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15th March 2021 – Editorials/Opinions Analyses

Content

  1. The job crunch and the growing fires of nativism
  2. A high growth plan for Indian agriculture

Editorial: The job crunch and the growing fires of nativism

Context:

  • The Haryana government has recently passed legislation that mandates companies in Haryana to provide jobs to local Haryanvis first, before hiring people from outside the State.

Relevance:

  • GS Paper 3: Indian Economy (issues re: planning, mobilisation of resources, growth, development, employment); Inclusive growth and issues therein.

Mains Questions:

  1. Unless States in India have the autonomy to create jobs, they will only resort to reserving existing jobs for locals. Discuss. 15 Marks
  2. The nature of economic growth in India in described as jobless growth. Do you agree with this view? Give arguments in favour of your answer. 15 Marks

Dimensions of the Article:

  • Conceptual Framework of Key Employment and Unemployment Indicators
  • Causes of unemployment in India
  • Government Steps for employment generation
  • Way Forward on Job Creation

Conceptual Framework of Key Employment and Unemployment Indicators

  • Labour Force Participation Rate (LFPR): It is defined as the percentage of persons in labour force (i.e. working or seeking or available for work) in the population.
  • Worker Population Ratio (WPR): It is defined as the percentage of employed persons in the population.
  • Proportion Unemployed (PU): It is defined as the percentage of persons unemployed in the population.
  • Unemployment Rate (UR): It is defined as the percentage of persons unemployed among the persons in the labour force.
  • Activity Status- The activity status of a person is determined on the basis of the activities pursued by the person during the specified reference period. It can be determined in two ways
    • Usual Status: When the activity status is determined on the basis of the reference period of last 365 days preceding the date of survey.
    • Current Weekly Status (CWS): When the activity status is determined on the basis of a reference period of last 7 days preceding the date of survey.

Causes of unemployment in India

  • Economic slowdown: Currently, sectors like auto, real estate, banking, construction, agriculture and MSMEs – all of which contribute a considerable amount towards India’s GDP – are facing a sharp demand slowdown.
  • Preference of voluntary unemployment: Voluntary unemployment is preferred over low-paying jobs (especially when one paid high educational fees) i.e. adopting the ‘wait-and-watch’ policy for the right job profile and remuneration.
  • Downgrading of employment: i.e. hiring of candidates, with higher but superfluous qualifications, for elementary positions (e.g. news reports of PhD holders applying for peon vacancies)
  • Lack of Industry- Academia cohesion: Disparity between colleges’/universities’ curriculums and industry requirements/ expectations.
  • Lack of vocational training: which renders many unemployable.

Government Steps for employment generation

  • MUDRA Bank Micro Units Development Refinance Agency (MUDRA) Bank
  • Start Up India and Stand Up India Schemes
  • Make in India Program
  • The apparel and garments sector received a special package.
  • Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

Way Forward on Job Creation

  • Shift development focus towards labour intensive sectors to create more jobs, such as food processing, leather and footwear, wood manufacturers and furniture, textiles and apparel and garments.
  • Cluster development to support job creation in micro, small and medium enterprises (MSMEs), with a specific focus on incentivizing these MSMEs to grow bigger to generate more jobs.
  • Formalisation of workforce: where growth in jobs must be inclusive and new jobs need to be decent and secure with better work conditions including social security benefits and the right to organise.
    • Expansion of the organized sector to create well-paid high productivity jobs.
  • Greater focus is required on better and relevant skilling opportunities so as to compete with neighbours and global competitors.
  • Expansion in export market by developing Coastal Employment Zones, using better technology, and improving on quality to remain competitive.
  • Incentivizing industry: Reducing corporate tax, easing lending norms and relaxing GST rules on a short term basis are some of the reforms that could give companies more room for hiring and boosting productivity.
  • The public investments in health, education, police and judiciary to create many government jobs.
  • The government should introduce reforms to quell the wage gap and get more women to become a part of the country’s workforce.
  • India will have to shed its service-led structure and transform into an innovation-driven economy and focus on becoming a creator rather than an adopter.

Editorial: A high growth plan for Indian agriculture

Context:

  • The centrality of agriculture in India goes much beyond its immediate employment contribution, where it engages close to 42 per cent of the country’s workforce.

Relevance:

  • GS Paper 3:  Storage, transport & marketing of agro-produce and related issues & constraints; Economics of animal-rearing.

Mains Questions:

  1. Agriculture  requires a diversified approach that takes into account peculiarities and constraints of states, investment in infrastructure and linking farmer producer groups with markets. Discuss. 15 Marks

Dimensions of the Article:

  • Importance of Agriculture:
  • Some major issue pertaining to Indian Agriculture
  • Measures to improve the Agricultural Productivity
  • Way Forward

Importance of Agriculture:

Agriculture (inclusive of animal husbandry, forestry and fishing) is central to the nutrition needs of India and remains the largest sector of India’s economy as a source of employment and accounts for 18% of India’s GDP.

  • According to the Fifth Annual Employment-Unemployment Survey of the Ministry Labour and Employment, 45.7% of India’s workforce in 2014-15 was employed in agriculture.
  • India’s agriculture production has been increasing at about 3.6% annually since 2011, sustained by improved access to inputs such as fertilisers and seeds, as well as better irrigation and credit coverage.
  • The sector has also been diversifying from grains towards pulses, fruit, vegetables and livestock products, largely driven by evolving demographics, Urbanisation and changing demand patterns.
  • It is the world’s largest producer of milk, pulses, and spices, and has the world’s largest cattle herd (buffaloes), as well as the largest area under wheat, rice and cotton.
  • It is the second largest producer of rice, wheat, cotton, sugarcane, farmed fish, sheep & goat meat, fruit, vegetables and tea.
  • Labour Intensive Sector: The centrality of agriculture in India goes much beyond its immediate employment contribution, where it engages close to 42 per cent of the country’s workforce.
  • Food Security: The sector not only feeds the large and growing Indian population but with its close interlinkage with poverty, it is best positioned to alleviate problems of malnutrition and hunger.
  • In addition, agriculture supplies inputs for other industries and is critical for triggering a multiplier effect in the economy, where a financially empowered farming community triggers a demand-led growth, particularly for manufactured products and services.

Some major issue pertaining to Indian Agriculture are:

  • Low Agricultural Productivity: According to Agriculture Ministry, India’s crop yields are lower than those in the US, Europe and China, due to (see infographic 2).
  • Policy Issues: There has been a total absence of the kind of syncretic policy between the Centre and states on the interlinked issues of agriculture, water, commerce and finance.
  • Agricultural Marketing: In the absence of sound marketing facilities, the farmers have to depend upon local traders and middlemen for the disposal of their farm produce which is sold at throw-away price. Agricultural Produce Market Committee (APMC) Act has also allowed the cartelization of traders that keeps farm-gate prices low.
  • Input Challenges: According Ashok Dalwai committee report, rise in input cost has led to decline in crop income over the years, which has resulted in the low productivity and purchasing power of farmers.
  • Inefficient MSP structure: According to the Shanta Kumar Committee, only 6% farmers get the benefit of MSP and remaining 94% are dependent on the markets.
  • Lack of Alternative Employment Opportunity leading to Overcrowding: The Situation Assessment of India reported that more than 40 % of farmers would like to quit agriculture if alternative opportunities were available.
  • Climate Change: Higher frequency of droughts, floods, temperature fluctuations, and unseasonal rains and hailstorms are adversely affecting agricultural production through soil erosion, pest attack, crop failure etc.
  • Poor state of Agriculture Education: State Agricultural Universities (SAUs) are facing non-replacement of retired faculty and high inbreeding of faculty (nearly 51% of faculty members have their degrees from the same university in which they are teaching), which hampers the quality of academic and research programmes.

Measures to improve the Agricultural Productivity:

  • Effective use of input cost – Government has taken up different steps for different inputs
  • Soil – introduced Soil Health Card Scheme to inform farmers about nutrients status of the soils.
  • Fertilisers – Rationalizing the use of fertilisers by giving information about nutrient status of soil, curbing illegal use of urea as well as ensuring adequate supply through Neem Coated Urea scheme.
  • Seeds – Providing with better quality seeds at affordable prices o Awareness – giving timely information and advisory services to farmers through online and telecom mediums such as Kisan Call Centre and Kisan Suvidha App.
  • Better Planning – through adoption of new technologies such as space technology which helping in better planning through forecasting of crop production, agricultural land-use mapping, drought prediction, and utilization of fallow paddy fields for Rabi crops.
  • Reduction of post-harvest losses:
    • Storage facilities – government is encouraging farmers to use warehouses and avoid distressed sales at lower cost. Also, loans are being provided against negotiable warehouse receipts are being provided with interest subvention benefits.
    • Integrated cold chains in rural areas.
  • Value Addition
    • Promoting quality through food processing – Under Pradhan Mantri Kisan Sampada Yojana, food processing capabilities will be developed by working on forward and backward linkage of agro processing cluster, benefitting 20 lakh farmers and creating employment opportunities for about 5 lakh.
  • Reforms in Agriculture Marketing
    • Integrating markets through e-NAM where 455 mandis have been linked to this platform.
    • Model Agricultural Produce Market Committee (APMC) Act is being worked upon which also includes private market yards and direct marketing.
    • Contract farming – the Government has released Model Act to promote contract farming.

Way Forward:

  • The states should move beyond production-centric approach to a value-chain approach with FPOs at its centre.
  • It highlights importance and requirement of growing public investments in basic infrastructure, like roads, markets, power supplies, and agri-R&D.
  • And finally, in the longer run, rationalizing subsidies (both input and output) via direct income transfer is suggested, as that will not only empower farmer but will also give them right signals for efficient use of these resources (fertilisers, power, water).
  • This will help put agriculture on a higher growth trajectory, augment farmers’ incomes, and promote sustainable development of agriculture.

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