Editorials, GS-3, Science & Tech

Voluntary Vehicle Fleet Modernization Programme (V-VMP)

The road transport and highways minister, in May 2016, released the first draft of the proposed Voluntary Vehicle Fleet Modernization Programme (V-VMP).

  • The programme proposes to offer tax benefits and discounts to people who junk old vehicles and replace them with new ones. Its primary intention is to reduce emissions and the priority is to get old fuel-guzzling and polluting trucks off the roads.

What has happened now?

Finance ministry has raised objections over few provisions in the scheme. These include provisions related to:

  • Number of vehicles to be scrapped.
  • Excise duty exemption.
  • Infrastructure creation.
  • Investments

Why Finance Ministry is opposing?

The scheme takes 28 million vehicles off the road and according to the Finance Ministry it is difficult to provide exemptions or rebates to such a huge number of vehicle owners. Besides, it would also lead to a financial burden on the government.

What’s the issue now?

Road transport and highway minister Nitin Gadkari is all set to make another attempt to convince finance minister Arun Jaitley to approve the Voluntary Vehicle Fleet Modernization Programme (V-VMP) in its current form.

What is V-VMP?

It is a policy proposed by the Road Ministry aimed at pushing 28 million decade-old polluting vehicles off the road. The policy aims at incentivising people to retire their old vehicles that were bought before March 2005 or are below BS IV standards.

  • As per the proposed policy, vehicles bought prior to March 31, 2005 or those below BS IV emission standards would be eligible for incentives if those were scrapped and replaced by new ones.
  • A fair value for the scrap, excise duty at 50% of the normal rate on the new vehicle and special discounts from automobile manufacturers are on cards for those who participate.
  • The incentives are expected to reduce the cost of a new vehicle for a buyer on an average 8-12%.
  • The policy recommends complete excise exemption for state transport buses to encourage public transport to shift to newer and higher capacity buses which will also help decongest roads.

Why it is needed?

Analysis of segment and age of vehicles causing air pollution has shown that MHCVs (Medium & Heavy Commercial Vehicles) constitute just 2.5% of the total fleet but contribute to 60% of pollution.

Besides, the older vehicles, typically more than 10 years of age and pre-BS I compliant, constitute 15% of the total fleet but pollute 10-12 times more than a new vehicle because of drastic change in pollution norms.
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Incentives proposed:

Under V-VMP, the road ministry has proposed that vehicle owners scrapping their old vehicles will get monetary incentives to buy a new vehicle in three forms to aid adoption of this programme:

  1. Scrap value from old vehicle.
  2. Automobile manufacturers’ special discount.
  3. Partial excise duty exemption.

Other details:

  • The scheme will focus initially on incentivising buyers of new commercial vehicle and keep passenger vehicles out of its ambit. It also won’t cover two-wheelers in the first phase.
  • Given that commercial vehicles change hands two to three times during their lifecycle, the government is also working out ways to issue tradeable certificates which would incentivise the last owner to scrap the truck and subsidise the purchase of the primary buyer. This will create a win-win situation for all stakeholders and make the overall dynamics of commercial vehicle trade more vibrant.
  • Under the plan, those opting for V-VMP will have to deposit documents relating to the vehicle at the recycling centre. After verification, the owner will get a VVMP certificate and the price for the scrap. He has to provide the certificate to the dealer while buying the new vehicle to avail of the discount.
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Why it is a good scheme?

  • The scheme has the potential to reduce the vehicular emission by 25-30% and saving oil consumption by 3.2 billion liters per year. The reducing in oil consumption by new vehicles will help save nearly Rs 7,000 crore in oil import.
  • Implementation of the scheme for trucks and buses would result in 17% reduction in CO emissions, 18% reduction in HC+NOx emissions and 24% reduction in PM emissions.
  • Also, the policy would boost sales of automobile manufacturers leading to higher production capacity utilisation and the automobile manufacturers would support the government in this initiative “financially by giving special discounts to customers buying vehicles under this scheme”.
  • Besides reducing emissions, it generates steel scrap worth Rs. 11, 500 annually, reducing steel import burden.
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Way ahead:

Road Ministry will clarify before the Finance Ministry that in the first phase, the target would be just medium and heavy vehicles which are just 1.2 million as compared to finance ministry’s estimate of 28 million.

As far as revenue loss on excise duty is concerned, Road Ministry will try to convince Finance Ministry, stating that with the old vehicles running on road, the revenue loss would be more. If the new vehicles are purchased, at least there would be some additional revenue for the government.

Similar experiments in other countries:

A scheme known as Cash for clunkers has been implemented across the globe in countries like the UK, US, Germany, France and Spain, for limited periods during the global recession of 2009, in a bid to drive sales in the domestic auto industry. The government buys up some of the oldest, most polluting vehicles and scraps them.

  • In the US, cash for clunkers was introduced during the recession and was an attempt to stoke growth within the economy. the scheme was tailor made in such a way that it also incentivised the US consumer to shift away from gas guzzlers.
  • Under the UK car scrappage scheme, a £2,000 incentive was paid to motorists who scrap cars registered before 31 August 1999 to buy a new car. The government contributed £1,000 and the remaining amount came from the dealers and manufacturers.
  • China substituted an estimated 2.7 million high polluters from the national car fleet by offering rebates of $450 to $900 from June 2009 to May 2010 while Indonesia launched a scrappage scheme in 2009 paying owners of vehicles at least 10 years old MR5,000 ($1,354) was shared equally by the government and auto makers.
GS-3, Indian Economy, Uncategorized

Government approves capital goods sector policy

The Hindu

News

  • First -ever policy for the capital goods sector approved by the Cabinet .

Key points of the policy

  • It aims to triple the value of production of capital goods to Rs.7.5 lakh crore by 2025 and create more than 21 million jobs.
  • It envisages increasing exports to 40 per cent of production from the present 27 per cent.
  • The share of domestic production in India’s demand will also be increased from 60 per cent to 80 per cent, making India a net exporter of capital goods.
  • It will help in realising the vision of ‘Building India as the World class hub for Capital Goods’.
  • It will also play a pivotal role in overall manufacturing as the pillar of strength to the vision of ‘Make in India’.
  • The objectives of the policy will be met by the Department of Heavy Industry in a time-bound manner through obtaining approval for schemes as per the roadmap of policy interventions.

What are ‘Capital Goods’?

  • Capital goods consist of any tangible assets that an organization uses to produce goods or services such as office buildings, equipment and machinery.
  • Consumer goods are the end result of this production process.
  • A capital good is a durable good (one that does not quickly wear out) that is used in the production of goods or services.
  • Capital goods are one of the three types of producer inputs, the other two being land and labor, which are also known collectively as primary factors of production.
GS-3, Indian Economy, Uncategorized

Now, a ‘tatkal’ system to expedite patent examination

The Hindu

What happened?

  • The government has amended rules and introduced several measures including a system similar to ‘tatkal’, to expedite examination of patent applications by start-ups as well as entities choosing India for the first filing of patent.

Why this move?

  • There are around 2.37 lakh patent applications pending in the country.
  • The government is aiming to bring down the time period for initial examination of patent applications from the present 5-7 years to 18 months by March 2018.
  • The move is to popularise India as a patent filing hub so that more companies file applications in India. Now many applications for the initial examination are filed abroad, in places like Europe, the US or Japan.
  • Government has also announced the National Intellectual Property Rights (IPR) Policy to push IPRs as a marketable financial asset and economic tool, promote innovation and entrepreneurship/start-ups, while protecting public interest.

Expedited examination

  • Under the ‘tatkal’-like system applicants can opt for the ‘expedited examination’- route on the grounds that they have chosen India as the competent International Searching Authority or International Preliminary Examining Authority in the corresponding international application, and file their applications first in India.
  • The ‘expedited examination’-route is also available to all entities that qualify as a start-up as per the definition for start-up provided in the Patent Rules.
  • The applications for this route have to be filed only electronically.
GS-1, Uncategorized

Alcohol prohibition

Recently elected Bihar government banning its sale and consumption to fulfil a key electoral promise.

Issue

  • Prohibition of alcohol

Consequences of alcohol consumption

  • Household impoverishment
  • Domestic violence
  • Premature mortality

Is prohibition of alcohol a sound move?

Prohibition is a very poor policy to address the consequences of alcohol abuse. No evidence.It has major negative implications :

  • Massive loss to the exchequer.
  • Criminalization of a majority of people who drink sensibly.
  • Criminalization of a large section of society right from the manufactures (will resort to illegal manufacturing), dealers (would resort to smuggling) and the consumers (would be forced to buy illegally).
  • This has a potential to result into a big nexus of smugglers, police ,politic. and bootleggers.

Prohibition of alcohol surprisingly has a serious ramification even on public health as poor people would resort to illegally brewed alcohol which is often poisonous and frequently results in deaths.

Prohibition in its true sense is rejected by most public health scientists who know this field, even the World Health Organisation does not recommend it.

There is lack of public health approach in India:

  • Government has permitted the shameless substitute advertising of alcohol by corporations, for example, through selling “bottled water” under the same brand names as their much better known alcoholic beverages.
  • Airline named after the most popular alcoholic beverage (Kingfisher)

What to do then if not prohibition?

India must not follow these archaic models of de-addiction. There are many other steps that could be taken:

  • Effective counselling interventions for those who wish to control their drinking.
  • Keeping a strong check on the proliferation of bootlegging and illegal manufacturing units.
  • Spreading awareness right from the schools and colleges about the problem of alcohol abuse

Conclusion

Though prohibition may appear to be a one stop solution to the problem of alcohol abuse

In fact there is no evidence to show that prohibition has ever had its intended impact.

Yes it will reduce alcohol consumption but it can do very little for domestic violence and premature mortality. It might pose more serious problems than it would tackle.

GS-3, Indian Economy, Uncategorized

Centre’s nod for NIMZ in Medak

Centre’s nod for NIMZ in Medak

The government has granted the final approval to the National Investment and Manufacturing Zone (NIMZ) at Zaheerabad in Medak district, Telangana.

  • The estimated total investment by the manufacturing industry by the end of the ultimate phase of the NIMZ’s development is Rs.17,300 crore and the employment generation is about 2.77 lakh.

What are National Investment and Manufacturing Zones (NIMZs)?

The National Investment & Manufacturing Zones (NIMZs) are an important instrumentality of the National manufacturing policy. The NIMZs are envisaged as integrated industrial townships with:

  • State of the art infrastructure.
  • Land use on the basis of zoning.
  • Clean and energy efficient technology.
  • Necessary social infrastructure.
  • Skill development facilities etc.

Aim: NIMZs aim to provide a productive environment for persons transitioning from the primary to the secondary and tertiary sectors.

What the National Manufacturing Policy (NMP) says?

The National Manufacturing Policy (NMP) has the objective of enhancing the share of manufacturing in GDP to 25% and creating 100 million jobs over a decade. The NMP provides for promotion of clusters and aggregation, especially through the creation of national investment and manufacturing zones (NIMZ).

The National Manufacturing Policy (NMP) provides for:

  • Relief from Capital Gains Tax on sale of plant and machinery of a unit located in a National Investment and Manufacturing Zone (NIMZ) in case of re-investment of sale consideration within a period of three years for purchase of new plant & machinery in any other unit located in the same NIMZ or another NIMZ.
  • Rollover relief from long term Capital Gains tax to individuals on sale of a residential property (house or plot of land) in case of re-investment of sale consideration in the equity of a new start-up SME company in the manufacturing sector for the purchase of a new plant and machinery.
  • Simple and expeditious exit mechanism for closure of sick units while protecting labour interests.
  • In respect of environmental laws/regulations, inspection by specially trained/designated/notified agencies for third party inspection to supplement the inspection by the Government agencies for compliance monitoring.

Some notable points:

  • NIMZ can be proposed with land area of at least 5000 hectares.
  • Land will be selected by state governments and preference would be given to uncultivable land.
  • NIMZ will be managed by Special Purpose Vehicle, headed by. Govt. officials and experts, including those of environment.
  • To enable NIMZs to function as self governing autonomous bodies, they will be declared by the state government as industrial townships under Article 243 Q (c) of the constitution.
  • NIMZs will be notified by the central government.
Editorials, Uncategorized

Cure for high medicine bills: A generics prescription law

Context

  • The central government is considering the introduction of a law to make it mandatory for the doctors to prescribe generic drugs

Why

  • So that everyone can access affordable medicines
  • from state-run Jan Aushadhi stores.

What is Jan Aushadhi stores?

  • ‘Jan Aushadhi’ is a campaign launched by the Department of Pharmaceuticals in association with Central Pharma Public Sector Undertakings, to provide quality medicines at affordable prices to the masses.
  • Jan Aushadhi stores have been set up to provide generic drugs, which are available at lesser prices but are equivalent in quality and efficacy as expensive branded drugs.
  • Generic medicines are unbranded medicines which are equally safe and having the same efficacy as that of branded medicines in terms of their therapeutic value.
  • The prices of generic medicines are much cheaper than their branded equivalent.

What is the future plan?

  • To set up 3,000 Jan Aushadhi stores across the country this year, current Union Budget promise.

Main issue.

  • A good chunk of Indian population is not able to afford the branded medicines which are priced very high.
  • Doctors doe not prescribe generic medicines and instead refer the branded counterparts.

Government proposed an ordinance or Act of Parliament

  • To ensure that doctors prescribe generic drugs or include a clause ‘or equivalent generic drug,’ when doctors prescribe a branded drug

The BPPI is responsible for implementing the Jan Aushadhi programme which was launched in 2008.

What is BPPI?

  • BPPI (Bureau of Pharma Public Sector Undertakings of India) has been established under the Department of Pharmaceuticals, Govt. of India, with the support of all the CPSUs for co-coordinating procurement, supply and marketing of generic drugs through the Jan Aushadhi Stores.

Main focus is accessibility, affordability and availability.

But if doctors will not prescribe generic drugs sales won’t take place.

Pharmacists should have the option to give the generic substitute

Reason for building jan Aushadhi stores?

  • Ex-factory cost of medicines are low
  • People get the drugs which are marked up multiple times owing to supply chain costs and incentives for medical representatives.
  • The Jan Aushadhi stores will be able to provide drugs at Rs. 19, if the ex-factory cost is Rs. 10. For which people are giving 100 rupees.

Solutions

  • Remembering a generic drug for combination drugs like PCM gets a little tricky.
    • create an IT-enabled prescription system that automatically includes the formulation of such drugs when a doctor prescribes a branded drug out of habit or because they don’t know the exact formulation
  • A law will be more effective than directives from the Medical Council of India asking doctors to write generic drug names.
  • State governments should asked to focus on buying generics drugs rather than expensive branded alternatives

Current position

  • Jan Aushadhi stores had opened in 16 States, and there are 283 stores in 22 States and Union Territories at present.
  • BPPI will set up ten times the existing number of stores this year.
  • Over 100 private pharma firms have enlisted to supply generic drugs.

Additional Points

Other initiatives taken by BPPI (Bureau of Pharma Public Sector Undertakings of India) to control the drug pricing are:

  • Price control of Scheduled Drugs through the National Pharmaceutical pricing authority (NPPA):Under the Drug Price Control Order, 1995, NPPA): Under the Drug Price Control Order, 1995, NPPA has been given the mandate to control and fix the maximum retail prices of a number of scheduled/listed bulk drugs and their formulations, in accordance with well defined criteria and methods of accounting, relating to costs of production and marketing .Notably therefore, the prices of these medicines have remained quite stable and affordable.
  • Price regulation of Non-Scheduled Drugs: Apart from the scheduled medicines under DPCO, 1995, the NPPA monitors the prices of other medicines not listed in the DPCO schedule, such that they do not have a price variation of more than 10% per annum. This has further helped in keeping the prices of most of the non-scheduled medicines stable and affordable.
Big Picture, GS-3, Indian Economy, Uncategorized

FDI in E-Commerce – whom will it Benefit?

Recently government passed an order allowing 100 percent FDI in market place model of e commerce sector with some regulations and restrictions. The industry which has been growing at a phenomenal phase (1 billion $ to 14 Billion $) since few years, the 100% percent FDI in e commerce industry is welcomed with both prudence and Joy. This article deals with certain issues relating to E-commerce industry.

Definition of e – commerce:

Buying and selling of goods and services including digital products over digital and electronic network.

Features of new FDI ruling:

  • 100% FDI allowed in market place model of e-commerce.
  • Market place model and inventory based model of e-commerce well defined.
  • Level playing field to all sellers in market place model.
  • Sales through one vendor not to exceed 25% in market place model.

As it turns out, the FDI ruling does not only come as a rude awakening to sellers but buyers as well. According to the guidelines, no seller has the right to revise the price of a product which ensures fair competition. This ruling could mean the end of special sale days like Flipkart’s Big Billion Day or special offers provided by the likes of Amazon, Snapdeal etc. In addition, sellers could be forced to sell products on their platform at prices much higher than what the Indian online shopper is used to. This is could bring brick-and-mortar stores back into the limelight.

Following are some of the concerns:

  • Indian market is not yet ready for opening up e-retail space to foreign investors. It will seriously impair small time trading of brick and mortar stores. Small time shopkeepers are not highly qualified and will not be able to compete with sound e-retail business format.
  • Because of scale of economic operations, e-commerce players in the inventory based model will have more bargaining power than standalone traders and will resort to predatory pricing.
  • The infrastructure created by major e-commerce players will be captive and government will not be able to achieve its objective of creating back end infrastructure.
  • Indian e-commerce market is at a nascent stage of development. With FDI in e-commerce, global players will have adverse impact on this domestic industry. It will lead to monopolies in ecommerce, manufacturing, logistics and retail sector.
  • Inventory based e-commerce competes directly with MSMEs. Indian e-commerce B2C is growing in an eco- system with Indian owned/led companies offering open marketplace models which provide a technology platform to help MSME reach across India and even globally. These marketplaces do not compete with MSME or retailers and allow everyone to trade. On the other hand, allowing the entry of inventory based large foreign e-tailers may shrink Indian entrepreneurship and the MSME sector.

 

However there are some advantages too:

  • Boost to the infrastructural development: Impetus to manufacturing sector: Growth in retail sector will have cascading effect in the manufacturing sector which will positively contribute to overall growth of economy and job creation.
  • More efficient supply chain management: Will reduce the need for middlemen leading to lower transaction costs, reduced overhead and reduced inventory and labour costs.
  • Adopting best global business practices: Will lead to better work culture and customer service.
  • Increased outreach: Will provide increased access to buyers/sellers; allow MSMEs and artisans to reach out to customers far beyond their immediate location, both locally within India and abroad.
  • Traceability and transparency: Will not only empower consumers with information and data but also help in better compliance of regulatory framework.
  • Reduced costs: On marketing and distribution, travel, materials and supplies will benefit businesses.
  • Improved customer service: providing more responsive order taking and after-sales service to customers and competitive pricing.

With new regulation in place ultimately government is legitimising the sector which before was neither regulated nor well defined. With new regulation in place there is a clarity which can help to assist growth by considering all the stake holders involved in the sector. However there are various concerns listed above that needs to be addressed through holistic approach.

Editorials, GS-3, Indian Economy, Uncategorized

Renegotiation of PPP contracts becomes a reality

Article Link

India’s finance minister Arun Jaitley announced three new initiatives on building infrastructure through the so-called public-private partnership (PPP) mode in the national budget he presented to Parliament on 29 February.

The three initiatives are:

  1. Public Utility (Resolution of Disputes) Bill:

It will shortly be introduced in the parliament to streamline institutional arrangements for the resolution of disputes in infrastructure-related construction contracts, PPP and public utility contracts.

  1. Guidelines for renegotiation of PPP:

The government has also proposed to introduce the guidelines for renegotiation of PPP concession agreements, keeping in view the long-term nature of such contracts and potential uncertainties of the real economy, without compromising transparency.

  1. New credit rating system:

A new credit rating system for infrastructure projects which gives emphasis to various in-built credit enhancement structures will also be developed, instead of relying upon a standard perception of risk which often results in mispriced loans.

All the three have a bearing on investments in the ports sector but it is the announcement on re-negotiation of agreements that has the maximum impact.

PPP in India:

India has emerged as one of the leading PPP markets in the world due to several policy and institutional initiatives taken by the central government and a sustained effort in various sectors to accelerate the implementation of PPP projects and programmes.

  • India has also developed a strong framework for the approval of PPP projects at the central government-level with appropriate oversight exercised by bodies independent of the projects and aware of the fiscal implications of PPPs.

Challenges:

However, in recent years, various challenges have arisen along with the acceleration in the pace of the roll-out of PPPs.

  • With the perception that participation in PPP projects has become too risky in the country, developers and financiers are not showing any interest to participate in any project bidding.
  • Besides, the common themes that emerge across infrastructure sectors are that risk allocation is viewed as one-sided and several sovereign obligations are not being met.
  • Also, unrealistic bidding in terms of revenue sharing that has placed concessions at risk of failure as economic conditions worsened over the past five years.
  • As far as the contractual elements of the PPPs is concerned, there is a general consensus that the model concession agreements (MCAs) are inflexible with no ability to change the terms of the concession.

What needs to be done?

  • For the next generation of PPP contracts, amend the model concession agreement to include provision for renegotiation with adequate safeguard built in to deal with uncertainties inherent in long-term contracts and protect the developer from unexpected changes beyond his control. Besides, it should also be ensured that the option of renegotiation is not misused.
  • Post-award changes are almost always fraught with moral hazards and political risks. Hence, it is necessary to establish a set of criteria or benchmarks to be applied to each proposed renegotiation that are quantifiable and ascertainable. That is, the case for a renegotiation can be made explicit and recorded so that the decisions made are rational and defensible.
  • The criteria or benchmarks for renegotiation should include evidence that the project distress is material and likely to result in default under the concession agreement in future should it continue.
  • Also, there should be evidence to show that this distress is not caused by the private party and is likely to cause adverse outcomes for the government and/or users of the concession assets.
  • It should also include evidence that a renegotiated concession agreement is likely to have direct cost implications for the government that are less than the financial outcomes of doing nothing.
  • The final decision for a renegotiated concession agreement must be based on full disclosure of long-term costs, risks and potential benefits.

Conclusion:

Besides renegotiation, the government, to ward off allegations of crony capitalism or litigation from bidders who lose out in the first stage, has to create a credible institutional mechanism. Also, pricing should combine public purpose considerations with those of risk and efficiency. Pushing big ticket reforms is no cakewalk in a raucous polity such as ours. Yet, a robust PPP framework can make a difference in cranking up investment and growth.

Editorials, GS-2, Social Issue, Uncategorized

Quantifying the caste quotas

Article Link

We have, in the past, observed that our political system wakes up only when the demand for reservation by a particular community turns into a violent protest. Even then, the government just confines itself to ascertaining demands of only that particular group.

  • The government has never tried to re-examine the whole conundrum of reservation holistically.
  • Added to this is the non availability of any data to tell who deserves preferential policies and why.

Concerns:

The proportion of individuals identifying themselves as Other Backward Classes (OBCs) has steadily grown over the years. The National Sample Survey Office data show that in 1999-2000, about 36% of the population fell in the self-identified OBC category. By 2011-12, this proportion had grown to 44%.

  • If combined with about 9% of the Scheduled Tribe (ST) and 20% of the Scheduled Caste (SC) population, the total proportion eligible for reservation comprises 73% of the Indian population.
  • If new claimants to the OBC category are added to this group, easily 80% of Indians would be eligible for reservation of some kind.
  • This would make it impossible for the government to provide effective benefits to this large a group. Thus, some choices within these categories will inevitably need to be made.

Why there is a need to reexamine our reservation policy?

  1. Changed external conditions:

Since independence, the external conditions which initially led to reservations have changed tremendously. Economic growth has resulted in a decline in poverty numbers from 37% of the population to 22%. Such development should have brought down the number of people seeking reservations, in contrast, rewards to government jobs have grown sharply.

  1. Increased popularity:

Wage increases associated with the Sixth Pay Commission and the expected implementation of the Seventh Pay Commission have made government jobs highly attractive. Hence, many groups historically tied to the land are now seeking favourable treatment while seeking entry into non-farm work.

  1. Increased competition:

In the last decade, access to government jobs has been declining for all groups. The India Human Development Survey (IHDS) by University of Maryland and National Council of Applied Economic Research shows that although in 2004-05 15.3% of men aged 22-39 with education level of class 12 or more had a regular salaried job in the government or public sector, this proportion fell to 11.7% by 2011-12.

  • This is because government jobs have stagnated while educational attainment has increased rapidly. Thus, it is not surprising that more claimants for these scarce jobs are aggressively staking their claims.
  1. Ambiguity in the reservation process:

Since the First Backward Classes Commission headed by Kaka Kalelkar submitted its report in 1955, several attempts have been made to identify backward castes, resulting in frequent discordance between these lists. Lack of consistency and clarity has lead to ambiguity in the entire process of reservation, leaving communities like Jats, Marathas and Patels dissatisfied.

  1. Lack of Data:

The problem is exacerbated by the lack of credible recent data. Since the 1931 Census, the only effort at collecting data on different castes and their socio-economic circumstances was undertaken by the Socio-Economic Caste Census (SECC), 2011. The National Commission for Backward Classes claimed, in a report dated February 2015, that these data are neither available nor usable for the purpose of establishing the economic condition of various castes.

How can we address these problems?

  1. Regular Surveys:

Conduct regular surveys to identify the beneficiaries who can claim the benefits under the reservation policy. This can be achieved by including data on caste in census surveys. The present phase in the planning cycle of the 2021 Census is the ideal time for ensuring that comprehensive data about caste and religion for all the groups, including forward castes, backward castes, and SCs and STs, are included in this Census.

  1. Reevaluation:

These data should also be used to re-evaluate the eligibility of groups for inclusion in reserved categories every 10 or at least every 20 years. Much of the social stratification in India is linked to the occupational status of the various castes.

  • With the changes in the economy, we can expect both the link between caste and occupation to weaken and the economic fortunes of various occupations to change considerably.
  • The opportunity for re-examination of the caste-wise economic status would facilitate the setting up of a structure for the redressal of grievances.
  1. Ensure wider reach:

We must also find a way of ensuring a churn in the number of individuals eligible for benefits to ensure that these benefits reach the widest segment of society. Though the creamy layer criteria exist, it has not been very effective.

  • With the advent of the Aadhar card, one way of ensuring that the same families do not capture all the benefits is to ensure that each time someone uses their reserved category certificate, their Aadhar number is noted down and linked with the certificate.
  • Further, it may be stipulated that the reserved category certificate can be used only once in 20 years, thus allowing for the benefits to reach even the sections that have hitherto been excluded from their ambit.
  • This would ensure that the same individual is not permitted to obtain both college education as well as a government job by using the same eligibility criterion, nor can one obtain an initial posting as well as promotion using the same criterion.

Conclusion:

The key to dealing with the quota quagmire lies in shuffling people in and out of the eligibility criteria and ensuring that the benefits are not concentrated among certain groups and/or individuals. All these principles are consistent with the democratic ideals and vision of social justice envisaged in India’s Constitution. It may be possible to achieve a consensus across the political spectrum for adopting a non-political and pragmatic approach to reservations. If we expect to phase out the reservation policy 100 years after Independence, the time for finding a long-term solution is clearly upon us, and we need to act now.

Editorials, GS-3, Science & Tech, Uncategorized

Internet Power to the People

Article Link

By explicitly barring differential pricing or “zero rating” of data services on the basis of content, route or application, the Telecom Regulatory Authority of India (Trai) has settled the net neutrality debate in favour of the principle of equality, spurning the blandishments of expediency.

  • Globally, this is being seen as the most important victory for the people in the tech space in the last 20 years.
  • With this, India has joined a select few countries that have protected net neutrality and barred zero-rating services.

Significance of this decision:

This decision has no doubt set the tone for regulators across the globe, especially those of countries that have socio-economic features akin to India’s. More important, it would ensure that generations of Indians are not forced to be satisfied with services that pretend to be the Internet itself, robbing them of the real benefits of the medium.

Background:

In the last year or so, there have been more than a few attempts by the big players to offer Internet services that intrinsically seemed to violate the net neutrality principle.

  • The public debate on net neutrality began in 2014 when India’s top telecom carrier Bharti Airtel decided to charge users extra for the use of applications with which they can make free calls over the Internet.
  • But the most prominent and persistent among the companies has to be Facebook, which spent a lot of time in pitching its Free Basics initiative as an altruistic effort that would help millions of India’s Internet have-nots.
  • Facebook’s global rebranding of its internet.org initiative as a platform open for all but adhering to Facebook’s standards, which offered “free and basic services”, was arguably the consequence of the debate over net neutrality in the country.

What was the issue now? What the TRAI ruled?

Facebook, through its initiative, had argued that it would be providing at least some access to millions of new users for free, who otherwise cannot afford it.

  • TRAI did not accept this principle. It noted that it is not against the provision of limited free data that allows a user to explore the Internet. But, it finds this route palatable because the choice is with the user.
  • The regulator’s problem with a price-based differentiation has more to do with the fact that in a market such as India it would distort consumer choice and have consequences that wouldn’t be understood easily.
  • The ruling also suggests that while TRAI recognises the need for India to bridge the digital divide, it realises that compromising the basic ideals of the Internet is not the way to do it.

How price-based differentiation would have affected?

The most important characteristic of the Internet is whether it is the richest corporation in the world or an individual writing a blog, both are treated identically on the Internet.

  • But, initiatives like free basics violate this principle. Such initiatives keep very few websites open for their customers.
  • Then, an individual blogger or small start-ups had to negotiate with the Internet service providers (ISPs) to reach the telco subscribers.
  • Telcos would then be the gatekeepers of the Internet. Only the biggest corporations could then survive on the Net.
  • If we accept that telcos can act as gatekeepers, we would then lose what has given the Internet its unique power, the ability for us not only to be consumers but also creators of content.
  • Hence, such differential treatment would have favoured big business with deep pockets, at the expense of small players and start-ups, a segment whose promotion the government has prioritised.

Why it is necessary to protect the internet?

Today, we have nearly a billion websites on the Internet and 3.5 billion users. This means that nearly one out of three users is both a content provider as well as content consumer. What the Internet monopolies want is that we should be passive consumers of their content, or at best generate captive content only for their platforms. This is why they have joined hands with telcos to offer various forms of zero-rating services. If this principle was accepted, then consumers would have had very limited space in the world of internet. The internet would have been one sided with consumers at the receiving end.

Conclusion:

While posing as a policy that would narrow the digital divide by offering pared-down internet services to those who can afford none, zero-rated products are actually a form of predatory pricing, and India’s regulator has followed its dharma by banning them from Indian cyberspace. It has rightly valued public opinion over the pet projects of government and big business. While Digital India would certainly empower people over the long term, support for start-ups in a broader landscape of technological creativity would create jobs and capabilities immediately. Government should now support this sunrise sector not with the taxpayer’s money, which it has rashly ventured, but by creating an environment for incubating start-ups.