8 May 2024 : Indian Express Editorial Analysis

1. Unemployment vs wages

Topic: GS3 – Indian Economy – Issues relating to development and employment.

Context:

Recent rhetoric comparing unemployment rates between India and Pakistan has sparked debate, highlighting deeper issues within India’s labour market. This analysis delves into the validity of these claims and the broader context of India’s employment landscape.

What is Unemployment?

• Unemployment refers to the condition where individuals capable of working are actively seeking employment but are unable to secure suitable jobs.
• An unemployed person is someone who is part of the labour force, and possesses the requisite skills but currently lacks gainful employment.
• Basically, an unemployed person is someone of working age, jobless, able and available to work, and actively looking for a job.

Unpacking the Claims:

• CMIE Consumer Pyramids Survey: The discussion around unemployment largely stems from the CMIE Consumer Pyramids Household survey, which has faced scrutiny due to methodological concerns, prompting Ashoka University to pause research utilizing this data. Claims suggesting a massive withdrawal of workers need to be critically examined in light of these challenges.
• Contrast with Pakistan: Assertions that Pakistan’s labor market is more attractive to youth than India’s overlook the dynamic nature of both countries’ economies and the ongoing transformation in India’s labor market.

Diagnosing India’s Labor Market:

• Focus on Wages: The discourse shifts from unemployment to the broader issue of wages, highlighting the prevalence of informal employment and subsistence agriculture. The low unemployment rate masks the reality of underemployment and inadequate wages, indicating a need for a nuanced diagnosis of the problem.

Policy Implications:

• Misguided Solutions: Election promises of expanding public sector employment and wealth confiscation represent a misdiagnosis of the issue and may lead to unsustainable solutions. Prioritizing redistributive justice over contributive justice risks undermining the aspirations of young Indians and perpetuating systemic issues.
• Balanced Policy Approach: The “Madhyam Marg” (middle path) between hostility towards the private sector and minimal state intervention advocates for efficiency, effectiveness, and technology-driven reforms in the welfare state. This approach emphasizes raising private employer productivity through formalization and leveraging digital infrastructure for inclusive growth.

Looking Ahead:

• Progress and Challenges: Despite significant progress in areas like education and investor confidence, structural challenges persist in India’s labour market. The ASER report and Gross Enrolment Ratios indicate positive trends in education, while investment inflows reflect growing confidence in India’s economic prospects.
• Market Dynamics: Economist Alfred Marshall’s framework of market periods provides insights into India’s labour market dynamics, emphasizing the role of demand in shaping labour prices over time. However, modelling long-term and secular trends presents challenges amid evolving technological and demographic shifts.
• Addressing Skepticism: External skepticism regarding India’s progress underscores the need for a balanced assessment that acknowledges achievements while addressing ongoing challenges. It also highlights the importance of data-driven analysis and a nuanced understanding of labor market dynamics.

Conclusion:

• Navigating the discourse on unemployment in India requires a multifaceted approach that goes beyond headline figures to examine underlying wage dynamics, policy implications, and long-term trends.
• By adopting a balanced policy framework and leveraging insights from economic theory, India can address the complexities of its labor market and pave the way for inclusive growth and development.

What are the Major Causes of Unemployment in India?

Population Size:  India’s substantial population amplifies the competition for employment opportunities, putting additional pressure on the job market. Managing this demographic challenge necessitates a comprehensive approach to economic development and job creation. Skills Mismatch: A predominant cause, where the skills possessed by the workforce may not align with the evolving demands of the job market. Addressing this issue requires initiatives focused on enhancing education and vocational training programs. Informal Sector Dynamics: The prevalence of the informal sector introduces complexities in tracking and addressing unemployment. Efforts to formalise and regulate this sector can contribute to a more accurate representation of employment conditions. Policy Implementation Challenges: Well-intentioned policies may face challenges in effective implementation, impacting their ability to generate employment. Streamlining policy execution and ensuring alignment with ground realities are imperative. Global Economic Factors:  Influences from the global economy, such as trade dynamics and geopolitical shifts, can impact India’s employment scenario. Crafting policies that enhance economic resilience to external factors is essential.

PYQ: Disguised unemployment generally means (2013) (a) large number of people remain unemployed (b) alternative employment is not available (c) marginal productivity of labour is zero (d) productivity of workers is low Ans: (c)

Practice Question:  How does recent rhetoric regarding unemployment in India compare to claims about Pakistan’s labor market attractiveness, and what implications does this rhetoric hold for India’s labor market policies and economic development? (250 words/15 m)

2. Sugar and spice, not all nice

Topic: GS2 – Governance – Government policies – Issues arising out of their design & implementation

Context:

Recent incidents of food safety issues involving ground spices, infants’ and children’s foods have sparked significant concern among consumers, raising doubts about the efficacy of the Food Safety and Standards Authority of India (FSSAI).

What is the Food Safety and Standards Authority of India?

• The Food Safety and Standards Authority of India (FSSAI) is a statutory body formed under the Food Safety and Standards Act, 2006.
• The Food Safety and Standards Act, 2006replaced acts like the Prevention of Food Adulteration Act,1954, Fruit Products Order, 1955, Meat Food Products Order, 1973.
• It operates under the Union Ministry of Health and Family Welfare.

Mandate:

• The FSSAI has the mandate of regulating the manufacture, storage, distribution, sale, and import of food articles, and also establishing standards to ensure food safety.

Structure and Organization:

• It is made up of 22 members and a Chairperson.
• One-third of the members must be women.

Functions:

• Setting Food Safety Standards: It has the power to lay down regulations to implement food safety standards in the country.
• Food Testing Accreditation: It has the power to set up guidelines for the accreditation of food testing laboratories in the country.
• Inspecting Authority Powers: Food safety officers have the right to enter and inspect any place where food products are manufactured, stored, or exhibited.
• Food Safety Research: The Research and Development division of FSSAI is responsible for research in the field of food safety standards. They continuously try to adopt international food standards.
• Identifying Threats: The FSSAI is required to collect data regarding food consumption, contamination, emerging risks, etc.

Ground Spices Safety Concerns:

• Quality Control Issues: Ground spices of popular brands like MDH and Everest were rejected by multiple countries due to the presence of carcinogenic ethylene oxide and salmonella bacteria.
• Call for Inspections: FSSAI ordered countrywide inspections and testing of all branded spices but consumer concerns persist due to perceived disparities in quality control for domestic versus exported products.

Infants’ and Children’s Foods Safety Concerns:

• Added Sugar Controversy: Nestle’s Cerelac with added sugar contradicts WHO guidelines urging a ban on added sugar in baby food products for children under three years.
• Regulatory Oversight: Despite regulations against added sugar in baby foods, reports indicate lapses in regulatory enforcement, raising questions about FSSAI’s capability to protect vulnerable groups like infants and children.

Regulatory Challenges and Recommendations:

• Lack of Mandated Reductions: FSSAI’s reliance on voluntary pledges from manufacturers instead of mandating reductions in fat, sugar, and salt raises concerns about regulatory effectiveness.
• Infrastructure and Oversight: Reports from various oversight bodies highlight inadequate infrastructure, staffing, and enforcement, necessitating a comprehensive overhaul of the regulatory system.
• Legal Imperatives: The Consumer Protection Act and judicial rulings emphasize consumers’ fundamental right to safe and healthy food, underscoring the need for regulatory reform to prioritize citizen’s safety.

Conclusion:

• A complete overhaul of the food safety and standards regulatory system is imperative to address consumer concerns, ensure compliance with international standards, and uphold citizens’ right to safe food.

Challenges Associated with Food Safety in India

Primary challenge is operational: India’s diverse food landscape, the lack of standardized recordkeeping and intentional food fraud may prevent manufacturers from efficiently tracing ingredients and assessing potential risks. Traceability is particularly challenging for small and medium sized businesses with limited resources. Logistical barriers: At least 10 States/Union Territories lack government or private notified food testing labs, as mandated under the FSS Act. These labs are distributed unevenly across regions; have insufficient number of food safety officers; and were found to operate ineffectively due to resource constraints, showed the FSSAI Annual Report of 2021-22. The absent accountability and consequences often mean enforcement agencies fail to penalize unscrupulous food operators, which fuels the issue. Lack of Transparency: FSSAI’s operations often lack transparency. The regulator conducted another pan-India testing of spices two years ago, results of which were never put out in the public domain. Surveys that flagged contamination in products like milk and jaggery “have not resulted in positively addressing the rampant practice of adulteration”.

 

PYQ: Consider the following statements: (2018) 1) The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954. 2) The Food Safety and Standards Authority of India (FSSAI) is under the charge of Director General of Health Services in the Union Ministry of Health and Family Welfare. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Ans: (a)

Practice Question:  What are the recent food safety concerns in India, particularly regarding ground spices and foods for infants and children, and how effective has the regulatory response been in addressing these issues? (250 words/15 m)