General Studies Paper 3

Introduction

• Gresham’s law refers to the dictum that “bad money drives out good.” Gresham’s law comes into play when the exchange rate between two moneys or currencies is fixed by the government at a certain ratio that is different from the market exchange rate. Such price fixing causes the undervalued currency — that is, the currency whose price is fixed at a level below the market rate — to go out of circulation. The overvalued currency, on the other hand, remains in circulation but it does not find enough buyers.

Market exchange rate

• It should be noted that the market exchange rate is essentially an equilibrium price at which the supply of a currency is equal to the demand for the currency.
• Also, the supply of a currency in the market rises as its price rises and falls as its price falls; while, on the other hand, the demand for a currency falls as its price rises and rises as its price falls.
• So, when the price of a currency is fixed by the government at a level below the market exchange rate, the currency’s supply drops while demand for the currency rises.
• Thus a price cap can lead to a currency shortage with demand for the currency outpacing supply.

Origins of the term

• Gresham’s law is named after English financier Thomas Gresham who advised the English monarchy on financial matters.
• It applies not just to paper currencies but also to commodity currencies and other goods.
• In fact, whenever the price of any commodity — whether it is used as money or not — is fixed arbitrarily such that it becomes undervalued when compared to the market exchange rate, this causes the commodity to disappear from the formal market.
• The only way to get hold of an undervalued commodity in such cases would be through the black market. Sometimes, countries can even witness the outflow of certain goods through their borders when they are forcibly undervalued by governments.
• Gresham’s law can be seen at play whenever a government fixes the exchange rate (or price) of a commodity money (such as gold and silver coins) far below than the market price of the commodity backing them.
• In such cases, people who hold the commodity money would stop offering the money at the price fixed by the government. They may even melt such commodity money to derive pure gold and silver that they can sell at the market price, which is higher than the rate fixed by the government.

Significance

• Gresham’s law, however, holds true only when the exchange rate between currencies is fixed under law by the government and the law is implemented effectively by authorities.
• In the absence of any government decree fixing the exchange rate between currencies, it is good money that eventually drives bad money out of the market and not the other way round.
• This phenomenon wherein “good money drives out bad” is called Thiers’ law (named after French politician Adolphe Thiers) and it is seen as a complement to Gresham’s law.
• The rise of private cryptocurrencies in recent years has been cited by many analysts as an example of good money issued by private money producers driving out bad money issued by governments.

Conclusion

• When the exchange rate between currencies is not fixed and people have the choice to freely choose between currencies, people gradually stop using currencies that they consider to be of poor quality and adopt currencies that are found to be of better quality.

General Studies Paper 2

Introduction

• India may be the fastest growing large economy of the world, but it is also facing accelerating food-price inflation. The rise in the price of food first accelerated sharply in 2019, and has climbed in most years thereafter. In July this year, annual inflation exceeded 11%, the highest in a decade.

State of Food Security and Nutrition in the World

• The ‘State of Food Security and Nutrition in the World’ of the Food and Agriculture Organization (FAO) estimates the proportion of the population across countries unable to afford a healthy diet.
• The figure for India in 2021 is devastating to note — an estimated 74% of the population cannot afford a healthy diet.
• Given a population of 1,400 million, this makes for approximately one billion Indians.

Finding is plausible

• A study reported found that while the cost of preparing a thaali at home has risen by 65%, in this period, the average wage of a manual worker rose by 38% and that of a salaried worker by 28%.
• The implied reduction in purchasing power is considerable, and it would be reasonable to expect that food consumption has been impacted.
• This would be in line with the reported rise in the prevalence of anaemia, mostly induced by nutrient deficiency, in the latest National Family Health Survey undertaken over 2019-21.
• Over 50% of adult women were estimated to be anaemic. This suggests that the FAO’s finding, that over half of India cannot afford a healthy diet, is plausible.
• Ensuring that Indians have access to a healthy diet is the most important task of economic policy today.
• Macroeconomic policy, relied upon to control inflation, has proved to be useless in the context.
• The Reserve Bank of India has failed in this task, with the inflation rate mostly higher than the target for four years by now. Its approach of contracting output when the inflation rate rises — misleadingly termed “inflation targeting” — does nothing to manage food inflation stemming from the supply side.
• Central banks are incapable of solving this problem, it must be said within any time frame. It is necessary to intervene on the supply side to ensure that food is produced at a steady price by raising the yield on land.

The significance of the Green Revolution

• India has rich experience in this area, having engineered a Green Revolution in the 1960s, but it is not being tapped.
• At the time, reeling under extreme food shortage following two successive droughts, the government orchestrated a supply-side response by providing farmers with high-yielding seeds, cheap credit, and assured prices through procurement.
• This succeeded spectacularly. Within a few years India was no longer dependent on food imports.
• If there was a single event that aided India’s quest to be self-reliant in the highly polarised climate of the Cold War, it was this.
• However, to have engineered the Green Revolution in India at a time when it was a desperately poor country challenged by having to ensure food security to a staggeringly large number is perhaps more significant.
• With hindsight, we can see that mistakes were made, among them the rampant use of chemical fertilizer, fuelled by subsidy, which degraded the soil.
• There was also the reliance on procurement prices rather than productivity increase to ensure farm incomes, which fuelled inflation.
• We also see that the policy was almost exclusively focused on cereals rather than pulses, the main source of protein for most Indians.
• However, rather than carping about the errors made in an extraordinarily successful economic policy intervention, we should be correcting them now.
• At the same time, we should focus on the specific goal of lowering the cost of producing food.

Initiatives to work on

• Expanding on each of these proposals would be in order. It has been pointed out for some time that increased public expenditure on irrigation is not reflected in an increase in irrigated area — whether due to waste or the diversion of funds has not been established.
• The ongoing fragmentation of already small land holdings lowers the capacity for productivity-enhancing capital investment, for which leasing is a solution.
• India’s network of public agricultural research institutes needs to be energised to resume the sterling role they had played in the 1960s.
• Finally, extension has now more or less vanished from where once the gram sevak was a familiar figure in the village, playing a crucial role in the dissemination of best practices. It must be revived.
• These initiatives should be dovetailed into a programme for the manifold increase of protein production, which India is severely deficient in.
• In all the areas identified above, the role of States is crucial.

Conclusion

• It was the Green Revolution that made the first dent on poverty in India. So, the poor did benefit from this strategy. Similarly, now, in order to ensure that all Indians have permanent access to a healthy diet, no approach consistent with ecological security must be off the table.

General Studies Paper 1

Context

• The G20 Summit and India’s success in disaster risk reduction are an opportunity to accelerate international cooperation and build resilience to risks.

About

• Risks are being created faster than they are being reduced.
• The aftershocks of the COVID-19 pandemic, combined with a polycrisis of war, debt, and food insecurity, are putting our collective ability to cope to the test.
• The rise in disasters is a trend, not an aberration. Headlines this year alone have brought a relentless wave of bad news across the world, from severe flooding in China to destructive wildfires in Europe and Hawaii to the hottest month ever on record in July.
• And perversely, it is the most vulnerable countries and communities which are paying the greatest price despite having contributed least to the problem.
• The majority of the 50 countries most vulnerable to climate change also suffer from severe debt issues.
• India, already among the world’s most disaster-prone countries, is experiencing this new reality acutely. In 2022, the country was battered by disasters or extreme weather nearly every day, while this year’s severe monsoon has caused widespread loss of livelihood and lives.

We have the solutions at hand

• First, we have the solutions for both adaptation and mitigation at hand.
• The SDGs remain our best blueprint for peace and prosperity, together with commitments made in Paris to limit global warming to 1.5°C, and the global framework for reducing disaster risks — the Sendai Framework for Disaster Risk Reduction.
• Eight years into the implementation of the Sendai Framework, progress is severely lacking.
• Many lessons are being learned from the COVID-19 pandemic, including on the importance of systems-wide disaster risk reduction, resilience, and adaptation.
• The crisis not only revealed our vulnerability to risk, but also forged new ways of working together, including through digital innovations, such as computer modelling and India’s CoWIN digital vaccine system.
• Another reason for optimism is India’s stewardship on disaster risk reduction.
• All the 28 States have prepared their own disaster management plans in recent years. Accordingly, mortality from extreme weather events has fallen drastically in recent years.
• India’s early warning system for cyclones covers the entire coastline and has helped reduce cyclone-related mortality by 90% over the last 15 years, while heat wave action plans at the local level have reduced heat wave deaths by over 90%.
• The recent zero death toll of Cyclone Biparjoy in Gujarat demonstrates what can be achieved through effective preparedness, response, and early warning and action systems.
• The 15th Finance Commission in India introduced significant reforms to disaster risk financing.
• With a total allocation of $28.6 billion at the national and State levels for a period of five years, the Government of India has provided sufficient resources for disaster preparedness, response, recovery, and capacity development.
• On the international stage, India is promoting disaster resilience and sustainability, including through the Coalition for Disaster Resilient Infrastructure, a global partnership for building resilience in infrastructure.
• India’s National Disaster Response Force responds to domestic disasters and is also regularly deployed to disaster zones around the world.

The transformations we need

• Disaster risk must be integrated at all levels, into how we build, how we invest, and how we live.
• One of the most cost-effective risk-reduction methods is early warning systems for all, spearheaded by the UN, with India’s support.
• Just a 24-hour warning of a coming storm can reduce the damage caused by 30%. Yet, over a third of the world’s population, mostly in least developed countries and Small Island Developing States, do not have access to such systems.

Way forward

• The ultimate goal is a global multi-risk warning system for all kinds of hazards, whether biological, tectonic, or technological.
• Improving global data capabilities will help us predict and respond to the risks we are facing. We commend India’s G20 presidency for its progress on knowledge sharing, joint data infrastructure, and risk analysis.
• Finally, we need to ensure that no one is left behind. We must enhance international cooperation in disaster prevention, response, and recovery, especially for the countries of the Global South.

General Studies Paper 3

Context

• Throughout human history, mosquitoes have constantly buzzed in the background of human existence, irritating us with their incessant bites and occasionally wreaking havoc by transmitting deadly diseases.

About

• The earliest known mosquitoes from the fossil record date back at least 70 million years, and evidence of mosquito-borne diseases like malaria dates back to Egyptian mummies from 2000 BC.
• Apart from malaria, which claims the lives of over half a million people every year and infects close to 250 million, mosquitoes serve as vectors for various other diseases.
• These include dengue, Zika, lymphatic filariasis, and yellow fever. Understandably, our relationship with these tiny, blood-sucking insects has been far from cordial.

Help from sequencing tech

• The rapid urbanisation of the world’s populations, especially in many large and economically developing countries like India, has led to annual surges in mosquito-borne illnesses like dengue.
• Together with climate change and its cascading consequences, mosquito-borne diseases have expanded into new territories. A notable example is the indigenous cases of dengue in France in recent years.
• It is not surprising then that mosquito control has taken centerstage today and the battle continues unrelenting with an array of tools – from mosquito nets to insecticides and the use of symbionts like Wolbachia.
• But with insecticide resistance in mosquitoes rising to alarming proportions, it has become imperative that newer approaches to mosquito control gain prominence, even despite the availability of a first-generation malaria vaccine that officials in different countries are currently implementing in a pilot in endemic regions.
• Notably, researchers from the University of California, the Tata Institute of Genetics and Society, and the Institute of Bioinformatics and Applied Biotechnology have helped prepare high-quality reference genomes for Anopheles stephensi, a major malaria-vector mosquito.
• The availability of these high-quality sequences, coupled with our capacity to genetically manipulate them, offers unprecedented opportunities.

The gene drive

• The fundamental idea behind genetic manipulation of mosquitoes is to systematically control their populations by interfering with their reproduction.
• A major one in this endeavour is gene-drive technology, whose end result is for mosquitoes to selectively inherit some genes, rather than the inheritance to follow the rules of Mendelian genetics.
• Here, a protein cuts the mosquito’s DNA at a part that doesn’t encode a particular sequence in the genome.
• This triggers a natural mechanism in the cell containing the DNA to repair it and forces the cell to incorporate a sequence, called the drive sequence, into the damaged portion.
• As a result, the malaria parasite won’t be able to replicate inside the mosquito’s gut.
• In a recent paper, researchers at Imperial College London genetically enhanced a gene expressed in the midgut of mosquitoes to secrete two antimicrobial substances called magainin 2 and melittin.
• They are detrimental to the Plasmodium parasite’s development in the midgut and also reduce the lifespan of female mosquitoes.
• Computational modelling studies have suggested that this approach could significantly disrupt malaria transmission.

Benefits as well as risks

• In 2020, the U.S. Environmental Protection Agency authorised the release of a genetically modified mosquito called OX5034 in counties in Florida and Texas.
• Oxitec developed this mosquito with a gene sensitive to an antibiotic, tetracycline.
• Genetically modified male OX5034 mosquitoes mated with female mosquitoes but the self-limiting gene prevented female offspring from surviving.
• As a result, the male mosquitoes would disappear from the environment after around a dozen generations.
• These technologies can bring benefits as well as risks, in different ways. An immediate implication is that the drastic reduction in the mosquito population could alter food chains and ecosystems that involve mosquitoes.
• So it’s likely that the gap in the food chain could be ‘invaded’ by other mosquitoes or in fact other insects.

Way forward

• Critics have expressed concerns about unintended consequences, such as unforeseen ecological disruptions or the potential for engineered genes to spread beyond target mosquito populations.
• The battle between mosquitoes and humankind seems to be a timeless struggle, a testament to human ingenuity against frustrating troublemakers aided by evolution.

General Studies Paper 2

Context

• India needs to build closer ties with ASEAN for economic, strategic reasons.

India-ASEAN Summit 2023

• Prime Minister Narendra Modi’s whistle-stop summit sojourn to the Indonesian capital of Jakarta earlier this week was primarily aimed at deepening India’s engagement with the economically significant grouping of 10 Southeast Asian nations.
• Coming on the eve of India’s hosting of the G-20 summit in New Delhi as the current holder of the bloc’s presidency, Mr. Modi’s presence at the annual ASEAN-India summit was an opportunity to cement traditional ties with the neighbouring Asian economies at a time of heightened global trade uncertainty.
• As the trade facilitation body UNCTAD noted in its June 21 ‘Global Trade Update’, the ‘outlook for global trade in the second half of 2023 is pessimistic as negative factors’ including downgraded world economic forecasts, persistent inflation, financial vulnerabilities and geopolitical tensions dominate.
• Against this backdrop, the joint leaders’ statement on ‘Strengthening Food Security and Nutrition in Response to Crises’ at the ASEAN-India summit underscores the shared vulnerability the region perceives in the face of the ongoing heightened global food insecurity, which has been exacerbated by the war in Ukraine, climate change and national policy responses to inflationary pressures.
• India’s recent curbs on export of rice have triggered some alarm, with the prices of the regional staple reportedly nearing a 15-year high.
• The onset of an El Niño, which is historically associated with disruptive weather events, queers the ground further, and ASEAN leaders are justifiably wary.
• Modi’s pitch, laying stress on the need for a rules-based post-COVID-19 world order and a free and open Indo-Pacific, was clearly directed at members among the Asian bloc who are increasingly disquieted by China’s recent muscle flexing and claims over the South China Sea.

India’s message

• The Prime Minister’s not-so-veiled message to the ASEAN members is that India is a more reliable long-term strategic and economic partner, which has no territorial ambitions that could discomfit them.
• India also sought to position itself as a voice to amplify the concerns of the Global South, stressing that it would be mutually beneficial for all.
• For India, grappling as it is with an underwhelming free trade agreement (FTA) with the 10-nation grouping, trade ties with the eastern economies have grown in volume but asymmetrically, with imports far outpacing the country’s exports.
• The widening trade deficit and the perception that Chinese goods are taking advantage of lower tariffs under the FTA to find their way into the Indian market, have among other factors precipitated a review of the pact that is likely to be completed in 2025.

Way forward

• In the meantime, India needs to stay closely engaged with the ASEAN members both as a trade hedge against the slowdown in its main western markets and to highlight its significance as an all-weather ally.

General Studies Paper 2

Introduction

• The central government introduced three Bills in Parliament in August. Called the Bharatiya Nyaya Sanhita (BNS), 2023, the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 and the Bharatiya Sakshya (BS) Bill, 2023 they are to replace the existing Indian Penal Code, 1860, the Code of Criminal Procedure (CrPC), 1973 and the Indian Evidence Act, 1872, respectively.

The Bharatiya Nagarik Suraksha Sanhita

• There is an explicit provision in the BNSS on the registration of a cognisable offence in any police station, irrespective of the area where the offence is committed.
• Though this practice (known as recording first information report, or FIR at Zero) has been in use for many years now, its formal inclusion in the BNSS may help complainants get their cases registered as a matter of right without running around.
• As there does not seem to be an intelligent differentia vis-à-vis the rest of the cognisable cases with overall objective of the provision, this differentiation may not stand scrutiny in constitutional courts.
• All provisions of the CrPC on arrest have been retained in the BNSS.
• A new clause says that for offences punishable with less than three years of imprisonment, an arrest could be done only with the prior permission of Deputy Superintendent of Police if the accused person is infirm or is aged over 60. This may provide some relief to these two categories of persons provided the Deputy Superintendent of Police uses the clause judicially.
• The new Codes provide for handcuffing in at least a dozen categories of persons who are accused of serious offences inter alia such as one who commits a terrorist act, murder, rape, acid attack or offence against the state.
• This is sure to help police, who may be short staffed, to secure their custody. But the enabling section that guides handcuffing has not changed.

At the scene of crime

• The new Sanhita provides for a mandatory visit of the crime scene by a forensic expert and the collection of forensic evidence for offences punishable with more than seven years of imprisonment.
• But on realisation of the ground reality (of limited forensic infrastructure at field level), a maximum five years of leverage has been given to State governments to bring this clause into operation.
• Therefore, unless State governments commit themselves to the provision of sufficient resources for the development of forensic infrastructure (technology and manpower), the impact of this change may not be visible soon.
• The Sanhita rightly encourages the use of audio-video means in recording the various steps of investigation; this includes searches.
• However, the preferred use of smartphones (as recommended) has its limitations.
• Despite a ban on the two-finger test in a case of rape, and this test having been termed by the Supreme Court to be unscientific and violative of the dignity and privacy of a rape victim/survivor, the ban does not have a place in the Code.
• On the disclosure of identity of victim/survivor of rape, the provision of giving authorisation (to disclose identity) to the next of kin in case the victim is minor, may also be omitted as the Protection of Children from Sexual Offences Act, which exclusively deals with this issue and does not have a similar provision.

Duration of police custody

• A provision in the Sanhita that has raised the eyebrows of critics is the increase in the period of police custody exceeding 15 days, as provided in the CrPC.
• This may help the police to interrogate an accused person again if additional evidence is found during an investigation.
• The Sanhita also proposes enlarging the scope of judicial inquiry into suspicious deaths by including dowry deaths, but relaxes the provision of the mandatory recording of statement of a woman, a male under the age of 15 or above 60 (65 years in the CrPC) at the place of their residence based on their willingness.
• It is hoped that this provision is not misused by the police, especially in crimes against women and children.

Way forward

• Overall, some of the proposed changes are definitely progressive in nature, but cannot be termed as path-breaking or radical.
• What must not be forgotten is that police stations are generally under-staffed, have poor mobility, insufficient training infrastructure and poor housing facilities.
• Police personnel work under stressful conditions. Therefore, the colonial mindset will go only if police reformation is taken up in its entirety and not just by tweaking some provisions of the applicable laws.

General Studies Paper 3

Context

• Earlier in August, Iran recorded a scorching heat index of 70 degrees Celsius (°C) in the coastal part of the country, a metric at which survival of life is unfathomable, if not impossible. The country had also declared public holidays on account of “unprecedented heat,”

Heat index

• Heat index, also known as apparent temperature, is a measure of how the temperature feels to humans.
• Relative humidity is an important factor that determines heat index, along with air temperature.
• A complex formula to calculate heat index was published by Dr. Robert Steadman, a professor published two papers titled The Assessment of Sultriness – Part I: A Temperature-Humidity Index Based on Human Physiology and Clothing Science, and Part II: Effects of Wind, Extra Radiation and Barometric Pressure on Apparent Temperature, both describing his calculations of heat index.
• Steadman’s study considers a typical adult human of either sex, with a height of 1.7 metres and a weight of 67 kg.
• Dew point, which is the temperature at which gas is transformed into a liquid state, is an important factor in the calculation of heat index.
• In terms of atmospheric moisture, it’s the temperature at which air cannot hold any more water vapour, and droplets of water begin to form.
• Steadman used 14 °C as the dew point in his calculations.

Importance  to measure the heat index

• Hot air can hold more moisture than cold air.
• Therefore, when temperature rises, the air’s capacity to hold moisture also increases, thus affecting the apparent temperature or heat index.
• Humidity is typically higher during heat waves — which is why the heat index at the time is usually higher than just the temperature because humid air can feel hotter to humans.

Impacts of high humidity on  human body

• High humidity can lead to heat stress, meaning the body is unable to get rid of excess heat.
• Humans usually maintain a core temperature in the range of 36.1 to 37.2 °C.
• When the body is unable to get rid of excess heat, the heart rate increases due to a rise in core temperature, leading to heat-related exhaustion and rashes, among other symptoms.
• It can also be fatal if not addressed promptly.
• At high temperatures, the human body can lose excess heat through perspiration and cool itself.
• But when humidity is high as well, it is difficult to sweat and then for that sweat to evaporate because the air around is already saturated with moisture. This makes it difficult for the body to lose heat.
• On the other hand, if the humidity is low, evaporation of sweat is easier, thus making the apparent temperature feel close to the actual air temperature.
• This is why a measure of heat index is more useful than just the temperature to gauge the impact of heat on humans.

Way forward

• A heat index value of 67°C or above can be extremely dangerous for people and animals who have direct and prolonged exposure,
• With climate change, it is likely that we will continue to witness record-breaking heat index values across the world.
• We will need to prepare and adapt to such extreme conditions by investing in early warning, making changes to work timings, and finding sustainable cooling solutions.

General Studies Paper 3

Context

• On August 18, apex banking regulator the Reserve Bank of India (RBI) issued guidelines enabling a borrower to transition from a floating interest rate-based loan to one with a fixed interest rate.

About

• According to RBI, the endeavour was to address borrowers’ grievances pertaining to the elongation of loan tenure and/or an increase in the EMI amount in the event of an increase in the benchmark interest rate.
• A lack of proper communication along with the absence of consent formed part of the concerns.
• The provisions would be extended to existing as well as new loans by the end of the current calendar year.

The instructions

• The apex banking regulator has given borrowers the option to switch over to a fixed (interest) rate mechanism for their loans from floating rates.
• This would be based on a board-approved policy drafted by the lending entity.
• The policy must also specify the number of times such a switch would be allowed during the tenure.
• The lender must also transparently communicate to the borrower all relevant charges alongside service charges or administrative costs associated with the transition.
• The responsibility would rest with the lender to communicate clearly, at the time of loan sanction, the impact emanating from the change in regime (floating to fixed), such as the change in EMI and/or tenure of the loan or both.
• The borrower would now also have the option to choose between enhancement of the EMI or elongation of the tenure or a combination of both.
• S/he might also opt to prepay the loan, either in part or full, at any point during the tenure.
• This would, however, still invite foreclosure charges or pre-payment penalty.
• Further, the regulator has sought that lending entities provide borrowers, through appropriate channels, a statement at the end of each quarter enumerating the principal and interest recovered till date, EMI amount, number of EMIs left and annualised rate of interest/ Annual Percentage Rate (APR) — for the entire tenure of the loan.
• The instructions would apply to all equated instalment-based loans of different periodicities albeit with certain changes based on the nature of the loan.

Differences between a fixed and floating interest rate

• Fixed interest rates are those that do not change during the tenure of the loan.
• On the other hand, floating interest rates are subject to market dynamics and the base rate — therefore, the risk differentiation.
• As also contended by several lending entities, floating interest rates are generally lower than fixed interest rates.
• It has been widely argued that their preference for the floating rate-based regime is to better adjust their positions as per the evolving market dynamics.
• The advantages are transmitted onto the borrower’s savings pool, but the opposite also holds true in a rising benchmark rate regime.
• Also noteworthy is the fact that floating interest rate loans do not draw any prepayment penalty— unlike fixed rate loans.
• However, the fixed rate-based regime endows a borrower with greater certainty and security.
• This also helps in better planning and structuring of individual budgets. Thus, prospective borrowers should note broader evolving economic dynamics and accordingly decide the tenure they seek.

Way forward

• About parameters for assessment, Governor Shaktikanta Das had earlier stated that banks would have to consider the payment capacity of the borrower and how long payment capacity would last (the age factor).
• He cautioned that it would be necessary to avoid unduly long elongation which sometime may going forward camouflage the underlying stress in a particular loan.

General Studies Paper 3

Context

• When the Periodic Labour Force Survey (PLFS) was released in 2017, it revealed the unemployment rate of India to be 6.1%, the highest ever recorded in India. The PLFS of 2021-22 showed unemployment reducing to 4.1%, much lower than before, but higher than some developed economies.

Defining unemployment

• Unemployment is not synonymous with joblessness.
• The International Labour Organization (ILO) defines unemployment as being out of a job; being available to take a job; and actively engaged in searching for work.
• Therefore, an individual who has lost work but does not look for another job is not unemployed.
• The labour force is defined as the sum of the employed and the unemployed.
• Those neither employed nor unemployed — such as students and those engaged in unpaid domestic work — are considered out of the labour force.
• The unemployment rate is measured as the ratio of the unemployed to the labour force.
• The unemployment rate could also fall if an economy is not generating enough jobs, or if people decide not to search for work.

Measuring unemployment in India

• The situation is complicated in a developing economy, because decisions to search for work are constrained by social norms.
• According to a 2009-10 survey undertaken by the National Sample Survey Organisation (NSSO), 33.3% of rural women and 27.2% of urban women aged 15 and above who were engaged in domestic work reported willingness to work if it were made available within the premises of the household.
• Measuring unemployment in India is difficult due to the informal nature of jobs.
• Unlike developed economies, individuals do not hold one job year-round. An individual may be unemployed this week, but may have worked as a casual labourer last month, and as a farmer for most of the year.
• The NSSO adopts two major measures for classifying the working status of individuals in India — the Usual Principal and Subsidiary Status (UPSS) and the Current Weekly Status (CWS).
• An individual’s principal status, whether employed, unemployed or out of the labour force, is based on the activity in which they spent relatively long time in the previous year.
• A person who is not a worker, according to the principal status, would still be counted as employed according to the UPSS if they were engaged in some economic activity in a subsidiary role for a period not less than 30 days.
• The CWS adopts a shorter reference period of a week. An individual is counted as being employed if they have worked for at least one hour on at least one day during the seven days preceding the date of survey.
• UPSS unemployment rates will always be lower than CWS rates because there is a greater probability that an individual would find work over a year as compared to a week.

The lockdown effect

• The lockdown announced in March 2020 was a profound disruption to the Indian economy.
• But this wasn’t reflected in the PLFS unemployment rates, which covers a period between July of one year to June of the next.
• The lockdown would have been covered in the last quarter of the 2019-20 PLFS, its after-effects seen in the 2020-21 PLFS.
• However, unemployment rates — measured both by the UPSS and CWS standards — fell in 2019-20 and 2020-21.
• Unemployment spiked during the lockdown quarter, but reduced thereafter. The CWS unemployment over the year would not show such a high rise.

Conclusion

• Unemployment is shaping up to be an important factor in the upcoming election. In order to successfully tackle it, it is important to understand how it is defined and measured in a developing economy.

General Studies Paper 2

Introduction

• Vasudhaiva Kutumbakam — these two words capture a deep philosophy. It means ‘the world is one family’. During India’s G-20 Presidency, this has translated into a call for human-centric progress.

The post pandemic world

• The post-pandemic world order is very different from the world before it. There are three important changes, among others.
• First, there is a growing realisation that a shift away from a GDP-centric view of the world to a human-centric view is needed.
• Second, the world is recognising the importance of resilience and reliability in global supply chains.
• Third, there is a collective call for boosting multilateralism through the reform of global institutions.

G-20 Presidency

• Our G-20 Presidency has played the role of a catalyst in these shifts.
• In December 2022, when we took over the Presidency from Indonesia. This was especially needed in the context of mainstreaming the marginalised aspirations of developing countries, the Global South, and Africa.
• The Voice of Global South Summit, which witnessed participation from 125 countries, was one of the foremost initiatives under our Presidency.
• It was an important exercise to gather inputs and ideas from the Global South.
• Further, our Presidency has not only seen the largest-ever participation from African countries but has also pushed for the inclusion of the African Union as a permanent member of the G-20.
• The G-20 2023 Action Plan on Accelerating Progress on SDGs will spearhead the future direction of the G-20 towards implementing SDGs.
• We believe there is a need to move away from a purely restrictive attitude of what should not be done, to a more constructive attitude focusing on what can be done to fight climate change.
• The Chennai High Level Principles (HLPs) for a Sustainable and Resilient Blue Economy focus on keeping our oceans healthy.
• A global ecosystem for clean and green hydrogen will emerge from our Presidency, along with a Green Hydrogen Innovation Centre.

Global Biofuels Alliance

• In 2015, we launched the International Solar Alliance. Now, through the Global Biofuels Alliance, we will support the world to enable energy transitions in tune with the benefits of a circular economy.
• Just like Yoga became a global mass movement for wellness, we have also nudged the world with Lifestyles for Sustainable Environment (LiFE).
• Due to the impact of climate change, ensuring food and nutritional security will be crucial. Millets, or Shree Anna, can help with this while also boosting climate-smart agriculture.
• In the International Year of Millets, we have taken millets to global palates. The Deccan High Level Principles on Food Security and Nutrition is also helpful in this direction.
• Technology is transformative, but it also needs to be made inclusive. In the past, the benefits of technological advancements have not benefited all sections of society equally.
• For instance, the billions across the world that remain unbanked, or lack digital identities, can be financially included through digital public infrastructure (DPI).

Significance of G-20 Summit in India

• Our G-20 Presidency is working on bridging the gender digital divide, reducing labour force participation gaps and enabling a larger role for women in leadership and decision-making.
• For India, the G-20 Presidency is not merely a high-level diplomatic endeavour. As the Mother of Democracy and a model of diversity, we opened the doors of this experience to the world.
• The G-20 Presidency has become a people-driven movement. Over 200 meetings will have been organised in 60 Indian cities across the length and breadth of our nation.
• Our G-20 Presidency strives to bridge divides, dismantle barriers, and sow seeds of collaboration that nourish a world where unity prevails over discord, where shared destiny eclipses isolation.

Conclusion

• As the G-20 President, we had pledged to make the global table larger, ensuring that every voice is heard and every country contributes. We have matched our pledge with actions and outcomes.