India’s EXIM Bank, Sri Lanka sign $500mn loan agreement
GS-3
Soon, homestays to come up around Sultanpur National Park
Ink India-Britain free trade, unlock new opportunity
Creating jobs by increasing capex
?3,358 cr. in MGNREGA wages not paid
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) workers are still waiting for almost ?3,360 crore in pending wage payments, with the largest pending payments in West Bengal, Uttar Pradesh and Rajasthan, according to the government’s reply to a question in the Rajya Sabha on Wednesday.
This comes as the Centre reduced its budget allocation for the rural jobs scheme by 25% in comparison to revised estimates for the current year. If these pending wage and material payment liabilities are carried forward into the next financial year, it will further reduce the amount of money available to pay workers next year.
‘Inadequate allocation’
In a statement criticising the 2022-23 budget allocation for the scheme, which is 25% lower than the revised estimates for the previous year, the NREGA Sangharsh Morcha estimated that only ?54,650 crore would be available for the scheme next year taking all pending liabilities into account. “Every year about 80-90% of the budget gets exhausted within the first six months, resulting in heavy slowdown of work on the ground.
The worker advocacy group added that at a per person per day cost of ?334, if all active job card workers requested work, the government would only be able to provide 16 days of employment out of the guaranteed 100 days, given the current budget estimates.
Ethnocentrism
(Important for Anthro Optional)
Ethnocentrism broadly refers to ethnic self-centredness and self-importance. This attitude could lead an individual to believe that their own culture or way of life is the correct way of living. It could also result in hostility towards other cultures.
Ethnocentrism is therefore the tendency to view one’s own group, the ‘in-group’, as the archetype and all the other groups, the ‘out-groups’, with reference to this ideal. The in-group’s boundaries are defined by one or more observable characteristics such as language, accent, physical features or religion, indicating common descent. While initially used in anthropology, the term is now used widely in sociology, psychology, political science, economics and markets, among other disciplines.
Changing definitions
Scientific interest in the term ethnocentrism started in the late 19th and early 20th century. Charles Darwin argued that competition with other groups makes people more cooperative with members of their own group, which further influences group prosperity (Boris Bizumic, 2012). Herbert Spencer argued that societies in general are characterised by internal amity (towards members of one’s group) and external enmity (towards everyone else).
Neither of them used the term ethnocentrism, however. Developing their ideas, it was the anthropologist William Sumner who is first said to have coined the term in 1906 in his book folkways and also used the concepts ‘in-group’ and ‘out-group’. However, it was the geologist and anthropologist William John McGee who is said to have first used the term in print. For McGee, ethnocentrism was a particular way of thinking similar to egocentrism, but characteristic of ethnic groups.
Robert A. Levine, an anthropologist, and Donald T. Campbell, a social psychologist, argued that ethnocentrism is a set of 23 characteristics, nine of which are positive attitudes towards a perceived in-group (such as perceptions about virtue and morals) and 14 of which are negative attitudes towards a perceived out-group (such as distrust, suspicion and blame). Early anthropologists argued that this feeling of superiority about the in-group curtailed an individual’s ability to understand the practices and values of other groups and to trust them. This feeling, they said, could lead to prejudice, dislike, dominance, ethnic conflict, instability of democratic institutions, and even war.
Ethnocentrism can also affect consumer choices and voting. However, later theorists argued that ethnocentrism might simply be preference for in-groups over out-groups. They said that the segregation of in-groups and out-groups should not necessarily be attributed to bias. In other words, they argued that you can be indifferent towards perceived out-groups or even like them, but less than you like your perceived in-group. Or you may dislike an out-group, but that attitude might not necessarily translate into some sort of discriminatory behaviour in a given situation. The ways of defining ethnocentrism thus keep changing and there is no definite consensus on the meaning of the term even today.
There are many examples of ethnocentric behaviour. Let’s try to understand this rather fluid concept with a simple example that many of us may be familiar with. Let’s assume that Ravi in India prefers to eat food with his hands. Ravi invites his American friend, Robert, to attend his sister’s wedding in India. When Robert arrives at the wedding, he is horrified to see everyone eating with their hands instead of using cutlery, as they do mostly in the U.S. Robert makes a rude remark about this unfamiliar practice and Ravi is hurt and angry. Robert’s attitude may be conscious or unconscious but his inability to accept this way of eating food as another culture’s practice and his tendency to view it as primitive while seeing his own culture as superior or advanced is ethnocentric.
Ethnocentrism is also quite similar to nationalism. All the expressions of ethnocentrism, such as feelings of superiority and even hostility towards out-groups, could be easily attributed to nationalism, but while ethnocentrism is at the level of an ethnic group, nationalism is at the level of a national group. Nevertheless, it is also important to note that nationalism also assumes certain factors that are not necessary for ethnocentrism. National groups are defined by the belongingness to a group that inhabits a national state or aspires to form a national state whereas ethnic groups do not require national states to be called ethnic groups, and they may lack a shared public culture or even territory (Smith, 2001). Ethnocentric feelings and attitudes such as preference for a familiar culture and group superiority have been exploited by nationalism.
A study from India
We can also understand ethnocentrism with a study from India. In a paper published in 1974 in the Journal of Cross-Cultural Psychology, Donald M. Taylor and Vaishna Jaggi tried to understand ethnocentrism and causal relations in the south Indian context. Thirty Hindus were asked to attribute the behaviour of their in-group (Hindus) and out-group (in this case, Muslims) performing socially desirable or undesirable acts to internal or external causes.
The subjects in the study were presented with a series of one paragraph-descriptions of an actor behaving in a social context. They were asked to imagine that they were in that situation and the actor was directing the behaviour at them. Each situation depicted one of four situations involving a Hindu or Muslim behaving towards them in a desirable or undesirable way. The situations included a shopkeeper being generous to the subject or cheating the subject and a teacher praising or scolding the subject.
For each paragraph, the subject was provided with four or five possible reasons for the behaviour. One of these reflected internal attributions (Hindu shopkeepers are generous or Hindus are rude) and the remaining reflected external attributions (the actor was compelled by social rules to behave as he did or there was a misunderstanding between the actor and the perceiver).
The study found that Hindus were more favourable to their in-group. They were more likely to make internal attributions for socially desirable behaviour performed by Hindus than for socially undesirable behaviour. Thus, they said Hindu shopkeepers are generous or Hindu teachers praise students. Conversely, undesirable behaviour performed by the same were not seen as reflections of internal behaviour but caused by external factors.
The subjects reversed their internal attributions for Muslim actors. Thus, they made internal attributions for socially undesirable behaviour (cheating was seen to reflect the internal characteristic of the actor) and external attributions for socially desirable behaviour. The study showed how ethnocentrism is evidenced not only in the form of generalised attitudes but also in the form of attributions for specific behaviour.
Process on to amend criminal laws: govt.
The government has started the process of comprehensive amendments to criminal laws, Minister for Women and Child Development Smriti Irani told Parliament on Wednesday in response to a question on marital rape, but warned against condemning every man as a rapist and every marriage as a violent one.
The Government of India has initiated the process for comprehensive amendments to criminal laws in consultation with all stakeholders, Ms. Irani told the Rajya Sabha in her written response to a question from CPI member Binoy Viswam on whether the Centre had taken a position on inclusion of marital rape as an offence under the Indian Penal Code.
The petitions have sought striking down exception to Section 375 of the IPC, which says forceful sexual intercourse or sexual acts by a man with his own wife, the wife not being 18 years, is not rape.
Section 3 of the Protection of Women from Domestic Violence Act, 2005 provides a definition for domestic violence, which includes physical, sexual, verbal and emotional abuse.
The National Family Health Survey-4 (2015-2016) shows that 7% of ever-married women experienced spousal sexual violence. Among ever-married women aged 15-49 who have ever experienced sexual violence, 83% report their current husband and 9% report a former husband as perpetrators.
Background
The 172nd report of the Law Commission in 2000 said it was not satisfied that [marital rape] exception should be recommended to be deleted since that may amount to excessive interference with the marital relationship.
The 2013 J.S. Verma Committee, formed in the aftermath of Nirbhaya gangrape, recommended making marital rape a crime, but this was not part of the Criminal Law (Amendment) Act passed in 2013 and a Parliamentary Standing Committee on Home Affairs formed to examine the ordinance before the passage of the law said, “the entire family system will be under great stress” should marital rape be criminalised.
India’s EXIM Bank, Sri Lanka sign $500mn loan agreement
Export-Import Bank of India (Exim Bank) Thursday said it has extended a line of credit of $500 million to Sri Lanka for financing the purchase of petroleum products.
With the signing of the LOC agreement for $500 million, Exim Bank, to date, has extended 10 lines of credit to the Sri Lankan government on behalf of the Indian government, taking the total value of LOCs extended to $2.18 billion, a release said.
Projects covered under the LOCs extended to Sri Lanka includes the supply of petroleum products, railway projects, defence and infrastructure projects.
Exim Bank has now in place 276 LOCs, covering 61 countries in Africa, Asia, Latin America and the Commonwealth of Independent States (CIS), with credit commitments of around $27.84 billion, available for financing exports from India.
About EXIM Bank
Export-Import Bank of India is the premier export finance institution of the country that seeks to build value by integrating foreign trade and investment with the economic rise of India. The Bank has been guided by expertise at the Board level, by senior policy makers, expert bankers, leading players in industry and international trade as well as professionals in exports, imports or financing. With offices spread across India and in select locations of the world, the bank aspires to boost the businesses of industries and SMEs.
Exim Bank of India represents a rare case of an institution where the concept and need for such an institution had been debated for a long period-more than two decades – before it was finally set up in 1982. The two decades prior to the establishment of Exim Bank witnessed significant changes in the industrial and the trade scenario. Indian exports during the fifties and the early sixties consisted of primary commodities and traditional manufactures like jute and cotton textiles. The dominant viewpoint was that in India’s case, expansion in domestic demand alone could realistically serve as the engine for economic growth, since export expansion opportunities were limited and there were fundamental constraints (like inadequate infrastructure) to export growth. The ideology relating to the manufacturing sector was to promote industrialization through import substitution. As a result, the export sector remained neglected with a small share in India’s GDP.
Soon, homestays to come up around Sultanpur National Park
Homestays would soon be allowed in the villages around Sultanpur National Park in Gurugram to promote tourism and provide an opportunity to the visitors to catch a glimpse of rural life in Haryana.
It was announced by Chief Minister Manohar Lal at World Wetlands Day programme held at Sultanpur National Park here on Wednesday. Union Environment Minister Bhupender Yadav was also present.
Mr. Lal said many tourists come to Sultanpur and Bhindawas Wildlife Sanctuary in Jhajjar to spot migratory birds and plans were being made for their stay. Recently, homestay policy was made for Tikkar Tal in Morni Hills and on the same pattern homestays would be started in the villages around these two places. With this, tourists would be able to experience the local culture and catch a glimpse of rural life, said Mr. Lal.
The Chief Minister said it was imperative to strike balance between earth and water as wherever there were wetlands, birds from all over the country and the world migrated to such places. Thousands of birds migrate from other countries and regions at Sultanpur and Bhindawas lakes in Haryana, said Mr. Lal.
Every year 50,000 birds of more than 100 species reach Sultanpur. Similarly, 40,000 birds of more than 80 species come to Bhindawas every year. More than 100 home species of birds are also found in Bhindawas.
Mr. Yadav said Forest Department had on record 49 Ramsar sites in India, including Sultanpur and Bhindawas lakes of Haryana. In future, work would be done to get 75 lakes of the country registered as Ramsar sites.
Ink India-Britain free trade, unlock new opportunity
In May last year, Prime Ministers Narendra Modi and Boris Johnson announced their shared vision for a transformative decade for the India-United Kingdom partnership. That they met in the middle of India’s second wave of COVID-19, shows their determination to turn their shared political will into action. As part of that transformation, the two leaders declared their ambition to more than double bilateral trade by 2030, which totalled over £23 billion in 2019. They directed their governments to take rapid steps to reduce barriers to trade, and to complete the groundwork necessary to begin work on a Free Trade Agreement (FTA) by the end of 2021.
A beginning
These words have now been made real. Both governments have already acted; for example, unlocking the export of British apples to India and enabling a greater number of Indian fisheries to export shrimp to the U.K. Small but meaningful steps by which both countries have demonstrated they can and have taken concrete measures to stimulate growth.
The big next step was the launch of FTA negotiations last month. On January 13, 2022 in New Delhi, India’s Commerce Minister Piyush Goyal and the U.K.’s International Trade Secretary Anne-Marie Trevelyan announced their shared ambition to finish negotiations on a comprehensive and balanced FTA by the end of 2022.
This is a big task; all trade negotiations are complex, and especially so between two partners of such different sizes and at such different stages of their development. The opportunities an FTA presents, however, are bigger — for both countries.
Businesses in both nations
Before looking at the future, it is worth taking stock of the present. There are nearly 600 U.K. companies in India employing more than 3,20,000 people. This includes: Barclays which has its biggest office outside of London in Pune, whilst JCB’s products manufactured in India are exported to over 110 countries across the globe, as are those by consumer goods giant Hindustan Unilever headquartered in Mumbai; just two of many examples of British companies supporting Prime Minister Modi’s vision for an Atmanirbhar Bharat.
Similarly, India is already a big investor into the U.K. — especially in dynamic sectors such as fintech, electric vehicles and batteries. In 2020-21, India was the U.K.’s second largest source of investment in terms of number of projects. Just last week, both Essar Group and Ola Electric announced investments into the U.K. But given the size of our two economies — the fifth and sixth in the world — our trade relationship in particular has underperformed. An FTA will change that.
The U.K. thrives on free trade. Having left the European Union’s common trade bloc after 47 years (in 2020), we are building a network of like-minded democracies committed to free trade. The Indian government is showing its determination to agree to a new set of trade deals; and it is not coincidental that both governments are negotiating with similar countries, for example, Australia. India has an extraordinary opportunity to transform its economy and society in the next 30 years, as it hits its demographic sweet spot, at the heart of the Indo-Pacific region where half the world’s people live and 50% of global economic growth is produced. Freer trade with the U.K. will help through greater access to a highly open and competitive market, offering valuable opportunities for India’s booming companies — for example giving Bengaluru’s start-ups direct access to London’s capital markets.
Fine prospects
A U.K.-India trade agreement will stimulate growth and employment in both countries. U.K. government analysis shows that, depending on the depth of the deal, an FTA would add around £14.8 billion to the GDP of India and the U.K. collectively by 2035. A trade deal helps diversify supply chains by making it easier and cheaper for more businesses to do business across borders. Lower barriers coupled with greater regulatory certainty would incentivise new small and medium-sized enterprises to export their goods and services. An agreement also means Indian and British consumers see improvements in the variety and affordability of products.
From past to future
Finally, an FTA would mark a new way of working between the U.K. and India. It gives a new framework within which the two countries can grow and flourish together, putting the colonial economic relationship where it belongs — in the history books. We should acknowledge that past, especially in this 75th year of India’s Independence, and build a future which is about opportunities for both countries.
Creating jobs by increasing capex
If we had to look for one single metric that held the key to us achieving our immense economic potential as a nation, creation of gainful jobs, particularly for our underemployed youth and women, would perhaps be a strong candidate.
Data from the International Labour Organization (ILO) suggest that India’s employment to population (over the age of 15) ratio has steadily dropped from 55% in 2005 to 43% in 2020. In 2020, it was 52% in Bangladesh, 63% in China and 73% in Vietnam. Specifically, women form just 20% of India’s workforce, while they comprise between 30% and 70% of the workforce in the other three countries. Further, CMIE data suggest that across manufacturing and services, India lost nearly 1 crore jobs between December 2016 and December 2021.
Amidst a global and domestic context muddied by the COVID-19 pandemic, Finance Minister Nirmala Sitharaman, and indeed the entire administration, has their job cut out, trying to enable creation of sustainable jobs over time. In the 2022-23 Budget speech, she went all-in on allocating ample money towards productive infrastructure investments as the way forward.
Momentum in tax collections
Before we get into that, let’s start with some good news. Data released by the Controller General of Accounts (CGA) shows that for the first nine months of the current fiscal year 2021-22 (FY22), the Centre’s revenue receipts across taxes and dividends already stood at ?17.3 lakh crore, just shy of the full year budget of ?17.9 lakh crore. There are many factors that contribute to this remarkable outcome.
First, higher income tax and Goods and Services Tax (GST) collections are on the back of a robust performance of India’s organised sector, amidst increased formalisation of the economy.
Second, the government deserves full credit for the conservative Budget projections of last year, even as it enhanced credibility by coming clean on expenditures hidden in off-balance sheet in the books of the Food Corporation of India. Put together, for the first time in many years, notwithstanding the pandemic and the intense hurt amongst the unorganised sectors, tax collections for this fiscal year will end well ahead of the original Budget projections.
This Budget, therefore, revised up FY22 Central revenue receipts to ?20.8 lakh crore, nearly ?3 lakh crore higher than the original Budget. Given the momentum in tax collections till December, notwithstanding the Omicron wave, actual revenue receipts may exceed even this number by an additional ?0.5 lakh crore-0.7 lakh crore. All this will more than make up for the projected shortfall in the government’s disinvestment Budget for this year.
Despite the much higher revenue receipts than budgeted, the overall FY22 fiscal deficit is projected to end at ?15.9 lakh crore (6.9% of GDP), higher than the Budget Estimates of ?15.1 lakh crore. Additional spending towards food and fertilizer subsidies, increased allocations towards the National Rural Employment Guarantee Scheme and export incentives, and a clean-up of the books of Air India prior to its sale all contributed towards increased expenditures.
Going forward, however, a sustained momentum in tax collections will provide additional degrees of fiscal policy freedom to the Finance Minister as she tries to foster domestic jobs and output. She has chosen to back investments into capital expenditure as the way to achieve this.
For the next fiscal year FY23, she has increased her capital expenditure budget – or investments into productive capital creation – to ?7.5 lakh crore, 24% higher than the FY22 revised estimate of ?6 lakh crore. Alongside she has pencilled in just 1% increase in revenue expenditure, i.e., into items such as salaries, pensions, interest, and subsidies. In this regard, she is continuing a trend that she started in last year’s Budget. Between FY11 and FY21, capital expenditure averaged just 12% of the government’s overall expenditure. For the current FY22, that ratio increased to 16%, and for FY23, the Finance Minister has proposed to take it to 19%.
The intent and commitment behind this strategy is clear and laudable. The expectation is that sustained investment in roads, railways, freight corridors, power, renewable energy along with initiatives such as Production-Linked Incentives (PLI) and other enabling legislation, will create the conditions for drawing in private sector investments into manufacturing, and foster job creation and sustainable growth.
The key lies in execution
But as with everything else, this strategy does come with a few caveats and risks. First, not all the headline capital expenditure is indicative of fresh greenfield investments. The ?0.5 lakh crore of clean-up of Air India’s books this year counts as capital expenditure. Similarly, for FY23, the government has set aside ?0.8 lakh crore to partly clean up the books of NHAI and BSNL. Nevertheless, the transparency this brings about is still very welcome.
Second, while there is a visible thrust on hard capital expenditure, the outlays towards critical areas such as education, healthcare and urban infrastructure remain subdued. One would think investments in these areas are equally, if not more critical, than hard infrastructure alone.
Third, the thrust on capital expenditure has resulted in notably higher fiscal deficit numbers than expected. Notwithstanding the intent and commitment, such high fiscal deficits can put pressure on interest rates and the Reserve Bank of India, even as it raises the risk of inflation, higher current account deficits, and the attendant threats to financial stability.
Ultimately, the key lies in execution. The Finance Minister has provided ample funds for the infrastructure thrust. It is up to the entire administration – Central, State, and local – to ensure that the funds are utilised in a timely fashion, and result in delivery of world-class infrastructure. Alongside, ease of doing investments have to be continually addressed, especially around key areas such as land acquisition, contract enforcement, and policy stability. Sustained investments in manufacturing and value-added services hold the key for the growth of small businesses, jobs, and our economic well-being.
