6th May – Editorials/Opinions Analyses

Contents

1. It’s time for a virtual judiciary
2. Boost wages to stimulate India’s growth
3. Pathways to a more resilient economy
4. Why liquor sales matter to states?

IT’S TIME FOR A VIRTUAL JUDICIARY

Focus: GS-II Governance

Why do we need a ‘Virtual Judiciary’ now?

• The pendency of cases in various courts in India is staggering- and the existing infrastructure may be grossly under-utilised.
• There are tribunals such as the Income Tax Tribunal that function only half-day most of the time.
• To make matters worse, most courts are closed for Christmas and summer vacations.
• Thousands of Indians cannot afford to go to court as legal costs are high and legal procedures are complicated.
• Cases are often adjourned due to various reasons.
• Most tax matters do not necessitate personal hearings.

Using Technology for Speedy disposal of cases?

• A virtual judiciary result in substantial savings in costs
• It will also lead to speedy disposal of cases.
• The productivity of lawyers will increase substantially as visits to courts and long waiting hours will be more an exception than a rule.
• If this practice is extended to other civil cases, efficiency will double, even treble, in judicial functioning.
• Advantages of All judges being able to hear cases from anywhere – better utilisation of manpower and infrastructure, and malpractices will be limited as there will no longer be familiarity between lawyers and judges.

How can the Virtual Judiciary work?

• We can submit all the papers via mail.
• The judge can decide the case based on all the available information.
• Wherever the judge requires clarifications, he or she can seek the same through email.
• Typically, the judge, after considering all the material available, can pass a draft order and send it to both sides for any comments which they may want to provide.
• Thereafter, the judge can, after considering the comments, pass the final order.
• This will enhance the quality of the judgment and also eliminate obvious errors.

-Source: The Hindu

BOOST WAGES TO STIMULATE INDIA’S GROWTH

Focus: GS-III Indian Economy

Why in news?

One of the moving images from today’s India is of migrant workers suddenly feeling desolate in their places of work and desperate to return to their villages, in the aftermath of the COVID-19 outbreak.

We need to plan for an economic growth driven by rising.

Patchy data

• As per 2018 data: Out of India’s total workforce of 471.5 million, only 12.3% are regular workers receiving some form of social security, while the rest are mostly casual workers or petty producers surviving under various degrees of informality.
• A vast majority of migrant workers belong to the category of informal casual workers.
• Available data on the size of the migrant workforce in India are rather patchy.
• According to the 2011 Census, there were 54.3 million persons (workers as well as non-workers) in the country who migrated from one State to the other.
  Workers migrate from villages to urban centres as the growth of rural incomes has not kept pace with the rising numbers and aspirations of the young in the countryside.
• Between 2005 and 2018, 19.3 million persons left agricultural work in these four States alone and sought job opportunities elsewhere.

Livelihood dependency of Workers

• A majority of the workers who leave villages find themselves in the bottom rung of the urban economy, earning a precarious living as drivers, factory workers, security guards and domestic helpers.
• Their livelihoods are directly or indirectly linked to economic activities that cater to the demand from the relatively affluent people.

Need to widen the demand base

• According to the official consumption-expenditure surveys (for 2011-12), the richest 5% accounted for as much as 64.4% of the value of overall consumption of durable goods (such as of furniture or refrigerators) in urban India.
• The share of consumption of such goods by the poorest 50% was only 13.4%.

How to overcome reduced demand / consumption?

• The COVID-19 pandemic is set to cause long-term disruptions to the existing structure of demand dominated by the consumption of a privileged few.
• The crisis in the economy can be overcome only by widening the sources of demand, by raising the consumption of and investment for the poor.
• Firms should assist in raising workers’ wages and incomes, and thereby, in enlarging the size of the markets.
• It is critical that governments increase spending on the economy, in areas such as infrastructure and innovation.
• The ideas of John Maynard Keynes during the great depression of the 1930s that Government spending can boost the spirits of private investors had helped to fuel an unprecedented economic boom in the U.S. and European countries.
• A striking feature of this ‘golden age of capitalism’ was that the real wages kept rising, providing the much-needed succour to the working classes.
• A massive expansion in government spending will uplift workers’ skills as well as their incomes and purchasing power.

Conclusion

A grave challenge to future growth is the ageing demographic structures in most parts of the globe.

Lifting the wages and the spirits of the wearied Indian worker could just be the dose required to bring cheer to the Indian and the global economies.

-Source: The Hindu

PATHWAYS TO A MORE RESILIENT ECONOMY

Focus: GS-III Indian Economy

7 radical ideas emerging to build a more resilient economy

1. “De-Growth”: The obsession with GDP as the supreme goal of progress has been challenged often- Goals for human progress must be reset.
2. “Sufficient boundaries”: Boundaries impede flows of trade, finance, and people- removing boundaries is good for global growth. However, since countries are at different stages of economic development, and have different compositions of resources, they must follow different paths to progress. COVID-19 has given another reason to maintain sufficient boundaries.
3. “Government is good”: Even Capitalist corporations are lining up for government bailouts.
4. “Market is not the best solution”: The “marketization” of economies has contributed to the increasing inequalities in wealth.
5. “Citizen welfare, not consumer welfare”: In economies, human beings are consumers and producers. In societies, they are citizens.Citizens’ needs cannot be fulfilled merely by enabling them to consume more goods and services.
6. “Competition must be restrained”: Collaboration is essential for progress.Further progress, to achieve the Sustainable Development Goals for example, will require collaboration.
7. “Intellectual property belongs to the public”: Intellectual property monopolies are producing enormous wealth for their owners, though many were developed on the back of huge public investments. Moreover, powerful technologies can be used for benign or malign purposes.

-Source: The Hindu

WHY LIQUOR SALES MATTER TO STATES?

Focus: GS-III Indian Economy

Why in news?

Following the easing of restrictions in the third phase of the nationwide lockdown, some of the most striking images on 4th May showed long queues outside liquor stores around the country.

Manufacture and sale of liquor is one of the major sources of their revenue.

How do states earn from liquor?

Liquor contributes a considerable amount to the exchequers of all states and Union Territories except Gujarat and Bihar, both of which have enforced prohibition.

States levy excise duty on manufacture and sale of liquor, and some states like Tamil Nadu also impose VAT.

A report published by the Reserve Bank of India on September 2019 – shows that state excise duty on alcohol accounts for around 10-15 per cent of Own Tax Revenue of a majority of states.

In fact, state excise duties on liquor is the second or third largest contributor to the category State’s Own Tax revenue; sales tax (now GST) is the largest.

How much do states earn from liquor?

• The five states that collected the highest revenue from excise duty on liquor were Uttar Pradesh (Rs 25,100 crore), Karnataka (Rs 19,750 crore), Maharashtra (Rs 15,343.08 crore), West Bengal (Rs 10,554.36 crore) and Telangana (Rs 10,313.68 crore).
• With Bihar and Gujarat having prohibited liquor, Bihar had ‘nil’ revenue from liquor in 2018-19 and 2019-20, while Gujarat’s liquor revenue was negligible.
• Andhra Pradesh too announced prohibition last year; however, sale of the liquor has been allowed with “prohibition tax” from 4^th May 2020.

State Excise and State Revenue

• State excise is levied mainly on liquor and other alcohol-based items.
• The states’ revenues comprise broadly two categories — Tax Revenue and Non-Tax Revenue.
• Tax revenue is divided into two further categories: State’s Own Tax Revenue, and Share in Central Taxes.

Again, Own Tax Revenue comprises three principal sources:

1. Taxes on Income (agricultural income tax and taxes on professions, trades, callings and employment)
2. Taxes on Property and Capital Transactions (land revenue, stamps and registration fees, urban immovable property tax)
3. Taxes on Commodities and Services

-Source: Indian Express