Background:-
There has been a hue and cry as far as demonetization is concerned since the night of November 8. Meanwhile, while we were observant of the various developments, we took a decision to wait until the whole story unfolds.Since November 9 , probably each newspaper had published more than 20 articles on the issue. Every erudite in the country , had an opinion about it, moreover every citizen of the country has an opinion about it.
The single move gave a rather “hungry media” a “giant meatloaf” and they have been chewing on it since then. Every day, and in every form of media, the story of demonetization is unfolding. Some analysis are vary personal and emotional in nature, while some are very rational in nature, some are individualistic and some have broader perspective.
But if you look closely, those who wanted to blame the move, they went on to sight and find cases where due to demonetization “someone” had suffered. Even a Bengali director made a movie about it named- “Shoonyata“, and of course as anticipated the movie shows the problems that unfold when a bride is about to get married and demonetization is announced. The movie is simply individualistic in nature, that means it tries to show the plight of a single bride, and through this the director wants to paint it as everybody’s plight.
So, before we delve into details of demonetization, it is certain that different corners of the society have different opinions about it as they endured the demonetization. To sum up, who are impacted and who are not, here is a rather simplified list :-
- Super rich/Rich with legitimate business- No impact or very little impact
- Upper-middle class- Not much impact
- Middle class-Not much impact beyond the obvious
- Neo-middle class- Probably hardest hit, mostly blue-collar workers who lost their job or were unable to be paid by their employer
- BPL household- Marginally hit
However, this is a historic move, because, there are no other such decisions which might impact each nook and corner of India and every citizen. Money after all is a basic necessity apart from the usual rhetoric of – “Roti,Kapda aur Makan” (“Food,Cloth and Shelter”)
Being a giant of a decision, it was necessary for us to not give into temptation and publish every article of the newspapers. So, we waited, watched, we observed and now is the time to publish.
History of demonetization:-
In 1971, the Wanchoo Committee had submitted an interim report in which it had recommended, among other reforms, the demonetisation of high-value currency notes. Y B Chavan was then finance minister. Retired civil servant, Madhav Godbole, in his book Unfinished Innings: Recollections and Reflections of a Civil Servant tells us that after many deliberations over the matter, demonetisation was accepted along with other reforms suggested by the committee.
However, “in view of the sensitive nature of the subject and the need for maintaining utmost secrecy”, the prime minister’s approval was needed. So Chavan went to meet Indira. And this is what he told Godbole about his meeting with Indira on the issue.
When Y.B. Chavan told Indira Gandhi about the proposal for demonetization and his view that it should be accepted and implemented forthwith, she asked Chavan only one question: “Chavanji, are no more elections to be fought by the Congress Party?” Chavan got the message and the recommendation was shelved.
Here is the Analysis:-
So, what exactly happened on 8 November?
Prime Minister addressed the nation and announced that effective from 9 November, all Rs 500 and Rs 1,000 notes of the current series (including pre-2005 ones) would cease to be legal tender. That means people could not use them to buy and sell goods and services. Technically, this was not demonetisation, but de-legalisation. The actual demonetisation happened with the proclamation, on 30 December, of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016, which reduced those notes to worthless bits of paper.
What does the ordinance do and why was it necessary?
Under Section 34 of the Reserve Bank of India (RBI) Act, 1934, the central bank has a liability to honour every currency note – anyone presenting that note has to get the value printed on it, whether Re 1 or Rs 2,000. As long as a note does not come back to the RBI, it continues to be a liability.
The only way this liability can end is for the government to expressly state that the old notes cannot be redeemed any more, which is what the ordinance does.
How much of old Rs 500 and Rs 1,000 notes were sloshing around before 8 November? How much has been returned or exchanged?
As of 9 November, the high denomination notes worth Rs 15.44 lakh crore was with the public.
There are various estimates of the money that has come in, based on data from the RBI, but it’s best to wait till the central bank puts out a figure. There could be double counting in the estimates that are going around right now.
Besides, though one will get a pretty accurate estimate in a few days or a week, an absolutely exact figure on notes returned will be known only after some months. Remember, that while the deadline for deposit of the old notes in banks ended on 30 December, resident Indians can still deposit these notes in the offices of the RBI till 31 March and non-resident Indians (NRIs) can do so till 30 June. These are the only two windows given by the ordinance. Resident Indians will have to give a declaration that they were outside the country between 9 November and 30 December.
In addition, people can declare their unaccounted wealth held in cash under the Pradhan Mantri Garib Kalyan Yojana, the second income declaration scheme that was announced on 16 December. The window for this too is open till 31 March. (Some of this could be in new notes, if black money holders have managed to launder the cash they held.)
But the amount returned by NRIs between 31 March and 30 June is not likely to be huge, so it is best to wait till mid-April to get a sense of how much of the demonetised currency has been returned.
Can the window given to NRIs be used to launder large sums of money?
Unlikely. A notification under the ordinance stipulates that the amount of demonetised currency returned by an NRI cannot exceed what is specified under the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015, issued under the Foreign Exchange Management Act, 1999. That limit is Rs 25,000. That’s why the amount returned by NRIs is not likely to be huge.
What is this fuss about my not being able to even keep old notes with me?
The ordinance gives a grace period (31 March and 30 June) for the return of the demonetised currency. So it is not as if you will be penalised for holding old Rs 500 and Rs 1,000 notes between 30 December and 31 March. Beyond this grace period, a person can hold only a total of 10 notes of both denominations (five Rs 500 and five Rs 1,000 or two Rs 1,000 and eight Rs 500, or all 10 of the same value etc) or only 25 notes for study, research or numismatics.
Anyone holding more than this (other than the RBI or anyone ordered to do so by a court in connection with a case) will have to pay a fine of Rs 10,000 or five times the amount of the value of currency found with him, whichever is higher.
Since these notes will be just worthless pieces of paper, what is wrong if I, say, decide to make a collage of 100 pieces and put it up in my drawing room? Or just keep it in my locker and periodically rue the day I decided to evade taxes or make money through crooked means?
Good question, this provision does defy logic. But, no answer. It’s also not clear how the authorities will come to know about people holding more than the specified number of notes beyond the grace period.
Fifty days on, has the inconvenience ended?
The short answer to this is, no, though the situation has improved since the first two weeks post 8 November. Finance Minister Arun Jaitley and RBI governor Urjit Patel have assured that there is enough supply of cash. But all of this is not making its way to banks. The curbs on cash withdrawal have not been rolled back entirely; though the limits for ATM withdrawals have been increased from Rs 2,500 to Rs 4,500 but the weekly withdrawal limit remains at Rs 24,000. There are still ATMs and bank branches with no cash, even in metros. For every story of no inconvenience, there is another of inconvenience and harassment.
Has demonetisation met the objectives it was supposed to achieve?
The jury is still out on this.
In his 8 November address, PM said the move was meant to “break the grip of corruption and black money”.
But black money is a consequence and not a cause of corruption. Merely demonetising high value notes will not eliminate corruption; discretionary power in the hands of the politicians and bureaucrats has to end. This needs a complete recast of governance systems.
The fact that through the past 50 days, there have been seizures of large volumes and value of new currency notes shows that the money-laundering industry has not been hit at all by the demonetisation move. All that happened was that the commission dropped from 40 per cent before the announcement of the Pradhan Mantri Garib Kalyan Yojana to 25 per cent.
Funding of political parties also needs a complete revamp. Political parties are a major conduit for unaccounted money and large cash donations are quite common. Cash donations up to Rs 20,000 need not be reported to the Election Commission and this is a major loophole that all political parties exploit. Nothing has happened to change this.
In his address, the PM also spoke about how fake notes of Rs 500 and Rs 1,000 have been used in terror financing. The new notes have extra security features and were supposed to deal a body blow to the counterfeiting industry. But the seizure of some counterfeiting machines in the past week has raised some doubts about this as well.
UPSCTREE’s understanding of the issue:-
Was it a “bold” move, is there any ethics involved ?
A simple example can clear whether it was a bold move or not. Following India’s demonetization , another country followed suit, i.e. Venezuela and it resulted in civil war and govt of that country had to roll back the decision.So, in sum, it was a a bold move, and given the size of the country and 87% transaction being carried out via cash, it was not only a bold but probably an audacious move.It could have been a political disaster and the PM would have no more been the PM- it was that big a risk to take on this “gamble”.The example of Venezuela is testament to it.
So, the next question is why there was no civil war, and this is purely a question of ethics, more specifically virtue ethics.
As per virtue ethics, an act seems ethical because it is carried out by an ethical person.In this case, people don’t judge the act but they judge the actor and form opinions according to it.Given the PM’s persona, people of India, took a leap of faith in the PM, majority were judging the PM than the act of PM.
This is because, there can not be a “Yes and No ” or “black and white” answer to this decision.Some benefits are visible and some benefits will never be visible and same goes for the “bad impacts” as well.It is a indeed a matter of “grey”, however most opinions emanating from different corners of society is either Yes or No.Economists themselves don’t have enough statistics of black economy, so it is worthwhile to ponder how general populace form their opinion and this is precisely the reason why we looked at it from an ethical angel and that gives us some clue of the popular psyche and the way they form the decisions.
Is there any benefit of this decision ?
The PM has a record of being an incremental reformer, but this is a “disruptive” move.The benefit , both short term and long-term are listed below :-
Economy
- Cost of real estate will come down- making housing affordable.It is indeed a recession like condition for real-estate mafias, and if accompanied by amendment to Benami Trasaction Act , it will have some real impact in this sector.
- Inflation is low
- Push for digital-economy
- Helps in curbing terror-financing and other threats to state such as Naxalism
- A fat deposit in banks may lead to cut in lending rates. It helped in debt-recovery and reduced NPA to some extent
Goveranance
In terms of governance, it helped establish the trust between people and state. For long, the many had the notion that they can get away with illegal means (tax evasion) etc, but this decision established the fact that govt. is willing to go any length to reward good-ones and punish the bad-ones. For long it was other way around, the bad-ones used to garner ill-gotten wealth and managed to get away with it (Just a recall of almost all movies of the last few decades may give the idea, where the good-ones are punished by the wicked , although the good-ones win at the end but that part of the movie was more of a fantasy than reality)
Consider this statistics – 24 lakh people have a declared income of more than 10lakh per annum (24 lakh in a country of more than 120 crore population- is this not tax-evasion?)-this statistics proves that many had such notion of getting away with their ill-gotten wealth. And the decision tries to bridge the gulf of trust deficit between the ruler and the ruled.
Socio-behavioral Impact
This is probably the hardest one to judge. Nevertheless, data shows that online transactions are on a up-swing and rise of more than 200% is evident of it. So this might be the trigger point for Indian economy to go cash-less or less-cash.
Other impacts and harsities are well-known and requires no elaboration.
Was this good decision badly implemented ?
This is indeed the next line of argument put forth by different sections and it has some merit in it. But given the nature of decision and the level of secrecy it required, those who implemented it were probably well aware of it. After all decision of this nature looses steam when it looses secrecy.
However, it could have been better implemented and there should have been an ad-hoc grievance call center set up across the country, where if an organization denies accepting the old notes or a medical denies the treatment to the public deliberately then a complaint should have been registered immediately and action should be taken immediately. This is a giant task , but the Panchayats and block-development-offices should have been ideal nodal point to deal with this kind of matter and some form of authority should have been delegated to them with standards of protocol.
The essence is – the state should have to pull all its strings , so that the basic facilities and services are not denied to the general public which requires adequate planning, co-ordination and data-dissemination in real-time. In short, it could have been better implemented.
The next question is whether the black money will be eradicated ?
There can not be any conclusive evidence of it, simply because it is “black” – that means no one can certainly say how much of it is “black”. However, this decision, although will curb black-money in short term, what it aims essentially is to raise the cost of money-laundering. That acts as a deterrence. When the cost and pain of money laundering outweighs the benefit of it then money-laundering as an act looses relevance.
Moreover, this years budget and tax decision will have impact on this. If the tax is lowered and tax base in increased then govt. will have all the money it wants to run the state and citizens will be least bothered about paying a marginal tax. In short, the govt. has to make tax percentage attractive enough so that money-laundering looses its relevance.So, that is one of the reason why the decision of this nature can not be judged in short-term as many other decision are interlinked with it.
There was demonetization before, so why this one is historic ?
It is all about timing. Gandhi would not have been Gandhi if he entered India after 1940 or in 1900. Gandhi is Gandhi because of his timing. Same logic can be applied to this decision. The decision before it had no ecosystem of digital payment to support, that means people had not much of alternative. Hence the past decisions had less impact. But this one is perfectly timed. It is the era of digital economy and there is the ecosystem of digital payment and alternative methods to go cash-less , hence important and historic. This will have impact.
So to sum it up, it was good decision, but could have been better implemented. The benefits and demerits are has both short term and long term connotations. Hence, it is wise to wait a little longer and look at the data to see and judge the impact. And there is the budget announcements to be made as well. So , jumping to a conclusion is neither called for nor wise at this juncture.
We all understand certain parts of it, we all don’t understand certain parts of it and nobody knows the exact statistics. And that’s demonetization in a nut-shell thus far.
And yes, there is a last question that went through everyone’s mind though .
Why 2000 rupees notes ?
At first instance one might think this is a moronic move by the govt., but we urge you to think harder. If you look at the data, most of the high value day-to-day transactions lie between 500 to 1000 rupees and by releasing 2000 notes instead of 1000, govt. is deliberately pushing people to do cashless transactions. It is little harder to do retail shopping with 2000 rupees notes and this is precisely govt. is trying to achieve – to give you the note but make it little inconvenient for us to transact. This is much to do with human psychology and less to do with economy. A slight inconvenience leads us to look for alternatives and govt. is trying to tap into this socio-economic-behavior. We wonder, whether the govt. has hired any behavioral scientist to do this. After all there is a whole new world of behavioral economics as well.
Of course, the above one is our interpretation, but if this is what the govt., is trying to do then it is indeed a well-though out move which looks moronic on the face of it.
Conclusion:-
There are some merit in the decision, however this decision is not aimed at black money only. For the simple reason that the stock of black wealth held in currency form has been generally estimated at around 5 to 6 per cent of the total black economy.
The stock of black economy does not get affected much and only a small portion of black money is held in currency. Most of it is stashed abroad or held in real estate, gold or foreign currency. Moreover, black money generation is a continuing process that involves evading taxes, regulations and engaging in corrupt and criminal activities. These cannot be tackled with a one-time measure.
The claim that the demonetisation was aimed at immobilising counterfeit currency also lacks some credibility, because such currency is estimated to value no more than Rs 400 crore, a very small proportion of the value of the high-denomination notes that were in circulation.
There is bound to be arrested growth in economy for short term.
- The informal sector is largely cash-dependent and alone accounts for 40 per cent of the GDP and employs 80 per cent of the workforce.
- The NBFC are unable to provide loan to small farmers and MSME sectors.
- Rupee exchange rates have increased and there is a downward swirl of stock market.
- The state of the economy matters significantly here because that will primarily determine response capacities of each segment, sub-segment and interactions within to influence aggregate outcome.
Some economists put the above arguments to justify that the move was nothing but disastrous. so why did the government go for this move causing much hardship to the common man,the very safety and security of whom the government wants to protect? Did the government take a very myopic step?
A deeper analysis gives a big NO as the answer. Because the sole and underlying motive of the government was TO MOVE TOWARDS A DIGITAL ECONOMY. The subsequent actions of the government bring testimony to this fact:-
a. Discount in digital transactions.
b. Facilitating several methods of digital transaction
c. Circulation of 2000 rupees.
This paradigm shift in the economy will increase the transparency in transactions making the illegal activities difficult and riskier.It will lead to increase in tax base thus reducing tax rate and enhancing the revenue generation.
Note :- This analysis is exclusive to UPSCTREE, and if you have any other alternatives, please do let us know and we can debate and deliberate on this. It took us a while to write this , however we have a strong belief that it will help you enrich your understanding of this issue. And if you think it is enriching, please don’t hesitate to share.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.
On March 31, the World Economic Forum (WEF) released its annual Gender Gap Report 2021. The Global Gender Gap report is an annual report released by the WEF. The gender gap is the difference between women and men as reflected in social, political, intellectual, cultural, or economic attainments or attitudes. The gap between men and women across health, education, politics, and economics widened for the first time since records began in 2006.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]No need to remember all the data, only pick out few important ones to use in your answers.
The Global gender gap index aims to measure this gap in four key areas : health, education, economics, and politics. It surveys economies to measure gender disparity by collating and analyzing data that fall under four indices : economic participation and opportunity, educational attainment, health and survival, and political empowerment.
The 2021 Global Gender Gap Index benchmarks 156 countries on their progress towards gender parity. The index aims to serve as a compass to track progress on relative gaps between women and men in health, education, economy, and politics.
Although no country has achieved full gender parity, the top two countries (Iceland and Finland) have closed at least 85% of their gap, and the remaining seven countries (Lithuania, Namibia, New Zealand, Norway, Sweden, Rwanda, and Ireland) have closed at least 80% of their gap. Geographically, the global top 10 continues to be dominated by Nordic countries, with —Iceland, Norway, Finland, and Sweden—in the top five.
The top 10 is completed by one country from Asia Pacific (New Zealand 4th), two Sub-Saharan countries (Namibia, 6th and Rwanda, 7th, one country from Eastern Europe (the new entrant to the top 10, Lithuania, 8th), and another two Western European countries (Ireland, 9th, and Switzerland, 10th, another country in the top-10 for the first time).There is a relatively equitable distribution of available income, resources, and opportunities for men and women in these countries. The tremendous gender gaps are identified primarily in the Middle East, Africa, and South Asia.
Here, we can discuss the overall global gender gap scores across the index’s four main components : Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment.
The indicators of the four main components are
(1) Economic Participation and Opportunity:
o Labour force participation rate,
o wage equality for similar work,
o estimated earned income,
o Legislators, senior officials, and managers,
o Professional and technical workers.
(2) Educational Attainment:
o Literacy rate (%)
o Enrollment in primary education (%)
o Enrollment in secondary education (%)
o Enrollment in tertiary education (%).
(3) Health and Survival:
o Sex ratio at birth (%)
o Healthy life expectancy (years).
(4) Political Empowerment:
o Women in Parliament (%)
o Women in Ministerial positions (%)
o Years with a female head of State (last 50 years)
o The share of tenure years.
The objective is to shed light on which factors are driving the overall average decline in the global gender gap score. The analysis results show that this year’s decline is mainly caused by a reversal in performance on the Political Empowerment gap.
Global Trends and Outcomes:
– Globally, this year, i.e., 2021, the average distance completed to gender parity gap is 68% (This means that the remaining gender gap to close stands at 32%) a step back compared to 2020 (-0.6 percentage points). These figures are mainly driven by a decline in the performance of large countries. On its current trajectory, it will now take 135.6 years to close the gender gap worldwide.
– The gender gap in Political Empowerment remains the largest of the four gaps tracked, with only 22% closed to date, having further widened since the 2020 edition of the report by 2.4 percentage points. Across the 156 countries covered by the index, women represent only 26.1% of some 35,500 Parliament seats and 22.6% of over 3,400 Ministers worldwide. In 81 countries, there has never been a woman head of State as of January 15, 2021. At the current rate of progress, the World Economic Forum estimates that it will take 145.5 years to attain gender parity in politics.
– The gender gap in Economic Participation and Opportunity remains the second-largest of the four key gaps tracked by the index. According to this year’s index results, 58% of this gap has been closed so far. The gap has seen marginal improvement since the 2020 edition of the report, and as a result, we estimate that it will take another 267.6 years to close.
– Gender gaps in Educational Attainment and Health and Survival are nearly closed. In Educational Attainment, 95% of this gender gap has been closed globally, with 37 countries already attaining gender parity. However, the ‘last mile’ of progress is proceeding slowly. The index estimates that it will take another 14.2 years to close this gap on its current trajectory completely.
In Health and Survival, 96% of this gender gap has been closed, registering a marginal decline since last year (not due to COVID-19), and the time to close this gap remains undefined. For both education and health, while progress is higher than economy and politics in the global data, there are important future implications of disruptions due to the pandemic and continued variations in quality across income, geography, race, and ethnicity.
India-Specific Findings:
India had slipped 28 spots to rank 140 out of the 156 countries covered. The pandemic causing a disproportionate impact on women jeopardizes rolling back the little progress made in the last decades-forcing more women to drop off the workforce and leaving them vulnerable to domestic violence.
India’s poor performance on the Global Gender Gap report card hints at a serious wake-up call and learning lessons from the Nordic region for the Government and policy makers.
Within the 156 countries covered, women hold only 26 percent of Parliamentary seats and 22 percent of Ministerial positions. India, in some ways, reflects this widening gap, where the number of Ministers declined from 23.1 percent in 2019 to 9.1 percent in 2021. The number of women in Parliament stands low at 14.4 percent. In India, the gender gap has widened to 62.5 %, down from 66.8% the previous year.
It is mainly due to women’s inadequate representation in politics, technical and leadership roles, a decrease in women’s labor force participation rate, poor healthcare, lagging female to male literacy ratio, and income inequality.
The gap is the widest on the political empowerment dimension, with economic participation and opportunity being next in line. However, the gap on educational attainment and health and survival has been practically bridged.
India is the third-worst performer among South Asian countries, with Pakistan and Afghanistan trailing and Bangladesh being at the top. The report states that the country fared the worst in political empowerment, regressing from 23.9% to 9.1%.
Its ranking on the health and survival dimension is among the five worst performers. The economic participation and opportunity gap saw a decline of 3% compared to 2020, while India’s educational attainment front is in the 114th position.
India has deteriorated to 51st place from 18th place in 2020 on political empowerment. Still, it has slipped to 155th position from 150th position in 2020 on health and survival, 151st place in economic participation and opportunity from 149th place, and 114th place for educational attainment from 112th.
In 2020 reports, among the 153 countries studied, India is the only country where the economic gender gap of 64.6% is larger than the political gender gap of 58.9%. In 2021 report, among the 156 countries, the economic gender gap of India is 67.4%, 3.8% gender gap in education, 6.3% gap in health and survival, and 72.4% gender gap in political empowerment. In health and survival, the gender gap of the sex ratio at birth is above 9.1%, and healthy life expectancy is almost the same.
Discrimination against women has also been reflected in Health and Survival subindex statistics. With 93.7% of this gap closed to date, India ranks among the bottom five countries in this subindex. The wide sex ratio at birth gaps is due to the high incidence of gender-based sex-selective practices. Besides, more than one in four women has faced intimate violence in her lifetime.The gender gap in the literacy rate is above 20.1%.
Yet, gender gaps persist in literacy : one-third of women are illiterate (34.2%) than 17.6% of men. In political empowerment, globally, women in Parliament is at 128th position and gender gap of 83.2%, and 90% gap in a Ministerial position. The gap in wages equality for similar work is above 51.8%. On health and survival, four large countries Pakistan, India, Vietnam, and China, fare poorly, with millions of women there not getting the same access to health as men.
The pandemic has only slowed down in its tracks the progress India was making towards achieving gender parity. The country urgently needs to focus on “health and survival,” which points towards a skewed sex ratio because of the high incidence of gender-based sex-selective practices and women’s economic participation. Women’s labour force participation rate and the share of women in technical roles declined in 2020, reducing the estimated earned income of women, one-fifth of men.
Learning from the Nordic region, noteworthy participation of women in politics, institutions, and public life is the catalyst for transformational change. Women need to be equal participants in the labour force to pioneer the societal changes the world needs in this integral period of transition.
Every effort must be directed towards achieving gender parallelism by facilitating women in leadership and decision-making positions. Social protection programmes should be gender-responsive and account for the differential needs of women and girls. Research and scientific literature also provide unequivocal evidence that countries led by women are dealing with the pandemic more effectively than many others.
Gendered inequality, thereby, is a global concern. India should focus on targeted policies and earmarked public and private investments in care and equalized access. Women are not ready to wait for another century for equality. It’s time India accelerates its efforts and fight for an inclusive, equal, global recovery.
India will not fully develop unless both women and men are equally supported to reach their full potential. There are risks, violations, and vulnerabilities women face just because they are women. Most of these risks are directly linked to women’s economic, political, social, and cultural disadvantages in their daily lives. It becomes acute during crises and disasters.
With the prevalence of gender discrimination, and social norms and practices, women become exposed to the possibility of child marriage, teenage pregnancy, child domestic work, poor education and health, sexual abuse, exploitation, and violence. Many of these manifestations will not change unless women are valued more.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]2021 WEF Global Gender Gap report, which confirmed its 2016 finding of a decline in worldwide progress towards gender parity.
Over 2.8 billion women are legally restricted from having the same choice of jobs as men. As many as 104 countries still have laws preventing women from working in specific jobs, 59 countries have no laws on sexual harassment in the workplace, and it is astonishing that a handful of countries still allow husbands to legally stop their wives from working.
Globally, women’s participation in the labour force is estimated at 63% (as against 94% of men who participate), but India’s is at a dismal 25% or so currently. Most women are in informal and vulnerable employment—domestic help, agriculture, etc—and are always paid less than men.
Recent reports from Assam suggest that women workers in plantations are paid much less than men and never promoted to supervisory roles. The gender wage gap is about 24% globally, and women have lost far more jobs than men during lockdowns.
The problem of gender disparity is compounded by hurdles put up by governments, society and businesses: unequal access to social security schemes, banking services, education, digital services and so on, even as a glass ceiling has kept leadership roles out of women’s reach.
Yes, many governments and businesses had been working on parity before the pandemic struck. But the global gender gap, defined by differences reflected in the social, political, intellectual, cultural and economic attainments or attitudes of men and women, will not narrow in the near future without all major stakeholders working together on a clear agenda—that of economic growth by inclusion.
The WEF report estimates 135 years to close the gap at our current rate of progress based on four pillars: educational attainment, health, economic participation and political empowerment.
India has slipped from rank 112 to 140 in a single year, confirming how hard women were hit by the pandemic. Pakistan and Afghanistan are the only two Asian countries that fared worse.
Here are a few things we must do:
One, frame policies for equal-opportunity employment. Use technology and artificial intelligence to eliminate biases of gender, caste, etc, and select candidates at all levels on merit. Numerous surveys indicate that women in general have a better chance of landing jobs if their gender is not known to recruiters.
Two, foster a culture of gender sensitivity. Take a review of current policies and move from gender-neutral to gender-sensitive. Encourage and insist on diversity and inclusion at all levels, and promote more women internally to leadership roles. Demolish silos to let women grab potential opportunities in hitherto male-dominant roles. Work-from-home has taught us how efficiently women can manage flex-timings and productivity.
Three, deploy corporate social responsibility (CSR) funds for the education and skilling of women and girls at the bottom of the pyramid. CSR allocations to toilet building, the PM-Cares fund and firms’ own trusts could be re-channelled for this.
Four, get more women into research and development (R&D) roles. A study of over 4,000 companies found that more women in R&D jobs resulted in radical innovation. It appears women score far higher than men in championing change. If you seek growth from affordable products and services for low-income groups, women often have the best ideas.
Five, break barriers to allow progress. Cultural and structural issues must be fixed. Unconscious biases and discrimination are rampant even in highly-esteemed organizations. Establish fair and transparent human resource policies.
Six, get involved in local communities to engage them. As Michael Porter said, it is not possible for businesses to sustain long-term shareholder value without ensuring the welfare of the communities they exist in. It is in the best interest of enterprises to engage with local communities to understand and work towards lowering cultural and other barriers in society. It will also help connect with potential customers, employees and special interest groups driving the gender-equity agenda and achieve better diversity.