Value Added Article: The Crumbling Mortar of BRICS | EPW


Relevance: GS Paper II

Source

International Bodies


Why has this issue cropped up?

The recently held ministerial meeting in Rio de Janeiro for articulating the agenda of the forthcoming 11th BRICS Summit in November 2019 began on a note of discordance among the member countries on the issue of resolution of the Venezuelan crisis.


Brazil: the weak link of BRICS

  • Beyond the conceptual usefulness of binding the most prominent emerging economies of the world, the functional efficacy of the association of these countries has always been a matter of uncertainty given their varying fiscal and political realities.
  • What adds to the ambiguity this year is Brazil’s shifting foreign policy priorities under the current tenure of President Jair Bolsonaro.
  • The Brazilian foreign policies for almost a decade and a half now have been premised on the generic acceptance of a multipolar world. However, the new diplomacy has blatantly rejected multilateralism in favour of privileged relations with the Western nations, especially the United States (US).
  • With restricted (or no) global ambitions that are potentially aligned with this diplomatic objective, Brazil appears to be a weak link of BRICS.

Dwindling relevance of BRICS

  • Since the 2008–09 global financial crisis, there is an emerging view—predominantly from the US—that the concept of BRICS, at least from the economic standpoint, no longer holds water.
  • This view primarily rested on the back of the estimates of dwindling gross domestic product (GDP) growth rates of the member countries, especially China, which evidenced a sharp decline from double-digit growth figures to 7% or less.
  • These estimates contrasted with the projections made by Goldman Sachs—the originator of the BRICS acronym—regarding BRICS being the locomotive of global economic growth in the coming years since the 2000s.

Threat to BRICS

  • Brazil’s hobnobbing with the US should be potentially as much threatening for the sustainability of BRICS, as is Russia’s avowed commitment to strengthen the United Nation’s central role in geopolitics.
  • In both the cases, policies can be conceived under hierarchical pressure for appeasement, thereby compromising the autonomy of BRICS and/or its institutions, such as the NDB..
  • The economic disparity within the group leaves ample room for the members to be resentful of each other regarding their individual representation in BRICS institutions. For instance, China with its cash surpluses has pledged to contribute two-fifths of the NDB’s proposed Contingency Reserve Arrangement of $100 billion. In so doing it may attempt to dominate the bank in due course, and/or look for opportunities to promote yuan-denominated trade among BRICS and/or the broader developing world.

Conclusion

With such inherent ambivalences in the notion of BRICS as a bloc,  we can say that the concept is trapped in the pitfalls of thinking in acronyms, one that could not transcend the outdated rhetoric of “multilateralism”.


Value Added Article: Declining Fertility and Demographic Dividend | EPW


Relevance: GS Paper III

Source

ECONOMY



Theme of the Article

A concerted policy to harness the demographic dividend is the need of the hour.


Two components of demographic transition

Demographic transition has two components, that of fertility and mortality transition. However, it is fertility transition that plays a decisive role in determining the demographic dividend of any population.


Decline in TFR

  • The steady decline in the total fertility rate (TFR), an indicator of the average number of children expected to be born to a woman during her reproductive span, has been the main driver of the slowing down of population growth in India in the recent decades.
  • Consequently, this has several implications for policy, as population growth is set for a slowdown in the coming decades, along with an increase in the share of the working age population.
  • While the high fertility states have also recorded a sharp decline in the TFR over time, it has declined to 2.2 per woman in the 22 major states in 2017. However, due to the skewed sex ratio, the required replacement-level fertility, or the effective replacement-level fertility is higher than the benchmark of 2.1.
  • The factors that contributed to a fall in the TFR include increasing mobility, delayed marriage, access to higher education, and greater financial independence of women.

Fertility rates: urban vs rural

  • Several contrasting phenomena are in operation in the rural and urban areas with regard to the decline in fertility rates.
  • Even though fertility rates fell across all age groups, fertility in the older age groups has risen over time in urban India.
  • While in the rural areas the fertility rates in the higher age groups, that is, among mothers aged above 35 has fallen, fertility of older women has grown in urban areas.
  • It was found that education too had a role to play with regard to fertility rates among women.
  • Although in general, fertility is lower among educated women, in urban areas, fertility rates among women in their 30s are higher among the better educated than the less educated women. This is because better educated women have been able to delay marriage and childbirth, while access to better healthcare facilities enables women to have children at a later age.
  • However, in the urban areas fertility has been falling faster than expected. As of 2017, the TFR of urban India has fallen to 1.7, which is lower than the replacement level. The fertility rates of urban areas of all states, except for Bihar, Rajasthan and Uttar Pradesh, are either at the replacement level or below it. Also, for 10 states, the TFR is below 2 in rural areas.

Demographcic transition not uniform

  • Demographic transition in India has not been uniform. Although the population growth is set for a slowdown, an increase in the share of the working age population points to the advantage of the demographic dividend in India. This means that the growth rate of the working population is higher than the general population.
  • Normally, the demographic dividend can last for 40 to 50 years and countries can benefit only if they can use it effectively. Otherwise, the demographic dividend can also turn into a demographic burden.
  • In India, as there is a clear divergence in demographic patterns across regions and states, the demographic dividend window is available at different times as the age structures differ across the states.
  • In the southern and western parts, the demographic dividend is set to close in five years with an ageing population, whereas in some states it would remain open for 10 to 15 years. In the high fertility states of the north, the window is yet to open.
  • Thus, India has the advantage of a longer span of the demographic dividend due to the differences in the patterns in demographic transition across states.
  • The benefits of the demographic dividend can be reaped only if sufficient investments are made for basic infrastructure, health, educational attainment, and skill upgradation of the workforce, apart from the creation of sufficient numbers of suitable jobs to provide employment to the burgeoning workforce. This is because the available workers would not be absorbed spontaneously to deliver high growth.
  • To harness the demographic dividend, therefore, it is necessary that people in the working age are gainfully employed and that those working have proper education and skills so that they are productive in the workplace.

Conclusion

With unemployment rate at a 45-year high of 6.1%, it is clear that enough jobs are not available and the poor employability of the workforce points to the deficiencies in their health, educational attainments and vocational training, thereby validating that enough is not being done to take advantage of the demographic dividend.


Value Added Article: Parched Present, Parched Future? | EPW

Relevance: GS Paper I

Source

Geography


Theme of the Article

Faced with a worsening water crisis, the state needs to exercise prudence in water management.


Introduction

The rains have arrived, albeit late, in many parts of India to provide a much-needed respite from the heatwaves that killed hundreds and the accompanying water scarcity that had accentuated the vulnerability and crisis situation.


Water stress: explanation

  • In cities like Chennai and Ranchi, water stress led to violent clashes, distress, and desperation, as the lakes and reservoirs dried up and people had to fight and fend for water for their everyday needs.
  • However, water scarcity is the truth not only for these cities, but also for large parts of the country which have been reeling under a drought-like situation.
  • The delay in monsoon or poor rainfall is not the only reason.
  • The effect of drought has been felt more intensely also because it is becoming difficult to scrape for the smallest amounts of water after digging even deeper.
  • India is a country that is guzzling its groundwater at a rate unmatched by any other. Groundwater here fails to be treated as a public good.
  • Even eastern India, which is otherwise considered as “water-affluent,” is staring at a future with “groundwater drought.”
  • Many of the parched villages have ­become deserted in Marathwada in Maharashtra, Bundelkhand in ­Uttar Pradesh and Madhya Pradesh, and even the mountain regions of Uttarakhand.
  • Cities in India thrive on the water brought from far away locations at a high cost and with loss involved in transmission.
  • Chennai alone has lost over 350 lakes. The expansion of ­cities fails to take into account access to water, and to mandate provisions to harvest rainwater, and reuse, recycle and treat waste water.
  • The quality of water that is discharged by the cities and the industries remains of no concern to them. Due to such an approach, close to 70% of the country’s water supply is contaminated, leading to an estimated two lakh deaths in a year.
  • Most of the farming close to cities is being done using the untreated wastewater, which contains heavy metals and toxic chemicals, further compromising public health.

Water stress: inequalities

  • Water stress also re-emphasises inequalities of gender, caste, and region.
  • While women have been burdened with the responsibility of arranging for water, in situations of crisis, it also leads to practices such as men marrying for the second or third time for the sole purpose of getting “water wives” to fetch water through the day.
  • Such villages are incidentally close to rivers and dams, but the supply being directed towards Mumbai, women plough on to get water covering long distances, even as they are the last in their households to get to use it.
  • With its availability shrinking further and the market playing an important role in defining the costs and beneficiaries, the more privileged find ways to control the access to water.
  • There is an inherent inequality in distribution and a failure to share ­water judiciously. It is evident in megacities like Delhi and Mumbai where access depends on income and social status.
  • In crisis situations, like in Chennai, while apartment buildings could afford to pay for three or four tankers per day, low income households could not.
  • Among rural households, only 18% are said to have access to piped water.
  • Small farmers are worse off and are forced to take their lives or migrate in drought conditions.
  • The real estate boom has promoted the tanker lobby and increased water extraction, along with usurping of the floodplains and the green cover.

Way forward

  • The interlinking of rivers, pushed for despite evidence of poor functioning of existing hydro projects, will only spell disaster and more conflicts.
  • In view of the looming water crisis, and associated food and health insecurity, it is vital to exercise prudence to manage water efficiently.
  • It will, however, mean a move towards water-prudent crops and lifestyles, augmented storage and regulation of the usage of water and policies that take into account the inequalities in access, and real time data of its consumption.
  • Instead of mere engineering and technocratic fixes, somewhere an acceptance is also needed that waterbodies in their healthy and natural state have the ability to replenish themselves along with a capacity to contain the intensity of climate crises.

Value Added Article: NUDGE TO FUDGE | EPW


Relevance: GS Paper III 

Source

ECONOMY


Theme of the Article

Without concrete measures for augmenting opportunities, “behavioural change” is a demagogy.


Why has this issue cropped up?

The Economic Survey 2018–19 is trying to apply a “humane” face to the public policies of a government. The government claims of nudging such positive changes through its flagship campaigns like the Swachh Bharat Mission (SBM) and/or the Beti Bachao, Beti Padhao (BBBP).


‘Nudge’ for behavioural change

  • The very idea that the commoners are not some “rational” entities called “economic men,” but “human beings” of flesh, blood and folly, and that they need encouragement/interventions or “nudges” (not enforcements/mandates) for making choices for positive ­socio-economic changes in the country, is nothing new.
  • In fact, for over a decade now various governments around the world are trying to integrate such insights from behavioural studies into policymaking.
  • The underlying objective is to increase citizens’ participation in various state-led programmes/schemes and policies by nudging positive behavioural changes among them.

Analysing ‘behavioural change’

  • Changes, if any, are largely restricted to a superficial change of perception brought through inauguration events/cake-cutting ceremonies/certificate distribution events/competitions/bike rallies, rather than any measures for initiating real changes at the ground level.
  • If that is the case, then what is the difference between a nudge that stimulates public behaviour towards socio-economic change and that which manipulates public behaviour for political expediency?
  • For example, a girl student receiving a bicycle under the BBBP scheme will be disenfranchised from its benefits due to various sociocultural embargos that are conventionally imposed on the movement of females.Whereas the bicycle might benefit the male members in her family and in turn influence their political (party) choices.
  • In a country like India where an individual’s behavioural pattern is deeply entrenched in sociocultural norms, financial assistances/handouts/money transfers (as in the case of the Kanyashree Prakalpa scheme in West Bengal) are least likely to bring about any fundamental changes in behaviour.
  • On the contrary, such incentives might further corrupt public conduct with beneficiaries demonstrating a prima facie change in perception for receiving the aids, while their intrinsic behaviour remains intact.

Human being vs economic man

In settings that are characterised by limited resources, scope and capability, it is difficult to discriminate a “human being” from a so-called “economic man.” This is because in such circumstances the folly of optimising self-interest at the cost of collective welfare is potentially astute for self-sustenance.


Conclusion

Without any systematic assessment of such ground realities and/or any blueprint of initiatives for expanding the economic opportunities, entitlements and capabilities, coming from the ruling government, the claims of paradigmatic change in the policy framework with shift of focus from the “homo economicus” (or economic man) to “homo sapiens” (or human beings) emerges as mere demagoguery.


Value Added Article: Fixed Fate, Free Will | EPW


Relevance: GS Paper III 

Source

ECONOMY


Theme of the Article

Abeyance of the Essential Commodities Act is easier said than done.


Why has this issue cropped up?

The fifth governing council meeting of the NITI Aayog, held on 15 June 2019, had called upon the state governments to undertake structural transformations of the Indian agricultural sector through the reforms of the marketing regulations, such as the Essential Commodities Act (ECA), 1955 and the Model Agricultural Produce Market Committee Act (APMC Act). In the context of the agrarian distress across the country, reforming these acts is expected to provide a breather, especially to the deteriorating farm incomes.


Reforming ECA

  • The idea for reforming the ECA, particularly at a time when surplus management has emerged as a pressing problem for the farm sector, deserves mention.
  • With the ECA being a deterrent for market integration—a necessary condition for Pareto optimality of spatial competitive equilibrium—its relaxation would imply that excess demand (supply) and hence price signals from one market will be transmitted to other markets.
  • In other words, farmers will get the right price for their produce, while increase in availability will give (price) relief to consumers.

A contagious issue

  • Amending the ECA is a contagious issue, especially for such crops that have a well-entrenched political practice of fixing an administered price.
  • Once the government commits an assured price to the growers, an essential corollary is that it must ensure the offtake of whatever is produced.
  • In the case of crops such as sugar cane, there is a political clout within the sugar milling industry that would resist any relaxation of control over the movement and marketing of the cane.
  • While a government would underwrite buffer stock at public cost (by levying a cess on the mills, which is effectively paid by consumers), it may not prevent such mala fides when its political fortunes are riding on the sugar industry.
  • With such examples at hand, “cooperative federalism” for agricultural reforms seems more notional than practical.
  • How can one forget the experience of implementing the Model APMC Act, which has been impeded by the tardy and varied state-level adoption of both the magnitude and content of the amendments?
  • Likewise, whether and/or to what extent a state government would concur to the central government’s recommendations for amending the ECA is a matter of its political expediency.

The private sector angle

  • The official explanation of the purpose of modifying the act, especially the restriction on stocking limits is that it is expected to encourage the much-needed investments (more specifically corporate investments) in agricultural marketing.
  • Such an explanation is based on some classic tenets of “market romanticism.”
    • First, that the private sector will act as an innovator/game changer for agricultural transformation and therefore needs to be integrated in the rural development strategy, and
    • Second,, that the efficiency outcomes of the market, and particularly the role of the private sector in improving marketing efficiency are axiomatic.
  • While these partially fit into promise of “minimum government, maximum governance,” but without a road map for governance it is not clear how such integration would pan out for the farmers in general and the smallholders in particular.
  • In fact, one cannot dismiss the fact that stockholding, bargaining advantage, risk-taking ability, and information control are among the key determinants of power behaviour in the market.

Conclusion

The re-elected government’s political will for “inclusive” agricultural reforms will stand the test of time only if it can create an “enabling environment” for making these reforms work in the coming days.


Value Added Article: Simultaneous Elections | EPW


Relevance: GS Paper  II (Polity )


Theme of the Article

Are elections a mere instrument to elect the government or a meaningful democratic exercise?


Introduction

“One Nation, One Election’’ has been an issue of great priority for the present govt. While there appears to be an acceptance of the idea, certain opposition parties have opposed it on the ground that it may adversely affect constitutional democracy and federalism. Many suspect that such a move may lead to the consolidation of authoritarian tendencies of the ruling party. Hence, it requires due deliberation and careful consideration.


Is the idea of holding simultaneous new?

  • The idea of holding simultaneous elections is not new, as it was mooted by the Election Commission in 1982 as well as the Law Commission in 1999.
  • However, the recent impetus has come from a discussion paper by NITI Aayog members as well as a report by the Law Commission.
  • Furthermore, this idea has been pushed forcefully by the Prime Minister in his speeches and monologues, thereby giving it political weightage.

Rationale behind simultaneous elections

  • Primarily, the rationale for this idea rests on the arguments for efficiency and expenditure.
  • The simultaneous conduct of elections is said to help reduce the overall expenditure on holding elections in a staggered and sequential manner, as has been the general precedent since 1969.
  • Moreover, it would also remove the impediment in taking policy decisions due to the adherence to the model code of conduct at different points in time.
  • Such arguments are essentially managerial/instrumental in nature and show scant regard for constitutional principles and democratic values.

Simultaneous elections and federalism

  • The implementation of this idea would demand the curtailment of the ongoing tenure of several state legislatures, which would effectively mean undermining the democratic mandate.
  • Even if this process is to be ensured without invoking Article 356 and were to be carried out consensually, it would stand to harm the federal principle.
  • Although the non-simultaneity was an outcome of the overreach of the then central government in the first place, over time, with the changes in correlation of political forces, it has aided the strengthening of federalism.
  • It is so because specificities of state-level issues and the regional forces addressing them prominently find better scope and space with the singular focus being on the elections in particular states.
  • Simultaneity threatens to drown these specificities and further strengthen the unitary bias, particularly in the context of the concentration of immense resources and the control of the narrative with one party.
  • Various assembly elections that happen to be held separately from general elections to the Lok Sabha can exercise democratic pulls and pressures on the union government.
  • Besides, elections held at different times can possibly force the union government to correct its anti-people policies, and pay heed to the demands of the masses.
  • Along with popular extra-parliamentary agitations and movements, elections in various states also provide a scope for the expression of this activity of the masses which is essential for the health of democracy.

Simultaneous elections and accountability

  • The proposals put forward to sustain the simultaneity stand in brazen contravention to the principle of accountability of the executive to the people through the legislature. It is so becuase the sustenance of simultaneous elections demands a provision for fixed tenure.
  • With the absence of such a provision, the pattern of simultaneity may be broken if a successful no-confidence motion against a government, at the union or state level were to necessitate mid-term elections.
  • Such eventuality is sought to be addressed through proposals, such as a so-called constructive no-confidence motion (which can be moved only by proving the possibility of an alternative arrangement), President’s rule, or immediate election for a curtailed period (that is a remainder of the term). None of these ideas find any place in the Constitution.
  • Ideas such as the constructive vote of no-confidence dilute the accountability to legislature and raise the question as to whether, in a democracy, stability can be given precedence over accountability.
  • Such dilution would also entail further entrenchment of the ongoing process of the Presidentialisation of the polity by stealth. This process also gets a boost as the simultaneous elections would unduly favour the big national parties—better endowed with resources and reach—and make the political contest increasingly bipartisan and centred on personalities of leaders.
  • Such a conception looks at elections as a mere procedure or method to elect the government to govern the people-nation. It imagines that people are passive voters who have to vote every five years and then withdraw from public activity, entrusting it to the executive.

Conclusion

Elections are an exercise whereby the principle of popular sovereignty is put into practice. One can debate how far such popular activity is possible in money- and media-dominated elections, but the underlying logic of simultaneous elections seeks to foreclose such a possibility itself.


Value Added Article: Dignity of Public Institutions | EPW


Relevance: GS Paper  II (Government )


Introduction

In the political sphere it is interesting to come across words like “insult.” It is interesting in the sense that it is used in relation to a public institution and the reference to individuals occupying these institutions is in the background.


Context of the Article

This was evident in the public use of this kind of language by the Prime Minister who suggestively used this word in order to establish a relationship between the morally painful feeling of insult and the “innocent” Government of Jharkhand.


Point of inquiry

Can public institutions be insulted and, if yes, what are the grounds on which the claim to have insulted the public institution be taken to be morally valid?


Analysis of the inquiry

  • Public institutions do not inherently possess an element of moral sensitivity that can produce the feeling of insult. This is because they are mere physical structures.
  • Similarly, it will be absurd to say that institutional procedures suffer from human insult although they could be abused by human beings.
  • Thus, these institutions due to their public nature acquire an abstract character as they do not belong to one single person. These two dimensions necessarily disallow any association of the feeling of insult to an institution.
  • If this is the case where one cannot stick insult to a public institution then how does one understand claims such as “the government has been insulted”?
  • The claim to insult has a purchase only on the condition that a public institution undergoes the process of personification at the cost of robbing the state of its democratic essence and republican character.
  • Or, they are put in a concrete relationship with a single person or a group of persons holding institutional power.
  • It is a person whose negative feeling of insult or affirmative sense of respect gets transposed onto the institution. It is in this sense that the language of insult gets stuck to these institutions.
  • Institutions are an embodiment of these public persons who make moral claims.
  • But making a claim that “institutions are being insulted” is only an inadequate or an incomplete claim. It becomes complete and valid when it is based on sound reasons.
  • An insult is an unfair moral allegation that is attributed to a government that has a relatively better record in good governance.
  • This unfair allegation seeks to show no respect for the good work that a government is doing.
  • Insult in this sense is disrespect expressed towards the government that has the evidence of doing good work for the people.
  • Thus, a claim to have been insulted is not an arbitrary claim. It has to be backed by sound reasons, drawing its force from the broader principle of justice.

Way forward

  • A state exists through conditions such as penalising tax evaders or punishing those who were responsible for mob lynching.
  • Prompt action on the part of the government agencies to prevent violence in cases of such lynching would enhance the public esteem of the institutions.
  • Stepping back is an active process of self-assessment or self-examination that the ruling party is supposed to take up on a regular basis. This would provide an opportunity for the government to improve upon its performance and offer better governance.
  • Naturally, this would eliminate the grounds that the opposition tends to use for subjecting the ruling government to criticism.

Conclusion

Stepping back and reflecting on one’s performance helps eliminate the need to convert fair and legitimate criticism into a matter of insult.


Value Added Article: Labour in the Indian Economy | EPW


Relevance: GS Paper III

Source

Economy


Segmentation of labour market

  • In India, labour markets are deeply segmented along caste and gender lines.
  • Members of the Scheduled Castes (SCs) or other oppressed groups are sometimes denied entry into certain occupations.
  • There are frequent instances in which workers belonging to oppressed castes are discriminated against, being paid lower wages or made to work for long hours.
  • Thus age-old social institutions continue to have a grip on the labour market despite the relatively fast growth of the Indian economy and modernisation of many of its segments.

Capital favoured over labour

  • Globally, economic changes that have occurred during the recent decades, set in motion by globalisation and neo-liberal economic policies, have favoured capital over labour.
  • This was in contrast to the period between the 1950s and 1970s during which the Keynesian policies of stimulating domestic demand through increased government expenditures had helped the “golden age of capitalism” to thrive. The working classes had made real gains during that phase.
  • On the other hand, from the 1980s onwards, the neo-liberal policy prescription of cutting government expenditures to a minimum has hurt the interests of the working poor.
  • Governments in developing countries, including India, have been unable to increase government expenditures to stimulate demand, even in the face of the 2008 global financial crisis.
  • The inability of present-day capitalism to absorb labour without dispossessing workers of their rights is the reason for the continuing expansion of the informal sector in developing countries.

Understanding of Informal Work

  • A striking feature of India’s labour market is the domineering share of the informal sector as a source of employment.
  • More than 82% of employment in the Indian economy is in the informal sector, that is, in enterprises that employed less than 10 workers.
  • Emergence of strong linkages between the formal and informal sectors can benefit the economy as a whole, with informal sector enterprises growing as ancillaries to or in subcontracting relations with the formal sector.
  • However, the relation between the formal and informal sectors has been rather weak in India, especially in the manufacturing sector.
  • Within the factory sector or organised manufacturing sector in India, there has been a rising share of contract workers or other informal workers, especially from the 2000s onwards.
  • Increasing employment of contract workers in place of regular workers reduce plant productivity and tend to depress the wages and bargaining strength of directly employed workers.

Female labour

  • There has been low rate of female labour force participation in India (and some other South Asian countries).
  • Policy interventions both at the supply and demand side to tackle this challenge are needed.
  • The supply-side interventions include creating institutions for improving women’s education and providing facilities such as childcare to ease the burden of domestic work.
  • The society and the economy undervalue the work performed by women within their own households.
  • If the official statistical agencies recognise cooking, childcare, and other activities performed by women within their own households as “work,” then work participation rate of women in India will be significantly higher than that of men.
  • Creating more employment opportunities in the economy will be crucial to boosting demand for women’s work.

Investment in labour

  • There is no doubt that the increase in the size of the working-age population offers a huge potential for India’s future economic growth.
  • However, “demographic dividend” requires investments in education and human development.
  • A large population could form the basis for a large market and a sizeable production base. In addition, an educated population can help in the creation of new knowledge. Clearly, India’s policymakers need to invest more in its people.

Conclusion

It is clear that in a country like India studies on labour will remain central to any attempt to understand the economy. Economists need take up research on questions of labour and employment growth in the Indian context.


Value Added Article: Fixed Fate, Free Will | EPW


Relevance: GS Paper III

Source

Economy


Theme of the Article

Abeyance of the Essential Commodities Act is easier said than done.


Why has this issue cropped up?

The fifth governing council meeting of the NITI Aayog, held on 15 June 2019, had called upon the state governments to undertake structural transformations of the Indian agricultural sector through the reforms of the marketing regulations, such as the Essential Commodities Act (ECA), 1955 and the Model Agricultural Produce Market Committee Act (APMC Act). In the context of the agrarian distress across the country, reforming these acts is expected to provide a breather, especially to the deteriorating farm incomes.


Reforming the ECA

  • The idea for reforming the ECA, particularly at a time when surplus management has emerged as a pressing problem for the farm sector, deserves mention.
  • With the ECA being a deterrent for market integration—a necessary condition for Pareto optimality of spatial competitive equilibrium—its relaxation would imply that excess demand (supply) and hence price signals from one market will be transmitted to other markets.
  • In other words, farmers will get the right price for their produce, while increase in availability will give (price) relief to consumers.

The concern with reforms

  • However, in the absence of further clarity from the NITI Aayog or the government on the trajectory of the reforms, scepticism pervades the commoner’s mind.
  • Will the commoner lose protection against irrational spikes in food prices if the government does not exercise its direct control over these?
  • Recall that, even with the ECA, governments have not been able to control price volatility effectively. Historically, the retail prices of the “essential” food items had largely escalated with government declarations of stockholding limits. For instance, the tightening of the government-determined quotas and releases of sugar in 2003 saw a rise in sugar and pulse prices.
  • Given such evidences, while (buffer) stocking and trade appear to be potentially better instruments for regulating prices, there is much cynicism about the feasibility of implementing any deregulation/abeyance of the ECA.

Can ECA reforms be successful?

  • Amending the ECA is a contagious issue, especially for such crops that have a well-entrenched political practice of fixing an administered price.
  • Once the government commits an assured price to the growers, an essential corollary is that it must ensure the offtake of whatever is produced.
  • In the case of crops such as sugar cane, there is a political clout within the sugar milling industry that would resist any relaxation of control over the movement and marketing of the cane in order to hike the retail prices of sugar, delimit the mills’ offtake on the grounds of low demand and hence refuse paying the administered prices to the growers.
  • While a government would underwrite buffer stock at public cost (by levying a cess on the mills, which is effectively paid by consumers), it may not prevent such mala fides when its political fortunes are riding on the sugar industry. With such examples at hand, “cooperative federalism” for agricultural reforms seems more notional than practical.
  • How can one forget the experience of implementing the Model APMC Act, which has been impeded by the tardy and varied state-level adoption of both the magnitude and content of the amendments? Likewise, whether and/or to what extent a state government would concur to the central government’s recommendations for amending the ECA is a matter of its political expediency.

Govt. purpose of modifying the act

  • The purpose of modifying the act, especially the restriction on stocking limits is expected to encourage the much-needed investments (more specifically corporate investments) in agricultural marketing.
  • Such an explanation is based on the following tenets:
    • First, that the private sector will act as an innovator/game changer for agricultural transformation and therefore needs to be integrated in the rural development strategy, and
    • second, that the efficiency outcomes of the market, and particularly the role of the private sector in improving marketing efficiency are axiomatic.

Conclusion

Given this, the re-elected government’s political will for “inclusive” agricultural reforms will stand the test of time only if it can create an “enabling environment” for making these reforms work in the coming days


Value Added Article: The Fate of New Police Initiatives | EPW


Relevance: GS Paper II

Source

Governance


Theme of the article

Accountability to the citizen must be paramount in community-policing initiatives.


Why has this raised?

As part of its community-policing initiatives, the Maharashtra police has decided to institutionalise the “best policing practices” that were or are being followed in districts across the state. These include the “police didi” programme in Mumbai, the “bharosa (trust) cell” by the Pune and Nagpur police and so on.


The hurdles to effective Policing

  • Such initiatives are discontinued after the officers who started them get transferred to other jurisdictions.
  • India’s ratio of police persons per 1,000 people is 1.2, which is grossly below the United Nation’s recommendation.
  • There are huge vacancies in almost every state, especially in the non-Indian Police Service posts.
  • Problems of overwork, lack of leave, poor dietary habits due to long hours of duty, lack of decent housing and so on are just some of the issues they face.
  • Lack of caste and religious diversity in the force.
  • The attitude towards women constables and assistant inspectors.
  • poor investigation, and forensic skills and means.
  • “political interference” in police functioning and the political executive’s hold over the force

Way forward

  • The overall image of the police and the force’s efficacy—though different in different states—needs long-term bolstering through major reforms.
  • The introduction of eight-hour shifts in Kerala and Mumbai has been welcomed by the police therein. This needs to be replicated by other states.
  • The accountability of the police to the larger community and their attitudes towards tribal, marginalised, Dalit and women complainants must beensured.
  • Their training, postings, etc, need to receive urgent attention.
  • 10 states in the country have implemented a host of police reforms. More states need to follow.

Conclusion

Policing is the only non-combatant organsiation that can use force against citizens and curtail their liberty. Such power must be tempered by its own moral and social consciousness. The initiative announced by the Maharashtra police must take these factors into account when it institutionalises the best community practices.