- Now or Never: States are driving bold reforms
- Equal freedom and forced labour
- Playing out live, a narrative of discrimination
- The need for a second chamber: Bicameral Legislature
- Reduce the country’s preference for cash
NOW OR NEVER: STATES ARE DRIVING BOLD REFORMS
Focus: GS-II Indian Economy
Why in news?
Uttar Pradesh, Madhya Pradesh and Gujarat have ushered in radical labour market reforms by freezing a vast number of acts and giving industries flexibility.
MP has initiated a series of ease-of-doing-business process reforms:
- A single form for registration.
- Valid licences for the life of a project with no annual renewal.
- Shops can open from 6am to midnight.
- From 61 registers and 13 returns for industries to just one return with self-certification and virtually no inspection by the labour department.
India’s Labour Market Regulations
- India has so far had the most inflexible labour market regulations, which hindered large scale investments, productivity and enhancement, technology absorption and high employment growth in Indian manufacturing.
- This has been the main reason why our enterprises have remained small in size and scale, leading to high informal employment.
- Labour regulations with the intention of protecting the workers in the organised sector, were unintentionally preventing the expansion of industrial employment that could benefit a large mass of new workers.
The Need for Changes
- In order to bring size and scale to manufacturing, there is a need to remove the permission clause for retrenchment, layoff and closure for all new units
- The good thing about the new initiative is that all clauses related to minimum wages, the number of hours, safety and security measures have been kept fully functional; those related to child and bonded labour will also remain applicable.
States Changing the Scenario for Farmers
- Punjab broke the state monopoly by reframing the Agriculture Produce Marketing Committee Act and Rules to allow private-owned markets and permit out-of-mandi transactions between farmers and consumers.
- MP’s ordinance facilitates to totally free farm produce markets.
- UP amended the five-decade-old Krishi Utpadan Mandi Adhiniyam by giving farmers total freedom to sell directly from their homes.
- Farmer Producer Organisations have been allowed in most of the states to deal directly in the electronic National Agriculture Market (e-NAM).
- All these reforms break the monopoly of middlemen who are rampant in agriculture and have been highly exploitative of farmers.
Way Forward: What more can be done?
- In the agriculture sector they need to support small land holders through contract farming.
- India’s land holdings are extremely small (86% of land holdings are less than 2 hectares).
- Indian farmers, therefore, suffer due to lack of size and scale, technology, seeds, and fertiliser inputs and are unable to take market risks.
- States, therefore, need to implement the Model Contract Farming Act, 2018.
- As recommended by the 15th Finance Commission, states also need to implement the Agriculture Land Leasing Act for agricultural and allied activities.
- Currently, registration means registration only of a deed or contract and not the property itself, and this has led to many land ownership related litigations. Hence, the states need to implement conclusive land titling on topmost priority.
- One Nation One Ration Card must become a reality enabling a migrant worker to get his ration from any fair price shop in India.
- States need to introduce a series of reforms in the electricity sector – 100% smart metering; granting of subsidies only through Direct Benefit Transfer (DBT); privatisation of discoms by way of sub-licensing and franchise models; and reduction in cross subsidy to ensure cost reflective tariff.
-Source: Times of India
EQUAL FREEDOM AND FORCED LABOUR
Focus: GS-II Social Justice, Governance
B.R. Ambedkar therefore argued that fundamental rights must also “eliminate the possibility of the more powerful having the power to impose arbitrary restraints on the less powerful by withdrawing from the control he has over the economic life of the people”.
- The 1931 Karachi Declaration and Bill of Rights expressly placed labour rights on a par with ordinary civil rights such as the freedom of speech and expression.
- The Right Against Forced Labour (Exploitation) is guaranteed by Article 23 of the Constitution.
- In this context of exploitation, it is important to understand that – compulsion that may not take a physical form, but instead, have a social or economic character that is nonetheless as severe.
- In 1983 the Supreme Court was called upon to address the exploitation of migrant and contract labourers, and in the landmark judgment, PUDR vs. Union of India, the Court held that the right against forced labour included the right to a minimum wage.
- Often, migrant and contract labourers had no choice but to accept any work that came their way, even if the remuneration offered is less than the minimum wage.
- The compulsion of economic circumstance which leaves no choice of alternatives to a person in want and compels him to provide labour or service was no less a form of forced labour than any other, and its remedy lay in a constitutional guarantee of the minimum wage.
Understanding Forced Labour in the Present context
- A market economy is sustained by a set of laws — the laws of contract, of property, and so on.
- This legal structure ensures that capital and labour do not face each other as equals across a mythical bargaining table.
- There is a structural inequality that enables the capital to “make rules” or “force” the labour.
- The purpose of labour laws, which arose out of a long period of struggle has always been to mitigate this imbalance of power.
- In some countries, the path chosen has been to give workers a stake in private governance, through strong trade union laws and mandatory seats for labour in the governing boards of firms (“co-determination”).
- In other countries (such as India), the path has been to create a detailed set of laws, covering different aspects of the workplace, and depend upon State agencies for their enforcement.
The Indian situation
Criticisms of Indian Labour Law Structure:
- It is argued that it sets up a labour bureaucracy that is prone to corruption
- The adjudicatory mechanisms are inefficient
- The rights that labour laws grant, are effectively submerged in a creaking judicial system, thus providing no relief
- The system creates an unconscionable tiered structure where a majority of the workforce, engaged in contract labour or informal employment, has very few rights
These problems certainly call for a debate on the future of labour rights, especially in a world where the rapidly changing nature of work is already rendering old concepts of jobs and employments obsolete.
Various State governments are in the process of removing labour laws altogether (for a set period of time). What this means, in practice, is that the economic power exercised by capital will be left unchecked.
- This debate must be guided by B.R. Ambedkar’s insights that remain relevant even today, the Constitutional guarantee against forced labour, and the understanding of force and freedom that takes into account differences in power.
- B.R. Ambedkar pointed out that “increase hours of work and reduce rates of wages” will leave the economic power exercised by capital uncontrolled.
- If the Constitution is to remain a charter of freedom, however, it must be equal freedom — and that must be the yardstick from which we measure proposed legal changes.
-Source: The Hindu
PLAYING OUT LIVE, A NARRATIVE OF DISCRIMINATION
Focus: GS-II Social Justice, Governance
Key insights into migration
- The government gave a tentative estimate of there being 10 crore migrant workers in India but admitted to many being largely undocumented and unregistered as workers.
- The last National Sample Survey Office migration survey, which was published more than 20 years ago, showed that between 1992-93 to 2007–08, the proportion of migrant households among Scheduled Tribes (STs) was higher than among all other communities.
- The same data showed that STs were the single largest group among female migrants.
Adivasis Facing Crisis
- The number of Adivasis dependent on wage labour has increased in comparison to those dependent on cultivation.
- With 45.5% of rural Adivasis below the poverty line, Adivasis usually do multiple kinds of work through the year, including migrating in search of work.
- Adivasi migration is mainly for seasonal agricultural and construction work, work in brick kilns or as manual workers in urban areas.
- In the name of ease of business, the last several years have seen an accelerated process of displacement and dispossession of Adivasi communities and a takeover of their land and forest-based resources, increasing the numbers of migrant workers from Adivasi communities.
- Adivasis are more vulnerable to the general hostility towards the poor displayed by state agencies, particularly the police.
Law and rights
- The Inter-State Migrant Workmen Act, 1979, the only law for migrant workers, is to be merged with the Labour Code.
- Although the Inter-State Migrant Workmen Act 1979, is inadequate since it deals only with those migrant workers in the contractor system and excludes workers who migrate on their own, for Adivasi migrant workers employed through contractors, its implementation would have ensured payment as well as free travel back home.
- In fact, according to the law, the Central government is legally liable to ensure free travel home since it is responsible for the termination of the work because of the lockdown.
Cause of suffering
- The functioning of Public Distribution System in Adivasi areas, particularly in the hilly regions, is generally irregular.
- At present, there are hardly any MGNREGA works in Adivasi areas, except to some extent in Chhattisgarh.
- The health infrastructure in the Adivasi areas is extremely poor.
- The annual report from the Tribal Affairs Ministry has data on the shortfall in Adivasi areas as: 20.7% for sub-centres, 26% for primary health centres, 23% for community health centres, and 27% for the number of doctors.
-Source: The Hindu
THE NEED FOR A SECOND CHAMBER: BICAMERAL LEGISLATURE
Focus: GS-II Governance, Polity
The Rajya Sabha came into being on April 3, 1952, and had undergone severe prenatal scrutiny in the Constituent Assembly.
History of Formation of Bicameral Structure in India
- The central legislature that came into being under the Government of India Act, 1919 was bicameral with a Council of States and a Legislative Assembly.
- The membership and voting norms for the Council of States were so restrictive that only wealthy land owners, merchants and those with legislative experience could enter it. Women could neither vote nor seek membership.
- The Government of India Act, 1935 proposed an elaborate and improved version of the second chamber, but this never materialised.
- The Constituent Assembly, which was formed in 1947, after adoption of the Constitution became the Provisional Parliament and made laws till 1952.
Bicameralism and federalism
- Bicameralism is a principle that requires the consent of two differently constituted chambers of Parliament for making or changing laws.
- This principle came into operation in 1787 with the adoption of the U.S. Constitution.
- At present, 79 Parliaments of the world (41% of the total number) are bicameral.
- The second chamber enables a second and reflective expression of representative opinion besides checking the propensity to yield to the impulse of sudden and violent passions.
- French philosopher Montesquieu said “The legislative body being composed of two parts; they check one another by the mutual privilege of rejecting”.
- Federalism and bicameralism are linked because the federal character of a nation comprising constituent units can be reflected in, and secured by, a bicameral legislature.
Constituent Assembly debates
- A second chamber might only prove to be a “clog in the wheel of progress” of the nation.
- In 1950, Dr. Sarvepalli Radhakrishnan, the first Chairman of the Rajya Sabha, said that Parliament is not only a legislative body but also a deliberative one which enables the members to debate major issues of public importance.
- The House elected directly by the people is susceptible to passions of the moment and electoral considerations.
- Their imprint on legislation needs to be checked by the second chamber whose members are expected to be sober, wise and well-informed with domain knowledge.
-Source: The Hindu
REDUCE THE COUNTRY’S PREFERENCE FOR CASH
Focus: GS-II Indian Economy
Why in news?
- The first two weeks of March 2020 saw a jump of about ₹53,000 crore in cash available with the public, a spike over the fortnightly average of ₹8,435 crore over the previous 12 months.
- The surge continued into lockdown, in spite of apprehensions that RBI notes could act as carriers of coronavirus.
- Studies suggest that the virus can survive on notes that pass through various anonymous hands for several hours, maybe even longer, yet, there is more cash around than ever before.
- Even advisories issued by authorities to opt for cashless transactions had no effect.
What explains the popularity of paper notes?
There are three main reasons we typically keep money in its raw form:
- To Spend on consumption,
- To Invest it in the hope of returns,
- For Contingency needs.
Anxiety spurs the need to keep emergency funds in a form as liquid as possible, and nothing beats the liquidity of cash.
Such behaviour was noticed even in the aftermath of demonetization.
Way Forward: How to Reduce Dependency on hard cash
- For currency demand to decline, trying to persuade people to go cashless is not enough. Digital money needs to be seen as sufficiently liquid too.
- Apart from expanded acceptability, e-transactions should not cost sellers anything at all.
- Further, e-commerce firms should be allowed to sell anything that’s legal even in red zones, where they are currently allowed to deliver only “essentials”, as defined by the State.
- People have the need for an assurance that the economy will be looked after, in order to avoid being panic-stricken.