Can Ayushman Bharat make for a healthier India?

(The Hindu)


Why India must harness blockchain gains

(The Financial Express)


Preserving banking and financial stability

(Live Mint)


Can Ayushman Bharat make for a healthier India?

(The Hindu)

Synoptic line: It throws light on issue of analysis of Ayushman Bharat.

(GS paper II)



  • Ayushman Bharat is National Health Protection Scheme, which will cover over 10 crore poor and vulnerable families by providing coverage upto 5 lakh rupees per family per year for secondary and tertiary care hospitalization.


  • Ayushman Bharat – National Health Protection Mission will subsume the on-going centrally sponsored schemes – Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme (SCHIS).


Can Ayushman Bharat make for a healthier India? –There are various views regarding this –



  • Yes



  • Ayushman Bharat, has two dimensions- first, it aims to roll out comprehensive primary health care with Health and Wellness Centres (HWCs) serving as the people-centric nuclei. A nationwide network of 1.5 lakh HWCs will be created by transforming the existing sub-centres and primary health-care centres by 2022.


  • This will constitute the very foundation of New India’s health care system. So far, the country’s primary health care has been focussing on reproductive, maternal health, newborn and child health as well as controlling priority communicable diseases.



  • If we build a strong, robust next generation primary health-care system, it will save lives and will lead to a healthier India. The government has committed for two-thirds of resources to go into a comprehensive primary health care as part of the National Health Policy 2017. The HWCs are somewhat on the lines of the U.K. general practices health system, but run largely by nurse practitioners and trained health workers, which are accessible near home.



  • The second dimension of Ayushman Bharat is the National Health Protection Scheme which aims to provide health cover of ₹5 lakh per family per year for hospitalisation in secondary and tertiary care facilities. In one go, given the ambitious size of the package, 40% of people, neonates to young and old, will have access to facility care for almost all the medical and surgical conditions that could occur in a lifetime.


  • This mission enables increased access to in-patient health care for the poor and lower middle class. The access to health care is cashless and nationally portable. The scheme would enable a weaver in a remote village to be able to walk into a hospital for a gall bladder stone surgery or a coronary stent without having to pay the hospital. It is a turning point for the health sector.



  • No



  • The National Health Protection Scheme (NHPS), is just an existing scheme re-announced with some expansion; the funds allocated are grossly inadequate; this scheme would overlap with many established State health insurance schemes; and most importantly, the scheme does not deal with preventive, promotive or outpatient care, so it is unlikely to lead to larger public health benefits.



  • The NHPS is not a new scheme, in fact it was announced in the 2016 Budget — the only difference being that the sum assured until now was ₹1 lakh, which has been raised to ₹5 lakh. In the last two years, the NHPS has been a non-starter- the reason for its failure is that many large States already have established health insurance schemes, and for most requirements their existing allocations of ₹1.5-2 lakh were quite adequate. So, this ‘old wine in new bottle’ scheme offers hardly any advantage.



  • This scheme seeks to build on existing Rashtriya Swasthya Bima Yojana (RSBY), but does not address many problems associated with RSBY. Reviews show that RSBY has not reduced health-care costs for the poor, with many States discontinuing it. There is no evidence that the NHPS will correct the distortions associated with RSBY, so results may be similar.


  • The NHPS is not a move towards Universal Health Care. The U.S. is the only developed country without a Universal Health Care (UHC) system; based on commercial health insurance, its system is very expensive and excludes a huge number of people. Introducing the American model based on commercial insurance is unsustainable for India, and may lead to unnecessary procedures without improvement in health outcomes.


  • More seriously, scrutiny of the current year’s health Budget shows no dedicated allocation for HWCs, rather this will have to be carved out of the existing NHM budget, which has itself seen a 5% cut compared to revised Budget estimates of last year.



  • It’s complicated



  • The scheme has two partsthe National Health Protection Scheme (NHPS) and the Health and Wellness Centres (HWCs). The former has received wide media coverage, the latter remains largely unknown. Both in the developed world and in the developing world, public provisioning of primary health care has been the central strategy of realising the right to health care.


  • Currently, the health sub-centres and primary health centres in India are limited to only some elements of maternal and child care and control of two or three major infectious diseases. What HWCs would do is to upgrade and increase the capacity of these centres to provide care for a large range of chronic illness and infectious disease.


However, there are three essential pre-requisites-


  • The first is an additional budgetary allocation of about ₹20 lakh per HWC per year, which would work out to about ₹30,000 crore per year.
  • The second condition is a matching human resource policy, which includes in the least a regular salaried workforce of at least three auxiliary health workers per HWC. 
  • Third, this needs a well-coordinated referral mechanism with specialists and doctors in the secondary and tertiary hospitals, but there are very limited effort, investment and even thought going into this.


  • The NHPS is a publicly-funded health insurance programme, with a limited budget, designed to provide financial protection for the poor against costs of secondary and tertiary health care. Many States already have similar programmes in place. First, insurance does little for access to hospital care in vast areas where there are no providers. That needs public investment.
  • Second, in the absence of any effective regulation of the private sector, and given high levels of information asymmetry, the consumption of services is determined more by what private providers find more profitable to provide, rather than health-care needs of the poor.


  • The NHPS could play a useful role, as an alternative and more flexible financing route for tertiary care in both public hospitals and for purchasing care from a more public service and less commercially oriented segment of the private sector where there are critical gaps.


QuestionDiscuss the salient features of ‘Ayushman Bharat’. In your opinion can Ayushman Bharat make for a healthier India or not?

Why India must harness blockchain gains

(The Financial Express)

Synoptic line: It throws light on the issue of importance of block chain technology.

(GS paper III)



  • According to the World Economic Forum’s report – blockchain is a ‘mega trend’ that will shape society and the economy in the next decade. Global investments in blockchain are on the rise as the successful implementation of use cases demonstrates the disruptive potential of the technology across industries. 


  • According to a market research company, the total global market size for the blockchain technology at $7.74 billion in 2024. According to the Swiss financial institution UBS, the blockchain technology will add as much as $300 billion to $400 billion of annual economic value globally by 2027.





  • International institutions, governments, incubators and accelerators, as well as private companies and non-profits, are discovering how the technology can bring about positive social impact in multiple ways.




  • There are various ways, firstly by creating trusted permanent records. According to the World Bank, over a billion people are not officially recognised by any government today. This means that they cannot enjoy the protection and services afforded to the citizens of a state. In India, governments of Telangana and Andhra Pradesh have launched pilots to record land ownership in blockchain, with the aim of resolving issues related to the acknowledgement of land rights and land property disputes.



  • Second, by transforming the way international aid is distributed. When a government is unable to provide essential services to its population due to a natural disaster or a civil war, the international community catalyses funds to bring relief to the affected communities. The blockchain technology provides much-needed transparency and ease of operations.


  • Third, by making financial inclusion truly universal. Micro-finance has proved to be a fantastic tool to bring large sections of unbanked population into the realm of financial services. The blockchain technology can support financial inclusion by using verified individual data to assess identity and creditworthiness, hence making opening and operating a bank account fast, easy and cost-effective.


In India


  • In India, blockchain is attracting the interest of both the government and the private sector. In the public sector, the NITI Aayog has announced that it is building IndiaChain, a blockchain network infrastructure that would complement IndiaStack and could even use Aadhaar. The announcement is extremely welcome as it puts the country on a similar path as that of the most advanced nations. Estonia, for example, has built its competitive advantage on its blockchain infrastructure and the public services offered through it.


  • In the private sector, Indian and global banks have come together under the BankChain consortium to explore, build and implement blockchain-based solutions. The consortium is focusing on developing use cases for KYC identification, contract management, loan syndication and peer-to-peer payments, among others.


  • The Indian market presents unique opportunities to identify globally scalable solutions, such as in the remittances sector. India is the largest recipient of personal remittances in the world, and at YES Bank we are looking at the blockchain technology to make international transfers fast, secure and affordable for all. To achieve this goal, India is partnering with Ripple, a US-based company, to realise the enhanced efficiencies of blockchain for real-time cross-border payments.


Way forward


  • Blockchain will bring about a massive transformation in traditional business models and generate new opportunities to create social impact.  India has the opportunity to leverage its unique characteristics as a large, fast-growing, emerging economy, its immense IT talent, and the potential of the blockchain technology to achieve a more inclusive and sustainable economic growth for the coming decade.


Question Global investments in blockchain are on the rise as the successful implementation of use cases demonstrates the disruptive potential of the technology across industries. Explain how India can harness blockchain gains?

Preserving banking and financial stability

(Live Mint)

Synoptic line: It throws light on the issue of how to build a strong banking system.

(GS paper III)



  • Almost a decade after the global financial crisis, economists continue to debate what went wrong, and how the world can avoid another blowout.  From the financial stability perspective, what matters is not just the total amount of credit in an economy, but also the quality of the firms that are getting funded.




  • The latest “Global Financial Stability Report” (GFSR) of the International Monetary Fund (IMF) could be useful in this context. Some of the takeaways from the research can also be useful for India, which is struggling with a massive bad debt problem.



  • The GFSR fills the gap in assessing the riskiness of credit flow at the cross-country level, and has mapped firm vulnerability indicators for 55 economies since 1991. The IMF notes- “Taking the riskiness of credit allocation into account helps better predict full-blown banking crises, financial sector stress, and downside risks to growth at horizons up to three years.” The riskiness of corporate credit is determined by the extent to which risky firms get credit compared to less risky firms.



  • Over the last 25 years, the riskiness of credit allocation has followed a cyclical pattern. It bounced back from post-financial crisis lows and was marginally below the historical average in 2016. This will now be an important indicator, as a significant upward move could threaten financial stability. The riskiness of credit allocation also varies across economies.


  • India also followed the global pattern but the riskiness of credit allocation was at a relatively lower level in 2016. A lower allocation to risky firms in recent years can perhaps partly be explained by the ongoing twin balance sheet problem. The IMF has used common financial ratios such as the interest coverage ratio and debt-to-profit ratio to assess the vulnerability of firms.


  • The IMF highlights that credit expansion is less likely to lead to riskier allocation with tighter macro prudential norms, an independent banking supervisor, smaller footprint of government in the corporate sector, and strong corporate governance.


  • These are important points as the current mess in the Indian banking system could have been avoided if India had a more effective regulatory architecture. The current bad debt problem is as much a result of weak corporate governance as it is of the vagaries of the business cycle.


  • Therefore, as credit growth picks up with economic recovery, policymakers would do well to strengthen the overall regulatory framework to avoid a repeat of what happened in the banking sector in the last few years.


  • India has made progress on some of these indicators in the recent past, but more needs to be done. For instance, the Reserve Bank of India’s (RBI’s) new framework for the resolution of stressed assets makes it mandatory to report non-performing accounts above Rs5 crore on a weekly basis.


  • This will make tracking easier. It will be important for the banking system not to become part of an excessive build-up of leverage in the corporate sector. Further, acceptance of the Kotak committee recommendations will help improve the level of corporate governance. Continued efforts to strengthen the framework to protect the interest of minority shareholders will push managements in the corporate sector to take more prudent decisions.


  •  In India, the financial system is dominated by state-run banks, which is partly responsible for the ongoing bad debt problem. Since privatization is not on the cards, India should work on a governance system where government holding in banks does not affect their operations.


Way forward


  • India should learn its lessons and do enough to build a strong banking system which can adequately fund the productive sectors of the economy in coming years.


Question What should Indian policymakers do to build a strong banking system?