02 August 2022

DAILY CURRENT AFFAIRS ANALYSIS

1 – Gig Economy: GS III – Indian Economy

What is the “gig economy”?

• A gig economy is a type of free market where enterprises frequently use temporary roles and independent workers on a temporary basis.
• According to a Boston Consulting Group report, there are 15 million gig workers in India working in industries like software, shared services, and professional services.
• According to a study conducted in 2019 by the India Staffing Federation, India is the fifth-largest flex-staffing market in the world, after the US, China, Brazil, and Japan.

What Potential Does India’s Gig Economy Have?

• 56 percent of the nation’s new jobs, which include both white-collar and blue-collar workers, were created by businesses in the gig economy.
• Blue-collar jobs in India frequently require gig workers, but there is also an increasing demand for them in industries that require project-specific consulting, sales, web design, content writing, and software development.
• The gig economy has the potential to increase India’s GDP by 1.25 percent in the “long term” and support up to 90 million jobs in non-agricultural businesses.
• In order to close the income and unemployment gaps as India moves closer to its stated objective of having a USD 5 trillion GDP by 2025, the gig economy would be a crucial factor.

What Primary Drivers Motivate the Gig Economy?

• The option to work remotely: In the digital age, employees are no longer compelled to work from a specific area; instead, they can accomplish their jobs from any location. This enables organisations to select the best people regardless of location.
• The millennial age seems to view careers considerably differently than previous generations. They attempt to pursue the work they want to accomplish rather than careers that might not fulfil their deepest interests.
• For gig workers, a variety of payment methods are employed, including fixed-fee (decided at contract commencement), time & effort, actual unit of labour accomplished, and quality of output. The time & effort model is a close second to the fixed-fee model as the most popular strategy.
• The Indian start-up ecosystem has rapidly expanded alongside the rise of a start-up culture.
• Contractual freelancers are utilised for non-core work because hiring full-time staff has significant fixed costs for start-up organisations.
• Start-ups are also thinking about hiring qualified technology freelancers (on a project-by-project basis) in disciplines including engineering, product, data science, and machine learning to boost their technical platforms.
• Increasing need for contract workers: In response to the epidemic, MNCs are employing flexible employment practises, especially for specialised projects, to reduce operating expenses.
• This propensity has a big impact on the gig culture in India.

What Issues Are Affecting the Gig Economy?

• Employees in the gig economy have low job security and little benefits because the gig economy grows primarily in an uncontrolled environment.
• Nevertheless, few claim that India’s gig economy is a continuation of the nation’s long-standing, uncontrolled informal labour market, which does not offer workers social security, insurance, etc.
• needed abilities: A worker needs to have the required skills. The ability to negotiate will always be limited unless a person is particularly gifted.
• Although it is common for corporations to invest in employee training, a gig economy worker will have to do it on his own and at his own own.
• Due to the imbalance between demand and supply, which already exists when it comes to available employment for online freelancers, pay will eventually decline as a result.

The Pandemic and the Gig Economy:

• Businesses were impacted by Covid-19, and people had to find reliable sources of income. The need for gig labour increased as a result of the outbreak.
• For instance, Google announced the August 2020 launch of its Kormo Jobs app in India to connect job seekers with openings in industries including retail, hospitality, and on-demand businesses.
• As the number of gig workers has expanded over time, notably with consumer internet companies like Zomato, Swiggy, Uber, Ola, Urban Clap, etc., the employees have increasingly complained a drop in their pay.
• Its two main implications on the environment of contract labour are as follows:
• In order to first satisfy the growing need for on-demand staffing, it has created new business models.
• Second, it has once more raised awareness of the employment rules that safeguard gig workers and set a federal minimum wage.

What Advantages and Disadvantages Do Gig Jobs Provide to Women?

Pros:

• Support for Balancing Labor and Home: The flexibility of gig work allows women to balance their traditional roles as caregivers and homemakers with employment.
• Provide a Safe Work Environment for Women: Technology and gig employment, which is supported by Work From Home, have addressed the issue of safety during travel and night shifts (WFH).
• Women now have greater employment alternatives in tier 2 and tier 3 cities as well.
• On-Demand Work is Available: Women now have access to on-demand employment, giving them the freedom to enter and exit the workforce when they see fit.
• Help with Extra Income: Gig employment enables women to earn more income, builds their self-esteem, and empowers them to make choices—all of which are essential components of women’s empowerment.

Cons:

• Since the gig economy exacerbates problems with the gender wage gap, biassed algorithms, gender stereotypes, and the technology divide that already exist in the labour market, it creates significant barriers to entry for women.
• As a result, it is essential to find and address these underlying structural issues in the digital world.
• The gender gap in computer literacy severely hinders women’s participation in gig employment. According to the GSMA Mobile Gender Gap Report 2020, only 21% of women in India utilise mobile internet, resulting in unequal access to digital technologies needed for participation in the platform economy.
• Despite the absence of a comprehensive database on gig workers in the country, platforms have been found to categorise jobs according to gender stereotypes.
• Men tend to work more in delivery and transportation, while women often handle formal domestic and caregiving tasks as well as provide beauty and wellness services.
• Pay Disparities: Pay gaps are a common occurrence in the freelance economy.
• Men and women gig workers in India earned between 8% and 10% less, according to reports from before the pandemic.
• According to studies, women undervalue their abilities and accept lower-paying jobs as a result of learned inequality, which exacerbates the already pronounced wage disparity in the gig economy.
• Biased Against Women: The platforms frequently discriminate against women because to their “on-demand” work schedules and incentive structures.
• The benefits of peak hours, when both demand and earnings are high, are typically missed by women who are active in domestic and childcare responsibilities.
• In addition, women’s working days are longer than men’s due to the combination of paid and unpaid work, which increases their time insecurity.
• What does the labour code for the gig economy include?
• presently enacted laws:
• The 2019 Code on Wages establishes a universal minimum wage and floor wage for both organised and unorganised sectors, including gig workers.
• In the 2020 Social Security Code, gig workers are recognised as a new occupational category.
• According to this definition, a gig worker is a person who works or participates in work arrangements and receives compensation for them outside of the traditional employer-employee relationship.

Problems Related to the Workers Security Code:

• The Code on Social Security law of 2020 does not guarantee benefits; nonetheless, platform workers presently have some benefits, including as maternity benefits, life and disability insurance, old age security, provident fund benefits, and compensation for injuries sustained on the job.
• However, being eligible does not guarantee that you will receive the advantages.
• Benefits are not guaranteed by any of the provisions, therefore even if the Central government occasionally creates social programmes to address these concerns of employment and personal security, they are not a given.
• Absence of Fixed Duties: The central government, platform aggregators, and employees are all jointly liable for providing basic welfare measures, according to the Code.
• However, it is not clear which stakeholder is in responsibility of delivering whatever degree of benefit.

What GIG employee conditions need to be improved?

• Need to Empower the Gig Workers: By forming an umbrella union, it will be possible to offer the gig workers more negotiating power.
• The formal recognition and information symmetry will help them defend themselves against the platforms better.
• Mandatory Coverage Must Be Offered to Platform Workers: Although some positive changes have resulted from the inclusion of gig workers in the labour legislation, the terms of their social security are ambiguous and lack any established regulating agencies.
• Platform workers must consequently receive the necessary coverage through the publicly supported programmes Pradhan Mantri Jan Arogya Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, and Pradhan Mantri Suraksha Bima Yojana.
• In order to protect women gig workers, who are typically more vulnerable in the platform economy, the aggregators can make this possible.
• It is necessary to build the appropriate social and physical infrastructure: The correct physical and social infrastructure must be built in order to encourage women to participate in gig work.
• By promoting societal norms that encourage men to conduct unpaid care and domestic work equally and by developing public care infrastructure, women’s move into gig work will be assisted.

Source The Indian Express

2 – African Swine Fever: GS II – Health Related Issues

• It affects and causes an acute form of hemorrhagic fever in domestic and wild pigs. It is a highly contagious and lethal animal illness.
• High fever, depression, anorexia, appetite loss, skin haemorrhages, vomiting, and diarrhoea are some of the further symptoms of the illness.
• In the 1920s, it was found for the first time in Africa.
• In the past, epidemics have been documented in the Caribbean, South America, and areas of Europe and Africa.
• However, since 2007, reports of the illness in domestic and wild pigs have been made in other nations across Asia, Africa, and Europe.
• Since the mortality rate is about 100% and there is no known treatment for the fever, killing the animals is the only way to stop it from spreading.
• Since ASF primarily spreads from animal to animal, humans are not at risk from it.
• The World Organisation for Animal Health (OIE) Terrestrial Animal Health Code lists ASF as a disease that should be reported to the OIE.

Source The Hindu

3 – Monetary Policy Committee: GS III – Indian Economy

• The Monetary Policy Committee (MPC), a government-appointed body that oversees the RBI, is entrusted with formulating monetary policy utilising instruments such as the repo rate, reverse repo rate, bank rate, and cash reserve ratio (CRR).
• In accordance with the 1934 amendments to the RBI Act, Section 45ZB, the Central Government of India established it.

Functions:

• The task of choosing the various policy rates, including MSF, Repo Rate, Reverse Repo Rate, and Liquidity Adjustment Facility, falls under the purview of the MPC.

MPC’s composition:

• There will be six people on the committee.
• Three of the six members will be proposed by the government.
• The governor would serve as the ex-officio chairperson, and the other three members would be from the RBI. The deputy governor of the RBI in charge of monetary policy as well as an executive director of the central bank will both be members.

Members’ selection and terms:

• Selection:A Search-cum-Selection Committee headed by the Cabinet Secretary would choose the government nominations to the MPC together with the RBI Governor, the Economic Affairs Secretary, and three specialists in the fields of economics, banking, finance, and monetary policy.
• Members of the MPC are appointed for a four-year term and are not eligible for re-appointment.

How are decisions reached?

• Each member has one vote, and decisions are made by majority vote.
• The committee’s chair will be the governor of the Reserve Bank of India. The governor will have a casting vote in the event of a tie but will not have a veto ability to override the other panel members.

What does RBI monetary policy entail?

• The Reserve Bank of India’s (RBI) policy regarding the use of monetary resources under its control with the aim of increasing GDP and reducing inflation is referred to as its “monetary policy.”
• The RBI is given authority to set monetary policy by the Reserve Bank of India Act of 1934.

What goals does the monetary policy have?

• According to the Chakravarty Committee’s recommendations, India’s monetary policy must take into consideration factors including fostering the expansion of new financial institutions, economic growth, equity, and social justice.
• The RBI continues to work to reduce inflation within a manageable range even as the Indian government strives to speed up the country’s GDP growth rate.
• The Monetary Policy Committee chooses the best policy interest rate to help the nation reach its inflation target in order to accomplish its key goals.

How are monetary policy instruments managed?

There are two categories of monetary policy instruments: qualitative instruments and quantitative instruments.

• Open Market Operations, Bank Rate, Repo Rate, Reverse Repo Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Marginal Standing Facility, and Liquidity Adjustment Facility are among the quantitative instruments on the list (LAF).
• Direct action, adjustments to the profit margin, and moral persuasion are all examples of qualitative instruments.

Source The Indian Express

 4 – GST Council: Prelims Specific Topic

The GST Council: What is It?

• The Constitutional (122nd Amendment) Bill (abbreviated CAB) was approved by both chambers of parliament in 2016 in order to establish GST.
• More than 15 states approved the CAB, and the Hon. President subsequently signed “The Constitution (One Hundred and First Amendment) Act, 2016”.
• Since then, the GST council has been officially recognised, creating the constitutional body responsible for resolving GST-related disputes.
• According to Article 279A (1) of the modified Constitution, the President established this joint forum of the Center and the States.

Members:

• Union Finance Minister is the Chairman of the GST Council.
• State Finance Ministers are its members.

Functions:

• The Council is tasked with “making recommendations to the Union and the States on major GST-related issues, such as the commodities and services that may be subject to or excluded from GST, model GST Laws,” as stated in Article 279 of the Constitution.
• It also determines the different GST rate slabs.
• For instance, a panel of ministers’ interim report recommended levying a 28% GST on horse racing, online gaming, and casinos.

Source The Hindu