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1.Rebound of Jallikatu (The Hindu)

2.Challenges ahead for economy in 2018 (Business Standard, Live MInt)

3.ASER report 2017 (Indian Express)

 

1.Rebound of Jallikatu (The Hindu)

Synoptic line: It throws light on the proposed triple talaq bill and its areas of concern. (GS paper II)

Overview

  • A spectator was gored to death by a bull during a jallikattu that is underway at Avaarangadu in Tiruchi district on Tuesday. As many as 20 persons were injured so far in the event, which commenced recently.

Lax rules

  • With animal rights activists at the head of the campaign against jallikattu, more attention seems to have been paid to cruelty to the bulls than the inherently dangerous nature of the bull-taming event, that puts both spectators and participants at risk. Two onlookers have died in the space of two days in the jallikattu events in Palameduand Avaarangadu in Tamil Nadu as the barricades separating the spectators from the arena were inadequate.

Inadequate safety arrangements

  • The safety arrangements monitored by the district administration at these annual events in the Pongal season failed to prevent death and injury. With some of the events inducting more than 400 bulls and almost twice as many tamers, jallikattu has become a disorderly spectacle, making a mockery of even well-laid-out plans.
  • The Animal Welfare Board of India, which was earlier in the forefront of documenting instances of mismanagement in the organising of jallikattu events, seems to have shifted its stance with a change of office-bearers. Other than spotting some “small mistakes” and “human errors”, the AWBI team’s convener found little amiss.
  • The concern, instead, was on preserving “native breeds” of bulls. After last year’s protests against the Supreme Court ban on jallikattu, when thousands of people gathered in public places in Tamil Nadu demanding a revival of the sport, the authorities have been wary of condemning bull-taming during Pongal. They now speak the language of custom and tradition, one that is similar to that of the jallikattu enthusiasts.

Way ahead

  • When the Supreme Court banned jallikattu on the basis of submissions made by the AWBI, which recorded instances of cruelty to animals in regulated events, it did so on the ground that regulations were not working. Following public protests and political pressure, and on the strength of hurriedly drafted legislation, jallikattu is now back on the Pongal calendar.
  • But nothing much has changed on the ground. Of course, participants and bulls are screened before being allowed into the arena. But the bulls do not heed the barricades that are meant to fence off spectators from the arena. Also, there is the risk of hyper-excited miscreants releasing the bulls outside the arena: this is what happened in Siravayal. District authorities have so far failed to find better ways to regulate the events, but more than the size of an event, the scale is the challenge. In short, there are too many events in too many places within a period of a few days, making regulation next to impossible.
  • It is one thing to have well-regulated jallikattu. But we are far from staging it in a manner that leaves nothing to chance and that is insured against damage wreaked by a rampaging bull.

Question: Though triple talaq bill is much needed legislation but any passage should not be introduced without any debate and deliberation. Comment.

 

2.Challenges ahead for economy in 2018 (Business Standard, Live MInt)

Synoptic line: It throws light on the issue and prospects for Indian economy. (GS paper III)

Overview

  • Global crude oil prices have climbed to around $70 a barrel. This is higher than what most Indian policy makers seem to have assumed in their models. US interest rates have also begun to tighten. The yield on the two-year US treasury note is now at its highest level since September 2008, the month when Lehman Brothers collapsed.
  • The yield curve has become steeper on expectations of higher inflation. The underlying reason for higher oil prices and US bond yields is that the global economy is in the midst of its best synchronized expansion since 2011.

Changing economic scenario

  • Economic growth has recovered from the depths it plunged to after the demonetisation shock. Most forecasters expect the Indian economy to accelerate further in 2018. Consumer price inflation has been climbing every month since it touched a low in June, and the latest number is close to the higher end of the acceptable range. Headline inflation has increased by 3.67 percentage points in the six months since June 2017.
  • The trade deficit is also widening, with oil being the most important contributor but other factors such as higher imports of gold and consumer electronics also playing a part. And finance minister will announce the final budget of the government on 1 February; it seems very likely that the fiscal deficit will be slightly higher than target.
  • The decline in global oil prices boosted the net incomes of Indians, though the Modi government quite sensibly decided to use the windfall to reduce its fiscal deficit rather than leave it in the hands of consumers. The process could reverse in case oil prices continue to go up.

Is all this a cause for worry?

  • he economic stability that has been achieved after the run on the rupee in mid-2013 does not seem to be at risk for now. Consider the example of inflation. The recent rise can at least partly be explained by the low base of the corresponding months a year ago, and it is likely that monthly inflation will remain elevated till June. It would be sensible to look at the average inflation for the year rather than the noisy monthly data, especially in these times when the economy was hit by two successive policy shocks.
  • So, the December 2017 inflation number (5.21%) is not a reason for sharp interest rate hikes just as the June 2017 number (1.54%) was not a reason for a sharp reduction in interest rates. An inflation-targeting central bank would normally look past temporary blips as long as underlying inflation expectations are stable.
  • Untangling the effects of higher global oil prices on Indian economic growth is not an easy task. There are two research papers that are worth highlighting here.
  • First, a working paper published by the International Monetary Fund in December 2016, shows that a lot depends on whether movements in global oil prices are dominated by changes in demand or changes in supply. The economic consequences of the two are quite different from each other in the case of an oil importer such as India.
  • A surge in oil prices driven by supply constraints typically hurts economic activity over a long period of time. The impact is quite different in case the increase in oil prices is primarily because of higher demand. Oil importers typically experience a temporary increase in output as well as higher inflation over the longer term. In other words, a lot depends on whether the current increase in global oil prices is being driven by higher demand or lower supply (though the shale revolution makes the former a more likely candidate).
  • Second, Harvard University economist showed in a 2007 paper that emerging markets such as India have more volatile economic growth than the developed economies. In other words, the business cycles in emerging markets are different from those in the developed economies. They show how shocks to trend growth are the primary source of fluctuations in these markets as opposed to transitory fluctuations around the trend.
  • India is nowhere near the dangerous place it was in 2013, in terms of the standard indicators of economic stability such as the fiscal deficit, the current account deficit and consumer inflation. Yet, the year ahead is likely to see some deterioration in public finances, a larger current account deficit that needs to be funded with capital inflows and higher inflation as the output gap closes. Indian macroeconomic policy always gets complicated when global oil prices increase steeply.

Way ahead

  • The economy in 2018 will thus look very different from the one in 2017. And all this at a time when potential growth could have slipped to as low as 6.7%, as credit rating agency Fitch recently estimated. In other words, the Indian economy could begin to heat up quickly with higher inflation and a bigger trade deficit as the main signals unless private sector investment picks up soon to increase productive capacity. The coming quarters will thus test the macroeconomic policy framework that has been in place since the end of 2013.

Question: Why Indian macroeconomic policy always gets complicated when global oil prices increase steeply?

 

3.ASER report 2017 (Indian Express)

Synoptic line: It throws light on the findings of ASER report 2017. (GS paper II)

Overview

  • The 2017 ASER report focuses on 14 to 18-year-olds, interviewing over 30,000 children across 28 rural districts. The Indian Express explains some of its findings.

86% of youth in the 14-18 age group are still within the formal education system

  • It has been eight years since the Right to Education (RTE) Act came into force in 2010, making elementary education a fundamental right for those in the 6-14 age group. Therefore, the 14-year-olds in the 2017 ASER (Annual Status of Education Report Rural) survey are among the first to have benefitted from the Act’s provisions of no-detention and free and compulsory education.
  • As the ASER report shows, a direct consequence of the RTE has been that most tend to continue to stay within the formal education set-up, even after the Act folds up at age 14. The data shows that at age 15, 92.1% of the children surveyed continued to be in school/college.
  • However, the enrolment gap between girls and boys increases with age at 14, there is hardly any difference (94.3% enrolment for girls, 95.3% for boys), but at 18, the gap widens (71.6% for boys, 67.4% for girls).

Learning deficits carry forward as 14 to 18-year-olds go from being adolescents to young adults

  • Though their ability to read in regional languages and English seems to improve with age, the same does not apply to math. The proportion of youth who have not acquired basic math skills by age 14 is the same as that of 18-year-olds. This underlines what ASER has always been suggesting that you need to have foundational skills in place in time.
  • Here too, there is a visible gender divide: while only 47.1% boys in the 14-18 group could do simple division (dividing a 3-digit number by a single digit), at 39.5%, girls fared worse.
  • One of the tasks given was ‘adding weights’. The youth surveyed were shown a picture of weights 1 kg, 5 gm, 50 gm, 500 gm, 200 gm, 200 gm and asked how much this adds to in kilogram. Almost half of those surveyed 44% got it wrong. Even among those with basic arithmetic skills, only 76% answered right.
  • These findings are worrying because these are everyday skills that formal education has failed to equip them with.
  • Besides, many of these students are the first in their families to complete eight years of schooling. About 44% of the age group had mothers who had never been to school, 25% had fathers who had never been to school and 20% had both parents who had never been to school. So, their ability to do basic calculations and make correct decisions is important not only for themselves but for the whole family.

73% had used a mobile phone within the last week

  • What we always knew this is a generation that spends a lot of time on the phone.However, there can be a potential. You have the overall picture. How do we build on that? You know 73% have access to a mobile phone. Is that something policy makers can build upon? These are things to think about.
  • Here too, there are significant gender differences. While only 12% boys had never used a mobile phone, 22% of girls surveyed had never used one. Girls and young women have far lower access to computers and the Internet.

Question: What are the significant take away from the state of education in India from ASER report?