Weekly Current Affairs (22nd to 30th November 2023) Part - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Rural Wage Disparities

Context: In a recent revelation by the Reserve Bank of India (RBI), the glaring gaps in rural wages across various Indian states have come to light, delineating a vast divergence in earnings between farm and non-agricultural workers.

• This revelation sparks a pressing need for comprehensive policies that can mitigate these disparities, ensuring a more equitable livelihood for the country's agricultural and non-agricultural labor force.

Insights from the RBI Data on Rural Wages

• Rural Economic Turmoil: The fiscal years 2021-22 and 2022-23 have been tumultuous for the rural economy due to the destabilizing impact of the Covid-19 pandemic, leading to disruptions in employment and income levels. Elevated inflation rates and increased interest rates in 2022-23 further exacerbated the situation, significantly affecting job opportunities and income stability across rural areas nationwide.
• Disparity in Rural Wages: Madhya Pradesh emerges with rural wages notably below the national average, with agricultural and non-agricultural workers earning Rs 229.2 and Rs 246.3 daily, respectively. In stark contrast, Kerala boasts the highest wages across sectors, showcasing rural farm workers earning Rs 764.3 per day. The disparity extends to rural construction workers, with Kerala at Rs 852.5 daily and Madhya Pradesh lagging at Rs 278.7.
• National Average Wages
  • Agricultural workers: Rs 345.7
  • Non-agricultural workers: Rs 348
  • Construction workers: Rs 393.3
• Stagnation in Rural Income Growth: Despite sporadic peaks in wage growth during 2022-23, the prospects for rural income remained subdued, indicating a stagnant real rural wage growth and an incomplete recovery in the unorganized segment of the economy. Although the demand for jobs under MGNREGA decreased slightly, it continued to surpass pre-pandemic levels, signaling an incomplete recovery, particularly in the unorganized sector.

Factors Propelling Wage Inequality

• Economic Disparities: Disparities in economic development among states translate into significant wage differences. Advanced industrial regions tend to offer higher-paying non-agricultural jobs compared to agrarian-centric areas.
• Policy Interventions: Diverse state-level policies on minimum wages, labor regulations, and social security schemes contribute to wage disparities. States with stringent labor laws may offer higher wages but might witness fewer job opportunities.
• Market Dynamics: Wage rates align with market demand for specific skills or labor. Regions with high demand and limited workforce supply in certain sectors tend to offer higher wages.
• Cost and Standard of Living: Variations in the cost of living directly impact wage disparities. Areas with higher living standards often offer higher wages to compensate for elevated expenses.
• Geographical Influences: Weather conditions and agricultural cycles influence work availability in rural areas, leading to seasonal wage variations.
• Migration and Labor Mobility: Labor mobility from low-wage regions to high-paying areas creates imbalances in wages, impacting both source and destination regions' wage structures.

Governmental Initiatives and the Road Ahead

• Empowering Rural Economies: Encouraging diversification in rural economies by promoting allied sectors such as animal husbandry, fisheries, and agro-processing could generate supplementary income sources, reducing reliance solely on agriculture.
• Technological Integration: Integrating technological advancements into agricultural practices can enhance productivity, providing access to modern farming techniques, machinery, and market linkages, thereby elevating rural incomes.
• Infrastructure Development: Investing in rural infrastructure, including better roads, irrigation systems, and connectivity, can stimulate economic activities, create job opportunities, and attract industries to rural areas, thereby boosting wages.
• Ensuring Migrant Workers' Welfare: Implementing policies safeguarding the rights and livelihoods of migrant workers can incentivize a balanced distribution of labor across states, ensuring fair wages, living conditions, and social security benefits.
• Promotion of Agri-Entrepreneurship: Supporting rural entrepreneurship by providing incentives, mentorship, and market access to aspiring agripreneurs could create a ripple effect, generating jobs and augmenting rural incomes.

Conclusion

The revelation of staggering disparities in rural wages across Indian states is a poignant call to action for policymakers and stakeholders. The path ahead necessitates robust measures focused on equitable distribution, policy reforms, technological advancements, and holistic rural development initiatives. Bridging this wage chasm is not just a socio-economic imperative but a cornerstone in nurturing balanced, sustainable growth for India's diverse workforce.

Battery Waste Management Rules, 2022

Context: In a world increasingly reliant on batteries for various purposes, the Battery Waste Management Rules of 2022 emerged as a beacon of hope towards a more sustainable future.

• However, despite their progressive nature, these rules exhibit critical gaps that could impede efficient recycling and pose challenges in handling battery waste effectively.

Understanding the Battery Waste Management Rules, 2022

The rules encompass all battery types, ranging from portable batteries to industrial and electric vehicle batteries. They establish the concept of Extended Producer Responsibility (EPR), holding battery producers accountable for the collection, recycling, and use of recovered materials in new batteries. Prohibition of landfill disposal and incineration, along with the introduction of recovery targets, further highlight the guidelines' environmental focus.

Key Components of the Rules:

• Extended Producer Responsibility (EPR): Producers mandated to collect and recycle waste batteries.
• Online Portal for EPR Certificates: Facilitating exchange between producers and recyclers.
• Recovery Targets: Aiming for 70% material recovery by 2024-25, scaling to 90% in subsequent years.
• Principle of Polluter Pays: Imposing environmental compensation for non-compliance.

Identifying Crucial Gaps in the Rules

Despite their laudable objectives, the rules exhibit several shortcomings that necessitate immediate attention:

• Labeling and Information Deficiency: Inadequate details on chemical composition hinder effective recycling.
• Design Complexity: Intricate assembly methods pose challenges in battery disassembly.
• EPR Implementation and Budgeting: Lack of clarity on budget allocation for collection and recycling.
• Informal Sector Competition: Potential rise of hazardous recycling practices due to informal collectors.
• Safety Standards and Handling: Absence of regulations for safe storage and transport of batteries.

Addressing the Gaps: A Path Towards Improvement

The remedy to these challenges lies in strategic policy revisions, technological innovations, and collaborative efforts:

• Policy Refinement: Mandate comprehensive labeling and recyclability information on batteries, inspired by the EU's Battery Directive.
• Incentivize Recycling-Friendly Design: Encourage standardized joining methods and eco-friendly materials in battery production.
• Budget Allocation Guidelines: Define clear budget mandates for effective waste collection and fair compensation to recyclers.
• Environmental Auditing and Standards: Strengthen auditing rules for compliance with environmental and safety measures.
• Technological Advancements: Invest in R&D for innovative recycling technologies and cutting-edge processes.

2nd CII India Nordic-Baltic Business Conclave 2023

Context: The 2nd CII (Confederation of Indian Industries) India Nordic-Baltic Business Conclave 2023 recently convened in New Delhi, igniting a beacon for collaboration between India and the Nordic Baltic Eight (NB8) countries.

• Renowned for their technological acumen and innovation, this convergence aimed to bolster ties and foster mutual growth through shared endeavors.

Understanding Nordic Baltic (NB) 8

The NB8 stands as a coalition uniting the Nordic countries—Denmark, Finland, Iceland, Norway, and Sweden—with the Baltic states of Estonia, Latvia, and Lithuania. These nations, bound by historical, cultural, and geographical affinities, leverage their unity to propel cooperation across diverse spheres encompassing politics, economics, trade, security, and culture.

Key Highlights from the Conclave

• Food Processing and Sustainability: Efforts concentrated on revolutionizing food systems by integrating sustainable practices and sharing innovations between India and the Nordic-Baltic nations. The discussions aimed at addressing global challenges holistically, considering economic, social, and environmental dimensions.
• Blue Economy and Maritime Collaboration: The emphasis was laid on managing the Blue Economy efficiently to fortify Global Supply Chain Resilience while fostering sustainable marine practices and innovation. It envisioned enhanced maritime cooperation between India and the Nordic-Baltic nations.
• Renewable Energy Integration: Discussions revolved around India's stride towards Renewable Energy integration, focusing on identifying resources, policy support, energy storage, and cutting-edge technology initiatives. The aim was to garner support from the innovative Nordic-Baltic economies in implementing clean energy technologies.
• Transition to Industry 5.0: Collaboration discussions centered on leveraging advanced technologies like AI (Artificial Intelligence), IoT, and smart manufacturing to amplify productivity and efficiency in the manufacturing sector. This collaboration sought to bolster India's aspiration of achieving developed nation status by 2047.
• Green Financing for Climate Action: The conclave underscored the pivotal role of climate finance in steering green and sustainable transitions. It explored strategies to drive funding and investments, fostering collaboration between India and the Nordic-Baltic countries to propel climate action.
• Information Technology and AI Collaboration: Efforts were directed towards exploring potential cooperative areas in leveraging IT and AI between India and the Nordic-Baltic countries. Skill development initiatives were discussed, aiming to foster inclusive growth in AI and IT.
• Resilient Supply Chain and Logistics: Discussions highlighted the imperative need for robust and efficient supply chains aligned with India's Logistics Policy. The conclave aimed to explore collaboration prospects for strengthening global value chains using technological advancements.

Economic Relations between India and the Nordic-Baltic Countries

• The economic tapestry woven between India and the Nordic-Baltic countries showcases promising figures in trade, investments, and sectoral engagements. Cumulative Foreign Direct Investment (FDI) and burgeoning trade numbers underscore mutual investment interests and bilateral partnerships.

Path Forward

• The road ahead beckons towards a deeper and diversified bilateral trade landscape. Fostering collaborations across sectors such as renewable energy, technology, healthcare, agriculture, and manufacturing stands pivotal. Mitigating trade barriers and facilitating investments while ensuring a conducive business environment remains imperative for sustained growth.

In conclusion, the 2nd CII India Nordic-Baltic Business Conclave 2023 has not only fortified existing partnerships but has also laid the foundation for pioneering collaborations that hold the potential to shape a future steeped in innovation, sustainability, and mutual prosperity.

Social Audits in MGNREGS

Context: In recent revelations from the Management Information System (MIS) on Social Audit maintained by the Ministry of Rural Development (MoRD), a profound insight into the status and hurdles of social audits within the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) emerges.

Examining Progress Across States and Union Territories

The MIS data reflects that out of the 34 States and Union Territories, only six have exceeded the 50% mark in executing social audits of works carried out under MGNREGS in gram panchayats. Kerala stands out as a leader, achieving an exemplary 100% coverage of gram panchayats in social audits, illustrating a comprehensive and inclusive approach. Following Kerala, five other states have surpassed the 50% mark in social audit coverage: Bihar (64.4%), Gujarat (58.8%), Jammu and Kashmir (64.1%), Odisha (60.42%), and Uttar Pradesh (54.97%).

• However, a stark contrast emerges with only three states covering 40% or more villages: Telangana (40.5%), Himachal Pradesh (45.32%), and Andhra Pradesh (49.7%). Alarmingly, among the poll-bound states, the figures are notably low—Madhya Pradesh (1.73%), Mizoram (17.5%), Chhattisgarh (25.06%), and Rajasthan (34.74%).

Understanding Social Audits

• A social audit constitutes a process of scrutinizing official records to verify if reported expenditures align with the actual expenses on the ground. Embedded within the MGNREGA Act of 2005, it acts as an anti-corruption mechanism, encompassing quality checks of infrastructure created, financial appropriation in wages, and procedural adherence.

Legislative Foundation and Framework

• Section 17 of the MGNREGA mandates the gram sabha to monitor works, forming the legal basis for social audits. The Audit of Scheme Rules, 2011, outlines procedures for social audits and duties of various entities. Social Audit Units operate independently, ensuring impartial evaluations. These units receive funds amounting to 0.5% of the previous year's MGNREGA expenditure, promoting autonomy.

Challenges in Implementation

• Several challenges impede effective social audits, including limited awareness among local communities about the legal framework, constrained financial resources for audit units, political influence, lack of coordination among authorities, and insufficient follow-up on audit reports.

Deciphering MGNREGS

• The MGNREGS, launched in 2005, is a monumental work guarantee program aiming to provide at least 100 days of employment to rural households engaging in unskilled manual work. It emphasizes enhancing livelihoods, ensuring social inclusion, and fortifying Panchayati Raj Institutions (PRIs).

Landmarks in MGNREGA Accomplishments

• Noteworthy achievements include GIS-Based Planning for Gram Panchayats, National Electronic Fund Management System (NeFMS)/DBT ensuring transparent wage disbursement, SECURE for estimate preparation, and Skill Development initiatives benefitting MGNREGA workers.

New Ventures in Program Implementation

• Recent initiatives like Amrit Sarovar, Jaldoot App, and Ombudsperson aim to bolster the MGNREGA implementation.

Conclusion

The MGNREGS continues to be a pivotal force in rural development, yet challenges persist in the efficacious execution of social audits, necessitating a collective effort to overcome impediments and harness the program's full potential for inclusive growth and equitable progress.

Special Category Status

Context: In a bid to address its socio-economic challenges, Bihar has recently made a resolute plea to be granted Special Category Status (SCS). This call arises from the revelations of the "Bihar Caste-based Survey, 2022," indicating that a substantial portion of Bihar's population continues to grapple with poverty. But what exactly does Special Category Status entail, and why is Bihar pressing for it?

Understanding Special Category Status

Special Category Status, a classification granted by the Central government, is aimed at aiding the development of states facing geographical and socio-economic disadvantages. Initiated on the recommendations of the 5th Finance Commission in 1969, this status primarily addresses economic and financial aspects, unlike special status that grants enhanced legislative and political rights.

Criteria and Benefits

• The parameters for SCS eligibility, such as hilly terrain, low population density, strategic location, economic backwardness, and nonviable state finances, are crucial factors. States accorded this status historically received approximately 30% of central assistance. 
• However, changes in the 14th and 15th Finance Commissions led to increased devolution of funds to all states. Despite this shift, SCS states continue to benefit from increased funding percentages in various centrally-sponsored schemes.

Why Bihar Seeks SCS?

• Bihar's plea for SCS hinges on several critical issues. Economic disparities stemming from limited industrial development, the impact of natural calamities disrupting livelihoods, inadequate infrastructure, and high poverty rates are among the primary concerns. With approximately 94 lakh impoverished families, Bihar seeks SCS to access funds necessary for welfare measures and development projects amounting to around Rs 2.5 lakh crore over the next five years.

SCS: Bihar's Eligibility and Other States' Demands

• While Bihar meets most SCS criteria, its lack of hilly terrain poses a challenge to infrastructural development. This raises the need for a revised methodology to address the state's socio-economic backwardness. Meanwhile, other states like Andhra Pradesh and Odisha have also sought SCS due to revenue loss and vulnerability to natural disasters, respectively, facing repeated denials from the Central government.

Challenges and Concerns

• Granting SCS raises concerns regarding resource allocation, dependency on central assistance, and effective implementation. Balancing funds among states, preventing over-reliance on central aid, and ensuring efficient fund utilization are key challenges in implementing SCS.

The Way Forward

• To ensure fairness and transparency, it's essential to redefine SCS criteria based on socio-economic indicators and infrastructure development. Encouraging comprehensive development plans focusing on sustainable growth, infrastructure, and human capital enhancement is crucial. Gradual reduction of states' dependency on central assistance and the promotion of self-sufficiency must be part of a holistic development strategy.

Conclusion

Bihar's quest for Special Category Status underscores the urgent need to address its socio-economic challenges. However, this endeavor also highlights the necessity for a comprehensive and redefined approach to ensure equitable development across states, fostering self-sufficiency and sustainable growth strategies.

Dollarisation and Economic Shifts

Context: Argentina stands at a crucial juncture grappling with severe inflation and extensive poverty, prompting considerations of dollarisation as a potential solution. Recently elected, the President of Argentina has proposed replacing the Argentine Peso with the United States Dollar. However, the immediate execution of this transition seems improbable due to Argentina's limited dollar reserves.

Exploring the Potential of Dollarisation

• Stabilizing Inflation: Dollarisation presents a promising avenue to combat hyperinflation by introducing a stable currency, breaking the cycle of rising prices caused by uncontrolled money supply. This stability fosters confidence, encouraging investments and consumer spending.
• Enhanced Trade Opportunities: Adopting the dollar incentivizes an export-focused strategy, attracting foreign investors and stimulating foreign trade. This emphasis on exports can significantly fortify economic growth and stability.
• Long-Term Economic Planning: A stable dollar value facilitates better long-term economic planning. Businesses, both local and international, can make more accurate forecasts and investments without being hindered by the volatility of a depreciating domestic currency.
• Mitigated Speculative Risks: Dollarisation has the potential to reduce speculative risks linked to fluctuating exchange rates, attracting foreign investors by offering stability and thereby promoting capital inflow and economic growth.
• Fiscal Discipline: Relinquishing control of monetary policy under dollarisation compels governments to depend on fiscal policies for economic stability. This shift could encourage more prudent fiscal management, curbing overspending and promoting economic discipline.

Ecuador's Experience and Insights

Drawing insights from Ecuador's journey post-dollarisation in 2000, significant economic progress was witnessed. Reduced inflation rates, decreased debt ratios, and improved social welfare highlighted the potential benefits. However, it's crucial to note that Ecuador's success wasn't solely attributed to dollarisation; factors like oil and gas reserves, government intervention, and social spending played pivotal roles.

Challenges on the Road to Dollarisation

• Policy Constraints: Dollarisation significantly limits a country's ability to autonomously manage monetary policy, impacting responses to economic downturns.
• Economic Shock Vulnerability: Fixed currencies may render dollarised economies more susceptible to external economic shocks, lacking the flexibility to adjust exchange rates swiftly.
• Limited Export Competitiveness: Loss of control over exchange rates might restrict a nation's ability to leverage currency devaluation for enhancing export competitiveness.
• Failure to Address Internal Imbalances: Dependency on a foreign currency might overshadow the need for internal structural reforms crucial for sustained economic development.

Understanding De-dollarisation

• Definition and Reasons: De-dollarisation refers to the deliberate process of reducing reliance on the US dollar in a country's financial system or economy. Governments might pursue this to assert economic sovereignty, mitigate dollar fluctuations, or seek independence in global finance.
• Strategies for De-dollarisation: This involves diversifying currency reserves, promoting alternative currencies in trade agreements, establishing currency swap agreements, or encouraging regional currencies in financial transactions.

Conclusion: Navigating the Terrain of Dollarisation

Dollarisation, when complemented by effective domestic policies, holds promise for economic success. However, its effectiveness lies in nuanced policy execution, balancing stability advantages with the necessity for independent economic strategies.