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Tough job: Govt’s new scheme to incentivise jobs creation is unlikely to trigger hiring

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Anurag Sharma (name changed) runs a logistics company in Delhi that owns five trucks and employs 22 workers. He keeps only eight employees on the company rolls to avoid hitting the threshold of higher compliance, which will inflate his costs. “I pay eight of them from the current account. The rest I pay in cash,” Sharma adds.

The government is now hoping to lure entrepreneurs like Sharma into hiring more people and putting them on the company rolls by promising to pay the new workers and employers’ contribution to the provident fund. For this, Finance Minister Nirmala Sitaraman on November 12 announced the Atmanirbhar Bharat Rozgar Yojana (ABRY) as part of a Rs 2.65-lakh-crore stimulus package. The announcements promised a total support of nearly Rs 30 lakh crore, including moratoriums on loan repayments, credit guarantee for MSMEs, support for the construction industry and home finance, free rations, and production-linked incentives. The government hopes these will revive the economy that has officially slipped into recession.

“The 100% government guarantee for MSMEs is a good step. The performance linked incentive is a great idea,” says Pronab Sen, chairman of the Ministry of Statistics and Programme Implementation’s Standing Committee on Economic Statistics. The former chief statistician also points out that the guarantee is meant to avoid loan default, and companies have to perform first to get the promised incentive. “But is performance in the companies’ hands?”

Companies’ performance, which will lead to more hiring, depends on revival of the domestic and international markets. And that rests on job creation and income restoration. Can the scheme kick-start that cycle?

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A Mumbai-based entrepreneur who let go 65 employees after his staffing services firm was crushed by the pandemic says he was a beneficiary of the Prime Minister’s Rozgar Protsahan Yojana, a predecessor of ABRY, launched in 2016 to incentivise hiring by employers. “I had availed of the benefits, but it never influenced my hiring decisions. In other words, it never made business sense to hire or fire one person because of the scheme.”

There are 630 million MSMEs in India, according to government data. Almost 90% of these are microenterprises, making them more vulnerable to economic shocks. The Sixth Economic Census of 2013-14 says only about 1.3% establishments employed more than 10 workers, the staffing threshold for mandatory insurance. Provident fund payments must start when a firm’s headcount touches 20. These companies’ finances are sometimes so precarious that their profit comprises evaded taxes and avoided welfare payments, say multiple promoters. That doesn’t bode well for workers in a country where 70% of salaried workers do not have written contracts, according to the Periodic Labour Force Survey 2018-19.

The Centre for Monitoring Indian Economy (CMIE) reported that unemployment inched up to 7% in October from 6.7% in September. October was the first month since May, when the lockdown was lifted, that employment fell, it said. Provisional EPFO data for September, announced on November 20, showed a net addition of 1.4 million.

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Large firms have been cutting costs to preserve profits but that takes a toll on B2B demand and has a cascading effect. CMIE reported that in the second quarter of the financial year, 1,897 companies made a record profit of Rs 1.3 lakh crore despite their top line shrinking by 5.7%. That reveals heavy cost cutting, mainly by slashing jobs and wages and squeezing suppliers amid falling sales.

While exports from Asia have been rising, MSMEs in India have not been able to participate in the trend due to a peculiar hurdle: shortage of containers. A sharp drop in imports due to the pandemic and India’s reluctance to import from China has meant fewer ships calling on Indian ports. This has disrupted the flow of containers. Merchandise imports fell over 36% between April and October, while exports declined 19% in that period.

Indore-based handicrafts exporter Suber Rampurwalla says he does 40% of his business between June and September, mainly catering to Christmas demand. Those consignments, about 25 containers, have to be shipped latest by October. “That is down about 40% this year,” he adds.

Khalid Khan, director of Mumbai-based auto parts exporter GEECO Trading Corporation, says consignments that were to be shipped in July and August had been rolled over for lack of containers. “Freight costs have more than doubled and we also have to pay rollover charges,” Khan adds.

Some hope rests on the rural economy, which has been propped up by heavy stimulus from the Centre and state governments. India is also reaping a bumper harvest even as bad weather in affected crops in some countries. “International prices of many commodities are at 3-4 year highs and so export parity has set in,” says Prerana Desai, head of research at Edelweiss Agri Services and Credit. “Edible oils are at record levels because of high import tariffs.” Good prices for a bountiful harvest is likely to raise rural incomes. The question is whether rural incomes would help boost consumption or savings.

“In uncertain times, the tendency is to save rather than spend,” says economist Sen. He says the government should do something to provide reassurance and there should be a clear recognition of what needs to be done and articulation of what it will do. “State governments that have been spending all these months will soon run out of money. Will the Centre continue its own stimulus and also fill in for the states? That is uncertain.”



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Education

Does NEP seek to end reservation policy? Yechury asks PM

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NEW DELHI: CPI(M) general secretary Sitaram Yechury wrote to Prime Minister Narendra Modi on Monday, asking him if the new National Education Policy sought to end the reservation policy in the educational institutions.

In the letter, Yechury highlighted how the NEP had no mention of reservations for the Scheduled Castes, Scheduled Tribes and Other Backward Class communities, and the differently-abled.

Approved by the Union cabinet in July, the NEP replaces the 34-year-old National Policy on Education framed in 1986. It is aimed at paving the way for transformational reforms in school and higher education systems.

“I am writing this letter to highlight one particular issue which is causing great anxiety especially among SC, ST, OBC communities and the disabled,” Yechury said. “It is truly shocking that NEP 2020 makes no mention of reservations for these sections, either for admissions or for appointments to teaching and non-teaching positions.”

In fact, even the word ‘reservation’ does not appear anywhere in the policy document. This has led to widespread concern whether this act of omission is deliberate, conveying the intention to reverse many decades of efforts to integrate quality, quantity and equity in the education system, according to Yechury.

The CPI(M) leader sought Modi’s response to a set of questions, which the former said were pertinent aspects that need to be discussed.

“Does NEP 2020 seek to end the policy of reservations for SC, ST, OBC and disabled in educational institutions? If not, could you please clarify as to why NEP2020 does not contain any mention of reservations?,” Yechury asked.

He alleged that various elements of the NEP were being rolled out in different parts of the country in an ad-hoc “piecemeal manner” without discussing with important stakeholders — state governments (education is on the concurrent list), students, teachers, non-teaching staff and experts.

“This is creating grave uncertainties and confusion about the actual direction proposed for the Indian Education system under this new policy, by your government,” he added.



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IISER Pune team wins gold at the iGEM 2020 synthetic biology competition

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PUNE: A team of 14 students from Indian Institute of Science Education and Research (IISER) Pune who competed at the 2020 international Genetically Engineered Machines (iGEM) contest, have won a gold medal at the International Giant Jamboree held virtually during November 13-22, 2020. The team also bagged the iGEMer’s award, meaning they were officially voted the best undergraduate team project by all the other teams in the competition, said an official release from IISER, Pune.

The iGEM (International Genetically Engineered Machine) competition is an international competition organized to give high school and collegiate students a platform to use synthetic biology to tackle real life problems facing the world today.

Describing the challenge, the official release said, “The IISER Pune team worked on developing a multi-faceted approach towards eradicating Malaria. They aimed to develop a library of protein-based therapeutics to combat the disease and a simple, cheap and efficient diagnostic kit along with an awareness campaign aimed at informing the public about the methods of prevention and cure. ”

Explaining the work behind the win, the release further said, “Working over 8 months, the team computationally designed short protein sequences that could be orally delivered as medication to stop the spread of Malaria in the human body. The team’s diagnostic kit consisted of an easy to use software that they developed with an accuracy of 95.45% that uses images of blood smears to detect Malaria. These images can be cheaply and easily obtained using the existing technologies of a Foldscope (a foldable microscope) and a Paper Centrifuge which cumulatively cost under 100 rupees.”



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Karnataka schools reopening news: Karnataka COVID-19 panel against reopening schools in December

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BENGALURU: The Technical Advisory Committee for COVID-19 in Karnataka has recommended to the state government not to reopen schools in December ahead of Chief Minister B S Yediyurappa’s a key meeting on Monday to take a call on the matter. “After extensive deliberations it was unanimously resolved not to reopen the schools in December, proceedings of the COVID-19 52nd Technical Advisory Committee (TAC) meeting held on Sunday said. The COVID-19 scenario shall be reviewed in the last week of December to consider reopening of schools at an appropriate time subsequently, it said, adding that this recommendation was for the consideration of the government in the larger public interest of the state. The schools have remained closed since March when the national lockdown was first enforced to combat COVID-19. The proceedings of the meeting, headed by Chairman Dr M K Sudarshan, said, the current scenario of COVID-19 in the state was showing a declining trend with around 1,700 cases and 20 deaths reported daily.

It was important to consolidate gains made after great efforts in the last eight months to contain the disease in the state, the panel said, pointing to the spike or resurgence of cases in Delhi, Haryana, Gujarat, Rajasthan and others.

Besides, the months of December and January due to winter are cold and conducive to occurrence and spread of respiratory infections, including COVID-19, it said, adding that the epidemiological perspective based on a state survey done in September is that there may be a spike in cases in the districts with low prevalence.

Chief Minister Yediyurappa and Primary and Secondary Education minister S Suresh Kumar are holding a meeting on Monday with the Education Department and other government officials to discuss reopening of schools.

The government has also taken suggestions from parents, health committee officials and educational experts, and other stakeholders.

Ahead of the meeting Yediyurappa said, “After taking note of the opinion expressed in the meeting, gathering suggestions from every one, we will take a decision. We will discuss and let you know the outcome.”

“Schools had to open in June, six months have gone. There are various opinions like not to open schools, to open for selective clases. Also government school students in rural areas are not getting the benefit of online classes,” Kumar said.

There were also social problesms arsing with reports about child labour and child marrigaes, he said.

The graduate, post-graduate, diploma and engineering colleges have reopened on November 17 in the state with preventive measures for COVID-19, but the attendance of students is said to be very poor so far.



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