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Survey 2019 big ideas: Rationalise minimum wages architecture
- According to the Economic Survey 2019,India needs to have a mandatory national-level minimum wage to promote social justice and curb distress migration.
- At present,minimum wages are fixed on the basis of the skill level, geographical areas,nature of work.This has led to a proliferation of minimum wages making enforcement a challenging task.
- The Survey’s recommendations are in line with the revised wage code bill which says fixing minimum wages based on either the level of skill or the geographical region or both.
- This simplification in the structure is expected to bring down the number of minimum wages to 300 from about 2,500 wage rates that exist today.
- Under this architecture,the Centre would notify a national floor minimum wage that could vary across the five geographical regions identified in the survey.This would serve as a floor wage.States have the option of fixing the wages at higher levels.
- Further,these wages would be regularly adjusted presumably by the state-wise consumer price index for industrial workers.The wage should also be extended to all sectors of the economy covering both the formal and the informal sector.
Survey 2018-19 calls for improvement in contract enforcement regime
- According to the Economic Survey 2018-19,contract enforcement remains the single biggest hurdle to improve India’s ease of doing business ranking.
- India has climbed to 77th position in the World Bank’s ease of doing business ranking that captured the performance of 190 countries.
- The Ease of Doing Business assessment provides objective measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle.
- Among various indicators,India’s worse performance was highlighted in enforcing contracts where the country ranked 163rd in 2018.
- The survey says that the solution is to improve the judicial system, particularly in lower courts where 3.5 crore cases remain pending.The survey said two key issues need to be dealt with in order to make the judiciary more efficient and to clear the ‘legal logjam.’
- Firstly,the courts must achieve a 100% case clearance rate(CCR) so that there is zero accumulation to the existing pendency.CCR is the ratio of the number of cases disposed of in a given year to the number of cases instituted in that year.
- Secondly,the backlog of cases already present in the system must be removed.District and Subordinate (D&S) courts which account for the bulk of pendency received 1.5 crore additional cases in 2018 and had a backlog of 2.87 crore as on January 1, 2018.
- The survey has also suggested (a)improving the efficiency of the courts, (b)increasing number of working days of courts (c)establishment of Indian Courts and Tribunal Services and (d)deployment of technology in the legal system.
Survey 2018-2019 proposes to raise retirement age
- The Economic Survey 2019 has suggested that the government should increase the retirement age from the current 60 years.The survey cited improved life expectancy for this move.
- The survey has said that India is set to witness a sharp slowdown in population growth over the next two decades.
- The total fertility rate which is a measure of how many children an average woman of reproductive age is likely to have in her lifetime will dip below the replacement 2.1 by 2021.
- Going with the trend,the Survey suggests that policy makers need to prepare for ageing which will need investments in health care as well as a plan for increasing the retirement age in a phased manner
- The Survey has suggested that a higher retirement age would also be crucial for the viability of the pension system which was in a nascent stage,apart from increasing female labour force participation in older age groups.
- Currently,the retirement age for most government employees is 60 years and most private companies have aligned their age of superannuation to the Centre and state governments.
- The survey also quoted the retirement age reforms being implemented or under consideration in countries like Germany (66 by 2023), Australia, US, UK and Japan (where increasing the retirement age to 70 is under consideration).
Survey moots central welfare database of citizens
- According to the Economic Survey,the government can improve its delivery of public goods and services by creating a central welfare database of citizens by merging various existing databases.
- The survey said that the government can collect four kinds of data namely (a)administrative data (b)survey data (c)transactions data and (d) institutional data
- The administrative data can consist of birth, death, pensions, tax and marriage records.The survey data consists of census data and National Sample Survey data.
- On the other hand,transactions data should consists of datasets from e-NAM (National Agriculture Market) and United Payments Interface. Institutional data should consist of data from public schools and hospitals.
- The government could utilise the information embedded in these distinct datasets to enhance (a)ease of living for citizens (b)improve targeting in welfare schemes (c)integrate fragmented markets and (d)bring greater accountability in public services.
- The survey also suggests critical rules that ensure strong privacy framework so that data is not tampered with and citizens still have a choice to opt out of some choices.
- First,while any ministry should be able to view the complete database, a given ministry can manipulate only those data fields for which it is responsible.Second,updating of data should happen in real time and in such a way that one ministry’s engagement with the database does not affect other ministries access.
- The survey has also recommended granting access to select database to private sector for a fee given that stringent technological mechanisms exist to safeguard data privacy.
Survey: shift focus to water productivity
- The Economic Survey 2018-19 has suggested that the Government should shift its focus from ‘land productivity’ to ‘irrigation water productivity’.
- This shift could happen if India provides incentives to farmers to adopt efficient water use to avert a looming water crisis.
- The survey has suggested India should introduce (a)improved irrigation methods (b)use technologies and (c)change cropping patterns to reduce the use of groundwater.
- The survey has said that one of the key reasons for the shrinking ground water level is the cropping pattern which is skewed toward crops that use more water.Rice and sugarcane crops together consume more than 60% of water available for irrigation.
- The survey said that States such as Tamil Nadu,Karnataka,Maharashtra and Andhra Pradesh which have high land productivity tend to have very low irrigation water productivity reflecting inefficient use of water and the need to re-calibrate cropping pattern
- According to a 2018 report by NITI Aayog,India is one of the world’s biggest users of ground water and its depleting levels are the main reason for the country’s severe shortages.About 600 million Indians are facing high-to-extreme water stress and the situation is set to worsen as water requirements rise.
- According to the India Meteorological Department,India is already facing a severe water crisis with about 60% of the country having received deficient rainfall from June 1-July 4,2019.
Survey 2018-19: Private funds needed for Swachh Bharat
- According to the Economic Survey 2018-19,Swachh Bharat Mission (SBM) was a complete success producing significant health benefits.
- The Survey claimed that 30 states / Union territories had cent per cent coverage of household toilets.Nearly 90% of all SBM toilets have been geo-tagged.
- The target was achieved due to (a)community participation (b)flexibility in choice (c)capacity building (d)behaviour change and (e)use of information technology and social media.
- The survey said that the next big goal on the Swachh Bharat journey is 100% safe and scientific disposal of solid and liquid waste.
- However,it emphasises that the large resources needed to reach this milestone will need to be met through crowd and corporate funding, private partnerships and innovative financing mechanisms along with government allocations.
- Some of the areas which must be dealt with in this next phase are (a) sewer construction and water availability (b)scientific techniques for waste disposal (c)treatment of industrial effluent (d)drain bio-remediation (e)river surface cleaning and (f)sustained rural sanitation.
- Apart from financial resources,the survey said that mindset change is the other major ingredient required for sustained progress in sanitation.
- The survey said that swachh grahis or village level ambassadors who have already been recruited for Phase 1 of the programme are key to maintaining momentum.
- Swachh Bharat Mission(Gramin)aims to make India an open defecation free(ODF) country.It seeks to improve the levels of cleanliness in rural areas through Solid and Liquid Waste Management activities and making villages Open Defecation Free (ODF) and clean.
train collisions in 2018-19, fire incidents rise: Economic Survey
- According to the Economic Survey 2019,incident of train collisions has come down to zero in the year 2018-19 in Indian Railways.
- The incidents of derailment have also decreased from 78 in 2016-17 to 46 in the year 2018-19.However,the incidents of fire has increased to six in 2018-19.
- Additionally,the survey said that in 2018-19,Indian Railways had carried 1221.39 million tonnes of revenue earning freight,an increase of 61.84 million tonnes or 5.33% over 2017-18.
- Indian Railways has also initiated a major electrification program for electrifying 100% of its broad gauge network.This would reduce the nation’s dependence on imported diesel oil.
- Addressing the ‘Swachh Rail Swachh Bharat’ mission of Indian Railways, the Survey ranks ‘Beas’ station as first in India in the case of cleanliness among ‘A’ category stations and ‘Visakhapatnam tops the list among ‘A1’ category station.
- Further,the survey has said that there is also a rise in the number of bio toilets in passenger coaches,plastic bottle crusher machines,mechanised cleaning and housekeeping at major stations in the country
calls for tax cuts, space for hotels in infra boost to tourism
- The Economic Survey 2018-19 has recommended a series of measures to boost the tourism sector.
- The tourism sector experienced a sharp slowdown in 2018.The survey stated that the foreign tourist arrivals(FTAs) in 2018-19 stood at 10.6 million compared with 10.4 million in 2017-18.
- The survey has recommended various measures to boost sector such as (a)increased budgetary allocation for development of infrastructure (b)making land available for hotels and (c)reduction in taxes.
- The survey has also added that there was a need to strengthen the coordination mechanism of various Ministries and stakeholders to resolve issues in promotion of tourism in the country.
- Additionally,the State governments also need to be sensitised about tourism being a major driver of employment and poverty alleviation.
Court of Justice to deliver verdict in Kulbhushan Jadhav case on July 17
- The International Court of Justice(ICJ) has said that it will deliver its verdict on July 17 in the case relating to Indian national Kulbhushan Jadhav.
- Kulbhushan Jadhav,an Indian national was convicted of conducting ‘subversive activities’ for the Indian government in Pakistan and has been sentenced to death by a Pakistani military court.However, India have denied all these charges and said that he was abducted from Iran.
- India had approached the ICJ on the grounds that Pakistan had breached Vienna Convention on Consular Relations by refusing consular access to Kulbhushan Jadhav.Further,India had got a stay order preventing Pakistan from executing former naval officer.
- The Vienna Convention of 1961 is an international treaty that defines a framework for diplomatic relations between independent countries. Article 36 of this treaty states that foreign nationals who are arrested should have the right to inform about their arrest at its consulate.
- The International Court of Justice was established in 1945 at Hague,Netherlands.It is composed of 15 judges elected to nine-year terms of office by the United Nations General Assembly and the Security Council.Its objective is to settle legal disputes submitted to it by (a)states (b) duly authorized international branches and (c) UN General Assembly.
Survey 2019 highlight
- The Economic Survey which is usually presented a day before the annual Union Budget has been tabled in Parliament.
- Economic Survey is an assessment documents that presents a picture of the Economic Landscape of the country.The Economic Survey is presented by the Chief Economic Adviser to the Government of India.
- The theme of the Economic Survey 2019 is about enabling a “shifting of gears” to sustained economic growth for objective of $5 trillion by 2024-25.
- The economic survey says that GDP growth in the country has averaged 7.5% over the past five years.The survey has predicted 7% Gross Domestic Product (GDP) growth in FY-20 on stable macroeconomic conditions.
- The survey provisionally estimates 2.9% growth rate for agriculture, forestry and fishing sectors in FY20.It sees fiscal deficit at 5.8% in FY19 versus 6.4% in FY18.
- The survey has said that to achieve the vision of $5 trillion economy by 2024,India needs to shift its gears to accelerate and sustain a real GDP growth rate of 8%.
- The growth is achievable through investment especially private investment.It said that Investment is the key driver of simultaneous growth in demand,jobs,exports & productivity.
- The survey also talks about the virtuous cycle of savings,investment and exports supported by a favorable demographic phase is required for sustainable growth.
- The Survey added that the accommodative stance of the Reserve Bank of India(RBI) will help to reduce real lending rates in the financial sector.
- The Survey also expects that the decline in non-performing assets (NPA) will lead to capital formation.
- The Survey expects the oil prices to decline in 2019-20 which in turn, would push consumption in the economy.However,it does not rule out the possibility of an upward pressure due to rising global growth which can impact the government’s fiscal math.
- The Survey has said that increased uncertainty over trade tensions and lower global growth could hit exports and suggested that an aggressive export strategy must be part of investment-driven model.
- The survey has said that rural wages growth which was declining seems to have bottomed out and has started to increase since mid-2018.It said that the pick up in food prices should help in increasing rural incomes and spending capacity.
- The survey has warned that prospects of export growth remained weak for 2019-20 if status quo is maintained.However,it said that reorientation of export policies to target countries/markets based on our own relative comparative advantage and the importing country’s exposure to Indian goods can foster export performance.
- The Survey stressed on the importance of supporting dwarf or smaller firms to create jobs.The survey has proposed complete overhaul of minimum wages in India.It has also proposed to increase the retirement age.
needed to spur the virtuous cycle in India
- According to the Economic survey,the virtuous cycle of savings, investment and exports supported by a favorable demographic phase is required for sustainable growth.
- The survey says that In order to trigger this virtuous cycle,we have to rely on some of FDI.They can come in and start investment and once this happens,that will enhance productivity which creates jobs,fosters exports and thereby demand.
- The survey has also said that the government is expected to further ease the foreign direct investment(FDI) norms with a view to bridge the widening current account deficit(CAD).
- Current account deficit is one of the key indicators of an economy’s health.It measures the difference between the value of the goods and services a country imports and the value of its exports.
- The survey also stated that among the major economies running current account deficit,India is the largest foreign exchange reserve holder and eighth-largest among all countries of the world.
- Further, talking about India’s exports, it said the composition of exports and import basket has almost remained unchanged in 2018-19 over 2017-18.
can sell PSU land, reduce majority stake to boost non-tax revenue: CEA
- The Chief Economic Adviser(CEA)has said that government can sell land held by PSUs and potentially reduce its majority stake in some companies to make up for the significant shortfall in tax revenues.
- According to the figures in the Economic Survey 2019,the government is expected to receive as much as ₹1.6 lakh crore less than what was estimated in the interim Budget.
- The interim Budget had pegged the government’s receipts in 2018-19 at ₹17.2 lakh crore while the Economic Survey’s provisional actual figures show this will be only ₹15.6 lakh crore.
- The CEA has also suggested that the government could reduce its holdings in some PSUs to below the majority stake of 51% of direct control.
electrified railway tunnel in India commissioned
- South Central Railway(SCR) has commissioned the longest electrified tunnel in Indian Railways in the state of Andhra Pradesh.
- The electrified tunnel is situated between Cherlopalli and Rapuru stations and is part of the railway line between Obulavaripalli– Venkatachalam – Krishnapatnam Port.
- It is constructed in the shape of ‘Horse Shoe’ on New Australian Tunnelling Method.
- The new line also facilitates direct and viable connectivity between South Coast and West Coast.
- It also opens up the viable rail connectivity between Krishnapatnam Port and its hinterland for freight train services.
approves MoU between India and Maldives for Shipping
- The Union Cabinet has given approval for the MoU between India and Maldives for the establishment of passenger and cargo services by sea, which was signed during the visit of Prime Minister of India to Maldives.
- The MoU will pave way for ferry services between Maldives and Kerala by Connecting Kochi with Male & Kulhudhuffushi in Maldives by Sea route.
- Further,this proposed ferry service will contribute in a big way to promote people to people (P2P) contact and to boost bilateral trade.
- At present,connectivity between the two countries is through flights to Male and seaplanes to resorts which is an expensive option.
- This sea connectivity will also help to promote inbound tourism particularly health and wellness tourism for India.Besides,large number of Maldivians also travel to Kerala and other South Indian cities for educational purposes.
- Male is the capital and most populous city of Maldives is situated at a distance of 708 Kms from Kochi.Kulhudhuffushi is the third most populous city of Maldives and is situated at a distance of 509km from Kochi.
most powerful passports revealed: Know where India ranks
- The Henley Passport Index 2019 has been recently released.
- The index has ranked India at 86th position.India’s mobility score is 58 which means that Indian passport holders can access 58 countries around the world without a prior visa.
- As per the Index,Japan and Singapore have the world’s most powerful passports.Both the countries secured top position out of 199 countries, due to passports which allow visa-free or visa-on-arrival travel to 189 places.
- Further,South Korea has been ranked in second place on the index along with Finland and Germany with citizens of all three countries having access to 187 destinations around the world without a prior visa.
- The UK and the US now share sixth place,the lowest position either has held since 2010.The pair was top of the list in 2014.
- Henley and Partners’ annual passport index ranks passports based on the number of countries a holder can go to without a visa or the number of countries a holder can go to where they can obtain a visa,visitor’s permit, or electronic travel authority upon arrival.
- The ranking is based on exclusive data from the International Air Transport Association(IATA) which maintains the world’s largest and most accurate database of travel information.
takes lead in BCIM with ₹2L cr offer to Bangladesh
- Bangladesh Prime Minister is on a visit to China.During the visit,nine agreements were signed in different sectors ranging from aid for the Rohingyas and economic and technical cooperation, investment, power,culture and tourism.
- Bangladesh PM has obtained rice aid for the Rohingya refugee crisis.China will provide 2,500 tonnes of rice for Rohingyas living in Bangladesh after being forcibly displaced from Myanmar.
- China has also taken a lead under Bangladesh-China-India-Myanmar (BCIM) corridor by extending a $31 billion funding package for infrastructure development in Bangladesh.
- BCIM corridor aims to connect China’s eastern city of Kunming with India’s Kolkata through Dhaka in Bangladesh and Mandalay in Myanmar. It envisages formation of a thriving economic belt focusing on cross-border transport,energy and telecommunication networks.
- India has not opposed the BCIM corridor but it has concerns about China expanding its influence in its eastern neighbouring countries.It also fears the project would open its northeastern region to China.
- Further,China’s financial investment in Bangladesh now appears to be its second-biggest after the $60 billion China-Pakistan Economic Corridor (CPEC).
- CPEC refers to a number of major infrastructure works currently under way in Pakistan intended to link Kashgar in China’s Xinjiang province to Gwadar deep sea port close to Pakistan’s border with Iran.The project seeks to expand and upgrade infrastructure across the length and breadth of Pakistan.
drags India to WTO over duty hike on 28 American goods
- The US has dragged India to the World Trade Organization(WTO) for according less favorable treatment to its products.
- India had levied higher tariffs on American products in response to the US imposing a global additional tariff of 25% and 10% on import of steel and aluminium product respectively.
- The US has said that the additional duties imposed by India appears to nullify or impair the benefits accruing to the US directly or indirectly under the GATT 1994.
- The General Agreement on Tariffs and Trade (GATT) is a WTO pact, signed by all member countries of the multilateral body.It aims to promote trade by reducing or eliminating trade barriers like customs duties.
- The US has alleged that the duties imposed by India appears to be inconsistent with two norms of GATT.
- Firstly,India does not impose these duties on like products originating in the territory of any other WTO member nation.Secondly,India also appears to be applying rates of duty to US imports greater than the rates of duty set out in India’s schedule of concessions.
- However,India’s argument in support of its duties is that retaliation is permitted under the WTO’s Agreement on Safeguards.
- To this,the US has said that its tariffs are not a safeguard measure but were taken under Section 232 of the US Trade Expansion Act of 1962 on grounds of national security.
- If the dispute consultations between the two countries fail to resolve the matter then the US can ask the WTO to set up a panel to decide on the matter.
attempts fresh focus on FTAs, talks with U.S., EU and ASEAN negotiators next
- Indian Government will engage in three sets of important trade talks with the European Union (EU), the United States and ASEAN (Association of Southeast Asian Nations).
- The talks will focus on resolving its pending talks on trade and dispelling criticism that India has been protectionist and held up Free Trade Agreement(FTA) negotiations.
- The chief negotiator of the EU and the Commerce Ministry will meet in an effort to restart talks on the Bilateral Trade and Investment Agreement (BTIA) which was suspended in 2013.
- BTIA is a Free Trade Agreement between India and EU which was initiated in 2007.Even after a decade of negotiations,India and EU have failed to resolve certain issues which have led to a deadlock.
- Further,a three-member delegation of ASEAN will also visit India to discuss on the Regional Comprehensive Economic Partnership(RCEP).
- The Assistant USTR (United States Trade Representative) will also be in India to restart talks as decided by Indian Prime Minister and the U.S. President when they met on the sidelines of the G20 summit.
- The two leaders had agreed that trade issues need to be discussed and trade ministers of both countries will be meeting soon to resolve issues.
- In 2014,the Indian government had decided to scrap all its FTA agreements with a view to negotiating new more equitable ones with various countries.
- But it has yet to close a deal on any one of them as it has been accused of imposing non tariff barriers on goods and asking for more access for Indian services.
- On the other hand, the election of trade hardliners in the U.S., Europe and other countries means that there may be less flexibility on the part of the negotiators visiting India next week.
to host 3rd global sunflower seed meet on July 19
- India will be hosting the 3rd International Sunflower Seed and Oil Conference(ISSOC) 2019 on July 19 and 20 in Mumbai.
- It is organized by the International Sunflower Oil Association (ISOA and will be hosted by the Solvent Extractors’ Association of India (SEA).
- International Sunflower Oil Association (ISOA) was established in 2015 in Rome by National Associations and Companies from China,Ukraine, Russia, Hungary, Spain and Argentina.
- It aims to encourage and promote better communications among sunflower oil producers,industry groups, academic researchers and local governments, as well as enhancing sunflower oil value addition and enlarging the field of its commercial application.
- The first International Sunflower Oil Symposium was held in 2015 at Shanghai,China and the second conference was held in 2017 at Odessa,Ukraine.
- Further,India is the largest importer of sunflower oil with imports of about 2.8 million tonnes.The global imports of sunflower oil is around 9.6 million tonnes.
- Sunflower seed is seen as a healthy table-seed and culinary seed having wide applications in a variety of food preparations including cakes and pastries.