05-07-2022

What all we will discuss?

1. Gig Economy
2. PACS
3. Rupee Depreciation

Weekly Current Affairs

4. BBB turned into FSIB
5. Financial Stability Report

TUESDAY

1

What is Gig Economy?
1. The economy based on flexible, temporary, or
freelance jobs, is called gig economy. It may involve
connecting with clients or customers through an
online platform.
What does NITI Ayog report says?
1. The rapidly burgeoning gig workforce is ushering in
a new economic revolution globally. India –
1. with its demographic dividend of half-a-billion labour
force and the world’s youngest population,
2. rapid urbanisation,
3. widespread adoption of smartphones and associated
technology – is the new frontier of this revolution.
In this backdrop, this first of-its-kind report presents
comprehensive perspectives and recommendations on
the gig-platform economy in India, engaging gig platform
workers in the millions.
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Who are Gig workers?
1. Gig workers are typically hired by companies on a contractual
basis and are not considered their employees. As a result, they
do not receive some of the benefits that an on roll employee of
the company may have — this means that they often do not
receive benefits like paid sick and casual leaves, travel and
housing allowances, and provident fund savings, among other
things.
2. Gig workers can be broadly classified into platform and non-
platform workers. Platform workers are those whose work is
based on online software apps or digital platforms. Example:
those whose work is based on online software apps or digital
platforms such as food aggregator platforms Zomato, Swiggy,
Ola, and others.
3. Non-platform gig workers are generally casual wage workers,
working part-time or full- time.
Classification of Gig workers
1. Gig workers – those engaged in livelihoods outside the traditional
employer-employee arrangement – can be broadly classified into
platform and non-platform-based workers.
2. Platform workers are those whose work is based on online software
apps or digital platforms.
3. Non-platform gig workers are generally casual wage workers and
own account workers in the conventional sectors, working part-time
or full time.
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Data related to gig economy Upsides of Gig Economy

1. The study estimates that in 2020- 21, 77 lakh (7.7 million) 1. Low Barrier to entry.
workers were engaged in the gig economy.
2. Flexibility.
2. The gig workforce is expected to expand to 2.35 crore (23.5
million) workers by 2029-30 making up for 4.1 per cent of 3. Variety.
total livelihood in India. 4. Independence.
3. At present about 47% of the gig work is in medium skilled 5. Opportunity to try new jobs.
jobs, about 22% in high skilled, and about 31% in low skilled
jobs. 6. Work from home.
4. Trend shows the concentration of workers in medium skills is 7. Price advantage for employers.
gradually declining and that of the low skilled and high skilled
is increasing. It may be expected that while the domination The gig economy can benefit workers, businesses, and
of medium skills would continue till 2030, gig work with consumers by making work more adaptable to the needs
other skills will emerge. of the moment and the demand for flexible lifestyles.

Downsides of Gig economy Recommendations

1. Inconsistent income. 1. A Platform India initiative, built on the pillars of accelerating platformization by simplification and
handholding, funding support and incentives, skill development, and social financial inclusion, like
2. Lack of job security. the immensely successful Startup India initiative, may be introduced.
3. Uncertain employment status. 2. Access to institutional credit may be enhanced through financial products specifically designed
for platform workers and those interested to set-up their own platforms. Venture capital funding,
4. Lack of benefits. As independent contractors, grants and loans from banks and other funding agencies should be provided to platform
platform workers cannot access many of the businesses of all sizes at the pre-revenue and early-revenue stages.
workplace protections and entitlements. 3. Platform-led models of skilling and job creation need to be promoted for the gig and platform
sector.
5. Inconsistency in services.
4. Gender Sensitisation & Accessibility Awareness Programmes for workers and their families:
6. Difficult to trust a service provider without Platform businesses can undertake partnerships with Civil Society Organizations (CSOs) to enable
recommendations. different sections of workers such as women workers and PwDs to take up employment
opportunities in the platform sector through skill development, access to finance and assets.
The gig economy can have downsides due to the
erosion of traditional economic relationships between 5. Undertake a separate enumeration exercise to estimate the size of the gig economy, and identify
workers, businesses, and clients. the characteristic features of gig workers.

3

Draw more women into the gig economy – NITI
Ayog’s Report
1. In an attempt to increase the participation of women
in the gig economy, the NITI Aayog has proposed
fiscal incentives like tax breaks or startup grants for
companies with about one-third of their workforce
as women and people with disabilities (PwDs).
2. A survey conducted across urban centres of India
revealed that women are more likely to take up
platform jobs after their education and marriage.
3. Female labour force participation in India has
remained low, oscillating between 16 per cent to 23
per cent in the last few years.
PwD and Gig Economy
1. Persons with disabilities, who make up 2.11 to 10 per cent of
India’s population, have a labour force participation rate of 36 per
cent.
2. Structural barriers like access to education and lack of skilling
have hindered their participation in the country’s labour force.
3. Recommendations :
1. A platform with high accessibility or a high degree of participation of
PwDs too may be rewarded with fiscal incentives.
2. Apart from incentivising platforms that focus on recruiting women
workers, the report also recommended that businesses have a higher
share of women managers and supervisors in the organisation to
ensure that communication to workers does not perpetuate gender
stereotypes.
05-07-2022
Draw more women into the gig economy – NITI
Ayog’s Report
1. Fiscal incentives such as tax-breaks or startup grants may
be provided for businesses that provide livelihood
opportunities where women constitute a substantial
portion (say, 30 per cent) of their workers.
2. However, according to the report, platform companies
offer flexibility and choice of labour to all workers in
general, and women in particular, empowering them to
monetise their idle assets when and where they want — a
benefit missing in traditional employment sectors —
making them an attractive opportunity for women and
persons with disabilities.
3. The report suggests that companies carry out gender
sensitisation and accessibility awareness programmes for
workers and their families, particularly to promote the
rights of women and persons with disabilities. It also
suggests partnering with various stakeholders to upskill
women and disabled persons.
Provide them Social security
1. Measures for Paid Sick Leave, Health Access and Insurance: This will
have positive implications for offering a social security cover to platform
workers engaged by these firms.
2. Occupational Disease and Work Accident Insurance: On the lines of
Indonesia’s initiatives in offering accident and other insurance to workers
through digital mechanisms, ride-hailing, delivery and e-commerce
platforms may adopt such a model for providing accident insurance to all
delivery and driver partners, and other platform workers across India.
3. Retirement/Pension Plans and Other Contingency Benefits: As
illustrated in the case of measures introduced in the U.K. in the study, gig
and platform firms need to adopt policies that offer old age/retirement
plans and benefits and other insurance cover for contingencies such as
injury arising from work that may lead to loss of employment and income.
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Provide them Social security Question 1: Practice Question – 2 Marks

1. Support to Workers in a Situation of Irregularity of Work: Gig and platform firms Which of the following statement is incorrect according to NITI Aayog’s ‘India’s Booming Gig
may consider providing income support to workers. This will be a critical step in
providing assured minimum earnings and social security from income loss in the and Platform Economy’ report?
wake of uncertainty or irregularity in work.
2. Supporting Small Businesses & Entrepreneurs associated with Platforms: As a a. Female labour force participation in India has remained lower than that of Persons with
part of initiatives introduced to mitigate the challenges posed by the Covid-19 disabilities.
pandemic, there have been examples of certain platforms extending interest-free
business advances and delayed payback periods to protect the gig workers, self- b. Women are more likely to take up platform jobs after their education and marriage.
employed and small businesses engaged with them. Kerala State Civil Supplies
Corporation in Kochi partnered with food delivery service Zomato to enlist grains
and other essentials on the app. Following such examples, collaborations between c. Platform companies offer flexibility and choice of labor to all workers in general, empowering
platforms and small businesses/entrepreneurs may be encouraged. them to monetize their idle assets when and where they want.
3. Contingency Cover out of a Corpus Fund: In order to support auto-rickshaw, cab,
kaalipeeli and taxi drivers to mitigate the effects of the Covid-19 lockdown on their d. Gig workers in low-skilled jobs are more than the gig workers in high-skilled and medium-
income, created a corpus of INR 20 Cr, called the “Drive the Driver Fund.” skilled jobs.
Measures such as offering a social security cover out of a corpus fund can help
support gig and platform workers and other selfemployed individuals associated
with the sector in case of contingencies.

Question 2: Practice Question – 2 Marks Seize the Mains Question

Which of the following issues are related to the Gig economy in India? What do you mean by Gig Economy? Discuss the various issues associated with it.
1. Lack of social security Answer in 250 Words – 15 Marks.
2. Instability in the job
Select the correct answer using the code given below:
a. 1 only Submit your answers at https://www.rajiasacademy.com/
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

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What all we will discuss? Why in News?

1. Gig Economy
2. PACS
3. Rupee Depreciation
4. BBB turned into FSIB
5. Financial Stability Report
However, majority of PACS have so far been not computerized and still functioning manually resulting
in inefficiency and trust deficit. In some of the states, standalone and partial computerization of PACS
has been done. There is no uniformity in the software being used by them and they are not
interconnected with the DCCBs and StCBs.
The other two tiers viz. State Cooperative Banks (StCBs) and District Central Cooperative Banks
(DCCBs) have already been automated by the NABARD and brought on Common Banking Software
(CBS).

What are PACS? Cooperative structure

1. The Primary Agricultural Cooperative credit societies
(PACS) constitute the lowest tier of the three-tier
short-term cooperative credit (STCC) in India
comprising of nearly 13 crore crore farmers as its
members.
2. Primary Agricultural Credit Societies (PACS), being
registered cooperative societies, have been providing
credit and other services to their members. PACS
generally provide the following facilities to their
members:
1. Input facilities in form of cash or kind component
2. Agriculture implements on hiring basis
3. Storage facility

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Cooperative structure
1. If one glances through the cooperative structure, it will be
observed that the cooperative sector has been playing a
crucial role in the overall development of the rural
economy.
2. The cooperative credit structure in the country has a
three-tier structure with the State Cooperative Banks
(StCB) at the apex level in each state, the District Central
Cooperative Banks (DCCB) at the middle level (or district
level) and Primary Agriculture Credit Societies (PACS) at
the lower level.
Cooperative structure
1. The Primary Agricultural Credit Societies (PACS) work at the
lowest level of the cooperative credit structure and thereby
lays the foundation to the cooperative structure of the
country. They are mainly organized to provide the short-term
and medium-term credit facilities among the rural people
according to their needs at very cheap and easy terms and
also provide funds to the rural farmers for agricultural
purpose.
2. In respect of the functioning of PACS, it is seen that the share
capital of PACS is contributed by the members and the main
source of fund is the members’ deposits. Apart from these
two, the borrowings from the district level banks form an
important element of working capital of PACS from where it
issues loans to its members as per their requirements and
credit worthiness. Thus, it is evident that these credit
institutions have been playing a crucial role to ensure the
prosperity of rural India which is considered to be the driver
of India’s economic growth.
05-07-2022
Cooperative structure
1. Each of these institutions has different areas of focus with
different functions. The State Cooperative banks take control
over the three tier co-operative credit structure in the state
where the bank operates and provides funds to the DCCBs in
each state. This apex bank plays a key-position because the
financial assistance from the RBI and National Bank for
Agriculture and Rural Development are invariably routed
through them to flow down to the lower tiers.
2. The District Co-operative Banks (DCCB) which operate at the
middle level of the co-operative credit structure generally
provide the normal banking activities in the District
headquarter and also provide funds and other technical
guidance and administrative support to the PACS. The
formation of DCCBs actually meets the mutual help between
DCCBs and PACS.
Their importance
1. A PACS is the first building block of the century-old cooperative
banking system of India. Each PACS was designed to be a village-
level credit society into which the farmers brought in share capital,
deposits and provided loans to each other. Elected members, one-
member-one-vote, transparency, ground-level reach, ease of
operations, speed, human connect—almost everything about the
structure of a PACS makes for robust ‘public policy for credit’.
2. “PACS account for 41 % (3.01 Cr. farmers) of the KCC loans given by
all entities in the country and 95 % of these KCC loans (2.95 Cr.
farmers) through PACS are to the small and marginal farmers.
3. “PACS will become nodal service delivery point for interest
subvention scheme (ISS), PM Fasal Beema Yojana, Direct Benefit
Transfer and provision of inputs like fertilisers, seeds etc. It will
ensure speedy disposal of loans, lower transition cost, faster audit
and reduction in imbalances in payments and accounting with SCBs
and DCBs,” the Ministry of Cooperation statement said.
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More about it… More about it..

Source:
Source: https://m.rbi.org.in/scripts/FAQView.aspx?Id=64#:~:text=Which%20banks%20are%20insur
https://www.rbi.org.in/scripts/FS_Overview.aspx?fn=2755 ed%20by,are%20insured%20by%20the%20DICGC.

Objectives of PACS Issues faced by PACS

1. PACS provides credit to the farmers, distributes inputs 1. Lack of supervision and inspection by Registrar of
like fertilizers and also runs outlets under Public Co-operative Societies resulting into financial
Distribution System. misuse and disproportion institutional
2. Crop loan is the prominent item of credit to the farmers development.
by Primary Agricultural Cooperative societies.
2. Government is hesitating to entrust any important
3. Primary Agricultural Cooperative society also issues loans government work.
for other agricultural purposes like purchase of farm
machineries and for non-agricultural purposes including 3. Poor recovery of loans due to persuasive policy,
loans for the purchase of consumer durables, housing differential rates of interest when compared to
loans, education loans and professional loans.
commercial and private banks and also no
4. It provides marketing facilities for the sale of agricultural customer friendly technological solutions,
produce restricted area of operation of the PACCS, and high
5. It associates itself with economic and social welfare transaction costs as well as the traditional policy
programmes of the village. of undiversified lending.

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The transition from being just a credit society to a multi-

service centre (MSC) and turn into a one-stop-shop for both
Issues faced by PACS goods and services.
1. Perhaps the people/institution are not prepared 1. No commercial bank branch can ever come close to providing the kind of services a PACS
or educated or sensitized enough to work without can,and, that within itself shows just why PACS need to be propped up. Perhaps this is what
control and supervision. the All India Rural Credit Survey of 1951 meant when it stated that “Cooperation has failed.
But cooperation must succeed”.
2. Mischievous persons may take advantage of the
situation to cheat the general public. 2. Improving the Sale of inputs
3. When the Government is exploring the possibility 3. Agri Clinics
of regulating the Non-governmental organizations
having vast experience, it is doubtful as to 4. Common Service Centers
whether the mutually aided Co-operatives in 5. Agro Service Centers
various fields can give desired result.
6. Micro Insurance
4. On the management side, there is a need for
rationalization of staff and introduction of modern https://www.financialexpress.com/opinion/agriculture-growth-why-primary-agriculture-credit-
management techniques society-need-to-be-propped-up/2050992/

Question 3: Prelims Question from 1999

Issues:
1. Just about two decades ago, credit cooperatives
covered 69% of the rural credit outlets and their share
in rural credit was fairly impressive, at 45% of the total
rural credit in the country. Of course, they had a lion’s
share of 57% in purveying short-term credit for
purchase of inputs. Today, those glory days are a distant
memory, with their share in rural credit at just 12.26%
in FY19. This continued slide, and just what can be done
to set the course straight, has been at the heart of a lot
of research within NABARD and RBI.
– 2 Marks
The farmers are provided credit from a number of
sources for their short and long term needs. The
main sources of credit to the farmers include:
a. The Primary Agricultural Cooperative Societies,
commercial banks, RRBs and private money
lenders
b. The NABARD, RBI, commercial banks and private
money lenders
c. The District Central Cooperative Banks (DCCB),
the lead banks, IRDP and JRY
d. The Large Scale Multi-purpose Adivasis
Programme, DCCB, IFFCO and commercial banks

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Question 4: Prelims Question from 2020

– 2 Marks What all we will discuss?
Consider the following statements : 1. Gig Economy
1. In terms of short-term credit delivery to the agriculture
sector, District Central Cooperative Banks (DCCBs) deliver 2. PACS
more credit in comparison to Scheduled Commercial Banks
and Regional Rural Banks 3. Rupee Depreciation
2. One of the most important functions of DCCBs is to 4. BBB turned into FSIB
provide funds to the Primary Agricultural Credit Societies.
Which of the statements given above is/are correct ?
5. Financial Stability Report

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither It nor 2

Why in News?

The rupee depreciated 5 paise to a record low of 79.11 against the U.S. dollar.

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Question 5 - Previous year Question from

How is the value determined? 2019 – 2 Marks
The value of any currency is determined by demand for the currency as well as its supply. When Which one of the following is not the most likely measure
the supply of a currency increases, its value drops. On the other hand, when the demand for a the Government/RBI takes to stop the slide of Indian
currency increases, its value rises. In the wider economy, central banks determine the supply of rupee?
currencies, while the demand for currencies depends on the amount of goods and services
produced in the economy. a. Curbing imports of non-essential goods and promoting
exports
In the forex market, the supply of rupees is determined by the demand for imports and various
foreign assets. So, if there is high demand to import oil, it can lead to an increase in the supply b. Encouraging indian borrowers to issue rupee
of rupees in the forex market and cause the rupee’s value to drop. The demand for rupees in the denominated Masala bonds
forex market, on the other hand, depends on foreign demand for Indian exports and other c. Easing conditions relating to external commercial
domestic assets. So, for instance, when there is great enthusiasm among foreign investors to borrowing
invest in India, it can lead to an increase in the supply of dollars in the forex market which in turn
causes the rupee’s value to rise against the dollar. d. Following an expansionary monetary policy

What all we will discuss? Bank Boards Bureau

1. Gig Economy 1. The Banks Board Bureau was set up in
2016 by the government with the aim
2. PACS to select executive directors and
managing directors and chief
3. Rupee Depreciation executives of PSBs and financial
institutions.
4. BBB turned into FSIB
2. The board has been recommending
5. Financial Stability Report appointments for directors,
chairpersons, and MDs for PSU general
insurers firms since 2018.
3. It is committed to improving the
Governance and Boards of public
sector financial institutions.

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Other functions of Bank Board Bureau More about FSIB..

1. To recommend the selection and appointment of Board of Directors in Mandated Institutions (Whole Time Directors The Financial Services Institutions Bureau (FSIB), which will replace
and Chairman). the Banks Board Bureau (BBB), will be much more than a mere
headhunter to fill in key posts at state-run banks, insurers and
2. To advise the Central Government on matters relating to appointments, confirmation or extension of tenure and other financial institutions (FIs).
termination of services of the Directors of mandated institutions;
According to an official order, reviewed by FE, the FSIB will advise
3. To advise the Central Government on the desired management structure of mandated institutions, at the level of the government on a suitable performance appraisal system for
Board of Directors and senior management; whole-time directors and non-executive chairmen of the state-run
financial services institutions. It will build a data bank relating to
4. To advise the Central Government on a suitable performance appraisal system for mandated institutions; the performance of public-sector banks (PSBs), FIs and insurance
5. To build a data bank containing data relating to the performance of mandated institutions and its officers; companies. It will advise the government on “formulation and
enforcement of a code of conduct and ethics for whole-time
6. To advise the Central Government on the formulation and enforcement of a code of conduct and ethics for directors” in these institutions. The FSIB will even help these state-
managerial personnel in mandated institutions. run banks, FIs and insurers in developing business strategies and
capital raising plans, etc.
7. To advise the Central Government on evolving suitable training and development programs for managerial
personnel in mandated institutions. These functions will be in addition to its role in recommending
Source: candidates for appointment as whole-time directors and non-
8. To help the banks in terms of developing business strategies and capital raising plan and the like; Financial Services Institutions Bureau: executive chairpersons of public-sector banks (PSBs), financial
institutions and public-sector insurers (PSI).
9. Any other work assigned by the Government in consultation with the Reserve Bank of India. FSIB to be much more than just a
headhunter | The Financial Express

Composition Question 6 - UPSC 2022 – 2 Marks

1. The FSIB will comprise
1. a chairperson nominated by the central government
2. the secretaries of the departments of financial services and public enterprises
3. the chairman of the Insurance Regulatory and Development Authority of India
4. and a deputy governor of the Reserve Bank of India (RBI).
5. Apart from them, there will be three members with knowledge of banks and other financial
institutions, and three more with knowledge of insurance, according to the order.

2. Former BBB chairman Bhanu Pratap Sharma has been selected to head the FSIB for two
years or until further orders. He was at the helm of the BBB since 2018 until his term ended
in April 2022.

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What all we will discuss? Financial Stability Report

1. Gig Economy
2. PACS
3. Rupee Depreciation
4. BBB turned into FSIB
5. Financial Stability Report

About FSR
1. A bi-annual report that reflects risks to
financial stability and the resilience of
financial system.

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Question 7 – UPSC 2016 – 2 Marks

‘Global Financial Stability Report’ is prepared by the
a. European Central Bank
b. International Monetary Fund

Thank you!
c. International Bank for Reconstruction and
Development
d. Organization for Economic Cooperation and
Development
HOPE YOU LIKED THE SESSION.

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