THE HINDU EDITORIAL – 16, June – 2017

a) Shoots take root: On Fed hike

The biggest takeaway from the U.S. Federal Reserve’s decision to raise the federal funds rate, for a third time in six months, is its assertion that growth in the world’s largest economy has gained traction and is on course to warrant further “gradual” rate increases. Fed Chair Janet Yellen emphasised the factors underpinning this rebound in economic activity — an “ongoing improvement in the job market and relatively high levels of consumer sentiment and wealth” that have spurred household spending, an expansion in business investment, and most significantly, a global pickup in demand. This offers more reassurance that the global economy may have finally re-emerged from the post-financial crisis doldrums. It is also noteworthy that the economic revival has been happening amid heightened policy uncertainty worldwide, especially in key areas like trade, as political tumult continues to roil the U.S. under the Donald Trump administration and, more recently, the U.K. as well. And while Ms. Yellen reiterated that the American central bank remained on alert in monitoring inflation developments, given a recent softening in price gains, the Fed’s decision to announce the contours of a programme to gradually pare the size of its $4.5 trillion balance sheet is another sign that the U.S. economic engine is warming up. India’s exporters can take heart that demand in one of the largest markets for their goods and services is likely to continue to strengthen in the coming months. The Fed also bumped up the median projection for U.S. economic growth in 2017 to 2.2%, from 2.1% forecast in March. Ms. Yellen and her colleagues on the Federal Open Market Committee have also done well to ward off a 2013 ‘taper tantrum’-like scenario by flagging the projected path of balance sheet normalisation — a deliberate and clearly calibrated set of reductions that increase over time — without detailing a schedule for the start of the process. Clearly spelling out that the plan to decrease reinvestment of principal payments from asset-backed and Treasury securities is conditional on the economy staying its anticipated course, the Fed has earmarked this year as the broad time frame for its start. India’s monetary authorities can derive some reassurance that they are not alone in adopting a policy stance that seems counter-intuitive to some in the light of slowing inflation in their respective economies. While the Fed describes its stance as “accommodative” to spur further strengthening in labour market conditions and a sustained return to 2% inflation, the Reserve Bank of India has said that its “neutral” poise is intended to continue support for economic expansion while ensuring price stability. The common theme is the welcome emphasis on consistency and stability in the messaging.

b) No time to work

In a welcome move this week, India has ratified two key global conventions meant to keep children away from work, decades since they were originally adopted by the International Labour Organisation. Nonetheless, the scepticism aroused by the Child Labour (Prohibition and Regulation) Amendment Act, 2016 over the government’s commitment towards complete abolition of child labour will persist. The ILO treaties are about the minimum age at which a person may begin work and the hazardous industries where she may not. Crucially, conventions 138 and 182 of the United Nations body leave it to the member-states to determine what constitutes acceptable or unacceptable work for children at different ages. Such flexibility has given the Indian government wiggle room in adopting the international standards in question, even though the 2016 legislation falls several notches below a comprehensive prohibition of child labour. The Act contains the controversial provision that condones the employment of children below 14 years under the rubric of family enterprises and the declassification of several industries as hazardous occupations. The detrimental effects on the ground from these dilutions of the original 1986 Act could be widespread. With roughly 90% of the workforce continuing to remain outside the ambit of the organised sector, protecting vulnerable children from exploitation is difficult. The rules notified by the Ministry of Labour and Employment for the enforcement of the 2016 amendment include some small concessions. Under these stipulations, children may work in domestic enterprises only for three hours after school, and not between 7 p.m. and 8 a.m. These restrictions are intended to ensure attendance at school. But given the sensitivities involved in monitoring activities within traditional households, effective enforcement will pose a challenge, and the rescue of vulnerable children will remain an uncertain proposition. India’s ratification of the two conventions, after more than 165 countries have legally bound themselves to their obligations, is itself a sad commentary on the priorities of successive governments, cutting across party lines. The ILO’s Minimum Age Convention of 1973 entered into force in 1976 — and the instrument pertaining to the elimination of the worst forms of child labour in 2000. While policymakers are no doubt alert to the inequities that perennially plague Indian society, the practical realities are too painful for the millions who languish on the margins. Any genuine enforcement of a minimum age at work will elude governments so long as a universal minimum wage of subsistence for the adult workforce is not implemented scrupulously. On this score, the record of different States is at best patchy. This scenario is unlikely to improve in the absence of a vibrant mechanism of collective bargaining among stakeholders. Without this, the total elimination of child labour will remain a difficult task.

WORDS/ VOCABULARY

1) Assertion

Meaning: A confident and forceful statement of fact or belief.

Example: She very quickly asserted her authority over the class.

Synonyms: Declaration, Claim

2) Traction

Meaning: The ability of a wheel or tyre to hold the ground without sliding.

Example: In deep snow, people should use snow tyres on their vehicles to give them better traction.

Synonyms: Grip, Friction, Adhesion

3) Underpinning

Meaning: To give support, strength, or a basic structure to something.

Example: He presented data to underpin his argument.

Synonyms: Nub, Hub, Kernel

4) Spurred

Meaning: To encourage an activity or development or make it happen faster.

Example: Rising consumer sales have the effect of spurring the economy to faster growth.

Synonyms: Stimulus, Incentive, Encouragement

Antonyms: Disincentive, Discouragement

5) Reassurance

Meaning: Words of advice and comfort intended to make someone feel less worried.

Example: I felt I couldn’t cope with the situation and was in desperate need of some reassurance.

Synonyms: Buoy Up, Cheer Up, Comfort, Soothe

Antonyms: Alarm, Unnerve

6) Doldrums

Meaning: Unsuccessful or showing no activity or development.

Example: Her career was in the doldrums during those years.

Synonyms: Depression, Melancholy, Gloom

Antonyms: Happiness

7) Tumult

Meaning: A loud noise, especially that produced by an excited crowd, or a state of confusion, change, or uncertainty.

Example: You couldn’t hear her speak over the tumult from the screaming fans.

Synonyms: Din, Loud Noise, Racket

Antonyms: Silence

8) Reiterated

Meaning: To say something again, once or several times.

Example: The government has reiterated its refusal to compromise with terrorists.

Synonyms: Repeat, Say Again, Restate

9) Contours

Meaning: An outline representing or bounding the shape or form of something.

Example: This map has contours marked at 250-metre intervals.

Synonyms: Outline, Silhouette, Form

10) Bumped

Meaning: An increase in something.

Example: There had been a bump in the number of students with learning disorders.

Synonyms: Nodule, Node, Outgrowth, Growth

Antonyms: Pothole

11) Calibrated

Meaning: Carefully assess, set, or adjust (something abstract).

Example: The regulators cannot properly calibrate the risks involved.

Synonyms: Modify, Alter, Regulate

12) Treasury

Meaning: The government department, in the UK and some other countries, that is responsible for financial matters such as spending and tax.

Example: The Treasury has announced new taxes.

Synonyms: Exchequer, Purse

13) Earmarked

Meaning: To keep or intend something for a particular purpose.

Example: Five billion dollars of this year’s budget is already earmarked for hospital improvements.

Synonyms: Set Aside, Lay Aside, Appropriate, Designate

14) Ratified

Meaning: (Especially of governments or organizations) To make an agreement official.

Example: Many countries have now ratified the UN convention on the rights of the child.

15) Scepticism

Meaning: Doubting that something is true or useful.

Example: The company’s environmental claims have been treated with scepticism by conservationists.

Synonyms: Doubt, Disbelief, Atheism

Antonyms: Conviction

16) Abolition

Meaning: The official ending of an activity or custom.

Example: The public wanted to retain the death penalty; parliament decreed its abolition.

Synonyms: Scrapping, Ending, Stopping

Antonyms: Retention, Creation

17) Wiggle

Meaning: To (cause to) move up and down and/or from side to side with small, quick movements.

Example: He tried wiggling the control stick but nothing happened.

Synonyms: Jiggle, Twitch

18) Condones

Meaning: To accept or allow behaviour that is wrong.

Example: If the government is seen to condone violence, the bloodshed will never stop.

Synonyms: Deliberately ignore, Forgive

Antonyms: Condemn, Punish

19) Rubric

Meaning: A set of instructions, especially on an exam paper, usually printed in a different style or colour.

Example: Read the rubric carefully.

Synonyms: Title, Legend

20) Languish

Meaning: To exist in an unpleasant or unwanted situation, often for a long time.

Example: After languishing in obscurity for many years, her early novels have recently been rediscovered.

Synonyms: Weaken, Wither, Waste away

Antonyms: Thrive, Flourish

21) Patchy

Meaning: Sometimes good and sometimes bad.

Example: Matthew found the service extremely patchy.

Synonyms: Uneven, Bitty, Intermittent, Fragmentary

Antonyms: Uniform, Complete