Lessons from Bhutan (The Hindu)

Mains Paper 2: Health and Education
Prelims level : PISA assessment
Mains level : Adopting education policy like Bhutan and its aftermath effect

Context

•  Bhutan’s teachers, doctors and other medical staff will earn more than civil servants of corresponding grades, if a policy recently announced by the country’s government is implemented.
•  The new salary scales will benefit about 13,000 teachers and doctors.
•  This is a novel move. No other country has accorded teachers and doctors such pride of place in its government service, both in terms of remuneration and symbolism.

Inspired or fanciful?

•  The policy’s tonal reference is to be found in Bhutan’s 12th Five Year Plan (2018-23), published by its Gross National Happiness Commission, the country’s highest policy-making body.
•  The commission’s strategy to achieve desired national outcomes through education opens with the notation, “making teaching a profession of choice”.
•  The proposal then is evidently at the core of a larger governmental strategy to achieve the country’s human developmental objectives.
•  The decision also comes in the wake of high levels of teacher attrition, especially the best.
•  The government has formulated the policy as a styptic to stop the serious haemorrhage.

PISA assessment

•  The Organisation for Economic Co-operation and Development’s Programme for International Student Assessment (PISA) is a worldwide study that measures and compares student ability in reading, mathematics,
• science and global competence, with financial literacy an option.
•  Accordingly, it ranks educational systems of countries. An independent study led by the economist, Peter Dolton, has demonstrated a distinct correlation between student outcomes in a country, as measured by PISA scores, and the status that its teachers enjoy.
•  The initiative’s latest report, Global Teacher Status Index 2018, based on its own surveys across 35 countries, goes on to make a strong case for high wages to improve teacher status.
•  Policies act as levers that governments use to achieve desired results in focus areas.
•  The results of Bhutan’s policy, if implemented, will take a few years to emerge for critical evaluation. It is, however, based on credible research.

The fiscal implications

•  Bhutan already spends about 7.5% of its GDP on education.
•  The fiscal implications of the new salary structure are unclear now. Generally, teachers constitute a considerable portion of government employees.
•  Therefore, governments looking to emulate Bhutan’s lead will inevitably be asked questions about the financial viability of such a momentous administrative decision.
•  The Minister concerned in Tamil Nadu, on educational indices, turned down demands of striking teachers for better pension explaining that wages, pensions, administrative costs and interest repayments already amounted to 71% of the State’s expenditure.

Can India afford a similar policy?

•  India currently spends about 3% of its GDP on education, accounting for about 10% of the Centre’s and States’ budgetary expenses.
•  Salaries constitute a large portion of this expenditure.
•  The NITI Aayog in its report last year recommended that India raise this to 6% of GDP by 2022. Paying teachers (and doctors) significantly higher salaries may seem like a tall order, but the Central and State governments could consider rationalising both teacher recruitment and allocation of funds to existing programmes.
•  Some programmes may have outlived their purpose, while others could be pared down or better directed. In fact, improving accountability in the system could free up huge savings.
•  A World Bank study found that teacher absenteeism in India was nearly 24%, which costs the country about $1.5 billion annually.
•  Absenteeism could be the result of many factors, including teachers taking up a second job or farming to boost incomes, providing parental or nursing care in the absence of support systems, or lacking motivation.
•  The incentive of an enviable income which is girded with unsparing accountability could mitigate many ills that plague the system, free fiscal space and help meet important national developmental objectives.

Education system in Delhi

•  Piloting a policy of such consequence may also be easier in a smaller State, say Delhi.
•  Education is a key focus area for the Delhi government; the State invests 26% of its annual budget in the sector (much more than the national average).
•  The administration has also worked on improving teacher motivation as a strategy for better educational outcomes. The base has been set.
•  The political leadership in the State, which is unafraid of the bold and big in the social sector, could build on this.
•  Moreover, since the State is highly urban and well-connected, it would be easier to enforce accountability measures, which must underpin so heavy an expenditure.

Way forward

•  Ultimately, no investment that enables an educated, healthy, responsible and happy community can be deemed too high by any society
•  The short-term GDP-minded would do well to consider these words in OECD’s ‘Education at a Glance 2018’ report: The quality of education can be a strong predictor of a country’s economic prosperity.
•  Shortfalls in academic achievement are extremely costly, as governments must then find ways to compensate for them, and ensure the social and economic welfare of all.
•  Governments intent on improving the quality of education they offer must step out of incrementalism in policy-making.
•  Improving teacher status by offering top notch salaries to attract the best to the profession could be that revolutionary policy-step forward, which Bhutan has shown a willingness to take.

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Prelims Questions:

Q.1) With respect to “International Boxing Association (AIBA)”, consider the following statements:
1. The International Olympic Committee (IOC) has recently stripped Olympic status from the troubled world boxing body AIBA.
2. Its headquarters is in Lausanne, Switzerland.

Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both
D. None

Answer: C
Mains Questions:
Q.1) Is the recent proposal in Bhutan on salary hike, part of a coherent strategy, or an inspired announcement that is resolute in intent but likely effete in effect?
Q.2) Is it possible to demonstrate that improving the status of the teaching profession positively influences educational outcomes?

IT dynamics revolution (The Hindu)

Mains Paper 2: International Relations
Prelims level : H-1B
Mains level : Indian Diaspora

Context

•  The sharp rise in wage costs for Indian IT companies due to an increase in overseas hiring, augurs well for the sector which has been trying to find a way around tightening H-1B visa rules.
•  Though the rise in staff costs may look to be a cause of concern in the short term, it could be a blessing in disguise in the long run.
•  Staff costs for large Indian IT services companies have gone up by 15-20 per cent in FY 19 as they hired engineers in countries wherever their clients are located.
•  This is being done, especially in the US where tougher immigration laws and tightening visa rules have become a predictable feature of Donald Trump’s Presidency.

Background

•  Over the last four years, there have been several tweaking of H-1B visa rules making it harder for Indian techies to land their dream job.
•  This emanates from a belief held by the Trump administration that companies are bringing in cheap labour to replace American workers through the H-1B route.
•  The US issued 10 per cent fewer H-1B visas between October 2017 and September 2018.
•  To fill the gap, IT companies have started hiring locally.

Cost effectiveness in India

•  Competition from global IT giants such as Accenture, and a workforce dominated by legacy engineers trained in old technology platforms is holding back Indian IT services firms from making big inroads into winning new-age technology projects.
•  In the traditional IT services space, India’s cost competitiveness, which is approximately 3-4 times cheaper than the US, had been the mainstay in the global sourcing market.
•  For far too long, some IT services companies have relied on shipping low-cost skilled labour to countries such as the US to drive higher margins.

New visa rule effect

•  Tougher visa rules are forcing many large Indian IT services firms to change their business model and ramp up onshore hiring.
•  To cope up with related higher costs, the IT companies are now beginning to move up the value chain in search of higher margins.
•  The earlier business model had led to a situation where Indian IT firms had become the global experts in executing low-value projects.
•  Now they are switching over to new transformational platforms like robotics, artificial intelligence and automation.
•  Indian engineers are also gaining from this shift as companies are investing in reskilling existing workforce to match the requirements of the new technology platforms, helping them to find more meaningful projects in Mumbai instead of implementing an enterprise resource planning software for a client in Chicago.

Way forward

•  Transformational business is seeing double digit percentage revenue growth.
•  This switch is great news for the Indian IT industry.
•  Globally, these new technologies are enabling tectonic shifts in systems and processes that require very different capabilities compared to implementing an enterprise resource planning software.
•  Hiring locally also makes the Indian IT companies more nimble in responding to these opportunities.
•  IT services companies should force a faster transformation in their delivery models to compensate for the increasing wage costs.

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Prelims Questions:

Q.1) With respect to “parole”, consider the following statements:
1. It is a system of releasing a prisoner with suspension of the sentence, which is usually subject to behaviour, and requires periodic reporting to the authorities for a set period of time.
2. Prisoners convicted of multiple murders or under the Unlawful Activities Prevention Act are also eligible for parole.

Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both
D. None

Answer: A
Mains Questions:
Q.1) A tighter H-1B visa regime will help Indian IT move up the value chain. Critically examine the statement.

Land digitization in Karnataka (Indian Express)

Mains Paper 3: Economy
Prelims level : Digital land ownership
Mains level : Farm loan waviers system and process in Karnataka

Context

•  The Karnataka government has released nearly Rs 8,357 crore as waiver amount to 20.40 lakh farmers against overdue crop loans of up to Rs 2 lakh till December 31, 2017.
•  It expects to complete this scheme, covering some 41 lakh farmers, by the end of this fiscal.
•  Karnataka is one of the few states with fully digitised records of land ownership, rights, tenancy and crop information.

Background

•  Most states undertaking loan waivers have done so based on the lists given by banks.
•  In many cases, the same farmer would have taken loans from multiple banks, thereby benefitting from waivers against all these accounts, even if the outstanding dues added up to beyond the announced limit.
•  In Karnataka, however, the state government could match the data from banks with the land survey, Aadhaar and ration card numbers.
•  It led to savings in double payments to around 5 lakh farmers and the waiver was limited to Rs 2 lakh per family against all their crop loan accounts.

Digital land ownership

•  The Karnataka scheme reveals the promise held out by direct benefit transfers (DBT) — how they can be made in a practically foolproof manner to every farmer based on their Aadhaar-seeded bank accounts as well as digitised land ownership details.
•  The next logical step should be to eliminate all farm subsidies and convert these into targeted DBTs or income support programmes.
•  Ramesh Chand, Member of the NITI Aayog, has favoured such a transition that is justifiable from both an efficiency and equity standpoint.
•  The Centre could take the lead here. Currently, its annual subsidy on food, fertiliser, crop loans and insurance premium, without accounting for rollovers and late payments, is over Rs 2,91,000 crore.
•  In addition, state governments dole out subsidies through free/cheap farm power and water that would total another Rs 1,50,000 crore or so.

Conclusion

•  Implementation of loan waiver in state points to possibility and promise of direct benefit transfer in helping farmers.
•  The Union Budget can make a beginning by announcing a three-year phase-out plan for all fertiliser subsidies and capping yearly foodgrain procurement for the PDS to 50 million tonnes.
•  The savings can be used to provide a flat Rs 5,000 per hectare to all farmers.
•  A single DBT scheme, with income support under PM-Kisan, will serve India’s farmers better than iniquitous and market-distorting subsidies.

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Prelims Questions:

Q.1) With respect to “Dragonfly Mission”, recently seen in news, consider the following statements:
1. It will fly to dozens of promising locations on Titan looking for prebiotic chemical processes common on both Titan and Earth.
2. This will be the first time NASA will fly a multi-rotor vehicle for science on another planet.

Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both
D. None

Answer: C
Mains Questions:
Q.1) Why should the Food Corporation of India physically procure, store and distribute paddy or wheat way beyond the requirements of the PDS?