Exam view: Real wages data vs Unemployment data; Efforts to calculate the real wages; lessons.

Context: There has been no significant growth of real wages at the all-India level or in the last eight years. This requires a reorientation of economic policies, with more focus on the drivers of wage growth.

Decoding the editorial: Real wages data vs Unemployment data

In public debates on economic policy, very little attention is paid to real wages. Instead, the focus is on the data on “unemployment”.

• The problem for the poor in India is more “underemployment” than unemployment. The poor people are rarely unemployed, because they cannot afford to do nothing.
• A sustained rise in real wages is a good sign that economic growth is translating into better jobs. Stagnation of real wages, on the other hand, would be a major concern from the point of view of poverty reduction.
• Standard of living increases, if real wages rise as workers are likely to be earning more and living better.
• Unlike unemployment, real wages are quite easy to track, for some occupations at least.
  • For example: In most Indian villages, there is a reasonably well-defined wage for casual agricultural labour at any point of time. No household survey is required to find it out. Simple enquiries at the village level will do. If done at regular intervals in a good number of randomly-selected areas, clear data on wage rates can be collected. Deflating them with a price index can be used to compute real wages.

Efforts to calculate the real wages:

• The Labour Bureau: The Bureau collects occupation-wise wage data every month in all Indian states and publishes summary statistics in the Indian Labour Journal.
  • The quality of this information is uncertain, but it is likely to be good enough for the purpose of assessing broad trends in real wages.

• The Reserve Bank of India (RBI): In its latest Handbook of Statistics on Indian States, the RBI presents annual wage estimates based on Labour Bureau data from 2014-15 to 2021-22.
  • The estimates pertain to male workers only.
  • They cover four occupation groups: General agricultural labourers, construction workers, non-agricultural labourers and horticulture workers.
  • The last group is ignored here as the wages of horticulture workers are reported for a few states only.
  • The nominal wage figures are converted into real wages using the Consumer Price Index for Agricultural Labourers (CPIAL) and then the estimate of the growth of real wages is done by semi-log regression of real wages on time.
  • Result: The growth rate of real wages between 2014-15 and 2021-22 was below 1 per cent per year across the board; more precisely 0.9 per cent, 0.2 per cent and 0.3 per cent for agricultural labour, construction workers and non-agricultural labour respectively. If we use the general Consumer Price Index as a deflator, instead of the CPIAL, the growth rates are lower — even negative for construction workers.
  • The picture is similar at the state level, for the same period. For agricultural labourers, the annual growth rate of real wages is above 2 per cent in just two major states: Karnataka (2.4 per cent) and Andhra Pradesh (2.7 per cent). In five major states (Haryana, Kerala, Punjab, Rajasthan, Tamil Nadu), real wages declined between 2014-15 and 2021-22.
  • The RBI series stops in 2021-22,
• The latest Economic Survey clearly shows that the pattern of stagnation continued.

A few salutary lessons emerge:

• Attention must be paid to real wages.
• The collection of wage data must be expanded and improved.
• There is a stark and disturbing contrast today between the rapid growth of the Indian economy and the sluggish growth of real wages.
• This contrast calls for a reorientation of economic policies, with more focus on the drivers of wage growth.

Source:

https://indianexpress.com/article/opinion/columns/jean-dreze-writes-wages-are-the-worry-not-just-unemployment-8553226/

In News: Recently, government released National Credit Framework policy

NCrF is a comprehensive framework encompassing elementary, school, higher, and vocational education & training, integrating learning on all dimensions i.e. academics, vocational skills and experiential learning including relevant experience and professional levels acquired. The National Credit Framework (NCrF) shall be an inclusive umbrella Framework to seamlessly integrate the credits earned through school education, higher education and vocational & skill education.

About NCrF

• NCrF has been jointly developed by high level committee comprising members from UGC, AICTE, NCERT, NIOS, CBSE, departments from ministries for education and skill development etc.
• NCrF is a set of guidelines to be followed by schools, colleges and universities in adopting credit system.
• It brings the entire school education system under the ambit of credits for the first time. So far, only National Institute of Open
• Schooling (NIOS) followed a credit system and credit is a way of quantifying learning outcomes.

Features of National Credit Framework (NCrF)

• NCrF is a single meta framework for creditization of all types of learning and integrating credits earned from various dimensions such as academics, vocational education, work experience etc.
• It provides for Assignment, Accumulation, Storage, Transfer and Redemption of Credits through Academic Bank of Credit (ABC).
• Knowledge in 18 Vidyas, including four Vedas, four subsidiary Vedas (Ayurveda–medicine, Dhanurveda – weaponry, Gandharvaveda-music and Silpa – architecture), Purana, Nayaya, etc. can be considered for creditization.
• NCrF has divided the learning ecosystem into eight levels, assigning credits based on learning hours from Class 5 to PhD level.
• The National Credit Framework (NCrF) provides for broad based, multi-disciplinary, holistic education, allowing imaginative and need based curricular structures and enabling creative combinations of subjects and disciplines.

https://indianexpress.com/article/education/vedas-puranas-to-fetch-students-credits-under-new-framework-8551358/

In News:  The Supreme Court of India observed that preventive detention laws in India are a colonial legacy and confer arbitrary power to the state.

About Detention:

Detention can be categorized into two types - preventive detention and punitive detention.

• Preventive detention:
  • It involves detaining a person to prevent a potential crime or disturbance of public order that they might commit in the future.
  • This type of detention is meant to be a proactive measure to maintain law and order in society.
• Punitive detention:
  • It is a type of detention that is imposed as a punishment for a crime that has already been committed.
  • It involves detaining a person after they have been found guilty of committing a crime or attempting to commit one.

About Preventive detention

• It is a legal concept in India that allows the government to detain individuals without trial for a certain period of time.
• It is recognized in the Indian Constitution under Article 22 which sets out the procedure that must be followed when a person is detained under a law providing for preventive detention.

Important features:

• Any person who is detained under a preventive detention law must be informed of the grounds for his detention, and must be given the earliest opportunity to make a representation against the detention.
• The law must also provide for the formation of an Advisory Board to review the detention and the person must be produced before a magistrate within a period of 24 hours of his detention.
• Person detained under a preventive detention law must be afforded the right to consult and be defended by a legal practitioner of his choice.
• The purpose of preventive detention is to prevent a person from committing a crime or disturbing public order.
• The power of preventive detention is granted to the government under various laws, including:
  • National Security Act, 1980, the Unlawful Activities (Prevention) Act, 1967, and the Armed Forces (Special Powers) Act, 1958.
• Preventive detention has been criticized for giving excessive and arbitrary powers to the state, and for being a colonial legacy.
• In addition to Article 22, other provisions of the Constitution relevant to the concept of preventive detention includes:
  • Article 19: It guarantees the right to freedom of speech and expression, assembly, association, and movement.
  • Article 21: which guarantees the right to life and personal liberty.

https://www.thehindu.com/news/national/preventive-detention-a-colonial-legacy-has-the-ability-to-confer-arbitrary-powers-to-the-state-sc-judgment/article66722072.ece#:~:text=The%20Supreme%20Court%20on%20Monday,laws%20as%20%E2%80%9Cextremely%20powerful%E2%80%9D

In News: Ministry of Power releases State Energy Efficiency Index 2021-22 Report

About

• It has been developed by the Bureau of Energy Efficiency (BEE), in association with Alliance for an Energy-Efficient Economy (AEEE).
• Nearly 50 indicators were aligned with national priorities to track outcomes and impacts of state-level energy efficiency initiatives.

Highlights of SEEI 2021-22 report

State-wise Ranking:

• 5 states - Andhra Pradesh, Karnataka, Kerala, Rajasthan, and Telangana - are in the Front Runner category (>60 points).
• 4 states - Assam, Haryana, Maharashtra, and Punjab - are in the Achiever category (50-60 points).
• Karnataka, Andhra Pradesh, Assam, and Chandigarh are the top-performing states in their respective state groups.

Major Recommendations:

• Enabling fiscal assistance for energy efficiency in the focus sectors besides mainstreaming energy data reporting and monitoring across sectors.
• Developing institutional capacity in states and UTs to address emerging needs and challenges in energy efficiency implementation.
• Enhancing cross-functional collaborations across financial institutions, energy service companies, and energy professionals in large-scale energy efficiency implementation in states.

About BEE:

• Bureau of Energy Efficiency (BEE) is a statutory body under the Ministry of Power, established in 2002.
• Its mission is to assist in developing policies and strategies with a thrust on self-regulation and market principles, within the overall framework of the Energy Conservation Act, 2001.
• BEE coordinates with designated consumers, designated agencies, and other organizations to perform its functions under the Energy Conservation Act.

https://pib.gov.in/PressReleasePage.aspx?PRID=1915359

In News: India is the fourth highest donor to UN Democracy Fund, which funds at least 68 projects worldwide linked to George Soros’s Open Society Foundation.

About UN Democracy Fund (UNDEF):

• UN Democracy Fund (UNDEF) is a United Nations trust fund that supports democratization efforts around the world.
• It was established in 2005 by the United Nations Secretary-General Kofi Annan, with the support of the UN General Assembly.
• It aims to promote democracy by providing funding to local and international NGOs and civil society organizations (CSOs) that support democracy-building initiatives.
• The fund's focus areas include strengthening democratic institutions and processes, promoting human rights, supporting gender equality, and fostering civic engagement and participation.
• Since its inception, UNDEF has funded over 800 projects in more than 150 countries, with a total budget of over $250 million.
• The top donors to UNDEF are the United States, Sweden, Germany, and
• UNDEF operates independently of the UN system, with its own governance structure, advisory board, and evaluation process.

UNDEF & India:

• India is an active donor to the UN Democracy Fund (UNDEF), which funds projects linked to Soros's Open Society Foundation (OSF)
• India has contributed over $150,000 to UNDEF in 2022 which is the fourth highest among 45 donors, including US, Sweden, and Germany.
• UNDEF has been criticized recently by India for its mala fide support to civil society and democracy-building initiatives with an attempt to interfere in its domestic affairs.

https://indianexpress.com/article/express-exclusive/in-new-delhi-george-soros-is-old-dangerous-and-on-a-watchlist-at-un-he-isnt-a-problem-8549460/

In News: A Grassroots Innovations Accelerator program has been announced to help grassroots innovators in farming with support for entrepreneurial, product, and market development.

About Grassroots Innovations Accelerator Program

• The program was launched at the ongoing Festival of Innovation and Entrepreneurship (FINE) 2023.
• It is a result of partnership between NIF Incubation and Entrepreneurship Council (NIFientreC), a Technology Business Incubator hosted by the National Innovation Foundation (NIF) and Publicis Sapient, a digital business transformation company.
• The partnership will help commercialise innovations by grassroots innovators to solve challenges in agriculture and farming.
• As pilot technologies for the program, five prototypes were identified including a pepper thresher, cole vegetable harvester, mini pulses mill, clove bud separator, and walnut peeler.
• The innovators of these prototypes will be provided end-to-end incubation support encompassing capacity building, access to a fabrication lab, risk capital and market, and long-term support necessary to commercialise and make these innovations market ready.
• NIFientreC was established in the year 2015 with financial support from the Department of Science and Technology (DST) for incubation and commercialization of technological ideas and innovations of grassroots innovators across the country.
• This program is in sync with SDG-9 which aims to build resilient infrastructure, promote sustainable industrialization and foster innovation.

Source:

https://pib.gov.in/PressReleasePage.aspx?PRID=1915883

In News: The European Space Agency (ESA) is all set to launch the Jupiter Icy Moons Explorer, or Juice, mission on April 13 from its spaceport in French Guiana on Ariane 5 launcher.

About Juice Mission:

• Jupiter Icy Moons Explorer (Juice) mission will be Europe’s first dedicated robotic mission to Jupiter which is scheduled to reach the planet in July 2031
• It will spend at least three years making detailed observations of the giant gaseous planet Jupiter and three of its largest moons, Ganymede, Callisto and Europa.
• Only two other spacecraft have ever examined Jupiter:
  • Galileo probe, which orbited Jupiter between 1995 and 2003, and
  • Juno, which has been circling the planet since 2016.
• NASA’s Europa Clipper, which is scheduled to be launched later this year, will arrive at Jupiter in 2030 to study its Europa moon.
• Although the mission will examine all three moons, the main focus will be on Ganymede, as it is the largest moon in the Solar System (larger than Pluto and Mercury) and the only one to generate its own magnetic field.
• The mission will help us understand if the oceans of these icy moons could have ever been suitable habitats for life.
• Another goal of the mission is to create a comprehensive picture of Jupiter by trying to understand its origin, history and evolution.
• Juice will also analyse the chemistry, structure, dynamics, weather, and climate of Jupiter and its ever-changing atmosphere.

Source:

https://indianexpress.com/article/explained/explained-sci-tech/european-space-agency-jupiter-icy-moons-explorer-juice-what-is-it-8552948/

In News: Recently Rajasthan government declared April 11, the birth anniversary of social reformer Jyotiba Phule as a public holiday.

About Jyotiba Phule:

• He was born on 11th April, 1827 in present-day Maharashtra, belonging to the Mali caste of gardeners and vegetable farmers.
• Jyotiba Phule was a social activist, thinker, anti-caste social reformer and writer from Maharashtra. He played an important role in eradicating untouchability and empowering society.
• Phule was given the title of Mahatma on May 11, 1888, by Vithalrao Krishnaji Vandekar, a Maharashtrian social activist.
• He also made organised efforts for the rights of farmers and labourers.
• Along with his wife, Savitribai Phule, he is regarded as pioneers of women’s education in India and they were the first native Indians to open the first indigenously-run school for girls in India in August 1848 at Pune in Maharashtra.
• Jyotiba realised the pathetic conditions of widows and established an ashram for young widows and eventually became an advocate of the idea of Widow Remarriage.
• In 1863, he opened a home for pregnant Brahmin widows to give birth in a safe and secure place and also opened an orphanage home to avoid infanticide.
• In 1873, Phule founded the Satyashodhak Samaj, or the Society of Seekers of Truth, for the rights of depressed classes, to denounce the caste system and to spread rational thinking.
• His famous works were Tritiya Ratna (1855), Gulamgiri (1873), Shetkarayacha Aasud, or Cultivator’s Whipcord (1881), Satyashodhak Samajokt Mangalashtakasah Sarva Puja-vidhi (1887).

Source:

https://www.newindianexpress.com/nation/2023/apr/10/rajasthan-govt-declares-birth-anniversary-of-jyotiba-phule-public-holiday-2564524.html

Why in news? Recently, the Unified Portal of the Central Bureau of Narcotics was launched by the Central Bureau of Narcotics.

About

• Unified portal aimed at streamlining the licensing and authorization process for the pharma and chemical industry in India.
• The portal has been developed with the goal of instilling efficiency, transparency, and accountability in the department's operations while boosting the economy for "Aatma Nirbhar Bharat" and ensuring the availability of essential narcotic drugs and medicines to patients and their families.
• The portal will benefit drug exporters, importers, and manufacturers with easy and secure transactions, simplified processes, and contactless operations.
• The portal is designed to be integrated with other government services, including Bharat Kosh, GST, PAN-NSDL validation, e-Sanchit, and UIDAI, providing single-point services for obtaining licenses from the Central Bureau of Narcotics.
• The portal is an effective tool for striking a balance between the availability of these substances for medicinal, scientific, and industrial use while ensuring compliance with the law and preventing their diversion for illicit use.

https://pib.gov.in/PressReleasePage.aspx?PRID=1915546

Why in news? Recently, RBI issued a framework for acceptance of green deposits by banks, and NBFCs.

About

• Green Deposit is a unique Fixed Deposit designed to give returns to the investor and Planet Earth. Funds received through Green Deposits will be deployed for environment-friendly projects.
• The investment in Green Deposit will go towards financing eligible businesses and projects that promote the transition to a low-carbon, climate-resilient, and sustainable economy.
• Allocation of proceeds raised from green deposits in India should be based on the official Indian green taxonomy.
• Renewable energy, energy efficiency, clean transportation, climate change adaptation, sustainable water and waste management, and green buildings, are among the list of projects/activities where REs could allocate the proceeds raised through green deposits.
• Excluded projects are: This includes projects involving new or existing extraction, production, and distribution of fossil fuels; nuclear power generation; and direct waste.

https://indianexpress.com/article/business/banking-and-finance/rbi-issues-framework-for-acceptance-of-green-deposits-by-banks-nbfcs-8551078/

Why in news? Recently, USA president visit Belfast, Northern Ireland, to mark the 25th anniversary of the Good Friday Agreement (GFA)

About

• The Good Friday Agreement was signed on April 10, 1998, between factions of Northern Ireland, and the governments of Britain and Ireland, to end decades of violence in Northern Ireland among those who wished to remain with the United Kingdom (UK) and those who wanted to join Ireland.
• Th agreement end the 30 years political conflicts of Northern Ireland known as the troubles.
• Northern Ireland, created in 1921 by partitioning Ireland, remained with United Kingdom after Ireland’s independence from UK.
• This resulted in violence between those who wished to remain with UK and those who wanted to join Ireland.

https://edition.cnn.com/2023/04/07/uk/good-friday-agreement-explained-intl-cmd-gbr/index.html

Why in news? Recently, the Central Board of Direct Taxes (CBDT) has notified the cost inflation index (CII) number for the current financial year, 2023-24.

About

• Cost inflation index is notified under Income-Tax Act, 1961 every year.
• It is popularly used to calculate the “indexed cost of acquisition” while calculating capital gains at the time of sale of any capital asset.
• Normally, an asset is required to be retained for more than 36 months (24 months for immovable property and unlisted shares) to qualify as Long-Term Capital Gains (LTCG).
• CII is used to arrive at inflation-adjusted purchasing price of assets so as to compute taxable LTCG.

https://economictimes.indiatimes.com/wealth/tax/cost-inflation-index-number-for-fy-2023-24-ay-2024-25-used-for-ltcg-calculation-notified-by-cbdt/articleshow/99395646.cms

Why in news? India and Vietnam reiterate commitment to deepen the strategic partnership between the two countries.

About

• Vietnam is in Southeast Asia on the eastern edge of the peninsula known as Indochina.
• Its neighbours include China to the north and Laos and Cambodia to the west.
• The South China Sea lies to the east and south.
• The mountains of the Annam Cordillera rise over most of the western side of Vietnam, while a thousand-mile (1,600-kilometer) coastline dominates the east.
• Vietnam's largest rivers, the Mekong in the south and the Red in the north, end at the South China Sea in huge swampy plains called deltas.
• These regions are home to most of the country's people and provide fertile ground to grow rice and many other crops.

https://newsonair.com/2023/04/10/india-vietnam-reiterate-commitment-to-deepen-strategic-partnership-between-the-two-countries/

Why in news? Deaths due to heat in Middle East & North Africa likely to rise 60 times by end of century.

About

Shared Socio-economic Pathway look at five different ways in which world might evolve in absence of climate policy.

• Sustainability (SSP1) – Taking Green Road (Low challenges to mitigation and adaptation).
• Middle of Road (SSP2) – where trends broadly follow historical patterns (Medium challenges to mitigation and adaptation).
• Regional Rivalry (Resurgent nationalism) (SSP3) – Rocky Road (High challenges to mitigation and adaptation).
• Inequality (SSP4) – Road Divided (Low challenges to mitigation, high challenges to adaptation).
• Fossil-fuelled Development (SSP5)– Taking Highway (High challenges to mitigation, low challenges to adaptation).

SSP1 and SSP5 envision optimistic trends for human development, while SSP3 and SSP4 are more pessimistic.

https://www.downtoearth.org.in/news/africa/deaths-due-to-heat-in-middle-east-north-africa-likely-to-rise-60-times-by-end-of-century-88707