📰 Unemployment rate dips in first quarter of 2022: survey
Rate for urban areas decreased to 8.2% in the first quarter
•The Periodic Labour Force Survey (PLFS) has reported that the unemployment rate for urban areas has decreased to 8.2% in January-March 2022 from 8.7% in the previous quarter (October-December 2021) and 9.3% in the same quarter in 2021. The survey report, released here on Thursday, defines unemployment rate as the percentage of unemployed persons among the labour force.
•On Tuesday, the National Statistics Organisation (NSO) released the survey results for 2020-21, which saw a decrease of 0.6 percentage points in unemployment rate that reached 4.2%, compared to 4.8% in 2019-20.
•The quarterly survey results for January-March of this year said the unemployment rate among girls and women aged 15 and above in urban areas declined to 10.1% from 11.8% a year ago. It was 10.5% in the previous quarter. The opening up of workplaces after the lockdowns seems to have had an impact on the unemployment rate. The unemployment rate among men fell to to 7.7% compared with 8% in the corresponding quarter of the previous year and 8.3% in the previous quarter.
•The labour force participation rate in Current Weekly Status (CWS) in urban areas declined to 47.3% in the January-March quarter of 2022. It was 47.5% during January-March 2021 and 47.3% during October-December 2021. Labour force is defined as the part of the population which supplies or offers to supply labour for pursuing economic activities for the production of goods and services and, therefore, includes both employed and unemployed persons.
•The worker population ratio in CWS in urban areas was 43.4% in January-March 2022, which showed an increase from 43.1% in January-March 2021 and 43.2% in October-December 2021.
Why do governments and central banks view cryptocurrencies negatively? Do these virtual currencies have intrinsic value?
•Bitcoin has lost more than two-thirds of its value while Ethereum has lost almost 80% from its peak. As a result, the overall market capitalisation of cryptocurrencies has dropped under $1 trillion for the first time since January 2021.
•Most analysts believe that the fall in the price of cryptocurrencies is in line with the fall in prices of stocks as central banks such as the U.S. Federal Reserve tighten monetary policy to fight inflation.
•Cryptocurrency enthusiasts argue that cryptocurrencies have always been subject to extreme price swings and that the current crash is a good time to buy these virtual currencies at a tremendous bargain. Sceptics, however, believe that the current crash could very well be the end of the road for cryptocurrencies.
•The story so far: Bitcoin and many other cryptocurrencies have been crashing since they hit an all-time high late last year. Bitcoin has lost more than two-thirds of its value since it hit a peak of around $69,000 in November last year and is currently trading at around the $22,000 mark. Ethereum, another cryptocurrency popular among investors, has lost almost 80% from its peak. As a result, the overall market capitalisation of cryptocurrencies has dropped under $1 trillion for the first time since January 2021. The crash, which shows no signs of reversal yet, seems to have led to a drop in investor enthusiasm with trading volumes in Indian cryptocurrency exchanges dropping by 90% from their peak.
Why are cryptocurrencies crashing?
•It may not be possible to pinpoint the exact reasons why investors are fleeing cryptocurrencies at the moment. Most analysts believe that the fall in the price of cryptocurrencies is in line with the fall in prices of stocks and other assets as central banks such as the U.S. Federal Reserve tighten monetary policy to fight price rise. As central banks withdraw liquidity from the market, there’s less money chasing assets, which in turn causes the prices of assets to drop. Others believe that the crash could also mark the popping of the bubble that has driven the prices of cryptocurrencies to stratospheric levels.
•Sceptics have long argued that the price of cryptocurrencies seems driven more by speculative fervour fuelled by easy monetary policy than by any fundamental factors. For instance, the extreme volatility in the price of cryptocurrencies was seen by many as a feature that ruled out the use of cryptocurrencies as money. Such extreme volatility simply seemed to reflect investor behaviour that bordered on gambling. These sceptics also pointed to the fact that even though cryptocurrency prices were rising aggressively, the use of cryptocurrencies for real-life transactions was low. So, in essence, there was very little reason to believe that the rally in cryptocurrencies was driven by their wider acceptability as an alternative to fiat currencies.
How do governments view cryptocurrencies?
•Some sceptics have also argued that even though private cryptocurrencies can rise to the status of alternatives to fiat currencies over time, governments and central banks may not allow this to happen. Many countries have taken several steps to discourage the widespread use of cryptocurrencies. While countries such as China and Russia have opted to impose outright bans on cryptocurrencies, others such as India have tried to tax and regulate them heavily. In India, while the government has not imposed an outright ban on cryptocurrencies, the Reserve Bank of India has been quite vocal about the need to ban them completely. It is no surprise that central banks are wary of private cryptocurrencies since they challenge the monopoly that central banks currently enjoy over the money supply of an economy. If cryptocurrencies became widely acceptable, it would affect the control that central banks possess over the economy’s money supply. It would also affect the ability of governments to fund their spending by creating fresh money as citizens could then opt to switch to alternative currencies.
Will cryptocurrencies rise again?
•Cryptocurrency enthusiasts argue that cryptocurrencies such as Bitcoin have always been subject to extreme price swings and that the current crash is a good time to buy these virtual currencies at a tremendous bargain. To be fair, many crypto-enthusiasts have been handsomely rewarded in the past when they bought cryptocurrencies during times of panic selling. They argue that cryptocurrencies, just like gold, protect investors against the risk of price inflation. It should be noted that, unlike fiat currencies issued by central banks, the supply of various cryptocurrencies is limited by design. By holding their wealth in cryptocurrencies that either maintain their value or even appreciate in value over time, investors can protect themselves against the debasement of their wealth by central banks.
•Sceptics, however, believe that the current crash could very well be the end of the road for cryptocurrencies. Even if cryptocurrencies manage to recover from the current crash, they may still not manage to hold on to their gains, because cryptocurrencies possess no fundamental value as money. In fact, some have argued that the real value of cryptocurrencies is somewhere close to zero. They point out that even the most popular cryptocurrencies such as Bitcoin are still not used very much in the daily purchase and sale of goods and services in the real economy. It should be noted that investors generally believe that the price of an asset gravitates towards its intrinsic or fundamental value in the long-run even though it may diverge from its fundamental value in the short-term.
•Crypto-enthusiasts, however, argue that while cryptocurrencies may not be widely accepted as a currency, they still represent an independent asset class like gold that can help investors protect their wealth from central banks. This argument is still prone to the criticism that cryptocurrencies do not possess any independent value of their own to be compared to gold and silver, and thus cannot offer any wealth protection over the long-run.
•Precious metals such as gold and silver are far more acceptable than cryptocurrencies, which is what gives them their intrinsic value. In fact, precious metals served as currencies for centuries and have been widely used for industrial and other purposes.
•No cryptocurrency has such a record. The fact that precious metals are limited in supply definitely helped boost their value. But limited supply alone cannot make cryptocurrencies like Bitcoin a valuable asset like gold and silver.
📰 Bulldozer injustice to ‘teach a lesson’
In today’s interpretation of the law in some States, the tempter’s provocation is overlooked and the tempted found guilty
•Shakespeare, speaking through Angelo in Measure for Measure, asks a pertinent question that resonates even today: “The tempter or the tempted, who sins most?” In the law on sedition, the Supreme Court of India made it clear that the one inciting violence is the guilty person. Ergo, the tempter sins most. In today’s interpretation of the law, it does not matter whether there is incitement or not; a charge of sedition will be slapped anyway if the powers that be do not ‘like’ what somebody has said or tweeted.
Bulldozer justice
•But the law gets more complicated when a fringe but influential national spokesperson incites violence by saying something offensive about the Prophet. The naya law seems to overlook the provocation of the tempter, but finds the tempted guilty. The guilty are then punished by a common judge, jury and executioner and also given double engine punishment: arrest, followed by arbitrary and retributive demolition of their residential accommodation, through what is now commonly referred to as bulldozer justice. I prefer to call it bulldozer injustice.
•There are adequate provisions in the Indian Penal Code for the police to act against any violator, but the law seems to be inapplicable if the tempter is an influential fringe or well connected. So, a call for goli maro is ignored; senseless lynching invites garlands for the accused; a call for genocide is a bit of a nuisance. Is it then surprising that something offensive said about the Prophet invites only a light rap on the knuckles? If that is deemed to be punishment enough, then the exercise of a fundamental right to protest by thousands of people across the country is understandable. Persons accused of far lesser offences have had charges of sedition foisted on them. The less fortunate have been subject to anti-terror laws such as the Unlawful Activities (Prevention) Act, while the unfortunate are imprisoned under the National Security Act (NSA) or the Public Safety Act.
When the state acts
•Is there a constitutional right to resort to violence during a protest? Absolutely not. The Constitution of India permits only a peaceful assembly without arms. Stones or brickbats can be weaponised and are a no-no. Violence in protests cannot be justified under any circumstances, whatever the cause. A light rap on the knuckles to the tempter does not warrant the use of a knuckle duster by the tempted.
•But, as they say, violence begets violence. And so, the state comes down on the violent protesters with a heavy hand and the apocryphal iron fist made popular a couple of years ago by a learned Supreme Court judge. The state then uses its machinery, literally, in the form of bulldozers to demolish the residential premises of those believed to be indulging in violent protests. The long arm of the law is employed to identify the protestors and a list is prepared of those who need to be ‘taught a lesson’. Remember, a similar stratagem was used in 1984 following the assassination of Mrs. Indira Gandhi. Back then, we called it genocide, while today we call it ‘teaching a lesson’.
Fundamental rights
•Some of the violent protesters own a house or a shop or a stall but many do not. Activist Javed Mohammad of Prayagraj, Uttar Pradesh, was unlucky enough that his wife owned a house. So, as a chapter in the lesson to be taught, he was first jailed and then her house demolished through a constitutional violation. Ironically, two judgments of the Supreme Court from Uttar Pradesh consider shelter as a fundamental right. In U.P. Avas Evam Vikas Parishad vs Friends Coop. Housing Society Ltd (1996) it was held that “The right to shelter is a fundamental right, which springs from the right to residence assured in Article 19(1)(e) and the right to life under Article 21 (of the Constitution)”. In Chameli Singh vs State of Uttar Pradesh (1996) it was held that “The right to shelter when used as an essential requisite to the right to live should be deemed to have been guaranteed as a fundamental right”. Those lucky enough not to have relatives owning a house will probably get brutally thrashed like the hapless victims of a lathi charge in a police station in Saharanpur, Uttar Pradesh, whose video has gone viral.
•How does the state justify the constitutional transgression? It says, as reported, that Mr. Javed’s house was illegal and a notice to demolish it was served on him (or pasted on the wall) and he did not avail the opportunity of a hearing granted as per law. It is difficult to believe the state for a variety of reasons.
An illegality
•First, the state collected taxes from Mr. Javed for the so-called illegal construction. Was the illegality of construction condoned? If not, was not the state complicit in perpetuating the illegality and also earning out of it? Has any action been taken by the state against its complicit officials?
•Second, the well-settled principle requiring state action to be just, fair and reasonable mandates, in the absence of any terrible urgency, another opportunity to Mr. Javed to appear for the hearing. Maybe he was sick or out of town. Why was this routine ‘another opportunity’ denied to him?
•Third, Mr. Javed’s house was demolished on a Sunday which is a government holiday. Even in NSA cases, the Supreme Court excludes Sundays for dealing with a representation against preventive detention. It is good if the government works on holidays as well, but could not the benefit of a government holiday be passed on to Mr. Javed by an “efficient” government? Let us be realistic.
•Fourth, the demolition order was pasted on the wall of Mr. Javed’s house on Saturday night and the demolition took place on Sunday morning, giving no time to him or his wife to challenge the correctness of the demolition order in a court of law or file an appeal. Is this just, fair and reasonable?
•Fifth, the Delhi High Court decided a case in which the Uttar Pradesh police unlawfully whisked away two residents of Delhi and managed to have them sent to judicial custody for almost two months on no charges at all. The Additional Advocate General of U.P. admitted that the police officers concerned made false statements before the court, created false documents in the investigation and even before the Special Investigation Team constituted to investigate the issues flagged by the High Court (Teenu vs Govt. of NCT of Delhi) (2022). Clearly, the U.P. police have a rather unenviable track record. Facts and documents in Mr. Javed’s case may equally be manufactured. Sorry, but the demolition saga smacks of vendetta, legal and factual mala fides.
Need for accountability
•What is the solution? First, the state should adequately compensate Mr. Javed to enable him to rebuild his house. Second, it should give him an equal amount of compensation for the mental distress caused to him and his family. Third, the officers concerned at all levels must be held accountable and punished enough to ‘teach them a lesson’. Accountability jurisprudence must take root in India and the culture of impunity banished. Fourth, disband the Uttar Pradesh State Human Rights Commission, a body that apparently sees no evil, hears no evil and does no good.
•Conclusion: The tempter has achieved her purpose and the tempted can only feel sorry for themselves and say goodbye to the rule of law.
📰 Waiting for jobs
The Centre’s decision to recruit personnel is a nod to the festering unemployment issue
•For a nation that has had a significant demographic dividend — the working age population is much larger than the non-working age sections — finding productive employment for its youth was to be an imperative for India. Yet, in the last few years, unemployment has remained a major concern — the leaked Periodic Labour Force Survey (PLFS) in 2018 revealed that India’s unemployment rate was the highest (6.07%) in four decades. The latest PLFS suggests that the numbers now are not so drastic, with the overall unemployment rate at 4.2% in 2020-21 compared to 4.8% in 2019-20 and the labour force participation rate (LFPR) increasing to 41.6%, up from 40.1% in 2019-20. In terms of the more widely used statistic internationally, the current weekly status of unemployment, the figure of 7.5% for all persons in 2020-21 is still worrying. But, the PLFS data will not bring much cheer to the Government despite a decrease in unemployment, according to official data. This is because the decrease, says the PLFS, has also coincided with the transfer of employment into lower productive and unpaid jobs away from salaried employment. Worryingly, industrial jobs have decreased with more employment in agricultural and farm-related jobs — a trend that accelerated following the lockdown and has not reversed since then. Unemployment rates among the educated (above secondary education — 9.1%) and the youth (age between 15-29 — 12.9%) have only declined marginally.
•Wage rates have continued to remain lower for those employed in either salaried jobs or self-employed compared to the pre-pandemic period, with the increases being marginal in the year following lockdown-driven days of the pandemic. It is clear that the Government must tackle unemployment and, concomitantly, the quality of employment issue, on a war footing. In this regard, Prime Minister Narendra Modi’s announcement that the Government will be recruiting 10 lakh personnel within the next 18 months (vacancies in the Railways, the armed forces and GST departments among others) should be seen as a step in the right direction. The latest data showed that there were 8.86 lakh vacant jobs among all central government civilian posts as of March 2020. Mr. Modi’s announcement was not about the creation of a large chunk of new jobs; the bulk of the promised employment is to fill up vacancies. But even this measure would be ameliorative in the real economy that continues to remain distressed, a consequence of the BJP-led government’s mismanagement and the effects of the pandemic in the last few years. The country cannot afford to squander more years in its race to reap the benefits of its demographic dividend, and the push to provide jobs for those seeking to enter the labour force, even if belated, will help ease matters for the medium term.
