IASbaba's Daily Current Affairs- 23rd July, 2015

How bad is the SECC data?

The Socio Economic and Caste Census (SECC) 2011 data, released partially by the central government, has shown worrying levels of rural poverty.
The NDA has signalled that this data would be the basis for targeted allocation of entitlements under various poverty alleviation programmes.
Several economists and census experts, however, worry that the SECC data itself might be unreliable or incomplete.

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What is missing in it?

The final data is still missing for over half the districts, and the draft list has gaps and inaccuracies,” says economist Jean Dreze.
Of 640 districts covered, data for 628 is in a draft list and only 277 in the final list.
Of the 35 states and Union territories, 21 are yet to publish their final list.
The PDFs released online are of the draft list, with missing households or even hamlets, and sometimes handwritten information that may or may not be in the digitised dataset.
It is hard to judge the integrity of the data until samples of the dataset are released for independent scrutiny.”

Why do we need authentic data?

It’s used for targeted allocation of entitlements under various programmes.
Welfare schemes flounder because they are scatter-shot. As a result, sections of society who don’t need a leg-up end up cornering welfare, at the cost of other less politically represented sections which need them the most.
Caste-based socio-economic backwardness is a reality.
To work towards ending it beyond making pious gestures, one needs caste-based data that is empirically correct.

Why is there so much debate on Caste data?

Caste is the other set of data which is yet to be released.
We are now told that the NitiAayog will compile and put out the information.
Census information on caste should have been canvassed by the agency with the best skills for the purpose— the Office of the Registrar General and Census Commissioner, India (ORGI).
However, the ORGI baulked at collecting this information as part of the Census of 2011.

Will SECC serve the purpose?

In the end, the SECC will turn out to be most useful only if the socio-economic component of the data is used for the specific purposes for which it was collected.
The Indira AwaasYojana could, for instance, cover only households living in one room or kutcha houses as identified in the SECC.
It would be a case of overreach if the finance ministry sees the SECC as providing it an opportunity to reduce coverage and slash welfare expenditure.

IAS BABA’s View

As the rather politically incorrect but well-meaning saying goes, it’s better to have no uncle than a blind uncle.
Add to that the fact that vote-bank politics has been responsible for development being more uneven than equitable,
Let the government first set up a panel of experts that includes those critics of the current methodology.
Let it then agree upon a set of SECC data within a timeframe. Armed with that data, let the welfare schemes reach their targeted destinations.

Connecting the Dots:

Could the central government then be thinking of cutting back on its food security obligations by restricting (National food security act) NFSA coverage to 40% of the population?
Write a note on N.C. Saxena committee appointed by the ministry of rural development.

Why is gold falling, and where is it headed?

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When the Gold prices are in rise generally?

Gold prices have gone up whenever public confidence in the dollar — the world’s reserve currency — has suffered erosion.
This is hardly the case today, with the US economy recovering from a recession even with low inflation — defying dire predictions of an imminent dollar collapse.
The best proof of it is the US dollar index, which measures the value of the greenback relative to a basket of six other global currencies.
The dollar index (base: March 1973 = 100) is currently close to 98, compared to the low of 72.93 on April 29, 2011 when the American economy was still sputtering.
A strong dollar has made the world somewhat less pessimistic about fiat currencies, while reducing the allure of gold as a safe haven asset.
The dollar index and gold prices generally move in opposite directions.

What about India? Why are prices falling here?

With a strong rupee in combination with relatively low inflation making the yellow metal not a very good investment. (The huge outflows from gold exchange-traded funds would testify to this.)
Gold ultimately has very little utility other than being raw material for jewellery and a store of value (though perhaps not over the long run).
Nor does it generate any income — unlike rentals from land, dividends from shares or interest from bonds.

But can the shiny metal rally again?

And as far as India goes, a big negative for gold is diminished rural purchasing power.
Given that an estimated two-thirds of India’s gold demand comes from rural areas, lower crop prices and a not-so-good monsoon so far is not good news for bullion traders and jewellers.
But it isn’t bad for the country’s balance of payments.
Gold imports peaked at $ 55-56 billion in 2011-12 and 2012-13 and, along with oil, were the primary source of current account deficits, before falling to $ 29-34 billion in the last two years. And they could fall further this year.

Connecting the Dots:

Write a note on reason behind falling prices of gold, oil and copper.
Why have gold prices crashed to more than five-year lows globally, and to near four-year lows in India?

IASbaba’s Daily Current Affairs- 23rd July, 2015