Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ayushman Bharat Digital Mission
Mains level: Issues with interoperability of Private Sector under Ayushman Bharat Digital Mission
Context
- On 27 September, 2021, Prime Minister Narendra Modi announced the rollout of the Ayushman Bharat Digital Mission with the aim of integrating the different and disparate digital health systems that exist into a National Digital Health Ecosystem.
What is Ayushman Bharat Digital Mission (ABDM)?
- The ABDM currently has five main components:
- Ayushman Bharat Health Account (ABHA) number: A unique health identification number,
- Healthcare Professionals Registry (HPR): A repository of healthcare professionals across both modern and traditional systems of medicine,
- Health Facility Registry (HFR): A repository of both public and private health facilities, including hospitals, clinics, diagnostic laboratories, and pharmacies,
- Unified Health Interface (UHI): An open protocol for digital health services linking patients with healthcare providers,
- ABHA Mobile App: An app allowing an individual to carry electronic health records.
- Digitization push of Government: To achieve the Sustainable Development Goals and targets of universal health coverage, the Indian government has expended significant efforts to promote the digitization of the healthcare sector to make health accessible, affordable, and equitably distributed.
- Citizens and doctors can access the health registry: The two registries would ostensibly create a database of India’s healthcare institutions and professionals that citizens would be able to access.
- Digital health card: The ABHA number and the application allow citizens to securely identify themselves and carry their health records to any healthcare facility.
- Targeted health care services: And lastly, the UHI would facilitate greater access to and delivery of healthcare services.
- Huge data for research: All of this activity has and will generate a tremendous quantity of data, which will be crucial for research, innovation, and policymaking.
Importance of private sector in health sector
- Mixed health care system: India has a mixed healthcare system, which means that it has both public and private healthcare providers. Without significant participation from the private healthcare providers, the ABDM’s ability to achieve its objectives will be limited.
- 81% doctors are private: This is because private healthcare infrastructure accounts for nearly 62 per cent of all of India’s health infrastructure and the private sector also provides 81 per cent of the doctors in India.
- Preference to private healthcare: Both rural and urban population in India seem to prefer seeking treatment from the private sector. Only 33 per cent of the rural and 26 per cent of the urban population depend on the public sector for healthcare.
Why Private health care are opting out of ABDM?
- Voluntary participation in ABDM: The voluntary nature of participation in the ABDM has led to a significant portion of private healthcare providers opting to not participate in the universal programme nor integrate into the UHI.
- High cost for digital records: Small healthcare providers like charitable hospitals, clinics, diagnostic labs, pharmacies, or nursing homes are less inclined to participate because of the significant costs involved.
- Requirement of manpower for digitization: The cost to these healthcare providers, who are most likely in various stages of digitisation, is the number of man hours required to digitise their health records and other data.
- Financial cost of digitization: The actual financial cost of upgrading or altering their digital health systems to meet basic required standards to participate in the ABDM and the UHI.
Impact of non-participation by private players
- A lack of participation from the private sector will negatively impact the objectives of the ABDM in major way:
- Limited success for UHI: Considering the concentration of private healthcare providers in urban areas, a lack of their participation and integration would limit the UHI’s ability to bring previously inaccessible services to the rural population who would otherwise have to travel to access them.
- Incomplete data and ineffective policy: The data generated by the ABDM and use of the UHI would be incomplete, which in turn would significantly limit the effectiveness of policy planning and programme delivery.
Conclusion
- It is unclear whether the government intends to achieve private sector participation through incentives or mandates. Without either approach, it seems that the ABDM will see little participation from smaller private healthcare providers, though how this will play out remains to be seen.
Mains Question
Q. What is the significance of Private Players in health care system of India? Explain the crucial role of Private health care in Ayushman Bharat digital Mission.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Free Trade Agreements
Mains level: Indias FTA's and frameworks and its significance
Context
- To achieve the export target of $2 trillion by 2030, India is going the whole hog on free trade agreements (FTAs). India is negotiating FTAs with countries such as the European Union, Canada, the U.K., and Israel.
Importance of FTA
- FTA include multiple trade aspects: FTAs cover a wide array of topics such as tariff reduction impacting the entire manufacturing and the agricultural sector; rules on services trade; digital issues such as data localization; intellectual property rights that may have an impact on the accessibility of drugs; and investment promotion, facilitation, and protection.
- Great impact on economy and society: Consequently, an FTA has a far-reaching impact on the economy and society. Given this, one legitimately expects transparency and greater scrutiny of the FTA process both during and after the negotiations.
What are the problems with Indian FTA negotiations?
- Lack of transparency in negotiations: India negotiates most FTAs behind closed doors with very little information about the objectives and processes followed and negligible scrutiny.
- No robust framework for FTA negotiations: This is not the case in other countries with whom India is negotiating such an FTA. In the U.K., for example, there are several robust mechanisms that foster a certain degree of transparency in the FTA negotiations. Furthermore, there are institutional apparatuses that enable the scrutiny of the actions of the executive, during and after the signing of the FTA.
- Detailed information on FTA’s: Department of International Trade (DFIT), U.K., publishes a policy paper laying down the strategic objectives behind negotiating an FTA and why it is important for the U.K. to have an FTA with a particular country. This policy paper is fairly detailed listing the specific advantages of signing an FTA such as the economic gains expected, distributional impacts, the environmental impact, and the labour and human rights dimensions of the FTA.
- Inputs from stakeholders: The policy paper that the DFIT publishes also contains the inputs and responses received by various stakeholders such as businesses, non-governmental organizations, and others. Furthermore, the policy paper also explains the government view on specific suggestions
- FTA scrutiny by parliament: In the U.K., the strategic objectives identified by the government for signing an FTA are scrutinized by the U.K. Parliament. This job is performed by the International Agreements Committee (IAC) of the British Parliament. The IAC hears expert witnesses on the FTA, critically examines the government’s strategic objectives for each FTA under negotiation, and offers key recommendations wherever it finds gaps in the government’s approach. The U.K. government then responds to these recommendations.
- Parliament has to ratify the FTA: In the U.K, under the Constitutional Reform and Governance Act, 2010, the executive has to lay down a treaty before the British Parliament for 21 sitting days with an explanatory memorandum before ratifying it. This allows Parliament to be apprised of the treaty the executive is going to ratify.
The contrast case of India’s FTA
- No publicly produced document in India: In India, no such document is produced publicly that makes a case for signing an FTA and assessing its impact on the environment and society at large. The Commerce Ministry the nodal body dealing with FTAs on its website provides the bare minimum information about FTA negotiations.
- No record of discussion with the stakeholders: Seemingly, the Commerce Ministry also undertakes stakeholder consultations and inter-ministerial meetings but there is no public record of these discussions and the government’s response to the concerns of stakeholders.
- No parliamentary scrutiny: In India, there is no mechanism for such parliamentary scrutiny of the executive’s actions during the FTA negotiations. India’s parliamentary system allows for department-related parliamentary committees that discuss various topics of importance and offer recommendations. However, the Parliamentary Standing Committee on Commerce (PSCC) rarely scrutinises the Indian government’s objectives behind negotiating and signing an FTA.
- No role for parliament to ratify the FTA: In India, there is no mechanism for any role of Parliament in the ratification of treaties including FTAs. Entering into treaties and matters incidental to it such as negotiations, signing and ratification are within the constitutional competence of Parliament. But, Parliament in the last seven-plus decades has not exercised its power on this issue, thus giving the executive unfettered freedom in negotiating, signing, and ratifying treaties including FTAs.
Recommendations for Improving the India’s FTA framework
- Publicise the objectives of FTA: India should take a leaf out of the U.K. book and develop a law on entering treaties including FTAs. This law should have the following parts. The executive should make a clear economic case outlining its strategic objectives publicly for entering into negotiations for a treaty such as an FTA.
- Mandatory consultation with all stakeholders: The executive should be under an obligation to consult all stakeholders, respond to their concerns and make this information publicly available.
- Dedicated parliamentary committee to scrutinize the FTA: The Indian Parliament should constitute a committee on the lines of the U.K.’s IAC that will scrutinise the strategic objectives behind entering into an FTA.
- Mechanism to ratify the FTA by parliament: The executive should place the FTA on the floor of Parliament for a certain duration, allowing Parliament to debate it, before ratifying it.
Conclusion
- While the executive’s constitutional prerogative of entering into an FTA or international treaties, in general, is indisputable, this power should be exercised in a manner that makes the executive answerable. After all, an integral facet of democracy is to hold the executive to account for its actions. It should be no different for negotiating international treaties including FTAs.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Vice-Chancellor Appointment and Centre state relation
Context
- Recent judgments of the Supreme Court of India on the appointment of vice chancellors (VC) in State universities in violation of the regulations of the University Grants Commission (UGC) are significant in the context of higher education in a federal country such as India.
- Gambhirdan K. Gadhvi vs The State of Gujarat (March 3, 2022): In the case, Gambhirdan K. Gadhvi vs The State of Gujarat (March 3, 2022), from Sardar Patel University, Gujarat, the Court (Justices M.R. Shah and B.V. Nagarathna) quashed the appointment of the incumbent Vice Chancellor on the ground that the search committee did not form a panel for the appointment of VC, and, therefore, was not in accordance with the UGC Regulations of 2018.
- UGC regulations will prevail over state law: It was held that since the State law was repugnant to the UGC regulations, the latter would prevail and the appointment under the State law had become void ab initio.
- Professor (Dr) Sreejith P.S vs Dr. Rajasree M.S. (October 21, 2022): In the second case, from Kerala, i.e., Professor (Dr) Sreejith P.S vs Dr. Rajasree M.S. (October 21, 2022), with the Bench of Justices M.R. Shah and M.M. Sundresh, the appointment of the Vice Chancellor of the A.P.J. Abdul Kalam Technological University, Thiruvananthapuram, was challenged on the ground that the search committee recommended only one name, which is against the UGC Regulations.
- Supreme court quashed the appointment of VCs: The Court quashed the appointment of the VC on the ground that the provision relating to the search committee in the University Act is repugnant to the UGC Regulations, and was therefore void.
Implications of the recent judgement
- Many VCs asked to resigned by Governor: Decision of the Supreme Court triggered unprecedented developments in Kerala with the State Governor, who is the Chancellor of all the universities in Kerala, asking as many as 11 VCs of other universities of the State to resign immediately on the ground that their appointments too had become void after the Supreme Court’s judgment.
- Tussle between governor and state: No VC has resigned as per the direction of the Governor. This development has intensified an already raging battle between the state government and the Governor, which is likely to become fiercer with the Kerala High Court quashing the appointment of the VC of the Kerala University of Fisheries and Ocean Studies on November 14 on the ground that this appointment was in violation of the UGC Regulations.
What are the legal and constitutional issues with judgement?
- UGC regulations vs state university Act: In both these cases, the issue framed by the Supreme Court is about whether the appointment of VCs should be made as per the UGC Regulations or the provisions of the State University Act.
- Education in concurrent list, Centre and state can make a legislation: As education is a subject on the Concurrent list, this question needs to be addressed seriously. A VC is appointed by the Chancellor under the relevant University Act, but the Supreme Court has brought in Article 254 of the Constitution to rule that if provisions of the State law are repugnant to the provisions of the Union law, the State law will become void.
- State law declared void over UGC violations: In the cases mentioned above, the top court found that the search committee recommended only one name for the appointment of VC which violates the UGC Regulations which require three to five names, and, therefore, the provision of the State law is void.
- Subordinate regulations prevailed over state law: Thus, the Court’s conclusion is that if any provision in the State university law is repugnant to the UGC Regulations, the latter will prevail and the former will become void. So, on the one side we have an Act passed by a legislature and on the other we have regulations made by a subordinate body such as the UGC.
Opinion of experts
- State laws are subordinate to the act of parliament: A careful reading of Article 254 would show that the repugnancy under this Article relates to a state law and a substantive law made by Parliament. It impliedly excludes rules, regulations, etc. Rules and regulations are made by subordinate authorities in this case the UGC whereas the substantive law is made by the superior authority, namely Parliament.
- State laws are not subordinate to UGC regulations: The repugnancy can arise only between the provisions of the University Acts and the UGC Act, and not the regulations of the UGC.
- UGC regulations are inferior to state assembly: The rules and regulations made by the subordinate authority, though laid in Parliament, do not go through the same process as a law. Normally these do not require the approval of Parliament. The rules and regulations have an inferior status as compared to an Act. The Constitution cannot be assumed to equate the Act with the rules.
- Article 254 does not include regulations: The Constitution does not, in general terms, define the term law. The inclusive definition of law given in Article 13(2) is applicable only to that Article. It has no application to other Articles, which means the term law does not include the rules, regulations, etc. for the purpose of Article 254.
- Violation of federal principle: The regulations made by a subordinate authority of the Union overriding a law made by a state legislature will amount to a violation of federal principles and a negation of the concurrent legislative power granted to the State by the Constitution.
- UGC regulations are Not part of UGC act: The UGC Regulations on the appointment of VCs are outside the scope of the main provisions of the UGC Act as none of its provisions refers to the appointment of VCs.
Conclusion
- Issue of appointment of vice-chancellor has opened the new conflicting chapter between Centre-state relations. Supreme court’s decision has further added the confusion rather than clarity to the issue. Supreme court need to review the judgements for harmonious relations between Centre and states.
Mains Question
Q. Explain the article 254 about Centre-state legislative relations? How the issue of vice-chancellor appointment is problematic for Centre-state relationship?
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Carbon Border Tax
Mains level: Not Much
BASIC countries that includes India has jointly stated that carbon border taxes, that could result in market distortion and aggravate the trust deficit amongst parties, must be avoided.
EU proposes, BASIC opposes
- The European Union has proposed a policy — called the Carbon Border Adjustment Mechanism– to tax products such as cement and steel that are extremely carbon intensive, with effect from 2026.
- BASIC, a group constituting Brazil, India, South Africa and China have opposed this move.
- These are large economies that are significantly dependent on coal, has for several years voiced common concerns and reiterated their right to use fossil fuel.
What is Carbon Pricing?
- Carbon pricing is an approach to reducing carbon emissions that uses market mechanisms to pass the cost of emitting to emitters.
- Its goal is to discourage the use of fossil fuels, address the causes of the climate crisis and meet national and international agreements.
- Well-designed carbon pricing can change the behavior of consumers, businesses and investors while encouraging technological innovation and generating revenue that can be used productively.
- There are a few carbon pricing instruments, such as a carbon tax and cap-and-trade programmes.
What is Carbon Border Tax?
- A carbon border tax (CBT) is a tax on carbon emissions attributed to imported goods that have not been carbon-taxed at source.
- The carbon border tax proposal is part of the European Commission’s European Green Deal that endeavours to make Europe the first climate-neutral continent by 2050.
Objective:
- To ‘incentivize’ greener manufacturing around the world and create parity with European manufacturers who are already subjected to substantial carbon levies.
A move to benefit local EU manufacturers
The carbon border tax has wide appeal in Europe. It is supported by the new president of the European Commission.
- A carbon border tax is able to protect a country’s local manufacturers, motivating them to adhere to green regulations.
- Many EU companies are at a cost disadvantage as they have been paying a carbon border tax and for carbon emissions since 2005 under the EU’s Emissions Trading System.
- The new carbon border tax can therefore lead to a more level playing field against importers, especially those from nations with more lax environmental standards.
What could the new proposal mean politically?
- Notably, China’s continuing reliance on non-renewable energy to power its economy leaves it particularly vulnerable in this matter.
- For example, given that China produces steel with blast furnaces that release a large amount of carbon, it will have to pay an additional layer of carbon border tax, which will increase its costs and its market price.
- This will consequently reduce the competitiveness of steel produced in China, compared to steel from other countries that is made in more carbon-efficient mills that do not have to pay this additional tax.
This suggests that the carbon border tax is also politically preferable to Europe as it slows down the gradually rising economy in China, and would therefore preserve the European countries’ competitiveness.
How does this impact India?
- As India’s third largest trading partner, the EU accounted for €62.8 billion ($74.5 billion) worth of trade in goods in 2020, or 11.1% of India’s total global trade.
- India’s exports to the EU were worth $41.36 billion in 2020-21, as per data from the commerce ministry.
- The CBT would cover energy-intensive sectors such as cement, steel, aluminium, oil refinery, paper, glass, chemicals as well as the power sector.
- By increasing the prices of Indian-made goods in the EU, this tax would make Indian goods less attractive for buyers and could shrink demand.
- Sadly, India’s many ‘self-reliance’ tariffs are also a contributor to this.
Issues with CBT
- Impact on trade: The degree of impact on industrial sectors would be largely influenced by two factors: carbon intensity and trade intensity.
- Altering competitiveness: For companies, it will raise the administrative burden of crossing borders and increase trade frictions, especially for small businesses. That will inevitably reduce choice and raise costs for consumers.
- Promoting protectionism: The carbon tax may end up being protectionist, and will hit emerging economies like India hard.
- Unfair practices under WTO: Depending on their design they could fall foul of WTO measures designed to prevent importing countries from discriminating against particular exporting countries.
- A violation of Paris Accord: CBT compels developing countries to pay the same price as the developed countries to climate change. The EU is essentially bypassing the principle of ‘common but differentiated responsibilities’ that should guide international climate action.
Way forward
- Carbon taxing is just one way of holding large emitters accountable for their role in harming the environment.
- However, fundamental changes can’t be forced by tariffs.
- If the planet is to have any hope of meeting the Paris Agreement goals, drastic measures that consider both the economic and social wellbeing of nations’ inhabitants must be taken.
- This should take all nations into confidence than imposing such overnight tariffs.
- It is no doubt that India must be in the forefront in climate politics. But it must also be cautious about the negotiations in global laws to protect domestic interests.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Permanent Comission
Mains level: Women in Armed Forces
The Supreme Court has ordered the government to grant pension to women officers who fought for 12 years to get reinstatement and permanent commission in the Indian Air Force (IAF).
Women in IAF: A case for Permanent commission
- History is replete with examples where women have been denied their just entitlements under law and the right to fair and equal treatment in the workplace.
- The women had been fighting for 12 years for a chance to be considered for permanent commission.
- The women pointed out to the court’s judgment in Babita Puniya Case.
- It upheld the right of women short service commission officers to be considered for permanent commission on a par with their men colleagues.
Why males have ever dominated the armed forces?
- Militaries across the world help entrench hegemonic masculine notions of aggressiveness, strength and heterosexual prowess in and outside their barracks.
- The military training focuses on creating new bonds of brotherhood and camaraderie between them based on militarized masculinity.
- This temperament is considered in order to enable conscripts to survive the tough conditions of military life and to be able to kill without guilt.
- To create these new bonds, militaries construct a racial, sexual, gendered “other”, attributes of whom the soldier must routinely and emphatically reject.
Dimensions of the Issue
- Gender is not a hindrance: As long as an applicant is qualified for a position, one’s gender is arbitrary. It is easy to recruit and deploy women who are in better shape than many men sent into combat.
- Combat Readiness: Allowing a mixed-gender force keeps the military strong. The armed forces are severely troubled by falling retention and recruitment rates. This can be addressed by allowing women in the combat role.
- Effectiveness: The blanket restriction for women limits the ability of commanders in theatre to pick the most capable person for the job.
- Tradition: Training will be required to facilitate the integration of women into combat units. Cultures change over time and the masculine subculture can evolve too.
- Cultural Differences & Demographics: Women are more effective in some circumstances than men. Allowing women to serve doubles the talent pool for delicate and sensitive jobs that require interpersonal skills, not every soldier has.
Hurdles for Women
- Capabilities of women: Although women are equally capable, if not more capable than men, there might be situations that could affect the capabilities of women such as absence during pregnancy and catering to the responsibilities of motherhood, etc.
- Adjusting with the masculine setup: To then simply add women to this existing patriarchal setup, without challenging the notions of masculinity, can hardly be seen as “gender advancement”.
- Fear of sexual harassment: Sexual harassment faced by women military officers is a global phenomenon that remains largely unaddressed, and women often face retaliation when they do complain.
- Gender progressiveness could be an illusion: Women’s inclusion is criticized as just another manoeuvre to camouflage women’s subjugation and service as women’s liberation.
- Battle of ‘Acceptance’: Acceptance of women in the military has not been smooth in any country. Every army has to mould the attitude of its society at large and male soldiers in particular to enhance acceptability of women in the military.
- Job Satisfaction: Most women feel that their competence is not given due recognition. Seniors tend to be over-indulgent without valuing their views. They are generally marginalised and not involved in any major decision-making.
- Doubts about Role Definition: The profession of arms is all about violence and brutality. To kill another human is not moral but soldiers are trained to kill.
- Physical and Physiological Issues: The natural physical differences in stature, strength, and body composition between the sexes make women more vulnerable to certain types of injuries and medical problems. The natural processes of menstruation and pregnancy make women particularly vulnerable in combat situations.
- Comfort Level: Most women accepted the fact that their presence amongst males tends to make the environment ‘formal and stiff’. The mutual comfort level between men and women colleagues is often very low.
Conclusion
- Concern for equality of sexes or political expediency should not influence defence policies.
- Armed forces have been constituted with the sole purpose of ensuring defence of the country and all policy decisions should be guided by this overriding factor.
- All matters concerning defence of the country have to be considered in a dispassionate manner.
- No decision should be taken which even remotely affects the cohesiveness and efficiency of the military.
Way ahead
- Induction of women into armed forces should be on the basis of their abilities and not on the basis of their gender.
- The training for both women and men should be standardized to eliminate differentiation based on physical capabilities.
- The career aspects and opportunities for women need to be viewed holistically keeping the final aim in focus.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Pension Scheme
Mains level: Pension reforms in India
Some political parties are promising to switch to the Old Pension Scheme in the opposition-ruled states.
Old Pension Scheme
- Pension to government employees at the Centre as well as states was fixed at 50 per cent of the last drawn basic pay.
- The attraction of the Old Pension Scheme or ‘OPS’ — called so since it existed before a new pension system came into effect for those joining government service from January 1, 2004.
- It was hence described as a ‘Defined Benefit Scheme’.
- To illustrate, if a government employee’s basic monthly salary at the time of retirement was Rs 10,000, she would be assured of a pension of Rs 5,000.
- Also, like the salaries of government employees, the monthly pay-outs of pensioners also increased with hikes in dearness allowance or DA.
What were the concerns with the OPS?
- Liability remained unfunded: There was no corpus specifically for pension, which would grow continuously and could be dipped into for payments.
- Usual budgetary allocation: The Union budgetary allocations (Rs 3,86,001 crore in 2020-21) provided for pensions every year; there was no clear plan on how to pay year after year in the future.
- Burden on working class: The ‘pay-as-you-go’ scheme created inter-generational equity issues — meaning the present generation had to bear the continuously rising burden of pensioners.
- Far extended pay-outs: Better health facilities would increase life expectancy, and increased longevity would mean extended payouts.
What was planned to address this situation?
Ans. Oasis Project
- In 1998, the Union Ministry of Social Justice and Empowerment commissioned a report for an Old Age Social and Income Security (OASIS) project.
- Its primary objective was targeted at unorganised sector workers who had no old age income security.
- The OASIS report recommended individuals could invest in three types of funds to be floated by six fund managers:
- Safe (allowing up to 10 per cent investment in equity),
- Balanced (up to 30 per cent in equity), and
- Growth (up to 50 per cent in equity)
- The balance would be invested in corporate bonds or government securities.
- Individuals would have unique retirement accounts, and would be required to invest at least Rs 500 a year.
Alternative to OPS: New Pension Scheme
- The New Pension System was proposed by the Project OASIS report; it became the basis for pension reforms.
- It was originally conceived for unorganised sector workers, was adopted by the government for its own employees.
- The NPS for Central government employees was notified on December 22, 2003.
- Unlike some other countries, the NPS was for prospective employees — it was made mandatory for all new recruits joining government service from January 1, 2004.
- The defined contribution comprised 10 per cent of the basic salary and DA by the employee and a matching contribution by the government — this was Tier 1, with contributions being mandatory.
- In January 2019, the government increased its contribution to 14 per cent of the basic salary and dearness allowance.
- Schemes under the NPS are offered by nine pension fund managers — sponsored by SBI, LIC, UTI, HDFC, ICICI, Kotak Mahindra, Aditya Birla, Tata, and Max.
Risk profiles under NPS
- NPS is now regulated under the Pension Fund Regulatory & Development Authority (PFRDA) Act, 2013.
- The risk profiles of various schemes offered by these players vary from ‘low’ to ‘very high’.
- The 10-year return for the NPS Scheme-Central Government floated by SBI, LIC, and UTI stood at 9.22 per cent; the 5-year return at 7.99 per cent, and the 1-year return at 2.34 per cent.
- Returns on high-risk schemes could be as high as 15 per cent.
Issues with OPS
- Burden on exchequer: In 30 years, the cumulative pension bill of states has jumped to Rs 3,86,001 crore in 2020-21 from Rs 3,131 crore in 1990-91.
- Huge share of tax receipts: Overall, pension payments by states eat away a quarter of their own tax revenues. If wages and salaries of state government employees are added to this bill, states are left with hardly anything from their own tax receipts.
- Issue of inter-generational equity: Today’s taxpayers are paying for the ever-increasing pensions of retirees, with Pay Commission awards almost taking the pension of old retirees to current levels. It means the pension of someone who retired in 1995 may well be the same as that for someone who retires in 2025.
Why states are reverting back to OPS?
OPS brings state governments some short-term gains:
- Deferment to contribution: They save money since they will not have to put the 10 per cent matching contribution towards employee pension funds.
- Low curtailment in salaries: For employees too, it will result in higher take-home salaries, since they too will not set aside 10 per cent of their basic pay and dearness allowance towards pension funds.
- Old age security: Some government employees are concerned that their pension may not be the same as 50 per cent of their last salary drawn (as in the OPS).
Why need pensions at all?
- Pension helps you accumulate a part of your income, over a long period, so that this money can be used post-retirement.
- They provide a steady source of income when one needs the most.
- It helps inculcate fiscal discipline.
Conclusion
- NPS vs. OPS will play out in the Himachal Assembly elections with freebie trending parties considering following the same trend as Rajasthan, Chhattisgarh and Jharkhand.
- The fiscal risks involved in the transition of NPS-borne employees to OPS regime are substantive and to a great extent unsustainable keeping in view the existing share of pensionary liability in government expenditure.
- It is estimated that the cost incurred by the government on pension is more than double the cost of NPS contribution in the long run.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Patan Patola
Mains level: Not Much
At the G20 summit, Prime Minister gifted traditional artworks from Gujarat- the ‘Patan Patola’ scarf to his Italian counterpart Giorgia Meloni.
What is Patan Patola?
- The ancient art of double ikat or Patola woven in pure silk dates back to the 11th century.
- The Patola fabrics bear an equal intensity of colours and design on both sides.
- This peculiar quality has its origins in an intricate and difficult technique of dyeing or knot dyeing, known as ‘bandhani’, on the warp and weft separately before weaving.
How is it woven?
- Patola is woven on primitive hand-operated harness looms made out of rosewood and bamboo strips. The loom lies on a slant.
- The other commonly worn Patola is the Rajkot Patola, woven on a flat loom.
- The process involves warp and weft silk threads that are tied with cotton thread on portions marked with the proposed design.
- This tied portion then remains unexposed to colours while dyeing, which is followed by tying, untying, redyeing and dyeing in different shades.
- Single and primary colours are applied one after another as mixed shades develop by overlapping. This makes the design stand out.
Who weaves it?
- The last surviving family into Patola weaving is the Salvi family in Patan.
- From the oldest 70-year-old Rohit to the youngest 37-year-old Savan, the entire nine member-family of five men and four women is engaged with this art form.
- The Salvi family shared that before World War II, Indonesia was the major buyer of Patolas.
- Legend has it that King Kumarpal of the Solanki dynasty invited some 700 families of Patola weavers from Jalna (Maharashtra) to settle in Patan in North Gujarat, and the Salvis are among them.
- The family has also been honoured with several national awards.
How costly it is?
- While possessing and wearing a Patola is considered a matter of pride, the fabric has largely remained inaccessible to common people because of its high price.
- The base price of a Patola saree in the Patan weave starts from Rs 1.5 lakh up and can go up to Rs 6 lakh.
- A typical 46-inch dupatta or scarf sells in the range of Rs 80,000, depending on the intricacy of the design.
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