In today's Finshots brief, we will discuss-
- Child marriage in India
- India's decision to open its borders further
- Vehicle dealers' inventory woes
Raising the Marriage Age
India is home to the highest number of child brides in the world. According to a 2019 report by UNICEF, the number reaches a whopping 23 million - that’s one-third of the global total. More than 27% of India’s girls are married off before they turn 18, and 7% are married even before they reach 15 years of age. And this was incredibly worrying on its own. But then, the pandemic made it worse.
Schools remained closed for months, unemployment levels surged, incomes deteriorated across the board and all this resulted in more financially downtrodden parents marrying off their underage daughters. Between March and May, "Childline"- a government-funded helpline for children stopped 5200 child marriages. However, they also said that thousands of cases probably went undetected due to the disruption of vigilance mechanisms. And according to a UN report from April, the virus can lead to an additional 13 million child marriages worldwide over the next decade.
The consequences of this will undoubtedly be dire. Getting married before 18 pulls young girls out of school, exposes them to domestic abuse, and can force them into giving birth before they’re ready. In fact, the World Health Organization says the main cause of death among girls aged 15-19 is pregnancy or childbirth-related complications.
The thing is, India does have laws that protect against child marriage. The first one was introduced in 1929 and defined a child as a male who was under the age of 18 years, and a female who was under 14 years. In 1978 the age limit was raised to 21 for males and 18 for females. In 2006, the Prohibition of Child Marriage Act clamped down on the practice more aggressively, by imposing a heavy fine and prison time on parents. However, the age limit remained unchanged.
But then, in his independence speech this year, Prime Minister Narendra Modi announced plans to raise women’s marriageable age from 18 to 21 years. And as per a recent State Bank of India report, this will bring big economic and social benefits for our country. These benefits will include lower maternal deaths, improved nutritional levels, more girls attaining their higher education goals and earning financial independence.
According to Soumya Kanti Ghosh, an economist with SBI, raising the marriage age will see the number of women graduates rising by as much as 7% over the current 9.8%. And this will not only help individual women, but the nation as a whole. You see, currently, only around 18% of India’s women contribute to the national workforce, with a majority of them engaged in manual labor. If the participation of educated and trained women increases by just 10%, India could add $770 billion to its GDP by 2025.
But that’s only if the implementation of the law is done right. And considering how rampant child marriages are despite our existing legal framework, we still have a long way to go.
Restore the Visas
The number of daily coronavirus infections in India has gone down to 55,000 from 100,000 last month. Scientists are saying the country has likely seen the worst of new infections and might be able to contain the pandemic by February 2021. Though some critics are contending that the decline is just a result of poor testing, the government is taking this as an opportunity to open the country up completely.
And the first step is to welcome back foreigners to our nation. The government has announced that all existing visas apart from electronic, tourist and medical ones are being immediately restored. Even expired visa holders can apply again. And though regular commercial flights are unavailable right now, travellers have options like flights under the government repatriation program and private charters.
But whether this move will provide much relief to our ailing economy and aviation industry, we’ll just have to wait and see.
Car Dealership Woes
Even before the pandemic started, automakers were dealing with the worst slowdown they’d ever experienced. And when raging infections shut down production plants and muted demand, their sales dropped further. But now, the festive season is coming up, and these manufacturers are hoping for a 15-20% sales growth. In anticipation of this revival, they are pushing more and more vehicles on dealerships.
According to the Federation of Automobile Dealership Association, inventory levels are now as high as 45-50 days at two-wheeler dealerships, and 35-40 days for passenger vehicles. These figures represent the average number of days the company holds its inventory before selling it. And dealers are not too excited about this. They expect demand to remain muted, and think sales will reach last year’s levels at the most. As such, the heightened inventory levels might actually hurt them.
You see, dealers depend on banks and financial institutions for their short-term capital requirements- like buying vehicles from manufacturers. And if they’re unable to sell these vehicles, they’ll have trouble repaying their loans. So, they would have preferred it if the inventory didn’t cross 20-30 days.
According to a recent ICRA report, automobile dealerships are among the worst-impacted segments in the entire automotive value chain. Some may even have to shut shop. The report says, “Given muted volumes, high fixed overheads and rising inventory levels, the overall credit stress is likely to remain high in the sector with few dealerships likely to witness closure.”
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-Written by Vedika Agarwal