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Type: Op-ed

  • India’s power discoms are at a critical point

    Context

    The power sector in India is at an inflection point. Three developments are triggering a shift across the power chain, generation and distribution in particular, and are in the process deepening existing faultlines, and exacerbating the distress.

    Three changes driving the shift in power sector

    1) Central government’s approach towards distribution segment

    • Till recently, the Centre had preferred to incentivise states, nudging them to address the issue that lies at the heart of the power sector’s woes — turning around the operational performance and financial position.
    • However, despite multiple attempts, not much has changed.
    • But over the past few months, the Centre appears to have changed tack.
    • The Centre no longer appears content to simply nudge states into acting.
    • This change in stance is evident from enforcing the tripartite agreement to recover the dues owed to power producers like NTPC by discoms in Jharkhand, Tamil Nadu and Karnataka to now regulating coal supplies to states where power generating companies have been delaying payments.

    2) Covid impact on government finances and ability to support discoms

    • Notwithstanding buoyant tax revenues this year, Covid has wreaked havoc on government finances.
    • The general government debt stands at 90 per cent of GDP.
    • Add to this demands for greater welfare spending, uncertainty over state government finances once the five year GST compensation period ends next year, and the limits to which states can continue to support discoms will increasingly be tested.
    • To what extent accounting jugglery can be used once again to clean up discom debt is debatable.
    • After all, even the liquidity facility arranged by the Centre to help discoms pay off their obligations will have to be paid back.

    3) Loss of monopoly and shift towards renwable

    • Until now, consumers had little recourse to alternate sources of supply.
    • Consequently, discoms, which are essentially geographical monopolies, were able to charge higher tariffs from commercial and industrial consumers to cross-subsidise agricultural and low-income households.
    • But the situation appears to be changing.
    • Migration of high tariff paying consumers through open access and investments in captive power plants is gaining traction, driven in large part by the emergence of solar as an alternative at seemingly competitive tariffs.
    • This reduced reliance of high tariff paying consumers on discoms will only exacerbate their already precarious financial position.
    • The pace at which this transition is occurring will only accelerate in the coming years.
    • On the supply side, at the global and the national level, there is a push towards cleaner fuel, solar in particular.
    • Flowing from this — though with debatable relevance given the current levels of per capita emissions — is the domestic policy thrust towards renewables.
    • Solar, in particular, benefits from both explicit and implicit subsidies — land at concessional rate, exemption from interstate transmission charges, discounted wheeling charges, cross-subsidies for open access, SECI taking on counterparty risk, and others.
    • It also enjoys “Must Run” status.
    • On the demand side, at current tariffs, solar is emerging as an attractive alternative for the high tariff paying commercial and industrial consumers.
    • On their part, discoms are trying to salvage a losing situation.
    • To stem the flow of high paying customers, some have begun levying an additional surcharge on whoever opts for open access to lower the cost differential.
    • Others are shifting from net metering to gross metering — essentially charging consumers higher tariffs — above particular consumption levels.

    Conclusion

    Continuously subsidising discoms for their AT&C losses (operational inefficiencies), and for not supplying power at commensurate tariffs to low-income households and agricultural customers (for political considerations) will become fiscally untenable.

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  • The right time for India to have its own climate law

    Context

    The United Nations Climate Change Conference (COP26, from October 31 to November 12, 2021), at Glasgow, Scotland is important as it will call for practical implementation of the 2015 Paris Accord, setting the rules for the Accord.

    Indian proposals

    • Prime Minister Narendra Modi announced, on November 1 at Glasgow, a ‘Panchamrit solution’ which aims at reducing fossil fuel dependence and carbon intensity.
    • This also includes ramping up India’s renewable energy share to 50% by 2030.
    • Union Minister of Environment, Forest and Climate Change Bhupender Yadav has reasserted the call for the promised $100 billion a year as support (from the developed world to the developing world).
    • But as we consider new energy pathways, we must also consider the question of climate hazard, nature-based solutions and national accountability.
    • This is the right time for India to mull setting up a climate law while staying true to its goals of climate justice, carbon space and environmental protection.

    Why India needs climate law

    • There are a few reasons for this.
    • Existing laws not adequate: Our existing laws are not adequate to deal with climate change.
    • We have for example the Environment (Protection) Act (EPA), 1986, the Air (Prevention and Control of Pollution) Act, 1981 and Water (Prevention and Control of Pollution) Act, 1974.
    • Yet, climate is not exactly water or air.
    • The Environment (Protection) Act is grossly inadequate to deal with violations on climate. Clause 24 of the Act, “Effect of Other Laws”, states that if an offence is committed under the EPA or any other law, the person will be punished under the other law (for example, Code of Criminal Procedure).
    • This makes the EPA subordinate to every other law. 
    • There is a need to integrate climate action: Integration includes adaptation and mitigation — and monitoring progress.
    • Comprehensive climate action is not just technological such as changing energy sources or carbon intensity, but also nature-based such as emphasising restoration of ecosystems.
    • India’s situation is unique: Climate action cannot come by furthering sharpening divides or exacerbating poverty, and this includes our stated renewable energy goals.
    • The 500 Gigawatt by 2030 goal for renewable can put critically endangered grassland and desert birds such as the Great Indian Bustard at risk, as they die on collision with wires in the desert.

    Suggestions on climate law

    • A climate law could consider two aspects.
    • Commission on climate change: Creating an institution that monitors action plans for climate change.
    • A ‘Commission on Climate Change’ could be set up, with the power and the authority to issue directions, and oversee implementation of plans and programmes on climate.
    • The Commission could have quasi-judicial powers with powers of a civil court to ensure that its directions are followed in letter and spirit.
    • System of liability and accountability: We need a system of liability and accountability at short-, medium- and long-term levels as we face hazards.
    • This also means having a legally enforceable National Climate Change Plan that goes beyond just policy guidelines.
    • A Climate Commission could ideally prevent gross negligence in fragile areas and fix accountability if it arises.

    Conclusion

    We have an urgent moral imperative to tackle climate change and reduce its worst impacts. But we also should Indianise the process by bringing in a just and effective law — with guts, a spine, a heart, and, most importantly, teeth.

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  • Charting a trade route after the MC12

    Context

    The World Trade Organization (WTO)’s 12th Ministerial Conference (MC12) is being convened in Geneva, Switzerland at the end of this month.

    Ministerial Conferences

    • The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions.
    • The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements

    The task ahead for MC12

    • Recent WTO estimates show that global trade volumes could expand by almost 11% in 2021, and by nearly 5% in 2022, and could stabilise at a level higher than the pre-COVID-19 trend.
    • The MC12 needs to consider how in these good times for trade, the economically weaker countries “can secure a share in the growth in international trade commensurate with the needs of their economic development’, an objective that is mandated by the Marrakesh Agreement Establishing the World Trade Organization.
    • Some of the areas are currently witnessing intense negotiations, these include adoption of WTO rules on electronic commerce, investment facilitation, and fisheries subsidies.

    Following issues will form the basis of MC12 discussions

    1) IPR waiver for Covid-19 related technologies

    • Pharmaceutical companies have used monopoly rights granted by their IPRs to deny developing countries access to technologies and know-how, thus undermining the possibility of production of vaccines in these countries.
    • To remedy this situation, India and South Africa had tabled a proposal in the WTO in October 2020, for waiving enforcement of several forms of IPRs on “health products and technologies including diagnostics, therapeutics, vaccines, medical devices.
    •  This proposal, supported by nearly two-thirds of the organisation’s membership, was opposed by the developed countries batting for their corporates.
    • The unfortunate reality of the current discussions is that an outcome supporting affordable access to COVID-19 vaccines and medicines looks distant.

    2) Fisheries subsidies

    • Discussions on fisheries subsidies have been hanging fire for a long time, there is considerable push for an early conclusion of an agreement to rein in these subsidies.
    • The current drafts on this issue do not provide the wherewithal to rein in large-scale commercial fishing.
    • Large scale commercial fishing is depleting fish stocks the world over, and at the same time, are threatening the livelihoods of small fishermen in countries such as India.

    3) E-commerce

    • Discussions on e-commerce are being held in the WTO since 1998, wherein WTO members agreed to “continue their practice of not imposing customs duties on electronic transmissions”.
    • The more substantive outcome was the decision to “establish a comprehensive work programme” taking into “account the economic, financial, and development needs of developing countries”.
    • However, in 2021, a key focus of the 1998 e-commerce work programme, namely “development needs of developing countries”, is entirely missing from the text document that is the basis for the current negotiations.
    • On the negotiating table are issues relating to the liberalisation of the goods and services trade, and of course guarantee for free flow of data across international boundaries, all aimed at facilitating expansion of businesses of e-commerce firms.
    • In fact, the decision on a moratorium on the imposition of import duties agreed to in 1998 has become the basis for a push towards comprehensive trade liberalisation — a perfectly logical way forward, given that the sole objective of the negotiations on e-commerce is to facilitate expansion of e-commerce firms.

    4) Investment facilitation

    • Inclusion of substantive provisions on investment in the WTO has been one of the more divisive issues.
    • In 2001, the Doha Ministerial Declaration had included a work programme on investment, but developing countries were opposed to its continuation because the discussions were geared to expanding the rights of foreign investors through a multilateral agreement on investment.
    • An investment facilitation has reintroduced the old agenda of concluding such an investment agreement.

    Issues with the negotiations

    • The negotiations on e-commerce and investment facilitation are being conducted not by a mandate given by the entire membership of the WTO in a transparent manner.
    • Instead, these negotiations owe their origins to the so-called “Joint Statement Initiatives” (JSI) in which a section of the membership has developed the agenda with a view to producing agreements in the WTO.
    •  This entire process is “detrimental to the very existence of a rule-based multilateral trading system under the WTO”, as India and South Africa have forcefully argued in a submission against the JSIs early this year.

    Conclusion

    Current favourable tidings provide an ideal setting for the Trade Ministers from the WTO member-states to revisit trade rules and to agree on a work programme for the organisation, which can help maintain the momentum in trade growth.

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  • Ensuring that policy outcome matches the intent

    Context

    Policy differences between parties and coalitions arouse heated debates in legislatures and at political rallies. But relatively scant attention is paid to whether the stated policy or enacted law — of any persuasion — delivered the intended outcomes/results.

    Issues with annual budget modalities

    • There are limitations in the structural design of the Union and the state governments of India, which either cause or enable inefficient translation of policy intent to semi-realised outcomes.
    • Nowhere is this more obvious than in the annual budget modalities followed by the Union and state governments.
    • The final accounts (FA) for a financial year are generally presented to the legislative body between 18 and 24 months after that year’s budget is approved, most often as a minor artefact along with the main attraction of the budget for the upcoming year and the minor attraction of the Revised Estimate (RE) for the year in progress.
    • In effect, a small fraction of the attention paid to intent (budget) is paid to the outcome (FA) which is only known many months after the year is over.
    • Governments in India adhere to the archaic cash accounting as opposed to accrual accounting, which is the norm for most companies and governments which introduces some strange incentives and behaviours, especially towards the end of the year.
    • As a result, even the final account is not what it seems, with the possibility that significant funds which have been presented to the legislature as spent are still held in off-balance-sheet accounts not visible to the government’s finance department.

    Way forward: Lessons from Tamil Nadu government

    • This structural limitation was the basis for the initiative to identify and retrieve unutilised funds that the Tamil Nadu government.
    • New procedures and systems will ensure that such moving/parking of funds (especially as the year ends) cannot happen outside of the finance department’s oversight.
    • On another front, the data-integrity project undertaken to support (among other reasons) the crop and jewel loan waiver poll promise has also produced remarkable results.
    • Many instances of ghost pension recipients and free-rice-entitled category of ration card holders and malfeasance in crop and jewel loan sanctioning have come to light.
    • The rectification of such anomalies will save the government a significant amount of funds, but, more importantly, enable fairer societal outcomes.
    • Tamil Nadu is diligently following the five-step approach: Collect and analyse data to develop a deeper understanding, disseminate results into the public domain and generate a public debate, receive feedback from the debate and inputs from experts, use these inputs to design policies and put into execution, constantly seek feedback and course correct when needed.

    Conclusion

    We need the thoughtful design of policies and schemes, and their execution, which are vital to achieving our intended goal of benefiting all citizens in a fair and inclusive manner.

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  • Trade and climate, the pivot for India-U.S. ties

    Context

    The fate of the grand strategic ambitions of the Indo-US relationship may depend substantially on how well they collaborate in two areas to which their joint attention is only belatedly turning — climate and trade.

    Importance of climate change and trade to India-US partnership

    • Strategic partnerships capable of re-shaping the international global order cannot be based simply on a negative agenda.
    • Shared concerns about China provide the U.S.-India partnership a much-needed impetus to overcome the awkward efforts for deeper collaboration that have characterised the past few decades.
    • What risks being lost is a reckoning with how interrelated climate and trade are to securing U.S.-India leadership globally, and how their strategic efforts can flounder without sincere commitment to a robust bilateral agenda on both fronts.

    India-US collaboration on climate change and challenges

    • India and the U.S. are collaborating under the Climate and Clean Energy Agenda Partnership.
    • In parallel, there are hopeful signs that they are now prioritising the bilateral trade relationship by rechartering the Trade Policy Forum. 
    • At COP26 in Glasgow India announced a net zero goal for 2070, it has called for western countries to commit to negative emissions targets.
    • Challenges: India’s rhetoric of climate justice is likely to be received poorly by U.S. negotiators, particularly if it aligns with China’s messaging and obstructs efforts to reach concrete results.

    Collaboration on trade

    • The failure of the U.S. and India to articulate a shared vision for a comprehensive trade relationship raises doubts about how serious they are when each spends more time and effort negotiating with other trading partners.
    • Protectionist tendencies infect the politics of both countries these days, and, with a contentious U.S. mid-term election a year away, the political window for achieving problem-solving outcomes and setting a vision on trade for the future is closing fast.

    Climate-trade inter-relationship

    • Climate and trade are interrelated in many ways.
    • If governments, such as India and the U.S., coordinate policies to incentivise sharing of climate-related technologies and align approaches for reducing emissions associated with trade, the climate-trade inter-relationship can be a net positive one.
    • India and the U.S. could find opportunities to align their climate and trade approaches better, starting with a resolution of their disputes in the World Trade Organization (WTO) on solar panels.
    • The two countries could also chart a path that allows trade to flow for transitional energy sources, such as fuel ethanol.
    • Shared strategic interests will be undermined if India and the U.S. cannot jointly map coordinated policies on climate and trade.
    • The most immediate threat could be the possibility of new climate and trade tensions were India to insist that technology is transferred in ways that undermine incentives for innovation in both countries or if the U.S. decides that imports from India be subject to increased tariffs in the form of carbon border adjustment mechanisms or “CBAMs”.

    Conclusion

    Concerted action on both the climate and trade fronts is mutually beneficial and will lend additional strength to the foundation of a true partnership for the coming century.

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  • Mixed signals on growth-inflation dynamics

    Context

    We are now at that point in the cycle where all central banks — the RBI, the US Fed, the European Central Bank, Bank of England and others — have begun to signal, a process of normalisation from the unprecedented loose monetary policy stimulus post the onset of the pandemic in early 2020.

    Recovery momentum

    • Surveys and data prints are now signalling that the recovery momentum in the first half of 2021 is decelerating in many countries, although the direction and momentum may vary.
    • The RBI Governor notes that “the external environment, which had been supportive of aggregate demand over the past few months, may lose momentum for a variety of reasons”.
    • China — its policy and economy — is the most salient risk for a sustained global recovery.
    • The Chinese authorities’ seeming determination to push ahead with structural reforms, de-carbonising initiatives, and curbs on real estate appear designed to sacrifice some short-term growth for medium-term efficiencies, and reduce financial risks and inequality.
    • Inflation in almost all major economies continues to remain high.
    • The US Personal Consumption Expenditure (PCE) survey measure of core inflation is running over 4 per cent.
    • The story is similar in Europe.

    Assessing India’s growth recovery

    • India’s growth–inflation dynamics are also becoming favourable, but are still subject to multiple risks.
    • In assessing India’s growth recovery, a risk of the global economy going into “stagflation”, going by US signals seems to be that if at all, it is likely to be mild.
    • The recovery of economic activity continues, although the high-frequency indicators we track suggest that the momentum observed in July and August has moderated.
    • Electricity consumption growth is also down from August levels, but part of this can be explained by both cooler, rainy weather, as well as coal shortage related cutbacks in many electricity-intensive manufacturing.
    • The residential real estate is reportedly doing exceptionally well, with low-interest rates on home loans, cuts in stamp duty and registration charges, and indeed behavioural shifts towards own home ownerships with hybrid and work from home shifts.
    • Even the commercial real estate sector is reviving.
    • The Union government also has large unspent cash balances, which can be judiciously deployed to boost both capex and consumption.
    • The overall inflation trajectory suggests a gradual glide path towards the 4 per cent target by March 2023 or a bit beyond.
    • There are risks of overshooting this forecast trajectory, despite a benign outlook on food prices.
    • This emanates from global metals, minerals, crude oil prices, and from supply bottlenecks persisting till well into 2022.

    Conclusion

    In summary, the growth–inflation signals remain mixed. Multiple episodes of global spillovers in the past couple of decades have taught us that imminent normalisation will have implications for all emerging markets.

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  • The Supreme Court is walking the talk on citizens’ rights

    Context

    When the bench of the Chief Justice of India passed an order appointing a committee in the Pegasus matter, it served the interest of every Indian.

    What led to the appointment of committee by the Supreme Court

    • Pegasus has allegedly been used against politicians and individuals across the globe, including against politicians, journalists and other private individuals in India.
    • The issue rocked Parliament, but the government was not willing to share any information pertaining to the software or its use, citing national security as a reason.
    • The alleged victims of the software turned to the Supreme Court, and prayed for setting up of an independent enquiry.
    • The government, on being called upon by the Supreme Court, cited national security, contending that any information it let out would become a matter of public debate, which could be used by terror groups to hamper national security.
    • Its unrelenting stand left the court with no option but to take a call on whether to blindly accept the government’s refusal to share no information whatsoever, or lean in favour of a citizen’s right to privacy, a fundamental right guaranteed under the Constitution.
    • The Supreme Court chose the latter course.

    Balancing the fundamental rights  nad judicial review with national security

    • The Supreme Court has observed that “the state cannot get a free pass every time the spectre of national security is raised”.
    • It goes on to say that national security “cannot be the bugbear that the judiciary shies away from, by virtue of its mere mentioning. Although this court should be circumspect in encroaching upon the domain of national security, no omnibus prohibition can be called for against judicial review”.

    Conclusion

    The Pegasus order upholding the individual’s right to a life of dignity and privacy, is music to the ears of those who believe in constitutional values and rule of law.
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  • Why India needs a Ministry of Energy?

    Context

    The blame cannot be placed on the doors of any one entity or ministry for the shortage of coal.

    Ministries linked with coal shortage issue

    • The Ministry of Coal and Coal India must certainly accept that they slipped up somewhere — whether in managing the production process, planning supplies or leaving vacant crucial leadership positions.
    • The Ministry of Power/NTPC should also accept responsibility as they allowed coal inventories to fall below the recommended minimum in an effort to better manage their working capital.
    • But they can claim they had no other option because the state government electricity distribution companies do not pay their dues on time or fully.
    • The discoms will point a finger at their political bosses, who compel them to sell electricity to residential and agricultural sector consumers at subsidised tariffs.

    Structural issues

    • There is no one public body at the central or state government level with executive oversight, responsibility and accountability for the entirety of the coal value chain.
    • This is a lacuna that afflicts the entire energy sector.
    • It will need to be filled to not only prevent a recurrence of another coal crisis but also for the country to realise its “green” ambition.
    • The word “energy” is not part of the political or administrative lexicon.
    • At least not formally. As a result, there is no energy strategy with the imprimatur of executive authority.
    • The NITI Aayog may well challenge this statement.
    • For they have produced an energy strategy.

    Suggestions

    • Energy act: The government should pass an Act (possibly) captioned “The Energy Responsibility and Security Act.”
    • This Act should elevate the significance of energy by granting it constitutional sanctity; it should embed in law, India’s responsibility to provide citizens access to secure, affordable and clean energy.
    • The law should lay out measurable metrics for monitoring the progress towards the achievement of energy independence, energy security, energy efficiency and “green” energy.
    • Ministry of energy: Towards the fulfillment of this mandate, the government should redesign the existing architecture of decision-making for energy.
    • Preference would be for the creation of an omnibus Ministry of Energy to oversee the currently siloed verticals of the ministries of petroleum, coal, renewables and power.
    • The department would have a narrower remit than the other energy departments but by virtue of its location within the PMO, it would, de facto, be the most powerful executive body with ultimate responsibility for navigating the “green transition”.

    Benefits

    • It is important to stress the positive impact the above redesign will have on investor sentiment.
    • Several corporates have signaled their intent to invest mega bucks in clean energy.
    • Reliance has committed $10 billion, Adani $ 70 billion over 10 years; Tata Power, ReNew Power and Acme Solar have also placed their stakes in the ground.

    Conclusion

    Energy sector will be immensely benefited if the current fragmented and opaque regulatory, fiscal and commercial systems and processes were replaced by a transparent and single-point executive decision-making body for energy.

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  • The Court’s order on Pegasus still falls short

    Context

    The Supreme Court of India appointed an independent committee to inquire into charges that the Union government had used the mobile phone spyware Pegasus to invade, access, and snoop into devices used by India’s citizens.

    Background

    • The petitioners before the Supreme Court relied on an investigation conducted by a consortium of global media.
    • These reports revealed that hundreds of phone numbers from India had appeared on a global list of more than 50,000 numbers that were selected for surveillance by clients of the Israeli firm, the NSO Group.
    • The NSO has since confirmed that its spyware is sold only to governments, chiefly for the purposes of fighting terrorism.

    Government’s defence

    • In response to the allegations made against it, the Government invoked national security.
    • What is more, according to it, the very adoption of this argument virtually forbade the Court from probing further.
    • In matters purportedly involving national security, the Court has shown an extraordinary level of deference to the executive.
    • The cases also posed another hurdle: a contest over facts.
    • The petitioners were asserting the occurrence of illegal surveillance.
    • The Government was offering no explicit response to their claims.
    • Now, to some degree, in its order appointing a committee, the Court has bucked the trend of absolute deference.
    • The Court has held that there is no magic formula to the Government’s incantation of national security, that its power of judicial review is not denuded merely because the state asserts that the country’s safety is at stake.

    Accountability on part of the government

    • The order recognises, correctly, that spying on an individual, whether by the state or by an outside agency, amounts to an infraction of privacy.
    • This is not to suggest that all surveillance is illegal.
    • In holding thus, the Court has effectively recognised that an act of surveillance must be tested on four grounds:
    • First, the action must be supported by legislation.
    • Second, the state must show the Court that the restriction made is aimed at a legitimate governmental end.
    • Third, the state must demonstrate that there are no less intrusive means available to it to achieve the same objective;
    • Finally, the state must establish that there is a rational nexus between the limitation imposed and the aims underlying the measure.
    • The test provides a clear path to holding the Government accountable.

    Way forward

    • The absence of a categorical denial from the Government, the order holds, ought to lead to a prima facie belief, if nothing else, that there is truth in the petitioners’ claims.
    •  Having held thus, one might have expected the Court to frame a set of specific questions demanding answers from the state.
    • If answers to these questions were still not forthcoming, elementary principles of evidence law allow the Court to draw what is known as an “adverse inference”. 
    • A party that fails to answer questions put to it will only risk the Court drawing a conclusion of fact against it.
    • If, on this basis, the petitioners’ case is taken as true, there can be little doubt that there has been an illegitimate violation of a fundamental right.
    • It is, therefore, unclear why we need a committee at all.
    • Ultimately, in the future, the Court must think more carefully about questions of proof and rules of evidence.

    Conclusion

    Ad hoc committees — sterling as their members might be — cannot be the solution. Far too many cases are consigned to the back burner on the appointment of external panels, and, in the process, civil liberties are compromised.

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  • There’s a mismatch between India’s graduate aspirations and job availability

    Context

    There is a huge pool of unemployed university graduates with unfulfilled aspirations. This group of dissatisfied, disgruntled youth can lead to disastrous consequences for our society.

    Enhanced enrollment

    • Reservation: The extension of reservations to OBCs and EWS increased the enrollment of students from these socio-economic backgrounds.
    • Increased education institutions: In addition, the massive increase in the number of higher education institutions has led to an enlargement of the number of available seats — there are more than 45,000 universities and colleges in the country.
    • The Gross Enrollment Ratio for higher education, which is the percentage of the population between the ages of 18-23 who are enrolled, is now 27 per cent.

    Issues of employment opportunities

    • Unfortunately, the spectacular increase in enrollment in recent years has not been matched by a concomitant increase in jobs.
    •  Employment opportunities in the government have not increased proportionately and may, in fact, have decreased with increased contractualisation.
    •  Even in the private sector, though the jobs have increased with economic growth, most of the jobs are contractual.
    • Worse, the highest increase in jobs is at the lowest end, especially in the services sector — delivery boys for e-commerce or fast food for instance.
    • Thus what we see is a huge pool of unemployed university graduates with unfulfilled aspirations.
    • This group of dissatisfied, disgruntled youth can lead to disastrous consequences for our society, some of which we are already witnessing.

    Way forward

    • A reduction in the rate of increase of universities and colleges might not be politically feasible given the huge demand for higher education.
    • Increase vocation institutions: A concurrent increase in the number of high-quality vocational institutions is something that can be done.
    • There are upwards of 15,000 Industrial Training Institutes (ITIs) in the country currently.
    • Upgrading the existing ITIs, opening many more new ones with high-quality infrastructure and updated curriculum is something which should be done urgently.
    • There is a scheme to upgrade some ITIs to model ITIs.
    • However, what is required is not a selective approach but a more broad-based one that uplifts the standards of all of them besides adding many more new ones.
    • Industry might be more than willing to pitch in with funding (via the CSR route) as well as equipment, training for the faculty and internships for students.

    Conclusion

    These steps could help mitigate the mismatch between employment opportunities and the increasing number of educated youth in the country.

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