Reports Current Affairs - 2019

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Efficiency gap in India’s power sector costs 4% of GDP: World Bank Report

The World Bank recently released a report titled ‘In the Dark: How Much Do Power Sector Distortions Cost South Asia’. As per the report, Efficiency gap in India’s power sector costs the Indian economy 4% every year, which equivalents to $86 billion in 2016FY.

Key Points of the Report:

  • The rural household’s income in India can be increased by $9.4 billion and business losses worth USD 22.7 billion can be eliminated with 24 hours access to power supply.
  • There was a shortage of 14% in India in meeting coal demand in 2016FY.
  • The average output per labour shift at Coal India’s underground mines was less than one ton in 2016FY, which is very less in contrast to 25 tonnes in the United States. Also, out of total 1o underground mines only one underground coal mine in India is mechanised.
  • As per the World Bank Report, Electricity subsidies provided by the government and inefficient power generation, transmission, and distribution of the power play a major role in power shortages.
  • In 2016, around 20% of electricity generated was lost during transmission and distribution. This rate is the highest loss rate in the world.
  • Industrial electricity tariffs become less affordable and competitive due to power subsidies from to households and farmers.
  • India provides subsidies on electricity for agriculture which has made India the world’s largest user of groundwater. The consumption of groundwater has increased by 700% from 1950 to 2014.

Recommendations in the report:

  • The report recommends reforms in the electricity sector to restore market pricing and improve efficiency. This will complement traditional investments to increase power supply and expand access to reliable electricity.
  • Reliable access to electricity will have a positive impact on Gender Equality by increasing women’s employment and girls’ study time. It will lead to lower use of kerosene lamps which would improve health and the environment.
  • Coal allocation and delivery need to be more efficient and competition in coal and electricity supply needs to be encouraged. Energy prices should be rationalised to reflect the actual cost of supply.
  • Incentives should be given for the promotion of more efficient power generation and delivery.
  • Social assistance should be provided to help people deal with higher energy prices.

India has made great progress in expanding access to power in recent years. However, many people still lack access to electricity and power shortages harm the economy and consumer well-being. India was at the 80th spot among 137 economies in the reliability of electricity supply as per the 2018 Global Competitiveness Report.

Gender wage gap highest in India, women are paid 34% less than men: ILO

According to Global Wage Report 2018-19 published by International Labour Organization (ILO), women are paid most unequally in India, compared to men, when it comes to hourly wages for labour. This gap in wages, known as gender wage gap is the highest among 73 countries studied in the report. The findings are based on data from 136 countries.

Highlights of report

On average, women are paid 34% less than men in India. Globally, on average, hourly wages of women are 16% less than those of men. Inequality is higher in monthly wages, with a gap of 22%. Overall, real wages grew just 1.8% globally (136 countries) in 2017.Women are paid higher hourly wages than men in Bangladesh. Gender wage gap highest in India, women are paid 30% less than men.

In most countries, women and men differ significantly in respect of working time – specifically, that part-time work is more prevalent among women than among men. The gender wage gap is visible even with women with higher levels of education. Emphasis needs to be placed on ensuring equal pay for women and men.

The gender wage gap has remained unchanged at 20% from 2016 to 2017. But in 2017, gender gap was accompanied by near-stagnation in wages. Real wage growth was lowest since 2008, the year of the financial crisis. In real terms (adjusted for price inflation), global wage growth declined to 1.8% in 2017, from 2.4% in 2016.

In advanced economies (G20), real wage growth declined from 0.9% in 2016 to 0.4% in 2017, meaning near stagnation. By contrast, in emerging economies and developing G20 countries, real wage growth dipped marginally from 4.9% in 2016 and 4.3% in 2017.

This global stagnation in real wages comes in line with global growth forecast, which was revised lower by International Monetary Fund (IMF) earlier. The slowdown in wages at level of hourly labour wages is in stark contrast with organised sector salaries.

International Labour Organization (ILO)

The ILO is United Nations agency dealing with labour issues, particularly international labour standards, social protection, and work opportunities for all. It was established in 1919 as an agency of the League of Nations and is headquartered in Geneva, Switzerland. India is a founder member of the ILO. At present, it has 187 members. The principal means of action in the ILO is the setting up of International standards in the form of Conventions, Recommendations and Protocol. So far, India has ratified 45 Conventions, out of which 42 are in force. Out of these 4 are Core or Fundamental or Conventions.