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  • The end of the doing business rankings

    The World Bank Group has scrapped its flagship publication, the ‘Doing Business’ report.

    Doing Business Report

    • This report publishes the influential annual ranking of countries on the Ease of Doing Business (EDB) index.
    • It ranks countries by the simplicity of rules framed for setting up and conducting businesses.

    Utility of the index

    The World Bank’s decision has wide ramifications, as the index serves varied purposes.

    • Many countries showcase improved ranking to signal market-friendly policies to attract foreign investments. National leaders often set EDB rank targets.
    • This helps them measure domestic policies against global “best practices” and browbeat domestic critics.
    • India, for instance, wanted its administration to ensure that India breaks into the top 50 ranks of the EDB index.
    • Some countries seem to use their political heft to improve their rank, polish their international image and sway public opinion (as appears to be China’s case).

    Issues with the credibility of the report

    • The Group acted on its commissioned study to examine the ethical issues flagged in preparing the 2018 and 2020 editions of the EDB index.
    • It is accused of having exerted pressure on the internal team working on the Doing Business report to falsely boost China’s rank by doctoring the underlying data.
    • Similarly, tensions were also reportedly brought to bear in the case of Saudi Arabia’s rank, among others.

    EDB index rank vs economic outcomes

    • There is a disconnect between the stellar rise in EDB index rank and economic outcomes.
    • The theory underlying the EDB index could be suspect, the measurement and data could be faulty, or both.
    • For example, China’s phenomenal economic success, especially its agricultural performance (after the reforms in 1978), is perhaps the most unmistakable evidence demonstrating that lack of clarity of property rights may not be the binding constraint in a market economy.
    • What matters is economic incentives.
    • Measuring regulatory functions underlying the index could be tricky and subjective and possibly politically motivated as well, as the controversies surrounding the index seem to suggest.

    EODB in India: At what cost

    Ans. Weakening labour regulations

    • Closer home, India has weaponised the mandate to improve the rank in the EDB index to whittle down labour laws and their enforcement and bring them close to the free-market ideal of ‘hire and fire’.
    • Most States have emulated Maharashtra’s lead of administrative fiat, which renders labour laws toothless by dismantling official labour inspection systems and allowing employers to file self-regulation reports.
    • The government has farmed out critical safety regulations such as annual inspection and certification of industrial boilers to ‘third party’ private agencies.
    • The Labour Department’s inspection is now not mandated; it is optional only by prior intimation to employers.

    Implications of such moves

    • Such abdication of the government’s responsibility towards workers has reportedly affected industrial relations.
    • The workers’ strike at Wistron’s iPhone assembly factory in Karnataka last year is an example.
    • Further, severe industrial accidents are rising, damaging life and productive industrial assets.

    Why did World Bank scrap the index?

    • Investigations into “data irregularities” in preparing the EDB index, as brought out by the independent agency, seems to confirm many shortcomings repeatedly brought to light for years now.
    • The index appears motivated to support the free-market ideal.
    • It is dressed up under scientific garb and is underpinned by seemingly objective methods and data collection.
    • Strong leaders (and motivated officials) seem to have used their position to manipulate the index to suit their political and ideological ends.

    Conclusion

    • India claimed the success of its Make in India initiative by relying on its ranking on the EDB index without tangible evidence.
    • Handing over law enforcement to employers by self-reporting compliance seems to have increased industrial unrest and accidents.
    • It perhaps calls for honest soul-searching as to what havoc a questionable benchmark can wreak.

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  • Front-of-pack labelling of Food Stuffs

    Seven years, four committees and two draft regulations later, India still does not have a clear labelling system to warn consumers about harmful levels of fat, salt and sugar in processed foods.

    Context

    • According to the Food Safety and Standards (Packaging and Labelling) Regulations, 2011, every pre-packed processed food product sold in the country must be labelled with nutritional information.
    • To ensure that consumers are able to easily see and interpret the nutritional information on food packets, an expert committee was established by the Food Safety and Standards Authority of India (FSSAI).
    • The committee, set up following an order of the Delhi High Court which was hearing a public interest petition seeking a ban on the sale of junk food in and around schools.

    Why label nutritional information?

    • This helps the consumer know everything about the food they buy and make an informed decision about what and how much to eat.
    • Such information is particularly crucial because the packaged food contain ultra-processed foods that are high in fat, salt or sugar and low in fibre and other essential micronutrients.
    • On the one hand, these foods cause malnutrition.
    • On the other hand they are linked strongly with obesity and diet-related non-communicable diseases, such as Type-2 diabetes, hypertension, heart ailments and certain cancers, like that of the colon.
    • All these increase the risk of premature death.

    Issues with labelling in India

    • Most products provide information in English understanding which can be daunting for a vast number of people in India.

    What is FoP labelling?

    • The front-of-pack (FoP) labelling system has long been listed as one of the global best practices to nudge consumers into healthy food choices.
    • It works just the way cigarette packets are labelled with images to discourage consumption.
    • Countries such as Chile, Brazil and Israel have laws to push the packaged food industry to adopt FoP labelling.
    • They have used FoP labelling as a measure to fight obesity and NCDs.

    FoP labelling in India

    • The system is yet to be implemented in India even seven years after it was first proposed by FSSAI.
    • The fact is, makers of packaged foods are also a powerful lot, with strong business acumen.
    • While companies in other countries have acceded to the FoP labelling laws, they are unwilling to do so in India — a country experiencing a dietary shift.

    Why must we have FoP labels?

    • Countries are working to find ways to nudge consumers into healthy food choices and to contain the growing crisis of obesity and diet-related non-communicable diseases (NCDs).
    • It is a crisis that increasingly impacts children and also exacerbates novel coronavirus disease (COVID-19) symptoms. Front-of-pack (FoP) labelling is definitely an effective tool in this effort.

    India definitely needs ‘warning labels’ on front-of-pack, but this must be a symbol-based label with no text and numbers. This is because:

    (1) Junk foods have high levels of unhealthy nutrients

    • There is strong evidence that sugar, salt and fat in junk foods are addictive, like nicotine in tobacco.
    • FoP ‘warning’ labels have helped reduce cigarette consumption. It is time we adopted the same for junk foods.

    (2) Warning labels are easy to notice and understand

    • They do not confuse consumers with mixed messages.
    • Their distinct shape, colour and size make them noticeable in the otherwise cluttered and colourful packaging.
    • With one label for one nutrient, it becomes easier to know if a product is high in more than one nutrient.

    (3) Warning labels are the global best practice now

    • At least seven countries have adopted warning labels in the past five years. These include Chile, Peru, Mexico, Israel and Uruguay.
    • Low- and middle-income mothers have shown profound changes in attitudes towards food purchases as they now understand the nutritional content of packaged foods.
    • Even children can read the labels and take an informed decision. This has also forced food companies to reduce the amount of sugar and sodium in foods and beverages.

    (4) They are best suited for India

    • Warning labels are best suited for India as they do not include numbers unlike many other FoP labels.
    • In fact, warning labels that are symbol-based, like that of Israel, can transcend the barriers of literacy and language in India.

    (5) FSSAI has experience of successfully implementing symbol-based FoP labels

    • Its “green filled circle in green outlined square” logo to depict vegetarian food has been hugely successful in informing consumers.
    • In recent years, FSSAI also has made similar laws to depict fortification (+F logo) and organic food (a green-coloured tick for Jaivik Bharat logo).

    Way forward

    • FoP labels must include information on nutrients that make food injurious to health.
    • This should be distinct from the details on the back-of-pack. FoP labels should aim to inform the consumer, while the back-of-pack label serves the purpose of scientific compliance and enforcement.
    • FoP labels should have information on ‘total sugar’ and not ‘added sugar’. There is no analytical laboratory method to differentiate ‘added sugar’ from total sugar and quantify it.

     

  • India scores 46th rank in the Global Innovation Index 2021

    India has climbed 2 spots and has been ranked 46th by the World Intellectual Property Organization in the Global Innovation Index 2021 rankings.

    Global Innovation Index

    • The Global Innovation Index (GII) is an annual ranking of countries by their capacity for, and success in, innovation.
    • It is published by Cornell University, INSEAD, and the World Intellectual Property Organization, in partnership with other organizations and institutions.
    • It is based on both subjective and objective data derived from several sources, including the International Telecommunication Union, the World Bank and the World Economic Forum.
    • The index was started in 2007 by INSEAD and World Business, a British magazine. It was created by Prof. Soumitra Dutta.

    Components of GII

    • The GII is computed by taking a simple average of the scores in two sub-indices, the Innovation Input Index and Innovation Output Index, which are composed of five and two pillars respectively.

    India’s performance

    • India has been on a rising trajectory, over the past several years in the Global Innovation Index (GII), from a rank of 81 in 2015 to 46 in 2021.
    • India attributed its improved performance due to the pivotal role played by the Department of Atomic Energy, the Department of Science and Technology, the Department of Biotechnology and the Department of Space.

    Global scenario

    • Switzerland topped the league table, followed by Sweden, the US and the UK.
    • Among Asian economies, South Korea jumped to the fifth position, up from 10 last year.
    • China was in the 12th position.

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  • Empathy through education

    Context

    While the National Education Policy (2020) notes numeracy and literacy as its central aims, Social and Emotional Learning should be an equally important goal as it supports skills such as communication, collaboration, critical thinking and creativity.

    What is social and emotional learning (SEL)?

    • SEL is the process of learning to recognise and manage emotions and navigate social situations effectively.
    • SEL is foundational for human development, building healthy relationships, having self and social awareness, solving problems, making responsible decisions, and academic learning.
    • Neurobiologically, various brain regions such as the prefrontal and frontal cortices, amygdala, and superior temporal sulcus are involved in the cognitive mechanisms of SEL.
    • Brain systems that are responsible for basic human behaviour, such as getting hungry, may be reused for complex mechanisms involved in SEL.
    • Despite its importance to life, SEL is often added as a chapter in a larger curriculum rather than being integrated in it.
    • The pandemic has brought unprecedented challenges for SEL as school closures reduced opportunities for students to deepen social relationships and learn collaboratively in shared physical spaces.
    • Even with parental involvement, the challenge of an inadequate support system for SEL remains.

    Way forward

    • Perhaps we can contextually adapt best practices from existing models.
    • A starting point would be to consider insights from the Indian SEL framework:
    • One, the application of SEL practices should be based on students’ socioeconomic backgrounds.
    • Two, SEL strategies of caretakers and educators must align with one another.
    • Three, long-term success requires SEL to be based on scientific evidence.

    Conclusion

    As a sustainable development goal outlines, policymakers now have to ensure that future changes prioritise “inclusive and equitable quality education and promote lifelong learning opportunities for all.” Importantly, the onus lies on all of us to make individual contributions that will drive systemic change.

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  • Holding transnational corporations accountable

    Context

    Given the enormous power that transnational corporations (TNCs) wield, questions about their accountability have arisen often. There have been many instances where the misconduct of TNCs has come to light such as the corruption scandal involving Siemens in Germany.

    Holding TNCs accountable: Background

    • The effort was made at the UN to develop a multilateral code of conduct on TNCs.
    • However, due to differences between developed and developing countries, it was abandoned in 1992.
    • Role of BITs: Aim was to use international law to institutionalise the forces of economic globalisation, leading to the spread of BITs.
    • Asymmetry in BITs: These treaties promised protection to foreign investors under international law by bestowing rights on them and imposing obligations on states.
    • This structural asymmetry in BITs, which confer rights on foreign investors but impose no obligations, relegated the demand for investor accountability.
    • In 2014, the UN Human Rights Council established an open-ended working group with the mandate to elaborate on an international legally binding instrument on TNCs and other businesses concerning human rights.
    • Since then, efforts are being made towards developing a treaty and finding ways to make foreign corporations accountable.
    • The latest UN report is a step in that direction.

    UN report on human rights-compatible international investment agreements

    • The UN working group on ‘human rights, transnational corporations (TNCs) and other businesses’ has published a new report on human rights-compatible international investment agreements.
    • It urges states to ensure that their bilateral investment treaties (BITs) are compatible with international human rights obligations.
    • It emphasises investor obligations at the international level i.e., the accountability of TNCs in international law.

    Using BITs to hold TNCs accountable

    • BITs can be harnessed to hold TNCs accountable under international law.
    • The issue of fixing accountability of foreign investors came up in an international law case, Urbaser v. Argentina (2016).
    • Subjecting corporates to international law: In this case, the tribunal held that corporations can be subjects of international law and are under a duty not to engage in activities that harm or destroy human rights.
    • The case played an important role in bringing human rights norms to the fore in BIT disputes.
    • It also opened up the possibility of using BITs to hold TNCs accountable provided the treaty imposes positive obligations on foreign investors.
    • Recalibrating BITs: In the last few years, states have started recalibrating their BITs by inserting provisions on investor accountability.
    • Issues with BITs: However, these employ soft law language and are hortatory.
    • They do not impose positive and binding obligations on foreign investors.
    • They fall short of creating a framework to hold TNCs accountable under international law.

    Takeaways for India

    • The recent UN report has important takeaways for India’s ongoing reforms in BITs.
    • Best endeavour clauses not enough: India’s new Model BIT of 2016 contains provisions on investor obligations.
    • However, these exist as best endeavour clauses. They do not impose a binding obligation on the TNC.
    • Impose positive binding obligations: India should impose positive and binding obligations on foreign investors, not just for protecting human rights but also for imperative issues such as promoting public health.
    • The Nigeria-Morocco BIT, which imposes binding obligations on foreign investors such as conducting an environmental impact assessment of their investment, is a good example.

    Consider the question ” Ensuring that the bilateral investment treaties (BITs) are compatible with international human rights obligations in the need of the hour. In light of this, assess the progress made globally on this issue and suggest way forward for India in framing its BITs.”

    Conclusion

    Reforms would help in harnessing BITs to ensure the answerability of foreign investors and creating a binding international legal framework to hold TNCs to account.

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  • EoDB at risk if issue of appointments to tribunals is not resolved

    While hearing a challenge to the Tribunal Reforms Act, 2021, the Supreme Court came down heavily on the government of India for vacancies not being filled on time. This could severely impact the ease of doing business in India, said the court.

    Background

    • The government has lauded the role of the Insolvency and Bankruptcy Code, 2016 (IBC), for improving India’s ranking on the “Ease of Doing Business” index over the last couple of years.
    • However, the SC’s observation is spot-on as vacancies in the tribunals have slowed down insolvency resolution due to the huge pendency of cases.
    • When the SC made its observations, the NCLT had only 30 members against a total strength of 63.

    About NCLAT and NCLT

    • National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT) in 2016.
    • NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India (CCI).
    • It is also the Appellate Tribunal to hear and dispose of appeals against the orders of the National Financial Reporting Authority.

    Difference between NCLT AND NCLAT

    NCLT

    NCLAT
    ·         NCLT is established as per Section 408 of companies act, 2013 ·         NCLAT is established as per Section 410 of companies act, 2013
    ·         It holds primary jurisdiction on cases of insolvency and bankruptcy ·         It holds appellate jurisdictions over the cases judged by NCLT
    ·         NCLT accepts and analyzes the evidence from creditors and debtors ·         NCLAT accepts and analyzes the decision made by NCLT
    ·         NCLT collects facts and evidences ·         NCLAT analyzes facts and evidences

    CJI’s reservations over Pendency

    • The NCLAT had a sanctioned strength of a chairperson plus 11 members but its functioning strength was of eight members.
    • Both the NCLT and NCLAT have been without chairpersons for several months respectively.
    • These vacancies are concerning because as of May 31, 13,170 insolvency petitions were pending before benches of the NCLT.
    • Of these, 2,785 petitions have been filed by financial creditors and 5,973 by operational creditors.

    Note: The IBC created an institution called an information utility to be the repository of information on debts and defaults in India.  The sole utility in India at present is the National E-Governance Services Ltd. (NeSL).

    Basis of these cases

    • The financial creditors are facing criticism for taking haircuts as high as 90 per cent against their claims.
    • A longer approval period would entail greater value erosion of a corporate debtor which would be an unattractive proposition for any prospective resolution applicant.
    • This uncertainty can be cured by a faster approval process by the NCLTs by the creation of more benches and filling up of current vacancies.

    Why is the Supreme Court fuming over vacancies?

    (a) Covid impact

    • The Indian economy is recovering from the adverse effects of the Covid-19 pandemic.
    • During the downturn, financial institutions and banks have suffered higher defaults than usual, impacting the robustness of the system.
    • Lending has decreased during this time and can only be encouraged now by shoring up the mechanism under the IBC to inspire confidence in creditors.

    (b) Non-compliance by the govt

    • The SC had granted time to the government till September 13 to take substantial steps in this regard, which was partially complied with by appointing 18 members.
    • The government, however, failed to avoid embarrassment as the CJI expressed his anger at the appointment process which had ignored candidates recommended by the selection committee.

    (c) Burden of pendency

    • There is a real risk of the court taking matters into its own hands by making appointments itself, or by taking harsher steps like transferring jurisdiction under the IBC to high courts.
    • One hopes that the situation is resolved quickly to make strict time-bound insolvency resolutions a reality.

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  • What is Planet Nine?

    A new study’s “treasure map” suggests that a planet several times more massive than Earth could be hiding in our solar system, camouflaged by the bright strip of stars that make up the Milky Way.

    Do not wonder. This too was a PYQ:

    Q.Which planet was downgraded to dwarf planet status?

    (a) Pluto

    (b) Mars

    (c) Earth

    (d) Venus

     

    [wpdiscuz-feedback id=”j8ws1stgve” question=”Please leave a feedback on this” opened=”1″]Post your answers here![/wpdiscuz-feedback]

    Planet 9

    • Planet Nine is a hypothetical planet in the outer region of the Solar System.
    • Its gravitational effects could explain the unlikely clustering of orbits for a group of extreme trans-Neptunian objects (ETNOs), bodies beyond Neptune that orbit the Sun at distances averaging more than 250 times that of the Earth.
    • Based on earlier considerations, this hypothetical super-Earth-sized planet would have had a predicted mass of five to ten times that of the Earth, and an elongated orbit 400 to 800 times as far from the Sun as the Earth.

    Curiosity for the ninth Planet

    • In August 2006, the International Astronomical Union broke several hearts when it announced that it had reclassified Pluto as a dwarf planet. ‘
    • The decision was based on Pluto’s size and the fact that it resides within a zone of other similarly-sized objects.

    Is everyone convinced that Planet Nine exists?

    • Researchers from across the globe have carried out several studies on Planet Nine and there are several theories about it, including one that stated Planet Nine could in fact be a black hole.
    • Another research has argued that the unknown object causing anomalous orbits of the trans-Neptunian objects could be a primordial black hole.
    • Yet another study noted that a trans-Neptunian object called 2015 BP519 had an unusual trajectory because it was affected by Planet Nine’s strong gravity.

    Back2Basics: Dwarf Planet

    • A dwarf planet is a small planetary-mass object that is in direct orbit of the Sun – something smaller than any of the eight classical planets, but still a world in its own right.
    • As of today, there are officially five dwarf planets in our Solar System.
    • The most famous is Pluto, downgraded from the status of a planet in 2006.
    • The other four, in order of size, are Eris, Makemake, Haumea and Ceres. The sixth claimant for a dwarf planet is Hygiea, which so far has been taken to be an asteroid.
    • These four criteria are – that the body orbits around the Sun, it is not a moon, has not cleared the neighborhood around its orbit, and has enough mass for its gravity to pull it into a roughly spherical shape.

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  • What is Serotype 2 Dengue?

    The Union Health Ministry has flagged the emerging challenge in 11 States across India of serotype 2 dengue, which it said is associated with “more cases and more complications” than other forms of the disease.

    Try this PYQ from CSP 2015:

    Q. Consider the following statements:

    1. In tropical regions, Zika virus disease is transmitted by the same mosquito that transmits dengue.
    2. Sexual transmission of Zika virus disease is possible.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

    [wpdiscuz-feedback id=”f66l7r4swb” question=”Please leave a feedback on this” opened=”1″]Post your answers here![/wpdiscuz-feedback]

    What is Dengue?

    • Dengue is a mosquito-borne viral infection, found in tropical and sub-tropical climates worldwide, mostly in urban and semi-urban areas.
    • It is transmitted by female mosquitoes mainly of the species Aedes aegypti and, to a lesser extent, Ae. albopictus.
    • These mosquitoes are also vectors of chikungunya, yellow fever and Zika viruses.
    • Dengue is widespread throughout the tropics, with local variations in risk influenced by rainfall, temperature, relative humidity and unplanned rapid urbanization.

    Its transmission

    • The virus is transmitted to humans through the bites of infected female mosquitoes, primarily the Aedes aegypti
    • Other species within the Aedes genus can also act as vectors, but their contribution is secondary to Aedes aegypti.
    • Mosquitoes can become infected from people who are viremic with dengue.

    Various serotypes

    • Dengue is caused by a virus of the Flaviviridae family and there are four distinct, but closely related, serotypes of the virus that cause dengue (DENV-1, DENV-2, DENV-3 and DENV-4).
    • Recovery from infection is believed to provide lifelong immunity against that serotype.
    • However, cross-immunity to the other serotypes after recovery is only partial and temporary.
    • Subsequent infections (secondary infection) by other serotypes increase the risk of developing severe dengue.

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  • Delhi-Mumbai Expressway: World’s longest

    The Minister for Road Transport and Highways Union Minister Nitin Gadkari concluded the review of the work progress on the Delhi-Mumbai Expressway.

    Delhi-Mumbai Expressway

    • The ambitious infra project started in the year 2018 is being constructed at a cost of Rs 98,000 crore and is scheduled for completion by March 2023.
    • States: Delhi, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra
    • Once ready, the expressway will feature a spur to Noida International Airport and Jawaharlal Nehru Port to Mumbai through a spur in the financial capital.
    • It will reduce travel time between certain cities to 12-12.5 hours from 24 hours.
    • The project is expected to improve connectivity to economic hubs of India like Jaipur, Ajmer, Kishangarh, Chittorgarh, Kota, Udaipur, Ujjain, Bhopal, Indore, Vadodara, Ahmedabad, and Surat.

    Key features of the expressway

    • The expressway which is eight-lane access-controlled can be expanded to a 12-lane expressway depending on the traffic volume
    • It will boast wayside amenities such as resorts, food courts, restaurants, fuel stations, logistics parks, facilities for truckers
    • For accident victims, it will offer a helicopter ambulance service as well as a heliport, which will use drone services for business
    • Along the highway, over two million trees and shrubs are planned to be planted
    • The highway project is Asia’s first and the world’s second to include animal overpasses in order to facilitate unrestricted wildlife movement
    • Besides, it will also involve two iconic eight-lane tunnels
    • The project will result in annual savings of more than 320 million litres of fuel as well as reduce Carbon dioxide emissions by 850 million kg
    • Over 12 lakh tonnes of steel will be consumed in the project’s construction, which is equivalent to constructing 50 Howrah bridges
    • For the project, 80 lakh tonnes of cement will be consumed, which is around 2 percent of the country’s annual cement production capacity
    • The ambitious Delhi-Mumbai Expressway project has also created job opportunities for thousands of trained civil engineers apart from generating over 50 lakh man-days of work

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  • Rising unemployment is yet to receive the attention it deserves from government

    Context

    India’s unemployment rate in August was 8.3 per cent. This was higher than the 7 per cent recorded in July. The month-to-month variations notwithstanding, these are all very high unemployment rates.

    Why inflation gets more attention in India than unemployment?

    • Periodic Labour Force Survey (PLFS) results showed the historically high unemployment rate of 6.1 per cent for 2017-18 (July to June). It was at a 45-year high.
    • New norm at 7-8 per cent: Till then, India was used to recording an unemployment rate of around 3 per cent. 
    • Today, an unemployment rate of 7-8 per cent seems to be the norm and such levels do not seem to matter.
    • The unemployment rate is not the most important labour market indicator for a country like India.
    • Why inflation gets preference: Between inflation and unemployment, the two economic indicators conjoined theoretically by the Phillips curve, it is inflation that wields political power.
    • Inflation hurts almost the entire population.
    • Equally importantly, high inflation rates can upset financial markets that in turn exert pressure on regulators to keep inflation in control.
    • Unemployment directly impacts only the unemployed, who don’t count much.
    • Worse still, society perceives being unemployed as an individual shortcoming, and not an outcome of a macroeconomic malaise.

    What does low labour force participation rate (LFPR) indicate about the labour market in India?

    • The unemployment rate is a measure of the economy’s inability to provide jobs only for those who seek work.
    • But, in India, very often people do not look for jobs in the belief that none are available which is reflected in a low labour force participation rate (LFPR).
    • India’s LFPR is at around 40 per cent when the global rate is close to 60 per cent.
    • It is important that this belief in the futility of a job hunt is overcome by an explosive creation of new good quality formal jobs.

    Why employment rate is a useful indicator for India

    • A useful labour market metric for a country like India is the employment rate.
    • This measures the proportion of the population over 14 years of age that is employed.
    • The definition of employment needs to be changed, at present, engaging in some economic activity for just one hour in any of the past seven days is counted as employment.
    • India’s record in providing employment to its people has been abysmally poor.
    • CMIE’s definition of employment indicates that in 2016-17, only 42.8 per cent of the working-age population was employed.
    •  In the year of the pandemic, it fell to 36.5 per cent.

    Reverse migration in employment from manufacturing to low productivity employment

    • People are moving away from factories as manufacturing jobs shrink, to farms that provide shelter largely in the form of disguised unemployment.
    • It cannot be the desire of a nation to move people away from high productivity, better quality jobs in manufacturing to low productivity employment in agriculture or as gardeners or security guards in the household sector.
    • Employment opportunities need to expand in areas where labour is deployed to deliver higher productivity for enterprise and higher returns to labour.

    Way forward

    • Increase investment: A large part of the solution to this lack of adequate jobs is in increasing investments.
    • Focus on demand size: For this, the investment climate needs to be business-friendly and government interventions must shift away from supply-side support to spurring demand.

    Conclusion

    The government needs to come up with policies for generating employment opportunities and stemming the reverse migration from manufacturing jobs to low productivity employment.

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