1. Banking Reforms Roadmap

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1.1. Banking Reforms Roadmap

• The reform agenda, aimed at EASE – Enhanced Access and Service Excellence, is based on six themes. Capital infusion is dependent on PSB performance on these reform themes

 

Theme 1: Customer Responsiveness

• EASE for customer comfort through promotion of digital banking and progressively making brick-and-mortar branch visits redundant, simplification of forms, providing one-stop access of financial services to customers including banking-plus services (insurance & investment), pleasing ambience with courteous staff and basic customer amenities.

• EASE in Grievance redressal through enabling real-time complaint status tracking by complainant with feedback from them to check the quality of redressal and analyzing & taking effective action on common grievances to avoid recurrence.

• EASE for Senior citizens and differently abled through doorstep banking, dedicated counters or giving preference in service, digitization and proactive services to minimize the visits required.

• Annual EASE ranking index on customer EASE to measure bank’s customer responsiveness and performance on all EASE items

 

Theme 2: Responsible Banking

• Clean lending and prudent asset management – through creation of Stressed Asset Management Vertical (SAMV) for focused recovery efforts of identified Stressed Assets, tie-up with agencies for specialized monitoring (ASMs) for clean & effective post-sanction follow-up, Institute efficient practices for effective coordination in large consortium loans, strict segregation of pre- and post-sanction roles & responsibilities, differentiated banking strategy etc.

• Furthering financial stability – by checking aggressive and imprudent lending through proactive, dynamic and systemic risk management, monetizing realizable value from sale of non-core assets and rationalizing overseas operations

• Improving governance for ensuring outcomes – It involves following a board-approved strategic vision & business focus plan, evaluation of performance of Bank’s Whole Time Directors by boards and strengthening & empowerment of boards.

 

Theme 3: Credit Off-take

• EASE for the borrower & pro-active delivery of credit- through online application facility for loans, digitalizing non-retail credit appraisal process, development of differentiated products and services for industry-based market segments.

 

Theme 4: PSBs as UdyamiMitra

• EASE of bill realization for MSMEs by registration of all banks on TReDS platform for faster bill discounting

• EASE of financing for MSMEs through steps such as board-approved policy for enhanced working capital to GST-registered MSMEs, enabling MSME financing through cluster-based financing & FinTech, time-bound and automated processing of MSME loan proposals

• Single-point MSME Relationship Officers for top-20 MSME accounts in every MSME-Specialised Branch

• Revival Framework for stressed MSMEs after identifying all SMA-1/2 MSME accounts.

 

Theme 5: Deepening Financial Inclusion & Digitalisation: micro-insurance, digitalisation

• EASE through near-home banking by establishing banking outlets within 5 Kms of every village, providing services through Bank Mitras for branchless banking and mobile ATM in every under-served district

• Social security through micro-insurance through massive expansion of coverage under PM Suraksha Bima Yojana and PM Jeevan Jyoti Bima Yojana

• EASE through digital payments by issuing RuPay debit card to all Pradhan Mantri Jan Dhan Yojana Accountholders, Aadhaar seeding all operative current & savings account, massively expanding Aadhaar-enabled payment Points of Sale

• Customer protection against cyber-frauds by taking steps such as ensuring refund against unauthorised debit in electronic transaction within 10 working days of notification by customer, real-time alerts for customer protection, free customer-level security updates for apps & Internet-based utilities

 

Theme 6: Ensuring outcomes: Governance/HR

• Farm credit, which forms part of priority sector lending, includes short-term crop loans and medium-term or long-term credit to farmers.

• Short-term crop loans are basically borrowings by farmers for six months or a maximum one year to help them raise money before and after harvest.

 

Calculation of Agricultural NPAs

• In general, principal or interest due for over 90 days is considered NPA. However, this is not applicable for agricultural loans.

• A loan granted for short duration will be treated as NPA if the installment of principal or interest thereon remains overdue for two crop seasons. For longer duration crops, it is one crop season. Long duration crops here are those that have crop seasons longer than one year.

• Developing personnel for Brand PSB by rewarding select top-performers identified through a Performance Management System (PMS), specialisation through job families, making mandatory annual role-based e-learning programme for all officers.

 

1.2. Agricultural Npas Spike​

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Important Stats

• Farm sector bad loans constitute 8.3 per cent of the total banking sector NPAs of March 2017. However, it is fairly less than compared to non-priority sector with accounts for 76.7% of total NPAs

• Compared to non-priority sector credit where

• Is Farm Loan Waiver a Viable Option to Solve Agricultural NPAs?

• Economists regard farm loan waiver as bad economics and a populist measure. It was first used in India in 1990s and was recently brought back in the forefront after the drought in 2009-10.

• Farm loan waivers have an adverse impact on the balance sheet of the lending institutions as well as on the finances of the states.

• It impacts credit discipline and dis-incentivises future borrowers to repay thereby creating the problem of moral hazard.

• It can also affect the flow of credit as bank lending tends to move away from areas with greater exposure to such schemes.

• Government borrowings go up and yields on government bonds are impacted which can in turn lead to crowding out of private borrowers as higher government borrowing increases the cost of borrowing for others. borrowers have defaulted 20.83 percent of the credit, farmers have defaulted only 6 percent of their total credit.

 

Reasons for growing NPAs in Agriculture Sector

• Dependence of Monsoon – Farm outputs were heavily affected by successive droughts of 2014 and 2015. Although it was followed by a normal monsoon in 2016, however 2017 again witnessed uneven monsoon. This has led to harvest losses.

• Increasing Rural Distress – Recent government data shows that there has been a decline in rural wages, fluctuation in prices and decline in crop sowing. Average all-India annual rural wage growth declined from 6.8 to 4.9 per cent between July and October and the decline is sharper for agricultural than for non-agricultural occupations.

• Decreasing Landholding – Decreasing landholding has led to successive losses and farmers are unable to reap the benefits of economies of scale.

• Implications of Farm Loan Waiver - Expectations of loan waiver prompt farmers to default on loans. Moreover, it has a domino effect such that farmers from different states demand loan waivers.

• Using Loan Amount for Non-farming Purposes - Farmers take loans through channels like Kisan Credit Card and using it for other non-farm activity including consumption.

• Depressed global prices for farm commodities - This has rendered agri-exports from the country relatively uncompetitive, while also exposing farmers to the threat of increased imports.

 

Some steps taken by govt to resolve rural distress

• Construction of 51 lakh pucca houses in 2017-18 under PMAY-G. It also helps neutralize agrarian discontent.

• Additional monetary support to beneficiaries for building toilets through the Swachh Bharat Mission-Gramin scheme and 90 days of wages under MGNREGA.

• Convergence is being sought with the Pradhan Mantri “Ujjwala” and “Saubhagya” schemes with free LPG and electricity connections specifically directed at PMAY-G beneficiaries.

 

Way Forward

• Expand the scope of irrigation to increase crop intensity, improve access to irrigation, enhance the seed replacement rate and encourage the balanced use of fertilizers.

• Adopting precision farming and related new technologies that allow highly efficient farming and conserve resources. Schemes like Rashtriya Krishi Vikas Yojana can contribute to such initiatives.

• Better leasing laws to solve the problem of informal tenancies.

• Encouraging farm related activities and non-farming activities to address the problem of rural distress and agrarian price glut.

• Establishing an Agriculture Risk fund to provide relief in natural calamities as was recommended by the M. S Swaminathan Committee.

• Better assessment of risk on part of banks to minimize defaulting of loans.

 

1.3. Report Of The Committee On Doubling Farmers’ Income​

Major recommendations in the report

• Improve Institutional Arrangement/Overhaul of the Union agriculture ministry: through steps such as o reorganizing some of the divisions of ministry to bring into focus new aspects like agri-logistics, investments for capital formation, primary processing etc.

• setting up a three-tier planning and review mechanism through district, state and national level committees

• establishing a national level policy and planning committee to review the policy framework and progress in doubling farmer’s incomes, review trade policy, budgetary allocations and status of farmers’ welfare

• Liberalize the definition of a ‘farmer’ to include cultivators, lessee farmers and sharecroppers and developing an online and annually authenticated database to identify a farmer and render him/her eligible to avail benefits of agriculture related support-system of government.

• Undertake land reforms such as incentivizing land pooling through legislating the Model Land Leasing Act 2016, draft a Model Contract Farming Act, encouraging Farmer producer organisations and comprehensive digitisation of land records.

• Reduce production risks and market unpredictability: through restructuring of Directorate of Marketing & Inspection to take onus for market intelligence and undertake price and demand forecasting, comprehensive drought-proofing of highly vulnerable districts, improving post-harvest management capacity of farmers,  

• deployment of technologies to improve estimates and resource use efficiency

• Improve trade regime – through adjusting imports according to pre-set triggers to correct price fluctuations, promoting exports to allow agricultural growth and steady access to international demand

• Liberalize and simplify agriculture policies such as ensuring greater choice of inputs to farmers at right quality and rational costs, liberalizing seed chain, revisiting fertilizer sector policies, rationalizing pesticide regulations, liberalising output market environment to invite private sector participants and modernizing agricultural market architecture and legislate the Model Agricultural Produce and Livestock Marketing Act 2017

• Remove Infrastructure constraints by setting up a dedicated division for investment and enterprises in the Ministry of Agriculture & Farmers’ Welfare.

• Tackle climate change: through rigorous monitoring, deploying technologies to mitigate adverse impact, preparing farmers for possible shifts in practices and habits, bringing changes in cropping system, crop selection and livestock care.

• Improve grassroot level participation by making Gram Panchayats responsible for agricultural development and preparing village level action plans at Gram Panchayat level.

• Improve support tools to help measure the farm income, monitor performance in real time and forecast demand and price for an array of agri-commodities. It may be used to conduct an annual ease of doing agribusiness survey.

 

1.4. Price Deficiency Payment (Pdp) Scheme​

About Price deficiency payment (PDP) scheme

• Under this, government support to producers does not involve direct market intervention. The market is, instead, allowed to set prices based on normal supply and demand forces while the government simply pays the difference between the MSP and the market-determined price.

• NITI Aayog in its three-year agenda has also suggested this system to address the gaps in Minimum Support Price (MSP) based procurement of crops.

 

Benefits

• The scheme provides an alternative to physical procurement of commodities at minimum support prices (MSPs).

• This scheme may be more effecting in ensuring that cropping pattern is not skewed in the favor of crops with assured procurement under MSP & it responds to consumer needs.

• Farmers receive the difference between average sale price (ASP) and MSP directly into their bank accounts thereby doing away with the costs of handling and storage. Thus, it may help in keeping India’s food subsidies bill under check & complying with WTO subsidy restriction.

 

Problems

• Non-applicability to non-registered farmers – For e.g. – in MP, the farmers who are not registered on the portal have been selling their produce at huge losses without any compensation.

• Less compensation – As the prices are fixed by the government, the compensation does not even cover the full cost of production at times. Eg: Haryana

• Less coverage – Although there is potential of covering all the production, yet the actual percentage of production which benefitted from this scheme was low. For e.g. only 32% of Urad and 18% of Soyabeen production in MP was covered.

• Involves too much micromanagement by government officials in terms of calculating the produce, average sale price in the state for that crop etc.

 

1.5. Cag Report On Fssai​

Highlights of the report

• No proper guideline: Ministry of Health and Family Welfare and the FSSAI are yet to frame regulations governing various procedures, guidelines and mechanisms as prescribed in the Food Act.

• Monitoring lapses: It has also failed to monitor and cancel licenses issued under the product approval system declared unlawful by the Supreme Court in 2015, due to which market is still flooded with unsafe food.

• Arbitrary functioning: FSSAI issued licences to food business operators without complete documents. It also does not have any documented policies and procedures for risk based inspections which allowed the sale of more than 800 processed foods with new formulations without assessing their safety.

• Lack of data: FSSAI does not have a database on food businesses in the country as FSSAI and state food safety authorities did not conduct any surveys for enforcement and administration of the Act.

• Human resource shortage: There is an acute shortage of licensing and enforcement officers in the states which severely affected food safety measures. It also noted that contractual employees were performing routine functions, defeating the intention of appointing contractual employees only for specific tasks of defined duration.

• Poor Testing Labs: Quality of testing by the laboratories cannot be assured due to lack of quality equipment, lack of trained human resource as 65 out of the 72 state food laboratories to which FSSAI and state food safety authorities sent food samples for testing do not possess National Accreditation Board for Testing and Calibration Laboratories (NABL) accreditation.

• It has failed to adhere to regulations in case of renewal of the license and failed to collect significant amount of penalties imposed for non-adherence.

• It has also failed to curb the import of unsafe foods in the country.

 

Way Forward

• CAG recommendations on FSSAI

• It should expedite the notification of regulation on areas that have been specified in the Food Act, but are yet not covered.

• Conduct surveys of food business activity, to ensure a comprehensive and reliable database of Food Based Organisations and ensure better enforcement and administration of the Act.MoHFW should ensure accreditation of all state food laboratories, pertaining to equipment and functionality of the lab.

• Adopting best practices: Reviewing the Food Safety and Standards Act, 2006 by benchmarking it with similar laws in other parts of the world.

• “One Nation, One Food Law” should be the guiding philosophy to provide an enabling regulatory environment for investment in the food sector.

 

1.6. Organic Food​

Provisions of the guideline

• Definition: FSSAI has defined

• Organic Agriculture: A system of farm design and management to create an eco-system of agriculture production without the use of synthetic external inputs such as chemicals, fertilisers, pesticides and synthetic hormones or genetically modified organisms.

• Organic Farm Produce: the produce obtained from organic agriculture.

• Organic Food Means: Food products that have been produced in accordance with specified standards for organic production.

• Mandatory labeling of Organic food from July, 2018 which should convey full and accurate information on the organic status of the product.

• There will be penalties on non-compliance of regulation.

• Approval authority: Organic food products should carry a certification mark or a quality assurance mark given by Production (NPOP)

 

India (PGS-India)

Significance

• It will help in curbing fraudulence and malpractices prevalent in organic market sector where inorganic products are being sold as organic.

• Impetus to Growth: A study by Indian Council for Research on International Economic Relations (ICRIER) in 2017 found that organic food market is expected to grow at 20% in the next five years if supported with right policies providing the necessary impetus.

• Empowering consumers who can now check the authenticity of organic food products.

• Empowering Farmer: Organic certification will also help farmer to earn a premium for their produce.

• Proper guideline will help in integrating organic product with global value chain and also in deepening domestic market.

• Health benefits: Increasing consumption of organic food will keep humans away from the effect of pesticide, fertilizer and growth hormone used in the inorganic farming.

 

Concern

• Issue with dual certification system – There is no linkage between the two certification systems (see infographic).

• PGS also fails to have a transformational impact as consumers don't believe PGS due to its self-certification character.

• Lack of interest by big retail player in promoting organic produce as a lot of time is spent on authenticating the source of product.

• Expensive product – as compared to the alternative present in market.

 

Way Forward

• Single Nodal Agency could be formed for streamlining of process and administrative cost.

• Integrating small and marginal growers to the market for organic produce following global standards will open up opportunities for agri-businesses.

• Develop infrastructure like cold storage, transportation etc. to increase its availability and competitiveness.

 

1.7. National Year Of Millets​

Background

• India is the largest producer of millets followed by the African countries of Nigeria and Niger.

• Approximately 60 million acres of land in India is under millet cultivation.

 

About Millets

• Millets are a group of small-seeded grasses, grow as cereal crops/ grains.

• It includes Jowar, Ragi, Korra, Arke, Sama, Bajra, Chena/Barr and Sanwa.

• Agro-Climatic Condition- grows well on well-drained loamy soils, arid and semi-arid such as in Rajasthan, Karnataka, Madhya Pradesh, etc.

 

Government Initiatives for Millets

• Integrated Cereals Development Programmes in Coarse Cereals based Cropping Systems Areas (ICDP-CC).

• Initiative for Nutritional Security through Intensive Millets Promotion (INSIMP)- aimed to bring 0.5 million hectare under Millets Cultivation, supply hybrid seed, establish composite millets processing units.

• Extension under Public Distribution System- under the National food security Act 2013, millets has been include under the PDS basket.

 

Four Dimensional benefits of Millets

• Farming and Food Security perspective o Less water requirement as compared to other crops due to an efficient root system.

• The short growing period assist in meeting the food demand.

• Less affected by diseases and pests, thus minimum requirement of pesticides.

• Used as food and fodder—in mixed farming systems.

• Intercropped with wide variety of vital crops.

• It can be alternative to major crop under the pretext of rising temperature and climate change.

 

Cultural and Poverty perspective

• Traditionally associated with cultivation practice of tribal e.g. Karnataka Ragi Habba (Festival).

• Does not require high mechanization and it can withstand drought,

• Gives more output with less input cost.

 

Nutrition Perspective

• Millets are rich in vitamins, calcium, iron, potassium, magnesium, zinc, and has low-GI (Glycemic index) which can reduce the malnourishment and hunger problem in India.

• Beneficial to gluten intolerant and high diabetic people.

 

Environmental Perspective

• It has good ability to sequester carbon and assist in climate adaptation.

• It utilizes mainly organic fertilizer, thereby, reducing both the economic and environmental cost associated with chemical fertilizers.

 

Challenges

• Unfavorable agricultural Policy- Crop loan, subsidies, Public Distribution System (PDS) are favourable for crops such as Rice, Wheat etc. which acts as a disincentive towards the cultivation of Millets.

• Focus on Specific Millets- most of the states usually focus on sorghum, pearl millet and finger millet and leave out many of the small millets while implementing these schemes.

• Dietary Habits- Due to increasing urbanization and industrialization, people are converging towards the consumption of Rice and Wheat (India Council of Agricultural Research 2014.)

• Lack of Awareness- about the socio-economic and nutrition benefits of Millets distorts its demand and supply. Moreover, Millets have a tag of ‘a poor man’s food’ which further reduce its consumption.

 

Way Forward

• Integrated Millet Development strategy- A holistic production-distribution strategy encompassing soil health, seed availability, mechanization and awareness generation is need of the hour.

• Policy action- In order to encourage famers to cultivate millets, government should generate demand by including the wide range of Millets varieties under Mid-Day Meal and Public Distribution (PDS).

• Customized approach- Millet cropping systems are part of diverse rain-fed ecosystems. Thus, they need custom-made location specific approaches.

• Special initiatives for backward and tribal regions- covering demand-supply gaps and ground level research are needed.

 

1.8. Pink Bollworm Attack On Cotton

Facts

• India is the largest cotton producing and second largest exporting country according to a report published by the International Cotton Advisory Committee in March 2017.

• Gujarat is the largest cotton producer in India followed by Maharashtra.

 

More about the News

• It has majorly affected cotton plantations in Maharashtra, Telangana, Andhra Pradesh, Karnataka and Gujarat.

• One of the worst hit states is Maharashtra because farmers there had planted a record 42 lakh plus hectares under cotton encouraged by previous year’s remunerative realisations.

• Gujarat on the other hand is comparatively less damaged as infestation happened at later stages due to better crop management by farmers, government agencies and seed companies.

• The drop in output could lead to rise in local prices and reduction in exports from India. Government Initiatives: Pradhan Mantri Fasal Bima Yojana

• It was launched in 2016. It is a yield based insurance scheme. It replaced the National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS).

• It covers yield loss due to non-preventable risks viz. natural fire, lightening, cyclone, flood, landslide, pests/diseases etc.

 

Causes of Pink Bollworm Infestation

• Absence of Crop Rotation encourages breeding of the pest. Large hybrids, over a thousand different varieties, with varying flowering and fruiting periods ensure continuous food availability to pests.

• Quality of Seeds: Moreover, this year, herbicide-tolerant hybrids not approved for cultivation have been sown. There are also cases of seed companies selling non-Bt cotton as Bt.

• Resistance to Bt cotton in pink bollworm due to longer duration crop (> 120 days) & continuous cropping.

• Farmers do not follow Standard Protocols along with planting Bt cotton to prevent infestation due to under-information or ignorance in following the rules.

 

Solutions

• Refugia crop: Planting non-Bt cotton as ‘refugia’ in the vicinity of the main Bt-cotton. Non-Bt cotton can act as a host for PBW and deter it to develop resistance to Bt toxins. It can be enforced by supplying the seeds in the same bags that contain Bt seeds.

• Using Original Bt cotton: Only recommended hybrids/varieties from companies with established R&D facilities which can vouch for the trait purity of the Bt cotton should be supplied.

• Pre-cultivation measures to prevent the carry-over of pink bollworm to the next cotton season such as selection of varieties with early maturity, drying of seeds under sun for 6-8 hours sowing of acid delinted seeds, two deep ploughings etc.

• Post-harvest Measures such as pheromone traps near cotton godowns to attract post-season moths, allowing cattle grazing of the left over green balls on the plant, destruction of cotton stubbles immediate to harvest, educating farmers and promotion of proper scientific methods etc.

 

Government Land Information System (GLIS)

• It is a first-of-its-kind centralised database created by the Ministry of electronics and information technology and monitored by the Prime Minister’s Office (PMO).

• It records total area, geo-positioning maps, and details such as ownership rights.

• According to the portal, the railways is the biggest landowner among Union ministries. The defence ministry, which owns a large share of the government’s land holding, has given only partial details citing security concerns.

 

1.9. The Problem Of Land Hoarding​

Details

• As per the information provided by the Government Land Information System (GLIS), various Central Ministries admit to owning only about 13,50,500 hectares of land. Whereas, disparate official sources suggest that the correct figure is several times more than what is disclosed.

• The situation is worsened by the fact that a large proportion of government land lies unused.

 

Impact

• Lack of productive use: A large part of the unused land is high-value property in prime areas in major cities. Lack of database means that these cannot be developed and used and is prone to encroachment.

• Artificial scarcity & high prices: It has created artificial scarcity and is one of the main drivers of skyrocketing urban real estate prices. This leads to unaffordable housing and reduced competitiveness of industrial & development projects.

• Corruption in allocation of this land - Scams involving the Adarsh Cooperative Housing Society, the Srinagar airfield project and the Kandla Port Trust are a few of the many such examples to misuse government land.

• Inadequate ownership records: For e.g.- 13 major ports have failed to produce title deeds for as much as 45% of their land holdings. This makes squatters difficult to evict & therefore they gravitate to these areas.

• Land amassed by private developers/ SEZ: Another report by the CAG on Special Economic Zones shows that as much as 31,886 hectares, or 53% of the total land acquired by the government for these zones, remains unused — land which could have been put to more productive use by its original owners.

 

Suggestions

• Furnish details about usage of acquired land: People have the right to know about usage of land acquired by government by way of compensation. For e.g.- in Britain, the government has pledged to provide details of ownership, location and intended use for all properties. Also citizens are invited to contest official land use and suggest alternatives under a ‘right to contest’.

• Comprehensive inventory of land resources and usage patterns: A comprehensive inventory of land resources and usage patterns should be made with information on the location of each property, its dimensions, legal title, current & planned use etc. to enable effective identification of land usage pattern.

• Use of surplus land: Surplus land should be utilised to meet the growing demands for services such as water and waste disposal, housing and transportation projects etc. and land intended for future use should be rented out, through a transparent bidding process, till such time it is needed.

 

FLOOR SPACE INDEX

​Background

• In Indian cities, FSI is generally about 1.50, which is said to be on the lower side given the needs of rapid urbanization. FSI in India (and FAR (Floor Area Ratio) everywhere else in the world), is the ratio of a building’s total floor area to the size of the piece of the land on which it is built.

• Most of the cities have low FSI as they have grown horizontally. This has put onerous demands on the amount of land that cities had to gobble up to accommodate the teeming millions. As per Census 2011, 377 million people lived in urban areas which are expected to increase to approximately 590 million people by 2030, according to a McKinsey report 2010.

 

Benefits of vertical growth of cities

• Reduced cost of real estate because the share of land cost in real estate comes down.

• Facilitates mass transport – because greater density makes it much more viable and affordable. This, in turn, reduces the massive dependence on personal cars that are effectively choking roads across most cities.

• Push to planned urban development – For ex: increasing the availability of land in urban areas is critical to meet the demand for affordable housing under Pradhan Mantri Awas Yojana (Urban).

 

Drawbacks of raising FSI

• Infrastructure deficit - Pressing for a major upward revision of FSI without a corresponding improvement in infrastructure, particularly transport to deal with crowding will pose more problems.

• High maintenance cost - High FSI will allow sky scrapers where day-to-day management of building requires a high cost. It will house the rich and may not be able to address the shortage in affordable housing category.

• One size fits all - Cities are contextual, what applies in one city might not hold good in another. Thus, each city needs to decide what kind of growth they can facilitate rather than centre giving a broad overarching national recommendation.

 

1.10. Inclusive Development Index​

About the Inclusive Development Index (IDI) 2018

• The 2018 index measures progress of 103 economies on eleven dimensions of economic progress in addition to GDP.

• The 2018 index also takes into account the “living standards, environmental sustainability and protection of future generations from further indebtedness”

• The index presents an alternative to GDP as GDP Facts related to Inequality from Oxfam report

• Oxfam, in its report titled ‘Reward Work, Not Wealth, noted that the richest 1% in India cornered 73% of the wealth generated in 2017 while bottom 67 crore Indians saw their wealth rise by just 1%

• Globally richest 1% took 82% of all growth in global wealth last year while bottom half saw 0% increase in wealth.

• It also pointed out to gender inequality in billionaires stating that globally 9 out of 10 billionaires are men.

• Measures current production of goods and services rather than the extent to which it contributes to broad socio-economic progress as manifested in median household income, employment opportunity, economic security and quality of life.

 

Some Key Observations

• Lithuania is ranked the world’s most inclusive emerging economy, while Norway tops the advanced economy list.

• Globally 64% of the 103 economies have seen their IDI scores improve over the past five years due to efforts of policymakers to broaden socioeconomic progress.

• Performance among BRICS economies is mixed with the Russian Federation (19) ahead of China (26), Brazil (37), India (62), and South Africa (69).

• Socio-Political Implications: Slow progress in living standards and widening inequality has contributed to political polarization and erosion of social cohesion in many advanced and emerging economies.

• WEF also said that rich and poor countries alike are struggling to protect future generations and cautioned that higher growth may not be a panacea for the social frustrations, including those of younger generations.

 

Performance of India

• India has an improving trend with rank 62nd out of 74 emerging economies. Of the three pillars, India ranks decent on inclusion, growth & development and inter-generational equity.

• Though the incidence of poverty has declined in India over the past five years, 6 out of 10 Indians still live on less than $3.20 per day. Thus, there is substantial scope for improvement for India in this aspect.

 

International Labour Organisation

• Established in 1919, it became first affiliated specialized agency of the United Nations in 1946.

• It has total 187 member nation including India is the member to it

• It is the only organisation of UN having tripartite governing structure, representing Workers, Employers and Government.

• It sets labor standards, develops policies and devises programmes promoting decent work for all women and men.