SYNOPSIS: IASbaba’s TLP – 2018: UPSC Mains General Studies Questions [12th December 2017]- Day 17
1. India has got a plethora of regulating bodies/ authorities which often have conflicting or overlapping jurisdiction. This requires a major overhaul of the regulatory regime to ensure that ‘minimum government and maximum governance’ is followed in true spirit. Substantiate by taking suitable examples.
- Why the overhaul of regulatory regime is required?
- What needs to be done?
The issue of multiple regulatory bodies with overlapping jurisdiction is major cause of governance deficit in India. Such phenomenon results in duplication of funds, functions and functionaries. This goes against the maxim of “minimum government and maximum governance”.
Examples and issues-
- Multiple agencies steer the function of local area governance. District development authorities and local governance institutions.
- Education sector- AICTE and UGC.
- Environment- CPCB and NGT.
- Controversy between SEBI and IRDAI over Unit Linked Insurance Policy.
- Faceoff between RBI vs CCI in 2012 over the issue of merging of the banks.
- Disagreement between CERC and CCI over the issue of “abuse of dominance” by electricity companies.
Overhaul of regulatory regime required:
- Lack of clarity leads to politicization of institutions.
- Inefficiency in functioning. Wastage of funds, functions and functionaries.
- Lack of accountability.
- Regulatory hurdle choking growth of economy.
- Recommendations made by RAs are rarely implemented.
What needs to be done?
- Parliament by law should clearly define the functions, responsibilities, powers, privileges of RAs.
- RAs should be given powers to get their judgements implemented so as to increase their efficiency.
- Balancing required b/w ensuring accountability vs autonomy.
- The regulators need to become more dynamic in their functioning. This is possible only if they are provided enough autonomy.
- The regulatory bodies should be kept out of ambit of any political influence
- As recommended by Srikrishna panel an oversight body to regulate finacial sector apart from the RBI.
- Recommendations of Punchi commission for an independent regulator overseeing all regulators.
To ensure the “minimum government and maximum governance ” notion of the government a regulatory convergence is required to avoid biases due to jurisdictional overlap. Above recommended steps can go a long way in solving the issue.
Best answer: disha
2. Why is government intervention a necessity? Examine. By taking two examples one each from the social sector and any of the economic sectors, illustrate the positive effects of government interventions.
- You can start by writing about government intervention first
- Write about necessity of government intervention
- Take examples from Social and Economic sector
- Write positive effects and conclude suitably
Introduction: The word “government”, is defined as an organization or a political body that exercises political authority, controls and administers public policy. They are also responsible for controlling the actions of the government body and the entire nation itself. There is no real model of a society run in the absence of government intervention. There are needs to be some state protection of property rights and spending on national defence.
Arguments for government intervention
- Greater equality, redistribute income and wealth to improve equality of opportunity and equality of outcome.
- Markets fail to take into account externalities and are likely to under-produce public/merit goods. For example, governments can subsidise or provide goods with positive externalities.
- Macroeconomic intervention. – Intervention to overcome prolonged recessions and reduce unemployment.
- Fairness, without government intervention, firms can exploit its Monopoly, to pay low wages to workers and charge high prices to consumers. Government intervention can regulate monopolies and promote competition. Therefore government intervention can promote greater equality of income, which is perceived as fairer.
- Sustainable Development and inclusive human development.
Arguments against government intervention
- Governments liable to make the wrong decisions – influenced by political pressure groups, they spend on inefficient projects which lead to an inefficient outcome.
- Personal freedom. Government intervention is taking away individuals decision on how to spend and act. Economic intervention takes some personal freedom away.
- The market is best at deciding how and when to produce.
Social Sector Intervention:
Pradhan Mantri Surakshit Matritva Abhiyan
“Pradhan Mantri Surakshit Matritva Abhiyan” Scheme is launched to improve the quality and coverage of Antenatal Care with Diagnostics and Counselling services as part of Reproductive Maternal Neonatal Child and Adolescent Health.
It offers some additional opportunities to all pregnant women who have missed their ante-natal visits due to some reasons.
It ensures to provide care provision by a Doctor, Physician or Specialist in at least one antenatal visit in the second or third trimester.
It also improves the quality of care taken during ante-natal. This includes ensuring of the below services. It provides applicable diagnostic services
Suitable management of any existing clinical condition like Anemia, Pregnancy induced hypertension, Gestational Diabetes etc.Proper counselling services in the State or District.
Economic Sector Intervention:
MGNREGS: Evolving the design of the wage employment programmes to more effectively fight poverty, the Central Government formulated the National Rural Employment Guarantee Act (MGNREGA) in 2005. The main objective of the scheme is to provide 100 days employment to rural unemployed people. In this scheme, employment to women is also provided.
On its 10th anniversary in 2015, the government allocated with record Rs. 38,500 crore funds to boost economic growth.
On an averageeach year around five crore people from rural areas are employed by MGNREGA.
It is noteworthy that 1,970 crore person-days of employment has been generated since its inception out of which 40 per cent belongs to SC/ST and 57 per cent women participation.
Around 182 million beneficiaries (15%) are provided social security.
Approximately, 10 crore bank/post office accounts of poorest people have been opened and around 80 per cent of MGNREGA payments are made through this route, an unprecedented step in the direction of financial inclusion.
Connecting the dots: You should have fair idea of measures already taken or being implemented in Social sector. Focus on Health,Education,Gender,Elderly and other related topics.
Best Answer: Aditi Dhaka
3. What in your opinion are the three most important areas that need government intervention to ensure that India’s demographic dividend doesn’t become a disaster? Substantiate your views.
In Introduction, define demographic dividend. Then start with main body part, mention three important areas as per your opinion and mention how government intervention is needed and how it can avoid disaster.
Introduction: Demographic dividend refers to change in the growth rate of economy as a result of change in age structure, where majority of population belong to productive working age i.e. 15 to 59 years and typically brought in by decline in mortality and fertility rates.
Most important areas: It might vary for each person. Until you can substantiate why it is important area, it is fine.
- Skill Development.
- National Security.
- Inclusive and sustainable development.
Note: Here six are given. Choose any three among them or you can add other areas too. But try to explain why and how intervention is needed and how it can prevent a disaster.
- Health: “Health is Wealth”
- Expenditure: Current expenditure is less than 2% of GDP. Atleast 3 to 5% is needed.
- Health Issues: Malnutrition, Diseases like Cancer, AIDS, Hepatitis, TB, and Malaria are all preventable.
- Growth effects: People spend majority of savings on them leading to poverty. It will affect performance of national output and lead to economic disaster.
- Man power: If health is improved, more time and energy can be spent on work to produce better output with better efficiency leading to national growth and development.
Above is one example for Health. It is to show how each point should be written and in case of no intervention how it will become disaster.
Conclusion: The above three sectors are very important which requires immediate government interventions to ensure India’s demographic dividend doesn’t become disaster but can become game changer for India’s growth and development.
Connecting the dots:
- Human resource potential of India.
- Youth empowerment.
Best Answer: No best Answer
4. Examine the significance of social security in India. Also discuss the social security schemes and initiatives launched by the government recently.
Approach: The question has got two parts with almost equal importance. You need to check that question is asking about the ‘Significance’ of Social Security. Many of you have written a very long introduction explaining what social security is. Try to stick to the line of the question and answer what is being asked.
Social Security is a system of welfare government where Government provides financial and other assistance to dependents like Old Age, unemployed, widows etc. Theoretically, it is a system of providing economic security and social welfare for the individual through government programs maintained by moneys from public taxation.
Significance of Social Security in India:
- India, according to population, is a huge country with one of the largest population of dependents including senior citizens, women, unemployed and under – employed. Due to lack of employment opportunities or personal barriers to get occupation, many people find it hard to sustain their life.
- These people live in miserable conditions and are not properly taken care off. Since Right to life is a fundamental Right, they deserve social security to live an honourable life.
- Many of these people become fodder for recruitment by anti social elements. For money they are willing to indulge themselves in crimes like murders, smugglings, kidnappings, rioting etc.
- Many of these people face nutritional challenges and have prolonged health problems. Because of this government has to invest a lot of money in healthcare. This is a negative expenditure instead this can be avoided with social security.
- Social security will also help in securing the future of people working in unorganized sector.
- Also, the ranking of India in HDI will improve.
- Tax payers money will be distributed to narrow the gap between haves and have nots.
Note: More points can be added to this list.
Latest Schemes Launched by the Government:
Social security schemes and initiatives launched by government
- New Pension Scheme: targets organised sector and encourages voluntary contribution for retirement.
- Swavalamban yojana/ NPS lite: targetted at unorganised sector. It is co- contributory pension scheme.
- Atal Pension Yojana: old age income security for working poor. Targets age group 18-40 years.Contribution can be made in the range Rs 42-210 with monthly retirement income in range 1000-5000. Low premimum encourages saving by LIG.
- Pradhan Mantri Jeevan Jyoti Yojana: 1year term life insurance with premium Rs 330/ providing return of 2L.
- Pradhan Mantri Suraksha Bima Yojana: 1 year term accident cum death cover with low premium of Rs 12/ . It extends coverage to LIG.
- Pradhan Mantri fasal Bima yojana: provide income security to farmers against crop failure due to natural calamities, pest or disease. It includes technology based assessment of loss and uniform premium for kharif(2%), rabi(1.5%) and horticulture crops(5%) needs to be paid.
- Rashtriya Swasthya Bima Yojana for BPL families: health insurance scheme which provides assistance for medical treatment . However It lacks coverage of expenditure on drugs and diagnostics due to which Out Of pocket expenditure on health has been high.
- National social Assistance Programme for BPL: it includes old age pension, widow pension, disability pension and national family benefit insurance in case of death of bread winner.
Other programmes for old age group include Indira Gandhi National Old Age Pension Scheme, Rashtriya Vayoshri Yojana to provide physical aids and assisted living devices.
Note: More old schemes can be written. You need to remember that there is a difference between schemes for social security and schemes for livelihood and empowerment.
Connecting the dots:
- How is social Security in India different from SS in USA?
- Should India start a Universal Social Security scheme?
Best Answer 1: Krishna
Best Answer 2: Sandhya
Q.5) What is futures market? Examine the factors that led to the near collapse of agri-futures in India. Should it be revived? Examine.
In India in all the seasons, mostly whenever bumper harvest happens most crops crashed below their respective minimum support prices (MSPs), triggering farm distress. One of the many reasons behind this situation is that planting decisions of our farmers were based on last year’s prices, rather than the prices expected at the time of harvest. Signals indicating future prices are largely absent as agri-futures have been decimated by excessive controls and regulation. It is time to think afresh and resurrect agri-futures in India.
A futures exchange, traditionally, is a term referring to a central marketplace where futures contracts and options on futures contracts are traded. More recently, with the growth in electronic trading, it is also used to describe the activity of futures trading itself.
In 2003, the Atal Bihari Vajpayee government’s decisions to allow futures markets in India after a long gap was hailed as a big and bold step towards better price discovery for farmers.
- This, in turn, was supposed to help farmers take informed planting decisions.
- In the initial years 2003-2007 agri-futures did show promising growth.
- But around 2007-2008, they were hit by the global food price crisis.
- Agri-futures picked up momentum again and peaked in 2011-2012.
However, since then, there has been heavy government intervention in agri-futures with higher margin requirements as well as absolute suspensions, resulting in their near collapse.
Factors responsible for the collapse of agri-futures:
- Disruption by stop – go suspension policy of government. Eg. In 2008 agriculture – futures were suspended, no continuity in the agri-futures.
- CTT 2013, a distinction was made between futures on pure agricultural commodities, such as wheat, cotton and soybean, and futures on processed farm commodities, such as soy oil, guar gum and sugar. The former were exempted from CTT while the latter were not.
- Low trading volumes due to uncertainty of policy.
- Trust issues between government and market participants, as there is no consistent policy regarding the agri-futures.
There has been heavy government intervention in agri-futures with higher margin requirements as well as absolute suspensions, resulting in near collapse of agri-futures,
Government steps to revive agri-futures:
If one has to develop agri-futures in India, the first step is
- To stay away from sensitive commodities (e.g., common rice, wheat, most pulses, and even sugar), at least for some time till futures gain momentum and some depth.
- It is better to focus on and develop less sensitive commodities such as oilseed complex (oilseeds, meals, and oils), feed (maize), cotton, basmati rice, spices, etc.
- Once markets are developed and the regulator has a higher degree of comfort, then India can diversify its agri-futures portfolio to cover other commodities.
- It is for the government to be reasonably assured that speculators are not rigging markets, it may be useful if the regulator allows only delivery based contracts, at least till the futures markets deepen.
- The government can also encourage its state trading enterprises (STEs) to trade on the agri-futures platform. This will boost the government’s confidence in agri-futures as it will have ample information from its STEs.
It has to be recognised that developing agri-futures is as much the responsibility of the regulator as that of the commodity exchanges, and both need to work in harmony for the benefit of various stakeholders, especially peasants who need useful information about future prices for their products while they are planting those crops. If the government can take bold decisions to revive the legacy of the Vajpayee government and it is not impossible to scale new heights in agri-futures, say, 200 million contracts by 2022.
Best Answer: Neeraj ravi
Second best answer: Jean Grey