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Editorial Notes

Editorial Notes 28th July 2016

Blockchain Technology in Digital Currency; CAMPA funds; Digital Divide; Universal Health Coverage; etc.
By By IT's Editorial Notes Team
July 28, 2016

Contents

Polity & Governance

  • Institutionalising Federalism
  • Bogeys on the Universal Health Coverage train

Economy

  • Should RBI issue a new digital Bharatcoin?

Environment & Ecology

  • Whose forests are these anyway?

Science & Technology

  • Bridging the digital divide

 

Polity & Governance

GS (M) Paper-2 Topic: “Powers, functions and responsibilities of various Constitutional Bodies.”

 

Institutionalising Federalism

The return of the single-party majority government at the Centre in 2014 has necessitated the strengthening of inter-governmental mechanisms for the harmonious working of the federal structure.

In this regard, the eleventh meeting of the Inter-State Council (ISC) was recently held after a gap of 10 years.IASToppers Editorial Notes 19th July 2016

ISC in the first four decades of the Indian federation:

  • The architects of India’s Constitution saw the need for inter-governmental forums in the working of the federal system.
  • There was a consensus during the Constituent Assembly debates on establishing such a forum. In spite of the legal status bestowed upon the ISC under Article 263, it was not set up until the Janata Dal-led National Front Government headed by V.P Singh accepted the recommendation of the Sarkaria Commission and established the ISC by a presidential ordinance in 1990.
  • The ISC was set up as an instrument for cooperation, coordination and evolution of common policies. Under Article 263 of the Constitution, the ISC is mandated to ensure better Centre-state cooperation and resolve Centre-state or inter-state issues. However, it has been largely underutilised.
  • In its first meeting in 1990, then PM V.P. Singh agreed to institutionalise the procedure for regular consultation between the states and the Centre. The ISC had then proposed to meet thrice a year, but in 26 years, it has met only 11 times.

What are the reasons for ISC’s failure to emerge as an active inter-governmental forum?

  • In the first four decades of the Indian federation during which the ISC was not formally set up, the Congress was dominant at the national and state levels. Therefore, issues were discussed across the table at party forums.
  • During this phase, the ISC was also sidelined because economic planning necessitated the creation of the National Development Council (NDC) which worked as a functional substitute for the Inter-State Council.
  • In the multi-party coalition phase since 1989, the importance of the ISC was further reduced as some state parties were represented in the federal coalition government at the Centre and the Union cabinet itself became a kind of inter-governmental forum.
  • Clause A of Article 263, which gave the ISC the power to investigate issues of inter-state conflict, was dropped in the presidential ordinance establishing the ISC.

What are the suggestions to strengthen the ISC?

  • The ISC needs to be given all the powers contemplated in the Constitution.
  • It should provide greater opportunities to civil society institutions and the corporate sector to make their representations.
  • The ISC and NITI Aayog should be merged into one constitutional forum to improve the institutional participation of state governments in inter-governmental affairs. It will enhance the institutional status of the NITI Aayog by being attached to a constitutional body i.e. the ISC.
  • Further, to make the ISC a truly federal rather than a central body, its secretariat should be shifted from the Union Home Ministry to the Rajya Sabha secretariat so that it would be under the direction of a neutral federal functionary, the vice-president of India rather than Union home minister.
[Ref: Indian Express]

 

GS (M) Paper-2 Topic: “Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.”

 

Bogeys on the Universal Health Coverage train

Introduction:

The commitment to achieve Universal Health Coverage (UHC) by 2030 is a mandate set by the Sustainable Development Goals (SDG) of the UN and signed up to by India in September 2015.

The article is all about UHC, criteria while selecting the services under the UHC, the concept of ‘progressive universalisation’, etc.

What is the meaning of Universal Health Coverage (UHC)?

The World Health Organisation (WHO) describes UHC as a state where the health needs of all citizens are met without any of them experiencing financial hardship.

It depicts UHC as a cube, with three dimensions:

  1. Population coverage (what proportion of people and which sections are covered);
  2. Service coverage (what is the package of health services that is covered) and
  3. Cost coverage (what proportion of the health-care cost is incurred as out-of-pocket spending and how much is met by the government or employer).

uc_cube_med

WHO acknowledges that the cube will be filled progressively, as resources for UHC increase in different health systems. Hence, the need for prioritisation, within and across each of these dimensions.

Conflicting priorities:

There will be a dynamic tension between the perspectives of those engaged predominantly with each of these dimensions.

  • Politicians are likely to look at population coverage as the key priority — wanting to ‘protect’ (and please) as many citizens (voters) as possible in the shortest time frame. They will advocate from the platform of equity.
  • Health-care professionals (especially influential clinicians) are prone to recommend as many clinical services as possible, especially expensive high-end technologies. They will argue from the platform of quality health care.
  • Economists will argue for reduction of poverty-inducing personal expenditure, while limiting the cost to the public exchequer. They will argue from the platform of socially responsive and fiscally prudent public financing.

How does one reconcile these conflicting priorities?

  • Some advocate the process of ‘progressive universalisation’, in which a limited package of clearly identified essential health services is available to all without financial hardship (cost covered through tax funding or government-subsidised social insurance). Other services are provided to the poor at government-subsidised low cost but the non-poor will have to pay full cost or purchase private insurance cover.
  • Others suggest a large package of health services to be provided free of cost to the poor, with government funding, while the non-poor will have to pay for all services at the beginning of the UHC process.

In what ways this ‘pro-poor’ universalisation approach is defective?

  • It is not truly universal because it only targets the ‘poor’.
  • It ignores the fact that targeted social sector programmes fail because influential sections of society have no stake in the success, sustainability, scalability, quality and integrity of such programmes which end up as false promises.
  • Such an approach also fails to recognise the financial vulnerability of a large fraction of the ‘non-poor’ to health care-related impoverishment.

Suggestions while adopting the approach of progressive universalisation:

If we are to adopt the approach of progressive universalisation, prioritising the poor but not excluding the non-poor from the essential package that UHC begins with,

  • There is a need to carefully select the services that go into that package.
  • The criteria for inclusion and exclusion need to be transparent, explicit and rational.
  • Rich countries, that can afford to cover a wide range of services, adopt a ‘negative list’ of services specifically excluded from the package.
  • Low- and middle-income countries, with less resources, begin with a list of services specifically included in the package and progressively expand it as more resources accrue.

What should be the criteria while selecting the services?

Criteria should include:

  • Disease burden (whether it is a major health problem in a country or State);
  • Expected size of health impact of the intervention (based on effectiveness estimated in research studies and then modelled for a standard population);
  • Cost-effectiveness (value for money) compared to other interventions;
  • Affordability (total budgetary impact);
  • Degree of financial risk protection (impact on out-of-pocket and catastrophic health expenditures and health care-related poverty);
  • Equity (attention to vulnerable groups);
  • Feasibility (technical and legal constraints);
  • Health system readiness (resourced, responsive);
  • Scope (scalability, sustainability) and
  • Acceptability (alignment amongst stakeholders and public acceptance).

Cost-effectiveness as the principal criterion:

Technocratic approaches to the development of an essential package, in many countries, have been dominated by cost-effectiveness as the principal criterion.

  • What is cost-effective in a specific health condition may not have a large population health impact, nor may it be affordable if large-scale application demands a big chunk of the health budget.
  • Also cost-effectiveness must always be balanced with respect for equity, lest some vulnerable groups get excluded from the benefits of UHC.
  • Further, a short-term perspective must be avoided. Otherwise, the medium- and long-term gains of health promotion, disease prevention and primary health care services will be ignored.
  • Their co-benefits for other sectors (like education and environment) and inter-generational benefits (through better health for the progeny) are also outside the count of conventional economic analyses.

Conclusion:

In order to ensure that all relevant criteria are appropriately integrated into the choice pathway for package development, wide-ranging consultations are needed, involving a large array of stakeholders.

This public health agenda should not be derailed by the populism of electoral politics, personal preferences of prominent medical professionals or the parsimony of public financing. It needs an all-of-society consensus and commitment, developed through participatory leadership.

[Ref: The Hindu]

 

Economy

GS (M) Paper-3 Topics:
“Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.”
“Science and Technology- developments and their applications and effects in everyday life”

 

Should RBI issue a new digital Bharatcoin?

India already has a new digital platform for mobile payments that is perhaps one of the best in the world. However, all the options—smart cards, mobile payments, electronic wallets—are merely an attempt to make rupee transactions digitally.

In this current scenario, the question is: Should RBI take the next step and issue its own digital currency using blockchain technology or some other form of consensus network?

RBI and Digital Currencies:

  • The Reserve Bank of India (RBI) had begun taking a serious look at the future way back in 2003, when a working group on the use of electronic money submitted its report.
  • The central bank later seemed to have grown wary of new digital currencies such as bitcoin; it even issued formal warnings about the risks of using them.
  • However, it has now decided to join the revolution through a joint committee with the finance ministry on cashless payments.

Will a digital currency affect banks’ position in the payments business?

According to an economist,

  • Banks could lose their dominant position in the payments business if individuals have direct access to the central bank clearing house for a digital currency.
  • People directly holding base money with the central bank will undermine bank business models that are based on credit creation through the fractional reserve system.
  • The existing monetary policy consensus could be overturned as central banks shift back to directly targeting money supply rather than interest rates.

What is blockchain technology?

  • At a very high level, the blockchain is a decentralized ledger, or list, of all transactions across a peer-to-peer network.
  • This is the technology underlying Bitcoin and other cryptocurrencies, and it has the potential to disrupt a wide variety of business processes.

Applications of blockchain technology:

  • Using this technology, participants can transfer value across the Internet without the need for a central third party. The buyer and seller interact directly without needing verification by a trusted third-party intermediary.
  • Transactions are not anonymous, but they are pseudonymous: a transaction record is created, but identifying information is encrypted, and no personal information is shared.

How a blockchain works

What challenges and opportunities does this technology pose for financial institutions?

Challenges:

  • Financial institutions such as banks and brokerages have long held the position of the trusted third party validating the authenticity and accuracy of a transaction. Blockchain significantly alters the need for this trusted third-party middleman.
  • China recently expressed his views regarding blockchain technology that it may not be able to handle the entire transaction needs of a large economy because the technology requires massive computational and data storage capabilities.

Opportunities:

  • With the ownership and provenance of a transaction recorded in the blockchain at the earliest stages of a transaction and verified at every subsequent stage, agreement among all parties involved in a transaction is guaranteed.
  • And because the blockchain can record and authenticate every stage of a transaction, it could theoretically be used to secure and verify any type of transaction, from simple goods-forcash exchanges to complex transaction management, without any third-party interaction.
[Ref: LiveMint]

 

Environment & Ecology

GS (M) Paper-2 Topics:
“Government policies and interventions for development in various sectors and issues arising out of their design and implementation.”
“Important aspects of governance”

 

GS (M) Paper-3 Topic:
“Conservation, environmental pollution and degradation, environmental impact assessment”

 

Whose forests are these anyway?

A recent controversial bill, the Compensatory Afforestation Fund Bill, 2015 that outlines a framework for the utilisation of compensatory afforestation funds is being strongly contested and challenged by civil society.

forest rights

What are the controversial provisions?

Usage rights of the CAMPA funds:

  • The current bill continues to ignore the Forest Rights Act. Instead of using the CAMPA funds to empower local communities to carry out afforestation, forest enrichment activities and ecological restoration, the Bill places its faith in the colonial-era forest bureaucracy.

Gram Sabha consent for afforestation activity:

  • According to a recent study, almost half of India’s forests are likely to come under the jurisdiction of gram sabhas; thus, any efforts to regenerate or afforest these lands will require their consent and support.
  • The FRA provides for individual and community rights over forests and provides a framework for communities to govern them. In view of this, an amendment to the proposed bill was introduced in the Rajya Sabha to include the provision of gram sabha consent for any afforestation activity.
  • However, the Ministry of Environment and Forests (MOEF) wants to push the CAMPA Bill in its current form, bypassing the authority of gram sabhas and the legal and moral rights of local communities over forests.

Other concerns:

  • The emphasis is on using these funds for plantation drives through the forest department despite there being clear evidence that much of these efforts fail. Official records show that 19.4 million hectares has been afforested by the forest department over the last decade but forest cover has barely increased.
  • Even the ecological value of whatever survives is highly dubious, as monocultures and mixed plantations can’t be substitutes for natural forests.

Suggestions:

Author suggests that:

  • We need to use Rs 41,000 crore (CAMPA accumulated over the years) to further strengthen local rights and empower communities to restore forests and degraded lands. For example, in Odisha, more than 10,000 villages have protected and regenerated local forests with no external funds.
  • Efforts like communities taking up ecological restoration at low costs can be greatly strengthened through securing local rights over forests and providing support to community efforts to conserve them.
  • The decision over where, what and how to plant and regenerate degraded lands, instead of being in the hands of a distant, inefficient bureaucracy, needs to be in the hands of local communities, who have the capacity to undertake adaptive management and maintain close oversight.
  • Innovative systems of incentives and direct payments can be designed using remote sensing.
  • Evidence from around the world shows that farmers and local communities are far more efficient and effective at protecting landscapes as compared to centralised bureaucracies. For example, in China, over 100 million hectares of forests has been handed over to communities and the government has invested over $50 billion, incentivising farmers and communities to conserve forests. Even in India, farmers have taken up forestry with great enthusiasm and 85-90 per cent of the country’s industrial wood supply is now sourced from them.
  • Using CAMPA funds to support community-based afforestation will also lead to major positive social and ecological outcomes. It will ensure a flow of Rs 4,000-5,000 crore to some of the poorest communities, as wage labour every year, with positive spin-offs in terms of improved incomes, poverty alleviation, food security and nutrition as well as better ecological outcomes in terms of eco-restoration, biodiversity conservation and carbon sequestration.
[Ref: Indian Express]

 

Science & Technology

GS (M) Paper-3 Topic: “Awareness in the fields of IT”

 

Bridging the digital divide

With the world presently scoring 62.99 on a scale of 100 in access to information and communications technology (ICT), higher overall social progress could be achieved by overcoming the digital divides that exist between the countries regardless of their level of economic progress.information and communications technology

Importance of ICT:

  • One of the parameters of assessing societal development of a country is the extent to which there has been penetration of information and communications technology (ICT) through the Internet, mobile phone subscriptions or through the degree of press freedom given to the journalists, news organisations and citizens of a country.
  • There is a high degree of correlation between the economic progress of a country and its access to ICT.

Global digital divide:

According to World Development Report 2016:

  • There exists a digital divide in its accessibility between the high income and low income countries, with high income countries typically showing greater penetration of digital technology as compared to less developed countries.
  • While in high income countries such as Finland, Norway, Denmark, Netherlands and Sweden, over 90% of the population is using the Internet, in lower income countries such as Afghanistan, Sub-Saharan African countries such as Central African Republic, Ethiopia, Tanzania, and Malawi, less than 10% of the population uses it.
  • Similarly, with regard to the extent of mobile penetration, Sub-Saharan Africa has the lowest mobile penetration of 73%, compared to 98% penetration in high income countries.

Over-performer countries:

  • There are countries which have over-performed relative to their economic peers in providing digital technology. One such country worth mentioning here is Costa Rica, which is the world’s top over-performer, known for its communication technology and also press freedom.

Underperformer countries:

  • Similarly, there are countries which have underperformed among their income peers on access to information and communication. For instance, Cuba, which has the lowest number of mobile phone subscriptions and lowest press freedom index, has been the most underperforming country on access to information and communication.

India and China- underperformers:

Two of the world’s most populated countries — India and China — are also among the few underperformers on access to ICT.

  • India, which has been appreciated globally for providing IT services, faces a huge digital divide, having a relatively low percentage of population with access to the Internet. In 2014, it had only about 18 people per 100 using the Internet (World Bank Data).
  • China on the other hand has a very weak press freedom index, resulting in its overall low performance on access to ICT.

A gap in adoption of digital technology:

  • Apart from the digital divide existing between countries, there also exists a gap in adoption of digital technology across different demographic groups within the country.
  • The World Development Report 2016 highlights such differences in accessibility to the Internet in Africa, where gaps arise out of differences in factors such as income, location, gender and age.

How can we overcome the digital divide?

  • One of the ways to bring about greater penetration of digital technology in society is to make it more affordable. This could be realised through support from multilateral organisations to the underperforming countries by helping them build their communication infrastructure.
  • Moreover, promoting greater market competition in Internet provision and encouraging public-private partnerships in building ICT infrastructure could increase the affordability of digital technology and thereby improve access to it.
  • Further, digital divides could be bridged to an extent by bringing greater awareness among citizens about the use of digital technology which could help in reducing information inequality in society. It is essential to build up the corresponding human capital necessary for making optimal use of the technology.
[Ref: The Hindu]

 

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  • rooma

    thanks for such a nice effort in helping for our preparation

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