Context:Over 57,000 migrant workers have enrolled in the One Nation, One Anganwadi program, allowing them to access government benefits for children under six and pregnant/lactating women even if they relocate.
About Poshan Abhiyan:
Launched in 2018 with the objective of improving the nutritional status of Children under 6 years, Adolescent Girls, Pregnant Women, and Lactating Mothers through a time-bound approach.
Implemented as a Centrally Sponsored Scheme by States/UTs.
Addresses malnutrition issues nationwide through various components such as ICT Application, Convergence, Community Mobilization, Behavioural Change & Jan Andolan, Capacity Building, Incentives and Awards, and Innovations.
Poshan Vatikas or Nutri-gardens are being established across the country to facilitate affordable and convenient access to fruits, vegetables, medicinal plants, and herbs, promoting the right kind of nourishment.
Context: The Massive Open Online Courses have gained a lot of currency in the last one decade. However, use of Artificial Intelligence has provided impetus to the growth of MOOCs in the recent years.
Background of MOOCs
Between 2008-2011, a new genre of online courses titled ‘Massive Open Online Courses’ (MOOCs) made their entry, driven by reputed institutions of learning.
Stanford University in 2011 brought first institutional course using MOOC model.
Most known and famous MOOC was edX launched by Harvard and MIT in joint effort.
As of 2021, there existed nearly 35 MOOCS Learning Management Systems (LMS) spread across North America, Asia and Europe.
India’s ‘Study Webs of Active-Learning for Young Aspiring Minds’ (SWAYAM) launched in 2017 by the Ministry of Education, Government of India. It is one of the world’s largest learning e-portals.
Challenges faced by MOOCs
Fragile financial situation
Very high operating cost and maintenance expenses
Steep marketing cost
Very low and competitive fee structure
High dropout rates by entry level learners.
However, in the recent years, artificial intelligence has become a vital tool to make MOOC more interactive and attractive as a platform. In the current case Generative Artificial Intelligence has made an impressive performance in retaining the utility of the MOOCs.
What is Generative AI?
Generative artificial intelligence refers to a subset of AI techniques and models that are designed to generate new content or data that is similar to, or indistinguishable from, real human-generated content. It involves training models to learn patterns and structures from existing data and then using that knowledge to generate new, original content.
Generative AI models can be used in various applications such as image synthesis, text generation, music composition, and even video generation. These models are often based on deep learning techniques, particularly generative models such as generative adversarial networks (GANs), variational autoencoders (VAEs), or transformers.
GANs, for example, consist of two components: a generator and a discriminator. The generator learns to generate new data samples, such as images, by trying to fool the discriminator into thinking that the generated samples are real. The discriminator, on the other hand, learns to distinguish between real and generated data. Through an iterative process of training and feedback, GANs can produce increasingly realistic and high-quality content.
Generative AI has shown significant advancements in recent years and has been used in a wide range of applications, including art and design, content creation, data augmentation, and even in the development of realistic deepfake videos. However, it's important to note that generative AI also raises ethical concerns, such as the potential for misuse, the creation of misleading content, and the need for responsible and ethical deployment.
Examples of Generative AI:
OpenAI's Generative Pre-trained Transformer (GPT)
DeepArt or Deepfakes
How Generative AI could be game changer in MOOCs?
It help students easily locate the suitable courses without any attempt to explore entire MOOC.
AI can give challenges and task to students on daily basis without any repetition in language or pattern.
AI coaching, counselling and virtual assistance. AI techniques like natural language processing (NLP) enable chatbots and virtual assistants to interact with students, answer their questions, and provide support.
AI can assist in content creation and curation for online courses.
AI can help in making learning more interesting, thereby retaining high enrolment ratios.
AI can analyze student data, such as performance, learning styles, and preferences, to create personalized learning experiences. Adaptive learning platforms can use AI algorithms to tailor educational content and resources to each student's individual needs.
AI can help in breaking down the language barrier in real-time.
Context: Norwegian Ambassador’s visit to the Indian Space Research Organisation (ISRO) headquarters offers an occasion to recall the launch of Rohini RH-300 Mk-II, the challenging mission which took place 26 years ago at Ny-Alesund, Svalbard.
About Rohini RH-300 Mk-II
It is a single-stage sounding rocket, derived from French Belier rocket engine technology.
It was part of the Rohini family of sounding rockets developed by ISRO’s Vikram Sarabhai Space Centre (VSSC) in Thiruvananthapuram.
It rose to the skies from Svalbard, Norway, an archipelago situated in the Arctic Ocean, operationalising a new rocket launching range there.
The RH-300 Mk-II was given a new name by the NSC (Norwegian Space Centre): Isbjorn-1, which translates literally as ‘Polar Bear-I.’
About Sounding Rocket
Sounding rockets are one or two-stagesolid propellant rockets used for probing the upper atmospheric regions and for space research.
They also serve as easily affordable platforms to test or prove prototypes of new components or subsystems intended for use in launch vehicles and satellites.
It is used for a variety of scientific purposes, including atmospheric research, astronomy, microgravity experiments, and space technology testing.
The first sounding rocket to be launched from Thumba was the American Nike-Apache in 1963.
Set up in 2014 by the Government of India as a premier think tank opened its door to bright young minds and launched its first internship programme.
It engages Indian students pursuing postgraduate degrees or in the final year of law and engineering graduate programmes or research scholars enrolled in recognized universities/ institutions within India or abroad, as interns.
The internship programme aims to provide young and brilliant minds to carry out research, critical study, documentation and dissemination of best practices to develop a national repository, and establish a platform for wider dissemination.
This will also provide opportunities for these young students to learn as well as contribute to public policy.
The Internship is for a minimum of 8 weeks and a maximum of 6 months duration.
Interns are to be paid Rs. ten thousand per month as an honorarium.
NCGG Internship Programme attracted huge interest and over 1,700 applications were received for the June 2023 batch.
From these applications, after scrutiny and interactions, 22 candidates have been selected based on their academic and extracurricular achievements and passion for public policy, governance, and related domains.
They represent a wide range of disciplines, including law, development studies, public health, economics, geography, political science, and more.
They have pursued their education at reputed institutions such as Harvard Law School, Tata Institute of Social Sciences, Indian School of Public Policy, and National Law Universities, among others.
The NCGG Internship Programme is a short-term engagement that offers a unique blend of public policy-making and practical experiences.
One of the key objectives of the programme is to foster a collaborative environment where interns can work on innovative ideas and perspectives on policies in their respective domains.
Context:A recent report by Centre for Science and Environment (CSE) highlighted that the particulate pollution is increasing in the cities of Rajasthan.
About Particulate Matter:
Particle pollution — also called particulate matter (PM) — is made up of particles (tiny pieces) of solids or liquids that are suspended in the air. These particles may include:
Dust
Dirt
Soot
Smoke
Drops of liquid
Particle pollution can come from two different kinds of sources — primary or secondary.
Primary sources cause particle pollution on their own. For example, wood stoves and forest fires are primary sources.
Secondary sources let off gases that can form particles. Power plants and coal fires are examples of secondary sources.
Some other common sources of particle pollution can be either primary or secondary — for example, factories, cars and trucks, and construction sites. Smoke from fires and emissions (releases) from power plants, industrial facilities, and cars and trucks.
Particle pollution includes:
PM 10: inhalable particles, with diameters that are generally 10 micrometers and smaller. These particles are relatively larger and can be seen as fine dust or smoke. They can come from various sources such as dust stirred up from construction sites, pollen, or emissions from vehicles and industrial processes.
PM 2.5: fine inhalable particles, with diameters that are generally 2.5 micrometers and smaller. These particles are much tinier and cannot be seen with the naked eye. They are often the result of combustion processes like burning fossil fuels, vehicle emissions, or even cooking. Because of their small size, PM 2.5 particles can penetrate deep into our lungs and even enter our bloodstream, causing more severe health issues.
Impact of Particulate Pollution:
Respiratory problems: Inhaling PM can cause or worsen respiratory conditions such as asthma, bronchitis, and other respiratory infections.
Cardiovascular effects: PM pollution has been linked to an increased risk of heart attacks, strokes, and other cardiovascular diseases. Fine particles can enter the bloodstream and contribute to the development of plaque in the arteries.
Reduced lung function: Long-term exposure to PM can lead to a decline in lung function, making it more difficult to breathe properly.
Allergies and irritation: Particulate matter can trigger allergic reactions and irritate the eyes, nose, and throat, causing symptoms such as coughing, sneezing, and watery eyes.
Premature death: Exposure to high levels of PM pollution has been associated with increased mortality rates, particularly among individuals with pre-existing health conditions and the elderly.
Cancer risk: Certain types of PM, such as diesel exhaust particles and some heavy metals, have been classified as carcinogens and are linked to an increased risk of developing lung cancer.
Developmental issues: Pregnant women exposed to high levels of PM pollution may experience complications such as preterm birth, low birth weight, and developmental issues in their children.
Impaired lung growth in children: Children exposed to PM pollution may experience reduced lung growth and development, leading to long-term respiratory problems.
Aggravation of existing conditions: People with pre-existing respiratory and cardiovascular conditions are particularly vulnerable to the health effects of PM pollution, which can exacerbate their symptoms and increase the severity of their conditions.
Steps taken by Government:
Government is taking all efforts for the mitigation of air pollution in the country. Central Government has taken a number of regulatory measures for prevention, control and abatement of air pollution in the country.
National Clean Air Programme (NCAP) a long-term, time-bound, national level strategy to tackle the air pollution across the country in a comprehensive manner with targets to achieve 20 % to 30 % reduction in PM10 and PM2.5 concentrations by 2024 keeping 2017 as the base year for the comparison of concentration.102 non-attainment cities mostly in Indo-Gangetic Plains have been identified based on ambient air quality data for the period 2011 – 2015 and WHO report 2014/2018.
Graded Response Action Plan (GRAP) was notified on January 12, 2017, for prevention, control and abatement of air pollution in Delhi and NCR.
National Air Quality Index: It was launched in 2014 as ‘One Number- One Color-One Description’ for the common man to judge the air quality within his vicinity. Eight pollutants namely particulate matter (PM) 10, PM2.5, Ozone (O3), Sulphur dioxide (SO2), nitrogen dioxide (NO2), carbon monoxide (CO), lead (Pb) and ammonia (NH3) act as major parameters in deriving the AQI.
Case Study: Rajasthan (Report by CSE) The air quality is worsening in both big and small cities and towns in Rajasthan due to increasing level of nitrogen dioxide and ozone.Systemic pollution persists due to inadequate infrastructure for pollution control across all sectors.Jodhpur and Kota is the second among the five non-attainment cities in the State.
Context: Recently the medical journal Lancet launched its study on Diabetes and Endocrinology that reveals that more than a tenth of the people in the country have diabetes, 35 per cent have hypertension and 28 per cent have high cholesterol levels.
What is a lifestyle disorder?
Lifestyle diseases can be defined as diseases linked to one's lifestyle. These diseases are non-communicable diseases.
Causes of Lifestyle Disorder
They are caused by lack of physical activity, unhealthy eating, alcohol, substance use disorders and smoking tobacco, which can lead to heart disease, stroke, obesity, type II diabetes and lung cancer.
These studies have pointed out that lifestyle-related disease is aggravated by poor awareness, especially in rural areas.
Who is more affected by Lifestyle disorders?
Several studies have shown that close to 20 per cent of diabetics in the country are below the age of 45 and nearly 45 per cent of the people with the disease are not senior citizens.
The burden of these disorders is higher in urban areas. But people in rural centres are increasingly becoming vulnerable to metabolic diseases, especially diabetes.
There is, for instance, almost no rural-urban divide when it comes to pre-diabetes — more than 60 per cent of pre-diabetic people in India end up having the disease.
The study’s warning that the country’s already serious diabetes burden could take a turn for the worst in the next five years should be taken seriously by the country’s healthcare sector.
Consequences of lifestyle disorder
In 2005, the World Health Organization (WHO) estimated that 61 per cent of all deaths -35 million and 49 per cent of the global burden of disease were attributable to chronic diseases.
By 2030, the proportion of total global deaths due to chronic diseases is expected to increase to 70 per cent and the global burden of disease to 56 per cent.
The Havard School of public health estimated that NCDs are responsible for a loss of 6.2 trillion US dollars between the period 2012-30.
Context: The findings of the National Family Health Survey-5 (2019-21) show that 59.1% of adolescent girls were anaemic. The NFHS-4 numbers also reported over 41.9% of school-going girls as underweight, numbers showcase a worrying trend.
Health of adolescent girls
Adolescence is the phase of life between childhood and adulthood, from ages 10 to 19.
It is a pivotal period of rapid physical, cognitive and psychosocial growth. This affects how they feel, think, make decisions, and interact with the world around them.
It is a significant indicator of women’s labour force participation in India in the long term, as better nutrition improves every young girl’s prospect to participate in productive activities
Adolescent girls are particularly vulnerable to undernutrition and anaemia due to the onset of menstruation.
Growth retardation is one of the most important health concerns for adolescents.
Recommended dietary allowances of nutrients for adolescents in India:
Reason for nutritional deficiencies in adolescent girls
Gender Discrimination: Environmental conditions to cultural norms that lack a gender-neutral environment within a household, affect the nutrition uptake in adolescent girls.
Poverty: Families with limited financial resources may struggle to provide an adequate diet for all family members, and girls may be disproportionately affected.
Limited Access to Healthcare: Lack of access to quality healthcare services, including prenatal care and postnatal support, can contribute to nutritional deficiencies in girls. Malnourished mothers are more likely to give birth to undernourished babies, perpetuating the cycle of malnutrition.
Early Marriage and Pregnancy: In some parts of India, girls are married off at a young age, which can lead to early pregnancies. Adolescent girls who become mothers before their bodies are fully developed are at a higher risk of malnutrition, as their bodies may not be able to adequately support both their own growth and the growth of their infants.
Social and Cultural Factors: Traditional beliefs and practices, such as restrictions on food intake for girls and women, can further exacerbate nutritional deficiencies. For example, the practice of excluding certain foods from women's diets during menstruation may result in inadequate nutrient intake.
Lack of Nutritional Knowledge: Lack of education and information about balanced diets, food preparation, and utilization of available resources can hinder the improvement of nutritional status. For example, bad cooking habits like over boiling vegetables and straining water, removing the husk from wheat, eating polished rice and straining rice water, etc.
Hookworm infestation: It is a parasitic infection and resides in the small intestine. It can cause significant nutritional deficiencies. They attach to the intestinal lining and consume blood, leading to chronic blood loss and iron deficiency anaemia. This can impair the body's ability to absorb nutrients, resulting in malnutrition and stunted growth, particularly in children.
Consequences of nutritional deficiencies in adolescent girls
Malnutrition: It can lead to stunted growth, weakened immune system, increased susceptibility to infections, and higher mortality rates.
Impaired Cognitive Development: Essential nutrients like iron, iodine, vitamin A, and zinc, can impair cognitive development and lead to learning disabilities, reduced attention span, and decreased intellectual capabilities. This can have long-term effects on educational attainment and economic productivity.
Increased Disease Burden: Nutritional deficiencies weaken the immune system and make adolescents more vulnerable to various diseases and infections. For example, vitamin A deficiency increases the risk of blindness and susceptibility to infectious diseases like measles. Iron deficiency can lead to anaemia.
Reproductive Health Problems: Nutrient deficiencies, particularly of iron and folate, can increase the risk of menstrual irregularities, and heavy or prolonged periods, and even affect fertility in the long term.
Economic Implications: Undernourished adolescent girls are also at a higher risk of chronic diseases and pregnancy complications, which can lead to a higher healthcare burden on both families and communities, potentially leading to financial instability and increased poverty.
Government initiatives to address nutritional deficiencies
Scheme for Adolescent Girls (SAG): This scheme is for adolescent girls of the age group 11-14 years to facilitate, educate and empower Adolescent Girls and to break the intergenerational life cycle of nutritional and gender disadvantage.
Rashtriya Kishor Swasthya Karyakram (RKSK): For adolescent participation and leadership, equity and inclusion, gender equity, and strategic partnerships with other sectors and stakeholders. The programme envisions enabling all adolescents in India to realise their full potential by making informed and responsible decisions related to their health and well-being.
Targeted and regionally contextualised Social and Behaviour Change Communication (SBCC) efforts around adolescent girls’ nutrition are sure to generate greater demand and the adoption of good practices of foods.
Integrated Child Development Services (ICDS): The ICDS is a centrally sponsored scheme that aims to provide a package of services, including supplementary nutrition, immunization, health check-ups, and referral services, to pregnant women, lactating mothers, and children up to 6 years of age. Adolescent girls are also included in the program to ensure adequate nutrition during this critical stage.
National Nutritional Anaemia Prophylaxis Program (NNAPP): This program focuses on preventing and controlling iron-deficiency anemia among vulnerable groups, including adolescent girls. It provides weekly iron and folic acid supplementation to girls aged 10-19 years, along with health and nutrition education.
National Deworming Day: The National Deworming Day on February 10 is an initiative aimed at deworming all children and adolescents in the country to prevent worm infestation and improve overall health. Adolescent girls are an important target group for this program.
Way forward
Routine training of health workers for effective implementation and monitoring of various schemes.
Implement comprehensive nutrition education programs in schools and communities that specifically target adolescent girls. Teach them about balanced diets, essential nutrients, and healthy eating habits. This can be integrated into the school curriculum or delivered through community health workers.
Nutritious school meals: Enhance the quality of mid-day meals provided in schools to ensure they meet the nutritional needs of adolescent girls. Include a variety of nutrient-rich foods like fruits, vegetables, pulses, and whole grains.
Conduct nutrition-focused workshops, cooking demonstrations, and awareness campaigns to empower families and communities to make informed choices regarding their nutrition.
Focus on addressing gender disparities that affect nutrition, such as unequal access to food, resources, and education.
Regular data collection and analysis can help track progress, identify gaps, and inform evidence-based decision-making for future interventions.
Investing in girls’ nutrition is not only a moral obligation of the state but also an economic one, with potential returns in the form of greater and more sustainable economic growth of the nation. The strength of a nation is measured by its ability to nurture its future generations. There is a need for effective convergence and collaboration among all the relevant departments, to sow the seeds of a healthier, stronger India, where every girl can reach her full potential.
Context: The National Bank for Financing Infrastructure and Development (NaBFID) plans to introduce takeout financing products to help finance projects and allow timely exits for commercial lenders.
What is Takeout Financing
Take out financing scheme means a long-term lending institution in the infrastructure sector like the NaBFID is purchasing the infrastructure loan sanction given by a commercial bank from its book.
This will relieve the commercial bank from locking assets in a long-term manner.
Takeout financing offers a window to the banks to free their balance sheet from exposure to infrastructure loans, lend to new projects and also enable better management of the asset liability position.
Hence, takeout financing enables financing longer term projects with medium-term funds.
About NaBFID
Union Budget 2021-22 has proposed to set up a development Bank in the form of NaBFID as financier, enabler and catalyst for the National Infrastructure pipeline. NaBFID is expected to reduce pressure on banks, lower the cost of capital and meet investment needs of $ 5 trillion economy.
Global Examples: China (China Development Bank), UK (Green Investment Bank), Germany (KfW).
Indian Examples: NABARD (Agriculture and Rural Development), Industrial Finance Corporation of India (Industrial Development), SIDBI and MUDRA (MSME Development), EXIM Bank (Trade Development), National Housing Bank (Housing Infrastructure).
Note: IFCI was the first ever development bank that was established in 1948. ICICI and IDBI Banks were initially set up as Development Banks but were later converted into Commercial banks based upon the recommendations of Narasimham Committee.
Ownership: NaBFID will be set up as a corporate body with authorised share capital of one lakh crore rupees. Shares of NaBFID may be held by: (i) central government, (ii) multilateral institutions, (iii) sovereign wealth funds, (iv) pension funds, (v) insurers, (vi) financial institutions, (vii) banks, and (viii) any other institution prescribed by the central government. Initially, the central government will own 100% shares of the institution which may subsequently be reduced up to 26%.
Source of Funds: Raise money in the form of loans in Indian Rupees and Foreign currencies. NaBFID may borrow money from: (i) central government, (ii) Reserve Bank of India (RBI), (iii) scheduled commercial banks, (iii) mutual funds, and (iv) multilateral institutions such as World Bank and Asian Development Bank.
Assistance Provided By Development Banks
The Development Banks may offer the following kinds of assistance to the companies:
Extend long term finance at concessional rates to the companies.
Subscribe/buy the shares of the companies which are involved in financing of infrastructure, industrial or housing projects.
Partial Credit Guarantee on the repayment of the bonds issued by the companies.
How The Setting Up Of NaBFID Would Benefit Indian Economy?
Meet Investment Needs: to realise $ 5 trillion by the end of 2024-25.
Reduce Pressure on Commercial Banks: Banks have mainly relied on short-term deposits for lending to long term infrastructure projects leading to Asset-Liability Mismatch and higher NPAs.
Lower Cost of Capital: Credit enhancement provided by the development Banks would enable the companies to raise loans at lower rates of interest leading to decrease in the cost of capital.
Reduce Foreign Currency Exposures: Presently, some of the Infrastructural and housing finance companies borrow loans from overseas markets. The depreciation in the value of Rupee may put additional burden on them and expose them to fluctuations in the exchange rate.
Strategies Needed To Ensure Success Of NaBFID
India's experience with the Development Banks has so far been a mixed bag. On one hand, some of the development banks were embroiled in controversies (National Housing Bank was involved in the Harshad Mehta Scam). While on the other hand, some of the development banks such as the one established by Karnataka Government provided necessary funding to Infosys company during its initial days, which in turn enabled Infosys to become a global giant. Hence, India has to learn from its past experiences in order to ensure the success of NaBFID.
Independence and Autonomy: Ensure professionalism, autonomy and effective control and audit mechanism. Otherwise, NaBFID's performance would be lacklustre and similar to that of Public Sector Banks.
Enhance Access to Long-term Capital: Budget 2021-22 has allocated only around Rs 20,000 crores, which is too little for our mammoth infrastructure needs. Enhanced financing can be provided by:
Long-term credit from RBI to NaBFID through Long-term Repo Operations (LTROs).
Declaration of Bonds issued by NaBFID as eligible securities for meeting SLR requirements of the Banks. (Encourage the Banks to buy Bonds issued by NaBFID 🡪 Enable NaBFID to raise money from Banks).
Enable NaBFID to borrow money from International Institutions such as World Bank, ADB etc.
Infuse Competition: Monopoly by NaBFID in infrastructure financing may lead to operational inefficiencies; need to encourage private sector to establish Development Banks so as to infuse competition.
Enhancing Investor Base: Make it easier for the pension fund companies, Insurance companies, mutual fund companies to invest in bonds issued by NaBFID; Tax incentives to the individuals upon investing in bonds issued by NaBFID etc.
Conclusion
Takeout financing is an accepted international practice of releasing long-term funds for financing infrastructure projects. It can be used to effectively address Asset-Liability mismatch of commercial banks arising out of financing infrastructure projects and also to free up capital for financing new projects.
Context: Banks can take on compromise settlements on accounts categorised as wilful defaulters or fraud without prejudice to the criminal proceeding underway against such debtors.
What is a Compromise Settlement?
A compromise settlement with the borrowers is negotiated by the bank with or without involving remission or sacrifices.
Recovery of debts due to banks is an important activity that aims at protecting the interest of the depositors and other stakeholders. If banks do not recover NPAs, depositors and other stakeholders will ultimately suffer.
Hence, any compromise settlement should have an underlying objective of recovery of dues to the maximum extent possible at minimum expense and within the shortest possible time frame.
About RBI Circular
RBI has allowed banks to enter into a compromise settlement for accounts termed as wilful defaulters and fraud. A wilful defaulter is a borrower who refuses to repay loans despite having the capacity to pay up.
Cooling off period: A wilful defaulter or a company involved in fraud can apply for new loans after at least 12 months of executing a compromise settlement. However, a regulated entity (banks and finance companies) are free to stipulate higher cooling periods as per their board-approved policies.
Analysis
Reduction in NPAs: Write-offs, or bad loans taken out from the NPA books for accounting and tax purposes, were used by banks to show lower non-performing assets (NPAs). In the last ten years, the reduction in NPAs due to write-offs was Rs 13,22,309 crore.
Early Recovery & Cost Savings: Such settlement ensures early recovery of dues and results in saving of cost to the bank in terms of legal expenses and other costs.
May lead to a tricky situation: Possibility that more public money will be lost in the process.
Misuse: Banks and corporates often misuse restructuring for evergreening problem accounts to keep reported NPA levels low.
Context: The government said Primary Agricultural Credit Societies (PACS) can be employed as drone entrepreneurs for spraying fertilizers and pesticides and for a survey of the property. PACS will also be connected with the marketing of organic fertilizers, especially Fermented Organic Manure (FoM)/ Liquid Fermented Organic Manure (LFOM)/ Phosphate Enriched Organic Manure (PROM).
About PACS
It is village-level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level.
It is an association of borrowers and non-borrowers residing in a particular locality. It is the final link between the borrower at the village level on one hand and the higher agencies like the central cooperative bank, state cooperative bank, and reserve bank of India.
The first PACS was established in 1904.
Regulation of PACS
It is registered under the Co-operative Societies Act which means they are regulated by the State government (specifically administrative aspects) and also regulated by the RBI.
NABARD is a nodal refinancing agency for PACS including other cooperative banks.
They are governed by the Banking Regulation Act-1949, Banking Laws, and Co-operative Societies Act 1965.
Financial Structure of PACS
PACS derives its working capital from its own funds, share capital, membership fee, and reserve fund, deposits, borrowing, and other sources.
PACS are involved in short-term lending or what is known as crop loans. At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers, etc.
Banks extend this credit at 7 percent interest, of which 3 percent is subsidised by the Centre, and 2 percent by the state government. Effectively, farmers avail the crop loans at 2 percent interest only.
It collects deposits from its members.
The funds of the society are derived from the share capital and deposits of members and loans from a central cooperative bank.
Credit from the SCBs is transferred to the district central cooperative banks, or DCCBs, that operate at the district level. The DCCBs work with PACS, which deals directly with farmers.
They also supply agricultural inputs and other services (in the form of money or in-kind) to their members.
They can also provide a storage facility to produce its members.
Formation of PACS
A group of ten or more people in a village or from many villages can form PACS.
Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them.
A village can have multiple PACS.
Membership fees are there to be a member of PACS but it is very low so that the poorest man can join it.
Members of the PACS have unlimited liability, which means each member assumes full responsibility for the society’s entire loss in the event of failure.
Management of the PACS is overseen by the elected body
Significance of PACS
PACS accounts for 41% of all Kishan Credit Card loans provided by all entities in the country.
PACS is the main source of credit for rural marginal farmers because around 60% of beneficiaries of PACS are small and marginal farmers according to NABARD’s annual report of 2021-22.
Context: The Monetary Policy Committee (MPC) has kept inflation front and centre of its approach to policy. The MPC’s recent unwavering focus on price stability is informed largely by its mandate to achieve the Consumer Price Index (CPI) inflation target of 4%, a goal that it has struggled to actualise right since January 2021 — a period during which inflation remained stuck above or close to the upper tolerance band of 6% in 20 of the 27 months.
About Monetary Policy
Monetary policy is a set of tools used by a nation's central bank to control the overall money supply and promote economic growth and employ strategies such as revising interest rates and changing bank reserve requirements.
Under the Reserve Bank of India, Act,1934 (RBI Act,1934) (as amended in 2016), RBI is entrusted with the responsibility of conducting monetary policy in India with the primary objective of maintaining price stability while keeping in mind the objective of growth.
The Monetary Policy Framework
In May 2016, the RBI Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework.
Inflation Target: Under Section 45ZA, the Central Government, in consultation with the RBI, determines the inflation target in terms of the Consumer Price Index (CPI), once in five years and notifies it in the Official Gazette.
Accordingly, the Central Government notified 4 per cent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016 to March 31, 2021 with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent. On March 31, 2021, the Central Government retained the inflation target and the tolerance band for the next 5-year period – April 1, 2021 to March 31, 2026.
Section 45ZB of the RBI Act provides for the constitution of a six-member Monetary Policy Committee (MPC) to determine the policy rate required to achieve the inflation target.
Monetary Policy Committee
Section 45ZB of the amended RBI Act, 1934 provides for an empowered six-member monetary policy committee (MPC) to be constituted by the Central Government by notification in the Official Gazette. The first such MPC was constituted in September, 2016. The present MPC members, as notified by the Central Government in the Official Gazette of October, 2020, are as under:
Governor of the Reserve Bank of India - Chairperson, ex officio
Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy - Member, ex officio
One officer of the Reserve Bank of India to be nominated by the Central Board - Member, ex officio
Prof. Ashima Goyal, Professor, Indira Gandhi Institute of Development Research - Member
Prof. Jayanth R. Varma, Professor, Indian Institute of Management, Ahmedabad - Member
Dr. Shashanka Bhide, Senior Advisor, National Council of Applied Economic Research, Delhi - Member
Last three persons are to be appointed by the central government. This category of appointments must be from “persons of ability, integrity and standing, having knowledge and experience in the field of economics or banking or finance or monetary policy”. (Section 45ZC)
The MPC determines the policy repo rate required to achieve the inflation target.
The MPC is required to meet at least four times in a year. The quorum for the meeting of the MPC is four members.
Each member of the MPC has one vote, and in the event of an equality of votes, the Governor has a second or casting vote.
Each Member of the Monetary Policy Committee writes a statement specifying the reasons for voting in favour of, or against the proposed resolution.
Positives of Recent RBI Rate Hikes
Headline inflation had eased appreciably in March and April, slowing to 4.7% in the first month of the current fiscal year from the bruising 6.7% average pace in 2022-23.
Macroeconomic fundamentals have strengthened after the unrelenting focus on preserving price and financial stability.
Negative Impact of Recent Rate Hikes
Increase in credit costs since the RBI started raising its benchmark interest rates in May 2022 appears to have retarded investment and consumption activity last year.
Bank credit data show the pace of growth in loans to industry, particularly the MSME and medium sectors, slowed appreciably last year.
The sequential contraction in estimated private consumption spending in the fourth quarter of the last fiscal year is also likely a fallout of the higher borrowing costs.
Risks to Inflation Projections
The spatial and temporal distribution of rainfall during this monsoon in the wake of El Niño conditions.
Unabated geopolitical tensions.
Uncertainty over international commodity prices including those of sugar, rice and crude oil.
Volatility in global financial markets.
Conclusion
Policymakers cannot afford to take their eyes off inflation. Price stability is after all a public good and achieving durable disinflation must remain a non-negotiable goal, especially amid widening income inequality and high levels of joblessness.
Context: Recently WHO said that piped potable water across India will avert 4,00,000 diarrhoea deaths.
Status of Water Accessibility in India
As per UNICEF two-thirds of India’s 718 districts are affected by extreme water depletion.
One of the challenges is the fast rate of groundwater depletion in India, which is known as the world’s highest user of this source due to the proliferation of drilling over the past few decades.
Groundwater from over 30 million access points supplies 85 per cent of drinking water in rural areas and 48 per cent of water requirements in urban areas.
Close to 54 per cent of rural women – as well as some adolescent girls - spend an estimated 35 minutes getting water every day, equivalent to the loss of 27 days’ wages over a year.
Less than 49 per cent of the rural population is using safely managed drinking water (improved water supply located on-premises, available when needed and free of contamination)
Impacts of Potable Water Accessibility
It will help in reducing the number of deaths associated with water accessibility like diarrhoea etc.
This would avoid 14 million DALYs (Disability Adjusted Life Years) from diarrhoea, save close to $101 billion and 66.6 million hours every day of time that would otherwise have been spent — predominantly by women — collecting water.
A DALY represents the loss of the equivalent of one year of full health and is a way to account for the years of life lost due to premature mortality (YLLs) and the years lived with a disability (YLDs), due to prevalent cases of a disease or a health condition, in a population.
It is estimated that waterborne diseases have an economic burden of approximately USD 600 million a year in India.
School attendance in India decreases when children are required to spend hours collecting water. A 22 per cent increase in school dropout rates has been reported in drought-affected states.
Steps Taken for Potable Water Accessibility
In 2019, the Ministry of Drinking Water and Sanitation (MDWS) was restructured and the Ministry of Jal Shakti (meaning “power of water”), was bifurcated into two key departments – the Department of Water Resources, River Development and Ganga Rejuvenation, and the Department of Drinking Water and Sanitation.
In August 2019, the union Government launched the Jal Jeevan (Water for Life) Mission.
The Centre says it will achieve 100% coverage under the Jal Jeevan Mission by 2024;
So far five States, including Gujarat, Telangana, Haryana and Punjab, have reported full coverage.
Grassroots-level support is being prioritized, and communities play a pivotal role in the planning, implementation, operation and maintenance of their schemes.
Around 11,000 Implement Support Agencies (ISAs, mainly NGOs) are being trained to support the implementation of the JJM, covering aspects such as
community empowerment and engagement,
water quality testing and surveillance,
utility operation, water safety and security planning,
source sustainability measures,
such as recharge and reuse through grey water management,
