the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders

General Studies 3

Inclusive growth and issues arising from it.
Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Disability-Inclusive Development Agenda

Introduction

Disability is a critical issue especially for an inclusive development agenda. Being a multi-sectoral issue it is important that disability is tackled through holistic policy action in coordination with all stakeholders and ministries.

Issue:

The National Institution for Transforming India (NITI Aayog) is formulating a Vision 2030 document.

This document is coterminous with the UN’s 2030 Sustainable Development Goals (SDGs), all 17 of which equally affect persons with disabilities as they do any other citizen.
The National Centre for Promotion of Employment for Disabled People conducted a seminar in December 2016.
The government, the private sector, and leaders from various development fields participated to take stock of the current situation and deliberate on how disability could be integrated in Vision 2030.
A starting point was that the government, the NITI Aayog, and all the associated stakeholders should interpret the provisions of the SDGs in line with the requirements and spirit of the UN Convention on the Rights of Persons with Disabilities (UNCRPD).

What may a road map for creating a disability-inclusive development agenda look like?

A starting point

Disability is still seen as an opportunity for dispensing charity rather than as a development or a human rights issue.
The knowledge of MPs and State legislatures must be refreshed on the rights, needs and issues of persons with disabilities based on the changing disability landscape, the UNCRPD, and the Rights of Persons with Disabilities Act, 2016.
The NITI Aayog must invest effort in building awareness for NGOs, academics, civil society, the private sector, etc., in order to articulate a disability-inclusive development agenda.

Disabled inclusive agenda

Persons with disabilities must be seen as integral to the decision-making process and not as an afterthought.
- They must be mentioned in the outcome metrics defined for each goal, target or indicator, and these matrices must elaborate specific strategies for persons with disabilities.
- There must be seven-year checkpoints for ministries or departments to assess the outcomes. Fair and adequate representation of disability groups during the consultation process is imperative.
- The NITI Aayog has mapped each goal to a nodal ministry and each target with the government’s key programmes and departments to make these targets accountable and realise them within a specified time period.
- However, disability is an issue that cuts across several ministries; it is not just a subject for the Ministry of Social Justice and Empowerment.
- Our analysis indicates that there are 26 ministries where there needs to be a dedicated focus towards persons with disabilities and a specific cell to address their concerns.
- Specific budgets need to be allocated across initiatives and ministries to address the needs of persons with disabilities.
The NITI Aayog too must have a dedicated cell which acts as a focal point and works with all ministries to monitor implementation and track progress across all initiatives for persons with disabilities.
The document must insist that data for persons with disabilities are appropriately collected, maintained and disaggregated.
This must include all government initiatives that capture any data related to population or human resources or human development, including employment, education, poverty and hunger.
While reporting from the SDGs’ point of view, the NITI Aayog must ensure that the process of data collection and disaggregation for disability must not be relegated to the silos of seven targets which explicitly mention persons with disabilities, or the additional six targets which mention people in vulnerable situations.
In addition, there are universal targets, which must also be achieved for persons with disabilities.
Our analysis indicates that there are more than 85 targets across 15 goals encompassing more than 100 indicators where there is a need to collect, analyse, disaggregate and report data for persons with disabilities.
All data must be available in the public domain, and published in an an accessible format and in a timely manner.

Universal Approach:

It is important for India to have the addition of a universally accepted disability question(s) on all existing data instruments.
The UN recommends the Washington Group Short Set of Questions on Disability, while India has been using a different question.
A standard question needs to be developed, taking into account the socio-cultural sensitivities of people with disabilities and their families.
The NITI Aayog should call for a national-level consultation with cross-disability groups and arrive at a consensus on the right question –
- This should then be unified across all data instruments of all sources of demographic information, including the impending Unique Disability ID,
- the population census, civil registration, sample surveys conducted by the National Sample Survey Organisation,
- Sample Registration System and for all social schemes.

Conclusion:

The overarching principle of Vision 2030 is to “leave no one behind”. We, as disabled citizens, are anxious to learn how this crucial document, which will encompass the SDGs 17 goals and 169 targets, will be inclusive of our needs and aspirations.

Connecting the dots:

Disability inclusive development agenda is a inter-ministerial and multi-sectoral challenge. Elaborate w.r.t. recent efforts of the NITI Ayog.

ECONOMY/NATIONAL

TOPIC: General Studies 3

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

Stayzilla episode: How to treat startups when they fail

Background: Arrest of founder of travel portal startup- Stayzilla on charges of non-payment of dues to its vendor has seen the entire start-up ecosystem fuming.

Stayzilla was started in 2005 and collaborated with about 8000 homestay properties in about 900 towns. It had also tied up with various state tourism boards including Madhya Pradesh, Rajasthan, Odisha etc. to promote the idea of homestay in India.
However, it was facing a stiff competition from Airbnb, Oyo and Treebo for discounts, funds and reliability of services.
Besides, it was facing some regulatory issues and had initiated the conversations with Central Government in April 2016 for easing the homestay guidelines.
In the meantime, it had raised about $40 million from private investors.
But sometime ago it announced that it will shut down and revamp its business model which led to controversies about its non-payment of dues to a media agency start-up, ultimately leading to arrest of founder.

The startup road blocks

The travel marketplace in India does not have local network effects and, therefore, could not take a focused city-by-city approach in terms of matching supply and demand.
This resulted in investing extensively in both sides of the marketplace, creating Homestays as well as guests who would choose a homestay across the country.
Though it was successful, the costs of the same deteriorated the company’s ability to expand quickly and cost effectively.
Also, as India does not have necessary public goods like logistics, tech savvy suppliers and online user demand which is oftently present in mature markets.
Besides there is lot of discounting game in the travel segment which force companies to also slash prices. This requires a lot of funds but is highly unsustainable.

Issues that need a solution

There is a need for collateral-free working capital assistance through the organised banking channels so that startups have cushioning effect in the initial years due to availability of funds.
This also reflects the absence of a proper foundation for the start-up ecosystem to effectively address the ups and downs of business.
There also arose a need, looking at the Stayzilla episode, to educate the entire stake-holders in the start-up ecosystem – right from investors to entrepreneurs and vendors besides the law-enforcing authorities – on their rights and responsibilities.

Treating the startups right

On the face of it, it seems to be a civil case between two parties which has been turned into a criminal case with police arrest.
A civil case to claim unpaid monies stretches for years before a final order is passed. Hence, now individuals and institutions choose to file criminal cases alleging fraud.
Such change of nature of case is possible because technically there is nothing in the law that prevents a person from pursuing criminal action in cases where there is an alternative civil remedy available.
This has brought forward some crucial questions like if the investors could have bailed the start-up entrepreneur out of an ugly situation? or if more vendors will now take criminal actions against failing start-ups?
According to data from start-up tracker Tracxn, 314 start-ups downed shutters in 2016 and 5 till now in 2017.
However, there is a need to look at the larger picture – the issue of accountability, role of private equity players and the available mechanism to settle such disputes.

What should be done?

The parties involved should consider building alternative dispute resolution mechanisms such as arbitration in their contracts. This is helpful as it gives direction to solve the issues and also the rising number and heavy backlog of cases in civil court.
What is important noticing here is that under law, even if Stayzilla were to undergo voluntary winding up, it would have to first set off its liabilities towards its creditors.
The shutting down party should try to clear dues to the greatest extent possible – whether it is employee salaries, vendor payments or office rents. In this case, if Stayzilla had raised money, it should have focused on paying off dues first rather than completely shutting down which has now initiated a legal battle.
The promoters have a moral responsibilities towards settling liabilities, even if the company structure gives leeway.
Today, most start-ups prefer having a structure of private limited companies or limited liability partnerships as they help promoters limit their liabilities.
A CIBIL-like system to measure credibility of the organisation as well as the founder should be explored. (CIBIL is India’s first Credit Information Company that collects and maintains records of an individual’s payments pertaining to loans and credit cards.)
Advertisement agencies operate on economics of trust and the business model is essentially one of a pass-through of the client’s payments to the media house after deduction of the agreed margins, which are miniscule.
To withhold the entire payment due to poor ‘services’ which constitutes only the small agency media commission of between 2-4% is unethical.
It is the responsibility of the vendors, promoters and media agencies to sort out their differences without court intervention in startups as it may affect the confidence of entire startup ecosystem.

Conclusion

Stayzilla is a prime example of a start-up malfunction and not meeting with its vendor obligations. The startups have a funding structure based on tranche funding from venture capitalists (VCs) and they broadcasts the funding figures even before the capital is received.

However, VCs place certain pre-conditions to be met for such disbursements and thus, the funding does not accrue in toto. This creates an uncertain environment in the start-up ecosystem which inflates the apparent creditworthiness of a start-up.

There are no quick-fix solutions in such disputes as the current legal process is cumbersome even though it allows for winding-up. The newly enacted Insolvency and Bankruptcy Code could go a long way in addressing such situations. But for now, a start-up ecosystem is needed that practices fairness.

Connecting the dots:

India needs an encouraging startup ecosystem which is currently unavailable due to sloppy nature of government start up programmes and unorganised private help. Do you agree? Examine.