Tag: Economic Survey 2019

India’s Expert Committee on Minimum Wages – A Questionable Exercise?

The constitution of the committee, notwithstanding the technical expertise, will send adverse signals to the stakeholders that the government is simply biding time.

On June 3, the Centre issued an opaque press release stating that it has constituted an expert committee under the chair of Professor Ajit Mishra, director of the Institute of Economic Growth (henceforth Mishra Committee) “to provide technical inputs and recommendations on fixation of Minimum Wages and National Floor Minimum Wages”.

And that it “…has been constituted for three years from the date of notification.”

This move of the Central government is bewildering for several reasons. The tenure of the committee is three years.

When I read it first, I thought it was a printing mistake and it would be rectified to three months. But the comments of the Senior Labour and Employment Advisor to the government and the Member Secretary of the Committee confirmed that its tenure is indeed three years. Why would any committee with a limited mandate such as this – unless it is a commission to enquire into a host of issues like the Second National Commission on Labour or the National Commission on Enterprises in the Unorganised Sector – be given such a long period?

Nevertheless, we should wait for the explicit terms of reference for the Mishra Committee to be able to make some sense of this move of the government.

In the meantime, there are four issues that should be debated and addressed:

1) What is the context preceding the appointment of the Mishra Committee?

2) Is it a welcome addition to the existing maze of bodies?

3) What value can it add, given the rigid legal mandate?

4) What are the possible implications of this measure?

The first draft of the Wage Code was presented in parliament on August 10, 2017, and the revised Code was passed in 2019.

On January 17 2018, the Centre constituted an Expert Committee under the Chair of Dr. Anoop Sathpathy, Fellow of the V.V. Giri National Labour Institute (henceforth, Sathpathy Committee) with a wide mandate to make a detailed review of minimum wages given the historical and the judicial context and recommend national and regional minimum wages, “…keeping in mind global best practices and their adaptability and relevance to the Indian context.”

The Sathpathy Committee, which included an expert on wages from the ILO’s New Delhi office, submitted its detailed scientific report in 2019.

The committee dealt in a detailed manner with several aspects such as the history of minimum wage policy in India, ILO’s framework concerning the minimum wage system, and the minimum wage systems in several countries. Ultimately, it recommended a national minimum wage rate of Rs 375 per day and a monthly wage of Rs 9,750 (and a housing allowance of Rs 1,430 for workers living in urban areas) and region-wise minimum wages (five regions).

The report was not well-received by trade unions, though it received some support for specific parts. Most of India’s trade unions demanded a national minimum wage of Rs 600 per day as per the Seventh Pay Commission’s recommended wage rate, which is not surprising as they as a pressure group will pitch for higher minimum wages.

Incidentally, the Sathpathy committee report did not figure in any of the discussions on wages initiated by the government. The Centre’s decision to give a meagre rise, from Rs 176 to Rs 178, in 2019 was seen as a possible rejection of the Sathpathy Committee report. Again, the very constitution of the Mishra committee reflects the implicit rejection of the recommendations of the Sathpathy committee.

Sanitation workers in Jaipur, Rajasthan. Photo: PTI

Committee members

The presence of three government representatives in the Mishra committee could raise some eyebrows, as it may lead to a moderation of the recommendations concerning the minimum wage rates. It is a simple economic anticipatory rationale that the Mishra Committee may be constrained to recommend a minimum wage less than that recommended (adjusted for inflation) by the Sathpathy Committee – else why another committee?

Ideally, the Mishra committee must enjoy autonomy and be an “arms at length” panel, with no overt government steering.

Alternatively, the Central government could have outsourced this job to ILO officials as the body possesses global technical expertise. Some ILO officials have done valuable work on minimum wages in India and in developing countries. It is, therefore, a mistake to call the Mishra Committee an “expert committee”.

To be sure, I am not questioning in any way the academic credentials of the technical members of the committee.

The Indian state, regardless of the party in power at the Centre, has always revelled in constituting committees and commissions and then consigning them to the already piled up committees’ reports’ dustbin.

The Sathpathy Committee report has met such a fate. What is the guarantee that the Mishra committee report, even if it is delivered well before its due date, i.e. June 2024, will not meet with the same fate as its predecessors’ reports?

Representative image of rural workers. Photo: UN Development Programme/Flickr (CC BY-NC-ND 2.0)

Is it a welcome addition to the existing maze of bodies? 

The Wage Code and the Rules framed under it provide for a maze of bodies – Section 8(1)(a) and Rule 38 provide for the appointment of a multi-partite committee (comprising representatives of employers and employees and independent persons) and Section 42 and Rule 28 for an Advisory Board at the central and the state levels. Rule 4(2) provides for the constitution of a committee comprising representatives from several Union Ministries and two technical experts to categorise workers’ skills.

In pursuance of the Draft Rules under the Wage Code notified on July 7, 2020, the Central government on March 1, 2021, issued a notification for the constitution of an Advisory Board inviting suggestions and objections from the stakeholders and the business matters concerning the functioning of it.

Thus we effectively have another expert committee. The question in passing is whether this body has a statutory basis? The rather brief press release does not mention any legal clause supporting its formation.

What value it can add given the legal and tripartite mandate? 

The press release very briefly provides the mandate for the Mishra committee. The panel will give recommendations to the government on Minimum Wages and National Floor Level Minimum Wage (NFLMW).

To arrive at the wage rates, the group will look into the international best practices on the wages and evolve a scientific criteria (sic) and methodology for fixation of wages.”

I have already dealt with the review by the Sathpathy Committee relating to international practices. Now, the Mishra Committee is expected to provide recommendations to the government on minimum wages and the NFLMW. But the Wage Code and the Rules have provided enough inputs on them.

The Wage Code and the Rules provide for a statutory NLFMW, regional minimum wages (metropolitan area, non-metropolitan area and the rural area as defined under Rule 4 framed under Section 6), and minimum wages at the state levels. The central government will determine the former two and the latter by the respective states and Union Territories.

The Wage Code and the Rules have provided the set of criteria to be considered for the determination of a statutory NFLMW and minimum wages (regional and the state levels). For example, Section 9 prescribes “minimum living standards of a worker” to determine NFLMW.  For fixation of minimum wages under Section 6 by the appropriate government, the Code defines a variety of factors like workers’ skills, arduousness of work [Section 6(6)(b)], and any other prescribed norms [Section 6(6)(c)].

Migrant workers who were stranded in Rajasthan due to the lockdown look out from a window of a train after arriving in West Bengal on May 5, 2020. Photo: Reuters/Rupak De Chowdhuri

Rule 3 framed under Section 6(5) [wrongly stated as it should have been Section 6(6)(b)(c) as required under Section 67(2)(b)(c)] defines the criteria following the recommendations of the Indian Labour Conference (ILC) and the criteria prescribed in the Supreme Court’s judgment in Workmen Represented by Secretary vs. Management of Reptakos Brett. And Co. Ltd. and Anr.,1992 (AIR 504) for calculation of minimum wage rate.

Also read: Insurance Needs a Stronger Push in Draft Labour Code on Social Security

The tripartite body, the ILC and the Supreme Court have dealt with the criteria and the Sathpathy Committee have made suitable revisions as they deemed fit. The Advisory Boards will have to follow the criteria spelt in Rule 3 to determine minimum wages. Rule 11 clarifies that the statutory NFLMW will also be determined by criteria spelt out in Rule 3.

What will be the functions of the Expert Committees and the Advisory Boards to be constituted under the existing regulations? What will happen to their recommendations in the light of the Mishra Committee’s recommendations as and when they arrive?

Also, the question is: what value addition can the Mishra Committee make to the prescribed legal mandate discussed above? What is the guarantee that the stakeholders will welcome this Committee’s recommendations?

What are the practical implications? 

Even though the Wage Code was enacted in August 2019, the eventual Rules notifying the Advisory Board at the Central level was done only in March 2021 arguably due to the economic slow-down and the terrible adverse impact of COVID-19 on business. But the workers, both formal and informal, have suffered multiple deprivations, including acute diminution in income-earning opportunities and depreciation in real wages. The Central government’s non-statutory minimum wage rate is a measly Rs 178. Various surveys and anecdotal evidence document substantial diminution in income levels and rising informality amongst workers. Millions are reported to have lost jobs during the COVID-period.

The non-implementation of the four Labour Codes and very partial implementation such as that we have noted here indicate a huge legal void. During the recent period, several state governments and the Central government have announced changes in the variable dearness allowance (VDA) component of the minimum wages while some like Kerala have revised the basic minimum wage rate for a sector.

Also read: Craftily Written Labour Codes Exclude Millions, Pay Little Heed to Equality

The practical question is: when would the universal minimum wage regime be implemented? The Central government needs to quickly announce the statutory NFLMW. Then the state governments can take suitable action to revise the minimum wage rate apart from announcing appropriate changes in the VDA.

The CITU, in a letter dated June 4, 2021, has questioned the validity of the appointment of the Mishra committee. It has called for its rescindment. The de novo proceedings in the context of what we have discussed above are superfluous. It would defeat the social dialogue process based on which the government has included the “criteria” in the Rules for determining minimum wages.  Further, there are provisions in the regulations as mentioned above to include experts in the expert committees and the advisory boards.

The constitution of the said committee, notwithstanding the technical expertise, will send adverse signals to the stakeholders that the government is simply biding time and not interested in implementing the Codes. Another committee with a three years tenure will frustrate the aspirations of the working class who have been waiting for a minimum wage.

Craftily Written Labour Codes Exclude Millions, Pay Little Heed to Equality

The two codes tabled for discussion on July 23 struck the proverbial hammer on the fate of millions of workers, robbing them of the possibility of decent work and wages, an equal workplace and avenues for access to justice.

This a statement released by Working People’s Charter Secretariat. The statement is based on contributions from a large collective of organisations, trade unions, academics and activists, namely Aajeevika Bureau, Rashtriya Hamal Panchayat, Delhi Shramik Sangathan, Hawkers Joint Action Committee, Meena Menon, professors Ravi Srivastava, Praveen Jha and Babu Mathew, along with Ashim Roy, Rahul Sapkal, Sister Lissy, Dihari Mazdoor Sangathan and the NCCEBL.

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On July 4, the Economic Survey argued that a higher national minimum wage is central to addressing inequality and widespread poverty in the country. A couple of weeks later, the government of India trashed its own analysis by proposing a “starvation wage” of Rs 178 a day – a minimum wage hike of merely Rs 2!

Experts allege that it is a precursor of what is in store for millions of workers as the cabinet passed two of the four proposed labour codes – Code on Wages as well as the Code on Occupational Safety, Health and Working Conditions.

Working people are a national asset – undermining their well-being is nothing short of a calamity. A need-based minimum wage should be guided by Supreme Court jurisprudence, as laid down in the Raptakos case, which is based on tests and principles laid down by the judiciary. Any recommendation for a wage level below this should be supported by a robust rationale.

The two codes were tabled for discussion on July 23 by Santosh Gangwar, minister of Labour and Employment. With this, the parliament has struck the proverbial hammer on the fate of millions of workers, robbing them of the possibility of decent work and wages, an equal workplace and avenues for access to justice.

Primarily driven by the interests of the industry, this predatory piece of legislation is all set to alter the labour protection landscape in India beyond repair and reclaim. It shows that there is a clear drive to “informalise the formal” which has been central to the overall architecture of the emerging labour regime.

New minimum wage precursor to darker days to come

The new minimum wage of Rs 178 per day translates to Rs 4,628 per month. It goes against the Labour Ministry’s own expert committee recommendation of Rs 375-447 per day, let alone the 15th Indian Labour Conference’s suggestion of Rs 692 a day, Rs 18,000 a month. The new national minimum wage, half of what was recommended, truly portends a death knell on India’s labour protection framework.

Also read: India’s Labour Laws Are Being Amended for Companies, Not Workers

The rhetoric on labour codes make it appear as if it passionately argues for a minimum wage. A closer look at the provisions of the wage code, however, busts this myth.

First and foremost, it violates the Supreme Court and the 15th Indian Labour Conference guidelines for a “needs based” criteria (covering nutrition, healthcare, education and provisions for old age) to fix the minimum wage – something that was adopted for Central government employees, but ignored for the larger mass of unorganised sector workers.

The codes exclude unorganised workers despite lofty claims to the contrary. Photo: Reuters/Mukesh Gupta/File Photo

No principles, whatsoever have been laid down with regards to determining minimum wages, and the entire exercise has been left to the discretion of the central advisory board.

Wages are also proposed to be determined by state-level advisory boards, something that Indian industry has long wanted. Experts argue that such an arrangement would lead to a race to the bottom as different states would compete to attract investments by lowering wages – an observation that is borne out by facts on the ground.

Reports suggest that in the period between 2010 and 2015, several industrialists relocated from Okhla Industrial Area in Delhi to Uttar Pradesh and Haryana as the latter offered 25-35% lower minimum wages than Delhi. Flight of capital would become extremely convenient in such a regime, pushing state governments to compromise on worker’s wages and welfare.

One may well question the intention of the government of India in even announcing such a national minimum wage. In our judgment it is primarily a signal to the industry that the jungle has been let loose, only wilder this time, and wages can be pushed down to the lowest levels possible to suit the interests of capital.

Chowkidar not even a worker per law

Despite its claims, both the codes exclude millions of unorganised workers. The Occupational Safety and Health Code does not cover workers employed in small enterprises deploying 10 or fewer workers, or those in the informal sector. As per an estimate, this is over 85% of India’s labour market, especially including those in medium and small enterprises, which often tend to be more risky and vulnerable to occupational hazards and safety violations.

The wage code also does not cover the large mass of informal workers because its definition of “employer” is ambiguous and narrow. For example, the code says, “Employer means a person who employs, whether directly or through any person, or on his behalf or on behalf of any person”. Most workers would struggle to establish their employment relations to benefit from the Code provisions.

Also read: Opposing Labour Codes, 10 Trade Unions Call for Nationwide Protest on August 2

Equality not a mandate labour codes support

Disturbingly, the code does not have any provisions to prohibit discrimination against workers from Adivasi and Dalit communities. There is pervasive evidence on the exclusion faced by such workers in the form of low earnings, wage thefts, abuse, harassment, low opportunities and minimal upward mobility. The new law is blind to it all.

Your wages can be stolen 

What happens if a worker does not receive due wages or does not receive them in time? As per the new code, in case of a dispute, a worker can now approach only a quasi-judicial, appellate authority, not within the jurisdiction of courts – a violation of the Civil Procedure Code section 9 that requires mandatory judicial review of decisions. What is worse is that a claim can only be filed by an appropriate authority, employee or trade union. This leaves out all workers in casual, informal, undocumented work, denying them any formal avenues to seek justice.

The new labour codes seek little but how to offer cheap labour and ignores equality on the whole. Credit: Reuters/ File/Shailesh Andrade

India’s informal economy is structured through long serpentine chains of contractors. Migrant workers often do not know who their employer is. The new wage code weakens the liability of the principal employer to pay wages to contract labour, if the contractor has failed to do so.

This has grave and far reaching consequences on the access to justice for informal workers, especially in a scenario where the volume of wage thefts from such workers is unacceptably high. Notably, the Occupational Safety and Health Code does talk about Principal Employer liability but it stealthily passes the buck to the manager or the supervisor.

It appears as though the government is trying to legalise contractualisation, instead of abolishing it. It is worth recalling that the contract labour act was legislated in 1979 with a view to abolish the contract system, while it is likely to become the new normal under this code.

‘How to supply cheap, pliable labour’

The entire tenor of both the codes reeks of eagerness to appease industry and create the much-hyped labour market flexibility and ease of doing business. This is exemplified by the flexible provisions for overtime, a move that can potentially legitimise 14-hour workdays as the norm.

Also read: Repealing the Construction Workers Act Under New Labour Codes Will Prove Disastrous

Secondly, by permitting recoverable advances, the new wage code leaves marginalised workers vulnerable to coercive labour. This will be especially detrimental to distressed labour migrants employed in the informal sector, who are willing to accept advances to provide for their families while they are away, entrapping themselves in coercive labour relationships and new forms of slavery. This is also in complete violation of the legal presumption declared by the Supreme Court that clearly links advances to forced labour.

Furthermore, the code has almost completely rejected the existing regulatory framework, attempting perhaps to eliminate all forms of inspection mechanisms for the unorganised sector. This means that the majority of the workforce will be outside the ambit of the code, leaving them completely vulnerable to unfettered exploitation.

Labour codes craftily written

Finally, it is most ironical that the parliament is about to debate on what could be the most poorly written piece of legislation in Indian history. Both the codes have no understanding of informal labour and its requirements from the law. There is a lot of ambiguity in the way provisions are phrased. At times the codes get too specific and at times too vague, reflecting either poor groundwork done or a deliberate ambiguity to allow for excessive discretion of the appropriate government.

The Occupational Safety and Health Code most notably subsumes the Building and Other Construction Workers’ Act, 1996 leaving out millions of construction workers in the lurch who were enrolled with the welfare board created under the Act. The code makes shoddy, vague mentions of provisions for construction workers, too visible to miss.

While many of us have been fighting for a change in labour laws ourselves and demanding a protective framework for informal workers in India, the proposed changes are far from what we have strived for. Our collective analysis shows that the new codes are crafty – in the garb of promoting worker welfare and enabling formalisation, it is seeking to repudiate basic human and labour rights to workers.

Higher minimum wages for workers in Delhi 

In a historic counter to this dismal state of wages in the Indian labour market and policy discourse, the workers’ movement has made a major stride forward in the National Capital Territory of Delhi.

The Working Peoples Charter, along with other trade unions and workers’ organisations of Delhi, successfully pushed for the first upward revision of minimum wages in 22 years in the NCT, based on revised estimates of living costs. Through these efforts, they successfully ensured the adoption of the recommendations of the Raptakos judgment, despite attempts by representatives of the industry to bypass the same.

The Delhi government is currently in the process of implementing the wage hike on the recommendations of the Minimum Wage Advisory Committee. The amendment takes into account the positive impact of inflation on the cost of commodities in the workers’ consumption basket. This effort has created hope for the entire nation to advance the agenda of needs-based minimum wage and implementation of the Supreme Court landmark order in the Raptakos case.

Note: An earlier version of this statement erroneously stated that there were no provisions for ensuring equal opportunity to women in the labour codes. This claim was found to be incorrect and the story has been updated accordingly.

The Dangers That Lurk Within India’s Vision of Becoming a Data Republic

The Economic Survey’s thesis of treating personal data as a public good is disturbing if not accompanied by appropriate safeguards.

Earlier this week, transport minister Nitin Gadkari informed the Rajya Sabha that his department had earned Rs 65 crore in revenue by selling access to centralised databases containing millions of vehicle registration and driver licence records.

This data was snapped up by 87 private entities and 32 government entities, according to Gadkari’s reply to a question raised in the upper parliamentary house. The sale of this valuable bulk data was permitted earlier this year after the ministry rolled out a new data sharing policy, which charges commercial organisations and individuals a one-time fee of Rs 3 crore for access.

At the heart of this policy is a new ethos sweeping the Narendra Modi government. In the Economic Survey 2019, India’s chief economic adviser Krishnamurthy Subramanian devotes a whole chapter to this, asserting data in India needs to be treated as a public good. 

Nobody can doubt the economic benefits of harnessing data – the proof lies in the rise of big technology giants and how they built their digital empires. 

The problem is that its not always easy for the private sector, especially in domains like education and healthcare, where the social benefits are high but profits are low. 

Also read: Looking Beyond Privacy: The Importance of Economic Rights to Our Data

To fix this problem, Subramanian has made the case that the Centre should step in and correct this disparity in the country’s social sectors by giving access to data held by the government or by making it lucrative enough for the private sector to come in.

For instance, the CEA proposes that access to data generated by the public welfare system be sold to the private sector. Information on students under various education government schemes can be sold to firms that could develop “innovative tutoring products tailored to the specific needs of specific districts”. Or data generated from the MNREGA scheme could be monetised by selling it to new-age fin-tech firms that want to give them customised micro-loans. 

The money that the government collects through the sale of data can then be used to help defray the costs in funding the welfare state. At one level, this explains  the government’s disinterest in continuing to support welfare schemes.  

The prime takeaway from the Economic Survey though – which was raised during the Aadhaar debate as well – is that impoverished people should trade their data for welfare. 

One could agree with the CEA purely in terms of its economic merits, but he completely ignores the politics behind the move, especially at a time when India still hasn’t passed a comprehensive privacy legislation that passes the rigorous test of public consultation.

In the ‘open data’ and ‘right to information’ communities, both of which have a rich history, public information and records have always been treated as a public good, to be publicly available and free for consumption by everyone. Yet, the very definition of ‘information’ is important – both the RTI and Open Data movements have never classified the personal details of an individual as public information, barring a few exceptions imposed for people in public office. 

The Economic Survey makes this mistake when it classifies the personal data of citizens, held in the custody of the government, as a public good. Certainly, datasets of roads, maps or climate metrics that are collected by the government could be classified as a public good, but extending it to personal data is extreme. 

There can be important exceptions carved out for personally identifiable information to be treated as a public good. For instance, personal healthcare data could be crucial in dealing with public medical emergencies, for controlling the spread of disease by identifying people that need to be quarantined. But still, sharing it with the private sector is unwarranted and comes with potentially harmful consequences.

The problem is that classification of personal data is being interpreted in multiple ways by different parties. The only official definitions of various data classifications are present in the National Data Sharing and Accessibility Policy. The policy under which the government’s open data portal was established clearly states that personal and sensitive data shall not be shared.

This is not being taken into consideration at all under the current proposed frameworks and instead is being interpreted as opening up trade with the private sector. 

Also read: Amid Opposition Criticism, Government Tables DNA Technology Bill in Lok Sabha

The idea of trading one’s personal data for accessing welfare has been already pushed onto people of the country with the Aadhaar initiative and its allied projects. The makers and proponents of the Aadhaar project have hidden behind the rhetoric of ‘open data’, ‘open APIs’, ‘public good’, ‘consent’, and being a ‘data-rich’ country for over ten years now. 

This has happened even as they – like Nero in ancient Rome – have done their best to ignore the disastrous privacy and security fires that have been set off as a result. 

One can find all these terms embedded in the Economic Survey. A look at its acknowledgement section shows that it thanks Sharad Sharma, the founder of iSPIRT, a group which built Aadhaar, IndiaStack and continues to build other technology stacks inside the government.

The private sector sees value in personal data and is building all the tools for the government to capture this data, even as they engage in regulatory capture themselves. Other and upcoming projects include National Urban Innovation Stack, Digital Sky, Public Credit Registry and the Skills Stack. All these projects are in general have been pushed through without any public consultation. Any criticism of this results in personal abuse and trolling. 

The survey’s proposal for the government to sell citizen data to the private sector comes from it treating data as public good and the ownership of data not being defined. Defining ownership of data further complicates the economics of data.

The state is thus ensuring you don’t claim property rights over it. The fundamental right to privacy does not grant you the right to ownership over data – it only gives further obligation for the state to protect your privacy. 

More centralisation, the better?

The state, along with the private sector, is now devising interesting ways to interpret this. The transport ministry’s bulk data sharing policy is one example of this. 

But even there, Gadkari’s department is wise enough to be aware of the privacy problems that inevitably result when you combine multiple datasets together. 

Also read: India’s Proposed Data Protection Measures Don’t Do Enough to Protect Data or Privacy

“There is a possibility of ‘triangulation’ (matching different data-sets that together could enable individuals to be identified and their privacy compromised). It is the responsibility of the organisation that any such activity, which result in identifying individuals using the RC [registration certificate] data-set, shall not be undertaken…,” the bulk data sharing policy warns. 

CEA Subramanian believes that building a data republic is only possible if one giant government database that encompasses all datasets is created. The push for such a database, one can argue, has been driven in part by the private sector’s business requirements. 

Credit: Economic Survey 2019.

Credit: Economic Survey 2019.

Subramanian’s proposal to link all government databases for building an enterprise architecture is inspired partly from Aadhaar-based hubs like e-Pragati/SRDH of Andhra Pradesh and IndiaStack. India Enterprise Architecture (IndiaEA), a proposal for unifying government databases, was submitted to government by National eGovernance Division with UIDAI chairman J. Satyanarayana as its lead architect. 

In the Economic Survey, Subramanian also gleefully anticipates how such a massive database could be used to help reduce leakages:

“If the information embedded in these datasets is utilised together, data offers potential to reduce targeting error in welfare schemes. For example, consider a hypothetical individual who is affluent enough to own a car but is able to avail BPL welfare schemes, though unwarranted. When datasets are unconnected, the vehicle registry does not speak to, say, the public distribution system registry.”

Giant databases also lay the groundwork for a new evolving paradigm called real-time governance. J. Satyanarayana has been a strong proponent of this, with his work in Andhra Pradesh, where the ‘Real-time Governance Society’ was tasked to mix and match public and private data by former chief minister Chandrababu Naidu. 

The problems that accompany this are conveniently ignored. Massive databases present a single point of failure. Real-time governance also effectively means real-time tracking of citizens. 

Questions raised on this surveillance aspect have never been properly answered by Satyanarayana during his public appearances. Satyanarayana’s proposal of an integrated database (People Hub) in Andhra Pradesh has, in part, contributed to the voter profiling and alleged data theft of 7 crore people seen in the recent assembly and Lok Sabha elections.  

Also read: How Can India Get Better Data Processing Laws?

In the Economic Survey, the chief economic adviser and his team propose the need for ‘Data Of the People, By the People, For the People’. A careful reading of the survey shows a lack of nuance and caution, clearly tilting the balance of power in favour of corporates at the expense of citizen rights. 

While the economic benefit of monetising and using public data cannot be ignored, India’s current approach towards this is better expressed by is “Data Of the People, By the Government, For the Corporates”. 

Srinivas Kodali is an independent researcher working on data and the internet.

The Life of Labour: 6 Killed in Pune Wall Collapse, Rehabilitation for Manual Scavengers

Latest news updates from the world of work.

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Agricultural crisis

Starved of moisture, Rayalaseema’s farmland fast becoming a desert

Forests precede civilisation, deserts succeed them, goes a French saying. The prophecy rings true in the region of Rayalaseema in Andhra Pradesh, which is fast turning into a desert. P. Sainath writes in PARI about the visible shift in the landscape of villages in the state’s Anantapur district, where sand is taking over moisture-deprived agricultural lands. In this well researched article, he exposes the intersection between neo-liberal agricultural economic priorities and the shifting climate, both of which have contributed in creating a desert at the heart of the Deccan Plateau.

Yet, communities and the state government has hardly learnt their lessons. They now gear up to exploit the last remaining sources of fresh water from deep underground to sustain market driven agricultural production. This manmade desert might well be the legacy we leave for the future.

Death at work

Six labourers killed in second wall collapse in Pune since Saturday

The onslaught of monsoon has brought a wall of a building owned by the Sinhgad Institutes in Pune’s Ambegaon crashing down. The wall fell on the houses of labourers below, killing six of them and injuring four more. The labourers were all from Madhya Pradesh and Chhattisgarh, according to The Hindu.

Municipal officials have been trying to shake off blame, ever so casually suggesting that it was the location of the labourers’ residences that was dangerous, instead of coming down hard on developers who recruit them and force them to set up temporary homes in such dangerous areas. 

Just last week, a similar collapse at Kondhwa had killed 15 people.

Union minister Prakash Javadekar visits patients injured in Kondhwa wall collapse accident. Photo: Twitter/@PIBMumbai

Cancer Institute reaches out to beedi rollers

The Cancer Institute at Adyar in Chennai has been conducting a survey among beedi workers in the districts of Vellore and Tirunelveli. Most of these workers are women and spend their days rolling thousands of beedis for wages of around Rs 150 per day. According to The Hindu, “About 78% beedi rollers who were surveyed by the Cancer Institute in Adyar were found to suffer from one ailment or the other — cancer, tuberculosis, respiratory disorders, chronic cold and cough, gynaecological problems or skin diseases.”

It is not clear if these diseases are directly caused by their occupation but the effect their work may have had on their health is a question of degree. Exposure to tobacco every day for many hours could lead to such diseases but awareness around occupational safety and health is still far too limited. The workers themselves do not enjoy their profession and the vast majority of them would move to an alternative if they had it, according to the survey. The fact remains that until they are given such a choice, they are trapped in an exploitative and fatal profession. 

Precarious work

Economic Survey cites Rajasthan’s labour reforms as ‘ideal’ 

The latest Economic Survey has described the labour reforms undertaken by Rajasthan as an example for the rest of the country. In 2014-15, Rajasthan had as many firms with 100 employees or more as the rest of India. Following a change in laws, the number of firms with 100 employees or more has increased at a significantly higher rate in Rajasthan than in the rest of India, the Economic Survey has observed.

The reforms that the state brought were numerous, including making it possible to shut down factories with up to 300 workers without government permission. Workers’ unions have criticised these reforms for being very stringently anti-labourer. The minimum number of workers required to form a union has been raised to 30% of the workforce. Rajasthan has also seen a lot of violence towards workers with the aid of the police as has been documented in this newsletter numerous times over the years.

Delhi government announces rehab package for manual scavengers

Given the high incidence of fatalities among manual scavengers inspite of the occupation having been made illegal, the Delhi government has proposed a multi-pronged rehabilitation package that it hopes will effectively help manual scavengers forced to engage in this task due to unemployment and poverty. The package includes a one-time cash payment of Rs 40,000, a soft subsidised loan of Rs 15 lakhs to set up a trade and access to a skill development programme with a stipend of Rs 3,000 a month.

The Delhi government had recently commissioned a survey in which East Delhi was recorded as the only area with (50) manual scavengers. Yet fatalities are reported frequently from across Delhi, which question the veracity of the survey. People pushed into manual scavenging are cautiously optimistic about the new package. Experts feel that such measures, along with a stricter enforcement of minimum wages in the state, will dissuade workers from engaging in the dehumanising and hazardous occupation. 

The men and women who are pushed into a life of manual scavenging are cautiously optimistic about the Delhi government’s new package. Photo: Dalberg Advisors

Other News

Fishing boat operators to launch stir seeking action against foreign trawlers

Foreign vessels entering Indian waters has long since been a source of unease for fishing boat operators, who will now launch a protest demanding action against these transgressions. National Fishworkers Forum general secretary T. Peter told the New Indian Express, “So far the authorities have refused to accept our complaints in this regard and have called them ‘baseless’. Now we have solid proof that the intrusion of foreign vessels has adversely affected both traditional fishermen and mechanised boats.”

The All Kerala Fishing Boat Operators Association is also trying to meet with government leaders to get them to pay attention to these problems.

Child exploitation rampant in potato chips industry

Farmers in north Gujarat have started to employ Adivasi children as labourers in their potato fields. The young workers put in about eight to 10 hours of work in the blazing hot fields and are often required to dig soil with bare hands while pulling out potatoes from the earth. The farmers who employ them have no misgivings about using children, a The Wire report noted. They collect and sort around 8,000 kg of potatoes a day for a promised daily salary of Rs 200 a day. However, after contractors’ fees are deducted, they earn around Rs 130, which comes as a huge relief to their poor families. While it is easy to blame the farmers or the contractors, or the families that send their kids to work, the article rightly points out that we have to look at the system that necessitates such exploitation of children.

Freshers’ salaries in IT sector stagnant for 7 years

An interesting article by Moneycontrol cites statistics from research about the tech sector. According to BetterPlace, ‘a digital platform for management of blue-collar workforce’, 10-15% of the workers entering the gig economy are graduates, many from the field of engineering. This includes delivery executives for apps like Zomato, Amazon or Swiggy. The article also compares salaries of two graduates, one from 2019 and one from 2010, and finds that they virtually have the exact same starting income. The numbers offer insight into the kind of jobs that are being offered by the sector and what actually lies behind the many jobs that this industry is supposed to create every year.

Construction workers oppose govt move to subsume labour laws into 4 codes

The coordinator of the National Campaign Committee for Construction Workers has written to the prime minister about the effect of repealing the Building and Other Construction Workers (BOCW) Act of 1996 and subsuming it under the four proposed labour codes. “The closure of BOCW boards will lead to cancellation of lakhs of pensions which are being paid to older workers and disabled workers in different states and the cancellation of millions of freeships being paid as education assistance to the children of construction workers, besides the cancellation of several other benefits including maternity benefits,” he said.

Currently, a cess is collected from developers of around 1% of their project cost by state-level boards which then distribute these funds through various social security schemes to construction workers. These boards have been criticised for not distributing these funds and there are allegations that thousands of crores are locked up with them. 

Under the existing political constraints, achieving a universal basic income at a reasonable minimum level will be a big step forward. Credit: Reuters

The coordinator of the National Campaign Committee for Construction Workers has written to the prime minister. Photo: Reuters

Govt revives ‘compulsory retirement’ plan for central employees, unions protest

Outlook has reported that the government recently revived a premature retirement plan for Central government employees who have completed 30 years in service or have reached 50 years of age. The government will recommend them for ‘compulsory retirement’ after reviewing their performance on a regular basis, it has been reported. This has understandably received a lot of pushback from unions who see it as a part of a plan to transfer work from the Central government to the private sector. 

Chhattisgarh government to raise retirement age of industrial labourers to 60

Based on requests from trade unions, the Chhattisgarh government has decided to raise the retirement age for industrial labourers from 58 to 60. The employer will now also have the option of raising the age further to 62 if they want. The law has not been passed yet and the government is currently seeking comments from stakeholders.  

International news

Unions present road map for ‘just transition’ to low carbon economy 

Trades Union Congress (TUC) has published A Just Transition to a Greener, Fairer Economy, a road map for a low carbon economy that does not penalise working class communities. This effort reveals the commitment of the unions affiliated with TUC to the need to address the climate emergency, while acknowledging the need to do so without harming the working communities. It calls for a worker centric, participatory process that does not leave workers without jobs, or necessary skills for new jobs or lower employment standards. While this road map has come from the unions with the active support of the Labour Party in the UK, a similar effort called the ‘Green New Deal’ is gaining popularity in the US.  

EVA Air cabin crew end 17 day strike after securing stipend hike

The cabin crew of Taiwan’s largest private airlines, EVA Air, ended their 17-day strike after the company agreed to their demands for a hike in flight stipends. The strike had caused severe disruption in air services and more than $97 million in lost revenues. The management has not only agreed to increase stipends but will also not take any punitive action against employees for the strike. This marks a major success for workers of a company that has a history of strict labour control. 

Budget 2019 Reeks of a Lack of Real Ambition

While troubles on the low investment are simply assumed away, the silence on major issues like job creation and the viability of agriculture was deafening. 

In terms of economic vision, it has always been difficult to make sense of the Narendra Modi government. 

The previous five years were hardly inspiring in economic terms: relatively little was done in terms of positive changes to address the major problems in the economy. Most economic policies of the earlier government – including some more problematic ones – were simply continued, often in a renamed or repackaged form, while the regime was punctuated by the twin disasters of demonetisation and the badly botched and rushed implementation of the goods and services tax.

Meanwhile, especially before the general election, the government put its head in the sand and simply denied the most obvious economic problems. It encouraged changes in the estimation of the GDP that were opaque and appeared to be unfortunately partisan, creating scepticism about the reliability of the data within and outside the country.

It suppressed unsavoury economic data like the report of the employment and unemployment survey emanating from its own statistical agency, which showed falling labour force participation especially of women and historically high open unemployment. It refused to admit the problem of low investment rates that were afflicting industry.

It offered a minor sop of cash transfers to some farmers in lieu of addressing their significant and growing problems that had resulted in a year of almost continuous farmers’ protests. Overall, it kept insisting that everything is fine in the economy, despite all evidence to the contrary.  

Also read: Union Budget 2019-20: All You Need to Know

Even so, a lot was expected from this first Budget to be presented by the new government. After all, this government now has enormous political capital, having just comprehensively won the recent election, despite all concerns about how that election was run, and so it can afford to announce big policies. Modi had already shown himself to be able to make bold decisions (demonetisation was certainly a bold decision, albeit a crazy and disastrous one).

The prime minister and other government officials have gone on record over the past few days, with extravagant claims of transforming the country through a ten-year vision of a “new India”, in which the size of the economy will supposedly more than double in just five years. (This is what the prime minister’s goal of achieving a $5 trillion size of GDP by 2022 amounts to, even with the optimistic assumption of a stable exchange over the period.) 

And there was much talk of blue sky thinking and bold moves to deal with the economic challenges ahead.

So what did the Budget finally deliver on these expectations? In the wake of all the promises, most people were left scratching their heads trying to identify even one big idea or significant move. 

Certainly, the silence on major issues like job creation and the viability of agriculture was deafening. 

The low investment rate was simply assumed away – in line with government arguments that investment has anyway bottomed out and will now increase. The problems in the banking and non-bank finance sector did get some much-required attention, but the proposed moves are minor and may well be inadequate to deal with the scope of the problem. Despite much emotion expended on small enterprises, there is really nothing that would improve their conditions significantly. 

People watch Nirmala Sitharaman’s Union Budget 2019-20 speech at an electronics store in Kolkata. Image: PTI

As has become usual in the last few years, the Budget was extremely optimistic in the matter of estimating future revenues. GST revenues are projected to go up by more than 13% over last year’s receipts, a tall order given the already poor receipts of the first quarter. 

There is a sop to the middle classes in terms of the increase in the exemption rate to Rs 5 lakh income per year, which it is claimed will be counterbalanced by slightly higher taxes on the very rich. The Centre has continued to centralise and bypass Finance Commission awards – surcharges and cesses, which do not have to be shared with state governments, are projected to account for around 16% of the projected tax revenues.

On the expenditure side, the lack of action may be even more surprising. The only big increase is on the pre-election scheme of cash transfer to farmers, the PM-KISAN, which will eat up Rs 75,000 crore. Infrastructure development is supposed to be a big priority of this government, but only the railways gets a reasonable additional allocation of just under Rs 13,000 crore (leaving out the high hopes of vast amounts to be raised through Public-Private Partnerships). 

Also read: Union Budget 2019: Fiscal Deficit Target for FY’20 Pegged at 3.3%

Road transport and highways get an increase of only 5.6%, barely keeping pace with projected inflation, while rural development fares even worse, with an increase of less than 5%.  

Other social sector spending mostly just about increases in line with the increase in nominal GDP, in other words remains around the same. The absence of any mention of the supposedly flagship Ayushman Bharat health insurance scheme in the Budget speech fits with its absence in the detailed budget papers, but it is no less surprising for that. 

Instead, the Rashtriya Swasthya Bima Yojana – which was supposed to be rendered defunct by the new scheme – has seen its tiny allocation increase from Rs 2,770 crore to Rs 6,656 crore – a tiny drop in the ocean of the projected requirement. As it happens, I am not an admirer of this scheme, which seeks to substitute two layers of private providers for a better funded public delivery scheme. But does the lack of outlay suggest that the government is also no longer so enamoured of this scheme? 

The surprise, then, is in the lack of ambition. 

But perhaps this confirms something that became quite clear before the elections: this is a government that is less interested in improving people’s economic conditions than in capturing people’s hearts and minds for its own goals. 

That is why one of the chapters in the Economic Survey, when combined with the new “ease” of taxation using only Aadhaar as announced in the Budget speech, should give us all pause. For those of us worried about the possible abuse of Big Data, its forthcoming marriage with Big Brother, as indicated by this Budget, may be the single most important indicator of the future intentions of this government.

Jayati Ghosh is a professor of economics at Jawaharlal Nehru University.

Union Budget 2019: Fiscal Deficit Target for FY’20 Pegged at 3.3%

Nirmala Sitharaman’s maiden budget speech will set the policy roadmap for the Centre’s next five years. Follow The Wire for live updates on the Union budget speech.

With the 17th Lok Sabha Budget session underway, the new Narendra Modi government is presenting its maiden Union budget. The expectations facing this budget are formidable: it will be required to tackle slowing economic growth while not straying too far from the fiscal consolidation path.

It will also keenly be watched for signals on the Centre’s policy roadmap for the next five years.

Nirmala Sitharaman is presenting her first budget on Friday, becoming the first full-time woman finance minister to announce India’s annual accounts. This is India’s 89th Union budget, including interim ones.

Note to readers: The live blog may take a few seconds to load, please don’t go away! If you keep this tab open on your browsers, new updates will load automatically.

Union Budget 2019-20: All You Need to Know

This goal, Sitharaman said, would be achieved by “minimum government, maximum governance”.

New Delhi: Finance Minister Nirmala Sitharaman is presenting the Modi 2.0 government’s first Budget today. She began her speech in parliament at 11 am, after she had met with President Ram Nath Kovind in the morning.

Economic growth

“Within five years, it [the Indian economy] has received $2.7 trillion. The $5 trillion goal is well within our reach,” Sitharaman said as her speech began – referring to the goal Prime Minister Narendra Modi had proposed. “Filled with an inherent desire to progress, led by a dedicated leadership in this House, the target is achievable. All of India’s private sector industries have played a substantial role in growing our economy.”

This goal, Sitharaman said, would be achieved by “minimum government, maximum governance”, involving:

  1. Building social infrastructure
  2. Digital India
  3. Make-in-India with emphasis on MSMEs
  4. Defence manufacturing
  5. Pollution-Free India
  6. Space programmes
  7. A host of other initiatives including Ayushman Bharat.

Even before the speech began, Sitharaman had caught some eyeballs by replacing the traditional image of the finance minister with a brown briefcase outside parliament. Instead of a briefcase, she held a red cloth bag with the Budget documents. According to CNBC, chief economic adviser Krishnamurthy Subramanian calls it a traditional ‘bahi-khata’ and that it symbolises the departure of slavery from Western thought.

Infrastructure

After talking about the country’s growth goals, Sitharaman ran through a string of infrastructure projects that government has planned. “I wish to propose a number of initiatives as part of kick-starting the virtuous cycle of domestic and foreign investment,” she said.

She began by talking about roads and metro rail tracks, and also said that time may be ripe for India to get into aircraft financing and leasing, to create a self-reliant aviation industry. She also talked about a national charging grid for electric cars, the development of inland waterways and using public-private partnerships for railway development.

Sitharaman also effectively announced a scaling up of India’s infrastructure network, parts of which have started over the last five years. “I propose to make a blueprint available for developing gas grids, water grids and regional airports.”

However, the finance minister failed to clarify where the money would come from. While she mentioned PPPs, India Inc’s balance sheets are already stressed – with little appetite for risky infrastructure bets.

MSMEs

The finance minister announced more interest subvention for loans taken out by MSMEs (both fresh and incremental loans). “Government will create a payment platform for MSMEs to enable financing of bills and payment on that platform itself,” Sitharaman said.

She also said pension benefits will be extended to three crore shopkeepers and retailers whose retail turnover is less than Rs 1.5 crore, in the form of a new scheme. No further details were in the speech on this.

Allowing more FDIs

Allowing more foreign direct investment may be on the cards, Sitharaman suggested. “Government will examine suggestions of further opening up FDI in aviation, media, animation and insurance sector.”

She said:

  1. Local sourcing norms will be eased for FDI in single-brand retail sector
  2. 100% FDI for insurance intermediaries
  3. Government is contemplating organising a global investors meet in India.

Rural development

Moving on to the rural section of the Budget, Sitharaman spent some time complimenting the previous Modi government’s achievements, including on the Ujjwala Yojana and Saubhaghya Yojana (LPG and electricity schemes). She also brought up older promises of the Modi government – such as electricity and gas for all by 2022, and the rural housing goals – and said that India is on track to achieve them.

Sitharaman said the government has decided to increase the Budget for the PM Gram Sadak Yojana – and said one lakh kilometres worth of roads will be updated. This would cost the government Rs 80,250 crore. She did not mention where this money will come from.

Farmers

On farming, the finance minister said, we need to “go back to the basics”. She complimented India’s traditional farming methods and the idea of zero-budget farming.

“Hope to form 10,000 new farmer producer organisations that will ensure economy of scale for farmers over next 5 years,” she said. She also talking about encouraging more states to use the e-NAM – an online trading platform for agricultural commodities – more.

Drinking water

A major step towards providing drinking water for all was taken earlier this year, Sitharaman said, referring to the Jal Shakti Mantralay. Water for all will be provided by 2024 and the government will focus on integrated management of piped water, including focus on creating local infrastructure (rain water harvesting, groundwater recharge and so on).

She did not talk about how much funding this would get.

Swachh Bharat

Talking about Modi’s pet Swachh Bharat project, Sitharaman said it has been widely successful and “9.6 crore toilets have been constructed since October 2014”. The Wire has done a large number of reports on how these toilets may have been constructed – but that doesn’t mean they’re usable. Kabir Agarwal’s series from Uttar Pradesh, for instance, talks about the multiple issues with this ‘toilet construction’.

She then promised India will be ‘open defecation free’ by October 2 this year. FYI: This is harder than it looks. India has claimed it is already 96% ODF-free. Santosh Mehrotra explains in The Wire why this isn’t quite true.

She also talked about the plight of manual scavengers – but not in a particularly constructive way. The finance minister claimed that sanitation work will now be done by robots to “save manual scavengers their dignity”.

Multiple reports have shown how the kind of technology the government uses to clean sewers is ineffective, and requires human intervention. In addition, a large number of manual scavengers – particularly women – are engaged in night soil collection and dry toilet cleaning, which robots cannot be deployed for. Sitharaman made no reference to this.

Skill India

Sitharaman talked about the Skill India programme by making some small announcements – but did not mention the many flaws in the scheme that have been pointed out.

She said that government will focus on new-age skills, skills needed for foreign markets and so on. But PMKVY is a programme that has fundamental flaws. Read here, here and here for more on this.

Banking and financial sector

Sitharaman started this section of her speech by saying that the government has been successful in tackling non-performing assets.

“Our efforts at cleaning up the banking sector are now clearly visible. NPAs of banks have reduced by over Rs 1 lakh crore over the last year. Recorded recovery of over Rs 4 lakh crore due to IBC have been effected in last four years. Provision coverage ratio is now at its highest in 7 years. Domestic credit growth has risen by 13.8%.”

This is all largely true, although the IBC still struggles with legal challenges, provision coverage ratio is still low when compared globally and credit growth hasn’t rebounded uniformly.

She also announced a public sector bank recapitalisation plan. “PSBs are now to be further provided Rs 70,000 crore in capital to boost credit,” says Sitharaman. This was required and expected.

Disinvestment target

The Budget speech said the strategic disinvestment of select Central Public Sector Enterprises will be a priority for this government. “In view of current macroeconomic priorities, government will not only re-initiate process of divesting Air India, but also offer up more CPSEs for strategic participation by private sector.”

The target for disinvestment proceeds was set at Rs 1.05 lakh crore for FY 2019-20.

Taxes

A full 1.5 hours into the speech, Sitharaman began Part B by thanking India’s taxpayers. “I begin by thanking our taxpayers, who as responsible citizens performed their duty by paying their taxes. It is because of their valuable contribution that our government is able to work for collective dream…”

She said that the government’s direct tax efforts have paid off. “Due to a slew of efforts taken by our government, direct tax revenue has significantly increased by over 78% from 6.38 lakh crore in FY 14 to around Rs 11.37 lakh crore in FY 18.”

She also said that the government would increase the number of companies who could benefit from the lowest corporate tax rate – to 99.3% of all companies. “Currently, the lower rate of 25% applies to companies having annual turnover of Rs 250 crore. I propose to widen this to include all companies having annual turnover of up to Rs 400 crore. This will cover 99.3% of all companies.”

The government has also decided to make PAN and Aadhaar cards “interchangeable”, Sitharaman said.

The first substantial change Sitharaman announced was increasing tax rates on individuals who earn more than Rs 2 crore and Rs 5 crore per year. “I propose to enhance surcharge on individuals having taxable income of Rs 2 crore to Rs 4 crore and Rs 5 crore and above so that effective tax rates will increase by 3% and 7% respectively.”

She also said that there will now be a cash transaction tax – 2% TDS – on withdrawals of more than Rs 1 crore per year.

Customs

Customs duty on various goods was also hiked – cashew kernels, vinyl flooring, tiles, metal fittings, mountings for furniture, auto parts, certain kind of synthetic rubber, marble slabs, optic fibre cable, CCTV camera, IP camera.

The duty on petrol, diesel and gold was also increased. “I propose to increase special additional excise duty and load and infrastructure cess each by Re 1 a litre on petrol and diesel,” Sitharaman said. “It is also proposed to increase customs duty on gold and other precious metal from 10% to 12.5%.” This announcement was met by booing from the house.

While closing her speech, Sitharaman said the fiscal deficit for the year is at 3.3%, down from 3.4%, and that particular outlays can be found in the annexure to the Budget documents that will be released online.

Note: This copy will be updated as the Budget speech goes on.

Economic Survey Predicts Sharp Slowdown in Population Growth Over Next Two Decades

More jobs would still have to be created in view of the demographic dividend.

New Delhi: Contrary to the right wing’s debate around population growth and “changing demography” to instil fear in the minds of voters, the Economic Survey 2018-19 has presented a rosy picture for the future. It noted that “India is set to witness a sharp slowdown in population growth in the next two decades”.

The survey said India’s population growth would be less than 1% during the decade 2021-31 and under 0.5% between 2031-41. “Such population growth rates would be close to the trend currently seen in countries such as Germany and France,” it insisted. The only reason for positive population growth in the next two decades, it said, would be the population momentum and the continued rise in life expectancy.

Also Read: Economic Survey 2019 Envisions India Rebounding on the Back of Private Investments

Taking into account the state-level differences in initial fertility levels, mortality and age composition, the policy document said both the trajectory of population and population growth will continue to vary across states.

Some states expected to have zero growth

In case of Tamil Nadu, for example, it said population growth will start declining between 2031-41 unless offset by inward migration. Likewise, population growth will be close to zero in Andhra Pradesh and as low as 0.1-0.2% in Karnataka, Kerala, Telangana, Himachal Pradesh, West Bengal, Punjab and Maharashtra.

Even in states that lag behind in demographic transition, there would be a “marked slowdown in population growth during 2021-41”, the survey says. Population growth will halve over the next two decades in Chhattisgarh, Uttar Pradesh, Rajasthan and Madhya Pradesh, it said.

To put matters into perspective, Bihar will have a population growth rate of just 1%. Still, along with Uttar Pradesh, it would account for 40% of the increase in India’s population during the years 2021-41.

Using the 2011 Census data as a baseline, the survey has projected the population by age-structure up to 2041. For this, it has used the cohort-component methodology (Cannan, 1895 and George et al, 2004) for population projections. The assumptions at the national level have been derived using the assumptions for fertility, mortality, life expectancy and sex ratio at birth of 22 states weighted by their share in national population. The projections have not taken into account any inter-state or international migration.

The projections have not taken into account any inter-state or international migration. Photo: United Nations Photo

The demographic dividend

The Economic Survey noted that the country as a whole will enjoy the “demographic dividend” phase despite some states transitioning to an ageing society by the 2030s. It said the population in the 0-19 age bracket has already peaked due to sharp declines in total fertility rates (TFR) across the country.

In this regard, it pointed out that the southern states, as also Himachal Pradesh, Punjab, West Bengal and Maharashtra, now have fertility rates well below the replacement rate. In other states like Bihar, Uttar Pradesh, Jharkhand, Chhattisgarh, Rajasthan and Madhya Pradesh, the TFR is above the replacement rate. But these states too are experiencing significant declines. “As a result, the national TFR is expected to be below replacement level by 2021.”

The document also stated that India’s working-age population will grow by roughly 9.7 million per year during the decade 2021-31 and 4.2 million per year between 2031-41. On the other hand, the proportion of elementary school-going children, i.e. 5-14 age group, will witness significant declines. As such, it suggested that many states would need to pay greater attention to consolidating or merging schools to make them viable, rather than building new ones.

Also Read: Economic Survey’s Call for MGNREGA to Become ‘Rural Distress Indicator’ a Nod to Jobs Crisis?

At the other end of the age scale, the document demanded that policy makers prepare for ageing. “This will need investments in health care as well as a plan for increasing the retirement age in a phased manner,” it said.

The survey had a close look at the impact of population arrest on India’s working-age population. It said as this population would rise by 96.5 million between 2021-31 and by 41.5 million between 2031-41, it would have implications for the required rate of job creation in the economy. It said “additional jobs will need to be created to keep pace with the projected annual increase in working-age population.”

Economic Survey Calls for More Efficient Use of Water in Agriculture

It says the cropping pattern in India is currently skewed heavily in favour of crops that are water intensive.

New Delhi: The Economic Survey of 2018-19 tabled on Thursday has recommended that the efficiency of water use in agriculture be improved. It has argued that currently, the cropping pattern in India is skewed heavily in favour of crops that are water intensive. Paddy and sugarcane alone consume more than 60% of irrigation water available, the survey has claimed.

The document puts the blame on incentive structure like the minimum support price (MSP) regime, subsidy on electricity, water and fertilisers as contributing factors to the ‘misalignment’ of cropping patterns in the country. The survey has argued that states where land productivity is higher tend to have lower irrigation water productivity.

It has contended that if the current patterns of use of water in agriculture continue, by 2050 India will be in the global hotspot for water insecurity. “Adopting improved methods of irrigation and irrigation technologies will have a critical role in increasing irrigation water productivity along with re-calibrating the cropping patterns,” it said.

Also Read: Economic Survey’s Call for MGNREGA to Become ‘Rural Distress Indicator’ a Nod to Jobs Crisis?

The economic survey has also recommended that a new development strategy should move ahead prioritising “smallholder agriculture in order to promote sustainable livelihoods and for reduction of poverty in India.” It has argued that smaller land holdings will be better at improving resource use efficiency.

The survey also showed that the share of marginal land holdings has increased from 60% in 2000 to 68% in 2015-16. This, the economic survey, sees as an opportunity.

“Devising policies to incentivise farmers to adopt efficient ways of water use should become a national priority to avert the looming water crisis,” the economic survey said.

It has suggested that micro-irrigation systems be used to improve water use efficiency, arguing that states with higher penetration of micro irrigation systems have shown better efficiency in water use and also fertiliser consumption.

Next, the survey recommends that the focus in agriculture should shift from ‘land productivity’ to ‘irrigation water productivity’. It also argues that the use of fertilisers and pesticides needs to be economised. Another recommendation made by the economic survey is to incentivise farmers to move to natural and organic farming.

Currently, India is staring at a water crisis as the monsoon has underwhelmed in its early days. In the month of June, India received 33% deficient rainfall. This comes at the back of a significantly deficient pre-monsoon season, the lowest rainfall in 65 years. In the preceding year, the monsoon had a deficit of 9% in the country, with large parts faring much worse. As a result, early kharif sowing is down almost 15%.

Economic Survey Bats for Mixing Behavioural Economics, Indian Myth and Political Messaging

The survey advocates using India’s mythological and religious moorings to help promote tax compliance and gender equality.

New Delhi: Within a few hours of Prime Minister Narendra Modi’s announcement on November 8, 2016 that currency notes of Rs 500 and Rs 1,000 would no longer be valid, Richard Thaler came out in support of the move.

“First step towards cashless and good start on reducing corruption,” he tweeted.

Almost a year later, in October 2017, Thaler won the Nobel Prize of Economics for spearheading behavioural economics – a field that combines insights from psychology, decision making and economics to understand human behaviour. This understanding would then allow designing policies that would ‘nudge’ people towards ‘good behaviour’.

The BJP celebrated Thaler’s victory, citing his support for demonetisation. (Although Thaler later said demonetisation’s implementation was ‘deeply flawed‘.)

Also Read: Modinomics and Behavioural Economics Are Two Sides of the Same Coin

On Thursday, the 2018-19 Economic Survey was released, containing a whole chapter on leveraging the behavioural economics of “nudge”. It does not, however, contain any reference to demonetisation.

What it does instead is provide insight into the BJP’s political messaging and perhaps, even the prime minister’s penchant for acronyms.

The chapter highlights two projects –  Swachh Bharat Mission and Beti Bachao, Beti Padhao – and says the government was successful in achieving their goals because of the application of “principles of behavioural economics”.

Swachh Bharat and behavioural economics

In the case of Swachh Bharat, the survey admits that it is not the first programme to address sanitation concerns, but the first to emphasise “behaviour change as much as, if not more than, construction of toilets”. The behaviour change was induced by making sanitation a community-level concern “rather than an obscure campaign of a distant government”.

“Non-conformers, therefore, find their act more visible to their community. The fear of community scorn, or a desire to fit in, or both, have led many to renounce open defecation,” the chapter says.

It is here that the line between a “nudge” and a “push” becomes blurry. A recent report said that more than half the households (56%) included in a survey said they were aware of coercion in their village. About 12% of the respondents said they faced it in their own households. “Scheduled caste and scheduled tribe households were more likely to be at the receiving end of coercive tactics,” the study suggests.

While the chapter claims that an “independent verification” of the mission through the National Annual Rural Sanitation Survey (NARSS) 2018-19 found that 93.1% of rural households had access to toilets. And that 96.5% of the households in rural India who have access to a toilet use it. However, other independent surveys have pegged these statistics at lower numbers.

Puneeta Kuretti outside the unused toiled built under the Swachh Bharat scheme in her village Kursel. The toilet has been lying unused since it was built in early 2017. Credit: Sukanya Shantha

The survey says that the Beti Bachao, Beti Padhao scheme’s success lies in the “powerful use of the insight on ‘social norm’”. The ‘Selfie with Daughter’ initiative, the survey says, successfully changed people’s attitude towards the girl child. “People needed to stop viewing girls as burdens and start celebrating them instead.” By highlighting the examples of parents around the country who were celebrating the girl child, that soon “became the norm”.

“Most people wanted to conform, and more and more parents posted selfies with their girls. Started by one proud father in a village in Haryana, the campaign went viral and #SelfieWithDaughter became a worldwide hit.”

The survey does acknowledge that the scheme’s work is far from over. “Posting a selfie is not tantamount to subverting entrenched orthodox mind-sets overnight, but its leverage of social norms is certainly a step in the right direction,” it says.

Clear and simple messaging

Another principle of behavioural economics that the survey identifies is the “power of clear messaging”. It says that to increase the involvement of stakeholders in a programme, the Centre has tried to use socially and culturally identifiable names that give a clear message of the programme’s objectives.

Some of these “clear messages” used by the Centre, the survey says, are the Namami Gange (“Namami Gange means ‘I pray to Ganga’ as the river Ganga is revered in our culture”), POSHAN Abhiyan (“Poshan means holistic nutrition”), Jan Dhan Yojana (“Jan Dhan implies ‘money of the people'”) and Ayushman Bharat (“Ayushman means ‘Being Blessed with long life'”).

Signs of this messaging can also be seen in the BJP’s political campaigns, where it has often used catchy and simple acronyms. The prime minister once used the acronym SCAM to describe the Samajwadi party, Congress, Akhilesh Yadav and Mayawati. In the 2019 general elections, Modi derided the grand alliance of SP, RJD and BSP as ‘sarab‘ (alcohol).

Prime Minister Narendra Modi speaking in Latur. Credit: PTI

The future of implementing principles of behavioural economics

The survey also suggests various other ways in which behavioural economics can be used. From Mohandas Gandhi’s “seven social sins” to using religious or “pious obligations” to convince people to pay taxes, the chapter envisions a rather broad scope to implement these principles.

The chapter says that a “revolutionary campaign that utilises the benefits of behavioural economics” is required to ensure gender inequality. “Our scriptures worship women as the embodiment of Shakti… societies where women are respected prosper,” the chapter says.

Again drawing on the importance of messaging, the chapter suggests a campaign name that draws on cultural and social norms – BADLAV (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi) – to represent the ‘change’ (badlav translates to change) towards gender equality. The campaign’s message would be to treat “women as the forms of Lakshmi”.

As Farah Naqvi has previously written in The Wire, the campaign is in line with the BJP’s vision of casting women in certain roles – mothers, sisters, daughters (or in this instance, goddesses).

“‘Mataaon, behenon aur betiyon (mothers, sisters and daughters)’ is the core of BJP-speak on women. Women in this framework are relational appendages to the male-headed household. They occupy roles. Critical roles, but structurally subservient ones.”

Also Read: For the BJP, ‘Women’s Rights’ Are Really All About the Men

It also draws inspiration from other Hindu mythological references – Ardhanareshwar (a half-male, half-female representation of Shiva) and female sages such as Gargi and Maitreyi – to stress that women have always enjoyed a position of respect and reverence in “ancient Indian society”. These examples should be synchronised with the campaign to make it effective, the chapter recommends.

Improving tax compliance

The survey suggests that the social norm in India is “evasion of taxes is acceptable” and aims to change it to “paying taxes honestly is honourable”. While some measures suggested are aimed at negating the belief that tax payments are squandered in “wasteful public expenditure or by corruption”, others include highlighting the tax paid by other taxpayers. It says the top ten highest taxpayers with a district could be afforded special privileges such as expedited boarding privileges at airports, or even naming important buildings after them.

The chapter also suggests that religious texts could be used to coax people into paying their taxes. In the scriptures of Hinduism, Islam and Christianity, the survey suggests that references to “debt” could be used to nudge people towards paying their taxes. All three religions, the chapter says, preach that owing a debt is a sin or crime.

“Given the importance of religion in the Indian culture, the principles of behavioural economics need to be combined with this “spiritual/religious norm” to reduce tax evasion and wilful default in the country,” the survey says.