1 – Old Pension Scheme:

GS II Topic Government Policies and Interventions

Context:

Certain Central government employees who applied for posts posted before December 22, 2003, the day the National Pension System (NPS) was notified but joined the service in 2004, the year the NPS went into effect, were given a one-time opportunity to move to the Old Pension Plan by the government (OPS).

About:

Lifetime post-retirement income is ensured by the plan.

In accordance with the prior scheme, employees were given a pension that was equal to 50% of their final paycheck. Also, they gain from the Dearness Relief’s biannual adjustment (DR). The remuneration was predetermined, and there was no salary deduction. Moreover, the OPS included a provision for the National Provident Fund (GPF).

Only employees of the Indian government have access to GPF. Basically, it allows all government employees to contribute a percentage of their income to the GPF. The full sum that has accrued during the employee’s employment is paid to them at the time of retirement.

The government pays the pension’s expenses. In 2004, the programme was discontinued.

Concerns:

The main problem was that the pension debt was still unfunded, which meant that no corpus had been established specifically for pensions that would increase over time and be available for payments.

The Indian government provided money for pensions in its annual budget, but there was no clear plan for how those payments would be made in the future.

The OPS was unsustainable as well. To begin with, pension liabilities would increase as seniors’ benefits such as current employee salaries or pensioners who benefited from indexation, or so-called “dearness relief,” increased annually.

Also, due to an increase in longevity, better medical facilities would result in longer payouts.

This has resulted in a large pension load for the Union and state governments.

What Efforts Were Undertaken to Address Important Issues?

The Union Ministry of Social Justice and Empowerment requested a report on the Old Age Social and Income Security (OASIS) initiative in 1998. An expert group submitted the report in January 2000.

The primary target of OASIS was the unorganised sector workers who lacked retirement income security.

Investors should think about three main fund categories: increasing, balanced, and safe, per the OASIS research. Six various fund managers will present these funds.

The balance would be invested in corporate or governmental bonds. Everyone would have their own retirement account and be required to make at least Rs. 500 in yearly contributions.

After retirement, at least Rs 2 lakh would be withdrawn out of the retirement account to purchase an annuity.

An annuity provider invests the money throughout the course of the person’s life and provides a set monthly income (Rs 1,500 at the time the report was written).

What was the origin of the New Pension Scheme?

The OASIS study served as the foundation for the New Pension Plan, which was unveiled in December 2003.

The National Pension System (NPS) was adopted by the Central Government in January 2004. (except for armed forces).

To assist central government employees who are covered by the programme and to streamline and strengthen it, the Union Cabinet approved changes to the NPS for 2018–19.

The NPS was established by the government as a means of escaping its pension obligations.

The early 2000s research that suggested India’s pension debt was out of control were highlighted in a news item.

In reaction to the creation of NPS, the Central Civil Services (Pension) Rules, 1972 were modified.

In order to receive a regular income after retirement, people can use some of their pension funds as a lump sum withdrawal and the remaining funds to buy an annuity.

NPS implementation is overseen and carried out by the country’s PFRDA (Pension Fund Regulatory and Development Authority).

Official ownership of all NPS assets is held by the PFRDA-created National Pension System Trust (NPST).

Features:

Any Indian citizens (including NRIs) between the ages of 18 and 70 are eligible to enrol in the NPS under its All-Citizens Model.

As part of a participation programme, employees make payroll deductions for their pension corpus, and the government matches those deductions. The funds are then invested in the designated investment plans by Pension Fund Managers.

The 10% of base pay that government employees who take part in this NPS contribute, as well as up to 14% from their employers.

As of 2019, Central government employees have the option of Investment Pattern and Pension Funds (PFs), according to the Finance Ministry.

60% of the corpus can be withdrawn tax-free after retirement, whereas 40% is invested in annuities, which is taxed.

The programme is open to everyone, including private individuals.

NPS issues: Unlike the OPS, the NPS requires employees to contribute 10% of their basic income and the dearness allowance.

There is no GPF benefit and the pension amount is not fixed.

The primary shortcomings of the plan are its return-based structure and market linkage. The reward is uncertain, to put it simply.

2 – Service Sector in India:

GS III Topic Indian Economy

Context:

According to a monthly survey released on Friday, the Indian services industry grew at its fastest rate in 12 years in February, helped by favourable demand conditions and new business gains.

Its highest level in 12 years, the seasonally adjusted S&P Global India Services PMI Business Activity Index increased from 57.2 in January to 59.4 in February.

Introduction:

In terms of GDP, the services sector dominates the Indian economy the most. Also, it has drawn a lot of international investment and contributes significantly to India’s exports. Also, it employs about 30% of the labour force in India. A wide range of activities are included in the services sector in India, including trade, lodging and dining, transportation, storage, and communication, financing, insurance, real estate, business services, community, social, and personal services, as well as services related to construction. In order to reach the targets of a US$ 5 trillion economy in the medium term and a developed economy status in the long term, the services sector is positioned to play a critical role.

What role does the services sector have in India’s economy?

Contribution to GVA: In FY21–22, India’s services sector, which continues to be the country’s main source of economic growth, provided 53% of the country’s Gross Value Added (GVA) at current exchange rates.

In the first half of 2021–22, the Services Sector as a whole increased by 10.8% Year on Year (YoY).

In 2021–22, the GVA of the entire services sector is projected to increase by 8.2%.

Contribution to Exports: India’s market share for services exports increased from 3% in 2010 to 3.5% in 2019 and 4% in 2020 and 2021, according to the WTO. The net export of services increased by about 25% in 2021–2022 notwithstanding COVID–19’s effects. The government has set a goal of US$350 billion in services exports in FY2022-23, which is 37% more than US$255 billion in exports in 2021–2022.

Beneficial for FDI inflows: From April 2000 and March 2022, the Services Sector in India received the most FDI inflows totaling US$ 94.19 billion. According to data given by the Directorate for Promotion of Industry and Internal Trade, the services category ranked first in FDI inflow (DPIIT).

Contribution to Start-ups and Patents: Over the past six years, start-ups in India have increased significantly, with the services sector accounting for the majority of these. By January 2022, India has acknowledged more than 61,400 start-ups.

What are India’s services sector’s prospects for the future?

Future industries are anticipated to help India’s services sector expand quickly: In India, the digital economy is predicted to reach US$ 1 trillion by 2025, the healthcare sector is predicted to reach US$ 372 billion by that year, the IT and business services sector is predicted to reach US$ 14.3 billion by the end of 2023 with an 8% growth rate, and artificial intelligence (AI) is predicted to increase India’s annual growth rate by 1.3% by 2035, according to a discussion paper by Niti Aayog.

A common national market has been established and the overall tax burden on goods has decreased as a result of the Goods and Services Tax (GST) adoption. Long-term expenses are anticipated to be lower due to the availability of the GST input credit, which will lead to lower service pricing. By 2030, it is anticipated that India’s software services sector would be worth $1 trillion.

What elements have fueled India’s rise in the services sector?

Demand growth: The service industry flourished as corporations outsourced their communication, advertising, computer support, and banking operations to India from abroad, particularly from industrialised nations. The service sector expanded rapidly as a result of this high demand. Demand for services increased as the population of the country grew. With an increase in population, there is a greater need for fundamental services including hospitals, schools, post offices, telegraphs, police stations, courts, transportation, and banking.

Technology and Structural Changes: There have been a number of technological and structural changes to the Indian economy. Changes in economic dependency from primary to tertiary industries are included. The outsourcing landscape has changed as a result of technological improvements, fueling the growth of the service sector. The primary and secondary industries also saw expansion thanks to technology. The need for services like transportation, storage, and trade has grown as a result of the development in the agricultural and industrial sectors.

Economic Reforms in 1991: The reforms of the 1990s have been associated with the expansion of India’s service industry. The service industry began to expand in the middle of the 1980s, but expansion picked up speed in the wake of the 1991 economic reforms. Privatization, the abolition of FDI restrictions, and the simplification of approval processes are only a few of the effects of service sector reforms. Demand evolved from necessary to discretionary consumption as a result of economic expansion and rising per capita income, which fueled the expansion of services. The sector’s expansion has been facilitated by the demand for services at high income levels being elastic. The demand for services like tourism, retail, catering, and elite education increased along with the rise in average income.

Attractive ecosystem: The government’s decision to introduce “Start-up India” intends to build an open ecosystem for businesspeople and encourage innovation. Services play a significant role in this system. The potential for the sector in India has expanded due to the technological infrastructure needed for such an ecosystem. This industry appeals as a location for investment because to its low setup costs. India also has a fair amount of financial market development.

Skilled Manpower: India has become a centre for global outsourcing because to a sizable pool of competent IT workers. It currently controls a 55% portion of the world market for sourcing.

Increased Productivity: The growth of the service industry is also influenced by a rise in labour productivity. Better technologies and increased labour productivity have increased manufacturing and agricultural output while requiring fewer labour.

Global Technology Hub: With 75% of the world’s digital talent present, India is the world’s hub for digital capabilities. The Ministry of Electronics and Information Technology is seeking to increase the digital economy’s contribution to GDP to 20% during the following five years. The government is constructing cloud-based infrastructure for cooperative networks that may be used by entrepreneurs and startups to develop creative solutions. India has submitted over 4000 patents for artificial intelligence (Al) over the last five years (until July 2021).

What difficulties does India’s services sector face?

Lack of Government Incentives: According to many experts, the government has not given incentives to the services sector in the same way that it has to the manufacturing sector. For instance, in 2018–19, the MEIS (Merchandise Exports Incentive Scheme), an export promotion programme for manufacturing, helped merchandise exporters to the tune of over INR 40,000 crore. The SEIS (Services Exports Incentive Scheme) equivalent reward for service exporters was INR 4,000 (10% of merchandise exporters).

Similar to this, the government offers rewards like tax breaks for new manufacturing enterprises. Similar incentives are not present when establishing infrastructure for service industries like tourism, hotels, hospitals, and colleges, among others. PLI programmes are lacking in the services industry.

Trade Restrictions: Foreign countries’ restrictions on the migration of service professionals, domestic certification requirements for foreign service providers, taxes on Indian service firms’ offshore income, etc., hinder the services sector. The services sector in India’s export potential is constrained by these limitations. In a similar vein, India fares poorly on the OECD’s Services Trade Restrictiveness Index (STRI), with only Thailand and Indonesia being more restrictive than India out of the 50 sample nations.

Although there is a sizable pool of qualified professionals, it is insufficient to support the sector’s expansion. Experts in the field bemoan the fact that many graduates lack employable skills and that significant effort is needed to train them.

Infrastructure: Services industries like tourism and hospitality are constrained in their potential by a lack of infrastructure (such as transportation, connectivity, and communication).

Finance: Many small service companies struggle to find reasonable financing to expand their operations. Lack of funding prevents people from upgrading their skills, upgrading systems and processes, which affects their competitiveness.

How can the problems be solved?

First, the government must make organised policy interventions in India’s services sector. Similar to Made in India, the government should start a “Services from India” initiative. To encourage a rise in service exports, the government should take into account increased tax advantages and a PLI-like plan for the services sector.

Second, in trade discussions, services need to be given more weight. The goal of India’s FTAs has been to promote commerce in goods. The India-Australia ECTA has a number of steps to help India’s service exports even if the trend is changing (like mutual recognition of professional services, avoiding double taxation on offshore income of Indian service firms in Australia etc.). The future FTAs with India should make sure of this.

Finally, India should promote the creation of international data governance norms. Outsourcing of consultation services will be greatly aided by the removal of data and privacy obstacles. The Indian services industry stands to gain the most.

Fourth, the IT sector makes up about 55% of the entire services sector. The government needs to develop a thorough plan for further diversifying the services industry. For continued expansion, sub-sectors including healthcare, tourism (particularly medical tourism), banking and financial services, and telecommunications must be supported.

Conclusion:

India’s largest and fastest growing industry is the service sector. It now boasts the highest labour productivity and is predicted to grow quickly in the coming years. India has a higher share of services in global trade than the typical country. The service industry will be able to contribute to inclusive growth through boosting investment, fostering the development of human resources and workforce, and enhancing infrastructure. A rising nation like India, which has a sizable, youthful population, must prioritise the creation of high-quality jobs and moving up the value chain. To increase the contribution of the services sector in India, the government must provide a stable and transparent policy environment and offer incentives similar to those offered to the manufacturing sector.

3 – QUAD:

GS II Topic International Relations

Context:

India joined other nations in calling for a “just and lasting peace in Ukraine” and respect for a rules-based order in the South and East China Seas in the inaugural Quad proclamation, which is seen as criticising both Russia and China.

Quad:

The Quadrilateral Security Dialogue (Quad) involving India, the United States, Japan, and Australia aims to ensure and maintain a “free, open, and prosperous” Indo-Pacific region.

The idea of Quad was first put up by Japanese Prime Minister Shinzo Abe in 2007. However, the idea was unable to move forward when Australia withdrew, purportedly as a result of Chinese pressure.

Shinzo Abe once more put up the notion of Asia’s “Democratic Security Diamond,” with involvement from Australia, India, Japan, and the US, in order to safeguard the marine commons from the Indian Ocean to the western Pacific.

In November 2017, India, the US, Australia, and Japan (primarily China) created the long-awaited “Quad” Coalition to develop a new strategy to protect the independence of the vital sea routes in the Indo-Pacific (especially China).

The Four Powers and China:

USA: To stop China’s growing influence in East Asia, the USA had a plan in place. So, the USA sees the coalition as a chance to recover its power in the Indo-Pacific area.

The US has referred to China and Russia as strategic foes in its National Security Policy, National Defense Strategy, and the Pentagon’s report on the Indo-Pacific Strategy.

Australia: Australia is concerned about China’s growing influence over its infrastructure, politics, and educational institutions.

In light of its disproportionate economic dependence on China for development, Australia has maintained its commitment to a Comprehensive Strategic Partnership with China.

Japan: Throughout the past ten years, Japan has expressed its displeasure with China’s territorial incursion in the region.

The economy of Japan continues to be largely dependent on trade with China; since the beginning of 2017, net exports have precisely contributed one-third of Japan’s economic growth.

As a result, Japan is balancing its territorial concerns with China with its economic duties.

Japan has also pledged to taking part in infrastructure projects in other nations as part of the Belt and Road Initiative. By doing this, Japan might strengthen its ties with China while lessening its influence there.

India is in a challenging strategic position as a result of China’s violations of international law, particularly the building of military installations on reclaimed islands in the South China Sea, as well as its expanding economic and military strength.

Given the strategic significance of China, India is carefully balancing China and the US by supporting China’s strategic autonomy, which has historically given China comfort.

Notwithstanding China’s concerns about the drill, India has also refused to allow Australia to take part in the Malabar Trilateral Maritime exercises between India, the US, and Japan.

The recent summit between Prime Minister Modi and President Xi Jinping in Mamallapuram resulted in fruitful developments, and both leaders view it as essential to providing stakeholders on both sides of the border with strategic direction.

Challenges:

China’s territorial claims: According to China, it has long controlled nearly the entire South China Sea region, giving it the right to create islands. However, the case was dismissed by the International Court of Arbitration in 2016.

Connection between ASEAN and China: China and the ASEAN nations are strong allies. China’s growing sway over ASEAN countries is seen in the recently formed Regional Cooperation Economic Partnership (RCEP).

Economic Might of China: The Quad states cannot afford to have unpleasant relations with China given China’s economic influence and the reliance on it by countries like Japan and Australia.

Convergence of the Quad Nations: Each country in the Quad alliance strives for a certain equilibrium of interests. As a result, the Quad Nation’s overall vision is disjointed.

How to Continue:

For the Quad, a more thorough self-image will be required. Impulsivity needs to be restrained by the Quad members. Also, it’s critical to maintain openness and make sure the phrase “Free and Open Indo-Pacific” is more than simply a catchphrase.

Yet, countries like Australia, Japan, and India may set the standard for infrastructural development, while the US must also adopt a more proactive approach to promote the idea of connectedness.

The Quad should concentrate on establishing a strong framework for regional discourse and working with ASEAN countries on matters of regional significance.

India obtains geopolitical credibility and an unique chance to actively shape a regional security architecture with implications for the entire world by entering the Quad framework.

4 – Cheetah Reintroduction in India:

GS III Topic Environmental Conservation

Context:

There are currently 20 cheetahs living in the Kuno National Park (KNP) in Madhya Pradesh, but there isn’t enough food for them all to survive. According to Yadvendradev Jhala, a wildlife biologist who was instrumental in India’s cheetah restoration programme, the Rajasthan government had offered to house some animals in the tiny but well-equipped Mukundra Tiger reserve, but “political considerations” prevented this from occurring.

What led India to decide to bring the cheetah back into existence?

The biological goals include helping to conserve the cheetah species worldwide and restoring the cheetah’s ecosystem function role in representative parts of its previous habitat.

With the reintroduction of the cheetah, India will be the only nation to have all five species of great cats, including the tiger, lion, leopard, snow leopard, and cheetah.

Improving Options for a Living: By increasing money from ecotourism and related activities, cheetah reintroduction will improve living conditions for the inhabitants in and around the areas where the species is expected to be brought.

Top predators are viewed as the food chain’s umbrella species because they have control over every level of the food chain, which aids in its maintenance.

For raising funds to balance the food web and open forest habitats, the charismatic cheetah can act as a flagship and umbrella species.

Climate Change Mitigation: India will be better able to trap carbon and support international efforts to prevent climate change by rebuilding ecosystems in cheetah protection zones.

What Factors Led to the India Cheetahs’ Loss?

There is historical evidence of Indian cheetahs from before the Common Period. Cheetah catches are documented as far back as the 1550s.

One of the main causes of extinction was the reduced levels of genetic variation brought on by a prior genetic bottleneck, which led to high infant mortality in the wild and a reduced capacity for reproduction in captivity.

After a lengthy time of sport hunting, cheetahs (both male and female) are frequently and widely taken in the wild.

In the 16th century, the Mughals and other Deccan kings began meticulously recording its interactions with people.

Killings for reward: In 1871, the British made things worse for the animal by offering a reward for the extinction of the species.

The latter phases of extinction took place under British colonial control.

The last cheetahs were reportedly shot in India in 1947, and the species was subsequently declared extinct in 1952.

What Problems Are Included in the Cheetah Translocation in India?

The ability of a cheetah to hunt on its own in the wild after being housed in a cage and fed game is a crucial concern.

For instance, Sundari the tigress was eventually imprisoned in Bhopal Zoo for the rest of her life following an unsuccessful attempt to relocate her to Satkosia in Odisha.

Adaptability: Due to their small size and the climatic and ecological contrasts between their new environment and their native one, reintroduced species are more susceptible to the effects of drift, selection, and gene flow evolutionary processes.

For movement, African cheetahs require large, open areas. Due to the fact that Indian parks are typically much smaller than those in Africa, there are fewer opportunities for such unrestricted wandering there.

Male cheetahs mate when females pass through their small areas, which causes breeding problems, according to research conducted in Africa. On the other hand, female cheetahs go far and by themselves.

There is no precedent to suggest that cheetahs, lions, tigers, and leopards could ever coexist peacefully as it has never happened anywhere.

Similar concerns exist for Kuno due to studies showing that cheetahs have been killed by leopards in Africa as prey. At the core area of Kuno, where the cheetahs will be housed, there are about 50 leopards.

worries about recovery Relocating a number of settlements will be necessary to effectively protect the cheetah habitat, which will undoubtedly have an effect on the locals and generate disruption and migration.

What Other Reintroduction Plans Are There That You Are Aware Of?

The 2018 Bisalpur Rewilding Project Over 150 of the critically endangered Indian antelope were brought back as part of the effort, along with a wide range of other animals and plants from the Jodhpur region.

Indian bison, or gaur: The relocation of 19 gaur in Bandhavgarh National Park in Madhya Pradesh was spearheaded by a safari company with roots in Africa.

The gaur herd increased to roughly 70 animals in ten years.

American bison: In the 1890s, there were only 750 American bison left in the wild because of obsessive hunting and slaughter for the fur trade.

The population has increased to about 350,000 as a result of population management, reintroduction strategies, and conservation initiatives.

White Wolves: Yellowstone’s reintroduction of grey wolves more than 21 years ago played a significant part in reversing the ecosystem’s deterioration there.