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My notes 30DEC2015 30-12-2015

Banking sector reforms in 2015

1)      Indradhanush Reforms – It centered at reforming the bank management practices – such as separation of Chairman and Managing directors, formation of Bank board Bureau for top level appointments.

  • The Public sector bank CEO positions are also opened up for private sector candidates

Suggested recommendation

  • Government has to decrease its statkes below 51% in Public sector banks
  • It shall withdraw from the Board of the bank and it shall be managed by professionals

2)      New banks – IDFC and Bandhan bank – two new full time banks are announced

3)      Payment banks – objective is to provide remittance services and distribution of financial products like insurance and mutual funds.

4)      Small finance banks – To finance the small loans for the people not covered by formal banking system.

5)      Strategic debt restructuring

6)      Bankruptcy code

7)      Inflation targeting

8)      Marginal cost lending rate – MCLR

Infrastructure

Sovereign and pension funds of foreign countries are interested to invest in Indias 40,000cr National Investment and Infrastructure Fund.

Net Neutrality and free Basics

It can be argued on the following levels

Access – Facebooks free Basics claim that it increases the access of internet to hitherto unconnected millions in the country. But, Facebook will determine what kind of access shall be provided and whom to be accessed to the people. It becomes a gate keeper to the flow of Information.

Equity – Free Basics is inherently promoting a new kind of digital divide as it providing only a partial access to internet, it deprives wider benefits of Public internet. On wider scale, The data of citizen is freely accessible to Facebook and it can monetize on the basis of free data available to them. The greater questions of Privacy and rights originate here. Citizens do not have control over the data they generate or a right over the income generated from the data they generates. It is often described as data colonialism.

Quality – The Experience of Public internet has increased due to innovation it unleashed and even Facebook is a byproduct of such an innovation. In this context, Free Basics can restrict this Innovation and revolution. New services, technological improvements need a service providers and facebooks approvals for their take off.

Agency –it can be said as where the locus of decision making ability lies. Free Basics shifts the agency from the end user to Facebook.

Competition and Market principles, Role of the regulator – Facebook worries that it may lose out in the future if it does not capture most of the world’s internet content on its platform. Inherently, it has a monopolistic, anti-competitive tendency.

Access to the Internet across the developed world, access to Internet was increased by making it affordable. India s tele density also increased on the same lines. Internet can also follow the same line.  Government policies shall promote competition where citizen benefits from lowered prices, rather than subsidizing them for truncated versions of Internet through Private providers such as free basics. These have Monopolistic tendencies of their own to increase their market power. A foreign company deciding what Indian shall watch also have inherent security challenges.

 

International North South transport corridor

Iran, Russia and India conceived this transport corridor to increase the access to central Asian markets through Tehran. It diversifies our export Markets and reduces the transport costs effectively.

Development of Logistics, Insurance cover, Banking sector, documentation procedures need to be improved to make it an attractive route to the traders.

 

 

 

 

Trade and commerce with Pakistan Issues

1)      MFN status to India

2)      Negative list of Pakistan

3)      Lack of Banking facilities

4)      Develo0pment of dispute resolution mechanism

 

GATS on Higher Education

It allows for the free movement of Educational services across the borders and makes Education a tradable commodity. It also demands for a level playing field between foreign and domestic education service providers.

But,

Access – It can increase the access to education only to the Rich and influential. As the Government subsidization of education decreases the concerns of Equity will arise, In India, Education is seen as a leveler between rich and poor.

Quality – It cannot be assured that only high quality educational institutions enter in to the country. 

Brain drain can get worsened as they train the students more for an international Market and Industry rather than to our needs.

The Ongoing reduction in educational subsidies, introduction of four year degree program, choice based credit system all are in line with GATS.

 

Question of the day

1)      Discuss the pitfalls of the claims of Free Basics on universalization of access to Internet. Suggest the alternative approaches how Internet can me made Universal for the digital inclusiveness in India.

2)      Do you think Foreign Universities entry in India can increase the quality, Equity and access to higher education?  Support your arguments with Examples. 

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