9 6 Comprehensive Coverage on Economics 3
85 FIXED-TERM EMPLOYMENT RULES 1 0 News The Union Ministry of Labour has urged States to issue orders permitting fixed-term employment (FTE) across ll industries. 2
86 Background -As per the Industrial Employment (Standing Order) 1 Act 1946, Fixed-term employment was initially made available only to apparel manufacturing sector in 2016 and then to Footwear manufacturing sector in 2017 through amendments. 0 -Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 in March notification allowed all industries to hire workers on contract with a fixed tenure. 2 -But under the Industrial Employment Act, 1946, the central government can frame rules for industries belonging to the central sphere only i.e. for central PSUs and Private sector units in the civil aviation, banking and finance, telecommunications, insurance, ports, dock, and mines sectors only. 4+
87 1 -Also, Labour is a Concurrent List subject and without a 0 Parliamentary ratification, States are not really obliged to follow these orders. This created confusion in private sector firms which do not belong to central sphere and prevented them from taking the benefits of this reform. 2 In order to plug this gap, the Central Government has asked the states to issue separate notifications for the same. 4+
What is fixed term employment? 1 FTE is a contract in which a company hires an employee for a specific period of time. The employee is not on the payroll of the company. Their payment is fixed in advance and is not altered till the term expires Such contracts are given out for temporary jobs and not for routine jobs. It cannot be used to replace existing employees who are on a long leave. Such workers are entitled to all statutory benefits (work hours, wages etc.) available to a permanent worker in the same establishment. However, other benefits such as Provident Fund is not available to them. 0 2 The employers can terminate the contract on certain grounds 4 (fraud, non-performance, etc.) even before the due date. The temporary worker having completed 3 months in service shall get 2 weeks' notice before termination.
89 Benefits of Fixed-Term Employment: 1 Fixed wages and work conditions: The workers are ensured to have a fixed wage and work conditions from before. This provides them livelihood security for the given period. Accountability: The workers are entitled to have statutory benefits. Therefore, they gain greater sense of accountability from the principal employer. Forecast labour costs: The fixed term contract enables the business to forecast their labour costs. It also provides relief against protests related to salary hikes etc. Short term Employment shortage: During peak seasons, industries face shortage of workers. Fixed-term employment will help them to hire and remove workers according to their requirements without extra legislative burdens. FTEs are particularly useful in executing specific projects, such as in the infrastructure sector, apparel, footwear and sections of the media 0 2 4+
90 Benefits of Fixed-Term Employment: 1 Commercial Competitiveness: Due to in-built flexibility in hiring and firing the workers, the business will be able to safeguard its commercial competitiveness through finding suitable employees Work Environment: It will become better as workers working conditions would be better in terms of working hours, wages etc. Middle men: The role of middlemen in providing labour will be minimised henceforth. 0 2 -Job Creation: FTE is expected to boost job creation, provided the cost of capital does not remain so low as to deter labour use. Labour Reform: It can be considered a major labour law reform and a positive step towards ease of doing business as it removes restriction on firing. 4+
91 Criticism against the move 1 0 Hire-and-fire: All central trade unions are protesting against the government's policy of hire-and-fire. Trade unions will go unrecognised by the move. Removal of Safety nets: The government has enabled the employers to sidestep even the minimum protection offered by the Factories Act 1948, Industrial Disputes Act 1947 and Contract Labour (Regulation and Abolition) Act 1970. 2 Undermines Job Regularisation: Collective bargaining talks for wage increase will not be possible. Business will have no incentive to regularise the jobs. 4+
92 Criticism against the move 1 0 Against the earlier judgments of Supreme court: The courts have allowed FTE only in seasonal activities. The Supreme Court has ruled earlier that a fixed-term contract worker who had worked for 7 years should be regularised. 2 Industries will be converted into Sweatshops: The major reason of conflict of workers with management (e.g. in Maruti-Suzuki incident) is common issues of non-recognition of trade unions, temporary workers far outnumbering regular workers and paying them very low wages. The move will encourage the same. 4+
93 NATIONAL LEVEL ENTREPRENEURSHIP AWARENESS CAMPAIGN 1 0 News The Small Industries Development Bank of India (SIDBI) has launched a national level entrepreneurship awareness campaign 'Udyam Abhilasha'. 2
94 About Udyam Abhilasha 1 The campaign is to promote entrepreneurship in the 115 aspirational districts identified by NITI Aayog. It would create and strengthen cadre of more than 800 trainers to provide entrepreneurship training to the aspiring youths across these districts thus encouraging them to enter the admired segment of entrepreneurs 0 2 SIDBI has partnered with Common service centres, e-Governance Services India Limited, a Special Purpose Vehicle, set up by the Ministry of Electronics and IT for implementing the campaign. 4+
95 About SIDBI 1 0 SIDBI set up on 2nd April 1990 under an Act of Indian Parliament, acts as the Principal Financial Institution for Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector as well as for co-ordination of functions of institutions engaged in similar activities. 2 SIDBI 4 SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
97 Why Upgrade Rural Markets into GrAMs? 1 As per the recommendations of Ashok Dalwai Report on doubling farmers' income, the rural periodic markets need to be upgraded into a function that enables aggregation and transportation from village level to wholesale market. 0 -It has been advised to build on the available 2 infrastructure to establish large number of primary rural agricultural markets to provide the following two services: oDirect marketing between producers and consumers Aggregation platforms for the small lots of farmers 4 o
100 CABINET APPROVES 24 OcT 2018 1 FISHERIES & AQUACULTURE DEVELOPMENT FUND 0 Creation of fisheries infrastructure facilities Creation of fund with a both in marine & inlandl corpus of 7,522 crore 2 Target of 15 million Employment opportunities to over tonnes of fish production by 2020 II9.40 lakh fishermen 4+
103 What is Fintech? 1 0 Fintech (financial technology) is used describe new tech that seeks to improve and automate the delivery and use of financial services. 2 At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes and lives by utilizing specialized software and algorithms that are used or computers and, increasingly, smartphones 4
About Agenda 1 The Bali Fintech Agenda is a set of 12 policy elements established to help member countries harness the benefits and opportunities of rapid advances in financial technology (fintech), while at the same time also managing the risks that arise 0 2 The Agenda proposes a framework of high-level issues that countries should consider in their own domestic policy discussions and aims to guide staff from the two institutions in their own work and dialogue with national authorities. 4
The 12 elements are distilled from members' own experiences and cover topics relating broadly to enabling fintech, building the foundations of the digital economy, ensuring financial sector resilience, addressing risks, promoting international cooperation, improve cross-border payments and remittance transfer systems. 1 0 2 It provides a framework to support the Sustainable Development Goals, particularly in low-income countries, where access to financial services is low. 4
107 Trends of Direct Tax collection 1 0 There has been a growth of more than 80% in the number of returns filed in the last four financial years and direct tax-GDP ratio rose to 5.98% in FY 2017-18, the highest it has been in the last 10 years. Further, the number of persons filing income tax returns also increased by about 65% during period from 2014- 2018. Moreover, Direct Tax-GDP ratio rose to 5.98% in FY 2017- 18, which is highest in the last 10 years. This shows a sign of improvement of Tax-Buoyancy (See Box) in the economy 2 4+
Tax Revenue and Non-Tax Revenue of Centre Government 1400000 1227014 1200000 1088792 1054101 1000000 943765 800000 600000 400000 322921 334770 288757 251260 200000 2016-2016 (Actuals) 2016-2017 (BE) 2016-2017 (RE) 2017-2018 (BE) 4+ The system of Direct taxation is governed by the Central Board of Direct Taxes (CBDT). It is a part of the Department of Revenue in the Ministry of Finance.
110 1 Use of Diaital platform: The increase in the use of information being collected digitally by the tax department increased the efficiency in tax collection and helps in checking of tax evasion. Hassle Free Refund: Small and medium taxpayers are getting easy tax refunds. This has boosted the taxpayer confidence in taxation system of the country, thus resulting into higher tax collection. Government Initiatives had also contributed to sound rate of Direct Tax collection, these initiatives include; 0 2 o Income Declaration Scheme: It offers an 4+ opportunity to tax defaulters to disclose their income under the Income Tax Act.
172 GLOBAL COMPETITIVE INDEX 4.0 1 0 News Recently, World Economic Forum released Global Competitive Index 4.0, under Global Competitive Report 2018. About Global Competitive Index (GCI) 4.0 2 It is a composite indicator that assesses a set of factors that determine an economy's level of productivity widely considered as the most important determinant of long-term growth.
Observations for India and its neighbouring countries 1 0 India, remained the South Asia's main driving force for competitiveness and its rank rose by five places from 2017, the largest gain among G20 economies. 2 Top performers in the upper and lower middle-income brackets, such as China and India, are catching up with or even outperforming the average among high-inco 4 me economies
114 Institutions Infrastructure Macroeconomic environment Fiscal and monetary indicators, savings rate and sovereign debt rating efficiency and transparency of public administration, e Public institutions ePrivate institutions Health & primary education State of public health, quality and quantity of basic education Health e Primary education Innovation BASIC Higher education & training Quality and quantity of higher education, and Business sophistication e Quantity of educatiorn eQuality of education e On-the-job training in the country Market size Goods market efficiency Factors that drive the intensity of domestic and foreign compotition, ad dermand conditions Size of the domestic and export markets e Domestic market size e Foreign market size tion Technological readiness Financial market development Labour market efficiency Labour market efficiency and flexibility, meri- tocracy and gender parity in the workplace e Flexibility eEfficient use of talent the financial and banking system e ICT use
115 Thanks! 2 Any questions? You can find me at @KomalShekhawat & firstname.lastname@example.org 4