Editorial 1 : Flip flop flip
Introduction: Any economic growth needs a predictable environment. Corporates want stability and predictability in government policy. Farmers and agri-entrepreneurs also desire it but are usually denied the same.
The recent flip-flops in the government’s policy
- In May 2022 government decided to ban all wheat exports, days after a union minister spoke of India being ready to feed the world and sending trade delegations to explore new markets for the cereal.
- More recently, onion exports were, first, in November 2023, not allowed at a floor price below $800 per tonne and, a month later, stopped altogether.
- Earlier this month, days before Lok Sabha polls in Maharashtra’s main onion-growing belt, the ban was removed.
- But the shipments are now subject to both a minimum export price of $550 per tonne plus a 40 percent duty.
- Imagine if corporates were to be put through such policy flip-flops.
- Forget improving the investment climate or ease of doing business, these amount to government-created uncertainty.
Government’s justification for policy changes
- The government’s defence of export curbs — extended to non-basmati rice, sugar and even de-oiled rice bran, a livestock feed ingredient — is that they are aimed at controlling food inflation and protecting consumers.
- This argument, however, ignores the interests of producers, who are mostly farmers with limited lobbying power, except during election time.
- A Rs 5/kg increase in onion prices may stretch the monthly budget of an average household consuming 5-6 kg by Rs 25-30.
- But for a grower harvesting 10 tonnes of the bulb per acre, a Rs 5/kg price reduction translates into a revenue loss of Rs 50,000.
- What is an inflation problem for the consumer is a livelihood issue for the farmer.
- The latter also does not have the flexibility to switch crops like the former can, by buying less of one and more of another item.
The decline in India’s agricultural exports
- India’s agricultural exports, as an analysis in Indian Express newspaper has shown, fell to $48.8 billion in 2023-24 from the record $53.2 billion of the previous fiscal.
- Much of this decline has been a fallout of the export bans and restrictions imposed in response to food inflation and domestic shortfall concerns.
The need for a new agriculture import-export policy
- The country needs a new export-import policy balancing the interests of consumers and producers as well as the short- and long-term imperatives of the farm sector.
- Controls, even where necessary, should be temporary and rules-based, taking the form of tariffs as opposed to outright bans or quantitative restrictions.
- The government can also create a buffer stock of all essential commodities to enable market intervention and curb excess price volatility.
- Ultimately, it needs to realise that building export markets takes time and effort, while undoing that requires just a stroke of the pen.
- Also, nothing hurts consumers more in the long term than hurting producers.
Conclusion: The country needs to balance the interests of both. Controls, even where necessary, should be temporary and rules-based, taking the form of tariffs as opposed to outright bans.
Editorial 2 : At ease with diversity
Introduction: A recent study by three members of the PM-Economic Advisory Council in India, Shamika Ravi, Abraham Jose and Apurv Mishra, “Share of Religious Minorities – A Cross-Country Analysis,” confirms this trend about the radically changing demographics of the OECD countries.
The Great Replacement Theory for European Demographic Change
- It was first talked about in the late 19th century, it argued that Jews and some Western elites were conspiring to replace white Americans and Europeans with people of non-European descent, particularly Asians and Africans.
- In France, Renaud Camus formally codified this theory through a book in 2011 Le Grand Remplacement.
- Surveys show that around 60 per cent of the French believed some aspects of this theory while not less than a third of Americans and Europeans also do so.
- The Great Replacement Theory is no longer just a theory, “but a reality” as per many European thinkers.
- Let’s take Amsterdam, the capital. It currently consists of 56 per cent migrants, The Hague has 58 per cent migrants and Rotterdam has almost 60 per cent migrants.
- Of course, most of these immigrants come from non-Christian, Non-Western African and Middle Eastern countries.
- London has 54 per cent migrants and Brussels has 70 per cent migrants.
A recent study by the PM-Economic Advisory Council on demographic change
- A recent study by three members of the PM-Economic Advisory Council in India, Shamika Ravi, Abraham Jose and Apurv Mishra, “Share of Religious Minorities – A Cross-Country Analysis,” confirms this trend about the radically changing demographics of the OECD countries.
- Drawing data points from 1950 to 2015, a three-generation period of 65 years, this study concludes that of the 35 out of the 38 OECD countries or the “developed world” it analysed, 30 countries have witnessed a steep decline in the share of the majority religious denomination – Roman Catholics in this case.
- The study covers 167 countries — by far the most exhaustive, although basic — and finds that the average reduction of majority populations globally during the period was 22 per cent.
- However, it also shows that the decline was much steeper in the OECD countries where the average decline of the majority religious population was at 29 per cent.
- Data about Africa too is revealing.
- Animism or native religion was the dominant religion in 24 countries in Africa in 1950.
- By 2015, it was no longer a majority in any of these.
Findings in the context of India’s demographics
- “In keeping with the global trends of declining majority, India too has witnessed a reduction in the share of the majority religious denomination by 7.81 per cent,” it states.
- The authors hypothesise that the increase in the population of minorities could be a “good proxy” for arriving at the conclusion that they were “flourishing” in the given country.
- In India’s context, a 7.81 per cent increase in the populations of Muslims, Christians, Sikhs and Buddhists (Parsis and Jains saw a decline) indicated that contrary to the propaganda, especially in the Western media, the minorities enjoy relative comfort in the country.
- The authors end the report by stating that “contrary to the noise in several quarters, careful analysis of the data shows that minorities are not just protected but indeed thriving in India.
- This is particularly remarkable given the wider context within the South Asian neighbourhood where the share of the majority religious denomination has increased and minority populations have shrunk alarmingly across countries like Bangladesh, Pakistan, Sri Lanka, Bhutan and Afghanistan.
- India’s performance suggests that there is a conducive environment to foster diversity in society.
- It is not possible to promote better life outcomes for the disadvantaged sections of society without providing a nurturing environment and societal support through a bottom-up approach”.
The conclusion of the study was taken out of context in India
- Rather than understanding the purpose of the study to negate the propaganda about the status of minorities in India, the debate largely shifted to the growing numbers of the minorities and dangers to the majority community thereof.
- A comprehensive study about the growing minority population in India, “Religious Demography of India”, was published by J K Bajaj, M D Srinivas and A P Joshi in 2003.
- Going down to the district level, that near-exhaustive study warned of the unbalanced growth of minority populations in the country.
- It triggered a widespread debate along similar lines at that time too.
The study tries to allay the fear of uncontrolled growth of the Muslim population in India
- New data also reveals that population growth rates in India are gradually coming closer to the healthy growth mark.
- Total Fertility Rate (TFR) data (number of births a woman gives in her lifetime), a credible indicator to project population growth, shows that in India, against the preferred TFR of 2.19, the national average is hovering around 2.
- It is a decline from 2.2 in 2015 and 3.4 in 1991.
- This decline, according to the National Family Health Survey data, is across all religious groups.
- Between 1991 and 2015, this decline for Hindus was from 3.3 to 2.1, while that of Muslims was from 4.4 to 2.6.
- Today, the figures for Hindus and Muslims have further declined to 1.9 and 2.4 respectively.
Conclusion: If the trend of decline in TFR continues, India is expected to see healthy population patterns in the coming decades. PMEAC’s conclusions in a way indicate the same thing that minorities enjoy all benefits and lead a comfortable life in India, while demographic changes in the whole world continue to be a matter of concern.