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Yojana Magazine Analysis -

Date: 13 March 2019

KEY ANNOUNCEMENTS

• Raises the Income Tax exemption limit to Rs. 5 LPA

• Raises standard deduction from Rs. 40k to Rs. 50k

• Allows individuals to sell one house property and make investment in two houses without paying any CGT

• Raises the threshold for TDS on interest income from Rs. 10k to Rs. 40k

OTHER ANNOUNCEMENTS

• Separate Department of Fisheries has been created

Financial Sector

FINANCIAL INCLUSION

• Definition

– Process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.

• Globally, 1.7 bn adults don’t have a basic transaction account.

BARRIERS TO FINANCIAL INCLUSION

Demand-side

– Low income

– Financial illiteracy

 – Digital illiteracy

– Lack of awareness

– Poor marketing

Supply-side

– Branch proximity

– Documentation

– Repayment terms

– Attitude of bank staff

– Technical issues

INITIATIVES FOR FINANCIAL INCLUSION

• Finance & Development Corporations* to give

concessional finance to:

 – Scheduled Castes

 – Scheduled Tribes

 – Safai Karamcharis

– Backward Classes

 – Minorities

 – Handicapped *Above are not for profit u/s 25 of Companies Act

 

OTHER INITIATIVES

• Rashtriya Mahila Kosh

• PM MUDRA Yojana

• Stand Up India Scheme

• Startup Village Entrepreneurship Programme

• Venture Capital Fund Scheme (for SCs & OBCs)

• Credit Enhancement Guarantee Scheme

• PM Jan Dhan Yojana

 

RASHTRIYA MAHILA KOSH

• Autonomous organization under MoWCD

• Provides micro credit to poor asset-less women

• Credit is given for income generating activities

• Offers loans for upto 12% simple interest to SHGs

 

PRADHAN MANTRI MUDRA YOJNA

• Loans upto Rs. 10 Lakh for non-corporate non-farm micro and small enterprises

– ~90% of this sector does not have access to formal sources of finance

– Disbursed by Commercial Banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs and NBFCs

– Refinanced by Micro Units Development and Refinance Agency Bank (or MUDRA Bank)

• Loan products as per stage of growth:

– Shishu (50k)

– Kishore (50k to 500k)

– Tarun (500k to 1000k)

STANDUP INDIA

• Every bank branch has to give a loan between Rs. 1 Lakh to 1 Crore to at least:

– One SC or ST borrower

– One woman borrower

• Loan is for setting up a Greenfield enterprise in manufacturing, services or trading sector

PRADHAN MANTRI JAN-DHAN YOJANA

• Also called National Mission for Financial Inclusion

• To ensure access to following financial services: – Banking/ Savings & Deposit Accounts

– Remittance

– Credit

– Insurance

– Pension

• About 34 Crore bank accounts opened as on Jan 2019

UN: 8 PILLARS OF GOOD GOVERNANCE

• Eight Elements of Good Governance

1. Participatory

2. consensus oriented

3. Accountable

4. Transparent

5. Responsive

6. effective and efficient

7. equitable and inclusive

8. follows the rule of law

ROLE OF NITI AAYOG

• Strategy for New India @ 75

– detailed roadmap

• Aspirational Districts Programme (Jan 2018)

– Aimed at 115 most backward districts

– Convergence of multi sector schemes

– Ranking based public competition among districts

• Direct Benefits Transfer

– Cumulative transfer of funds has crossed Rs. 6 L Cr

 – Estimate savings have touched Rs. 1.1 L Cr (up to Dec 2018)

OTHER REFORMS

• Civil Service

– Promote an officer oriented culture

– Reduce the no. of current 60+ separate civil services at central and state level through rationalization

– Encourage lateral entry at higher levels

– Bring down entry age in civil services

– Strengthen municipal cadres and outsource where possible

– Develop inclusive citizen-centric framework of governance

OTHER REFORMS

• Legal

– Create a repository of all existing central, state laws & rules

 – Repeal redundant laws

 – Reform criminal justice and procedural laws with focus on pre-institution mediation

– Prioritize court process automation and ICT enablement for electronic court and case management

 – Introduce an administrative cadre in the judicial system

OTHER REFORMS

• Police

– Implementing Model Police Act 2015

– Greater representation of women

– Continual education for police personnel

– Reform of FIR lodging mechanism (introduce e-FIRs)

 – Common nation-wide emergency number

 – Separate cadre for cyber crimes

E GOVERNANCE

• Offering services in faceless, paperless and cashless mode

• Providing connectivity and digital identity to all

• Targeting benefits through Aadhar-enabled DBT

• Simplifying forms/processes + Process re-engineering

• Use Artificial Intelligence for better implementation

• Promote usage of UMANG App + My Gov App

PM JAN AROGYA YOJANA

• 5 L insurance cover per family per year for secondary/tertiary care;

• States to pay 40% cost;

• Implementation through State/District Health Agency

• 1. 5 Lakh Health & Wellness Centres to provide primary care

• At least 1 Medical College for every 3 Parliamentary Constituencies

• At least 1 Government Medical College in each State of the country

• Subsumes: RSBY + Senior Citizen Health Insurance Scheme (SCHIS)

• Current status (as on 31st Jan 2019): – 6600 HWCs have been made functional – Nearly 10 Lakh beneficiaries received treatment worth Rs. 1000 Crore

NATIONAL HEALTH POLICY 2017

• Commitment to achieve Universal Health Coverage

• Increase govt. funding to 2.5% of GDP by 2025

• States should spend 8% of budget on health by 2020

– Currently it is around 5%

WAY FORWARD

• Put Primary Health Care First

– It can tackle up to 80% of health needs and reduce need for specialized health services

• Focus on Financial Protection and not Notional Coverage

 – In 2015-16: 25% pop. covered under health insurance

– With PMJAY, it is expected to touch 55% pop.

 – NITI Aayog => 75% by 2022

• States must take Lead and Innovate

– Develop sub-district level health system

– Separate public Health cadre

– Strengthen urban primary health services

ENABLING INITIATIVES | SKILLING

• NATIONAL SKILL DEVELOPMENT AGENCY (ADVICE & COORDINATION)

• NATIONAL SKILL DEVELOPMENT CORPORATION (INDUSTRY-LED)

– PRAVASI KAUSHAL VIKAS YOJANA

• PM KAUSHAL VIKAS YOJANA

– SKILL TRAINING TO 10 MILLION YOUTH BY 2020

– SHORT TERM TRAINING (150-300 HRS) TO DROPOUT / UNEMPLOYED

 – RECOGNITION OF PRIOR LEARNING AND BRIDGE COURSES IF NEEDED

– KAUSHAL AND ROZGAR MELAS EVERY SIX MONTHS

– PLACEMENT ASSISTANCE AND PROPER MONITORING

• DEENDAYAL ANTYODAYA YOJANA

ENABLING INITIATIVES | ENTREPRENEURSHIP SCHEMES

• START UP INDIA SCHEME

• STAND UP INDIA SCHEME – SC/ST and Women

• RURAL ENTREPRENEURSHIP:

– DDU SWANIYOJAN YOJANA – rural version of Startup India

– STARTUP VILLAGE ENTREPRENEURSHIP PROGRAMME (SVEP)

– RURAL SELF EMPLOYMENT TRAINING INSTITUTE (MORD)

 – INDIA BPO PROMOTION SCHEME (IBPS)

– DAIRY ENTREPRENEURSHIP DEVELOPMENT SCHEME (DEDS)

INTERVENTIONS

• For Education

• For Economic Development

• For Social Empowerment

• For Political Representation & Reservation in Employment

• Other Institutional Mechanisms

Refer => Yojana Analysis August 2018

WHAT’S NEW IN BUDGET 2019-20?

SNAPSHOT: BUDGETARY ALLOCATIONS

ENROLMENT PARAMETERS

INEQUALITY IN ACCESS TO EDUCATION (SCHOOLING YEARS)

BUDGET ANNOUNCEMENTS

• Education outlay increases by 10%

• Focus on tech-led reforms in higher & secondary edu

• Allocation of:

 – Rs. 0.3 L Cr to National Education Mission

• All schemes related to literacy / education improvement have been put under the umbrella of National Education Mission.

– Sakshar Bharat

- Literacy campaigns Adult Education & Skill Development

– Sarva Shiksha Abhiyan

– Rashtriya Madhyamik Shiskha Abhiyan (RMSA)

– Teachers Training

– Rs. 0.3 L Cr to school education (primary + secondary)

GOVERNANCE

• UN Declaration of the Child Rights (1959)

• UN Convention on the Rights of the Child (1989)

– First legally binding international instrument to incorporate full range of human rights of child

– India is the signatory of UNCRC (1992) and post that changed its law on juvenile justice

• National Commission for Protection of Child Rights (2007)

• Right to Education Act 2009

• NCPCR Guidelines for Eliminating Corporal Punishment in School 2010

• Protection of Children Against Sexual Offences Act 2012

• Global Strategy for Women's and Children's Health (2016-2030)

 

CONSTITUTIONAL RIGHTS

• Art 21A: Right to free and compulsory elementary education for all children b/w 6 to 14 age

• Art 24: Right to be protected from any hazardous employment till the age of 14 years

• Art 39(e): Right to be protected from being abused and forced by economic necessity to enter occupation unsuited to their age or strength

• Art 39(f): Right to equal opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and guaranteed protection of childhood and youth against exploitation and against moral and material abandonment

AREAS OF CONCERN

• Age-appropriate sex education in school and home

• Prevalence of Child labor and trafficking

• Malnutrition – Over & Under

• Regional Imbalances in Child Development

WAY FORWARD

• Each state should have their own plan for Child Health

• Providing credit to poor families to offset Child labor

• PRIs should be involved in effective implementation of RTE & Child Labor Prohibition law

• ~2 Lakh population in small pockets in RJ, MP & Delhi are in family prostitution (e.g. Bedia community)

• Special attention to differently-abled children

• Sex education deserves spotlight

QUANTITATIVE SITUATION

• World

– By 2050, 1 of every 5 persons will be 60+

• Currently, 1 of every 10 is 60+

• India

– Pop. (2018) = 100 million (> pop. of UK)

– Pop. (2050) = 324 million (> pop. of USA)

 

QUALITATIVE SITUATION

• Roots of traditional joint family system eroding:

– Rapid urbanization

– Higher aspirations among youth

– Increasing participation of women in workforce

• Increase in lifespan results in chronic functional disabilities leading to need for assistance

• Lack of special attention to diet, health related complexity not apprehended by the elders

WAY FORWARD

• Quality of Life Index for Elderly

– 4 pillars:

• Physical

• Intellectual

• Social connectedness

• Spiritual

– Ease of Living will be proportional to avenues available for the development of the four domains of life after 60