Q.1) What do mean by bank mergers? What are the issues and challenges in merging banks?
Amalgamation is different from merger. In amalgamation, as in the present case, old banks are destroyed for creating a new entity. In case of merger of SBI associates with SBI, all are merged into an existing entity(SBI).
- Consolidatio00n will present individual implementation challenges for the banks. There will be a possible rise in bad loan ratios.0
- Lenders will also have to do significant amount of rearranging of their branch networks. Over time, most banks have set up branches and ATM networks in similar locations particularly in Tier-1, Tier-2 towns.
- Despite automation, most Indian banks have gone for massive expansion of their branch networks in urban India, which will be redundant when some of them merge.
- In case of SBI, following the merger, gross NPAs have jumped from Rs1.08 trillion to Rs1.79 trillion. While its own net profit was Rs2,815 crore in the March quarter, the merged entity reported a loss of Rs3,300 crore.
- RBI has alre0ady created D-SIBs to reduce systemic risk from financial conglomerates that can send shocks to other parts of the financial system. The creation of banking giants through mergers should increase the regulations.0
- Several case studies have shown that merger announcements trigger confusion, anxiety and ins0ecurity in staff, leading to slowdowns in business. Weak talent management and poor communications often exacerbate these challenges.
Q.2) Why is the incidence of TB so high in India? What are the challenges in eliminating TB?
India continues to have the highest number of tuberculosis (TB) cases in the world as revealed by the Global TB Report 2017 of World Health Organization (WHO).
Reasons for prevalence of TB:
- Rising cases of multidrug-resistant TB (MDR-TB) in India.
- Poor diagnosis of TB.
- Challenges due to increasing HIV-TB double burden.
- Over reliance on over the counter drugs for medication is strengthening drug resistance.
- Underreporting and underdiagnosis of TB cases continue to be a challenge.
- Unregulated private sector and weak health systems.
- TB care and prevention investment remains low.
Measures to tackle the same:
- In 2016 RNTCP has expanded TB care services and made landmark changes in the strategy of diagnosis and treatment of TB.
- A new drug Bedaquiline was introduced for treatment of MDR-TB at 6 identified sites.
- Single window delivery of HIV-TB services was expanded at all Anti-retroviral Treatment (ART) centres in the country.
- ICT enabled treatment adherence support system (99 DOTS) was also extended for HIV-TB patients.
- E-NIKSHAY development and field testing began in Gujarat and Maharashtra.
Q.3) What is PISA? Why did India leave it earlier? What made it rejoin it now? What impact will it have on India’s education outcomes?
HRD Ministry has decided to participate in Program for International Student Assessment (PISA) after a gap of 10 years.
PISA is an international Survey conducted every three years and coordinated by the OECD. It assesses the quality of education systems across the world by evaluating students in science, mathematics and reading.
Why India left & Why it joined now?
In 2009, India was placed 72nd among the 74 participating countries. Then Indian government blamed “out of context” questions for the poor show and chose not to participate in the 2012 and 2015 cycles. Till date, India has participated only once in PISA-2009.
- It is felt that PISA has contributed to an obsession with standardized testing relying heavily on quantitative measures.
- The triennial survey has also been criticized for shifting focus from long-term and enduring solutions to temporary measures. Ad-hoc measures are being increasingly adopted by countries to improve their ranking.
- Kendriya Vidyalaya Sangathan set up a committee to review the matter and its report recommended that the country participate in the 2018 test cycle.
- The government will request OECD to administer the test across all schools in Chandigarh in 2021 because of it Compact area, To keep number of languages in which the test has to be administered to a minimum and Chandigarh’s record of performing well in learning assessments.
Impact on outcomes:
- According to OECD, it has created opportunities for policy-makers and stakeholders to collaborate across borders.
- It would lead to recognition and acceptability of Indian students and prepare them for the global economy in the 21st century.
Q.4) The digital revolution has made it possible for the services sector to deliver rapid growth and jobs more sustainably than the manufacturing sector. Discuss.
The emergence of e-commerce platform is an example of how digital revolution can lower transaction costs, increase productivity as well as make it more inclusive.
- Expansion of digital technology can play a big role in improving rural access to banking.
- Financial inclusion can be achieved through last-mile connectivity
- Financial services will help in medium-size cities, small towns, and villages to become new drivers of growth.
- The digital revolution means it is possible for the services sector to deliver rapid growth and jobs more sustainably than the manufacturing sector.
Digital technology and growth:
- The new industrial revolution and digital technological changes have changed the growth drivers in developing and developed countries.
- These technological changes have enabled services to be the new driver of growth.
- The digital revolution, by lowering transaction costs in services and overcoming problems of asymmetric information, has made services more dynamic than in the past
- The emergence of e-commerce platforms is an example of how digital revolution can lower transaction costs, increase productivity as well as make it more inclusive.
- Internet-based businesses or services, fixed up-front costs can be high initially, but once the physical infrastructure is in place, each additional customer, user, or transaction incurs very little extra cost.
- Developing countries are relying more on services and less on manufacturing as drivers of growth and job creation.
Digital revolution in India is significant as it promises to bring a multi-dimensional metamorphosis in almost all sectors of the society including service sectors. From digitization in governance to better healthcare and educational services, cashless economy and digital transactions, transparency in bureaucracy, fair and quick distribution of welfare schemes all seem achievable with the digital India initiative of the present Government.