15th May – Editorials/Opinions Analyses

Contents

1. What is the ‘One Nation, One Ration Card’ system?
2. Are India’s labour laws too restrictive?
3. Five ways how blockchain technology can aid recovery
4. India’s revival plan must focus on cities

WHAT IS THE ‘ONE NATION, ONE RATION CARD’ SYSTEM?

Focus: GS-II Social Justice, Governance

Why in news?

• Finance Minister on 14^th May 2020 announced the national rollout of a ‘One Nation, One Ration Card’ system in all states and Union Territories by March 2021.
• As of now, about 20 states have come on board to implement the inter-state ration card portability.

Why do we need a ‘One Nation, One Ration Card’ system?

• In the present system, a ration cardholder can buy foodgrains only from an FPS that has been assigned to her in the locality in which she lives.
• Suppose a beneficiary lives in the district of Basti in Uttar Pradesh and migrates to Mumbai for work. Currently, she is no longer able to purchase subsidised foodgrains from a PDS shop in her new locality in Mumbai.
• The Public Distribution System (PDS) system is marred with inefficiency leading to leakages in the system. To plug the leakages and make the system better, the government has started the reform process.

What is the one ‘One Nation, One Ration Card’ system?

• Under the ‘One Nation, One Ration Card’ system, the beneficiary will be able to buy subsidised foodgrains from any FPS across the country.
• The new system, based on a technological solution, will identify a beneficiary through biometric authentication on electronic Point of Sale (ePoS) devices installed at the FPSs, and enable that person to purchase the quantity of foodgrains to which she is entitled under the NFSA.

How will the system of ration card portability work?

• Ration card portability is aimed at providing intra-state as well as inter-state portability of ration cards.
• While the Integrated Management of Public Distribution System (IM-PDS) portal provides the technological platform for the inter-state portability of ration cards, enabling a migrant worker to buy foodgrains from any FPS across the country, the other portal (annavitran.nic.in) hosts the data of distribution of foodgrains through E-PoS devices within a state.
• The Annavitran portal enables a migrant worker or his family to avail the benefits of PDS outside their district but within their state.

Since when has the One Nation, One Ration Card System been in the works?

• The one card scheme work started about two years back when the government launched a scheme called Integrated Management of Public Distribution System (IM-PDS) in April 2018.
• It used a technological solution involving the use of Aadhaar to identify beneficiaries.
• Under the scheme, the seeding of ration cards with Aadhaar is being done.
• Simultaneously, PoS machines are being installed at all FPSs across the country.
• Once 100 per cent of Aadhaar seeding and 100 per cent installation of PoS devices is achieved, the national portability of ration cards will become a reality.
• It will enable migrant workers to buy foodgrains from any FPS by using their existing/same ration card.

How has been the experience of Ration Card Portability so far?

• The facility of inter-state ration card portability is available in 20 states as of now but the number of transactions done through using this facility has been low so far.
• According to data available on the IMPDS portal, only 275 transactions have been done until May 14.
• Usages of intra-state ration card portability are way higher than the inter-state portability.

-Source: Indian Express

ARE INDIA’S LABOUR LAWS TOO RESTRICTIVE?

Focus: GS-III Indian Economy

Why in news?

Some State governments including Uttar Pradesh (U.P.) and Madhya Pradesh (M.P.) have proposed ordinances to exempt manufacturing establishments from the purview of most labour laws.

Are the Labour Law Exemption ordinances justified?

Three Issues:

1. The kind of changes that have been made, they potentially will hurt, will dis-enable the realisation of the constitutional objectives that the Constitution provides as a number of basic rights, and, a number of directions under the directive principles of state policy.
2. The facility of the concurrent subject has been abused.
3. It will create industrial discontent, even a kind of labour unrest, which will stifle any hope of achieving industrial progress. And, employers will not benefit because these provisions will hurt labour welfare and thereby labour efficiency.

At the lower ends of the labour spectrum where less education is required, there is usually an excess supply of labour which gives more bargaining power to employers.

• So, the responsibility of the state in such a context is to safeguard the interests of labour through legislation because the market does not give them the necessary protection.
• The well-known things that act as constraints on job creation- include the overall health of the economy, the level of demand in the economy.

Was lack of flexibility in Labour Laws an issue?

• It is certainly possible that at the lower end of the manufacturing spectrum, the labour laws have been arbitrarily and extortionately imposed.
• They do incentivise some employers to evade showing workers on their books, for fear that even if they’re following laws, the state may come down on them on some pretext or the other.
• There has to be a little bit more of a nuanced understanding of where exactly labour laws are a constraint and what can the government do to make life simpler there, while not going beyond a non-negotiable floor.

Is urging the mandatory return of workers implementable?

1. There must be enabling conditions like resumption of public transportation or private provision of transportation by the employers.
2. COVID SOPs must be effectively implemented at the workplace because the workers could withdraw from a potentially hazardous workplace.
3. And third, there must be work.

If these three conditions are satisfied and still the workers do not report, action can be taken against them, as per the company rules or agreements or the standing orders under the Industrial Employment Standing Orders Act, 1946, giving the workers a fair hearing.

Do these ordinances risk compromising workers’ rights and safety?

1. These ordinances have frozen the conditions of work like lighting, temperature, dust and fumes and brightness and there is every incentive for the employer to ignore given the labour market opportunistic behaviour.
2. The extension of working hours and deficient conditions of work, pose a considerable threat to occupational safety and health.

Making India a more attractive destination as a Justification

• The overall business climate, the reliability of the state and its policies, the infrastructural situation, electricity supply, logistics and transport, the quality of labour and the skill of labour, human capital issues.
• All these things matter as much, if not more, than the level of wages and the laxity, or lack thereof of the labour laws.

What lies ahead for our labour force?

• The responsibility actually lies squarely on the government to restore some health to the labour market.
• There is a necessity for the government to come out with a fairly strong fiscal package that creates optimistic conditions by providing employment to people, something that tightens the labour market a little bit, puts money in people’s pockets, and creates demand in the economy.
• And, once the private investment follow and once there’s some health restored in the economy and economic growth has been restored, then, we can go back to the labour reform issue.

-Source: The Hindu

FIVE WAYS HOW BLOCKCHAIN TECHNOLOGY CAN AID RECOVERY

Focus: GS-III Indian Economy

Introduction to rise of Blockchain Technology

Fuelled by the unceasing hype around Bitcoin and cryptocurrency, blockchain has been regarded as the silver bullet solution for everything—hacking, threats to democracy, poverty and world hunger.

5 ways in which Blockchain Tech can help mitigate the COVID crisis:

I – Building more resilient supply chains

• An end-to-end supply chain on blockchain, combined with digitization and Internet of Things (IoT), can make the chain transparent and traceable, and tell us quickly where any problem lies.
• That blockchain use could offer transparent, traceable and cheaper supply chains has been known for a while, but cost, data sharing hesitation, and a lack of incentive have kept managers from setting them up.
• A crisis like COVID can change these mindsets to build supply chains that are far more resilient for the next big crisis of this kind.

II – Universal basic income and digital currency

• A blockchain-based digital currency (Bitcoin-like, but more stable and backed by the government) is an apt UBI solution for the millions who are unbanked but have some mobile or internet connectivity.
• This has health benefits too, especially now that paper currency is seen as a virus-carrier.

III – Tokenization and fractional ownership

• Blockchains have brought in a great innovation: asset tokenization, which converts rights into an asset and then into a digital token.
• This can enable fractional ownership and sale.
• In a cash and capital-starved post-covid society, tokenization could enable liquidity and fractional ownership of real estate, industrial and farm equipment, etc.

IV – Global health record repository

• Health records on blockchain can be very significant with their security, transparency and privacy benefits.

V – Fundraising

• Initial coin offerings (ICOs) had emerged as an alternate way of raising money, through the blockchain-enabled crowd-sourcing of funds.
• The emergence of authentic and safe ICOs as an alternate mechanism for start-ups to raise funds can still be a reality.

-Source: Livemint

INDIA’S REVIVAL PLAN MUST FOCUS ON CITIES

Focus: GS-III Indian Economy

Introduction

The country needs a strong structural shift into organized manufacturing and away from its burden on the agricultural sector.

The role of urban spaces across India will be key in this transition.

Cities are hubs of economic activity and growth, and they increase productivity through the creation of agglomeration economies.

Why should the focus be on Cities?

As per the latest estimates available from 2011-12, urban areas in India contribute somewhere between 52.6% to 64.9% of the national output despite having much lower share of the population than rural areas.

This explains why they tend to be the focus of any discussion on economic activity. However, they should not be the sole focus.

The pillars

There are several policy changes that are needed to maximize the economic potential of cities.

1. There is a need to deepen the economic data generation and analysis in the country. The data sets that we employ now (like Economic Census, National Sample Survey Office, Annual Survey of Industries) do not have the level of granularity as desired for analysis at the city and region level. In an age of big data analytics, machine learning, and artificial intelligence, this approach undermines our ability to harness the power of these technologies.
2. The policy environment needs to be harmonized to create an unequivocal focus on economic growth at all levels. While the need for different policies across various sectors cannot be denied, their tendency to function at cross purposes to each other needs correction.
3. It is important to understand the cause-effect relationship between economic growth and urbanization. Increased urbanization may not necessarily lead to increased economic growth.

How should Urbanisation be managed for economic growth?

• Urbanization supports economic growth only if it improves economic complexity, i.e., fosters conditions leading to increased accumulation and aggregation of productive knowledge, thus help push the frontiers of technological progress in society.
• There is a need to transform the urban local bodies (ULBs) into economic development enterprises.
• The over-dependence on state and national governments threatens to sever their links with citizens and creates a complex principal-agent problem, wherein the principal (citizens), have poor control over the way their agents (ULBs) govern them.
• Economic growth has to be a key objective of the city government, and that can only be possible if city governments are fully empowered in the true spirit of the 74th Amendment (devolution of powers to Urban local bodies).
• As the increased pace of economic growth is bound to cause increased urbanization, the importance of spatial redistribution comes into play, and it is necessary to point out why cities should not be the sole policy focus for the government.

The negatives

• There is congestion on the roads, rent prices rise, and time of commute increases for people in the city.
• The productivity increases up to a certain threshold of city population, after which the costs of congestion begin to outweigh the benefits from agglomeration resulting in a decline in productivity.
• Low growth makes the possibility of starting a new city more difficult, thus triggering a self-catalytic process of ‘over-urbanization’ of the large city, even after it has much exceeded its optimal size threshold.

How have we handles Urbanisation so far?

The draft National Urban Policy Framework (NUPF) of the Government of India has acknowledged the need for appropriate paradigms of regional development.

-Source: Livemint