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23 Jan 2020: The Hindu Editorial Analysis

1) On status of early childhood education: Playing with learning


  • The Annual Status of Education Report 2019 data on early childhood education in rural areas makes the case that the pre-school system fails to give children a strong foundation, especially in government-run facilities. 
  • Going by the findings, the percentage of girls in government schools is higher than in private institutions, the cognitive skills of children attending official anganwadi playschools do not match those attending private schools, and there is a significant percentage of underage children in the first standard of formal school, in violation of the stipulated age of six. 
  • It is beyond question that children will be benefitted greatly if they are provided a properly designed environment to acquire cognitive skills. These skills are critical to their ability to verbalise, count, calculate and make comparisons. 
  • What the ASER data sampled from 26 Indian districts seem to indicate is an apparent imbalance in State policies, which is disadvantaging the less affluent as anganwadis and government schools are poorly resourced. 
  • Official policies are also not strict about the age of entry, resulting in four and five year olds accounting for a quarter of government school enrolment, and over 15% in private schools.

  • Substantive questions of pre-primary and early children education raised even by meagre surveys such as ASER call for a deeper look at how governments approach funding of institutions and teacher training for better outcomes. 
  • It is as important to let teachers feel invested in anganwadis as play-and-learn centres aiding children in acquiring cognitive skills, as it is to provide physical infrastructure. Building human resource capabilities would depend on teachers being recruited on the basis of aptitude, their training in credentialed colleges and assurance of tenure of service. 
  • It is unsurprising that in the absence of policies with strong commitment, according to the ASER data, two-thirds of those in the second standard cannot read a text at age seven that they were meant to read a year earlier. 
  • The performance only marginally improves for those in the third standard. There are similar inadequacies for numeracy skills. It is a paradox that students appear to fare somewhat better in private schools with poorly paid teachers. 
  • Nationally, the problem is of a weak educational foundation with little scope for creative learning in the three-to-six year age group, and a governmental system disinterested in giving children motivated, well-trained teachers. 
  • There is no dearth of literature on what works for creative teaching and learning, including from programmes such as the Sarva Shiksha Abhiyan. Neither is there a lack of financial resources. 
  • Government-supported schools with motivated and trained teachers are a must. What remains is for governments to show commitment to education.

 

2) On Speakers and disqualification: Ending inaction


  • There are two significant aspects to the Supreme Court’s latest decision on the Speaker as the adjudicating authority under the anti-defection law. 
  • The first is that Parliament should replace the Speaker with a “permanent tribunal” or external mechanism to render quick and impartial decisions on questions of defection. 
  • Few would disagree with the Court’s view that initial fears and doubts about whether Speakers would be impartial had come true. The second is its extraordinary ruling that the reference by another Bench, in 2016, of a key question to a Constitution Bench was itself unnecessary. 
  • The question awaiting determination by a larger Bench is whether courts have the power to direct Speakers to decide petitions seeking disqualification within a fixed time frame. 
  • The question had arisen because several presiding officers have allowed defectors to bolster the strength of ruling parties and even be sworn in Ministers by merely refraining from adjudicating on complaints against them. Some States have seen en masse defections soon after elections. 
  • Secure in the belief that no court would question the delay in disposal of disqualification matters as long as the matter was pending before a Constitution Bench, Speakers have been wilfully failing to act as per law, thereby helping the ruling party, which invariably is the one that helped them get to the Chair.
  • The reference to a larger Bench, in 2016 in S.A. Sampath Kumar vs. Kale Yadaiah was based on the landmark judgment in Kihoto Hollohan (1992) which upheld the validity of the Constitution’s Tenth Schedule, or the anti-defection law. 
  • This verdict had also made the Speaker’s order subject to judicial review on limited grounds. It made it clear that the court’s jurisdiction would not come into play unless the Speaker passes an order, leaving no room for intervention prior to adjudication. 

  • Finding several pending complaints before Speakers, the Bench, in 2016, decided that it was time for an authoritative verdict on whether Speakers can be directed to dispose of defection questions within a time frame. 
  • While fixing an outer limit of three months for Speakers to act on disqualification petitions, in the present case, Justice R.F. Nariman given four weeks to the Manipur Assembly Speaker to decide the disqualification question in a legislator’s case. He also held that the reference was made on a wrong premise. 
  • He has cited another Constitution Bench judgment (Rajendra Singh Rana, 2007), in which the Uttar Pradesh Speaker’s order refusing to disqualify 13 BSP defectors was set aside on the ground that he had failed to exercise his jurisdiction to decide whether they had attracted disqualification, while recognising a ‘split’ in the legislature party. 
  • As “failure to exercise jurisdiction” is a recognised stage at which the court can now intervene, the court has thus opened a window for judicial intervention in cases in which Speakers refuse to act. 
  • The Supreme Court ends Speakers’ freedom to do nothing in disqualification cases. This augurs well for the enforcement of the law against defection in letter and spirit.
     

3) Reviving The Economy


  • CONTEXT: That India is in the midst of a serious economic slowdown is no longer in question. 
  • The debates are now mostly about what to do about it: Whether to opt for a fiscal expansion to boost demand or to carry out deep reforms to raise productivity and the growth potential of the economy. 

 

  • REPORTS: As per the recent release by the National Statistical Office (NSO), the growth rate of the GDP in real terms is now 5 per cent, the lowest in more than a decade, and that of the nominal GDP is 7.5 per cent — the lowest in four decades.
  • Technically, this is being called a slowdown and not a recession, since in absolute terms GDP has not fallen. Yet, the leaked National Sample Survey (NSS) consumer expenditure data — a report that was withheld and now has been officially withdrawn — shows that real monthly per capita expenditure has in fact fallen in absolute terms between 2011-12 and 2017-18. 
  • In rural areas, consumption expenditure decreased by 8.8 per cent, while in urban areas it increased by 2 per cent, leading to an all India decline of 3.7 per cent.

 

  • CONSUMER EXPENDITURE: This is a striking fact as there has never been a decrease in the average level - a contraction rather than growth -in all the NSS consumer expenditure surveys since liberalisation. 
  • If average consumer expenditure is down, then where is the GDP growth coming from? 
  • After all, according to National Accounts Statistics (NAS) that produce the estimates for national income, consumer expenditure is around 60 per cent of the GDP. 
  • Investment (or gross fixed capital formation, to be precise) is about 30 per cent of the GDP, and its growth rate has plummeted to less than 1 per cent according to latest estimates. 
  • And while government expenditure has grown at a high rate (around 10 per cent), it is only about 10 per cent of the GDP. 
  • Accordingly, growth in investment and government spending contribute 1.3 percentage points to the overall GDP growth rate, and so to get an overall 5 per cent growth rate, consumer expenditure should be growing at higher than 5 per cent.

 

  • PUZZLE: How can consumption expenditure be going down in absolute terms according to the NSS estimates and be growing at more than 5 per cent according to the NAS? 
  • That these two types of estimates of consumption expenditure do not match is well-known, and that is the case in other countries as well.  However, as has been noted in a recent column by C Rangarajan and S Mahendra Dev, it is a puzzle as to why the gap between the two estimates has widened so much over the last few decades in India.  In the very latest round, they note, the discrepancy had reached alarming proportions.

 

  • COMPARISION: In the 1970s, consumer expenditure according to NSS estimates was around 90 per cent of consumer expenditure according to NAS, but in 2017-18 it was only 32.3 per cent. 
  • It is as if we are looking at data from two different countries, one where consumption expenditure growth is positive and propping up the GDP growth rate and the other where it is actually falling.
  • There is scope for criticism of both data sources and to get to the bottom of this issue making the NSS report available in full is a first step. However, a few inferences can be drawn that pertain to the debate around the state of the economy and the policy options.

 

  • REASONS BEHIND THE DISCREPANCY: First, as is well-known, the presence of a large informal sector plays a big role in the discrepancy between the NSS and NAS estimates. 
  • It accounts for nearly half of the GDP and employs 85 per cent of the labour force. 
  • Yet, in national income accounts, growth in the informal sector is estimated by extrapolating from the performance of the formal sector. As the newly appointed chairman of the Standing Committee on Statistics, Pronab Sen, put it in a recent interview, it is largely guesswork.
  • Second, because of the presence of the informal sector, expansionary fiscal policy will be more effective than what would appear from official statistics, as a big part of its impact will be felt in the informal sector.  Indeed, the expansionary effect will be larger than what can be guessed from the formal sector expansion. 
  • The reason is that a big segment of the population is located in the informal sector; they are poorer and tend to spend a much higher fraction of their income on consumption.  This group has been seriously affected by the economic slowdown. Calculations by S Subramanian, based on the draft NSS report, confirm that there was a rise in the rate of poverty between 2011-12 and 2017-18, with a pronounced spike in rural areas.
  • Third, it is true that the fiscal space is quite tight for an expansion, given the size of the existing deficit and the limited scope for raising more tax revenues or borrowings.  However, the effect of an expansionary policy on the budget deficit will look much worse than what it would be since the estimates of its effect on income expansion and tax collection will be largely based on the formal sector. 
  • But, some of the income generated in the informal sector will boost demand in the formal sector through consumer demand for mass-consumption items (for instance, biscuits, as opposed to automobiles). Therefore, in the medium term, once the engine of the economy starts moving, the income expansion and deficit numbers will look better.
  • Finally, policies such as personal and corporate income tax cuts, which are being talked about, will achieve precious little.  To start with, they will affect barely 3-5 per cent of the adult population.
  • Also, income tax revenues amount to around 2.5 per cent of the GDP and corporate income taxes around 3.3 per cent.  So, irrespective of the number of people affected, and even if they spend the entire increase in their income as a result of the tax cut, the overall economic impact will be small relative to the GDP. 
  • Moreover, most of the tax is paid by the richest among these groups (the top 5 per cent taxpayers contribute 60 per cent of individual income tax revenue), and the rich tend to spend a smaller fraction of their income (and save more). 
  • Also, leveraged firms and households will possibly use the money to save or repay loans rather than consume.  Therefore, a tax cut for the rich would be less effective in raising spending compared to an equivalent amount being given to poorer groups who spend a much higher fraction of their incomes.

 

  • CONCLUSION: To sum up, fiscal pessimists and hawks are underestimating the role of the informal sector. 
  • To get the engine of the economy revving, an expansionary fiscal policy that harnesses the energy of the informal sector to boost aggregate demand is the order of the day. 
  • With a huge informal economy, government should increase spending, not worry about deficit

                                           

4) Three-Capital Theory


  • CONTEXT: In Andhra Pradesh, Chief Minister YS Jaganmohan Reddy has green-lighted the passage of the “Andhra Pradesh Decentralisation and Equal Development of All Regions Bill” sets the stage for three capitals. 
  • The executive capital, Visakhapatnam, is 700 km from Kurnool, 
  • the judicial capital, and 400 km from Amaravati, 
  • the legislative capital, which is 370 km from Kurnool. 
  • By Euclid’s principles, the day-to-day business of government in Andhra Pradesh is about to become a logistical nightmare.

 

  • EXAMPLES FROM PAST: While the Mughals and the Raj had contented themselves with two seasonal capitals, to protect top officials from extreme weather, geographically splitting the arms of government has not been attempted before.

 

  • IDEA BEHIND THE MOVE: The government argues that the idea of decentralisation dates back to the Sri Bagh pact of 1937, and that the development of Hyderabad into an IT hub rivalling Bangalore by N Chandrababu Naidu has starved other regions of the state of development. 
  • The Justice BN Srikrishna Committee of 2010 and the K Sivaramakrishnan Committee of 2014 had suggested more even development. 
  • The GN Rao Committee of 2019 suggested three capitals and the Boston Consulting Group had recommended the locations. 
  • The government also argues that officials could easily travel to Amaravati to brief ministers when the legislature is in session. 

 

  • CHALLENGES: The government also argues that officials could easily travel to Amaravati to brief ministers when the legislature is in session. 
  • However, they would have to stay put there for the duration, abandoning their day-to-day duties in Visakhapatnam.
  •  Meanwhile, police officers would have to travel from their headquarters in Mangalagiri to the secretariat in Visakhapatnam. 
  • And since much of important litigation involves the administration and the police, everyone would have to travel regularly to Kurnool. 
  • The travel bill would be steep, and the inefficiencies generated by the system would rapidly erode possible gains in decentralised development.
  • Andhra Pradesh is to have a lot of logistical headaches and not much decentralised development to show for it.

 

  • POLITICAL RIVALRY: This illogical scheme may be explained by political rivalry. In 2015, N Chandrababu Naidu, the first chief minister of divided Andhra Pradesh, had laid the foundations for a new capital in Amaravati in the presence of the prime minister and the vice president. 
  • However, the scheme faltered for lack of central support and when Reddy’s YSR Congress swept to power, the three-capital theory replaced it. If the intention was to dilute Naidu’s idea of Amaravati — itself an inefficient choice, since well-developed Vijayawada is nearby — satisfaction will come at an exorbitant cost. 
  • Reddy should use his energies in dealing with farm distress, the issue that had swept him to an absolute majority last year.