Daily Editorial Analysis for 20th May 2021

Interpretations which impede a just social order

Why in News

• On 5^th May, the Supreme Court of India declared the Maharashtra law as unconstitutional which provided for reservation to the Maratha community in education and public employment in the State.

Reasons of declaring Maratha law unconstitutional

There are few reasons to declare Maratha Laws ‘Unconstitutional’:

• First, the Court held that the Maratha community did not constitute a socially and educationally backward class.
• Second, the judges discovered that the law was in breach of a rule previously set by the Court disallowing reservations made in excess of 50% of the total available positions.
• Third, the Court held that State governments had no independent power to declare a group as a backward class.

Not from the Constitution

• The idea that reservations ought to be restricted to 50% does not stem from the Constitution.
• The text of Articles 16(4) and 15(4) which confer power on the government to make reservations contains no such limitation.
• Originally, these clauses were seen by the Supreme Court as exceptions to a broad rule of formal equality that was thought to be envisioned by the Constitution.
• To that end, the Court held that to allow reservation in excess of 50% would lead to
• an exception overriding a rule.
• But a seven judge Bench, in State of Kerala vs N.M. Thomas (1975), laid this theory to rest.
• There, the Court held that a programme of reservation was inherent in the Constitution’s basic guarantee of equal treatment, and that affirmative action by the state
• was compelled by an objective of attaining substantive equality.
• With that, the rule requiring that reservations stay under 50% ought to have been deemed incongruous. But when the Court sat as a nine­judge Bench in Indra Sawhney vs Union of India (1992) it sustained a paradox.

Court stands on listings

• Following the Supreme Court’s judgment in Indra Sawhney, the determination of backward classes was made by the National Commission for the Backward Classes, at the level of the Centre, and by regional commissions at the level of the State
• As a result, backward communities that were kept out of the central list were entitled to reservation at least for those posts and seats under the control of the State government.
• For example, 25 different groups categorised as backward in Tamil Nadu do not find place in the central list.
• The 102nd Amendment (2018), which forms the basis for the Court’s ruling, granted constitutional status to the National Commission for Backward Classes.
• It introduced Article 342A, through which it stipulated that the President of India may, after consultation with the State government, notify groups of persons within such a State who are deemed to be socially and educationally backward.
• Any such “Central List”, the clause clarified could only be altered by Parliament. Article 366(26C) was also added, and “socially and educationally backward classes” was defined as “such backward classes as are so deemed under Article 342A for the purposes of this Constitution”.

Term and interpretations

• The verdict, which was controlled predominantly by Justice S. Ravindra Bhat’s opinion, relied on the plain meaning of Articles 342A and 366(26C).
• But it overlooked, at least, two essentials’ factors:
• first, the term “Central List” which is used in Article 342A, has always been understood in contradistinction to the term “state list”, in that it refers to the categorization of groups as backward for the purposes of reservation to posts and seats under the Union government’s control.
• Second, when State governments objected to the 102nd Amendment on the ground that their power was being divested, the Union Minister of Social Justice and Empowerment, assuaged their concerns and pointed out that the proposed changes did no such thing.
• However, the term “Central List” in Article 342A shows that, if anything, the Constitution recognizes the power of State government to frame lists of their own.

Conclusion

• If the majority’s interpretation of the 102nd Amendment is correct, then the changes altogether dispossess States from exercising a time-honored authority.
• But yet the amendment, in the Court’s belief, did not violate the Constitution’s basic structure. This was because, according to the majority, the alterations neither took away
• “the very essence of federalism” nor denuded the States of their effective power to legislate.
• The changes, as interpreted by the Court, are by no means superficial; they directly impede the ability of States to secure a just social order.
• The Union government has already filed a petition to review the judgment insofar as it limits the power of State governments.
• Should the Court refuse the plea, it is imperative that Parliament amends the Constitution and grants to States an express power to determine backwardness.
• Any other result will offend the delicate balance at the heart of Indian federalism.

GS PAPER – II                           

Why in News

• As COVID­19 destroys lives and livelihoods, an unprepared government has rendered low paid, informal workers, who constitute 91% of the workforce, totally hapless, pushing them further into poverty.

Gaps in the code

• India’s Parliament in September 2020 passed a Social Security Code.
• Although health budget in FY 2021-22 is higher than last year but a larger chunk of it is devoted to vaccines thus leaving out the other sectors.
• The SS Code 2020 merges existing social security laws and attempts to include informal workers within the ambit of social security administration.
• The SS Code 2020 amalgamates and rationalises the provisions of eight existing central labour laws. Of these acts, employees provident fund, employees state insurance (ESI), maternity benefit, gratuity is entirely for organised sector workers.
• For employees’ state insurance, the existing employee threshold has been withdrawn and now the government can extend ESI benefits to any organisation irrespective of the number of workers employed therein.

Hurdles for informal workers

• It proposes that both the central and State governments will formulate schemes for unorganised workers.
• To avail social security, an informal worker must register herself on the specified online portal to be developed by the central government.
• The absence of definite and unambiguous provisions in the present code would further complicate achievement of universal registration.
• There is lack of awareness among informal workers regarding social security schemes. Online registration places a further challenge as most informal workers lack digital literacy and connectivity.
• Informal workers find difficult to furnish all documentary papers required as part of the registration process.
• Most of them are footloose casual workers (26% of all workers) and self-employed (46% of all).
• They move from one place to another in search of livelihoods. Furnishing proof of livelihood and income details in the absence of tangible employer­employee relations is very difficult.
• Such requirements deter informal workers from completing the registration and they continue to remain outside the social security ambit.

Inter-State cooperation must

• The code does not provide for interstate cooperation.
• Without formulation of a basic structure by central govt., implications of this code would be too varied across States to be administered.
• Effectiveness of social security code is something lost in the Centre-State labyrinth and jurisdictional or institutional overlap.
• This identity should be primal and all unorganised workers should have basic social security coverage, irrespective of labour market classifications.

Key benefits

• Maternity Benefit:
• Under the SS Code, the provision of maternity benefit has not been made universal. It is presently applicable for establishments employing 10 workers or more.
• The definition of ‘Establishment’ did not include the unorganised sector.
• Hence, women engaged in the unorganised sector would remain outside the purview of maternity benefit.
• Employees Provident Fund
• It will remain applicable, to every establishment in which 20 or more employees are employed.
• Thus, for informal sector workers, access to employees’ provident fund remains unfulfilled too in the new code.
• Payment of Gratuity
• Gratuity shall be payable to eligible employees by every shop or establishment in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months.

Lost opportunity

• The provision of social security could be used to formalize the workforce to a certain extent.
• The state has a responsibility but the primary responsibility still lies with employers since they are taking advantage of workers’ productivity.
• The code also faces financial constraints but the onus is left on state govt.
• This code remains a collage of existing pieces of legislation without that interweaving thread of integration. It has promise but cannot meet those expectations.

Conclusion

• At a time when India chairs a BRICS meeting in Delhi (preparatory to a Summit) that is focused on issues of labour, especially informality, it fails to even recognise that India is ageing without social security, and the demographic dividend of the young workforce that could support the ageing ends in 15 years.
• This is a dreadful failure on the part of the state in a time of dire crisis for the nation.

GS PAPER – III                               

Flashing lights

Why in News

• The RBI’s latest monthly bulletin has just confirmed what many economists and anecdotal evidence have been pointing to a sharp fall in economic momentum.

Impact of COVID-19 in Indian Economy

• In an article on the State of the Economy, RBI officials have flagged the ‘demand shock’ inflicted by the ferocious second wave of the COVID­19 pandemic.
• Specifically, they have cited the loss of mobility, impact on discretionary spending and increase in unemployment as clear signs that demand is in the doldrums.
• GST e-way bills is an indicator of the health of domestic trade, contracted 17.5% month­on­month, while automobile fuel consumption, commercial vehicle sales and domestic air passenger traffic all shrank from the preceding month.
• And the previously relatively unscathed rural economy too saw demand begin to dry up as new infections spread wider and deeper into the countryside, a trend reflected in a 33.5% contraction in the dispatches of two wheelers and a palpable weakening in demand for tractors.
• Unemployment, which hit a four-month high of 8% in April as per a survey by the Centre for Monitoring Indian Economy, was at 9.5% on May 18 based on a 30-day moving average.
• Crucially, rural unemployment captured by the moving average has risen to 8.6%.
• With the pace of vaccinations having slowed nationwide, more so in rural and semi­rural areas, the agriculture sector is likely to face challenges in the coming months when sowing for the kharif crop will need to be done.

Conclusion

• The reports on the infections and deaths linked to the disease from the villages and towns portray a grim picture and it is hard to see rural demand for anything other than the barest of essentials including food and medicines reviving any time soon.
• Add to this the rising cost of transport fuels, and the sharp increases in commodity prices, cutting across agricultural and industrial raw materials segments and one sees ‘a worsening of domestic cost conditions’ as the RBI officials warn.
• Accelerating inflation threatens the economy’s overall consumptive capacity and policy makers need to be wary of the real danger of stagflation.
• The shrinking fiscal space notwithstanding, authorities need to spend more on an expedited nationwide vaccine roll­out and must seriously consider direct cash transfers to boost demand.