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07 July 2016 K2_CATEGORY IAS Blog
  • After 68 years of independence, country is still suffering from poverty and disparities, though state resources are continuously utilised in the name of poverty alleviation. Huge amount is spent on key subsidies by the government.
  • But, it is widely accepted that India’s welfare system is pervaded with leakages. Rampant corruption diverted the benefits intended for the poor to the pockets of middlemen and corrupt officials.
  • JAM trinity is an attempt to increase effective use of available technology.
  • What is JAM Trinity?
    • JAM Trinity refers to-
    • J- Jan Dhan Yojana bank account (PMJDY).
    • A- Aadhar, a unique number to identify everybody with biometric details.
    • M- Mobile phone number.
  • Any customers applying for a bank account under the Pradhan Mantri Jan Dhan Yojana should provide Aadhaar number as identity proof. The applicant has to produce his mobile number for the Aadhaar enrolment in the account. This is the way of linking Trinity. Once the linking is complete, the customer will be identified by Aadhaar number.
  • What role can JAM trinity play?
    • JAM Trinity can effectively cut the leakages by enabling better delivery of direct benefit transfer (DBT).
    • JAM will lead to Unique Identification of beneficiaries thus eliminating fake beneficiaries.
    • JAM will also lead to financial inclusion of people living in villages and in backward areas.
    • JAM trinity is creating an atmosphere for enabling DBT and will also help in direct delivery of various government schemes like scholarship for students, Janani Suraksha Yojana, old age pension etc.
    • The strong link is that country’s 70% of population uses mobile phone. Lack of full reach of Aadhar registration and lack of total financial inclusion are weak links of the trinity but situation has improved substantially on these two count as well.
  • Technological innovations and possibilities of cash transfer
    • New innovations in Information and Communication Technology have brought the opportunities for direct cash transfer to help the poor. As per recent experiments leakages can be curtailed by reducing involvement many department in the distribution process.
    • A recent study evidence that MGNREGA and social security payment were paid on an average 10 days faster with new Aadhar link bank accounts through direct benefit transfer system and leakages minimised by 10.8 %.
  • Magnitude of distortion in price subsidies
    • Government provide adequate subsidies in railways services. Passenger tariff on train artificially kept low.
    • These controlled rail prices actually provide more benefits to the rich and the poor. Deliberate low passenger tariffs have affected Railway finances and it has been unable to generate resources for capacity expansion to the growing need of population. To maintain the balance, railways tries to cross subsidise passenger fare by raising the freight tariffs. This has resulted in diversion of freight traffic to road Transport. Consequently this has caused more emission, pollution, traffic congestion and accidents.
    • In case of liquefied petroleum gas that touching fact is that among the all LPG users, the poorest 50% of household consume only 25% of LPG. The net welfare gain from LPG subsidy for Poor household is less than rupees 10 where the LPG welfare gain to rich household is close to rupees 80.
    • As per estimate only 46% of total consumption of the subsidized kerosene is by households living Below Poverty Line. 51% of subsidised kerosene is consumed by non poor and almost 15% of subsidised kerosene is actually consumed by the relatively better off, the richest 40%.
    • The purpose of subsidizing fertilizers is to incentivize farmers for cultivation of high yielding varieties of crops. But in true sense it benefits of fertilizer manufacturers and rich farmers. Again manufacturers avail the benefits of freight subsidy for transit.
    • It is estimated that a large fraction of price subsidies allocated to water utilities up to 85% are spent on subsidizing private taps when 60% of poor household get their water from public taps.
    • Price subsidies distort markets in multiple dimensions that ultimately hurt the poor. For wheat and rice the government provides subsidy to both producer and consumer. Wheat and rice are procured from the farmers at guaranteed minimum support price. High MSP encourages MSP supported crops and discourages cultivation of other crops. This brings a supply-demand mismatch of non MSP supported crop and raises their price and volatility in the market. This ultimately hurts the poor household who tend to have uncertain income stream. High MSP coupled with water and electricity subsidies lead to conservation of water intensive crops by rich farmers that cause depletion of groundwater table.
  • The JAM Solution :
    • Above distortions in subsidy distribution can be easily solved by JAM approach. Seeding Aadhaar number into the bank account is the key for implementation of the program. This will definitely help in plugging leakages and better resource distribution to the poor.

Bottleneck to JAM and possible solutions

  • PMJDY aims to extend the banking services to the unbanked population in the country for upliftment of the under-privileged. The critical areas for the sustenance of this plan are proper remuneration for agents, penetration of bank accounts for transaction readiness etc.
  • Aadhaar has got statutory status in the budget session of the Parliament but the debate is still going on related to privacy issues.
  • Reliable mobile and data connectivity in the remote rural areas may not be available to effectively deliver DBT benefits directly to the people.
  • JAM trinity’s real challenge is with non-cash benefits such as subsidies on food, kerosene, LPG etc. Converting these subsidies into cash equivalent and paying it directly into the bank account is a challenging issue. Quantification of cash equivalent must be carried out in a realistic way.
  • The method of settings income criteria for identify the potential beneficiaries and then transferring the cash equivalent through the JAM trinity is very cumbersome.
  • At present success of the welfare scheme is directly proportional to degree of abuse by middleman and higher income group. But the success of JAM trinity depends on penetration of Information and Communication Technology.
  • Setting up of service quality benchmarks for Digital Financial Transactions and their constant monitoring is essential to build trust in this new system.
  • Spreading financial literacy with involvement of civil society, opening more branches and improving bank infrastructure are major challenges.
  • People have to be better educated so that they can better manage their accounts and also safeguard themselves from various fraudulent activities.
  • Telecommunication companies are reluctant to invest in remote areas because of low profit. Government can give active support for infrastructure development there.
  • Farmers saying high upfront costs of fertilizer and then waiting for subsidy through banks account, may be adversely affected. So a mechanism needs to be advised for this.
  • Strict monitoring of subsidy route. Any suspicious activity should be thoroughly investigated by Vigilance agencies.
  • Banking corresponding agents can be used to educate farmers not to fall into trap of moneylenders.
  • There is need for infrastructure like cellular towers, cheap mobile plans, electricity etc.
  • Government should see to it that various schemes like Smart city, Skill India, Digital India and Make in India integrated with JAM and DBT so that less leakage and productive results are achieved at a faster pace.


If the JAM trinity can be seamlessly linked, and all subsidies are routed through bank account, the real progress in terms of direct income support to the poor may finally be possible. The critical areas that need to be taken care of to make JAM and DBT effective are:

  • Adequate and timely disbursement of transaction processing charges to the banks and agent.
  • Pacifying the debate around privacy related issues of Aadhar.
  • Setting up and monitoring of service quality by the Finance ministry, TRAI, NCPI and UIDAI.

If these measures are taken, then twin problem of rationalising the subsidies and at the same time protecting the poor can be solved effectively.

Question: JAM trinity is an attempt to increase effectiveness of welfare measures by making effective use of available technology. Elucidate. Also discuss the challenges to JAM and solutions.

07 July 2016 K2_CATEGORY IAS Blog

For India, the SCO has been about increasing its political, economic and security stakes in Central Asia. Pursuing the goal of multi-polarity apart, are there direct potential gains for India? Discuss.

Suggested answer:

  • The membership of SCO would be “a natural extension of India’s ties with member countries.”
  • SCO could offer India with some unique opportunities to get constructively engaged with Eurasia to address shared security concerns, especially for combating terrorism and containing threats posed by ISIS and the Taliban.
  • India could benefit from stepping up cooperation especially by tapping into the existing SCO processes such as the Regional Anti-Terrorist Structure (RATS) that shares key information and intelligence on movements of terrorists and drug-trafficking.
  • Direct stakes are also in gaining information such as on drug-trafficking control, cyber security threats, public information, mass media, educational, environmental, disaster management and water related issues of Eurasia that we know little about.
  • SCO could also change the way for TAPI to see the light at the end of the tunnel, the viability of which has been threatened so far by a host of reasons.
  • Further, India would be able to seek mutually beneficial partnerships with SCO members in human capacity building, technology, education, health and policy convergence in regional trade and financial institutions.
  • India could bring to the SCO its techno-economic expertise, markets and financial commitment.
  • India should certainly join SCO with a fresh mind without any ambiguity. But at the same time, India should be mindful of the geopolitical calculations
07 July 2016 K2_CATEGORY IAS Blog

The article focus on the challenges to be faced by government in doubling farmer’s income by 2022 and the measures to be followed.

  • The government is desiring and working towards doubling the farmer’s income by 2022. Several measures have been announced in Budget FY17 and by the ministry of agriculture and farmers’ welfare.
  • During the run up to the Green Revolution and thereafter, the emphasis was always on production and productivity. Enhancing farmers’ income was not in focus per se.
  • Our policies were usually farm-centric and not farmer-centric.
  • This is one of the reasons why there is farmers’ distress despite the fact our country has achieved commendable position in food production.
  • But we still need to make efforts for achieving the coveted position in productivity in these commodities. The finance minister, in his Budget speech, emphasised that “we need to think beyond food security and give back to our farmers a sense of income security.”
  • Historically, there is little evidence that this idea was attempted or even articulated, but in the recent past several states have clearly demonstrated that this is achievable.
  • For achieving this objective, we will have to devise micro-level action plans to augment farmers’ income from all sources and not just from crop cultivation.
  • We must also take into cognisance that rural demand drives our economy and exports are declining in recent years.
  • Farmers’ income can be improved
    • If/when productivity goes up,
    • If/when the cost of production comes down,
    • If/when we ensure agricultural commodities produced get a remunerative price through a transparent price discovery mechanism.
    • Improved income from allied activities to agriculture and non-farm sector or even wage employment during the agricultural off season.
  • The strategy must integrate them all. All relating agencies must come together and work in harmony.
  • Considering that substantial yield gaps exist in major crops and across all regions, we have to leverage technology, adopt precision farming and ensure that farmers get correct and timely crop advisory and market information.
  • To simplify, every variety of a crop has a genetic yield potential which can be achieved if a proper agronomic package is adopted.
  • There are several ideas being tried to put agricultural extension on digital medium, but a well-coordinated approach harmonising the efforts of traditional institutions is the need of the hour.
  • Likewise, irrigation efficiency too has to be addressed. The focus should be on “more crop per drop
  • The challenges and the way forward:
    • The challenge of climate change is real and there is a crying need to develop a climate-resilient agriculture.
    • Cost saving is big issue where the approach should involves developing localised solutions as no universal solution works. Information dissemination must be done using digital technology for extensive outreach.
    • Land laws require changes to formalise land leasing practice, in the absence of which term investments are not made by the tillers to enhance production and productivity.
    • Infrastructure creation in connectivity, irrigation, marketing, storage, communication, small farm equipment, etc, is also important for reducing cost of production and improving efficiency.
    • Information technology can contribute enormously in this endeavour by ushering in efficiency of agricultural markets, better price discovery and, above all, transparency.
    • Banks have to finance these measures too. Suitable skill building and enterprise development in the farm and off-farm sector warrants attention.
    • It is an opportune time to move beyond income generation from farms and focus on reducing post-harvest losses, explore opportunities in allied sector, food processing both at local and regional levels, and off farm income complementarities.
    • Doubling farmers’ income needs funds at institutional level as well as at enterprise level, for which a robust institutional credit flow mechanism is a must.
    • We have to create a healthy credit environment by enhancing access to credit through technology in an equitable manner.
    • Our resource-scarce farming community such as small and marginal farmers, tenant farmers, share croppers, etc, and farmers in east, centre and northeast regions deserve special attention.

Question:we will have to devise micro-level action plans to augment farmers’ income from all sources and not just from crop cultivation. Why we have not been able to increase farmers income as yet. What policy measures can be taken to correct this situation.

Suggested approach:

  • Reasons for low farmer income.
  • Challenges to be faces.
  • Policy measures to correct the situation.


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07 July 2016 K2_CATEGORY IAS Blog

National Rural Health Mission

    • It is for all towns and villages with a population below 50,000
    • Aims to provide Reproductive, Maternal, Newborn, Child Health and Adolescent (RMNCH+A) services
    • It includes interventions in the following areas
      • Maternal health
      • New born and Child Health
      • Adolescent health
      • Universal immunization
      • Family Planning
      • Addressing declining sex ratios
      • Addressing gender based violence
      • Access to safe abortion service, prevention and management of reproductive tract infections and sexually transmitted infections
  • Key features/initiatives under NRHM

Accredited Social Health Activists (ASHAs), Auxillary Nurse Midwives (ANMs) , Aanganwadi Workers (AWW)

  • Accredited Social Health Activists (ASHAs) are trained community health activists. They are trained to work as an interface between the community and public health system. The ASHA is to be a fountainhead of community health programmes in her village. She is to promote institutional delivery, universal immunization, sanitation, ante- natal and post-natal checkups etc.
  • Auxillary Nurse Midwives (ANMs) are like resource persons for ASHAs. They hold weekly/fortnightly meetings with ASHAs and provide them with on-job training
  • Aanganwadi Workers (AWWs) guides ASHAs in performing various activities. AWWs are also depot holders for drugs etc and issue them to ASHAs

Janani Suraksha Yojana

  • It is an intervention towards preventing maternal and neo-natal mortality by promoting institutional delivery
  • Eligible women are given cash assistance and post-delivery care.
  • Performance based incentives to ASHAs etc are also given for promoting institutional delivery

Janani Shishu Suraksha Karyakram

  • It is meant to supplement the cash entitlements given under Janani Suraksha Yojana. It aims to eliminate out of pocket expenses incurred by pregnant women and sick neonates.
  • Entitlements include free drugs and consumables, diet upto 3 days during normal delivery and upto 7 days in C-section, free diagnostics, free transport from home to institution. These ensure that deliveries are “zero-expense deliveries”.
  • Infants are also entitled to free treatment at public health institutions till 30 days of birth.

Rashtriya Bal SwasthyaKaryakram

  • It aims at early detection and management of the 4Ds prevalent in children from age 0-18 years-
    • Defects at Birth
    • Diseases in children
    • Deficiency Conditions
    • Developmental Delays including disabilities
  • Includes community based newborn screening by ASHAs (0-6 weeks) for birth defect and screening by mobile health teams (consists of 2 doctors, ANM and one pharmacist) from 6 weeks to 18 years.
  • Children diagnosed with illnesses receive treatment including tertiary level care.

Flexible Pool for control of communicable diseases

  • Was created to combine and integrate all the ongoing schemes related to communicable diseases.
  • These include National Vector Borne Diseases control programme, Revised National Tuberculosis programme, National leprosy control programme, Integrated Disease Surveillance Programme.

Flexible pool for non-communicable diseases

  • Aimed to combine and integrate all the ongoing schemes related to non-communicable diseases
  • These include National programme for prevention and control of cancer, diabetes, cardiovascular diseases and stroke, national mental health programme, National tobacco Control Programme, National programme for healthcare of the Elderly etc.