Today's Headlines

Today's Headlines - 19 January 2023

RBI warned states against OPS

GS Paper - 3 (Economy)

The Reserve Bank of India (RBI) has cautioned states against reverting to the old pension scheme (OPS), which was in vogue till 2004, stating that it will add to the fiscal burden of States in the coming years. The central bank says OPS – instead of the National Pension Scheme (NPS) — will lead to the accumulation of liabilities which can become a major risk in the future.

What did RBI say about OPS?

  1. A significant risk looming large on the sub national fiscal horizon is the likely reversion to the old pension scheme by some states.
  2. The annual saving in fiscal resources that this move entails is short-lived. By postponing the current expenses, states risk the accumulation of unfunded pension liabilities in the coming years, the RBI said in its ‘Report on state finances’ .
  3. As per the Budget estimates for 2022-23, states are expected to incur a 16 per cent rise in pension expenditure at Rs 463,436 crore in 2022-23 as against Rs 399,813 crore in the previous year, the RBI said.
  4. The compounded annual growth rate (CAGR) in pension liabilities for the 12 years ended FY22 was 34 per cent for all the state governments, according to an SBI Research report.

Why are more states going for OPS?

  1. The RBI warning has come after more states joined the queue to bring back OPS instead of the National Pension Scheme (NPS).
  2. After RajasthanChhattisgarhJharkhand and PunjabHimachal Pradesh has announced its intention to opt for OPS.
  3. States have found it convenient to pay old pensioners with the money collected from the serving employees.
  4. Under the OPS, retired employees received 50 per cent of their last drawn salary as monthly pensions. An OPS is considered fiscally unsustainable, and state governments do not have the money to fund it.

Old pension scheme vs NPS

  1. An old pension scheme (OPS), commonly known as the PAYG scheme, is defined as an unfunded pension scheme where current revenues fund pension benefits. Under this scheme, the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners.
  2. OPS involved a direct transfer of resources from the current generation of taxpayers to fund the pensioners.
  3. NPS is a defined contribution pension scheme. NPS enables an individual to undertake retirement planning while in employment. With systematic savings and investments, NPS facilitates the accumulation of a pension corpus during their working life.

 

The problem of antibiotic resistance

GS Paper - 3 (Health and Diseases)

Since antibiotics were introduced to the world in the mid-20th century, deaths attributable to infections dropped from over 50% to 10-15%. Experts have been warning for decades that the threat of antibiotic resistance could take us back in time to when even simple infections were deadly.

How serious is the issue really?

  1. A study in 2019 found more than 1 million people a year died from infections linked to microbes that are resistant to antibiotics — more than those who died due to malaria or with HIV/AIDS.
  2. Experts describe antibiotic resistance as one of the greatest challenges facing humanity.
  3. They predict that if the problem remains unsolved10 million people could die as a result by 2050.

What causes antibiotic resistance?

  1. Antibiotic resistance occurs when bacteria evolve to evade antibioticsOveruse and misuse of antibiotics are the biggest drivers of resistance.
  2. That means that the more we use antibiotics, the worse the problem of antibiotic resistance becomes.
  3. Antibiotics work by binding to a specific target protein on bacteria, then entering to kill it from the inside.
  4. Penicillin, for example, weakens the bacterial cell wall, causing the cell to disintegrate.
  5. The most common ways bacteria evade antibiotics come from mutations that allow them to stop drugs from binding to bacteria. It’s like the bacteria changed the locks so the antibiotic key no longer opens the cell door.
  6. Bacteria can also achieve resistance by producing proteins that inactivate or modify the antibiotic, so it no longer binds to the bacteria. Or the target protein is mutated so the antibiotic can no longer bind to it.
  7. But worst of all is when bacteria evolve many of these mechanisms in backup, so even if you overcome one, other resistances might fill the gap.

 

China’s population drops for first time

GS Paper - 2 (Population)

China saw its population fall by roughly 850,000 last year – its first drop in six decades, bringing its population to around 1.41 billion at the end of 2022, the country’s National Bureau of Statistics said. The government said on 17 January 2023 that 9.56 million people were born in China in 2022, while 10.41 million people died. The drop, the worst since 1961, also makes it more probable that India will become the world’s most populous nation this year.

India to become most populous in 2023

  1. Both India and China, in the 20th century, were similar in terms of key indicators impacting population growth, such as life expectancy (the number of years a person is expected to live on average), the Crude Death Rate (the number of deaths in a population per 1,000 people) and Total Fertility Rate or TFR (the number of children a woman, on average, is expected to bear in her lifetime).
  2. Mortality falls with increased education levelspublic health and vaccination programmes, access to food and medical care, and provision of safe drinking water and sanitation facilities. In both countries, this happened, resulting in a net increase in population for many decades.
  3. The replacement rate is the number of children a woman is to have in order to at least replace the present generation in the future.
  4. China’s TFR, according to its 2020 Census, was 1.3 births per woman — marginally up from the 1.2 in the 2010 and 2000 censuses, but way below the replacement rate of 2.1.
  5. While TFR is gradually declining in India too, more important is the working-age population. Its share in the overall population crossed 50% only in 2007 and will peak at 57% towards the mid-2030s.
  6. India, therefore, has a window of opportunity well into the 2040s for reaping its “demographic dividend”, like China did from the late 1980s to 2015, contingent upon the creation of meaningful employment opportunities for a young population.

The impact of the One-Child Policy

  1. One cause behind the fall in numbers in China is the one-child policy imposed between 1980 and 2015, limiting the number of children couples could have to one.
  2. China has said that the policy has helped prevent nearly 400 million births, but as the proportion of those in the working-age population began reducing, the policy became a matter of concern.
  3. The country’s statistics bureau said the working-age population between 16 and 59 years old totalled 875.56 million, accounting for 62.0% of the national population, while those aged 65 and older totalled 209.78 million, accounting for 14.9% of the total. Men outnumbered women by 722.06 million to 689.69 million, reflecting the sex-selective births that were carried out because of the preference for the male child.

 

ASER 2022

GS Paper -2 (Education)

According to the latest Annual Status of Education Report (ASER), the spike in dropout rate after the outbreak of the Covid-19 pandemic was “temporary” in nature as enrolment numbers, across age groups, touched a record high in 2022, reaching the highest level since the introduction of the Right to Education Act in 2009.

More about the news

  1. Pre-COVID, the last national ASER rural field survey was conducted in 2018. That year, the all-India enrolment figure for the age group 6 to 14 was 97.2 per cent.
  2. The 2022 data shows that this number has increased to 98.4 per cent,” said the CEO of Pratham Foundation which led the survey.

Effect of pandemic

  1. The pandemic had triggered alarm bells on school enrollment, with ASER 2020 and 2021 reports capturing a fall in the proportion of children in schools in the 6-14 age groups.
  2. The out of school numbers rose from 2.8 per cent in 2018 to 4.6 per cent in 2020, a level at which it remained in 2021 as well.

After pandemic results:

  1. ASER 2022, which covered seven lakh children across 616 districts and was conducted by 27,536 volunteers, shows that the proportion of out of school children is down to 1.6%.
  2. The ASER report also highlights another trend that found reflection in other government reports such as the Unified District Information System for Education Plus data which came out last year.

Enrolment in government schools has increased:

  1. ASER 2022 states that for the country as a whole, the percentage of all children aged 11 to 14 who are enrolled in government schools has risen from 65 per cent in 2018 to 71.7 per cent in 2022.
  2. According to the UDISE+ data for 2021-22, between 2020 and 2021, enrollment in government schools increased by 83.35 lakh while in private schools it dipped by 68.85 lakh.

What led to this more enrolment in government than private?

  1. It is due to uncertainty of income and closure of budget private schools in rural areas.
  2. If family income goes down or becomes more uncertain, it is likely that parents may not be able to afford private school fees. Hence, they are likely to pull their children out of private schools and put them in government schools.
  3. In rural areas, most private schools are of the low cost or budget variety, many of which had to shut down during COVID because it was not economically viable to retain the staff.

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