Gist of EPW April Week 3, 2019

The Economic and Political Weekly (EPW) is an important source of study material for IAS, especially for the current affairs segment. In this section, we give you the gist of the EPW magazine every week. The important topics covered in the weekly are analysed and explained in a simple language, all from a UPSC perspective.

TABLE OF CONTENTS

1. Manufacturing the ‘Ideal’ Worker
2. Disaster Relief Financing
3. Beyond Electoral Bonds

1. Manufacturing the ‘Ideal’ Worker

Background

• According to press reports, contractors in Beed district of Maharashtra are unwilling to hire women cane cutters because they feel women who menstruate are likely to take breaks from work and this may adversely affect productivity.
• In fact, irrespective of sex, any breaks taken by the contracted labour results in their incurring heavy financial penalities.

How the employers treat the employees?

• The employers’ or contractors’ rationality, in most cases, is based on the principle of “optimum use” of labour power. Anything that counters this principle or prevents the maximisation of profits is either excluded or manipulated.
• Even occasional rest from the drudgery of work, which is central to human activity, is considered a “wastage” of resources.
• This is most evident in the case of domestic workers and daily wage labourers where employers feel entitled to every minute that they pay for.

Concerns

• Half of the women in some villages of Beed district have undergone hysterectomies to prevent job loss and cut in salary
  • Contractors emphasize the “voluntary” nature of such medical procedures, the women report that it is the contractors who loan them money for the surgery and then recover the amount from their wages.
• It is well known that in the informal sector in India, most occupations dominated by women are undervalued and underpaid.
• The devaluation of women’s labour is also accompanied by casteist and patriarchal notions of purity and pollution where women are prohibited from certain jobs, especially in the food processing, sericulture, and garment industries
• The dogged pursuit of profit and productivity creates workplaces that seem “genderless,” but in reality continue to be highly masculinised and socially hierarchised.
• Employers on their part view rights such as maternity leave, childcare, sanitation facilities, and designated spaces for rest as liabilities for their “optimal” production processes

Conclusion

• National Commission for Women’s post facto recognition of the labour atrocities in Beed is welcome, it is unlikely to be any more than a rap on the knuckles of a conveniently blinkered bureaucracy.
• The decline in agricultural labour markets has led to a rise in unemployment, compelling marginalised women to take up ill-paying and exploitative contractual jobs under subhuman working conditions
• In the absence of a structural change in workplaces and stringent labour regulations, discrimination and atrocities against female labour are likely to continue to rise.

2. Disaster Relief Financing

Context

• Over the years, finance commissions have provided guidelines to the central government on assisting the state governments in providing relief to disaster-affected communities.
• The mode of computing the quantum of allocation has led to some states receiving less than their deserved allocations.
• This needs to be reviewed in the wake of the constitution of the Fifteenth Finance Commission.

Analysis of financing issues

• The federal structure envisaged by the Indian Constitution ensures that taxation is mostly controlled by the central government, while spending is largely done by state governments.
• Hence, the seamless transfer of resources from the centre to the states is vital.

Finance Commissions

• The Constitution provides for the periodic setting up of finance commissions (FCs), whose recommendations are valid for a period of five years, in order to guide the sharing of central tax collections with the states.
• The most recent one—was constituted in 2017 to come up with recommendations to be adopted for a period of five years from 2020 to 2025.
• FCs also lay down the rules by which the centre provides grants-in-aid to the states from the Consolidated Fund of India.
• They are also required to suggest measures to augment the resources of states and ways to supplement the resources of panchayats and municipalities.
• FC reflects the demands of the circumstances prevailing at the time of its constitution.

Financing Disaster Relief

• Disaster management and relief measures for natural calamities figure neither in the union and state lists, nor in the concurrent list.
• Hence, by default, according to item 97 of the union list, it becomes the responsibility of the centre.
• However, in practice, this responsibility has been vested with the states—and rightly so—since most of the work in the area of disaster management lies with the states and the districts.
• While the central government plays a largely supportive role, providing financial, technical, and material support whenever necessary.

The Disaster Management Act, 2005

• The Disaster Management Act, 2005 provided for effective management of disasters, including mechanisms for funding disaster relief and response.
• The act envisaged the creation of two types of funds:
• One for disaster response and
• Other for mitigation at three different levels: national, state, and district.
• Thus, for disaster response, there would be a
  • National Disaster Response Fund (NDRF)
  • a State Disaster Response Fund (SDRF) in each state
  • And a District Disaster Response Fund (DDRF) in each district.
• Similarly, there would also be Disaster Mitigation Fund respectively for National, State and District but it has not been set up yet.
• The Twelfth FC extended the list of calamities to cover landslides, avalanches, cloud bursts, and pest attacks. It also recommended the continuation of the NCCF scheme in its existing form. Aligning with the Disaster Management Act of 2005.
• The National Calamity Contingency Fund (NCCF) no longer exists as it has been merged with the NDRF since 2010.
• The Thirteenth FC recommended the creation of the NDRF and the renaming of the CRFs as SDRFs.
• The Fourteenth FC adopted the recommendations of Thirteenth FC for contributions from both the centre and the states for the NDRF.

Varied Vulnerability of States

• Margin money is a separate fund to provide relief to communities affected by disasters as per the recommendations of the Finance commissions. Some of the vulnerabilities of the states are given below:
• The Seventh FC’s recommendation for computing margin money, said that: expenditure incurred due to drought need not be included in the margin money however, relief expenditure from floods, cyclones etc. can be included.
• These recommendations were a serious setback to states like Rajasthan and Karnataka, which have drought-prone areas and have been hit by successive droughts.
• The entire interior region in northern Karnataka is prone to drought, and even if all the planned works of the state were to be diverted to this region, it would not be adequate to provide relief.
• Thus the state would be forced to spend other developmental funds to fight drought, which is what is happening almost every alternate year.
• Karnataka was forced to seek central assistance to deal with drought and showcases the inadequacy of the quantum of the SDRF allocation to Karnataka.
• The SDRF was meant to enable state governments to deal with disasters at their level without depending on central assistance.
• The allocation to the SDRFs was to be based on the incidence of and vulnerability to disasters in each state. It would be natural to anticipate that increased vulnerability would result in higher allocation to SDRFs.
• However, the SDRF allocations made by the Fourteenth FC do not take this into account. For instance, the state of Punjab, which is relatively less prone to disasters than Karnataka, was given higher allocation.

Conclusion

• The Fifteenth FC’s ToR directs it to review financing of disaster management initiatives.
• The review of the FCs’ ToRs and allocations to SDRFs over the years has revealed that the commission should pay close attention to the various issues highlighted here
• To ensure effective disaster management and enable state governments to move towards disaster risk reduction.

3. Beyond Electoral Bonds

Context

• Election Commission of India’s (ECI) provisional election expenditure estimates over the past six decades—skyrocketing almost 274 times — one is barely left with any doubt about the presence of some enigmatic benevolent sponsors in the backyards of the political parties.

Analysis of the issue

• A recent survey of some politicians, shows that the majority of such mysterious sources of income reaches the zenith for high-level incumbents like a member of Parliament or a lower house in the state assembly (constituting almost 44% and 47% of their respective incomes).
• This finding inadvertently ends up implying that political financing in India is an economy in which the state will keep exerting a heavy hand to incentivise clandestine funding.
• Electoral reforms in India have had a chequered history that has seen the political will for enforcing and or adhering to the regulatory systems of election and political financing conspicuously missing.
• The electoral bonds, however, have lent the political parties the statutory immunity for denting, rather than simply circumventing, these regulations.
• The most disconcerting aspect of such sanctions is that these make the electoral system potentially an apparatus for legitimising the black income of both the “benefactor” and the “beneficiary.”

Amendments to laws

• By relaxing the definition of “foreign source” companies through the amendment of the 2016 Finance Act, the government has opened up the route for legalising the political donations even from shell companies.
• The amendment in the Foreign Contribution (Regulation) Act (FCRA), 2010 has removed the embargo on foreign funding for Indian elections, its application with retrospective effect for 42 years.
• This has enabled political parties to emerge clear of sub judice inquiries on “illicit” foreign donations in all previous elections.
• Again, there are amendments in the Representation of the People Act, 1951 and the Income Tax Act, 1961 that have legally reinstated the case for anonymous donations, though for amounts below ₹ 20,000.
• Yet, there remains an absence of clarity regarding the maximum number of times that donations of this magnitude can be made by any particular contributor.

ECI and flaw in action

• While the ECI has rightly pointed out that the electoral bonds would wreck the transparency in political funding.
• But its concern for denuding transparency seems to be limited by a rather censored goal of providing a “level playing field” to all contesting parties, and not driven by the overarching objective of preserving the “spirit” of universal adult suffrage.
• A level playing field is elusive when elections are becoming highly competitive in nature.
• Such competitive elections are likely to evidence increasing monetisation
• The smaller the chances are for a candidate in getting elected, the higher is their usage of money for mitigating such risks.
• If money is the distorting factor for an ethically integrated polling process, why did the ECI raise the expenditure limit for individual candidates from ₹ 40 lakh to ₹ 70 lakh?
• When the (self-declared) audit reports of key contestants from the dominant political parties showed only 15%–20% utilisation of the erstwhile prescribed expenditure limit.

Conclusion

• Despite the plethora of commissions and recommendations, the failure to contain the costs of elections and the impropriety of their funding, suggests laissez-faire attitude towards political funding.
• Regulatory institutions, be it the ECI or the Supreme Court (as per its judgment on the electoral bonds dated 12 April 2019), are deliberating on the interests of the (relatively few) donors, rather than the 850 million voters.
• Also not giving much importance to the fact that linkage ­between the political parties and their donors can dictate the degree of the voter-centricity of state policies.
• However, lost in this myopic political blame game are fundamental issues—such as
  • The codification of election expenditures,
  • Monitoring beyond the period of the model code of conduct,
  • The very structure of the electoral system—which could have made a real impact on electoral reforms.

For more EPW articles, read “Gist of EPW”.