IASbaba’s Daily Current Affairs (Prelims + Mains Focus)- 8th March 2018
Economic Inequality at Workplace
Part of: Mains GS Paper I- Social empowerment
- The World Economic Forum in its 2017 edition of Global Gender Gap Report estimated that it would take 217 years for the economic gender gap to be closed, mostly because the gap has widened.
- The same report estimates gender gap in politics would take up to 99 years to be closed.
- The education specific gender gap is estimated be reduce to parity in next 13 years
- The overall global gender gap can be closed only in 100 years across 106 countries that the report has been tracking since 2006.
- Economic inequality includes disparity in pay for the same work done by a man and a woman.
India: Mixed progress
India has made mixed progress on closing the gap in various spheres since 2006
- While it narrowed the gap in education and political empowerment, there has been slippages on economic participation and health and survival.
- Legislative changes such as the amendments to the Maternity Benefit Act, 1961 if implemented well can help women with young children to return to work in the organised sector.
- The number of women elected to nine State Assemblies where elections were held in the past year has declined from 83 to 76, thus reducing their collective representation in these Assemblies from 7.9 per cent to 7.3 per cent.
Women participation and GDP:
- The IMF estimated that raising the level of participation of women in economic activity to bring it on par with men could increase India GDP by 27 per cent.
- The WEF Global Gender Gap report estimates that global GDP could increase by $5.3 trillion by 2025 by closing the gender gap in economic participation by 25 per cent over the same period.
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“Udyam Shakti” Initiative
Part of: Mains GS Paper I- Social empowerment
- Udyam Sakhi is an inititative to bring aspiring business women and their possible mentors together on one platform so that they could be hand-held through the process of setting up and running an enterprise.
- The portal will be launched by the Micro, Small and Medium Enterprises Ministry.
- The mentors, who would be extending their services on a voluntary basis, could be social entrepreneurs, senior executives, retired businesswomen, former bank officials or members of non-profit organisations.
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TOPIC: General Studies 2:
- India and its neighbourhood- relations.
- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
- Effect of policies and politics of developed and developing countries on India’s interests
Global trade is facing the challenge of protectionism
The United States announced recently that it will impose tariffs on the import of aluminium and steel.
The World Trade Organization has warned that Mr. Trump’s trade war could lead the world into another recession.
Rationale given by U.S. President Donald Trump:
- He argued that free trade is the reason why the U.S. suffers a huge trade deficit.
- He also believes that tariffs can help protect American businesses and jobs from the threat posed by foreign competition.
Mr. Trump hopes to protect American manufacturers who have failed to keep up with global competition through the means of restrictive tariffs.
Importance of free trade:
It allows free competition without any of the protective barriers imposed by governments.
Such competition is believed to give consumers access to cheaper and better products from across the world, thus improving their standard of living over time.
Fallouts of US’s decision:
- Restrictions on trade this will affect consumers across the world, which includes ordinary Americans, who will no longer be able to enjoy the full benefits of free trade across borders.
- Such steps can further boost populist forces that hold sway in many countries. It could once again revive protectionist sentiment which has been on the wane following the recovery from the global economic meltdown.
- In the U.S., the latest levy is expected to put at risk millions of manufacturing jobs that rely on these metals. Conversely, it is unlikely to create significant new employment in these two sectors given that current U.S. steel and aluminium production remain close to a 10-year average.
- A major global trade war can be ensued. In the 1930s similar war had disastrous results as it deepened the Great Depression.
- The European Union (EU) has vowed to hit back by imposing retaliatory tariffs on the import of American goods.
However, such knee-jerk reaction from the EU may only increase the burden on European businesses and their consumers.
It might also spur further trade restrictions from the U.S., thus risking a full-fledged global trade war.
- Washington’s traditional allies, who will be hit the most from the tariffs, have warned of bilateral retaliation on U.S. goods, besides mounting a challenge at the WTO.
Does higher tariffs secure domestic industries?
Many governments including Indian government adopt high tariffs on the pretext of saving domestic industries mainly the nascent ones.
The role of high tariffs in promoting domestic industries can have several unintended consequences.
- For instance, a report by the World Bank argues that high tariff and non-tariff barriers in the automotive sector in India and Pakistan might be reducing international competitiveness and slowing down the spread of world-class good practices in the value chain.
The local original equipment makers (OEMs) in both countries do not face adequate competition due to high import tariffs of 60% and 80% on completely built units of passenger cars. This makes imports of cars prohibitively expensive, thus encouraging local OEMs to focus on the domestic market at the expense of exports.
As a result, despite being the world’s sixth largest auto producer by volume, India has less than 1% of global export markets compared with more than 3% for China.
- It has been reported that high tariffs have been tried for key industries in Malaysia, Indonesia, Singapore and Hong Kong, with unconvincing results.
On the contrary:
- The World Bank report also highlights an interesting contrasting case of the Indian auto parts sector-
The sector has witnessed a gradual reduction in import tariffs since the 1990s (from 60% to an average of 12.5%). This has been a powerful catalyst to its global success, with increased production and exports.
Although tariffs play an important role in the competitiveness of countries, they are not the sole determinants.
Despite imposing high import tariffs, several Asian countries successfully raised export incomes and economic growth rates, whereas some countries in other regions achieved less success on both fronts despite lowering considerably their import tariff levels in the 1990s.
Ordinary consumers of all countries are likely to lose as a result of any trade war between countries.
Instead of retaliating with more tariffs, which could cause the current dispute to spiral into a full-fledged global trade war, the U.S.’s trading partners must try to achieve peace through negotiations.
Connecting the dots:
- Global free trade is facing headwinds mainly because of U.S. Discuss the issue, importance of free trade and suggest measures.
General Studies 1:
- Social empowerment
General Studies 2:
- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
- Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes
Making Indian women financially independent
“Our dream of New India is an India where women are empowered, strengthened, where they become equal partners in the all-round development of the country.” Prime Minister Narendra Modi said this recently in his Mann Ki Baat.
This represents the aspirations of millions of women in India; women who are not being restricted to participation in India’s development trajectory but are also leading it.
Making women financially independent:
Socio-economic transformation is possible when a woman is financially independent and is empowered to make free choices.
- Since the launch of the Pradhan Mantri Mudra Yojana (PMMY) in 2015, loans worth Rs 2.1 lakh crore have been sanctioned to women entrepreneurs.
With 76 per cent of the beneficiaries being women, Mudra is an emancipator for women who are breaking shackles, establishing enterprises.
- With a focus on the empowerment of women and SC/STs through access to formal capital, the Stand-Up India scheme was launched in April 2016.
It provides loans ranging from Rs 10 lakh to Rs 1 crore.
Of the 38,477 loans extended under the scheme, 81 per cent are to women.
- Under Ajeevika, loans are given to self help groups to help them avail of livelihood opportunities. Loans to SHGs of women increased to about Rs 42,500 crore in 2016-17, 37 per cent more than the previous year.
- Without financial inclusion, financial independence is unachievable. Jan Dhan, with more than 16 crore women beneficiaries, has given an unprecedented boost to financial inclusion. Notably, the percentage of zero balance accounts has fallen to 20 per cent of the total accounts opened. This means more women are making use of their accounts.
- Out of 1.04 crore people who benefitted from the Skill India programme within the first year of its launch, 40 per cent were women.
For women who have never received vocational training, Skill India has been an entry point into the job market and prosperity.
- To incentivise employment of women in the formal sector, amendments in the Employees Provident Fund and Miscellaneous Provisions Act, 1952 have been proposed in this year’s budget.
Women employees’ contribution has been reduced to 8 per cent for the first three years of employment against the existing rate of 12 per cent or 10 per cent.
Women through above mentioned initiatives are not just becoming financially independent, but also job creators who employ more women in their communities.
Entrepreneurship and financial independence provides multiple windows of opportunity for more women to join the workforce, sometimes without changing their cities or even stepping out of homes.
“When we empower the women in a family, we empower the entire household. When we help with a woman’s education, we ensure that the entire family is educated… When we secure her future, we secure the future of the entire home.”- PM Modi.
Connecting the dots:
- Discuss the importance of making women financially independent. Also discuss government’s recent initiatives in this regard.
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