Open Forum

New Delhi, 23 April 2025

Rural Employment

CENTRE, STATES BLAME GAME

By Dhurjati Mukherjee 

There were recent protests in the Lok Sabha during the Budget session of Parliament regarding long delays in the release of funds to some states under the rural employment guarantee scheme, stressing that the livelihood of the poor has been badly affected. MPs from various parties, including the main opposition party, Congress raised the issue but the junior rural development minister alleged misappropriation of funds and other irregularities in the implementation of the scheme. 

A Congress MP from Kerala said workers had not received wages for the past three months and the delayed payment and low wages had led to a sharp decline in the MGNREGA workforce. Another member from DMK claimed that funds to Tamil Nadu amounting to over Rs 4000 crore had been pending for the last five months. 

It is understood that over 40 lakh claims for wage payments under the 100-day rural job scheme have been delayed beyond the stipulated 15 days. In a written reply in the Rajya Sabha, the minister for rural development Giriraj Singh highlighted the hardships faced by poor rural workers, owing to the payment delay. According to the Centre, the state governments have approved 49.18 lakh claims for delayed compensation in 2024-25 till March 25 this year, of which 12.94 lakh claims have been settled. 

Delving into the matter, one finds that in 90 percent of the cases, the delay happens at the end of the rural development ministry in processing the FTOs (funds transfer order) but the Centre does not pay any compensation. It may be mentioned here that a parliamentary committee on rural development had recently expressed concern over the delay in MGNREGA wage payment. The committee urged the government to release funds in time and coordinate with the states to prevent delay in wage disbursement. As of date the pending liability under the scheme is a massive Rs 27,000 crore!At the same time, the Committee had noted slow implementation of projects by states, which had led to the accumulation of unspent balances. To address the issue, Ministry of Finance has made approval of funds conditional on utilisation of unspent balances. 

The government cannot allocate adequate funds and in time for the job guarantee programme though some renowned economists have urged the need for starting a similar programme for urban and semi-urban areas. But all this is not of primary concern for the government which is more interested in subsidising land and other facilities to industry so that they gain in wealth. Or is there any justification of a resource-constrained country to exempt people drawing up to Rs 12 lakhs per annum in the recent budget? 

Economists and planners cannot fathom the rural employment scenario sitting in a metro city like Delhi. The scenario is indeed quite distressing as is revealed from NSSO facts.  As per National Sample Survey Organisation (NSSO, 2023), of the total rural workers, 63 percent belonged to the category of self-employed, comprising their own account workers and employers and helpers in household enterprises, earning a very low income. Another 24.8 percent of workers are casual labourers, who only get a few days of employment in a year due to the seasonal nature of their work. 

Additionally, only 12 percent who are salaried workers receive a regular income from rural employment. The earnings of the self-employed are around Rs 11,612 on an average per month though males get over Rs `13,800. Do the above figures in any way reveal that the country will attain the status of a developed country within a few years? 

While the government is turning a deaf ear to the question of rural employment, it was indeed surprising that the Prime Minister, speaking at the Artificial Intelligence Action Summit in Paris, heralded the “dawn of the AI age”, noting that it will create more jobs than it destroys with unprecedented opportunities for enhanced productivity and innovation. Political leaders may have the liberty of making statements even though there is no rationale behind it. It has been estimated that 23 percent of the working population is possibly facing an axe in India by 2040 as stated by none other than the Niti Aayog though this figure would rise to 69 percent in the World Bank’s more realistic presumption.  

It is well known that politicians in the country, like in others are in the habit of making unjustified statements and unrealistic claims. It is worth mentioning here that agriculture and textile workers became redundant with mechanisation and factory automation in the 19^th century and later as robots were introduced to assembly lines, electronics, computers and other appliances with many being left by the wayside. In this connection, it needs to be asserted that the benefits of productivity gains have not been widespread in most countries and alsoin India. Rather, they have led to insatiability of material desires and widening inequality.  

However, it needs to be pointed out that there is a need to understand each country on a case-to-case basis, depending on its population and workforce. India with such a huge population as also a very large workforce, most of whom are in the unorganised sector with a very poor pay package, does not compare with the western countries. It has to adopt its own strategy of labour utilisation and employment generation. 

Why can’t the government impose an employment cess of just 0.5 percent for those who earn more than Rs 10 lakh per month? There is need to generate productive employment for at least 150 days in rural areas and say 50 days in urban and semi-urban areas. The government instead of seeking donations for their parties can also seek donations for employment generation which would go a long way in helping the impoverished and marginalised sections of society. 

The Ministry of Rural Development claims it aims to improve the quality of life in rural areas of the country and acts as the nodal agency for most development and welfare activities in rural India. The Department of Rural Development says it implements programmes to provide employment in rural areas, support economic development through enhanced connectivity, and ensure livelihood and social security for the poor and vulnerable.Major schemes run by the Department include Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Pradhan Mantri Gram Sadak Yojana (PMGSY), National Rural Livelihoods Mission (NRLM), and Pradhan Mantri Awaas Yojana-Gramin (PMAY-G). 

In the present scenario, what is needed is balanced development, that is, allocation of more resources to the rural sector to create job opportunities. The priorities should include modernising schools and health centres apart from ensuring more job opportunities in rural areas. International organisations like Oxfam have been urging the Indian government to impose a super-rich tax, say of just 1 or2 percent so that both social and physical infrastructure could be developed in villages which, in turn, would create more employment opportunities. Why the nagging delay? ---INFA 

(Copyright, India News & Feature Alliance)

Open Forum

New Delhi, 16 April 2025

SC On Governors’ Role

WILL CONFLICT WITH GOVTS END?

By Dhurjati Mukherjee 

The recent judgment of the Supreme Court stating categorically that the constitutional head of a state should be guided by the values of the Constitution and “not by political expediency”is significant and much needed. The landmark ruling that the governor must respect the will of the people, reflected by decisions taken by elected representatives in the Assembly and must refrain from creating roadblocks, is expected to end the stalemate over the powers of governors in various states. 

Justice Pardiwala, who penned the judgment, observed as per Article 200 of the Constitution, the governor has only three options when a bill is placed before him – grant assent, withhold it and send it back for reconsideration or reserve it for the President. It said a bill could be reserved for the President only at the first instance. 

Since long there has been a deterioration in the system of governance, more so due to the role of governors in playing their role in the states. The Court has fixed a time limit of one month for the governor to give assent and a timeline of three months for the President to take action. Meanwhile, all the pending 10 bills of Tamil Nadu have been deemed assented by the order. Though the governor will continue to be chancellor of state universities, he may not have any role to play in appointment of vice-chancellors. 

It may be pointed out here that not just Tamil Nadu but in other states like Chhattisgarh, West Bengal, Haryana and Kerala the Chief Ministers have been facing problems with governors. Though commissions appointed earlier had recommended fixing a time limit for governors to decide on a bill, the present Supreme Court judgment has fixed it as one month. Even the Karnataka Law Commission’s 22^nd report exclusively dealt with ‘Assent to Bills – Problems of Delay (Articles 200 and 201 of the Constitution)’ chaired by Justice VS Malimath, categorically stated that “it would indeed be anomalous and paradoxical if more time is taken by the head of state to assent to a bill than for a legislature to pass it. It is well-settled that every state action has to be reasonable”. 

The impartiality of the role of the governor has come in for attack as they have been found to disturb elected governments. Political analysts have alleged that the governors have not acted with necessary objectivity in the exercise of their powers or in the role of a vital link between the Centre and the states. 

Not that the states are playing a judicious role as they tend to ignore the Governor in various ways. This is specially evident in West Bengal where the governor was not allowed to choose his nominee as the Vice Chancellor of the universities of which he is the head. However, the well-established dictum of the governor playing the role of a philosopher and guide to the Council of Ministers is no longer been valid today. It has been alleged that, in recent years, the appointment of governors is being done with the clear intent of keeping Opposition-led states on the wrong foot. 

The conflict between the governors and the state governments is nothing new but has aggravated in recent years. Obviously, the reason behind this is two-fold – one centralisation of authority in the hands of the chief minister and the other is the increasing politicisation and  corruption in the administration. All this has raised questions whether the governor has any role in the state and whether the position should be abolished. 

The Sarkaria Commission had recommended that a politician from the ruling party at the Centre should ideally not be appointed as governor of a state which is governed by an Opposition party or combination of parties. But in 2021, the BJP appointed the Tamil Nadu party chief as Telangana Governor, and this resulted in frequent conflicts with the BRS government. The delay in signing bills has also been manifest by the governors of Tamil Nadu and Punjab governors, leading to much confusion in the respective states. 

There has not been any clear guideline on the appointment of governors and the Centre’s choice remains the only criterion. Much earlier, of course, persons of eminence and retired bureaucrats, who were somewhat neutral, were appointed to the post. The crisis in the state administration has placed the need to look at a different way of appointing governors. The theory that states may appoint names may not be conducive to overall governance as the need for creating counter-balances in the power structure may be lost in the process. 

While some believed that forming a panel which includes the leader of the Opposition in selecting a governor, this will not help as the Centre’s nominees will be in the majority and have its way in choosing its nominee. The Leader of Opposition can only add an additional layer of scrutiny. Thus, the procedure of appointment of governors remains a big problem. However, it needs to be stated that doing away with the position of governors is not advisable at this juncture as ideally this role is necessary to keep a check on the governance system and report the same to the Centre, from time to time. 

It is also a fact that governors have not been able to improve the governance of states. But higher education has, to a certain extent, maintained some form of neutrality due to the pro-active role of the governor, who is the chancellor of all universities of the state. One of the major reasons for the clash with governors is in this realm as states always prefer to control universities and have their chosen men in pivotal positions. Obviously, this will not improve the quality of education in the country and the governor should be given a free hand to have eminent academic scholars to head universities. 

Though one cannot go against laid out principles in the Constitution, it needs to be stated that the governor should be bestowed with more powers. Take for example, the pre and post-poll violence that we see in some states, with West Bengal having a notorious reputation, the governor should be given some powers. There is need to form an expert committee at the national level to evolve what type of intervention the governor can do when there is wanton violence and increase in crimes all over the state.   

As for governance, which in most states is deplorable, the question arises that if an elected government fails to run the state properly being enmeshed with corruption and nepotism, what role should the governor play?  Can the governor make recommendations that the states have to follow? While most states are severely stressed due to financial constraints, for which they frequently blame the Centre, the governance of these states is poor due to lack of transparency and judicious outlook. 

If governors have no role in ensuring good governance and guiding the state, what is the use of having these titular heals? There is a need to re-examine the role of governors by an expert committee and, if necessary, give them adequate powers to play an effective role in ensuring good governance. This is not to belittle elected governments but to give governors their due share in the administrative machinery for effective functioning, provided they are neutral and not tilting towards the Centre. ---INFA

(Copyright, India News & Feature Alliance)

Open Forum

New Delhi, 9 April 2025

Tariff Wars

EFFECTS ON INDO-US TRADE

By Dhurjati Mukherjee 

The US has announced 26 per cent across-the-board reciprocal tariffs on India but these are substantially lower than most countries. It was 34 percent levied on China (effectively about 54 percent), 46 percent on Vietnam, 49 percent on Cambodia, and 37 percent on Bangladesh. This gives India some comparative advantage though estimates suggest around two-thirds of India’s exports to the United States will bear the impact of the tariffs. 

One may point out here that the Trump administration does not club India with countries like China, Mexico and Canada. “The US has serious issues with China, Mexico, and Canada related to currency manipulations, illegal migration and other security concerns. But with India it has only tariff issue and there are high expectations that negotiations would start towards arriving at a broad tariff structure.” 

Experts feel that US tariffs have created a somewhat chaotic environment and there isn’t a consistent strategy visible. Countries at the receiving end of tariff firing have already responded differently. There have been counter retaliatory measures with say the European Union and Canada targeting US political constituencies and daily consumption items to put back pressure through higher domestic prices. 

Retaliation has also come from China, which has imposed a 34 percent tariff on all imports from the US, which will match the so-called reciprocal tariffs on Chinese products, besides rolling out a slew of export control measures. The US and China, the two biggest economies in the world, have a lot of interdependence though the balance is tilted in favour of China. Experts think that Trump’s sweeping tariffs will have a significant effect – around 2 percentage points -- of the GDP of the Chinese economy. 

Regarding the farm sector, agriculture will be hit with a decline projected in dairy products and marine products like shrimp while rice exports remain largely unaffected. There are reports of India reforming its MSP system for rice and wheat though this may take sufficient time and lower tariffs on farm products. In this sector, India’s average tariff on US imports is 41.8 percent compared to the US tariff of 3.8 percent on Indian imports, with India exporting $7.1 billion versus US exports of $1.6 billion. 

The Gem & Jewellery Export Promotion Council (GJEPC) stated that in the short run “we foresee a reshaping of global supply chains and anticipate challenges in sustaining India’s current export volume of $10 billion for the US market”. After the steep tariff hike, the jewellery market does not look bright as there may be a sharp decline in demand in the US market. It could also lead to job cuts in the industry that depend largely on manual labour for diamond cutting, polishing and making expensive jewellery. Out of the total $33 billion worth of gems and jewellery exports from India, a third was to the US. However, metal exporters heaved a sigh of relief as the US exempted steel and aluminum from additional 27 percent duty. Last month, it had imposed 25 percent tariff on these metals. 

However, the textile sector holds out promise as India is at a relative advantage compared with countries such as Bangladesh and Vietnam. “India competes globally for textile exports with countries such as Bangladesh, Vietnam, Cambodia, Sri Lanka and China. Compared with around 26 percent tariff for Indian imports, these countries have been hit harder by US tariffs”, according to EY India sources. The US imports around $10 billion of textiles and clothing from India and there is a possibility of securing further strategic advantage by including textiles in potential “zero for zero” trade deal. Regarding auto components, it will be subject to a 25 percent import tariff in the US and the list of items is expected to be finalized shortly. 

Exemption of pharmaceuticals and semiconductor industries from the ambit of tariffs, at least for the time being, has been of great help to Indian exporters. Indian Pharmaceutical Alliance stated that this decision underscores the critical role of cost-effective, life-saving generic medicines in public health. India exported $8 billion of pharma products to the US in 2024, which accounted for 40 percent of the generic drugs consumed in the US and this is expected to increase this year. This shows the popularity and acceptability of Indian generic medicines, more so due to the present drug shortages in the US. Though some believe that the pharma sector is not out of the woods and that a tariff is expected to be imposed later, it will not be big enough and the manufacturers and consumers will be in a position to share the burden and India’s export to the US market will not be affected. 

Similar patterns exist in transport equipment (Indian tariff: 14.9 percent, US tariff: 0.9 percent). However, though not automobiles but auto components are a serious matter as India exports are around $2.2 billion to the US. Tariffs may affect exports of auto components, but the bigger worry is whether US manufacturers may produce more locally and outprice imports. With labour costs quite low in India – even after 25 percent tariffs – it remains to be seen whether labour-intensive auto components would be cheaper than those produced locally. 

A section of experts is of the opinion that reducing the trade surplus with the US may be by curbing exports with high import content such as smartphones, solar panels, gold jewellery and diamonds. These goods make up over $15 billion in exports but out of this money, the country has to pay a lot of foreign exchange. It is expected that in the coming years, indigenous electronic manufacturing would be boosted up to become competitive in the global market. 

There are expectations that there could be a high-level trip to the US by the Union Finance Minister Nirmala Sitharaman sometime this month. The finance minister’s US visit may build upon the on-going talks but may not be limited to trade and tariff alone. India and the US are, no doubt, committed to strengthen their overall economic relationship, both bilateral and multilateral, as strategic partners. 

The tariff has put an extra burden on most Indian products to the US with marine products, dairy, medical equipment, machinery and carpets being the hardest hit. Given that these are all labour-intensive sectors, the government may evolve a strategy to push them aggressively however, much depends on the proposed Indo-US Bilateral Trade Agreement and, according to Niti Aayog’s experts, the final such treaty will aim to enhance the potential gains during the next five years or so. Some expect that the agreement may facilitate the possibility of increasing Indo-US trade in the coming years and may strengthen the Indian economy. 

Meanwhile, the tariff war will drag down global investments and growth. The OECD has cut down its growth projections, noting that trade disruption will take a significant toll on the global economy, which is expected to slow down this year. Even the WTO has forecast that world trade will shrink as a result of these tariffs while the IMF has termed it sluggish. Obviously, the question before most analysts the world over is whether Trump wants to destroy the global economic order. ---INFA 

(Copyright, India News & Feature Alliance)

Round The World

New Delhi, 16 May 2025

Executing Operation Sindoor

A Veritable Pause

By Prof (Dr) DK Giri

(Professor of Practice, NIIS Group of Institutions) 

In a powerful speech Prime Minister Narendra Modi delivered some hard messages to Pakistan, and by extension, to the world. He said, "If ever there is a dialogue with Pakistan, it will be only on terrorism and PoK". That is a formidable strategic step. So far, India's Pakistan policy has been defensive, asserting the integration of the Indian part of Kashmir, not the whole of Kashmir, meaning reclaiming PoK.

The second message is that "blood and water cannot flow together". Unless Pakistan explicitly delinks from terrorism networks existing in its soil, India should keep the Indus Water Treaty suspended. This is a bold step, especially as it was signed in 1960 by the World Bank etc. The treaty has not been disturbed ever since. For India to take that step is a big departure from history. It is commendable.

The third signal to the world is that Operation Sindoor is not called off; it is just halted, a calculated pause. Pakistan should not assume that it is all over.In the past, India was to absorb the shocks, public anger, and the bloodshed caused by terrorists, in Mumbai, Uri, Pulwama, but no more. The Prime Minister has made it amply clear that terrorists and their handlers will be chased, hunted down and punished. India would retaliate. Remember the foreign policy formulation, any act of terrorism will be construed as an act of war. The messages could not be stronger. The taste of the pudding is in eating. So what matters is the execution of the intent. The action part also is demonstrated through Operation Sindoor.

Let us talk a bit about the issues being debated before and after the 7th May, the date Operation Sindoor was launched hitting 9 terrorist targets inside Pakistan.One strategic issue is whether Operation Sindoor was inevitable, if there was no other option. I have written in detail about this point in my previous pieces in this column that it could not be avoided. It was necessary to dismantle the terror network. Although they have not been done completely, a beginning has been made and Islamabad is expected to finish it. In case, it does not, New Delhi will have to clean it up by appropriate means.

The second issue is if India should have gone for the ceasefire. That is debatable. Nehru made a mistake by stopping the advancing army that was beating back the tribal intruders in Kashmir in 1947. Strategists argue that Modi repeated the mistake by accepting the ceasefire without liberating PoK etc. Well, the nature of military confrontation has drastically changed since 1947. Like former General Navarene said the war is not like a Bollywood movie, there are deaths and destruction on both sides. So ceasefire if it was asked for by Pakistan should have been accepted. Pakistan is crumbling under the weight of its own internal contradictions. It can perish as a viable state even without a war with India. India should ensure that Pakistan is no longer sponsoring terrorism into India.

 New Delhi is fully conscious of ramping up pressure on Pakistan. The   Prime Minister has assured the country on this. This is the beginning of the end terrorism emanating from Pakistan. The third issue is the lack of international support for India whereas Pakistan got it from China, Turkey, and Azerbaijan. This is not new. Their collusion has been on the card for a long time.

But there is a point in this argument. Except Israel, no country in the world has openly and actively come out in support of India. That perhaps is because India prefers to remain neutral, non-aligned or multi- aligned. India therefore has no friends on board. This again has been argued in my articles where I suggest that you should reach out to partners and recognise friends. The Foreign Minister had said, India needs partners, not preachers. The same can be said about India. Many countries want India as a partner, not a moral preacher.

Another point that is heavily debated is who won the limited battle that lasted some 3 days unlike those in Ukraine and Gaza which have been in since 3 years. Again, the comparison may not be as authentic as India and Pakistan are both nuclear powers.At any rate, both countries know deep inside the extent of their loss and vulnerability.

A word about the role of the media, especially the electronic media, the TV. Less said the better about the media. They have shamed themselves by spreading lies and damn lies to sensationalise India' reaction and Pakistan's counter action etc. The action-reaction continuum was lost on the media. In future, none expects the media to report with responsibility and accountability.

Can Pakistan take advantage the ceasefire and regroup to attack again. But New Delhi should remain ever vigilant and willing to retaliate. Eternal vigilance against Pakistan is the price of the security of Indian citizens.---INFA

(Copyright, India News & Feature Alliance)