Mitras Analysis of News : 23-6-2017

Print Friendly, PDF & Email

1.The high cost of ageing (The Hindu)

2.Too much profit? (The Hindu)

3.Explained: Gulf crisis: Implications for India

 

1.The high cost of ageing (The Hindu)

 Synoptic line: It throws light on changing Population dynamics and shift from communicable to non-communicable diseases (NCDs) in India. (GS paper II)

Overview

  • Population dynamics and a rapidly changing age structure reflect the combined impact of increasing life expectancy and declining fertility. Life expectancy at birth in India climbed from 37 years in 1950 to 65 years in 2011, stemming from declines in infant mortality and survival at older ages due to public health improvements. The key question is whether longer lives have translated into healthier lives.
  • The National Health Policy (NHP), 2017 has not thoroughly covered about rapid rise in the share of the old people i.e. 60 years or more and associated morbidities, especially sharply rising non-communicable diseases (NCDs) and disabilities. Continuing neglect and failure to anticipate these demographic and epidemiological shifts from infectious diseases to NCDs may result in enormously costlier policy challenges.
  • World Economic Forum has estimated that NCDs may cost as much as $4.3 trillion in productivity losses and health-care expenditure between 2012 and 2030, twice India’s annual GDP.

Ageing scenario in India

  • Detailed projections of the old in India by the United Nations Population Division (UN 2011) show that India’s population, ages 60 and older, will climb from 8% in 2010 to 19% in 2050. By mid-century, their number is expected to be 323 million.
  • Survey by Human Development Survey (IHDS) 2015 shows that the prevalence of high blood pressure among the old almost doubled over the period 2005-12; that of heart disease rose 1.7 times; the prevalence of cancer rose 1.2 times; that of diabetes more than doubled, as also that of asthma; other NCDs rose more rapidly.

Shift in burden

  • Often it is asserted that the burden of NCDs is increasingly borne by less affluent sections of the population. In other words, wealth and health deprivations have a larger overlap because of more sedentary life-styles, dietary shifts towards more fatty and processed foods, rising obesity, high rates of smoking and alcohol consumption, rural-urban migration and changing age structure. The burden of NCDs shifted from the most affluent to the least affluent over this period.
  • As NCDs are associated with a large majority of deaths among the old, about 93% of the total deaths among 70 years or more in 2013 they are now more vulnerable to mortality risk. In fact, the least wealthy have become more susceptible to this risk.
  • According to WHO, by age 60, the major burdens of disability and death arise from age-related losses in hearing, seeing or moving, and NCDs. The co-occurrence of disability and NCDs poses a higher risk of mortality.

Disability in India

  • Disability is the umbrella term for impairments, activity limitations and participation restrictions. An assessment of functioning in activities of daily living (ADLs) is one method widely used to assess disability in older persons. Disability is usually measured by a set of items on self-reported limitations with severity of disability ranked by the number of positively answered items.
  • Disabilities in ADL show dependence of an individual on others, with need for assistance in daily life. The activities of feeding, dressing, bathing or showering, walking 1 km, hearing, transferring from bed and chair, normal vision, and continence are central to self-care and are called basic ADLs. Difficulty in walking was 1.7 times greater in the age group 70-plus years relative to 60-69 years in 2012
  • Both prevalence and severity of disabilities rose during 2005-2012, there is the co-occurrence of NCDs and disabilities that is more likely to be fatal. There is increase in Heart disease and disabilities that rose 1.3 times, blood pressure and disabilities rose 1.2 times, diabetes and disabilities, blood pressure and heart disease and disabilities increased 1.4 times.

Way forward

  • In brief, that the curse of old age has become worse is undeniable. Along with expansion of old age pension and health insurance, and public spending on programmes targeted to the health care of the old, careful attention must be given to reorient health systems to accommodate the needs of chronic disease prevention and control by enhancing the skills of health-care providers and equipping health-care facilities to provide services related to health promotion, risk detection, and risk reduction.

Question:  With growing population of old age in India and rising cases of Non- communicable diseases, what are challenges lying ahead for India? Suggest the measures that need to be incorporated while framing policy for old age and disable people?

 

2.Too much profit? (The Hindu) 

Synoptic line: It throws light on the proposed anti-profiteering clauses under GST act. (GS paper III)

Overview

  • The government has put in place a few ‘draconian’ rules to force businesses to pass on the benefits of goods and services tax (GST) to consumers, even threatening with cancellation of registration in case found guilty of profiteering.

What is anti-profiteering?

  • Businesses that receive the benefit of paying lower taxes under the new goods and services tax (GST) regime can’t keep it with them.
  • Instead, according to the GST Act, they must pass it on to consumers by reducing the price of the products they sell. Hence, any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.
  • If any business fails to comply with this rule, authorities from the National Anti-Profiteering Authority (NAPA) will use the “anti-profiteering” clause of the Act to take action against them by ordering a reduction of prices, imposing penalties, or even cancelling a company’s registration.
  • The supposed intent of the clause is to prevent price rise induced by the imposition of the new national tax. In order to offset the higher taxes imposed on certain goods, the government wants to make sure consumers receive the benefits of lower taxes on other goods.

Overseas experience of anti- profiteering

  • India is not the only country to conjure up an anti-profit legislation. Malaysia tried an anti-profiteering and price control law in 2011, ahead of its GST roll-out. It turned out to be a disastrous move which was counter-productive and finally abandoned.

Problems with anti profiteering

  • Anti-profiteering clause makes no economic sense. It assumes that lowering the tax rate on businesses will improve their profit margin, so they should not complain about lowering prices. While it is true that a reduced tax rate can improve profit margins, it does not follow automatically that prices need to fall.
  • This is because pricing decisions are based solely on consumer demand for a product, not the cost of production. Businessmen do not sell their products at a higher or lower price because their cost of production has changed after a change in the tax rate.
  • In fact, it is the likely price that consumers will pay for a product that determines what businessmen will pay for its inputs.

Conclusion

  • Contrary to the intention of the anti-profiteering clause, this will not benefit consumers. Shortages are likely to follow as prices fall without a commensurate increase in supply. This is because profit-capping will distort business returns, thus discouraging new investment that could help ramp up production.
  • In contrast, when the tax rate is reduced without a cap on profits, it usually leads to a similar fall in prices, but without shortages. This is because higher profit m

Question:  What can be possible impacts of anti-profiteering clauses from the point of view of consumers?

 

3.Explained :  Gulf crisis: Implications for India (GS paper II)

Introduction

  • The Persian Gulf region was shaken by a massive political earthquake on June 5, 2017 when four Arab countries – Saudi Arabia, United Arab Emirates (UAE), Bahrain and Egypt – announced that they were severing all political, economic and diplomatic links with Qatar, a member of the Gulf Cooperation Council (GCC).
  • The four countries were soon joined by Libya, Yemen and even Maldives. However, Kuwait and Oman, the remaining two members of the GCC, refused to follow the lead of Saudi Arabia in this regard.

Why such a decision?

  • Saudi Arabia said that it took the decision because of Qatar’s “embrace of various terrorist and sectarian groups aimed at destabilising the region”, including the Muslim Brotherhood, al-Qaeda, the Islamic State of Iraq and Syria (ISIS) and groups supported by Iran.
  • Qatar vehemently denied that it supports terrorism, arguing that it has assisted the United States in the War on Terror and in the ongoing military intervention against ISIS.
  • While the immediate causes of the drastic action are not clear, problems between Saudi Arabia and Qatar have been brewing for some time. Tensions between Qatar and its Arab neighbours have grown in recent years as part of a tussle for regional leadership.
  • Qatar, buoyed by its huge earnings from the production and export of gas, has been trying to carve out a comparatively independent foreign policy that is at variance with the approach of Saudi Arabia and other major Arab nations.
  • Qatar’s influential television channel Al Jazeera, which is extensively viewed in the region, often adopts positions that are critical of Saudi Arabia.
  • It is unlikely that Qatar will agree to make its regional and international policies subservient to those of Saudi Arabia and other Gulf countries. It is likely that the influence and clout of Iran and Turkey will increase in the region. It also seems probable that the US will engage itself pro-actively to obtain closure on the issue.
  • It is in the US interest to see a quick end to the confrontation, as Qatar hosts the Al Udeid air base, which houses 100 aircraft and 100,000 military personnel belonging to the US Central Command.

Implications for India

  • These developments are likely to have significant implications for India, given that its citizens make up the largest expatriate group in the region.
  • There are around seven million people of Indian origin working in the Middle East. Security and stability in the region is hence of paramount importance for India. Further, the Indian diaspora in the region remits around USD 40 billion a year. These funds are immensely valuable as they help India manage its current account deficit.
  • Energy is another critical area of engagement. A fifth of India’s oil, and about 65 per cent of gas imports, comes from countries of the Middle East including Iran, Qatar, Iraq, Saudi Arabia and others.
  • India is the third largest export destination for gas from Qatar (behind Japan and South Korea). Qatar is the largest supplier of LNG to India, accounting for over 65 per cent of India’s global import and 15 per cent of Qatar’s export of LNG. Petronet LNG has declared that it does not expect any impact on gas supplies from Qatar.
  • It is India’s biggest gas importer and buys 8.5 million tonnes a year of liquefied natural gas (LNG) from Qatar under a long-term contract. In addition, it also buys additional volumes from Qatar under spot deals. If tensions were to rise in the Persian Gulf, shipments of LNG could become risky. And in case the crisis gets prolonged, prices of food items and essential commodities in Qatar could increase and affect the lives of 650-to-700,000 Indians.
  • This could also affect remittances. A prolonged crisis could result in increased insecurity, reduced economic activity and stress on the 50 per cent or so of the total inward remittances that India receives from the Gulf.

Way ahead

  • Given the range, expanse and depth of India’s interests and its rapidly expanding political, economic and strategic profile, sooner or later India will have to get more vigorously engaged in dealing with developments in this crucial region.
  • In the coming years, India will have to adopt a more hands on policy in any security crisis or economic upheaval that may strike the region because its own security, economic well-being, and energy needs are all closely interlinked with this region.

Question: What are the implications of Saudi-Qatar rivalry for Indian diaspora?

Previous Post
Next Post

admin