Sample Material of Current Public Administration Magazine
1.Accountability & Responsibility
Finding a safe approach to public finance
The Economic Survey 2021-22 reveals fissures in the economy. While high frequency indicators hold promise of India’s swift rebound, there are signs of the unequal nature of this recovery. The service sector is limping back to pre-pandemic levels as agriculture and manufacturing carry the weight of the recovery. On the demand side, weak private consumption remains a concern. This contrasts starkly with a record increase in the operating profits of corporates and increase in prices, including that of equity and housing.
Though the troughs in economic activity from repeated lockdowns are now less pronounced, it is a moment to reflect if the worst has passed. Tax collections, often used as an indicator of the health of the economy, provide an incomplete picture. Buoyant direct tax revenues signal that incomes of taxpaying population are resilient. However, the impact of the pandemic on the non-tax paying population remains unmeasured. Taxpayers expect reliefs while there is pressure to ramp up social sector spend. These competing interests leave the government in a bind. Knowing well that fiscal consolidation is expected of it and no new source of tax that can pay for the full cost of recovery, the government has adopted a safe approach to the budget.
2. Indian Government and Politics
What three recent cases say about our labyrinthine legal system
The Supreme Court (SC) decided a case in January 2022 and the judgment made it to the headlines. If a Hindu man dies intestate (without a will), the daughter can inherit her father’s self-acquired property. GurunathaGounder (I) had two sons, MarappaGounder and RamaswamyGounder. RamaswamyGounder died before his elder brother, Marappa, who also died a long time ago, in 1949. A minor point was raised about whether MarappaGounder died in 1949, or in 1957.
Why is that timeline important? Because the Hindu Succession Act was passed in 1956 and it governs intestate succession among Hindus. This bit, about the year of Marappa’s death, was examined by a trial court (judgment of 1994) and the Madras High Court (judgment of 2009) and both courts decided Marappa died in 1949, not 1957. The SC saw no reason to question that established fact. Nor was another fact questioned: In 1938, Marappa bought the property through his own resources. It wasn’t joint family property. He could have dealt with it as he chose, had he left a will. Unfortunately, he died intestate. MarappaGounder had only one daughter, KupayeeAmmal, and no sons. She died in 1967 and left no children. RamaswamyGounder had one son and four daughters. The son was GurunathaGounder (II). The daughters were Thangammal (dead now), Ramayeeammal (dead now), Elayammal and Nallammal. Thangammal, dead now, was the original plaintiff, who applied for partition.
When MarappaGounder died, who should inherit his property? Should it be KupayeeAmmal, the only daughter? Or, since she was a woman, should it be RamaswamyGounder’s son, GurunathaGounder (II)? When KupayeeAmmal died, who should inherit the property? Should it be GurunathaGounder (II) and his heirs, or should his four sisters also have a share?
3. Welfare Administration
Reducing welfare spending right now is a dangerous gamble
A week before the Union budget was to be presented, the chairman of Hindustan Unilever (HUL) wanted the finance minister (FM) to plan for a Mahatma Gandhi National Rural Employment Guarantee Scheme-type programme for the urban poor. He reasoned that personal consumption, which constitutes nearly two-thirds of India’s economy, has been badly hit and schemes like MGNREGA should be extended and expanded until consumption recovers fully.
This is a stunning reversal of opinion about MGNREGA, which was lampooned just a decade ago by the private sector, policy commentators and then Chief Minister Narendra Modi as a “dole” for the poor that would render them lazy and indolent.
Ironically, the Economic Survey of 2021-22 proudly states that MGNREGA provided a safety net to more than 110 million poor Indians. For context, all the companies listed in the stock exchange and unicorn start-ups, put together, employ a mere seven million people.
But, in actuality, more than 110 million would have been reliant on MGNREGA this year, had the programme not run out of money after just six months in the current financial year. Demand for work under MGNREGA, which is by design an unemployment insurance scheme for people plunged into penury, is at record highs and ostensibly many were turned away due to lack of funds.
4. Current Topic
A growth-focussed monetary policy
The underlying framework of the Union Budget, though less inflationary than a consumption-led budget would have been, remained growth-focussed. That could have nudged the RBI to announce a formal policy normalisation path. Moreover, since the last monetary policy review, the risks stemming from the Omicron variant have proved to be milder relative to the Delta version. But these concerns have been replaced by new risks emanating from elevated crude oil prices and the possibility of aggressive policy measures by the US Federal Reserve. Yet Mint Road has chosen to stay accommodative. Clearly, growth is the greater concern.
The status quo has positively surprised markets who had pencilled in a reverse repo rate hike. The benchmark 10-year yield, which had started to ascend a few months back, and got a further lift from the sharp rise in the government’s borrowing programme for the next fiscal year, softened a bit. That said, even with an accommodative stance, the RBI continues normalising liquidity in a calibrated manner by layering a dynamic approach and restoring the liquidity management framework of February 2020.
The global situation, however, is different. With inflation surprising on the upside and being viewed as a potent threat, many central banks are tilting towards faster tightening. Several emerging market economies, especially those following inflation targeting, had started raising interest rates last year in response to inflationary pressures from food and energy prices. With geopolitical tensions in Central Asia and Ukraine escalating, the spike in energy prices is fomenting inflation even as global growth slows. Currently, China is the only major economy cutting rates to stem sharply slowing domestic demand. Many south-east Asian central banks are staying accommodative since their inflation remains largely benign and some like the Bank of Thailand remain tolerant to inflationary pressures.
Among the systemically important ones, the Bank of England was the first to raise rates. Europe, too, is facing higher-than-anticipated inflation and the European Central Bank, which has so far kept its options open, is now expected to advance normalisation.
5. Jail Administration
Time to end employer criminalisation
The Vishnu Sahasranama presciently anticipated India’s 75-year journey to 26,134 employer jail provisions — Saha-srarchisapta-jihvahsaptai-dhasapta-vahanah, Amoortiranaghochintyobhaya-krudbhaya-nashanah (amateur translation: Fear is created so it can be taken away). This excessive criminalisation hasn’t created world-beating honesty or the world’s largest jail system but has painful consequences for corruption, formal jobs, and justice. The PM’s last Independence Day speech made lower regulatory cholesterol a policy priority: 22,000 citizen compliances have since been purged and the recent budget skillfully prioritised Ease of Doing Business (EODB) 2.0. This purge must extend to employer criminalisation for three reasons — corruption, formal jobs and justice.
A new paper titled Jailed for Doing Business by GautamChikermane of ORF and Rishi Agrawal of TeamleaseRegtech painstakingly documents the imprisonment risks faced by Indian entrepreneurs across 1,536 laws in seven categories — labour, secretarial, environment health and safety, finance and taxation, industry-specific, commercial, and general. Eight hundred and forty-three laws have 26,134 criminal provisions. Fifty-five per cent prescribe more than one year of jail, 67 per cent have more than five jail provisions, and one law has 700 ways to end up in jail! Let’s dive into the case for purging: