75 Days Mains Revision Plan 2024 – GS 3
Full Syllabus
Q1. Universal Basic Income (UBI) holds the potential to combat poverty and reduce inequality if designed effectively. Comment. (10M)
Introduction
Universal Basic Income (UBI) is a social welfare scheme that provides a fixed, unconditional cash transfer to all eligible individuals or households, irrespective of their income or employment status. The concept of Universal Basic Income (UBI) appealing in the 2016-17 Economic Survey, however, the current CEA, V Anantha Nageswaran, has dismissed it, asserting that it is unnecessary for the country.
Body:
Potential of Universal Basic Income (UBI) in combating poverty and reducing inequality:
Combating poverty:
- Direct financial support: UBI provides direct financial support to individuals and families, helping them meet basic needs, such as food, healthcare, and education.
- Financial inclusion: UBI can encourage financial inclusion by promoting bank account usage and formal financial transactions.
- Elimination of targeting errors: UBI eliminates targeting errors, as it is provided universally, reducing administrative costs and ensuring coverage of all eligible individuals.
- More autonomy: A study by SEWA Bharat found that women in rural India who received cash transfers had greater autonomy in decision-making.
- UBI empowers recipients by giving them the flexibility to spend the cash according to their priorities, including investments in livelihoods and education.
Reducing inequality:
- Reduced income inequality: India’s Gini coefficient, a measure of income inequality, was 7 in 2020, according to the World Bank.
- UBI, when funded adequately, can reduce income inequality by providing a safety net for the poorest while mitigating extreme wealth disparities.
- Social Inclusion: UBI fosters social inclusion by providing financial support to marginalized populations, helping them participate more fully in society.
- Counter-Cyclical Effect: UBI’s unconditional nature makes it counter-cyclical, automatically expanding during economic downturns, providing a safety net for those facing job loss or economic hardship.
- Human dignity: UBI recognizes the intrinsic value of every individual by providing them with the means to lead a life of dignity and self-determination. It empowers recipients to make choices that align with their aspirations and needs.
Issue with UBI in India:
- Cost and fiscal sustainability: Implementing UBI is costly and requires significant financial resources, potentially necessitating higher taxes, spending cuts, or increased debt. It can also lead to inflation and hinder economic growth.
- Economic Survey of 2016-17 estimated that a UBI of 7,620 per year for every Indian would cost about 4.9% of GDP.
- Perverse incentives: UBI may reduce work motivation and productivity, creating a culture of dependency. It could discourage skill development and training, as some may opt for a basic income without pursuing income-generating opportunities.
- Inflationary pressures: The widespread distribution of a fixed income may drive up prices for goods and services, as businesses adjust pricing strategies to capture the additional income in the market.
- Potential for dependency: UBI carries the risk of fostering dependency on government support, potentially leading to complacency and reduced motivation for personal and professional growth.
- Implementation Challenges: India faces issues in public service delivery, including identification, targeting, monitoring, and accountability. UBI requires reliable data, technology, and strong institutions to prevent corruption, leaks, and exclusion errors.
- Incomplete Universal Aadhar enrollment complicates beneficiary identification and targeted service delivery.
Alternatives to Universal Basic Income (UBI) as approaches to poverty alleviation:
- Implement targeted cash transfer programs that focus on specific vulnerable groups, such as the Direct Benefit Transfer (DBT) scheme for LPG subsidies.
- Expand and improve existing employment guarantee schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). These programs provide guaranteed employment opportunities to rural households, reducing poverty by increasing income.
- Strengthen the Public Distribution System (PDS) and improve the distribution of subsidized food grains and essential commodities to low-income families. This ensures food security for the poor.
- Invest in skill development and vocational training programs to enhance the employability of the underprivileged.
- Promote microfinance institutions and microcredit programs that provide small loans to low-income individuals, particularly women, to start or expand small businesses, thus generating income.g. SHGs.
Kalaignar Magalir Urimai Thittam is a women’s rights grant scheme just rolled out recently in Tamil Nadu aimed at providing financial support to eligible women recognized as heads of families.
Under this scheme, eligible women are entitled to receive a monthly rights grant or basic income of ₹1,000 each. This amounts to an annual grant of ₹12,000 per beneficiary. The intention is to improve the livelihood of women, enhance their standard of living, and promote self-respect in society.
A similar scheme has been launched by the Karnataka Government: Karnataka Gruha Lakshmi Scheme supports women heads of families by providing eligible women will receive financial assistance of ₹2000 per month.
Conclusion
Each of these alternatives can be tailored to address specific poverty challenges in India. A combination of these approaches, depending on the region and population in question, can lead to a more comprehensive and effective strategy for poverty alleviation.
Q2. Analyse the macroeconomic factors contributing to high unemployment rates in India. Is achieving employment goals contingent on a dedicated focus beyond rapid GDP growth? Comment. (15M)
Introduction
India is grappling with a persistent jobs crisis, evident from official data and on-the-ground reports. The issue is characterized by low labour demand, particularly for regular wage work, indicating a macroeconomic challenge.
Body:
Macroeconomic factors contributing to high unemployment rates in India:
- Job gap: Employment generation has lagged in GDP growth, only 1.9 million jobs created 2011-17 against workforce rise of 5-8 million annually.
- Job growth concentrated mainly in unorganised sector(94% ) largely working at low wages.
- On the e-Shram portal, 28 crores were registered in November 2022 and 94% reported earning less than Rs. 10,000 per month.
- Decline in agricultural jobs: The agriculture sector has traditionally been India’s largest employer. However, increased mechanization of farming, stagnant rural wages, declining average farm sizes etc. have reduced the capacity of agriculture to absorb more workers.
- Skill Mismatch: Many job seekers lack the necessary skills and qualifications demanded by employers. This skill gap leads to unemployment despite job vacancies, particularly in sectors requiring specialized skills.
- g. Nearly 80% of the workforce does not have job-ready formal skills training.
- Information gaps on talent demand-supply due to lack of deeper engagement between industries, academic institutions and skill bodies in shaping curriculum or placement programs.
- g. According to NASSCOM, India is projected to face a shortage of 14-19 lakh tech professionals by 2026.
- Labour Market Rigidities: Stringent labour laws and regulations in India hinder the flexibility of employers to hire and fire workers. This discourages job creation, especially in the formal sector, and contributes to the prevalence of informal employment and underemployment.
- Downturns amid COVID-19: The economic shocks of the COVID-19 pandemic led to severe income losses and job cuts across formal and informal sectors. Small businesses and daily wage earners were hit hardest. Urban unemployment rose to record highs in early 2020. Though the economy is rebounding, the recovery has been uneven thus far.
Achieving employment goals in India requires a dedicated focus beyond rapid GDP growth. While GDP growth is important for overall economic development, it must be accompanied by policies targeted at job creation, skill development, and labour market reforms.
The contingency of achieving employment goals beyond rapid GDP growth:
- Quality of Employment: Merely focusing on GDP growth may not address the quality of employment generated. While economic growth is essential, policymakers must ensure that it translates into meaningful employment opportunities that provide decent wages, job security, and social benefits.
- Inclusive Growth: GDP growth alone may not address income inequality or ensure that the benefits of economic development are shared equitably across society. Inclusive growth policies are necessary to uplift marginalized communities, reduce poverty, and create opportunities for all segments of the population.
- Structural Reforms: Addressing unemployment requires structural reforms in the labour market, education system, and regulatory environment. These reforms aim to enhance skill development, promote entrepreneurship, and create a conducive business environment for job creation.
- Social Cohesion: High unemployment rates can lead to social unrest and instability. Therefore, achieving employment goals goes beyond economic considerations and is essential for maintaining social cohesion and stability in society.
- Trickle-down effect limited: Benefits of headline GDP growth figures often disproportionately accrue to corporates and organized sectors. The trickle-down to job creation and wage growth across agricultural and unorganised sectors is uneven and limited.
- Structural economic shifts: With factors like technology, globalization and demography changing job markets, achieving employment goals cannot be left to the vagaries of only GDP performance. Proactive policymaking is vital.
Way forward:
- Implementing the objectives of National Employment Policy (NEP): A separate policy focus is needed on employment, focusing on both demand side and supply side components in addition to the focus on GDP growth.
- Expanding apprenticeship programs via incentivizing industries to engage and training institutions to prioritize placements.
- g. Infosys’ Campus Connect program
- Employment-linked Skill Voucher programs where skills training apt for available jobs is provided to youth to directly improve job readiness.
- g. PM Kaushal Vikas Yojana for Skill training.
- Cluster-based skill centres focused on opportunities in key regional industries to align with job availability.
- g. Gujarat Cluster Development Program for Artisans.
- Labour reforms and incentives boost job creation and formalization, especially in MSMEs and manufacturing.
- g. The ‘Shram Suvidha Portal’ introduced by the Ministry of Labour & Employment streamlines labour law compliance for businesses
- Other measures like the introduction of the Urban Version of MGNREGA, increasing industrialization and investment in agriculture with diversification to generate more employment along with the promotion of agro-processing industries near urban centres.
Conclusion
The unemployment rate impacts the Indian economy by influencing spending, growth, and job opportunities. Policymakers need to trade-off GDP growth rate with the addition of a workforce in the economy for job creation and economic development simultaneously.
ETHICS
Q3. What are ethical dilemmas? Discuss the ethical dilemmas that public servants face in contemporary times in public space. [10M, 150words]
Key Demand of question: Define dilemma. Explain the ethical dilemma faced by public servants in the world.
Structure of the answer:
Introduction: Start with the definition of dilemma.
Body:
- Briefly explain about dilemma and its causes.
- Discuss how public servants face ethical dilemmas in office.
Conclusion:
Conclude by highlighting its significance.
Introduction:
An ethical dilemma occurs when conflicting principles create challenges in decision-making. It arises when one must choose between competing ethical values and rules to determine the correct course of action. Administrators frequently encounter such dilemmas, which complicate their decision-making process and require careful consideration to resolve.
Body:
These dilemmas can generally be categorized into three types:
- Personal cost ethical dilemmas: These arise when adhering to ethical standards incurs a significant personal cost for the public servant, such as jeopardizing their position or damaging valued relationships.
- Right-versus-right ethical dilemmas: These occur when there are conflicting ethical values, such as the obligation of public servants to be transparent and accountable to citizens versus the duty to maintain confidentiality.
- Conjoint ethical dilemmas: These involve situations where a conscientious decision-maker faces a combination of the aforementioned dilemmas, requiring them to navigate multiple conflicting ethical principles to determine the right course of action.
The ethical dilemmas faced by public officials in office are:
- Conflict of Personal Conviction and Organizational Duty: Public officials often face ethical dilemmas when their personal beliefs clash with the obligations imposed by their organization.
E.g. Court judge rescues a sighting conflict of interest.
- Interpretation of Policies and Personal Morality: When interpreting government policies, public officials may struggle between adhering strictly to official guidelines and applying their personal sense of right and wrong.
E.g. COVID time stringent rules.
- Loyalty vs. Ethical Integrity: Public officials may encounter conflicts between their loyalty to senior officials or political superiors and their own ethical convictions.
E.g. Karnataka Valmiki corporation scam where senior officials nexus pressured office workers to indulge in corruption.
- Confidentiality vs. Public Interest: The obligation to keep sensitive information confidential can conflict with the public’s right to be informed, especially if the information could expose government wrongdoing or inefficiency.
E.g. Lapses in the NEET exams in 2024.
- Accountability vs. Duty to Report Misconduct: When faced with evidence of government mismanagement, inefficiency, or corruption, public officials must decide whether to report such issues, which could.
E.g. Satyendra Dubey director of NHAI flagged financial irregularity in the project.
Conclusion:
Civil servants are tasked with delivering justice to numerous individuals, making their impartiality and neutrality crucial for fulfilling their societal responsibilities. They frequently encounter dilemmas while performing their duties. Objective decision-making must be aimed at achieving the greater public good.
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