What the continued distress in informal labour market says

 

Ishan Bakshi writes: It points towards a continuing divergence in the fortunes of the formal and informal parts of the economy.

Economic data released over the past few weeks suggests that the Indian economy has emerged from the second wave of the pandemic better than most expected. Two broad points emerge. First, although the second wave was far more virulent, the impact of the localised restrictions imposed during this period on economic activity was less damaging than observed last year. And second, in the weeks and months thereafter, large parts of the economy are almost back to pre-Covid levels. However, these data points mask the distress lingering in large parts of the informal economy.

The informal/unorganised sector in India accounts for roughly half of the total value added in the economy (52.4 per cent in 2017-18), and employs around 90 per cent of the labour force. The extent of distress that continues to persist in this part of the economy — at least in rural areas — can be gauged from the state of the informal labour force. This can be gleaned from the MGNREGA data.

In the first quarter (April-June) of the ongoing financial year, the number of households demanding work under MGNREGA, while higher than pre-Covid levels, was lower than last year. There could be two possible explanations for this. One, that the extent of distress in the labour market last year was of a much higher magnitude. Or two, that the spread of the pandemic in rural areas this year curtailed the registration of households demanding work under MGNREGA.

In the second quarter (July-September), however, the number of households demanding work this year was not only around the same level as last year, but was also significantly higher than the pre-Covid level (2019-20). This signals two possibilities.

First, that sections of the informal labour force in rural areas and the migrant households who have not returned to urban areas, were unable to find non-farm employment, and had to rely on MGNREGA. This implies that large parts of the informal economy — sectors like manufacturing, construction, trade and transport, where those currently demanding work under MGNREGA would have normally found jobs — were operating well below their pre-Covid levels in the second quarter as well.

Second, it is also plausible that to the extent that employment opportunities were available, a section of the informal labour force simply opted for whatever work was available at depressed wage rates, supplementing its income by seeking work under MGNREGA. After all, in the absence of safety nets, at current per capita income levels, few can afford to stay unemployed for long and look for remunerative employment. (MGNREGA also provides an avenue for these households to rebuild their buffers, which would have been depleted while dealing with the fallout of the second wave.)

The situation is unlikely to be materially different for the urban informal labour force considering that even formal employment in some of these sectors (trade, accommodation and restaurants) has been badly hit, as revealed by the latest Quarterly Employment Survey. This implies that even a downward trending unemployment rate will not be an accurate gauge of labour market distress.

This level of sustained distress in the informal labour market points towards a continuing divergence in the fortunes of the formal and informal parts of the economy. For, if both formal and informal segments were rebounding at an equal pace, then surely, the labour market distress in both these segments should also have been dissipating, even if with a lag, at similar momentum. After all, the value added per worker is unlikely to rise dramatically in the informal economy. It is more likely to rise in the case of the relatively larger firms in the formal sector. This is in line with the first quarter results of the listed companies which show that while the bigger companies flourished, the smaller ones (those in the range of Rs 0-25 crore) continued to be mired in distress.

This also suggests that in sectors with a large informal presence — construction (where three-fourths of the overall value-added was by the informal segment in 2017-18), trade, transport and communication (value added by the informal segment ranges from 47.7 per cent to 86.6 per cent), real estate and professional services (roughly half the value-added is by the unorganised segment) and manufacturing (where between 20-25 per cent of the value-added is by the unorganised segment) — the relatively larger firms in the formal sector would have gained at the expense of the unorganised.

Thus high-frequency indicators, which indicate that the economy is operating at more than 90 per cent of its pre-Covid level — even surpassing it in many sectors — do not reflect the distress in the informal economy or among the smaller firms in the formal economy. Simply extrapolating the performance of the organised sector to that of the unorganised, as may be the case with some estimates, would thus present an inaccurate picture of the Indian economy.

One outcome of this sustained divergence between the formal and the informal labour force is the worsening of the income distribution. To the extent that it endures — even when the economy had recovered to pre-Covid levels during the second half of last year, the number of households demanding work under MGNREGA remained significantly higher than pre-Covid levels — this loss in purchasing power of the lower half of the distribution chain would translate to the aggregate household consumption basket shifting towards that of the relatively affluent households. This would raise demand for the less labour-intensive services and high-end/imported manufactured products and reinforce the current labour market trends.

How quickly, and to what extent, the informal economy can return to its pre-Covid level of value-added and employment is debatable. While during demonetisation, a badly bruised informal sector clawed its way back, the disruption this time is of a much higher magnitude. This labour market scarring has broader implications for aggregate consumption and investment, and indicates subdued medium-term growth prospects.

This column first appeared in the print edition on October 4, 2021 under the title ‘Unmask the distress’. ishan.bakshi@expressindia.com

Source: Indian Express, 4/10/21

Quote of the Day

 

“Our lives are defined by opportunities, even the ones we miss.”
F. Scott Fitzgerald

“हमारा जीवन अवसरों से परिभाषित होता है, उन अवसरों से भी जिन्हें हम जाने देते हैं।”
एफ़ स्कॉट फिट्ज़जेराल्ड

Shanti Swarup Bhatnagar Award 2021

 India’s highest science award called “Shanti Swarup Bhatnagar Award 2021” was presented to the 11 scientists on the occasion of 80^th foundation day of Council for Scientific & Industrial Research (CSIR).

Key Facts

• Shanti Swarup Bhatnagar (SSB) award has been named after the founder & Director of CSIR, late Dr Shanti Swarup Bhatnagar.
• This award has christened as ‘Shanti Swarup Bhatnagar (SSB) Prize for Science and Technology’.
• It is given to scientist for their outstanding contributions to science and technology, every year.

Recipients of award in 2021

In the year 2021, the recipients of Shanti Swarup Bhatnagar (SSB) Prize for Science and Technology are:

1. Amit Singh from Indian institute of science, Bengaluru, in Biological Sciences category.
2. Arun Kumar Shukla from Indian institute of Technology Kanpur, in Biological science category.
3. Dr Kanishka Biswas in Chemical Sciences category. She is from Jawaharlal Nehru Centre for Advanced Scientific Research in Bengaluru
4. Dr T Govindaraju from Jawaharlal Nehru Centre for Advanced Scientific Research, Bengaluru, in the category of Chemical Sciences.
5. Dr Binoy Kumar Saikia in “Earth, Atmosphere, Ocean & Planetary Sciences”.
6. Dr Debdeep Mukhopadhyay in Engineering Sciences.
7. Dr Anish Ghosh and Dr Saket Saurabh in Mathematical Sciences.
8. Dr Jeemon Panniyammakal in Medical Sciences
9. Dr Rohit Srivastava
10. Dr Kanak Saha in Physical Sciences.

Purpose of the award

This award is presented to recognise outstanding Indian work in science and technology.

About the SSB prize

The SSB Prizes are awarded for notable and outstanding research, annually. The prizes comprise of Rs 5,00,000. It is presented in the categories of Biological Sciences, Chemical Sciences, Engineering science, Earth, Atmosphere, Ocean and Planetary Sciences, Mathematical Sciences, Physical Sciences and Medical Sciences.

NABARD approves credit plan for rearing Yak Husbandry

 National Bank for Agriculture and Rural Development (NABARD) approved a credit plan on September 28, 2021 for yak husbandry in Arunachal Pradesh.

Key facts

• This credit plan for yak husbandry will help herders in securing loans for strengthening their livelihoods.
• This scheme was developed by “National Research Centre on Yak (NRCY)” located at Dirang in West Kameng district of Arunachal Pradesh.
• NRCY works under the Indian Council of Agricultural Research.

Significance of the scheme

The credit plan started by NABARD for yak husbandry was found to be feasible in extending advances with the held commercial banks. The credit plan by NABARD has been included in potential linked credit plans (PLCP) of Tawang, West Kameng and Shi Yomi districts of Arunachal Pradesh. This credit plan will boost the livelihood of herders in the state.

About Yak

Yak is one among the most prized animals in Himalayan region because of its multifarious roles in strengthening nutritional security by providing milk and meat. The animal also provides shelter and clothing through its fibres. It is also used as a beast of burden.

Concerns with Yak Population

In past few decades country has witnessed a decline in Yak population. Yak population has declined because of inbreeding and unscientific farming practices. Furthermore, the disillusionment of younger generation because of hardship of yak rearing is one of the major reasons of mass desertions from Yak rearing occupation. The credit scheme by NABARD will help in curbing the reducing trend of yak population. Credit plan will also facilitate profitable farming by promoting entrepreneurship.

Manipur: Festival of Dance and Music “Nata Sankirtana”

 

“Nata-Sankirtana” festival was started at the Mandap of Jawaharlal Nehru Manipur Dance Academy (JNMDA), Imphal, from September 30, 2021.

Highlights

• The festival is a three-day festival of Dance and Music.
• It is the annual features of the Academy’s activities.
• Manipur is known for its rich culture and tradition inherited from forefathers and Sports. Thus, to protect and promote the culture and tradition for the future generations government is taking up several activities in the state.
• The government is also monitoring the income generation and employment generation for unemployed youths and taking up several schemes like ‘start up’.

Different sessions of the festival

• Inaugural session of the Nata Sankirtana was attended by artistes from different organizations of Nata Sankirtana, students of JNMDA as well as gurus & other eminent personalities.
• On the first day of festival, students of JNMDA showcased Nata Sankirtana called Sheihou while artiste of Prachaya Nata Sankirtana Samaj, Khurai Thangjam Leikai, Imphal showcased Nata Sankirtana called Sheisin.
• Second day of the festival will mark the performance by artiste of Public Theatre Artiste Association in Phoijing, Nambol. They will perform Nata Sankirtana ( Sheihou). On the other hand, artiste of Indra Kala Bhavan from Moirang will perform Nata Sankirtana (Sheisin).
• Last day of the festival will be marked by performance of artiste from Nata Sangeet Academy & Research Centre, Yaiskul Janmasthan, Imphal. They will perform Nata Sankirtana (Sheihou).

Nata Sankirtana

In classical Ragas, Nata sankirtana is a hymn of lord Krishna that synthesizes seevral indigenous rhythms. Sankirtana follows a strict code in its performance with rhythms pattern and costumes that are determined by specific rules & regulation. Sankirtana is performed to mark important occasions in person’s life such as from birth to death. UNESCO had recognized Manipur Nata Sankirtana in 2013.

Recognising Gandhi the philosopher

 

K.P. Shankaran writes: The politically charged, non-violent and ethical style of philosophy propagated by Gandhi is intended to make one spiritual — a practitioner is encouraged to gravitate and work for the welfare of all other beings.

It is not often that Gandhi is portrayed as a philosopher. To me, Gandhi is as significant as the Buddha of the Nikayas and the Socrates of Plato’s early dialogues. These three men are unique because, like Confucius of China, they can be credited with inventing philosophical ways of life that were led by ethics as opposed to others led by metaphysics. The Buddha’s philosophical way of life, within a few centuries, got morphed into two different “religious” forms of life — Theravada and Mahayana. Socrates’ philosophy, however, did not suffer the same fate. Hellenistic philosophy, like Stoicism, is still capable of inspiring people the way Confucianism does in China. Unfortunately for Gandhi, the understanding that he was a philosopher is only slowly getting recognised. The credit for recognising Gandhi as a philosopher goes to two philosophers belonging to the Analytic tradition of philosophy — Akeel Bilgrami and Richard Sorabjee. The latter is a historian of Greek and Hellenistic philosophy.

My position is, however, slightly different from that of these two Analytic philosophers. Philosophy was initially practised only in three civilisations — Chinese, Greek and Indian. In these civilisations, philosophy functioned as a way of life distinct from other ways of life that were rooted in a belief in supernatural powers. But even the philosophical ways of life practised in those ancient times could be divided into two categories — a metaphysics-led philosophical way of life and an ethics-led philosophical way of life. Barring the philosophies enunciated by the Buddha, Socrates and Confucius all other philosophies propagated metaphysics-led ways of life.

The basic difference between these ways is that in ethics-led philosophy, the attempt is to transform the practitioner from his/her baser state of being to an ethically higher state of existence and in the process making him/her, at least in the case of Socrates and the Buddha, psychologically self-sufficient. The Buddha called such a condition “Nirvana”. Socrates articulated it by saying “a virtuous person cannot be harmed” to indicate the disappearance of selfishness-induced fears in the practitioner.

However, in the metaphysics-led philosophical way of life, instead of a higher ethical state of being, the philosopher tries to achieve a higher state of understanding (insight) as well as a communion with what is taken to be the “ultimate”. In the latter, ethics has only a secondary role to play.

In the 20th century, Gandhi reinvented a very original ethics-led philosophical way of life. But Gandhi’s philosophical significance has largely remained unrecognised. The reason, I think, is that once Christianity banned all non-Christian ways of life in Europe in 529CE, philosophy re-emerged in 17th century Europe as a purely theoretical discipline by shedding its life practices. With that, the idea of “philosophical ways of life” became extinct in Europe. This shift from philosophy as a way of life to philosophy as a theoretical discipline is celebrated as the birth of modern Western philosophy. By the end of the 18th century, philosophy had become an academic discipline, with only academics functioning in philosophy departments being treated as philosophers. With colonisation, these European ideas started influencing public discourse in the rest of the world. Viewed against these standards, Gandhi did not qualify as a philosopher. It was, therefore, not surprising that to the people at large, it was only Gandhi’s political dimensions that became visible. The ethical dimension and the associated way of life got subsumed under the category of “religion”. But Gandhi was not religious even though he constantly used the Vaishnava vocabulary. Nevertheless, he was spiritual, if spirituality means reduction of self-centredness. This is clear from his introduction to his translation of the Gita. His shift from “God is Truth” to “Truth is God” in 1929, was also aimed at making ethics the “first principle” of his philosophy. A precursor to this can be seen in his 1907 free translation of William Salter’s “Ethical religion” when he said, “morality should be observed as a religion”.

Gandhi, like the Buddha, was an ethical consequentialist in that the purpose of his ethical way was to reduce self-centredness and to promote a concern for the well-being of all (sarvodaya). Till the end of his life, he constantly tried to get rid of his own self-centred behaviours and thoughts. On numerous occasions he had said that he aspired to “reduce to zero”, that is, totally eliminate selfishness/self-centeredness. For the Buddha, too, the reduction of self-centeredness through the cultivation of virtues like satya, ahimsa, aparigraha, brahmacharya, etc., was crucial for fostering sarvodaya. According to the Buddha’s empirical theses, once the concern for the well-being of all (sarvodaya) is well stabilised, psychological self-sufficiency would ensue and this, in turn, would cause unsatisfactoriness (dukkha) and its concomitant fears to disappear. Gandhi named that state of being as “moksha” instead of “nirvana”.

What makes Gandhi different from the Buddha is that Gandhi, apart from individual moksha, wanted development of freedoms (Gandhi’s constructive programme, if correctly interpreted, aims at the attainment of a set of basic freedoms such as freedom from hunger, thirst, illiteracy, avoidable diseases, etc.) for humanity as a whole. Only through political action, according to Gandhian ethics, can we implement this constructive programme. Therefore, Gandhi’s philosophical way of life is an explicit desire for a socialist society — since an ethics based on the reduction of selfishness can only approve a socialist way of life, for logical reasons. Anything that enhances selfishness, like a capitalist economy, is anathema to Gandhi’s philosophical way of life. As a philosophical practitioner, a Gandhian philosopher can only live in a community based on the fundamental principles of socialism, such as equality and the absence of private property. Even though socialist themes like the idea of a “simple life” were part of all philosophical schools of the Subcontinent, it was only in Gandhi that they achieved an explicit political/ideological dimension — Gandhi’s ashrams were such socialist communes. Gandhi’s constructive programme sought to generate socialist enclaves within a capitalist social set up and he called that swaraj.

The politically charged, non-violent and ethical style of philosophy propagated by Gandhi is intended to make one spiritual — a practitioner is encouraged to gravitate and work for the welfare of all other beings. I hope the philosophical way of life enunciated by Gandhi does become a substitute for religion in a post-religious world.

Source: Indian Express, 1/10/2021

Quote of the Day

 

“I am who I am today because of the choices I made yesterday.”
Eleanor Roosevelt

“मैं आज जो हूं उसका कारण है वे निर्णय जो मैंने कल किए थे।”
एलेनॉर रूज़वेल्ट