GS (M) Paper-3: “Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.”
Misguided protectionism should go
- The Commerce Minister Nirmala Sitharaman had recently articulated the Government’s moral dilemma over protectionist measures – “While the demand from several sectors (dominated by big companies) for protection may seem justified, such moves run the risk of impacting the vast SME sector and consumers as the cost of production and consumption go up.”
Adverse impacts of protectionism:
- Protection from imports for large corporates increases the input costs for SMEs, which are downstream value-adding companies that provide most of the manufacturing jobs and exports. SMEs, being vulnerable face the heat of higher input costs which will make them uncompetitive, leading to large-scale closures, job losses and fall in exports.
- Essential products that most Indians use now cost 25 to 100 per cent higher than international prices.
Arguments in favour of protectionism:
- Government has to ensure that vulnerable large corporates mired in huge debts are protected from cheap imports to help them survive and repay the loans taken, mostly, from public sector banks.
Arguments against protectionism:
- The Government need not protect large corporates if they are not structurally vulnerable to making sustained losses — merely to help increase their profits — as protection kills job creation opportunities and increases costs for the common man.
- In the absence of clear guidelines on the conditions under which the Government should protect large corporates from cheap imports, many undeserving players seek and avail themselves of cover in the name of Make in India and, in the process, end up destroying the competitiveness of the SME sector.
Impact of protectionism on few sectors:
- Steel: Sells at 50 per cent over international prices. Domestic steel producers enjoy safeguards in the form of anti-dumping, minimum import price, etc that benefits all with a few receiving near-free ore and coal in addition, which reduces their input costs by over 10 per cent.
- Cement: Imports are virtually impossible as BIS certification — which takes months to realise— has prevented imports from most of the competitive, exporting cement factories in South East Asia. Cement companies enjoy availability of virtually free limestone, fly ash and, in some cases, coal too.
- Given the huge impact on SME sectors, job creation, and cost of living for all, protection should never be given to sectors / companies that are structurally profitable.
- Protection should be given only to those sectors that will incur losses if not protected. No profit-making industries/companies should get it.
- Give protection only to ensure that the beneficiary sectors / companies remain profitable and are able to sustain their debt-servicing obligations
- Protection should be regularly monitored and reviewed — about its duration, continued impact on the targeted as well as downstream sectors — and changed/discontinued accordingly.
- It is essential to understand the downside of protectionism and ensure that protection is given only under exceptional circumstances.
GS (M) Paper-2: “Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.”
Crimes against women | Coordinates of safety
National Crime Records Bureau Data: Crime against women
- As per National Crime Records Bureau reports, incidence of serious crimes against women rose from 237 per day in 2001 to 313 per day in 2015. Of these crimes, 30 per cent were rapes (including intent to rape).
- These crimes include rape, kidnapping and abduction, dowry deaths and cruelty by husbands and relatives.
- Minor girls, adolescent and old women are frequently victims of brutal rapes and murders.
- Higher incidence of crimes during 2001-2015 coupled with low conviction rate of 21 per cent of cases reported suggests that women are more vulnerable to serious crimes.
- Women’s vulnerability varies enormously across States. Incidence of serious crimes was as high as 75 per lakh women in Delhi in 2015 as against approximately 5 per lakh women in Andhra Pradesh and Tamil Nadu.
Factors behind inter-State variations:
As answers to these questions lie in the interplay of affluence of a State, religion, demographics including female/male ratio, employment opportunities for women, their literacy, rural/urban population ratio, quality of governance in the State and media exposure, we carried out a detailed analysis that allows us to assess their individual and joint contributions to variation of serious crimes over time and across States.
- Greater affluence is accompanied by a reduction in such crimes: A 1 per cent increase in State GDP (per capita) is associated with a 0.42 per cent reduction in the incidence of serious crimes.
- If alcoholism and substance abuse are lower among men, or if these addictions are better treated in more affluent States, sexual or physical assaults on women are less likely.
- Sex ratio: The sex ratio norm is 950. India’s ratio was below this (944 in 2015). A one per cent increase in the sex ratio lowers serious crimes against women by 8 per cent. Indeed, a skewed sex ratio more than undermines the affluence effect.
- Other influential factors include female literacy and labour force participation. Female bargaining power depends on both their literacy and outside employment. However, the evidence also suggests a backlash in which male spouses — especially those who are unemployed — assert their superiority by retaliatory physical and sexual violence.
- The higher the rural/urban population, the higher the incidence of serious crimes against women. A one per cent decline in the rural/urban population ratio is associated with a reduction of 0.4 per cent in the incidence of such crimes.
- Classifying the populations into Hindus and Muslims, we find that in both groups women are vulnerable to serious crimes but more so among the former. A one per cent increase in the share of the Hindus increases such crimes by 1.64 per cent — double the incidence among Muslims
- Exposure to media — captured through readership of newspapers in English and major Indian languages — has two effects: one is better reporting of crimes and perhaps, more importantly, a crime deterrence effect. It is difficult to separate the two and so the combined effect is that a one per cent increase in readership is associated with a 1.9 per cent reduction in such crimes.
Governance, a key determinant
- Nobel laureate Amartya Sen has emphasised that rape and other serious crimes against women are closely intertwined with inefficient policing and judicial systems, and callousness of society. So the quality of governance in States is key to understanding the huge variation in incidence of serious crimes against women.
- In a recent study of 19 States on the basis of five criterias — infrastructure, social services, fiscal performance, justice, law and order, and quality of the legislature, we find that the incidence of serious crimes against women declines with better governance.
In conclusion, if the crimes against women rose despite greater affluence and a slight increase in the sex ratio during 2001-15, the answer must lie in likely deterioration of governance and persistence of low sex ratios in certain States.[Ref: The Hindu]