Two-thirds of elderly financially dependent on others, says study
According to a survey, 65 per cent of the elderly in India are dependent on others for their financial requirements and undergo financial crisis.
The nation-wide survey conducted by Agewell Foundation involved a random sample of 15,000 people across India aged 60 or above.
The study found that pension was the main source of income for 38 per cent of the respondents.
Further, 46.4 per cent of the elderly claimed that their net-worth value had increased remarkably in their old age, primarily due to a sharp increase in real estate prices over the last two decades.
Healthcare
More than four-fifths of the respondents said that their major problems were related to healthcare issues, where financial status plays a key role.
The report finds that senior citizens aged over 70 are marginalised and isolated to a large extent.
According to the report, the financially well-off older people do not wish to be dependent on government facilities for healthcare needs, as they prefer private institutions for better services.
Financially insecure old people expect social security, free health care and subsidies so that they can lead a comfortable and respectable life in old age. At the same time, older people with sound financial health look forward to risk-free investment schemes, so that they can earn good returns to meet financial needs in old age.
Finally, the Adivasis of Telangana get a sweet deal
It is a sweet deal for Telangana’s hard-working Adivasis, the Kolams of Adilabad, the Chenchus of Mahabubnagar and the tribals of Eturnagaram in Warangal.
They can now overcome the setback suffered after the bifurcation of Andhra Pradesh, and get access to the State’s first honey processing and packaging plant at Nirmal, raising their income prospects.
Honey, that these tribals gather from the forests will be packaged for sale under the brand name of Girijan Cooperative Corporation (GCC Honey). The initiative is to be inaugurated on Gandhi Jayanthi.
After Andhra Pradesh was bifurcated, Telangana’s honey gatherers fell on hard times. Honey, which is classified as minor forest produce, was no longer sent to Chittoor or Rajamahendravaram for processing. That left the GCC in Telangana with a large volume, and about 400 quintals were stored in its godowns in Adilabad division.
Encouraging tribals
The main aim is to encourage the Particularly Vulnerable Tribal Groups of Kolams and Chenchus to continue to collect honey. The activity will provide them good income.
Commodities trading may open to foreigners
The Securities and Exchange Board of India (SEBI) has initiated talks with the Reserve Bank of India (RBI) to allow foreign portfolio investors into the commodity derivatives market.
SEBI Chairman U.K. Sinha said on the sidelines of an event on the completion of one year of merger of Forward Markets Commission (FMC) with SEBI. The FPI regulations emanated from FEMA (Foreign Exchange Management Act) and any kind of foreign money coming into the country has to have RBI approval.”
The regulator is also keen to allow other participants such as banks, mutual funds and insurance companies in the commodities market but will do so in a phased manner after talking to other regulatory bodies.
SEBI took over as the regulator of commodity derivatives market on 28th September 2015 and since then has initiated various measures like allowing option contracts, new commodities apart from releasing guidelines for warehouse service providers and online registration of brokers, among others.
‘Cautious manner’
The regulator plans to further develop the market but would do so in a “cautious manner.”
Spot polling
SEBI has already set up an advisory committee for commodity derivatives and the committee has further set up separate sub-groups to look into issues of spot polling of prices and how exchanges can rope in more hedgers.
The commodity derivatives market is dominated by two exchanges – Multi Commodity Exchange of India (MCX) and the National Commodity and Derivatives Exchange (NCDEX).
Metals and energy contracts dominate the trading at MCX, which has more than 90 per cent of market share in the commodity derivatives space.
The SEBI chairman said that the regulator is also looking at the “unduly balanced” ratio of business between the existing commodity exchanges.
New commodities
The regulator will soon give the go-ahead for options trading in one commodity each from the agri and non-agri segment.
On the recommendation of SEBI, the government has also allowed futures trading in new commodities like diamond, brass, pig iron, eggs, cocoa and tea.
Further, the advisory committee is also deliberating on issues such as improving the liquidity of the contracts.
About Commodity Derivatives:-
Commodity derivatives are investment tools that allow investors to profit from certain items without possessing them. This type of investing dates back to 1848 when the Chicago Board of Trade was established. Initially, the idea behind commodity derivatives was to provide a means of risk protection for farmers.
Modern commodity derivatives trading is most popular with people outside of the commodities industry. The majority of people who use this investment tool tend to be price speculators. These people usually focus on supply and demand and try to predict whether prices will go up or down. When the prices of a certain commodity move in their favor, they make money. If price moves in the opposite direction, then they lose money.
The buyer of a derivative contract buys the right to exchange a commodity for a certain price at a future date. Although this person is a contract buyer, he may be buying or selling the commodity. He does not have to pay the full value of amount of the commodity that he is investing in. He only needs to pay a small percentage, known as the margin price.
The contract seller is the person who accepts a margin. He agrees that on a certain date he will buy or sell the commodity stated in the contract at a certain price. Both parties are generally required to honor the agreement despite losses.
For example, an investor may buy a contract from the seller that gives him rights to one ton of coffee beans for $1000 US Dollars (USD) on July 1st. Although the value of the contract is $1000 USD, the buyer may only be required to pay $100 USD. On July 1st, the seller will transfer the rights of one ton of coffee beans to the buyer.If the current value of a ton of coffee beans on July 1st is $1,500 USD, the buyer can sell to the market and make a $500 USD profit. If the value of coffee beans on that day is only $800 USD, this person will have purchased at a loss. He can choose to take possession of the coffee beans, which is rare. He can sell to the market at a loss. In most cases, he will become the seller and attempt to find a buyer.
Commodity derivatives trading allows a person to use a small sum of money for the potential to earn substantial profits. This sort of investment, however, is considered high risk. When prices are not in an investor’s favor, he can suffer substantial losses. Commodities that are open to this type of investing include cotton, soybean, and rice. In some countries, although these commodities are available, this type of trading is illegal.
Merger of Sebi and FMC:-
What does the merger mean?
The Forward Contracts Regulation Act (FCRA) stands repealed, and the regulation of the commodity derivatives market shifts to Sebi under the Securities Contracts Regulation Act (SCRA), 1956. SCRA is a stronger law, and gives more powers to Sebi than FCRA offered to FMC. Market players feel that commodity markets will now be better regulated, with more stringent processes — and will thus evoke greater confidence.
Why is Sebi seen to be better equipped to monitor commodities trading?
The FMC only regulated the exchanges, and had no direct control over brokers. Also, Sebi has a far superior surveillance, risk-monitoring and enforcement mechanism that market participants say will give more confidence to investors, and may help businesses grow. Among other powers, Sebi now also has the power to access call data records.
How can Sebi expand the scope of commodity trading?
While foreign institutional investors are allowed to invest in Indian equities and debt markets, they are currently restricted from participating in commodities trading at exchanges. According to sources, Sebi may allow FII participation in commodities trading going forward, which would provide more depth to the markets, and increase liquidity, investor participation and better price discovery.
Brokers also feel Sebi may introduce option contracts (call and put options) in commodities trading, thereby providing better hedging tools to investors. Sebi has said that it will oversee price determination of commodities. Price discovery has been a major issue in commodities trading, and if the regulator addresses that concern, it will be a big confidence-booster for participants.
Who proposed the merger?
The NSEL( National Spot Exchange Ltd) episode underlined the need for a better and stronger regulator to safeguard investor interest and restore confidence. The Financial Sector Legislative Reforms Commission (FSLRC) had earlier stressed on the need to move away from sector-wise regulation. It proposed a system in which RBI would regulate the banking and payments system, and a Unified Financial Agency (UFA) would subsume all other financial sector regulators such as SEBI, IRDA, PFRDA and FMC, to regulate the rest of the financial markets.
Swachhagraha
‘Swachhagraha’ – an Adani Act initiative towards ‘Creating a Culture of Cleanliness’ has been launched at Ahmedabad recently. The initiative has been launched in association with the Centre for Environment Education (CEE) as its Knowledge and Implementation partner.
The programme plans to be rolled out in 250 schools across 6 cities in Gujarat, namely Ahmedabad, Surat, Vadodara, Anand, Rajkot and Bhuj-Mundra. It is envisioned that Swachhagraha will eventually be scaled up to covering more than 12 states across the country in the times to come.
‘Swachhagraha’ draws inspiration from the ‘Satyagraha’ movement, which catalyzed action through tremendous patience & perseverance, and united the entire nation to fight against a common enemy.
‘Swachhagraha’, similar to ‘Satyagraha’ aims at engaging people and bringing about a change, similar in scale to India’s freedom movement, where people get involved to take action for ‘Creating a culture of Cleanliness’.
Aligning with the Swachh Bharat Mission (SBM) announced by our Hon’ble Prime Minister, Shri Narendra Modi, Swachhagraha’s mission is to kill the litterbug amongst all of us and transform the face of the nation beyond 2019 and forever.
Google to set up ‘Cloud Region’ in Mumbai, to go live in 2017
Google will open a new Google Cloud Region in Mumbai, that is expected to be live in 2017.
The India cloud region is aimed at offering Google Cloud Platform services to Indian developers and enterprise customers.
Receive Daily Updates
Recent Posts
Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.