CURRENT AFFAIRS ON NATIONAL INCOME

Gross Domestic Product BY BIJENDRA KUMAR SINGH SIR

Gross Domestic Product (GDP) is the total money value of final goods and services produced in the
economic territories of a country in a given year.

• GDP stands for the total value of goods and services produced inside the territory of India
irrespective of whom produced it- whether by Indians or foreigners.

1. Shape of Economic Recovery

• The impact of COVID 19 on world economy has led to speculations on economic recovery
models.
• Economic recovery can take many forms, which is depicted using alphabetic notations. For
example, Indian government has claimed V-shaped recovery of Indian economy post COVID-
19 disruptions.
• The alphabets generally denote the graph of growth rate, which resembles the shape of the
letter. The fundamental difference between the different kinds of recovery is the time taken
for economic activity to normalize.
• V-shaped recovery
• It is a scenario of recovery in which the country quickly recoups lost ground and gets back to
the normal growth trend-line.
• In this model, incomes and jobs are not permanently lost, and the economic growth
recovers sharply and returns to the path it was following before the disruption.

2. Centre for Monitoring Indian Economy

❖ Recently, the Centre for Monitoring Indian Economy (CMIE) has released data related to
jobs gained or lost during the Covid-19 lockdown period (April-July 2020).
 ❖ Established in 1976, primarily as an independent think tank, CMIE is a leading business
information company which produces economic and business databases and develops
specialized analytical tools to deliver these to its customers for decision making and for
research. It analyses the data to decipher trends in the economy.

Key Findings
• Salaried Jobs
❖ They Suffered a total loss estimated to be 18.9 million during April-July 2020.
❖ 17.7 million salaried jobs were lost in April. After gaining 3.9 million jobs in June and 5
million jobs were again lost in July.

• Informal and Non-Salaried Jobs

❖ This category of job has shown improvement during the April-July 2020 increasing to
325.6 million in July 2020 from 317.6 million in 2019, an increase of 2.5%.
❖ This is because of the opening of the country in a phased manner.
❖ This category of employment accounted for about 32% of the total employment but it
suffered 75% of the hit in April 2020.
❖ Out of total 121.5 million jobs lost in April 2020, 91.2 million of the jobs were lost from
this category.
❖ Small traders, hawkers and daily wages labourers were the worst hit by the lockdown.

• Farm Jobs
❖ The jobs lost in the non-farm sectors have resulted in people moving towards farm
employment. The farm sector gained 14.9 million jobs in the April-July 2020 period.
❖ In 2019, 42.39% of the workforce in India was employed in agriculture.

3. Code on Social Security (GIG Economy)

The draft Code on Social Security has proposed that the Centre may formulate social
security schemes for gig workers.
The draft law has defined a gig worker as a “person who performs work or participates
in a work arrangement and earns from such activities outside of traditional employer-
employee relationship”. E.g., freelancers, independent contractors, project-based
workers and temporary or part-time hiers.
The draft code defines a platform worker as a person who is part of an organization that
“uses an online platform to access other organizations or individuals to solve specific
problems or to provide specific services in exchange for payment”. E.g., Uber driver.
GIG economy: In a gig economy, temporary, flexible jobs are common place and
companies tend toward hiring independent contractors and freelancers instead of full-
time employees.

Impact
• As per the draft social security code, the Central Government may formulate and notify,
from time to time, suitable social security schemes for gig workers and platform workers.
This is the first time that gig workers and platform workers have been considered for social
security benefits.
• Such schemes would encompass issues like “life and disability cover”, “health and maternity
benefits”, “old age protection” and “any other benefit as may be determined by the Central
Government”. This will help in the overall development of informal sector workers.