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  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    The new consumer

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    The focus of this article is on the behavioural changes in the consumer post Covid. It also suggest the ways to deal with these changes.

    Context

    • The consumer during and post-COVID is showing remarkable flexibility, bringing about a paradigm shift in her consumption pattern.

    Issue of generating demand

    • Some state governments are busy demanding the opening up of the economy.
    • However, the issue is that the economy does not merely need opening up, but it requires urgent generation of basic demand.
    • That is why consumer behaviour needs to be closely watched.
    • Since the lockdown, the priorities of consumers have seen a drastic shift.

    Factors to consider to increase demand

    • 1) The decrease in the purchasing power to buy products needs to be addressed.
    • The government must look at ways like a reduction in taxes which will help the common man.
    • 2) The current scenario has also made all of us go back to the basic needs.
    • Luxury products hold little value. But renting will increase.
    • 3) The emphasis will be on saving for a rainy day, whether in the case of banks or households
    • 4) Aviation, tourism and hospitality sectors have been hit and continue to remain so even after the restrictions are lifted.
    • 5)  e-commerce has shown exponential growth and will continue to do so.
    • 6) With “Vocal for Local” gaining momentum, there’s a huge increase in local apps, local kirana stores, local artisans and brands.
    • 7) Schools and colleges have taken a hit as e-learning and online courses are being preferred.
    • 8) The entertainment industry has been drastically hit. The media and entertainment industry needs to pay heed to this and curate content accordingly.
    • 9) With a lot of people laying emphasis on their health and immunity, there’s been a substantial rise in the consumption of organic, ayurvedic, and immunity-boosting products.
    • Apart from the obvious products, financial and medical insurance will play an important role.
    • 10) Real estate will suffer as no long-term, high investment purchases will be favoured, but renting will increase.

    Role of the government

    • 1) People need to be provided with their daily needs — basic essentials such as food, water, housing, and electricity.
    • The government is already taking care of that, but money also needs to be given.
    • 2) Jobs need to be provided through development of infrastructure projects.
    • 3) Farmers need to have insurance for their crops and the infrastructure to sell at the right price.
    • 4) Migrant workers with their livelihoods being disrupted are looking for support,and many are focusing on agriculture as a means of income.

    Way forward

    • The government should focus on generating demand for products, and create jobs by improving infrastructure.
    • The government must incentivise spending by offering tax benefits on the amount spent.
    • Government must forget about fiscal prudence this year.
    • Consumers in rural areas are buying more than before.Companies should focus on tapping the rural demand

    Consider the question “Demand has been the driver of India’s growth. But the pandemic has dampened it with devastating effect. Agaist this backdrop suggest the measures to be taken by the government to revive the demand.”

    Conclusion

    With focus on these emerging trends and changing behaviour of the consumers, the government must take steps to bring the economy fast on the tracks.

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  • Coronavirus – Health and Governance Issues

    What are Immunity Passports?

    | Ethics | Mains Paper 4: Ethics

    There is a growing debate for a rethink on “immunity passport” to be handed out to those who have recovered from COVID-19 for the purpose of travel or work without restrictions of quarantine.

    Try this question form mains:

    Q.Discuss various ethical issues evolved during the outbreaks of pandemics (of the scale of COVID-19).

    Immunity Passports

    • They are the recovery or release certificate or a document attesting that its bearer is immune to a contagious disease.
    • The concept has drawn much attention during the COVID-19 pandemic as a potential way to contain the pandemic and permit faster economic recovery.
    • The can be used as a legal document granted by a testing authority following a serology test demonstrating that the bearer has antibodies making them immune to a disease.

    What is the ongoing debate?

    • Experts argue that if reinfections were a significant problem, by now, there would have been hundreds or at least thousands of cases of reinfections at the global level.
    • Till such time effective vaccines become available people who have recovered from COVID-19 should be permitted to travel without restrictions.

    A case for consideration

    • Immune protection after infection/disease is always much more robust than most vaccines, and definitely than most COVID-19 vaccines in development.
    • Some of the vaccines undergoing clinical trials are mostly directed at a single or a couple of proteins (spike) of the virus.
    • But vaccines under trial that use the inactivated coronaviruses would expose the immune system to a whole range of viral proteins, much like natural infection and can produce immune responses.
    • However, it is not known if people who have experienced asymptomatic infection would show robust immune responses like those who have recovered from moderate or severe disease.

    Ethical issues involved

    • Issuing ‘immunity certificates’ to people who have recovered can be an ethical minefield.
    • Doctors do not generally prefer immunity to be induced by natural infection compared with vaccines. It seems logical, but there are multiple challenges.
    • There might be long-term health complications in those who had COVID-19, whereas the vaccine will have minimal or no adverse health consequences.
    • There is a danger that similar arguments will be made for other vaccine-preventable diseases for which we have a universal immunisation programme.

    There is also a public health risk of issuing immunity certificates:

    • People whose livelihood has have been affected would be encouraged to adopt risky behaviour so as to get infected rather than taking precautions to stay protected from the virus.
    • This would lead to a sharp increase in cases across the country with huge numbers requiring hospitalization.
    • Such a situation would lead to testing capabilities getting overwhelmed, crumbling of the health-care systems and increased deaths.

    Threats over malpractices:

    • Immunity certification will include a system for identification and monitoring, thus compromising privacy.
    • Other contentious issues would be profiteering by private labs performing tests, and the menace of fake certificates which we have already seen in some Indian states.
    • In the end, an immunity passport will further divide the society with different ‘haves’ and ‘have-nots’.

    Way forward

    • We need to look at COVID-19 with a sense of balance and not hysteria.
    • Terms such as immunity passports may not have relevance as we do not know anything about specific kinds of immune responses and the duration of protection in people.
    • There is currently not enough evidence about the effectiveness of antibody-mediated immunity to guarantee the accuracy of an ‘immunity passport’ or ‘risk-free certificate’.
    • The permission to travel or work should be decided on a case by case basis, according to the principles of ethics while dealing with a pandemic.

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  • Modern Indian History-Events and Personalities

    How Quit India movement gave a new direction to India’s freedom struggle?

    | | Mains Paper 1: Modern Indian History

    On August 8, 78 years ago, Mahatma Gandhi gave the call for British colonizers to “Quit India” and for the Indians to “do or die” to make this happen.

    Try this PYQ:

    Q.With reference to the Indian freedom struggle, consider the following events:

    1. Mutiny in Royal Indian Navy
    2. Quit India Movement launched
    3. Second Round Table Conference

    What is the correct chronological sequence of the above events?(CSP 2017)

    (a) 1-2-3

    (b) 2-1-3

    (c) 3-2-1

    (d) 3-1-2

    What led to the events of August 1942?

    • While factors leading to such a movement had been building up, matters came to a head with the failure of the Cripps Mission.
    • World War II was raging, and a beleaguered British needed the cooperation of their colonial subjects in India.
    • To this end, in March 1942, a mission led by Sir Stafford Cripps arrived in India to meet leaders of the Congress and the Muslim League.
    • The idea was to secure India’s whole-hearted support in the war, in return for self-governance.
    • However, despite the promise of “the earliest possible realization of self-government in India”, the offer Cripps made was of dominion status, and not freedom.

    A final blow

    • The failures of the Cripps Mission made Mahatma Gandhi realize that freedom would be had only by fighting tooth and nail for it.
    • Though initially reluctant to launch a movement that could hamper Britain’s efforts to defeat Fascist forces in the World War, Congress eventually decided to launch a mass civil disobedience.
    • At the Working Committee meeting in Wardha in July 1942, it was decided the time had come for the movement to move into an active phase.

    The Gowalia Tank address and Gandhiji’s arrest

    • On August 8, Gandhiji addressed the people from Mumbai’s Gowalia Tank maidan with the ‘Do or Die’ mantra.
    • By August 9, Gandhi and all other senior Congress leaders had been jailed.
    • He was kept at the Aga Khan Palace in Pune, and later in the Yerawada jail.
    • It was during this time that Kasturba Gandhi died at the Aga Khan Palace.

    The slogan ‘Quit India’

    • While Gandhi gave the clarion call of Quit India, the slogan was coined by Yusuf Meherally, a socialist and trade unionist who also served as Mayor of Mumbai.
    • A few years ago, in 1928, it was Meherally who had coined the slogan “Simon Go Back”.

    Outcome: A people’s movement

    • The arrest of the leaders, however, failed to deter the masses. With no one to give directions, people took the movement into their own hands.
    • In Bombay, Poona and Ahmedabad, lakhs of people clashed with the police on August 9. On August 10, protests erupted in Delhi, UP and Bihar.
    • There were strikes, demonstrations and people’s marches in defiance of prohibitory orders in Kanpur, Patna, Varanasi, and Allahabad.
    • The protests spread rapidly into smaller towns and villages.
    • Till mid-September, police stations, courts, post offices and other symbols of government authority were attacked.
    • Railway tracks were blocked, students went on strike in schools and colleges across India, and distributed illegal nationalist literature.
    • Mill and factory workers in Bombay, Ahmedabad, Poona, Ahmednagar, and Jamshedpur stayed away for weeks.
    • In some places, the protests were violent, with bridges blown up, telegraph wires cut, and railway lines taken apart.

    Outcome

    • The Quit India movement was violently suppressed by the British – people were shot, lathi-charged, villages burnt and enormous fines imposed.
    • In the five months up to December 1942, an estimated 60,000 people had been thrown in jail.

    Significance

    • Soon after, Gandhi and almost the entire top Congress leadership was arrested and thus began a truly people-led movement in our freedom struggle.
    • Eventually dispersed violently by the British, it left behind a clear message that the British would have to leave India, and no other solution would be acceptable to its masses.

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  • Foreign Policy Watch: India-China

    What are Confucius Institutes, and why are they under the scanner in India?

    | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    • The Ministry of Education (previously HRD) had sent a letter to several institutions seeking information about the activities of their Confucius Institutes (CIs) and Chinese language training centres.
    • This has brought the spotlight to China’s CI programme, a key pillar of Beijing’s global soft power effort, and raised questions about the future of India-China cooperation in the education space.

    Try this question for mains:

    Q.“It cannot be business as usual with China after the border clash.” Critically comment.

    What are the Confucius Institutes (CI)?

    • Starting with a CI in Seoul in 2004, China’s National Office for Teaching Chinese as a Foreign Language (NOCFL) known as Hanban establishes CI.
    • China has established 550 CIs and 1,172 Confucius Classrooms (CCs) housed in foreign institutions, in 162 countries.
    • As the Hanban explains on its website, following the experience of the British Council, Alliance Française and Germany’s Goethe-Institut, China began “establishing non-profit public institutions which aim to promote Chinese language and culture in foreign countries”.

    What is the presence of CIs in India?

    • India is reviewing the presence of CIs in seven universities, in addition to 54 MoUs on inter-school cooperation involving China, which is not connected to the CI programme.

    How have CIs been viewed around the world?

    • The CI arrangement has generated debate in the West, where some universities have closed the institutes amid concern over the influence of the Chinese government and it’s funding on host institutions.
    • Closures of some CIs have been reported in the United States, Denmark, the Netherlands, Belgium, France and Sweden.
    • While the closures in the West have made news, these cases still represent a minority. Faced with this backlash, China is now rebranding the programme.
    • Most of the 550 CIs and more than 1,000 CCs around the world are still active, with a presence spanning Africa, Central Asia, Latin America, and across Asia.

    What does it mean for India-China relations?

    • CIs and CCs had already been in India for more than 10 years.
    • Even prior to the border skirmishes, Indian authorities had viewed the CI arrangement somewhat warily.
    • Along with the new move to review CIs, Mandarin has been dropped from the list of foreign languages that can be taught in schools in the new National Education Policy.

    Not a perfect move

    • Recent moves by India shows that it cannot be business as usual with China after the border clash.
    • However, India’s long-term objectives are not clear.
    • De-emphasizing learning Mandarin is neither likely to impact China’s stance on the border nor help India in developing the expertise and resources it needs in dealing with China.

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  • Monsoon Updates

    Boreal Summer Intra-Seasonal Oscillation (BSISO)

    Prelims Only | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    Researchers at the Indian National Centre for Ocean Information Services (INCOIS), Hyderabad have reportedly found a way to better forecast the Boreal Summer Intra-Seasonal Oscillation (BSISO).

    Try this PYQ:

    Q.With reference to ‘Indian Ocean Dipole (IOD)’ sometimes mentioned in the news while forecasting Indian monsoon, which of the following statements is/are correct? (CSP 2017)

    1. IOD phenomenon is characterized by a difference in sea surface temperature between tropical Western Indian Ocean and tropical Eastern Pacific Ocean.
    2. An IOD phenomenon can influence an El Nino’s impact on the monsoon.

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    What is BSISO?

    • The BSISO of the Asian summer monsoon (ASM) is one of the most prominent sources of short-term climate variability in the global monsoon system.
    • It is the movement of convection (heat) from the Indian Ocean to the western Pacific Ocean roughly every 10-50 days during the monsoon (June-September).
    • Compared with the related Madden-Julian Oscillation (MJO) it is more complex in nature, with prominent northward propagation and variability extending much further from the equator.
    • It represents the monsoon’s ‘active’ and ‘break’ periods, in which weeks of heavy rainfall give way to brilliant sunshine before starting all over again.
    • The active phase also enhances monsoon winds and hence the surface waves.

    Why predict BSISO behaviour?

    • Some phases of boreal summer intraseasonal oscillation or BSISO induce high wave activity in the north Indian Ocean and the Arabian Sea, the researchers claimed.
    • Wave forecast advisories based on the BSISO would be more useful for efficient coastal and marine management.
    • This finding has a great significance in developing seasonal and climate forecast service for waves and coastal erosion for India.

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  • Foreign Policy Watch: India-Pakistan

    Pakistan’s new Political Map

    | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Recently Pakistani PM announced a new political map of Pakistan.

    Do you think that the recent launch of new political maps depicting Indian territories by Pakistan would make any difference on the international community’s stance on Kashmir?

    A chain reaction

    • With this, Pakistan became the third country to launch a new political map after India and Nepal did the same.
    • India had reiterated its territorial claims in J&K, and Ladakh with the new map; this triggered a reaction from Nepal which contested Indian claims in the Kalapani region of Pithoragarh district.

    What are the features of the new map?

    • The new political map of Pakistan has claimed the entire region of Jammu and Kashmir stretching all the way to the edge of Ladakh.
    • The map also claims Junagarh and Manavadar, a former princely State and territory, respectively that are part of present-day Gujarat.
    • Pakistan also claimed the entire territory and water bodies that fall in the Sir Creek region in the westernmost part of India.

    Defiance of old agreements

    • The territorial claims of Pakistan are, however, of a far greater extent and challenge many of the past understandings and treaties.
    • This clearly runs counter to the Simla Agreement which treated Kashmir as a bilateral matter.
    • It leaves out a claim line at the eastern end of J&K indicating Pakistan’s willingness to make China a third party in the Kashmir issue.

    How different is it from previous ones?

    • A similar map has been part of school textbooks of Pakistan for many years which highlights the territorial aspiration of Pakistan over the northern part of the subcontinent.
    • The document also maintains bits of reality on the ground as it shows the Line of Control in Kashmir in a red-dotted line.
    • The map may be used to provide legal cover for some of Islamabad’s territorial ambitions, especially in Kashmir and Sir Creek.

    A Cartographical warfare

    • The map is likely to lead to changes in Pakistan’s position on territorial disputes with India.
    • By demanding the entire J&K region, Pak is changing the main features of its Kashmir discourse as it includes the Jammu region prominently.
    • The inclusion of Junagarh and Manavadar opens fundamental issues of territorial sovereignty of India.
    • Manavadar, a princely territory, joined India on February 15, 1948, and Indian troops marched into Junagarh in September that year incorporating it into Indian Territory.
    • By normalizing Islamabad’s claims over these former princely territories, Pakistan is most likely to assert its rights over the former princely State of Hyderabad as well.

    What does Pakistan plan to gain by this exercise?

    • Sir Creek is a collection of water bodies that extend from the Arabian Sea deep inside the territory of Kutch and is rich in biodiversity and mangrove forests.
    • India’s position on Sir Creek is based on the Kutch arbitration case of 1966-69.
    • The new map can be used to reassert Pakistan’s claims regarding the Rann which it had lost in the arbitration conducted in Geneva.
    • India’s position regarding Sir Creek is based on the fact that the arbitration had granted the entire Rann and its marshy areas to India while leaving the solid land across the Rann to Pakistan.
    • By demanding the demarcation to shift towards the eastern bank, Pakistan appears to be going back also on the spirit of the Rann of Kutch arbitration where the overwhelming evidence of maps supported India’s claims.

    Are there any claims on its western borders?

    • The map is silent about territorial claims in the west and northwest of Pakistan.
    • It indicates Islamabad’s acceptance of the Durand Line as the border with Afghanistan.
    • The reality on the ground, however, shows problems that continue to haunt Pakistan on that front as well where law and order have been difficult to maintain because of free movement of armed fighters.
    • A deadly clash between Afghan civilians and Pakistani troops near its Khyber-Pakhtunkhwa province is a usual discourse.
    • The resultant situation has placed Afghan and Pakistani troops in a confrontational position.

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

    Agriculture Infrastructure Fund (AIF) Scheme

    Schemes | Agriculture | Mains Paper 3: Food Processing & Related Industries In India

    PM has launched a new financing scheme under the ₹1 lakh crore AIF.

    Note the following things about AIF:

    1) It is a Central Sector Scheme

    2) Duration of the scheme

    3)Target beneficiaries

    Agriculture Infrastructure Fund (AIF)

    • It is a Central Sector Scheme meant for setting up storage and processing facilities, which will help farmers, get higher prices for their crops.
    • It will support farmers, PACS, FPOs, Agri-entrepreneurs, etc. in building community farming assets and post-harvest agriculture infrastructure.
    • These assets will enable farmers to get greater value for their produce as they will be able to store and sell at higher prices, reduce wastage and increase processing and value addition.

    What exactly is the AIF?

    • The AIF is a medium – long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and credit guarantee.
    • The duration of the scheme shall be from FY2020 to FY2029 (10 years).
    • Under the scheme, Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans with interest subvention of 3% per annum.
    • It will provide credit guarantee coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to Rs. 2 Crore.

    Target beneficiaries

    The beneficiaries will include farmers:

    • PACS, Marketing Cooperative Societies, FPOs, SHGs, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects

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  • Zoonotic Diseases: Medical Sciences Involved & Preventive Measures

    [pib] E-Sanjeevani Tele-Medicine Platform

    PIB | Governance | Mains Paper 2: Health & Education

    1.5 lakh teleconsultations were recently completed on the “eSanjeevani” and “eSanjeevani OPD” tele-medicine.

    Why Telemedicine?

    Telemedicine can increase the efficiency of care delivery, reduce expenses of caring for patients or transporting to another location, and can even keep patients out of the hospital.  

    E-Sanjeevani Platform

    • E-Sanjeevani is a platform-independent, browser-based application facilitating both doctor-to-doctor and patient-to-doctor tele-consultations.
    • It provides the ease of accessing the health records at the comforts of one’s home.
    • The application is based on invite-system which restricts it to the actual beneficiaries of the application.
    • It has a user-friendly interface which facilitates both tech-savvy and novice doctors/users in the rural and urban environment to access the application.
    • This eSanjeevani platform has enabled two types of telemedicine services viz. Doctor-to-Doctor (eSanjeevani) and Patient-to-Doctor (eSanjeevani OPD) Tele-consultations.
    • The former is being implemented under the Ayushman Bharat Health and Wellness Centre (AB-HWCs) programme.

    Services included:

    The telemedicine platform hosts speciality OPDs which include:

    • Gynaecology, Psychiatry, Dermatology, ENT, Ophthalmology, antiretroviral therapy (ART) for the AIDS/HIV patients, Non-Communicable Disease (NCD) etc

    With inputs from:

    https://www.cdac.in/index.aspx?id=hi_pr_eSanjeevani

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  • Coronavirus – Economic Issues

    Restructuring to cushion impact on the economy

    | Economics | Mains Paper 3: Indian Economy

    “The article analyses the present scenario of the economy and impact of the steps taken by the central bank and the government.” 

    Context

    • Monetary policy committee (MPC) members, through a unanimous vote, decided to keep policy rates unchanged.
    • MPC also maintained an accommodative stance.
    • This was the result of inflation hovering around 6% i.e. above the MPCs target of 4%.

    Restructuring package after moratorium ends

    • Moratorium on loans ends 31 August, RBI said the way forward is a restructuring package for businesses and households.
    • Recent data released by large banks indicate that there has been a sizeable reduction in moratorium in June from 50% in April for all scheduled commercial banks (SCBs).
    • As economic activity normalizes further, the need for restructuring will be even lower.

    What do the trends indicate

    • Most indicators—manufacturing and services Purchasing Managers’ Index(PMI’s) electricity output, vehicle sales, exports, imports—point to economic momentum settling at 10-15% below covid levels in the near-term.
    • The RBI’s consumer confidence survey—gauge of consumer spending—was at its lowest in May, and the one-year outlook is not promising.
    • This implies that consumption demand, especially discretionary demand, will be far lower.
    • With muted consumption, capacity utilization, which had fallen to 68.2% last December, has fallen further in the last few months.
    • Thus, investment demand is not likely to see upward momentum in the near term, even with lower interest rates.

    How RBI’s intervention made the difference

    • An economic slowdown of such proportions leads to an increase in risk premium.
    • Rating upgrade to downgrade ratio of the corporate sector had fallen to 0.05 as in May from a high of 1.11 in December 2018.
    • Spread between 3-year AAA corporate bonds and sovereign bonds rose to 276 basis points on 26 March.
    • But the spread has since fallen to 50bps.
    • This was possible because of the abundant liquidity made available by RBI and credit enhancement provided by the government.

    Way forward

    • RBI and the government will have to work together to revive demand.
    • Centre has already expanded its gross borrowing to ₹12 trillion.
    • Even with net tax collections at 53% of last year’s levels, the Centre has increased its spending by 13% over 2019-20.
    • The government better understand that this is the time to apply Keynesian economics.
    • Global central banks have become large buyers of sovereign debt to support the larger roles being played the governments.
    • In India, too, the Centre and states will have to spend to crowd-in private sector spending.
    • RBI’s role will be important not only as the lender of last resort but also as a buyer of government securities.
    • It has carried out its function as a central bank well, and brought a semblance of stability to financial markets.
    • It will have to do the same in the sovereign bond market.
    • More importantly, it will have to remain vigilant of impending risks to growth and inflation, and be ready to act.

    Consider the question “To what extent the steps taken by the RBI and the government to stabilise the economy battered by the covid pandemic were helpful? 

     Conclusion

    As India’s central bank comes towards the end of its interest rate reduction cycle, it will have to navigate the economy through financial and macroeconomic stability. The government will also have to act in tandem with the central bank in steering the economy through this storm.

    Original

    articles:https://www.livemint.com/opinion/columns/opinion-restructuring-to-cushion-impact-on-the-economy-11596758908360.html

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

    Importance of increasing the income of those at the bottom of income pyramid

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    India’s growth has been fuelled by demand which has dampened owing to various factors. One untapped source of demand could be the group which lies at the bottom of income pyramid. This article suggests the ways to increase the income of this group.

    Structural demand problem

    • India’s structural demand problem predates the COVID-19 shock.
    • This problem has been compounded after lockdown as jobs have been lost and incomes have collapsed.
    • Boosting domestic demand is critical for an economic revival as external demand is likely to remain muted.
    • It is argued that India’s growth story has been driven by demand generated by those who are at the top of India’s socio-economic pyramid
    • But the demand from that section has now plateaued.

    So, where the demand is going to come from?

    •  Turn to those at the bottom of the pyramid.
    • Those at the bottom of pyramid have a high marginal propensity to consume.
    • But realising the untapped demand potential of this group requires enhancing their incomes and earnings.

    Division of India’s workforce

    • Periodic Labour Force Survey (2018-19) tells us that less than 10 per cent of the workforce is engaged in regular formal jobs.
    • Another 14 per cent are engaged in regular informal jobs with average monthly earnings (Rs 9,500), which is roughly equivalent to or slightly below a minimum wage.
    • The self-employed and casual workers account for 50 per cent and 24 per cent of the workforce respectively and report average earnings that are considerably below a decent minimum amount.
    • Casual workers, who are unlikely to receive work on every day of the month, are at the bottom of the employment structure.

    How to increase the earning of those at the bottom of employment structure

    • Devising strategies that enhance productivity growth in the informal economy could increase their income.
    • Raising the minimum wages of the worst-off workers.
    • At present, under the Minimum Wage Act,  India has a complex set of minimum wages which offer different wages by occupation type and skill levels.
    • The Code on Wages (2019) seeks to universalise minimum wages and extend them to the unorganised sector.

    Way forward

    • 1) Ensuring a decent minimum wage for those who are the bottom of the distribution — the casual labour, would be helpful in this context.
    • This will help set a higher wage floor for others engaged in low-paid work, including regular informal workers.
    • 2) It is also important that minimum wages are paid in public workfare programmes too, in particular MGNREGA works.
    • At present, MGNREGA wages are not covered under the Minimum Wages Act.
    • 3) The minimum wage can be linked to the consumption expenditure of the relatively better-off group of workers.

    Consider the question “India’s growth story is scripted by demand which has been tapering off. The new source of demand could be those at the bottom of income structure. Suggest the strategies to increase the income of this group which could then translate into demand.”

    Conclusion

    The Indian employment challenge today cannot be seen independently of the problem of inadequate income. The above intervention will not only enable income enhancement of those in low-paid work but also add fuel to demand and growth, this time from those at the bottom of the distribution.

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