Silverliningsplaybook, [09.02.

18 09:52]

Making school education qualitative

The Central Government, through the centrally sponsored schemes of Sarva Shiksha Abhiyan (SSA) and
Rashtriya Madhyamik Shiksha Abhiyan (RMSA) supports the States and UTs on several interventions to
improve quality, including regular inservice teachers’ training, induction training for newly recruited
teachers, training on ICT Component, Inclusive Education, Gender Sensitization and Adolescent
Education. Under both SSA and RMSA, the focus is to give subject specific, need based and relevant in
service teacher training to both elementary and secondary teachers for their professional
development. Moreover, interventions like motivation and awareness programmes, remedial teaching
are also supported under RMSA to improve quality of school education at secondary level. Further,
interventions such as Science fair/Exhibition and Talent Search at district level; mathematics and
science kits to schools, visit of students to higher institution and learning enhancement of students
are also approved. The Central Government has been consistently pursuing the matter of expeditious
recruitment and redeployment of teachers and to implement norms of the RTE Act 2009 with the
States and UTs at various forums. Advisories have also been issued to States and UTs from time to time
to implement the norms of the RTE Act and for redeployment of teachers to ensure that all school
teachers should spend adequate time serving in rural areas through a transparent policy. Further, the
Government has initiated the following steps to make school education qualitative:

Shagun portal has been launched to create a repository of best practices in school education and to
monitor the implementation of SSA;
Swachh Vidyalaya Campaign for the provisions of separate toilets for girls and boys in every school;

Swachh Vidyalaya Puraskar was instituted from 2016-17 at District, State and national level as a next
step to Swachh Vidyalaya initiative;

Padhe Bharat Badhe Bharat was launched in 2014 to ensure that students of classes I & II are able to
read with comprehension as well as basic numeracy skills;

Rashtriya Avishkar Abhiyan was launched in 2015 to motivate children of the age- group of 6-18 years
in study of Science, Mathematics and technology;

The Right of Children to Free and Compulsory Education (RTE) Act has been amended in February, 2017
to include reference on class-wise, subject-wise Learning Outcomes to ensure that all children acquire
appropriate learning level;

Section23 (2) of the RTE Act has been amended in August, 2017, to extend the period of in-service
training for untrained elementary teachers to 31st March, 2019 to ensure all teachers acquire
minimum qualifications as laid down by the academic authority;

E-pathshala webportal (http://epathshala.gov.in/) and mobile apps (Android, iOS and Windows) have
been launched in November 2015 to disseminate e-resources including e-books developed by NCERT,
SCERT/ SIEs, State boards etc;

Shaala Siddhiis a comprehensive instrument for school evaluation leading to school improvement,
which was launched in November, 2015;
Kala Utsav programme has been started to promote arts in education by nurturing and showcasing the
artistic talent of school students at the secondary stage;

An Online Project Monitoring System (PMS), for online managment and monitoring of RMSA has been
enabled from August 2014, Distribution of tablets preloaded with relevant e content in Kendriya
Vidyalayas has been started on a pilot basis to connect students and their teachers for effective
learning;

Also, 93 Kendriya Vidyalayas (KVs) have been started during last 3 years and 62 new Navodaya Vidyalas
have been sanctioned.

Automated Monitoring System at the school level under Mid Day Meal Scheme has been introduced
for real time monitoring of the scheme;

RBI to link base rate with MCLR from 1 April

Improving monetary policy transmission

1. The Reserve Bank of India (RBI) will link the base rate for loans with the marginal cost of funds-
based lending rate (MCLR) from 1 April

2. This is likely to narrow the gap between the base rate and MCLR, and benefit borrowers who are
still using the base rate

3. It is being seen as a phasing out of the base rate system

MCLR benefits

1. The MCLR is more sensitive to monetary policy transmission and is closely linked to the actual
deposit rates

2. MCLR is calculated on the basis of incremental cost of funds, making it a more reliable benchmark
rate as compared to the base rate

3. MCLR is reviewed on a monthly basis and base rate on a quarterly basis

Example

1. Since April 2016, while the repo rate has been reduced by 75 basis points, State Bank of India’s base
rate has come down by 65 basis points but the one-year MCLR by as much as 1.25 percentage points

2. One basis point is one-hundredth of a percentage point

Back2Basics

Base Rate

1. Base rate is the minimum rate set by the Reserve Bank of India below which banks are not allowed
to lend to its customers
2. Base rate is decided in order to enhance transparency in the credit market and ensure that banks
pass on the lower cost of fund to their customers

MCLR

1. MCLR actually describes the method by which the minimum interest rate for loans is determined by
a bank – on the basis of marginal cost or the additional or incremental cost of arranging one more
rupee to the prospective borrower

2. The MCLR is a tenor linked internal benchmark (tenor means the amount of time left for the
repayment of a loan)

3. The MCLR comprises of the following:

a) The marginal cost of funds which is a novel concept under the MCLR methodology comprises of
Marginal cost of borrowings and return on net worth, appropriately weighed.

b) Negative carry on account of’ Cash reserve ratio (CRR)- Negative carry on the mandatory CRR arises
because the return on CRR balances is nil.

Negative carry on mandatory Statutory Liquidity Ratio (SLR) balances may arise if the actual return
thereon is less than the cost of funds.

c) Operating Cost associated with providing the loan product, including cost of raising funds, but
excluding those costs which are separately recovered by way of service charges.

d) Tenor Premium- The change in tenor premium cannot be borrower specific or loan class specific. In
other words, the tenor premium will be uniform for all types of loans for a given residual tenor.

4. The MCLR methodology for fixing interest rates for advances was introduced by the Reserve Bank of
India with effect from April 1, 2016

Rationalization of autonomous bodies:

Context:

The Union Cabinet has approved the proposal for closure of Autonomous Bodies, namely, Rashtriya
Arogya Nidhi (RAN) and Jansankhya Sthirata Kosh (JSK) and the functions are proposed to be vested in
Department of Health & Family Welfare (DoHFW).The rationalization of Autonomous Bodies under
Department of Health & Family Welfare will involve inter-ministerial consultations and review of existing
bye laws of these bodies. The time frame for implementation is one year.

Rashtriya Arogya Nidhi (RAN):It was set up as a registered society to provide financial medical assistance
to poor patients receiving treatment in designated central government hospitals. An advance is placed
with the Medical Superintendents of such hospitals who then provide assistance on a case to case basis.
Since the DoHFW provides funds to the hospitals, the grants can be given from the Department to the
hospital directly. RAN functions can, therefore, be vested in DoHFW. Managing Committee of RAN
Society will meet to dissolve the Autonomous Body (AB) as per provisions of Societies Registration Act,
1860 (SRA). In addition to this, Health Minister’s Cancer Patient Fund (HMCPF) shall also be transferred
to the Department. The timeline required for this is one year. Jansankhya Sthirata Kosh (JSK): It was set
up with a corpus grant of Rs.100 crores in the year 2003 to raise awareness for population stabilization
strategies. JSK organizes various activities with target populations as a part of its mandate. There has
been no continuous funding to JSK from the Ministry. Population stabilization strategies require private
and corporate funding, which can be accessed through JSK. Although, JSK will continue to play a
significant role in population stabilization strategies, its existence as an Autonomous Body is not
necessary. Hence, JSK as an Autonomous Body can be closed as it can be administered by the
Department as a fund.

Changes made in classification of MSMEs:

Context:

The Union Cabinet has approved change in the basis of classifying Micro, Small and Medium enterprises
from ‘investment in plant & machinery/equipment’ to ‘annual turnover’. Section 7 of the Micro, Small
and Medium Enterprises Development (MSMED) Act, 2006 will accordingly be amended to define units
producing goods and rendering services in terms of annual turnover as follows:

• A micro enterprise will be defined as a unit where the annual turnover does not exceed five crore
rupees;

• A small enterprise will be defined as a unit where the annual turnover is more than five crore rupees
but does not exceed Rs 75 crore;

• A medium enterprise will be defined as a unit where the annual turnover is more than seventy five
crore rupees but does not exceed Rs 250 crore.

• Additionally, the Central Government may, by notification, vary turnover limits, which shall not exceed
thrice the limits specified in Section 7 of the MSMED Act.

Background:

At present the MSMED Act (Section 7) classifies the Micro, Small and Medium Enterprises (MSMEs) on
the basis of investment in plant and machinery for manufacturing units, and investment in equipment
for service enterprises. The criterion of investment in plant and machinery stipulates self declaration
which in turn entails verification if deemed necessary and leads to transaction costs. Significance of this
move:

The change in the norms of classification will enhance the ease of doing business. The consequent
growth and will pave the way for increased direct and indirect employment in the MSME sector of the
country. This will also encourage ease of doing business, make the norms of classification growth
oriented and align them to the new tax regime revolving around GST (Goods & Services Tax).