Sending the wrong signal

(The Hindu)


The working class

(Live Mint)


A smart card for the farmer

(The Indian Express)

Sending the wrong signal

(The Hindu)

Synoptic line: It throws light on issue of recent Supreme Court order in the SC/ST Act case.

(GS paper II)



  • India is home to over 180 million Dalits, and over the last 10 years (2007-2017), there has been a 66% growth in crime against Dalits. A crime is committed against a Dalit every 15 minutes.


  • Data from the National Crime Records Bureau on which the Supreme Court based its recent judgment that sought to protect public servants and private citizens from arbitrary arrests under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989, show that the rape of Dalit women has doubled in the last 10 years.


  • The figures represent only a tip of the iceberg since most Dalits do not register cases for fear of retaliation by higher castes. Even if a case reaches court, the most likely outcome is acquittal due to caste biases at every stage.


Assessment of the reasons



  • Justices A.K. Goel and U.U. Lalit in Kashinath Mahajan, had adopted a ‘purposive interpretation’ and by invoking Ambedkar on societal fraternity, he have diluted the stringent provision of denial of anticipatory bail in the SC/ST Act. The judgment gives no prominence to caste atrocities and ignores untouchability, which is still prevalent. The mischief that Parliament wanted to address too was ignored by the court.




  • The decline in the conviction rate for crimes against Dalits has created an impression that this may be driven by false filing of cases. But data from NCRB do not seem to support this contention. In fact, the share of false cases under the SC/ST Act has declined over time (2009-2015). The conviction rate too has in fact improved from 23.8% in 2013 to 28.8% in 2014.



  • Low conviction rates show poor investigation and incompetence of prosecution. Witnesses routinely turn hostile in such cases. There have been low conviction rates in terror crimes as well, but the question is that –‘Will the court similarly dilute stringent provisions of terror laws?’ If there is concern about the ‘presumption of innocence’ of the accused, the protection of anticipatory bail should be extended to the accused in all cases and under all statutes.


  • The high court rightly noted that in spite of possibility of misuse of the SC/ST Act, its penal provisions cannot be faulted as it would send the wrong signals to the downtrodden. The apex court has indeed sent wrong signals. The court has deviated from the established judicial opinion on the subject. The Supreme Court had clearly said that anticipatory bail provision for the first time was introduced in 1973 and it is merely a limited statutory right and not part of right to life and personal liberty under Article 21.


Way ahead


  • Justice Goel’s judgment has given too much space to the arguments in favour of those accused of offences against Dalits. He has quoted judgments from the Gujarat High Court at length. Gujarat, incidentally, has a low conviction rate under the SC/ST Act.
  • Section 22 of the SC/ST Act already protects public servants from prosecution if they acted in ‘good faith’. But now even a First Information Report is not to be registered without preliminary inquiry. Moreover, even after the registration of FIR, the accused cannot be arrested without written approval of the appointing authority. No FIR can be registered against anybody without permission of the senior superintendent of police.


Question-Explain how the judgment of Kashinath Mahajan, have given the chilling effect on the already underreported crimes against Dalits. Also suggest measures to address issue.

The working class

(Live Mint)

Synoptic line: It throws light on the issue that how India should tackle the labour policy challenges posed by the gig economy.

(GS paper III)



  • With the technological advancement, Apps have become ubiquitous in our lives, as now it is used for calling a taxi, ordering food, connect with friends, make payments, and a lot more. These apps are central to what is now called the gig economy, where a payment for every service replaces the traditional labour contract for the long term.


In the gig economy



  • The ongoing Facebook controversy is just one part of a broader examination of the social impact of this emerging new economy based on online platforms. The recent strike in some Indian cities by thousands of taxi drivers on the Uber and Ola networks also raises some important questions about the underlying assumptions of the gig economy, especially the role of labour in it.



  • There are ample reasons to welcome the growing popularity of such apps, for an example; there is little doubt that the rise of taxi aggregators has offered harried commuters a comfortable alternative to traditional taxis. The attempts by taxi unions in many cities around the world to block competition from taxi aggregators only hurt consumers. There is a flip side as well, thanks to lower search costs. The apps also allow taxis to be used more efficiently, rather than idling by roadsides waiting for customers.


  • However, there is grey underside to the gig economy as well. According to some critics it is like a Dickensian world in which workers are at the mercy of the online platforms they are members of. Others have spoken about digital serfs who have few rights. The reported reasons why Uber and Ola taxi drivers took their cars off the road are worth focusing on in this context, since they raise some deeper questions about the role of labour in the gig economy, especially at a time when many thinkers believe that an economy of freelancers is one solution to the global jobs challenge.


Important economic issues


  • There are two important economic issues here. First, most traditional firms are based on the principle that ownership goes to the individuals who take financial risks. The firms then hire workers to produce. This principle does not seem to apply to many of the economic activities that are conducted on online platforms. Here, it is often the worker who is taking the financial risk to buy his own tools. The platform takes a part of his earnings because it offers the worker access to potential customers on its network.


  • Second, online platform markets tend towards monopoly owing to network externalities. More customers are sign on to use a network when they know that there are lots of suppliers on the same network. And the number of suppliers increases because there are lots of customers waiting to be serviced.



  • The network grows exponentially in value. The problem is the distribution of revenue. How should this be divided between the online platform and its members? The problem becomes more acute as platforms tend towards becoming monopolies.



Way forward


  • As the collapse of transaction costs after the computer revolution led to the unbundling of integrated firms into complex global supply chains, the growing use of apps has begun to shift the labour market away from stable employment contracts. This will create several policy challenges-


  • First, will governments need to provide some form of guaranteed income support given the revenue volatility that is inherent in the gig economy?
  • Second, should competition regulators begin to worry about the monopolistic powers that several online platforms will eventually have thanks to network effects?
  • Third, what is the alternative to the collective action undertaken by workers since the Industrial Revolution to protect their rights?
  • Fourth, are there any rational principles to decide what would be a fair division of revenue between online platforms and those who use them to sell their wares?


Question India needs to have these debates, especially at a time when there is a growing belief that micro-entrepreneurship rather than employment in modern enterprises is being projected as a solution to the Indian jobs challenge.

A smart card for the farmer

(The Indian Express)

Synoptic line: It throws light on the issue of Kisan Credit Card.

(GS paper III)



  • In order to achieve goal to double the income of farmers by 2022, access to institutional credit and crop insurance are the two important steps in this direction. According to 70th round of NSSO survey (2013), 52 per cent of the farmer households were indebted, of which 60 per cent had accessed formal credit.




  • Farmers access crop loan primarily through Kisan Credit Cards (KCC). The KCC is necessary to procure good quality inputs to raise productivity and production. Every time credit flow to farmers is reviewed, it is observed that the eastern and the north-eastern parts of the country receive proportionately less credit as compared to the western or southern parts.



  • Regarding crop insurance, despite the government’s best intentions, it has not picked up on a scale the government would like. One of the major reasons is the apathy of bankers to deduct the premium amount from the loanee farmers’ accounts in time and transfer the same to the insurer.



  • Another critical issue is that the farmers often take a loan for some crop and sow something else. This happens because the credit limit for farmers is linked to the scale of finance of different crops. (Scale of finance is the total input cost incurred for a particular crop per hectare of land). If a farmer declares that he is going to crop sugarcane or potato, the credit limit will be high whereas if he declares that he is going to crop oilseed or cereals, the credit limit will be lower.


  • When banks insure a farmer, they go by his declaration at the time of making the KCC and insure accordingly. There is no attempt to verify which crop has been actually planted and there is no system of asking the farmer to fill some form for crop insurance. As a result, when a crop loss is reported, there is a dispute between the farmer and the insurance company. It is catch 22 situation.


  • On the one hand, the banker cannot name any other crop other than declared in the KCC, for a change would cause the invalidation of the card. On the other, on the farm there is some other crop which needs to be insured for the claims to be processed by the insurer. The result is that the farmer refuses to get his crop insured.



  • The third important issue is of targeting subsidies in a proper manner. We know by now that direct benefit transfer (DBT) is a unique policy tool to target subsidy, reduce wasteful expenditure and plug leakages. This has been amply demonstrated in many areas, including agricultural subsidies. The government has been trying to move in that direction slowly in the case of urea.




  • The distribution of urea is now being done through an Aadhaar-enabled biometric identification system, but it does not distinguish between a farmer and a non-farmer. The present system does not transfer the fertiliser subsidy to the bank account of the farmer. However, DBT can address the issue of diversion of subsidised fertiliser for other uses and also cross-border diversion. When that starts, the issue of making upfront payment will come up. Since urea is a heavily subsidised item, small and marginal farmers may find it difficult to make the full payment upfront.





  • The above issues can be fixed by making two changes in the KCC. The limit of a KCC can be de-linked from the scale of finance of the crop sown and be based on the area of land held by a farmer. This will result in two things. One, the farmer will not have to make a false declaration to get a higher credit limit. This will result in true declaration of the crop sown and hence, the discrepancy seen in crop insurance will be addressed.


  • And secondly, it will address the issue of distorted inter-regional credit flow to farmers. With the upper limit of Rs 3 lakh for a KCC, it should be possible to provide a limit of Rs 1 lakh per hectare per annum for crop loan to the farmers at the current level of provisioning in this head by the central government. This will ensure that credit flow to farmers in backward regions increases.


  • Increasing access to formal credit is necessary for enhancing incomes of farmers, especially the small and marginal. Farmers who cannot access institutional finance have to seek credit from informal channels, which charge them anywhere between 24 to 36 per cent per annum as interest.


  • In contrast, those who have access to formal bank credit receive it at 7 per cent per annum, which further gets discounted to 4 per cent. Some fear the farmers may misuse the crop loan if it is not linked to the scale of finance. Such persons should do a field check about the “proper utilisation” of crop loan in its present form.


  • There is time to ensure better targeting and encourage digital transactions. It is high time the KCC is redesigned for better outcomes.


Question What is Kisan Credit Card? Explain how better designed Kisan Credit Card can help improve access to institutional credit and ensure crop insurance?