- Wasting water: India needs economic incentives, technology and regulations to tackle water stress
- Last mile banking
Bilateral & International Relations
- A movement in coma
GS (M) Paper-1: “Agriculture related topics”
Wasting water: India needs economic incentives, technology and regulations to tackle water stress
Water shortage poses an economic, environmental and security threat to India. It’s important all levels of government understand the gravity of the situation.
- Agriculture uses about 80% of India’s water resources.
- Within India, a Punjab or a Maharashtra which are among the most water intensive producers of rice and sugar are key producer states.
- Indian agriculture is inefficient in its use of water.
- Power subsidies have had an adverse impact on irrigation patterns.
- Decades of perverse incentives have led to a situation where 65% of the wells in India registered a decline when water level this year was compared with the last decade’s average.
- We use two to four times more water to produce a unit of major food crop than China or Brazil.
- It’s important for all levels of government to understand the gravity of the situation of water shortage.
- Solving water shortage requires an integrated approach which combines economic incentives, technology and tighter regulations.
- Action on power subsidies needs to be complemented with use of technology to carry out aquifer mapping.
- States must break the groundwater-energy nexus to remove a perverse incentive to overuse groundwater.
- Technology and tighter regulations also need to be combined to mitigate water contamination.
- India should learn from Israel, water stressed country, which manages its water resources far better to obviate any shortage.
GS (M) Paper-3: “Inclusive growth and issues arising from it”
Last mile banking
The tendency of banks to open branches in a competitive spirit in urban areas since their nationalisation had led to a heavy concentration in cities such as Bombay, Calcutta and Delhi. Even after five decades of imposing social controls on bank, this trend continues.
- Official data shows that only 27 per cent of villages in India have a bank within a five km radius and the number of those without a basic bank account is still huge.
Concerns related to Jan Dhan Yojana:
With a strong push from centre to provide last mile banking, insuring financial inclusion- nearly 24.1 crore no frills or basic accounts were opened.
- However, a recent investigative report found bank officials putting in Rs 1 or Rs 5 to keep some accounts, which were dormant or inactive after opening, alive.
- Adoption of such methods should raise concern, given the potential for misuse even if that means making a deposit of just a rupee.
Myths vs. reality:
Financial Inclusion- success story of Bangladesh NGO:
- Millions have been brought into the formal and regulated banking system through bKash Limited, a mobile financial services provider promoted by the Dhaka-based mega NGO, BRAC
- It has leveraged telecom networks and its own agents spread across the country to enable ordinary people to send and receive funds, including international remittances, through their own mobile phones and personal identification number-protected accounts.
Suggestions to ensure last mile banking:
- To ensure last mile banking ICT networks should be leveraged.
- This is reflected in the Unified Interface of India, or UPI, the system which powers multiple bank accounts into a single mobile app and offers banking features.
- This is also reflected in the early subscriptions to the government’s ambitious Bharat Bill Payments, an integrated bill payments system offering multiple modes of paying utility bills such as power, water, telephone and gas.
- JAM trinity already envisages delivering subsidies and transfer-payments directly to bank account. This would help in checking leakage and corruption along with decreased transaction cost.
- Banking correspondents help bring people in the hinterland into the banking fold. However, Banking correspondents are way too small to be viewed as a systemic risk. Yet India’s banking regulator has restricted them to serving only one bank, perhaps to prevent arbitrage.
- Efforts at banking outreach may succeed only if there are better incentives at work for such last-mile workers and also those providers who ensure not just basic bank accounts but also products such as accident and life insurance and micro pension schemes.
More private player:
- Of the over 24 crore accounts under Jan Dhan, the share of private banks was just 3%. That should prompt the government and the central bank to review the method and playing field for achieving the goal of basic banking and financial services.
The dressing up of numbers and the fact that almost half of the accounts were with zero balance should now prompt the government to look beyond these banks for ensuring last mile-connectivity and universal bank accounts and quantitative financial inclusion.[Ref: Indian Express]
Bilateral & International Relations
GS (M) Paper-2: “Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests”
A movement in coma
The 17th summit of the NAM has recently been concluded at Margarita Island, Venezuela.
How can we say that developing countries are ignoring NAM summit?
- The sparse attendance by heads of government or state at the 17th NAM summit.
- India’s PM Narendra Modi’s absence at the summit.
- Moreover, it has acted as mere forum for meeting of heads of India and Pakistan- like Prime Minister Manmohan Singh and General Pervez Musharraf at Havana summit in 2006.
Radical phase of NAM:
- NAM’s radical phase peaked with the declaration in the 1979 Havana Summit that the “socialist camp” was a “natural ally” of the NAM. If Nehru prevailed over the radicals in 1961, there was no one to stop the charismatic Fidel Castro from imposing his expansive views on the NAM.
- For most countries, including India, the radicalism of 1979 was unpalatable. By the time the NAM gathered again in Delhi in 1983, the fault-lines within it could no longer be hidden.
Why the relevance of NAM is under question?
- The irrelevance of NAM was perhaps foretold at its very founding in 1961.
- Contrary to the image of a cohesive movement seeking to challenge the dominance of the imperialist powers, it was hard to find agreement among the founding leaders on the purpose and objectives of NAM.
- The Iran-Iraq war, the Soviet occupation of Afghanistan, the Vietnamese intervention in Cambodia, and the military support to national liberation movements in Southern Africa and Central America had deeply divided the NAM.
- It was not the end of the Cold War that made the NAM irrelevant. The movement was dysfunctional well before that. The disintegration of USSR and end of Cold war just acted as the final blow.