India has expressed its concerns to Saudi Arabia over the possibility of job losses of a large number of Indian workers in the kingdom because of a new labour law (Nitaqat).
Both the nations have set up a Joint Working Group (JWG) which will deliberate on framing a Memorandum of Understanding, which is to be a comprehensive document guiding all aspects of India-Saudi labour relations.
What is Nitaqat?
- The Nitaqat is a new policy being placed by the Saudi government in order to reduce the unemployment rate among Saudi citizens.
- This policy makes it mandatory for Saudi Companies to reserve 10 percent of jobs for Saudi nationals.
Why Saudi Arabia is implementing such a policy?
- Saudi Arabia’s economy depends heavily on the existence of a large proportion of expatriates working for various establishments in the private and public sector.
- However, unlike the other states of the Gulf Cooperation Council (GCC), Saudi Arabia has large number of unemployed citizens, which creates a state of resentment among those citizens.
- As per estimates, the unemployment rate among Saudi nationals has reached 12%. More than 6.5 million non-Saudis are working in the private sector of the Kingdom compared to 7,00,000 Saudis.
Is this type of policy a new concept?
No. This is not a new concept. Initially in 1994, the Saudi government had started a system called ‘Saudization’ with the same purpose of reducing unemployment of its citizens. The programme required the appointment of Saudi citizens of the total workforce of all the establishments existing in the Kingdom. However, due to several reasons, the system could not be implemented. This percentage varied in accordance to the activity of the establishment. However, due to several reasons, the system did not achieve the desired objectives.
How will Nitaqat work?
- ‘Nitaqat’ which means ‘Ranges’, divides the Saudi labor market into 41 activities and each activity into 5 sizes (Giant, Large, Medium, Small and Very Small) to have in total 205 categories.
It classifies establishments into following ranges:
- Excellent : establishments which have highest localization ratio in their workforce
- Green: establishments which have high localization ratio
- Yellow : low localization ratio
- Red : lowest localization ratio
Effects of classification on different ranges:
- Those establishments which will be in Excellent and Green ranges will have advantages and rewards while those in Yellow and Red will be on the receiving end.
Some key advantages to Excellent or Green ranges:
- Eligibility to issue work visas for the development of new business
- Ability to contract with non-Saudi workers from the establishments of the Red and the Yellow ranges in the Saudi market.
- This will result in granting the establishments that have achieved high rates of localization the opportunity to appoint non-Saudi workers with no need to issue new work visas, which helps to rationalization the recruitment and employment of additional non-Saudi labor.
Main disadvantages to Red and Yellow ranges:
They will be forced to expedite the localization of the jobs within the establishments to upgrade their range to the Green or the Excellent range to maintain the expats they have. Otherwise, the establishments located in these ranges – Red and Yellow ranges – will be denied from obtaining new or alternative visas, lose control over the non-Saudi workers in the establishment as they will have the freedom of contract with a new employer and will not be allowed to obtain new work visas to appoint new-non-Saudis workers or to set up a new subsidiary or branch.
Recent addition in Nitaqat law:
- Expatriate worker should work only under his sponsor and the worker is not meant to perform any job other than the one mentioned on his job card have raised much panic among the expatriate workers.
What are India’s concerns over this policy?
- At present over 2 million Indian nationals are working in Saudi Arabia. Implementation of this law will lead to job losses and reduced job opportunities for Indians too.
Month:Current Affairs – April, 2013, Current Affairs – May, 2013 Categories: National
Tags: Current Affairs - 2017 • Current Affairs 2013 • IBPS • India-International Relations • India-Saudi Arabia • Saudi Arabia • Socio-Economic
Kargil got its first Farmers’Club, as NABARD inaugurated Trespone Farmer’s Club at Trespone TSG Block in the district.
What is Farmers’ Club (FCs) ?
- Farmers’ Clubs (FCs) are grassroot level informal forums of farmers.
- Such Clubs are organized by rural branches of banks with the support and financial assistance of NABARD for the mutual benefit of the banks concerned and the village farming community/rural people.
- With the enhancement of the programme, other agencies like NGO, VAs, KVKs, SAUs etc. are also now included as agencies included in the formation and promotions of FCs.
- The Farmers’ Clubs programme which was earlier known as “Vikas Volunteer Vahini (VVV) Programme” was launched by NABARD in 1982.
- The programme was directed towards development in rural areas through credit, technology transfer, awareness and capacity building.
- The “VVV Programme” was renamed as “Farmers’ Club Programme” in 2005 by revisiting its earlier mission.
What is the need of Farmers’ Clubs?
Around 60% of country’s population depends on agriculture which contributes18% to India’s GDP. The Tenth Five Year Plan and National Agriculture Policy documents envisage a growth level of 4% in Agriculture. However the growth of the sector has not been satisfactory with less than 2% growth in the last 50 years. To meet the targeted growth it is imperative improve productivity and reduce costs by improving efficiency. Keeping that in mind NABARD devised FCs strategy to provide package of initiatives for transfer of technology, improving input use efficiency, promoting investments in agriculture both in private and in public sectors and creating a favourable and conducive economic environment. The emerging needs in agriculture sector now are adoption of location specific skill and knowledge based technologies, promote greater value addition to agriculture produce, forge new partnerships between public institutions, technology users and the corporate sector, harness IT more effectively to realize financial sustainability and compete in the international market.
Who can form FCs?
- All Institutional Agencies (Commercial Banks, Cooperative Banks and Regional Rural Banks) and all grassroot level organisations (NGOs, PRIs, State Agricultural Universities, KVKs, ATMA, Post Offices etc.) are eligible to form Farmers’ Clubs.
What are the functions of FCs?
The broad functions of the Farmers’ Clubs are:
- Coordinate with banks to ensure credit flow among its members and forge better bank borrower relationship,
- Organise minimum one meeting per month and depending upon the need, there would be 2-3 meetings per month. Non-members can also be invited to attend the meetings,
- Interface with subject matter specialists in the various fields of agriculture and allied activities etc., extension personnel of Agriculture Universities, Development Departments and other related agencies for technical know how upgradation. For guest lectures, even experienced farmers who are non members from the village/ neighbouring villages could be invited,
- Liaison with Corporate input suppliers to purchase bulk inputs on behalf of members,
- Organise/facilitate joint activities like value addition, processing, collective purchase of inputs and farm produce marketing, etc.; for the benefit of members. They can also sponsor / organise SHGs,
- Undertake socio-economic developmental activities like community works, education, health, environment and natural resource management etc.
- Market rural produce and products
How a bank is benefitted by opening FCs?
FCs concept is a win-win situation for both the banker and the borrower. As per a study, the following benefits were accrued to a bank branch operating FCs:
- Increase in deposits.
- Increase in the credit flow and diversification of lending.
- Generation of new business avenues.
- Increase in the recoveries and decline in the non-performing assets.
- Reduction in the transaction costs of financial institutions/ Banks.
- Socio economic development of the village.
- Besides these benefits to the banks, the Farmers’ Club has also been instrumental in certain social welfare measures like free eye check-up camp, Animal Health Care Camp, Mass vaccination camp, community works like road, check-dams, afforestation, etc.
- Enhancement in bargaining power for bulk purchase of inputs and marketing of their produce.
How NABARD supports FCs?
NABARD’s policy support for Farmers’ Club Programme lays stress on linking technologies with farmers’ club members and also facilitating market access through the following mechanism:
- Capacity building of members of Farmers’ Clubs including leadership training.
- Linkage with technology/markets
- Self Help Groups (SHGs)/Joint Liability Groups (JLGs) formation
- Forming Federations of Farmers’ Clubs/Producers’ Groups/Companies
Financial Support from NABARD
- NABARD also provides financial assistance of Rs.10,000/- per club per annum for a period of 3 years to all agencies irrespective of whether they are institutional or other agencies and also the region concerned.
What is the current status of FCs?
- During 2009-10, 16,590 Farmers’ Clubs have been formed taking the cumulative number of farmers’ Clubs to 54,805 as on 31st March 2010.
Month:Current Affairs – April, 2013, Current Affairs – May, 2013 Categories: Business, Economy & Banking
Tags: Agriculture • Current Affairs 2013 • Socio-Economic