9 PM Daily Current Affairs Brief – March 10th, 2023
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GS PAPER - 1
Internal Migration in India and associated challenges: Explained, pointwise
Contents
- 1 What is the Internal Migration?
- 2 What are the constitutional provisions that facilitate Internal migration?
- 3 What is the status of Internal Migration in India?
- 4 What are the benefits of Internal Migration in India?
- 5 What are the challenges faced by Internal migrants?
- 6 What are the challenges in addressing internal labour migration issues in India?
- 7 What are the government policies taken to protect internal migrants?
- 8 What should be done to protect internal migrants?
- 9 Conclusion
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Introduction
Recently, a fake video was found in Tamil Nadu that showed images of locals beating up migrant workers. Representatives from Bihar and Jharkhand have been to Tamil Nadu to check out the situation. The issue once again stirred the debates on issues of Internal Migration in India.
What is the Internal Migration?
Migration is the geographic movement of people across a specified boundary for the purpose of establishing a new permanent or semi-permanent residence. The term “in migration” and “out migration” are used for movement between areas within a country (internal migration).
Note: The terms “immigration” and “emigration” are used to refer to moves between countries (international migration).
What are the constitutional provisions that facilitate Internal migration?
- Migration within the country for work is a fundamental right of a citizen as upheld by Article 19 of the Constitution of India.
- The fundamental rights further prohibit human trafficking and guarantee freedom from discrimination based on place of birth, equal opportunities for employment, and protection from forced as well as child labour.
- Interstate migration comes under the seventh schedule of the Constitution, List I (Union List), entrusting the authority to the central government.
What is the status of Internal Migration in India?
According to the 2011 Census, India had 45.6 crore migrants in 2011 (38% of the population) compared to 31.5 crore migrants in 2001 (31% of the population). In 2011, 99% of total migration was internal and immigrants (international migrants) comprised just 1%.
In 2017, the Ministry of Housing and Urban Poverty Alleviation stated that 17 districts accounted for the top 25% of India’s total male out-migration.
According to the Economic Survey of 2022-23, Tamil Nadu has the highest number of interstate migrants – over 25 lakh people – engaged in factories in India. States like Jharkhand and Bihar are amongst the lowest.
What are the benefits of Internal Migration in India?
Match labour demand and supply: Migration fills gaps in the demand for and supply of labour, efficiently allocates skilled labour, unskilled labour, and cheap labour.
Availability of cheap labour: Internal migration offers a competitive environment for manufacturing especially the availability of cheap labour.
Improve inequity: Due to internal migration, wages in rural areas increase. The people from the poorer section get the job, and inequality improves. Some migrate for seasonal work, and then they come back with remittances. There are two channels that work to improve inequalities in the areas of origin areas.
Reap the demographic dividend: Migrant workers can help the economy reap the demographic dividend when quality jobs, adequate healthcare and nutrition and universal social protection are provided.
Circular migration or repeat migration: It is the temporary and usually repetitive movement of a migrant worker between home and host areas, typically for the purpose of employment. circular migrants are the backbone of our economy and contribute at least 10% of India’s gross domestic product (GDP).
Improve Quality of Life: Migration enhances chances of employment and economic prosperity which in turn improves quality of life.
Social Remittances: Migration makes migrants’ social lives better because they learn about new cultures, customs, and languages. This helps people get along better with each other and makes sure that people are more equal and tolerant.
Help India reach Sustainable Development Goal 8 (SDG-8): It will “Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.”
What are the challenges faced by Internal migrants?
Lack of social security and health benefits and poor implementation of minimum safety standards law.
Lack of access to affordable housing and basic amenities in urban areas.
Exclusion from Political Rights: Migrant workers are deprived of many opportunities to exercise their political rights like the right to vote.
Language, food and other cultural barriers: Most of the internal migrants come from rural areas. They mostly speak only their mother tongue and cannot converse sufficiently well in other regional language.
Neither the local people are conversant. Hence, communication with local people and employers, travelling, accessing government benefits, medical facilities, reading and writing and integration with the local culture and food habits are major challenges for migrants.
Exploitation, discrimination and non-payment of wage: The vulnerability of the migrants is vivid, especially when it comes to working hours, safety measures, hazardous jobs and low wages compared to the local workers.
Sexual abuse and gender violence: Women migrants are the most vulnerable. Women face double victimisation, wages are lower than that of men, and they are sexually abused and harassed.
Trafficking and bonded labour: Migrant workers are susceptible to human trafficking and become bonded labourers.
Health hazards, accidents and deaths: Migrant workers are vulnerable to health hazards and infectious diseases due to deplorable living conditions often provided by the employer at the work sites.
Xenophobia: Some examples of xenophobic tendencies are the anti-lungiwalas movement of the 1960s, the anti-bhaiya movement of the 1980s in Maharashtra, the “sons of the soil” movement in Assam, and similar anti-migrant agitations and attacks in Gujarat, Karnataka, etc.
Vulnerability to crises and disasters: Migrant workers are highly vulnerable to disasters and often migrate to cope with droughts, floods, landslides, earthquakes or cyclones.
What are the challenges in addressing internal labour migration issues in India?
No policy framework: There is a lack of a policy framework for the inclusion of internal migrant workers in India. There is inadequate coordination among states on a formal exchange of information on migrant workers.
Invisible workers: Migrant workers are not covered by protective law since India has not ratified the International Labour Organization’s Domestic Workers Convention, 2011.
Little to no emphasis on migration: A latest report observes that there has been little to no emphasis on migration within the country.
Informal arrangements: The lack of policy focus on internal migration within the country has been attributed to the presence of informal arrangements in which migrants work and due to the absence of reliable estimates on migrants.
Absence of reliable databases: Migrant workers remain un-enumerated and unrecognized at the local, regional and national levels. It is challenging for local self-governments (LSGs) and labour departments to engage with high labour mobility as it is characterized by informality and lack of documentation.
Employers incur no liability: Employers use recruiters to find and manage workers and thereby absolve themselves from any responsibility for protecting their rights and providing decent working conditions.
What are the government policies taken to protect internal migrants?
Central government Initiatives:
A Policy for Integrating Migrants with Development: The Ministry of Housing and Urban Poverty Alleviation (MHUPA), constituted the “Working Group on Migration” in 2015 and it submitted a report in 2017. The report made a number of recommendations and provides a roadmap for the better inclusion of migrants at their destinations.
Legislative arrangement: The Interstate Migrant Workmen’s Act, 1979 has been the only legislation governing the conditions of migrant workers in India. However, migrant workers have been governed by various labour laws with no focus on migration status such as the Contract Labour (Regulation and Abolition) Act, 1970; the Unorganized Workers Social Security Act, 2008. In 2020, different labour laws were amalgamated into four labour codes.
Draft National Migrant Labour policy: In 2021, NITI Aayog has prepared a draft National Migrant Labour policy.
Other arrangements: Some of the other projects are the One Nation One Ration Card (ONORC) project, the Affordable Rental Housing Complexes (ARHC), the PM Garib Kalyan Yojna scheme, and the e-Shram portal.
State government Initiatives:
- In 2012, with the help of the International Labour Organisation, an MoU was signed between Odisha and Andhra Pradesh to track labourers migrating from 11 districts of Odisha to work in brick kilns in then-united Andhra Pradesh.
- Kerala has set up facilitation centres for migrant workers whom the state refers to as “guest workers”.
Read more: Migrants Are All Of Us |
What should be done to protect internal migrants?
Bring different sections together: There is a need to bring together different sectoral concerns related to migration, including social protection, housing, health and education.
Streamlining recruitments: This is to eliminate occupational vulnerability and strive towards humane working conditions in the various sectors.
Introduce outreach methods: This is to provide information, education and communication support to migrant workers.
Separate management bodies for interstate migration: This will helpful in improving the data on migration, especially data on seasonal and circular migration.
The other necessary reform include a) Ensuring financial inclusion for the migrants, b) Moving towards a universal social protection system; c) Guaranteeing dignified, safe and healthy living and working conditions; d) Enabling workers’ collectivisation and organisations, e) Bringing in technology and design innovations to address the nutrition, housing, water and sanitation needs of migrant workers, f) Conducting research and training to improve policy and practice.
Conclusion
In the next ten years, migrant workers in India could be the key to the country’s growth and progress. For this reason, the government and the private sector need to take more long-term steps.
Sources: Live Mint, PRS, DTE (Article 1 and Article 2) and ILO.
GS PAPER - 2
The days after Women’s Day: Integrate women cops as leaders in the police force
Source– The post is based on the article “The days after Women’s Day: Integrate women cops as leaders in the police force” published in The Indian Express on 10th March 2023.
Syllabus: GS2- Vulnerable sections of the population. GS1- Social empowerment
News– Gender empowerment has been a popular theme in India and some tangible policy decisions have indeed been made. Increasing representation of women in uniform services is one such initiative.
What are the issues faced by women in uniform?
Crime against women is very high with an abysmal rate of conviction. Public spaces are still unsafe, especially after dark. It curtails their free movement. Thus, it adversely affects their working hours and employment avenues.
In most states, there is absence of in-service training after their induction. Female police officers are expected to investigate crimes against women and cases under POCSO Act. But, in many states, they have not received any specialised training for the same.
A study at the Centre for Police Research during 2015-16 showed that the number of women is increasing in Maharashtra Police. But women officers do not receive the required cooperation from male colleagues.
Another area of concern is the hostility faced by women police officers during pregnancy and post their maternity leave.
What is the way forward to improve the situation of women in uniform services?
Policy alone is not sufficient to strengthen the position of women in uniform. There has to be commitment from the field-level leadership too.
Coaching in communication skills and fruitful negotiations during public disorder is needed. It can help them deal with the different types of conflicts they face.
Women officers can work on their time management skills, financial literacy and networking to attend to diverse professional and personal responsibilities.
Local law colleges and universities can be approached to understand the latest amendments and provisions of law.
It is important to sensitise men on women in police stations and the need to respect them as professional colleagues instead of resenting their presence.
The concept All Women Police Stations needs relook. There is a need for inclusive police stations where complainants, irrespective of gender, will get prompt redressal of their grievances.
A standard police station must reflect the healthy gender ratio of society. Its main objectives are prevention and detection of crime and maintenance of public order.
The idea that women police can do justice to the issues of women needs to be discarded now. Women have proved competent to deal with complex issues while men have proved to be compassionate and empathetic to women victims.
Confining them to All Women Police Stations or investigating offenses against women and children is a gross under-utilisation of their wide-ranging capabilities. It is also unjust for women victims who are made to travel long distances in search of AWPSs.
Menstruation and child-bearing stages in a woman’s career should also be accepted naturally without casting aspersions on their capabilities. This requires sensitivity. The department should construct rest rooms, changing rooms and creches for them.
Travel and tourism is poised for its own Amrit Kaal
Source– The post is based on the article “Travel and tourism is poised for its own Amrit Kaal” published in The Indian Express on 10th March 2023.
Syllabus: GS2- Government policies and interventions. GS3- Economy
Relevance– Issues related to tourism sector
News– India’s travel and tourism sector will be the key axis of development in the coming years. Budget 2023 has outlined the path to developing tourism in mission mode.
The tourism sector accounts for 10% of the total employment directly andprovides 8% of the overall GDP.
What are the efforts by the Indian government for the growth of tourism?
The Budget Session addressed all the “6Ps” effectively by covering destination planning and management, infrastructure development, sustainability and safety, development of human capital, policy, and process interventions to align the Centre and states, and promoting the narrative of Indian tourism.
The Union budget has listed six themes for the development of the sector — convergence, public-private participation, creativity, innovation, digitisation and development of destinations.
Tourism remains a state subject. The central tourism department is making efforts to move it to the Concurrent List. The idea of a National Tourism Board is under consideration by the government.
Prime Minister Modi has a vision to develop 50 destinations across the country.
What is the way forward for the growth of the tourism industry in India?
There is a need for collaboration between the government, private sector, and local communities in developing and promoting tourism. It stimulates creativity, enhances competitiveness.
Technology adoption will help in the growth of tourism. Travel experiences are becoming more personalised, immersive, and interactive.
AR/VR can help travelers explore destinations before they even arrive. It can providevirtual tours and simulations of famous landmarks, historical sites, and cultural experiences. AI-powered chatbots and digital assistants can help travelers plan their trips, recommend personalized activities, and offer real-time assistance while traveling.
A coordinated approach boosted by the adoption of technology resolves the issue of low spending by foreign tourists in India. On average, foreign tourists spend 33% less than they would in the US.
The tourism sector requires a comprehensive strategy that addresses the six key pillars of planning, place, people, policy, process, and promotion.
Granting tourism infrastructure status will provide further impetus to the growth of the sector.
Stopping the boats: On the U.K.’s new ‘Illegal Migration Law’
Source: The post is based on the article “Stopping the boats: On the U.K.’s new ‘Illegal Migration Law’” published in The Hindu on 10th March 2023.
Syllabus: GS – 2 – Effect of policies and politics of developed and developing countries on India’s interests.
Relevance: About UK’s new ‘Illegal Migration Law’.
News: Recently, the United Nations High Commissioner for Refugees (UNHCR) has severely criticised the U.K. Prime Minister’s plan to pass a new “Illegal Migration Law”. This is because the planned law effectively stops the granting of asylum to migrants who reach the U.K. illegally.
What is the reason behind UK’s new ‘Illegal Migration Law’?
The UK government is worried that many number of persons are attempting to travel to the U.K. and trying to apply for asylum while on British soil. This according to the UK government is costing significant cost to the exchequer.
Hence, the new law aims to return illegal asylum seekers to either return to their own country or to a “third country” which will enter an agreement with the UK. For instance, Rwanda has entered into an agreement to provide processing facilities for illegal migrants.
Illegal immigrants will also face a lifetime ban on citizenship and re-entry to the U.K.
Exceptions: The Bill makes exceptions for those arriving directly from the countries they are fleeing. But such people will be a small proportion given the short distances “small boats” could travel.
Read more: Study explains migration events that brought genetic diversity among Nepalese population |
What are the challenges in implementing the UK’s new ‘Illegal Migration Law’?
According to the UNHCR, a) the law would contravene international laws, including the 1951 Refugee Convention that Britain is a signatory, b) Those who flee their homes and countries often do so without proper paperwork, as they are forced to leave to save their lives. So, there are problems in identifying their source countries, c) An estimated 45,000 came to the U.K. on “small boats” last year. They would have been economic refugees rather than political asylum seekers. But, the British government does not make a distinction between the two, d) The Bill is like the U.S administration that latched on to the equally catchy “Build That Wall” slogan, e) The plan to transport asylum seekers to a third country highlights neo-colonialism and will involve considerable cost which migrants are unlikely to be able to afford,
What the western countries should focus on while enacting Illegal Migration Laws?
Introspect their message: Western countries have long quoted international law and convention to India on its plan to forcibly deport Rohingya refugees to Myanmar, or to discriminate on the basis of religion in the Citizenship (Amendment) Act. Hence, they must introspect on their message to the world by enacting such laws themselves.
Does not belittle the real contributions of immigrants: Western countries should value the significant contributions made by immigrants to western societies. Including those like the parents of UK’s present PM and UK’s Home Secretary, who made their journey from Africa.
GS PAPER - 3
Old Pension System will take from the poor and give to the rich
Source– The post is based on the article “Old Pension System will take from the poor and give to the rich” published in The Indian Express on 10th March 2023.
Syllabus: GS3- Indian economy
Relevance– Issues related to public finances
News– Recently, the return to the Old Pension System has been proposed by sections.
What are some facts about OPS and NPS?
OPS is a “pay-as-you-go” scheme. The contributions of current government employees are used to fund the pension liabilities of past government employees. In OPS, the employees are guaranteed an amount equivalent to 50% of their last salary in perpetuity.
NPS was established by the NDA government in 2003. It is a defined contribution scheme. The employees invest a certain fraction of their salary that is complemented by a contribution from the government.
What are the arguments against OPS?
It will have fiscal implications. The only way the OPS can be made sustainable is by either having more government employees or by more borrowing. More employees will lead to inefficiency in governance.
States’ finances will be crippled under the pension burden. A recently released report by the Reserve Bank of India on states’ finances provides a detailed breakdown of states’ expenditures on pensions.
In Rajasthan, the state’s expenditure on pensions as a percentage of its own tax revenues is 28%. In contrast, for example. In Maharashtra, the same percentage is 14%.
States will have to cut down their expenses. Expenses on health, education, and other long-term assets will naturally be the first ones to go.
The losers will be the majority of poor people who will be denied basic services and support from the state. The winners will be the minority of wealthy government employees.
This is a rare example of a policy that explicitly takes away the wealth of the poor to distribute it to the rich. The retiring government employees are amongst the top 5% of income earners in India.
Finally, the sixth and the seventh pay commissions revised the salaries of government employees upwards assuming that they would be under NPS. Therefore, any switch to OPS now is a breach of trust of all citizens.
How can OPS make political sense?
There can be two explanations. One benign, and one disturbing.
Benign explanation– Freebies are not mutually exclusive. Parties desperate to win elections are promising everything to everyone. In the short run, they may even fulfil their promise. Finally, they will cut down on expenditures such as defence, healthcare.
If the current dispensation at the Centre is re-elected, opposition parties will inherit an even better fiscal situation when they eventually come back to power.
Parties may also have miscalculated the political costs and benefits of OPS.
Disturbing explanation– The Opposition has realised that the main obstacle in its quest for power at the Centre is the last-mile delivery of welfare schemes.
The success of these schemes eventually rests on the ability of the lowest layer of government employees to deliver these schemes. OPS may incentivise government employees to sabotage these welfare schemes.
Can the cheetahs help India’s grasslands?
Contents
Source: The post is based on the article “Can the cheetahs help India’s grasslands?” published in The Hindu on 10th March 2023.
Syllabus: GS 3 – Environment
Relevance: concerns associated with the re-introduction of cheetahs in India
News: Government is trying to re-introduce cheetahs in India by bringing them from Namibia and South Africa.
Madhya Pradesh’s Kuno National Park has been chosen as the site for the re-introduction of cheetahs. The article discusses the several aspects of survival of cheetahs in India.
How long will it take for cheetahs to adapt in the Indian climate?
Cheetahs have come from a very different terrain to India. Therefore, it might take time to adapt in the Indian climate.
Moreover, it is not only the adaptation to climate that will determine the success of reintroduction of cheetahs to India.
The factors such as reproduction and a self-sustaining population also plays a role in determining the survival of cheetahs in India.
Further, Cheetah Action Plan states that in 15 years the project will be considered a success if Kuno reaches an established population of 21 adults.
Can the reintroduction of cheetahs help in improving India’s grasslands?
India doesn’t have vast savannah grasslands like Africa from where the cheetahs are coming. There are only six or seven savannah types of grasslands present in India.
Therefore, the healthier population of cheetahs will indicate improving grasslands in India because they mostly prefer to prey in these grasslands.
However, it will take 30-40 years for the cheetah to reach a population of 20-40 animals. Therefore, it becomes difficult to say that Indian grasslands will improve with the re-introduction of cheetahs in India.
Will re-introduction of cheetahs contribute to the development of a larger ecosystem?
As it has been seen in the case of tigers, there has been a remarkable increase in the tiger reserves from 9 to 53. Therefore, it is expected that reintroduction of cheetahs will also help in the improvement of the ecosystem.
However, when we look at the animal’s habitat, it becomes difficult to say that it will improve the ecosystem because cheetahs are the weakest of the large cats.
They exist at low densities of less than one per 100 sq km. 8-10 cheetahs can be hosted in an area of 750 sq km which is a smaller number.
Therefore, it is not feasible to say that re-introduction cheetahs will help in the development of a larger ecosystem.
Moreover, the government is planning to promote eco-tourism with the re-introduction of cheetahs.
Is it feasible to promote ecotourism and conservation together?
Eco-tourism along with conservation can be promoted. However, there is also a need to address the challenge associated with it because there have been experiences that people over do it.
Ecotourism helps in generating employment for the locals, but any tourism plan must be community driven.
Industrial policy learnings from a Soviet model versus Japanese
Contents
- 1 What are arguments in support of policy interventions by the government in the economy?
- 2 What were the debates related to the development model to be followed by India after independence?
- 3 Why do some economists argue that India should have adopted the development path chosen by Japan after the Meiji Restoration in 1868?
- 4 How was the Japanese development strategy different from the one that the Soviet Union followed in three ways?
- 5 What are arguments against the wage goods model?
Source– The post is based on the article “Industrial policy learnings from a Soviet model versus Japanese” published in The Indian Express on 10th March 2023.
Syllabus: GS3- Changes in Industrial Policy and their Effects on Industrial Growth.
Relevance– Different models for industrial growth
News– The governments of most of the economically advanced countries are now pivoting towards more interventionist policy. They are promoting investments in preferred sectors through a combination of domestic subsidies as well as import tariffs.
What are arguments in support of policy interventions by the government in the economy?
First, the desire to build some element of strategic autonomy in a more geopolitically fragile world.
Second, the need to help in rapid transition to a green economy before climate change does more damage.
Third, the attempt to reduce dependence on a single supplier or a single source of export demand.
Early Indian nationalists of all hues agreed that the state should play an active role in driving economic development after independence. Though there were differences in the details.
In 1950, the two most important models to follow were those of Japan and the Soviet Union.
India ultimately adopted the Soviet model. It was based on Mahalanobis’ strategy.
Why do some economists argue that India should have adopted the development path chosen by Japan after the Meiji Restoration in 1868?
Japan at the time of the Meiji Restoration had crucial features that made it the best economic model for India.
Japan had focused on higher farm productivity, the rapid expansion of primary education, and an early focus on export markets to accelerate industrial expansion. By the 1920s, Japan was in the ranks of the world’s industrialized countries.
India’s First Five-Year Plan also mentioned the Japanese experience as a way forward. Even Jawaharlal Nehru saw the benefits of the Japanese strategy,
The Mumbai economists C.N. Vakil and P.R. Brahmananda were critical of Nehru-Mahalanobis strategy. They argued that India should focus its development strategy on the production of wage goods rather than heavy industry, like what the Japanese did.
How was the Japanese development strategy different from the one that the Soviet Union followed in three ways?
Japan built industrial capacity with private rather than public investment. The sectoral focus was on light rather than heavy industry. Rapid productivity growth on small farms owned by families released female workers for industrial work.
Since all industrial progress in Japan has been achieved in comparatively recent years, it offersIndia the most direct and valuable lessons in reconstruction.
What are arguments against the wage goods model?
While the wage goods model outperforms the Mahalanobis model in the short run.the growth rates converge over a longer period of 40 years.
This is under the unrealistic assumption of a very highinitial savings rate. With more realistic savings at the beginning, the Mahalanobis model actually outperforms the wage goods model.
The ideal track to run India’s logistics system
Contents
Source: The post is based on the article “The ideal track to run India’s logistics system” published in The Hindu on 10th March 2023.
Syllabus: GS 3 – Infrastructure
Relevance: concerns associated with the railway’s logistics services
News: The Union Budget 2023 has doubled the PM Gati Shakti National Master Plan to States from ₹5,000 crore to ₹10,000 crore, and has announced an outlay of ₹2.4 lakh crore for the Indian Railways.
This will help Railways to play an important role in enabling a coordinated and integrated logistics system.
What is the preferable mode of logistic transport in India at the present?
At present, 65% of freight movement is done by road transport due to the convenience roads offer for logistic movements.
However, this has also increased the burden on roads with increased pollution and high logistic costs (almost twice that of railways).
Therefore, it is necessary to adopt railways as a mode for cargo movement. This will improve India’s logistics competitiveness.
How are the Indian Railways’ logistics services compared with the world?
Globally, countries are heavily investing in advanced rail infrastructure for quick and low-cost container movement.
For example, China uses special trains to carry containers that connect significant ports and has dedicated rail lines to move container traffic and planned double-decker container carriages for greater efficiency.
The Indian Railways are also upgrading their infrastructure through the PM Gati Shakti National Master Plan. However, these are significantly lower than other countries such as the United States and China.
What are the problems faced by the Railways in its freight services?
First, the increased transit time by rail and pre-movement and post-movement procedural delays freight movement by rail.
Second, the railways also lack necessary terminal infrastructure, maintenance of good sheds and warehouses, and uncertain supply of wagons.
Third, the absence of integrated first and last-mile connectivity by rail increases the chances of damage due to multiple handling and also increases the inventory holding cost.
What can be done to improve freight service by the Railways?
First, it needs to improve infrastructure with proper policy tools.
Second, private participation in the operation and management of terminals, containers, and warehouses can be encouraged.
Third, a special entity can be established under the railways to handle intermodal logistics in partnership with the private sector. This will help in addressing the first and last-mile issue faced by the railways.
The entity could function as a single window for customers for cargo movement and payment transactions.
Fourth, the railways can introduce an Uber-like model for one of the two cargo wagons, attached to each passenger train. This will enable customers to book the wagon using an online application.
This could directly increase freight traffic without any additional investment in infrastructure.
About improving financial inclusion: Breaking barriers, building inclusion
Contents
Source: The post is based on the article “Breaking barriers, building inclusion” published in the Business Standard on 10th March 2023.
Syllabus: GS – 3 – Inclusive growth and issues arising from it.
Relevance: About improving financial inclusion.
News: According to the latest Findex Report by the World Bank, around one-third of adults still lack access to formal financial services. It means approximately 1.7 billion people worldwide are unbanked.
About the potential of financial inclusion
-Financial inclusion has been linked to up to 14% growth in the gross domestic product in developing economies.
-Women affected disproportionately: Only 47% of women hold a bank account, as opposed to 55 per cent of men.
-Financial inclusion and a sustainable digital economy are two critical components of achieving Sustainable Development Goals (SDGs) and reducing poverty.
What are the critical challenges while developing financial inclusion?
a) Ensuring digital identity systems might infringe on individuals’ privacy rights, b) Digital banking systems might not be fair and inclusive to all income or socio-economic status groups, c) Promoting a digital public good which can be sustainable and accessible is also a challenge.
Read more: How to boost financial inclusion |
How India’s G-20 presidency helps in improving financial inclusion?
Firstly, the theme of India’s G20 Presidency, “Vasudhaiv Kutumbakam,” underlines the message of equitable growth and a shared future for all.
Secondly, the G20 Global Partnership for Financial Inclusion working group met in Hyderabad under the grouping’s Global Partnership for Financial Inclusion (GPFI) initiative.
Note: The GPFI aims to advance financial inclusion as an essential enabler for reducing poverty and promoting economic growth, potentially improving people’s lives worldwide. This initiative works closely with other international organisations.
Thirdly, the G20 Financial Inclusion Action Plan (FIAP) aims to prevent future economic crises by encouraging conditions that promote its objectives of financial inclusion and stability. Four major drivers have been highlighted in the new G20 FIAP to lay the groundwork for further progress toward financial inclusion.
These are, a) the acceptance of the 2030 Agenda for sustainable development as a worldwide framework for sustainable development, b) rapid development and penetration of digital breakthroughs, c) greater emphasis on underprivileged populations’, and d) mainstreaming financial inclusion.
Read more: Financial inclusion is integral to holistic development |
What should be done for improving financial inclusion?
A multifaceted strategy is needed to create an inclusive and sustainable digital economy.
Focus on digital identification, banking, payments, and regulation: This will provide opportunities to enhance global economic stability and streamline service delivery. Digital banking should focus on promoting stability, transparency, fairness, inclusivity, and interoperability.
Focus on Digital identity systems: These include India’s Aadhaar and national ID schemes in Morocco and the Philippines. These systems help to streamline the delivery of services and payments.
Create a digital stability board: This will aid in advancing digital regulation by supporting better data-sharing legislation and data management for individuals and small- and medium-sized businesses.
Adaptation of laws and institutions to the digital revolution: Adaptation is required especially in areas such as competition policy, regulatory regimes, innovation ecosystems, workforce development, social protection frameworks, and tax policies.
Promote sustainability and inclusivity in the digital economy: These can be done by a) establishing a supportive and enabling e-commerce environment, b) developing inclusive digital infrastructure, c) adapting policies and institutions to digital transformation, d) harnessing digital transformation inclusively, and e) using digital public goods.
Make financial inclusion a top priority for G20 countries: The G20 working group should consider strategies to strengthen the financial system’s foundation, facilitate remittance flows, and lower the price of remittance transfers.
Along with the above measures, global nations should also focus on collaborating with international organisations to unlock the potential of millions of individuals and communities and foster sustainable, inclusive economic growth.
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