IASbhai Daily Editorial Hunt | 26th Nov 2020
“Build your own dreams, or someone else will hire you to build theirs.” – Farrah Gray
EDITORIAL HUNT #262 :“Jobless Growth and the Pandemic | UPSC”
P. Chidambaram | Praveen Chakravarty
Jobless Growth and the Pandemic | UPSC
P. Chidambaram is a former Finance Minister of India and a current Member of Parliament. Praveen Chakravarty is a political economist and a senior office bearer of the Indian National Congress
Jobs, exports and the trade pacts link
India needs to shed its exaggerated fears of trade agreements to create new jobs — the country’s biggest challenge
SYLLABUS COVERED: GS 3 : Employment
India can ‘protect’ its domestic industry with high trade barriers while aspiring for bilateral trade treaties to promote exports. Comment -(GS 3)
- RBI’s Prediction
- Jobs and Economic Slowdown
- Exports and Agreements
- Where are the Jobs ?
- Breaking the wall
- RBI’S PREDICTIONS : According to the Reserve Bank of India (RBI), the Indian economy will further contract by 10% in the July-September quarter.
- ECONOMIC RECESSION : India is in an economic recession for the first time in its independent history.
- MANGO PEOPLE ( आम आदमी ) : The average Indian ‘feels’ the economic despair when her older child has lost his job or when her younger one cannot find a job despite her impressive educational qualifications.
JOBS ARE THE FIRST CASUALTY
- ECONOMIC SLOWDOWN : Thousands of people lost their jobs due to the slowing economy in 2018-19 and 2019-20.
- JOB LOSS : Unemployment had reached a 45-year high. By one estimate, more than 2 crore people lost their jobs during the lockdown.
- POVERTY AND STARVATION : When jobs were lost, incomes were lost too.Millions of people found that they did not have a roof over their heads or money to feed their families.
SOURCES : STATISTA
WHERE THE JOBS ARE
- LABOUR INTENSIVE SECTOR : 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 ETC.
- LARGE SCALE EXPORTS : Merchandise exports also create supporting jobs in warehousing, transport, stevedoring, container stations, shipping, ship chandling, ports and export financing.
SOURCES : DownToEarth
EXPORTS AND AGREEMENTS
- STAGNANT POLICY : Unfortunately, despite the “Make in India” hype, export volumes have languished in the last six years.
- MERCHANDISE EXPORTS FELL : Merchandise goods exports were $314 billion in 2013-14 and remained stagnant for the next five years touching $313 billion in 2018-19.
THE MISTAKEN PATH
- Complete reversal in the direction of India’s foreign trade policy with higher tariffs
- Non-tariff barriers
- Quantitative limits
- The return of licensing
- Border country restrictions
- The appreciating value of the rupee.
- THE AGE OF TRADE AGREEMENTS : Both bilateral and multilateral was born. There were more winners than losers because of trade agreements.
- SOME HISTORIC TRADE AGREEMENTS : The Association of Southeast Asian Nations (ASEAN), North American Free Trade Agreement (NAFTA) and the Southern Common Market (MERCOSUR).
- LUKEWARM AGREEMENTS : Half-hearted and hesitant agreements like the South Asia Free Trade Agreement (SAFTA) failed.
- GDP TRAJECTORY : For nearly 10 years after 2003, GDP growth averaged more than 7%per annum.
- NON FARM JOBS : Non-agricultural jobs in India were generated at a rate of 7.5 million per annum.
- CONSTRUCTION LABOURS : New non-agricultural jobs pulled over 5 million per annum out of agriculture and into construction and other work.
- DEMONETISATION : Demonetisation and the reluctance to competently handle the non-performing assets crisis sent the economy into a downward spiral.
- JOBLESSNESS : Post-2013, people are still leaving agriculture, but non-farm sector jobs are growing more slowly.As a result, joblessness has grown.
- EDUCATED UNEMPLOYMENT : The number of unemployed educated youth and a disheartened labour force increased to unprecedented levels by 2018.
- COVID-19 IMPACT : The COVID-19-driven collapse of the economy and jobs followed this year.
BREAK DOWN THE WALL
- IDEA OF FREE TRADE : It is true that FTA provisions were also misused by some countries to question the foreign investment policies and tax policies of other countries.
- A MODEL FTA DESIGN : India decided to keep FTAs in abeyance until we could agree with our partner countries, on a model FTA that built in safeguards against abuse.
- CLOSED ECONOMY : After the RCEP walk out, we are few steps away from full protectionism that kept India a closed and struggling economy for three decades.
- TACTICS AND ENGAGEMENT : India must re-learn to engage with other countries and negotiate favourable trade agreements through the bilateral and multilateral routes.
- PROSPERITY AND RESILIENCE : Wisdom lies in learning from the past, being smart and resilient in the present and securing our prosperity in the future.
The art of survival in a fiercely competitive world is engagement and negotiation.
SOURCES: THE HINDU EDITORIAL HUNT | Jobless Growth and the Pandemic | UPSC