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The Hindu Editorial Analysis | PDF Download

Date: 02 October 2019
  • In the age of rising frustrations and religious fanaticism among Indian youth, How Gandhi’s path of self control and religious tolerance can guide India, Comment. (350 Words)
  1. How Gandhi’s life upholds the moral and ethical path of life that can be a guideline for the average citizen of India. Comment (250 W)
  2. “There is enough for the need of human beings but not for the greed.” Comment on Gandhi’s statement in the context of Inequality and environment imbalance. (350 W)

  • The butterfly named Himalayan tailless bushblue(Arhopala ganesa ganesa)was known to occur at an altitude between 1,300 m to 2,400 m in Jammu and Kashmir and Uttarakhand.
  • Recent studies however, have located the species at 3,577 m in Askot Wildlife Sanctuary in Uttarakhand, at least 1,200 m higher than it’s known range.

 Huge iceberg breaks off Antarctica

  • A more than 1,500 sq.km. iceberg recently broke off Antarctica, but the event is part of a normal cycle and is not related to climate change, scientists say.
  • The iceberg, dubbed D28, broke away from the Amery ice shelf between September 24 and 25, according to observations from European and American satellites.
  • It is about 210 metres thick and contains 315 billion tonnes of ice, American glaciologist Helen Amanda Fricker said.
  • The figures are huge, but iceberg production is part of the normal cycle of ice shelves, which are an extension of the ice cap, she said. “Ice shelves have to lose mass because they gain mass. They want to stay the same size,” said Ms. Fricker, a professor at the Scripps Institution of Oceanography at the University of California.
  • The gain in mass comes from snow falling on the continent and glaciers that move slowly toward the shore. The east of Antarctica — where D28 broke off — is different from the west of the continent and Greenland, which are rapidly warming due to climate change.

 Humans pollute more than volcanoes:

  •  study CO2 emissions are 100 times greater
  • Human activity churns out up to 100 times more planet-warming carbon each year as all the volcanoes on Earth, says a decade-long study released Tuesday.

 

  • The Deep Carbon Observatory (DCO), a 500-strong international team of scientists, released a series of papers outlining how carbon is stored, emitted and reabsorbed by natural and manmade processes.
  • They found that manmade carbon dioxide emissions drastically outstrip the contribution of volcanoes — which belch out gas and are often fingered as a major climate change contributor — to current warming rates.
  • The findings were published in the journal Elements.
  • Manmade emissions in 2018 alone topped 37 gigatonnes.
  • Celina Suarez, associate professor of geology at the University of Arkansas, said modern manmade emissions were the “same magnitude” as past carbon shocks that precipitated mass extinction.
  • “We are on the same level of carbon catastrophe which is a bit sobering,” she said.
  • By comparison, the CO2 released annually by volcanoes hovers around 0.3 and 0.4 gigatonnes — roughly 100 times less than manmade emissions.
  • the Chinese President was unambiguous in declaring that China was now prepared to “struggle” to achieve its two centenary goals — ridding China of poverty by 2021 and emergence as an advanced socialist nation by 2049.
  • In the presence of three former leaders — Jiang Zemin, Hu Jintao and Wen Jiabao — Mr. Xi, in his address, referred only to Mao Zedong, the founding father of the PRC, leaving aside any allusion to Deng Xiaoping, the architect of China’s reforms that began in 1978.
  • Did Prime Minister Narendra Modi endorse U.S. President Donald Trump’s 2020 reelection bid in his Houston speech on September 22? Did he wade into the domestic politics of the U.S.? These questions have resurfaced after External Affairs Minister S. Jaishankar rebuffed suggestions that he did both, during an interaction with Indian journalists in Washington DC.
  • Answer to the first question is ‘No’ and the Minister is right on that. Answer to the second is “Yes’, and the Minister is wrong on that. Here is why.
  • “My recollection of what the Prime Minister said was that candidate Trump had used this (Ab ki baar Trump sarkar). So the PM is talking about the past,” said Mr. Jaishankar, denying the allegation that the PM was campaigning for Mr. Trump.
  • What did Mr. Modi say? “The words of candidate Trump, Ab ki baar Trump sarkar, rang loud and clear. And his celebration of Deepavali in the House — White House — lit up millions of faces with joy and appreciation,” he had said.
  • Ab ki baar Modi sarkar was Mr. Modi’s 2014 campaign slogan that a Hindutva group in the U.S. had repurposed for Mr. Trump, who made a short campaign ad with himself uttering the Hindi slogan. So, in an oblique way, Mr. Modi was claiming some credit for Mr. Trump’s victory in 2016 and not endorsing his 2020 candidacy.
  • Mr. Jaishankar is right in saying that media reporting, and the response of the Opposition, largely misinterpreted Mr. Modi’s comment.
  • Whether or not Mr. Modi’s speech and the rally amounted to involvement in U.S. politics is a question that requires some explanation, but the answer can only be in the affirmative.
  • “We have a very nonpartisan (approach to domestic U.S. politics). So, our sort of approach to whatever happens in this country is their politics, not our politics,” Mr. Jaishankar said. But that is not how Houston continues to play out. Mr. Modi’s expansive diaspora politics draws from Hindutva that sees Hindus as a trans-border civilizational community with Bharat as its “natural home”. Diaspora mobilization in a manner not intimidating to others in a multiethnic foreign country is one thing; loud and boisterous desi rallies that brazenly seek to bend American politicians in a particular way is another. The first is soft power; the second is a menace. This amounts to Mr. Modi’s diaspora politics trying to tilt the scale in favour of Mr. Trump and against the Democrats. And this will have repercussions.

 The worst may be over

  • The economy is showing positive signs though a turnaround is some distance away
  • The latest set of economic numbers released this week sends across mixed signals about the health of the economy. Core sector growth, which measures the output of eight major infrastructure sectors of the economy, went into negative territory for the first time in over four years in August as five out of the eight sectors constituting the index shrank in size. Overall growth in these sectors dropped to -0.5% in August in contrast to the same month last year when core sector growth stood at a much stronger 4.7% and July this year when it was 2.7%. The coal sector witnessed the worst fall, contracting 8.7% year-over-year in August, while steel, fertilizer and refinery products saw positive growth. These dismal numbers suggest that the economy is still some distance away from posting a strong revival in growth and it may be too soon to predict a definite turnaround. However, other high-frequency data on the economy suggest that the worst might be over. Vehicle registrations have witnessed a strong comeback in September as discounts ahead of the upcoming festival season have managed to spur sales. Further, although car and tractor companies continue to witness a drop in sales compared to last year, their rate of contraction has begun to slow down. A return to the sales levels witnessed last year, however, will require a stronger rebound in the overall economy.
  • Other macroeconomic indicators that could potentially tie the hands of the government as it tries to tackle the slowdown have also shown signs of improvement. The government has limited its borrowing in the first half of the year to ₹4.42 lakh crore, which is in line with its initial borrowing plan in order to achieve the fiscal deficit target of 3.3% for the year.
  • The current account deficit at the end of the first quarter of the current financial year has narrowed to 2%, from 2.3% at the end of Q1 last year, thanks to higher service sector exports. The result of the various stimulus plans that have been announced by Finance Minister Nirmala Sitharaman over the last few weeks and the Reserve Bank of India’s spree of rate cuts beginning in February will be seen over the next few months and quarters. It is doubtful, however, whether these reform measures, even if they manage to reverse the slowdown, will be enough to boost growth over the 8% mark anytime soon. The Economist Intelligence Unit, for instance, predicts GDP growth to be just over 5.2% this fiscal.
  • The corporate tax cut last month was an important structural reform that could significantly boost animal spirits in the economy. More such reforms, however, will be needed to permanently lift India’s growth trajectory.
  • At a panel discussion hosted recently by the students of Delhi’s Ambedkar University, the topic was, ‘Are we heading for an economic crisis?’ Presumably, they had been prompted by the all-absorbing news of a slowing economy. It is indeed correct that such a slowing is taking place. Growth has slowed for the past few quarters — the past two-and-a-half years, if we go by annual growth rates.
  • That this has not been comforting to the government is evident from the fact that its Ministers are running from pillar to post in an effort to goose the economy. But should we be worried?
  • Those who heard the address to the United Nations climate change summit by the teenager Greta Thunberg earlier this month may not be as worried about economic growth as the government is. Globally, industrial growth driven by mindless consumption is the cause of climate change, now unmistakably upon us. But India does need some growth as income levels here are still very low. The problem of low incomes can, however, be tackled even with less growth so long as it is of the appropriate type. So, the slowing of growth in India cannot reasonably be termed a crisis.
  • Rural unemployment
  • There is, however, one feature of the economy that does answer positively to the query of whether it is in crisis today, and that is unemployment. Figures reported in the report of the last Periodic Labour Force Survey point to a dramatic rise in the unemployment rate since 2011-12, when the previous survey on unemployment was undertaken. Apart from the category of ‘Urban Females’, the most recent estimate of unemployment shows that it is the highest in the 45 years since 1972-73. But even for ‘Urban Females’, it is double what it was in 2011-12. For the largest cohort, namely ‘Rural Males’, in 2017-18, it is four times the average for the 40 years up to 2011-12. These figures should convince us of the existence of a grave situation, if not crisis, with respect to employment in the country. In the average country of the OECD, an increase in unemployment of such magnitude would have triggered a nationwide debate, not to mention agitation on the streets.
  • The government has responded to the slowing of growth by announcing a range of measures, the most prominent of them being the reduction in the corporate tax rate. While this may have a positive effect, the move is not based on the big picture. The tax cut is meant to be a remedy for stagnant corporate investment. But if the level of corporate investment itself reflects some underlying reality, it is only by tackling the latter that we can get to the root of the problem. A large part of corporate sales is driven by rural demand, reflected in the reported lay-offs by biscuit manufacturers. We do not hear their voices or, more importantly, the government does not, as they are less organized than some other sections of the corporate world, the automobile industry being one such.
  • The rural picture matters not only because the largest numbers are located there but also because of their low incomes. This means that the future growth of demand for much of industrial production is likely to come from there. After all, how many more flat-screen televisions can an urban middle-class household buy once it already possess one? The high unemployment rate for ‘Rural Males’ does suggest that we have zoomed in up to a reasonable degree of precision on the site of low demand.
  • Production decline
  • We must now answer the question of why rural incomes are growing so slowly. The recent history of crop agriculture points towards one reason. In the nine years since 2008-2009, this activity has recorded zero or negative growth in five. Put differently, in the majority of years, it has shown no growth. The economy has very likely not seen anything like this since 1947.
  • When growth fluctuations include production decline, a particular feature emerges. Households incurring consumption debt in bad crop years would be repaying it in the good ones. This implies that consumption does not grow appreciably even in good years. Recognising the record of agricultural production is sufficient to grasp what we see in India today. This does not imply that other factors do not matter, and we could imagine several, ranging from low export growth to the state of the banking sector, but this does suggest that poor agricultural performance is a significant explanation of slack domestic demand. Unstable agricultural production first lowers the demand for agricultural labour and, subsequently, its supply, showing up in greater unemployment. It has been pointed out that the investment rate has declined. This is indeed correct but this may well be a reflection of the poor agricultural performance. Private investment both follows output growth and leads it. When non-agricultural firms observe slow agricultural growth, they are likely to shrink their investment plans and may not revise their decision till this growth improves. Thus, attempting to influence the private investment rate is to only deal with a symptom. It is rural income generation that is the problem.
  • Long-term solution
  • Any long-term solution to the problem of unemployment to which the slowing growth of the economy is related must start with agricultural production. Observing the performance of crop agriculture for close to a decade since 2008-09, we might say that we are witnessing something wholly new in India. It has long been recognized that there is a crop-yield cycle related to annual variations in rainfall but we are now witnessing a stagnation. Now, unlike in the case of a cycle, recovery cannot simply be assumed. We would need the expertise of agricultural scientists to confirm what exactly is responsible for this state but it would not be out to place to ask if there is not a role for ecological factors in causing agricultural stagnation. These factors encompass land degradation involving loss of soil moisture and nutrients, and the drop in the water table, leading to scarcity which raises the cost of cultivation. Almost all of this is directly man-made, related as it is to over-exploitation or abuse, as in the case of excessive fertilizer use, of the earth’s resources. Then there the increasingly erratic rainfall, seemingly god-given but actually due to climate change entirely induced by human action. A deeper adaptation is required to deal with these factors. Intelligent governance, resource deployment and change in farmer behaviour would all need to combine for this.
  • It is significant that the reality of an unstable agricultural sector rendering economy-wide growth fragile has not elicited an adequate economic policy response. Policy focus is disproportionately on the tax rate, the ease of doing business in the non-agricultural sector and a fussy adherence to a dubious fiscal-balance target. It is now time to draw in the public agricultural institutes and farmer bodies for their views on how to resuscitate the sector. We may be experiencing an ecological undertow, and it could defeat our best-laid plans for progress.
  • Amartya Sen had once quipped that India’s unemployment figures were low enough to put many developed countries to shame. Professor Sen was, of course, not commending the country’s record in employment creation, but instead, highlighting the difficulties involved in measuring employment and unemployment in a developing country.
  • Unemployment has been at the centre of public debates in India recently. The government’s Periodic Labour Force Survey carried out in 2017-18 revealed that unemployment in the country reached an all-time high rate of 6.1%. What explains this sudden jump in unemployment in India, which had remained at a rather low rate of around 2% for several decades?
  • Our estimates based on official employment surveys and the Census show that in 2018, there were 471.5 million persons employed and 30.9 million unemployed in India.
  • At the heart of the unemployment problem in India were young, unemployed men aged 15 to 29 years who comprised 21.1 million or 68.3% of all the unemployed in the country. To understand how their numbers rose recently, we need to examine the behaviour of not just labour demand but also labour supply over time. Rising numbers of job seekers
  • First, the size of labour supply in India is getting a boost from the rapid expansion of the working-age population in the country — the population of 15-59-year-olds increased at the rate of 14 million a year in the 2000s.
  • Second, the nature of labour supply is changing too, with increasing enrolment of young adults for education and their rising job aspirations. Of all 15-29-year-old females in India, 31% had been attending schools or colleges in 2018, up from 16.3% in 2005 (although, it needs to be mentioned here that there have been questions on the quality of education received and skills acquired by these young people).
  • Third, the size of the workforce engaged in agriculture (and allied activities) has been declining in India: from 258.8 million in 2005 to 197.3 million in 2018 (which still accounted for 41.9% of the total workforce in the country). This decline has been partly due to the ‘push’ from low-productivity agriculture, which has suffered due to stagnant public investment from the 1990s onwards. The decline has also been driven by the ‘pull’ of new opportunities that emerge in the towns and cities. A significant number of people who are ‘employed’ according to official statistics could actually have been in ‘disguised unemployment’ in agriculture (consider a person who does no job but occasionally assists his family in cultivation). Young persons in rural areas will be increasingly keen to exit disguised unemployment in agriculture.
  • As a result of the above-referred factors, there has been a significant increase in India in the supply of potential workers for the non-agricultural sectors. These are 15-59-year-olds who are not students nor engaged in agriculture. If provided the relevant skills, they could possibly work in industry, construction and services. Our estimates show that the potential non-agricultural workforce in India grew at the rate of 14.2 million a year between 2005 and 2012, which rose further to 17.5 million a year between 2012 and 2018.
  • How has the growth of labour demand matched up to the job challenge in India? Between 2005 and 2012, construction had been the major source of employment in India, absorbing men who exited agriculture in rural areas, especially in Uttar Pradesh, Rajasthan, Bihar and Madhya Pradesh. The growth of construction jobs was associated with a revival in agricultural incomes and rural wages during this period.

Labour demand lagging behind

  • However, the growth of agricultural incomes and the rural economy in India slowed down markedly after 2012. New employment opportunities in construction created in rural India amounted to 18.9 million between 2005 and 2012, which fell sharply to 1.6 million between 2012 and 2018. The size of the manufacturing workforce in India declined by one million between 2012 and 2018, with micro and small firms in the informal sector suffering severe setbacks. At the same time, some segments of the services sector, especially education and professional, business and allied services recorded acceleration in employment growth after 2012. The crisis in the rural economy appears to have been moderated to some extent by an increase in governmental spending in 2016-18.
  • Even from 2005 to 2012, job creation in industry, construction and services in India (at the rate of 6.3 million a year) was inadequate to absorb the increase in potential job seekers into these sectors (at the rate of 14.2 million a year). Between 2012 and 2018, while the supply of potential workers into the non-agricultural sectors accelerated (to 17.5 million a year), actual labour absorption into these sectors decelerated (to 4.5 million a year). Thus, the mismatch between potential supply of and demand for labour deepened after 2012. While only the women suffered due to the mismatch during 2005- 2012, young men were also affected after 2012. In fact, 30-59-year-old men managed to secure 90.4% of all new non-agricultural employment opportunities that emerged in India between 2012 and 2018, leaving too few new jobs for women and younger men.
  • Faced with the inadequate number of new jobs generated in the economy, women withdrew altogether from the labour market. Of all 15-59-year-old women in India, only 23% were employed in 2018, down from 42.8% in 2005. Correspondingly, there had been a sharp rise in the proportion of women who reported their status as attending to domestic duties in their own households. At the same time, the response of young men to the slow job growth in the economy was to continue in the labour market as job seekers. Among 15-29- year-old men, there was an unprecedented increase in the number of the unemployed, from 6.7 million in 2012 to 21.1 million in 2018. This was indeed the main contributor to the sudden increase in overall unemployment in India.
  • India faces a tough challenge in creating decent jobs for its growing young population. To tackle this, action will be needed on multiple fronts including investments in human capital, revival of the productive sectors, and programmes to stimulate small entrepreneurship. If the country is unable to make effective use of the strengths of its young women and men now, it can perhaps never do so. Within the next two decades or so, India’s population will gradually start getting older, and it will be tragic for millions of poor Indians to grow old before getting even moderately rich.