QUESTION : Despite the law banning manual scavenging, this practice still exists. Examine the causes and suggest steps needed to overcome problem of manual scavenging in India.
Topic- THE MENACLES OF CASTE IN SANITATION WORK
WHAT ?
Manual Scavenging In India
WHY IN NEWS ?
Even in 2020, the Indian government and our civil society continue to grapple with the inhuman nature of manual scavenging.
MANUAL SCAVENGING :
- Manual scavenging refers to the practice of manually cleaning, carrying, disposing or handling in any manner, human excreta from dry latrines and sewers.
- The practise of manual scavenging is linked to India’s caste system where so-called lower castes were expected to perform this job.
- Manual scavengers are amongst the poorest and most disadvantaged communities in India.
- Frequent deaths occur as manual scavengers don’t even have adequate tools and protective gear to clean the manhole. It often involves using the most basic of tools such as buckets, brooms and baskets.
THE CURRENT SCENARIO IN INDIA :
- While civil society started a movement in the 1990s to abolish dry latrines, the focus now is on manhole deaths and the provision of safety equipment to sanitation workers.
- The movement has been demanding the abolition of the dehumanizing practice of the manual removal of human excreta and calls for the introduction of mechanization for handling waste.
- Various State governments and the Central governments have responded to these civil society demands by introducing different legislations to stop manual scavenging and provide incentives to build toilets.
- Currently, the Indian government seems to be framing the issue as a spectacle in the form of Swachh Bharat Abhiyan and is addressing the problem in terms of an obstacle in the way of tourism promotion.
- Abysmal situation:
o During the last Chennai floods, sanitation workers from the Nilgiris district were made to travel in garbage trucks to Chennai.
o This situation has continued even during the coronavirus pandemic eg. in Tamil Nadu, sanitation workers are asked to work in newly formed COVID-19 wards.
STEPS TAKEN IN PAST :
- Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act in 1993
o The Act prohibited the construction of unsanitary dry latrines and employing manual scavengers.
o The Act had defined ‘manual scavenger’ as a person engaged in or employed for manually carrying human excreta.
o However, the government’s description of the dry latrine was a problem, as it defined dry latrine as “latrine other than a water-seal latrine”.
o Manual scavenging was not just a practice related to dry latrines, but also to insanitary latrines and open defecation.
- Safai Karamchari Andolan
o The Safai Karamchari Andolan, a social movement that campaigned against manual scavenging, along with other organizations, filed public interest litigation(PIL) in the Supreme Court.
o The demand was to direct State governments and Union Territories to strictly enforce the law to stop the practice of manual removal of human excreta.
- Prohibition of Employment as Manual Scavengers and their Rehabilitation Act,2013
o Though the construction of dry latrines has drastically reduced, the number of deaths in manholes, sewers and septic tanks continues to remain high.
o The Indian government had plans to amend the 2013 Act to completely mechanize the cleaning of sewers and manholes and build new sewers.
o However, neither the past nor the present amendment addresses the issue of labor safety.
- Swachh Bharat Abhiyan
o The same is the case with the Swachh Bharat Abhiyan, which skirts the issue of labor rights and the stigma attached to sanitation.
o Also, not only toilets but even cleaning work is seen as a lowly job in India.
o Most sanitation contracts are given to private contractors or self-help groups, and such staff hardly have ID cards, leave alone the protection of medical insurance policies.
ISSUES RELATED TO MANUAL SCAVENGING :
However, while manual scavenging for many may have ended as a form of employment, the stigma and discrimination associated with it lingers on.
o This makes it difficult for liberated manual scavengers to secure alternative livelihoods.
o People could once again return to manual scavenging in the absence of other opportunities to support their families.
Correctly identifying manual scavengers remains a key challenge.
WHY MANUAL SCAVENGING PREVALENT IN INDIA ?
Scavenging has been an occupation imposed upon certain citizens of the country by the society, which later on continued as a traditional occupation among Scheduled Castes.
- Manual scavenging exists primarily because of absence of water borne latrines. The House-listing and Housing Census, 2011 reported that there are about 26 lakh insanitary latrines in the country.
- With emergence of urban areas these people were also employed for cleaning of sewers or septic tanks.
- Low level of education, awareness about their rights, laws and low self esteem force them to take such work.
- Lack of empathy among the government, contractors and household members employing manual scavengers is another reason, wherein these class of people fail to see the agony of the manual scavengers.
- Poor implementation of the existing laws has also helped in continuation of this practice.
- These section of society are not organized and don’t have any significant voice in the government structures which cause their voice being unheard.
WAY FORWARD:
- There is a need to provide vehicles for sanitation workers to travel to their designated workspaces.
- Urgent need to dissociate caste from labor:There are hardly any exclusive trade unions for sweepers.
- There is a need for political will and social pressure to avoid any further deaths.
- If the law on manual scavenging is to be effective, the penalties must be uniformly and visibly enforced.
- It is equally important for State governments to address the lack of adequate machinery to clean septic tanks.
- Toilet designs proposed by the government include those in which fully composted waste must be removed from pits every two years
- The Centre must ensure that this does not become an avenue to oppress members of some communities, reflecting social inequalities.
- The Swachh Bharat Abhiyan should make expansion of the sewer network a top priority.
QUESTION : Explain how digital transactions on the Universal Payment Interface (UPI) has brought payment revolution in India and list the issues of MDR.
Topic- POTHOLES ON THE DIGITAL PAYMENT SUPERHIGHWAY
WHAT ?
Digital Payment
WHY IN NEWS ?
Digital payments have found strong ground, especially in India, increasingly relegating all other modes of payments to the background.
- According to a report, Indian digital payment industry is expected to reach $1 trillion by 2023.
- The Indian startup ecosystem is expected to play a crucial role in enabling this industry as it is capable of leveraging the opportunities by addressing a multitude of challenges.
NPCI :
- National Payments Corporation of India (NPCI) is an umbrella organization for all retail payments in India.
- It was set up in 2009 with the support of RBI and Indian Banks Association (IBA).
- The idea for NPCI emerged in the vision document on payments system, 2005-08 released by RBI in 2005.
ADOPTION OF DIGITAL PAYMENTS IN INDIA :
- Digital payments have found strong ground in India reducing all other modes of payments to the background.
- Through a faster system of simultaneous debits and credits, the money value is transferred from one account to the other across banks.
- With such versatility and ease of settling financial transactions, the growth of digital payments is going to be phenomenal, supported by banks and Fin-Tech companies.
EVOLUTION OF DIGITAL PAYMENTS IN INDIA :
- A major thrust toward large value payments was effected through the Real Time Gross Settlement System, or RTGS, launched by the RBI in March 2004.
- The large value payments on stock trading, government bond trading and other customer payments were covered under the RTGS.
- It substantially reduced the time taken for settlements.
- Around the same time, the RBI introduced National Electronic Funds Transfer, or NEFT to support retail payments.
- Now, NEFT is available round the clock and RTGS will follow from December 2020 — only a few countries have achieved this.
- These systems were seeded and reinforced with the setting up of the umbrella retail payments institution: National Payments Corporation of India (NPCI).
- NPCI was set up by 10 lead banks at the instance of the RBI in 2009.
- The NPCI as a not-for-profit company
HOW NPCI TRANSFORMED RETAIL PAYMENT SYSTEM IN INDIA :
- The NPCI’s success against deeply entranced formidable international players, supported by innovative technology, viz. Unified Payments Interface (UPI) and Immediate Payment Service (IMPS), is well recognised by central banks in many other countries.
- The Bank for International Settlements’s endorsement of the NPCI model in 2019 is a major accolade.
- With digital payment being a public good like currency notes, it was necessary that the corporation was fully supported by the RBI and the government as an extended arm of the sovereign.
- It was also necessary to contain expectations on profits, avoiding direct or indirect control by powerful private interests could dilute the public good character of the outfit.
ISSUES OF CONVERTING NPCI INTRO FOR-PROFIT :
- Converting NPCI intro for-profit company will be a retrograde step with huge potential for loss of consumer surplus along with other strategic implications.
- Instead the strategy should be to assist the NPCI financially, either by the RBI or the government, to provide retail payment services at reduced price (in certain priority areas).
- This may also help support expansion of the payment system network and infrastructure in rural and semi-urban areas in partnership with Fin-Tech companies and banks.
ISSUE OF MDR :
- In Budget 2020-21, the government prescribed zero Merchant Discount Rate (MDR) for RuPay and UPI, both NPCI products.
- Zero MDR on UPI and RuPay will help to popularise digital payments benefiting both customers and merchants.
- There is justification in this zero MDR prescription by the government.
- It is justified because depositors implicitly pay around 3% to banks as net interest margin, being the difference between saving and risk free bond rate, for enjoying certain payments services traditionally.
- When banks enjoy such a huge amount of current account savings account (CASA) deposits, in return, is it not incumbent on them to provide such payment services?
- The government left out other providers of digital payment products from this MDR prescription.
- Taking advantage of this dichotomy, many issuing banks switched to mainly Visa and Master cards for monetary gains.
- As customers were induced by such supplier banks, it created a kind of indirect market segmentation and cartel formation, though there is hardly any quality difference in payment products.
- It may be noted that even the European Central Bank imposed a ceiling on MDR for all, protecting consumer interest.
PRICING FOR DIGITAL PAYMENTS :
- The ideal pricing for digital payments products should be based on an analysis of-
(i) producer surplus
(ii) consumer surplus
(iii) social welfare for which we need cost-volume-price data.
- A factor which needs to be reckoned is the float funds digital payments allow (cash withdrawal is a drain on the banking system), which is a source of sizeable income for banks.
- The RBI will do well to study and arrive at a rational structure of pricing including MDR (possibly also penalty on default by customer).
WHAT IS MDR ?
- The merchant discount rate (MDR) is charged to merchants for processing debit and credit card transactions.
- To accept debit and credit cards, merchants must set up this service and agree to the rate.
- The merchant discount rate is a fee, typically between 1%-3%, that merchants must consider when managing business costs
CONCLUSION :
- The introduction of UPI by National Payments Corporation of India has shown a remarkable result. Also, RBI’s Vision 2021 is a step in the right direction as it looks to create a robust digital payment ecosystem by moving towards a cash-lite economy.
- In this context, government has a crucial role to play in protecting consumers against exploitation (i.e., setting level playing field regime in MDR)
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