Inequality on the rise
Mains: G.S. I & II Social issues, Social Justice
Why in news?
Amid a raging pandemic and record levels of contraction in the economy, the riches of India’s super-rich multiplied in some instances by over three times.
- Between January and June this year, 85 new Indians were added to the high net worth individuals (net worth > $50 million).
- Only the China and United States added more individuals than India, while the list shrunk in many other countries.
- The 2019 report by Oxfam, titled “Public good or Private Wealth?” showed that India’s top 10% holds 77.4% of the total national wealth, while the top 1% holds 51.53% of the wealth.
- The bottom 60% population holds only 4.8% of the national wealth.
- The Gini coefficient of wealth in India in 2017 is at 0.83, which puts India among the countries with highest inequality countries.
- According to Oxfam if India stops inequality from rising further, it could end extreme poverty for 90 million people by 2019. If it goes further and reduces inequality by 36%, it could virtually eliminate extreme poverty.
In farm debate, a green reality check
Mains: G.S. II & III Polity and Governance, Sectors of Indian economy
Why in news?
Proponents of the three new farm laws have claimed that they will engender competition in agricultural markets and will give farmers a choice to sell wherever they like whereas the opponents of these laws, including many farmer groups, have forcefully argued that these policies will strangle the mandi system, spell the end of the Minimum Support Price (MSP), and lead to oligopolistic buying by large agribusinesses.
- These debates, however, have remained restricted to the realm of agricultural marketing and the economics of livelihoods.
- They miss the fundamental reality of today’s times — that the current agrarian impasse reflects the fatigue of dominant approaches to agriculture, which assumes growth is limitless and resources are inexhaustible.
- Added to this is India’s agrarian structure, closely aligned with the caste structure, thereby marking the whole system with tremendous inequality in access to natural resources, capital and markets.
- A combination of all these is reflected in the multiple ecological, economic and social crises that beset rural India. To tackle all these challenges, we require alternative policies that address these foundational deficits and go beyond the dominant paradigm of high-external-input, high-cost agriculture.
- The recognition that agriculture is embedded in nature and that the agrarian economy is constrained by the limits imposed by nature and by social rules is fundamental to making policies that can benefit farmers.
- Instead of a resource-based approach, the need is to develop a relationship-based approach towards the environment.
- The challenges towards adopting such an approach have ecological, sociocultural, political, techno-scientific and economic dimensions. Reducing this complex maze to either economic or techno-scientific or a combination of both is highly problematic.
- This reductionism is the primary reason we are now suffering the consequences of runaway climate change, to which the contribution of modern agriculture is significant.
- Moreover, the destruction of our rich agricultural biodiversity, the growing toxicity of our air, water and soils, the over-extraction of groundwater and growth in pesticide resistance have led to farming becoming a high-risk venture, in addition to threatening human health. The link between factory farming of animals and the growth of zoonotic diseases is now well-known, especially after the COVID-19
- Modern agricultural practices emphasise maximising crop yields, farm incomes and global competitiveness. The single-minded pursuit of such goals has remade our land and farms into monocultures. Success means ensuring a single crop accesses all the nutrients and everything else is killed as pests or weeds. This has led to increasing doses of chemical fertilisers and pesticides, causing widespread soil degradation. The extent of degraded land in India is 12 crore hectares or about 38 per cent of our total geographical area.
- Unfortunately, the scientific paradigm of single-crop productivity has promoted an agricultural system with ecologically unsustainable cropping patterns. It has contributed significantly to climate emissions, and threatened farmer livelihoods and the natural resource base they depend upon. Moreover, it has also distorted our food consumption patterns, replacing nutritious millets with polished rice and wheat and negatively affected our nutritional security.
- In attempting to offer a new deal to farmers, do the new farm laws recognise or address any of these fundamental concerns? Do the farmer organisations pressing for continued MSPs and subsidies recognise the in-built reproduction of these problems in this model?
- Sadly, both sides have continued to ignore the broader ecological and social contexts in which agriculture is embedded. By promoting greater corporatisation of agriculture (through contract farming, higher stocking limits and private marketplaces), the laws will, in all probability, accelerate the growth of long supply chains of monoculture commodities. An expanded MSP regime might support the livelihoods of farmers growing the crops being procured and who have the wherewithal to access the mandi/procurement centres, but it will necessarily be limited by the government’s ability to purchase. Moreover, guaranteed procurement in the past has incentivised monoculture farming, with huge ecological and social costs.
- If we truly want to ensure the livelihoods of our farmers and provide safe, healthy, nutritious food for our consumers, it is imperative to make policies that go beyond the productivity trope and populist posturing. This can begin with the salient recognition that any sound economic and techno-scientific model must have agroecology and equity at the core and, must indeed, be guided by them.
Nature of economic recovery
Mains: G.S. III Indian Economy
Why in news?
As India emerges from the blow of lockdown, how far has the economy of households recovered? While unemployment is back at pre-pandemic levels, data show that the stress of creating new jobs is not yet over, household incomes remain depressed, and household spending has recovered only partially.
- Both tax and non-tax government revenues have grown year-on-year. Industrial output has also been steadily rising, though this slowed down for a few core sectors in October. Indeed, this is also reflected in the strong GDP numbers from Q2, which were fuelled by the growth in both private consumption and investment demand.
- The recovery is not evenly distributed across Indian states.
- If workers left the labour force entirely, we should see a drop in the employment-to-population ratio, or ‘Epop’. This is also called the employment rate or the Worker Population Ratio (WPR). It is the number of people employed as a fraction of the total working age population. A reduction in this measure implies an overall reduction in employment.
- It is found that while the unemployment rate bounced back, India’s Epop has not fully recovered. We are about 2 percentage points below pre-Covid levels. This suggests that India has 20 million fewer employed people than it did before Covid.
- Loss in income seems to be due to the fact that the majority of occupations were less remunerative during the lockdown than before. This continued to be the case even in July. So even if a worker managed to hold on to a job through the lockdown, she earned less compared to her previous wage. These losses were concentrated among subsistence farmers, smaller businessmen (such as shopkeepers or dhaba owners), agricultural labourers, and industrial and machine workers.
- Pre-pandemic, monthly per-capita non-food household expenditure was Rs 2,000 while food expenditure was Rs 1,500. This trend reversed itself at the height of the lockdown. Both food and non-food expenditure fell sharply, with non-food expenditure falling even lower than food expenditure.
- Our focus has been more towards documenting the facts. There is still more work to be done in just understanding what is happening. To suggest changes requires a deeper knowledge of the what, and also the why. Government response to economic crises is usually dominated by supply side interventions. At best, our work makes the case for more direct government intervention on the household side.
101 PSUs give ₹155 crore from their staff salaries to PM fund
Mains: G.S. II RTI
Why in news?
RTI records accessed by The Indian Express show that apart from over ₹2,400 crore in CSR funds, over 100 PSUs from across sectors have together contributed nearly ₹155 crore from staff salaries to the PM CARES fund.
- Oil giant ONGC, gave ₹29.06 crore to the fund from staff salaries, tops the list of PSUs.
- Contributions also include ₹11.43 crore from salaries at the ailing BSNL, which was unable to chip in from its CSR funds.
- Prime Minister Office (PMO) who manages the fund had declined to furnish details of the contributions received and said PM CARES Fund is not a public authority under the ambit of RTI Act.
- The fund was setup on March 28 this year following the Covid outbreak and had a corpus of ₹3,076.62 crore by March 31 itself, of which ₹3,075.85 crore were listed as voluntary contributions.
- Close on the heels of ONGC at the top is Indian Oil Corporation, which donated ₹23.99 crore from staff salaries and ₹ 225 crore from CSR.