25th December – Editorials/Opinions Analyses

Contents

1. DOUBLE TROUBLE: UNEVEN INFLATION AND SLUGGISH GROWTH
2. STRENGTHENING GRASSROOTS DEMOCRACY
3. NIGHT SHIFTS IN FACTORIES FOR WOMEN ALBIET DAYTIME SHIFT CONCERNS PERSISTS
4. JUSTICE DENIED

DOUBLE TROUBLE: UNEVEN INFLATION AND SLUGGISH GROWTH

Why in news?

• International Monetary Fund called for “urgent” policy measures to reverse the current slowdown that has weighed down global economic growth.
• However, the policymakers face a dilemma regarding “urgent” measures as prices continue to rise even as the economic growth has dropped below 5%.

In-house condition

• Reserve Bank of India (RBI) Governor, while terming the recent spike in inflation as a transient phenomenon, has called for counter-cyclical measures and structural reforms to help the economy

• The non-­uniform nature of the current price rise makes the job of policymakers a lot more complicated. Even as food prices have risen rapidly — food inflation has crossed the 10% mark for the first time in many years

• Analysts debate whether the slowdown is structural or cyclical. The difference matters to some extent.
• If it is cyclical, the expectation is that – there is a chance for upturn soon.
• If it is purely structural, it will take time until the structural rigidities are removed.
• Normally, the slowdown is cyclical if it results from a weakening of demand

What is the role of RBI?

• The central bank’s hands have been tied down by the recent spike in inflation, and it has halted its rate cut spree that began in February this year

• Monetary policy generally is more effective in controlling inflation than stimulating an economy

Way forward:

• Perfectly calibrating monetary and fiscal measures in such a situation amid confusing signals sent out by various inflation numbers can be a tough task, but very necessary.

• One significant factor in the current scene is the steep fall in investment rate (gross fixed capital formation rate) from 34.3% in 2011-­12 to 27.8% in the second quarter of 2019-­20. This results in a sharp decline in the potential rate of growth.
• Thus, one sector which needs immediate reforms is the financial system more particularly the Banking system and within it the public sector segment – addressing the NPA (Non-performing assets) problem while defining relationship between Govt. and the Banks.

• Three autonomous elements that that can be used as ;ever to raise demand are
  1. Government Consumption Expenditure
  2. Government Investments and
  3. Exports
• Reforms on GST may also be necessary to make it more ‘manufacturer and trader’ friendly.

STRENGTHENING GRASSROOTS DEMOCRACY

Why in News?

The Tamil Nadu government delayed holding rural local body elections, due in 2016, by three years.

Details:

• This unconstitutional delay started when the Madras High Court cancelled the Notification of the State Govt. due to irregularities.
• The reason cited for the delay are: delimitation and carving out new districts.
• It’s been more than two decades since the 73rd and 74th constitutional amendments were passed by Parliament, which accorded constitutional status to local administration bodies across India.

• Local body elections serve as a means to both strengthen the parties’ organizational structures and enable them to stay connected with their voters.

• The presence of a robust machinery at the local level is a measure of the health of democracy and people’s participation, hence, absence of rural local bodies is bound to have an immense effect.

Extra Information:

• Article 40 of the Directive Principles of State Policy states:
• “The state shall take steps to organize village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government.”
• The conceptualisation of the system of local self-government in India took place through the formation and effort of four important committees:

1. Balwant Rai Mehta Committee (1957)
2. Ashok Mehta Committee (1977-1978)
3. G V K Rao Commitee (1985)
4. L M Singhvi Commitee (1986)

• The 73rd and 74th Constitutional Amendment acts of 1992 added two new parts IX and IX-A  to the constitution.
• It also added two new schedules – 11 and 12 which contains the lists of functional items of Panchayats and Municipalities.
• It provides for a three-tier system of Panchayati Raj in every state – at the village, intermediate and district levels.

NIGHT SHIFTS IN FACTORIES FOR WOMEN ALBIET DAYTIME SHIFT CONCERNS PERSISTS

Why in News?

• On November 20, the Karnataka government issued a notification allowing women to work night shifts (7 p.m. to 6 a.m.) in all factories registered under the Factories Act, 1948. States that already allow this are Haryana, Rajasthan, Punjab, Andhra Pradesh, Madhya Pradesh, and Maharashtra

• In line with the Night Work Convention, 1990 of the International Labour Organization, these States amended the Factories Act to remove both sex­ based discrimination in night work and restrictions on the fundamental right to practice any profession, occupation, trade, or business of one’s choice.

• This move has to be read alongside the State’s attempt to improve ease of doing business, investor friendliness, and flexibility in a macroeconomic climate vis-­a­-vis increasing female work participation rate, which is only 25% in India.

Challenges

• Notification said that, night shifts for women will only be allowed if the employer ensures adequate safeguards concerning occupational safety and health, protection of dignity and honour, and transportation from the factory premises to points nearest to the worker’s residence.

JUSTICE DENIED

Why in News?

Saudi court this week sentenced five men to death, convicted three to jail terms and acquitted three others for the gory murder of dissident Saudi journalist Jamal Khashoggi in October 2018.

The Khashoggi case convictions worsen the global image of Saudi Arabia, especially considering the flip-flopping statements on what transpired and the closed-door court trials.