IASbhai Daily Editorial Hunt | 26th Nov 2020

“Build your own dreams, or someone else will hire you to build theirs.” – Farrah Gray

Dear Aspirants
IASbhai Editorial Hunt is an initiative to dilute major Editorials of leading Newspapers in India which are most relevant to UPSC preparation –‘THE HINDU, LIVEMINT , INDIAN EXPRESS’ and help millions of readers who find difficulty in answer writing and making notes everyday. Here we choose two editorials on daily basis and analyse them with respect to UPSC MAINS 2020-21.

EDITORIAL HUNT #262 :“Jobless Growth and the Pandemic | UPSC

Jobless Growth and the Pandemic | UPSC 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

      HEADLINES:

Jobs, exports and the trade pacts link

      CENTRAL THEME:

India needs to shed its exaggerated fears of trade agreements to create new jobs — the country’s biggest challenge

SYLLABUS COVERED: GS 3 : Employment

      MAINS QUESTION:

India can ‘protect’ its domestic industry with high trade barriers while aspiring for bilateral trade treaties to promote exports. Comment -(GS 3)

      LEARNING: 

  • RBI’s Prediction
  • Jobs and Economic Slowdown
  • Exports and Agreements
  • Where are the Jobs ?
  • Breaking the wall

      INTRODUCTION: 

India’s economy contracted by 23.9% in the first quarter of 2020-21.

  • RBI’S PREDICTIONS : 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. 

  • 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.

      BODY: 

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.

They included all kinds of jobs — regular salaried, non-contractual, casual, daily wage, and self-employment.

  • 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.

Jobless Growth and the Pandemic | UPSC

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.

These job-creating sectors depend not only on the domestic market but, significantly, on export markets.

  • LARGE SCALE EXPORTS : Merchandise exports also create supporting jobs in warehousing, transport, stevedoring, container stations, shipping, ship chandling, ports and export financing.

Jobless Growth and the Pandemic | UPSC

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

  1. Complete reversal in the direction of India’s foreign trade policy with higher tariffs
  2. Non-tariff barriers
  3. Quantitative limits
  4. The return of licensing
  5. Border country restrictions
  6. The appreciating value of the rupee.

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. 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.

BACKGROUND

  • 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.

But only 2 million of the youth were joining the labour force (as enrolment in schools/colleges was increasing).

  • 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.

      IASbhai Windup: 

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.

Purely trade and commercial disputes were dragged to international arbitral tribunals on the pretext of violating FTA provisions.
 

  • 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.

Most manufacturing today has a long supply chain that cuts across many countries. 

  • 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

 

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