Human Rights Issues

[op-ed of the day] Preventing mob lynching

op-ed snap | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 2-Protection of vulnerable section and mob lynching.
Context

The spate of incidents of lynching over the past few years has led to a heightened sense of insecurity among the marginalised communities. The Centre should specify penal action against officials and doctors accused of dereliction of duty.

2018 Supreme Court Judgement
- In 2018, the Supreme Court described lynching as a “horrendous act of mobocracy”.
- The Court exhorted the Centre and State governments to frame laws specifically to deal with the crime of lynching.
- The SC laid down certain guidelines to be incorporated in these laws including
  - Fast-track trials.
  - Compensation to victims, and
  - Disciplinary action against lax law-enforcers.
The State laws
- Manipur bill for the law against lynching: The Manipur government came up first with its Bill against lynching in 2018, incorporating some logical and relevant clauses.
  - Provision of nodal officer: The Bill specified that there would be nodal officers in each district to control such crimes.
  - Compensation to the victim: The law provides for adequate monetary compensation to the victims or their immediate kin.
  - Punishment for failure to enforce the law: Police officers who fail to prevent the crime of lynching in their jurisdiction are liable to be imprisoned for a term that may extend from one to three years with a fine limit of ₹50,000.
  - No concurrence of state for the prosecution of the police: No concurrence of the State government is required to prosecute them for dereliction of duty.
- Rajasthan bill: The government has accepted only a few guidelines issued by the apex court.
  - No action against police officers: The bill is also silent on any action to be initiated against police officers who may be accused of dereliction of duty.
- West Bengal bill: Most other guidelines of the Supreme Court have been adopted by the State.
  - Stringent punishment: Punishment for lynching to death is punishable with the death penalty or life imprisonment and a fine of up to ₹5 lakh.
What the Centre can do
- Adoption of the SC guidelines: The Centre should adopt the guidelines provided by the SC to deal with the crime.
- Action against doctors: Centre would do well to incorporate sections in the law for penal action against doctors who stand accused of-
  - Dereliction of duty.
  - For delay in attending to victims of lynching.
  - For submitting false reports without carrying out a proper and thorough medical examination of the victims.
- The compensation scheme for victims: Under the compensation scheme for the victims, the amount to be paid to the victims should be recovered from the perpetrators of the crime.
  - Collective fines: Collective fines should be imposed on the villagers where the lynching takes place.
- Punishment for a political leader for inciting the mob: Centre could even provide for punitive action against political leaders found guilty of inciting mobs.
- Punitive action against police: Punitive action to be taken against police officers accused of dereliction of duty, as incorporated in the law enacted by Manipur government, could be replicated in the Central law too.
  - Punitive action as a deterrent: It would deter police officials acting in a partisan manner in favour of the lynch mob.
Conclusion

Until a zero-tolerance attitude is adopted in dealing with mob lynching, this crime will continue to show a rising trend.
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Internal Security Trends and Incidents

[op-ed snap] Maoist rebellion: policy fade-out, policy fade-in

op-ed snap | Security Issues | Mains Paper 3: External State & Non-State Actors: Challenges To Internal Security.

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 3- Threat of Left Wing Extremism and ways to deal with it.
Context

When much is made of peace talks with rebels in Northeast India, avoidance of peace talks with Maoist rebels is strange.

States left to deal with the Maoists
- Scale and extent of the problem: Officially in 2019, there are 11 states and 90 affected districts.
- State subject: This is because policing and maintaining law and order are matters devolved to states.
- The approach adopted to deal with the problem: According to MHA-
  - Capacity building: Primarily by capacity building of the state governments.
  - Areas of capacity building: Capacity building is to be carried out in areas of security and development. This will continue with the-
  - Better police training.
  - Better intelligence gathering.
  - Reinforcing police stations in conflict zones.
  - And recruiting locals into auxiliary forces.
- Support by MHA: MHA will continue to provide the Central Reserve Police Force (CRPF) and other paramilitaries under its command.
  - Support of NTRO: Intelligence gathering outfits such as the National Technical Research Organisation (NTRO).
  - NTRO has in the past year increased drone surveillance over the densely forested Abujhmad area in southwest Chhattisgarh, which remains the main rebel hub.
The success achieved so far
- Influence reduced to 90 districts: The policies so far has certainly contained the rebels across 90 affected districts.
- Surrender and rehabilitation policy: Most Maoist-affected states in India have a surrender and rehabilitation policy.
- Surrender policy along with search and destroy : Surrender policy rides in tandem with search-and-destroy missions that police and paramilitaries provide.
- This pincer has massively depleted rebel leadership and ranks with regular killings, arrests, and surrender of its leaders and cadres.
Return of conflict displaced people
- It is crucial for the conflict-displaced to return to their homes.
- Issues related to return of displaced: Agencies discourage those returning from going back to their old home and instead are offered state-mandated enclaves.
  - No or little economic imperatives: Those returning are offered little economic imperative besides daily wage labour and scrambling for government handouts.
  - Some government jobs: For some, jobs are offered in
  - That is, in any case, the present for much of the 50,000 or so who did not manage to escape to Telangana and elsewhere.
Conclusion
- The central government would do well to focus here and in beginning negotiations for peace.
- The Left-wing rebellion, a reality for over 50 years, is difficult to end until poor governance is improved.
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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

[op-ed snap] The perils of RBI’s fixation on inflation

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

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 3- Inflation targeting by RBI, and other mandates of RBI.
Context

The RBI’s responsibility to regulate the financial sector may have taken a back seat after the adoption of inflation targeting as the main objective. Has a fixation with inflation rate made the RBI take its eyes off the loan books of the banks?

Evolution of the role of the Central Banks
- Maintaining financial stability: The establishment of some of the world’s oldest central banks was inspired by the goal of maintaining financial stability.
  - Harm to the depositors: It was recognised that when private commercial banks fail, whether due to malfeasance or misjudgement, they harm their trusting depositors.
  - Harm to the entire system: But when banks fail they not only harm the depositors they can also take down with them the rest of the financial system.
- Banks lending to one another: The entire financial system also gets harmed when banks have lent to one another, which is not uncommon.
  - The collapse of credit: In the crisis that ensues, there is a collapse of credit which, in turn, leads to a downturn in economic activity.
- Lender of last resort: To avoid this, the central bank was conceived of as the lender of last resort.
  - Prevention of run on the banks: Lender of last resort is the one that could pre-empt a run on banks and give them time to put their books back in order.
  - Regulation of banks: However, this was to be accompanied by the adoption of a tough regulatory stance.
  - Whereby the central bank would stay hawk-eyed towards the activities of banks, particularly risky lending.
- Rise of neo-liberalism and change in a role: With the rise of neoliberalism, the central tenet of which is that markets should be given free play, the regulatory role of central banks took a back seat.
  - Inflation control as primary role: The Central banks came to be primarily mandated with inflation control.
Inflation targeting and regulation of the financial market by RBI
- Multiple indicator approach: In India, the RBI had earlier pursued a ‘multiple indicators approach’.
  - What was the multiple indicator approach: The approach involves concern for outcomes other than inflation, including even the balance of payments.
  - Discouraging the approach: Developments in economic theory discouraged ‘multiple indicators approach’.
  - It was argued that having economic activity as an objective of monetary policy leads to higher inflation.
- Favouring low inflation over lower unemployment: Discouraging the ‘multiple indicator approach’ encouraged low inflation over low unemployment.
- Inflation targeting as the sole objective of monetary policy: The Indian government also instituted inflation targeting as the sole objective of monetary policy.
  - The fixed target for the RBI: The RBI was permitted to exceed or fall short of a targeted inflation rate of 4% by a margin of 2 percentage points.
- But have the RBI’s original mandate as a central bank been met?
  - IL&FS crisis: In 2018, within three years of the adoption of inflation targeting goal, a crisis engulfed IL&FS, a non-banking financial company in the infrastructure space.
  - Not a small player: It operated over 100 subsidiaries and was sitting on a debt of ₹94,000 crores.
  - Effects of default: Given this, IL&FS default had a chilling effect on the investors, banks and mutual funds associated with it both directly or indirectly.
  - PMC bank crisis: In 2019, a run on the Punjab and Maharashtra Co-operative Bank had to be averted by imposing withdrawal limits.
  - Outright fraud in PMC case: While in the case of IL&FS, some part of the problem may have been caused by a slowing economy, outright fraud underlay the crisis at PMC Bank.
  - Raghavendra Sahakara Bank case: In early 2020, curbs have had to be placed on withdrawals from the Bengaluru-based Sri Guru Raghavendra Sahakara Bank.
- Pertinent question
  - Regulatory sector at the backseat? It is not too early to ask if the RBI’s responsibility to regulate the financial sector may have taken a back seat after the adoption of inflation targeting as the main objective.
  - Has a fixation with inflation rate made the RBI take its eyes off the loan books of the banks?
The recent rise in inflation and shortfall of currency notes
- Inflation at 7%: At over 7%, the inflation rate in December is the highest in five years.
  - Not cause of concern: This may not be the reason to panic, for the price rise could be seasonal and may well abate.
  - Question on inflation targeting: But it does raise a question on the efficacy of inflation targeting as a means of inflation control.
  - Reason for moderate inflation so far: If the inflation rate was within the intended range so far, that may have been due to both declining food prices and, for a phase, oil prices.
- The shortfall of notes: The central bank has a monopoly on the issue of notes.
  - There is an absolute shortage of small denomination notes in the bazaars of India.
  - Small-denomination notes are mostly unavailable.
Conclusion

While focusing on the inflation, the Central bank also needs to keep the other mandates especially the regulation of the finance sector in check.
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Coal and Mining Sector

[op-ed of the day] Let’s not muddle along on how we share natural endowments

op-ed snap | | Mains Paper 2: Government Scheme/Policies

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 2- Adoption of policy of auctioning of resources and periodic review of the policy.
Context

Governments regulations and restrictions in the markets, believing that policies could artificially restrict either supply or demand, or both, often results in unrealistic or unworkable prices.

Adoption of the auctioning process to allocate resources
- Design of process makes the difference: While auctions may be the cleanest way to allot scarce natural resources to private parties, their design makes all the difference.
- Three things needed to get the desired results from auctions:
  - Clear policy goal: Define clear policy goals for the allotment of the resource whether coal blocks, spectrum or land.
  - The proper process of periodic review: Define a proper process for periodic review of the design itself, since it may not be possible to get everything right in the first instance.
  - Make the process non-partisan: Make the political oversight process as non-partisan as possible, so that regime changes do not keep upending policies.
What went wrong in spectrum allocation case?
- Arbitrary tweaks in policy: Arbitrary tweaks were made in the telecom licence and spectrum allocation policy.
  - Which is what forced the apex court to intervene and cancel those licences.
- The claim of revenue loss: Cancellation followed a claim by the CAG that the “presumptive” revenue losses may have been as high as ₹1.76.
- Result of the two events-policy of revenue maximisation: The net result was that all subsequent auctions were designed to maximize spectrum bids.
  - Winner’s curse: The policy finally ended up becoming a winner’s curse, evident in the pile of debt incurred by the telecom sector.
- Why did this happen? This happened because of the absence of a clear policy goal.
Real estate sector
- High land prices: The same goes for real estate, which is struggling right now due to high land prices because the bureaucracy prevents price reduction in land.
  - Unaffordable to middle-income buyers: That make most properties unaffordable for middle and lower-middle-income buyers.
- Low FSI issue: Urban land prices are high due to artificial constriction of supplies through the fixing of low floor space indices (FSIs) even in land-scarce localities.
Technology and periodic review of policy
- Technology can lower costs: Spectrum or land or coal mines are not always in short supply, for new technology lowers costs.
  - Efficient spectrum use: The same spectrum can, with the use of newer technology, be used more efficiently.
  - 3D printing in construction: Better infrastructure and improved building technologies (even 3D printing techniques for mass housing projects in non-urban areas) can lower housing costs enormously.
  - Automated coal mining: Automated coal mining can lower coal production costs, enabling higher profitability even with relatively high auction bids.
- Need for periodic policy review: Technology can reduce the prices of the resources and hence the periodic review of the prices at which the resources are allocated need to be taken to for balanced pricing.
Conclusion
- Policies on the allocation of scarce resources need to evolve based on actual experience and changing technologies and processes.
- The success or failure of a specific policy cannot be judged purely from a revenue or transparency point of view.
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UDAY Scheme for Discoms

[op-ed snap] Power replay

op-ed snap | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 3-Indian power sector-Problems faced by the Discoms and their solutions.
Context

Five years after the launch of UDAY, power-sector once again seems to be going deep into the troubles.

Where the Discoms stand now?
- Losses increased: The losses of state-owned distribution companies (discoms) risen.
- Dues increased: Discom’s dues for power purchases have also surged.
  - Dues owed by discoms to power producers, both independent and state-run entities, stood at Rs 80,930 crore.
  - Of these, Rs 71,673 crore extends beyond the allowed grace period of 60 days.
  - Rajasthan leads the states with the most dues, followed by Tamil Nadu and Uttar Pradesh.
Components of UDAY and progress made
- The UDAY scheme, which involved state governments taking over the debt of discoms, had three critical components
- First-Reduction in AT&C losses: While progress has been made on some of these fronts, it hasn’t been in line with the targets laid out under UDAY.
  - AT&C (Aggregate Technical and Commercial) losses have declined in some states, but not to the extent envisaged.
  - Under UDAY, discoms were to bring down AT&C losses to 15 per cent by FY19.
- Second- Timely revision of tariffs: While some states have raised power tariffs, the hikes have not been sufficient.
  - In tariff revision decisions political considerations prevailed over commercial decisions.
- Third- elimination of the gap between per unit of cost and revenue realised: The gap between the average cost per unit of power and the revenue realised has not declined in the manner envisaged.
  - Because of this discoms were forced to reduce their power purchases and delay payments to power producers.
Way forward:
- The new plan, being formulated by the government reportedly, aims to address these issues by-
  - Reducing electricity losses.
  - Eliminating the tariff gap.
  - Smart metering.
  - Privatising discoms.
  - Having distribution franchisees.
- Altering incentive structure: Along with the above, the Centre should also look at altering the incentive structures of states in order to ensure compliance.
- Provision of penalties: Stiff penalties need to be imposed for not meeting the targets laid out in the new scheme.
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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

[op-ed snap] Reset and reform

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

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 3- Socio-economic upheaval in Indian economy and its consequences for the Indian economy.
Context

With the Indian economy caught in the middle of a socio-economic upheaval, the government needs to make its focus on the economy clear and pronounced.

India in the middle of a socio-economic upheaval
- Weakening economy: The economy has been weakening for a couple of years now.
- Social upheaval: The social upheaval is new but its seeds have been fermenting for a while.
- Consequences of the two: The social and economic sides of an economy are not divorced from each other.
  - Each influences the other and the current quagmire threatens to unleash the worst type of feedback between the two.
Consequences for the employment
- Most severe consequence due to the interaction between the social and economic sides is unemployment.
- Rising unemployment disproportionately affects the young.
- India’s job market: India whose median citizen is in the 30s and which is inducting 10 million new young people to the job market every year.
- Demographic dividend turning into a curse: This dynamic, popularly hailed as India’s demographic dividend, can rapidly turn into a demographic curse if the employment situation doesn’t improve.
Falling investment rate, increased risk perception
- Where will the jobs come from? The job creators are entrepreneurs, conglomerates, and multinationals.
  - It is in their nature to take investment risks as long as the returns are high enough.
- Investment rates below 30: In India, investment rate fell well below 30 per cent a while back.
  - Falling returns: The returns on investment were not compensating entrepreneurs for the risk.
  - The recent social upheaval is only adding to the perceived risk.
- Wait and see approach: The more investors adopt a “wait-and-see” approach, the worse the job situation will become.
Way forward
- Structural reforms: The government needs to announce a clear plan and timeline for structural reforms.
- Prioritising domain competence in staff: The government has to start staffing technical positions by prioritising domain competence and empowering these hires with policy relevance.
- Maintaining the integrity of institutions: The government need to maintain the integrity of institutions tasked with the regulation of corporations and banks, monetary policy management, data collection/dissemination and law enforcement.
- Accommodate dissent: The government also needs to desist from trying to drown out protesting voices with state muscle power.
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Goods and Services Tax (GST)

[op-ed of the day] GST may not have been revenue-neutral

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

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 3- GST-below expected collection, and problems associated with it.
Context

In theory, the shift to GST made eminent sense, yet in practice, some of these expectations have been belied.

Why have GST collections not measured up to expectations?
- This could be due to a combination of three factors:
- First: The tax rates under GST are lower than in the earlier regime-GST was not revenue neutral, to begin with.
- Second: There has been massive tax evasion due to under-reporting, input credit scams and fake invoices
- Third: A slowing economy has impacted firm revenues, and thus tax collections.
GST should have been revenue-neutral but it is not
- Fitment exercises not carried out: The fitment exercise should have been undertaken in a manner so as to ensure that collections pre and post GST are the same.
  - But, this fundamental principle was not adhered to, and other considerations dominated.
  - Revenue neutrality Vs. Multiple objectives: The GST council began its deliberations not with the single objective of revenue neutrality, but with multiple objectives in mind.
  - Closeness to existing tax: Council wanted to ensure that rates were close to the existing tax incidence (accounting for cascading); to ensure minimal impact on inflation.
  - Not regressive: The council also wanted the proposed rate structure was not regressive in nature.
  - The council wanted that items of mass consumption were not taxed at a higher rate.
  - Achieving all these objectives simultaneously proved a difficult task.
The issue of tax evasion
- It is difficult to arrive at firm estimates of the scale of the problem but there are some indications of its size.
- In West Bengal, it was estimated that the value of goods (July 2017 to March 2018) entering a state appeared to be under-reported by around Rs 50,000 crore.
- Rs 60,000 crore in Madhya Pradesh, and Rs 1,50,000 crore in Maharashtra.
- Numerous cases of tax fraud and fake invoice scams have also been detected since then
Problems involve and possible solutions
- Invoice matching: It is argued that invoice matching will help if implemented it from the beginning.
  - It could have helped plug the loopholes.
- Issue of under-reporting: It is debatable whether invoice matching can end under-reporting (collusion) and fake invoices.
- Limit of state capacity in handling cases: The Central and state administrations can intervene in only about 3 lakh cases in a year.
  - Their capacity to track lakhs of transactions on a daily basis is questionable.
- Slowing economy: Already existing structural issues have been compounded by the slowing economy.
Way forward
- There are certain options available to the government.
- First: Either recalibrate the expectation or carry on the efforts to plug the loopholes and the shortcoming in the system.
- Second: Lower the cut-off for composition scheme. A higher level simply encourages business “splitting”.
- Third: Reduce exemptions.
- Fourth: The council must deliberate on the rate structure, bringing it in line with pre-GST levels.
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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

[op-ed snap] A rough patch

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

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 3- Rising inflation-slowing growth rates and its consequences for Indian economy.
Context

High inflation has reduced the fiscal space available for a rate cut.

RBI target of 6% breached.
- CPI at 7.35 %: Retail inflation, as measured by the consumer price index (CPI), has surged to 7.35 per cent in December 2019.
- Latest inflation data seems to corroborate fears articulated by the Monetary Policy Committee (MPC) in its December meeting.
- In the meeting, MPC refrained from cutting the benchmark repo rate.
Consequences for the economy
- Reduced scope for fiscal slippage: High inflation reduced the space for further easing of policy rates.
  - Even after clarity over the extent of the Centre’s fiscal slippage emerged.
- Rise in yield for 10-year securities: The 10-year G-sec yields have reacted sharply to these developments, rising to 6.67 on Tuesday.
  - Offsetting operation twist: Rise in yield resulted in offsetting the impact of the RBI’s recent open market operations.
- Inflation targeting under stress: The combination of weak economic activity and higher than expected supply-side inflationary pressures has put the inflation-targeting regime under test.
Reasons for the inflation rise and chances of easing
- Food prices rise: Much of the rise in the headline inflation number can be traced to higher food prices.
  - Food inflation has risen to a near six-year high of 14.12 per cent in December 2019, up from 10.01 per cent in the previous month.
  - Vegetable prices have surged to 60.5 per cent in December, contributing nearly 3.7 percentage points to the headline numbers.
- Chances of ease in coming months: While vegetable crop cycles tend to be short, and supply-side pressures may ease in the coming months.
  - The stickiness in prices of protein items is likely to provide a floor for food inflation.
Bleak outlook for inflation easing
- No short-term return to normal level: Food inflation is unlikely to revert to previous levels in the short term.
- Household inflation expectations, a key metric in the MPC’s assessment, are more responsive to food inflation, this will further exert upward pressure on MPC.
- A factor of hostilities in the Middle East: The uncertainty over oil prices on account of hostilities in the Middle East, adds to the bleak outlook for inflation.
Conclusion

With limited fiscal space for a meaningful stimulus, the government intends to support the economy during this rough patch, and return growth to a higher trajectory.
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Primary and Secondary Education – RTE, Education Policy, SEQI, RMSA, Committee Reports, etc.

[op-ed snap] Not ready for school

op-ed snap | Governance | Mains Paper 2: Health & Education

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 2-National Education Policy and ASER 2019 report , emphasis on the preschool education and issues associated with it.
Context

The draft NEP (National Education Policy) document points out that close to five crore children currently in elementary school do not have foundational literacy and numeracy skills.

Severe learning crisis: The document cites several possible reasons for this crisis.
- First reason: Many children enter school before age six.
  - Lack of options: This is partly due to the lack of affordable and accessible options for pre-schooling.
  - Therefore, too many children go to Std. I with limited exposure to early childhood education.
  - Consequences for the poor: Children from poor families have a double disadvantage -lack of healthcare and nutrition and the absence of a supportive learning environment on the other.
- Second reason: Lack of developmentally appropriate activities by age and phase.
  - The misplaced focus of ICDS: School readiness or early childhood development and education activities have not had a high priority in the ICDS system.
  - Acting as an extension of pre-school education: Private preschools that have increased access to preschool but are often designed to be a downward extension of schooling.
  - Thus, they bring in school-like features into the pre-school classroom, rather than developmentally appropriate activities by age and phase.
Three clear trends in ASER-2019 data
- First trend: Scope for expansion of Anganwadi network.
  - Expansion network: There is considerable scope for expanding Anganwadi outreach for three and four-year-old children.
  - All-India data from 2018 shows that slightly less than 30 per cent children at age three and 15.6 per cent of children at age four are not enrolled anywhere.
- Second trend: Under 6 students in class I.
  - ASER 2018 data show that 27.6 per cent of all children in Std I are under six.
  - It is commonly assumed that children enter Standard I at age six and that they proceed year by year from Std I to Std VIII.
  - The Right to Education Act also refers to free and compulsory education for the age group six to 14.
  - However, the practice on the ground is quite different.
- Third trend: There are important age implications for children’s learning.
  - Association with learning output: ASER-2019 indicate the higher learning output associated with age in the same class.
  - In Std. I, the ability to do cognitive activities among seven-eight-year olds can be 20 percentage points higher than their friends who are five years old but in the same class.
  - In terms of reading levels in Std. I, 37.1 per cent children who are under six can recognise letters whereas 76 per cent of those who are seven or eight can do the same.
  - Age distribution in Std. I vary considerably between government and private schools.
  - Private schools in many states have a relatively older age distribution.
Way forward
- Understanding the children: Understanding the challenges that children face when they are young is critical if we want to solve these problems early in children’s life.
- Providing for developmentally appropriate skill: Instead of focusing on the pre-school years as the downward extension of school years there is a need for providing developmentally appropriate skill in these years.
- Pedagogy: On the pedagogy side reworking of curriculum and activity is urgently needed for entire age band of four to eight.
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Issues related to Economic growth

[op-ed of the day] Economic reforms are best done brick by boring brick

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

Note4Students
From UPSC perspective, the following things are important:
Prelims level: Not much.
Mains level: Paper 3- Economic reform-sudden or persistent and incremental, sustainable.
Context

Rather than big bang measures or a stealthy agenda, India can count on small but significant improvements.

Reforms only in crisis or by stealth
- The accepted conventional wisdom is that economic reforms in India happen only in a crisis or by stealth.
- Reforms in the crisis
  - Reforms of 1991 : The big example of the former are the 1991 reforms.
  - In 1991 the country faced a huge foreign exchange crisis, resulting partly from the fiscal profligacy of the previous decade.
  - 1999 telecom sector reforms: Another example is from 1999 when the telecom sector was in near bankruptcy, and that crisis led to the shift away from fixed fee for spectrum to revenue sharing.
  - The situation of no other choice: In both cases, there was considerable opposition to those reforms, but they were pushed through because the crisis left no other choice.
- Reform by stealth: Other than a crisis, more often than not, it has been economic reform by stealth.
  - In the form of executive orders: These reforms are often in the form of an executive decision rather than legislation. Following are the examples of it-
  - Expansion of the list under licence: The expansion of the list of items under the Open General Licence for imports, which is a reform of protectionism, or the reduction in the set of industries reserved for small-scale businesses.
  - Electoral bond introduction: A more recent example of stealth reform was the insertion of an electoral bond scheme in the Finance Bill of 2018.
  - Advantages of going stealth: Reform by stealth offers the advantage of going in either direction.
  - In 2013, faced with a potential currency crisis, the Reserve Bank of India (RBI) quietly retracted the limits on the liberalized remittance scheme (LRS).
  - Problem with stealth reforms: Stealth reforms are introduced stealthily but when they do not yield the desired result they are rolled back unpredictably, increasing uncertainty in policies of the government.
Persistent, encompassing, creative incrementalism in reforms
- The Economic Survey of 2015 pretty much ruled out Big Bang reforms in India, calling instead for “persistent, encompassing, creative incrementalism” on them.
- This is the right mantra.
- What incrementalism means: It implies continuity, not slowness, a sustainable speed that gives reforms predictability and stability. Following are its examples of it-
- Reform in food subsidy: Example of incrementalism could be reforms that are being carried out in food subsidies.
  - First: Reduce the leakages of the subsidy to non-farmers.
  - Thus, when procurement is done, payments go directly to their Aadhaar-linked accounts.
  - This will lead to non-farmers getting eliminated,
  - Second-Pay subsidy only to the poor: It will lead to subsidy savings, allowing us to limit the subsidy only to poor farmers.
- Sovereign gold bond scheme: The use of paper gold greatly reduces imports of the physical metal and outgoes of foreign exchange.
  - The sale of these bonds is being expanded, and they would eventually be everywhere, even at post offices.
- Aggregate licence by RBI: The next example is from a new category called account aggregators licensed by RBI.
  - It allows users’ control over the digital data trail that their transactions generate, and they can monetize it or use it to enhance their creditworthiness.
  - This is an incremental reform with huge ramifications.
Conclusion
- The reforms cited above are incremental, not a big bang, persistent but not slow, open and not by stealth, and finally, imaginative too, since they respond to real needs.
- Effective reforms are those that are done brick by brick, the boring measures that chip away at everything that constrains high, inclusive and sustainable growth.
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Type: op-ed snap