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Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Taking India’s agri-marketing and PDS system on a more efficient path

Note4Students

From UPSC perspective, the following things are important :

Prelims level : APMC, e-NAM

Mains level : Paper 3- Agri-marketing and PDS, scope for improvement

Agriculture is still the mainstay of Indian economy. There are certain problems that persist in the agri-marketing and PDS. The author suggests to use the present corona crisis to embark on the path of the reform in these areas.

 Supply lines maintained during the lockdown

  • India seems to have contained the mortality rate from Covid-19 to 3.3% which is lower than the global average of about 7 per cent.
  • On the food front too, India has done reasonably well.
  • Despite initial disruptions in supply lines, India has somehow managed to feed its large population of 1.37 billion.
  • In fact, if there is any complaint, it is from the producer’s side that the prices of perishables have collapsed in some parts of the country.
  • But, from the consumer’s point of view, even for perishables like milk and vegetables, supply lines were quickly restored and food is easily available in the markets at reasonable prices.
  • On keeping supply lines for essential food alive and running, those in the government managing the food logistics surely deserve to be complimented.

Reforms in agri-marketing and PDS

  • Agriculture still engages India’s largest workforce.
  • And it may be the only sector that registers a respectable growth this year as almost all other major sectors may plummet into negative territory.
  • Agriculture sector is in urgent need of the reforms that can help farmers get a better price for their produce with consumers still paying a reasonable price for their food.
  • Following ways are suggested for agri-marketing:
  • While the APMC markets can keep doing their business as usual, it is time to open channels for direct buying from farmers/farmer producer organisations (FPOs).
  • Any registered large buyer, be it processors or retail groups or exporters must be encouraged by providing them with a license, that is valid all over India.
  • They should be exempted from any market fee and other cesses as they will not be using the services of the APMC market yards.
  • E-NAM can flourish if grading and dispute settlement mechanisms are put in place.
  • Private mandis with modern infrastructure need to be promoted in competition with APMCs.
  • On the PDS front, we need to move towards cash transfers that can be withdrawn from anywhere in the country.
  • Some initiative has already been taken by the Madhya Pradesh and even Uttar Pradesh is now moving along these lines.
  • But much more can be done to put India’s agri-marketing and PDS system on a more efficient path.

Consider the question asked by the UPSC in 2014 “There is also a point of view that Agricultural Produce Marketing Committees set up under the State Acts have not only impeded the development of agriculture but also have been the cause of food inflation in India. Critically examine.”

Conclusion

The recovery of the economy, whether it will be V-shape or J-shape, depends upon the package that the government announces. The mega reforms need to be built in this recovery package.


Agriculture Produce Marketing Committee Regulation (APMC) Act.

  • All wholesale markets for agricultural produce in states that have adopted the Agricultural Produce Market Regulation Act (APMRA) are termed as “regulated markets”.
  • With the exception of Kerala, J & K, and Manipur, all other states have enacted the APMC Act.
  • It mandates that the sale/purchase of agricultural commodities notified under it are to be carried out in specified market areas, yards or sub-yards. These markets are required to have the proper infrastructure for the sale of farmers’ produce.
  • Prices in them are to be determined by open auction, conducted in a transparent manner in the presence of an official of the market committee.
  • Market charges for various agencies, such as commissions for commission agents (arhtiyas); statutory charges, such as market fees and taxes; and produce-handling charges, such as for cleaning of produce, and loading and unloading, are clearly defined, and no other deduction can be made from the sale proceeds of farmers.
  • Market charges, costs, and taxes vary across states and commodities.

Foreign Policy Watch: India-China

Seven trends in the geopolitics of the world

Note4Students

From UPSC perspective, the following things are important :

Prelims level : G-7, G-20, BRI etc.

Mains level : Paper 2- Recent changes in the global order that were hastened by the pandemic.

The article examines 7 trends that have been emerging in the global order for quite some time now. The corona crisis has only accentuated these trends. So, what are these trends? read to know more.

1. The rise of Asia

  • The first trend which became clear in the aftermath of the 2008 global financial crisis is the rise of Asia.
  • Economic historians pointed to its inevitability, recalling that till the 18th century, Asia accounted for half the global GDP.
  • The Industrial Revolution accompanied by European naval expansion and colonialism contributed to the rise of the West, and now the balance is being restored.
  • The 2008 financial crisis showed the resilience of Asian economies.
  • And even today, economic forecasts indicate that out of the G-20 countries, only China and India are likely to register economic growth during 2020.
  • Asian countries have also demonstrated greater agility in tackling the pandemic compared to the United States and Europe.
  • This is not limited to China but a number of other Asian states have shown greater responsiveness and more effective state capacity.
  • Consequently, Asian economies will recover faster than those in the West.

2. Decline of the US

  • The second trend is the retreat of the U.S.after a century of being in the forefront of shaping the global order.
  • The U.S. played a decisive role in shaping the world, from the World Wars to the leadership of the western world during the Cold War, molding global responses to threats posed by terrorism or proliferation or climate change.
  • But recent examples show that interventions in Afghanistan and Iraq have become quagmires that have sapped domestic political will and resources.
  • President Donald Trump called for “America first” and during the current crisis, the U.S.’s efforts at cornering supplies of scarce medical equipment and medicines and acquiring biotech companies engaged in research and development in allied states, shows that this may mean “America alone”.
  • Moreover, even as countries were losing trust in the U.S.’s leadership, its mishandling at the home of the pandemic indicates that countries are also losing trust in the U.S.’s competence.

3. Weakening unity of the EU

  • A third trend is the European Union’s continuing preoccupation with internal challenges.
  • This internal disruption is generated three factors: 1) EU’s expansion of membership to include East European states 2) Impact of the financial crisis among the Eurozone members 3) Ongoing Brexit negotiations.
  • Threat perceptions vary between old Europe and new Europe making it increasingly difficult to reach agreement on political matters e.g. relations with Russia and China.
  • Rising populism has given greater voice to Euro-sceptics and permitted some EU members to espouse the virtues of “illiberal democracy”.
  • Adding to this is the North-South divide within the Eurozone.
  • This divide was seen when austerity measures were imposed on Greece, Italy, Spain and Portugal a decade ago by the European Central Bank.
  • These austerity measures were persuaded by the fiscally conservative Austria, Germany and the Netherlands.
  • The EU lacked solidarity when Italy was battling the pandemic alone.
  • Further damage was done when Italy was denied medical equipment by its EU neighbours who introduced export controls.
  • Schengen visa or free-border movement has already become a victim to the pandemic.
  • The EU will need considerable soul searching to rediscover the limits of free movement of goods, services, capital and people, the underlying theme of the European experiment of shared sovereignty.

4. Rise of China

  • China’s growing economic role has been visible since it joined the World Trade Organization in 2001.
  • Its more assertive posture has taken shape under President Xi Jinping’s leadership with the call that a rejuvenated China is now ready to assume global responsibilities.
  • In recent years, the U.S.-China relationship moved from cooperation to competition; and now with trade and technology wars, it is moving steadily to confrontation.
  • A partial economic de-coupling had begun and will gather greater momentum.
  • The Belt and Road Initiative involves investing trillions of dollars in infrastructure building as a kind of pre-emptive move against any U.S. attempts at containment.
  • Even if Mr Xi’s leadership comes under questioning, it may soften some aggressive policy edges but the confrontational rivalry with the U.S. will remain.

5. Failure of multinational institutions

  • With COVID-19, international and multilateral bodies are nowhere on the scene.
  • The World Health Organisation (WHO) was the natural candidate to lead global efforts against the health crisis but it has become a victim of politics.
  • The UN Security Council (UNSC), the G-7 and the G-20 are paralysed when the world faces the worst recession since 1929.
  • The reality is that these institutions were always subjected to big power politics.
  • During the Cold War, U.S.-Soviet rivalry blocked the UNSC on many sensitive issues and now with major power rivalry returning, finds itself paralysed again.
  • Agencies such as WHO have lost autonomy over the decades as their regular budgets shrank.
  • Budget constraints forced them to increasingly rely on voluntary contributions sourced largely from western countries and foundations.
  • The absence of a multilateral response today highlights the long-felt need for reform of these bodies but this cannot happen without collective global leadership.

6. The oil prices

  • The two trends were changing energy markets: 1)Growing interest in renewables and green technologies on account of climate change concerns. 2) The U.S. emerging as a major energy producer.
  • Now, a looming economic recession and depressed oil prices will exacerbate internal tensions in West Asian countries which are solely dependent on oil revenues.

7. Stability of West Asia

  • Long-standing rivalries in the region have often led to local conflicts but can now create political instability in countries where regime structures are fragile.

Consider the question “The Corona crisis contributed to speeding the failure of a global order which had been faltering before the pandemic afflicted the world. Examine the trends that have been accentuated by the pandemic.”

Conclusion

The vaccine may end the corona crisis when it comes, but the unfolding trends in the geopolitics have been altering the world even before the corona crisis and continue to do so after a pandemic is over.

 

Insolvency and Bankruptcy Code

New approach to economic revival: SNAP

Note4Students

From UPSC perspective, the following things are important :

Prelims level : IBC 2016 provisions.

Mains level : Paper 3- IBC provisions and need for novel approach to deal with the economic fallout of the pandemic.

In this article the author suggests a new approach to deal with multiple bankruptcies and stressed assets that would come up post COVID. So, what is the new approach and how it is different from the existing IBC? Read further.

Why is speed of resolution important?

  • First, because it is the only way to revive the economy.
  • As revenues have dried up cash flow problems have cascaded down the supply chain.
  • Firms will consequently be unable to restart production unless they first get credit to pay their suppliers and workers.
  • But impaired firms cannot get credit and impaired banks cannot provide it.
  • So, the entire economy will be stuck unless the balance sheet problem is sorted out.
  • Second, speed will also minimise the losses from the COVID crisis.
  • The value of bankrupt firms decays rapidly over time, and the bill for this loss will have to be borne ultimately by the government.
  • So, speed is necessary to contain the damage to the government’s financial position, which has been badly eroded by the COVID crisis.
  • But moving quickly will be difficult.
  • The only real mechanism that currently exists to handle stress and bankruptcy is the Insolvency and Bankruptcy Code (IBC) system, which has been suspended for six months.

Why the IBC cannot help much?

  • Many have therefore argued for bringing the IBC back into operation as soon as possible.
  • Why such a strategy would not be very effective? The system is slow, with many cases taking two years or more; it could easily become overwhelmed completely if it is forced to absorb a large new set of bankrupt firms.
  • In addition, the IBC envisages that banks maximise their recoveries by auctioning off the bankrupt firms to the highest bidder.
  • But in a nation and indeed a world, where all balance sheets are damaged, it is not obvious who would be able to buy these firms, or at what prices.
  • So recovery rates from sales could be low, undermining the objective of the exercise.
  • Even if strong bidders could be found, there is a fundamental political, even philosophical, question of whether it is really right to take these firms away from their promoters.
  • After all, many of these firms did nothing wrong; they got into financial difficulties because of the corona crisis.

So, what is the solution?

  • What is needed is a new set of procedures that can utilise much of the existing IBC framework, but are simple, straightforward, and prompt, with a built-in expiry clause.
  • Let’s Call them Special Non-Adversarial Procedures (SNAP).
  • As soon as the lockdown is largely over, the IBC creditor committees (CoCs) could meet to assess the new wave of NPAs.
  • The largest, most complex cases — say, those with debts exceeding Rs 10,000 crore — would be sent to the IBC for regular treatment.
  • But all other cases would be eligible under SNAP
  • After all, the wider the set of companies that are put back on their feet quickly, the stronger the recovery will be.

How would the SNAP work?

  • Under SNAP, CoCs would, over the next three months, examine delinquent firms’ financial records, checking to see whether they are actually viable.
  • If so, these firms would be designated as Lockdown Affected Enterprises (LAEs), eligible under SNAP.
  • Since the basis of the designation would be that the firm is fundamentally sound but because of COVID impact, an Insolvency Professional (IP) appointed by the CoC would work with existing management (who would continue to run the firm) to arrange for interim finance.
  • Then, the IP would assess how much of a debt reduction the firm needs, and within three months would present a specific proposal to the CoC.
  • If the CoC can reach a two-third majority in favour of the proposal, the promoter would keep the firm, while the firm would be granted immediately released from bankruptcy.
  • Since the National Company Law Tribunal (NCLT) is already overloaded, it would not be involved at all in SNAP.
  • If the CoC cannot reach agreement within the three-month deadline, or if at any subsequent point the firm defaults on its newly reduced debt, it would be sent to the IBC for resolution.
  • SNAP would be disbanded by end-December 2020.

Checks and balances under SNAP

  • Such a system would have a series of checks and balances, to prevent firms from securing undeserved debt reductions.
  • Banks would need to certify that defaulters are truly LAEs.
  • IPs would need to certify the size of the debt reduction.
  • A large majority of creditor banks would need to agree to the IP’s proposal.

What should be the role of the government in SNAP?

  • With these checks and balances in place, the government should then commit to two things.
  • First, it should provide some legal cover, ensuring that bankers would not be subject to investigations by the anti-corruption agencies, as long as they followed the LAE rules.
  • Second, the public sector banks would be compensated for the costs of the reduction in the value of the asset, automatically and fully.

Major advantage of SNAP

  • Besides speed, SNAP would have one further major advantage.
  • It would reduce the adversarial nature of the IBC process, arising because promoters are forced to cede their firms.
  • Under the proposed system, promoters would not only have incentives to cooperate; they would actually want to take the initiative, applying for LAE designation themselves, in the hopes that they could get back to business as soon as possible.
  • Such a system might seem difficult to envisage, but it is certainly feasible: It is a design feature under Chapter 11 of the American bankruptcy act.
  • If SNAP succeeds, some of the special procedures could be introduced permanently into the IBC framework, adding a new dimension: Not just liquidation and rehabilitation under new promoters but rehabilitation under existing management.

Way forward

  • After SNAP, repair of the financial system would have to go back to addressing the long-standing problems, which will have been aggravated by the crisis.
  • Firms that were unviable even before the COVID crisis would be sent directly to the IBC, but with the IBC reformed.
  • The government should issue guidelines focusing on the following three-
  • 1. Focusing the COCs on the goal of maximising value, disregarding non-commercial objectives.
  • 2. Directing the NCLT courts to focus on the CoCs’ adherence to the procedure rather than on the merits of their decisions.
  • 3. Increasing competition in the auction by allowing promoters to bid for their assets, as long as they have not been declared wilful defaulters.
  • For the power and real estate sectors, a sui generis approach via the creation of a bad bank is still the best way forward.
  • Real estate resolutions need to take into account the interests of home-owners, something that is almost impossible to do under the IBC.

Consider the question, “Economic revival after the pandemic would require some tweaks in the IBC as it was not designed to handle such situations. Suggest the ways to handle the bankruptcies more effectively and changes that are desired in the IBC.”

Conclusion

Introducing three-pronged strategy quickly would set the stage for the economic recovery of India:  1) Special, expedited, non-adversarial and time-bound bankruptcy procedures (SNAP) for COVID-affected firms 2) A reformed IBC focused squarely on loss-minimisation 3)Bad banks for stressed assets in the power and real estate sectors.


Back2Baciscs: What is Insolvency and Bankruptcy Code-2016?

  1. The Code creates time-bound processes for insolvency resolution of companies and individuals.  These processes will be completed within 180 days.  If insolvency cannot be resolved, the assets of the borrowers may be sold to repay creditors.
  2. The resolution processes will be conducted by licensed insolvency professionals (IPs).  These IPs will be members of insolvency professional agencies (IPAs).  IPAs will also furnish performance bonds equal to the assets of a company under insolvency resolution.
  3. Information utilities (IUs) will be established to collect, collate and disseminate financial information to facilitate insolvency resolution.
  4. The National Company Law Tribunal (NCLT) will adjudicate insolvency resolution for companies.  The Debt Recovery Tribunal (DRT) will adjudicate insolvency resolution for individuals.
  5. The Insolvency and Bankruptcy Board of India will be set up to regulate functioning of IPs, IPAs and IUs.

Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Explained: How can Inter-State workers be protected?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Inter-state workers migration

Context

  • Following the novel coronavirus pandemic, the nationwide lockdown announced on March 24 at short notice has caused immense distress to migrant workers around the country.
  • Hundreds have been seen trying to walk home to Uttar Pradesh, Bihar, West Bengal and Odisha from their places of work in Rajasthan, Delhi, Maharashtra, Gujarat and so forth.

Try a mains question on this issue:

Inter state migrants face social, economic and cultural shocks. Discuss some steps taken by center and state governments. Also suggest further reforms.

Inter-State workers: Where is their almighty?

  • Recently, 16 migrant labourers who were trying to return to Madhya Pradesh, their home State, on foot were killed when a goods train ran over them.
  • Questions are being raised about their welfare and the lack of legal protection for their rights.
  • Those working in the field of labour welfare have recalled a 1979 law to regulate the employment and working conditions of inter-State migrants.
  • The lack of serious implementation has led to their rights being ignored.

What about occupational safety?

  • As part of the present regime’s efforts towards consolidating and reforming labour law, a Bill has been introduced in Parliament called the Occupational Safety, Health and Working Conditions Code, 2019.
  • The proposed code seeks to merge 13 labour laws into a single piece of legislation.
  • The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, is one of them.
  • Activists fear that specific safeguards given to migrant workers may be lost as a result of this consolidation.

Inter-State Migrant Workmen Act, 1979: What does the law envisage?

  • The Act seeks to regulate the employment of inter-State migrants and their conditions of service.
  • It is applicable to every establishment that employs five or more migrant workmen from other States; or if it had employed five or more such workmen on any day in the preceding 12 months.
  • It is also applicable to contractors who employed a similar number of inter-State workmen.
  • The Act would apply regardless of whether the five or more workmen were in addition to others employed in the establishment or by the contractors.
  • It envisages a system of registration of such establishments. The principal employer is prohibited from employing inter-State workmen without a certificate of registration from the relevant authority.
  • The law also lays down that every contractor who recruits workmen from one State for deployment in another State should obtain a licence to do so.

What are the beneficial provisions for inter-State migrants in it?

  • The provision for registration of establishments employing inter-State workers creates a system of accountability and acts as the first layer of formalizing the utilization of their labour.
  • It helps the government keep track of the number of workers employed and provides a legal basis for regulating their conditions of service.
  • As part of the licensing process, contractors are bound by certain conditions.
  • These include committing them to provide terms and conditions of the agreement or any other arrangement on the basis of which they recruit workers.
  • In no case, shall the wages be lower than what is prescribed under the Minimum Wages Act.

What does the proposed Code say on migrant workers?

  • The attempt to consolidate laws relating to occupational safety, health and working conditions means that many separate laws concerning various kinds of workers and labourers will have to be repealed.
  • The proposed law seeks to repeal 13 Acts such as the Factories Act, Mines Act, Dock Workers’ Act, the Inter-State Migrant Workmen Act, and other enactments relating to those working in plantations, construction, cinema, beedi and cigarette manufacture, motor transport, and the media.

What does the news law promise for migrant workers?

  • Regarding inter-State migrant workers, the Act includes them in the definition of ‘contract labour’.
  • At the same time, an inter-State migrant worker is also separately defined as a person recruited either by an employer or a contractor for an establishment situated in another State.
  • The Code has a chapter on ‘contract labour and inter-State migrant workers’, but the Parliamentary Standing Committee has recommended that the provisions relating to migrant workers be covered in a separate chapter.
  • The Code contains provisions similar to the 1979 Act regarding registration of establishments, licensing of contractors and the inclusion of terms and conditions on hours of work, wages and amenities.
  • Further, both the old Act and the proposed Code envisage the payment of a displacement allowance and a journey allowance to inter-State migrant workers.

Trade Union’s response

  • Even though the Code seeks to preserve many of the protections and rights are given to inter-State workers, trade unions feel that it is always better to have a separate enactment.
  • The unprecedented distress and misery faced by migrant workers due to the current lockdown have drawn attention to beneficial legislation dedicated to their welfare.
  • The Centre of Indian Trade Unions (CITU) has highlighted the fact that both the States where they work and home States have obligations cast upon them in the existing law.
  • Despite the fact that it has been poorly implemented at all, labour unions feel that preserving the separate enactment and enforcing it well is a better option than subsuming it under a larger code.

Coronavirus – Economic Issues

Relaxation in labour laws due to COVID-19 outbreak and their impacts

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Various laws mentioned

Mains level : Lockdown and its impacts on Labour

  • Amid the coronavirus-induced lockdown, an increasing number of states that include Uttar Pradesh, Madhya Pradesh, Rajasthan and Gujarat have pushed through changes to their labour laws by way of amendments — ordinances or executive orders.
  • They aim to provide some sort of blanket exemption to employers from labour laws.

Practice Question

Q. Multiplicity of Labour laws in India has done little to address the plight of Labourers. Critically comment in context to the nationwide lockdown imposed due to the coronavirus outbreak.

What is the move all about?

  • Most states cleared an ordinance exempting businesses from the purview of most labour law provisions for the next three years.
  • However, labour laws related to bonded labour, deployment of women and children and timely payment of salaries are not changed.

Changes in the law

  • The changes in the labour laws will apply to both the existing businesses and the new factories being set up in the state.
  • Similarly, the Madhya Pradesh government has also suspended many labour laws for the next 1000 days.
  • Few important amendments are:
  • Employers can increase working hours in factories from 8 to 12 hours and are also allowed up to 72 hours a week in overtime, subject to the will of employees.
  • The factory registration now will be done in a day, instead of 30 days. And the licence should be renewed after 10 years, instead of a year. There is also the provision of penalty on officials not complying with the deadline.
  • Industrial Units will be exempted from majority of the provisions of the Industrial Disputes Act, 1947.
    • Organisations will be able to keep workers in service at their convenience.
    • The Labour Department or the labour court will not interfere in the action taken by industries.
    • Contractors employing less than 50 workers will be able to work without registration under the Contract Labour (Regulation and Abolition) Act, 1970.

 Major relaxations to new industrial units are:

    • Exempted from provisions on ‘right of workers’, which includes obtaining details of their health and safety at work, to get a better work environment which include drinking water, ventilation, crèches, weekly holidays and interval of rest, etc.
    • Exempted from the requirement of keeping registers and inspections and can change shifts at their convenience.
    • Employers are exempt from penalties in case of violation of labour laws.

Rationale Behind the Changes in Labour Laws

  • States have begun easing labour laws to attract investment and encourage industrial activity.
  • To protect the existing employment, and to provide employment to workers who have migrated back to their respective states.
  • Bring about transparency in the administrative procedures and convert the challenges of a distressed economy into opportunities.
  • To increase the revenue of states which have fallen due to closure of industrial units during Covid-19 lockdown.
  • Labour reform has been a demand of Industries for a long time. The changes became necessary as investors were stuck in a web of laws and red-tapism.
  • Businesses and economic activities have slowed down due to which labour welfare has also been affected due to the national lockdown.

What are the Indian Labour Laws?

  • Labour falls in the Concurrent List and there are many laws enacted by the Centre that a state cannot just brush aside.
  • Estimates vary but there are over 200 state laws and close to 50 central laws. And yet there is no set definition of “labour laws” in the country.

Their types

Broadly speaking, they can be divided into four categories. Refer to the image.

  • The main objectives of the Factories Act, for instance, are to ensure safety measures on factory premises and promote the health and welfare of workers.
  • The Shops and Commercial Establishments Act, on the other hand, aims to regulate hours of work, payment, overtime, a weekly day off with pay, other holidays with pay, annual leave, employment of children and young persons, and employment of women.
  • The Minimum Wages Act covers more workers than any other labour legislation.
  • The most contentious labour law, however, is the Industrial Disputes Act, 1947 as it relates to terms of service such as layoff, retrenchment, and closure of industrial enterprises and strikes and lockouts.

Why are labour laws often criticised?

  • Indian labour laws are often characterized as “inflexible”. Most of them are inadequate to make the sector formalized.
  • At present 90% of India’s workers are parts of the informal economy. The Chart shows, even the organised sector are increasingly employing workers without formal contracts.
  • Others have also pointed out that there are too many laws, often unnecessarily complicated, and not effectively implemented. This has laid the foundation for corruption and rent-seeking.

Issues with the recent relaxation

1.Exploitation

  • The state of UP has summarily suspended almost all labour laws including the Minimum Wages Act.
  • Hence this move is characterized as “creating an enabling environment for exploitation”.
  • That’s because far from being a reform, which essentially means an improvement from the status quo, the removal of all labour laws will not only strip the labour of its basic rights but also drive down wages.
  • For instance, what stops a firm from firing all existing employees and hiring them again at lower wages.
  • For one, as Chart 3 shows, even before the Covid-19 crisis, thanks to the deceleration in the economy, wage growth had been moderating.
  • Moreover, there was always a wide gap between formal and informal wage rates. For example, a woman working as a casual labourer in rural India earns just 20% of what a man earns in an urban formal setting.
  • If all labour laws are removed, most employment will effectively turn informal and bring down the wage rate sharply. And there is no way for any worker to even seek grievance redressal.

2.Informalization

  • Moreover, far from pushing for a greater formalization of the workforce, this move will in one go turn the existing formal workers into informal workers as they would not get any social security.

3. Will reduce demand in the economy

  • Scrapping labour laws to save on labour costs will not help start the economy but will do exactly the opposite.
  • It will reduce wages, lower earnings (particularly of low wage workers) and reduce consumer demand.

4.Unlikely to spur economic growth?

  • Theoretically, it is possible to generate more employment in a market with fewer labour regulations.
  • However, as the experience of states that have relaxed labour laws in the past suggests, dismantling worker protection laws have failed to attract investments and increase employment.
  • It is unproven if they can cause an increase in worker exploitation or deterioration of working conditions. However, in the long run, employment will not increase, because of several reasons.

5. Enacted without any scrutiny:

  • Usually, any change in an Act follows a rigorous process of public consultation, scrutiny by committees of Parliament, and debates in the House before being approved.
  • The changes described here have not gone through such a process.
  • However, most of these have a three-month time limit, and any extension would need to be approved by the legislature.

What else could have been done?

1.Allow two shifts

  • There is already too much-unused capacity. Firms are shaving off salaries up to 40% and making job cuts. The overall demand has fallen. Which firm will hire more employees right now, he asked.
  • If the intention was to ensure more people have jobs, then states should not have increased the shift duration from 8 hours to 12 hours.
  • They should have allowed two shifts of 8-hours each instead so that more people can get a job.
  • This move and the resulting fall in wages will further depress the overall demand in the economy, thus hurting the recovery process.

2.Partnered with the industry

  • Most governments have done across the world have partnered with the industry and allocated 3% or 5% of the GDP towards sharing the wage burden and ensuring the health of the labourers.
  • Moreover, beyond labour regulations, firms face a lot of other hurdles like the shortage of skilled labour and the weak enforcement of contracts etc.
  • Time demands to secure the labour most than their employers.

Coronavirus – Disease, Medical Sciences Involved & Preventive Measures

Indigenous antibody test: COVID Kavach ELISA

Note4Students

From UPSC perspective, the following things are important :

Prelims level : ELISA Test, Antigen, Antibodies

Mains level : Not Much

Indian Council of Medical Research (ICMR)-National Institute of Virology (NIV) at Pune has developed and validated the indigenous IgG ELISA test “COVID KAVACH ELISA” for antibody detection for COVID-19.

Our thumb rule suggests that the ELISA test is being used only for the diagnosis of HIV infection. Right?

But the ELISA test is a broader term to diagnose antibody-antigen interaction after certain virus infection to a person.  UPSC can test your basic knowledge of core biology with a question based on this concept.

What is ELISA test?

  • ELISA (enzyme-linked immunosorbent assay) is a plate-based assay technique designed for detecting and quantifying substances such as peptides, proteins, antibodies and hormones.
  • Other names, such as enzyme immunoassay (EIA), are also used to describe the same technology.
  • In an ELISA, an antigen must be immobilized on a solid surface and then complexed with an antibody that is linked to an enzyme.
  • Detection is accomplished by assessing the conjugated enzyme activity via incubation with a substrate to produce a measurable product.
  • The most crucial element of the detection strategy is a highly specific antibody-antigen interaction.

What are antibodies?

  • An antibody is a large, Y-shaped protein produced mainly by plasma cells that are used by the immune system to neutralize pathogens such as pathogenic bacteria and viruses.
  • There are five immunoglobulin classes (isotypes) of antibody molecules found in serum: IgG, IgM, IgA, IgE and IgD.
  • They are distinguished by the type of heavy chain they contain.

Application of ELISA

  • Presence of antigen or the presence of antibody in a sample can be evaluated
  • Determination of serum antibody concentrations in a virus test
  • Used in the food industry when detecting potential food allergens
  • Applied in disease outbreaks- tracking the spread of disease e.g. HIV, bird flu, common, colds, cholera, STD etc

Significance

  • Robust antibody tests are critical for surveillance to understand the proportion of the population exposed to infection.
  • The test will have the advantage of testing 90 samples together in a single run of 2.5 hours.
  • Moreover, ELISA based testing is easily possible even at the district level as the ELISA kit has an inactivated virus.
  • There are also minimal bio-safety and bio-security requirements as compared to the real-time RT-PCR test.
  • The test has the advantage of having much higher sensitivity and specificity as compared to the several rapid test kits which have recently flooded the Indian market.

Limitations

  • Since the ELISA test is based on the detection of antibodies, it can only help in knowing if the person has been previously infected by a coronavirus.
  • It takes one-three weeks for the antibodies to develop in response to infection.
  • So, if a person who has been recently infected by the virus is tested during the window period (the time taken to develop antibodies) the result will turn out to be negative.
  • But a repeat test after a couple of weeks will indicate the true infection status.

How it is different from the PCR test?

  • While the RT-PCR, which detects the RNA of the coronavirus, enables detection of current infection, it will not be useful if the testing is carried out days after the infection clears as the virus will no longer be present.
  • However, antibodies developed in response to the coronavirus infection will be present in the blood for a longer duration and hence the ELISA test can help detect past infection.
  • The maximum time the antibodies will be present in the body is not known for coronavirus.

Back2Basics: Reverse Transcriptase – Polymerase Chain Reaction (PCR) Test

  • It uses a technique that creates copies of a segment of DNA. ‘Polymerase’ refers to the enzymes that make the copies of DNA.
  • Kary Mullis, the American biochemist who invented the PCR technique, was awarded the Nobel Prize for Chemistry in 1993.
  • The ‘chain reaction’ is how the DNA fragments are copied, exponentially — one is copied into two, the two are copied into four, and so on.
  • However, SARS-COV-2 is a virus made of RNA, which needs to be converted into DNA. For this, the technique includes a process called reverse transcription.
  • A ‘reverse transcriptase’ enzyme converts the RNA into DNA. Copies of the DNA are then made and amplified.
  • A fluorescent DNA binding dye called the “probe” shows the presence of the virus. The test also distinguishes SARS-COV-2 from other viruses.

History- Important places, persons in news

Florence Nightingale and her legacy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Florence Nightingale

Mains level : Not Much

The 200th birth anniversary of Florence Nightingale, founder of modern nursing, falls tomorrow on May 12.

Personality based questions sometimes find their way in the Prelims. For example:

Q) A recent movie titled The Man Who Knew Infinity is based on the biography of – (CSP 2016)

(a) S. Ramanujan

(b) S. Chandrasekhar

(c) S. N. Bose

(d) C. V. Raman

Who was Florence Nightingale?

  • Nightingale (1820-1910), who had considerable mathematical skills, is credited with being the first healthcare professional to use data to show that infection control improves health outcomes.
  • Through her career, she stressed a practice that is relevant as ever today — handwashing.

Nurse and mathematician

  • Her signature effort came during the Crimean War (1854-56), when she answered a government call for nurses and took a posting in Turkey.
  • This is where she earned the name ‘Lady with the Lamp’, for walking around patients’ beds at night, holding a lamp. Here she did her pioneering work with statistics.
  • When she arrived, diseases such as cholera and typhus were rife in the hospitals.
  • Nightingale collected data, calculated the mortality rate, and showed that an improvement of sanitary methods would reduce the number of deaths.
  • The mortality rate dropped from 60% to 42.7% by February 1855, and to 2.2% by the spring.

  • She used her data to create graphics, the most famous of which is a polar area diagram (pictured) that used areas to represent variations in death rate.
  • The blue wedges from the center of the circle represent area for the deaths from Preventable or Mitigable diseases, the red wedges measured from the center is deaths from wounds, & the black wedges measured from the center is the deaths from all other causes.
  • The blue wedges, representing death by sickness, are far bigger than those representing wounds.

Foreign Policy Watch: India-Pacific Island Nations

Mapping: Islands in the Pacific

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Mapping: Islands in the Pacific

Mains level : Not Much

Approximately four months after COVID-19 was first detected, the South Pacific Islands have not yet reported any cases of the infectious disease.

Closely observe the map. Note important islands. UPSC may shift its traditional focus from middle east/central asia to this region. These days, Pacific and Indo-Pacific region carry a decent importance.

We can expect MCQs asking to arrange these islands in north-south / east-west direction.

Which South Pacific islands have recorded cases of COVID-19?

  • Fiji recorded its first case of COVID-19 on March 19.
  • Guam, a territory of the US in the South Pacific, witnessed an outbreak among the staff of the US navy.
  • New Caledonia also recorded its first COVID-19 cases in mid-March, with links to overseas travel.
  • The Solomon Islands, the Cook Islands, Tonga, Tuvalu, Vanuatu, the Marshall Islands, Palau and Nauru have no recorded cases of COVID-19.

What impact will COVID-19 have on Pacific island nations?

  • A widespread outbreak of COVID-19 will have a disastrous impact on these island nations.
  • Although these islands are popular with tourists, the outer islands and rural villages are home to indigenous populations.
  • Most of these areas have a very basic infrastructure for healthcare, with larger hospitals and medical centres located in bigger towns.
  • Even in everyday circumstances, these small medical centres struggle due to the lack of medical supplies.
  • The socio-cultural factors, like the prevalence of large families in this region, also make the individuals susceptible to community transmission.
  • There is also a lack of access to running water, making sanitation difficult.
  • Environmental factors like the seasonal tropical cyclone that swept through the region in April, led to the displacement of hundreds of people in the Solomon Islands, Fiji, Vanuatu and Tonga.

Wildlife Conservation Efforts

Species in news: Sal Forest Tortoise

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Sal Forest Tortoise

Mains level : NA

A recent study by ecologists in the Wildlife Institute of India, Dehradun, has found that the area designated as a protected area network has only a small overlap with the actual habitat of Sal forest tortoise. Over 90% of the potential distribution of the species falls outside the current protected area’s network.

What you should focus on?

On map, identify areas where Sal forest tortoise are found.

Revise the map of various Forest system of India and their characteristics as well.

Also…..Is tortoise a mammal or an amphibian?…..or something else??

Sal Forest/ Elongated Tortoise

  • Also known as the elongated tortoise (Indotestudo elongata), the sal forest tortoise, recently assessed as Critically Endangered, is heavily hunted for food.
  • It is collected both for local use, such as decorative masks, and international wildlife trade.
  • The Sal forest tortoise is widely distributed over eastern and northern India and Southeast Asia.
  • It is one of the only four land tortoises found in India. It is legally protected under Schedule IV of the Indian Wildlife (Protection) Act, 1972 as amended up to 2006.
  • According to the IUCN, the population of the species may have fallen by about 80% in the last three generations (90 years).

About Sal Forest

  • It is a forest type dominated by a single plant species, commonly known as Sal tree (Shorea robusta).
  • It belongs to the category ‘Tropical Moist Deciduous Forest’.
  • The distribution of Sal forests is controlled by the conditions of topography, geology, and soil.
  • Sal forests are mainly distributed in the South and Southeast Asia, occurring along the base of Tropical Himalayas from Assam to Punjab, in the eastern districts of Central India, and on the Western Bengal Hills.

Also read the complete series on-

Natural Vegetation and Wildlife- Part 1 | An Overview of Natural Vegetation Types Found in India

Indian Ocean Power Competition

[pib] Mission SAGAR

Note4Students

From UPSC perspective, the following things are important :

Prelims level : SAGAR Programme

Mains level : India's SAGAR policy of Indian Ocean Region

As part of India’s outreach amidst the ongoing COVID-19 pandemic, ships have departed for Maldives, Mauritius, Seychelles, Madagascar and Comoros, to provide Food Items, COVID related Medicines including HCQ Tablets and Medical Assistance Teams under Mission Sagar.

Mission SAGAR, unlike other missions, can create confusion with the name and its purpose. Make note of such special cases. UPSC can ask such questions as one liner MCQs.

Mission SAGAR

  • As part of the mission, INS Kesari would enter the Port of Male in the Republic of Maldives, to provide them 600 tons of food provisions.
  • The deployment is in consonance with the PMs vision of Security and Growth for All in the Region ‘SAGAR’.
  • This deployment is in line with India’s role as the first responder in the region and builds on the excellent relations existing between these countries to battle the COVID-19 pandemic and its resultant difficulties.
  • The operation is being progressed in close coordination with the Ministries of Defence and External Affairs, and other agencies of the govt.

Back2Basics

SAGAR Programme (Security and Growth for All in the Region)

  • SAGAR is a term coined by PM Modi in 2015 during his Mauritius visit with a focus on the blue economy.
  • It is a maritime initiative which gives priority to the Indian Ocean region for ensuring peace, stability and prosperity of India in the Indian Ocean region.
  • The goal is to seek a climate of trust and transparency; respect for international maritime rules and norms by all countries; sensitivity to each other`s interests; peaceful resolution of maritime issues; and increase in maritime cooperation.
  • It is in line with the principles of the Indian Ocean Rim Association.

IORA (Indian Ocean Rim Association)

  • Established in 1997 in Ebene Cyber City, Mauritius.
  • First established as Indian Ocean Rim Initiative in Mauritius on March 1995 and formally launched in 1997 by the conclusion of a multilateral treaty known as the Charter of the IORA for Regional Cooperation.
  • It is based on the principles of Open Regionalism for strengthening Economic Cooperation particularly on Trade Facilitation and Investment, Promotion as well as Social Development of the region.