1.Re-Envisaging the priorities for skilling  (Bsiness Standard)

2.Task for 15th Finance Commission (Live Mint)

3.Disease related to transition of lifestyle (Down to Earth)

1.Re-Envisaging the priorities for skilling (Business Standard)

Synoptic line: It throws light on why Skill training should be viewed as a complementary part of mainstream education, rather than being regarded as an inferior alternative. (GS paper III)

Overview

  • Young and aspirational generation that makes up about 40% of India’s population has long been regarded as the saviour and driver of future economic growth. Yet, the gap between the productive labour force and the employment and entrepreneurial opportunities available to them continues to widen. The fourth Industrial Revolution has already made its mark on certain sectors.
  • The economic turmoil that could be brought on by further large-scale disruption should be a cause of concern.

 Future vulnerabilities for India

  • India’s status as an information technology (IT) powerhouse has fostered the false hope that the nation could be saved from future disruption. It should be noted, however, that the global appeal of the Indian IT industry has been the labour cost arbitrage available to multinational corporations looking to capitalize on a young, educated, English-speaking population.
  • Low wages cannot drive economic growth or foster innovation, and the sector’s professionals are easily replaceable if they ask for higher pay or wish to move up the ladder.
  • With prestigious and highly regarded Indian sectors such as IT amounting to little more than cyber “coolies”, the manufacturing and agricultural sectors are in an even more precarious situation. Much of India’s workforce is already hampered with outdated and irrelevant skills. As technology continues to surge forward in leaps and bounds, both blue- and white-collar jobs will become increasingly sparse.

How to tackle the decline

  • To be fair, policymakers recognize the problem and have taken steps to combat it. The zSkilling India” programme aimed at accelerating the pace of skill development, creating new employment opportunities and reforming India’s archaic labour ecosystem is a positive step.
  • Yet the challenges faced by the ministry of skill development and entrepreneurship (MSDE) are complex and varied.
  • Encumbered with the Herculean challenge of skilling 400 million young Indians by 2022, the MSDE is forced to coordinate with 22 departments and ministries at the national level, and many more at the sub-national levels. The MSDE also must account for the possibility of intra-state migration, rapid urbanization and possible changes in social fabric as populations react to new job opportunities.

Changes to be made

  • Fulfilling the great expectations set for the MSDE seems unlikely unless certain changes are made. A prime example of the worst-case scenario can be seen with the National Skill Development Corporation (NSDC), an autonomous entity functioning under the MSDE.
  • Tasked specifically with the responsibility of skilling 10 million people by 2020, the NSDC has struggled to achieve its goal. If India wishes to avoid economic stagnation and societal upheaval, additional policy measures must be undertaken to cut through bureaucratic red tape and bring clarity to the policy framework.
  • Creating a coherent organizational structure is the first step the NSDC, for example, has been tasked with managing the financing processes while also implementing the skilling programmes. Separating the two tasks and allowing the ministry of finance to manage the financial aspects would allow the NSDC to focus on its core competencies, allowing it to be more effective and efficient.
  • It is also imperative that the MSDE focus on implementing a multi-skilling aspect to its training programme moving forward. As job markets evolve at unprecedented rates, it is incumbent upon the MSDE to provide its trainees with more than one way to earn a living. Additionally, the ministry should also explore the possibility of programmes aimed at skilling and reskilling older “educated” populations that might be left behind owing to disruption and technological advances.
  • Furthermore, the curriculum and education system offered also needs to be overhauled. Industry sources claim that close to 90% of trainees have limited understanding of the business sectors they are entering. For many skill programme graduates, the training does very little to prepare them for their day-to-day jobs.
  • Targeted initiatives focused on updating skills can help ensure that the training benefits its intended audience. A solutions-based approach, where instructors employ case studies and present relevant problems, would provide students with a holistic education, allowing them to compete at both the national and international levels.
  • Implementation of licensing and regulation procedures can also help boost the Indian labour force’s chances globally. Most developed nations have systems in place to ensure that electricians, plumbers, agricultural machine operators and other skilled trade workers update their skills regularly through the licensing and regulatory mechanisms. Implementing such a system without creating additional layers of burdensome bureaucracy might be challenging, but could also be a key difference marker for the Indian labour force moving forward.

Way ahead

  • Cutting away excessive bureaucratic fat, implementing structural changes to the pedagogy of the skill training system, and installing licensing and regulatory mechanisms are all important steps to help reskill India. The most important change, however, needs to happen on a cultural level. Skill training should be viewed as a complementary part of mainstream education, rather than being regarded as an inferior alternative.
  • Gainful employment through skilled trades needs to be embraced by the wider Indian public and given the respectability and opportunity it deserves, for true change to be brought about. Otherwise, India’s youth will be relegated to the same conditions that their grandparents were subject to.

Question–  How government should respond so that targeted initiatives focused on updating skills can help ensure that the training benefits its intended audience?

2.Task for 15th Finance Commission (Live Mint)

Synoptic line: It throws light on the need of strengthen cooperative federalism via upcoming finance commission. (GS paper III)

Overview

  • The 15th Finance Commission led by N.K. Singh held its first meeting this week. The tasks before it are unique in the sense that it has to make its recommendations after the rules of fiscal federalism have been profoundly reset by the introduction of the goods and services tax (GST). This is the first finance commission that will do its work under the new tax system.

Areas to look for

  • The impact of GST on federal public finances is still not clear. For example, the fact that the new tax, which is a destination levy, will shift the incidence of taxation from production to consumption means that the distribution of indirect taxes between different states could change significantly.
  • The ambiguity about the revenue-neutral GST rate also puts a big question mark on the health of public finances at all levels over the medium term. These issues need to be framed against the larger challenge of increasing the Indian tax to gross domestic product ratio.
  • Successive finance commissions have increased the proportion of tax revenue that goes to the states a necessary change given the growing importance of direct taxes as well as the need for higher spending by state governments in local public goods. The First Finance Commission headed by K.C. Neogy had recommended that the states get a tenth of total taxes collected centrally. That share has steadily increased. The 14th Finance Commission headed by Y. V. Reddy recommended that the share of the states should be 42%.

Tasks for Finance commission

  • The Constitution empowers the finance commissions to go beyond the core issues of how to divide taxes vertically between New Delhi and the states on the one hand and horizontally between states on the other. Constitutional provisions also allow finance commissions to make broader recommendations in the interests of sound finance, a testimony to the vision of our Constitution makers.

Tasks for 15th Finance Commision

  • One of the key issues that the 15th Finance Commission will need to deal with is how to incentivise the states to stick to fiscal discipline. The terms of reference of the new commission have suggested linking transfers to a range of parameters, such as efforts made to deepen GST, how quickly a state moves towards the replacement level of fertility, eliminating power sector losses, improving the ease of doing business, adoption of direct benefit transfers and progress in sanitation. These performance parameters are clearly a reflection of the policy preferences of the Narendra Modi government.
  • One important change and a tricky political issue is the decision to use population according to the 2011 census as the base for calculating the expenditure needs of various states. Even the 14th Finance Commission had been explicitly asked to use the 1971 population numbers while deciding the devolution formula.
  • The shift to the latest demographics is necessary since public goods expenditure by the states has to be linked to the number of citizens, but it could also be a sore point for southern states that have been more successful in reducing their rate of population growth.
  • The Fifteenth Finance Commission is also expected to recommend new fiscal targets for the Union and state governments. It can be assumed that the targets will broadly be similar to what the recent fiscal review committee suggested, especially since it was also headed by N.K. Singh.
  • A focus on state finances is needed, especially given the recent deterioration in the fiscal parameters of the states. But the finance commission should also not ignore the fiscal health of the Union government, given its importance in the overall macro performance of the Indian economy.

Way ahead

  • Every finance commission has to do a political balancing act. It needs to give more resources to the states given the growing importance of sub-national governments in the Indian political economy. It also needs to ensure that New Delhi is not fiscally constrained given its role in key national public goods such as defence.
  • Federalism can flourish only when it is accompanied by a strong central agency that credibly enforces the rules for a new political economy equilibrium (which is sometimes mistakenly described as pooled sovereignty, even though Indian states are not sovereign in any rigorous sense of the term).
  • The three central tasks of the 15th Finance Commission will thus be to strengthen cooperative federalism, frame the incentives needed to shift public spending in the desired direction, and do all this without compromising fiscal stability.

Question:- One of the key issues that the 15th Finance Commission will need to deal with is how to incentivise the states to stick to fiscal discipline. Comment.

 

3.Disease related to transition of lifestyle (Down to Earth)

Synoptic line: It throws light on the need of interventions needed for fighting against non-communicable diseases. (GS paper III)

Overview

  • In June 2017, British medical journalLancet published a review of the prevalence of diabetes in 15 states of India. This study by a group of medical practitioners, funded by the Indian Council of Medical Research (ICMR), has worrying numbers. It finds that while some 7 per cent people in India (based on 15 states’ data) had diabetes, the prevalence of pre-diabetes (early signs, particularly elevated blood sugar levels) was a staggering 10-15 per cent, depending on the criterion used. This is no small health burden on a poor country.

Harmful transitions

  • Their conclusion is we are undergoing an epidemiological transition. States with higher GDP Gujarat, Maharashtra, Tamil Nadu and Chandigarh have higher prevalence of this disease as compared to Bihar or Jharkhand. Delhi and Goa, with high income levels, are still awaiting sampling. Rural areas have lower diabetes rates than urban ones.
  • But most worryingly, the study finds that the poor in urban well-off states have higher incidence of diabetes than the rich in the same cities. In other words, the rich in rich cities have started to learn good food habits.

    But the poor are now falling into the trap of bad food. The study also found that conversely, in rural areas it was the more socio-economically advanced that were falling prey to diabetes. “It is an epidemic that is in a state of transition,” the study noted. With such large numbers of poor in urban areas and such large numbers of the getting-rich in rural areas, this can easily get out of hand.

  • We are going from lack of food or malnutrition to over-nutrition because of bad food. This is a transition that must be avoided.
  • The fact is that India has what can only be described as a double burden of diseases. We have the diseases of the poor everything from malnutrition to cholera. But we also have the diseases of the rich cancer and diabetes. Worse, as the ICMR study shows, the poor, who can ill-afford the diseases of the rich are now afflicted by them.

Things to be chnaged

  • We know that these diseases—called non-communicable by the health community—are connected to our lifestyles. What we eat? What air we breathe? And what environment we live in? These are part of the package of “toxic” development. A model of development where we first pollute and then think of cleaning up. A model where we first industrialise-chemicalise our food, eat unhealthy junk and then think of going to the gym to exercise or eat organic food. But the question is can we not avoid the transition?
  • Can we not go from being poor but unhealthy to being rich and healthy? Why should we inherit the diseases of a lifestyle that can be junked?
  • This is where change is essential. This is where we need to make crucial linkages between our health and the health of the environment. Today, it is polluted water, which is visible in the deliberate murder of our rivers, that is also one of the largest-killers of babies in the country. Today it is the lack of clean energy in homes that makes women cooking on biomass fuel suffer from killer respiratory disorders.
  • It is also responsible for pollution that is making air toxic to breathe in our cities. So, health is an indicator for the environment. The good news is that our health is also the only real trigger for environmental action.
  • We will act to improve the environment, when we know it impacts us directly. For instance, today, in Delhi there is outrage against the pollution in the air. This is because the 2016 winter’s public health emergency when pollution levels spiralled out of control has brought about a clear understanding of the link between toxins and our bodies. It will drive change.

Way ahead

  • It is for this reason that the United Nations’ sustainable development goals (SDGs)—13 global goals that the world needs to achieve by 2030—must put children at the very centre. Every goal has a link to the child and every goal has a link to the health of the child and so the health of the Planet. This is the human face of the SDGs that would define our progress, or not. It is the health of our children that must be put at the centre of the health of our planet.

Question:- Can we not go from being poor but unhealthy to being rich and healthy?