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Daily Editorial Analysis

Editorials & Articles – 2 May 2024

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May 2, 2024 #Articles, #Editorial Analysis
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Editorials & Articles – 2 May 2024

The wrong way to fight inequality

Topic: GS2 – Social Justice – Development and management of social sector/services.

Understanding income and wealth inequality in India is crucial for UPSC aspirants to grasp socioeconomic challenges and policy implications.
Context:
●  The article discusses research by economists, including Thomas Piketty, on income and wealth inequality in India, highlighting trends since the 1980s and proposing alternatives to wealth redistribution, emphasising economic freedom and competition.

 Introduction:

  • Income and wealth inequality in India, as revealed by economists including Thomas Piketty, underscores profound socio-economic challenges.
  • Trends since the 1980s reflect disparities in economic growth and access to opportunity, prompting debates on policy interventions to promote equity and inclusive development.

Overview of Income and Wealth Inequality in India:

  • Economists, including Thomas Piketty, reveal alarming trends in income and wealth inequality in India over the past century.
  • In 2022, the top 1% owned 40.1% of total wealth and earned 22.6% of total income, while the bottom 50% owned only 6.4% of wealth and earned 15% of income.
  • Such disparity prompts calls for a wealth tax on the rich to address regressive tax policies.

Economic Growth and Inequality Trends:

  • Inequality surged since the 1980s with the adoption of market policies, contrasting with stagnant growth during socialist decades.
  • Despite the bottom 50% losing share of national income (from 23.6% to 15% since 1982), their real income increased over four-fold between 1991 and 2022.
  • However, income gaps persist, with the top 1% earning significantly more than the bottom 50%.

Barriers to Economic Mobility

  • Economic freedom isn’t equally distributed; the poor face barriers such as limited access to capital and high education costs.
  • In a truly free market, such disparities would incentivize individuals to pursue higher-paying jobs, but barriers impede this progression.
  • Liberalising sectors like finance and education could facilitate upward mobility by enabling investment in high-paying skills.

Inevitability of Wealth Inequality

  • Wealth inequality is intrinsic to market economies, rewarding better investors and entrepreneurs.
  • However, India’s extreme wealth gap is exacerbated by government favouritism toward the top 1%, hindering competition and exacerbating disparities.
  • Addressing special privileges and fostering competition would naturally reduce wealth concentration.

Impact of Wealth Tax

  • Introducing a wealth tax could have unintended consequences, as investors may reduce capital investments to maintain post-tax income.
  • This indirectly affects workers and landowners, potentially lowering their income and output.
  • Additionally, most of the top 1%’s wealth is in capital assets, not consumer goods, so taxing them wouldn’t directly address low living standards.

Alternative Solutions to Inequality

  • Taxing the rich could impede economic growth and harm living standards.
  • Instead, offering greater economic freedom to the poor would enable them to compete better in the market and claim a larger share of the economic pie.

Conclusion

  • While the data on income and wealth inequality in India is alarming, solutions like a wealth tax may not address underlying issues effectively.
  • Addressing barriers to economic mobility and fostering competition could offer more sustainable solutions to reduce inequality and improve living standards for all.
Inequality in India
Inequality Trends in India:

●  Wealth Inequality: Top 10% own 77% of national wealth; poorest half have only 4.1%.

●  Income Inequality: Top 10% and 1% hold 57% and 22% of total income respectively; bottom 50% share reduced to 13%.

●  Tax Burden: 64% of GST from bottom 50%; only 4% from top 10%.

●  Global Hunger Index: India’s score at 28.7, considered serious; highest child-wasting rate.

●  Healthcare Accessibility: 63 million pushed into poverty annually due to healthcare costs; majority unable to access needed care.

(Source – The Economic Times, December 7, 2022)

Causes of Increasing Inequality in India:

● Unequal Access to Education: Disparities in educational opportunities perpetuate socio-economic inequalities, limiting upward mobility for marginalised communities.

● Informal Sector Dominance: The dominance of the informal sector in India’s economy leads to low wages, insecure employment, and lack of social protection, exacerbating income disparities.

● Unequal Distribution of Wealth: Concentration of wealth among small elite contributes to widening income gaps and socio-economic inequalities.

● Caste and Gender Discrimination: Persistent caste-based and gender-based discrimination marginalise certain groups, limiting their access to opportunities and resources.

● Urban-Rural Divide: Disparities between urban and rural areas in terms of infrastructure, employment opportunities, and access to basic services widen income and wealth gaps.

Way Forward:

● Investment in Education: Enhance access to quality education and skill development programs to promote equal opportunities for all.

● Job Creation: Implement policies to stimulate job creation, particularly in sectors with high labour-absorptive capacity, to reduce unemployment and underemployment.

● Social Protection: Strengthen social safety nets and welfare programs to provide financial support and assistance to vulnerable populations.

● Progressive Taxation: Introduce progressive tax policies to redistribute wealth and reduce income inequalities.

● Gender and Caste Equality: Promote gender equality and social inclusion through affirmative action policies and measures to address caste-based discrimination.

● Rural Development: Focus on rural development initiatives to bridge the urban-rural divide and promote inclusive growth.
India must collaborate with Indian Ocean countries for data on warming
Topic: GS1 – Geography –  Climate Change – Changes in water-bodies

GS3 – Environment – Environmental pollution and degradation

Understanding Indian Ocean warming is crucial for UPSC aspirants to grasp climate change impacts on marine ecosystems and mainland India.
Context:
● The article highlights projections of significant warming in the Indian Ocean, leading to increased marine heatwaves, coral bleaching, severe cyclones, and erratic monsoons in mainland India.

 Introduction:

  • The projected warming of the Indian Ocean poses significant challenges for marine ecosystems and mainland India’s climate stability.
  • With forecasts indicating increased marine heatwaves, coral bleaching, severe cyclones, and erratic monsoons, understanding and addressing these impacts are paramount for sustainable development and environmental protection.

Overview of Indian Ocean Warming

  • The Indian Ocean has warmed by 1.2°C and is projected to heat up by 1.7°C to 3.8°C from 2020 to 2100.
  • A recent study forecasts a tenfold increase in marine heatwaves, from 20 days per year to 220-250 days, leading to a near-permanent heatwave state.
  • This warming trend extends beyond the surface, increasing the ocean’s heat content significantly.

Impact on Marine Ecosystems

  • The rise in marine heatwaves threatens coral reefs, accelerating coral bleaching and damaging the fisheries sector.
  • Accelerated warming, measured up to 2,000 meters below the surface, indicates a substantial increase in the ocean’s heat content.
  • The thermal capacity of the Indian Ocean is rising at a rate of 4.5 zetta-joules per decade, expected to escalate to 16-22 zetta-joules per decade in the future.

Consequences for Mainland India

  • Warming trends in the Indian Ocean contribute to more severe cyclones and erratic monsoon patterns in mainland India.
  • The frequency of severe cyclones is expected to rise, alongside an increase in the intensity of monsoon rainfall, leading to prolonged droughts and floods.

Anthropogenic Contributions and Global Commitments

  • Anthropogenic activities, particularly fossil fuel burning, significantly contribute to global warming and the resultant impacts on the Indian Ocean.
  • Current global commitments to reduce greenhouse gas emissions may not adequately address the ocean’s warming, as marine systems respond slowly to external changes.

Need for Collaborative Action

  • India must collaborate with Indian Ocean-bordering countries to enhance data gathering and projections to better understand local impacts.
  • Investments in infrastructure development and protection should align with projections to mitigate risks associated with ocean warming.

Conclusion

  • The warming of the Indian Ocean poses significant threats to marine ecosystems and mainland India’s climate stability.
  • Urgent collaborative efforts are required to enhance data collection, projection accuracy, and infrastructure development to address the challenges posed by ocean warming effectively.
Potential impact of warming of Indian ocean on Indian climate/weather
●  Increased Indian Ocean temperature may intensify monsoon rains, leading to more extreme precipitation events.

●     Higher ocean heat content can fuel the formation and intensification of cyclones in the Arabian Sea and Bay of Bengal.

●  Marine heatwaves could disrupt marine ecosystems, affecting fish stocks and coastal livelihoods.

● Coral bleaching due to sustained high temperatures may harm biodiversity and coastal protection.

● Thermal expansion of seawater contributes to sea-level rise, threatening coastal areas with inundation and erosion.

●  Overall, these changes may have far-reaching consequences on agriculture, water resources, and coastal infrastructure in India.

The trade push

Topic: GS3 – Indian Economy – Effects of liberalisation on the economy

This topic is relevant for both Prelims and Mains as the article discusses global trade trends, including factors affecting trade volumes and export earnings.

 

Context:
  • The article aims to explain the recent trends and challenges in global trade, with a particular focus on India’s export performance. It highlights the factors contributing to the decline in global merchandise trade, such as the Covid-19 pandemic and geopolitical conflicts, and analyzes how these factors have impacted India’s exports.

Global Trade Volatility:

  • Global trade has experienced significant fluctuations in recent years due to various factors such as the Covid-19 pandemic and geopolitical conflicts.
  • The data from the United Nations Conference on Trade and Development shows a continuous decline in the value of global merchandise trade since the middle of 2022, with a notable 6% decrease in global merchandise exports in 2023.

India’s Performance in Global Trade:

  • India’s performance in global trade aligns with this trend, with merchandise exports falling by 7% in 2023.
  • Despite this decline, India outperformed developing Asia as a whole, which saw a 8% decrease in merchandise exports.
  • However, there were signs of improvement in the January-March 2024 quarter, with sequential growth observed.

Factors Impacting India’s Exports:

  • India has faced challenges in the global trade environment, including lower international commodity prices, particularly in energy and non-energy sectors.
  • The decline in crude oil prices significantly contributed to the fall in India’s overall merchandise export bill.
  • However, despite lower prices, India managed to increase the volume of petroleum exports.
  • Excluding petroleum and gems and jewellery exports, core exports increased by 1.4%, indicating higher shipment volumes of goods.

Export Sector Analysis:

  • Several key sectors in India’s export portfolio experienced growth, including electronics, drugs and pharmaceuticals, engineering goods, and agricultural products.
  • The electronics sector, in particular, saw a notable 24% growth, driven by exports of telecom instruments and mobile handsets incentivized by government schemes.
  • Despite bans on certain agricultural products, overall agriculture and allied exports saw healthy growth, driven by categories such as meat and poultry products, spices, fruits and vegetables, oil meals, oilseeds, and unmanufactured tobacco.

Destination of India’s Exports:

  • India’s export destinations varied, with a decline in exports to the US, despite solid economic growth in 2023, primarily due to the dominance of the services sector.
  • However, exports to the Euro region increased despite economic slowdowns and geopolitical uncertainties.
  • Additionally, exports to the Gulf Cooperation Council (GCC) countries, particularly the UAE, rose significantly.

Concerns and Priorities:

  • While overall export growth is positive, there are concerns about the decline in labor-intensive sectors such as gems and jewellery, textiles, leather, marine products, and plastics.
  • The share of these sectors in India’s merchandise exports has decreased over the last decade, highlighting the need to address this decline as a priority.

Future Outlook for India’s Exports:

  • Despite challenges, there are positive indicators for India’s exports, including upward revisions to global growth and trade projections by multilateral agencies.
  • Bilateral free-trade agreements and efforts to boost manufacturing are expected to further stimulate India’s exports in the near to medium term.
  • However, uneven global growth and geopolitical tensions remain potential spoilers that need monitoring.

Conclusion:

  • India’s export performance reflects global trade dynamics, with challenges posed by factors such as the Covid-19 pandemic, geopolitical conflicts, and fluctuating commodity prices.
  • While certain sectors have shown resilience and growth, there are concerns about the decline in labor-intensive industries.
  • However, with supportive measures and favorable global projections, India’s exports are expected to contribute positively to overall growth momentum in the coming years, though vigilance against potential disruptions remains essential.
How does Economic Slowdown Impact International Trade and Individual’s Purchasing Power?
  • During an economic slowdown, international trade, including both exports and imports, declines significantly due to reduced overall demand for goods and services.
  • People tend to avoid discretionary spending, which particularly impacts certain imports and postponable expenses.
  • As a result, the exports of engineering goods, gems and jewellery, chemicals, readymade garments, plastics, and petroleum products have contracted or grown at a slower pace in 2023.
  • Inflation, the uneven increase in prices, especially for essentials like food and energy, erodes individuals’ purchasing power. However, if imported products are cheaper than domestic alternatives, people may opt for imports.
  • The Exchange Rate between currencies also plays a role in determining the purchasing power of an individual. Additionally, inflation affects the flow of capital to developing countries.

 A tax on aspiration

Topic: GS3 – Indian Economy – Government Budgeting

This topic is relevant for both Prelims and Mains as the article discusses the concept of inheritance tax and its implications on wealth distribution, economic growth, and middle-class aspirations.

 

Context:
  • The article aims to explore the concept of inheritance tax, which has recently become a topic of significant debate in the country. It discusses the proposal put forth by Congress leader Sam Pitroda to implement inheritance tax and the subsequent reactions from political parties.
What is Inheritance tax?
  • This tax is imposed on those who inherit assets from a deceased person.
  • The rate of this tax depends on the value of the property received by the heir and his relationship to the decedent.
  • This tax is a form of death tax.

Debate on Inheritance Tax:

  • The concept of inheritance tax, sparked by Congress leader Sam Pitroda’s suggestion for its implementation, has brought this policy tool into the spotlight once again.
  • Pitroda referenced the US example, where the government levies a 55% tax on the deceased’s wealth, while the remaining 45% is distributed among legal heirs or children.
  • However, the Congress party distanced itself from Pitroda’s views, emphasizing that they are his own and do not represent the party’s stance.

Global Context of Inheritance Tax:

  • Inheritance tax, also known as estate tax or death tax, exists in various forms across several countries, including South Africa, Brazil, and the US.
  • However, emerging economies like India and China do not have provisions for such a duty.
  • Examining the wealth distribution among the top 10% of the population in different countries reveals that an inheritance tax may not necessarily lead to equitable wealth distribution, as it is higher in countries like South Africa, Brazil, and the US compared to India and China.

Why has there been growing demands for the implementation of Inheritance Tax in India?

  1. Rising wealth and income inequality in India– In the post-liberalisation period of the Indian economy, the wealth and income inequality has been rising in India. According to Credit Suisse 2018 Global Wealth Report, the richest 1% own 51.5% and the richest 10% account for 77.4% of the nation’s wealth. Bottom 60% of the population own only a meagre 4.7% nation’s wealth.
  2. Lack of Inclusive Growth– The Gini wealth coefficient in India has gone up from 81.3% in 2013 to 85.4% in 2017 (100% represents maximal inequality). The growth in India has not been inclusive.
  3. Endowments to Social Sector Institutions– Indian hospitals, universities, and other institutions need endowments and funds from inheritance tax. For ex- Harvard University receiving funds from estates, is exempt from Inheritance tax.
  4. Need for more direct taxes– The government’s fiscal deficit has increased after the COVID-19 pandemic. Hence, additional sources of direct taxes like inheritance tax need to be explored to contain the fiscal deficit as mandated by the FRBM Act.
  5. International practices– Developed countries such as England, France, Germany, the USA and India’s South East Asian counterparts like Philippines, Taiwan and Thailand have been charging inheritance tax.

Challenges and Implications of Implementing Inheritance Tax:

  • Implementing an inheritance tax may present several challenges and implications, particularly in countries like India.
  • Wealthy individuals can easily avoid inheritance tax by utilizing tax-exempt assets or transferring their wealth before death.
  • Furthermore, an inheritance tax could disincentivize wealth accumulation and investment, potentially hindering entrepreneurship and capital formation.
  • It may also lead to the forced sale of assets to pay taxes, disrupting family enterprises and resulting in inefficient asset allocation.

Administrative Burdens and Resistance:

  • In addition to economic concerns, an inheritance tax could impose significant administrative burdens, particularly for widows and non-resident Indians.
  • Tax regulations and procedures may exacerbate emotional and financial stress, highlighting the need for simplified and accessible tax frameworks.
  • Moreover, taxpayers may resist inheritance tax due to its visibility and perceived burden, leading to distorted perceptions of fiscal policy.

Impact on Middle-Class Aspirations and Economic Growth:

  • The introduction of inheritance tax may negatively impact middle-class aspirations and wealth creation efforts.
  • It could discourage savings and investment, slow down economic growth, and drive talent and capital flight abroad.
  • Enforcement challenges and tax avoidance strategies may further limit revenue generation.

What are the benefits of Inheritance Tax?

  1. Reduction of inequalities-The inheritance tax reduces Intra-Generational Inequality and promotes Inter-Generational Equity by preventing the concentration of income and wealth in the hands of a few.
  2. Greater financial resources for Govt- According to an Oxfam Survey of 2018, 51 of a total of 101 billionaires are more than 65 years old and collectively own ₹10.54 trillion. A moderate inheritance tax of 10-15% (like other Asian countries such as the Philippines, Taiwan and Thailand) can act as a stable and significant source of revenue for the government.
  3. Greater Revenue to fund public welfare- Inheritance tax provides additional sources of revenue to the government for expansion of social sector programmes, and its push towards universal health insurance.
  4. Creation of meritocratic society-It will help in creation of a meritocratic society by chipping away the advantages the children of the wealthiest families enjoy by accident of birth. The redistribution of initial endowments can help in the establishment of optimal social state.
  5. Progressive in nature-Inheritance tax is a progressive tax as it places a higher tax burden on wealthy individuals only.

Conclusion:

  • While the debate on inheritance tax continues, its implementation poses complex challenges and implications for countries like India.
  • Balancing the need for wealth redistribution with concerns about economic growth and middle-class aspirations is essential for effective policymaking.
  • Ultimately, inclusive wealth creation efforts and innovative economic policies are crucial for achieving long-term prosperity and reducing wealth inequality.
History of Inheritance Tax in India
  • It was introduced in 1953 under the Estate Duty Act, 1953 as an attempt to reduce economic disparity.
  • Estate duty rates were progressive and rose as far as 85 percent on estates exceeding Rs 20 lakh.
  • Estate duty was levied on the market value of all immovable properties in India, as well as on all movable property (whether in India or outside) passed on to successors upon the death of an individual.
  • The erstwhile law also had an anti-avoidance mechanism in place to curb certain transactions such as gifts made in ‘contemplation of death’ or gifts given within two years prior to death.
  • Despite its noble objectives, the estate duty law was met with significant disapproval throughout its existence due to a number of factors:
  • The law was complex and led to higher litigation and higher administration costs,
  • Perceived double taxation on the same assets in the form of estate duty and wealth tax (later abolished w.e.f. from FY16),
  • Lower estate duty collections as a result of illegal concealment and the practice of holding benami properties.

Vitrectomy

Delhi minister Saurabh Bharadwaj announced that Aam Aadmi Party colleague and Rajya Sabha MP Raghav Chadha had travelled to the United Kingdom for urgent vitrectomy surgery.

What is Vitrectomy? 

  • It is a surgical procedure that removes the vitreous humour, a gel-like substance that fills the eye between the lens and the retina. This surgery is essential for treating a variety of eye conditions, particularly those that affect the retina and the clarity of vision.

How is it Performed? D

  • uring a vitrectomy, an ophthalmologist makes tiny incisions in the sclera, the white part of the eye, allowing the insertion of specialised instruments. These instruments can cut away and remove the vitreous humour, enabling the surgeon to access and repair any underlying retinal issues.

Why Does One Undergo Surgery? 

  • One of the most common reasons for this surgery is retinal detachment, a condition where the retina separates from the back of the eye, leading to potential blindness if not promptly treated. In some cases, the surgery may also be performed to remove foreign objects from the eye, or to address complications from previous eye surgeries, such as cataract surgery. Overall, the surgery’s goal is to address and repair vision-threatening conditions, improving or preserving sight for patients.

What are the Complications of Surgery? 

  • Vitrectomy, while a life-changing procedure for many patients, comes with its share of potential complications, like infection; cataract formation; retinal detachment (new detachment or worsening of existing detachment possible); bleeding, scarring, or swelling within the eye; etc.
Why is China more important for Tesla than India?

Why in News? 

  • Within a week of postponing his visit to India, Tesla CEO Elon Musk landed in Beijing to push for Full Self-Driving (FSD) cars.

What makes China more Important?

  • China’s Dominance in Battery Production– China accounts for over half of global electric vehicle (EV) sales, largely driven by its dominance in battery production- a critical element for EV manufacturing.
  • Tesla’s Biggest Plant in Shanghai- was opened in 2018 after a new Chinese policy allowed foreign carmakers to establish fully-owned subsidiaries. It is important as it supplies cars to New Zealand, Australia, and Europe.
  • India’s EV Push Still at Nascent Stage- India has historically relied on imports of batteries from elsewhere, and has a fragmented EV supply chain, but is pushing for battery production through production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage- a crucial component of lithium-ion batteries. As per Niti Aayog, India could represent up to 13% of global battery demand by 2030.
  • Regulatory Flip-flops on India’s EV Policy– In 2018, then Niti Aayog CEO denied the need of an EV policy. In 2018-19, Centre increased customs duty on CKD (completely knocked down) imports of motor vehicles, motor cars, motorcycles from 10% to 15%. It was eased last month (with India’s EV policy launch)with a minimum investment limit for manufacturers at Rs 4,150 crore.

Is There Still an Opportunity for India? 

  • Yes, as China’s exports are increasingly coming under scrutiny in Europe and the US. European Commission last year launched an anti-subsidy investigation into battery electric vehicles (BEV) imports from China to determine whether BEV value chains in China benefit from illegal subsidization and causes economic injury to EUs EV manufacturers. The US also considers Chinese EVs as a threat to its carmakers.
The Question of Article 31C
While hearing a case to decide whether the government can acquire and redistribute private property, a 9-judge Bench of the SC decided to take up another issue of “radical constitutional consequence”: does Article 31C still exist?

What’s in Today’s Article?

  • What is Article 31C of the Indian Constitution?
  • Introduction of Article 31C
  • The Journey of Article 31C
  • The Ongoing Case in SC
  • What are the Arguments in the SC?

What is Article 31C of the Indian Constitution?

  • Article 31C protects laws enacted to ensure –
    • The “material resources of the community” are distributed to serve the common good (Article 39(b)) and
    • That wealth and the means of production are not “concentrated” to the “common detriment” (Article 39(c)).
  • As per Article 31C, these particular directive principles (Articles 39(b) and 39(c)) cannot be challenged by invoking the right to equality (Article 14) or the rights under Article 19 (freedom of speech, right to assemble peacefully, etc).

Introduction of Article 31C:

  • Article 31C was introduced by the Constitution (25th) Amendment Act 1971.
    • The amendment specifically mentioned the “Bank Nationalisation Case”, in which the SC stopped the Centre from acquiring control of 14 commercial banks by enacting the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969.
    • In this case, the court held that the ‘right to compensation’ was not appropriately ensured by the Banking Act.
  • The 25th Amendment sought to surmount the difficulties placed in the way of giving effect to the Directive Principles of State Policy. One of the means employed to do so was the introduction of Article 31C.

The Journey of Article 31C:

  • The 25th amendment was challenged in the Kesavananda Bharati case (1973) in which 13 judges held by a narrow 7-6 majority that the Constitution has a “basic structure” that cannot be altered, even by a constitutional amendment.
  • As a part of this verdict, the court struck down the last portion of Article 31C, which states that no law giving effect to DPSP shall be called in question in any court on the ground that it does not give effect to such policy.
    • This opened the door for the court to examine laws that had been enacted to further Articles 39(b) and 39(c).
  • In 1976, Parliament enacted the Constitution (42nd) Amendment Act, which expanded the protection under Article 31C.
    • As a result, every single directive principle (Articles 36-51) was protected from challenges under Articles 14 and 19 of the Constitution.
    • It was meant to give precedence to the directive principles over those fundamental rights which hinders socio-economic reforms for implementing the directive principles.
  • In 1980, in the Minerva Mills v. UoI case, the SC struck down the above clause of the 42nd amendment.
    • The five-judge Bench held that Parliament’s power to amend the Constitution was limited, and it could not be used to remove these limitations and grant itself “unlimited” and “absolute” powers of amendment.
  • However, the ruling resulted in a conundrum – By striking down part of the 25th amendment, did the court strike down Article 31C as a whole.

The Ongoing Case in SC:

  • The court is hearing a challenge to Chapter VIII-A of the Maharashtra Housing and Area Development Act, 1976 (MHADA).
    • This chapter, introduced by an amendment in 1986, allows the government to acquire “cessed” properties in Mumbai, citing the obligation under Article 39(b) of the Constitution.
  • In 1991, the Bombay High Court upheld the amendment, citing the protection granted by Article 31C to laws enacted in furtherance of Article 39(b).
  • This decision was appealed at the SC in 1992, where the question eventually became whether “material resources of the community” under Article 39(b) included private resources such as cessed properties.

What are the Arguments in the SC?

  • When the hearing began, the 9-judge Bench seemed to agree with the Centre’s submission that the case should be restricted to interpreting Article 39(b).
  • However, the very next day, the Bench stated that the question of whether Article 31C still lives following the Minerva Mills decision has to be decided to avoid “constitutional uncertainty”.
  • Senior Advocate (appearing for the petitioners) argued that the original version of Article 31C was ‘substituted’ with the expanded version provided in the 42nd Amendment.
    • Therefore, when this new Article 31C was struck down in Minerva Mills, the older provision would not automatically be revived.
  • On the other hand, the Solicitor General (appearing for the Centre) argued that the doctrine of revival must apply in this case, and the post-Kesavananda Bharati position on Article 31C must be restored.
    • To explain the doctrine and justify its application, he relied on Justice Kurian Joseph’s observations in the case where the court struck down the Constitution (99th) Amendment Act (NJAC).
    • Justice Joseph held that once the process of substitution and insertion by way of a constitutional amendment is itself held to be bad and impermissible, the pre-amended provisions automatically resurface and revive.
Analysing Labour on a Warming Planet

What’s in Today’s Article?

  • Background (Context of the Article)
  • Major Highlights / Takeaways of the ILO’s Report

Background:

  • The International Labour Organisation (ILO) had recently published a report title “Ensuring safety and health at work in a changing climate“.
  • The ILO published this report to bring attention to the global health threat workers are currently facing.
  • The report indicates that there is an urgent call to ensure the future of labour is climate proofed and to address the constantly evolving work environment as the planet warms.
  • The report states that well over a third of the world’s population, are exposed to excessive heat annually, leading to almost 23 million work-related injuries.
  • The ILO has sought an overhaul of existing Occupational Safety and Health-related (OSH) protections and laws, as they have struggled to keep up with the evolving risks from climate change, resulting in worker mortality and morbidity.

What Are the Emerging Hazards?

  • The ILO has identified six key impacts of climate change. They are:
    • Excessive heat
    • Ultraviolet (UV) radiation
    • Extreme weather events
    • Workplace air pollution
    • Vector-borne diseases
    • Agrochemicals
  • These could lead to a range of health issues such as stress, stroke and exhaustion.
  • The ILO mentions agriculture workers, workers in the construction sector, conservancy workers in cities and those employed in transport and tourism as most affected by climate change.
  • It is also important to take note of the global rise in gig employment, which is highly heat-susceptible.
    • It is also one of India’s fastest growing worker communities, such as ride hailing app drivers, food and groceries deliverers, home repair workers like electrician, plumbers, and AC mechanics, and courier service employees.
    • Gig workers constitute about 1.5% of India’s total work force, which is projected to grow to about 4.5% by 2030, according to a Nasscom study.
  • In the Indian context, all these segments put together suggest that about 80% of the country’s 2023 workforce of 600 million is susceptible to heat-related hazards.
  • That is 180 million more than the entire current population of South America.

Which Sectors Are Affected the Most?

  • Agriculture Sector:
    • Agriculture is by far the most heat susceptible sector globally, particularly so in the developing world, where informal farm labourers work with little to no weather protection.
    • According to the Union Agriculture Minister Arjun Munda, December 2023 replies in Parliament, ‘about 45.76% of the total Indian workforce was engaged in agriculture and allied sector during 2022-23’.
    • This is fast reducing, and about 20% down from the numbers working in agriculture three decades ago.
    • The NSSO data of July 2018-June 2019 reveal that almost 90% of Indian farmers own less than two hectares of land, and earn an average monthly income of a little over ₹10,000.
    • Farmers in the bottom three States of Jharkhand, Odisha and West Bengal are earning as low as ₹4,895, ₹5,112, and ₹6,762.
    • About half of India’s farmers are indebted, they lack access to modern technology and latest research in agriculture.
    • This leaves little room for them to invest in adapting to a warming planet.
    • Many communities have already begun shifting work timings to early mornings and sun-down hours as a heat coping mechanism.
    • The ILO advices more hydration points, breaks and rest shelters in the country’s plantations.
  • Micro, Small and Medium Enterprises (MSME) Sector:
    • Agriculture is followed by India’s MSME sector that employs about 21% of the country’s workforce, or more than 123 million workers.
    • This sector of about 64 million enterprises, second only in size to China’s MSME segment, contributes almost half of India’s exports and more than a third of the country’s total manufacturing output.
    • Yet, the overwhelming informalization of the sector has meant little to no oversight of worker conditions by State Occupational Safety and Health (OSH) departments, leaving them highly vulnerable to heat hazards.
  • Building & Construction Sector:
    • MSME sector is followed by the building and construction segment which constitutes about 70 million workers, almost 12% of India’s workforce.
    • Workers here must cope with the urban heat island effect, as construction is a highly urban-centric economy, with rising growth in cities.
    • Construction workers are also the most prone to physical injuries and air pollution related health hazards, like asthma, as several Indian cities are among the most polluted globally.

What Laws Address Workplace Safety?

  • A range of more than 13 central laws in India regulate working conditions across several sectors. These include:
    • The Factories Act, 1948, the Workmen Compensation Act, 1923, the Building and Other Construction Workers Act, 1996, the Plantations Labour Act, 1951, the Mines Act, 1952 and the Inter-State Migrant Workmen Act, 1979.
  • These laws were consolidated and amended in September 2020 under one law — the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code, 2020).
  • While several unions are critical of the new law for watering down safety and inspection standards, the Union government is yet to officially notify its enforcement.
  • This has meant that unions and the judiciary continue to rely on the older laws to seek redress and accountability.
  • The Indian Factories Act defines a factory as an enterprise with “10 or more” workers, but those registered under this law are less than a quarter of a million based on the latest available data.
    • An overwhelming majority of India’s 64 million MSMEs are not registered under this law, and are therefore outside the purview of governmental inspections.
  • Provisions w.r.t. Heat Hazards:
    • When it comes to dealing with occupational heat, the Factories Act broadly defines ventilation and temperature and leaves it to the States to decide optimal standards based on specific industries.
    • However, these regulations were framed more than five decades back.
      • For instance, Maharashtra framed its rules under the law in 1963, while Tamil Nadu did so in 1950.
      • Both these rules mention a maximum wet bulb temperature of 30°C on a shop floor with a height of 1.5 metres and also mention provisioning adequate air movement of at least 30 meters per minute.
  • Provisions w.r.t. Other Climate Hazards:
    • While the OSH 2020 Code has attempted some remediation, lawyers point to a clause which allows online inspection of safety by enterprises.
    • These raise serious concerns of compromising a law that is already weak in implementation.

By ULF TEAM

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