9 PM Daily Brief – August 17th,2020

Good evening dear reader.

Here is our 9pm current affairs brief for you today

9 PM for Main examination

GS-2

1. On National Digital Health Mission (NDHM)

GS-3

2. Global trade and India’s geopolitical stature
3. Agri- Markets: One Nation, One Market
4. A vision for progressive capitalism
5. Current Economic Contraction

9 PM for Preliminary examination

FACTLy

1.On National Digital Health Mission (NDHM)

Source: The Indian Express and Livemint

Syllabus: GS-2- Health

Context: Indian Prime Minister announced National Digital Health Mission (NDHM) on Independence Day.

About National Digital Health Mission (NDHM)

• It aims to liberates citizens from the challenges of finding the right doctors, payment of consultation fee, making several rounds of hospitals for prescription sheets.

Features:

• It would be a voluntary healthcare programme that would reduce the gap among stakeholders such as doctors, hospitals and other healthcare providers, pharmacies, insurance companies and citizens by connecting them in an integrated digital health infrastructure.
• It comprises six key building blocks or digital systems:
  • Health ID,
  • Digi Doctor,
  • Health Facility Registry,
  • Personal Health Records,
  • e-Pharmacy
  • Telemedicine
• Health ID and Health Facility Registry shall be owned, operated and maintained by the government. However, private operators will have equal opportunities to integrate with these systems and create products for the market
• The National Health Authority design, build, roll-out and implement the National Digital Health Mission.

Privacy concerns over National Digital Health Mission:

• Critics have raised concerns about the extent to which a government should have access to personal information.
• There are also concerns over the risk of data leaks from a widely-linked central database.

Way Forward:

• There is an urgent need for a robust data protection law which will give legal control over our data stored anywhere on our behalf. Also, the citizens the right to be forgotten should be ensured.
• The government and India’s legal, IT and medical systems need to come together to translate the NDHM’s patient-centric vision into reality.

2.Global trade and India’s geopolitical stature

Source: Live Mint

Syllabus: Gs3: Economic Development,

Context: India needs to focus one Self-reliance through robust economic expansion and not by shutting the world out and losing foreign support.

Economic slowdown impact negatively India’s geopolitical standing:

• Need to avoid past mistakes which undermined strategic interests: Countries and companies are more interested in economic upside. For instance, during 1970s and 80s, due to import and foreign exchange restrictions, international sanctions and foreign sympathy for domestic insurgencies kept us on the back foot.
• Current policy approach of India undermining geopolitical interest:
  • Rising trade restrictions.
  • Reluctance to participate in a wider geopolitical contest against China.
  • Undermining relevance as a world power: China trying to box New Delhi into a sub-subcontinental role and push its hegemonic economic agenda.
• If no fiscal stimulus provided: According to Pronab Sen’s estimates, it could take five years for India’s gross domestic product to return to the 2019-20 levels.
  • Slow recovery and global growth.
  • Slew of measuresintroduced by the government in recently are useful but inadequate for a quick recovery
  • Rise in protectionism and raising taxes.

 “self-reliance” should not be mistaken as “self-sufficiency”.

• Benefits of self-reliance:
  • Helped with the demands of living during lockdown when global supply chains were in disarray.
  • To signal displeasure against Chinese aggression and to impose costs on Beijing.
• Self-sufficiency:
  • Decrease competition:for instance, a domestic purchase quota for defence equipment shields domestic producers from competition will eventually lead to lower quality products.
  • Restrict consumer choice.
  • Idea of self sufficiency is impractical and harmful to national interest.

Achieve Self-reliance by accelerating the recovery and regaining the path of high growth:

• Marshall Plan-like public investment in infrastructureis necessary to galvanize rapid post-pandemic growth.
• Raise per capita income: greater our per-capita income leads to the greater our self-reliance. For instance, the United States is self-reliant not because it makes everything within its borders, but because it can purchase or make everything that it wants.
• Diversify the sources:Reducing dependence on imports from China or fuel from West Asia doesn’t mean trying to make everything in India.
• Work with like-minded nations: shape the international trading system in a manner that reduces catastrophic risks and geopolitical coercion. It will also strengthen India’s hand in international relations.
• Maintain strategic autonomy: justify reluctance to side with the United States in the Indo-Pacific theatre against China.
• Resist the forces of de-globalization: to build more balanced international economic order.

3.Agri- Markets: One Nation, One Market

Source: The Indian Express

Syllabus: GS  3-Transport and marketing of agricultural produce and issues and related constraints

Context: Agriculture Infrastructure Fund is a major step towards getting Agri- markets rights for farmers.

Agriculture Infrastructure Fund (AIF):

1. Anew pan India Central Sector Scheme which is also a part of ‘Aatmanirbhar Bharat’ to make farmers self- reliant.
2. It will provide a medium- long term debt financing facility for investments in viable projects for post- harvest management infrastructure and community farming assets through interest subvention and financial support, largely anchored at the Farmer Producer Organizations (FPOs) and also availed by individual entrepreneurs.
3. Under this scheme, Rs one lakh crore will be provided by banks and financial institutions as loans, at concessional rates, to Farmer Producer Organizations (FPOs) and other entrepreneurs through Primary Agriculture Credit Societies (PACs).

Government issued ordinance to liberate the legal framework of agri- market:

Government had issued three ordinances. These ordinances relate to the amendments in the Essential Commodities Act, APMC Act:

1. To allow farmersto sell their produce outside the Agricultural Produce Market Committee (APMC) mandis and
2. To encourage farming contractsbetween farmers, processors, exporters and retailers.

Role of National Bank for Agriculture and Rural Development (NABARD):

It is responsible for the creation of 10,000 more Farmers Producer Organizations. Thus, it will create a package which will help these outfits realize better prices.

Absent elements of Agricultural Infrastructure Fund:

1. Small Farmers- It is known that better storage facilities can help farmers avoid distress selling immediately after the harvest, when prices are generally at their lowest.

• However, small farmers cannot hold stocks for long as they have urgent cash needs to meet family expenditures.
• Therefore, the value of storage facilities at the Farmer Producers Organizations (FPO) level could be enhanced by a negotiable warehouse receipt system.

2. Agri futures markets- Several countries such as China and The U.S. have agri- future markets that are multiple times the size of those in India. The value of traded contracts on agri- futures in the National Commodity & Derivatives Exchange Limited (NCDEX), the latest agri- commodities derivatives exchange in India was Rs 18.3 lakh crore in 2012.

• It fell to Rs 4.5 lakh crore in 2019 and by July 2020 it reduced to Rs. 1.5 lakh crore.

Action needed to minimize the market risk:

1. FPOs Training- NABARD should form a compulsory module that trains Farmer Producers Organizations (FPOs) to use the negotiable warehouse receipt system and navigate the realm of agri- futures to secure their market risks.
2. Involvement of Government agencies- Government agencies in commodity markets such as The Food Corporation of India (FCI), National Agricultural Cooperative Marketing Federation of India (NAFED), State Trading Corporation (STC), should increase their participation in agri- futures.
3. Banks as re- insurers – The banks which gives loans to Farmer Producers Organizations (FPOs) and traders should participate in commodity future as ‘re- insurers’ of sorts for the healthy growth of agri- markets.
4. Liberating and stable policies- Governmentpolicies should be more stable and market friendly.

Way Forward:

India needs to secularly and geographically integrate its Agri- markets (one nation, one market), so that spot and future markets will unite in long term. Only then the Indian farmers will realize the best price for their produce and markets risks will be covered.      

4.A vision for progressive capitalism

Source- The Indian Express

Syllabus-GS 3- Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

Context- Production, devolution, universalism, and market-building can all be given higher specification in detailed policies. But policy without vision only leads to a permanent and pensioned Opposition.

Issues with current economic system:

Economic distribution system- Measurement of economic growth by gross domestic product (GDP), which is basically a measure of the goods and services produced in a certain period of time and a sign of the health — or lack thereof — of the economy.

Challenges associated with GDP

1. Inequality– Even when the GDP numbers are strong, the prosperity isn’t being shared. Income inequality has exploded, wages have stagnated, and the richest are hoarding wealth while everyone else struggles to keep up.
2. Multi-dimensional effect– More power has been concentrated in the hands of fewer corporations, which result as weaker unions, wage stagnation, less innovation, and lower productivity.

To make the economy grow faster:

1. Restructuring rigged markets – This is to change how they work and who they reward, rather than simply redistributing their benefits after the fact.
2. Deregulation of market– The real prescription for growing the economy is deregulation, tax cuts, and a pro-market bent.
3. Main principles– Should focus on general principle such as production, devolution, universalism, and market-building.
4. Production –Focusing on cities and towns in poorer regions of India. Export route to prosperity is now closed with the end of hyper globalization. Poorer regions still have a shot to “export” their way to prosperity, with richer regions playing their consumers.
5. Devolution-Fiscal power must be transferred to the state and local level to get policies form-fit for specific markets and conditions to reverse our internal colonialism.
6. Universalism- Need of universal basic income and universal healthcare policies to cease inequality, instability, and ecological disaster.
7. Market-building- Markets are allocation mechanisms, information processors, ways of being social. Progressives have to stop thinking about “The Market” as a den of vice. Markets long predate capitalism; they will outlast it.

Way forward-

A progressive vision means finding out the difference between growth and redistribution — and finding where there’s overlap. It has to be based on inclusive growth where interests of all sections are considered.

5.Current Economic Contraction

Source: Indian Express

Syllabus: Gs3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Context: The current economic contraction is different from what India has experienced earlier, that’s why government needs to borrow and spend more.

Economic contraction during past:

• Fall in growth:growth fell from 8 per cent in 1999-2000 to an average of 4.5 cent during the next three years.
• However, India has never experienced negative economic growth since 1979-80.
• 19957-58: Registered a significant balance of payments (BOP) deterioration.
• 1979-80: witnessed the second global oil shock following the Iranian Revolution.
• Economic contraction in past were due to “supply side” issues.

Current economic contraction is purely economic problem and different in following ways:

• As per various agencies, there will be real GDP decline of 5-10 per cent for 2020-21. It would be the country’s first ever not triggered/accompanied by an agricultural or a BOP crisis.
• Agriculture sector witnessing growth: no shortage today of food
  • Rabi crop harvest improved and ongoing kharif season is expected to perform better.
  • Public cereal stocks increased at 94.42 million tonnes as on July 1 were also 2.3 times the required level.
• Current account registered BOP surplusin January-March 2020 quarter (first in 13 years).
• Merchandise trade account recorded surplus for the first time after January 2002.
• Rise in savings:Aggregate deposits with commercial banks as of July 31 were Rs 14.17 lakh crore or 11.1 per cent higher than last year.
• Increase in Forex reserves:Foreign exchange reserves were at an all-time high of $538.19 billion rising by $60.38 billion since end-March the lockdown.
• Western style demand slowdown leading to recession: due to decrease in consumption and investment demand.
• Reasons for less demand:
  • Decrease in household expenditure due to loss of income.
  • Employed persons and businesses are saving more.
  • Businesses reducing capacity, investing less, reducing staff strength and conserving cash.
  • Limited fiscal space:government has limited fiscal space due to increase in fiscal deficit to 4.6 per cent in 2019-20
  • Impact: Decrease in consumption and investment will contract the economy further leading to reduction investment as well.
• Crisis faced by banks due less credit demand: deposits are increasing (11.1 per cent). However, the corresponding credit growth has been just Rs 5.37 lakh crore or 5.5 per cent.

Way forward:

• Government needs to increase public spending:
  • Increase borrowing:Fiscal deficit has increased but between 2007-08 and 2019-20, the Centre’s outstanding debt-GDP ratio has come down from 56.9 to 49.25 per cent and liabilities of state also fell from 74.6 to 69.8 per cent. Governments can borrow at rates below nominal GDP growth.
  • Less cost of borrowing: yields on 10-year Indian government bonds have softened from 6.5 to 5.9 per cent and even more for states — from 7.9 to 6.4 per cent — despite massive fiscal slippages.
  • Learning from past:The weighted average cost of Central borrowings more than halved from 12.01 per cent in 1997-98 to 5.71 per cent in 2003-04 and the then government resorted to borrowing.

The need of the hour is that the government should focus more on GDP growth and reviving the economy.

9 PM for Preliminary examination

Click on “Factly articles for 17th August 2020”

https://factly.forumias.com/factly-articles-for-17th-august-2020/