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

Aug, 06, 2019

[op-ed snap] Code Red for labour

Context

Centre proposed to replace 44 labour laws with four codes.

Problems with the codes

  1. These codes are antithetical to the very idea of statutory protection of labour and dignified standard of living for workers
  2. Original labour laws were enacted after decades of struggle and were meant to ensure certain dignity to the working-class people
  3. Ministry of Labour’s proposal to fix the national minimum floor wage at ₹178 is devoid of any defined criteria or method of estimation.
    1. This may lead to a race to the bottom by States, to attract capital and investments. 
    2. This is being called ‘starvation wage’ as the Ministry’s own committee recommended ₹375 as the minimum.
  4. The four codes exclude over 95% of the workforce employed in informal units and small enterprises, who are in greater need of legal safeguards.
  5. There is no clarity on who constitutes an ‘employer’, an ‘employee’ or an ‘enterprise’, giving the owner greater discretion to interpret the provisions.
  6. To minimise wage bills and compliance requirements, it is proposed that ‘apprentices’ be no longer considered employees.
    1. Evidence indicates that apprentices are made to do jobs of contractual as well as permanent employees.
  7. The code has a provision on “employees below fifteen years of age”, which can be construed as legalisation of child labour. 
  8. The code on wages legitimises and promotes further contractualisation of labour, instead of abolishing it.
  9. Wage code brings back the provision of “recoverable advances”, a system linked to coercive and bonded labour by the Supreme Court. The distressed and vulnerable migrant labourers could be bonded to work through advance payments.
  10. The 8-hour workday shift has been done away with, and multiple provisions of increased overtime have been inserted. 
  11. The code also gives ample alibis to employers to evade bonus payments.
  12. Non-payment of wages will now not be a criminal offence and penalties in case of non-compliance have been reduced.
  13. Code on industrial relations is replete with restrictions on forming or registering unions, calling a strike and seeking legal redressal for workers.

Proposed laws resemble ‘employer codes’ rather than ‘labour laws’.

Aug, 03, 2019

[op-ed snap] The seriousness of the problem of unemployment in India

Context

Indian economy is slowing. This is largely a result of weakening demand, mostly in rural areas. Slowing demand has contributed to the declining availability of jobs, where jobless growth is already a problem.

The seriousness of the problem

  1. Employment-unemployment surveys of National Sample Survey Office (NSSO): latest Periodic Labour Force Survey (PLFS) tells us the following total number of workers in the economy was 472.5 million in 2011-12, which fell to 457 million in 2017-18. The absolute number of workers declined by 15.5 million over six years.
    1. this is the first time in the history of employment measurement by the NSSO that the total number of workers declined in absolute terms.
  2. 16-million decline in the number of workers reported by the Labour Bureau’s Annual Employment Surveys of the fourth and fifth rounds

Reasons for unemployment

  1. fall in the number of workers in agriculture and a sharp fall in the absolute number of female workers
    1. Roughly 37 million workers left agriculture in the last six years.
    2. At the same time, 25 million women workers were out of the workforce.
  2. crisis in agriculture in the last six years has only accelerated the process
  3. The trend of declining women workers has absolutely no parallel in any developing or developed country of similar per capita income. In most East Asian countries, the period of rapid growth was also accompanied by a rising number of women workers.

Problems

  1. Number of people aged 25-64 years increased by around 47 million during the six-year period
  2. The economy should have created at least 83 million jobs between 2012 and 2018 to accommodate those who have entered the labour force and those forced out of agriculture. But it witnessed a decline in the number of workers by 15.5 million

Conclusion

Stagnant wages and jobless growth are not just indicators of a weakening economy, but also a recipe for political instability and a crisis in the countryside. The government should acknowledge the extent of the problem and then try to address it.

Jul, 22, 2019

[op-ed snap] Sucking up surplus

CONTEXT

The Centre’s decision to clip the wings of the Securities and Exchange Board of India has not gone down too well with its members. Yet, the Centre is refusing to budge. In a letter dated July 10, SEBI Chairman Ajay Tyagi said the Centre’s decision to suck out SEBI’s surplus funds will affect its autonomy.

Background

  • As part of the Finance Bill introduced in Parliament, the Centre had proposed amendments to the Securities and Exchange Board of India Act, 1992 that were seen as affecting SEBI’s financial autonomy.
  • To be specific, the amendments required that after 25% of its surplus cash in any year is transferred to its reserve fund, SEBI will have to transfer the remaining 75% to the government.
  • On Friday, the government rejected the plea from SEBI’s officials asking the government to reconsider its decision, thus paving the way for further conflict.
  • Prima facie, there seems to be very little rationale in the government’s decision to confiscate funds from the chief markets regulator.

Impacts

  • For one, it is highly unlikely that the quantum of funds that the government is likely to receive from SEBI will make much of a difference to the government’s overall fiscal situation.
  • So the amendment to the SEBI Act seems to be clearly motivated by the desire to increase control over the regulator rather than by financial considerations.
  • This is particularly so given that the recent amendments require SEBI to seek approval from the government to go ahead with its capital expenditure plans.
  • A regulatory agency that is at the government’s mercy to run its financial and administrative operations cannot be expected to be independent.
  • Further, the lack of financial autonomy can affect SEBI’s plans to improve the quality of its operations by investing in new technologies and other requirements to upgrade market infrastructure.

Long term impacts

  • This can affect the health of India’s financial markets in the long run. In the larger picture, this is not the first time that the government at the Centre has gone after independent agencies.
  • The Reserve Bank of India and the National Sample Survey Office have come under pressure in recent months, and the latest move on SEBI adds to this worrisome trend of independent agencies being subordinated by the government.
  • The Centre perhaps believes it can do a better job of regulating the economy by consolidating all existing powers under the Finance Ministry.
  • But such centralisation of powers will be risky.

Conclusion

Regulatory agencies such as SEBI need to be given full powers over their assets and be made accountable to Parliament. Stripping them of their powers by subsuming them under the wings of the government will affect their credibility.

Jul, 12, 2019

[op-ed snap] Tread with caution: on labour laws

CONTEXT

As part of its commitment to simplify and consolidate labour rules and laws under four codes, the Union Cabinet has cleared the Occupational, Safety, Health and Working Conditions Code, a week after it approved the Code on Wages Bill.

Objective

The latter seeks to include more workers under the purview of minimum wages and proposes a statutory national minimum wage for different geographic regions, to ensure that States will not fix minimum wages below those set by the Centre. These steps should be welcomed.

Labour safety

The Code on labour safety and working conditions include regular and mandatory medical examinations for workers, issuing of appointment letters, and framing of rules on women working night shifts.

Other Codes

  • Other codes that await Cabinet approval include the Code on Industrial Relations and the Code on Social Security.
  • Unlike these pending bills, especially the one related to industrial relations that will be scrutinised by labour unions for any changes to worker rights and rules on hiring and dismissal and contract jobs, the two that have been passed should be easier to build a consensus on, in Parliament and in the public sphere.

Challenges

  • Organised unions have vociferously opposed changes proposed in the Industrial Relations code, especially the proviso to increase the limit for prior government permission for lay-off, retrenchment and closure from 100 workers as it is currently, to 300.
  • The Economic Survey highlighted the effect of labour reforms in Rajasthan, suggesting that the growth rates of firms employing more than 100 workers increased at a higher rate than the rest of the country after labour reforms.
  • But worker organisations claim that the implementation of such stringent labour laws in most States is generally lax.
  • Clearly, a cross-State analysis of labour movement and increase in employment should give a better picture of the impact of these rules.

Way Forward

  • Simplification and consolidation of labour laws apart, the government must focus on the key issue of job creation.
  • The Periodic Labour Force Survey that was finally made public in late May clearly pointed to the dire situation in job creation in recent years.
  • While the proportion of workers in regular employment has increased, unemployment has reached a 45-year high.
  • The worker participation rate has also declined between surveys held in 2011-12 and 2017-18.
  • The government’s response to this question has either been denial, as was evident after the draft PLFS report was leaked last year, or silence, after it was finally released.
  • In such a situation, the government should be better off building a broader consensus on any major rule changes to existing worker rights rather than rushing through them for the sake of simplification.
  • The consolidated code bills should be thoroughly discussed in Parliament and also with labour unions before being enacted.
Jul, 06, 2019

Centre to streamline labour laws into set of 4 codes


News

  • The government in its second term would streamline several existing labour laws into a set of four labour codes in a move aimed at reducing disputes.

Set of four labour laws

  • The government is proposing to streamline multiple labour laws into a set of four labour codes.
  • The government wants to concise 44 labour laws into four broad codes on wages, social security, industrial safety and welfare, and industrial relations.
  • This will ensure that process of registration and filing of returns will get standardised and streamlined.
  • The Bill will replace the current Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
  • It provides that the Central government will fix minimum wages for certain sectors, including railways and mines, while the states would be free to set minimum wages for another category of employment.
  • The code also provides for setting up of a national minimum wage.
  • The Central government can set a separate minimum wage for different regions or states.
  • The draft law also says that the minimum wage would be revised every five years.

Beginning with wages

  • The first of these labour codes– Wage Code Bill –will likely be enacted in the ongoing budget session, paving the way for benchmarking minimum wage for different regions.

For more reading, navigate to:

New Code on Wages Bill

Jul, 05, 2019

New Code on Wages Bill

News

New Code on Wages Bill

  • The Union Cabinet has cleared the new version of Code on Wages Bill, which seeks to define the norms for fixing minimum wages.
  • It will be applicable to workers of organised and unorganised sectors, except government employees and MNREGA workers.
  • It will amalgamate the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

New determining factors of wages

  • As per the Bill, minimum wages will be linked only to factors such as skills and geographical regions.
  • At present, minimum wages are fixed on the basis of categories such as skilled, unskilled, semi-skilled, high skilled, geographical regions, and nature of work such as mining.
  • These are applicable for 45 scheduled employments in the central sphere and 1709 scheduled employments in states.
  • This is expected to effectively reduce the number of minimum wage rates across the country to 300 from about 2,500 minimum wage rates at present.

Floor Wage

  • A National Floor Level Minimum Wage will be set by the Centre to be revised every five years, while states will fix minimum wages for their regions, which cannot be lower than the floor wage.
  • The current floor wage, which was fixed in 2017, is at Rs 176 a day, but some states have minimum wages lower than it such as Andhra Pradesh (Rs 69) and Telangana (Rs 69).

Importance

  • An effective minimum wage policy is a potential tool not only for the protection of low paid workers but is also an inclusive mechanism for more resilient and sustainable economic development.
  • A simple, coherent and enforceable Minimum Wage System should be designed with the aid of technology as minimum wages push wages up and reduce wage inequality without significantly affecting employment.
Jun, 15, 2019

[Op-ed snap] Welcome measure

CONTEXT

In a welcome move, the Union government has announced a significant reduction in the contribution by workers and employers towards the employees’ state insurance (ESI) scheme.

Background

From July 1, the overall contribution to ESI is slated to decline from 6.5 per cent to 4 per cent, with employers’ contribution falling from 4.75 per cent to 3.25 per cent, and that of employees from 1.75 per cent to 0.75 per cent.

Benefits

Lower Cost of hiring and formal jobs – This decision, which lowers the cost of hiring for employers, should be seen in conjunction with recent initiatives such as the Pradhan Mantri Rojgar Protsahan Yojna (PMRPY) that aim to boost the creation of formal jobs by lowering the costs associated with formalisation.

Medical Care and cash benefits –The ESI Act provides for medical care and cash benefits in case of contingencies to employees drawing a salary up to Rs 21,000 per month. It is one of the pillars of the social security architecture in the country.

Issues

1.Its current cost structure is prohibitive.

2.Contribution far exceeds the benefits –

  • A look at its accounts shows that the current levels of contribution far exceed the benefits disbursed by it — in fact, only around half of the contributions are paid out as benefits.
  • For instance, in 2016-17, while total contributions stood at Rs 16,852 crore (including interest income of Rs 3,069 crore), total expenditure incurred for medical benefits was only a fraction at Rs 6,409 crore.
  • This growing divergence between collections and disbursement has led to a substantial build up of its reserves.
  • At the end of March 2018, its corpus stood at Rs 73,303 crore, up Rs 13,920 crore from last year.
  • Between 2012 and 2017, it earned Rs 19,993 crore as interest income alone on this corpus.
  • But this rise in income hasn’t translated to greater benefits.

3.Standing committee on labour’s report –

  • As the standing committee on labour noted in a report last year, people continue to be deprived of the benefits of the ESI scheme “due to lack of coverage of ESIC scheme, poor functioning of hospitals, etc”.
  • This suggests that contributions can be substantially lowered, while maintaining benefits at current levels.

Way Forward

  • Prohibitive mandatory contributions such as the provident fund/employee state insurance tend to act as deterrents to formalisation.
  • As the experience of PMRPY has shown, lowering these costs tends to have a positive impact on formalisation.
  • In fact, much of the recent rise in the EPFO subscriber base is on account of PMRPY.
  • Lowering costs further, or offering employees the choice of who handles their contributions, could accelerate the process further.
Jun, 04, 2019

Periodic Labour Force Survey (PLFS) data for 2017-18


News

  • The govt has finally released Annual Report of the Periodic Labour Force Survey (PLFS) 2017-18 and the Quarterly Bulletin PLFS.

Periodic Labour Force Survey (PLFS)

  • The PLFS was launched from 1st April 2017.
  • Primary aim of the PLFS is to generate reasonably accurate indicators of labour market at a short span for every quarter for which speed of quality data collection and processing are important.
  • PLFS was launched with the objective of measuring employment every three months in urban areas and once a year in both rural and urban areas.
  • The quarterly survey only captures data classed as current weekly status (CWS), while the annual survey measures both the usual status and CWS.
  • The NSSO was historically conducting Employment and Unemployment Surveys as part of its National Sample Surveys.

Who are the Unemployed?

  • Labour force means people working or looking for jobs in the age group of 15-29 years.
  • CWS Method: A person who is unable to get work for even an hour in the last seven days despite seeking employment is considered unemployed.
  • Usual Status Method: Under this, the employment activity of a person is determined on the basis of a reference period of 365 days preceding the date of the survey.

Trends

  • Labour force participation has been declining and touched 36.9% in 2017-18 as more among them, especially females, enrolled for higher studies.
  • The youth accounted for 28.2% of urban males and 27.8% of urban females.
  • During 2017-18, among people aged 15-29 years, the share of the educated was 65.8% among urban males. It was 65.4% among urban females.
  • A higher percentage of males compared to females had received either formal or non-formal vocational training.

Reality of jobless growth

  • The rising unemployment rate despite falling labour force participation for the youth is more worrying.
  • This is likely to raise questions about whether India is suffering from jobless growth.
  • According to Census 2011, India has 333 million youth—a number that is likely to touch 367 million in 2021 and 370 million by 2031.
  • With this huge rise in youth unemployment, it is hard to reconcile this information with the EPFO data that people keep talking about, because a majority of the new entrants to EPFO would be the younger people.
May, 29, 2019

Social and Labor Convergence Programme (SLCP)

News

  • The ‘Social and Labor Convergence Programme (SLCP),’ an initiative to have a standard-neutral, converged assessment framework for the textile and clothing industry, will be launched in India very soon.

Social and Labor Convergence Programme (SLCP)

  • The SLCP is an initiative led by the world’s leading manufacturers, brands, retailers, industry groups, (inter)governmental organizations, service providers and civil society organizations, to eliminate audit fatigue by replacing current proprietary tools with a standard-neutral Converged Assessment Framework.
  • The objective of the programme is to improve the working conditions in textile units by allowing resources that were previously designated for compliance audits to be redirected towards the improvement of social and labour conditions.

What SCLP actually is?

  • This is a voluntary adoption by the textile and clothing makers.
  • The SLCP would be holding free seminars at Mumbai, Bengaluru, Tiruppur, and New Delhi and will launch operations in India, China, Sri Lanka and Taiwan this month.
  • The SLCP is not a code of conduct or compliance programme.
  • The converged assessment framework is a tool developed by the SLCP, which provides a data set with no value judgment or scoring.
  • It is, however, compatible with existing audit systems and codes of conduct. This means that the same data set can be used by a wide-range of stakeholders.
  • It eliminates the need for repetitive audits to be carried out on the same facility.

Impact

  • For the exporting units, it will reduce the number of social audits and facilitate measuring of employment practices, thus improving working conditions and employee relations.
  • It also redeploys resources towards improvement actions and fosters collaboration between supply chain partners.
  • The benefits of SLCP for facilities are that it addresses audit fatigue by reducing the number of social audits and facilitates measuring of employment practices, thus improving working conditions & employee relations.
  • It also redeploys resources towards improvement actions and fosters trust and collaboration between supply chain partners.
  • SLCP will be holding a series of free one-day seminars in four centres to introduce facilities and their business partners to the SLCP process.
May, 06, 2019

How to strengthen the National Occupational Safety and Health systems

News

Occupational Safety is at peril in India

  • It’s been a decade since the National Policy on Safety, Health and Environment at the Workplace (NPSHEW) was announced.
  • It called for a legislation on safety, health and environment at workplaces.
  • Yet, only the manufacturing, mining, ports and construction sectors are covered by existing laws on Occupational Safety and Health (OSH).
  • Around 2.3 lakh workers were affected and 2,500 died in more than 81 industrial accidents in the past three-and-a-half decades.
  • Yet sectors such as agriculture, services and transport remain unlegislated from the point of work-safety.

Why in news again?

  • The issue has been flagged by the Directorate General Factory Advice Service and Labour Institutes (DGFASLI) of the Union Ministry of Labour & Employment.
  • In 2018, the DGFASLI suggested that a comprehensive legislation on OSH covering all sectors needed to be developed within three years.
  • Progress, however, hasn’t been much. There has also not been a specific budget to support the effective implementation of policy.

Various sectors are uncovered. Why?

I. Factories Act not enforced

  • Under the Factories Act, 1948, the state governments are empowered to frame their respective state factories rules and enforce both the Act and the Rules in their states.
  • But these functionaries are not adequately staffed for enforcing the Act and the Rules. In fact, many posts under have been lying vacant.
  • Besides this, the central rules under this are not available.
  • These rules are required to be framed and enforced by an authority under the central government for the factories under the administrative control of the central government and public sector undertakings.
  • It is also worrying that the Micro, Small & Medium Enterprises too do not have any legislation to cover the safety and health of the workers.

II. Dock Workers Act, 1986 and Regulations, 1990 enforced in major ports only

  • The Dock Workers (Safety, Health and Welfare) Act, 1986 and Regulations, 1990 have been enforced only in major ports by the DGFASLI.
  • In other ports, the state governments are required to frame respective state regulations and enforce the provisions of the both, the Act and the Regulations, in these ports.
  • However, till date, none of the states have framed their regulations for enforcement in these ports.
  • These ports are also handling huge quantities of cargo, including dangerous goods; the absence of regulation on safety and health of the workers and its enforcement is a major gap

III. Building and Other Construction Workers’ Act not being enforced in true spirit

  • The Building and Other Construction Workers’ Act, 1996, is being enforced by the Labour Commissioners at the centre and at the state Level.
  • However the safety and health provisions under the Act are highly technical in nature and are not being enforced in true letter and spirit.

IV. Limited research on occupational safety

  • Modern approaches for dealing with safety, health and environment at workplace demands research in the area.
  • But the number of institutes in the country for research and development are limited and these too are not fully equipped for carrying out their activities effectively.
  • Capturing data related to occupational safety and health across all the sectors has also been an issue for a long time, which has not been taken seriously till date.
  • The most recent facts and figures shared by the ministry in Parliament in February 2019 were up to 2016 only.
  • It is important to have suitable schemes for subsidy and provision of loans to enable effective implementation of the policy. However, such a scheme too has not been launched so far.

V. The glooming Agriculture sector

  • The agriculture sector is the largest sector of economic activity and needs to be regulated for safety and health aspects.
  • But the sector is lacking on legislation on safety and health for workers in this sector.
  • There are certain Acts on occupational safety and health pertaining to certain equipment or substances, namely, the Dangerous Machines Regulation Act, the Insecticides Act.
  • But the enforcement authorities are not identified under these Acts and hence are not being enforced.
  • Lack of legislation on safety and health in the agriculture sector is hindering the ratification of ILO convention 155.
  • Ratification of ILO conventions concerning occupational safety and health needs to be expedited, says the profile document on occupational health prepared by the DGFASLI.
Mar, 29, 2019

[op-ed snap] The shape of an urban employment guarantee

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: Periodic Labour Force Survey (PLFS), NSSO

Mains level: Focusing on urban employment to deal with present employment crisis.


NEWS

CONTEXT

The unemployment rate has reached a 45-year high (6.1%) in 2017-18 as per leaked data from the Periodic Labour Force Survey (PLFS) report of the National Sample Survey Office (NSSO).

Severe Crisis regarding employment situation

  • According to the PLFS report, the unemployment problem is especially aggravated in India’s cities and towns. Aside from unemployment, low wages and precarity continue to be widespread.
  • In urban India the majority of the population continues to work in the informal sector.
  • Hence, India cannot ignore the crisis of urban employment.

Importance of towns in growth

  • Both State and Central governments tend to treat towns as “engines of growth” for the economy rather than spaces where thousands toil to make a living.
  • Programmes such as the Swarna Jayanti Shahari Rozgar Yojana (1997) that included an urban wage employment component have made way for those focussed on skilling and entrepreneurship.

Policy ignorance of urban bodies in growth and employment Context

  • India’s small and medium towns are particularly ignored in the State’s urban imagination.
  • As per Census 2011, India has 4,041 cities and towns with an urban local body (ULB) in the form of a Municipal Corporation, Municipal Council or Nagar Panchayat.
  • However, national-level urban programmes such as the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) only benefit a fraction of them.
  • Most ULBs are struggling to carry out basic functions because of a lack of financial and human capacity.
  • Further, with untrammelled urbanisation, they are facing more challenges due to the degradation of urban ecological commons.
  • Hence, we need new ways to promote the sustainable development of India’s small and medium towns.

Promoting Urban  Employment

  • In the context of the present employment crises, it is worthwhile considering to introduce an employment guarantee programme in urban areas.
  • Along with addressing the concerns of underemployment and unemployment, such a programme can bring in much-needed public investment in towns to improve the quality of urban infrastructure and services, restoring urban commons, skilling urban youth and increasing the capacity of ULBs.

1.Urban employment programme

  • The idea of an urban employment programme is gaining traction in political and policy debates.
  • According to multiple reports, it could be a key agenda of a possible Common Minimum Programme of the Opposition parties for the 2019 general election.
  • In Madhya Pradesh, the new State government has launched the “Yuva Swabhiman Yojana” which provides employment for both skilled and unskilled workers among urban youth.

A.Pros of the urban employment programme

  • Such a programme would give urban residents a statutory right to work and thereby ensure the right to life guaranteed under Article 21 of the Constitution.
  • To make it truly demand-driven, we have proposed that the ULB receives funds from the Centre and the State at the beginning of each financial year so that funds are available locally.
  • Wages would be disbursed in a decentralised manner at the local ULB.
  • Given the State’s relative neglect of small and medium towns and to avoid migration to big cities, such a programme can cover all ULBs with a population less than 1 million.
  • Since it is an urban programme, it should have a wider scope than the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA); this would provide employment for a variety of works for people with a range of skills and education levels
  • It would not come at the expense of MGNREGA but rather the two would go hand-in-hand.
  • Urban informal workers with limited formal education would benefit from this programme.
  • They can undertake standard public works such as building and maintenance of roads, footpaths and bridges for a guaranteed 100 days in a year, at ₹500 a day.
  • a new set of “green jobs” which include the creation, restoration/rejuvenation, and maintenance of urban commons such as green spaces and parks, forested or woody areas, degraded or waste land, and water bodies.
  • Further, a set of jobs that will cater to the “care deficit” in towns by providing child-care as well as care for the elderly and the disabled to the urban working class have been included.

2.Skilling and apprenticeship

  • Another novel aspect is the creation of a skilling and apprenticeship programme for unemployed youth with higher education
  • Who can sign up for a contiguous period of 150 days (five months), at ₹13,000 a month for five months to assist with administrative functions in municipal offices, government schools, or public health centres, and for the monitoring, measurement, or evaluation of environmental parameters.
  • While the first category of work is aimed at providing additional employment opportunities and raising incomes for those in low-wage informal work, the second category is to provide educated youth experience and skills that they can build-on further.
  • Such a programme will cost between 1.7-2.7% of GDP per year depending on design, and can provide work opportunities to around 30-50 million workers.
  • In light of the 74th Amendment, this programme should be administered by the ULB in a participatory manner by involving ward committees.

Checks and balances to enhance accountability

  • Strong transparency and accountability structures — proactive disclosure of information based on Section 4 of the RTI Act, proactive measures through mandatory periodic social audits, public hearing and reactive measures through a “Right to Timely Grievance Redressal” for workers.

Way Forward

  • An urban employment guarantee programme not only improves incomes of workers but also has multiplier effects on the economy.
  • It will boost local demand in small towns, improve public infrastructure and services, spur entrepreneurship, build skills of workers and create a shared sense of public goods.
  • Hence, the time is ripe for an employment guarantee programme in urban India.

 

Mar, 06, 2019

[pib] PM Shram Yogi Maan-Dhan (PM-SYM) Scheme

Note4students

Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre & States & the performance of these schemes

From UPSC perspective, the following things are important:

Prelims level: Pradhan Mantri Shram- Yogi Maandhan Yojana

Mains level: Pension Scheme for Unorganised sector workers


News

  • The PM Shram Yogi Maan-Dhan (PM-SYM) was formally inaugurated by PM Modi.

PM Shram Yogi Maan-Dhan (PM-SYM) 

  1. PM-SYM will be a Central Sector Scheme administered by the Ministry of Labour and Employment and implemented through Life Insurance Corporation of India and CSCs.
  2. LIC will be the Pension Fund Manager and responsible for Pension pay out.
  3. The amount collected under PM-SYM pension scheme shall be invested as per the investment pattern specified by GoI.

Eligibility Criteria

  1. The unorganised workers mostly engaged as home based workers, street vendors, mid-day meal workers, head loaders, brick kiln workers, cobblers, rag pickers, domestic workers, washer men, rickshaw pullers, landless labourers, etc. whose monthly income is Rs 15,000/ per month or less and belong to the entry age group of 18-40 years are eligible for the scheme.
  2. They should not be covered under New Pension Scheme (NPS), Employees’ State Insurance Corporation (ESIC) scheme or Employees’ Provident Fund Organisation (EPFO).
  3. Further, he/she should not be an income tax payer.

Features of PM-SYM

Pension Pay out

  1. Once the beneficiary joins the scheme at the entry age of 18-40 years, the beneficiary has to contribute till 60 years of age.
  2. On attaining the age of 60 years, the subscriber will get the assured monthly pension of Rs.3000/- with benefit of family pension, as the case may be.

Family Pension

  • During the receipt of pension, if the subscriber dies, the spouse of the beneficiary shall be entitled to receive 50% of the pension received by the beneficiary as family pension.
  • Family pension is applicable only to spouse.

Contribution by the Subscriber

  • The subscriber’s contributions to PM-SYM shall be made through ‘auto-debit’ facility from his/ her savings bank account/ Jan- Dhan account.
  • The subscriber is required to contribute the prescribed contribution amount from the age of joining PM-SYM till the age of 60 years.

Matching contribution by the Central Government  

  • PM-SYM is a voluntary and contributory pension scheme on a 50:50 basis where prescribed age-specific contribution shall be made by the beneficiary and the matching contribution by the Central Government.
  • For example, if a person enters the scheme at an age of 29 years, he is required to contribute Rs 100/ – per month till the age of 60 years.
  • An equal amount of Rs 100/- will be contributed by the Central Government.

Enrolment Process

  • The enrolment will be carried out by all the Community Service Centers (CSCs).
  • The subscriber will be required to have a mobile phone, savings bank account and Aadhaar number.
  • The eligible subscriber may visit the nearest CSCs and get enrolled for PM-SYM using Aadhaar number and savings bank account/ Jan-Dhan account number on self-certification basis.

Facilitation Centres

  • All the branch offices of LIC, the offices of ESIC/EPFO and all Labour offices of Central and State Governments will facilitate the unorganised workers about the Scheme.
Feb, 28, 2019

[op-ed snap]Unemployment in India: The real reason behind low employment numbers

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level:Periodic Labour Force Survey (PLFS).

Mains level: Mismatch in actual job growth and data being provided and reasons why there is a mismatch


NEWS

CONTEXT

Last month saw a series of discussions related to employment numbers reported in the leaked Periodic Labour Force Survey (PLFS).

Reason Behind Different Employment rates reporting

  • There to be a stark difference in the methods used to choose survey households.
  • The PLFS is based on the education level of households and the EUS is based on expenditure (urban) or livelihood (rural) of households.
  • Any direct comparison of the survey results of the PLFS with the earlier EUS would lead to erroneous inference about the employment scenario.
  • The sample chosen in the PLFS was not quite representative of the underlying Indian population in terms of the achievement of secondary education leading to lower estimates for the population, labour force participation and employment.

The EUS

  • The EUS, which was last conducted during the 68th round of the NSSO for the duration July 2011 to June 2012, is a comprehensive survey providing a complete scenario of the labour force, across sectors like agriculture, industry, services, etc, in both rural and urban areas.
  • In any survey, a sample of locations are chosen judiciously to represent the entire country.
  • For the EUS 2011-12, the selection of locations for First Stage Units (FSU) in the sample, urban and rural classification was made based on the data from Census 2001 and each town with a population of more than 10 lakh was represented as a separate group in sample locations.
  • For the Second Stage Strata (SSS), the criteria for choosing households in both the rural and urban areas was household affluence, as shown in the accompanying table.
  • In rural areas, 50% of chosen households are those with principal earnings from non-agriculture-based activities.
  • For urban areas, the Monthly Per Capita Expenditure (MPCE) available from the previous rounds of the NSSO household surveys forms the basis for selecting households.
  • The sample also has good representation of the middle class engaged in gainful employment-related activities.

The PLFS

  • It provides continuous update on the employment situation in India (quarterly for urban and yearly for rural areas).
  • This survey has, for the first time, used the Computer Assisted Personal Interviewing (CAPI) method to capture data—a great step towards technology adoption. The sample size of various NSSO surveys are comparable and may assumed to be in line with the last EUS survey of 2011-12.
  • There is a major change in the criteria for the selection of households in the SSS for both rural and urban areas, based on the number of members in the household having general education up to secondary level (10th standard).
  • At first glance, the household selection criteria for the PLFS seems aspirational in nature, as the choice of households is dependent upon the education level of the household instead of the earlier criteria of affluence/expenditure.
  • It is true that mostly formal or better-playing employment is linked to the education level of the household members and this move by the PLFS is really aspirational in nature.
  • Percentage of people above secondary level as of 2011 is quite low, at 21.51%, which goes further down to 15.3% for the rural population but has a healthy number of 35.24% for the urban population. Not all informal or daily wage employment requires more than secondary level education. A healthy literate level of 63.07% implies that a large portion of the population has basic literacy, which is what is required for daily wage employment.
  • It can be seen that there are 66.42% of households (75.61% rural and 46.20% urban) with no family members with general education above secondary level. Whereas only 25% of households have been sampled based on these criteria, leading to a huge mismatch between the reality and the samples drawn. People from these households are mostly daily wagers or engaged in informal employment, which would also show lower employment estimates.

Conclusion

  • These numbers provided a good view on the education level of the people in India and showed that the stratification criteria used in the PLFS is not quite aligned to the secondary and above secondary levels of education in the country.
  • This under sampling, leading to under-representation of such households, is leading to lower estimates of the people for this group in labour force participation and employment rate.
  • The percentages of households for the urban area, though far from the sample sizes are closer to the reality in urban areas compared to rural areas.
  • It would be proper to wait for the next round of the PLFS (2018-19) that is under progress and compare its findings with the results of the PLFS (2017-18) to make a more correct assessment of the employment rate in the country.

 

 

Feb, 15, 2019

Minimum wage: what it is, how it is fixed

Note4Students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Minimum wage determination criteria

Mains level:  Minimum wages for workers


News

  • Central trade unions have called a nationwide strike today to protest the government’s announcement of a hike in minimum wages for workers.

Why are the trade unions not happy?

  1. The government has announced a 42% increase in minimum wages for unskilled non-agricultural workers in central sphere.
  2. Employees of the central government and allied departments and undertakings, for category ‘C’ areas from Rs 246 a day to Rs 350 a day — or Rs 9,100 for a month of 26 working days.
  3. A, B and C category areas are determined broadly on the basis of their urban/rural profile.
  4. The trade unions had demanded statutory minimum wage for all workers of not less than Rs 18,000 per month.

Who will benefit from the increase?

  1. The minimum wage revision will be applicable to central government employees in its scheduled employment, in line with the provisions of the Minimum Wage Act, 1948.
  2. Currently, there are 45 scheduled employments under the central sphere, including agriculture, stone mines, construction, non-coal mines, and loading and unloading, and around 1,679 employments of states.

How is the minimum wage determined?

  1. The norms for determining the minimum wage were recommended by the Indian Labour Conference in 1957.
  2. It decided that the minimum wage should be need-based, and should ensure the minimum human needs of the industrial worker.
  3. Five norms were suggested:
  • Three consumption units for one earner in a standard working class family, with the earnings of women, children and adolescents in the family being disregarded.
  • Net intake of 2,700 calories for an average Indian adult of moderate activity.
  • Per capita consumption of cloth of 18 yards per annum, which would mean for the average worker’s family of 4 a total 72 yards.
  • Rent corresponding to the minimum area provided for under the Subsidised Industrial Housing Scheme for low-income groups.
  • Fuel, lighting and other miscellaneous items of expenditure to constitute 20 per cent of the total minimum wage.

SC Judgement

  1. In 1991, the apex Court, in Raptakos & Co. Vs its workers, ruled that children’s education, medical requirement, minimum recreation including festivals, ceremonies, provision for old age and marriage, should constitute 25%, and be used as a guide for fixing the wage.
  2. These six criteria are considered by the central and state governments to fix the minimum wage.
  3. The minimum wages include basic and variable dearness allowance, which is revised twice a year based on Consumer Price Index (Industrial Worker).

Why is there a disparity in minimum wages across India?

  1. Based on the recommendations of the National Commission on Rural Labour in 1991, a National Floor Level Minimum Wage was proposed in order to have a uniform wage structure across the country.
  2. In 1996, the NFL Minimum Wage was fixed at Rs 35 per day, which was revised in subsequent years and currently stands at Rs 160 per day.
  3. Since this Wage does not have statutory backing, it is not mandatory for states — although they are advised to fix minimum wages at not less than the National Floor Level Minimum Wage.
  4. Some states such as Kerala and Delhi already have a higher minimum wage for unskilled labourers than what has been announced by the government.
  5. However, in the absence of legal backing, the lowest minimum wage drops very low.
Feb, 15, 2019

[pib] Pradhan Mantri Shram Yogi Maan-Dhan (PM- SYM)

Note4students

Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre & States & the performance of these schemes

From UPSC perspective, the following things are important:

Prelims level: Pradhan Mantri Shram- Yogi Maandhan Yojana

Mains level: Pension Scheme for Unorganised sector workers


News

  • The PM Shram Yogi Maan-Dhan (PM-SYM)will be rolled out by the Ministry of Labour and Employment from. 15th Feb, 2019.

PM Shram Yogi Maan-Dhan (PM-SYM) 

  1. PM-SYM will be a Central Sector Scheme administered by the Ministry of Labour and Employment and implemented through Life Insurance Corporation of India and CSCs.
  2. LIC will be the Pension Fund Manager and responsible for Pension pay out.
  3. The amount collected under PM-SYM pension scheme shall be invested as per the investment pattern specified by GoI.

Eligibility Criteria

  1. The unorganised workers mostly engaged as home based workers, street vendors, mid-day meal workers, head loaders, brick kiln workers, cobblers, rag pickers, domestic workers, washer men, rickshaw pullers, landless labourers, etc. whose monthly income is Rs 15,000/ per month or less and belong to the entry age group of 18-40 years are eligible for the scheme.
  2. They should not be covered under New Pension Scheme (NPS), Employees’ State Insurance Corporation (ESIC) scheme or Employees’ Provident Fund Organisation (EPFO).
  3. Further, he/she should not be an income tax payer.

Salient Features of PM-SYM

Pension Pay out

  1. Once the beneficiary joins the scheme at the entry age of 18-40 years, the beneficiary has to contribute till 60 years of age.
  2. On attaining the age of 60 years, the subscriber will get the assured monthly pension of Rs.3000/- with benefit of family pension, as the case may be.

Family Pension

  • During the receipt of pension, if the subscriber dies, the spouse of the beneficiary shall be entitled to receive 50% of the pension received by the beneficiary as family pension.
  • Family pension is applicable only to spouse.

Contribution by the Subscriber

  • The subscriber’s contributions to PM-SYM shall be made through ‘auto-debit’ facility from his/ her savings bank account/ Jan- Dhan account.
  • The subscriber is required to contribute the prescribed contribution amount from the age of joining PM-SYM till the age of 60 years.

Matching contribution by the Central Government  

  • PM-SYM is a voluntary and contributory pension scheme on a 50:50 basis where prescribed age-specific contribution shall be made by the beneficiary and the matching contribution by the Central Government.
  • For example, if a person enters the scheme at an age of 29 years, he is required to contribute Rs 100/ – per month till the age of 60 years.
  • An equal amount of Rs 100/- will be contributed by the Central Government.

Enrolment Process

  • The enrolment will be carried out by all the Community Service Centers (CSCs).
  • The subscriber will be required to have a mobile phone, savings bank account and Aadhaar number.
  • The eligible subscriber may visit the nearest CSCs and get enrolled for PM-SYM using Aadhaar number and savings bank account/ Jan-Dhan account number on self-certification basis.

Facilitation Centres

  • All the branch offices of LIC, the offices of ESIC/EPFO and all Labour offices of Central and State Governments will facilitate the unorganised workers about the Scheme.
Feb, 13, 2019

[op-ed snap] The shape of the jobs crisis

Note4Students

Mains Paper 3: Economic Development| Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of India’s demographic dividend.

Mains level: The news-card analyses the issues of growing unemployment in India and why there’s a need for an industrial policy or employment strategy, in a brief manner.


Context

  • India has no industrial policy or employment strategy to ride the wave of its demographic dividend

Job creation has slowed down

  • Job creation has slowed since 2011-12, the year of the last published National Sample Survey Office (NSSO) labour force survey.
  • Experts have used Labour Bureau annual survey (2015-16) data and Centre for Monitoring Indian Economy Pvt. Ltd. (CMIE) data (post-2016), which has a sample size larger than the NSSO labour force surveys, to reach this conclusion.
  • Both surveys cover rural and urban, and organised and unorganised sector employment.
  • They capture both the Employees’ Provident Fund Organisation/National Pension Scheme (organised) as well as such employment as might be generated by MUDRA loans or platform economy jobs.
  • The latter two job sources are precisely what the government claims were not being captured by jobs data available.
  • However, government claims on absence of ‘good’ data on jobs are simply untenable.

A jump now

  • The leaked NSSO 2017-18 data have shown that while the open unemployment rate (which does not measure disguised unemployment and informal poor quality jobs that abound in the economy) by the usual status never went over 2.6% between 1977-78 and 2011-12, it has now jumped to 6.1% in 2017-18.

More young people have become educated

  • This was expected as in the last 10-12 years, more young people have become educated.
  • The tertiary education enrolment rate (for those in the 18-23 age group) rose from 11% in 2006 to 26% in 2016.
  • The gross secondary (classes 9-10) enrolment rate for those in the 15-16 age group shot up from 58% in 2010 to 90% in 2016.
  • The expectation of such youth is for a urban, regular job in either industry or services, not in agriculture.
  • If they have the financial wherewithal to obtain education up to such levels, they can also “afford” to remain unemployed.
  • Poor people, who are also much more poorly educated, have a much lower capacity to withstand open unemployment, and hence have lower open unemployment rates.

Unemployed have stopped looking for work

  • What NSSO 2017-18 also shows is that as open unemployment rates increased, more and more people got disheartened and fell out of the labour force.
  • In other words, they stopped looking for work.
  • The result is that labour force participation rates (LFPR, i.e. those looking for work) for all ages, fell sharply from 43% in 2004-5 to 39.5% in 2011-12, to 36.9% in 2017-18 (a reflection mainly though not only of the falling female LFPR).

Growing numbers of youth who are NEETs

  • This shows up in the growing numbers of youth who are NEETs: not in education, employment or training.
  • They are a potential source of both our demographic dividend but also what is looking to be a mounting demographic disaster.

Across education categories

  • A sharp increase in the unemployment rate of the educated should have worried the government.
  • It is estimated that the unemployment rate rose over 2011-12 to 2016 from 0.6% to 2.4% for those with middle education (class 8);
  • 1.3% to 3.2% for those who had passed class 10;
  • 2% to 4.4% for those who had passed class 12;
  • 4.1% to 8.4% for graduates; and
  • 5.3% to 8.5% for post-graduates.
  • Even more worrying, for those with technical education, the unemployment rate rose for graduates from 6.9% to 11%, for post-graduates from 5.7% to 7.7%, and for the vocationally trained from 4.9% to 7.9%.

Structural retrogression for Indian Economy

  • For an economy at India’s stage of development, an increase of workers in agriculture (of 20 million that took place over 1999-2004) is a structural retrogression, in a direction opposite to the desired one.
  • Between 2004-5 and 2011-12, the number of workers in agriculture fell sharply, which is good, for the first time in India’s economic history.
  • Similarly, the number of youth (15-29 years) employed in agriculture fell from 86.8 million to 60.9 million (or at the rate of 3 million per annum) between 2004-5 and 2011-12.
  • However, after 2012, as non-agricultural job growth slowed, the number of youth in agriculture actually increased to 84.8 million till 2015-16 and even more since then (as the CMIE data would attest).
  • These youth were better educated than the earlier cohort, but were forced to be in agriculture.

Drop in manufacturing jobs

  • Manufacturing jobs fell in absolute terms, from 58.9 million in 2011-12 to 48.3 million in 2015-16, a whopping 10.6 million over a four-year period.
  • This is consistent with slowing growth in the Index of Industrial Production (IIP), which consists of manufacturing, mining, and electricity.
  • The IIP had sharply risen from 100 in 2004-5 to 172 by 2013-14 (in the 2004-5 series), but only rose from a base of 100 in 2011-12 in the later series to 107 in 2013-14, and to 125.3 in 2017-18.
  • This is also consistent with exports first falling after 2013, then barely recovering to levels still lower than 2013.
  • It is also consistent with investment-to-GDP ratio falling sharply since 2013, and still remaining well below 2013 levels.
  • This holds for both private and public investment.

“NEET”: A major concern

  • What is tragic is the growing number of educated youth (15-29 years) who are “NEET”.
  • This number (70 million in 2004-5) increased by 2 million per annum during 2004-5 and 2011-12, but grew by about 5 million per annum (2011-12 to 2015-16).
  • If that later trend continued it is estimated it would have increased to 115.6 million in 2017-18.
  • That is a 32 million increase in “NEETs” in our society over 2011-12 to 2017-18.

Way Forward

  • These youth (“NEET” and unemployed) together constitute the potential labour force, which can be utilised to realise the demographic dividend in India.
  • It is estimated that the number of new entrants into the labour force (currently at least 5 million per annum), and especially educated entrants into the labour force will go on increasing until 2030.
  • It will thereafter still increase, though at a decelerating pace.
  • By 2040 our demographic dividend — which comes but once in the lifetime of a nation — will be over.
  • China managed to reduce poverty sharply by designing an employment strategy (underpinned by an education and skills policy) aligned to its industrial strategy.
  • That is why it rode the wave of its demographic dividend.
  • It is time India should also devise and align its industrial policy and employment strategy to reap the benefits of its demographic dividend.
Feb, 02, 2019

Pradhan Mantri Shram-Yogi Maandhan Yojana

Note4students

Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre & States & the performance of these schemes

From UPSC perspective, the following things are important:

Prelims level: Pradhan Mantri Shram- Yogi Maandhan Yojana

Mains level: Pension Scheme for Unorganised sector workers


News

Pradhan Mantri Shram-Yogi Maandhan Yojana

  1. The scheme announced in the Budget 2019 has proposed to launch the scheme for the unorganised sector workers with monthly income upto Rs 15,000.
  2. The Government will deposit equal matching share in the pension account of the worker every month.
  3. It is expected that at least 10 crore labourers and workers in the unorganised sector will avail the benefit of the scheme within next five years making it one of the largest pension schemes of the world.
  4. A sum of Rs 500 crore has been allocated for the Scheme.
  5. The scheme will also be implemented from the current year.

Criteria

  1. This pension yojana shall provide an assured monthly pension of Rs 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age.
  2. An unorganised sector worker joining pension yojana at the age of 29 years will have to contribute only Rs 100 per month till the age of 60 years.
  3. A worker joining the pension yojana at 18 years, will have to contribute as little as Rs 55 per month only.
Jan, 28, 2019

Yuva Swabhiman Yojana

Note4students

Mains Paper 2: Polity | Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of the vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Yuva Swabhiman Yojana

Mains level:  Various initiatives for EWS


News

  • The Madhya Pradesh government has announced the launch of a scheme to ensure temporary employment to the youths from the economically weaker sections (EWS) in the urban areas.

Yuva Swabhiman Yojana

  1. The Scheme would guarantee 100 days of employment every year to the EWS youths.
  2. During their employment, youths would be given skills training of their choice, so that they can take benefits of the available job opportunities.
  3. While those in rural areas get employment under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), the urban poor youth are left out.
  4. This scheme will effectively cover them.
Jan, 19, 2019

[op-ed snap]Diagnosing the job crisis

Note4students

Mains Paper 2: Social Justice|Issues relating to development and management of Social Sector/Services relating to Health,Education, Human Resources.

From UPSC perspective, the following things are important:

Prelims level:Nothing as such.

Mains level: The news-card analyses the problem of India’s MSME sector, in a brief manner.


Context

  • It has been observed by some experts that the regulatory framework that has choked MSMEs has contributed to the farm crisis and quota demands in India.
  • And that farm loan waivers, migration restrictions and10 per cent economically backward reservation in government jobs does not represent a sustainable approach.

Overhauling India’s MSME sector

  • The only way to create millions of jobs with decent wages is a policy re-imagination of the rights, needs, and treatment of formal MSME entrepreneurs.
  • The average employer in India is not a formal MSME or somebody large like Marico, Lupin or the Tatas, but an informal MSME because the present regulatory framework are not pro-informal sector MSME.
  • Fewer than 2 per cent of our 63 million MSME’s are formal.

Labour market interventions in MSMEs can be by:

  • Taking the long view:a 10-year plan is not 10-one-year plans for formalisation, urbanisation, industrialisation, financialisation and human capital.
  • Recognise progress made:6 million new formal enterprises and 30 million new social security payers in the last three years), and
  • Get bolder with structural interventions that matter most to MSME entrepreneurs.

India’s problem is no longer jobs but wages

  • Creating millions of well-paying jobs needs ending killing of millions of MSMEs (small but formal employers that will grow and pay the wage premium because of enterprise productivity).

Formalisation of MSMEs need

  • lower regulatory framework,
  • labour law rationalisation,
  • e-governance, and
  • education effectiveness
  • all in turn need civil service reform.

Way Forward

  • The only solution to helping farmers is having less of them and making the remaining productive — US farms with more than $1 million in sales are only 6 per cent of farms but produce 66 per cent of output.
  • The need of the hour is to have enough formal MSME employers.
Jan, 14, 2019

Private Member’s Bill to allow employees to ignore calls after work

Note4students

Mains Paper 2: Polity | Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of the vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Right to Disconnect Bill, 2018

Mains level:  Employee Welfare measures in India


News

  • A Member of Parliament has introduced a Private Member’s Bill in the Lok Sabha to give employees the right to not respond to communication from employers outside of office hours.

Why such move?

  1. Studies have found that if an employee is expected to be available round the clock, they tend to exhibit risks of over-work like sleep deprivation, developing stress and being emotionally exhausted.
  2. This persistent urge to respond to calls and e-mails (termed as ‘telepressure’), constant checking of e-mails throughout the day, and even on weekends and holidays, is reported to have destroyed work-life balance of employees.

Right to Disconnect Bill, 2018

  1. The Bill is to “establish an Employees’ Welfare Authority to confer the right on every employee to disconnect from work-related telephone calls and emails beyond work hours and on holidays.
  2. It calls for the Right to Refuse to answer calls and emails outside work hours and for all matters connected therewith or incidental thereto.
  3. It means that while the employer may contact the worker after work hours, the employee is not obliged to reply or shall have the right to refuse to answer such calls.
  4. Further, in case an employee refuses to reply any call during out-of-work hours, such employee shall not be subject to any disciplinary action by the employer.
  5. Non-adherence would lead to penalties of one per cent of the total employee remuneration.

Various Provisions

Overtime Wages

  • If an employee works beyond work hours which are mutually agreed — he/she shall be entitled to overtime at the normal wage rate.

Digital Detox

  • The Bill states that the government is entitled to provide employees counselling, digital detox centres, and similar resources “to free an employee from digital distractions and enable him to truly connect with the people around him.

Employee Welfare Authority

  1. An Employee Welfare Authority will be set up, including IT, Communication and Labour ministers, under the Bill which.
  2. Besides publishing a study regarding the impact of digital tools beyond work hours and yearly reports, the authority is required to outline a charter outlining employee-employer negotiations.
  3. Companies with more than 10 employees would periodically negotiate specific terms with their workers, publish their own charter, and create an Employee Welfare Committee consisting of representatives of the company’s workforce.

Back2Basics

Private member’s bill

  1. Members of Parliament other than ministers are called private members and bills presented by them are known as private member’s bills.
  2. A private member bill can be introduced by both ruling party and opposition MPs.
  3. They can introduce a bill in the parliament after giving prior notice of one month.
  4. The bill needs to be passed in both houses of parliament.
  5. Once passed in both the houses, bill needs to get assent of the president to become an act.
  6. By set tradition, President can easily exercise his absolute veto power against such bills.
  7. In Lok Sabha, the last two and a half hours of a sitting on every Friday are generally allotted for transaction of “Private Members’ Business”, i.e., Private Members’ Bills and Private Members’ Resolutions.
Jan, 14, 2019

Sikkim launches “One Family One Job” Scheme

Note4students

Mains Paper 3: Economy | Development & Employment

From the UPSC perspective, the following things are important:

Prelims level: ‘One Family One Job’ scheme

Mains level: Ensuring employment in NE states


News

  • Sikkim has recently launched the ‘One Family One Job’ scheme which entitles one government job for every family in the state.

‘One Family One Job’ Scheme

  1. The scheme envisions employment to a member of every family which does not have a government job in the state.
  2. Under this scheme, all loan debts in the farming and agriculture sector would be revoked.
  3. At present recruitments are being made for Group C and Group D posts in 12 government departments.
  4. The letters were awarded only to members of those families which do not have a government job at present.
  5. The task of providing employment was entrusted to the Department of Personnel.
  6. Over 25,000 already employed but unregularised government employees would also be subsequently regularized within 2019 according to their seniority.

What makes it special?

  1. Sikkim has become the first state in the country to carry out such an exclusive programme for the people who would now be entitled to state government employee benifits.
  2. Sikkim was the only state that earmarks 70 per cent of its revenues towards salaries for state government employees.
  3. As of now, the state government has over 1 lakh regularised employees on its rolls from a population of just 6.4 lakh.
  4. Sikkim is also the only state in the country that gives the highest salaries to state government employees.
Jan, 08, 2019

New national policy for domestic workers being drafted, 40 lakh to benefit

Note4students

Mains Paper 2: Governance | Mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.

From UPSC perspective, the following things are important:

Prelims level: National policy for domestic workers

Mains level: Welfare measures for domestic workers and unorganized sector workers


News

  • The Ministry of Labour & Employment is set to formulate a National Policy on Domestic Workers for providing various social securities.

Draft National Policy on Domestic Workers

  1. In a bid to give recognition to domestic workers besides making them eligible for minimum wages, social security and safe working conditions, labour ministry is drafting the national policy.
  2. As per the National Sample Survey, there are an estimated 39 lakhs people employed as domestic workers by private households, of which 26 lakhs are female domestic workers.
  3. Some of the salient features of the proposed draft are:
  • Inclusion of Domestic Workers in the existing legislations
  • Right to register as unorganized   workers
  • Right to form their own associations/unions
  • Right to minimum wages, access to social security
  • Right to enhance their skills
  • Protection against from abuse and exploitation
  • Access to courts, tribunals for grievance redressal
  • Establishment of a mechanism for regulation of private placement agencies.
  • Establishment of a grievance redressal system for domestic workers.

Other Policy Measures

  1. The Centre is already implementing Unorganised Workers’ Social Security Act, 2008.
  2. The act aims to provide social security relating to life and disability cover, health and maternity benefits, old age protection to the unorganised workers including domestic workers.
  3. The ministry is also drafting a Universal Social Security Code that would cover even domestic workers, who are otherwise deprived of benefits such as medical insurance, pension, maternity and mandatory leave.
Jan, 08, 2019

[pib] Formulation of a new Labour Code

Note4students

Mains Paper 2: Polity | Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of the vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Basics of the proposed Code

Mains level:  Labour related legislation in India


News

Labour Code on Industrial Relations

  1. The Ministry of Labour & Employment has prepared a Labour Code on Industrial Relations, by simplifying, amalgamating and rationalizing the relevant provisions of the following three Labour Laws:-
  • The Industrial Disputes Act, 1947,
  • The Trade Unions Act, 1926,
  • The Industrial Employment (Standing Orders) Act, 1946.
  1. The provisions of the draft Code have been discussed with stakeholders in various Tripartite Meetings and then finalized.
  2. Labour code on wages and industrial relations are two of the four codes that labour ministry had been working over the last few years.
  3. In line with recommendations of Second National Commission on Labour, ministry had formed four labour codes, namely wages, industrial relations, social security & welfare and occupational safety, health and working conditions.
Jan, 05, 2019

[pib] Amendment to the Trade Unions Act, 1926 to make provisions regarding Recognition of Trade Unions

Note4students

Mains Paper 2: Polity | Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Trade Unions Act, 1926

Mains level:  Labour related legislation in India


News

  • The Union Cabinet has approved Amendment to the Trade Unions Act, 1926 to make provisions regarding Recognition of Trade Unions.

What Amendments brings in?

  1. The proposed Bill will ensure that the nomination of workers’ representatives in tripartite bodies by the government will become more transparent.
  2. Trade Unions so recognized would be accountable in maintaining industrial harmony.
  3. Recognition of Trade Unions at Central/State level would reduce duplicacy of such exercise by different departments. Recognized Trade Unions may be assigned specific roles at Central or State level.

Benefits of the Amendments

The approval will facilitate:

  • Recognition of Trade Unions at Central and State level;
  • Ensure true representation of workers in the tripartite bodies;
  • Check on the arbitrary nomination of workers’ representatives by the Government
  • Reduce litigations and industrial unrest

Indian Trade Unions Act, 1926

  1. The legislation regulating the trade unions is the Indian Trade Unions Act, 1926.
  2. The Act deals with the registration of trade unions, their rights, their liabilities and responsibilities as well as ensures that their funds are utilized properly.
  3. It gives legal and corporate status to the registered trade unions.
  4. It also seeks to protect them from civil or criminal prosecution so that they could carry on their legitimate activities for the benefit of the working class.
  5. The Act is applicable not only to the union of workers but also to the association of employers and extends to whole of India.
  6. Also, certain Acts, namely, the Societies Registration Act, 1860; the Co-operative Societies Act, 1912; and the Companies Act, 1956 shall not apply to any registered trade union, and that the registration of any such trade union under any such Act shall be void.

Trade Unions in India

  1. The credit for the first association of Indian workers is generally given to the Bombay Mill-Hands Association founded by N.M. Lokhande in 1890.
  2. This was in the period just after the passing of the ‘First’ Factories Act in 1881 by the British Government of the time.
  3. The following years saw the formation of several labour associations and unions.
  4. The first clearly registered trade-union is considered to be the Madras Labour Union founded by B.P. Wadia in 1918.
Dec, 21, 2018

[op-ed snap] Citizen-led employment generation is what’s needed

Note4students

Mains Paper 3: Economy | Development & employment

From the UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Alternative ways to generate employment in India


Context

Migration a cause of social tensions

  1. Social tensions are rising as “two Indias” emerge from a demographic perspective
  2. The north and east have high fertility rates, low labour force participation and high marginal employment
  3. In contrast, the west and south have low fertility rates and, in some instances, is showing the shortage of manpower
  4. This is resulting in interstate migration, creating social tensions
  5. The west and south are resentful when they see “outsiders” stream in on packed trains
  6. The north and east are likely to experience increasing social strife when a digitally alive population fails to fulfil their aspiration
  7. Of every 100 additional employment requirement for the country in the coming decade, 80 will be in the 10 large states in the north and east where demography is still in its surge phase

Need for large-scale employment

  1. Creating large-scale local employment will be essential for inclusive growth, and is a key agenda for the country over the coming decade
  2. Employment opportunities will require a focus on smaller districts that house a majority of our population and still remain rural or semi-urban and in some cases tribal
  3. Employment generation requires district-level effort for job creation that links local entrepreneurs to markets, with solutions that use local resources

Approach to large-scale employment

  1. Employment generation is the task of citizens, society, and the private sector, not just the government
  2. Employment generation starts with the strengths, resources and capabilities of that region
  3. These resources require market connects, which generate revenues for a local entity, or which can highlight local assets, as with tourism
  4. This approach addresses the challenge of creating large-scale employment as an opportunity for inclusive growth
  5. The approach takes local leaders, local resources as the starting point of employment generation
  6. For instance, agro-processing, dairy, non-timber forest product, local tourism are resources that are specific to a region or a district and should be a starting point for employment generation

Taking forward this approach

  1. Underlying this approach is a change in mindset
  2. Most narratives for our 1.3 billion democracy sees citizens as passive consumers
  3. The approach starts by looking at citizens and local entrepreneurs as producers not mere consumers
  4. It then creates an enabling ecosystem that shifts the focus of economic value creation from larger cities to smaller towns using local resources from that area
  5. It uses market connects as the starting point
  6. Connecting local entrepreneurs to the market using local capabilities of that district is a key feature
  7. An initial assessment of districts understands which local resources will be of use to the regional, national and international markets
  8. The nature of the processing, manufacturing or in some cases services interventions are identified given this market connect
  9. The platform also identifies local entrepreneurs who are able to create and man the units, and strong finance connects are also facilitated
  10. The result is local direct job creation in those local enterprises as well as indirect job creation as local produce is collected, processed and exported

Way forward

  1. This approach can drive efficiency in the economy with lower cost, wider sourcing structures while providing employment to a large number of people in smaller districts
  2. It’s a once-in-a-lifetime opportunity to build India, keeping the citizen at its centre and utilizing the bountiful resources of our smaller districts where employment is most needed
Dec, 03, 2018

[op-ed snap] Job creation at the farmer’s doorstep

Note4students

Mains Paper 3: Economy | Development & employment

From the UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Need of focusing on the non-farm sector for job growth and sustainable income opportunities for farmers


Context

Rural economy in a poor state

  1. Rural India’s economic situation continues to worsen
  2. A recent survey by the National Bank for Agriculture and Rural Development (All India Rural Financial Inclusion Survey) shows that the average monthly income of rural households is ₹8,059, with agricultural households deriving only 43% of their income from agriculture
  3. This is also reflected in the decoupling of urban Indian incomes from rural India with per capita income in rural India lagging a fair bit
  4. The government has sought to double farmer income by raising minimum support prices, but such initiatives would apply directly only to 48% of rural India, with non-agricultural households being left behind

Rythu Bandhu model also not feasible

  1. The Telangana government’s recent announcement of the Rythu Bandhu scheme has spotlighted the policy of utilising cash transfer to assist land-owning farmers with a non-agricultural income — instead of the traditional policy measures of price interventions, trade restrictions and farm loan waivers
  2. While the scheme is nominally intended as investment support for inputs such as seeds and pesticides, it implies a transfer of ₹8,000 per acre for every landowning farmer over two crop seasons
  3. As Credit Suisse notes, the scheme has an inbuilt bias for large farmers, allowing 9% of farmers with more than five acres to earn 34% of the total payout

Raising farmer incomes

  1. The conversation on raising farmer income needs to embrace non-farm diversification, an important pathway for empowering landless labourers and marginal farmers
  2. Diversification, away from marginal farming, is typically the answer — helping to overcome land constraint to income growth while allowing farmers to cope with exogenous shocks through additional income
  3. In some cases, it even allows them to reinvest in productivity-enhancing agricultural technologies

Livestock sector: Interventions required

  1. The livestock sector can offer significant opportunities for bolstering non-farm income
  2. The current breeding policy (based on exotic blood and artificial insemination) needs to be revamped
  3. A national breeding policy is also needed to upgrade the best performing indigenous breeds
  4. Buffalo breeding ought to be given more attention, while poultry breeding should be focussed on conservation
  5. State governments should be encouraged to participate in national breeding policy implementation, creating an environment for competition among alternative suppliers of artificial insemination
  6. Consensus must be built among breeders to develop indigenous breeds
  7. The feed supply (currently inadequate) needs to be mitigated through greater imports, with feed technology packages developed for extension dissemination
  8. Geographical information system-based analysis must be utilised to map production systems
  9. Private investment must also be encouraged
  10. Animal health care should become a priority, with greater investment in preventive health care

Improving the condition of Migrant workers

  1. We should also embrace the fact that agricultural labourers routinely seek construction-related daily wage labour to bolster their income
  2. We have to enable migrant workers to get deserved access to various government (Central and State) schemes, despite the lack of identity proof
  3. Access to Anganwadi facilities should be provided regardless of their identity documents
  4. While multiple laws exist for the welfare of construction workers, compliance is abysmal
  5. The penalties for non-compliance have to be increased to a significant fraction of the construction cost, payable by the builder
  6. Registration of workers with the Welfare Board should be made mandatory and be the responsibility of the contractor and the builder
  7. If the contractor is found to engage or employ any worker without a registration card/ID, penalties (monetary and non-monetary) should be imposed, which would then be used for improving awareness and penetration of registration cards and their benefits
  8. The registration cards should be linked to their Jan-Dhan accounts, and transfer of payments on a periodic basis be made directly to their accounts
  9. In order to improve the condition of women, strict anti-harassment laws should be implemented
  10. Creche facilities at construction sites should be provided to also ensure that children are not neglected; they often play with gravel and dust, which can threaten their health
  11. Workers should also be provided with training and skilling in their areas of interest, as it could lead to higher earnings and credit-worthiness

Way forward

  1. Our policies should help create sustainable, long-term, rural, non-farm employment options which can aid the rural poor in overcoming barriers to economic prosperity
  2. India’s rural development policies should increasingly focus on developing markets, infrastructure and institutions that can help sectors such as livestock and construction growth
Dec, 01, 2018

[op-ed snap] Wage drag: on ILO’s Global Wage Report

Note4students

Mains Paper 3: Economy | Development & employment

From the UPSC perspective, the following things are important:

Prelims level: Global Wage Report, ILO

Mains level: Fall in wages of workers across the globe and its impact on overall economy


Context

ILO report on wages

  1. The International Labour Organisation’s Global Wage Report has put into sharp relief one of the biggest drags on global economic momentum: slowing wage growth
  2. Global wage growth, adjusted for inflation, slowed to 1.8% in 2017, from 2.4% in 2016
  3. This is the lowest rate since 2008
  4. Across a majority of geographies and economic groupings, wage expansions were noticeably tepid last year

Impact of slow wage growth

  1. The obvious impact of this low pace has been on global economic growth with consumption demand hurt by restrained spending by wage-earners
  2. The acceleration of economic growth in high-income countries in 2017 was led mainly by higher investment spending rather than by private consumption
  3. In many low- and middle-income economies the average wage, in absolute terms, was so low it was still inadequate to cover the bare needs of the worker

Reasons for this phenomenon

  1. The intensification of competition in the wake of globalisation, accompanied by a worldwide decline in the bargaining power of workers has resulted in a decoupling between wages and labour productivity
  2. The share of labour compensation in GDP across many countries has been weakening
  3. The Washington-based Economic Policy Institute uses the U.S. example to buttress the argument that widening inequality is slowing demand and growth by shifting larger shares of income “to rich households that save rather than spend”

Way forward for India

  1. For India’s policymakers, the message is clear: to reap the demographic dividend we need not only jobs but wage expansion that is robust and equitable
Nov, 30, 2018

Gender wage gap highest in India, women are paid 34% less than men: ILO

Note4students

Mains Paper 3: Economy | Development & Employment

From UPSC perspective, the following things are important:

Prelims level: Global Wage Report 2018-19

Mains level: Inequality of Wages for Women


News

Highest gender wage gap is in India

  1. Women are paid the most unequally in India, compared to men, when it comes to hourly wages for labour.
  2. On average, women are paid 34 per cent less than men, a recent report by the International Labour Organization (ILO) has found.
  3. This gap in wages, known as the gender wage gap, is the highest among 73 countries studied in the report.

India not alone in the race

  1. This gender wage gap has remained unchanged at 20 per cent from 2016 to 2017. Women are paid higher hourly wages than men in Bangladesh.
  2. In advanced economies (G20), real wage growth declined from 0.9 per cent in 2016 to 0.4 per cent in 2017, meaning near stagnation.
  3. By contrast, in emerging economies and developing G20 countries, real wage growth dipped marginally from 4.9 per cent in 2016 and 4.3 per cent in 2017.

Global Scenario

  1. These findings are presented in the flagship publication of the ILO, the Global Wage Report 2018-19, which was released on November 26.
  2. The trend holds true globally as well. Inequality is higher in monthly wages, with a gap of 22 per cent.
  3. In real terms (adjusted for price inflation), global wage growth declined to 1.8 per cent in 2017, from 2.4 per cent in 2016. The findings are based on the data from 136 countries.
  4. Overall, real wages grew just 1.8 per cent globally (136 countries) in 2017.
  5. In most countries, women and men differ significantly in respect of working time – specifically, that part-time work is more prevalent among women than among men.

Way Forward

  1. But in 2017, the gender gap was accompanied by a near-stagnation in wages. Real wage growth has been the lowest since 2008, the year of the financial crisis.
  2. With empirical evidence that gender wage gap is visible even with women with higher levels of education, the report advocated that emphasis needs to be placed on ensuring equal pay for women and men.
Nov, 03, 2018

[pib] PM launches historic Support and Outreach Initiative for MSME Sector

Note4Students

Mains Paper 3: Indian Economy | Planning, mobilization of resources, growth, development and employment

From UPSC perspective, the following things are important:

Prelims level: Various initiatives for supporting MSME Sector

Mains level: Facilitating MSMEs in India


News

Context

  1. Hon’ble PM has launched a historic support and outreach programme for the Micro, Small and Medium Enterprises (MSME) sector.
  2. As part of this programme, the Prime Minister unveiled 12 key initiatives which will help the growth, expansion and facilitation of MSMEs across the country.

Five key aspects for facilitating the MSME sector

  • Access to credit,
  • Access to market
  • Technology upgradation
  • Ease of doing business and
  • Security for employees

Key Initiatives

Access to Credit

  1. 59 minute loan portal
  • Loans upto Rs. 1 crore can be granted in-principle approval through this portal, in just 59 minutes.
  • This portal will be made available through the GST portal.
  • 2 percent interest subvention for all GST registered MSMEs, on fresh or incremental loans.
  1. TReDS compliance
  • All companies with a turnover more than Rs. 500 crore, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS).
  • Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables.
  • This will resolve their problems of cash cycle.

Access to Markets

  1. The public sector companies have now been asked to compulsorily procure 25 percent, instead of 20 percent of their total purchases, from MSMEs.
  2. Out of the 25 percent procurement mandated from MSMEs, 3 percent must now be reserved for women entrepreneurs.
  3. He said transactions worth more than Rs. 14,000 crore have been made so far through GeM (Govt. E Market).
  4. All public sector undertakings of the Union Government must now compulsorily be a part of GeM.

Technology Upgradation

  1. PM announced establishment of tool rooms across the country as they are a vital part of product design.
  2. 20 hubs will be formed across the country, and 100 spokes in the form of tool rooms will be established.

Ease of Doing Business

  1. Clusters will be formed of pharma MSMEs and 70 percent cost of establishing these clusters will be borne by the Union Government.
  2. The announcement focused on simplification of government procedures. The return under 8 labour laws and 10 Union regulations must now be filed only once a year.
  3. As part of establishing a unit, an entrepreneur needs two clearances namely to establish.
  4. The Environmental clearance and consent under air pollution and water pollution laws have been merged as a single consent and self certifications.
  5. For minor violations under the Companies Act, the entrepreneur will no longer have to approach the Courts, but can correct them through simple procedures
Nov, 01, 2018

[op-ed snap] Support for lives on the move

Note4students

Mains Paper 1: Social issues | Population & associated issues

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Factors affecting migration in India and the need of an internal migration policy


Context

Rising migration

  1. Internal migration can be driven by push and/or pull factors
  2. In India, over the recent decades, agrarian distress (a push factor) and an increase in better-paying jobs in urban areas (a pull factor) have been drivers of internal migration
  3. Data show that employment-seeking is the principal reason for migration in regions without conflict

Effects of migration

  1. Though migration is expected to enhance consumption and lift families out of absolute poverty at the origin, it is not free from distress
  2. Distress may be due to unemployment or underemployment in agriculture, natural calamities, and input/output market imperfections
  3. Despite these issues, internal migration has resulted in the increased well being of households, especially for people with higher skills, social connections and assets
  4. Migrants belonging to lower castes and tribes have also brought in enough income to improve the economic condition of their households in rural areas and lift them out of poverty
  5. Data show that a circular migrant’s earnings account for a higher proportion of household income among the lower castes and tribes
  6. This has helped to improve the creditworthiness of the family members left behind — they can now obtain loans more easily

Rise in the urban informal economy

  1. The modern formal urban sector has often not been able to absorb the large number of rural workers entering the urban labour market
  2. This has led to the growth of the ‘urban informal’ economy, which is marked by high poverty and vulnerabilities
  3. Most jobs in the urban informal sector pay poorly and involve self-employed workers who turn to petty production because of their inability to find wage labour
  4. Then there are various forms of discrimination which do not allow migrants to graduate to better-paying jobs
  5. Migrant workers earn only two-thirds of what is earned by non-migrant workers, according to 2014 data

Costs of migration

  1. Migrants have to incur a large cost of migration which includes the ‘search cost’ and the hazard of being cheated
  2. Often these costs escalate as they are outside the state-provided health care and education system
  3. This forces them to borrow from employers in order to meet these expenses
  4. And frequent borrowing forces them to sell assets towards repayment of their loans

New forms of discrimination

  1. Employment opportunities, the levels of income earned, and the working conditions in destination areas are determined by the migrant’s household’s social location in his or her village
  2. The division of the labour market by occupation, geography or industry (labour market segmentation), even within the urban informal labour market, confines migrants to the lower end
  3. Often, such segmentation reinforces differences in social identity, and new forms of discrimination emerge in these sites

Need for a National Migration Policy

  1. The need for a national policy towards internal migration is underscored by the fact that less than 20% of urban migrants had prearranged jobs and nearly two-thirds managed to find jobs within a week of their entry into the city
  2. In India, the bulk of policy interventions, which the migrants could also benefit from, are directed towards enhancing human development; some are aimed at providing financial services
  3. As government interventions are directed towards poverty reduction, there is a dearth of direct interventions targeted and focussed on regions
  4. Policies on this could be twofold. The first kind could aim at reducing distress-induced migration and the second in addressing conditions of work, terms of employment and access to basic necessities

Steps that can be taken

  1. There is a need to distinguish between policy interventions aimed at ‘migrants for survival’ and ‘migrants for employment’
  2. Continued dynamic interventions over long periods of time would yield better results compared to single-point static interventions, especially in the context of seasonal migrants
  3. Local bodies and NGOs which bring about structural changes in local regions need to be provided more space
  4. Interventions aimed at enhanced skill development would enable easier entry into the labour market
  5. We also need independent interventions aimed specifically at addressing the needs of individual and household migrants because household migration necessitates access to infrastructure such as housing, sanitation and health care more than individual migration does
  6. Government interventions related to employment can be supported by market-led interventions such as microfinance initiatives, which help in tackling seasonality of incomes

Way forward

  1. As remittances from migrants are increasingly becoming the lifeline of rural households, improved financial infrastructure to enable the smooth flow of remittances and their effective use requires more attention from India’s growing financial sector
  2. A national policy for internal migration is needed to improve earnings and enable an exit from poverty
Sep, 22, 2018

[op-ed snap] Can trade agreements be a friend to labour?

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Less focus on labour welfare in international trade negotiations and need for more equitable rules for labour welfare


Context

International trade agreements and labour welfare

  1. Labour advocates have long complained that international trade agreements are driven by corporate agendas and pay little attention to the interests of working people
  2. The preamble of the World Trade Organization Agreement mentions the objective of “full employment”, but otherwise, labour standards remain outside the scope of the multilateral trade regime

Regional trade agreements focus on labour welfare

  1. Regional trade agreements have long taken labour standards aboard
  2. The linkage in these agreements between preferential market access and adherence to core labour rights has become increasingly explicit
  3. According to its proponents, the Trans-Pacific Partnership would have required Vietnam, Malaysia, and Brunei to improve their labour practices significantly—and Vietnam to recognize independent trade unions

Resistance by developing nations

  1. Developing countries have generally resisted the inclusion of labour standards in trade agreements for fear that advanced countries will abuse such provisions for protectionist purposes
  2. This fear can be justified when the requirements go beyond core labour rights and make specific wage and other material demands
  3. The problem with trade agreements’ labour provisions is not that they are too restrictive for developing countries
  4. It is that they may remain largely cosmetic, with little practical effect

Need to care about labour standards

  • We may have a humanitarian desire to improve working conditions everywhere
  1. We should have equal regard for workers in the domestic economy and those employed in export industries
  2. In principle, we could expand enforceable labour clauses in trade agreements to cover working conditions in the entire economy
  • Increasing the profile of governing bodies
  1. If we are serious about improving working conditions everywhere, we should resort to experts on human rights, labour markets, and development, and raise the profile of the International Labour Organization
  2. The objectives of both domestic labour unions and international human-rights advocates are served better through other means

Way Forward

  1. Labour rights are too important to leave to trade negotiators alone
  2. To date, labour clauses in trade agreements have remained a fig leaf, neither raising labour standards abroad nor protecting them at home
  3. We can start by treating labour rights as being on a par with commercial interests, rather than being an adjunct to them
Aug, 31, 2018

Quota is State-specific, rules the Supreme Court

Note4students

Mains Paper 2: Polity | Structure, organization and functioning of the Executive and the Judiciary

From UPSC perspective, the following things are important:

Prelims level: Judgment of the SC, Judges Cases

Mains level: Debate over Reservations.


News

Context

The Constitution Bench was answering a reference made to it in Bir Singh versus Delhi Jal Board, a 2013 case, on the legal question whether a Scheduled Caste person from a State would be accorded the same concessions in employment in another State.

Pan-India reservation rule applies to Delhi

  1. Reservation is State-specific, but Delhi is a ‘miniature India’ where the “pan-India reservation rule” applies according to the Supreme Court.
  2. A five-judge Constitution Bench led by Justice Ranjan Gogoi unanimously held that a person belonging to a Scheduled Caste in one State cannot be deemed to be a Scheduled Caste person in relation to any other State to which he migrates for the purpose of employment or education.
  3. The benefits of reservation provided for by the Constitution would stand confined to the geographical territories of a State/Union Territory.
  4. This is in respect to which the lists of Scheduled Castes/Scheduled Tribes have been notified by the Presidential Orders issued from time to time.

Dissenting opinion

  1. But Justice Banumathi, in a separate opinion, dissented with the majority opinion on the point that the pan-India reservation rule for Delhi was fully in accord with the constitutional structure of a federal polity.
  2. She said the very object of the constitutional scheme of upliftment of the SCs/STs of these Union Territories would be defeated if pan-India reservation is allowed in Union Territories like Delhi.
  3. However she agreed that reservation should be State-specific.
Aug, 24, 2018

EPFO data not the right gauge of employment level

Note4students

Mains Paper 3: Indian Economy | Development and Employment

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level:  Disparities in Employment statistics in India.


News

Complications in EPFO data

  1. The EPFO recently revised down the net enrolment numbers for the period from September 2017 to May 2018 by 5.54 lakh (12.4%) to 39.2 lakh from its earlier estimate of 44.74 lakh made last month.
  2. The downward revision in the Employees’ Provident Fund Organisation data does not imply a decrease in formal sector employment.
  3. According to labour economists there are several problems with the EPFO data and caution against its use as a gauge of formal sector employment in the country.

No clarity

  1. EPFO data is a very complicated piece of work. There is a lack of clarity about the methodology being followed for this dataset.
  2. It is not clear what happens when a person changes jobs — and that happens very, very frequently.
  3. When someone applies for a new policy and already has an older one, what does EPFO do? Does it merge the two policies? Does it delete one? Does it keep the older policy active?
  4. EPFO is not actually disclosing this. They must make a deduction somewhere, but it is not clear if this is happening.
  5. Another major lacuna in the EPFO numbers was that it does not make clear whether the additions are to the total number of members (about 150 million) or to the number of active members who actually make payments and who number only about 60 million.
  6. If this addition is simply people moving from the member to active member category, there is no new job creation, or even new formal job creation, at all.

Impact of GSTN registration

  1. Most of the informal employers have been outside the EPFO net; enterprises may not have registered at all, or may not have admitted that they employ enough people to meet the EPFO threshold.
  2. The new GST regime created a certain incentive for many small enterprises to register themselves on the GST network, and so they may have registered under EPFO.
  3. Thus, these are not new jobs being created; it is simply that they are newly registered under EPFO.

Why EPFO number does not matter?

  1. Changes in EPFO numbers are not always indicative of a change in employment levels since there are several reasons why EPFO numbers might change without a corresponding change in employment.
  2. Some examples are a worker quitting their job to start their own company, a worker being transferred to a foreign branch of an Indian company etc.
  3. Employees retiring, and employees quitting once they get married are the prime factors of reduced employment.
  4. For example, a company employing 19 people may not be in EPFO, but as soon as it adds one more employee, all 20 are added to EPFO.
  5. But the actual increase in employment has only been a single person.
  6. The estimates may include temporary employees whose contributions may not be continuous for the entire year.
Aug, 22, 2018

ILO report flags wage inequality in India

Note4students

Mains Paper 3: Economy | Development & Employment

From UPSC perspective, the following things are important:

Prelims level: India Wage Report

Mains level: Read the attached story.


News

India Wage Report by ILO

  1. Real average daily wages in India almost doubled in the first two decades after economic reforms, but low pay and wage inequality remains a serious challenge to inclusive growth warned ILO in its India Wage Report.
  2. This is essential to combat persistent low pay in some sectors and to bridge the wage gaps between rural and urban, male and female, and regular and casual workers.

Low Wages led to lower share in National Income

  1. Overall, in 2009-10, a third of all of wage workers were paid less than the national minimum wage, which is merely indicative and not legally binding. That includes 41% of all casual workers and 15% of salaried workers.
  2. In 2011-12, the average wage in India was about ₹247 rupees a day, almost double the 1993-94 figure of ₹128.
  3. However, average labour productivity (as measured by GDP per worker) increased more rapidly than real average wages.
  4. Thus, India’s labour share or the proportion of national income which goes into labour compensation, as opposed to capital or landowners, has declined.

Urban-Rural Gap

  1. The rise in average wages was more rapid in rural areas, and for casual workers.
  2. However, these groups started at such a low base that a yawning wage gap still remains.
  3. Thus, the average wage of casual workers — who make 62% of the earning population — was only ₹143 a day.
  4. Daily wages in urban areas (₹384) also remain more than twice as high as those in rural areas (₹175), the report said.
  5. Regional disparities in average wages have actually increased over time, with wages rising more rapidly in high-wage States than in low-wage ones.

Gender Wage Gap

  1. The gender wage gap decreased from 48% in 1993-94 to 34% in 2011-12, but still remains high by international standards.
  2. And of all worker groups, the average wages of casual rural female workers was the lowest, at just ₹104 a day.

Concerns raised by ILO

  1. The ILO highlighted the lack of timely data as a hindrance, pointing out that its analysis — and the decisions of Indian policy makers was dependent on 2011-12 data from the Employment and Unemployment Survey (EUS) of the NSSO.
  2. State-specific and comparative studies on wages are needed, said the ILO, urging collaborative work between government agencies, academic institutions and expert organisations.
  3. The ILO has called for stronger implementation of minimum wage laws and strengthening of the frameworks for collective bargaining by workers.
Aug, 04, 2018

Mukhyamantri Yuva Nestam Scheme

Note4students

Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre & States & the performance of these schemes

From UPSC perspective, the following things are important:

Prelims level: Particulars of the Scheme

Mains level: Initiative to address Unemployment related issues


News

Mukhyamantri Yuva Nestam- a Pension Scheme

  1. The AP government has launched this  scheme through which an allowance of Rs 1000 per month will be provided to unemployed youth in the state.
  2. About 12 lakh youths in the age group of 22-35 years will get the benefit of the scheme.
  3. The registration for the scheme will start mid-August.
  4. The scheme will be extended to all those eligible even if there are more than one beneficiary in a family.
  5. It will implement the scheme in a very transparent manner like pension scheme.
  6. The money will be credited directly into the bank accounts through biometric authentication.
Jul, 12, 2018

World Population Day: What ails the Youth of India

Note4students

Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The newscard gives a quick recap of the issues faced by Indian Youth despite unemployment.


News

Liabilities to Indian Youth

  1. Plagued with problems ranging from stress, unmet family planning needs, unbalanced diets and gender disparities in labour, the Indian youth seems far from turning into an aggressive workforce in future.
  2. Population dynamics, marital statistics, fertility and contraception, mortality and neonatal health care, literacy and employment play important roles in the lives of young men and women.

Family Planning- the multifaceted problem

  1. An unmet need for family planning not only affects the abilities of men and women to plan families, but it also decreases overall well-being.
  2. It limits opportunities to increase earnings, participate in the workforce, access health services, and pursue their own education and that of their children.

Stress remains a major factor

  1. The Cigna 360° Well-Being Survey 2018 done by Cigna TTK Health Insurance covering nearly 14,500 people in 23 markets around the world reveals that stress levels are high in India compared with other developed and emerging countries.
  2. About 89% of the population in India said they are suffering from stress compared with the global average of 86%.

Women are worst hit

  1. The statistics are also disturbing for women in the workforce. A report by the ministry of statistics and programme implementation—Youth in India-2017—stated that during 2011-12, about 55% of males and about 18 % of females in rural areas were in the labour force.
  2. Whereas the corresponding percentages in urban areas were about 56% for males and about 13% for females.
  3. The lack of infrastructure, unavailability of basic amenities at workplaces, rigid and inflexible work hours, the absence of care facilities at or near the workplaces have not motivated women to participate in the labour market significantly.
Jul, 05, 2018

[op-ed snap] The paradox of job growth

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: Central Statistics Office (CSO), Employees’ Provident Fund (EPF), National Pension Scheme, Employees’ State Insurance Scheme, Employment-Unemployment Surveys (EUS), Index of Industrial Production (IIP), Annual Survey of Industries (ASI)

Mains level: Mismatch in actual job growth and data being provided and how jobs can actually be created in economy


Context

Latest employment estimates

  1. Central Statistics Office (CSO) released employment estimates recently
  2. The CSO’s press release has claimed that 4.1 million new jobs were created in the economy’s formal sector during eight months since last September
  3. They are off the mark, and confined to the economy’s organized or formal sector, accounting at best for 15% of the workforce
  4. NITI Aayog and official economists have also put out similar estimates since early this year
  5. But the official estimates are completely silent about the majority of the workforce engaged in the informal sector

CSO definition

  1. The CSO release defines jobs as ones that provide at least one government financed (or mandated) social security benefit such as Employees’ Provident Fund (EPF), National Pension Scheme, or Employees’ State Insurance Scheme

Reliability of these estimates

  1. The estimates are based on administrative records of implementing the social security schemes, whose completeness, consistency and accuracy are unknown
  2. Since a formal (organised) sector worker, in principle, can legitimately access (or subscribe to) more than one social security scheme, double counting is a distinct possibility
  3. The official data also suffers from a conceptual problem
  4. The social security databases, by design, are lists of workers enrolled in the schemes, as an entitlement or as voluntary subscribers — not employment registers
  5. These schemes are applicable to establishments above a certain size (of employment), and to certain kinds of enterprises

How actual job growth doesn’t happen

  1. For instance, in the factory sector, those employing 20 or more workers are mandated to provide EPF to all the workers (with a matching contribution by the employer)
  2. So, if in a factory, employment goes up from 19 to 20 workers, it comes under the purview of the EPF, to be provided to all the 20 workers
  3. The EPF enrolment increases by 20 workers, but the additional job created is just for one worker

India’s job sector

  1. The formal sector stands at the apex of India’s labour market pyramid, agriculture being at the bottom, employing 50% of the workforce
  2. The remaining workers are in the non-farm informal sector, spread across rural and urban areas
  3. This sector has grown in recent decades at the expense of the other two sectors mentioned above
  4. Nearly half of the informal labour workers are self-employed in household (or own account) enterprises, often engaging unpaid family labour
  5. Varying degrees of under-employment or disguised unemployment are the defining feature of informal labour markets

Lack of data on job sector

  1. Since 1972-73, the five-yearly Employment-Unemployment Surveys (EUS) conducted by the National Sample Survey (NSS) have been the mainstay for analysing labour market trends
  2. The last round of the EUS was in held in 2011-12
  3. Now, there is no reliable way of updating employment trends
  4. The EUS has been replaced with an annual Period Labour Force Survey, and a time use survey but these are yet to be released

Why low job growth?

  1. GDP growth figures are probably overestimated on account of the mis-measurement of GDP in the new National Accounts Statistics (NAS) series
  2. The economy is probably growing much slower
  3. In manufacturing, in the last few years, the growth rates reported by the Index of Industrial Production (IIP), and the Annual Survey of Industries (ASI) are consistently lower than those reported by GDP in manufacturing, suggesting an overestimation of manufacturing value added in the NAS
  4. Demonetisation and the Goods and Services Tax (GST) seem to have dented informal sector production and employment

Way forward

  1. The recent output growth rates are probably overestimated after the latest revision of the National Accounts Statistics a few years ago, on account of the questionable methodologies and databases used
  2. The faulty barometer of economic well-being seems to be misleading the nation
Jul, 04, 2018

[pib] KVIC launches e-marketing system

Note4students

Mains Paper 3: Economy | Development and Employment

From UPSC perspective, the following things are important:

Prelims level: KVIC, KIMIS

Mains level: Promotion of indigenous Khadi to boost rural development through employment


News

Khadi Institution Management and Information System (KIMIS)

  1. The Khadi and Village Industries Commission (KVIC) launched an e-billing system named Khadi Institution Management and Information System (KIMIS).
  2. The system is an in-house single umbrella billing software for sale and purchase that could be monitored, round-the-clock, from any part of India.
  3. The system can be accessed from anywhere in the country for the sale and purchase of Khadi and Village Industries products.
  4. This software will give real-time data of sales and will also give the updated status of stocks of khadi bhawans and godowns, allowing better planning and control of inventory of the KVIC.
  5. He added that 480 Khadi institutions and showrooms are linked with this billing software and it will be useful in raising demand and supply of goods in high demand.

Back2Basics

Khadi and Village Industries Commission (KVIC)

  1. The Khadi and Village Industries Commission (KVIC) is a statutory body formed by the Government of India, under the Act of Parliament, ‘Khadi and Village Industries Commission Act of 1956’.
  2. It is an apex organization under the Ministry of Micro, Small and Medium Enterprises, with regard to khadi and village industries within India.
  3. Its head office is based in Mumbai, with its six zonal offices in Delhi, Bhopal, Bangalore, Kolkata, Mumbai and Guwahati.
  4. The Commission has three main objectives which guide its functioning. These are –
  • The Social Objective – Providing employment in rural areas
  • The Economic Objective – Providing saleable articles
  • The Wider Objective – Creating self-reliance amongst people and building up a strong rural community spirit.
Jun, 25, 2018

[op-ed snap] Countering India’s labour market imbalances

Note4students

Mains Paper 3: Economy | Development & Employment

From UPSC perspective, the following things are important:

Prelims level: NITI Aayog Action Agenda

Mains level: The newscard highlights dangers of low job growth and job displacement on the onset of new technologies like AI.


Context

Demographic Dividend – a benefit or bane?

  1. The issue of jobs has come into focus with forthcoming general elections.
  2. While economic growth has been impressive over the last couple of decades, job creation has been relatively slow.
  3. The increase in the share of young adults in the total population often called India’s “demographic dividend”, has turned out to be a problem rather than an asset.
  4. Whether or not job creation has slowed down in recent years has been debated vigorously, primarily owing to the poor quality of jobs data.

Jobs scenario in India

  1. Multiple data sources clearly show that job opportunities in India are, at present, limited, with the average annual addition to regular jobs during 2012-16 falling to 1.5 million from 2.5 million in 2004-12.
  2. Besides, job creation in India’s organized manufacturing sector experienced a sharp fall in 2012, later recovering only to a level considerably below any prior year during 2006-12.
  3. Furthermore, the share of regular workers with any form of social security has declined from 45% in 2011-12 to 38% in 2016.

Where the real problem lies- finds NITI Aayog

  1. NITI Aayog’s Action Agenda (AA), published over a year ago, attempted to find the issue.
  2. According to the AA, underemployment and poor job quality have been the real problems.
  3. No formula for the unemployment rate differs in India’s low labour force participation rate—the proportion of working-age people looking for jobs or working.
  4. It stands at its lowest in two decades, at 54%, compared to 62% in the late 1990s (it is currently around 70% in Brazil, China and Indonesia).

Find outs of NITI Aayog’s AA

  1. The AA has provided several good ideas for job creation, including labour law reforms at the state level, recognizing the difficult national political landscape as well as the wide cross-state variation in the nature of political constraints.
  2. Recent progress in this regard includes raising the minimum firm-level employment threshold for the application of the Industrial Disputes Act (that puts severe constraints on the hiring and firing of workers) from 100 to 300 workers.
  3. The AA has also identified labour-intensive sectors, such as apparel, electronics, food processing, gems and jewellery, financial services, and tourism, where employment needs to be encouraged.
  4. Furthermore, the report emphasizes the role of exports in job creation and recommends establishing coastal employment zones (CEZs), similar to China’s special economic zones (SEZs)

Health and Education- facing the real shortage

  1. There are some real imbalances across the economy, with some key sectors facing a shortage of skills and personnel. Such shortages are primarily in social services like health and education.
  2. The quality of these services, especially those available to low-income, remote and rural households, is shockingly low owing to the scarcity of quality doctors, nurses and teachers.

Automation and AI – filling the gap

  1. Another recently released NITI Aayog document, titled “National Strategy For Artificial Intelligence #AIforall”, proposes a strategy based exactly on such a principle of filling up the skill gap.
  2. For example, specialized software can be used to diagnose diseases (and prescribing appropriate medications) or grading students’ written work and providing feedback, thereby enabling large-scale online education.
  3. India’s information technology (IT) sector, until recently, had been able to create a number of high-skilled jobs due to a significant amount of offshore outsourcing by developed countries.
  4. In future, the support and maintenance services for AI, rather than IT, may be in demand, given that IT support itself is being robotized.

Way Forward: Countering Jobs- Skills Mismatch

  1. The new NITI document provides some specifics in this regard. However this document does not take seriously any job displacement threats from AI.
  2. For its future growth, India’s IT (and AI) sector needs to reinvent and position itself in a more innovative role, which will require considerable capacity building.
  3. Thus, there are serious imbalances, varying across sectors, between the availability of jobs and the supply of skills and workers.
  4. While good ideas to deal with them exist both within and outside the government, implementation is key. This is where the government often does not perform well.

Back2Basics

NITI Aayog Action Agenda

  1. The draft “Three Year Action Agenda” of the NITI Aayog been released in 2017  for 2017-18 to 2019-20.
  2. It focuses on seven key areas that include revenue and expenditure, economic transformation in major sectors, regional development, growth enablers, and reforms in governance, social sectors and sustainability.
  3. It is said to be a phasing out of Five Year Plan as a concept.
Jun, 20, 2018

Database on unorganised workers gets underway

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: UWIN — Unorganised Workers Identification Number, Socio-Economic and Caste Census 2011, Unorganised Workers Social Security Act, 2008

Mains level: Schemes for the welfare of people working in unorganized sector


News

Portable smart ID for workers

  1. The Centre has started work to create a national database and Aadhaar-seeded identification number system to facilitate welfare delivery to 40 crore workers in the unorganized sector
  2. This comes ten years after passing a law that envisaged a portable smart ID card for unorganized sector workers

Unorganised Workers Identification Number

  1. The Union Ministry of Labour has called for tenders to design, develop and run the new UWIN — Unorganised Workers Identification Number — Platform
  2. The “single unified sanitized database” will assign a ten-digit UWIN to every worker and include details of both nuclear and extended families of unorganized workers
  3. The Centre will create and maintain the platform and it is up to the states to identify and register unorganized workers
  4. The Socio-Economic and Caste Census 2011 will be used as the base for the platform, and other worker databases — from the states as well as other Central ministries such as Textiles and Health — will also be incorporated into UWIN
  5. The Unorganised Workers Social Security Act, 2008 had first mandated that every worker be registered and issued a smart ID card

Aadhar Mandatory

  1. Those who have enrolled for Aadhaar but have not yet received it can provisionally enroll themselves into the UWIN system with their Aadhaar Enrollment ID
  2. They will be assigned a UWIN number only when they are able to link Aadhaar with their dataset at a later stage
Jun, 15, 2018

India among 90 nations without paid paternity leave for new dads: UNICEF

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: UNICEF

Mains level: DEmand for paternity leave across the world and various impediments in its implementation


News

No national policy on paternity leave

  1. India is among almost 90 countries in the world without national policies in place that ensure new fathers get adequate paid time off with their newborn babies
  2. Almost two-thirds of the world’s children under one-year-old, nearly 90 million, live in countries where their fathers are not entitled by law to a single day of paid paternity leave
  3. This was revealed in a study conducted by UNICEF

Family-friendly policies being formulated

  1. Around the world, momentum for family-friendly policies was growing
  2. For example, in India, officials are proposing a Paternity Benefit Bill for consideration in the next session of Parliament which would allow fathers up to three months of paid paternity leave
  3. Earlier this year, UNICEF modernized its approach to parental leave provisions, with up to 16 weeks of paid leave for paternity across all of its offices worldwide

Need for paternity leave

  1. Evidence suggests that when fathers bond with their babies from the beginning of life, they are more likely to play a more active role in the child’s development
  2. Research also suggests that when children positively interact with their fathers, they have better psychological health, self-esteem and life-satisfaction in the long-term
May, 08, 2018

[op-ed snap] Rural income: looking beyond agriculture

Note4students

Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The suggestions to increase rural income through non-farm sector.


News

Ambitious dream of the government

  1. The government has announced its ambitious target of doubling farmers’ income by 2022-23 in 2015-16
  2. Incomes would have to grow annually by 10.4% to double in seven years

Reality: The current situation

  1. The data on growth rates of farm income given by NITI Aayog in its policy paper on doubling farmers’ income shows that:
  2. the real income of farmers has grown at a rate of 3.4% between 1993 and 2016

 Raising of the minimum support prices (MSPs) will not help

  1. Recent efforts to improve farmers’ income have been focused on raising minimum support prices (MSPs)
  2. Historical evidence shows that MSP does not directly translate into higher incomes for farmers due to a deficient ground-implementation framework
  3. Additionally, high MSPs result in market distortions and render Indian exports uncompetitive in world markets

Thus, it does not appear realistic to double the real income of a rural household from agriculture alone. Incomes of rural households need to be augmented from non-farm income sources

What is needed?

  1. A shift of workforce is required from the farm to the non-farm sector, including household and non-household manufacturing, processing, mining and quarrying, repair, construction, trade and commerce, transport, communication and tourism, etc.
  2. More than 45% of the workforce is engaged in a sector(agriculture) which contributes less than 17% to the country’s GDP
  3. This share is poised to further decline; agriculture cannot sustain households dependent on it for long
  4. The sooner we recognize this, the faster we will be able to evaluate policy alternatives

Comparison with China

  1. China, whose farm sector was similar to that of India in the 1960s, now employs only 27.7% of its workforce in agriculture
  2. It has left India far behind in value of agriculture production and rural household incomes
  3. This is because first, it produces much more from each hectare than India does, and second, it rigorously developed non-farm income sources
  4. Labour-intensive “township and village enterprises” (TVEs) were established in rural areas and saw keen participation from the private sector due to low-wage labour
  5. TVEs became engines of growth for Chinese rural non-farm sector
  6. As a result, rural poverty levels are as low as 2.5% now in China while in India, they remain as high as 40% in some states

India should follow the footsteps of China

  1. Taking a cue from its neighbour, India needs to undertake a drive to intensify non-farm employment in its rural areas
  2. Rural households need to be encouraged and enabled to engage household members in non-farm livelihood and contribute to the household income through remittance earning or direct earning

 The manufacturing sector in rural areas needs a great push

  1. The thrust on the manufacturing sector in rural areas has been woefully inadequate. Manufacturing activity, especially employing modern technology, in rural areas has been neglected
  2. Lack of required skills and technical knowledge are the major barriers, apart from good quality infrastructure and power
  3. This has led to minimal private sector investment
  4. Growth of rural manufacturing requires massive investment in skill formation and entrepreneurship development as well as in infrastructure

The way forward

  1. Overreliance on using pricing and MSPs to boost farmer incomes may be short-sighted as Indian agriculture prices need to be aligned with global prices
  2. Focus on non-farm incomes will thus go a long way in raising farm household as well as farmer incomes
May, 03, 2018

Policy for domestic workers ready

Note4students

Mains Paper 2: Governance | Government policies & interventions for development in various sectors & issues arising out of their design & implementation

From UPSC perspective, the following things are important:

Prelims level: National policy for domestic workers

Mains level: Working conditions of domestic workers and measures taken to improve them


News

National policy for domestic workers

  1. The draft national policy for domestic workers would make recommendations on working hours, leave entitlements and minimum wages, but would leave it to states to notify them in accordance with their existing legislations
  2. It is likely to be announced this month

Proposed provisions

  1. Boards of registration could be set up at state, district, or even Resident Welfare Association (RWA) level
  2. These boards would administer social security benefits for workers, including Provident Fund contribution by employers and medical insurance
  3. The draft policy envisages that states would set up mechanisms to register and regulate placement agencies for domestic workers, with no provision for Central regulation
Apr, 27, 2018

India has to create more formal jobs: World Bank

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: World Development Report 2019, Systematic Country Diagnostic (SCD), World Bank

Mains level: India’s informal job sector and urgent need of formalisation


News

Need for formalisation

  1. The World Bank in its draft World Development Report 2019 said in India the pay-offs in the formal sector are over twice as much as in the informal sector
  2. It made a strong case for creating more formal jobs in India

Need of formalisation

  1. Persistent informality and low-productivity employment pose the greatest challenge to developing countries
  2. Informal workers show resourcefulness in handling the constraints they face, but the businesses they run are too small to raise the livelihoods of their owners
  3. Informal firms add only 15% of the value per employee of formal firms
  4. The size of India’s informal sector has remained around 91% despite economic and technological revolution

Other similar observations

  1. In another draft report titled Systematic Country Diagnostic (SCD) for India released in February, the World Bank said India needs to create regular, salaried jobs with growing earnings rather than self-employed ones
  2. In a report titled ‘Jobless Growth?’ released earlier this month, the World Bank said to keep employment rates constant, India needs to create 8 million jobs per year as it adds 1.3 million to the working-age population every month

Counting informal jobs

  1. The government recently decided to start counting jobs created in the non-farm informal sector
  2. The government has asked the labour bureau under the Union labour ministry to begin counting jobs created in establishments deploying less than 10 people
  3. It means that establishments and shops run by a single owner or with one employee too will be counted as employment generation
Apr, 20, 2018

[op-ed snap] Demographic dividend, growth and jobs

Note4students

Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Demographic dividend, human capital, etc.

Mains level: Importance of Demographic Dividend for India, how to build India’s human capital, etc.


News

India has one of the youngest populations in an aging world

  1. By 2020, the median age in India will be just 28, compared to 37 in China and the US, 45 in Western Europe, and 49 in Japan
  2. Importance: Demographics can change the pace and pattern of economic growth

What is demographic dividend?

  1. Demographic dividend refers to the growth in an economy that is the resultant effect of a change in the age structure of a country’s population
  2. The change in age structure is typically brought on by a decline in fertility and mortality rates

Demographic dividend can increase economic growth through six channels

  1. The first channel is through the swelling of the labour force, as more people reach working age
  2. The second channel is the increased fiscal space created by the demographic dividend to divert resources from spending on children to investing in physical and human infrastructure
  3. The third channel is the rise in women’s workforce that naturally accompanies a decline in fertility, and which can be a new source of growth
  4. The fourth is the increase in savings rate, as the working age also happens to be the prime period for saving
  5. The fifth channel is an additional boost to savings that occurs as the incentive to save for longer periods of retirement increases with greater longevity
  6. The sixth channel is a massive shift towards a middle-class society that is already in the making

But demographic dividend can also transform into a curse

  1. The growth benefit of a demographic dividend is not automatic
  2. A lot depends on whether the bulge in working population can be trained, and enough jobs created to employ the 10 million more people who will join the labour force every year
  3. There is mounting concern that future growth could turn out to be jobless due to de-industrialization, de-globalization, and the fourth industrial revolution and technological progress
  4. While digital technologies may enable the creation of new products and more productive jobs, they may also substitute existing jobs
  5. India may not be able to take advantage of these opportunities, due to a low human capital base and lack of skills

State-wise opportunity

  1. Whether the demographic dividend promotes growth or transforms into a curse depends on how prepared the states that should benefit from a young population are
  2. Bihar, Uttar Pradesh and other lagging states will experience a much bigger bulge in working population than more developed states like Tamil Nadu
  3. Unfortunately, the less-developed states are also the least prepared to take advantage of the demographic change they will undergo

India’s human capital is not enough

  1. India’s human capital base may not be adequate for the future or in a position to benefit from the demographic dividend
  2. India is home to the world’s largest concentration of illiterate people in the world
  3. It has made gains in human development, but challenges remain
    (human capital: the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country)

What should be done?: Building human capital

  1. Investing more and more efficiently in people will enable India to tap into its demographic divided, and prepare the country for the future
  2. There is a powerful link between these investments and economic growth, stability and security
  3. Investing in people through healthcare, quality education, jobs and skills helps build human capital,
  4. which is key to supporting economic growth, ending extreme poverty, and creating more inclusive societies
  5. New technology could be exploited to accelerate the pace of building human capital, including massive open online courses and virtual classrooms
  6. Policymakers should have a greater incentive to redouble their efforts to promote human capital so that it can contribute to economic growth and job creation

The way forward

  1. No country can achieve its potential and meet the challenges of the 21st century without the full participation of working population
  2. High-quality education is one of the strongest ways for countries to reduce poverty, achieve gender equality, and create more jobs
  3. Building human capital translates into higher rates of economic growth and job creation
  4. Demographic dividend without investments in human capital will be a wasted development opportunity,
  5. and it will further widen economic and social gaps, instead of narrowing them
Mar, 23, 2018

Parliament passes Payment of Gratuity Bill

Note4students

Mains Paper 2: Polity | Parliament & State Legislatures – structure, functioning, conduct of business, powers & privileges & issues arising out of these

From UPSC perspective, the following things are important:

Prelims level: Payment of Gratuity (Amendment) Bill, Maternity Benefit (Amendment) Act, 2017

Mains level: Labour law reforms and their effects


News

Payment of Gratuity (Amendment) Bill passed

  1. Parliament passed a key bill that will empower the government to fix the amount of tax-free gratuity and the period of maternity leave with an executive order
  2. The legislation will enable the government to enhance the ceiling of tax-free gratuity to Rs. 20 lakh from the existing Rs. 10 lakh for employees falling under the Payment of Gratuity Act

Other benefits

  1. The bill also allows the government to fix the period of maternity leave for female employees as deemed to be in continuous service in place of the existing 12 weeks
  2. The amendment comes in the backdrop of Maternity Benefit (Amendment) Act, 2017 enhancing the maximum maternity leave period to 26 weeks
Mar, 21, 2018

Government extends facility of fixed-term employment for all sectors

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: Fixed-term employment, Industrial Establishment (Standing Order) 1946

Mains level: Variuos initiatives being taken to ease labour laws and doing business


News

More formal employment 

  1. The government has extended the facility of hiring workers on fixed-term employment to all sectors
  2. This has been done for improving the ease of doing business for players intending to hire people for completing specified projects, tasks or orders

Fixed term employment

  1. The concept of fixed-term employment defines the tenure of employment as well as other associated conditions of service and remunerations, which are provided to regular employees under various labour laws
  2. The fixed term employment was defined as a workman who is employed on a contract basis for a fixed period

Present status

  1. This facility was available only for the apparel manufacturing sector as per the Industrial Establishment (Standing Order) 1946

How will this amendment benefit workers?

  1. The fixed worker would be entitled to all benefits like wages, hours of work, allowances and others statutory benefits, not less than permanent workmen
  2. Services of the temporary workman shall not be terminated as punishment unless he has been given an opportunity of explaining the charges of misconduct alleged against him
  3. The employer can directly hire a worker for a fixed term without the mediation of any contractor
Mar, 13, 2018

New metric for jobs growth to include informal economy

LNote4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: Labour Bureau, NITI Aayog, TDS, GSTN, sixth economic census

Mains level: Job growth and related issues


News

Expanding the scope of job creation in the country

  1. The government has now decided to start counting jobs created in the non-farm informal sector
  2. The government has asked labour bureau under the Union labour ministry to begin counting jobs created in establishments deploying less than 10 people
  3. It means establishments and shops run by a single owner or with one employee too will be counted as employment generation

A pragmatic definition of workers

  1. In July 2017, a government task force headed by then NITI Aayog vice-chairman had suggested adopting a “pragmatic definition” of formal workers
  2. It recommended that workers covered under private insurance or pension, those subjected to tax deduction at source (TDS) and those working in companies excluded from the Goods and Services Tax Network (GSTN) should be considered for counting of jobs

Data coverage

  1. The labour ministry will take the 2013-14 sixth economic census as the base for the new survey of informal jobs
  2. The annual household survey by the department of statistics, the quarterly establishment survey by labour bureau covering eight sectors and 18 subsectors and now the new survey of establishments with less than 10 employees will give a comprehensive picture of jobs in India
Feb, 14, 2018

India needs to create more salaried jobs: World Bank

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: World Bank, Systematic Country Diagnostic, Demographic dividend, employment-unemployment surveys

Mains level: Rising number of job seekers and low employment opportunities


News

Draft Systematic Country Diagnostic

  1. India needs to create regular, salaried jobs with growing earnings rather than self-employed ones
  2. This needs to be done in order to join the ranks of the global middle class by 2047—the centenary of its Independence
  3. The World Bank said this in a draft Systematic Country Diagnostic (SCD) for India

About SCD

  1. The SCD is an analytical exercise that the World Bank conducts in all countries
  2. It articulates an analysis of the most important opportunities and challenges to achieving, in that country, the two goals the World Bank Group holds itself accountable for—eliminating extreme poverty and boosting shared prosperity

Demographic dividend may turn into a demographic curse

  1. Between 2005 and 2012, the Indian economy generated about 3 million new jobs per year, while an extra 13 million people entered the working age population each year
  2. There is no recent credible jobs data as India conducts the comprehensive employment-unemployment surveys only once in five years
  3. The World Bank warned that with an increasing number of youths needing employment, the jobs deficit that India faces has the potential to turn the much-awaited demographic dividend into a demographic curse

Reforms in land and labour markets required

  1. The existing stringent labour regulations create a segmented labour market with a high level of protection for a very small fraction of workers in jobs
  2. It creates high barriers for the entry of other workers into the protected segment of the formal labour market
  3. Flexible labour markets that facilitate the reallocation of workers in response to market conditions are important for productivity and job growth
  4. Well-functioning land markets require clearly defined property rights, a reliable land registry, and predictable processes for investment and changes in land-use
Feb, 07, 2018

[op-ed snap] The manufacturing muddle

Note4students

Mains Paper 3: Economy | Effects of liberalization on the economy, changes in industrial policy & their effects on industrial growth

From UPSC perspective, the following things are important:

Prelims level: Union Budget, inverted duty structure, GST, Sarva Shiksha Abhiyaan, Annual Labour Bureau survey, Economic Survey 2018, Employees’ Provident Fund Organisation, twin balance sheet problem, Insolvency and Bankruptcy Code

Mains level: Rising youth population and lowering jobs


Context

Correction in IDS

  1. The Union Budget has reinforced the correction of the inverted duty structure (IDS)
  2. An IDS means higher duty on intermediate as opposed to final/finished goods
  3. Final/finished goods often enjoy concessional customs duty under some schemes

Effects of IDS

  1. Chinese/other imports have swamped India’s small- and medium-sized enterprises and large manufacturing companies
  2. It has raised the import-intensity of manufacturing as well as dampened job growth by raising capital intensity
  3. The share of manufacturing in GDP and employment has not risen since 1991

Benefit by GST

  1. The goods and services tax (GST), especially the IGST or Integrated GST component, has begun to erode the advantage that the IDS was giving to foreign exporters in Indian markets

China’s strategic industrial policy

  1. China had followed a strategic industrial policy for two decades and thus stolen a march on India in labour-intensive manufacturing exports
  2. China reduced the absolute numbers and percentage of the poor in the population by absorbing surplus labour in manufacturing
  3. One major reason for this was that China’s agricultural and rural income growth was much higher
  4. It sustained consumer demand and also generated industrial jobs much faster
  5. India’s policy structure failed to utilise its labour advantage to grow labour-intensive manufacturing exports

Return to pre-1991 ‘protectionism’?

  1. Customs duties have been raised on capital goods and electronics, and silica for use in manufacture of telecom-grade optical fibre
  2. Duties have also been raised on labour-intensive manufactures such as food processing, footwear, jewellery, furniture, toys and games

Effect of tariff reductions

  1. Reduction of tariffs (1991-1998) was precipitous, from an average rate of 150% to 40% by 1999
  2. Indian manufacturers, unreasonably protected till 1990, were suddenly exposed to competition
  3. A slower reduction would have enabled them to adjust to import competition, upgrade technology, and compete
  4. The sudden onslaught of lower-priced imports decimated many domestic enterprises
  5. This overexposure gathered momentum as from the early 2000s, free trade agreements with much of East/South-east Asia reduced tariffs further

Rise in informal employment

  1. Beginning 2000, the number of those joining the labour force grew sharply to 12 million per annum till 2004-05
  2. As domestic manufacturing employment growth was slow, they could only be absorbed in agriculture or traditional services
  3. Two fortuitous, though policy-induced, developments have saved the day since 2004-05
  4. As population growth fell from 1990 onwards, entrants to the labour force fell
  5. As school education access grew rapidly, post-Sarva Shiksha Abhiyaan, children remained in school

Present challenge

  1. These entrants, much better educated than the earlier cohort, are now entering the labour force
  2. They want either white-collar jobs in the private or preferably public sector or in industry or in modern services
  3. Data from the government’s Annual Labour Bureau survey and the Centre for Monitoring Indian Economy indicate that job growth is lower than entrants to the labour force
  4. The only sector with a significant increase in labour absorption has been services

Way forward

  1. The GST, Economic Survey 2018 has rightly claimed, led to a formalisation of some informal firms, and hence workers (by registration in the Employees’ Provident Fund Organisation)
  2. The resolution of the twin balance sheet problems (of companies being over-leveraged and banks unable to lend due to mounting non-performing assets), together with the Insolvency and Bankruptcy Code, should now open the floodgates for new manufacturing investment
  3. Policy must attempt to close the loop between rising demand and supply through consumer demand
Jan, 23, 2018

India improves global talent competitiveness ranking to 81st

Note4students

Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: Global index of talent competitiveness

Mains level: India’s position in various indexes and reforms required to improve ranking


News

Global index of talent competitiveness

  1. India has moved up on a global index of talent competitiveness to the 81st position
  2. India has improved its position from 92nd last year
  3. India was at the 89th place in 2016 on the index

About the index

  1. The index measures how countries grow, attract and retain talent
  2. It is released every year on the first day of the World Economic Forum (WEF) annual meeting
  3. The study was released by Adecco, Insead and Tata Communications this year
Jan, 15, 2018

First labour code on wages likely to be passed in Budget session

Image source

Note4students

Mains Paper 2: Governance | Government policies & interventions for development in various sectors & issues arising out of their design & implementation.

From UPSC perspective, the following things are important:

Prelims level: Wage code bill, Payment of Wages Act, 1936, the Minimum Wages Act, 1949, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976

Mains level: Reforms in labour laws


News

Wage Code Bill for labour reforms 

  1. The government will push its first labour code – Wage Code Bill – in the forthcoming budget session
  2. This would enable government to set benchmark minimum wage for different regions

About the bill

  1. The draft Code on Wages Bill 2017 was introduced in the Lok Sabha in August 2017
  2. The bill seeks to combine Payment of Wages Act, 1936, the Minimum Wages Act, 1949, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976 into one code

Important provisions of the bill

  1. The new Code on Wages will ensure minimum wages to all and timely payment to employees irrespective of the sector without any wage ceiling
  2. The bill proposes a concept of statutory National Minimum Wage for different geographical areas
  3. It will ensure that no state fixes the minimum wage below the benchmark decided by the Centre for that particular area
  4. It also provides for an appellate authority between the claimed authority and the judicial forum which will lead to speedy, cheaper and efficient redressal of grievances and settlement of claims

Restructuring labour laws

  1. The Ministry of Labour and Employment aims to combine over 44 labour laws into four broad codes in wages, industrial relations, social security, and occupational safety, health and working conditions
  2. The other three codes are at different levels of consultations with the stakeholders
Dec, 14, 2017

[op-ed snap] A job crisis, in figures

Note4students

Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Employment data discussed in the newscard. Employment issue is specially mentioned in the Mains Syllabus, and is therfore very important.


News

What is the main issue?

  1. Much of the debate on employment performance over the last few years has been mired in ambiguity due to the absence of high-frequency employment statistics

Step taken by the government

  1. The government has put in place a taskforce to revamp India’s employment data architecture, but new employment numbers are unlikely to come out anytime soon

Statistics which underscore the severity of India’s job crisis
First: Data from the Labour Bureau’s Annual Household Employment survey

  1. It shows a decline in total employment from 480.4 million (2013-14) to 467.6 million (2015-16)
  2. The only sector to have witnessed a significant increase in employment was wholesale and retail
  3. In the manufacturing sector ( both organised and unorganised) employment has declined over the same time period

Second: data from the Annual Survey of Industries (ASI)

  1. It is an enterprise survey which covers only the organised manufacturing sector
  2. It is found that employment to have increased from 12.94 million to 13.25 million between 2013-14 and 2014-15
  3. Given that there is no ASI data beyond 2014-15
  4. Calculations suggest that between 2014-15 and 2015-16, employment in the private corporate manufacturing sector (PCMS) increased by approximately four lakh
  5. In the following time period (2015-16 to 2016-17), a little over three lakh jobs were created in this sector
  6. Given that this is the organised sector where the “good productive” jobs lie, the pace of job creation is far from adequate

Third: NSSO’s recently-released report, “Unincorporated Non-Agricultural Enterprises” (73rd round)

  1. It provides data on unregistered/unorganised firms in the non-agricultural sector (excluding construction) for the year 2015-16
  2. It is found the total number of workers engaged in unorganised manufacturing enterprises increased from 34.88 million to 36.04 million between 2010-11 and 2015-16
  3. On the other hand, the total number of workers engaged in non-household establishments (which employ at least one hired labourer) declined by 0.67 million
  4. Household enterprises pay lower wages and have lower productivity as compared to non-household establishments
  5. The increasing employment in household enterprises is thus a disturbing phenomenon
  6. It seems to be a consequence of the lack of alternative decent employment opportunities

Fourth: Statistics from various administrative data sets

  1.  A noteworthy source in this context is the government’s recently launched National Career Services (NCS), which attempts to provide a nation-wide online platform for jobseekers and employers
  2. As of March 2016, 36.25 million job seekers were registered on the NCS portal. By October 2017, this had increased to 39.92 million against a mere 7.73 lakh vacancies posted on the exchange
  3. An analysis of the NCS data is fraught with several challenges such as limited coverage
  4. And the fact that job seekers registered on the exchange are often already employed in low paying establishments and are in search of better paying jobs in the organised sectors of the economy

The way forward

  1. The numbers given above reinforce the enormous gap between the pace of job creation and demand for productive jobs.
  2. An examination of multiple datasets reaffirm the acuteness of India’s jobs crisis
  3. It is time we stop citing the lack of reliable and timely data as an excuse for having a meaningful debate on job creation

 

Dec, 14, 2017

[op-ed snap] Two myths about automation

Note4students

Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Particulars of Automation

Mains level: Automation is an important topic of discussion these days because of its affect on jobs. This article supports automation and suggests some measures which can lessen the affects of it.


News

What is automation?

  1. Automation can be defined as the technology by which a process or procedure is performed without human assistance
  2. In other words, Automation or automatic control, is the use of various control systems for operating equipment such as machinery, processes in factories, boilers and heat treating ovens, switching on telephone networks, steering and stabilization of ships, aircraft and other applications and vehicles with minimal or reduced human intervention, with some processes have been completely automated

Reports on Automation

  1. According to a report, Automation Will Eliminate 9% Of US Jobs in 2018
  2. And one-third Of US workers could be jobless by 2030 due to Automation
  3. Reports like these leave the impression that technological progress and job destruction are accelerating dramatically (First Myth)
  4. But there is no evidence of either trend

Are jobs really at risk?

  1. Everyone thinks they know is that previously safe jobs are now at risk (second myth)
  2. Once upon a time, it was possible to argue that robots would displace workers engaged in routine tasks, but not the highly skilled and educated
  3. In particular, machines, are not capable of tasks in which empathy, compassion, intuition, interpersonal interaction, and communication are central
    Automation in law
  4. Machines are already more efficient than legal associates at searching for precedents
  5. But an attorney attuned to the personality of her client still plays an indispensable role in advising someone contemplating a messy divorce whether to negotiate, mediate, or go to court
  6. Likewise, an attorney’s knowledge of the personalities of the principals in a civil suit or a criminal case can be combined with Big Data and analytics when the time comes for jury selection
  7. The job is changing, not disappearing
    Automation in medical field
  8. It’s not that nurses’ aides are being replaced by healthcare robots; rather, what nurses’ aides do is being redefined
  9. And what they do will continue to be redefined as those robots’ capabilities evolve from getting patients out of bed to giving physical therapy sessions and providing emotional succour to the depressed and disabled
  10. Thus, the coming technological transformation won’t entail occupational shifts on the scale of the Industrial Revolution
  11. Important concern: But it will be more important than ever for people of all ages to update their skills and renew their training continuously, given how their occupations will continue to be reshaped by technology

What is the real problem?

  1. In the US, board membership for workers’ representatives, strong unions, and government regulation of private-sector training are not part of the prevailing institutional formula
  2. As a result, firms treat their workers as disposable parts, rather than investing in them (for their skill development)
  3. And government does nothing about it

What is the solution?

  1. Instead of a “tax reform” that allows firms to expense their capital outlays immediately, why not give companies tax credits for the cost of providing lifelong learning to their employees?
Dec, 12, 2017

Railways halts 2004 job scheme for children of staff opting for VRS

Note4students

Mains Paper 2: Governance | Government policies & interventions for development in various sectors & issues arising out of their design & implementation.

From UPSC perspective, the following things are important:

Prelims level: Principle of equal opportunity, Article 14 and 16 of the Constitution

Mains level: Schemes/provisions that violate basic principles of Constitution


News

Employment initiative for family members of employees stopped

  1. Railways has stopped an employment initiative launched in 2004 when it started giving jobs to children of employees in the lower tier in return for voluntary retirement
  2. The Liberalised Active Retirement Scheme for Guaranteed Employment for Safety Staff (LARSGESS) was suspended indefinitely last month
  3. Railways decided to approach the Supreme Court to determine if the scheme is Constitutionally tenable

Why suspension of the scheme?

  1. The move comes after the Punjab and Haryana High Court said in July while hearing a case over the scheme, that it violated the Constitution on the “principle of equal opportunity” for all in government jobs
  2. Such a policy was violative of Article 14 and 16 of the Constitution of India the court found

Divergent views of judiciary

  1. In the past, the Kerala High Court and Patna High Court had found merit in the scheme
  2. So, railways wants SC to decide this matter for entire country as jurisdiction of high courts is limited in their respective states
Nov, 07, 2017

[op-ed snap] Aiming high, looking far

Note4students

Mains Paper 3: Economy | Development and employment

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: It is important to know ‘the other side of the story’, as in last few months we had many articles which criticized demonetisation. But this article shows opposite views and how it will be helpful in countering employment issues.


News

Context

  1. The article talks about the positive side of the demonetisation

Is unemployment our real problem?

  1. Our unemployment rate of 4.9 per cent is not  vague but a wages problem(i.e. low wages)
  2. This diagnosis is important
  3. As our real problem is wages, India needs the higher productivity that comes from structural change: Formalisation, industrialisation, urbanisation, skilling and deep financial markets

How demonetisation made India a better habitat for formal job creation?
There are five reasons behind this:

FIRST: Rs 18 lakh crore new lending capacity

  1. Demonetisation has reduced cash with citizens
  2. Bank deposits have increased by somewhere between Rs 2.8-4.3 lakh crore
  3. Currently, banks are lending this liquidity to the RBI but when they start doing their jobs well, this liquidity  will boost investment and formal job creation

SECOND: 7.6 crore new monthly digital transactions

  1. Demonetisation exploded the number of digital payments on UPI/Bhim from 1 lakh in October 2016 to 7.7 crore in October 2017
  2. Digitisation is important for formalisation because it makes regulatory arbitrage and tax evasion difficult

THIRD: 3 lakh crore new financial savings

  1. Demonetisation has catalysed a savings shift away from gold and real estate
  2. The eight months after demonetisation saw mutual fund inflows of Rs 1.69 lakh crore and the three months after demonetisation saw Life Insurance Premiums rising by 46 per cent
  3. Greater financialisation of savings creates a virtuous cycle for formal job creation because they deepen and broaden domestic capital markets

FOURTH: 2 per cent lower interest rates

  1. Expensive loans are better than no loans but the cost of money has been crippling for India’s entrepreneurs
  2. Lowering interest rates is a policy priority and banks had been only passing on 50 per cent of lower policy rates to customers; in the year after demonetisation this has risen to 100 per cent
  3. India’s economic trajectory suggests interest rates could reduce another 3 per cent over time
  4. sustained formal job creation needs the lower interest rates that come from macroeconomic stability, fiscal discipline, muted inflation expectations and an Independent Monetary Policy Committee

FIFTH: permanent damage to our sense of humour about the rule of law

  1. Demonetisation targeted a less-cash society because cash is the primary tool of corruption
  2. Demonetisation did not end corruption but raised its costs
  3. And ending our sense of humour about the rule of law that bred a riskless view of cash is an important pre-condition for sustained, formal, high-wage job creation

The way forward

  1. The problem for India’s youth is not jobs but wages
  2. As India completes a year of demonetisation, it’s early for conclusions but the early results are encouraging
Oct, 14, 2017

To reverse women leaving the workforce, policies must change behaviour before they change beliefs

Image Source

News

Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Important issue of women’s workforce is discussed in the article. The UPSC is known to ask questions on these kind of issues.


News

Context

  1. In most countries, higher numbers of educated women have resulted in the improvement of their societal status and economic participation
  2. But in women’s participation in economic sector is very low
  3. The article talks about this serious issue

Low participation of women in the economic sphere

  1. Only 27 per cent of working-age women in India work
  2. The number fell sharply in the last decade from 43 per cent to 27 per cent
  3. Nepal and Bangladesh are way ahead, leaving only the Arab countries and Pakistan behind India

The World Bank report, ‘Precarious Drop: Reassessing Patterns of Female Labour Force Participation in India‘

  1. According tot the report, participation of women in economic sector depends on their marital-status, age, education, family labour composition and whether in rural or urban India
  2. Stability in family income levels also lead to women dropping out of the workforce
  3. Other factors include lower levels of job creation, availability of very low paying jobs in the informal sector, poor infrastructure, safety issues, and boys outnumbering girls in technical and professional education
  4. The study concludes that “education skilling and legal provisions may not be sufficient”

What are the acceptable norms of work in India?

  1. In a heterogeneous country like India, ‘acceptable’ norms of work may differ based on income, caste, rural/urban and informal/formal sector
  2. One belief is allpervasive: women are primarily homemakers and men breadwinners

Is breaking stereotypes really difficult?

  1. Research in neuroscience states that deep-seated ‘typical’ beliefs regarding race, caste, gender and other social categories get embedded or hardwired in the brain
  2. Inaccurate to start with, the brain finds it difficult to ‘unlearn’ them even when the reality has changed. It interprets new data in a biased manner to confirm originally held beliefs (confirmatory bias)

Can behavioural changes counter these stereotypes?

  1. Research in behavioural design provides evidence that this is indeed possible and has been successfully pursued in many countries
  2. There are ‘behavioural insights’ groups advising governments in the US, Britain, Australia and Germany

Misguided policies

  1. Government and corporate sector policies, instead of taking steps to encourage and hasten this permeability, have been misguided
  2. The flawed legislation introduced recently increasing maternity benefits from three to six months is a case in point
  3. For ensuring that women don’t opt out of work, it reinforces gendered norms and unwittingly places women at a disadvantage
  4. What could have helped instead is a combination of maternity and paternity leave, on a ‘use it or it lapses’ basis

The way forward

  1. Involving women in the decisionmaking process and in leadership roles, rather than providing benefits passively, can have far-reaching benefits
  2. Behavioral design, when complemented by a judicious mix of legislation and incentives, can go a long way in resetting norms sooner
Oct, 12, 2017

[op-ed snap] Tapping potential of India’s other half

Note4Students

Mains Paper 1: Role of Women

The following things are important from UPSC perspective:

Prelims: Not much

Mains level:  Female labour force participation rate in India is around 27% which is abysmally low in comparison to China and Western nations. This article gives some reasons for the same and solutions of how to increase female work participation.

 


News

Context

India has a low female work participation ratio.

In global context women outnumber men in positions with lower salary, and are employed in industries that pay less.

Why low female labour force participation?

  1. Among professionals, where equal pay for equal work is the norm, women fall behind because of significant transitions of their lives such as child bearing and rearing.
  2. An American study put the so-called motherhood penalty — the average by which women’s future wages fall at 4 per cent per child, and 10 per cent for the highest-earning and most skilled women.
  3. Society at large gains from its quality reproduction, but the bulk of the cost is borne by women
  4. Wherever there are fewer jobs, men corner the available jobs, as they are seen as the primary wage earners.

What can be done to get more women working and narrow the gender gap?

  1. Flexible working hours and decent conditions of work, including security at the workplace and during the commute to and from the workplace.
  2. The need is for liberal policies such as letting both men and women have equal access to flexible working hours and leave for care.
  3. To let women continue with their work after child birth and enhance the participatory effort by both parents to raise families.
  4. Most countries have adopted contributory pension plans because women who take time out from work to look after the young and earn less than men at a similar stage in their working lives will not be able to build a decent retirement nest.
  5. This is important especially in the West, given high divorce rates among the elderly; but could be a problem in this country as well.

Forgoing women in the workforce is to forgo a large part of the nation’s economic potential.

 

 

Oct, 03, 2017

From Textile to IT: Wave of Job Losses Hits New And Old Economy

Note4students

Mains Paper 3| Indian Economy: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment

From UPSC perspective, the following things are important:

Prelims level: Schemes: TWRFS and RGSKY

Mains level: Understanding the phenomenon of unemployment in the economy


News:

Context

  1. The article elaborates on the series of job losses witnessed by the economy in multiple sectors in the last 2 years.
  2. The author has tried to collate data from various ministries and has tried to connect the dots.

 

The main reason for job losses is following-

  1. There is hardly any growth in private investment, private consumption and exports. The growth in economy is fuelled by government spending only.

 

Scenario in textile sector-

  1. Exports and production is down due to slump in both external and domestic demand
  2. Demonetisation and transition to GST has hit small players
  3. Labour issues and cost of production is also causing structural issues in the sector
  4. Most of the units that have been shut in the sector belong to power loom textile
  5. The government does not capture data from the small and medium scale textile sectors, hence the distress in these areas is not visible.

 Important observations

  1. Capital goods firms are struggling as most of the downstream sectors are saddled with excess capacity and low demand.
  2. Labour bureau’s Quarterly Employment Surveys (QES) are also showing downslide in employment growth because of the layoffs in IT/BPO and financial services sector, which were earlier the key drivers of growth in these surveys.

Textile Workers Rehabilitation Fund Scheme (TWRFS)

  • The scheme was introduced in the year 1986
  • Aim: to provide relief to workers rendered jobless due to permanent closure of non-SSI (Small Scale Industry) textile mills in private sector
  • Relief: workers who have suffered job loss are given wages for three years on tapering basis
  • This scheme has been merged under Rajiv Gandhi Shramik Kalyan Yojana in 2017

Rajiv Gandhi Shramik Kalyan Yojana (RGSKY)

  • Introduced in 2005
  • This is an unemployment benefit scheme when the unemployment is caused due to closure of a factory or permanent invalidity arising out of non-employment injury
  • The unemployment benefit is provided for the period of 12 months
  • This also covers medical care for the beneficiary and the beneficiary’s family

Back2basics

  1. New Economy and Old Economy:
    Old Economy includes industries embedded in the industrial revolution and the mass production of physical goods. Eg Energy, automobile, steel etc
    New economyis the result of the transition from a manufacturing-based economy to a service-based economy. Eg. IT and IT-es industry
  2. Capital goods are goods that are used in producing other goods
  3. Meaning of excess capacity and low demand: when a factory is not utilising its full capacity due to low demand then there is bound to be stress in the sector
  4. Private Investment: the investment coming in from private players in the economy to purchase assets eg. Roads built by private players, spectrum sale etc
  5. Private consumption: it is the consumption of goods and services by private households.

 

 

 

Sep, 20, 2017

Women employment rate in India sees dramatic drop in last 20 years

Note4students

Mains Paper 1: Social issues | Role of women and women’s organization

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The data in the article presents an important issue related to Indian Society.


News

World Bank report on Indian Women

  1. A team of economists from the World Bank released a report on the labour force participation of women in India
  2. Using data from the NSSO, this report shows that labour force participation rate of women in India has slipped dramatically in the last 20 years

Particulars of the report

  1. The drop has been most dramatic among women in rural India
  2. Research shows that while nearly half the rural women aged 15 years and above were “in the labour force” in 1993-94, the number dropped to less than 36% in 2011-12
  3. Labour force participation rate of urban women has also dropped in the same period

 

Sep, 07, 2017

Centre sets up panel to suggest on new jobs

Image Source

Note4studnets

Mains Paper 2: Polity | Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: Important step taken by the government for countering unemployment issue in the counrty.


News

A new Task force

  1. The government has constituted a new task force led by NITI Aayog to recommend measures to increase employment by promoting labour-intensive exports
  2. Task force will give its report on recommendations in November this year

What is the strategy behind it?

  1. An important strategy is to enable a shift towards more labour-intensive goods and services that are destined for exports
  2. Given the importance of exports in generating jobs, India needs to create an environment in which globally competitive exporters can emerge and flourish
Aug, 23, 2017

[op-ed snap] The republic of statistical scramble

Image Source

Note4students

Mains Paper 2: Governance | Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential

From UPSC perspective, the following things are important:

Prelims level: Particulars of the NSSO and Labor Bureau

Mains level: Accurate Data collection is very much needed for better policy prescription


News

Context

  1. The article talks about the employment data in the country and the issues related to its collection

Contradictory Data on Employment

  1. One set of numbers claims the current phase of economic growth as jobless
  2. Other set of data have accompanied vigorous assertions of rising employment

Different Employment surveys

  1. The National Sample Survey Organization (NSSO), under the ministry of statistics and programme implementation (Mospi), conducts a comprehensive household survey once every five years
  2. NSSO also conducts an unorganized units survey
  3. The labour bureau in the ministry of labour and employment also conducts two household surveys—a quarterly quick employment survey and another on an annual basis
  4. Finally, various government administrative bodies, such as the EPFO or ESIC, provide some indication of organized sector employment trends

Issues with employment data collection

  1. All the surveys given above suffer from some infirmity
  2. Why: Because of methodological issues, unviable sample size, inability to distinguish between different types of employment, long gaps or irregular frequencies
  3. But one thing is common: the findings only provide a partial picture and are therefore useless as a tool for policy design

Comments of the Economic Survey on Employment data

  1. Part two of the Economic Survey says: “The lack of reliable estimates on employment in recent years has impeded its measurement and thereby the Government faces challenges in adopting appropriate policy interventions”

Recommendations from the NITI Aayog

  1. NITI Aayog has recommended
    (1) vast improvements to existing surveys
    (2) institutional and legislative changes
    (3) improved physical and digital infrastructure
    (4) more aggressive use of technology to crunch the time-gap(in employment surveys)

The way forward

  1. The infrastructure of employment data collection needs an urgent improvement to maintain credibility, perceive economic trends and deliver appropriate policy prescriptions
Aug, 07, 2017

[op-ed snap] Private power, public apathy: labour laws for domestic workers

Related image

Image source

Note4students

Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

Once you are done reading this op-ed, you will be able to attempt the below.

Discuss the need for the Parliament to urgently enact a comprehensive law covering the rights of the country’s domestic workers?

From UPSC perspective, the following things are important:

Prelims level: Not much

 Mains level: International Labour Organisation’s Convention 189 on Decent Work for Domestic Workers. Why  India is unwilling to ratify it.


News

Context

  • Domestic workers are among the most exploited sections of the Indian workforce. 

Domestic labourers in India

  1. The 1931 Census recorded a large pool of labour, i.e. 27 lakh, as domestic workers, or ‘servants’
  2. These high numbers reduced considerably with the growing intensity of the anti-feudal struggle and development of occupational diversities in the post-Independence era. 1971 Census recorded only 67,000 domestic workers.
  3. However, this trend has been reversed since the early 1990s and  1991 Census recorded 10 lakh domestic workers. 
  4. The NSSO data of 2004-05, for example, has recorded 47 lakh domestic workers in India; the majority of whom, i.e. 30 lakh, were women. 

Noida issue

  • The recent confrontation between this otherwise docile workforce of domestic workers and their wealthy employers in Noida(Uttar Pradesh) brought to light, the widespread exploitation of domestic workers, and the huge antagonism between their interests and those of their employers

Over exploitation

  1. Employer-dominated, domestic work industry is characterised by low, stagnant wage rates. Wages are particularly low for Bengali and Adivasi workers.
  2. Irregular payment of wages by employers
  3. Extraction of more work than agreed upon at the start of employment
  4. Practice of arbitrarily reducing wages

Reasons behind over-exploitation

  1. Indian state’s unwillingness to ratify the International Labour Organisation’s Convention 189 on Decent Work for Domestic Workers, and thereby, to modify landmark labour laws to bring domestic work under the purview of state regulation. 
  2. Private power of regulation enjoyed by the employer.
  3. Private nature of regulation has allowed the employer to exercise quasi-magisterial powers over the domestic worker in India.
  4. Workers’ attempts to renegotiate their terms of work or to leave such employment are outbid by verbal, and often, physical assaults by employers
  5. Domestic workers are on an almost absolute risk of unemployment or criminalisation when they try to obtain their dues.

Back2basics

International Labour Organisation’s Convention 189 on Decent Work for Domestic Workers

Provisions

  1. Each Member shall take measures to ensure the effective promotion and protection of the human rights of all domestic workers, as set out in this Convention.
  2. Each Member shall, in relation to domestic workers, take the measures set out in this Convention to respect, promote and realize the fundamental principles and rights at work, namely:
    • (a) freedom of association and the effective recognition of the right to collective bargaining;
    • (b) the elimination of all forms of forced or compulsory labour;
    • (c) the effective abolition of child labour; and
    • (d) the elimination of discrimination in respect of employment and occupation.
  3. Each Member shall take measures to ensure that domestic workers enjoy effective protection against all forms of abuse, harassment and violence.
  4. Each Member shall take measures to ensure that domestic workers, like workers generally, enjoy fair terms of employment as well as decent working conditions and, if they reside in the household, decent living conditions that respect their privacy.

 

Nov, 09, 2016

States to get Rs7,000 crore for skill development II

  1. Besides, it will disburse some Rs 3,000 crore or 25% from the funds earmarked for the Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
  2. PMKVY is a flagship skill development scheme of the Union government to train 10 million people over the next 4 years
  3. Why: The ministry feels that the centre will not be able to achieve the target of skill development all on its own and taking states along will be the key
  4. India wants to skill train some 500 million people by 2022 but has been largely behind the curve in last five years
  5. Baring 2013-14, the skill development initiative has fallen short of target each year between 2011-12 and 2015-16 as per official data
Nov, 09, 2016

States to get Rs7,000 crore for skill development I

  1. What: The Union government will disburse around Rs7,000 crore to states to help align them with the centre’s skill development agenda
  2. And also persuade them to create an ecosystem of entrepreneurship for youngsters
  3. How: The ministry is taking soft loan of $1 billion (nearly Rs 6,660 crore) from the World Bank for skill development initiatives
  4. Most of the amount will be disbursed to states
Nov, 02, 2016

Lesser wages for equal work is violation of human dignity: SC

  1. SC judgment: It terming the denial of equal pay for equal work to daily wagers, temporary, casual and contractual employees “exploitative enslavement,”
  2. The SC has held that they should be paid at par with regular employees doing the same job as them
  3. Such classifications resulting in disparity and denial of the principle of “equal pay for equal work” is esseantially oppressive, suppressive and coercive conduct by employers
  4. It is also antithetical to the ideal of a Welfare State
Oct, 03, 2016

Centre rethinks plan to widen EPF coverage

  1. The centre is reconsidering a plan to widen the social security net for workers by bringing more factories under the provident fund coverage
  2. The Labour Ministry has proposed to bring down the threshold limit for coverage of firms under the Employees’ Provident Fund (EPF) to factories with at least 10 workers
  3. At present, the EPF Act is applicable to factories with minimum 20 workers
  4. Contradiction: On the one hand, there is a proposal to bring larger number of people under the EPF fold and on other hand, there is another proposal to give workers an option to opt out of EPFO and move to NPS- this needs a re-think
Sep, 14, 2016

Govt widens scope of jobs survey- II

  1. New Survey: In its place, Govt has started another, more broad-based survey, which captures the employment market in India
  2. Instead of just eight manufacturing and export-oriented sectors, the labour ministry has zeroed in on 18 sectors and sub sectors, including services that make up most of the non-agriculture labour market in India
  3. The new quarterly employment survey will have a sample size of over 10,000 industries—five times as large as the previous survey’s
Sep, 14, 2016

Govt widens scope of jobs survey- I

  1. Gone the old: Govt has discontinued the quarterly employment survey, more than seven years after it started the exercise
  2. It was aimed at gauging the impact of a global recession on manufacturing and export-oriented industries
  3. Why? The quick employment survey has outlived its purpose
  4. Now we need to have a broad-based focus keeping in mind the new realities of Indian economy
  5. While manufacturing sector is important, ignoring the service sector will not give a complete picture of the employment generation in the country quarter-on-quarter
Sep, 01, 2016

Increased rural spend fails to cheer real rural wages

  1. Source: A recent Yes Bank report with the help of Centre for Monitoring Indian Economy (CMIE) database
  2. Spending growth: Govt’s rural spending has seen a marked uptick this year including spending on rural roads
  3. Employment generation under MNREGA too has seen robust growth in the June 2016 quarter
  4. Wages stagnant: But these measures haven’t led to any rise in rural real wages yet
  5. Real rural wages have been in the negative territory since October 2015 and continued to be so until May 2016
Aug, 31, 2016

Minimum wage hiked, but unions firm on strike plan

  1. News: The Left-affiliated central trade unions will go ahead with the one-day nationwide strike, even as the Centre announced sops in a bid to placate the unions
  2. Govt offers: A hike in the minimum wage for unskilled non-agricultural workers in central public sector units from Rs. 246 to Rs. 350 a day
  3. Formation of a committee to look into extending benefits under the Employees’ State Insurance Corporation Act to unorganised sectors, including anganwadi, mid-day meal and Asha volunteers
  4. The Finance Ministry also issued a notification on higher bonus to government employees for 2014-15 and 2015-16
Aug, 22, 2016

Govt links job creation sops to growth in company’s headcount

  1. Concern: Companies may let go of existing employees and hire replacements to avail of the incentives offered by the Govt
  2. Step taken: Govt has specified that companies will have to increase the headcount they had as of 31 March 2016 to qualify for the benefits in the current financial year
  3. Background: Govt is trying to incentivize employers for creating new jobs at a time when new jobs are scarce
  4. Stats: Some 12 million people enter the job market every year but employment hasn’t kept pace
Aug, 09, 2016

Panagariya blames industry for employment crisis

  1. News: Indian entrepreneurs’ tendency to invest only in capital-intensive businesses or those requiring high-level skills is to blame for the employment crisis in the country, according to Arvind Panagariya, Vice-Chairman, Niti Aayog
  2. These sectors did not create well-paid jobs for those at the bottom of the pyramid
    Indian firms have succeeded in sectors such as automobiles, software, telecom, finance and engineering
  3. However, investments in clothing, light manufacturing or food processing, where jobs could be aplenty for people with less or no skills, have been abysmal
  4. This is the reason why the transition in India of taking the workforce out of agriculture towards industry and services is the slowest in the world
  5. It was transformational growth of 8.3% from 2003-04 to 2011-12 but we didn’t see a transformation in the workforce because not enough well-paid jobs were being created for those who could migrate from agriculture
  6. That is actually an issue that industry associations need to take up on a war-footing
May, 12, 2016

Govt. to define ‘new employees’ for EPS

  1. Govt is likely to come out with a definition for the term ‘new employees’ for Pradhan Mantri Rojgar Protsahan Yojana
  2. Accordingly, ‘new employees’ may be defined as those in excess of the average employee base of a firm for the previous three years
Apr, 15, 2016

Law to increase workers’ bonus faces fresh hurdles

  1. Context: The Payments of Bonus Act of 2015 has hit an embarrassing roadblock with High Courts in eight states staying the payment of such benefits
  2. It is considered as Govt’s attempt to appease the working class by paying higher bonus, with retrospective effect from April 2014
  3. Act: Was passed by Parliament in December 2015 and notified on January 1
  4. It doubled the statutory bonus paid to employees and made more workers eligible for bonus by raising the salary ceiling under the law from Rs.10,000 to Rs.21,000 a month
  5. Why stay? Industry bodies had approached the courts because retro-active amendments would be very difficult for employers
Apr, 08, 2016

Ministry plans Rs.10,000 minimum monthly wage for contract workers

  1. Context: The issue of wages to contract labour had led to increasing labour unrest in the past
  2. News: The Labour Ministry has proposed a minimum monthly income of Rs.10,000 for contract workers
  3. At present, employers give the fixed minimum wages to workers for 45 economic activities,as mentioned in the Minimum Wages Act, 1948
  4. Criticism: Out of estimated 3.6 crore contract labourers, only 60 lakh were covered under the Contract Labour (Regulation and Abolition) Act, 1970
  5. Impact: It will increase the minimum wages of contract labourers from around Rs.6,000/month that is paid to them in a few sectors at present
  6. Fact: Of the 3.6 crore contract workers about 32% are employed by contractors in the public sector
Apr, 01, 2016

Pace of job growth slows to six-year low

  1. Context: The Labour Bureau report on changes in employment in selected sector
  2. News: New jobs in 8 labour-intensive industries fell to a six-year low in the first nine months of 2015
  3. Reason: Industrial growth has been low and employment takes place only when production is up
  4. A lot of rationalisation of staff is taking place in the corporate sector and the govt itself is not recruiting people
  5. Criticism: The data doesn’t give a comprehensive pciture of the job growth in the country as it doesn’t capture many sectors
  6. Challenge: The main idea of growth is to create jobs at all levels, which is not happening
  7. 8 crucial sectors: Textiles, leather, metal, automobiles, gems and jewellery, transport, IT and handloom
Mar, 25, 2016

New labour reforms in way

  1. Context: Govt plans to introduce five new labour bills in the second half of the budget session
  2. Aim: To accelerate labour reforms that have been on the back-burner for the past year
  3. Bills: Industrial Relations Code Bill, Wage Code Bill, Small Factories Bill, Shops and Establishments Bill, EPF Bill
  4. Simplification: Govt wants to club around 40 existing labour laws into 4-5 acts
  5. For example, all wage-related laws will be made part of the wage code and all industrial relations laws included in the related code
Mar, 14, 2016

PF benefits may reach all contract employees

  1. News: Employees Provident Fund Organisation will make public as well as private sector companies accountable for providing PF benefits to contract workers
  2. Background: The govt. decision to be strict with large employers who increasingly rely on contract workers often without paying them their statutory dues
  3. Reason: Fresh instances of industrial strife due to pay disparity between contract staff and regular employees
  4. Contract Labour Act: It requires employers to pay equal pay and benefits for work done by contract employees that is similar to regular employees’ role
Feb, 22, 2016

NSSO data on unemployment

  1. Statistics: In urban areas, the unemployment rate had reduced from 4.5% in 2004-05 to 3.4% in 2011-12
  2. In rural areas, the rate has been stable at around 1.7 per cent during this period
  3. Self-employment is the major source of income for almost half the households, across all religious groups, in rural areas, followed by casual labour
  4. Christians have the highest rate of unemployment in both rural and urban areas in 2011-12
  5. Reason: Christians are economically better off, so they have the capacity to be unemployed as they look for the right job
  6. Christians are also the most educated group, hence unemployment rate is higher among them
Feb, 19, 2016

Labour Ministry moots National Social Security Authority

  1. Context: To provide social security to the entire population in a bid to prop up the government’s pro-worker credentials
  2. The News: The authority may have all ministers and secretaries dealing with social security programmes along with state officials as members
  3. Functions of Authority: To formulate the National Policy on Social Security to co-ordinate the central and state level programmes
  4. To ensure that the objectives of the policy are achieved within the time frame prescribed
  5. Policy Objective: The proposed Social Security Department within the Labour Ministry will provide “policy inputs” and “secretarial services” to the body
  6. Idea comes: when the trade unions have announced fresh nationwide protests on March 10 against the government’s “anti-labour policies”
Feb, 18, 2016

Haryana to set up police stations in industrial parks to check unrest

  1. Context: Recent incidents of labour unrest and violent industrial strife in and around the Gurgaon-Manesar belt
  2. News: Haryana govt. is setting up police stations within industrial parks and an industrial intelligence unit
  3. Purpose: To look out for any signs of festering industrial unrest so as to improve security for investors
  4. They are expected to quickly track and react to ‘unwanted activities’ that could trigger industrial strife
  5. Updates: State has also approved many labour reforms as it competes with neighbouring Rajasthan
  6. Future: The state is planning to declare IT, auto, textiles and electronics as public utilities, making it difficult for workers to go on strike
  7. It is also bringing in a new regime to ensure investors are not harassed by frequent inspections
Feb, 15, 2016

Ministry rejects smart card plan for unorganised workers

  1. Context: Finance Ministry rejecting the latest Labour Ministry proposal to issue one card per family as an impractical idea
  2. Background: The Unorganised Workers’ Identification Number (U-WIN) scheme, first mooted in September 2014
  3. Aim: To provide a smart card to the unorganised workers for entitled to benefits under various schemes such as Rashtriya Swasthya Bima Yojana (RSBY) and other schemes
  4. Relevance: There are around 40 crore unorganised workers, which accounts for around 89 per cent of the total workforce
  5. Idea: The portable smart card would have details of bank account, mobile numbers and benefits of social security schemes that can be availed by the workers
  6. Why Rejection? The Finance Ministry has asked for individual smart cards to the unorganised workers irrespective of the cost implications
Feb, 10, 2016

Labour ministry to restructure job survey

Union labour ministry will revamp its quarterly job survey to reflect the latest employment data

  1. Data will be from both the manufacturing and service sector
  2. Aim is to make it more structured and sync it with policymaking and have regular up-to-date jobs data for both policymaking and public consumption
  3. More job-creating sectors, like banking, insurance, e-commerce and small and medium enterprises, will be added to “get a complete picture”
  4. Labour bureau to visit over 10,000 firms every quarter, more than four times present number, to track employment
  5. So far, employment data collection in India has been ad hoc, patchy and irregular
Jan, 29, 2016

Trade unions to hold nationwide protests in March

  1. Trade unions across the country will hold nationwide protests in March.
  2. It will be against the govt’s labour law concessions for start-ups and its failure to hold negotiations on the unions’ charter of demands.
  3. The unions have also questioned the govt’s continued push for contentious labour law reforms.
Jan, 27, 2016

Soon, annual and quarterly reports to replace once-in-5-year job surveys

  1. The govt. could soon launch a first of its kind annual employment survey.
  2. It will have the ability to generate quarterly reports on job market trends in certain segments like urban India.
  3. The plan is to release such employment data soon after the surveys by using modern technology.
  4. This will enable policymakers to react faster to labour market movements and track job creation goals.
  5. An estimated million people are joining India’s workforce every month.
Jan, 11, 2016

Cabinet to soon consider law to retrench workers

  1. The Union Cabinet will soon consider a law to combine India’s 3 archaic labour legislations.
  2. To make it easier for companies to retrench employees and to raise severance pay.
  3. The Bill will club the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947, into a single code.
  4. Trade unions continue to oppose the proposed law, which allow firms with a staff of 300 to sack workers without govt permission, up from the present requirement of up to 100 workers.

    Constant protests from the trade unions have derailed the government’s proposed labour reforms.

Jan, 09, 2016

Bonus Act notified

  1. The Union govt has notified the Payment of Bonus (Amendment) Act, 2015.
  2. It will allow lakhs of workers to become eligible to bonus retrospectively from the last financial year.
  3. The decision has enthused workers, but the industry is unhappy and it has written to the govt suggesting ways to simplify bonus distribution.
  4. It says that the new Act will lead to financial stress, especially on small and medium enterprises.
Dec, 24, 2015

Parliament approves backdated bonus hike

  1. The Rajya Sabha approved amendments to the Payment of Bonus Act of 1965 in the winter session.
  2. It approved a retrospective bonanza for employees by changing the effective date for a hike in statutory bonus payments to April 1, 2014.
  3. It will make millions of employees eligible for bonus arrears for 2 years.
  4. The financial burden on the central govt. is expected to be around Rs. 6,115 crore.
Dec, 07, 2015

Government aims to move five more reforms to labour laws

  1. The govt is striving to introduce 5 more labour reform legislations in the winter session of Parliament.
  2. It will introduce bills for new wage and industrial relations code and amend laws governing child labour and bonus payments.
  3. The key thrust of these reforms was creating more jobs and improving the ease of doing business.
Dec, 02, 2015

Gujarat’s controversial Bill gets President’s nod

  1. President has given assent to the contentious Labour Laws Bill of Gujarat.
  2. The govt. passed the Bill to relax labour laws to give an impetus to industrialisation in the State.
  3. It has provisions to ban strikes in public utility services for up to 1 year.
  4. The bill provides for out of court settlement between mgmt. and the labourers by paying certain fee to the govt.
  5. It also allows employers to change the nature of job of the employees without prior notice.
Apr, 29, 2015

Gender gap becoming a chasm in labour market

UN report says women are forced to work under harsh conditions.

The Progress of the World’s Women 2015-2016 report comes 20 years after the landmark Fourth World Conference on Women in Beijing.

  1. In developing regions, up to 95% of women’s employment is informal, in jobs that are unprotected by labour laws and lack social protection.
  2. In South Asia, the gender pay gap is 35% for women with children compared to 14% for those without.
  3. This is a care penalty that unfairly punishes women for stepping in when the State does not provide resources
Mar, 30, 2015

What policy challenges exist in bringing labour reforms in India? (2/2)

  1. Reforms must be linked to worker benefits, while simultaneously easing the compliance burden on small and medium enterprises.
  2. Women workers require legislation too – Scheme based workers (Indira Kranti Patham/ Anganwari) should have social security as well.
  3. For urbanisation and development to take place, labour must be formalised in India.
Mar, 30, 2015

What policy challenges exist in bringing labour reforms in India? (1/2)

  1. With an average age of 29, India’s population is in the middle of a demographic boom.
  2. In 2014, 93% of India’s workforce was in the unorganised sector.
  3. Primary challenges – Increase the employability + shift labour from agricultural to non-agricultural jobs + social security measures.
  4. Low wages, limited security  Rurban jobs don’t offer much better + Women have difficulty participating in the industries.
  5. Reforms at slow pace – India’s labour law regime & the ease of doing business have always been at loggerheads.
Mar, 01, 2015

What do we know about informal employment?

  1. Activities and income that are partially or fully outside government regulation, taxation, and observation.
  2. Neither taxed, nor monitored, it is also called ‘grey’ economy.
  3. The financial contribution to economy not included in GDP and GNP.
  4. In India – 75% of employment in rural area and 69% in urban area are under informal sector.

Discuss: NSSO surveys are used to identify these Informal Sectors. What more do we know about NSSO’s methodology?

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