As per news reports, the union government has filed a Presidential Reference in relation to the 2G judgment. In this judgment the Supreme Court had cancelled 122 2G licences granting access to spectrum and had ordered their re-allocation by means of an auction. It also held that use of first cum first serve policy (FCFS) to allocate natural resources was unconstitutional. It had held that natural resources should be allocated through auctions. As per the news report, the Presidential Reference seeks clarity on whether the Supreme Court could interfere with policy decisions. This issue has been discussed in a number of cases. For instance, the Supreme Court in Directorate of Film Festivals v. Gaurav Ashwin Jain[1] held that Courts cannot act as an appellate authority to examine the correctness, suitability and appropriateness of a policy. It further held that Courts cannot act as advisors to the executive on policy matters which the executive is entitled to formulate. It stated that the Court could review whether the policy violates fundamental rights, or is opposed to a Constitutional or any statutory provision, or is manifestly arbitrary. It further stated that legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial review. In Suresh Seth vs. Commissioner, Indore Municipal Corporation[2] a three judge bench of the Court observed that, “this Court cannot issue any direction to the Legislature to make any particular kind of enactment. Under our constitutional scheme Parliament and Legislative Assemblies exercise sovereign power or authority to enact laws and no outside power or authority can issue a direction to enact a particular piece of legislation.” In the present case it may be argued that whereas the Court was empowered to declare a policy such as FCFS as unconstitutional, it did not have the jurisdiction to direct auctioning of spectrum and other natural resources. The Presidential Reference may conclusively determine the Court’s jurisdiction in this regard. However, it has been urged by a few experts that this Presidential Reference amounts to an appeal against the decision of the Court. They have argued that this could be done only through a Review Petition (which has already been admitted by the Court). The advisory jurisdiction of the Court invoked through Presidential References, is governed by Article 143 of the Constitution. Under Article 143 of the Constitution of India, the President is empowered to refer to the Supreme Court any matter of law or fact. The opinion of the Court may be sought in relation to issues that have arisen or are likely to arise. A Presidential Reference may be made in matters that are of public importance and where it is expedient to obtain the opinion of the Supreme Court. The Court may refuse to answer all or any of the queries raised in the Reference. A Presidential Reference thus requires that the opinion of the Court on the issue should not have been already obtained or decided by the Court. In the Gujarat Election Case[3] the Supreme Court took note of Presidential References that were appellate in nature. Thus, a Presidential Reference cannot be adopted as a means to review or appeal the judgment of the Supreme Court. Against judgments of the Court the mechanisms of review is the only option. This position was also argued by Senior Advocate Fali S. Nariman in the Cauvery Water Case[4], where the Court refused to give an opinion. Whether the Court had the authority to determine a policy, such as FCFS, as unconstitutional is not disputed. However, there are conflicting judgments on the extent to which a Court can interfere with the executive domain. It would be interesting to see whether the Court would give its opinion on this issue. In the event it does, it may bring higher level of clarity to the relationship between the executive and the judiciary.
[1] AIR 2007 SC 1640
[2] AIR2006SC767
[3] (2002) 8 SCC 237
[4] (1993) Supp 1 SCC 96(II)
In April 2020, the International Labour Organisation (ILO) estimated that nearly 2.5 crore jobs could be lost worldwide due to the COVID-19 pandemic in 2020. Further, it observed that more than 40 crore informal workers in India may get pushed into deeper poverty due to the pandemic. In this blog post, we discuss the effect of COVID-19 on unemployment in urban areas as per the quarterly Periodic Labour Force Survey (PLFS) report released last week, and highlight some of the measures taken by the central government with regard to unemployment.
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Methodology for estimating unemployment in PLFS reports The National Statistics Office (NSO) released its latest quarterly PLFS report for the October-December 2020 quarter. The PLFS reports give estimates of labour force indicators including Labour Force Participation Rate (LFPR), Unemployment Rate, and distribution of workers across industries. The reports are released on a quarterly as well as annual basis. The quarterly reports cover only urban areas whereas the annual report covers both urban and rural areas. The latest annual report is available for the July 2019-June 2020 period. The quarterly PLFS reports provide estimates based on the Current Weekly Activity Status (CWS). The CWS of a person is the activity status obtained during a reference period of seven days preceding the date of the survey. As per CWS status, a person is considered as unemployed in a week if he did not work even for at least one hour on any day during the reference week but sought or was available for work. In contrast, the headline numbers on employment-unemployment in the annual PLFS reports are reported based on the usual activity status. Usual activity status relates to the activity status of a person during the reference period of the last 365 days preceding the date of the survey. |
To contain the spread of COVID-19, a nationwide lockdown was imposed from late March till May 2020. During the lockdown, severe restrictions were placed on the movement of individuals and economic activities were significantly halted barring the activities related to essential goods and services. Unemployment rate in urban areas rose to 20.9% during the April-June quarter of 2020, more than double the unemployment rate in the same quarter the previous year (8.9%). Unemployment rate refers to the percentage of unemployed persons in the labour force. Labour force includes persons who are either employed or unemployed but seeking work. The lockdown restrictions were gradually relaxed during the subsequent months. Unemployment rate also saw a decrease as compared to the levels seen in the April-June quarter of 2020. During the October-December quarter of 2020 (latest data available), unemployment rate had reduced to 10.3%. However, it was notably higher than the unemployment rate in the same quarter last year (7.9%).
Figure 1: Unemployment rate in urban areas across all age groups as per current weekly activity status (Figures in %)
Note: PLFS includes data for transgenders among males.
Sources: Quarterly Periodic Labour Force Survey Reports, Ministry of Statistics and Program Implementation; PRS.
Recovery post-national lockdown uneven in case of females
Pre-COVID-19 trends suggest that the female unemployment rate has generally been higher than the male unemployment rate in the country (7.3% vs 9.8% during the October-December quarter of 2019, respectively). Since the onset of the COVID-19 pandemic, this gap seems to have widened. During the October-December quarter of 2020, the unemployment rate for females was 13.1%, as compared to 9.5% for males.
The Standing Committee on Labour (April 2021) also noted that the pandemic led to large-scale unemployment for female workers, in both organised and unorganised sectors. It recommended: (i) increasing government procurement from women-led enterprises, (ii) training women in new technologies, (iii) providing women with access to capital, and (iv) investing in childcare and linked infrastructure.
Labour force participation
Persons dropping in and out of the labour force may also influence the unemployment rate. At a given point of time, there may be persons who are below the legal working age or may drop out of the labour force due to various socio-economic reasons, for instance, to pursue education. At the same time, there may also be discouraged workers who, while willing and able to be employed, have ceased to seek work. Labour Force Participation Rate (LFPR) is the indicator that denotes the percentage of the population which is part of the labour force. The LFPR saw only marginal changes throughout 2019 and 2020. During the April-June quarter (where COVID-19 restrictions were the most stringent), the LFPR was 35.9%, which was lower than same in the corresponding quarter in 2019 (36.2%). Note that female LFPR in India is significantly lower than male LFPR (16.6% and 56.7%, respectively, in the October-December quarter of 2019).
Figure 2: LFPR in urban areas across all groups as per current weekly activity status (Figures in %)
Note: PLFS includes data for transgenders among males.
Sources: Quarterly Periodic Labour Force Survey Reports, Ministry of Statistics and Program Implementation; PRS.
Measures taken by the government for workers
The Standing Committee on Labour in its report released in August 2021 noted that 90% of workers in India are from the informal sector. These workers include: (i) migrant workers, (ii) contract labourers, (iii) construction workers, and (iv) street vendors. The Committee observed that these workers were worst impacted by the pandemic due to seasonality of employment and lack of employer-employee relationship in unorganised sectors. The Committee recommended central and state governments to: (i) encourage entrepreneurial opportunities, (ii) attract investment in traditional manufacturing sectors and developing industrial clusters, (iii) strengthen social security measures, (iv) maintain a database of workers in the informal sector, and (v) promote vocational training. It took note of the various steps taken by the central government to support workers and address the challenges and threats posed by the COVID-19 pandemic (applicable to urban areas):
The central and state governments have also taken various other measures, such as increasing spending on infrastructure creation and enabling access to cheaper lending for businesses, to sustain economic activity and boost employment generation.
