Gist of EPW February Week 1, 2022

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 analyzed and explained in a simple language, all from a UPSC perspective.

Gist of EPW February Week 1, 2022:-Download PDF Here

TABLE OF CONTENTS

1. Budget Focus: A Desperate Gamble
2. The Paradox of Data-based Governance
3. The Illegality of Ken-Betwa Link Project
4. Deciphering the Indian Slip on the Global Hunger Index 2021

1. Budget Focus: A Desperate Gamble

Context

In Budget 2022-23, infrastructure was one of the key sectors in focus and saw high allocations. The higher allocations for a few infrastructure sectors will not trigger a virtuous cycle of investments, discusses the article.

Infrastructure Spending

• In terms of capital spending, the budget allocation has been increased by Rs 1.5 lakh crores to Rs 5 lakh crores in 2022–23.
• About 67% of this is accounted for by allocations to sectors like transportation, highways, railways, and defence, whose impact will be visible only in the medium term.
• The other large capital allocations are for conditional transfer of funds to the states and for public sector telecommunication companies, which do not guarantee returns.
• Even as the relative capital spending has seen an increase by around a third over the last two years to 9% of the GDP in 2022–23, it has also increased the debt burden on the country.
• The debt receipts have now reached 6 trillion rupees which are at an all-time high, and also pushed interest payments up and costs of servicing debt to 9.4 trillion rupees, which is around 125% of the budget allocation for capital spending.

Reduced allocations in the Budget 2022-23

• At the macro level, the total budget expenditure of Rs 39.4 lakh crores is 3% of the gross domestic product (GDP) in 2022–23, as compared to 18% in 2020–21.
• The government has continued to reduce the relative size of the budget for the second consecutive year despite the recurring waves of the pandemic, with a continued drop in consumer demand, and extensive rural distress.
• The budget cuts have focused exclusively on revenue spending, including major schemes and subsidies, that immediately affect the overall welfare considering the slow pace of recovery.
• The budget estimates indicate that the expenditure and outlay on central schemes, which account for almost 50% of the total budget, will decline in 2022–23.

Impacts of reduced government spending on important sectors

• Since the reductions are higher in revenue spending or the consumption expenditure of the government, the impacts would be immediate and severe.
• Revenue spending has declined by 3.4% to 12.4% of the GDP between 2020–21 and 2022–23, due to a fall in government funding of important schemes, including flagship schemes, and even ministries.
• The schemes that are affected by the budget allocations include,
  • Mahatma Gandhi National Rural Employment Guarantee – funds have been reduced by 25%. More on MGNREGA in the link.
  • Pradhan Mantri Awas Yojana – for promoting urban housing, road works, crop insurance scheme, the agricultural price stabilisation fund, and funds for gas connection for poor households.
  • Midday Meal Scheme – the allocation in the budget is very meagre.
• The overall budget subsidies were also reduced by 25%.
  • The oil subsidies have been cut by 10%.
  • Food and fertilizers saw a decline of around 25% each.
  • Interest subsidies by 33%.
  • The cuts in interest and fertilizer subsidies will negatively impact agriculture.
• The budget allocations for government ministries that are crucial to the economy also seem very few.
  • The most affected are health and housing.
  • The absence of any predominant strategy to plug the loopholes in the health sector is a cause of worry.
• The budget allocations for Scheduled Caste, Scheduled Tribe, and women’s welfare schemes have seen a rise, which is less than half of the overall spending. This will impact the efficacy of these schemes.

Reduction in tax revenue

• A major reason for drastic cuts in the social sector and welfare spending, and the increasing dependence on market borrowings to fund capital expenditure, is the shrinking share of corporate taxes.
• Despite claims of boosting growth, the budget numbers suggest that the tax-to-GDP ratio will decline to 7% of the GDP in 2022–23.
• The negligence in tax mobilisation is due to the shrinking share of corporate taxes after the sharp rate cuts.
• A major part of the buoyancy in the goods and services tax is due to the surging imports and not from any significant improvements in consumption.

Conclusion

• The budget 2022–23 has focused largely on stimulating growth by trying to substitute the private sector investments with public sector investments.
• The move is unlikely to have any immediate impact as the reduced consumer demand, low-capacity utilisation, and inflationary threats remain the major hurdles that restrain private investments and hinder the prospects of accelerating growth.
• Considering the situation, the soft monetary policy stance will most likely be reversed and heavy lifting is required to support sustainable growth recovery.

2. The Paradox of Data-based Governance

Context

Challenges and opportunities of Data-based Governance.

Data-based Governance

• Data is considered as the new currency currently driving governance.
• From Hunger and other indices to the caste census, data is the centre of focus.
• How it is coll­ected, interpreted, and developed into an index are debated and often have been controversial.
• The pandemic management that relies heavily on data in terms of testing, vaccinating or tracking recoveries and deaths has increased this debate over data.

Evidence-based policy (EBP)

• The reason for the prominence of the data-driven approaches is because of the evidence-based policy (EBP).
• The EBP has been regarded as a rational form of governance that bases its decisions on objective data rather than external pressures.
• According to Sutcliff and Court “the pursuit of EBP is based on the premise that policy decisions should be better informed by available evidence and should include rational analysis.”
• EBP is said to be important for deve­loping countries as public resources are often scarce or limited.
• It req­uires both data and the process of data collection to be scientific, rigorous and validated both in the process of coll­ection as well as analysis.

Historical background of the usage of EBP

• Tracing the history of the process of data collection, it could be seen how European countries accumulated large volumes of data in the early 19th century on a range of variables that often did not lead to any meaningful analysis.
• The analysis of Foucault’s “bio­politics” into “overt” and “subversive biopolitics” in the Canadian context where the very first census of the population took place in 1666 shows how the overt bio­political agenda i.e tax incentive for larger families in the Canadian context, did not have the intended effect but the subversive biopolitics in the form of “categorisation” of the population that took roots persists till date.
• Analyzing the historical perspective is important as it shows how state formation has been linked to “data regi­mes, statistics and probability.”
• Further, the entire process of data collection in the digital generation is distinct from the 19th-century processes.

Role of Information and communication tech­no­logies in policymaking

• Information and communication tech­no­logies (ICTs) have had a revolutionary impact on the way data is viewed currently as it rec­onfigures relationships between states, subjects, and citizens.
• Big data, machine learning and algorithms are the frameworks within which citizens operate, unaware of how these digital interfaces are converting them into data to be used by unknown entities.
• It is in this context it is necessary to make the distinction bet­ween politics of data and “data politics”.
• In the age of data politics, new players like multinational corporations that control ICTs and social media platforms are becoming more significant forces than the state.
• This is alarming as unlike the checks and bala­nces that limit the state’s influence, these large, transnational corporations are not constrained or held accountable by any such mechanisms.

Data-based Governance

• Gathering large volumes of data regarding the public by the state through census, surveys, etc, and currently via digital platforms has gained momentum in the context of EBP.
• Aim: To assist the use of research and evidence to inform workable funding decisions.
• Goal: To further ­invest in what works to improve outcomes for citizens based on prior evidence.
• Data-based governance aims to create a system of reliable and validated data with associated infrastructure.
• The governance outcomes are difficult to measure bec­ause governance outcomes are a combination of tangible outputs and intangible processes.
  • Measuring only tangible outputs without capturing the intangible processes provides ambiguous conclusions.
  • Example: in trying to evaluate women’s participation in a gram sabha, not only the number of women participants (outcomes) but also the nature of parti­cipation (process) should also be captured.

Challenges

• States collect huge volumes of administrative data. But a large portion of these data are unutilised or are underutilized as these administrative data are not validated or updated.
• The same data is collected by different agencies with different identifiers making consolidation of data difficult.
• The admi­nistrative data is usually kept confidential and is beyond the reach of the public and researchers for scrutiny or analysis.
• Measuring governance is a complex task. Especially the law and order aspect of governance.
  • Example:
    • Few studies use estimates of crime rates (ECR) as their indicator which looks at the total number of criminal cases reported.
    • While other studies look at the estimates of industrial disputes and strikes (EIDS) to assess worker satisfaction.
    • Similarly, another study takes into account the complaints against Police behaviour as their indicator.
  • The problem of ambiguity.
    • Example: The central government’s edu­cation survey ranks TN 4th in educational attainment, but another index shows that 27 of TN districts as being educationally backward.

Recommendations

• If governance decisions are to be data-centric, there is a need to ensure a system of good, robust and reliable databases.
• There is a need for a decentralized system of data collection process where states should build their databases from scratch.
• States should invest in both human and technical infrastructure with quality control measures to ensure that policy decisions are based on robust and rigorous data.
• The data-based governance req­uires validated and scientific data.
• The policymakers should use data wisely to ensure equality and equity.

Conclusion

In the age of a data-driven world, the means of governance are being forced to become data-centric. In this situation, data-based governance or policymaking is a step in the right direction. However, the challenges associated with data-centric governance should be addressed to make it more reliable, credible, and transparent.

3. The Illegality of Ken-Betwa Link Project

Context

The Union Cabinet approved the funding and implementation of the Ken-Betwa river interlinking project at a cost of ₹44,605 crores.

Ken-Betwa Interlinking Project:

• The project plans to irrigate the water-deficient areas and provide electricity to the Bundelkhand region, spread over Uttar Pradesh and Madhya Pradesh.
• The project involves transferring surplus water from the Ken river in Madhya Pradesh to the Betwa in Uttar Pradesh thus irrigating around 3.64 lakh hectares in the region.
• The project involves building a 77-metre-tall and a 2-km-wide Dhaudhan dam and a 230-km canal.
• The Centre would fund ₹39,317 crores for the project, with ₹36,290 crores as a grant and ₹3,027 crores as a loan.

Read more on the Ken-Betwa Interlinking Project in the linked article.

Criticism regarding the project

• The findings of the Supreme Court-appointed Central Empowered Committee (CEC) highlights that the wildlife clearance by the National Board for Wildlife (NBWL), was against the Wild Life (Protection) Act, 1972 (WPA) and hence illegal.
• Section 35(6) of the WPA dealing with national parks is also true for sanctuaries according to Section 29 of the WPA and since the Ken Gharial Sanctuary on the Ken river, will also be affected similarly to the Panna Tiger Reserve (PTR), it too requires detailed scrutiny.
• Due to the very fact that the wildlife clearance accorded to the project by the NBWL is not permissible by law, the project should have been rejected by the cabinet committee.
• On International Tiger Day, the PM reiterated the “Indian government’s commitment to ensuring safe habitats for the species and nurturing their habitat and ecosystems” but the project is said to affect the tiger population of PTR.

Central Empowered Committee (CEC) Report findings

• A large block of 6,017 ha of forestland that is part of the national park and core critical tiger habitat has been diverted to non-forest use and this will result in the total loss of wildlife habitat of 10,500 ha due to submergence and fragmentation.
• The forestland involved in submergence is a unique ecosystem of morphological significance with rich biodiversity in the region, which cannot be recreated.
• The objective of the declaration of this unique ecosystem as a national park is to ensure the application of the laws of nature but this will be violated and result in a breakdown of the evolutionary process of millions of years.
• The measures are insufficient to mitigate the loss of habitat and the threat of the PTR losing the status of “source area” would put the tiger population at risk.
• The assumptions of the NBWL and the Ministry that the project will have a positive impact on the tiger population are found to be flawed as the large floodplains will remain underwater even during summer.
• The NBWL, while giving clearance to the project, has not taken into account the decision of the Court wherein it held that “the approach should be ecocentric and not anthropocentric, and must apply the species best interest standard as all species have equal rights to exist on earth.”

Way forward

• Experts suggest that much cheaper, faster, and sustainable alternatives to the project are available for the people in the Bundelkhand region.
• Restoring large tanks and village ponds must be given high priority, as these as common pools have been used for centuries.
• Property rights and tenure security can effectively influence the sustainable use of structures as seen under the RRR (repair, renovation, restoration) scheme and Pradhan Mantri Krishi Sinchai Yojana.
• The region receives about 1,100 mm of rainfall annually, and there are examples where communities with less than half of this rainfall have been able to create water security through watershed development.

Read about Pradhan Mantri Krishi Sinchai Yojana.

Conclusion

Based on the view of an expert committee of NBWL that says “no developmental project should destroy the ecology of remnant fragile ecosystems and an important tiger habitat in the country”, it would be ideal to avoid projects in areas with protected area status in the best interest of wildlife and the overall wellbeing of the society.

4. Deciphering the Indian Slip on the Global Hunger Index 2021

Context

India has slipped to the 101st rank on the Global Hunger Index (GHI) 2021 out of 116 countries across the world.

Details

• The better ranking and performance of India’s three neighbours namely Bangladesh, Nepal, and Paki­stan has gained much attention.
• The government of India is attributing India’s position to the methodological discrepancies in the Food and Agriculture Organization’s (FAO) food insecurity estimates based on the Food Insecurity Experience Scale (FIES) survey conducted by the Gallup World Poll (GWP).

Global Hunger Index

• The Global Hunger Index aims to track hunger at the world, regional and country levels.
• It is an annual report published by the Concern Worldwide of Ireland and Welthungerhilfe of Germany.
• GHI has three components, each having a weight of one-third and measured by three indicators namely,
  • Prevalence of undernourishment (PoU)
  • Prevalence of stunting and wasting among children below 5 years
  • Under-five mortality rate (UFMR)

Prevalence of undernourishment (PoU)

• Data on the PoU is obtained from the FAO’s estimates, which takes into account three parameters, namely
  • The average dietary energy consumption (DEC)
  • The inequality in access to dietary energy
  • The minimum dietary energy requirement (MDER)
• The FIES-based projections are used to project DEC levels.

Comparison between India and its Neighbour

Image source: EPW

• Bangladesh and Nepal are ahead of India in terms of imp­rovement in all the indicators of the GHI.
• Child wasting
  • Nepal has reduced the levels below India’s level of child wasting.
  • Bangladesh’s level is lower than both India and Pakistan.
  • In India, the prevalence of wasting has increased to 17.3.
• PoU
  • The PoU is significantly lower in Nepal and Bangladesh than in India and Pakistan.
• Therefore India is ranked lower than Nepal and Bangladesh on the GHI.
• Pakistan has performed worse than India in terms of child stunting and UFMR, but it is better in terms of PoU and child wasting.
• The higher prevalence of child wasting in India reflects the underlying hunger to some extent.

Child Wasting in India

• The rising trend of child wasting in India started about 10 years ago, suggesting that access to food could be a problem for India.
• Based on the Demographic and Health Survey (DHS) data,
  • Between 2004–05 and 2015–16, the prevalence of stunting among children below 3 years had dec­lined, but the prevalence of wasting among children had increased.
  • Between the 1998–99 and 2004–05 rounds, the prevalence of wasting increased and this continued until 2015–16.
• The calorie consumption data for 2011–12 also suggest that there is a shortfall in calorie consumption with reference to the minimum average daily energy requirement (ADER).
• The low levels of calorie intake are due to inadequate access to food either due to the rising food prices or food shortage.
  • Between 2004 and 2013, the food prices in India increased by a 157%
  • India has been experiencing inflation in food, mainly because of a gap in demand for and supply.
• Since 2004–05, the prevalence of wasting among children has shown an increasing trend across states.
  • Between 2015–16 and 2019–20, almost all states saw an increase in the prevalence of wasting
  • In Gujarat and Karnataka, where wasting has not increased the level remains significantly high.
  • At 15%–16%, wasting is also very high in Kerala despite its excellent performance on health and nutrition.

Impact of COVID – 19 Pandemic

• The COVID-19 pandemic has further increased the problems of food and nutrition across the world.
• As projected by the World Food Programme (WFP), the number of food-insecure people may have doubled in 2020 due to the supply chain disruptions because of the pandemic.
• Due to an increase in unemployment and fall in incomes households were unable to access basic food and nutrition.
• In India during the national lockdown in 2020, more than 50% income reduction was estimated which would translate into a decline in the food security of the population.
• Landless farmers, informal workers, and mig­rant labourers were the worst affected in terms of decline in food insecurity.
• The food security system failed despite India’s extensive social support system, including the public distribution system (PDS), the Mahatma Gandhi National Rural Employment Guarantee Scheme, and cash transfer.

Conclusion

The increase in hunger can not be entirely attributed to COVID-19. As the rising trend of child wasting and shortfall in calorie consumption started nearly a decade ago in India. The COVID-19 has further increased the underlying vulnerabilities and all these together have been reflected in India’s ranking on the GHI.

Gist of EPW February Week 1, 2022:-Download PDF Here

Read previous EPW articles in the link.