IAS Gyan

Daily News Analysis


14th May, 2020


A plan to revive a broken economy


- The Prime Minister has just announced Lockdown 4.0 and a package of ₹20 lakh crores, but this includes already allocated money of ₹6-lakh crores and monetary policy directives to banks and non-banking financial companies.

- The announcements by the Finance Minister thus far involve no additional public spending, even though this is urgently required to revive the economy and prevent further contraction.

Food and cash transfers first

- The immediate need is to provide free food and cash transfers to those rendered income less.

- Providing every household with ₹7,000 per month for a period of three months and every individual with 10 kg of free food grains per month for a period of six months.

- It is likely to cost around 3% of our GDP (assuming 20% voluntary dropout).

- This could be financed immediately through larger borrowing by the Centre from the Reserve Bank of India.

- The required cash and food have to be handed over to State governments to make the actual transfers, along with outstanding Goods and Services Tax compensation.

Doable things:

- Plentiful Food grains: Food Corporation of India had 77 million tonnes and rabi procurement could add 40 million tonnes.

- Curtailing of multiplier rounds: Because of the lockdown restrictions, the multiplier rounds of such expenditure are heavily truncated at present and would not generate as much demand as in normal times.

- Maintain Current Demand: Cash transfers in many spheres will only enable current demand to continue (such as payment of house rent to continue occupancy) and not create any fresh demand.

- Expansions of Output: When greater normalcy finally allows pent-up demand to surface, output could also expand because of resumed economic activity.

- Demand in Local markets: Putting money in the hands of the poor is the best stimulus to economic revival, as it creates effective demand and in local markets.

- Hence, an immediate programme of food and cash transfers must command the highest priority.

Revamp MGNREGA work

Reasons of Hardships:

- Return of migrants: Millions of migrant workers have endured immense hardships to trudge back home, and are unlikely to return to towns in the foreseeable future.

- Need to provide employment: Employment has to be provided to them where they are, for which the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) must be expanded greatly and revamped with wage arrears paid immediately.

- The 100-day limit per household has to go;

- Work has to be provided on demand without any limit to all adults.

- Permissible work must include not just agricultural and construction work, but work in rural enterprises and in care activities too.


- The revamped MGNREGS could cover wage bills of rural enterprises started by Panchayats.

- Cover wage bills of existing rural enterprises, until they can stand on their own feet.

- This can be an alternative strategy of development, recalling the successful experience of China’s Township and Village Enterprises (TVEs).

- Public banks could provide credit to such Panchayats-owned enterprises and assume a nurturing role vis-à-vis them.

Unsustainability of Globalisation:

- Growth in India in the coming days will have to be sustained by the home market.

- Since the most important determinant of growth of the home market is agricultural growth, this must be urgently boosted.

- The MGNREGS can be used for this, paying wages for land development and farm work for small and medium farmers;

- Provide government support through remunerative procurement prices, subsidised institutional credit, other input subsidies, and redistribution of unused land with plantations.

- Agricultural growth in turn can promote rural enterprises, both by creating a demand for their products and by providing inputs for them to process; and both these activities would generate substantial rural employment.

The urban focus

- In urban areas, it is absolutely essential to revive the Micro, Small and Medium Enterprises (MSMEs).

- Introduce an Urban Employment Guarantee Programme, to serve diverse groups of the urban unemployed, including the educated unemployed.

- Urban local bodies must take charge of this programme, and would need to be revamped for this purpose.

- “Permissible” work under this programme should include, for the present, work in the MSMEs.

- This would ensure labour supply for the MSMEs and also cover their wage bills at the central government’s expense until they re-acquire robustness.

- It should imaginatively also include care work, including of old, disabled and ailing persons, educational activities, and ensuring public services in slums.

- The humanitarian crisis of the lockdown reveals the imperative for more, not less labour protection. Such measures, far from reviving investment or employment, would also further reduce domestic demand.

The ‘care’ economy

- The post-pandemic period must see significant increases in public expenditure on education and health, especially primary and secondary health including for the urban and rural poor.

- The “care economy” provides immense scope for increasing employment.

- Vacancies in public employment, especially in such activities, must be immediately filled.

- Anganwadi and Accredited Social Health Activists/workers who provide essential services to the population are paid a pittance and treated with extreme unfairness.

- Need to improve their status, treat them as regular government employees and give them proper remuneration and associated benefits, and greatly expand their coverage in settlements of the urban poor.

Way to do so:

- These could easily come within the total package announced by the Prime Minister, which could be financed by printing money.

- In the medium term, public revenues must be increased.

- A combination of wealth and inheritance taxation and getting multinational companies to pay the same effective rate as local companies through a system of unitary taxation will garner substantial public revenue.

- They will also reduce wealth and income inequalities which have become horrendous.

-  A 2% wealth tax on the top 1% of the population, together with a 33% inheritance tax on the wealth they bequeath every year to their progeny, could finance an increase in government expenditure to the tune of 10% of GDP.

- A fresh issue of special drawing rights by the International Monetary Fund (which India has surprisingly opposed along with the United States) would provide additional external resources.


- Additional resources would suffice to finance the institution of five universal, justiciable, fundamental economic rights:

- The right to food, the right to employment, the right to free public health care, the right to free public education and the right to a living old-age pension and disability benefits.

Reference: https://www.thehindu.com/opinion/lead/a-plan-to-revive-a-broken-economy/article31577261.ece

The death of fatalism

- Historic events such as Covid 19 compel us to raise big questions usually submerged in the hustle and bustle of life: what is and what isn’t in human control?

- How to make sense of collective helplessness in the face of abrupt changes?

- What is the place of contingency, fortune and misfortune in our life?


Fatalism provides one answer: human agency is insignificant.

- We are permanent victims of inscrutable forces beyond our control.

- The surge of fatalism seems inevitable within popular consciousness.

- What else can we expect in the land of Karma — the idea that birth, status, marriage, occupation, all life experiences, and death are predetermined?

- Isn’t our personal destiny inscribed on our forehead or in the lines of our palm?

- Are we not already allotted a share (bhaga) of fortune or misfortune at birth?

-  Isn’t Hinduism virtually synonymous with fatalism?

- In Hindustani, phrases such as ‘Hamari kismet meinyehlikhahai’ suggest importance of fatalism.


The near-absence of fatalism

- Ordinary people are not resigned to their fate — an inscrutable, unpredictable force that acts on humans against their will, mocks their agency and humiliates them.

- Instead, they expect governments to take charge, doctors and nurses to save lives, scientists to deliver a cure, fellow citizens to behave responsibly.

- Poor are willing to take huge risks and return home, not die of hunger when abandoned by governments.

- In short, Hindu fatalism seems to be a myth spun by Western, orientalist imagination. Or, perhaps, sustained by the rich who imagine the poor to be victims of fate; it is not what the poor believe about themselves.


Fatalism in India:

- Historically, large segments of Indian thought are non-fatalistic and give an important place to human agency.

- The philosopher Sukumari Bhattacharji made a plausible case for the absence of fatalism in various ancient texts: the Rig Veda, the Brahmanas, the Samhitas, the Upanishads, the Aranyakas, and in Jaimini’sPurvaMimamsa.

- The theory of Karma found in the teachings of Buddha and Mahavira are not just atheistic but valorise human agency.

- Though the idea of fate exists, it is immanent, inscribed in and dependent upon human action spread over many births.

- Likewise, in Puranic literature, fate and human agency coexist. I

- In the Mahabharata, Rishis reject the argument that humans are victims of forces beyond their control. In ancient India, perhaps only the atheistic Ajivikas embraced fatalism.

- Fate can be thwarted by action, particularly by those prepared to take risks.

- It can also be challenged, especially among the underprivileged, by ‘witchcraft’, or worship of ancestors and local deities.

- Anthropologists like Kathleen Gough record the derision with which Dalits in Tamil Nadu dismiss ideas of bhagya, phalalikhita, or inexorable fate.

- In conditions of extreme, prolonged distress, entire world views may emerge that make human vulnerability permanent, unexpected, unpredictable forces salient, and render human agency, order and reason insignificant.

- The idea of the absurd which emerged during the Second World War, underscoring the futility of the search for meaning and it stresses on futility of human action



- Fate is an integral, recurrent feature of the human condition.

- In every civilisation, such concepts emerge unbidden.

- All ancient worldviews had a term for it: moira in Greek, ming in Chinese and bhagya in Sanskrit.


Why Fate?

- The human world can always be viewed as a great contest between human agency and nature, something currently beyond control.

- The more humans are able to control their destiny, the less room in their perspective they have for fate.

- But there are times when most human beings feel utterly helpless — say, in times of wars, natural calamities, social upheavals, or personal misfortune.

- In such moments of extreme vulnerability and loss of control ordinary human beings with their practical consciousness rely on notions such as fate.

- They submit, surrender, resign themselves to and eventually accept their condition — ‘so be it’, ‘such is my lot’.


Human powers versus chance

- In short, an ongoing battle rages between what the Italian humanist Machiavelli calls Virtue (human powers) and Fortuna (chance/fate).

- Individuals, societies and, indeed, humanity must have a realistic view of what is given and the extent to which it can be altered.

- It is impossible to entirely give up a conception of something beyond us and equally, to entirely reject a modicum of responsibility for one’s actions.

- We are always in part responsible for what is happening to us, though this contracts or enlarges depending on circumstances.

- Fate is linked to misfortune and death.

- No wonder accidents that result in death are called fatal and human beings who perish in disasters are called fatalities.



- fatalism whose over-valorisation of fate nullifies human agency must disappear, views that introduce the dialectic of fate and human agency to account for contingency, misfortune and bad luck cannot be erased.


Reference: https://www.thehindu.com/opinion/op-ed/the-death-of-fatalism/article31576678.ece






Major stimulus package for MSMEs


Announcement by Finance Minister:

Atma Nirbhar Bharat Abhiyan:

- It is 1st tranche of the package.

- Announced a Rs. 3 lakh crores collateral free loan scheme for businesses, especially micro, small and medium enterprises (MSMEs).

- Extended deadline for income tax returns for financial year 2019-20, with the due date now pushed to November 30, 2020 for salaried taxpayers and workers.

- The rates of tax deduction at source (TDS) and tax collection at source (TCS) have been cut by 25% for the next year.

- Statutory provident fund (PF) payments have been reduced from 12% to 10% for both employers and employees for the next three months.

- For two lakh MSMEs that are stressed or considered non-performing assets, the Centre will facilitate provision of Rs. 20,000 crores as subordinate debt.

-  A Rs. 50,000 crores equity infusion is also planned, through an MSME fund of funds with a corpus of Rs. 10,000 crores.

- Global tenders will not be allowed for government procurement up to Rs. 200 crores.

Expansion of definition of MSME:

- It will allow for higher investment limits and the introduction of turnover-based criteria.

- NBFCs, housing finance companies and microfinance institutions — many of which serve the MSME sector — will be supported through a Rs. 30,000 crores investment scheme fully guaranteed by the Centre.

Impact of the Scheme:

- The measures announced are amounted to Rs. 5.94 lakh crores, which include both liquidity financing measures and credit guarantees.

- The direct fiscal cost to the government in the current financial year may only be Rs. 16,500 crores.

Reference: https://www.thehindu.com/todays-paper/major-stimulus-package-for-msmes/article31578657.ece


Vocal about local, but no snub to globalization

Four discernible strands in Mr. Modi’s speech:

Import Substitution:

- First, import substitution, an objective that drove nationalist economic policies in the 20th century, is back.

- The biggest superpower’s struggles with procuring enough masks and paracetamol, for instance, has exposed its vulnerabilities. Self-reliance is suddenly not a bad idea again.

- the new context has given him the courage to be “vocal about local”. In a crisis, only the local capacities can be useful.

People Centric:

- Call for a new form of globalisation — from profit driven to people-centric.

- The global brands of today were sometimes also very local like this, they became global from (being) local.

-Concept of India-led globalisation — on climate, on being helpful to other countries by offering them supplies in a time of crisis, led by the principle of Vasudhaiva Kutumbakam.

Cost to China:

- India’s self-reliance can only be at the cost of China.

- The current crisis could work to China’s advantage further if it is business as usual.

- He questioned the Chinese grip over global supply chains, and gave an invitation to western partners such as the U.S. for closer partnerships.


- Reforms are those policies that transform the lives of ordinary citizens.

- Policies to ensure that growth benefits the poor and the weaker sections” and “a frontal attack on corruption”, were reforms.

- List of reforms overlaps substantially with the demands of owners of capital — rational tax system, simple and clear rules-of-law, good infrastructure, etc.


- Severe limitations in capital, technology and human resources.

- Balancing the interests of capital and labour is not easy.

Reference: https://www.thehindu.com/todays-paper/tp-national/vocal-about-local-but-no-snub-to-globalisation/article31578580.ece



India records 3,525 more virus cases

- The Indian Council of Medical Research (ICMR) said in a release that it “has fast-tracked the rollout of the global ‘Solidarity’ trial launched by the World Health Organization to help find an effective treatment for COVID-19”.

About Solidarity Trial:

- "Solidarity” is an international clinical trial to help find an effective treatment for COVID-19, launched by the World Health Organization and partners.

- It will compare four treatment options against standard of care, to assess their relative effectiveness against COVID-19.

- While randomized clinical trials normally take years to design and conduct, the Solidarity Trial will reduce the time taken by 80%.

- Enrolling patients in one single randomized trial will help facilitate the rapid worldwide comparison of unproven treatments. 

- Four potential anti-viral agents — Remdesivir, Chloroquine/Hydroxychloroquine, Lopinavir-Ritonavir and Lopinavir-Ritonavir with Interferon (beta-1a) — are to be evaluated in the trial.


$3.6 mn in U.S. funding to Indian labs may be delayed


- A decision by the U.S. Centers for Disease Control and Prevention (CDC) to donate $3.6 million to Indian laboratories and research agencies to assist in countering the COVID-19 pandemic could run into delays, given that the agency has been placed on a “watch list”.

Reasons for delay:

- any funding from the U.S. government body would have to be cleared by the Ministry of Home Affairs (MHA) as it had been placed on a “watch list” on December 2, 2019.

- It has been barred from sending funds directly to any government or private institute in India without the MHA’s clearance.

- CDC was put on watch list because CDC has funded an “unapproved” Indian laboratory in Manipal for work on the Nipah virus, considered a “potential bio-weapon”.

Reference: https://www.thehindu.com/todays-paper/36-mn-in-us-funding-to-indian-labs-may-be-delayed/article31578659.ece


CAPF canteens to go swadeshi

- Government announced that all canteens of the Central Armed Police Forces (CAPF) would only sell swadeshi or products made in India.

About CAPF:

- The CAPF comprises forces such as the Central Reserve Police Force, the Border Security Force, the Indo-Tibetan Border Police, the Services Selection Board, the Central Industrial Security Force, the National Security Guard and the Assam Rifles.

- The central purchase committee of the Central Police Canteen system is headed by an Additional Director General-rank officer.

- The facility was initiated as a welfare venture by the MHA in 2007.

- The beneficiaries are serving and retired CAPF personnel and their families.

Reference: https://www.thehindu.com/todays-paper/capf-canteens-to-go-swadeshi/article31578662.ece


India may miss nutrition targets

Finding of Global nutrition report 2020:
- India is among 88 countries that are likely to miss global nutrition targets by 2025.

- India will miss targets for all four nutritional indicators for which there is data available — stunting among under-five children, anaemia among women of reproductive age, childhood overweight and exclusive breastfeeding.

- India is identified as among the three worst countries, along with Nigeria and Indonesia, for steep within-country disparities on stunting.

Nutrition targets by World Health Assembly:

- Identified six nutrition targets for maternal, infant and young child nutrition to be met by 2025.

- Reduce stunting by 40% in children under five

- Reduce prevalence of anaemia by 50% among women in the age group of 19-49,

- Ensure 30% reduction in low-birth weight and no increase in childhood overweight,

- Increase the rate of exclusive breastfeeding in the first six months up to at least 50%

- Reduce and maintain childhood wasting to less than 5%.

About global nutrition report:

- The 2020 Global Nutrition Report looks beyond global and national patterns, revealing significant inequalities in nutrition outcomes within countries and populations.

- It is leading report on state of nutrition in world.

Reference: https://www.thehindu.com/todays-paper/tp-national/india-may-miss-nutrition-targets/article31570165.ece 


Requests for FB user data by India up 28%

Finding of Transparency Report by US Based Social Media network:

- The number of user data requests from the Government of India to Facebook increased 28% from July to December 2019 at 26,698 queries for 39,664 users or accounts — the second highest globally, according to a latest Transparency Report by the U.S.-based social media network.

- The total duration of these disruptions affecting Facebook services was 36 weeks, 6 days and 9 hours.

- Other countries that were a part of the list were Chad, Egypt, Ethiopia, Indonesia, Iran, Iraq, Mauritania, Myanmar, Sudan and Swaziland.

Reference: https://www.thehindu.com/todays-paper/requests-for-fb-user-data-by-india-up-28/article31578660.ece


Stimulus package has nothing for migrants

Challenges to Package:

- The total stimulus package for the MSMEs amounted to Rs. 3.6 lakh crores but ‘where is the remaining Rs. 16.4 lakh crores.

- There was nothing in the package that could stimulate demand.

- The government should not be unduly bothered about running up a high fiscal deficit and could monetise part of the deficit if it reached a worrying level.

- There is nothing for the migrants.

Reference: https://www.thehindu.com/todays-paper/tp-national/stimulus-package-has-nothing-for-migrants/article31578570.ece


Rs. 3,100 crores from PM CARES allocated for COVID-19 relief

- The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund, better known as PM CARES, will allocate Rs. 3,100 crores to COVID-19 relief, including funds for ventilators, migrant workers and vaccine development.

- The PM CARES Fund Trust has decided to spend Rs. 2,000 crores to buy 50,000 Indian-made ventilators.

- Another Rs. 1,000 crores will be used to support the States’ welfare measures for migrant workers, and will help provide accommodation, food, medical treatment and transport

- State-wise allocations will be determined on the basis of population (50% weightage), the number of positive COVID-19 cases (40% weightage) and a 10% share split equally to ensure a basic minimum sum for all States.

- The money will be released to the district administration through the State Disaster Relief Commissioners.

About PM-CARE fund:

- Prime Minister is the ex-officio Chairman of the PM CARES Fund and Minister of Defence, Minister of Home Affairs and Minister of Finance, Government of India are ex-officio Trustees of the Fund.

- The Chairperson of the Board of Trustees (Prime Minister) shall have the power to nominate three trustees to the Board of Trustees who shall be eminent persons in the field of research, health, science, social work, law, public administration and philanthropy.

- The fund consists entirely of voluntary contributions from individuals/organizations and does not get any budgetary support.

Reference: https://www.thehindu.com/todays-paper/tp-national/rs-3100-crore-from-pm-cares-allocated-for-covid-19-relief/article31578610.ece


Industrial output shrank 16.7% in March

About Industrial Output:

- Industrial production measures the output of businesses integrated in industrial sector of the economy such as manufacturing, mining, and utilities.

- In India, manufacturing accounts for 77.6 percent of total output, mining for 14.4 percent and electricity for 8 percent.

- Details released by the Ministry of Statistics and Programme Implementation. 

Reference: https://www.thehindu.com/todays-paper/industrial-output-shrank-167-in-march/article31570196.ece


GI tag for Sohrai Khovar painting, Telia Rumal

Sohrai Khovar Painting:

- The Sohrai Khovar painting is a traditional and ritualistic mural art being practised by local tribal women during local harvest and marriage seasons using local, naturally available soils of different colours in the area of Hazaribagh district of Jharkhand. 

- The style features a profusion of lines, dots, animal figures and plants, often representing religious iconography.

- In recent years, the walls of important public places in Jharkhand, such as the Birsa Munda Airport in Ranchi, and the Hazaribagh and Tatanagar Railway Stations, among others, have been decorated with Sohrai-Khovar paintings.

Telia Rumal:

- Telia Rumal cloth of Telangana involves intricate handmade work with cotton loom displaying a variety of designs and motifs in three particular colours — red, black and white.

- Telia Rumal can only be created using the traditional handloom process and not by any other mechanical means as otherwise.

About GI act:

- The Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act) is a sui generis act of the Parliament of India for protection of geographical indications in India.

-  It was enacted the Act to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights.

-  The GI tag ensures that none other than those registered as authorised users (or at least those residing inside the geographic territory) are allowed to use the popular product name.

-  Typically, GI conveys an assurance of quality and distinctiveness, which is essentially attributable to the fact of its origin in that defined geographical locality, region or country.

Reference: https://www.thehindu.com/todays-paper/tp-life/gi-tag-for-sohrai-khovar-painting-telia-rumal/article31570229.ece