01/10/2019 – THE HINDU Editorials Notes- Mains sure Shot

 

GS-3 Mains

Question – How is rural unemployment and climate change linked to the present economic crisis?( 250 words)

Context – the slowing down of the economy and the realities associated with it.

 

The present scenario:

• Economic growth has slowed for the past few quarters and the rate of unemployment is at all time high.
• Figures reported in the report of the last Periodic Labour Force Survey point to a dramatic rise in the unemployment rate since 2011-12, when the previous survey on unemployment was undertaken.
• In the ‘rural males’ in 2017-18, the rate of unemployment is four times the average for the 40 years up to 2011-12.
• This is a matter of grave concern because this is one of the most underlying real cause of the present economic slowdown.
• How we will see gradually.
• But this does not mean that other factors do not matter like  low export growth, the state of the banking sector etc.

The government’s response:

• The government has responded to the slowing of growth by announcing a range of measures, the most prominent of them being the reduction in the corporate tax rate.
• This is a positive step but now the thing to be understood is that this is a solution for low investment rate in the economy. But investment too depends on the root cause and that is demand.
• The industrialists will invest in an economy only when there is a demand for the goods that they produced. So the real cause is not low investment but it is low consumption and that is arising out of unemployment.
• When we talk of unemployment, it is the rural unemployment that concerns the most.

Why?

• It is mostly because the future growth of demand for much of industrial production is likely to come from rural areas.
• After all, how many more flat-screen televisions can an urban middle-class household buy once it already possess one? 
• The urban middle class already have access to things which a considerable section of the rural population doesn’t, for example, refrigerators or ovens or mixer grinders.
• So the main demand for these items will come from the rural households. So if rural unemployment increases, demand (consumerism) will decrease, production will decrease and investment in the economy will be less despite cuts in tax rates.

How does climate come in?

• Agriculture is one of the sectors that faces the direct brunt of climate change. A majority of our agriculture is still dependent on good monsoons and other natural factors.
• When there is fluctuation in weather conditions production declines and this gives rise to a particular feature.
• That is households incurring consumption debt in bad crop years would be repaying it in the good ones. This implies that consumption does not grow appreciably even in good years.
• Unstable agricultural production first lowers the demand for agricultural labour and, subsequently, its supply, showing up in greater unemployment.
• When non-agricultural firms observe slow agricultural growth, they are likely to shrink their investment plans and may not revise their decision till this growth improves.
• Thus, attempting to influence the private investment rate is to only deal with a symptom.
• It is rural income generation that is the problem.

Conclusion/ Way ahead:

• So, any long-term solution to the problem of unemployment to which the slowing growth of the economy is related must start with agricultural production.
• Close to a decade since 2008-09 a new phenomenon is being seen in the agricultural sector i.e. agricultural production has become stagnant. There is a need to use the expertise of agricultural scientists to confirm what exactly is responsible for this stat.
• There is also a need to look at the role of ecological factors in causing agricultural stagnation. These factors include land degradation involving loss of soil moisture and nutrients, and the drop in the water table, leading to scarcity which raises the cost of cultivation. 
• Almost all of this is directly man-made, related as it is to over-exploitation or abuse, as in the case of excessive fertilizer use, of the earth’s resources.
• Then there is also the need to deal with fluctuations in rainfall due to climate change entirely induced by human action. 
• Also apart from tax rate cuts and improving the ease of doing business there is a need to address the rural and agricultural sector as well.
• It is now time to draw in the public agricultural institutes and farmer bodies for their views on how to resuscitate the sector.
• Overall, we may be experiencing an ecological undertow, and it could defeat our best-laid plans for progress.

 

 

No-2

 

GS-3 Mains

Question – Access the Model Tenancy Act, 2019.(250 words)

Context – Many houses lying vacant without being rented by owners.

 

What is Model Tenancy Act, 2019?

• ‘Model Tenancy Act’, 2019 seeks to balance the interest and rights of both the owner and tenant and to create an accountable and transparent ecosystem for renting the premises in disciplined and efficient manner. It includes both residential and non-residential properties.
• It is under the Ministry of Housing and Urban Affairs (MoHUA).

Important Provisions of the Act:

• The Act lays down obligations of tenants and landlords, and provides for proper mechanism for disputes.
• It is intended to be an Act that balances the interests of the owner and the tenant by establishing a mechanism for speedy trial and to establish Rent Court and Rent Tribunal to hear appeals and for matters connected to rental housing.
• Its stated aim is to promote the creation of a rental housing stock for various income segments including migrants, formal and informal sector workers, students, and working professionals, mainly through private participation.
• The Act also mandates that no person will let or take any rental premise without an agreement in writing in both rural and urban areas.
• Also, within two months of executing such an agreement, the land owner and tenant must contact the Rent Authority, who will issue a unique identification number to both the parties.
• Also there is a provision to submit agreements through a dedicated digital platform.

What are the rights of the tenant and owner?

• The Model Act lays down various rules, including that the security deposit to be paid by the tenant should not exceed two months’ rent for residential property, and should be a minimum of one month’s rent for non-residential property.
• It lists the kinds of repairs each party would be responsible for, with the proviso that money for repairs can be deducted from the security deposit or rent, as applicable, if a party refuses to carry out their share of the work.
• The Rent Court can allow repossession of the property by the landlord if the tenant misuses the premises, after being served a notice by the landowner.
• Misuse of the premises, as defined, includes public nuisance, damage, or its use for “immoral or illegal purposes”.
• If the tenant refuses to vacate, the landlord can claim double the monthly rent for two months, and four times the monthly rent thereafter.

What was the need of such an Act?

• A kind of fear psychosis was observed among the owners which led to 1.1 crore houses lying vacant (according to 2011 census).
• The existing rent control laws are restricting the growth of rental housing and discourage owners from renting out their vacant houses due to fear of repossession.
• The Model Act would bring these into the rental market, and would promote the growth of the rental housing segment.
• One of the potential measures to unlock the vacant house is to bringing transparency and accountability in the existing system of renting of premises and to balance the interests of both the property owner and tenant in a judicious manner.

The benefits:

•  If adopted and enforced by the states, will lead to a better regulated private rental housing market for the middle and higher income segments and also address the grievances of the tenants.
• The Draft MTA will also promote growth of rental housing and investment in the sector and promote entrepreneurial opportunities and innovative mechanism of sharing of space.
• It will enable the creation of adequate rental housing stock for various income segments of society including migrants, formal and informal sector workers, professionals, students etc. and increase access to quality rented accommodation, enable gradual formalization of rental housing market.
• As per Census 2011, nearly 1.1 crore houses were lying vacant in the country and making these houses available on rent will complement the vision of ‘Housing for All’ by 2022.

Way forward:

• Even if the Act is very well intended, yet it must be periodically reviewed in order to bring in any amendment if required.