28th April 2017, Editorial

GS II: Mechanisms, Laws, Institutions & Bodies constituted for protection and betterment  of vulnerable sections.

A new chapter for the disabled

The 2016 Act will give full effect to the UN Convention.

It is in accordance to the United Nations Convention on the Rights of Persons with Disabilities adopted in 2006 which India has signed and ratified in October, 2007.

The Bill will replace the existing PwD Act, 1995, which was enacted 21 years ago.

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The salient features of the Act passed on 19th April 2017 are:

  1. Disability has been defined based on an evolving and dynamic concept.
  2. The types of disabilities have been increased from existing 7 to 21 and the Central Government will have the power to add more types of disabilities.
  3. Speech and Language Disability and Specific Learning Disability have been added for the first time. Acid Attack Victims have been included. Dwarfism, muscular dystrophy have has been indicated as separate class of specified disability. The New categories of disabilities also included three blood disorders, Thalassemia, Hemophilia and Sickle Cell disease.
  4. Government has been authorized to notify any other category of specified disability.
  5. State governments to ensure that the persons with disabilities enjoy their rights equally with others.
  6. Reservation in higher education, government jobs, reservation in allocation of land, poverty alleviation schemes etc. have been provided for persons with benchmark disabilities (person with not less than forty per cent of a specified disability) and those with high support needs.
  7. Every child with benchmark disability between the age group of 6 and 18 years shall have the right to free education.
  8. Government funded educational institutions as well as the government recognized institutions will have to provide inclusive education to the children with disabilities.
  9. For strengthening the Prime Minister’s Accessible India Campaign, stress has been given to ensure accessibility in public buildings (both Government and private) in a prescribed time-frame.
  10. Reservation in vacancies in government establishments has been increased from 3% to 4% for certain persons or class of persons with benchmark disability.
  11. The Bill provides for grant of guardianship by District Court under which there will be joint decision – making between the guardian and the persons with disabilities.
  12. Broad based Central & State Advisory Boards on Disability are to be set up to serve as apex policy making bodies at the Central and State level.
  13. Office of Chief Commissioner of Persons with Disabilities has been strengthened who will now be assisted by 2 Commissioners and an Advisory Committee comprising of not more than 11 members drawn from experts in various disabilities.
  14. Similarly, the office of State Commissioners of Disabilities has been strengthened who will be assisted by an Advisory Committee comprising of not more than 5 members drawn from experts in various disabilities.
  15. The Chief Commissioner for Persons with Disabilities and the State Commissioners will act as regulatory bodies and Grievance Redressal agencies and also monitor implementation of the Act.
  16. District level committees will be constituted by the State Governments to address local concerns of PwDs. Details of their constitution and the functions of such committees would be prescribed by the State Governments in the rules.
  17. Creation of National and State Fund will be created to provide financial support to the persons with disabilities. The existing National Fund for Persons with Disabilities and the Trust Fund for Empowerment of Persons with Disabilities will be subsumed with the National Fund.
  18. The Bill provides for penalties for offences committed against persons with disabilities and also violation of the provisions of the new law.
  19. Special Courts will be designated in each district to handle cases concerning violation of rights of PwDs.

Image Source: Getty Images

Source: The Hindu, PIB


GS I: Population & associated issues

India’s population story

Even after fertility levels drop to replacement levels, the total population will still grow.

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Concepts to be understood:

Fertility rate is defined as the number of births per 1,000 women between the ages of 15-44 in a calendar year.

Total fertility rate determines the number of children a hypothetical woman would have if she lived to be 44 years old.

Replacement level is the amount of fertility needed to keep the population the same from generation to generation.

Factors that can impact replacement rate:

  1. Mortality rate is by far the most important factor. A higher death rate in an area  would increase the replacement level for that region.
  2. Immigration can also impact replacement levels. A population influx from elsewhere would decrease the replacement level.
  3. Similarly a population drain from its country would decrease the replacement level.
  4. Gender ratio is also to be taken into consideration. Replacement levels would reduce if a larger percentage of females are born than males.
  • As per National Family Health Survey (NFHS) 2017 (Census 2011), India’s fertility rate which has come down from 2.7 to 2.2 is close to its replacement late which stands at 2.1.
  • The total population will still grow, and is likely to reach 1.7 billion by 2050.
  • Thrust of this growth will come from the youth bulge, with 365 million (10-24 years old) already in, or soon to enter, their reproductive ages.
  • Even if they have children only in numbers that replace themselves, the resultant growth due to such a large base of young people will drive the growth momentum for population.
  • States like Assam, Gujarat and Haryana, which are about to reach replacement levels, should adopt policies for delaying childbearing rather than limiting births.
  • Fertility reduction must come from increased availability and use of quality family planning services.
  • Predominantly youthful north and an ageing south.
    • Most of the current and future demographic potential is locked in Bihar, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, and Uttar Pradesh.
    • In the south, there will be a dearth of young working people to keep up and expand the level of economic development. I
    • nvesting in young people in the north to realise the demographic dividend will be a win-win situation for all India, north and south.

Image Source: Getty Images

Source: The Hindu, study.com


GS II: Functions & responsibilities of the Union and States, issues and challenges pertaining to federal structure, devolution of powers and finances upto local levels and challenges therein.

GS III: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Learning to run twice as fast

The challenge in States achieving a debt ceiling of 20% by 2023 threatens overall fiscal responsibility targets.

Background

What is fiscal deficit?

The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.

How is the deficit met?

A deficit is usually financed through borrowing from either the central bank of the country or raising money from capital markets by issuing different instruments like treasury bills and bonds.

What is India’s fiscal deficit?

Market loans in Budget 2016 were Rs. 4.25 trillion or 21% of the budget of Rs. 19.78 trillion. Fiscal deficit for 2015-16 was at 3.9% of GDP.

Who sets targets to reduce fiscal deficit?

Fiscal Responsibility and Budget Management Act of 2003 was introduced ahead of the 2001 Union budget when fiscal deficit was close to 6%.

The framework set a 3% target by 2008 which was achieved to a 30-year low of 2.5 percent of GDP in 2007-08.

However owing to the global financial crisis, the deficit surged to well above 6% in 2009 – 10.

Presently, the FRBM Act has been reviewed by the FRBM Committee Chair N.K. Singh on whose recommendations, the government:

  • had set a fiscal deficit target of 3.9% of GDP for FY 15-16.
  • has achieved 3.5% for FY 16-17.
  • Set 3.2% for FY 17-18. 3% target thereafter.
  • Advocated reaching a fiscal deficit to GDP ratio of
    • 2.8% in 2020-21
    • 2.6% in 2021-22
    • and 2.5% in 2022-23.

What is Debt-GDP ratio?

The debt-to-GDP ratio is a country’s debt as a percentage of its total economic output (measured by GDP.)

The N.K. Singh committee has recommended lowering India’s Debt to GDP ratio from 68.5% in 2016 to 60% in 2023 comprising 40% for the Central government (currently 49.23%)  and 20% for the State governments (currently 21%).

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  • Given the recent performance of the Union government in maintaining the fiscal responsibility, the 40% target seems to be a likely probability.
  • The focus is now on the States to perform and achieve a debt – ceiling of 20% by 2023.
  • Issues faced by States:
  • ISSUE 1:
    • The difference between govt debt and growth rate of the economy determines the future trend of the debt to GDP ratio. If the difference is on a higher side, the ratio will explode and if low, the ratio will be contained.
    • Presently even though the Union govt’s debt is higher than that of States, the differential rate is lower than the latter’s and thus States will be mandated to catch up.
    • Seeing the current trend, States need to lower their Primary and Fiscal deficit to maintain the current level of Debt to GDP ratio.

NOTE: Primary deficit is one of the parts of fiscal deficit. While fiscal deficit is the difference between total revenue and expenditure, primary deficit can be arrived by deducting interest payment from fiscal deficit.

  • ISSUE 2:
    • Credit goes to external environment/factors: The performance of states in maintaining fiscal discipline can be credited to debt waivers, conslidation of central loans, debt restructuring scheme of the 12th Finance Commission, relief packages from the Union govt and a positive economic scenario.
    • Any efforts to instill discipline on their part is not very prominent.
  • ISSUE 3:
    • When the 14th Finance Commission set conditions to enhance State Borrowings to 0.5% of the GSDP (Gross State Domestic Product), their eligibility was:
      • Debt to GSDP ratio should not be more than 25%. and/or
      • Interest payments should not be more than 10% of revenue receipts.
    • Only 6 states could meet this criteria which implies that the rest of the States are under high debt burden.

THE WAY FORWARD

  1. Prudent fiscal management to be practised by States.
  2. Judicious use of Article 293 (3) of the Indian Constitution which makes it mandatory for a State to take the Central government’s consent for raising any loan if the former owes any outstanding liabilities to the latter.
  3. Implementation of transparent accounting practices.
    • PSU Borrowing and explicit guarantees issued by States do not form a part of State Govt liabilities.
    • Budgetary malrpractices.
    • The Fourteenth Finance Commission’s (FFC) recommendation of adopting “a template for collating, analysing and annually reporting the total extended public debt in their respective budgets as a supplement to the budget document” must be implemented.
  4. Quality of spending is worsening. Focus to increase capex.
    • Dominance of revenue expenditure while Capital expenditure on infra development remains stagnant.
  5. The 15th FC could try to restore fiscal prudence.
    • The 14th Finance commission took a break from the traditional approach of the 11th, 12th and 13th Finance Commission of implementing fiscal prudence among states and instead accommodated the Census 2011 population and increased forest cover into its formula resulting in increased funds to States.

Image Source: Livemint

Source: The Hindu, Economic Times, Livemint

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