DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 18th October 2024
Archives (PRELIMS & MAINS Focus) POVERTY Syllabus Mains – GS 2 & GS 3 Context: The International Day for the Eradication of Poverty (IDEP) – is observed annually on October 17 since 1992. Background: – The theme for 2024 IDEP is “Ending Social and Institutional Maltreatment, Acting Together for Just, Peaceful, and Inclusive Societies”. Key takeaways As per the international poverty line set by the World Bank, anyone living on less than $2.15 a day is in extreme poverty. Poverty measurement in India According to the Household Consumption Expenditure Survey for 2022-23, less than 5 per cent of Indians are now expected to live below the poverty line. However, the release of the report set in motion debates around the poverty line used to estimate the extent of deprivation. The evolution of poverty estimates in India In 1971, V N Dandekar and N Rath defined the poverty line based on calorie consumption (2,250 calories per person per day, based on National Sample Survey data of 1960-61), setting it at Rs 15 for rural and Rs 22.5 for urban areas. In 1979, the Y K Alagh Task Force set poverty lines based on calorie needs of 2,400 calories (rural) and 2,100 calories (urban), which remained the official method until the 1990s. However, this methodology for estimating poverty at the national and state levels has been critiqued by many for giving an inappropriate picture of poverty. In 1989, the Planning Commission formed the Lakdawala Expert Group to “look into the methodology of estimating poverty and to redefine the poverty line, if necessary”. The Lakdawala Committee in 1993 introduced state-specific poverty lines, adjusting for regional price differences, but faced criticism for not maintaining the original calorie norms. With the criticisms for the Lakdawala Committee mounting, the Tendulkar Expert Group was formed in 2005 to review the methodology for poverty estimation. The Tendulkar Committee recommended five main changes: Shift from Calorie Consumption: The committee recommended moving away from calorie consumption as the sole indicator of poverty. Instead, it proposed a more comprehensive approach that includes both food and non-food items. A uniform poverty line basket for both rural and urban areas. A change in the price adjustment procedure to correct spatial and temporal issues with price adjustment. Incorporation of private expenditure on health and education while estimating poverty (earlier poverty lines assumed that health and education would be provided by the State and formulated poverty lines accordingly); The use of Mixed Reference Period instead of Uniform Reference Period In 2009, the Tendulkar Committee submitted its report of estimated poverty lines for rural and urban areas in all states. It concluded that the all India poverty line in 2004-05 was Rs 446.68 and Rs 578.80 per capita per month in rural and urban areas respectively. According to the Lakdawala Committee, the percentage of the population living below the poverty line in 2004-05 was 28.3 per cent in rural areas and 25.7 per cent in urban areas. The same according to the Tendulkar Committee report was 41.8 per cent in rural areas and 25.7 per cent in urban areas. The Tendulkar Committee further recommended a new method to update the poverty lines, adjusting for changes in prices and patterns of consumption, using the consumption basket of people close to the poverty line. Thus, the national poverty lines for 2011-12 are Rs 816 and Rs 1,000 per capita per month for rural and urban areas respectively. The Tendulkar Committee report faced widespread criticism and the Rangarajan Committee was set up in 2012 to address these issues. The report was submitted in 2014 and the old practice of having separate all-India rural and urban poverty line baskets and deriving state level poverty lines from these was brought back. The report raised the monthly per capita consumption expenditure to Rs 972 and Rs 1407 in rural and urban areas respectively. The government, however, did not take a call on the Rangarajan Committee report. The last official poverty data was released in July 2013 which was estimated based on the Tendulkar line for 2011-12. According to this, 21.9 per cent of the population in India lived below the poverty line. Source: Indian Express THE $500 BILLION OPPORTUNITY Syllabus Mains – GS 3 Context: Recently, Prime Minister Narendra Modi announced a $500 billion (Rs 4.20 lakh crore) target for electronics manufacturing in India by 2030. Background: – The ambition is audacious – India’s entire manufacturing output in 2023-24 was roughly $660 billion (Rs 55.4 lakh crore). Key takeaways Cluster-Based Growth: Historically, manufacturing growth has thrived in regional clusters. The electronics industry, from Silicon Valley to Shenzhen, has followed this model. In India, clusters like Sriperumbudur (Tamil Nadu) and Noida (Uttar Pradesh) contribute nearly 50% of India’s electronics exports. India’s focus must be on achieving export competitiveness at scale to drive growth in electronics manufacturing. To sustain and accelerate growth in electronics, we need deep and ambitious region-led reform that can create large, globally competitive electronics manufacturing regions. Special Electronics Manufacturing Zones: To address land acquisition challenges, the government should develop large electronics manufacturing zones around existing clusters. Example: Declaring 300 sq km regions for electronics manufacturing, incorporating factories and new parks. Electronics factories can employ thousands and it is important to house workers close to factories. Large zones make it possible to have social infrastructure like worker housing, schools, hospitals and recreation facilities. Within the zones, the focus needs to be on attracting lead brands and their partners as anchor investors and they can, in turn, attract their downstream partners. Importance of Scale: Global competitors like Shenzhen (2,000 sq km) employ 4.6 million workers and export over $300 billion. Comparatively, Indian clusters like Mundra EMC are much smaller (2.5 sq km with 5,000 workers), necessitating expansion. Pro-Employment Labour Reforms: Indian electronics regions need pro-employment labour laws, including longer shifts, competitive overtime rules, and the removal of restrictions on employing women (who form a majority of the workforce). Taxation and Tariff Reforms: India needs to ease cross-border inventory management. Electronics manufacturing requires movement of components. Extremely specialised supply chain participants mean that much of this movement is cross-border. Thus, all countries like Vietnam, China, etc., already allow foreign vendors or brands to manage component inventory seamlessly across borders without tax or tariff
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