The Hindu Today News & Editorials – 16 February 2021

The Hindu Editorial Analysis

1) Farm laws and ‘taxation’ of farmers.

 To show Indian agriculture as being net taxed to argue for the farm laws has poor conceptual validity.

GS-2: Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

GS-3: Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System-objectives, functioning, limitations, revamping;


Context:

  1. For past three decades, a majors stapes taken to liberalizing Indian agriculture was that farmers were “net taxed”. Means “incomes of farmers were kept artificially lower” than what they should have been.
  2. It was argued that this “net taxation” existed because protectionist policies deprived farmers from higher international prices, and administered price system deprived farmers of higher domestic market prices.
  3.  If there were more liberal domestic markets policy and freer, fare global trade, prices received by farmers would rise.

 

The net taxation of agriculture:

  1. The farm laws are necessary to end the net taxation of agriculture. For this purpose, data on Producer Support Estimate (PSE) are used.
  2. A recent study found that by Producer Support Estimate (PSE) in Indian agriculture was –6% (negative) between 2014-15 and 2016-17.
  3. For the developed country  PSE was +18.2% in the Organisation for Economic Co-operation and Development (OECD) countries, +19.6% in the European Union countries and +9.5% in the U.S.
  4.  The farm laws would weaken restrictive trade and marketing policies in India and “get the markets right”. This, in turn, would eliminate negative support and raise farmers’ prices.

 

Milk is Best Example of liberal domestic markets policy:

  1. There is no Minimum Support Price (MSP) in milk, and a substantial share of milk sales takes place through the private sector, including multinationals like Nestle and Hatsun.
  2. Yet, India’s milk sector is growing faster than the food grain sector. If the milk sector can grow without MSP and with private corporate, why cannot other agricultural commodities.

 

The Producer Support Estimate (PSE) and its estimation:

  1. The PSE is estimated using a methodology advocated by the OECD. The OECD defines the PSE as “the annual monetary value of gross transfers from consumers and taxpayers to agricultural producers, measured at the farm gate level, arising from policies that support agriculture”
  2. In other word “PSE is an indicator of the annual gross transfers from consumers and taxpayers to agricultural producers, measured at the farm gate level, arising policy measures that support agriculture, regardless of their nature, objectives or impacts on farm production or income”
  3. The PSE has two components. The first is market price support (MPS). MPS is that part of the gross transfers to producers arising from “a gap between domestic market prices and border prices of a specific agricultural commodity”.
  4.  The second is budgetary transfers (BOT). BOT includes all budgetary expenditures on policies that support agricultural production. PSE is the sum of MPS and BOT, expressed also as a percentage of the value of agricultural production.

 

The PSE Estimation (means international prices were volatile):

  1. The PSE (The Producer Support Estimate) for Indian agriculture in 2019 was ?-1,62,740 crore, or -5.5% of the value of production. Within the PSE,
  2. The PSE for Indian agriculture was +1.9% in 2000. It fell to -14% in 2004, -20.4% in 2008 and -27.8% in 2013.
  3. Afterwards, it rose to -3.8% in 2015 and -5.5% in 2019. These fluctuating PSEs mean nothing in terms of taxation or subsidization of producers.

 

How MPS (market price support) calculated:

  1. The MPS was negative while BOT was positive. The MPS was ?-4, 61,804 crore, or -15.5% of the value of production. The BOT was ?+2, 99,064 crore, or +10.1% of the value of production.
  2. The MPS for a commodity is calculated as the product of its annual production and the difference between its international and domestic prices.
  3.  The problem begins here: the international price is considered a benchmark with no reference to the actual possibilities of domestic producers obtaining that price.

 

The Hindu Today News & Editorials – 16 February 2021

 

The case of milk trade:

  1. The OECD estimates of MPS and PSE to show the perils of restrictive markets. By the same logic then, if the increasing penetration of private companies and the absence of MSP in milk are positive features, we should expect positive and rising MPS and PSE for milk.
  2. The milk had the highest negative MPS among India’s major agricultural commodities in 2019. The MPS for milk was ?-2, 17,527 crore, which accounted for about 47% of the total MPS in agriculture.
  3.  The MPS for milk was -37.5%. Thus, if we go by the OECD estimates, milk was one of the most heavily “taxed” agricultural commodities in India.
  4. The reason is that the OECD methodology, either for milk or for other commodities, does not offer any realistic assessment of the extent of taxation or subsidization.

 

The Question the methodology:

  1. The OECD numbers suggesting negative support, farmers, policymakers, and other stakeholders need to understand the pitfalls and limitations in the underlying methodology.
  2. The unpredictability in the inherent data, the total support can move from huge negative to huge positive.
  3. For India, the negative support as a percentage of the total value of agriculture production has substantially reduced in recent years.
  4. It is possible that support to Indian farmers in the near future becomes one of the highest in the world due to pitfalls in the OECD methodology.
  5. This might set alarm bells ringing, particularly in the developed countries, which may aggressively question India’s support measures.

 

The lack of logic in debates:

  1. The use of OECD estimates to (a) highlight the overall negative MPS for agriculture as a problem; (b) but conveniently remain silent on the negative MPS for milk;
  2.  And lastly (c) argue in the same breath that milk producers have benefited from the growth of private firms. The absence of logic in this line of argument is nothing but appalling.
  3. In fact, what is missed in these debates is the elephant in the room: the BOT. The West’s PSEs in agriculture are positive and higher than India’s because they have higher BOT than in India.

 

Conclusion:

  1. The MPS is a wrong measure of taxation in agriculture because the international price is no “true price” to be accepted as a benchmark. Further, a negative MPS, by itself, implies neither a government that squeezes revenues out of farmers nor the absence of absolute profitability in agriculture.
  2. By removing the link between support and farm production decisions, and investing instead in needed public services, governments can build an enabling environment in which farmers have the freedom to make business decisions in response to evolving market opportunities at home and abroad.
  3. “The beauty lies in the eye of the beholder”, the amount of subsidy depends on the methodology adopted for calculating it. Rather then it’s human value and rights.

 

2) “Deathtrap”

Labour reforms and technological advances within the fireworks industry are necessary

GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

GS-3: issues relating to planning, mobilization, of resources, growth, development and employment. And changes in industrial policy and their effects on industrial growth


Context:

  1. Thousands of workers in Tamil Nadu’s famed fireworks industry remain trapped in unsafe conditions despite an unending series of accidents that keep drawing attention to their plight.
  2.  The accident at an Industrial unit can overcome by strong legislation, labour reforms and technological advances within the fireworks industry are necessary.

 

The short-term action is not a solution:

  1. The statistical records shows, on the ground there is only short-term action like registration of cases, arrests, identification of causes, token inspections, issuance of warnings and safety advisories are taken.
  2. The causes are well documented but unlicensed units that have mushroomed in and outside industrial area mostly escape scrutiny till explosions occur.

 

16 February 2021: The Hindu Editorial Analysis

 

A greater concern is “the illegal sub-leasing”

  1.  A greater concern is the illegal sub-leasing of contracts for manufacturing crackers by licensed units. Preliminary investigation into the current tragedy has also revealed sub-leasing of works to several persons.
  2. The very nature of work in a hazardous industry makes sub-leasing a byword for safety compromise.
  3.  It leads to conversion of every shed in a manufacturing unit into a ‘factory’ in itself with inflammable chemicals stored all over.
  4. The sub-leasing and the limit on workers to be deployed is violated resulting in crowding in each shed. Supervision of the quantum of chemicals to be mixed or stored a key task to avoid friction becomes a casualty.

 

What is Sublease agreement?

  1. A sublease is a legally binding contract made between a tenant and a new tenant also known as a subtenant or a sublessee.
  2.  The sublease gives the subtenant the right to share or to take over the rented premises from the original tenant.

 

The labours and the piece-rate system:

  1. Untrained workers and the piece-rate system, which induces people to race to produce more units per day, have also caused accidents.
  2.  Eyewitness accounts suggest that in the latest accident, a worker, possibly fatigued, had hurriedly emptied semi-finished crackers triggering an explosion.
  3. While the Petroleum and Explosives Safety Organization under (DPII) Ministry of Commerce and Industry offer’s  training for workers, shortage of labour has prompted the industry to hire new recruits with limited skills.
  4.  The industry continues to be labour-intensive, although a decade ago Parliament was informed that automation of the hazardous manufacturing process would be undertaken.

 

How to Minimize Firework industrial Risks:

  1. Awareness: Inform Tenants about the Law, in order tenant to display any type of firework at rental property they must have the proper permits and insurance to do so.
  2. National Council on Firework Safety: it’s Always obey all local laws regarding firework, to include is a firework safety checklist,
  3. Require Renters and worker Insurance: Renters insurance covers your tenant’s personal belongings in the case of fire or smoke damage and worker insurance can help in health hazard.
  4. The man, animal and the environment norms: a balance between the interests of the firecracker industry and the right to public health, allowing the manufacture and sale of only “green” and reduced-emission or “improved” crackers,

 

Way forward:

  1.  The Periodic inspections at factories, sustained crackdown and stringent penal action against violators are non-negotiable.
  2. The Central and State governments must provide the needed manpower for enforcement agencies as the industry has grown manifold.
  3. A sustained political push for labour reforms and technological innovations within the industry is also essential.

 

3) Structural reforms for NEP 2020.

Governing bodies for universities and colleges must be reframed to make them equitable.

GS-2: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.


Context:

  1. The COVID-19 pandemic and also easing and normal academic activity being gradually resumed, the Central government’s New Education Policy (NEP) is back in focus.
  2. While the policy covers a wide range of issues,which include reforms in school and higher education, the emphasis should also be on the need to restructure the governing bodies for universities and autonomous colleges.

 

The Appointments and Management structure:

  1.  The system of appointments of vice-chancellors and syndicates, or governing councils, the key authorities for any university, needs to be revised.
  2. The appointments are often mired in controversies, with frequent reports in the past of aspirants for the post of vice-chancellors and membership of syndicates indulging in unethical practices to gain favour.
  3.  The NEP talks of creating new structures, such as a Board of Management, to replace the syndicate system. To implement this recommendation, State governments must bring in a slew of bold reforms, some of which are outlined below.

 

The system of syndicates:

  1. The existing system of syndicates, consisting of government nominees and those nominated by Governors or chancellors, should be dispensed with.
  2. Often, people lacking merit but with an eye on memberships of affiliation, building, and purchase committees, among others, get nominated to these bodies.

 

The Board of Management structure

  1. The system as vice-chancellor as chairman, the Board should consist of former vice-chancellors drawn from other universities, members drawn from industry, the alumni, eminent public intellectuals, principals of affiliated colleges on rotation and members representing the non-teaching staff.
  2.  The Board’s decisions should be taken by consensus or by a majority of the members present. Proceedings should be conducted in virtual mode and made available for stakeholders’ viewership.

 

The appointment of vice-chancellors

  1. For the appointment of vice-chancellors of universities, search committees constituted for such purposes must be thoroughly restructured.
  2. The government’s and chancellors’ role in such committees must be done away with.
  3. The practice of having government nominees, chancellor’s nominees and university nominees should be stopped.
  4. It should be replaced by drawing an eminent former vice-chancellor or academician of proven integrity and administrative capability for the post of chairman.

 

Regulation for Higher Education:

  1. Higher Education Commission of India (HECI) will be set up as a single overarching umbrella body for entire higher education, excluding medical and legal education.
  2.  HECI to have  four independent verticals  – National Higher Education Regulatory Council (NHERC) for regulation, General Education Council (GEC ) for standard setting, Higher Education Grants Council (HEGC) for funding,  and National Accreditation Council( NAC) for accreditation.
  3.  HECI will function through faceless intervention through technology, & will have powers to penalise HEIs not conforming to norms and standards.
  4.  The Public and private higher education institutions will be governed by the same set of norms for regulation, accreditation and academic standards.

 

The Transparent procedures

  1. Applications for the post of vice-chancellors can be invited through advertisements on the university website and through newspapers.
  2.  The Biodata and profile of candidates must also be published on the websites. The committee may then allot marks to candidates’ scholarship in terms of teaching and research, administrative capabilities, and capacity for fundraising.
  3. The scores obtained by candidates should be consolidated and the names of shortlisted candidates then submitted in the order of merit to chancellors for deciding on formal appointments.

 

The Issue of accountability:

  1. The Faculty members must mandatorily upload on university websites their annual plans for research and innovative modes of teaching.
  2. Their annual self-appraisal reports can be evaluated by external peers and their recommendations should be strictly implemented.
  3. There is an urgent need to overcome faculty shortage by recruiting teachers in order to overcome the existing trend of higher educational institutions relying on guest faculty.

 

Improve the higher education ecosystem:

  1. In order to improve the higher education ecosystem, excellence in teaching, research, innovation, entrepreneurship and social contribution must be encouraged.
  2. The NEP’s recommendations, like the introduction of four-year courses that have the option of re-entry and exit, one- or two-year postgraduate courses, and setting up of an Academic Bank of Credit for credit transfers, may be helpful.

 

Way forward:

  1. NEP 2020 aims to increase the Gross Enrolment Ratio in higher education including vocational education from 26.3% (2018) to 50% by 2035. 3.5 Crore new seats will be added to Higher education institutions.
  2. NEP makes recommendations for motivating, energizing, and building capacity of faculty thorugh clearly defined, independent, transparent recruitment, freedom to design curricula/pedagogy, incentivizing excellence, movement into institutional leadership. Faculty not delivering on basic norms will be held accountable.
  3. A new and comprehensive National Curriculum Framework for Teacher Education, NCFTE 2021, will be formulated by the NCTE in consultation with NCERT. By 2030, the minimum degree qualification for teaching will be a 4-year integrated B.Ed. degree .Stringent action will be taken against substandard stand-alone Teacher Education Institutions (TEIs).

Author: IAS Blogger

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