Indian Economy Quiz: Services Sector |1 Mar, 2021

Gig economy can be defined as a work engagement where on one side, there is a service seeker i.e., a consumer with a demand for a specific task, and on the other side, and there is a service provider i.e., a gig worker who can perform that specific task.

· A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.

· In this economy, tech-enabled platforms connect the consumer to the gig worker to hire services on a short-term basis.

· Gig workers include self-employed, freelancers, independent contributors and part-time workers.

· The digital gig economy generated a gross volume of approximately $204 bn from worldwide customers in 2018.

· Transportation-based services contributed to over 50% of this value. The size of the gig economy is projected to grow by a 17% CAGR and generate a gross volume of ~$455 bn by 2023.

· India has emerged as the 5th largest country for flexi-staffing after US, China, Brazil and Japan.

· Haryana, Madhya Pradesh, Andhra Pradesh, Gujarat and Telangana have most opportunities in terms of growth for the flexi-workers.

Source: The Hindu

The National Digital Communications Policy, 2018 seeks to unlock the transformative power of digital communications networks – to achieve the goal of digital empowerment and improved well-being of the people of India; and towards this end, attempts to outline a set of goals, initiatives, strategies and intended policy outcomes.

The National Communications Policy aims to accomplish the following Strategic Objectives by 2022:

· Provisioning of Broadband for All

· Creating 4 Million additional jobs in the Digital Communications sector

· Enhancing the contribution of the Digital Communications sector to 8% of India’s GDP from ~ 6% in 2017

· Propelling India to the Top 50 Nations in the ICT Development Index of ITU from 134 in 2017

· Enhancing India’s contribution to Global Value Chains

· Ensuring Digital Sovereignty

Source: Sriram’s IAS

The traditional argument is that the lower the interest rate, the better for businesses as it brings down the cost of capital, making investments more attractive.

· Any government would love this as the country would then draw higher investments leading to higher growth and more job creation.

· Governments abhor higher interest rates as, theoretically, these push up project costs and keep investors away.

· Capital is one of the three main factors of production, which are critical to the growth of a commercial entity, the other two being land and labour.

· But capital is only a necessary, not sufficient, condition. Land, unless allocated by the local government, is too costly for investors seeking to set up shop.

· On labour, even if adequate hands are available for a job, the skill quotient is still low. Training graduates to be job-ready is a form of tax that companies pay.

· Also, to be taken into account is the market environment and demand. If end users are seeing lesser money in hand than earlier, demand will certainly be impacted.

· Therefore, in an environment where the other factors of production are not favourable for an investor, low interest rates by themselves may not prove attractive enough.

· Any revival of economic activity will be contingent on joint efforts by the government on the fiscal front to stimulate demand, and the RBI, to keep interest rates low.

Source: Sriram’s IAS

The Union Cabinet approved a new hydroelectricity policy that, among other things, included large hydro projects within the ambit of renewable energy.

· Prior to the policy, only small hydro projects of a capacity of less than 25 MW were treated as renewable energy. Large hydro projects were treated as a separate source of energy.

· India’s renewable energy sector had an installed capacity of 75,055.92 MW as of February 2019, according to data with the Central Electricity Authority.

· This made up about 21.4% of the overall energy mix, with the rest coming from thermal, nuclear and large hydro sources.

· With the inclusion of large hydro in renewable energy, the energy mix changes drastically.

· Renewable energy capacity would now be 1,20,455.14 MW or 34.4% of the overall energy mix.

Terming delays in highway projects as “unacceptable”, Road Transport and Highways Minister, asked officials and developers to strictly adhere to project schedules.

· Minister also launched online web portal ‘GATI’ on the pattern of ‘PRAGATI’, the portal used by the Prime Ministers’ Office for monitoring projects.

· The portal ‘GATI’ can be accessed from NHAI’s website, and contractors and concessionaires can raise any project-related issues on the platform, according to a statement by the Ministry of Road Transport and Highways.

· The issues raised on ‘GATI’ will be daily monitored by a team of NHAI officers and will be constantly reviewed by the senior officers of the National Highways Authority of India (NHAI) and the Ministry of Road Transport and Highways.

Source: The Hindu

The Kerala Rail Development Corporation (KRDCL) is confident that the ₹66,405-crore Thiruvananthapuram-Kasaragod semi-high-speed rail corridor project (named Silver Line) for which year 2024 has been set as the deadline, will be economically feasible and attain operational break-even within 10 years of being commissioned.

· Of the total cost of the 532-km project, around 50% will be loan at less than 1% interest from multilateral lending agencies such as KfW, AIIB (Asian Infrastructure Investment Bank), JICA (Japan International Cooperation Agency), or ADB (Asian Development Bank).

· Repayment is assured since there will be a rate of return of 8.1% on the investment. The balance amount will be raised from equity and (subordinate) debt from from the State and Central governments.

Source: The Hindu

RBI has placed the financially troubled Yes Bank under a moratorium (temporary suspension).

· After placing this bank under a moratorium, the RBI announced a draft Scheme of Reconstruction.

· This scheme entails the State Bank of India (SBI) investing capital to acquire a 49% stake in the restructured private lender.

Source: The Hindu

In 1971, the government nationalised the private sector companies (107 Indian and foreign companies) playing in the general insurance segment and a government company, the General Insurance Corporation of India (GIC) was formed in 1972. The GIC started operation on January 1, 1973 with its four holding companies:

· National Insurance Company Ltd.

· New India Assurance Company Ltd.

· Oriental Fire and Insurance Comany Ltd.

· United India Insurance Company Ltd.

Source: TMH Ramesh Singh

The public sector insurance company, Agriculture Insurance Company of India Limited (AICIL) was set up by the Government of India in December 2002 (commenced its business in April 2003).

· This is a dedicated agri-insurance company and aims “to serve the needs of farmers better and to move towards a sustainable actuarial regime”.

· This company was responsible to look after the National Agriculture Insurance Scheme (NAIS) which was launched in 1999.

· Since January 2016, the company is looking after the newly launched PMFBY (Prime Minister Fasal Bima Yojana) which subsumed the existing agri-insurance schemes— the NAIS and the Modified NAIS (of 2010).

· Till the AICIL was not set up, the agri-insurance responsibility of the government was being looked after by the General Insurance Corporation (GIC).

· AICIL is jointly promoted by public sector insurance companies and development financial institutions—majority shares owned by the GIC (35 per cent) and NABARD (30 per cent) while the four public sectors general insurance companies own 8.75 per cent each in it.

Source: TMH Ramesh Singh

The Insurance Regulatory and Development Authority (IRDA) was set up in 2000 (the Act was passed in 1999) with one chairman and five members (two as full time and three as part-time members) appointed and nominated by the government.

The authority is responsible for the regulation, development and supervision of the Indian insurance industry.

Source: TMH Ramesh Singh