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1.Moving on National medical commission Bill (The Hindu)

2.Prospects of upward projector for real estate (Live Mint)

3.India’s Electronics manufacturing challenge (Live Mint)

 

1.Moving on National medical commission Bill (The Hindu)

Synoptic line: It throws light on the proposed bill to create National Medical Commision. (GS paper III)

Overview

  • Recently, the government has decided to send the National Medical Commission Bill to a standing committee for a relook into its feasibility. However, there are certain concerns which should be looked upon.

National Medical Commission Bill: The Background

  • Medical Council of India (MCI) is the apex body to regulate medical education. It was established in 1934 by British government to regulate medical practice and medical education in the country. Its functions can be placed in two categories viz. medical education and ethics. Its key functions included:
  1. To maintain uniform standards of UG and PG medical courses
  2. Recognize and derecognize UG and PG medical courses
  3. Reciprocity with foreign countries regarding the medical degrees in India
  4. Maintenance of register of medical practitioners in the country.
  5. Upholding the ethics in medical education and profession in India.
  • For last many years, MCI has been subject to criticism due to corruption and unethical practices. Thus, there was a need to either reform the MCI drastically or replace it with a new architecture.
  • This bill seeks to replace the Medical Council of India with National Medical Commission as top regulator of medical education in India.
  • It would also put in place a four tier structure for the regulation of medical education. The 20 member National Medical Commission will be at the top of this structure.The bill also seeks to put in place a common entrance exam and licentiate exam, which all medical graduates will have to clear to get practicing licences.

Medical Advisory Council

  • The Central Government will create a Medical Advisory Council as a platform for states to put their concerns and views before the National Medical Commission. It will be an advisory body to advise the National Medical Commission on matters related to standards and discipline in medical education in India. It will also advise the NMC on measures to enhance the equitable access to medical education.

National Medical Commission

  • The central government will create a National Medical Commission as a body corporate and autonomous boards under the overall supervision of the National Medical Commission.

Concerns with the NMC

  • A few bodies such as Indian Medical Association have opposed the above bill on grounds that it may cripple the medical education in the country because the entire architecture has been made answerable to the bureaucracy and non-medical administrators. It also expressed concerns on making Licentiate examination as basic qualification to practice instead of MBBS.
  • All members of the NMC are members of the Council, undermining the latter’s independence. This, and other concerns, must be addressed. Perhaps the most controversial provision of all is for a bridge course allowing alternative-medicine practitioners to prescribe modern drugs. One motivation could be to plug the shortfall of rural doctors by creating a new cadre of practitioners. But if this was the rationale, better solutions exist.
  • The shortfall of MBBS doctors is partly due to the fact that many of them seek a post-graduate degree to improve career prospects. MCI regulations prevent even experienced MBBS doctors from carrying out procedures like caesarians and ultrasound tests, while nurses are barred from administering anaesthesia. Empowering doctors and nurses to do more is a reform many have called for, and that would have been easier to implement than a bridge course for AYUSH practitioners. Yet, the NMC Bill hasn’t taken it up.

Way ahead

  • A way to bolster healthcare delivery is a three-year diploma for rural medical-care providers, along the lines of the Licentiate Medical Practitioners who practised in India before 1946. Chhattisgarh tried this experiment in 2001 to tackle the paucity of doctors it faced as it was formed.
  • Graduates from such a three-year programme would only be allowed to provide basic care in under-served pockets. Massive protests by the Indian Medical Association and poor execution derailed the Chhattisgarh experiment, but the idea wasn’t without merit. India has no choice but to innovate with health-care delivery models to tackle the challenges it faces. The trick is to base these innovations on evidence.
  • There is plenty of evidence that MBBS doctors and nurses can do more than they are legally allowed to do. But integrating alternative-medicine practitioners into modern medicine requires a lot more thought. The government will do well to empower existing doctors before attempting more ambitious, and questionable, experiments.

Question: What type of meaningful reforms can be adopted in order to improve the medical conditions in India?

 

2.Prospects of upward projector for real estate (Live Mint)

Synoptic line: It throws light as how after the year of important reforms; the future is looking bright particularly when it comes to affordable housing. (GS paper III)

Overview

  • India’s real estate sector witnessed some significant developments over the past year-and-a-half. These have changed the face of the industry and augur well for it in the long run. The sector has become more transparent and organized owing to recent policy changes and consumers are better off for these.

The key reforms

  • The reforms began in May 2016, when the Real Estate (Regulation and Development) Act 2016 (RERA) came into force. The Act came into full effect from May 2017, bringing unprecedented levels of transparency into real estate projects. RERA promises to minimize delays in projects, weed out unscrupulous developers, and provide homebuyers with detailed information on the specifications and the progress of the projects they invest in.
  • RERA was followed by the introduction of the goods and services tax (GST), which rolled many different taxes into one. Until then, both consumers and developers had to pay multiple, and often varying taxes, which caused confusion.
  • GST has come as a relief for both, by bringing clarity into the process. Moreover, it will lower the cost of construction, and bring more liquidity into the market.
  • The sector will also benefit from the amendments that were made late in 2016 to the Benami Transactions Prohibition Act. This, coupled with the central government’s stated intent to make Aadhaar linkage compulsory for all property transactions, will help in curbing malpractices and stopping the inflow of black money into real estate.

The significance of reforms

  • All these developments are highly significant. They will not only bring transparency and accountability, but also consolidation in their wake. Developers need to be sufficiently funded to achieve RERA compliance.
  • Small or cash-starved developers will probably have no choice but to partner with larger, established players to survive. Moreover, unscrupulous developers big or small will have no place to hide in the transparent environment that RERA will usher into the industry.
  • The real estate sector will be institutionalized, and probably have fewer but larger and more reliable developers in the years to come.As the industry adapts to all these developments and trends, it is likely that the residential real estate segment will pick up in the first half of 2018. Home loan interest rates have gradually been decreasing over the past few years, and banks and financial institutions are offering varied, attractive schemes to incentivize customers, particularly for ready-to-move-in properties.
  • The recapitalization of banks will also rejuvenate the banking sector and give a boost to lending. This will spur healthy competition between different actors and ultimately result in cheaper loan options for consumers. The Reserve Bank of India had slashed key interest rates by 25 basis points (a basis point is one hundredth of a percentage point) in August, and kept the repo rate unchanged in December. This, too, will help in lowering interest rates on home loans.
  • Home loan rates apart, the other major factor that could give a boost to real estate in the near future is affordable housing. In 2017, the government tried to incentivize affordable housing with renewed zeal. The guidelines of the Pradhan Mantri Awas Yojana (urban) (PMAY) were amended to encourage more millennials married or single to invest in property. Even unmarried children of a household are now eligible to apply for loans under PMAY. The government is trying to attract both middle-income and low-income groups to this segment.

Way ahead

  • A boom in affordable housing and the resulting construction and allied jobs can help make a significant dent in the malaise of joblessness. It can also have a multiplier effect on the national gross domestic product, and boost the demand for different categories of products and services. India’s real estate is transitioning to a new era after what has been a rather eventful year. And the prospects for homebuyers, developers, and the financial ecosystem are brighter than they have ever been.

Question: How a boom in affordable housing can help make a dent in the malaise of joblessness?

 

3.India’s Electronics manufacturing challenge (Live mint) 

Synoptic line: It throws light on the issue as India’s electronics manufacturing has been unable to respond to the rising demand, increasing the import bill while the country loses an opportunity to create employment for millions. (GS paper III)

Overview

  • A growing middle class, rising disposable incomes, declining prices of electronics and a number of government initiatives have led to a fast-growing market for electronics and hardware products. However, India’s weak manufacturing base has not been able to respond to this increasing demand, leading to a growing trade deficit.

Shortfall in indigenous manufacturing

  • Of the country’s total demand for electronics, between 50-60% of the products and 70-80% of the components are imported. India’s imports of electronic goods grew 31% between April and October 2017 to $29.8 billion. Meanwhile, the trade deficit reached close to $100 billion during the April-November period of 2017, against $67 billion in the same eight-month period a year ago.
  • This is an ominous sign. If the situation doesn’t change, a report by Deloitte Touche Tohmatsu states, expenses on electronics imports could surpass those on oil imports by 2020. Moreover, the industry has the potential to provide millions of jobs, directly and indirectly.

Government’s steps in this regard

  • In order to deal with the problem, the government has listed the electronics industry as a priority sector under its Make In India campaign. There are various government schemes to encourage domestic manufacturing which provide tax and tariff concessions, investment subsidies, preferential market access in government procurement and export subsidy.
  • In fact, as recently as December, the government increased the import duty on various electronic items like smartphones, LED bulbs and microwave ovens for most products, the rate increased from 10% to either 15% or 20%.
  • However, he way forward is to increase the country’s general competitiveness in the export market instead of pursuing sectoral policies. India’s share in the global electronics market was a minuscule 1.6% of the market in 2015 that is currently valued over $1.75 trillion.
  • With a large domestic market and a number of trained engineers, India’s absence in the electronics manufacturing supply chain is an anomaly that better policies can correct. Instead of preserving our market for domestic manufacturers, the goal should be to capture a larger piece of this global market.

Why India has not been able to perform well.

  • There are various factors that have kept these goals from being met.
  • First is the inverted tax structure for electronic goods. Due to a limited base of local component suppliers, manufacturers are dependent on importing parts. Under the World Trade Organisation’s information technology agreement of 1995 (ITA-1), tariffs on 217 IT products were set at zero. However, the positive custom duties on the components (or parts) used in electronic products make it expensive for domestic manufacturers to compete with foreign competitors who can access the components at lower prices.
  • The solution is to bring the duties on components down to the level of the product. Some parts might be used for multiple products that may have different duties, but it’s important to rule in favour of simple rules and apply the rate-cut regardless of use. It’s not difficult to imagine a rule for assessing the eligibility for the duty-concession depending on the use to which a component is put it is precisely this kind of paperwork that needs to be avoided.
  • Second, foreign direct investment (FDI) in electronics is less than 1% of the total FDI inflow because of onerous labour laws, delays in land-acquisition and the uncertain tax regime have kept investors at bay. While the labour laws may be reformed in 2018, and we might be past the times of retrospective taxation, the memory of the Vodafone and Nokia cases is still fresh in investors’ memory. In order to inspire confidence, laws need to be liberal and predictable.
  • In the case of taxation, it is important to clearly establish the tax liabilities under different circumstances in full detail. A possible experiment could be special economic zones like the Dubai International Financial Centre Dubai’s normal civil and commercial laws do not apply in this area and a British chief justice ensures the practice of British common law.
  • Third, the procedures for cross-border trade work against the competitiveness of Indian producers as shown by the Doing Business rankings India ranks 146 in the category of trading across borders due to the high costs of compliance. The numerous forms, fees, inspections and the associated time discourage domestic producers from exporting and keep them out of the international supply chain.

Way ahead

  • China, with its rising labour costs, will soon not be the global manufacturing hub it is today. This is an opportunity for countries like India, the Philippines, Thailand, etc., to attract companies to move their plants to their country. Despite its low costs of labour, India might lose this race if it doesn’t reform the key sectors of the economy.
  • This is not to suggest that the government is oblivious to these challenges. In fact, much has been done in the past couple of years to suggest that we are moving in the right direction. Introduction of the landmark goods and services tax (GST) has increased the distance that trucks are travelling by about 30%.
  • GST has also reduced the confusion associated with various state and local taxes. And the government seems determined to improve the condition of highways and ports.Yet, much needs to be done towards removing barriers that discourage exports and creating a reputation for stable and predictable rules.

Question: The present need of the hour is to revive electronics manufacturing. How can India’s electronics manufacturing industry be made globally competitive?