13th May – Editorials/Opinions Analyses

Contents

1. Riding roughshod over State governments
2. Getting cash transfers out of a JAM
3. Why Labour Law Rejig is no Reform?

RIDING ROUGHSHOD OVER STATE GOVERNMENTS

Focus: GS-II Governance, GS-III Disaster Management

Introduction

During the lockdowns the Centre has issued guidelines from time to time, ostensibly under the Disaster Management Act of 2005, containing varying restrictions on public activity and commerce which the States are expected to enforce.

The Centre directs the State governments to scrupulously enforce every new set of guidelines, with the States ONLY being allowed to increase and not dilute the restrictions.

Is the Centralised Approach Counterproductive?

1. The Central government, in its latest guidelines, has classified all districts in the country as red, orange or green zones in a bid to lift lockdown restrictions in an area-specific manner.However, some states and UTs have raised concerns that the areas that are identified are very large and that there was no need to keep economic activity on hold in an entire district when cases had been reported only from a small portion of that district.
2. Kerala, probably the best-performing State in terms of its response to COVID-19, was sent a missive by the Central government to refrain from relaxing restrictions in the State. This restriction on relaxing terms comes even though Kerala has shown a near-perfect recovery rate and a steep fall in the number of cases.

Such Centralised approach may actually be unconstitutional.

The federal scheme

• Under the federal scheme, Parliament can legislate on matters under the Union List (List I), Stage legislatures can legislate on matters under the State List (List II), and both Parliament and State legislatures can legislate on matters under the Concurrent List (List III) – given in Schedule 7.
• The residuary power to legislate on matters that are not mentioned in either List II or List III vests with Parliament under Article 248 of the Constitution read with Entry 97 of List I.
• The rule of harmonious construction laid down by the Supreme Court in a number of judgments dictates that the entries in the legislative lists must be interpreted harmoniously, and in the event of any overlap – the specific subject matter contained in a particular entry must be deemed to have been excluded from another entry which may deal with a more general subject matter.
• As per Articles 73 and 162, the executive power of the Centre and the States is co-extensive with their respective legislative powers, which means that the Central and State governments can only take executive actions in matters where Parliament and State legislatures, respectively, have powers to legislate.

Where does Disaster Management stand in the Lists?

• Disaster management as a field of legislation does NOT find mention in either List II or List III, nor does any particular entry in List I specifically deal with this.
• Thus, the Disaster Management Act could only have been enacted by Parliament in exercise of its residuary powers of legislation under Article 248 read with Entry 97 of List I.

So, what exactly does the Disaster Management Act do?

• The Disaster Management Act allows the Centre to issue guidelines, directions or orders to the States for mitigating the effects of any disaster.
• The definition of ‘disaster’ under the Act is quite broad and, literally speaking, would include a pandemic too.

How can the Centre’s Directions be considered as Unconstitutional?

• ‘Public health and sanitation’ is a specific field of legislation under Entry 6 of List II.
• This would imply that States have the exclusive right to legislate and act on matters concerning public health.
• Consider that Disaster Management Act would have to be enacted as an exercise of residuary powers, as it does not find any particular place in any of the Lists.
• The Supreme Court has held time and again that federalism is a basic feature of the Constitution.
• The Disaster Management Act, having been enacted by Parliament under its residuary powers of legislation, cannot be applied to pandemics in view of the fact that the power to legislate on public health is vested specifically and exclusively with the States.

The catch for constitutionality

• Under Entry 29 – ‘Prevention of inter-State spread of contagious and infectious diseases’ – of List III, both Parliament and State legislatures are competent to legislate on matters involving inter-State spread of contagious or infectious diseases.
• Therefore, theoretically speaking, Parliament would be competent to pass a law that allows the Central government to issue directions to the States to prevent inter-State spread of a disease like COVID-19.

Law for Inter-State Spread

• The law regarding ‘Prevention of inter-State spread of contagious and infectious diseases’ – is The Epidemic Diseases Act, 1897, which has the objective of preventing the “spread of dangerous epidemic diseases.”
• However, under this Act, it is the State governments which have the prerogative to take appropriate measures for arresting the outbreak or spread of a contagious or infectious disease in their respective States.The Central government’s powers are limited to taking measures for inspecting and detaining persons travelling out of or into the country.

-Source: The Hindu

GETTING CASH TRANSFERS OUT OF A JAM

Focus: GS-II Governance

Introduction

The Jan Dhan-Aadhaar-Mobile (sometimes referred to as: JAM trinity) has been propounded as a dream cash-transfer infrastructure for India.

It was born in chapter 3 of the Economic Survey 2015, titled “Wiping every tear from every eye: The JAM number trinity solution”.

An illusion and its fading

• The original formulation, in 2015, mentioned two possible incarnations of the trinity: mobile banking and post office payments.
• The second option never made much headway, perhaps because it did not have enough scope for private profit.
• So, Aadhaar-enabled mobile banking became the supreme goal.
• JAM project latched on to another flourishing narrative, Universal Basic Income (UBI). In the early days of the COVID-19 crisis, JAM was often invoked (sometimes along with UBI), however, poor people who were far from using the digital-payment systems were still running from pillar to post to collect their meagre benefits from old-fashioned bank accounts.
• Long bank queues and related hardships have started emerging, especially in rural areas where the density of banks is relatively low.

Reliability on JAM during these times: Issues with JDY Accounts

The lead cash-relief measure in the national relief package consists of monthly transfers of ₹500 to women’s JDY accounts.

1. During the frantic initial JDY wave, in 2014-15, banks opened JDY accounts en masse to meet the targets – many accounts were opened without informed consent, duplicate accounts flourished, Aadhaar numbers were seeded without any safeguards, and so on.
2. According to a recent Yale study, less than half of poor adult women have a JDY account. Hence, cash transfers to women’s JDY accounts are likely to involve large exclusion errors.
3. JDY accounts are for everyone, National Election Studies 2019 data show that JDY beneficiaries tend to be better-off than NREGA beneficiaries. Survey suggests that the probability of having a JDY account is more or less the same for poor and non-poor households. Hence, inclusion errors are also likely to be larger in the JDY approach.

Back to cash in hand?

• There have been significant issues with NREGA payments, often related to Aadhaar.
• Numerous “direct benefit transfer” schemes have faced similar problems, also reflected in official transaction data.
• Both the Aadhaar Payment Bridge System (APBS) and the Aadhaar-enabled Payment system (AePS) are shot through with technical glitches, possibly exacerbated by the recent surge in transactions, and especially unkind to the powerless.
• The job-cards list is a transparent, recursive household list with village and gram panchayat identifiers, while the list of JDY accounts is an opaque list of individual bank accounts.
• Cash-in-hand may seem like the antithesis of JAM, but this option may become important in the near future if the banking system comes under further stress.

-Source: The Hindu

WHY LABOUR LAW REJIG IS NO REFORM?

Focus: GS-II Governance

Concerns with the existing Labour Laws in India

• The Labour law in India is rigid, and restricts mobility.
• The list of laws that govern India’s workforce is itself formidably large—at least 40 central laws and more than a 100 state-level acts and regulations.
• The Industrial Employment (Standing Orders) Act, 1946 goes to the extent of making employers seek permission to even reassign an employee’s tasks.
• There are also arguments that the Existing laws protect only a small proportion of the Indian workforce.
• A majority of the workforce is employed in the informal and unorganized sector. So, less than 11 million people out of 450 million workers are given the service of protection today.

Defining Labour Law Reforms

• Uttar Pradesh unveiled an interesting definition of reform by eliminating nearly all worker protection laws, include basic guidelines on occupational safety and minimum standards for working conditions, for a period of three years.
• Madhya Pradesh government announced some startling labour law exemptions to new investors for the next 1,000 days. Labour inspectors—the bane of industry managers—were to now be replaced with a third-party certification. For new units, firing workers would become much simpler and trade unions would not be allowed to raise issues and bargain with the management. Except for the Building and Other Construction Workers Act, Bonded Labour System (Abolition) Act, and Section 5 of the Payment of Wages Act (which gives workers the right to receive timely wages), all other laws were deleted for the next three years for all firms.
• Gujarat granted labour law exemptions for 1,200 days.
• Assam government has also announced a provision for fixed-term employment of workers, and it has also been proposed that factories will now be allowed to increase working hours from the existing eight hours to a new 12-hour shift.

Judging these moves by various state governments

• The broad justification given for such reforms is that – economic activity has been hampered by the pandemic and governments across the country need to give greater flexibility to businesses and industries to provide employment to returning migrants, among others.
• However, if that was indeed the purpose, the 12-hour shift decision is clearly contrary to the objective.
• If jobs have to be added, the push should have been for shorter work hours and an increase in shifts, which would then distribute employment.

Click here to Read more about “Labour Laws in India”

Is such elimination of Laws entirely right during these times?

• But minimum workplace standards may actually be more important in the post-COVID world, not less.
• There will have to be serious supervision with regard to safe distancing, facilities for washing hands, and even adequate sanitization.
• By diluting aspects of the law which already mandate many of these basic minimums, India will only hurtle towards more COVID-19 cases.

The Beginning of Reform

• India’s first labour law was the Apprentices Act passed in 1850.
• It was the government in Rajasthan in 2014, that started the labour law reform process – when it relaxed the prevailing norms for retrenchment and hiring of contract workers and also made the process of registering a new trade union more stringent.
• This reform lead to – Rajasthan’s wage growth dipping considerably, unemployment rates going up, and the state’s gross domestic product growth fell as the effect of demonetization kicked in and economic activity went downhill.

Is China’s downfall a silver lining?

• The silver-lining, according to some, is that China has become unpopular and is now on its way down. Trade with China will no longer be encouraged by various nations and supply chains will attempt to move elsewhere.
• However, this optimism seems misplaced. Industries that did move away from China in the recent past have mainly shifted to Bangladesh and Vietnam, and have stayed away from India, despite the country’s large domestic market.
• The reason for this cannot be stringent labour laws alone.

Weakness in Indian Industries

• India’s ease-of-doing-business is still struggling with other issues: poor contract enforcement, shortage of skilled labour, and an unstable tax structure.
• Even if industrial revival and the need to make India globally competitive is the only pressing concern in policy circles at the moment, the case for rigid labour laws being the main villain preventing an Indian manufacturing renaissance is very weak.
• In the 21st century, Indian industry has been repeatedly slow and ineffective in reacting to global economic shocks—for instance, the textile sector losing its sheen after the Multi-Fibre Arrangement expired in 2005.

Conclusion

• Labour is a concurrent subject and the significant laws are central laws. They cannot be done away with through state ordinances.
• The Economic Survey of 2018-19 had stressed that a high minimum wage is critical for workers and does not impact employment generation.
• At a time when there are calls for universal basic income, at least a higher minimum wage is essential.
• When law ceases to exist, the jungle raj takes over.
• This move of allowing state governments to use a weak moment in national history to push through hurried and sweeping measures will only undermine worker safety and distort our labour institutions further.

-Source: Livemint