Union Budget 2019 Expert Opinion: Look to creative economy, take a leaf from South Korea’s playbook

Union Budget 2019-20 Expectations

Budget 2019 Expert Opinion on Budget Expectations: There is now broad consensus that the upcoming interim Budget 2019 will be geared towards bolstering the current government’s polling prospects in the general election. Several reports indicate that the government will use the opportunity to appease impoverished sections of the Indian society and the mercantile community. The remainder of the budget, pundits deem, shall be rife with promises of what the government hopes to do, should it make its way back into power for another term.

Given the government’s emphasis on technology policy over the last few years, with the release of Draft Data Protection Bill in 2018 as well as several consultation papers ruminating the possible regulation of different aspects of the technological realm, it is not unreasonable to expect items addressing these issues in the interim budget 2019 as well. If these speculations are indeed accurate, one hopes that the government has factored one critical facet of the broader digital sphere into its vision for 2019 and beyond – the creative industry.

Read Also: Budget 2019 Expectations- This may be the most important task at hand for Modi government on February 1

The creative industry, a broad term for what is essentially the media and entertainment sector, presents an important economic opportunity for India. It is one of the fastest growing segments of the Indian economy – recording an annual growth rate of 11.2 percent in 2016. It is also a key source of employment generation for India – an important consideration as the country needs to generate 10 million jobs per year to prevent mass unemployment. A report by the Boston Consulting Group predicts that the creative industry has the potential to generate 7 – 800,000 jobs over the next few years. Notably, a majority of these jobs could be relatively immune to automation. A study by NESTA reveals that 87 percent of creative workers are at low to no risk of losing their jobs to a machine.

Despite all its trappings, however, India’s creative industry fails to extract substantial value from its products, when compared to other developing economies. Notably, it generated only USD 18 billion in revenue in 2016, accounting for about 1 percent of India’s GDP. Comparatively, South Korean creative industry revenues in 2016 totaled a whopping USD 89 billion, accounting for 6 percent of the country’s GDP.

Part of the reason why South Korea’s creative sector is so successful is because the country’s government is heavily invested in fomenting its commercial ambitions. For instance, the South Korean government makes a concerted effort to maintain a robust intellectual property rights (IPR) regime. IPRs are the life-blood of the creative industry, as they serve as the vehicle through which creators can monetise their work. One of the pillars of a robust IPR regime are measures to mitigate the piracy of creative goods. Towards this end, South Korea has enacted a stringent copyright law to safeguard the interests of its creative industry. Further, and more importantly, it recently launched a special anti-piracy unit known as the Copyright Infringement Response Team (CIRT) for the effective enforcement of the provisions listed in its copyright legislation.

India has taken some initial steps towards improving its IPR regime with the induction of national IPR policy that has better IPR enforcement as one of its purported goals. However, little has been done to convert this policy promise into effective practice. Illustratively, according to a study by Digital TV Research, India’s concerted failure to counter copyright piracy of film and television content alone will cost the Indian economy 3.1 billion dollars in 2022.

Though laws are being enacted in India to counter piracy, such as the recent amendment to Cinematograph Act which threatens to severely penalise anyone who attempts to make unauthorised copies of cinematographic films, the efficacy of these provisions is questionable. A historical analysis of India’s copyright law reveals that an increase in the stringency of penalties does not generally translate into a reduction in copyright piracy. For instance, the 1984 amendment to the Indian Copyright Act made it easier for police to seize pirate works. But it was an ineffective deterrent to piracy as most piracy cases did not culminate in convictions, due to capacity issues within the police force. Thus, unless anti-piracy law is accompanied by efforts to mobilise and train the police to carry out its enforcement, it is effectively toothless no matter how severe its penalties are.

For Budget 2019, the government should, then, take a leaf from South Korea’s playbook and look to allocate resources towards the creation of India’s own anti-piracy enforcement unit. Such a measure would be a good starting point towards unlocking further value for one of the country’s most significant economic imperatives – the creative industry.


Opinion: Finally, Modi is Taking Crucial Decisions for Economy


ed interest had, of late, begun asking this one leading question – when will Narendra Modi return to proper economic management and start taking critical decisions relating to the economy? The Prime Minister has partially answered them with finance minister Arun Jaitley appointing a new Secretary to head the Department of Economic Affairs (DEA) and finally picking a Chief Economic Advisor known for his strong reforms credentials. The NDA government had oddly been without a Chief Economic Advisor after the post fell vacant last year.

Rajiv Mehrishi, Chief Secretary in Rajasthan, will soon take over as Secretary, DEA and US-based economist Arvind Subramanian will take charge as Chief Economic Advisor. As a matter of protocol, the CEA works very closely with Secretary, Economic Affairs on all macro policy matters. So Arvind Subramanian will work with Rajiv Mehrishi on a day-to-day basis.

Mehrishi also has formidable reforms credentials going by the big policy initiatives he took in Rajasthan under Chief Minister Vasundhara Raje. In fact, Mehrishi is credited for much of the economic reforms initiative undertaken by the chief minister, both in her current term as well as her previous stint in office. In many ways, she found Mehrishi indispensable as her policy advisor. So after taking charge as Chief Minister last year, Vasundhara promptly asked Mehrishi, who was then Secretary, Department of Fertilizer at the Centre, to join her government. He could not say no.

Within months of moving to Rajasthan, Mehrishi made waves with his Labour Law reforms. He also rewrote the newly-amended land acquisition law which many argue is procedurally difficult to implement. Since land is a state subject, the Vasundhara Raje government is rewriting the law without diluting benefits for farmers.

Since States also have concurrent jurisdiction over labour laws, Mehrishi made creative changes in various provisions without losing the essence of the legislation. For instance, the Industrial Disputes Act says a formal trade union can be formed with a minimum 15 per cent of the work force. This resulted in a messy situation of multiple trade unions getting formed with 15 per cent of the total workers. This minimum limit was raised to 30 per cent so that the Labour Union is of a reasonable size and scale. Of course it could still result in two unions getting formed, but it will not be as messy as before.

Mehrishi also tweaked the Factories Act which currently says any establishment with 100 workers or above will mandatorily require government permission before shutting down. Rajasthan has now raised the minimum number of workers’ limit to 300. So only factories with 300 workers and above need to take permission from the government before shutting down. These amendments are currently awaiting the President’s assent. The spirit of these amendments is now being followed by the Centre which announced changes in labour laws yesterday. Vasundhara Raje will not be very happy to lose Rajiv Mehrishi. But she can’t do much about it, as it is her own party which rules at the Centre.

Arvind Subramanian, the former Chief Economist of ADB, is also an interesting choice. Subramanian is a firm believer in the rapid rise of Asia, led by China, in the coming years. While most US-based economists tend to argue that the United States will sooner or later bounce back to its position of economic primacy, Arvind argues that the world may be at an inflection point where China’s economy and currency will start to dominate much faster than we all imagine. In his much talked about book, “Eclipse: Living in the shadow of China’s dominance”, it is argued that just as the United States’ economy and currency overtook that of England early 20th century, China might do the same to the US in the 21st century. In fact, Modi may have chosen him partially to understand how China and other emerging Asian economies can convert their economic dominance to a strategic advantage.

Arvind Subramanian also believes in pragmatic reforms. For instance, he has argued India is right to assert its position in WTO in relation to the agriculture sector but says it was a tactical mistake not to sign the Trade Facilitation Agreement. Subramanian believes there is enough scope to transfer cash to our farmers without falling foul of the WTO provisions.

Subramanian is also a strong proponent of shutting down public banks rather than recapitalising them, if they cannot stand on their own feet. He has said the good assets of bad banks must be transferred to other well-run private banks – this, he holds, is preferable to injecting loads of additional capital in government-owned banks which cannot sustain themselves. He is a strong critic of Indira Gandhi and her policy of bank nationalisation. The Sangh Parivar, however, may have different views in this regard. The RSS always admired Indira Gandhi for many things she stood for. Subramanian may have to wade through these complexities which oversimplified western analyses sometimes do not grasp adequately.

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Opinion: Early Education Classrooms Need More Movement to Breed Movers and Shakers

Opinion: Early Education Classrooms Need More Movement to Breed Movers and Shakers

“…it is necessary to recognize that the early-childhood classroom has been significantly altered by increasingly rigorous academic standards in ways that rarely align with how young children learn,” writes The Atlantic’s Lara N. Dotson-Renta. Dotson-Renta is a mother herself, and for her piece “Why Young Kids Learn Through Movement” talked to many experts who stand by the fact that movement in early learning is vital to future success. A current push for more rigorous academic standards in the early years, however, has forced movement in pre-K and kindergarten classrooms to occur less and less. Dotson-Renta’s sources suggest the phenomenon could be detrimental to the country’s future work force- the movers and shakers who don’t learn to actually move and shake until too late in the game. The ideal classroom set-up for young learners, says professor emerita of early-childhood education at Lesley University Nancy Carlsson-Paige is one that’s in constant movement. “If you walk into a good kindergarten class, everyone is moving. The teacher is moving. There are structured activities, but generally it is about purposeful movement,” she said, according to the article. The National Association for the Education of Young Children says the role of play is crucial to developing healthy behavioral habits for the future; the group is vehemently against policy makers pushing more rigorous standards into the earliest grades while sacrificing play time with no concern. And the list of sources that support play in early learning go on and on. Read more for yourself here and check out related readings below. Nicole Gorman, Education World Contributor.