Editorial 1: Testing times: On India and fast-shifting dynamics in key markets
Context:
- India’s goods exports fell for the third time in five months during February. The $33.8 billion of shipments marked an 8.8% drop from a year ago.
Trade figures 2022-23
- As per Economic Survey 2022-23, Indian economy had recovered from COVID-19 pandemic and performed robustly in trade.
- External Sector position in february 2023 was as follows:
- Merchandise exports were US$ 332.8 billion for April-December 2022.
- India diversified its markets and increased its exports to Brazil, South Africa and Saudi Arabia.
- To increase its market size and ensure better penetration, in 2022, CEPA with UAE and ECTA with Australia come into force.
- India is the largest recipient of remittances in the world receiving US$ 100 bn in 2022. Remittances are the second largest major source of external financing after service export
- As of December 2022, Forex Reserves stood at US$ 563 bn covering 9.3 months of imports.
- As of end-November 2022, India is the sixth largest foreign exchange reserves holder in the world.
- The current stock of external debt is well shielded by the comfortable level of foreign exchange reserves.
- India has relatively low levels of total debt as a percentage of Gross National Income and short-term debt as a percentage of total debt.
Recent developments
- In recent times of generally exuberant export growth, the only steeper decline was recorded in October 2022. A sharp 29% collapse in oil exports, a 12% fall in chemical shipments and a 10% contraction in engineering goods outflows — accounting for almost half of India’s merchandise exports — propelled February’s decline.
- But the effects of faltering global demand went beyond, dragging down 13 more of India’s top 30 export items. February’s exports are still 7.3% above October’s number, but the immediate outlook is reverting to the gloom that prevailed in the last quarter of 2022 — about large parts of the world slipping into recession.
- Resilient economic data from major markets over the past couple of months had infused a belief that the world economy may just end up avoiding the worst that was feared in 2023. But the Ides of March dispelled those hopes — for now, at least.
- Retail sales in the U.S., India’s largest export destination, soared 3% in January as a positive surprise, but slumped in February. The failures at two U.S. banks and the disclosure of vulnerabilities by European banker Credit Suisse amid the U.S. Federal Reserve’s scramble to rein in inflation, suggest this momentum may not turn around anytime soon.
| Recently, the U.S. banking regulators shut down the Silicon Valley Bank (SVP) Financial Group, causing shockwaves in the startup community, including in India.The collapse of Silicon Valley Bank was caused by the US Federal Reserve’s decision to raise interest rates, leading to less appetite for risk and resulting in investors pulling out their money to meet their liquidity needs. |
- With manufacturing already shrinking for two quarters, a sustained spell of slipping shipments could mean factory job losses and dent consumption. As it is, the 8.2% drop in February’s imports — the sharpest in a three-month contractionary streak and the lowest import bill in almost a year ($51.3 billion) — does not reflect well on domestic demand that is hoped to insulate the economy from global shocks.
- The government is looking to curb inessential imports to keep the deficit in check amid weaker exports. But this is tricky territory where factors such as quality, pricing and supply chain linkages matter too, and missteps could curb consumer (and investor) choice.
Conclusion:
- With the deficit already constricted sharply over January and February from the record $29.2 billion level hit last September, policy bandwidth may be better used to support exporters to tap new markets and react more nimbly to fast-shifting dynamics in key markets. The long-dithered rejig of the 2015-20 foreign trade policy must not be delayed any further, at any cost.
Editorial 2: On reservation for women in politics
Context:
- A day before her appearance in front of the Enforcement Directorate in the Delhi liquor policy case, Bharat Rashtra Samithi (BRS) leader K. Kavitha launched a hunger strike recently seeking early passage of the long-pending Women’s Reservation Bill.
History of political reservation for women
- The issue of reservation for women in politics can be traced back to the Indian national movement. In 1931, in their letter to the British Prime Minister, submitting the official memorandum jointly issued on the status of women in the new Constitution by three women’s bodies, leaders Begum Shah Nawaz and Sarojini Naidu wrote, “To seek any form of preferential treatment would be to violate the integrity of the universal demand of Indian women for absolute equality of political status.”
- The issue of women’s reservation came up in Constituent Assembly debates as well, but it was rejected as being unnecessary. It was assumed that a democracy would accord representation to all groups. Over the course of time, women’s reservation in Indian legislatures became a recurrent theme in policy debates.
- For instance, in the Committee of the Status of Women in India, set up in 1971, a majority continued to be against reservation for women in legislative bodies; but all members of the committee supported reservation for women in local bodies. Slowly, many State governments began announcing reservations for women in local bodies.
- National Perspective Plan for Women recommended in 1988 that reservation be provided to women right from the level of the panchayat to that of Parliament.
- These recommendations paved the way for the historic enactment of the 73rd and 74th amendments to the Constitution which mandate all State governments to reserve one-third of the seats for women in Panchayati Raj Institutions and one-third of the offices of the chairperson at all levels of the Panchayati Raj Institutions, and in urban local bodies, respectively. Within these seats, one-third are reserved for Scheduled Caste/Scheduled Tribe women.
- Many States such as Maharashtra, Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand and Kerala have made legal provisions to ensure 50% reservation for women in local bodies.
Women’s Reservation Bill provisions:
- After local bodies, the next step was to ensure reservation in Parliament, but this has been a difficult fight. The Women’s Reservation Bill proposes to reserve 33% of seats in the Lok Sabha and State Legislative Assemblies for women.
- It was first introduced in the Lok Sabha as the 81st Amendment Bill in September 1996 by the Deve Gowda-led United Front government. The Bill was referred to a joint parliamentary committee but it lapsed with the dissolution of the Lok Sabha.
- In 1998, the Atal Bihari Vajpayee-led National Democratic Alliance (NDA) government; In 2008, the Manmohan Singh-led United Progressive Alliance (UPA) government also tried to pass the bill but failed to get support of both Houses of Parliament.
- In 2014, the BJP promised one third reservation for women in its manifesto and repeated the promise in its 2019 agenda. But there has been no movement from the government in this regard.
Arguments for the Bill
- Proponents of the Bill argue that affirmative action is imperative to better the condition of women since political parties are inherently patriarchal.
- Despite the hopes of the leaders of the national movement, women are still under-represented in Parliament. Reservations will ensure that women form a strong lobby in Parliament to fight for issues that are often ignored.
- There is now evidence that women as panchayat leaders have shattered social myths, been more accessible than men, controlled the stranglehold of liquor, invested substantially in public goods such as drinking water, helped other women express themselves better, reduced corruption, prioritised nutrition outcomes, and changed the development agenda at the grassroots level.
- Today, India has a high percentage of crimes against women, low participation of women in the workforce, low nutrition levels and a skewed sex ratio. To address all these challenges, it is argued, we need more women in decision-making.
- Proponents such as Brinda Karat argue that the discussion is not about a Bill alone, but about changing powerful, entrenched interests in India’s polity.
Arguments against the Bill
- Many opponents of reservation for women argue that the idea runs counter to the principle of equality enshrined in the Constitution. They say that women will not be competing on merit if there is reservation, which could lower their status in society.
- Women are unlike, say, a caste group, which means that they are not a homogenous community. Therefore, the same arguments made for caste-based reservation cannot be made for women.
- Women’s interests cannot be isolated from other social, economic and political strata.
- Some argue that reservation of seats in Parliament would restrict the choice of voters to women candidates. This has led to suggestions of alternate methods including reservation for women in political parties and dual member constituencies (where constituencies will have two MPs, one of them being a woman).
- But some parties have pointed out that even these may not work as parties may field women candidates in unwinnable seats, or women may contest the elections but not get voted to power, or they may get relegated to a secondary role.
- As men hold primary power as well as key positions in politics, some have even argued that bringing women into politics could destroy the “ideal family”.
Conclusion
- Only about 14% of the members in Indian Parliament are women, the highest so far. According to the Inter-Parliamentary Union, India has a fewer percentage of women in the lower House than its neighbours such as Nepal, Pakistan, Sri Lanka and Bangladesh — a dismal record.
- In this context, reservation for women could be a game changer for political empowerment of Indian women
