Q1. Discuss the origins and key features of the New Pension Scheme (NPS) introduced in India in 2004. Analyze the implementation challenges and issues associated with the NPS, particularly in comparison to the Old Pension Scheme (OPS). (250 words)
Topic- Pension system in India:
Introduction:
The New Pension Scheme (NPS) emerged as a pivotal reform in India’s pension system, aimed at addressing the burgeoning pension liabilities and introducing market-linked features for retirement benefits. However, the scheme’s market-linked nature raised apprehensions about unpredictable returns and financial insecurity for retirees.
Body :
- Importance of pension
- Issues with pension
- Old Pension System
- Origins of New Pension System
- Features of NPS
Conclusion :
While the New Pension Scheme aimed to address pension liabilities and introduce market-based features, its implementation encountered challenges and raised concerns about financial security for employees. Evaluating the NPS against the backdrop of the Old Pension Scheme highlights the trade-offs between sustainability and certainty in India’s pension system.
UPSC Syllabus Pension system in India:
What are the reasons for introduction of Fiscal responsibility and Budget Management (FRBM) act, 2003? Discuss critically its salient features and their effectiveness. (UPSC Main 2013)
Introduction
The New Pension Scheme (NPS) emerged as a pivotal reform in India’s pension system, aimed at addressing the burgeoning pension liabilities and introducing market-linked features for retirement benefits. However, the scheme’s market-linked nature raised apprehensions about unpredictable returns and financial insecurity for retirees.
Body Status :
Importance of Pension
- As the healthcare improves, people would be living more and hence pension support would be required for survival.
- As per a recent UN report, the share of older persons in India is projected to increase to nearly 20 per cent in 2050. This calls for giving due protection to them.
- The pension can give hope to survive and reduce the suicide rate among the elderly.
Issues with pension system
- The Parliamentary Standing Committee on Rural Development observed the meagre amount of assistance under the different components of the National Social Assistance Programme(NSAP).
- The pension sector adds to the financial strain of the government’s fiscal plan. Many studies reveal that the volume of expenses against the payment of pensions is growing at a faster pace than that of the taxes and duties.
- A large part of the Indian population remains uncovered under any pension scheme. Those who remain uncovered usually belong to the unorganised sector.
Old Pension System
- Pension to government employees at the Centre as well as states was fixed at 50 per cent of the last drawn basic pay.
- There was no corpus specifically for pension, which would grow continuously and could add burden for government finances.
- Pension liabilities would keep climbing since pensioners’ benefits increased every year due to regular DA hikes. Also, better health facilities would increase life expectancy, and increased longevity would mean extended payouts.
Origins of NPS
- The NPS originated from the OASIS report and was formally notified in December 2003, with implementation starting in January 2004 (excluding armed forces).
- It introduced the National Pension System (NPS) as a means to alleviate pension liabilities by shifting to a contribution-based model.
Features of NPS
- Participation by all citizens aged 18-70
- Contributions from employees and matching contributions from employers
- Investment of funds in designated schemes, and
- the option to withdraw a portion of the corpus at retirement while using the remainder to purchase annuities for regular income.
Implementation Challenges of NPS
- Despite its objectives, NPS faced several challenges and criticisms.
- Unlike OPS, NPS required employees to contribute a percentage of their basic pay, along with the dearness allowance, leading to concerns about increased financial burden on employees.
- Moreover, NPS lacked the fixed pension amount and GPF benefits provided by OPS, introducing uncertainty in retirement benefits.
- The scheme’s market-linked nature raised apprehensions about unpredictable returns and financial insecurity for retirees.
Conclusion
While the New Pension Scheme aimed to address pension liabilities and introduce market-based features, its implementation encountered challenges and raised concerns about financial security for employees. Evaluating the NPS against the backdrop of the Old Pension Scheme highlights the trade-offs between sustainability and certainty in India’s pension system.
Q2. In what ways has India’s National Action Plan on Climate Change (NAPCC) been effective in addressing the impacts of climate change? Provide examples of key initiatives and their outcomes, highlighting their role in both mitigation and adaptation strategies. (250 words).
Topic- Climate change :
Introduction
About 90% of the Himalayan Region will experience drought lasting over a year if global warming increases by 3 degrees Celsius, according to new research. The findings, published in the journal Climatic Change, show that 80% of the increased human exposure to heat stress in India can be avoided by adhering to Paris Agreement’s temperature goals of limiting global warming to 1.5 degrees Celsius, compared to 3 degrees Celsius warming.
Body
- Climate Change
- Intergovernmental Panel on Climate Change (IPCC)
- Consequences of climate change for India
- Mitigation strategies
- Adaptation strategies
Conclusion
Human activities, particularly the combustion of fossil fuels, serve as the primary catalyst for climate change. India, due to its diverse terrain, rapid depletion of natural resources, industrial expansion, and urbanization, faces heightened vulnerability to these impacts. The World Bank warns that climate change could escalate poverty levels significantly by 2030, underscoring the urgent need for global and individual country efforts as outlined in the Paris Agreement.
UPSC Syllabus Climate change :
Why was this question asked?
How does the draft Environment Impact Assessment (EIA) Notification, 2020 differ from the existing EIA Notification, 2006? (UPSC Main 2020)
Introduction:
About 90% of the Himalayan Region will experience drought lasting over a year if global warming increases by 3 degrees Celsius, according to new research. The findings, published in the journal Climatic Change, show that 80% of the increased human exposure to heat stress in India can be avoided by adhering to Paris Agreement’s temperature goals of limiting global warming to 1.5 degrees Celsius, compared to 3 degrees Celsius warming.
Body Status
Climate Change
- Climate change refers to long-term shifts in temperatures and weather patterns.
- These shifts may be natural, but since the 1800s, human activities have been the main driver of climate change, primarily due to the burning of fossil fuels (like coal, oil, and gas), which produces heat-trapping gases.
- The main greenhouse gases that are causing climate change include carbon dioxide and methane.
Intergovernmental Panel on Climate Change (IPCC)
- The Intergovernmental Panel on Climate Change is an intergovernmental body of the United Nations.
- Its job is to advance scientific knowledge about climate change caused by human activities.
- The World Meteorological Organization and the United Nations Environment Programme established the IPCC in 1988.
Consequences of climate change for India
- The Intergovernmental Panel on Climate Change (IPCC) highlights several potential consequences of climate change for India
- Rising temperatures and precipitation patterns contribute to glacial lake outburst floods, as evidenced by the Uttarakhand incident in February 2021.
- Sea-level rise and intensified tropical cyclones exacerbate flooding in regions like Mumbai and the Konkan area (e.g., the 2021 flood).
- Certain regions, notably northwestern India, Jharkhand, Orissa, and Chhattisgarh, anticipate more frequent droughts, adversely affecting agricultural production by 2040.
- Monsoon variability, influenced by aerosols and internal factors, is expected to increase, leading to devastating losses as observed in Maharashtra, Uttarakhand, and Kerala in 2021.
- Escalating heat extremes and marine heatwaves pose significant threats, currently impacting regions like Andhra Pradesh and Telangana.
Mitigation strategies
- National Action Plan on Climate Change (NAPCC): Initiated by the Government of India in 2008, this plan focuses on reducing greenhouse gas emissions and outlines policies for climate mitigation and adaptation.
- Paris Agreement Commitments: India pledged to reduce its greenhouse gas emission intensity by 33-35% below 2005 levels by 2030, generate 40% of its power capacity from clean energy sources, and create additional carbon sinks through forest and tree cover expansion.
- National Clean Energy Fund (NCEF) : Established in 2010, the NCEF finances and promotes clean energy initiatives and research within the country.
Adaptation strategies
- Capacity Building: Providing communities with financial, technical, and infrastructural support to minimize climate change-related losses.
- Interlinking of Rivers Project: Aimed at addressing water scarcity issues.
- Climate-Smart Agriculture: Implementing practices to enhance agricultural productivity while mitigating climate change impacts.
Conclusion
Human activities, particularly the combustion of fossil fuels, serve as the primary catalyst for climate change. India, due to its diverse terrain, rapid depletion of natural resources, industrial expansion, and urbanization, faces heightened vulnerability to these impacts. The World Bank warns that climate change could escalate poverty levels significantly by 2030, underscoring the urgent need for global and individual country efforts as outlined in the Paris Agreement.