The double whammy of the Russian war on Ukraine and changing climate poses a serious threat of food insecurity to several countries in Asia and Africa. The UN’s World Food Programme estimates that about 44 million people in 38 countries are already at ‘emergency levels of hunger’. Amidst rising global food prices, a number of countries have banned export of agricultural commodities.
As of May 29, 2022, 18 countries (excluding Russia and Ukraine) have imposed bans on exports of various commodities like wheat, pasta, corn, chicken and vegetable oils.
India has banned the export of wheat to check the potential rise in prices in the face of low procurement and there are reports suggesting that the government is mulling a ban on rice exports to tame inflation.

Rationale behind recent export bans:

By doing so, the government's idea is to tame inflation in India. This export ban is a pre-emptive step and may prevent local wheat prices from rising substantially. However, in May, the consumer price index (CPI) inflation was 7.04 per cent (YoY).
The cereals group as a whole contributed only 6.6 per cent to this inflation. Within that, wheat, other than through PDS, contributed just 3.11 per cent and non-PDS rice contributed 1.59 per cent. So, by imposing a ban on wheat and rice exports, India can’t tame its inflation as more than 95 percent of CPI inflation is due to other items.

The Ukraine-Russia war has led to a slump in wheat production from a region known as the world’s bread basket. Russia and Ukraine together account for 25% of the world’s wheat exports.
It has led to a hike in prices of wheat and supply side glitches.
India is the world’s second largest wheat producer and one of its biggest consumers.
When the government decided to ban wheat exports in the face of climbing prices, there were many protests from the international community. In Asia, except for Australia and India, most other economies depend on imported wheat for domestic consumption and are at risk from higher wheat prices globally, even if they do not directly import from India.
Same is the case of Sugar. Similarly, Indonesia’s palm oil export ban has a significant impact on India’s economy.  Prices of edible oil hiked in India. It poses challenges to curtail inflation.

 

The recently concluded WTO ministerial meeting as well as the G-7 meet expressed concerns about food security in vulnerable nations. Abrupt export bans inflict high costs on poorer nations, and many millions fall below the poverty line as a result of such actions by a few.
If India wants to be a globally responsible player, it should avoid sudden and abrupt bans and, if need be, filter them through transparent export taxes to recover its large subsidies on power and fertilisers.

 

Source: Indian Express

By 2025, it is estimated that 70 per cent of Indians will be of working age. This ‘demographic dividend’ could give India an edge over the developed countries where a larger segment of the population would by then be past retirement.
However, this demographic dividend can easily turn into a demographic disaster if a majority of the working age population remains unemployable due to a lack of skills. India has one of the youngest populations globally, and women comprise a significant number of them.
Youth participation in the workforce is vital for economic growth and development as they are equipped with new-age skills, adapt to new changes and present a new perspective. However, if nearly half the youth population is excluded from the workforce, then economic growth is compromised, trapping women at the bottom of the economy.

Female labour force participation rate (FLFPR) in India has been one of the lowest among the emerging economies and has been falling over time. This has resulted in a decrease in the ratio of working females to the population of females in the working age group.
NITI Aayog said in a report titled ‘India’s Booming Gig and Platform Economy’ female labour force participation in India has remained low, oscillating between 16 per cent to 23 per cent in the last few years. Structural barriers like access to education and lack of skilling have hindered participation of the female workforce in the country’s labour force.
Low participation of women in the labour force in India is attributed to the lack of employment opportunities, rising education levels and household incomes, and problems in measurement, such as under-reporting of women’s work.
Religion and social perceptions of women and the presence of young children in the household all influence the likelihood of India’s women to participate in the labour market. Structural characteristics in the labour market have played a more important role than changes in the underlying characteristics of the female working-age population in influencing participation rates.
These structural barriers, such as norms that inhibit women’s labour market options, in conjunction with a consistent decline in agricultural employment, are likely to be key factors in explaining the long-term stagnation in female participation rates.  Therefore, it is right to say that low female labour force participation is the result of structural factors.

‘India’s Booming Gig and Platform Economy’ report of NITI Aayog

According to the report, the expected expansion of India’s gig workforce by 2029-30 from 77 lakh in 2020–21 is to 2.35 crore. India requires a framework that balances the flexibility offered by platforms while also ensuring social security of workers.
The consequent platformisation of work has given rise to a new classification of labour — platform labour — falling outside of the purview of the traditional dichotomy of formal and informal labour. In an attempt to increase participation of women in the gig economy, the NITI Aayog has proposed fiscal incentives like tax breaks or startup grants for companies with about one-third of their workforce as women.

Ingredients of Better Policy:

The participation of women in the country’s workforce has been woefully inadequate, and this needs to change for India to reap its demographic dividend. Capacitating our women is also the key to generational social transformation.
Empowerment of women is a critical part of a nation’s development and it is a balanced equation of her education, health, employability and decision-making power. Availability of agency and removal of constraints faced by women is imperative for sustainable and equitable development of both the community as well as the nation.
India needs to adopt a gendered lens in education and skilling programs to overcome the challenges of an underrepresented section of youth in the workforce, as well as support women in securing and retaining jobs. Introducing a ‘Platform India initiative’ on the lines of the ‘Startup India initiative’ can help in improving the female workforce.

 

Source: Indian Express     Outlook India     Niti Aayog

Decode the Question:

The Micro, Small and Medium Scale (MSME) sector in India enjoys a distinct position in view of their contribution to the socio-economic development of the country.
The emphasis on MSME has always been an integral part of India’s industrial strategy. Development of MSME prevents migration of rural population to urban areas in search of employment and contributes to other socio-economic aspects, such as reduction in income inequalities, dispersed development of industries and linkage with other sectors of the economy.

Economic Potential of MSME:

The Indian government needs to work on strategies and try to bring finance to MSMEs so that the sector can decarbonise.
Climate finance should be routed to the MSME sector. The sector needs to be connected with a more formal financial credit system, which will enable them to achieve climate finance and bridge the huge credit gap.
Promotion of MSME and rural industrialisation has been considered by the Government of India as a powerful instrument for realising the twin objectives of ‘accelerated industrial growth and creating additional productive employment potential in rural and backward areas.’

References: Down To Earth