Sri Lanka’s Aggravating Economic Crisis
Context:
Sri Lanka’s economic crisis is aggravating rapidly, putting citizens through enormous hardship. Over the weekend, at least two senior citizens died while waiting in long queues to buy fuel; the price of cooking gas spiked to LKR 4,199 (roughly ₹1,150), the price of the widely used milk powder shot up by LKR 600 a kg, and authorities were forced to cancel school examinations for millions of students, due to a shortage of paper.
Relevance:
GS II- International Relations (India and its Neighbourhood)
Dimensions of the Article:
- Reason for Economic Crisis:
- What is happening on the ground?
- How is India helping?
- How is India’s assistance being viewed in Sri Lanka?
Reason for Economic Crisis:
- Sri Lanka is in the grips of one of its worst economic meltdowns in history.
- The first wave of the pandemic in 2020 offered early and sure signs of the distress —
- Thousands of Sri Lankan labourers were left stranded in West Asian countries and returned jobless.
- Garment factories and tea estates were forced to close as diseases spread in clusters. The tourism industry has taken a significant hit.
- Thousands of young people in cities have lost their jobs as businesses have abruptly fired or shut down.
- All significant foreign exchange generating industries, including exports and remittances, as well as tourism, were severely harmed as a result of the currency fall.
Policy Failure of Sri lankan Government:
- The lack of a comprehensive strategy to respond to the crisis then, coupled with certain policy decisions last year — including the government’s abrupt switch to organic farming —widely deemed “ill-advised”, further aggravated the problem.
- The government declared emergency regulations for the distribution of essential food items, amid wide import restrictions to save dollars which in turn led to consequent market irregularities, and reported hoarding.
- Fears of a sovereign default rose by the end of 2021, with the country’s foreign reserves plummeting to $1.6 billion, and deadlines for repaying external loans looming.
What is happening on the ground?
- At the macro-economic level, all indicators are worrisome.
- The Sri Lankan rupee, that authorities floated this month, has fallen to nearly 265 against the U.S. dollar. Consumer Price inflation is at 16.8% and foreign reserves stood at $2.31 billion at the end of February.
- Sri Lanka must repay foreign debt totalling nearly $7 billion this year and continue importing essentials from its dwindling dollar account.
- In a recent address to the country, President said Sri Lanka will incur an import bill of $22 billion this year, resulting in a trade deficit of $10 billion.
- For citizens, this means long waits in queues for fuel, a shortage of cooking gas, contending with prolonged power cuts in many localities and struggles to find medicines for patients.
- In families of working people, the crisis is translating to cutting down on milk for children, eating fewer meals, or going to bed hungry.
How is India helping?
- India supports Sri Lanka as part of its first-neighbourhood policy.
- For the provision of essential commodities, a $1 billion credit line was inked. India’s help package includes a key component.
- India has provided $ 2.4 billion in assistance since January 2022, including a $400 million RBI currency swap and a $500 million loan deferment.
China:
China is considering Sri Lanka’s recent request for further $2.5 billion assistance, in addition to the $2.8 billion Beijing has extended since the outbreak of the pandemic
How is India’s assistance being viewed in Sri Lanka?
- The leadership has thanked India for the timely assistance, but there is growing scepticism in Sri Lankan media and some sections, over Indian assistance “being tied” to New Delhi inking key infrastructure projects in the island nation in the recent past — mainly
- the strategic Trincomalee Oil Tank Farm project;
- the National Thermal Power Corporation’s recent agreement with Ceylon Electricity Board to set up a solar power plant in Sampur, in Sri Lanka’s eastern Trincomalee district;
- two renewable energy projects in northern Sri Lanka, with investment from India’s Adani Group.
- New Delhi is accused of using “diplomatic blackmail” by the Sri Lankan media. The political opposition has accused the Adani Group of entering Sri Lanka through the “back door”, avoiding competitive bids and due process.
National Pharmaceutical Pricing Authority
Context
The National Pharmaceutical Pricing Authority (NPPA) could approve a price increase of more than 10% in drugs and equipment on the National List of Essential Medicines (NLEM).
- The hike in the Wholesale Price Index is driving the increase, which is likely to affect almost 800 drugs and devices (WPI)
Relevance:
GS II- Government Policies and Intervention, Health
Dimensions of the Article:
- About National Pharmaceuticals Pricing Authority
- Functions of NPPA
- How does the Pricing Mechanism work?
About National Pharmaceuticals Pricing Authority
- NPPA is an organization under Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers which was set up in 1997 to revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order (DPCO), 1995.
- The prices are now fixed/revised under Drugs (Prices Control) Order (DPCO), 2013.
- It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.
Functions of NPPA:
- To implement and enforce the provisions of the Drugs Price Control Order (DPCO), 1995/2013 in accordance with the powers delegated to it.
- To undertake and/or sponsor relevant studies in respect of pricing of drugs/formulations.
- To monitor the availability of drugs, identify shortages, if any, and to take remedial steps.
- To collect/maintain data on production, exports and imports, market share of individual companies, profitability of companies etc. for bulk drugs and formulations.
- To deal with all legal matters arising out of the decisions of the Authority.
- To render advice to the Central Government on changes/revisions in the drug policy.
- To render assistance to the Central Government in the parliamentary matters relating to the drug pricing.
How does the Pricing Mechanism work?
- All drugs covered by the NLEM are subject to price controls. The NLEM comprises routinely used medicines like paracetamol and azithromycin, as well as drugs used to treat fever, infection, heart disease, hypertension, and anaemia.
- The Health Ministry compiles a list of pharmaceuticals that are eligible for price restriction, which is then added to Schedule 1 of the DPCO by the Department of Pharmaceuticals.
- The National Pharmaceutical Pricing Authority (NPPA) will examine the list with the help of the Standing Committee on Affordable Medicines and Health Products (SCAMHP). The National Pharmaceutical Pricing Authority (NPPA) then sets the prices for medications in this Schedule.
- Scheduled pharmaceuticals, which account for around 15% of the pharma market, are allowed a rise by the government based on the WPI (Wholesale Price Index), while the remaining 85% are allowed an automatic increase of 10% every year under the Drugs (Prices) Control Order 2013.
- The annual change in the price of scheduled pharmaceuticals is closely monitored and rarely exceeds 5%.
- The Drugs and Cosmetics Act of 1940 classifies drugs into schedules and establishes rules for their storage, display, sale, dispensing, dosing, and prescribing.
- Rather than using the WPI, the pharma industry is now requesting at least a 10% rise for scheduled pharmaceuticals.
- Input costs have risen sharply in recent years. One of the causes is that China supplies 60 percent to 70 percent of the country’s medical needs.
Drugs (Prices Control) Order (DPCO)
- The Drugs Prices Control Order, 1995 is an order issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs.
- The Order inter alia provides the list of price controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by Govt., penalties for contravention of provisions etc.
- For the purpose of implementing provisions of DPCO, powers of Government have been vested in NPPA.
New India Literacy Programme
Context:
Government approved a new scheme “New India Literacy Programme” for the period FYs 2022-2027 to cover all the aspects of Adult Education to align with National Education Policy 2020 and Budget Announcements 2021-22.
- The National Education Policy 2020 has recommendations for Adult Education and Lifelong Learning.
Relevance:
GS II- Education
Dimensions of the Article:
- About New India Literacy Programme
- Objectives of the scheme
- Salient Features of the scheme
About New India Literacy Programme
- The scheme will cover non-literates of the age of 15 years and above in all state/UTs in the country.
- The scheme will be implemented through volunteerism through online mode.
- The training, orientation, workshops of volunteers, may be organized through face-to-face mode.
- All material and resources shall be provided digitally for easy access to registered volunteers through easily accessible digital modes, viz, TV, radio, cell phone-based free/open-source Apps/portals, etc.
- The target for Foundational Literacy and Numeracy for FYs 2022-27 is 5 (five) crore learners @ 1.00 crore per year by using “Online Teaching, Learning and Assessment System (OTLAS)” in collaboration with National Informatics Centre, NCERT and NIOS in which a learner may register him/herself with essential information like name, date of birth, gender, Aadhaar number, mobile number etc.
- As a progressive step, it has also been decided that from now onwards that the term “Education For All” will be used in place of “Adult Education” by the Ministry in view of the fact that the terminology “Adult Education” is not incorporating appropriately all non-literates of 15 years and above age group.
Objectives of the scheme
- To impart foundational literacy and numeracy
- To impart critical life skills (including financial literacy, digital literacy, commercial skills, health care and awareness, child care and education, and family welfare);
- Vocational skills development (with a view towards obtaining local employment);
- Basic education (including preparatory, middle, and secondary stage equivalency);
- Continuing education (including engaging holistic adult education courses in arts, sciences, technology, culture, sports, and recreation, as well as other topics of interest or use to local learners, such as more advanced material on critical life skills).
Salient Features of the scheme
- School will be Unit for implementation of the scheme.
- Schools to be used for conducting survey of beneficiaries and Voluntary Teachers (VTs).
- Different strategies are to be adopted for different age cohorts. Flexibility for States/UTs will be provided to undertake innovative activities.
- Use of Technologies to impart Adult Education for wider coverage of the scheme.
- Performance Grading Index (PGI) for State/UT and district level will show the performance of States and UTs to implement the scheme and achievements on yearly basis by weighing both the physical and financial progress through UDISE portal.
- CSR/Philanthropic Support may be received by hosting ICT support, providing volunteer support, opening facilitation centres for learners and for providing IT access to economically weak learners in the form of cell phones, etc
- There will be involvement of community, participation of philanthropic/CSR organizations through volunteerism and through Vidyanjali portal.
- States/UTs will promote individual/ family/ village/ district success stories through various platforms.
- It will utilize all types of media – Electronic, Print, Folk & Inter-personal platforms including social media platforms like Facebook, Twitter, Instagram, WhatsApp, YouTube, TV channels, radio, etc.
- Annual Achievement Survey of Learning Outcomes by samples of 500-1000 randomly selected learners from each state/UT and Outcome-Output Monitoring Framework (OOMF).
Need for this scheme
- As per Census 2011, the absolute number of non-literates of the country in 15 years and above age group is 25.76 crore (Male 9.08 crore, Female 16.68 crore).
- Even after the Saakshar Bharat programme implemented during 2009-10 to 2017-18, it is estimated that currently around 18.12 crore adults are still non-literate in India.
Exercise LAMITIYE-2022
Context:
The 9th Joint Military Exercise LAMITIYE-2022 between the Indian Army and Seychelles Defence Forces (SDF) is being conducted at Seychelles Defence Academy (SDA), Seychelles from 22 March to 31 March 22.
Relevance:
GS III- Security Challenges, Facts for Prelims
Dimensions of the Article:
- About Exercise LAMITIYE-2022
- Objectives of the Exercise
About Exercise LAMITIYE-2022
- Exercise LAMITIYE-2022 is a biennial training event which is being conducted in Seychelles since 2001.
- Exercise LAMITIYE with Seychelles is crucial and significant in terms of security challenges faced by both the Nations in the backdrop of current global situation and growing security concerns in the Indian Ocean Region.
- The 10 days long joint exercise will include field training exercises, combat discussions, lectures, demonstrations and culminate with a two days validation exercise.
- Both sides will jointly train, plan and execute a series of well-developed tactical drills for neutralistion of likely threats that may be encountered in Semi Urban environment, while exploiting and showcasing new generation equipment and technology for conducting joint operations.
- Due emphasis will be laid on enhancing tactical skills in combating hostile forces in Semi-Urban environment and on increasing interoperability between forces.
Objectives of the Exercise:
- The objective of the joint training exercise is to build and promote bilateral military relations in addition to exchanging skills, experiences and good practices between both the armies.
- The joint military exercise will enhance the level of defence co-operation between Indian Army and Seychelles Defence Forces (SDF) and will further manifest in enhancing the bilateral relations between the two countries.
