News: Prime Minister Narendra Modi will not attend the G7 summit in the United Kingdom next month, the Ministry of External Affairs announced.
About Group of Seven (G7):
The Group of Seven (G7) is an intergovernmental organization consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
The heads of government of the member states, as well as the representatives of the European Union, meet at the annual G7 Summit.
As of 2018, the G7 represents 58% of the global net wealth ($317 trillion), more than 46% of the global gross domestic product (GDP) based on nominal values, and more than 32% of the global GDP based on purchasing power parity.
The seven countries involved are also the largest IMF-advanced economies in the world.
3 countries are constitutional monarchies (United Kingdom, Canada, Japan), 2 are presidential or semi-presidential republics (France, United States) and 2 are parliamentary republics (Germany and Italy).
2. CHINA’S SLOWING POPULATION GROWTH
News: China’s once-in-a-decade population census has recorded a slowing population growth rate that will likely see China’s population peak — and be overtaken by India’s — by as early as 2025, experts said, with the number of births falling for the fourth consecutive year.
China’s population was 1.41 billion in 2020, according to the census, increasing by 72 million since the last census in 2010, recording a 5.38% growth in this period. The average annual growth was 0.53%.
The slowing growth rate, a consequence of China’s stringent family planning rules over decades — known as the “one-child policy” but involving a range of varying restrictions across urban and rural areas — has evoked concerns of a rapidly ageing society and the impact on China’s labour force, and fears that China will, as some experts have said, “get old before it gets rich”.
The census recorded 264 million in the age group of 60 and over, up 5.44% since 2010 and accounting for 18.70% of the population. Those in the 15-59 age group were 894 million persons, down by 6.79% since 2010 and accounting for 63.35% of the population.
About Demographic Dividend:
Demographic dividend, as defined by the United Nations Population Fund (UNFPA), is “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older)”.
In other words, it is “a boost in economic productivity that occurs when there are growing numbers of people in the workforce relative to the number of dependents”.
UNFPA stated that “A country with both increasing numbers of young people and declining fertility has the potential to reap a demographic dividend.”
Demographic dividend occurs when the proportion of working people in the total population is high because this indicates that more people have the potential to be productive and contribute to growth of the economy.
About Population Pyramid:
A population pyramid or “age-gender-pyramid” is a graphical illustration of the distribution of a population (typically that of a country or region of the world) by age groups and gender; it typically forms the shape of a pyramid when the population is growing.
Males are usually shown on the left and females on the right, and they may be measured by count or as a percentage of the total population. This tool can be used to visualize the age of a particular population.
It is also used in ecology to determine the overall age distribution of a population; an indication of the reproductive capabilities and likelihood of the continuation of a species.
A population pyramid often contains continuous stacked-histogram bars, making it a horizontal bar diagram. The population size is shown on the x-axis (horizontal) while the age-groups are represented on the y-axis (vertical).
The size of each bar can be displayed either as a percentage of the total population or as a raw number. Males are conventionally shown on the left and females on the right.
Population pyramids are often viewed as the most effective way to graphically depict the age and distribution of a population, partly because of the very clear image these pyramids provide.
A series of population pyramids could give a clear picture of how a country transitions from high to low fertility rates.
If the pyramid has a broad base, this indicates that a relatively high proportion of the population lies in the youngest age band, such as ages 0–14, which suggests that the fertility rate of the country is high and above population sub-replacement fertility level.
The shape of the pyramid can also reveal the age-dependency ratio of a population. Populations with a high proportion of children and/or of elderly people have a higher dependency ratio. This ratio refers to how many old and young people are dependent on the working age groups (often defined as ages 15–64).
3. MICRO-FINANCE INSTITUTIONS
News: Reeling under the impact of the second wave of the pandemic, the microfinance sector has reached out to the Reserve Bank of India (RBI) for support, including an emergency credit line and creating awareness among State governments on ill-effects of loan waivers.
About Micro – Finance Institutions:
A microfinance institution is an organization that offers financial services to low income populations. Almost all give loans to their members, and many offer insurance, deposit and other services.
A great scale of organizations is regarded as microfinance institutes. They are those that offer credits and other financial services to the representatives of poor strata of population (except for extremely poor strata).
Microfinance institutions (MFIs) are financial companies that provide small loans to people who do not have any access to banking facilities. The definition of “small loans” varies between countries. In India, all loans that are below Rs.1 lakh can be considered as microloans.
The primary goals of microfinance institutions are the following:
Transform into a financial institution that assists in the development of communities that are sustainable.
Help in the provision of resources that offer support to the lower sections of the society. There is special focus on women in this regard, as they have emerged successful in setting up income generation enterprises.
Evaluate the options available to help eradicate poverty at a faster rate.
Mobilise self-employment opportunities for the underprivileged.
Empowering rural people by training them in simple skills so that they are capable of setting up income generation businesses.
Some of the key benefits of MFIs include the following:
It enables people expand their present opportunities – The income accumulation of poor households has improved due to the presence of microfinance institutions that offer funds for their businesses.
It provides easy access to credit – Microfinance opportunities provide people credit when it is needed the most. Banks do not usually offer small loans to customers; MFIs providing microloans bridge this gap.
It makes future investments possible– Microfinance makes more money available to the poor sections of the economy. So, apart from financing the basic needs of these families, MFIs also provide them with credit for constructing better houses, improving their healthcare facilities, and exploring better business opportunities.
It serves the under-financed section of the society – Majority of the microfinance loans provided by MFIs are offered to women. Unemployed people and those with disabilities are also beneficiaries of microfinance. These financing options help people take control of their lives through the betterment of their living conditions.
It helps in the generation of employment opportunities – Microfinance institutions help create jobs in the impoverished communities.
It inculcates the discipline of saving – When the basic needs of people are met, they are more inclined to start saving for the future. It is good for people living in backward areas to inculcate the habit of saving.
It brings about significant economic gains – When people participate in microfinance activities, they are more likely to receive better levels of consumption and improved nutrition. This eventually leads to the growth of the community in terms of economic value.
It results in better credit management practices – Microloans are mostly taken by women borrowers. Statistics prove that female borrowers are less likely to default on loans. Apart from providing empowerment, microloans also have better repayment rates as women pose lesser risk to borrowers. This improves the credit management practices of the community.
It results in better education – It has been noted that families benefiting from microloans are more likely to provide better and continued education for their children. Improvement in the family finances imply that children may not be pulled out of school for monetary reasons.