News & Editorial Analysis 25 February 2023

The Hindu News Analysis

1 – Menstrual Leave Policy:

GS II Topic Government Policies and Interventions:

Context:

While being a biological occurrence, menstrual pain may nevertheless act as a “disincentive” for employers to hire women, according to the Supreme Court’s ruling on February 24.

What is the process for maternity leave?

Students typically need to have at least 75% attendance each semester in order to sit for the exams. The state will now grant female students an extra 2% off.
This shows that female students who maintain a 73% attendance rate are eligible to take their exams.

What makes this activity crucial?

The nation’s first “feminist choice for university-college students” has been hailed as a result of this initiative.
Period leave would improve inclusion and tolerance in the classroom and at employment.
This would boost the proportion of working women and encourage girls to pursue higher education.

Have similar activities since occurred?

The Bihar government introduced period leave for working women in 1992.
The Menstrual Hygiene Scheme of the Health Ministry, which was introduced in 2011, sought to expand the availability of sanitary napkins for rural girls.
The Arunachal Pradesh Legislature first tabled the Menstruation Benefits Bill in 2017. It was brought up once more in 2022. The Bill was dropped because it was determined that the subject was “unsuitable” for discussion in the “holy” institution.

What are the concerns?

Although this is a kind gesture, the fact that menstruation is taboo in India raises questions. In this case, the word “leave” could readily be used to justify discrimination.
For instance, in countries like Japan and South Korea, there exist laws allowing for time off. Yet, according to surveys, the number of women utilising it is declining because to concerns about social stigma.
Another concern is the potential medicalization of a typical biological process. This might also exacerbate existing gender biases.
Businesses can be less willing to hire women due to worries about the productivity and financial costs of missed periods.

How do we go about it?

Even though this menstrual break solely pertains to women and excludes other persons who menstruate, it is still a wise decision. It has sparked a more serious discussion about a sensitive topic.
Given the level of stigma that currently surrounds the topic, it is imperative to keep up the conversation on menstruation hygiene. To achieve gender justice and equality, the government must overcome a number of obstacles, including this one.
Students in Kerala are now demanding that the period leave be taken into account going forward while determining internal marks. In addition to internal points, a student earns two marks for participation in class. This is given to students who have between 75 and 85% attendance.
The government would also be wise to extend the benefit to transgender children.
Extending the advantages of paid time off to working women would be a major step in meeting the needs of so many.

Conclusion:

The most recent Kerala ruling is a positive step towards gender equality and justice. Yet there’s still a taboo issue that needs to be solved. It would be preferable to make the advantages available to everyone who menstruates.

2 – India EU Free Trade Pact:

GS II Topic International Relations:

Context:

According to Union Commerce Minister Piyush Goyal, negotiations for a free trade agreement (FTA) with the 27-nation union will require more time.

Speaking at the Technotex conference in this city, which was put on by the business association FICCI, Mr. Goyal said that the EU and two to three other countries are currently engaged in active negotiations for FTAs.

Despite the government’s excellent attempts to entice foreign investors, they have faced a number of regulatory challenges in India.
Investors filed a lawsuit against India: Many international companies have sued India to compel India to uphold the rights outlined in the bilateral investment treaties, including Vodafone, Cairn Energy, Nissan, White Industries, Telenor, Nokia, and Vedanta (BITs). This is the main justification behind the EU’s desire for an IPA with India.
EU investors are still protected by Indian law despite India’s history of unilaterally altering the law. Nonetheless, it is conceivable to unilaterally change Indian law to the harm of the investor.
lengthy legal process Indian courts agonisingly drag out the decision-making process. The yearning for protection under international law arises from this.

What challenges must be overcome before the INDIA-EU Treaty is signed?

Non-justiciable tax regulations: India aims to push taxation policies outside the scope of the treaty by making tax-related regulatory measures non-justiciable. The EU finds it challenging to accept this proposal in light of India’s recent experience of tax-related investment challenges with Vodafone, Cairn Energy, and Nissan.
judicial system with two levels: The EU’s investment plan for India proposes for the formation of a two-tier court-like framework with an appellate procedure and tenured judges to resolve treaty disputes between investors and the state.
EU’s advice for MIC This notion is related to the EU’s support on a global scale for the creation of a multilateral investment court (MIC), for which discussions are now taking place at the United Nations Commission on International Trade Law (UNCITRAL). The MIC seeks to solve several issues with the current investor-state dispute settlement system, which is centred on arbitration.
India’s view regarding the establishment of a system equivalent to an investment court is uncertain. India hasn’t formally taken part in the UNCITRAL deliberations to establish a MIC.

What is the issue with MFN and FET?

EU wants MFN status: The EU’s investment plan contains a most-favorable-nation (MFN) clause to make sure that EU investors do not experience discrimination in contrast to other foreign investors.
Since it worries that foreign investors would use the MFN clause to engage in disruptive treaty shopping, India is opposed to incorporating it. India is opposed to having the MFN clause in its investment treaties, on the other hand. Such disruptive treaty shopping can be avoided by negotiating for a qualified MFN provision rather than completely excluding it.
Provision for fair and equitable treatment (FET) This clause is present in the EU investment proposal but not in the Indian 2016 Model BIT.

Why is IPA required at this point?

The amount of FDI is decreasing: For the last ten years, FDI to India has decreased to a level of only 2% of GDP. While increasing from €63.7 billion in 2017 to €87.3 billion in 2020, the EU’s share of foreign investments in India is still far lower than its share of investments in China (€201.2 billion) or Brazil (€263.4 billion).
BIT terminations have a negative impact. Several analyses show that India’s unilateral decision to end BITs has had a negative impact on FDI inflows into India.
India requires the IPA with the EU to bring in FDI in order to meet the aspirational milestone of having a $10 trillion GDP by 2030.

Conclusion:

India must handle its own business. Also, the Parliament’s standing committee on foreign affairs has encouraged India to reevaluate the 2016 Model BIT.

3 – MGNREGA:

GS II Topic Government Policies and Interventions:

Context:

According to the Economic Report 2022-23, which was published on January 31—the day before the Union Budget—6.49 crore households requested employment through the Mahatma Gandhi National Rural Employment Guarantee Program (MGNREGS). 6.48 crore of them received job offers from the government, and 5.7 crore of those households accepted them. The poll concluded that the system had a positive impact on household income, agriculture productivity, and production-related expenses. It was stated that this helped with “income diversification and strengthening rural livelihoods.”

About MGNREGA:

About: In 2005, the Ministry of Rural Development launched MGNREGA, one of the world’s largest labour guarantee programmes.
The basic objective of the programme is to offer every adult resident of a rural home who is willing to engage in unskilled physical labour for the benefit of the public 100 days of guaranteed work per fiscal year.
As of 2022-2023, 15.4 crore people are MGNREGA-eligible workers.
Lawful Ability to Work: This act uses a rights-based framework, in contrast to earlier employment guarantee programmes, to address the underlying causes of chronic poverty.
At least one-third of the recipients must be women.
The Minimum Wages Act of 1948 mandates that salaries be paid in accordance with the state’s statutory minimum wages for agricultural labourers.
Demand-Driven Strategy The MGNREGA’s design’s most important feature is its legally supported demand that any rural adult find employment within 15 days of applying; if this is not the case, a “unemployment allowance” must be supplied.
Worker self-selection is possible under the demand-driven system.
Decentralized preparation There is an emphasis on deepening the decentralisation process by giving Panchayati Raj Institutions (PRIs) a substantial role in organising and carrying out these initiatives.
According to the law, Gram Sabhas must recommend projects to be taken on and must execute at least half of those projects.

What Issues Arise in the Implementation of the Scheme?

Delay and Insufficiency in Funds Disbursement: The MGNREGA mandate that wages be paid within 15 days has not been met by the majority of states. Moreover, employees are not compensated for late wage payments.
The programme has consequently became supply-based, and employees have begun to lose interest in working for it.
There is currently no lack of evidence to support the claim that financial shortfalls are the root cause of wage payment delays, including a statement from the Ministry of Finance.
Separation based on caste: By caste, the delays varied greatly. While just 26% of payments for non-SC/ST employees were completed within the necessary seven days, 46% of payments for SC (Scheduled Caste) employees and 37% of payments for ST (Scheduled Tribes) employees were.
Caste-based segregation had a negative impact that was most noticeable in underdeveloped States like West Bengal, Madhya Pradesh, Jharkhand, and Odisha.
Ineffective PRI role: Grame panchayats are unable to effectively and timely implement this act because of their restricted authority.

4 – Cyberattacks:

GS III Topic Science and Technology:

Context:

Over the past few weeks, our rapidly expanding digital networks’ fragile underbelly has come to light. The first ransomware attack on servers was directed at the All India Institute of Medical Sciences, a prestigious university in India. When the systems finally went online more than two weeks later, over 40 million health records were impacted. Soon after, the ransomware organisation BlackCat broke into the parent company of Solar Industries Ltd, one of the Ministry of Defence’s munitions and explosives suppliers, and stole over 2 Terabyte of data.

About:

Cyberattacks are unauthorised attempts to access computer systems without authorization in order to steal, expose, modify, disable, or destroy data.
Such attacks are typically carried out by ransomware-seeking organisations to stop networks from functioning after encrypting data. Demands are addressed to organisations, frequently negotiated, and then paid without informing law enforcement.
Cyberterrorism: It is generally characterised as any premeditated, politically motivated attack against information systems, programmes and data that threatens violence or results in violence.

The surge of cyberattacks in India is due to:

increasing reliance on technology As we develop more fast, more and more services are being transferred online to increase accessibility and usability.
This propensity has the drawback of making such systems more vulnerable to hackers.
For instance, there is fear over serious injury and loss if hackers are successful in breaking into a country’s nuclear, banking, or energy networks.
The increased reliance on digital technology in the post-COVID era has revealed digital inequality that must be removed through enhancing competence.
Terrorists use cutting-edge techniques to disseminate their message and incite hatred online.
ineffectiveness of the law enforcement measures India’s approach to cyber security has so far been disorganised and haphazard.
Even though there are several organisations, regulations, and programmes, their implementation has not been up to par.
strained relations with China: China is one of the top nations in the world for information technology. So, it ought to be able to disable or partially interfere with information technology services in other nations.
With the current border standoff and the violent clashes between their armies, it is expected that relations between the two countries would deteriorate to the point where they begin assaulting one other’s crucial information infrastructure.
Covert and asymmetrical conflict: Cyberwarfare, in contrast to traditional conflict, which results in casualties and face-to-face confrontations, is covert and has the advantage of credible denial, which enables governments to deny involvement even after they are exposed.
Similar to this, a small nation with advanced technology and skilled personnel can engage a more strong adversary without fear of suffering substantial losses.
As a result, nation-to-nation conflict has increasingly moved online.
Due to a lack of international coordination, there is a lack of global consensus and collaboration in this sector.
An unsustainable online environment results from both the general public’s low level of digital literacy and the digital divisions across nations.
It has been asserted on occasion that people are easily duped by click-baiting into reading information that frequently has virus attached to it.

Guidelines for minimising cyberattacks:

Cyber readiness: Using this approach as a road map, institutes will be encouraged to increase their level of cyber readiness and will be able to develop their skills in a range of areas, including collaboration, accurate attribution, and forensics.
Financial Preference: Several ministries must allocate considerable sums in order to make sure that cyber security measures don’t remain the lowest priority.
The need for a national cyber security policy Businesses in all sectors should take note of this tragedy and tighten their cyber security procedures. Publicizing and promoting the national cyber security policy is also essential.
increasing capability The National Critical Information Infrastructure Centre (NCIIPC) and CERTIn must become more capable in order to counter the increasingly complex threats and attacks. In addition, sectoral CERTs must be set up for a number of businesses, including the health industry.
Cooperation between nations: International collaboration on countering cyberattacks needs to gain more clout outside of the GGE meetings, the 37-nation Counter Ransomware Initiative (CRI) sponsored by the US, and the European Union.

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The Hindu Editorial Analysis

India’s R & D Estimates Are An Incomplete Picture:

Context:

India’s research and development (R&D) expenditure-to-GDP ratio of 0.7% is incredibly low when compared to other major nations and much below the global average of 1.8%.

Problems with the current system:

The main factor is underinvestment in R&D by the corporate sector. In affluent nations, the business sector makes up about two-thirds of the gross domestic expenditures (GERD), whereas this percentage is only 37% in India. Yet, there is evidence indicating that India’s GERD statistics are inflated.
The National Science Foundation (NSF) of the United States reported in a 2022 infobrief that American multinational corporations (MNCs) invested $9.5 billion in R&D in India in 2018 and $9.8 billion the next year.
MNCs from other industrialised countries invest in R&D in India. The Department of Science and Technology (DST) has provided an estimate of foreign MNC R&D spending in 2017–18, which is under 10% of what American multinationals have acknowledged spending in India on R&D.
The National Science and Technology Management Information System (NSTMIS) of the DST compiles GERD statistics in India. Information on R&D is easier to obtain for the public sector, higher institutions, and government organisations. It is difficult to acquire data from the private sector. The stated R&D estimates are severely lacking due to two main factors.
The method utilised to identify them excludes all of the R&D performing companies. The NSTIMS uses both the Department of Scientific and Industrial Research (DSIR) list of recognised R&D units and the Prowess database of the Centre For Monitoring Indian Economy (CMIE) Pvt. Ltd. for this.

For two reasons, there could not be many real R&D performers on the DSIR list:

Companies who don’t find the government’s incentives to be compelling enough or that are hesitant to provide the DSIR access to sensitive data may not be compelled to sign up with the DSIR.
For R&D firms in services like software and R&D services, the requirement of having different infrastructure for R&D to distinguish it from their regular company may be hard. Several companies involved in cutting-edge technological R&D could be considered services.

Moving ahead:

For India’s R&D statistics to adequately reflect the R&D ecosystem, immediate and long-term efforts are needed.
The NSTMIS should soon include information on patents awarded in both India and the U.S. to its current methodology for selecting R&D performing enterprises.
R&D statistics shouldn’t solely be reliant on survey responses, even if surveys can collect a lot more information about innovative activities. Instead, using the mandatory disclosures that the corporations must provide to the MCA, annual R&D estimates can be produced.
In order to assure compliance and appropriate reporting, technology can be utilised like in the case of redesigned income-tax return forms where numerous components are interlinked.
Also, it should be made essential to incorporate information on R&D expenditures that must be appropriately disclosed to regulatory bodies in the environmental, social, and governance (ESG) ranking of businesses.

Conclusion:

One of the key components of our quest to create a $5 trillion economy by 2025 is maximising India’s R&D potential.

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The Indian Express Editorial Analysis

What’s Feeding The Inflation In India:

Current Situation:

The inflation rate for products is declining globally as input costs and demand decline. However the cost of things is increasing in India.
Services inflation is still high globally despite the fact that demand for high-touch services is growing more slowly than expected. Inflation for services is declining in India.

Urban demand growth as an inflation driver:

The beginning of it all was the decline in rural consumer expenditure in the latter half of 2021.
During 2022, the monsoon rains proved unreliable, inflation picked up speed, and the March heatwave spread, resulting in a subpar harvest and a severe hit to rural earnings.
Demand in cities increased throughout this period. Lockdowns ended, and urban jobs returned. Workers who had left for home during the pandemic era came back to the major cities.
In India, earnings increased every time a worker relocated from a rural to an urban area. Increased salaries meant strong consumption. In light of this, the rural demand deficit became even more apparent.
Winter agricultural sowing increased in 2022’s final few months. Agricultural salaries increased as more workers were required on the ground.
In fact, once inflation was taken into account, they surpassed pre-pandemic levels. Other rural indicators also indicated higher revenues, such as the manufacturing of consumer non-durables, which increased quickly from October levels.
By the end of 2022, the change in labourers returning to the cities and the resulting growth stimulation were practically ended. After that, indicators of urban demand, like the production of durable goods for consumers, started to decline. Fair enough, rural demand is just marginally increasing while urban demand is a little bit declining. Both are hardly dramatic. But it’s obvious that things are gradually changing.

Condition of the Informal Sector:

Around 80% of India’s labour force is employed in the informal sector, which includes both agricultural and non-agricultural employees equally.
A series of economic shocks have hit businesses in the unofficial sector:
Lockdowns came first, followed by an increase in commodity prices.
Small businesses underperformed large businesses during the epidemic, losing market share, turning a loss, and paying their employees less. The informal small businesses suffered the most.
The prospects for small businesses have gotten better in recent months as a result of ending the lockdowns and the spike in commodity prices from a year ago. High input costs are no longer as burdensome, and staff salaries at these companies are gradually increasing. Increasing production of non-durable consumer goods is one indicator that suggests that informal sector incomes are rising.

Connections between the rural and unofficial sectors:

In one sense, we use the terms nearly interchangeably since there are substantial connections between the rural and informal sectors.
First, around three-fourths of the informal sector employees in the nation reside in rural India.
Second, a large portion of the food that rural Indians eat is made in the unofficial economy.
But, it’s also crucial to remember that 25% of informal labourers are located in metropolitan areas of India, where their living standards are also rising.

How will the patterns of demand for goods and services in the rural and unorganised sectors change?

In rural areas, 20% of households are landowners (own more than one hectare of land). They rely heavily on agriculture for their livelihood.
On the other hand, wages account for a large portion of the income for the 80% of households with landless status (holding less than one hectare of land).
Their salaries are divided between agricultural work (which accounts for about 40% of households) and non-agricultural work (the remaining 40 per cent of households).
Every one of these groups was performing poorly up until six months ago. Now
It has been noted that consumption in the rural and informal sectors is more heavily weighted towards commodities than services, as well as consumer non-durables than consumer durables.
Also, manufacturers are utilising this chance to increase profit margins following last year’s significant losses. This explains why retail inflation hasn’t decreased as much as wholesale inflation and why manufacturing profit margins are increasing more quickly than service provider profit margins.
Most notably, it explains why the inflation rate for products is higher than that for services.
The primary cause of the overall products demand exceeding the demand for services is the rise in more goods-heavy demand from the rural and unorganised sectors.

Conclusion:

Inflation in FY24 is anticipated to be higher than what most people are now anticipating in either case (the consensus of estimates).
The rate-setting strategy of the RBI may be affected by this. We predict that the Fed’s activities, global inflation, and any potential pressure on the rupee will have a significant impact on the RBI’s rates during the next sessions.
According to estimation, domestic inflation might not offer much breathing room either. The point is well-made. Prepare for additional RBI rate increases over the upcoming months.