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. Onslaught of Escalating Fuel Prices 2. A Regressive Syllabus Redesign 3. Impact of COVID-19 on Labour
Onslaught of Escalating Fuel Prices
- In the last few months, there has been a sharp increase in the prices of petrol and diesel in the country by 17 % (or Rs 11.66 per litre) and 13% (or Rs 9.17 per litre) respectively.
- In July 2020, unit prices of petrol and diesel in major metro cities were skyrocketing.
- In Delhi, petrol and diesel prices stood at Rs 80.43 per litre and Rs 81.05 per litre respectively.
- On the other hand, in Mumbai, petrol and diesel were available at Rs 87.19 and Rs 79.29 respectively.
This article analyses the various aspects of crude price hike and discusses its impact on the lives of commoners.
Global crude oil prices and consumers:
- Comparing the current situation with the last quarter of 2018, when the crude oil price globally was almost twofold of the existing prices, the prices of petrol and diesel have remained almost the same, fluctuating between Rs 80-85 per litre.
- It means that the consumers are not able to avail the benefits of the low global oil prices.
- Hence, this puts to question the purpose of India’s fuel price deregulations (of 2010 and 2014).
The linkage between global crude prices and retail prices
- In theory, there is a direct linkage between petrol and diesel prices in India and global crude prices.
- It means that a fall in the price of crude oil in the international market will lead to a decline in retail prices also.
- This downward trend has been seen since February 2020.
- But, in practice, oil price decontrol seems to be rigid/sticky downwards.
- This rigidness can be seen in price decontrol because of the policy of the government.
- Whenever there is a fall in the global crude oil prices, new taxes and levies are imposed by the government to increase the revenue.
In the end, there is no change in the condition of the consumers. They either pay the same which they were paying prior to the imposition or end up paying even more than that.
- Price decontrol is a practice followed by the retailers in which there is no intervention of the government in the process of pricing.
- In the case of India, the government intervenes in such matters whenever it is required.
- Under price decontrol, retail prices are fixed by the Indian fuel retailers on the basis of their calculations of profits which are over and above the costs (or prices) at which they source their inputs from the upstream oil companies for whom the price benchmark is derived from global crude prices.
Fall in the Demand and Prices of Crude oil
- The spread of the Covid-19 disease across the world and almost worldwide lockdowns in response to this led to a sharp decline in the demand and prices of crude oil.
Fall in Demand
- Media reports state that the reduction in sales of diesel and petrol is greater in the first fortnight of July 2020 as compared to the first fortnight of July 2019.
- This is the primary reason as to why the Indian retailers have decided to collude, increase the retail prices of these products so that they can recover their losses.
Fall in Prices
- Crude oil prices have dropped significantly from the average of $55 per barrel in February to $20 per barrel by the end of March 2020.
- It is only now that the revival of prices has started, following the step by step relaxation of the lockdown rules.
Government’s effort to build a fiscal position by increasing fuel price
- Government increasing the excise duty on petrol and diesel has its effects on consumer prices as well as further exacerbating their condition.
- With this imposition, taxation covers nearly 69% of the retail prices of fuel in India—the highest rate of fuel taxation globally.
- The high rate of taxation is often used as a tool to revive the economy from the slowdown but it should be kept in mind that fuel prices are also used as an instrument to accumulate revenue for political desirability.
- An example of this is high excise revenue earned by the government in 2016-17 by increasing the duty on petrol and diesel.
- Politics of price hike: In order to please the voters during the pre-poll period, some states like Karnataka decided to immobilize the daily revision of petrol pump prices in April-May, 2018.
Debating the rationality of fuel price hike
Two questions arise amidst this crisis:
- Will this hike in the prices of petrol and diesel help the oil markets of India recover from the depression? There are very less chances because of the following reasons:
- Restricted mobility: With mobility still being limited/restricted, the demand for vehicular fuel is less likely to revive soon.
- Higher fuel price deters the use of personal vehicles: Even if mobility is restored, people would prefer to use non-shared or private vehicles due to the fear of transmission of disease.
- It means that there will be an increase in the expenditure on fuel costs at hiked prices.
- These factors, in turn, are likely to act as demand depressing factors.
- How will it impact the common people?
- Fare hike of public transport because of increasing oil prices.
- Higher inflation: There will be an increase in the logistic costs for the already damaged supply chains.
- Most disconcertingly, the fuel price hike brings to the fore the contrasting nature of a so-called “commoner-friendly” state, where common people are going to be most affected by such action.
A Regressive Syllabus Redesign
- The announcement of significant cuts in the syllabus of all subjects has been made by the Central Board of Secondary Education (CBSE) in response to the situation created by the Covid-19 pandemic.
- This also highlighted the national level historical turf war between curriculum designers and exam organisers.
The article analyses the impact of this move on the quality of learning while highlighting other flaws in the education system.
Public response to cuts:
- The response of the public to these cuts was as per the expectations. Some were terming it as a political move, which the CBSE officials have denied.
- Reduction in the syllabus provided a sense of relief to the school principals and teachers from their new anxiety due to a switch from classroom teaching to online teaching.
- CBSE students may also be pleased by this move.
- The plausible purpose of cutting the syllabus is to reduce the burden of curriculum on students.
- The students can prepare for the board exams with a reduced number of topics in each subject.
- The next exam season is about seven months away, that is, if they are held on time in February and March 2021.
Linkage between prescribed syllabus and the annual exams
- Links between annual exams and syllabus are crucial for the education system.
- This linkage was officially forged in the latter half of the 19th century and since then six generations have gone through certified education, making the link familiar to the entire social spectrum.
- This linkage has also served several systemic and social functions.
Shortcomings of the linkage:
- Impacting curiosity: The linkage froze the scope and process of examination, which overlooked educational aims such as awakening of the personal curiosity, and the desire to follow something out of interest.
- Detached learning: The examination process is such that the evaluation is detached from learning.
- The questions asked in the examination are judged correct if students write only those things which are mentioned in textbooks.
- Topics are segregated according to marks and those topics that are considered important carries more marks.
- Moreover, model answers are made available just before the exam and teachers ensure that students write the exact words in the following examination.
- Understanding a topic with reference to other topics and connecting the dots is neither expected nor welcome.
- Suppressing creativity: The punishment for applying personal imagination or reasoning is lower marking.
- As a result, teachers encourage students to write answers similar to the approved ones.
- Instead of encouraging the interest of students in the subject, the focus of pedagogic efforts is on the success of examinations.
- Maintaining social order: Separation of learning from preparing for exams enables the system to serve as an instrument of social selection.
- Board exam performance channelizes mobility into higher education and employment.
- In the matter of course, public exams have become a tool to maintain social order as marks provide a legal basis for the distribution of educational and economic opportunities.
The above-mentioned characteristics clearly depict why the examining institution can mercilessly cut down the syllabus without thinking about the effects it will have on the quality of learning.
Impact of slashing curriculum: Exams have been prioritised over learning
- The official measure of this syllabus cut is expressed in terms of percentage. It indicates the mechanical way the board sees the framework of curriculum and its parts.
- 30 % reduction in the syllabus is affirmed by the CBSE.
- Impact on language subjects: In language subjects, the slashing refers to literary pieces included in the prescribed textbook.
- These pieces can be ignored by the students because they are not going to be asked in the examination. Hence, in this manner, the promise to reduce the burden is fulfilled.
- Impact on other subjects: In other subjects such as mathematics, science and social sciences, questions will be asked from the topics spared by the board’s scissors.
- This is not a matter of concern to the board if some topics become difficult to understand by the students because the topics preceding and supporting them have been removed.
- Example: Federalism has been deleted from the political science syllabus. There is no need to study this topic for next year’s (2021) exam. However, the Constitution as a topic is kept. Without knowing federalism it is difficult to make sense of the constitution.
Triumph of the organizers of exams over curriculum designers
- The goal of curriculum designers is to enable students to make sense of what they are learning. However, the Indian system provides a permanent edge to the organizers of exams over the curriculum designers.
- Impact of pandemic and digital education:
- The turf war between them has been suppressed for now by the pandemic.
- Without any consideration of alternative responses to the pandemic, online delivery of content has come up as the sole, favoured solution. Digital technology has finally achieved its long-delayed victory.
- Norms for online delivery of content and intake have been laid down and announced.
Committee for reforming education
- Yash Pal committee: After an ardent appeal made by late RK Narayanan to reform education, the Ministry of Human Resource Development appointed the Yash Pal Committee to look into it.
- It was chaired by the space scientist and great educationist Yash Pal. The committee which presented its report in 1993, highlighted that incoherent syllabus was creating a burden on students.
- Reforms in the design and content of the syllabus led by Pal himself are now under the CBSE’s carving knife.
- This regressive move is likely to be followed by the state boards but, there may be certain exceptions.
Impact of COVID-19 on Labour
- The pandemic has enforced changes in the labour market which have not only enhanced unemployment but has also led to the erosion of workers’ rights.
- The article analyses the impact of the pandemic on various sectors, especially on manufacturing.
Impact of COVID-19 pandemic on labour market:
- The outbreak of the COVID-19 pandemic and the resulting lockdown has impacted the labour market in a very harsh manner, such as the decline or complete loss of livelihoods, which have led to a severe impact on migrant workers and the working poor.
- Workers providing essential services: There has been a large increase in the workloads and working schedules of other workers such as health workers and those providing essential services.
- Workers in the service sector: Service sector experienced huge lay-offs and retrenchments due to the pandemic, but this has also been an agent for transforming the workplace.
- Technically qualified employees have been able to continue their work from home through remote working arrangements.
- This has led to a change in their work-life balance and resulted in indeterminate net effects on productivity.
- Most of the employees have been involuntarily forced into working remotely, often under stressful conditions because of the pandemic, which could lead to diminished motivation and concentration as well.
- However, these longer working hours have not been counterbalanced by the wages prevalent before the outbreak of the crisis.
- It can be clearly said that the pandemic has directly disrupted the lives of millions of workers in countries across the globe by resulting in a significant reduction in wages, reduction in working hours and layoffs.
ILO report on employment amid pandemic
- Increase in job loss: It is expected that 6.7% of working hours equivalent to 195 million full-time workers will get eroded in the second quarter of 2020.
- This will result in large scale unemployment worldwide and a higher proportion of it will be from the Arab nations, Europe, Asia and the Pacific regions.
- The sectors which will be badly affected are accommodation and food services, manufacturing, retail, and business and administrative activities.
Declining labour productivity
- A decade long significant reduction in the productivity of labour, since the global financial crisis of 2007-09, is being faced by the world economy.
- It is evident from various studies that the pandemic has caused severe effects on the productivity of labour.
- A study conducted by the World Bank on 35 advanced and 129 emerging markets and developing economies concluded that the four pandemics that occurred during the period 2008-18 led to severe impacts on the productivity of labour via a decline in investments resulting due to a growing sense of uncertainty.
- Furthermore, the increased sense of uncertainty about the ongoing pandemic and its duration could also lead to disruption in trade and foreign direct investment (FDI).
- Although the pandemic has resulted in changed behaviour, it was expected that this changed behaviour would escalate the take-up of new technologies, encourage greater efficiency and speed up scientific innovation among businesses.
- The analysis of Annual Survey of Industries (ASI) data clearly demonstrates that the productivity of labour in the organized manufacturing sector has declined in a significant manner over the past eight years.
- The productivity of labour was also lower than the neighbouring country China.
Indian economy amid the pandemic
- Many emerging and developing economies were facing much weaker growth before the onset of the pandemic.
- Accompanied by the structural features of the slowdown, this would aggravate the long-term impacts of deep recessions associated with the COVID-19 crisis.
- A deep slowdown has been witnessed by the Indian economy prior to the occurrence of this pandemic.
- There has been a decline in the Gross Domestic Product (GDP) for nine consecutive quarters.
- Given the risk aversion at the global level, the possibility of a revival in private and corporate investment is supposed to be fallen behind.
Changing nature of manufacturing amid the pandemic
- According to the Federation of Indian Chambers of Commerce and Industry, in order to alleviate the shortage of workers during the pandemic, the manufacturing sector could also seek the mass adoptions of latest technologies, such as robotics, artificial intelligence, and big data.
- This in turn would lead to a reduction in 10-20% existing jobs specifically in labour-intensive industries.
- In a labour surplus country like India, the replacement of labour with new technologies will cause severe effects on the generation of employment.
- Nevertheless, new jobs that would be created are supposed to provide room for 5-10% of jobs for highly skilled workers.
Erosion of workers’ right amid the pandemic
- Although the labour laws of India are blamed for this reduction in productivity.
- Recently, some states such as Maharashtra, Madhya Pradesh, Haryana, Himachal Pradesh, Uttar Pradesh and Gujarat have declared a slew of labour laws suspension in order to avail the benefits from the disrupted global supply chains because of conflicts in trade, to invite foreign investments for international firms seeking to move production out of China and provide support to the businesses in recovering from the losses of the pandemic.
- These policy changes have led to undermining worker rights and dismantling of decades-old protective measures that were framed to abide by ILO conventions and constitutional obligations.
- Adoption of labour-displacing technologies and dilution of labour rights in the wake of the pandemic and associated events have made the labourers pay a heavy price.
- Sadly, other alternatives to expand public investment in the economy have not been explored. Measures such as wealth tax can be introduced by the government to finance public investment.
- The government needs to focus on stimulating aggregate demand and increasing purchasing power to revive the economy.
For more EPW articles, read “Gist of EPW”.