Minimum Support Prices (MSPs)
For Prelims: MSP- crops covered, how is it decided.
For Mains: MSP- need, significance, concerns and rectifying measures.
Context: Union Cabinet has announced a Minimum Support Price (MSP) of 14 Kharif crops.
About MSP: What is it?
In theory, an MSP is the minimum price set by the Government at which farmers can expect to sell their produce for the season. When market prices fall below the announced MSPs, procurement agencies step in to procure the crop and ‘support’ the prices.
Who announces?
The Cabinet Committee of Economic Affairs announces MSP for various crops at the beginning of each sowing season based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The CACP takes into account demand and supply, the cost of production and price trends in the market among other things when fixing MSPs.
Why is it important?
Price volatility makes life difficult for farmers. Though prices of agri commodities may soar while in short supply, during years of bumper production, prices of the very same commodities plummet. MSPs ensure that farmers get a minimum price for their produce in adverse markets. MSPs have also been used as a tool by the Government to incentivise farmers to grow crops that are in short supply.
Greying India must delay retirement
For prelims and main : GS II Social protection schemes GS III Indian Economy
In news
India may have to raise the retirement age as the country sees a rapid increase in the size of the elderly population over the next two decades due to the slowing down of the population growth rate, according to the Economic Survey 2018-19.
- It is forecast that the population rate will grow less than 1% from 2021 to 2031 and under 0.5% from 2031 to 2041.
- This is primarily due to the fall in the total fertility rate (TFR).
- TFR is projected to decline between 2021-2041 and fall below replacement level fertility at 1.8 as early as 2021.
Replacement level fertility rate
The total fertility rate of 2.1 is called the replacement level fertility below which populations begin to decline.
Replacement level fertility rate for India
- For India, the effective replacement level fertility is slightly higher than the normal benchmark due to the skewed gender ratio and is at 2.15-2.2.
- The current TFR in 14 out of the 22 major States is already below the effective replacement level fertility.
- At the State level, southern States as well as West Bengal, Punjab, Maharashtra and Himachal Pradesh have below replacement level fertility and will see TFR decline to 1.5-1.6 by 2021.
- By 2031, all States are likely to see below replacement level fertility.
Change in demography
- The working-age population is expected to see a large increase leading to India’s demographic dividend peaking around 2041, when the share of those in the age group of 20-59 is expected to hit 59%.
- The size of the elderly population, 60 years and above, is expected to nearly double from 8.6% in 2011 to 16% by 2041.
- The population size of those between 0-19 years, which is on the decline, is likely to drop from as high as 41% in 2011 to 25% by 2041.
New policy Challenges
- Provisions for health and old-age care
- Access to retirement-related financial services
- Public pension funding
- Retirement age, etc.
Suggestions
- Increasing the retirement age for both men and women going forward could be considered in line with the experience of other countries.
- It would also help increase female labour force participation in the older age-groups.
- Many countries such as the U.S., Germany and France have already raised the retirement age to reduce the burden on pension funding.
- Additional jobs will have to be created to keep pace with annual increase in working-age population of 9.7 million during 2021-31 and 4.2 million during 2031-41.
Surrogacy regulation bill
For prelims: key features of the bill.
For mains: need for regulation, concerns and issues associated with surrogacy.
Context: The Cabinet has approved the introduction of Surrogacy (Regulation) Bill, 2019 that aims to prohibit commercial surrogacy in India.
Key features of the bill:
- The Bill proposes to regulate surrogacy in India by establishing a National Surrogacy Board at the central level and state surrogacy boards and appropriate authorities in the state and Union Territories.
- The purpose of the Bill is to ensure effective regulation of surrogacy, prohibit commercial surrogacy, and allow ethical surrogacy.
- While commercial surrogacy will be prohibited, including sale and purchase of human embryos and gametes, ethical surrogacy for needy couples will be allowed on fulfilment of stipulated conditions.
- It will also prevent exploitation of surrogate mothers and children born through surrogacy.
- There will not be any financial implications, except for the meetings of the National and State Surrogacy Boards and appropriate authorities, which will be met out of the administrative budgets of respective departments.
Need for regulation:
India has emerged as a surrogacy hub for couples from other countries and there have been reports concerning unethical practices, exploitation of surrogate mothers, abandonment of children born out of surrogacy, and rackets involving intermediaries importing human embryos and gametes. The 228th report of the Law Commission of India has recommended prohibiting commercial surrogacy and allowing altruistic surrogacy by enacting suitable legislation.
What is an altruistic surrogacy arrangement?
The Bill includes contracting a ‘close relative’ as a surrogate by a heterosexual married couple who have been childless for five years of their marriage.
Mains Question: Analyse the ethical and economic implications of latest surrogacy bill.
What are Core Investment Companies (CICs)?
For prelims and mains: CICs- significance, challenges and their regulation.
Context:
The Reserve Bank has constituted a working group that will review the regulatory and supervisory framework for core investment companies.
The six-member working group is to be headed by Tapan Ray, non-executive chairman, Central Bank of India and former secretary, Ministry of Corporate Affairs.
The terms of reference of the working group include examination of the current regulatory framework for CICs in terms of adequacy, efficacy and effectiveness of every component thereof and suggest changes therein.
Background:
In August 2010, RBI had introduced a separate framework for the regulation of systemically important core investment companies (CICs), recognising the difference in the business model of a holding company relative to other non-banking financial companies.
What are Core Investment Companies (CICs)?
- CICs are non-banking financial companies with asset size of ₹100 crore and above which carry on the business of acquisition of shares and securities, subject to certain conditions.
- CICs, which are allowed to accept public funds, hold not less than 90% of their net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.
- Investments of CIC in the equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its net assets as mentioned in clause.
Exemption: CICs having asset size of below Rs 100 crore are exempted from registration and regulation from the RBI, except if they wish to make overseas investments in the financial sector.
What do the term public funds include? Is it the same as public deposits?
Public funds are not the same as public deposits. Public funds include public deposits, inter-corporate deposits, bank finance and all funds received whether directly or indirectly from outside sources such as funds raised by issue of Commercial Papers, debentures etc. However, even though public funds include public deposits in the general course, it may be noted that CICs/CICs-ND-SI cannot accept public deposits.
Need:
This Concept was originated in order to safeguard NBFCs which are formed for group investments from stringent RBI procedures.
Sources: the Hindu.
India could host ‘Detroit’ of EVs
ForPrelims and mains : GS III Indian Economy
In news
According to economic survey, with the right policies, it’s possible that one of India’s cities could become the ‘Detroit of electric vehicles’.
National Electric Mobility Mission Plan 2020 (NEMMP) and FAME
- India has a “National Electric Mobility Mission Plan 2020 (NEMMP)” in place to “achieve sales” of 60-70 lakh units of electric vehicles (that includes buses, two-wheelers and cars) by 2020.
- In 2015, the Faster Adoption and Manufacturing of Electric vehicles (FAME) scheme was launched to fast-track the goals of NEMMP.
- FAME India Phase II, with an emphasis on electrification of public transport, was also launched from April 1, 2019.
Global scenario
- Globally, the sales of electric cars have grown from just over 2,000 units sold in 2008 to over 10 lakh in 2017.
- The market share of electric cars is around 2% in China while it is around 39% in Norway.
In India
- Electric two wheelers have been the major part of EV sales with sales of around 54,800 in 2018.
- Indian market share in electric cars is only 0.06%.
- Uttar Pradesh topped the list of the States with highest EV sales of 6,878 units in 2017-18.
Renewable energy in India
- India’s adoption of electric vehicles was part of its larger thrust towards increasing the share of renewable energy and reducing carbon dioxide emissions.
- The share of renewables (excluding hydro above 25 MW) in total power generation was around 10% in 2018-19 compared with around 6% in 2014-15.
- India stands fourth in wind power, fifth in solar power and fifth in renewable power installed capacity.