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GS Paper: Issues relating growth and development, employment

One must know India’s Economic Growth Story
Context
- As the COVID-19 pandemic fades and hopes to rise for nations and societies to return to some kind of normalcy, there is effort all around to take stock of where we stand and what our prospects look like. A look back over the last few years at how India performed in terms of its economy.
Present situation of India’s economic growth
- Mixed growth story: One group of experts argues, India’s growth story is more mixed. In 2021-22, its GDP growth was 8.7%, which was among the highest in the world. This is good but, against this, we must offset the fact that much of this is the growth of climbing out of the pit into which we had fallen the previous year.
- IMF reduced the growth forecast: In 2020-21, India’s growth was minus 6.6%, which placed the country in the bottom half of the global growth chart. For 2022-23, the International Monetary Fund has cut India’s growth forecast to 6.1%.
Structural assessment of India’s growth
- Rising inequality and high unemployment: Most of India’s growth is occurring at the top end, with a few corporations raking in a disproportionate share of profits, and unemployment is so high, it is likely that large segments of the population are actually witnessing negative growth.
- Slowdown in previous years: What makes India’s growth story worrying is that the slowdown began much before the COVID19 pandemic. It began in 2016, after which, for four consecutive years, the growth rate each year was lower than in the previous year. Growth in 2016-17 was 8.3%. After that it was, respectively, 6.9%, 6.6%, 4.8%, and minus 6.6%.
- Status of unemployment: India’s unemployment rate is high. In October, it stood at 7.8%. However, what is really worrying is youth unemployment. According to International Labour Organization (ILO) data, collated and presented by the World Bank, India’s youth unemployment, that is, from among people aged 15 to 24 years who are looking for work, the percent that does not find any, stands at 28.3%.
Know the basics-What is Unemployment?
- Definition: Unemployment is a phenomenon that occurs when a person who is capable of working and is actively searching for the work is unable to find work.
- Those who are excluded: People who are either unfit for work due to physical reason or do not want to work are excluded from the category of unemployed.
- Unemployment rate: The most frequent measure of unemployment is unemployment rate. The unemployment rate is defined as a number of unemployed people divided by the number of people in the labour force.
- Labour Force: Persons who are either working (or employed) or seeking or available for work (or unemployed) during the reference period together constitute the labour force.
Other perspectives on Indian economy
- The latest GDP numbers suggest: For Q1 FY2022–23 suggest that economic growth is on a healthy track. Consumers, after a long lull, have started to step out confidently and spend private consumption spending went up 25.9% in Q1.
- On the production side: the contact-intensive services sector also witnessed a strong rebound of 17.7%, thanks to improving consumer confidence.
- Healthy agriculture sector: The only sector that consistently performed well throughout the pandemic, remained buoyant.
- Industrial growth: Industrial growth boosted from accelerating growth in construction and electricity, gas, water supply and other utility services sectors.
- Manufacturing is not doing well: A sector that has not yet taken off sustainably is manufacturing, which witnessed modest growth of 4.5% in Q1. Higher input costs, supply disruptions, and labor shortages due to reverse migration have weighed on the sector’s growth. According to the Reserve Bank of India’s (RBI’s) data on nonfinancial firms, surging raw material costs have stressed the profitability and margins of companies.
What are the Challenges for the growth of economy?
- High inflation: The biggest worry is that of high inflation (which has persisted for way too long) and all the challenges that come along with it. Inflationary environments increase the costs of doing business, impact profitability and margins, and reduce purchasing power. In short, inflation thwarts both supply and demand. Central banks’ monetary policy actions, in response to rising inflation, can impede credit growth and economic activity, thereby intensifying the probability of a recession in a few advanced nations.
- Rising current account deficit: The other challenge is the rising current-account deficit and currency depreciation against the dollar. While a rebounding domestic economy is resulting in higher imports, moderating global demand is causing exports to slow. The US dollar’s unrelenting rise and global inflation are further causing India’s import bills to rise.
- Declining forex: The RBI had to intervene to contain volatility and ensure an orderly movement of the rupee. The RBI’s intervention is leading to a drawdown in foreign exchange reserves. Consequently, the import cover from reserves has reduced to nine months from a high of 19 months at the start of 2021 (although, it remains above the benchmark of three months).
The economy’s growth drivers are improving
- Exports: Exports, the first growth driver are slowing down and are likely to moderate along with the probable global economic slowdown.
- Government spending: Government spending, the second driver, is already at an elevated level, thanks to the pandemic, and the government will likely focus on its prudence in utilizing limited resources. The good news is the share of capital expenses is going up even as the government is reducing revenue expenses. Multiplier effects of this spending will aid in growth in income, assets, and employment for years to come. Strong tax revenues may support further capital spending in the future.
- Capital expenditure: According to experts, prospects for capex investments the third growth driver by companies are brighter. Sustained demand growth may be the most-awaited cue for a sustained push for investment.
- Consumer demand: Consumer Demand, the fourth, and perhaps the most important, growth driver has improved significantly in recent quarters. However, spending has not grown sustainable despite improving consumer confidence. For instance, retail sales are growing but the pace is patchy, and auto registrations have remained muted. We expect that receding pandemic fears and the upcoming festive season could give a much-needed boost to the consumer sector.
Conclusion
- Indian economy should not be looked from isolation. It is very much integrated in global economy. Pandemic, Ukraine war, US- China trade war have given a successive shock to global and Indian economy. Despite that Indian has done well than rest of the world. Our focus should be on curbing inequality, not to allow people to descend into extreme poverty and employment generation.
Mains Question

Q. Analyse the present economic macro-indicators of Indian economy. What are the challenges for growth story of India in the context of global uncertainty?

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November 2, 2022
Road to Net Zero Goes Via Green Financing
Context
- Climate finance, or Green Money, remains a critical bottleneck for India in its journey towards the Net Zero 2070 objective and to create a resilient system through climate adaptation and mitigation. The challenge is daunting to make a climate transition for a nation of 1.4 billion people with increasing aggregate national income and individual wealth inequality.
What is the Present arrangement of external financing for climate change
- Estimated cost: Finances for climate change were to be channelized through multi-tiered systems in the form of national, regional, and international bodies. It has been estimated that India will need $15 trillion to finance its Net Zero journey.
- Concessional loans: In most cases, small amounts flowing now into the developing component of the G20 nations are actually in the form of concessional loans rather than grants.
- Technological support from developed countries: There is no doubt that India will need international financial commitments and technological support from developed countries, who have been erratic with their promised deliveries so far.
What is green financing?
- Green finance is a phenomenon that combines the world of finance and business with environment friendly behavior. It may be led by financial incentives, a desire to preserve the planet, or a combination of both.
- In addition to demonstrating proactive, environment friendly behavior, such as promoting of any business or activity that could be damaging to the environment now or for future generations.
Green financing through domestic market
- Status of Green Bonds: As for domestic financial sources, according to an RBI Bulletin from January 2021, green finance in India is still at the nascent stage. Green bonds constituted only 0.7% of all the bonds issued in India since 2018, and bank lending to the non-conventional energy constituted about 7.9% of outstanding bank credit to the power sector as of March 2020.
- Provision of Green loans: The report also mentioned that the development of green financing and funding of environment-friendly sustainable development is not without challenges, which may include false compliance claims, misuse of green loans, and, most importantly, maturity mismatches between long-term green investments and relatively short-term interests of investors.
What are the challenges to green financing?
- No assessment of climate finance risk: Research report indicates that banks in India, like in many parts of the world, are not prepared to adapt to climate change; and have not yet factored in any climate-related financial risks into their day-to-day decision-making. Some of the criteria used to assess the banks include a commitment to phase out investments in coal, disclosing and verifying direct and indirect emissions, issuing green loans, financing climate mitigation, and Net Zero targets for different types of emissions and their implementation plans.
- Lack of enthusiasm among bankers: The report is also critical that none of the 34 banks have tested the resilience of their portfolios in the face of climate change. Yet, the bankers’ noise around the green finance topic is euphorically loud, without action.
- No standard definition of green financing: These banks and financial institutions are also not geared up for financing green transition. India faces the big challenge of “how to define green”, as there is no uniform green definition and green taxonomy.
- Poor debt market for green finance: The green money is generated through largely debt-based products (green bonds, climate policy performance bonds, debt for climate swaps, etc.), while the fund deployment occurs through debt-based, equity-based, and often, insurance-based instruments, apart from grants and loans. However, the Indian market lacks the depth of its debt markets or the heft of the bond markets.
- Lack of green data governance: There is an inherent problem with “green data governance” that entails tracking the entire data-chain of a green financing initiative.
- Unviable green projects: Like many other private sectors funding, the banks look at rates of return that do not really often make financing “public goods” as viable investments. They are even apprehensive about financing projects with long gestation periods with uncertain returns.
What is way forward for green financing?
- Considering social cost of carbon: An economic return alone might not be sufficient to induce green financing. A more holistic rate of return, considering the social cost of carbon, will be appropriate.
- Return on green investment should include social returns: A longer time horizon will be needed for the cost-benefit analysis and the estimation of the return on investment. This is because, for climate-related projects, the returns increase over time. The extent to which the particular project could result in CO2 reduction and, eventually reduction in the social cost of carbon need to be assessed. As an example, India intends to reduce 1 billion Tonnes of CO2. The present social cost of CO2 (SCC) is $86/tonne. Therefore, the sheer economic gain is to the tune of $86 billion, or 2.1% of the current Indian GDP. Social cost saving is a public good and is enjoyed by all businesses, including the financial institutions.
- Applying the green taxation: Hence, for a stronger business case for climate finance, experts propose to include in its Return-on-investment calculations the cost-benefit returns of the project through NPVSCC20 the Net Present Value of Social Cost of Carbon over 25 years of the project, a time period that compares well with tenor of infra and sovereign bonds. As an incentive, the government could introduce taxation sops for using NPVSCC25.
You may want to know about Net Zero
- Net zero means cutting greenhouse gas emissions to as close to zero as possible, with remaining emissions re-absorbed by oceans/ forests.
- China, US, EU and India contribute 75% of total GHG emissions
- However, per capita GHG emissions for US, EU and China are7,3 and 3 times of India
- India has set target to achieve net zero emissions by 2070.
Conclusion
- The way India finances its journey to Net Zero 2070 could very well be a framework for other nations, for it would need to have contours of social inclusion, economic flexibility, and sustainable financing, while keeping in mind the political compulsions, as well as serving the demographic requirements of creating and sustaining livelihood in decades to come.
Mains Question

Q. Green financing is the most crucial part of achieving Net zero target. Comment. What are the India’s efforts to finance its climate action goals?

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October 29, 2022
Reality check on India’s Population policy
Context
- Earlier this year, the United Nations published data to show that India would surpass China as the world’s most populous country by 2023.According to the 2018-19Economic Survey, India’s demographic dividend will peak around2041, when the share of the working age population is expected to hit 59%.
What is the Present status of India’s population?
- Declining Total fertility rate (TFR): The Total fertility rate (TFR) has declined from 2.2 (reported in 2015-16) to 2.0 at the all- India level, according to the latest National Family Health Survey of India OR NFHS- 5 (phase 2) released by Union Health Ministry.1.6 in urban areas2.1 in Rural area and 2.0 all India.
- Sex ratio: There are 1,020 women per 1,000 men in India according to the recently released Fifth Edition (NFHS-5). Such a sex ratio has not been recorded in any of the previous four editions of the NFHS.
Need for population control measures
- At present, India hosts 16% of the world’s population with only 2.45% of the global surface area and 4% of water resources.
- The ecosystem assessments also pointed out the human population’s role in driving other species into extinction and precipitating a resource crunch.
- So, the population explosion would irreversibly impact India’s environment and natural resource base and limit the next generation’s entitlement and progress. Therefore, the government should take measures to control the population.
What will be the Impact of declining fertility?
- Implications on Political economy: It’s not just the economic implications that we need to think about but also the implications of the political economy.
- Spatial difference: India’s fertility fell below 2.1 births for certain States 10 years ago. In four other States, it’s just declining. So, not only is the fertility falling, the proportion of the population that will be living in various States is also changing.
- North-south imbalance: The future of India lies in the youth living in U.P., Bihar, M.P. If we don’t support these States in ensuring that their young people are well educated, poised to enter the labour market and have sufficient skills, they will become an economic liability.
How India can take advantage of its demographic dividend?
- Investing In literacy: If China hadn’t invested in literacy and good health systems, it would not have been able to lower its fertility rates. In any case, we have much to learn from China about what not to do.
- Planning for elderly: Especially in the case of the elderly, where the estimates show that12% of India’s total population by 2025 is going to be the elderly. Every fifth Indian by 2050 will be over the age of 65. So, planning for this segment merits equal consideration.
- Focusing on gendered dimension: India certainly has the capacity to invest in its youth population. But we don’t recognise the gender dimension of some of these challenges. Fertility decline has tremendous gender implications.
- Lowering the Burdon on women: What it means is that women have lower burden on them. But it also has a flip side. Ageing is also a gender issue as two thirds of the elderly are women, because women tend to live longer than men do. Unless we recognise the gender dimension, it will be very difficult for us to tap into these changes.
- Educating the young girls: So, what do we need to do? India has done a good job of ensuring educational opportunities to girls. Next, we need to improve employment opportunities for young women and increase the female employment rate. Elderly women need economic and social support networks.
Do we really need the population policy?
- Existing policy is right: India has a very good population policy, which was designed in 2000. And States also have their population policies. We just need to tweak these and add ageing to our population policy focus. But otherwise, the national population policy is the right policy.
- Reproductive health is important: What we need is a policy that supports reproductive health for individuals. We also need to start focusing on other challenges that go along with enhancing reproductive health, which is not just the provision of family planning services.
- Avoiding the stigma: We need to change our discourse around the population policy. Although we use the term population policy, population control still remains a part of our dialogue. We need to maybe call it a policy that enhances the population as resource for India’s development, and change the mindset to focus on ensuring that the population is happy, healthy, productive
- Thinking beyond two child policy: Our arguments and discussions have not gone beyond the two-child norm. The two-child norm indicates a coercive approach to primarily one community. And there are too many myths and misconceptions around population issues, which lead to this discourse, which takes away attentions of from real issues.
Way forward
- Family welfare approach: We need to move from a family planning approach to a family welfare approach. We should be focusing on empowering men and women in being able to make informed choices about their fertility, health and wellbeing.
- Thinking about automation: As fertility drops and life spans rise globally, the world is ageing at a significant pace. Can increasing automation counteract the negative effects of an ageing population or will an ageing population inevitably end up causing a slowdown in economic growth? We need to look at all of that.
- Changing the mindset: We are where we are, so let’s plan for the wellbeing of our population instead of hiding behind the excuse that we don’t have good schooling or health because there are too many people. That mindset is counterproductive.
- Skill development and making population productive: It is not about whether the population is large or small; it is about whether it is healthy, skilled and productive. Thomas Malthus had said as the population grows, productivity will not be able to keep pace with this growth, and we will see famines, higher mortality, wars, etc. Luckily, he proved to be wrong.
- Adhering to the Cairo consensus: Cairo International Conference on Population and Development in 1994 stressed population. The Cairo Consensus called for the promotion of reproductive rights, empowering women, universal education, maternal and infant health to untangle the knotty issue of poverty and high fertility. The consensus also demands an increase in the rate of modern contraceptive prevalence, male contraception. States instead of releasing population control measures can start to adhere to implementing the Cairo consensus.
- Adopting Women-Centric Approach: Population stabilisation is not only about controlling population growth, but also entails gender parity. So, states need to incentivize later marriages and childbirth, promoting women’s labor force participation, etc.
- Seeing Population as a Resource rather than Burden:
  - As the Economic Survey, 2018-19, points out that India is set to witness a sharp slowdown in population growth in the next two decades.
  - Further, population estimates also predict a generational divide between India’s north and south, Fifteen years from now.
  - So instead of population control policies at the state level, India needs a universal policy to utilize population in a better way.
Conclusion
- We have the capacity to tap into the potential of our youth population. There is a brief window of opportunity, which is only there for the next few decades. We need to invest in adolescent wellbeing right away, if we want to reap the benefits. Otherwise, our demographic dividend could turn easily into a demographic disaster.
Mains Question

Q.Why India’s fertility rate is declining? How India can convert its demography into opportunity by investing in gendered based population policy?
October 14, 2022
Migrant workers in India
Context
- India has used Aadhaar (digital identity) and UPI (digital payments) extensively to address the challenges of identification and financial inclusion in social protection delivery, particularly in the case of migrants.
Who is a migrant worker?
- A “migrant worker” is a person who either migrates within their home country or outside it to pursue work.
- Usually, migrant workers do not have the intention to stay permanently in the country or region in which they work.
- As per the census 2011, the total number of internal migrants in India is 36 crore or 37% of the country’s population.
- The Economic Survey pegged the size of the migrant workforce at roughly 20 percent or over 10 crores in 2016.
What are the problems faced by migrants?
- Issues with finding local Employment: Most migrant workers have a seasonal nature of employment. During off-seasons, they struggle to feed their families. Repeated lockdowns made situations more difficult for migrants to find jobs in their localities. They faced travel restrictions which hindered their job search as well.
- Lack of Insurance Benefits in a Pandemic Environment: Migrant workers work in precarious conditions with little wages and no access to government schemes and services. Poor and unsafe working and living conditions make them prone to diseases. Greater threats of occupational illnesses, nutritional diseases, alcoholism, HIV, and communicable diseases are rampant in the migrant workforce.
- Issue of timely and Fair Payment of Wages: The informal workforce in India consists of more than 150.6 million regular and daily wage earners. Most of these workers are unaware of their rights as ‘migrant workers. Many unscrupulous agents coerce them and don’t pay minimum wages as per law.
- Lack of portability of benefits: Migrants registered to claim access to benefits at one location lose access upon migration to a different location. This is especially true of access to entitlements under the PDS. The ration card required to access benefits under the PDS is issued by state governments and is not portable across states. This system excludes inter-state migrants from the PDS unless they surrender their card from the home state and get a new one from the host state.
- Lack of affordable housing: The proportion of migrants in urban population is 47%. In 2015, the Ministry of Housing and Urban Affairs identified migrants in urban areas as the largest population needing housing in cities. There is inadequate supply of low-income ownership and rental housing options.
Government steps for migrant workers
- Pradhan Mantri Garib Kalyan Yojana: After the lockdown, Pradhan Mantri Garib Kalyan Yojana with a financial package of Rs. 1.7 lakh crore was launched to help poor, needy, and unorganized sector workers of the country.
- PM SVANidhi Scheme: PM SVANidhi Scheme was launched to facilitate collateral-free working capital loans up to Rs.10,000/- of one-year tenure, to approximately, 50 lakh street vendors, to resume their businesses.
- Pradhan Mantri Garib Kalyan Rojgar Abhiyan: In order to facilitate the employment of migrant workers who have gone back to their home state, Pradhan Mantri Garib Kalyan Rojgar Abhiyan was initiated in 116 districts in Mission Mode.
- State migrant cell: Migrant workers’ Cell is being created to prepare a database of migrant workers in states with mapping.
- eShram portal: It is a national database created to register the unorganised workers in the country, including the migrant workers.
- National policy on migrant workers: NITI Aayog has been mandated to prepare a draft national policy on migrant workers to reimagine labour-capital relations while integrating the migrant workers within the formal workforce.
How technology could provide Solutions?
- Providing digital public infrastructure (DPI): Digital public infrastructure systems that enable the effective provision of essential society-wide functions and services can enable a paradigm shift, allowing governments to co-create solutions with the private sector and civil society.
- Adopting Public private partnership models: There are three key areas where DPI can enable public-private partnerships (PPP) in the delivery of social protection of migrants,
1. Awareness of entitlements: One barrier faced at the initial stage is lack of awareness of entitlements or of the need to reapply, when migrants move from one state to another. Jan Saathi is an application that provides migrants withinformation on eligible social security schemes. Organisations such as Haqdarshak not only inform potential beneficiaries about their eligibility for various schemes, Central or State, but also help them avail entitlements.
2. Information about livelihoods and housing: The informal nature of the labour market makes access to affordable and safe living conditions a challenge, especially if the family migrates as a unit. Ministry of Housing and Urban Affairshas introduced the Affordable Rental Housing Complexes under PMAY-Urban but the availability of such facilities is inadequate compared to the number of migrants. Bandhu’s ecosystem of applications connect migrant workers directly with employers and housing providers, to give them more informed choices. Jobsgaar and MyRojgaar also play a similar role by connecting workers to employers.
3. Healthy Grievance redressal Mechanism: Gram Vaani bridges the gap in grievance redressal by providing a platform where citizens can use Interactive Voice Response (IVR) to record their grievance in accessing entitlements. Aajeevika Bureau and The Working People’s Charter built the India Labourline to provide legal aid and mediation services to migrant workers.
- Adopting a well-designed data: While a growing ecosystem of private players (NGOs, civil society organisations, not-for-profit and for-profit entities) are addressing these needs, well designed data exchanges can help unlock a strong public-private collaboration in the delivery of social protection.
What more government can do to address the issue of migrants?
- Creating centralized data: The state’s digital efforts are often in siloes and the need to maximize the use of data across schemes and departments is a high priority.
- E-Shram: Initiatives such as direct benefit transfers and linking schemes for the portability of entitlements have shown promise. e-Shram, which is a national database of unorganized workers, aims to reduce access barriers to social protection for migrants.
- Making portable entitlement: Recent announcements of API-based integration of e-Shram with the various state government labor departments and with the One Nation One Ration Card scheme are a step in that direction.
- Working with the private sector: Enabling linkages of migrant data with the private sector can lead to benefits on the demand side, in the form of reduced transaction costs in identifying jobs, affordable housing, and redressal of grievances.
- Engaging the private sector: Private players who have established relationships with these mobile populations can help the state in planning and forecasting the demand for benefits. An example of this is the digital payment ecosystem since the introduction of UPI.
Conclusion
- Digital technologies have potential solutions to problems and transform the livelihood of migrants. The need for adequate data protection and safeguards is essential for the implementation of any such initiative.
Mains Question

Q.Enlist the problem faced by migrant workers? Elaborate on how use of technology can solve the many problems of migrants.
October 11, 2022
Moonlighting: Overemployment or Underpayment
Context
- In July, Kotak Securities said in a study that at least 60% of 400 employees surveyed said they themselves had, or knew someone who had engaged in moonlighting.
What is mean by moonlighting?
- Moonlighting is a state where employees work for remuneration with entities other than their employers. It is not defined in any of the statutes in India. However, there are enactments that deal with double employment.
How does it affect companies and what are latest examples?
- Wipro: According to Wipro CEO, there is a lot of chatter about people moonlighting in the tech industry. This is cheating plain and simple. The company sacked 300 employees following the discovery that they were working for rival firms on the side, leading to conflict of interest.
- Infosys: Infosys has warned staff against moonlighting, saying it could lead to termination.
- Effect of WFH: Another software firm DXC Technologies said that moonlighting by employees was a challenge for employers but that wouldn’t affect its WFH (work from home) policy that has worked well for both the firm and its staff.
- Moonlighting policy: Swiggy announced a moonlighting policy’ that allows employees to pursue their passion for economic interests alongside their fulltime employment.”
What is the Legal status of moonlighting?
- Factory act: Section 60 of the Factories Act deals with restriction on double employment stating that “No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save in such circumstances as may be prescribed. However, this enactment is applicable only to employees working in factories.
- The Tamil Nadu Shops & Establishments Act, 1947: There are State enactments which deal with employment of persons working in offices, banks, shops, etc. In Tamil Nadu, it is termed as The Tamil Nadu Shops & Establishments Act, 1947. However, there is no provision wherein dealing with dual employment.
- Glaxo Laboratories (I) Limited vs Labour Court, Meerut and others: The apex court held that “The employer has hardly any extra territorial jurisdiction. He is not the custodian of general law and order situation or the Guru or mentor of his workmen for their well-regulated cultural advancement. If the power to regulate the behaviour of the workmen outside the duty hours and at any place wherever they may be was conferred upon the employer, contract of service may be reduced to contract of slavery.” This case was not specifically about moonlighting but the court’s observation gives us an idea as to how the law may view such cases.
Way forward
- More earning: The Minister of State for Skill Development and Entrepreneurship, and Electronics and IT, said that employers should not to suppress employees who want to monetise, develop and demonstrate but also urged employees not to violate their agreements with employers.
- Working hours: Moonlighting is subject to law of the land. The sphere of employment cannot be extended by the employer beyond working hours and outside his place of employment.
- Socialistic view: The Courts of law in India dealing with employment are Writ Courts and Labour Courts, which exercise jurisdiction based on equity or fairness. Therefore, the Courts may lean in favour of the employee unless the contravention of the employee has led to serious prejudice and loss to the employer
Conclusion
- Employees are not the slaves of employers. What they do beyond the working hours is none of the business of employer unless it affects company financially or causes substantial damage to business. Government should bring the legal statute to regulate moonlighting and prevent the unjustified punishment of employees.
Mains Question

Q. What is moonlighting? Why employees do moonlighting? Discuss the legal framework about moonlighting in India.

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October 7, 2022
Free Breakfast Scheme,Healthy Children: Healthy Nation
Context
- Under the free breakfast scheme of Tamil Nadu Government, children in government schools from Class I to Class V will get nutritious breakfast provided in their schools every morning. The scheme is aimed at encouraging more children to continue to come to school and help prevent dropouts in primary level.
CM’s Breakfast Scheme
- The scheme covers around 1.14 lakh students in 1,545 schools which include 417 municipal corporation schools, 163 municipality schools and 728 taluk and village panchayat-level schools.
- The inauguration of the scheme marks an important milestone in the State’s history of providing free meals to school students.
What is the approach for breakfast scheme?
- Morning Breakfast: Under the morning breakfast scheme, every student is to be provided a cooked meal of 150-500 grams breakfast with sambar with vegetables. With a budget outlay of Rs33.5 crore in the initial phase, the new scheme caters to 1,14,095 primary school students from1,545 government schools.
- Micronutrients deficiency: School administration will serve hot breakfasts to schoolchildren by 8:30 am before their classes begin. Students will be served upma, kichadi or Pongal from Monday to Friday, while rava kesari or semiya kesari will be added to the menu on Fridays.The local millets available in the area will also be part of the menu for at least two days a week.
- Aim of the scheme: The scheme mainly aims to help students attend school hunger free and improve their nutritional status.
What do the Critics of the scheme argue?
- Freebies: The scheme stands at the confluence of three socio-political developments: a fierce but murky political debate on freebies.
- Mid-day meal scheme: There was no need to supplement the existing mid-day meal scheme. But going by the content of the scheme, it seems unlikely that it will bring any substantial or sustained improvements in the above mentioned aspects of nutrition, especially since T.N. is already doing well in this regard.
- Populism: This is just a populist scheme by state government for vote bank politics.
- Questionable outcomes: Though the scheme has the potential to ensure that children attend classes hunger free, reliable and representative data on what proportion of them attend school without having breakfast regularly is scarce. Though the State acknowledges that students tend to skip breakfast because of the school timing and their financial situation, it is important to identify which among these is the significant contributor. The present approach does not distinguish between the two.
What the Defenders of the scheme argue?
- Positive outcomes: Studies from other countries suggest that free breakfast schemes might help increase educational outcomes through a likely increase in school attendance and improved concentration on studies.
- On freebies: The freebie debate strategically deploys fiscal burden as a potent tool to possibly constrain States from discharging this responsibility.
Why feeding children in school is important?
- Welfare state: The States have a responsibility to promote welfare and minimise inequalities in income as well as in facilities and opportunities among individuals and groups (Article38).
- Global Food Security Index: The welfare responsibility of the States remains undiminished, especially since India is ranked 71out of 113 countries on the Global Food Security Index.
- Global Hunger Index: India ranked 101 out of 116countries on the Global Hunger Index.
- Human development index: 132 out of 191 countries on the Human Development Index. India’s mean years of schooling stood at just 6.7 years in 2020-21.
- Inequality: Additionally, India has among the highest levels of inequality in education. This responds closely with the rising wealth inequality, as brought out by the recent Credit Suisse report.
- Stunting and wasting: Malnourishment in children (stunting, wasting and underweight) under 5 years has reduced as per National family health survey-5 (2019-21) from 38.4% to 35.5%, 21.0% to 19.3% and 35.8% to 32.1% respectively as compared to NHFS-4 (2015-16). However present scenario is not good as compare to other developing nations in south Asia.
What are the different Existing Scheme?
- The Midday Meal Scheme: The Midday meal is a school meal programme in India designed to better the nutritional standing of school-age children nationwide.
- The programme supplies free lunches on working days for children in primary and upper primary classes in government, government aided, local body, Education Guarantee Scheme, and alternate innovative education centres, Madrasa supported under Sarva Shiksha Abhiyan, and National Child Labour Project schools run by the ministry of labour.
- Serving 120 million children in over 1.27 million schools and Education Guarantee Scheme centres, the Midday Meal Scheme is the largest of its kind in the world.
- PM-POSHAN: The name of the scheme has been changed to PM-POSHAN (Pradhan Mantri Poshan Shakti Nirman) Scheme, in September 2021, by MoE (Ministry of Education), which is nodal ministry for the scheme.
- The Central Government also announced that an additional 24 lakh students receiving pre-primary education at government & government-aided schools would also be included under the scheme by 2022.
Conclusion
- India’s spending in human development enhancing welfare schemes has been very dismal. There is an urgent need for implementing innovative and effective welfare schemes to address the disruptions caused by the pandemic in the education and nutrition sectors and strengthen these sectors.
Mains Question

Q.Malnutrition, under-nutrition and micro-nutrition requires a different approach. Distinguish and suggest the existing policy gaps to address them.

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October 4, 2022
India ranks 132 in HDI as score drops
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India ranks 132 out of 191 countries in the Human Development Index (HDI) 2021, after registering a decline in its score over two consecutive years for the first time in three decades.

What is Human Development Index (HDI)?
- The HDI combines indicators of life expectancy, education or access to knowledge and income or standard of living, and captures the level and changes to the quality of life.
- The index initially launched as an alternative measure to the gross domestic product, is the making of two acclaimed economists from Pakistan and India, namely Mahbub ul Haq and Amartya Sen.
- It stresses the centrality of human development in the growth process and was first rolled out by the United Nations Development Programme in 1990.
Dimensions of the Human Development Index – HDI
- The idea that progress should be conceived as a process of enlarging people’s choices and enhancing their capabilities is the central premise of the HDI.
- Since its launch, the HDI has been an important marker of attempts to broaden measures of progress.
- The HDI considers three main dimensions to evaluate the development of a country:
1. Long and healthy life
2. Education
3. Standard of living
Limitations of HDI

HDR has been always disputable and has caught the public-eye, whenever it was published. It has many reasons.

One of them is that the concept of human development is much deeper and richer than what can be caught in any index or set of indicators. Another argument is that its concept has not changed since 1990 when it was also defined in the first.

(1) An incomplete indicator
- Human development is incomplete without human freedom and that while the need for qualities judgement is clear; there is no simple quantitative measure available yet to capture the many aspects of human freedom.
- HDI also does not specifically reflect quality of life factors, such as empowerment movements or overall feelings of security or happiness.
(2) Limited idea of development
- The HDI is not reflecting the human development idea accurately.
- It is an index restricted to the socio-economic sphere of life; the political and civil spheres are in the most part kept separate.
- Hence there is a sub-estimation of inequality among countries, which means that this dimension is not being taken into consideration appropriately.
(3) A vague concept
- Concerning data quality and the exact construction of the index HDI is conceptually weak and empirically unsound.
- This strong critic comes from the idea that both components of HDI are problematic. The GNP in developing countries suffers from incomplete coverage, measurement errors and biases.
- The definition and measurement of literacy are different among countries and also, this data has not been available since 1970 in a significant number of countries.
(4) Data quality issues
- The HDI, as a combination of only four relatively simple indicators, doesn’t only raise a questions what other indicators should be included, but also how to ensure quality and comparable input data.
- It is logical that the UNDP try to collect their data from international organizations concentrating in collecting data in specific fields.
- Quality and trustworthiness of those data is disputable, especially when we get the information from UN non-democratic members, as for example Cuba or China.
(5) A tool for mere comparison
- The concept of HDI was set up mainly for relative comparison of countries in one particular time.
- HDI is much better when distinguishing between countries with low and middle human development, instead of countries at the top of the ranking.
- Therefore, the original notion was not to set up an absolute ranking, but let’s quite free hands in comparison of the results.
(6) Development has to be greener
- The human development approach has not adequately incorporated environmental conditions which may threaten long-term achievements on human development. The most pervasive failure was on environmental sustainability.
- However, for the first time in 2020, the UNDP introduced a new metric to reflect the impact caused by each country’s per-capita carbon emissions and its material footprint.
- This is Planetary Pressures-adjusted HDI or PHDI. It measured the amount of fossil fuels, metals and other resources used to make the goods and services it consumes.
(7) Wealth can never equate welfare
- Higher national wealth does not indicate welfare. GNI may not necessarily increase economic welfare; it depends on how it is spent.
- For example, if a country spends more on military spending – this is reflected in higher GNI, but welfare could actually be lower.
Significance of HDI
- It is one of the few multidimensional indices as it includes indicators such as literacy rate, enrollment ratio, life expectancy rate, infant mortality rate, etc.
- It acts as a true yardstick to measure development in real sense.
- Unlike per capital income, which only indicates that a rise in per capital income implies economic development; HDI considers many other vital social indicators and helps in measuring a nation’s well-being.
- It helps as a differentiating factor to distinguish and classify different nations on the basis of their HDI ranks.
Way forward
- Both sustainable development and poverty eradication are both long-term and urgent endeavours, requiring not only the gradual and substantial redirection of country policies but a rapid response to pressing problems.
- Ideally, sustainable development could provide an overarching framework within which all sub-goals (eg poverty eradication, social equality, ecosystem maintenance, climate compatibility) are framed.
- It is not a subset of development; it is development (in a modern world of resource limits).
- Environmental issues are not one factor among many but the meta-context within which poverty and other goals are sought.
- Investing more in public research could lead to technological solutions to poverty and sustainability problems becoming more rapidly and openly available.
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September 9, 2022
Green finance for green future
Context
- Inclusion of climate change and green finance in policy is crucial for a strong economy.
What is green finance?
- Green finance is a phenomenon that combines the world of finance and business with environment friendly behaviour. It may be led by financial incentives, a desire to preserve the planet, or a combination of both.
- In addition to demonstrating proactive, environment friendly behaviour, such as promoting of any business or activity that could be damaging to the environment now or for future generations.
Green finance instruments
- Dedicated fund: A “green super fund” could be established to jumpstart green investments by pooling together international and domestic capital.
- Sovereign green bond (SGB): The sovereign green bond is a novel idea. It will be a part of the government’s borrowing programme. The gross borrowing programme of the government is pegged at Rs 14.95 lakh crore. The SGB (sovereign green bond) raised will be part of the aggregate borrowing programme and has to be used for projects which are ESG (environment, social and governance) compliant.
Network for Greening the Financial System
- The Network for Greening the Financial System is a network of 114 central banks and financial supervisors that aims to accelerate the scaling up of green finance and develop recommendations for central banks’ role for climate change.
- The NGFS was created in 2017 and its secretariat is hosted by the Banque de France.
Purpose
- The Network’s purpose is to help strengthening the global response required to meet the goals of the Paris agreement and to enhance the role of the financial system to manage risks and to mobilize capital for green and low carbon investments in the broader context of environmentally sustainable development.
Significance
- Green goals: Reaching net-zero emissions and other climate-related and environmental goals will require significant investments to enable decarbonisation and innovation across all sectors of the economy. Greening the financial system is key to making these investments happen.
- SDG goals: Green finance initiatives also aim to achieve the 2030 Sustainable Development Goals (SDGs), shifting the focus from creating value for shareholders (economic) to creating value for stakeholders (economic, environmental, and social).
- Green future: And as we begin to recover from the pandemic, green finance presents a huge opportunity to build back with a greener future, creating new businesses and jobs.
- Robust growth: Supports strong and green growth in all sectors of economy .
The issues in mobilization and effective use of green finance are
- Low incentives: The return on green finance is long term, low in monetary value & many times intangible, so that the ability of the financial system to mobilize private green finance, especially in developed countries is difficult.
- Distribution challenge: Developing countries like India have challenges of development & poverty alleviation, so allocation of resources towards meeting fundamental needs & promoting the green projects which require heavy investment is a challenge.
- Skewed investment: In many countries, green finance & much of the green projects are limited to the investment in renewable energy: India whose 60% of installed capacity is coal based, greening of coal technology is required which is mostly limited to private players in developed countries. It is subjected to IPR & makes them cost prohibitory.
- High risk: Green bonds are perceived as new and attach higher risk and their tenure is also shorter. There is a need to reduce risks to makes them investment grade.
Conclusion
- Our future depends on how we resolve our environmental challenges. Further, we are the world’s third-largest carbon emitter and will play a crucial role in getting the planet to a low-carbon trajectory. Simply put, we must urgently transform our economy to get to the green frontier.
Mains question

Q. As the world copes with the repercussions of carbon emissions, there is growing pressure to achieve climate-compatible growth. In this context What do you understand by the term green finance? Discuss how it will help to achieve climate-compatible growth along with limitations of green finance.

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August 27, 2022
How to bring Indian women into the workforce?
Fewer than one in five Indian women are in the labour force. Four out of five are neither working nor looking for work.

Why in news?
- India has one of the world’s lowest female labour force participation rates (LFPR).
- This means the productive potential of half of the population goes unutilized.
Why women’s LFPR is so low in India?
- There are many reasons:
1. A lack of demand for women workers;
2. Poor working conditions including low wages,
3. Safety concerns and exploitation;
4. Girls studying longer; migration;
5. Nuclearization of families where there are fewer women to share domestic responsibilities; and
6. Middle-income effect is where women stop working because the household has enough income.
- The root of much of this is deep-set patriarchy and neglect for women’s claim to their equal place in a man’s world.
Why enhancing women’s LFPR is critical?
- Research and experience highlight that when women have money, they spend it on the well-being of their families.
- From Brazil’s Bolsa Familia to the Pradhan Mantri Garib Kalyan package for women with Jan Dhan accounts, policymakers have tried to reap the benefits of putting money in women’s hands.
- One way to do this is to ensure that more women have jobs, higher wages, and equal pay.
What is needed to improve women’s employment?
- Persistent effort must be directed toward community sensitization to root out patriarchal social norms.
- In addition to enforcing existing regulations like minimum wages, there must be supportive ancillary policies including childcare; secure transport; lighting; safety at work; and quotas in hiring, corporate boards, and politics to foster more women in leadership.
What obstacles do we confront?
- Correcting asymmetries of power is hard, especially when it entails changing convention.
- Men who are blind to their privilege, or will be forced to share their privileges, will resist change.
- Engendered discrimination results in a lack of labour market demand for women workers.
- This is visible in policies such as honorariums instead of wages for Anganwadi and Asha workers.
- It is also evident from over-reliance on home-based work for women, on and offline, instead of doing the hard work to ensure equal opportunity, outcomes, and real choice.
What happens if we don’t act?
- A concerted effort to advance gender equity must be a central priority over the next 25 years.
- Evidence shows that economic disempowerment of women can result in losses of 10% of GDP in industrialized economies and over 30% in South Asia and in the Middle East and North Africa.
- India’s GDP could grow by nearly ₹3 trillion if women were brought into the labour market and given access to formal, ‘decent’ work opportunities.
Way forward
- If we improve women’s labour force participation, not only do we harness the massive productive potential of half of the population, but their earnings will yield enormous dividends for the future of the country and economy.
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August 17, 2022
What is Purchasing Managers Index (PMI)?
India’s services firms saw growth in new business and output accelerate to a 11-year high in June, as per the survey-based S&P Global India Services Purchasing Managers Index (PMI).

What is the news?
- The index rose to 59.2 last month, from 58.9 in May, signalling a strengthening in demand across the services sector, which had borne the brunt of the COVID-19 pandemic.
Purchasing Managers’ Index (PMI)
- PMI is an indicator of business activity — both in the manufacturing and services sectors.
- It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.
- It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
- The PMI is compiled by IHS Markit based on responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
How is the PMI derived?
- The PMI is derived from a series of qualitative questions.
- Executives from a reasonably big sample, running into hundreds of firms, are asked whether key indicators such as output, new orders, business expectations and employment were stronger than the month before and are asked to rate them.
How does one read the PMI?
- A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.
- Higher the difference from this mid-point greater the expansion or contraction. The rate of expansion can also be judged by comparing the PMI with that of the previous month data.
- If the figure is higher than the previous month’s then the economy is expanding at a faster rate.
- If it is lower than the previous month then it is growing at a lower rate.
What are its implications for the economy?
- The PMI is usually released at the start of the month, much before most of the official data on industrial output, manufacturing and GDP growth becomes available.
- It is, therefore, considered a good leading indicator of economic activity.
- Economists consider the manufacturing growth measured by the PMI as a good indicator of industrial output, for which official statistics are released later.
- Central banks of many countries also use the index to help make decisions on interest rates.
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July 6, 2022