QUESTION : A trade agreement like RCEP is both an opportunity and a threat. Economic isolation is not an option for India and It must move towards bilateral trade pacts. Analyse.
THREAT OR TREAT
WHAT ?
RCEP And India
WHY IN NEWS ?
Recently, the Regional Comprehensive Economic Partnership (RCEP), a mega trade bloc comprising 15 countries led by China came into existence.
India opted to stay out after walking out of discussions last year, the new trading bloc has made it clear that the door will remain open for India to return to the negotiating table
WHAT IS RCEP ?
- Described as the “largest” regional trading agreement to this day, RCEP was originally being negotiated between 16 countries — ASEAN members and countries with which they have free trade agreements (FTAs), namely Australia, China, Korea, Japan, New Zealand and India.
- The purpose of RCEP was to make it easier for products and services of each of these countries to be available across this region. Negotiations to chart out this deal had been on since 2013, and India was expected to be a signatory until its decision last November.
WHY DID INDIA WALK OUT ?
- Unfavourable Balance of Trade: India has trade deficits with 11 of the 15 RCEP countries, and some experts feel that India has been unable to leverage its existing bilateral free trade agreements with several RCEP members to increase exports.
- Fear of Dumping of Chinese Goods: India has already signed FTAs with all the countries of RCEP except China. This is the major concern for India, as after signing RCEP cheaper products from China would have flooded the Indian market.
- Non-acceptance of Auto-trigger Mechanism: In order to deal with the imminent rise in imports, India had been seeking an auto-trigger mechanism that would have allowed India to raise tariffs on products in instances where imports cross a certain threshold. However, other countries in RCEP were against this proposal.
- Lack of Consensus on Rules of Origin: Rules of origin are the criteria used to determine the national source of a product. India was concerned about a “possible circumvention” of rules of origin. The deal did not have sufficient safeguards to prevent routing of the products.
- Protecting domestic industries: Throughout the negotiations, the dairy industry demanded protection as the industry was expected to face stiff competition from Australia and New Zealand when the deal was signed. Similarly, steel and textiles sectors have also demanded protection.
- MFN Status: India wanted RCEP to exclude most-favoured nation (MFN) obligations from the investment chapter, as it did not want to hand out, especially to countries with which it has border disputes, the benefits it was giving to its strategic allies
- Issue of Market Access: RCEP also lacked clear assurance over market access issues in countries such as China and non-tariff barriers on Indian companies.
- Lack of Commitment to resolve above issues: India had been “consistently” raising “fundamental issues” and concerns throughout the negotiations and was prompted to take this stand as they had not been resolved by the deadline to commit to signing the deal.
- No deal better than bad agreement: India’s stance was based on a “clear-eyed calculation” of the gains and costs of entering a new arrangement, and that no pact was better than a “bad agreement”.
How far is China’s presence a factor for India’s decision?
- Apart from economic reasons (fear of dumping), escalating tensions with China are a major reason for India’s hardened position on the deal.
- China’s participation in the deal had already been proving difficult for India due to various economic threats, the clash at Galwan Valley has soured relations between the two countries.
- The various measures India has taken to reduce its exposure to China would have sat uncomfortably with its commitments under RCEP
WHY RCEP IMPORTANT FOR CHINA ?
- China is trying to overcome Covid-19 disruptions and resurrect the supply chain mechanism and possibly put pressure on US President-elect Joe Biden.
- The Indo-Pacific so far ran on twin tracks of economy and security with economy on a weak wicket.
- China is trying to strengthen the economic base while the US is focussed on the security aspects.
- For India, RCEP hardly makes a difference as it has FTAs with ASEAN, and CEPAs (Comprehensive Economic Partnership Agreements) with Japan and South Korea already.
WHAT CAN THE DECISION COST INDIA ?
- There are concerns that India’s decision would impact its bilateral trade ties with RCEP member nations, as they may be more inclined to focus on bolstering economic ties within the bloc. The move could potentially leave India with less scope to tap the large market that RCEP presents —the size of the deal is mammoth, as the countries involved account for over 2 billion of the world’s population.
- Given attempts by countries like Japan to get India back into the deal, there are also worries that India’s decision could impact the Australia-India-Japan network in the Indo-Pacific. It could potentially put a spanner in the works on informal talks to promote a Supply Chain Resilience Initiative among the three.
- However, India’s stance on the deal also comes as a result of learnings from unfavourable trade balances that it has with several RCEP members, with some of which it even has FTAs. An internal assessment by the government has revealed that the growth in trade (CAGR) with partners over the last five financial years was a modest 7.1%. While “there has been growth rate in both imports from and exports to these FTA partners”, the “utilisation rate” of FTAs both for India and its partners has been “moderate” across sectors, according to this study, which covers pacts with Sri Lanka, Afghanistan, Thailand, Singapore, Japan, Bhutan, Nepal, Republic of Korea and Malaysia.
- India has trade deficits with 11 of the 15 RCEP countries, and some experts feel that India has been unable to leverage its existing bilateral free trade agreements with several RCEP members to increase exports.
- Moreover, one doesn’t get into FTAs merely to provide your market to your partner countries. While one accommodate their partner countries, the objective is also to increase the presence of their own products in the markets of partners, and India hasn’t been able to achieve the latter objective. India’s share in the imports of RCEP partner countries have either stagnated or fallen.
WHAT ARE INDIA’S OPTIONS NOW ?
- Can Join in future: Japan worked hard to keep the RCEP agreement “open for accession by India” and also said that India may participate in RCEP meetings as an “observer”.
- Observer in RCEP meetings: RCEP signatory states said they plan to commence negotiations with India once it submits a request of its intention to join the pact “in writing”, and it may participate in meetings as an observer prior to its accession.
- RCEP not connected to its vision on Indo-Pacific: Indian government has made it clear that India was not about to step back from its Act East policy, nor was the decision on RCEP connected to its approach to the Indo-Pacific
- Exploring other alternatives: There is also a growing view that it would serve India’s interest to invest strongly in negotiating bilateral agreements with the US and the EU, both currently a work in progress.
WAY FORWARD :
- Strengthen Existing Agreements: The trade and investment agreements with ASEAN, Japan and Korea, as well as its bilateral arrangements with Malaysia and Singapore must be strengthened.
- Marketing Products: The marketing of Indian products to existing favourable markets, as well as other countries where India has a low export presence.
- Export Diversification : The export strategy for India requires a two-pronged approach, focussing on both enhancing domestic competitiveness and undertaking targeted promotional activities
- Deeper Economic Reforms: Must be initiated particularly in factor markets of land, labour and capital
- Targeted Export Promotion: Provide information on markets to their manufacturers and exporters, especially small enterprises, and assisting them with marketing efforts.
- External Integration Strategy: The country needs to keep its interests on the table.
CONCLUSION :
Instead of sitting out and building tariff walls across sectors, it must prod and incentivise the industry to be competitive, and get inside the RCEP tent at the earliest opportune moment.
QUESTION : What are various reasons for low labour force participation of women in India? Suggest some measures to correct the labour market’s gender skew.
FALLEN THROUGH THE CRACKS
WHAT ?
Women Employment Status In India
WHY IN NEWS ?
The year 2020 marks the anniversary of two major events concerning the status of women.
MORE ABOUT IT :
The World Economic Forum’s Global Gender Gap Report 2020 ranked India at 149th position out of 153 countries on Economic participation and opportunity. According to the WEF report, raising women’s participation in the labour force can increase India’s GDP significantly. A working woman creates a lot more employment in the economy thus providing a source of livelihood for others.
The declining women’s labour force participation, gender pay-gap, high rates of informal work with lack of social security are seen as impediments to the goal of gender equality and the empowerment of women in India.
ISSUES OF WOMEN’S ECONOMIC PARTICIPATION IN INDIA :
- Economic Growth not translating into employment: India’s female employment trends do not resonate with its high economic growth, low fertility, and rise in female schooling.
- Declining Female Labour Force Participation rate: Periodic Labour Force Survey (PLFS), 2018-19 shows that women faced a decline in labour participation rates (from 2011 to 2019) in rural areas from 35.8% to 26.4%, and stagnation in urban areas at around 20.4%.
- Low Global Ranking: Furthermore, the World Economic Forum’s Global Gender Gap Report ranks India at 149 among 153 countries in terms of women’s economic participation and opportunity.
- Wage Gap: The gender wage gap is the highest in Asia, with women 34% below men (for equal qualification and work), according to a 2019 Oxfam report. This stifles women’s labour force participation, despite the guarantees of India’s Equal Remuneration Act, 1976.
- Feminisation of Agriculture: Agriculture that is an almost completely informal sector employs nearly 60% of women, who form the bulk of landless labourers, with no credit access, subsidies, little equipment, and lack of social security measures.
- Abysmal Land ownership: Only about 13% of women tillers owned their land in 2019.
- Low participation in Manufacturing Sector: Manufacturing employs (almost completely informally) only around 14% of the female labour force.
- Care work dominates Women’s participation in Service Sector: According to the National Sample Survey (NSS) 2005, over 60% of the 4.75 million domestic workers are women.
- Unequal gender division of household work: Women spend (an unpaid) three times (as per NSS) or even six times (as per OECD) more time than men in household work.
- Overburdened Healthcare work: According to WHO, 70% of the world’s healthcare and social workers are women. In India, women are indispensable as frontline ASHA workers, but they are underpaid and overworked.
- Disproportionate impact of Pandemic: In India, the Centre for Monitoring Indian Economy (CMIE) showed that 39% of women lost their jobs in April and May compared to 29% of men, in the context of the ongoing pandemic.
REASONS FOR LOW WOMEN LABOUR FORCE PARTICIPATION :
- Lack of opportunities: In recent times, rural distress has affected women the most as income-generating opportunities have disappeared. The problem of ‘labour demand constraints’ or the lack of suitable job opportunities is acute for women in rural India, with a fall in the availability of farm jobs and the lack of economic opportunities in non-farm employment. Mechanisation of farm and non-farm activities has also reduced opportunities for work.
- Women education: Data from the National Sample Survey Office (NSSO) show that education and employment have a U-shaped relationship (a rise and subsequent decline in employment with the rise in education levels). Work participation drops sharply for women with primary and secondary education and rises only with college-level education. Further, the non-availability of white collar jobs, disproportionate long hours and lesser job security narrow downs the job opportunities for educated women in India.
- Unpaid work: A 2018 study has found that the time spent on unpaid economic activities performed at the household and community levels by women is one of the important determinants of the FLFPR. So, the time spent on unpaid work, especially on unpaid care and domestic chores has hindered women’s participation in the labour force.
- Gender bias: Constraints in form of casteist and patriarchal notions of purity and pollution where women are prohibited from certain jobs, especially in the food processing, sericulture, and garment industries has added to the low participation.
- Changing family nature: Of late, with a reduction in family sizes and distress migration of rural males, the burden of unpaid work on women has been increasing disproportionately. The burden of domestic work and unpaid care inhibits women’s ability to acquire skills for better jobs, leading to a vicious cycle of women being kept out of the labour force.
- Under-reporting: Finally, though most women in India work and contribute to the economy in one form or another, much of their work is not documented or accounted for in official statistics, and thus women’s work tends to be under-reported. Therefore, mis-measurement may not only affect the level but also the trend in the participation rate.
CRITICISM OF RECENTLY PASSED 3 LABOUR CODES of
- The laws are expected to transform labour relations, but they only end up ‘easing business’ labour codes acknowledge neither the gender wage gap nor non-payment of wages and bonuses, and ignore informal (mostly women) workers in terms of social security, insurance, provident fund, maternity benefits, or gratuity.
- Though ‘allowing’ women to work night shifts, there is little focus on accountability and responsibility
- Even protection from sexual harassment at workplace is missing.
- Maternity benefits remain unchanged from the 2017 amendment, with an insensitively formulated adoption leave policy that grants leave to women who adopt infants under the age of three months, ignoring that most children are much older at the time of adoption.
STEPS TAKEN BY THE GOVERNMENT :
The Maternity Benefit (Amendment) Act, 2017 –
o The amendment provides for 26 weeks of paid maternity instead of 12 weeks.
o The Bill introduces a provision wherein an employer may permit a woman to work from home after the period of paid leave.
o The Bill introduces a provision that requires every establishment with 50 or more employees to provide crèche facilities within a prescribed distance.
o The Bill has faced criticism for excluding paternity leave. There are also apprehensions
Sexual Harassment Electronic-Box (SHe-box)
o The Ministry of Women and Child Development (WCD) has launched an online platform to enable women employees working in both the public and private organisations to file complaints related to sexual harassment at the workplace.
o It has been launched to ensure the effective implementation of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013.
WAY FORWARD :
- Science needs the best scientists, and a knowledge economy needs a gender-balanced workforce.
- Government policies should focus on behavioural changes that make female employment more acceptable in the society.
- Government schemes must target the fundamental cultural and social forces that shape patriarchy.
- Communication programmes on gender equality in secondary education to help students imbibe equitable gender norms.
- Acknowledging child care as the responsibility of both parents.
- As for the workforce, much needs to be done, beyond maternity benefit entitlements and other quotas.
- A useful and easily implementable idea would be to give income tax benefits to women. It would be a bold and effective step to increasing India’s female workforce participation.
- For political empowerment of women, their representation in Parliament and in decision making roles in public sphere is one of the key indicators of empowerment.
- Gig Economy provides women flexible work options to pursue their career while not missing important milestones in their family lives.
- Initiatives such as Skill India, Make in India, and new gender-based quotas from corporate boards to the police force can spur a positive change. But we need to invest in skill training and job support.
- There is a need for timely auditing of laws to ensure better implementation of legislation.
- Better transport infrastructure added with childcare facilities at or near workplaces will help women realise their full potential.
- Ultimately, the goal is not merely to increase female labour force participation, but to provide opportunities for decent work that will, in turn, contribute to the economic empowerment of women.
CONCLUSION :
Gender cannot be wished away, since every policy and code affects a giant proportion of India’s workforce — both paid and unpaid, acknowledged and unacknowledged.
हिन्दी