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The Hindu Daily Editorial DiScussion 15/2/19 By - Ashish Singh
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Page 8 Page 9 Stress points of democracy In this election year in India, we need to keep a sharper eye on the weakening of institutions Is the unemployment crisis for real? .Employment opportunities, formal jobs and . the labour force are all shrinking Removed from reality India is more interested in maintaining a facade of social harmony than in putting things in order The Karnataka model of politics Its Assembly constituency-level leadership can operate independent of a political party Auditor's account The CAG report does not allay all doubts about the Rafale deal . .Common and minimum . Opposition parties will have to make compromises to build a cohesive front
Every drop matters GS PAPER 3 Indian Economy and issues relating to employment.
The jobs situation in India does not reflect a crisis, but it is a matter of serious concern. A crisis is understood as an emergency that demands immediate attention, without which we could see a calamity of sorts. There is no immediate calamity of any kind But there is a deeply insidious problem at work in the form of shrinking employment opportunities, shrinking formal jobs, and a shrinking labour force. A populous and demographically young country like India has a lot to gain if the expanding working-age population can ioin the labour force and be provided with gainful employment.
But if India cannot provide employment to its growing working-age population, it does not just miss a chance to become a prosperous country, but also risks becoming an unmanageable or unruly country. Unemployed youth, beyond a threshold, can lose hope of a job and can easily stray into becoming unsocial elements. A bigger problem is that those who do get jobs and prosper do not appreciate the plight of those who do not It is mistakenly believed that those who do not get good jobs are not worthy of getting them. The blame is placed at the door of the unemployed as if it is entirely their problem.
Statistics give us clues of the brewing problem and its insidious nature. First, we are in the midst of a serious investments deficit. CMIE's CapEx database demonstrates the persistent fall in new investment proposals since 2011-12. New investment proposals had peaked at?25 trillion in 2010-11. In 2017-18, these were down to 11 trillion, and in 2018-19, these are unlikely to cross 10 trillion.
The impact of this fall in investments is visible in shrinking jobs. In a point-to point comparison, in 2018, the number of persons employed declined by 11 million. An estimated 408 million people were employed in December 2017. This fell to 397 million in December 2018. The average employment in 2017 was 406.5 million This fell to an average of 402.1 million in 2018. This shows a smaller fall of 4.5 million. Either way, we see a very substantial fall in employment. One (11 million) is only much worse than a fairly bad fall of 4.5 million, or 10%.
This fall in jobs is not translating into a proportionate rise in unemployment. But it is showing up in a fall in the labour participation rate. A rise in unemployment is bad, but a fall in the labour participation rate is worse. The former reflects a shortage of jobs compared to the number of people looking for jobs. The latter reflects a fall in the number of people looking for jobs. When we juxtapose this against falling jobs, we see a glimpse of the hopelessness of people who should be looking for jobs.
Our real crisis is in the nature of the government's response to the situation. When the establishment works hard to rubbish sound statistical practices and results of large sample household surveys and instead uses back-of-the-envelope calculations to measure employment, we are headed towards a bigger crisis than the jobs crisis.
The furore around the unemployment issue is ill-founded. Most of the analysis is based on incomplete representations of the labour market. The recent surveys that profess spiralling unemployment are either unverifiable or heavily skewed by sampling biases. This narrative raises questions on the political motivations behind these surveys that may intend to change the perception of India's growth trajectory, nationally and globally.
CMIE claimed that the total working population in India declined by 11 million 1.1 crore) in 2018. These preliminary estimates seem opportunistically quoted by the think tank two months ahead of schedule. CMIE has considered a minuscule sample of 1,40,000 respondents for a nation of more than 1.3 billion citizens. With regards to the leaked excerpts of the National Sample Survey Office survey, the public has been unduly kept in the dark about the methodology used to compute the claimed 6.1% unemployment rate.
Another trend which was noticed was that jobs were being created in big cities. However, cities carry less weight in the aforementioned surveys. A company called BetterPlace Safety Solutions, which has one of the deepest databases of the formal sector workforce in India, had recently released these revelatory migration trends. Until such biases are removed using actual data, we must reserve judgment.
Today, if you talk to employers like shopkeepers and small and large firms, they will tell you that they are not finding enough employees. This means that there are not enough skilled people in the market. Manish Sabharwal of TeamLease has been producing an annual labour report documenting a healthy demand for jobs. However, these jobs provide insufficient compensation for the applicants. India has a wage problem and not a job problem. This problem can only be solved by creating higher-quality jobs to meet aspirations.
The need to work to make ends meet also fuels India's large informal economy. Over 90% of the employed (farm and non-farm) are informal workers In the non-farm sector, 66% of those employed are informal workers. The informal economy is characterised by low levels of productivity and low wages because many of these workers are underemployed.
The urgent crisis confronting the economy, then, is underemployment. Underemployment occurs when workers are unable to find employment that makes use of their qualifications and skills For instance, an engineer might be working in a mechanic shop. Underemployment and/or refers to the sharing of low-productivity work,as is common in agriculture, for example. I10 Or picture a 16-year-old who spends his mornings selling just enough coconuts to make the bare minimum to survive. And these are just examples of visible underemployment. P11
Persistent underemployment also contributes to the decline in labour force participation rates. As people grow frustrated with their inability to find a good job, they may stop looking for work and drop out of the labour force altogether. Data from the leaked NSSO labour force survey suggest that the labour force participation rate declined to 49.8% in 2017-18 from 55.9% in 2011-12. Both underemployment and this form of discouragement are a significant loss of productive potential. This is particularly troubling when it pertains to India's large and growing youth population. Pathways to productive and high-quality employment are essential to deliver better living standards to citizens
Stress points of democracy . Essay
These are difficult, as also unsettling, times. It is not the complexity of issues that confront the world as much as the steady undermining of institutional and knowledge structures that are posing a threat to the world. Across the world, democracy is in obvious retreat, with authoritariarn tendencies on the ascendant. Russia's Vladimir Putin, China's Xi Jinping and Turkey's Recep Tayyip Erdogan are constantly projected as the faces of authoritarianism, but many democratic leaders reveal a similar authoritarian streak, which adds to democracy's woes. . It may be too early to predict the demise of democracy, but the reality is that it is not a good time for democratic institutions, or for those who see democracy as the answer to the world's problems.
The U.S., which prides itself as a leading democracy, is setting a bad example today Under President Donald Trump, arbitrary decision-making has replaced informed debate. His diatribe against what he calls a "ridiculous partisan" investigation against him is an indication. . Another is his determination to build a wall to keep out Mexican immigrants, even risking an extended shutdown of the U.S. government. The decision of the U.S. to withdraw from the Intermediate-Range Nuclear Forces Treaty - a key pact signed in 1987, and hailed as the centrepiece of European security since the Cold War- without a detailed internal discussion appears to be setting the stage for Cold War 2.0.
Federal fallout Currently, we are witnessing vituperative exchanges between the Prime Minister and some Chief Ministers which involve accusations such as fomenting riots and running extortion rackets. . This damages the fabric of democracy . Centre-State relations are already under strain, and face the threat Y. of still greater disruption. . Selective interpretation of information is a fallout of such situations. Those in authority deem all information not acceptable to them as nothing but disinformation.
Those opposed to the government, on the other hand, insist that the government suffers from a lack of probity. The current sulphurous exchanges between the ruling dispensation and the Opposition over the purchase of Rafale aircraft are arn example. The casualty is truth, and the veracity of official facts and statistics.
Many instances of this kind can be quoted, but one specific instance that has caught the fancy of the public is the current debate on jobs and unemployment. .The Central government has effectively rejected a report by the well-regarded National Sample Survey Office- which showed that unemployment in 2017-18 was at a 45-year high - without giving any valid reason for doing so. . The government's only reasoning for rejecting the report is that it is a 'draft', which has only added to existing doubts about its real intentions. Similarly, doubts are being raised about the validity of the government's revised GDP estimates.
Breaches of democratic conventions are adding to the already existing disquiet. Adherence to democratic norms has for long been perceived as crucial to maintaining the independence of institutions and processes. . An impression exists today that attempts are being made to effect changes in the existing system. Two instances during the past year when the government breached long-held conventions have raised questions about the intentions of those in authority.
Alongside the decline in democratic conventions, another cause for concern is the virtual collapse of key institutions such as the Central Bureau of Investigation (CBI) Touted as India's premier investigation agency, its reputation has of late suffered a near mortal blow, mainly on account of internecine quarrels, as also external interference in its internal affairs. Created out of the Delhi Special Police Establishment in 1963, a brainchild of then-Home Minister Lal Bahadur Shastri, the agency was earlier headed by persons with impeccable integrity and ability. It had also adhered previously to the s arrests, except in the most exceptional of circumstances. Over time, the quality of the CBI leadership and the tribe of proven investigators has witnessed a decline, which has impacted the image of the organisation.
. An agency of the government, part of the Ministry of Personnel functioning under the Prime Minister, supervised at one step removed by the Central Vigilance Commission, and constantly under the watch of the Supreme Court, the CBl serves many masters. The choice of Director, following the Vineet Narain case, by a committee headed by the Prime Minister, with the Chief Justice of India and the Leader of Opposition as the other members, has hardly helped the CBI maintain a reputation for independence. The recent unsavoury drama, which witnessed a 'Kilkenny cat fight' between the Director and his No. 2, reflects the lack of institutional culture in the organisation.