UPSC Online Editorial Analysis
Title of the editorial: Jobs, exports and the trade pacts link
Written by: P. Chidambaram (a former FinanceMinister of India and a current Member ofParliament) & Praveen Chakravarty (apolitical economist and a senior officebearer of the Indian National Congress)
Topic in the syllabus: Indian Economy and issues relating to planning, mobilization, of resources, growth,
development and employment (GS-3)
Analysis about: This editorial talks about why India needs to shed it fears of trade agreements to create new jobs.
- How the value of the rupee affects exports?
- When the rupee depreciates, it loses value with respect to the dollar. This means it takes more rupees to exchange with a dollar. And when Rupee appreciates, it means less Rupees to exchange with Dollar.
- Most of the international trade happens in US dollars. Therefore, as rupee depreciates, exports become more profitable, because the exporter earns more rupees for exchanging dollar.
- And when Rupee appreciates exports become less profitable, because the exporter earns less rupees for exchanging dollar. (as the Importer of the other country has less rupees in exchange of Dollar)
- On the other hand, imports become expensive as the importer needs to pay more rupees for the dollars billed.
- What are nontariff barriers? – A non-tariff barrier is any measure, other than a customs tariff, that acts as a barrier to international trade. These include:
- regulations: Any rules which dictate how a product can be manufactured, handled, or advertised
- rules of origin: Rules which require proof of which country goods were produced in
- quotas: Rules that limit the amount of a certain product that can be sold in a market.
- India’s economy contracted by 3.9% in the first quarter of 2020-21. According to the Reserve Bank of India (RBI), the Indian economy will further contract by 10% in the July-September
quarter. This is technically defined as a recession by economists.
- In any country, the ultimate economic test is, are there sufficient jobs, incomes and livelihoods for all in the workforce?
What is the severity unemployment in India?
- Thousands of people lost their jobs due to the slowing economy in 2018-19 and 2019-20. Unemployment had reached a 45year high.
- During the seven-month lockdown period, there were 11 crore people who asked for work under MGNREGA. That is 20 times more than the total number of persons employed by all the companies listed on the stock exchange.
What is the connection of exports & employment? & Why India needs more export markets?
- Large numbers of good quality jobs can be created only in sectors that are labour intensive, and where India has a comparative advantage, such as apparel, leather goods, value-added agriculture
and so on.
- Let us suppose that the government makes available ₹10 lakhs as a loan to four companies for capital investment.
- The first company, a steel manufacturing company, will create one new job with this amount.
- The second, an automobile manufacturer, will create three new jobs.
- The third, a producer of leather goods, will create 70 new jobs.
- And the fourth, an apparel and garment maker, will create 240 new jobs including 80 for women (Economic Survey 2016-17).
- These job creating sectors depend not only on the domestic market but, significantly, on export markets.
- More than one-half of the leather goods and one third of the apparel produced in India are exported to other countries.
- India, therefore, needs to find more export markets, nurture them, and sustain them amid intense global competition.
- Merchandise exports also create supporting jobs in warehousing, transport, stevedoring, container stations, shipping, ship chandling, ports and export financing.
What there is a link between exports and trade agreements?
- For nearly two decades, the countries of the world invested in a rule based trading order.
- The age of trade agreements — both bilateral and multilateral — was born.
- Some historic trade agreements were the Association of Southeast Asian Nations (ASEAN), North American Free Trade Agreement (NAFTA) and the Southern Common Market (MERCOSUR).
Half-hearted and hesitant agreements like the South Asia Free Trade Agreement (SAFTA) failed.
- The harsh truth is that exports are linked to trade agreements.
- The member countries of a trade agreement promote trade among themselves with easy rules but restrict trade with non-members with hard rules.
- It gives boost to the export between member countries of trade agreements.
Plight of Indian export and reasons behind that:
- Export volumes have languished in the last six years. Merchandise goods exports were $314 billion in 2013-14 and remained stagnant for the next five years touching $313 billion in 2018-19.
- The reason for this is-
- the disruption of export supply chains due to demonetisation and Goods and Services Tax
- the complete reversal in the direction of India’s foreign trade policy with higher tariffs,
- border country restrictions,
- the appreciating value of the rupee.
The way forward:
- We need to shed exaggerated fears of trade agreements.
- To be able to export goods, India must import raw materials or equipment or technology from other countries in the supply chain.
- We must relearn to engage with other countries and negotiate favourable trade agreements through the bilateral and multilateral routes.
- No country will allow import of Indian goods and services unless that country is able to export its goods and services to India on reasonable and fair terms. The art of survival in a fiercely competitive world is engagement and negotiation.
- India has the immediate opportunity to export goods worth $60 billion in labour intensive sectors which can then create lakhs of new jobs.
- To revive exports, India needs greater and frictionless access to global markets.
Title of the editorial: Refining trade union strategies to strike a chord
Written by: K.R. Shyam Sundar (Professor, HRMArea, XLRI, Xavier School ofManagement, Jamshedpur)
Topic in the syllabus: Indian Economy and issues relating to planning, mobilization, of resources, growth,
development and employment, changes in industrial policy (GS-3) | Social empowerment (GS-1)
Analysis about: This editorial talks about recent labour law reforms & what should be the trade union response in this regard.
- The four labour bills passed are the Industrial Relations Code 2020, Code on Occupational Safety, Health & Working Conditions Code 2020 and Social Security Code 2020 and the Wage Code. With parliament approving these four codes, it replaces the current twenty-nine labour laws with just four labour codes throughout the country subsequently.
- Polity (GS-2) – Trade unions are one of the pressure groups.
- Ten central trade unions have called for nationwide strike on November 26,2020 to condemn what they consider to be the ant people, and ant labour economic policies of the government. This follows strikes in the coal and defence sectors protesting privatisation and the corporatisation policies of the government.
Why these codes are getting criticised?
- The Codes are based on the fundamental unproven premise that labour laws and inspection system are obstacles in attracting investment, and, hence the government must promote a cheaper and flexible labour market.
- They offer substantial flexibility to the employers in terms of easy hire and fire.
- They provide freedom to hire contract labour.
- They provide unregulated fixed term employment.
- The Codes have also considerably redefined the concept and practice of labour inspection system by diluting it.
What are the positive aspects of these codes?
- The Codes do extend some labour rights such as-
- statutory recognition of trade unions,
- formalisation of employment contracts,
- social security to gig and platform economy workers.
Why the central trade unions have decided to go on strike today? (Issues)
- The central government and several State governments had chosen the COVID19 crisis ridden period as an “opportune time” to enact labour law reforms having far reaching adverse consequences for labour rights and structural reforms.
- The central government, as per trade unions, did not conduct an effective and sustaining social dialogue, though it held a few symbolic parleys with them.
- At the State level, social dialogue institutions are largely absent or weak. The last Indian Labour Conference, a tripartite social dialogue body, was held in 2015.
- Trade unions contend that many of their suggestions have not been incorporated in the Codes and the COVID19 relief measures.
- Their demands are –
- direct cash transfer of ₹7,500 per month for all non-income taxpaying families;
- 10 kg free ration per person per month to all the needy;
- expansion of MGNREGA to provide 200 days of work in a year in rural areas at enhanced wages;
- extension of employment guarantees to urban areas;
- withdrawal of all anti-farmer laws and anti-worker labour codes;
- protection of government employment;
- restoration of old pension schemes
What is the way forward for trade unions?
- Trade unions must explore other avenues such as seeking the ILO’s intervention, judicial action
and social dialogue.
- There is no alternative to social dialogue in a pluralistic democracy which all the parties in the industrial relations system must make effective use of and make suitable amendments to the Codes to aid both ease of doing business and promote labour rights.
Title of the editorial: We don’t need no EdTech control
Written by: Sushant Sinha (Ph.D. in Computer Science fromthe University of Michigan and is the founder of legalsearch engine Indian Kanoon)
Topic in the syllabus: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources. (GS-2) | Science & technology (GS-3)
Analysis about: This editorial talks about how children are being made to learn about complex aspects of computer science without any knowledge of real-world needs.
- Algorithms – In mathematics and computer science, an algorithm is a finite sequence of well-defined, computer-implementable instructions, typically to solve a class of problems or to perform a computation. Algorithms are always unambiguous and are used as specifications for performing calculations, data processing, automated reasoning, and other tasks.
- Artificial intelligence – It is intelligence demonstrated by machines, which is unlike the natural intelligence displayed by humans and animal. The term “artificial intelligence” is often used to describe machines (or computers) that mimic “cognitive” functions that humans associate with the human mind, such as “learning” and “problem solving”.
- Machine learning – It is an application of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. Machine learning focuses on the development of computer programs that can access data and use it learn for themselves.
- New EdTech (portmanteau of education and technology) companies, which feast on the fear of parents that their children will be left out of the ‘race’, have also seen this period as an opportunity to do aggressive marketing.
- They claim that children will earn millions of U.S. dollars in the future if they learn with the help of these companies.
- Children are being fast forwarded into learning about aspects of programming languages, data structures and algorithms. Some are even being taught to develop mobile applications, games, Artificial Intelligence (AI) and machine learning.
What are the practical issues in these courses?
- An algorithm is a sequence of instructions to be followed in order to solve a complex task.
- Teaching them programming syntax or programming constructs or data structures for efficiently managing data is definitely not appropriate for their age.
- And asking them to develop mobile apps is again going overboard because most apps require knowledge of real-world needs that children don’t have.
- Computer science doesn’t exist in a vacuum. Some areas like theoretical computer science, operating systems and networking are focused on improving computer systems, but a lot of the work also involves identifying new areas of application for which children need more knowledge of the world around them and how different disciplines work and interact.
- AI involves search and logical deductions to optimise an objective function so that computers can pretend to be intelligent.
- Both AI and machine learning require an application domain and are not just hammers that can produce intelligence automatically.
- Machine learning even requires manual tagging of classes by humans and intelligence in figuring out a set of features in the domain.
- Just because computer systems are becoming powerful doesn’t mean that children can easily jump on the bandwagon without much knowledge of the rest of the world.
What kind of computer science education is appropriate for children?
- Children could learn the basics of computing and what it means to develop an algorithm to solve a task.
- For instance, they can learn algorithms to prepare an omelette.
- They could learn how different parts of a computer system operate.
- Children need to know how to surf the Internet in a safe and secure environment.
What children should study at a young age?
- Children have plenty to learn in science and social studies, for which the ability to read and write is far more essential, rather than being trained as app developers and innovators.
- This will enable them to be more knowledgeable. Perhaps there is no better way to do this than by reading literature.