IASbaba's Daily Current Affairs Analysis

IASbaba’s Daily Current Affairs (Prelims + Mains Focus)- 27th April 2018

(PRELIMS+MAINS FOCUS)

NITI Aayog and ITC Ltd to strengthen farming systems in collaboration

Part of: Mains GS Paper II, III- Government interventions, Indian agriculture

Key pointers:

NITI Aayog and ITC Ltd will collaborate in the agriculture and allied sectors in order to strengthen farming systems across 25 aspirational districts.
Launched by the Prime Minister in January, the ‘Transformation of Aspirational Districts’ programme aims to improve performance of these districts.
The 25 aspirational districts cover Assam, Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar and Jharkhand.
ITC will promote best practices and technologies, set-up demonstration farms and also create master trainers from government extension workers.
Master trainers will be created at the block level. The company will also work out the logistics to ensure the farmers are trained even at the gram panchayat level.
NITI Aayog will work in close collaboration with the district administrations and ITC to build capacities.
In order to ensure implementation, performance review and problem-solving, a Project Management Committee (PMC) at the district level will be set up.
It is expected that over 2 lakh lead farmers (LF) in 25 districts will be trained as a part of the partnership.

Article link: Click here

(MAINS FOCUS)

NATIONAL

TOPIC: General Studies 3:

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

Issues relating to poverty and hunger

Saving the newborns’ lives in India

In news:

In February, the United Nations International Children’s Emergency Fund (Unicef) released a report highlighting the grim state of the Indian health system for newborns.
With an average newborn mortality rate of 25.4 deaths for every 1,000 live births, India leads the list of lower middle-income countries with the highest number of newborn deaths—a staggering 6.4 million per year, or about a quarter of the world’s total.
Although India is undeniably on a path toward economic prosperity, losing millions of children every year to preventable deaths undermines this progress.

Reasons behind newborns death:

With the inclusion of vaccines against diarrhoea and pneumonia in the national immunization programme, India was able to reduce the under-five mortality rate by 34% between 1990 and 2006. However, because causes of newborn deaths are different, immunization programmes are unable to prevent these deaths.
Some 80% of newborn deaths result from complications from labour and delivery: premature birth, low-birth weight, neonatal infections, and birth trauma.
Out of these, infections such as pneumonia and diarrhoeal diseases, account for half of all newborn deaths.

Instead of asking for more resources we need to improve the capacity of the existing health system.

Improving the capacity of existing health system:

Simple interventions around the time of birth:
Such as hand washing, cleaning the umbilical cord with a regular antiseptic, ensuring the newborn is warm, dry, and fed—are affordable and more effective than previously thought and can reduce newborn death rates in low-resource settings.
Most of these strategies do not require a specialist.
Task sharing approach:
It refers to strengthening of the capacity of the health system by distributing essential responsibilities among a larger group of health workers and emphasizing shared responsibility for high-quality outcomes.
For instance, in obstetric care of a newborn, a trained birth attendant or midwife can handle routine cases, freeing up an experienced surgeon or obstetrician to handle complications.

Case study:

Recent evidence from Karnataka revealed that WHO birth attendant training in Essential Newborn Care reduced perinatal mortality to 36 per 1,000 live births, from 52.
Stillbirth rates decreased by about 40%, to 14 per 1,000 live births, and early neonatal death fell by about one-fourth to 22 per 1,000 live births.

Better training of midwives:
About 70% of the Indian population currently resides in rural areas. Midwives already play a crucial role in delivering obstetrical care in these areas.
Most midwives, however, have never been trained in practices of infection control or uembilical cord care.
Strengthening midwifery practices through education, training, and regulation in low- and middle-income countries can result in more efficient utilization of resources and improved outcomes for both pregnant mothers and newborn children.

The above mentioned low-cost and high-impact interventions can save millions of lives. Medical and nursing professional societies can play a critical role in the solution.

Conclusion:

We must empower and train healthcare providers who work in remote communities and serve populations that are unable to access safe and affordable obstetric care in the current health system. Losing almost a million lives every year to preventable causes is a travesty of sound health policy. The cost of inaction is too high.

Connecting the dots:

A Unicef report released recently highlighted the grim state of the Indian health system for newborns. The issue is more about poor capacity of existing healthcare system and less about lack of resources. Analyze.

ECONOMY

TOPIC: General Studies 3:

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

Preventing defaults: Reducing NPAs

Background:

Both Vijay Mallya and Nirav Modi cheated the Indian banks of over Rs. 22,000 crore and are enjoying their ill-gotten gains after fleeing India.
To put the matter into perspective Rs. 22,000 crore is a small fraction of the total Non-Performing Assets (NPAs) of banks that runs into lakhs of crores.
A very large percentage of these NPAs are loans to corporates. Defaults by retail borrowers are small. From this it is obvious that the banking system is being exploited by willful defaulters — mainly large borrowers to get their loans passed without a thorough scrutiny or project appraisal.
These unscrupulous borrowers either exploit the inefficiencies in the banking system or collude with bank officials to defraud the system.

Solution:

It may not be possible to completely eliminate NPAs. But structural reforms in two areas could definitely improve the situation significantly:

The management of PSBs.
Handling of cases of bank frauds by investigating agencies.

What needs to be done?

Following steps which, if implemented, would go a long way in reducing NPAs over a period of time.

Selection criteria:

The system of selection and appointment of top officials — executive directors, board members and chairperson — in banks needs a complete overhaul. The person at the helm of the affairs can make or break an organisation.

The quality of top management is one of the main problems in PSBs.
There is political interference in the selection process. Merit is seldom considered as the main criteria.
Expecting an official who paid for his or her promotion to be upright or righteous is difficult. Such officials would also be compelled to advance loans whenever ‘a request’ is received from his or her mentors in ‘Delhi’, often without an appropriate credit appraisal.
The accountability systems in banks are practically non-existent.

The first reform should thus be to put in place a mechanism to ensure selection of competent and honest bankers.

Skilling senior staff:

Ensuring that senior bankers are well trained in project appraisal.
Project finance requires different skill sets than those acquired by bankers in routine banking operations.
Earlier, development financial institutions such as ICICI and IDBI had strong project appraisal departments. The public-sector banks have no institutional mechanism to develop such skills.

Strengthening the vigilance departments:

Strengthen the vigilance departments.

There is no effective vigilance mechanism in PSBs.
Even if the vigilance finds any lapses on the part of top officials, they are seldom reported.

An effective vigilance department would be able to detect a ‘quid pro quo’ in awarding a loan or a nexus between a bank official and a rogue borrower in flouting the norms.

Time-bound probe:

There is a need for time-bound investigations.

Some cases of large NPAs which are in the public domain or there is evidence of willful default are referred to Central Bureau of Investigation (CBI). The agency takes years to conclude a case, by the time many witnesses would have retired and forgotten the details of the case or even be dead.

It should be made mandatory that every case should be concluded in two years. In exceptional (more complicated cases) situations, it could be extended to three years.

Raising accountability:

The government is the majority owner of PSBs and it has a big say in their management. Usually, the government is represented on bank board by bureaucrats from the Ministry of Finance. These officers often come with little experience or knowledge in banking.
But being the representatives of the owner as well as being closer to the political powers, they exercise a disproportionately large influence on the decisions taken by the Board. Yet the irony is that they are never held responsible for the decisions.

So the system needs to change.

Appointing officers for a longer period of time in the same ministry and provide them with training in banking and financial services.
Induction of professionals from the industry who could bring in necessary expertise.

Finally, the regulator — the Reserve Bank of India — has a major role in safeguarding the health of banks. It cannot absolve itself from this responsibility just by ` announcing quick-fix-measures immediately after a fraud is unearthed. The RBI has enough powers even to replace a bank board when it comes to safeguarding the depositors’ money.

Conclusion:

The rot in the Indian banking system is deep but it can be treated. Unless the measures suggested are implemented effectively, the banking system would continue to burn cash for the politicians, bureaucrats, and businessmen. And the people of India, including the poorest of the poor would continue to pay the price.

Connecting the dots:

Eliminating NPAs needs structural reforms in two areas- the management of PSBs and the way cases of bank frauds are handled by investigating agencies. Discuss.