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Subject: Economics

  • Why have LPG prices seen a sharp rise?

     

    Recently, LPG prices, which are revised on a monthly basis, went up yet again.

    What influences LPG prices in India?

    • Domestic prices of liquefied petroleum gas (LPG) are based on a formula — the import parity price (IPP), which is based on international LPG prices.
    • Saudi Aramco’s LPG price acts as the benchmark for the IPP and includes the free-on-board price, ocean freight, customs duties, port dues and the like.
    • This dollar-denominated figure is converted into rupees before local costs — such as local freight, bottling charges, marketing costs, margins for oil marketing firms and dealer commissions and the GST — are added.
    • This helps the government arrive at the retail selling price for LPG.
    • The government resets the LPG price every month, the decision being influenced by international prices and how the rupee has behaved against the dollar in the immediately preceding weeks.

    Who will the price rise affect?

    • The price increase will affect retail consumers who have given up the subsidy.
    • The government has said that for those who avail subsidy, the increase would be mostly absorbed by the rise in subsidy.
    • The Centre said the price of an unsubsidized cylinder would increase from â‚č714 to â‚č858.50 in Delhi, for example, and that the subsidy offered would go up from â‚č153.86 to â‚č291.48.
    • Of the 27.76 crore retail consumers, 26.12 crore consumers avail LPG subsidy. Likewise, for Ujjwala consumers, the subsidy would go up from â‚č174.86 to â‚č312.48 per cylinder.

    Does this help the government move to an open pricing regime?

    • Prior to the latest round of the price increase, the government had raised LPG cylinder prices by â‚č62, starting from August 2019.
    • Compare this with the increase of â‚č82 that had taken place over five years to mid-2019, indicating a penchant for increasingly lesser subsidy.
    • In the latest round, though, the Centre has sought to absorb much of the increase for those availing subsidy.
    • It looks like the most recent increase has been beyond its control and it is hence raising the subsidy levels to protect consumers, given that the economy is reeling from lack of consumer spending.

    What is the outlook?

    • With international crude prices on the downtrend, it is plausible the LPG prices too would see a slump.
    • Aramco has lowered its propane price for February to $505 per metric tonne.
    • Assuming we receive no surprises from the rupee-dollar tango, a softening of LPG prices in the domestic context may be expected.

    What are the implications for the broader economy?

    • At a time when consumer demand, in general, for goods and services in the country has slumped, more cash in the hands of the retail consumer may have helped spur demand.
    • It is ironic that the government has had to raise LPG prices now.
    • This sucks away even more disposable income from those consumers who pay market rates for LPG. As a result, household budgets are bound to go up, especially for those not availing the subsidy.
    • The increase in LPG price could spur headline inflation even further. As it is, the consumer price index inflation has seen a rise over the past few months.

  • Corporate Model of Indian Railways

     

    The Kashi Mahakal Express is the country’s third ‘corporate’ train after the two Tejas Express trains between Delhi-Lucknow and Mumbai-Ahmedabad started over the past few months.

    A new model

    • This is a new model being actively pushed by Indian Railways- to ‘outsource’ the running of regular passengers’ trains to its PSU, the Indian Railway Catering and Tourism Corporation (IRCTC).
    • This has been dubbed an ‘experiment’ as a natural extension of this model is to lease out 100 routes to private players to run 150 trains, something that is in the works.

    How does the model work?

    • In this model, the corporation takes all the decisions of running the service– fare, food, onboard facilities, housekeeping, complaints etc.
    • Indian Railways is free from these encumbrances and gets to earn from IRCTC a pre-decided amount, being the owner of the network. This amount has three components- haulage, lease and custody.
    • The haulage charge IRCTC is paying for the Tejas trains is in the range of Rs 800 per kilometer.
    • This includes use of the fixed infrastructure like tracks, signalling, driver, station staff, traction and pretty much everything needed to physically move the rake.

    Finances

    • On top of that IRCTC has to pay the lease charges on the rake as Indian Railways coaches are leased to its financing arm, the Indian Railway Finance Corporation (IRFC).
    • Added to that there is a per-day custody charge, of keeping the rake safe and sound while it is in the custody of the PSU.
    • Roughly each of these components works out to be around Rs 2 lakh per day for the New Delhi-Lucknow Tejas rake.
    • In other words, IRCTC has to pay Indian Railways a sum total of these three charges, roughly Rs 14 lakh for the Lucknow Tejas runs in a day (up and down) and then factor in a profit over and above this.
    • This money is payable even if the occupancy is below expectation and the train is not doing good business.

    What powers does IRCTC have?

    • Being a corporate entity with a Board of Directors and investors, IRCTC insists that the coaches it gets from Railways are new and not in a run-down condition, as is seen in many trains.
    • The quality of the coaches has a direct bearing on its business.
    • In this model, IRCTC has full flexibility to decide the service parameters and even alter them without having to go to Railway ministry or its policies.
    • To that end, the business of running trains can be run with the independence needed to run a business with profit motive.
    • This, policymakers believe creates the environment for enhanced service quality and user experience for the passengers.
    • IRCTC gets the freedom to decide even the number of stoppages it wants to afford on a route, depending on the needs of its business model.

    What is Indian Railways’ benefit from this model?

    • The bright side for Indian Railways is that it doesn’t have to suffer the losses associated with running these trains thanks to under-recovery of cost due to low fares and its own hefty overheads.
    • The lease on its coaches is also taken care of.

    Is this the same model for private train operators?

    • The model in which private train operators are sought to be engaged is different wherein along with haulage of Rs 668 per kilometer the operator needs to agree to revenue sharing with Railways.
    • The company willing to share the highest percentage of revenue will win the contract.
    • Private players may not need to pay lease and custody charges as it is expected that they will bring in their own rolling stock.
    • All this is because over the next five years, after the two dedicated freight corridors are operationalised and a lion’s share of freight trains move to the corridors, a lot of capacity will free up in the conventional railway lines for more passenger trains to run to cater to the demand.
    • The government wants private players and maybe also its own PSU, along with Indian Railways, to share the load of pumping in more trains into the system.

  • How countries play the tariff game

     Context

    It is important to have a stable tariff policy which would help to link effectively to global value chains.

    Why countries levy tariff?

    • The tariff is a tax levied on an imported good at the border.
    • Countries use tariffs to-
      • Provide easy market access or restrict them to protect domestic industry.
      • It also serves the purpose of revenue collection and-
      • To achieve some strategic objectives by giving/denying tariff concessions to countries.

    Harmonised System in international trade

    • What is it? Goods are classified at 2, 4, 6, 8 digits and some countries have even up to 10 digits, depending upon the level of trade potential of a country.
    • WCO’s system of codes: The classification of these codes is streamlined under an international coding system called ‘Harmonized System’ (HS) under World Customs Organization (WCO) to which 138 countries are contracting parties and about 200 customs authorities are signatories.
    • India’s national tariff lines are about 11,000 at HS 8-digit.

    Historic background of the tariffs

    • Colonial-era: During the colonial era tariffs were heavily used to protect the domestic industry, enjoy unbridled access to the colonized markets and raise tariffs against competitors.
    • Adam Smith’s advocacy of free trade: Adam Smith in 18th Century challenged this idea of regimented trade with his advocacy of free trade that was convincingly brought out in his seminal work ‘Wealth of Nations’.
    • Theory of comparative advantage: Further, in the 19th Century, David Ricardo, building on this concept, propagated the ‘theory of comparative advantage’.
      • The theory proposes that nations should remain focused on their specific areas of competence and allowed to trade freely with other countries.
      • This theory is against import substitution and considers raising tariffs as a drag on economic growth.
    • What proponents of high tariff said? Proponents of high tariffs assert that-
      • Developed countries dominated global markets for decades with high tariffs, developing countries should continue to enjoy differential tariff treatment until they catch up with the rest.

    How countries calibrate tariffs?

    • Each country calibrates its tariffs taking into account its-
      • Domestic production.
      • Demand and
      • Sensitivities.
    • Typically, tariff structures of a manufacturing country reveal a pattern:
      • Low tariffs on raw materials and intermediate goods in the range of 0-5%.
      • Slightly higher tariffs for finished goods in the range of 7-10%.
      • Higher tariffs for agriculture products at above 15%, sometimes up to bound rates as allowed under WTO.
      • As agriculture lines are politically sensitive, most countries zealously guard them with high tariffs.

    Export-import linkage and effects of high tariffs

    • How tariffs could harm export competitiveness: Availability of cheaper raw materials and intermediate products support making of competitively priced finished goods for export markets.
      • The challenge for an entrepreneur is to find these cheaper inputs.
      • If these inputs are not available domestically at competitive rates, they look to source them from outside.
      • But as high tariffs act as barriers to sourcing cheaper inputs, they undermine export competitiveness of a product.
    • Implications for MSMEs
      • For MSMEs (micro, small and medium enterprises), this dependency linkage is even more critical, without which they might close down their operations under threat of persistent losses or low returns.
      • Impact on jobs and economy: This would have consequential impact on jobs, income and consumer choices in an economy.
    • Inefficiency and corruption at entry points: High tariffs could breed inefficiency and corruption at the entry points as it leaves much scope for discretion at the hands of officials, circumvention through under/over-invoicing and violation of rules of origin.
    • Impairing demand: Overtime, high tariffs run the risks of impairing demand and paralyzing domestic manufacturing.
    • Maintaining judicious balance: Leveraging tariffs for benchmarking domestic prices is not an uncommon practice in any country.
      • But maintaining a judicious balance between the interests of primary producers and user industries is imperative, given that there exists an intimate link between imports and exports.

    India and Global Value Chain (GVC)

    • 80% trade through More than 80% of the global trade runs through Global Value Chains (GVCs) which have evolved extensively in various regions of the world.
      • Low tariffs help GVCs to thrive, essentially for the purpose of sourcing and accessing foreign markets.
    • Why stable tariff policy is important for India?
      • For India to emerge as a global hub for “networked products” and make every district an ‘export hub’ for a specific item, as envisaged in this year’s Budget, it is important to have a stable and predictable tariff policy which would help to link effectively to GVCs.
      • For investors: From an investor’s point of view a stable tariff policy is a huge motivation.

    Free-trade agreements and hope of getting market access

    • Market access: The assumption that tariff concessions under bilateral free trade agreements (FTAs) would help get market access is misplaced.
      • Why the assumption is misplaced? In reality, this may not happen as same concessions can be offered by a country to other trading partners in a trade arrangement or throw open to all countries on an MFN (most favoured nation) basis.
      • Inverted duties situation: Gradual tariff liberalization is a natural progression and failing to do so could result in a situation of inverted duties where finished products end up being cheaper than raw materials and intermediate goods
      • Thus, calling for tariff correction in course of time.

    Revenue Generation through tariffs

    • Why it is not a good idea? The domestic consumers ultimately end up absorbing import duties as they get passed onto products they consume.
    • Taxing own people: This is akin to taxing one’s own people in an indirect way by making them pay more for a product than in other markets.
    • Revenue generation from enhanced activities: For these reasons, the idea of revenue collection from import duties is losing steam, and instead, revenue generation from enhanced economic activity is gaining wider acceptance as a dynamic process.

    Conclusion

    Increasing tariffs on the import can end up hurting the economy than benefitting it in the long run, so the government must reconsider the policy of tariff increase.

     

  • Fine-tuning GST

    Context

    Even as the 31-month-old GST evolves, the debate on its success rages on. Many have argued that GST is losing its sheen and needs a complete overhaul while others contend that the new tax system is on course and the trials and tribulations were not unexpected.

    Analysis of GST collection

    • 39% increase over the average of the base year 2015-16: The average monthly GST collection for the period August 2017 to January 2020 stands at Rs 97,188 crore which is an impressive 39 per cent increase over the average monthly collection of subsumed taxes in the base year 2015-16, at around Rs 70,000 crore.
    • The average growth rate of 9.7% per year: This is an average growth rate of 9.7 per cent over the almost 4-year period post-2015-16 and a compounded growth rate of 8.55 per cent.
      • Though less than 14% but not insignificant: This compounded growth rate is not insignificant even though it is just about 0.61 times the very ambitious 14 per cent rate of growth promised to the states before GST rollout.
    • Perception of infectiveness due to ambitious 14% promise: The average growth rate of the collection in 18 non-special category states (accounting for the bulk of the revenue) during the 3-year period immediately preceding GST stood at around 8.9 per cent.
      • Thus, if the perception about the effectiveness of GST has not been very encouraging, it is only in the context of the very ambitious 14 per cent compounded annual growth rate promised to the states.

    Reasons for tepid growth in GST collections

    • The overall economic situation in the country: The revenue performance of GST during the current fiscal year is not out of sync with the overall economic situation in the country.
      • The growth rate in tax yield at 4.69 %: Accordingly, during the 10-month period ending January 2020, the growth rate in tax yield was 4.69 per cent.
      • The relatively tepid growth was primarily due to a negative growth of 4.03 per cent in September-October 2019.
      • After the dip in September-October 2019, GST collections rebounded and this is a reminder that one need not write GST off in a hurry.
    • Complacency in the states due to 14% promise: Complacency in the states on account of assured 14 per cent growth cannot be ruled out.
      • States were jolted with the delay in compensation for August-September 2019 and resorted to vigorous monitoring of compliance and action against toxic and unverified credits, circular trading and tax evasion which had resulted in unmatched credit claims of around Rs 50,000 crore.

    Two suggestions as corrective measures

    • The GST Council deliberated on the recent trends in revenue collection and was cognizant of the need for corrective measures. Two options were suggested. One was the “big bang” approach-
    • Big Bang approach: It involves an overhaul of-
      • The legal framework.
      • Processes and systems and-
      • Re-writing GST almost de novo.
    • A steady-state approach: A “steady-state” approach involved-
      • Incremental reforms.
      • Solving problems as they arise.
      • Plugging loopholes.
      • Improving the compliance environment through increased monitoring with better tools.
    • The Council chose the second approach and the signs are already showing.

    The steps taken-

    • Red flag reports: The GSTN has developed red flag reports based on GSTR-1, auto-generated GSTR-2A, GSTR-3B and the national e-way bill system.
      • These reports identify non-filers so that action can be taken against active taxpayers who defaulted in filing returns.
      • Till November 2019, around 6 lakh dealers had defaulted in furnishing one or more returns from July 2017 involving estimated tax liabilities of around Rs 25,000 crore.
      • Increase in the filing: An SOP has been developed for proceeding against such return defaulters and this has helped increase the percentage of filing which has contributed to revenue.
    • Making Aadhaar mandatory: To further the ease of doing business, it was decided to grant registration without physical verification and a system of deemed registration was put in place.
      • Spot verification has unearthed non-existent dealers and led to the cancellation of around 1 million entities.
      • It has now been decided to mandate Aadhaar authentication for taking new registration and thereafter the existing registered taxpayer population would have to undergo Aadhaar authentication in a phased manner.
    • Use of analytical tools: Advanced analytic tools are being used to unravel complex networks of firms created just for generating credit and these analyses are being strengthened through machine learning and AI.
      • An all-India offence/enforcement database is being built.
    • System of data exchange with other agencies: In order to identify dealers posing a “hazard” to revenue and do a 360-degree profile of risky taxpayers, a system of regular data exchange with banks, CBDT, ED, RoC and other agencies is being put in place.
      • Fraudsters will find it almost impossible to game the system.
      • The new return system set to roll from April 1 is expected to curb incidences of unmatched turnovers and utilisation of un-validated.
    • System of e-invoicing: In order to validate and improve the quality and fidelity of invoice reporting and return filing, a system of e-invoicing is proposed to be implemented in a phased manner beginning April 1.
      • This will begin with taxpayers with turnovers exceeding Rs 500 crore and will auto-populate e-way bill generation and filing of Anx-1 in the new return system apart from validating credit flow from taxpayers.

    Conclusion

    These measures will effect qualitative improvement to the compliance eco-system which will not only lead to an improvement in the collection but will also make life easier for taxpayers and tax authorities alike.

  • Adjusted Gross Revenue (AGR)

    The Supreme Court came down heavily on the Department of Telecommunications (DoT) for issuing a notification that asked for no coercive action against telecom companies even though they had not paid the adjusted gross revenue (AGR) dues by the stipulated deadline.

    What is AGR?

    • Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
    • It is divided into spectrum usage charges and licensing fees.

    What does SC order on AGR mean?

    • The order by the top court means that the telecom companies will have to immediately clear the pending AGR dues, which amount to nearly Rs 1.47 lakh crore.
    • Vodafone Idea, which has to pay up nearly Rs 53,000 crore, faces the prospect of shutting down business.
    • Bharti Airtel, which faces a payout of more than Rs 21,000 crore, could also be in trouble for not paying the AGR dues on time.
    • Other than the telcos, non-telecom companies could also be facing huge payouts individually, which amount to total of Rs 3 lakh crore.

    What exactly did the government notification say?

    • The Licensing Finance Policy Wing of the DoT last month directed all government departments to not take any action against telecom operators if they failed to clear AGR-related dues as per the Supreme Court’s order.
    • The order came as a huge relief for operators — mainly Bharti Airtel and Vodafone Idea — that would have otherwise faced possible contempt action for not paying dues by the deadline that ran out on that same day.

    No more relief to telecoms

    • Bharti Airtel and Vodafone Idea together owe the telecom department Rs 88,624 crore.
    • Prior to the DoT order restraining coercive action, the companies had told the government that they would wait for the outcome of the Supreme Court hearing.
    • Reliance Jio paid up its dues of Rs 195 crore on January 23.
    • As things have turned out, however, the companies have got no relief from the Supreme Court.

    What is the background of SC’s AGR order?

    • On October 24, 2019, the court had agreed with DoT’s definition of AGR, and said the companies must pay all dues along with interest and penalty.
    • Bharti Airtel and Vodafone Idea had tried to persuade DoT to relax the deadline and, after failing, moved the court seeking a review of its judgment.
    • The court dismissed the review petition in mid-January, and also did not extend the deadline for paying AGR dues.
    • It had, however, agreed to hear the companies’ modification plea.

    Where does the government stand in this situation?

    • The payout by telecom and non-telecom companies is likely to lead to windfall gains for the central government, which could help it close some of the fiscal deficit gap for the current financial.
    • At the same time, however, the government will be under pressure to ensure that the telecom market does not turn into a duopoly if Vodafone Idea does indeed decide to shut shop.
    • It will also have to manage the payouts to be done by non-telecom companies as most of them, such as Oil India, Power Grid, Gail, and Delhi Metro Rail Corporation are public sector units.

    What does this situation mean for customers and lenders?

    • If Vodafone Idea does exit, an Airtel-Jio duopoly will be created, which could lead to bigger bills, considering it was the cutthroat competition in the sector that made mobile telephony and Internet almost universally affordable.
    • The AGR issue has triggered panic in the banking industry, given that the telecom sector is highly leveraged.
    • Vodafone Idea alone has a debt of Rs 2.2 lakh crore that it has used to expand infrastructure and fund spectrum payments over the years.
    • The mutual fund industry has an exposure of around Rs 4,000 crore to Vodafone Idea.

    Assist this newscard with:

    https://www.civilsdaily.com/news/explained-adjusted-gross-revenue-agr-in-telecom-sector/

  • [pib] Nagpur Orange

     

    The first consignment of Nagpur oranges was flagged off to Dubai from Vashi, Navi Mumbai.

    Nagpur Orange

    • Nagpur orange is rustic and pockmarked exterior which is sweet and has juicy pulp.
    • It gives the city of Nagpur its pseudonym Orange City.
    • It oranges blossom during the Monsoon season and are ready to be harvested from the month of December.
    • The Geographical Indication was accorded to the Nagpur Orange by the registrar of GIs in India and is effective as of April 2014.

    The best breed

    • Nagpur mandarin in one of the best mandarins in the world. Production of this fruit crop in the central and western part of India is increasing every year.
    • Mrig crop (monsoon blossom), which matures in February – March, has great potential for export since arrivals of mandarin fruit in international market are less during this period.
    • In the whole region only one variety of Nagpur Mandarin is grown.

  • Towards a new world order

    Context

    Social inequalities and the grim problems of stark and continuing poverty are at the epicentre of the new world.

    The ugly face of capitalism and growing inequalities

    • The concentration of the health: The latest Oxfam Report presented at Davos points out that 2,153 billionaires have more wealth than 4.6 billion people.
    • Rising poverty: The emergence of billionaires and oligarchs in different parts of the world coincides with increased poverty among the already poor people, especially children.
    • Concept of stakeholder’s capitalism: These realities make observers question the tenability of stakeholder capitalism as a concept.
    • Faults in the capitalism on display in 2008: The ugliest face of this capitalism was visible during the 2007-2008 economic crisis, first in the U.S. and thereafter across the European Union.
      • At that time, it appeared as if the global economy was on the verge of collapse.

    Intensification of energy use and sustainability

    • The relation between growth and energy: One of the chief characteristics of economic development is the intensification of energy use.
      • There is an unprecedented concentration of high energy density in all economic development strategies.
    • Use of non-renewable sources: The bulk of the energy continues to be generated from non-renewable sources.
    • Developing world capturing energy-generating sources: The developed world’s, and China’s, central objective is to capture energy-generating resources from across continents and put them to use to push GDP growth to greater heights.
      • In the process, sustainability is becoming a casualty.
    • Higher waste generation: The higher the use of energy, the larger the amount of waste generated. Entropy, like time, is always unidirectional, it only goes forward.

    Disposal of e-waste

    • High energy consumption and disposal of waste: Egregious consumption of energy by the developed world has been accompanied by the disposal of residual products (‘e-waste’) on the shores of many African and Asian countries.
    • Impact on the developing world: As a result of the disposal, the poor in the developing world are, unwittingly, drawn and exposed to toxic, hazardous materials like lead, cadmium and arsenic.
      • Hence, the ‘globalisation’ phenomenon has turned out to be nothing other than the exploitation of the developing world, with most countries being treated as a source of cheap labour and critical raw material.

    Unfairness involved in the Globalisation

    • Increasing consumption in the developing world: Countries in the developed world, and China, are ferociously using up finite raw materials without care or concern for the welfare of present and future generations.
    • Bright and the dark side of the development: Certainly, there has been significant technological progress which has brought about a revolution in the fields of healthcare and communications, but there is also a dark side to this.
    • System loaded in the favour of the rich: High expenses and Intellectual Property Rights load the system further in favour of the rich.
      • Pernicious system of carbon credit: To demonstrate how unfair the system is, one can look at the pernicious plan to set up a carbon credit system.
      • Under this, countries with high energy consumption trends can simply offset their consumption patterns by purchasing carbon credits, the unutilised carbon footprint, from poor developing countries.

    Understanding the Nordic Economic Model

    • ‘Nordic Economic Model’: It pertains to the remarkable achievements of the Scandinavian countries comprising Denmark, Finland, Iceland, Sweden, Norway, and allied territories. They also have-
      • Large public sector enterprises.
      • Extensive and generous universal welfare systems.
      • High levels of taxation.
      • And considerable state involvement in promoting and upholding welfare states.
      • Among the happiest countries: UN reports also indicate that the Nordic countries are the happiest countries in the world. The U.S., in contrast, is in 19th place.
      • The total population of the Nordic countries is estimated at almost 27 million people.
      • Among the richest countries: These nations are among the richest in the world when measured in terms of GDP per capita.

    Enlightened Global Order

    • Taking the Nordic model as a template, there are some ingredients that could be part of a new ‘enlightened global order’.
    • What does the Global Order include? These should include-
      • Effective welfare safety nets for all.
      • Corruption-free governance.
      • A fundamental right to tuition-free education including higher education.
      • And a fundamental right to good medical care.
      • Shutting of tax havens.
      • Tax structure: In Nordic countries, personal and corporate income tax rates are very high, especially on the very rich. If a just, new world order is to arise, taxes everywhere should go up.
    • Holding companies responsible: When it comes to the corporate sector, there are some new perspectives.
      • Changing the parameters of profit: In traditional business accounting, ‘bottom line’ refers to the financial year’s profit or loss earned or incurred by the company on pure financial parameters.
      • The four ‘Ps’: Following vigorous debates, a new format has emerged under which a company’s performance is measured through four ‘Ps’.
      • The first is ‘P’ for ‘profit’.
      • The second ‘P’ is for people — how the company’s actions impact not only employees but society as a whole.
      • The third ‘P’ is for the planet — are the company’s actions and plans sensitive to the environment?
      • The fourth ‘P’ is for purpose, which means the companies and individuals must develop a larger purpose than ‘business as usual’. They must ask: what is the larger purpose of the company, apart from generating profits?
      • Using performance in terms of four ‘P’s: Using big data and text analytics, a company’s performance can be measured in terms of all the four ‘P’s and a corporate entity can be thus held accountable. Market capitalisation need not be the only way to measure the value of a company.

    Conclusion

    Much work is yet to be done to uplift the global economic order, but the important point is that new tools are now emerging. What is required is a global consensus and the will to make the planet more sustainable, so that all individuals can live with justice and equality, ensuring that not a single child is hungry or seriously unwell because of poverty or lack of affordable medical help.

     

     

     

     

  • To help her work

    Context

    When it came to allocating funds, the budget relegates women’s economic participation to secondary importance.

    The current status of women in India

    • Lack of Equality: India continues to struggle to provide its women with equal opportunity.
    • A low score on international measures: On international measures of gender equality.
      • India scores low on women’s overall health and survival and ability to access economic opportunities.
    • Why it matters? Since the woman’s economic engagement is related to her own and her family’s well-being, the continuing decline in rural women’s labour force participation is a cause for concern, and both affects and reflects these worrying gender gaps.

    Why female labour force participation matters beyond social cause?

    • Source of economic growth: Ignoring India’s declining female labour force participation at a time of economic distress is a mistake.
      • Not just a social cause: Involving women in the economy is not a social cause — it is a source of efficiency gains and economic growth.
    • Missing out on many things: In a country where young women’s education is now at par with men’s, ignoring that half of the population isn’t participating equally in the economy means we are missing out on many things, like-
      • Innovation.
      • Entrepreneurship.
      • And productivity gains.
    • Large potential to increase in GDP: The large potential increases in GDP that could accrue to India and countries around the world, if they could only close their labour force gender gaps, are often cited.
      • 60% increase in GDP: A report by McKinsey Global Institute suggests that if women participated in the Indian economy at the level men do, annual GDP could be increased by 60 per cent above its projected GDP by 2025.
      • Underlying conclusion: The underlying conclusion is that women’s potential to contribute to GDP is huge.
      • Gain larger than any other region: The same analysis also suggested that India’s potential GDP gains through achieving economic gender parity were larger than gains in any of the other regions they studied.

    How can the state be responsive to women? 

    It can be ensured in the following two ways-

    • 1.MGNREGA-Important focus: An important focus could be a smarter policy and gender-intentional implementation.
      • A key example comes from MGNREGA, a programme whose official policy has long been to pay individual workers in their own bank accounts.
      • It is observed that this policy was typically not implemented and that women’s wages were usually being paid into the bank account of the woman’s husband.
    • Why paying wages in women’s account matters?
      • Giving women digital control of her wage:
      • This seemingly small change — giving a woman digital control of her wages — had a big impact.
      • Working women more outside their home: Women who received digital accounts plus training worked more outside their homes, not only for MGNREGA but also in private employment.
    • Higher economic engagement and lessening patriarchy
      • Importantly, women from especially conservative households reported higher economic engagement and an improved ability to move about their communities unaccompanied.
      • Lessening of patriarchal norms: Surveys conducted showed that the payment in account also began to influence restrictive patriarchal norms.
    • 2.Need to move beyond MGNREGA
      • Ease of doing business and reform in labour market reforms: Continuing to improve ease of doing business and addressing rigid labour market regulations can also draw more women into high-potential sectors.
      • Such as those supported under Assemble in India.
      • Potential in manufacturing: Rural women’s relative participation in manufacturing has grown compared to men’s, and manufacturing stands out as a promising means to pull young women, in particular, into the economy.
      • Potential in SMEs: Ensuring better support to small and medium-sized enterprises can help new businesses.

    Conclusion

    • Attune schemes to the aspiration of women: Ensuring that these programmes are attuned to the needs and aspirations of women is not expensive. But it makes a much difference.
      • Review of policy and programme: It requires a review of individual policies and programme implementation.
    • Increase the funding: The government needs to increase funding to programmes targeting women. Until then, the policy can build on the fact that pulling women into the economy isn’t just a function of budget allocations or social sector programmes. It’s also a matter of thoughtful policy design and political will.

     

     

  • [pib] ‘Apiary on Wheels’ Initiative


    ‘Apiary on Wheels’ was recently flagged off today by the Union Minister of MSME.

    ‘Apiary on Wheels’

    • It is a unique concept designed by KVIC for the easy upkeep and migration of Bee Boxes having live Bee colonies.
    • It is a platform which can carry 20 Bee Boxes from one place to another without any difficulty.
    • It is like an attachment which can be easily connected with a Tractor or a Trolley and may be pulled to any suitable destination.
    • Specially, in summers, the beekeepers usually adopted crude methods to feed the bees and many bees used to die in the process.
    • This concept of migration, cooling with the help of solar panels and sugar drips with zero risk to the lives of bees, will prevent any damages to the bee boxes or bee colonies and help produce quality honey.

    How it works?

    • Two large wheels on either side of the Apiary and 4 separate compartments with independent doors, having 5 bee boxes each help the platform to remain intact without disturbing the live bee colonies.
    • It is also connected with a solar panel system which automatically triggers a fan inside the compartment as soon as the temperature reaches 35 degree centigrade or above.

  • Missed call

    Context

    As the dust settles after the Union budget and the Supreme Court’s decision to not provide relief to telcos from their licence fee liabilities, it is an appropriate moment to step back and examine how we got here.

    The issue over the definition of AGR (Aggregate Gross Revenue)

    • What is AGR issue: Since the New Telecom Policy of 1999 (NTP 1999), operators were required to pay a percentage of their AGR to the government as licence fees instead of a one-time licence fee.
      • License fee based on earnings: This was done in exchange for moving operators from fixed licence fee-based on irrationally exuberant bids they had made in the mid-nineties-to a regime that determined licence fee based on revenue earned, thereby de-risking the obligation.
      • Why it matters? What constitutes AGR is important for the purpose of the computing licence fee and thousands of crore are dependent on this.
    • Consequences of ambiguity over the definition of AGR: Bundling – a pervasive phenomenon in most telecom markets have not taken off in India.
      • What is bundling? Product bundling is a marketing strategy that involves offering several products and/or services for sale as one combined product.
      • The fear is that handset sales will also come under the purview of AGR. Handsets, it could still be argued are part of the service offering.
      • Dividend on earning is considered as the part of AGR: Interest and dividend earnings on investments have also been included in AGR.

    Unfair practices and cancellation of licences by the court

    • Controversy over conversion charges: In 2003, “limited” mobility service was converted into a fully mobile service with a one-time payment of Rs 1,658 crore as “conversion” charges, generating controversy. It was labelled as a “back door entry” to full mobility.
    • Disguising international calls as domestic: Around the same time, the DoT used to levy a fee of Rs 4.75 per minute on international calls known as “access deficit charge” (ADC) to fund universal coverage. It is well known that an operator disguised international calls as domestic to bypass ADC.
    • Showing call revenue as internet services revenue: For some time, internet services attracted lower or no licence fee and it became expedient for operators to indulge in license fee “arbitrage” by showing more revenue from internet services.
    • Inflating subscriber numbers: Another manoeuvre was to inflate subscriber numbers to gain access to scarce spectrum in the days when fresh spectrum was administratively assigned based on subscriber numbers.
    • First come first serve policy: Finally, the shameful spectacle was the battle fought by operators to jump the queue to deposit earnest money for gaining rights over the spectrum that was oddly sought to be assigned by a method called “first come first served” and whose definition itself was quite elastic.
    • Cancellation of licence by the Court: Thereafter, in the litigation that inevitably followed, the Court cancelled 122 telecom licences and mandated allocation of spectrum by auction.

    Conclusion

    • Erosion of trust between the public and private sector in general and in the telecom sector, in particular, has been a negative externality of the reform process.
    • Restoration of trust between public and private sector is necessary: In this context, the appeal made by the finance minister during her budget speech for the restoration of “vishwaas” between the public and private sectors and between citizens and government is critical