Satyarthi backs new child labour law

Satyarthi backs new child labour law
The rules notified recently by government have set right the earlier anomalies’

Nobel Peace Laureate Kailash Satyarthi, who had earlier criticised the new child labour law, has supported the new framework, saying the fresh rules to support the law have addressed all the concerns.

“The Child Labour (Prohibition and Regulation Amendment) Act, 2016, had some lacunae when it was enacted, but the rules notified recently by the government have addressed the weaknesses,” Mr. Satyarthi said in an interview to The Hindu on the eve of World Day Against Child Labour. “The new rules have made it a progressive law.”

Various child rights activists, including Mr. Satyarthi, had earlier criticised the law, enacted in July last year, for reducing the number of hazardous occupations from 83 to three and allowing children to assist in family enterprises. “I was not happy earlier. But with the new rules, the issues have been properly addressed. Earlier, the interpretation was that any child could help in family enterprises. But if you look at the rules, it’s possible only in a few occupations, and hazardous occupations have also been clearly defined,” said Mr. Satyarthi, who won the Nobel Prize in 2014 for his work on reducing child labour.

Even international agencies such as the International Labour Organisation (ILO) and the United Nations Children’s Emergency Fund (UNICEF) had criticised the government over the two concerns flagged by the Nobel laureate.

The 2016 law prohibits employment of children aged below 14. However, it allows adolescents (aged 14-18) to work in non-hazardous occupations and children to assist their families in businesses after school hours. The previous law allowed children to be employed in family enterprises without restriction.

The Labour and Employment Ministry on June 2 notified the Child Labour (Prohibition and Regulation) Rules, 2017, which state that children can help in family enterprises only for three hours after school hours. Children could not extend any help between 7 p.m. and 8 a.m. It also laid out conditions on which children could offer help to their families.

Mr. Satyarthi lauded the government’s move to ratify the International Labour Organisation (ILO) Conventions on child labour. This would ensure compliance with the new law, he said. “There has been a paradigm shift in the government’s stance from the past when it said those raising the cause of child labour had a western agenda. Now, the government has agreed to global scrutiny of child labour,” he said.

How does the monsoon affect the economy

How does the monsoon affect the economy
Earlier this year, the India Meteorological Department (IMD) had predicted the country would get normal monsoon rains in 2017. The state-run weather body last week said India’s annual monsoon rainfall is expected to be 98% of the long-period average (LPA), up from 96% projected earlier, raising prospects of higher farm output and economic growth.

The forecast has a margin error of 4%. The monsoon is considered normal if rains in the June-September season are between 96% and 104% of a 50-year average of 89 cm.

Why are monsoon rains important for India?

The monsoon is the lifeblood for India’s farm-dependent $2 trillion economy, as at least half the farmlands are rain-fed. The country gets about 70% of annual rainfall in the June-September monsoon season, making it crucial for an estimated 263 million farmers.

About 800 million people live in villages and depend on agriculture, which accounts for about 15% of India’s gross domestic product (GDP) and a failed monsoon can have a rippling effect on the country’s growth and economy.

Whereas, a normal to above-normal and well-distributed monsoon boosts farm output and farmers’ income, thereby increasing the demand for consumer and automotive products in rural markets.

What were recent trends?

India witnessed a normal monsoon in 2016 but only after two back-to-back poor monsoons in 2014 and 2015 that affected the overall growth in the country.

However, with a good chance of a normal monsoon in 2017, analysts expect the growth momentum to continue.

“The second consecutive year of normal monsoon will help revive consumption demand, which was severely affected by the de-legalisation of Rs. 500 and Rs. 1,000 notes,” India Ratings and Research said.

What happens in case of a poor monsoon?

The monsoon has a direct impact on the country’s agricultural GDP. The planting of key kharif, or summer, crops like rice, sugar cane, pulses and oilseeds begins with the arrival of monsoon rains in June.

Summer crops account for almost half of India’s food output and a delayed or poor monsoon means supply issues and acceleration in food inflation, a key metric which influences Reserve Bank of India’s decision on interest rates.

A deficit monsoon could also lead to a drought-like situation, thereby affecting the rural household incomes, consumption and economic growth. A poor monsoon not only leads to weak demand for fast-moving consumer goods, two-wheelers, tractors and rural housing sectors but also increases the imports of essential food staples and forces the government to take measures like farm loan waivers, thereby putting pressure on finances. Whereas a normal monsoon results in a good harvest, which in turn lifts rural incomes and boosts spending on consumer goods. It also has a positive impact on hydro power projects.

What is the current forecast for rain distribution?

The monsoon rains arrive on the southern tip of Kerala by around June 1 and gradually covers a major part of the country by mid-July before retreating by the end of September. The IMD has predicted seasonal rainfall this year to be 96% of LPA over north-west India, and 100% of LPA over central India.

Rains in the southern regions are likely to be 99% of LPA while precipitation in north-east India will be 96% of LPA in the four-month period. All projections have a margin error of 8%.

Rainfall in July and August, crucial months for crop sowing, over the country is expected to be 96% and 99% of LPA, respectively, both with a margin error of 9%. India Ratings said the spread of monsoon over space and time is also forecast to be normal and that bodes well for agricultural output.

“Even the water storage available in 91 major reservoirs of the country for the week ending on 1 June 2017 was higher than last year by 128% and 105% of the last 10 years, which augurs well for kharif sowing,” it noted.

Why India’s bad loan problem is really bad

Why India’s bad loan problem is really bad
The average bad loans of public sector banks are 75.53% of their net worth; for many, they have exceeded their net worth. This is why both RBI and govt are worried
Last week, Spain’s largest lender Banco Santander SA announced taking over struggling Banco Popular Espanol SA for a symbolic value of €1. Santander also plans a €7 billion ($7.88 billion) rights issue to infuse capital and provide for the bad loans of Popular, the country’s sixth biggest bank.

The European authorities, led by the European Central Bank, were behind the rescue act. Popular had been struggling under the burden of €37 billion of bad loans in the real estate sector but Santander feels that this deal will accelerate its growth and profit from 2019. Analysts also see an opportunity for Santander in Popular’s small and medium-sized corporate loan portfolio; besides, Santander can also sell off Popular’s property assets.

The sale, which was stitched at the speed of light, did not impact stock markets. In fact, bank stocks rose in Europe last Wednesday after it was announced at 0430 GMT in Brussels by the Single Resolution Board, an agency formed by the European Union to wind down sick banks.

Indeed, there are differences between the state of affairs in Popular and some of the state-owned Indian banks (Popular was facing a run on its deposits), but is the Santander-Popular deal something which can be emulated in India? Corporate assets have soured for many government-owned banks but they have their pockets of strength—retail loans, relatively low-cost savings and current accounts, non-core assets, a vast branch network.

How do we solve the bad loan problems? There are two distinct trends before us: Spain believes in swift action, while Italy allows the problem to fester for years. Should we go the Spain way or continue with our band-aid approach? It will be interesting to hear what India’s finance minister Arun Jaitley says when he meets the heads of public sector banks and financial institutions later on Monday to review their performance.

The new ordinance gives the Reserve Bank of India (RBI) powers to force banks to sort out issues in a time-bound manner by forming multiple oversight committees and encourages banks to take haircuts. Besides, RBI can now move the insolvency court against the bank defaulter on its own. However, it does not say how the holes in banks’ balance sheets will be filled in the aftermath of the cleanup drive.

Meanwhile, it may not be a bad idea to ask two key questions and seek the answers.

How did the Indian banking system get into the mess?

There have been multiple reasons behind this. The popular way of looking at this is the state-owned banks are inefficient—they do not have the expertise in credit appraisal and monitoring of loans. This could be an over-simplification of the real causes behind the pile of bad loans. Indeed, in relative terms, private banks are better off but in those sectors where both private and public banks have taken exposures, both have almost equally suffered. The private banks have much less bad assets because they have not given loans to certain sectors/corporate groups.

Why did the public sector banks take exposures to those sectors where private banks fear to tread? In some cases such as infrastructure, there was subtle and not-so-subtle nudge by the government, the majority owner of these banks. Besides, most of these banks also have a herd mentality. Once one bank gives a loan to one particular sector, others follow it almost blindly in search of balance sheet growth.

In the aftermath of the collapse of iconic US investment bank Lehman Brothers Holdings Inc. in September 2008, growth collapsed in the world, but India was almost insulated from that with the government unveiling massive economic stimulus programmes. RBI cut its policy rates to a historic low and flooded the market with liquidity and banks gave loans indiscriminately. The “boom” lasted for a few quarters but the “bust” that followed has been continuing for years. Most banks misread the economic scenario.

Also, post-Lehman collapse, the deposit growth for private banks slowed while the government-owned banks were flooded with money and that, in many cases, led to misallocation of capital.

How bad is the bad loan scene?

Well, it depends on through which prism do we want to look at it. Going by rating agency Icra Ltd’s latest analysis, gross bad loans of Indian banks in March 2007 has been 9.5% of their loan portfolio. After setting aside money, or making provisions, the net bad loans are 5.5%.

This is one way of looking at the problem but it does not tell us the real story. One needs to add to this the loans that have been restructured under different schemes and the many large accounts which are extremely vulnerable as the borrowers are over-leveraged and not in a position to service the loans regularly. If we add all these, then the total stressed assets could be close to 16% of bank loans.

Again, this does not reveal the full picture. We also need to add to these the loans that have been written off. Unlike in other parts of the world, in India, written off loans are taken out from banks’ balance sheets but they are parked in the branches of banks and as and when part of those loans are recovered, they add to banks’ profits. By taking them off from the banks’ balance sheets, an optical illusion of lower bad loans (in percentage terms) is created. If we add the written off loans to the pile, the overall stressed assets could be as much as 20% of banks’ loan assets.

Banks’ exposure to large corporations and infrastructure sector has been most affected. In this segment, bad loans could be as much as 35-40% while the retail loans are in fine health.

It’s needless to say that the private banks are much better off than the state-owned banks. For instance, in March 2017, public sector banks’ gross bad loans have been 11.4% versus private banks’ 4.2%; their net bad loans at 6.7% are more than three times the net bad loans of private banks.

Finally, bad loans as a percentage of overall loan portfolios of banks do not explain the enormity of the problem. We need to look at the bad loans against the backdrop of the net worth or capital and reserves of the banks. In March 2017, for the industry, it’s close to 50% and for private banks, around 13%. However, the average bad loans of the government-owned banks are 75.53% of their net worth; for many, they have exceeded their net worth. This is why both RBI and the government are worried. We need to address the problem now; there is no time to lose.

2D magnets discovered for first time

2D magnets discovered for first time
Scientists have for the first time discovered two-dimensional magnets that are formed by a single layer of atoms and may pave the way for more compact and efficient devices
Scientists have for the first time discovered two-dimensional magnets that are formed by a single layer of atoms and may pave the way for more compact and efficient devices.

Magnetic materials form the basis of technologies that play increasingly pivotal roles in our lives today, including sensing and hard-disk data storage. For smaller and faster devices, researchers are seeking new magnetic materials that are more compact, more efficient and can be controlled using precise, reliable methods.

A team led by the University of Washington (UW) and the Massachusetts Institute of Technology (MIT) in the US has for the first time discovered magnetism in the 2D world of monolayers, or materials that are formed by a single atomic layer. The findings, published in the journal Nature, show that magnetic properties can exist even in the 2D realm — opening a world of potential applications.

“What we have discovered here is an isolated 2D material with intrinsic magnetism, and the magnetism in the system is highly robust,” said Xiaodong Xu, a professor at UW. “We envision that new information technologies may emerge based on these new 2D magnets,” said Xu. Researchers have previously shown that CrI3 — in its multilayered, 3D, bulk crystal form — is ferromagnetic, that is, it has some magnetic properties.

However, no 3D magnetic substance had previously retained its magnetic properties when thinned down to a single atomic sheet. In fact, monolayer materials can demonstrate unique properties not seen in their multilayered, 3D forms. “You simply cannot accurately predict what the electric, magnetic, physical or chemical properties of a 2D monolayer crystal will be based on the behaviour of its 3D bulk counterpart,” said Bevin Huang, doctoral student at UW.

Atoms within monolayer materials are considered two- dimensional because the electrons can only travel within the atomic sheet, like pieces on a chessboard. To discover the properties of CrI3 in its 2D form, the team simply used Scotch tape to shave a monolayer of CrI3 off the larger, 3D crystal form. “Using Scotch tape to exfoliate a monolayer from its 3D bulk crystal is surprisingly effective,” said Genevieve Clark, doctoral student at UW.

The researchers detected magnetic properties in CrI3 using a special type of microscopy. In CrI3 flakes that are two layers thick, the magnetic properties disappeared, and returned in three-layer CrI3. The scientists will need to conduct further studies to understand why CrI3 displayed these remarkable layer-dependent magnetic phases.

“2D monolayers alone offer exciting opportunities to study the drastic and precise electrical control of magnetic properties, which has been a challenge to realise using their 3D bulk crystals,” said Xu. “But an even greater opportunity can arise when you stack monolayers with different physical properties together. There, you can get even more exotic phenomena not seen in the monolayer alone or in the 3D bulk crystal,” Xu added.

RSETI Diwas 2017

RSETI Diwas 2017

As part of multi-pronged strategy to address rural poverty, Ministry of Rural Development (MoRD) is undertaking two initiatives in skill development under the National Rural Livelihoods Mission (NRLM):

 

(i)         Placement linked skill development program called DDU-GKY which allows skilling and assured wage employment. 

(ii)        Skill development through 587 Rural Self Employment and Training Institutes (RSETI) in the country, which provides skilling, thereby enabling the trainee to take bank credit and start his/her own Micro-enterprise. 

 

The Ministry today celebrated 4^th RSETI Diwas in recognition of outstanding performance of RSETIs in various states. A total of 88 awards were given for the years 2014-15 and 2015-16 to best performing States, lead Banks administering RSETIs and Directors of RSETIs. Top performing States in different categories include Jharkhand, Karnataka, Andhra Pradesh, Odisha and Chhattisgarh. Amongst Banks the top performers are State Bank of India, Canara Bank, Syndicate Bank, ICICI and Andhra Bank.

 

Top performing RSETIs include training institutes of SBI Vijayanagaram, SBI Vishakapatinam, PNB Gaya, Canara Bank Halial and Davangere, Syndicate Bank Manipal and Meerut, Andhra Bank Srikakulam, ICICI Jodhpur and Udaipur, and RUDSETI Ananthapur and Bijapur.   

 

At present 587 RSETIs are functioning in the Country, covering 32 States/UTs with the participation of 37 Sponsor Banks. Over 22 Lakh unemployed youth have been trained by RSETIs and 13 Lakh of them are engaged in self-employment. Of these credit linkage has been provided to nearly 6 lakhs candidates.

 

RSETIs have aligned their curriculum with Common Norms for skill development courses. It offers skilling in 56 NSQF aligned courses specially designed for entrepreneurship development.

 

The 4^th RSETI Diwas celebration was chaired by Shri Narendra Singh Tomar, Union Minister, Rural Development, Panchayati Raj, Drinking Water and Sanitation. He emphasised the need for increase in rural entrepreneurship for sustainable livelihoods. He also emphasised on how rural livelihoods playing a strategic role in development of the rural clusters.  To carry forward this momentum he appealed to the Banks to give their cooperation. 

 

Dr. Santosh Kumar Gangwar, Minister of State for Finance, appealed to the Banks who have sponsored the RSETIs in their Lead Districts to develop these Centres as ‘Centres of Excellence’ in the field of Entrepreneurship development as also increase lending to the youth skilled in RSETIs.

 

Shri Ram Kirpal Yadav, Minister of State for Rural Development lauded the role of RSETIs in the nation building exercise by capacity building of the unemployed youth throughout the Country.

 

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The founder member of RUDSET Self-employment initiative, Dr D Veerendra Heggade, also participated in the event and blessed budding entrepreneurs’ success.

    

IIT-Delhi, IIT-Bombay, IISc among world’s top 200 universities

The rise of IIT-Delhi and IIT-Bombay is significant as Indian educational institutions had lost ground in the QS rankings last year

The Indian Institute of Technology (IIT)-Bombay has broken into the top 200 club in the latest edition of the ‘Quacquarelli Symonds (QS) World University Rankings’, to join IIT-Delhi and Indian Institute of Science (IISc), Bengaluru, in this group. With this, India, for the first time, is home to three of the top 200 universities in the world.

According to the ‘QS World University Rankings 2018’, released on Wednesday morning, IIT-Bombay improved its performance by 40 positions, from 219 rank last year to 179 this time. In another first, IIT-Delhi has replaced IISc as the best ranked Indian institution in the world. So, while IIT-Delhi has risen from 185 rank to 172 this year, IISc slipped over 30 places from 152 to 190.

The rise of IIT-Delhi and IIT-Bombay is significant as Indian educational institutions had lost ground in the QS rankings last year. But IISc’s performance could be a cause for concern as the institution, which dropped out of the top 150 club in the 2017 rankings, has slipped even further instead of recovering lost ground.

However, IISc is rated the sixth best institution in the world in terms of QS’s ‘citations per faculty’ metric. “This metric measures the research intensiveness and research impact of a university by dividing the number of citations that a university’s research acquires by the number of faculty members at that university. QS notes that IISc’s research papers were cited nearly 82,000 times over the five-year period QS used for this metric,” states the QS press release.

The HRD Ministry is currently working on a framework to encourage educational institutions to break into the top 100 club of any of the reputed world ranking metric.

The ranking table this year has provided a list of the world’s 959 top universities, which includes 20 Indian institutions — six more than last year. Jadavpur University (ranked in the 601-650 band), University of Hyderabad (601-650), Anna University (651-700), Manipal University (701-750), Aligarh Muslim University (800-1000) and Birla Institute of Technology and Science (800-1000) are the six new entrants.

Delhi University, for the first time, entered the top 500 group, moving up from the 501-550 category to the 481-490 category. IIT-Kharagpur improved its rank from 313 to 308, and IIT-Kanpur rose from 302 to 293 rank. IIT-Madras, however, lost a few places and moved from 249 to 264 rank. IIT-Guwahati moved from 481-490 band to 501-550 band. Banaras Hindu University, Panjab University, University of Mumbai and University of Pune are all ranked in the 801-1000 band.

“India is progressing in our global rankings. Five Indian universities feature among the global 100 for research indicator. However, there is still plenty of room for improvement, especially in the ‘employers reputation’ indicator, suggesting that a closer collaboration between the corporate world and the leading universities is essential. India is also less competitive than other countries in the international students and faculty indicators, which makes perfect sense given the huge internal demand for higher education,” Ben Sowter, Research Director at QS, has been quoted as saying.

In the overall rankings, Massachusetts Institute of Technology (MIT) continues its run as the world’s best university for the sixth consecutive year. Stanford University and Harvard University follow as the world’s second and third best institutions.

Despite the same electoral model, there are marked differences in how polls are conducted in Britain and in India

Their Westminster, and ours

Despite the same electoral model, there are marked differences in how polls are conducted in Britain and in India

The UK is all set for a mid-term general election on June 8, which could only be derailed if there is yet another terror attack. While the poll issues involved and the fluctuating fortunes of political parties are a matter of separate analysis, I will confine myself to the more mundane electoral system and its management issues. When the country had its last general election on May 7, 2015, I was an independent observer along with a sizeable international group, mostly election commissioners, many of whom were my old colleagues and counterparts. I was allotted three constituencies. Interestingly, two of these gave two successive prime ministers — David Cameron and Theresa May (I wonder if a third one is waiting in the wings!).

It is interesting to compare the system in the UK and India, which hold many similarities as well as significant differences. The first significant difference is that in India, the Election Commission of India (ECI) decides the dates for the elections keeping political parties, including the ruling one, guessing, whereas in the UK, the date was always decided by the prime minister, giving the ruling party a political advantage. This surely went against the principle of a level playing field. In 2011, therefore, the old system was changed to a fixed date election — May 7, every five years.

The 2015 election was the first under this system. But, in an article I wrote for this paper (‘Britain’s electoral plumbing’, IE, May 12, 2015), I raised a question as to what would happen to the fixed date in case of a mid-term general election. Who imagined that this question would come to haunt the British in less than two years?

The basic common factor is the electoral model itself that we both follow — the Westminster model. Our Lok Sabha and their House of Commons are counterparts to which voters directly elect their representatives. But the size of the house and the parliamentary constituencies differ enormously. The size of the Indian electorate is 20 times that of the UK which almost corresponds to the state of Rajasthan. Despite the small population, the House of Commons has a huge strength of 650 MPs as against 543 in India. The average number of electors for each of these MPs is about 70,000 while India has an average of 1.6 million electors. Campaign styles and logistics thus are worlds apart.

In the UK, campaigning is much cheaper, confined to door to door visits by candidates or agents, and TV debates. Paid political advertising on TV and radio is not permitted — this is unthinkable in India where mass media, despite the exorbitant costs, is the backbone of campaigns. Paid news, which is rampant in India, is unheard of in the UK. There is a cap on election expenditure of both the candidates and the parties in the UK, whereas in India, it extends only to the candidates. That’s a huge loophole that raises campaign expenditure to obscene levels.

The participation of voters in the UK was the same with a total turnout of 66.1 per cent against 66.4 per cent in India in 2014; however, over the years, it’s coming down in the UK and going up in India, thanks to the voter education programme started by the ECI in 2010. Youth apathy has been common to both, though the ECI’s efforts to increase youth participation have had a dramatic effect, especially since the launching of the National Voters Day, focussed on young persons, leading to an addition of nearly 120 million voters (three UKs!) between the last two elections.

India is also one-up using electronic voting machines (EVMs) since 1998 while the demand for electronic voting in the UK has never been very audible. The clamour for internet or online voting however is gathering slow momentum in both countries. The biggest plus for the UK is that their system is very clean, with no violence, booth capturing, no impersonation and no rigging. For us in India, this is a constant struggle. Their system is very trusting: The UK is the only country in the world where no identity proof is required. No photo on the electoral rolls. No marking of fingers. There are no party agents in the booth to verify the voter’s identity. There is no police near polling stations, whereas, in India, a booth has to be secured like a fort. We are accused of killing the festival of democracy; the British are happy with quiet, civilised polling.

A very significant difference is that poll day is not a holiday. To enable working class persons to vote, the voting hours are long — 7 am to 10 pm. They normally vote either early in the morning or late evening. Housewives and the elderly vote during the day. So, the scene is never chaotic. The UK has about 8 million foreigners, nearly two million of whom are from Commonwealth countries. The latter are entitled to vote. Of these, there are over 6,15,000 Indian voters who alone can influence the results in 30 constituencies. Voices are often raised against this anomaly.

Both countries follow the First-Past-The-Post (FPTP) system of election, where the candidate getting the highest number of votes is declared elected. Questions are often raised about the fairness of the system. In the UK, it snowballed to the extent that a referendum was held in 2011, though it failed with 68 to 32 per cent vote (with a low turnout of 42 per cent). Many questioned the fairness of the result as the government conducted only perfunctory publicity about it.

In India, the demand for replacing FPTP with Proportional Representation has become louder after the 2014 general election, when a party (the BSP) with the third largest vote share in the country ended up with zero share in parliamentary seats. In the end, questions have sometimes been raised about the logistics and management of elections in the UK. In the 2010 and 2015 UK election, there were complaints about postal ballots and some polling stations, even in London, falling short of ballot papers before the poll’s end, unthinkable in India. Our election management, despite its mind-boggling problems, like the Maoist insurgency, militancy, the constant shadow of terrorism, is quite fail-safe.

Brexit being at the heart of debate in this election, global interest in this poll is greater than ever. Let us now see how it plays out.