Survey pegs growth at 8-8.5% in ’22-23 #GS3 #Economy
The Economic Survey for 2021-22, tabled by Union Finance Minister Nirmala Sitharaman in the Lok Sabha, expects the GDP to grow by 9.2% this year and 8% to 8.5% in 2022-23, even as it expressed concerns about the implications of hardening inflation and energy prices.
“Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. The year ahead is also well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of the economy,” the Survey projected.
The Survey’s GDP growth estimate for the coming year is based on the assumption that ‘there will be no further debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of US$70-$75/bbl, and global supply chain disruptions will steadily ease over the course of the year’.
The Survey acknowledged the risks that have emerged at the time it was being written — the new COVID-19 variant, Omicron, sweeping across the world, inflation jumping up in most countries, and the cycle of liquidity withdrawal being initiated by major central banks.
It highlighted that the country’s macro-economic stability indicators on the external front, fiscal front as well as the financial sector health and inflation, were well-placed to take on the challenges of 2022-23.
‘One of the reasons’ for this comfortable position, the Survey argued, was the government’s unique response strategy that didn’t ‘pre-commit to a rigid response’ but ‘opted to use safety nets for vulnerable sections’ based on information.
While the 9.2% growth estimate for 2021-22 suggested a recovery above the pre-pandemic level of 2019-20, the Survey conceded that private consumption and segments such as travel, trade and hotels were yet to fully recover.
“The stop-start nature of repeated pandemic waves makes it especially difficult for these sub-sectors to gather momentum,” it said.
“Latest advance estimates suggest full recovery of all components on the demand side in 2021-22 except for private consumption. When compared to pre-pandemic levels, recovery is most significant in exports followed by government consumption and gross fixed capital formation,” it noted.
‘GDP ratio hit 29.6%’
The country’s investment to GDP ratio had hit 29.6% in 2021-22, the highest level in seven years, the Survey explained, attributing this capital formation to the government’s policy thrust on quickening the ‘virtuous cycle of growth via capex and infrastructure spending’ had increased capital formation in the economy.
“While private investment recovery is still at a nascent stage, there are many signals which indicate that India is poised for stronger investment,” it observed, citing record corporate profits in recent quarters and high mobilisation of risk capital by firms.
“Inflation has reappeared as a global issue in both advanced and emerging economies…. India does need to be wary of imported inflation, especially from elevated global energy prices,” it stated, even as it suggested that the double-digit wholesale price inflation in recent months would ‘even out’.
Can striking down an exception create new offence, asks HC #GS2 #Governance
The Delhi High Court on Monday asked if striking down the provision in Section 375 of the Indian Penal Code (IPC), which grants immunity to husbands against marital rape, as unconstitutional would lead to creating a new offence.
A Bench of Justices Rajeev Shakdher and C. Hari Shankar posted the query to advocate Karuna Nundy, who is representing two petitioners — RIT Foundation and All India Democratic Women’s Association — that are seeking to strike down the exception granted to husbands under the Indian rape law.
The Bench’s query came in view of arguments raised by some parties in the case that courts cannot create new offence. It asked Ms. Nundy whether there were precedents where courts had struck down a statutory provision even if it led to creation of a new offence.
The Bench elaborated that today if a wife files a complaint of rape against her husband and gets an FIR registered, the husband can move the court to strike it down. “Once she says he is her husband, there is no offence…,” the Bench remarked.
However, if the exception is struck down, the same relief is not available to the husband any more, the Bench said, adding, “So the question again is are we not creating an offence?”
Bunch of petitions
In India, marital rape is not defined in any statute or law. The High Court was hearing a bunch of petitions seeking to strike down the exception granted to husbands under the Indian rape law.
The exception says sexual intercourse by a man with his wife aged 15 years or above is not rape even if it is without her consent. In October 2017, the Supreme Court increased the age to 18 years.
Govt.’s stance sought
During the hearing, the court also asked the Centre’s counsel to clarify the stand of the government on the issue.
Ms. Nundy argued that until marital rape becomes an explicit offence it will remain “condoned”. “This case is about the moral right of a married woman to refuse unwanted, forcible sexual intercourse. It is about respecting the right of a wife to say no and recognising that marriage is no longer a universal licence to ignore consent,” she said.
Referring to a Supreme Court judgment, Ms. Nundy argued that women cannot be treated as a commodity and marriage does not make a “rapist a non-rapist”. “Not only do consequences to a specifically labelled offence deter it, they elevate the consciousness of those who understand where the boundaries are,” she argued.
Ms. Nundy further argued that the Indian Constitution is “transformative” in nature and this case is about “people versus patriarchy and bigotry”. The court will continue hearing the case on Tuesday.
Demand for MGNREGA work softens #GS2 #Governance
Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme has dropped from the peak of the first lockdown, but is still higher than pre-COVID levels, the Department of Economic Affairs said in its annual Economic Survey, noting that this is “an indicator of rural labour markets”.
However, it cautioned against drawing conclusions about the movement of migrant labour on the basis of MGNREGA employment, noting that the highest demand for work under the scheme was seen in States which are usually the destination of migrant workers, rather than source States.
More funds sought
Advocates for rural workers argued that the drop in demand is also due to funding constraints, and urged a significant increase in allocations for the scheme in Tuesday’s Union budget.
According to the Survey’s analysis, though demand for work stabilised after the second COVID wave with a maximum of 4.59 crore persons in June 2021, aggregate MGNREGA employment is still higher than pre-pandemic levels of 2019, after accounting for the seasonality of demand.
“The supply side effect of MGNREGA funding skews the picture of demand,” said Nikhil Dey, founder of the Mazdoor Kisan Shakti Sangathan, a union for unorganised rural workers across the country. “There is no doubt that demand went up during the lockdown and when money was available through the increased allocation,” he said, noting that the Centre had infused Rs. 40,000 crore worth of additional funding early in the first lockdown, meaning scheme administrators had sufficient money to cope with the hike in demand.
In 2021-22, on the other hand, additional funding was not available until late in the year when many States had already run out of money, forcing an artificial suppression in demand on the ground.
“For the upcoming 2022-23 financial year, activists have asked for a budget allocation of Rs. 2.6 lakh crore, which would cover the guaranteed 100 days of work for all active job card holders. But anything less than Rs. 1.4 lakh crore, which is the amount spent in 2020-21 plus inflation, will be a clear suppression of demand by the government,” said Mr. Dey.
The Survey also mapped the State-wise demand trends. “Intuitively, one may expect that higher MGNREGS demand may be directly related to the movement of migrant labour i.e. source States would be more impacted. Nevertheless, State-level analysis shows that for many migrant source States like West Bengal, Madhya Pradesh, Odisha, Bihar, the MGNREGS employment in most months of 2021 has been lower than the corresponding levels in 2020,” it said.
According to the Survey, demand has been higher for migrant recipient States like Punjab, Maharashtra, Karnataka and Tamil Nadu.
Mr. Dey noted that Karnataka, Tamil Nadu and Rajasthan have a record of administrative sensitivity and efficiency with regard to MGNREGA implementation even pre-COVID.
“These States also see high levels of short–term migration within their own borders,” added Rajendran Narayan, an assistant professor at Azim Premji University who is part of a research group on MGNREGA.
India, Russia hold discussion on UN Security Council agenda #GS2 #IR
Ahead of Russia’supcoming Presidency of the United Nations Security Council this month,India and Russia on Monday held consultations on the UNSC issues during the visit ofAmbassador Sergey Vasilyevich Vershinin, Deputy Minister of Foreign Affairs (DFM) of the Russian Federation. The discussion came in the backdrop of tensions between Russia and Ukraine over possible eastward expansion by NATO.
“The Russian delegation briefed India on its priorities during the 76th session of the U.N. General Assembly. Both sides also agreed to work closely together, given the common challenges faced and in keeping with their long standingspecial andprivilegedstrategicpartnership,” the Ministry of External Affairs (MEA) said in a statement.
Both sides held wide-ranging discussions on issues on the UNSCagenda and related developments. They agreed to deepen cooperation on issues of mutual interest at multilateral platforms.India has maintained a cautious position over the military tension bordering eastern Ukraine where Russia has rushed around a lakh additional soldiers and heavy armaments in the past weeks.
Official spokesperson of the Ministry Arindam Bagchi said last week India supports “peaceful resolution”of the crisis through “sustained diplomatic efforts”. Apart from close strategic ties with both Russia and Ukraine, India is also concerned about the wellbeing of a large number of its citizens who are resident in Ukraine.
Creating jobs via infra investments #GS3 #Economy
Principal Economic Adviser Sanjeev Sanyal on Monday sought to allay concerns over rising unemployment and asserted that the economy was creating a significant amount of new jobs. The government, he added, was also creating jobs through capital expenditure on infrastructure and providing job support via the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
“There are areas where the public sector is generating jobs, it may not be government jobs but when you are talking about capital expenditure on infrastructure, that is also a job created by government spending, the contractors’ workers may not be government employees, so there is that kind of job being created, and then you know support jobs like the MGNREGA are also forms of government jobs,” Mr. Sanyal said in reply to a query on lack of job creation in the public sector. He added that for a ‘regular government job’ there had always been a lot of demand in India. “This is not a new phenomenon … such incidents have happened in the past as well, well before COVID-type situation.”
The comments come amid ongoing controversy over recruitment in the Railways in which more than one crore applications were received for about 30,000 jobs. “There has been an attraction in India for regular government jobs and we have always heard, even in my childhood, that so many lakh people apply for so few numbers of jobs, so this is not a new phenomenon at all,” he said.
On inflation, Mr. Sanyal asserted that despite a spike worldwide, inflation in India was still within the tolerance threshold.
“The international situation is clearly in an environment where there are all kinds of pressures, particularly from oil prices… supply side shocks, chip shortages, cargo tariffs, etc. So these do have an impact. We are part of the world and imported inflation is an issue and we do need to take that into account,” he said.
Mr. Sanyal, however, added that the rest of the world was also in some ways responding to it. “It’s not like they are not doing it as well … A lot of effort is being put worldwide in trying to ease up all these supply side problems … don’t think of these things in linear fashion. Yes, there is a problem with imported inflation, but don’t begin to sort of extrapolate this into the future.”
Fortified rice supply in govt. schools raised #GS3 #Economy
The Centre has distributed 3.38 lakh metric tonnes of fortified rice till December 2021 through anganwadis and mid-day meal schemes at government schools, according to the Economic Survey released on Monday.
In 2019, the government approved a Centrally sponsored pilot scheme for fortification of rice for a period of three years beginning 2019-2020. The scheme is being implemented in 15 districts across as many States.
Last year, during his Independence Day speech, Prime Minister Narendra Modi announced that by 2024 rice made available under every government programme will be fortified to fight malnutrition.
Some public health experts have however raised concerns over fortification of rice as an effective tool to fight malnutrition and have said diversification of diet is more important.
Vaccination was key to reviving economy #GS3 #Economy
The COVID-19 pandemic posed the challenge of balancing livelihoods while saving lives, the Department of Economic Affairs said in the Economic Survey, tabled in the Parliament on Monday. It highlighted that vaccination played a critical role in minimising the loss of lives, boosted confidence in the economy for resumption of activity and contained the sequential decline in output due to the second wave.
With the global economy continuing to be plagued by uncertainty two years into the pandemic, with resurgent waves of mutant variants, supply-chain disruptions, and a return of inflation in both advanced and emerging economies, the DEA stressed that vaccination had served as more than a health response and was critical in helping reopen the economy, particularly contact-intensive services.
Therefore, it should be treated for now as a macro-economic indicator, it said. According to data in the Survey, 99% of the registered healthcare workers and 100% of frontline workers, 87% of the population aged between 18-44, 95% of the population aged between 45-60 and 89% of the population above 60 had been covered under the first dose.
The DEA observed that a strong and resilient social infrastructure became even more important during the pandemic.
“To save lives and livelihoods amid the COVID-crises, countries have adopted various strategies. India, the country with the second-largest population and a large elderly population, adopted a multi-pronged approach,’’ it said.
Given the nature of the pandemic, the health response, including vaccination strategy, remained critical. India, one of the young nations in the world, also faced the challenge to sustain the learning outcomes in schools, building skills and reskilling the population and ensuring employment and livelihood to one of the largest labour forces in the world.
The government’s response through ‘Atmanirbhar Bharat Abhiyan’ packages and other sector specific initiatives provided the necessary support to mitigate the adverse impact of the pandemic, it asserted.
India ranks third globally in forest area gain: Survey #GS3 #Environment
India has increased its forest area in the past decade and ranks third globally in average annual net gain in forest area from 2010-2020, the Department of Economic Affairs (DEA) said in the annual Economic Survey. India annually added an average 2,66,000 hectares of forest area over the period.
Forests covered 24% of India’s geographical area, accounting for 2% of the world’s total forest area in 2020. The top 10 countries account for 66% of the world’s forest area. Brazil (59%), Peru (57%), Democratic Republic of Congo (56%) and Russia (50%) have half or more of their geographical area under forests.
“Much of India’s increase in forest cover from 2011-21 is attributed to enhancement in very dense forest cover, which rose by approximately 20%,” the DEA said. “Open forest cover also improved by 7%… Going forward, there is need to further improve forest and tree cover. Social forestry could also play a significant role in this regard,” it added.
The latest biennial ‘India: State of Forest Report’ has elicited criticism from independent experts, who have questioned the methodology used to count forests. Officials in the environment ministry, while asserting that India’s definitions of ‘forest’ and ‘tree cover’ were consistent with global definitions, acknowledged that most of the increases had occurred outside areas traditionally marked as ‘forest’ and included plantations and orchards.
India calls for ‘quiet diplomacy’ on Ukraine #GS2 #IR
India called for quiet diplomacy and the peaceful resolution of the Russia-Ukraine tensions. Speaking at the UN Security Council (UNSC) meeting on Ukraine, India’s Permanent Representative to the UN also called for the immediate de-escalation of the situation while taking into account the security interests of all.
“India’s interest is in finding a solution that can provide for immediate de-escalation of tensions taking into account the legitimate security interests of all countries and aimed towards securing long term peace,” Mr. Tirumurti said.
India was one of three countries (Kenya and Gabon were the others) that abstained from a procedural vote on whether or not Ukraine would be discussed. China and Russia voted against the move. The U.S., which initiated the meeting, and nine other countries voted to hold the discussion.
Mr. Tirumurti reiterated India’s support for a July 2020 ceasefire, the 2014 Minsk Agreement and the Normandy Process. The Normandy Format refers to discussions held between Russia, Ukraine, Germany and France, who have met since 2014, when Russia annexed Crimea. The four countries met in Paris on January 26 and are set to meet in Berlin in two weeks.
India also called for quiet diplomacy as both the West, led by the U.S., and Russia have been talking tough publicly. “Quiet and constructive diplomacy is the need of the hour. Any steps that increase tension may best be avoided by all sides in the larger interest of securing international peace and security,” Mr. Tirmurti said
More than 20,000 Indian nationals — including students — live in Ukraine. Mr. Tirumurti told the Council their safety was a priority.
Railways to see ‘very high’ capex over 10 years: Survey #GS3 #Economy
In the next 10 years, the railway sector will see a ‘very high level’ of capital expenditure (capex) to cater to the passenger demand, while the modal share of railways in freight will rise to 40-45% from the present level of 26-27%, the Department of Economic Affairs said in the annual Economic Survey.
“The next 10 years will see a very high level of capex in the railway sector as capacity growth has to be accelerated such that by 2030 it is ahead of demand,” the Survey said.
Noting that up to 2014, the capex on railway was barely Rs. 45,980 crore per annum, the government said: “The capex outlay for 2021-22 is Rs. 2,15,000 crore.”
It added that as more projects are taken on hand and several sources of capital funding are developed, the capex will increase further in the coming years and the railway system will actually emerge as ‘an engine of national growth’.
The Survey added that despite facing the unprecedented COVID-related challenges, Indian railways had carried 1.23 billion tonnes of freight and 1.25 billion passengers during FY21.
“Despite COVID-19 pandemic revenue-earning freight loading (excluding loading by Konkan Railway Corporation Ltd. was 1,230.9 million tonnes in 2020-21 as compared to 1,208.4 million tonnes during 2019-20. Passengers originating were 1,250 million in 2020-21 as compared to 8,086 million in 2019-20,” the Survey pointed out.
Core sectors grow 3.8%, analysts see mixed signs #GS3 #Economy
Output from India’s eight core sectors grew 3.8% in December 2021, accelerating marginally from the 3.4% increase recorded in November, but still far from the healthy 8.4% year-on-year rise in October. Though output dipped year-on-year in just two sectors, crude oil (-1.8%) and steel (-1%), economists said signals from the data were mixed.
Cement output recovered from a 3.6% contraction in November to grow almost 13%. Natural gas rose 19.5%.
“Many high-frequency indicators from December have trailed the growth recorded in October so we expect industrial output to report a feeble rise of less than 2%, lower than core sectors’ growth for the fourth consecutive month,” said ICRA chief economist Aditi Nayar.
Care Ratings also expects core sector growth to remain muted going forward. “The rapid surge in COVID-19 cases… and imposition of fresh curbs could further weigh on core sector growth over the coming months,
‘Adopt UNCITRAL for cross-border insolvency #GS3 #Economy
The Economic Survey 2021-22 has called for a standardised framework for cross-border insolvency as the Insolvency and Bankruptcy Code (IBC) at present does not have an instrument to restructure firms involving cross-border jurisdictions.
The proposal to frame a robust cross-border insolvency framework has already been highlighted in the report of the Insolvency Law Committee, which had recommended the adoption of the United Nations Commission on International Trade Law (UNCITRAL), with certain modifications to make it suitable to the Indian context. “UNCITRAL on Cross-Border Insolvency, 1997 has emerged as the most widely accepted legal framework to deal with cross-border insolvency issues,” the Survey said.
It has been adopted by 49 countries so far, such as Singapore, the U.K., the U.S., South Africa and Korea. This law works on four main principles: access, recognition, cooperation and coordination.