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Showing posts with label The Indian Express. Show all posts
Showing posts with label The Indian Express. Show all posts

Monday, April 19, 2021

Questions in a surge (The Indian Express)

Written by Kaushik Das Gupta 

Health worker in PPE suit treating Covid-19 patients at an Isolation center in New Delhi on Saturday. Express Photo by Praveen Khanna)

This time, last year, India was under a lockdown announced by Prime Minister Narendra Modi in a televised address during which he issued several messages of caution. He talked about the need for extreme vigilance and underlined the salience of physical distancing and use of masks — points he would reiterate several times later in the year. A less remembered part of the PM’s speech was a note of comparison with countries more prosperous and resourceful than India. Even these countries are struggling to control the novel coronavirus, he said.

The country pushed back the virus through a combination of measures that restricted people’s movement — their socially and economically crippling effects are now well-documented — the skill of its medical professionals who took on the virus under conditions that demanded unprecedented mental and physical resolve, and a panoply of arrangements to augment the health infrastructure. Medical protocols evolved and policymakers made innovative interventions at times — the Delhi government’s home-care initiative for less serious patients that took the burden away from hospitals and quarantine facilities was one such initiative. A notable feature of the fight was also the use of makeshift facilities — stadiums, hotels, banquet halls were turned into COVID-care centres.

Healthcare facilities are strained again, a year later, with the virus striking back with a vengeance. Several state governments, including those in Maharashtra and Delhi, are back to mobilising “temporary” reinforcements.

The panic that has set in the past few weeks occasions a recall of the well-known criticisms and warnings – admissions too — about India’s health infrastructure deficit. There is little doubt that the crown-shaped virus has become multiple times more infectious compared to last year. But scientists had always cautioned about the microbe’s arbitrary ways. With governments scrambling for medical facilities, oxygen cylinders, ventilators and critical drugs such as Remdesivir, the question that must be asked is: Was the unpredictability factor sufficiently appreciated, when we decided — rightly so — to live with an adversary that is known to make its way insidiously, with most hosts not even showing symptoms?

A virus hijacks its receptor’s cells to make copies of itself. But reproductions are not always perfect. Many of these mutations have little effect on the tiny entity’s capacity to infect humans. Some of these errors even make the virus more benign. But some changes make it more adept at jumping from one host to the other. In September last year, as India’s first wave was peaking, scientists in the UK warned of a mutant 50 times more transmissible — implying that the microbe could cause many more deaths if left uncontrolled. By the end of the year, more than 4,000 people in different parts of Europe had been infected by this mutant.

Early this year, evidence began to surface of the more prolific versions of the virus sneaking into India. In January, double mutants, now known as B.1.617, were found in samples collected in Maharashtra, a few weeks before India’s worst-affected state began to report reversals of the gains made last year. But there was no conclusive evidence that these specimens were typical of the recent surge in the state. And the jury is still out, about three months later, even as the Pune-based National Institute of Virology has found B.1.617 in 60 per cent of the specimens collected from Maharashtra. The specimen size is too small to show that B.1.617 is now the predominant coloniser. Meanwhile, there is evidence of this fast-spreading mutant in samples from Delhi, Punjab and Madhya Pradesh as well.

Scientists say that constant analysis of the virus’s genetic information, combined with epidemiological data, is crucial to providing real-time knowledge about the pathogen’s vagaries. Interestingly, both the UK and India were alert to this imperative in the early days of the pandemic. India’s enthusiasm, however, seems to have flagged — less than 1 per cent of COVID-positive specimens are subjected to genomic sequencing — while the UK was able to use this tracking method to alert the world about the changes in the virus’s biology. Globally, though, the deployment of this technology has been patchy. But as a Lancet editorial in February pointed out, “the fact that Gambia, Equatorial Guinea, and Sierra Leone have a higher rate of genome sequencing than France, Italy, or the USA, suggests that wealth is not the only determinant of capacity”. India, too, it seems, has not made optimum use of its facilities. The Delhi-based Institute of Genomics and Integrative Biology is reportedly analysing less than 30 per cent of the samples it is equipped to study.

Last week, Home Minister Amit Shah belatedly admitted the possible role of mutants in the surge. “Scientists are studying it,” he said. The health ministry, however, remains obstinate about the country’s inoculation strategy, framed when the pandemic was receding. That time it had rightly talked of prioritising frontline workers, senior citizens and those with comorbidities. With the virus taking on menacing proportions, the government tweaked the priority criteria to include all people above the age of 45. It has also granted emergency use approval to vaccines that have received the nod of the US, UK, Japan and the WHO. But the primary challenge of India’s inoculation project was always going to be the pace at which it shields a substantial section of its population to reduce the severity of COVID — this challenge has intensified with the second wave.

Last month, US President Joe Biden pledged to amass enough vaccine stocks to inoculate every American by the end of May. In India, in contrast, states have begun to complain of vaccine shortage. Though the Centre vehemently denies such claims, the CEO of the country’s leading vaccine manufacturing company first asking for Rs 3,000-crore to ramp up production capacity and then pleading with Biden to end the embargo on raw materials needed to produce the shot aggravates the miasma, and invites questions: Is the government postponing the use of the Rs 35,000-crore allocated for vaccine development in the current Budget? Has it been shy in using its good offices with the US to intercede on behalf of the country’s vaccine manufacturing companies?

India’s scientific expertise and its vaccination manufacturing capacity were, rightfully, touted as its best bet in the battle against the virus. Have we used these capacities to the optimum, given institutions enough support? Did we learn the right lessons last year? Answers to these questions hold the key to lifting the gloom that has overtaken the country.

Courtesy - The Indian Express.


An unfair tax proposal (The Indian Express)

Written by Suranjali Tandon 

The US Treasury building in Washington.

The US Treasury’s call for a global minimum tax has received global endorsement. It is being proposed that the race to the bottom for corporate tax rates be reversed. While in principle it is sound policy to remove preferential rate structures for companies, one must inquire into what stakeholders mean when they say that a company must pay its fair share of taxes, and more so to whom.

The Base Erosion and Profit Shifting (BEPS) programme was initiated in 2013 to curb practices that allowed companies to reduce their tax liabilities by exploiting loopholes in the tax law. Big tech companies, for instance, were able to plan activities such that physical presence was not necessary to operate in large markets such as India and profits could be relatively easily relocated to low-tax jurisdictions through financial manoeuvres.

The OECD co-opted countries in the framework by suggesting that a consensus-based outcome would be superior to a patchwork of independent changes. Developing countries weren’t sure if they would receive the right to tax the mobile incomes of tech companies. Addressing this concern, the OECD published a policy note that bifurcated the challenge into two pillars. Pillar one was to address the issue of reallocation of taxing rights whereas all remaining BEPS issues would be addressed by pillar two.

In October 2020, when blueprints of the proposals were released, experts pointed to their complexity. Most contentious is that only a fraction of the profits will be allocated to markets. While the blueprints are undergoing consideration, the tax base of countries, including India, remains exposed to the risk of under or non-taxation.

To fix this, countries have implemented a digital services tax on revenues. In response, the US launched, in 2020, inquiries under the Trade Act 1974 and is now proposing tariffs as means to curb the proliferation of such measures. Departing from the Trump regime, the Biden administration has assured its participation in finding a consensus-based solution. However, at a recent presentation, the US Treasury suggested that it will apply the pillar one proposal to top 100 companies and will not accept any result that is discriminatory to US companies. The US now supports a simplification of the proposal. However, it remains to be seen how the final version pans out for markets such as India.

Shifting to pillar two, it is now being proposed that the US corporate tax rate be raised to 28 per cent. However, the raising of the tax rate is to be read alongside the proposals under pillar two, which seek to achieve a harmonisation of rates across the world.

It is being suggested that a minimum tax rate be defined for the world. This would require consensus on what the effective tax rate companies must pay. This minimum rate is not yet defined, but once this rate is fixed, a multinational enterprise’s effective tax rate in each jurisdiction will be compared with the minimum and where a lower rate is paid, a top-up tax will apply. But who gets to tax the remaining profits? As per the current design, the country where the ultimate parent entity resides is where the tax is first applicable. Given that nearly 30 per cent of the Forbes 2000 companies are in the US, the implementation of this proposal best serves the needs of the US.

For India, committing to such a global standard needs to be assessed carefully, especially since the proposal will apply to companies with global revenues above Euro 750 million. Moreover, India has witnessed a consistent rise in the effective tax rate which is now close to 26 per cent.

The call for a minimum tax may be seen as US correcting for the slippages in its own tax laws and as a means to finance the $2 trillion spending programme. For the rise in US tax rates to pay off, it requires other countries to reform their tax systems accordingly and, most importantly, allow for the taxation of incomes that are perceived to be undertaxed. India has, over the past few years adopted legal measures to tax incomes of companies that avoid residence in India. It is perhaps time to reflect if the two pillars of international tax reform are meant to support the super structure of developed countries.

 The writer is assistant professor, NIPFP.

Courtesy - The Indian Express.


Get farmer numbers right (The Indian Express)

Written by Harish Damodaran 

How many farmers does India really have? The Agriculture Ministry’s last Input Survey for 2016-17 pegged the total operational holdings at 146.19 million. The NABARD All India Rural Financial Inclusion Survey of the same year estimated the country’s “agricultural households” at 100.7 million. The Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) has around 111.5 million enrolled beneficiaries, with an average of 102 million-plus getting payments during 2020-21.

India’s official farmer population, in other words, is anywhere between 100 million and 150 million. But how much of this comprises actual farmers? Agricultural households, as per NABARD’s definition, cover any household whose value of produce from farming activities is more than Rs 5,000 during a year. That obviously is too little to qualify as living income.

A “real” farmer is someone who would derive a significant part of his/her income from agriculture. This, one can reasonably assume, requires growing at least two crops in a year. The 2016-17 Input Survey report shows that out of the total 157.21 million hectares (mh) of farmland with 146.19 million holdings, only 140 mh was cultivated. And even out of this net sown area, a mere 50.48 mh was cropped two times or more, which includes 40.76 mh of irrigated and 9.72 mh of un-irrigated land. Taking the average holding size of 1.08 hectares for 2016-17, the number of “serious full-time farmers” cultivating a minimum of two crops a year — typically one in the post-monsoon kharif and the other in the winter-spring rabi seasons — would be hardly 47 million. Or, say, 50 million.

The above figure — less than half or even a third of what is usually quoted — is also consistent with other data from the Input Survey. These pertain to the number of cultivators planting certified/high yielding seeds (59.01 million), using own or hired tractors (72.29 million) and electric/diesel engine pumpsets (45.96 million), and availing institutional credit (57.08 million). Whichever metric one considers, the farmer population significantly engaged and dependent on agriculture as a primary source of income is well within 50-75 million.

The current agriculture crisis is largely about these 50-75 million farm households. At the heart of this is the absence of price parity. In 1970-71, when the minimum support price (MSP) of wheat was Rs 76 per quintal, 10 grams of 24-carat gold cost about Rs 185 and the monthly starting pay for a government schoolteacher was roughly Rs 150. Today, the wheat MSP is at Rs 1,975/quintal, gold prices are Rs 45,000/10g and the minimum salary of government schoolteachers is Rs 40,000/month. Thus, if 2-2.5 quintals of wheat could purchase 10g gold and pay a government primary schoolteacher’s salary in 1970-71, the farmer has to now sell 20-23 quintals for the same. Fifty years ago, one kg of wheat could buy one litre of diesel at MSP. Today, that ratio is upwards of 4:1.

The absence of farm price parity didn’t hurt much initially when crop productivity was rising. Pre-Green Revolution, wheat and paddy yields in Punjab averaged 1.2 and 1.5 tonnes per hectare, while trebling to over 3.7 and 4.8 tonnes, respectively, by 1990-91. The output gains reaped by farmers from planting high-yielding varieties more than offset the lower price increases in their produce relative to that of other goods and services.

Since the 1990s, yields have further gone up to 5.1-5.2 tonnes/hectare in wheat and 6.4-6.5 tonnes for paddy. But so have production costs. In cotton, maize, vegetables, milk and poultry products, farmers experienced both yield gains (from Bt and hybrid seeds technology, drip/sprinkler irrigation, laser levelling, crossbreeding and improved agronomic and feeding practices) and favourable prices (on the back of growing domestic incomes and export demand) during the first 15 years or so of this century. The last five-six years, however, have seen prices of these crops come under relentless downward pressure. This, even as costs — whether of diesel, pesticides and, more recently, non-urea fertilisers — have escalated.

The demand for making MSP a legal right is basically a demand for price parity that gives agricultural commodities sufficient purchasing power with respect to things bought by farmers. It is coming mainly from the 50-75 million “serious full-time farmers” who have surplus to sell and with real stakes in agriculture. They are the ones whom “agriculture policy” should target. Most government welfare schemes are aimed at poverty alleviation and uplifting those at the bottom of the pyramid. But there’s no policy for those in the “middle” and in danger of slipping to the bottom.

An annual transfer of Rs 6,000 under PM-Kisan may not be small for the part-time farmer who earns more from non-agricultural activities. It is a pittance, though, for the full-time agriculturist who spends Rs 14,000-15,000 on cultivating just one acre of wheat and, likewise, Rs 24,000-25,000 on paddy, Rs 39,000-40,000 on onion and Rs 75,000-76,000 on sugarcane. When crop prices fail to keep pace with escalating costs — of not only inputs, but everything the farmer buys — the impact is on the 50-75 million surplus producers. They have seen better times, when yields were on the rise and the terms of trade weren’t as much against agriculture.

Any “agriculture policy” has to first and foremost address the problem of price parity. Should this be ensured through MSP-based procurement, paying the difference between MSP and the market price, or simply per-acre transfers? Would farmer interest be even better served by the government guaranteeing a minimum “income” rather than “price” support? These are details that can be worked out once there is clarity on the number of farmers for whom crop prices actually matter.

Subsistence or part-time agriculturalists, on the other hand, would benefit more from welfare schemes and other interventions to boost non-farm employment. Even within farming, the opportunities for them aren’t in regular crop agriculture. A one-acre farmer can rear five cows and sell 30 litres of milk daily from three at any given time. The same small holding can, alternatively, house a broiler farm with up to 10,000 birds and six batches being sold in a year.

Whether it is crop, livestock or poultry, agriculture policy has to focus on “serious full-time farmers”, most of them neither rich nor poor. This rural middle class that was once very confident of its future in agriculture today risks going out of business. That shouldn’t be allowed to happen.

 The writer, national rural affairs and agriculture editor for The Indian Express, is currently on sabbatical with the Centre for Policy Research, Delhi.

Courtesy - The Indian Express.


Wednesday, April 14, 2021

An aggressive vaccination drive holds the key to economic revival (The Indian Express)

Written by Sajjid Z. Chinoy

The dramatic resurgence of COVID-19 in India risks reshaping the domestic macroeconomic narrative. Till a month ago, the focus was on assessing the nature of the economic recovery from the first wave, and its implications for fiscal and monetary normalisation. That narrative, however, risks being disrupted by fast-moving developments on the virus front.

India’s daily new cases have surged past 1,50,000, much above the first peak, a pattern similar to the US, UK, South Africa and Brazil, where second waves had much higher amplitudes. In India’s first wave, the increase from 50,000 to about 1,00,000 cases took about 50 days; in the second wave, it’s taken just 13. To start with, the second wave was more concentrated, with Maharashtra accounting for 60 per cent of cases. But its share has now dropped to below 40 per cent. While the top five states still account for about 65 per cent of cases, the reproduction (R) factor in almost 10 states is estimated to be two or higher, creating risks for a wider and more rapid spread, if unaddressed.

While case fatality ratios are lower, the sheer speed of the second wave has meant the elevated “denominator” is putting pressure on some healthcare systems. Therefore, even as policymakers are understandably reluctant to impose blanket lockdowns — given the associated economic disruptions — they may have no choice but to impose local or regional circuit-breakers to ward off pressure on the healthcare infrastructure. A series of local lockdowns have been announced in recent days, and more can be expected, reflected in the Oxford Stringency Index — a measure of restrictions on activity — jumping by almost 30 per cent over the last week.

Courtesy - The Indian Express.


The wellness workforce (The Indian Express)

Written by Preeti Sudan 

A graffiti in New Delhi (Express photo/Amit Mehra)

The National Commission for Allied and Healthcare Professions Bill, 2020 (NCAHP) was passed by Parliament in March. It’s a historic event for two reasons. First, it is not every day that we see unanimous support for legislation. Second, the impact of this legislation on the health workforce and healthcare denotes a paradigm shift.

Initial efforts at regulating allied health professions were participatory, beginning in the early 1990s. After numerous consultations with key stakeholders, the first draft Bill was uploaded on the health ministry’s website in 2015, inviting public comments. The overwhelming number of responses triggered another, more intensive process of public consultations, expert meetings, reviews, and discussions with stakeholders, including states. Building consensus on a range of provisions in the Bill was no mean feat. The revised “Allied and Healthcare Professions Bill” was introduced in the Rajya Sabha in December 2018. The health department-related parliamentary standing committee made 110 recommendations. The government accepted 102 recommendations unequivocally, and six with slight modifications, resulting in the NCAHP, 2020.

This legislation provides for regulation and maintenance of standards of education and services by allied and healthcare professionals and the maintenance of a central register of such professionals. It recognises over 50 professions such as physiotherapists, optometrists, nutritionists, medical laboratory professionals, radiotherapy technology professionals, which had hitherto lacked a comprehensive regulatory mechanism.

An important feature of this Bill is the classification of allied professionals using the International System of Classification of Occupations (ISCO code). This facilitates global mobility and enables better opportunities for such professionals, potentially benefiting around 8-9 lakh existing allied and healthcare-related professionals.

The Act aims to establish a central statutory body as a National Commission for Allied and Healthcare Professions. It will be supported by 10 professional councils to frame policies and standards, regulate professional conduct, prescribe qualifications, create and maintain a central register.

The government has taken all possible measures to incorporate the demands and recommendations of states. Thus, the Bill has the provision for state councils to execute major functions through autonomous boards. The state councils are the implementation agencies while the National Commission is the overarching body devising policies.

Global evidence demonstrates the vital role of allied professionals in the delivery of healthcare services. The demand for such professionals is high. They are the first to recognise the problems of the patients and serve as safety nets. Their awareness of patient care accountability adds tremendous value to the healthcare team in both the public and private sectors. The passage of this Bill has the potential to overhaul the entire allied health workforce by establishing institutes of excellence and regulating the scope of practice by focusing on task shifting and task-re distribution.

There has been a paradigm shift in perception, policy, and programmatic interventions in healthcare delivery in India since 2017. Being healthy was largely understood as not being sick or getting treated when sick. Curative healthcare received substantially greater attention than preventive and promotive aspects. Ayushman Bharat as a programmatic intervention, with its two pillars of Health and Wellness Centres (HWCs) and Pradhan Mantri Jan Arogya Yojana (PMJAY), operationalised certain critical recommendations of the National Health Policy, 2017, emphasising wellness in healthcare. With PMJAY, the neediest are protected from catastrophic expenditure as the government became a payer of hospital expenses for 50 crore people, and India took the first step towards delivering comprehensive primary healthcare with HWCs, that provided services that addressed major causes of morbidity and mortality.

The stress of modern lifestyle, rapid urbanisation, rising chronic non-communicable disease burden, and an increasing proportion of elderly from 5.3 per cent in 1950 to an estimated 10 per cent in 2020 and expected to increase to 19 per cent by 2050), have necessitated a change in delivering healthcare. Caring for patients with mental conditions, the elderly, those in need of palliative services, and enabling professional services for lifestyle change related to physical activity and diets, all require a trained, allied health workforce. The NCAHP is not only timely but critical to this changing paradigm.

  The writer is former Union secretary, health and family welfare

Courtesy - The Indian Express.


American fleet and Indian waters’ (The Indian Express)

Written by Manish Tewari  

India and US were involved in a joint naval exercise, along with navies of Japan, France and Australia in the eastern Indian Ocean region, in the La Pérouse exercise between April 5 and April 7. (Source: Twitter/@USNavy)

The United States of America has always basked in its bluntness and candour. However, what it did recently is something of an “achievement” even by its own tone-deaf standards.

On April 7, the US Navy put out a rather quixotic announcement on the official website of its Seventh Naval Fleet stating that one of its ships, USS John Paul Jones, had asserted navigational rights and freedoms approximately 130 nautical miles west of the Lakshadweep Islands inside India’s Exclusive Economic Zone (EEZ), without requesting Delhi’s prior consent. It went on to declare that the freedom of navigation operations (FONOPs) are not about one country, nor are they about making political statements.

Several elements of the Seventh Fleet entering Indian waters without permission touch on emotive issues for India with attendant overtones of patriotism. The fact that these FONOPs have happened earlier does not, in any manner, normalise what happened on April 7 — or, for that matter, why the Seventh Fleet courted ignominy half a century ago.

Herein hangs a tale. As the Indo-Pakistan conflict over the genocide in the then East Pakistan looked inevitable, US President Richard Nixon and his National Security Adviser (NSA) Henry Kissinger decided that if push came to shove, they would weigh in on West Pakistan’s side. This was notwithstanding the fact that the US administration was fully cognizant of the grave human rights violations being perpetrated by the Pakistani army in the east of the country.

Consistent with the plan in November 1971, Henry Kissinger advised his Deputy NSA General Alexander Haig to direct the US Navy to keep an aircraft-carrier-led task force ready for deployment in the Indian Ocean.

As the tide of war turned against Pakistan, US Navy’s Task Force-74 of the Seventh Fleet led by the aircraft carrier USS Enterprise was ordered to sail at battle speed into the Bay of Bengal from the Gulf of Tonkin where it was then deployed for operations in the Vietnam war. Concurrently, the British Navy also dispatched a naval group led by the aircraft carrier HMS Eagle towards the west coast of India.

An audacious and coordinated “grand bluff” to intimidate India was thus operationalised. British ships in the Arabian Sea would engage Indian naval assets, thereby providing a distraction for the US Task Force-74 to make a dash for the coast of East Pakistan to reinforce the pulverised Pakistani positions. The objective being to force an immediate ceasefire and stop Dhaka from falling into Indian hands.

Obviously, this caused great consternation in India. Articulating India’s position, Defence Minister Jagjivan Ram thundered: “Even if the US were to send the 70th fleet, we would still not be deterred”.

However, on the ground, the situation was grim. Facing the British and the American Armada was Indian Navy’s Eastern Fleet commanded by its aircraft carrier Vikrant with barely 20 light fighter aircrafts. The Indian Air Force would provide the rest of the muscle.

Invoking the Indo-Soviet Treaty signed on August 9, 1971, India requested the Soviet Union for help to call out the Nixon-Kissinger chicanery. The Soviets responded with alacrity. The 10th Operative Battle Group (Pacific Fleet) commanded by Admiral Vladimir Kruglyakov slipped anchor at Vladivostok and in double quick time reached the Bay of Bengal. The Soviets stared down the Anglo-American flotilla and the rest is history. However, the American perfidy at that critical moment is indelibly imprinted in the collective Indian psyche.

Since then, India and the US have become friends if not allies. The Quad between US, Japan, Australia and India is plugged as the fulcrum of a future Asian NATO. India and US have signed foundational agreements for better interoperability between their respective militaries. Since the Indian nuclear tests of 1998, there has been better appreciation of each other’s strategic imperatives. The US, by its own admission, has supported India logistically in eastern Ladakh.

However, it seems the understanding has not permeated deep enough to understand each other’s psyche, if not sensibilities. In the fiftieth year of the creation of Bangladesh, to sail a Seventh Fleet vessel in defiance of Indian law through our EEZ, and then advertise it is downright obtuse, if not intended to send out a message to India and the larger Indo-Pacific region. For the manoeuvre is not as innocent as it is being made to look.

The Joe Biden administration’s appreciation of the Indo-Pacific and India’s place in it is very different from that of its predecessor. While Trump saw India as an important instrument to counter the growing Chinese influence in the region, President Biden has a more nuanced, if not a softer, approach towards Beijing. The manner in which FONOP was broadcast is obviously to smoothen ruffled Chinese feathers over similar operations in the South China Sea that the US has been regularly undertaking.

Given that India and China are still locked in an eyeball-to-eyeball confrontation in eastern Ladakh, such posturing by the US does not augur well for India. Even our “time-tested ally” Russia wants to balance its position in South Asia given our “closeness” to the US, as evidenced by the Quad and our approach to Afghanistan that is more aligned to the US position than what Moscow is proposing. India will do well to weigh its options far more carefully. A stitch in time saves nine.

 The writer is a Congress leader, lawyer, MP and former Union Information and Broadcasting Minister.

Courtesy - The Indian Express.


Saturday, April 10, 2021

Swimming above the wave (The Indian Express)

Written by Sonal Varma , Aurodeep Nandi 

With the daily run-rate of cases surpassing the first-wave peak, it’s no longer just a wave, but a potential tsunami.

As India’s economy embarks on a new financial year, a dark cloud is on the horizon: The second wave. Every day brings further reconfirmation that the second wave is no longer a Maharashtra-centric phenomenon. With the daily run-rate of cases surpassing the first-wave peak, it’s no longer just a wave, but a potential tsunami. Yet, there is a silver lining — the number of daily deaths is currently around half of what it was during the first wave peak, offering some relief to the health infrastructure, and consequently reducing the urgency of states to rush into lockdowns. However, as cases rise, this relief may prove short-lived.

The second COVID-19 wave comes at a time when India’s economy has made a resilient comeback. But with the spectre of lockdowns again looming large, how much does the second wave threaten this recovery?

There are a few reasons why we aren’t raising a panic at this point. First, the lockdowns are far more benign than they were during the first wave. While select contact-based services and transportation are likely to be hit, they remain operational at lower capacity levels. The rest of the economy — agriculture, industry and even services such as construction, communication, trade — should remain largely unaffected. Our estimates suggest that the sectors “at-risk” account for less than 6 per cent of the economy. Second, firms and consumers have rapidly adjusted to the new normal and the relationship between (lower) mobility and (weak) economic activity has been weakening over time.

The ultra-high frequency data for March and early April, released since the renewed lockdowns were announced, seem to largely corroborate this. While power demand, ozone concentration levels, and railway freight revenues have remained relatively resilient, there is a dip in driving congestion and railway passenger revenues. Google retail and recreation mobility, while mostly holding up on aggregate, have shown greater drags in Maharashtra, and a slow moderation in states like Punjab, Madhya Pradesh and Gujarat. The Nomura India Business Resumption Index, our weekly tracker of the pace of economic activity normalisation, is tracking around 9 percentage points below normal after almost returning to pre-pandemic levels in end-February. Hence, the second wave has resulted in a marginal hit to services activity, but the goods sector continues to recover.

There are bright spots to look forward to over the coming quarters. First, the pace of vaccinations is likely to accelerate further — we estimate that India is on track to vaccinate 40-45 per cent of its population by end-2021. As vaccinations pick up, they are also likely to result in an “ultimate unlock” of the economy as the services sector bounces back. Second, we expect a synchronised global growth recovery to begin in Q2, led by the US, which should have some beneficial growth effects on India. Historically India’s growth cycle has moved in sync with the global cycle due to trade and investment linkages. And finally, the lagged impact of easy financial conditions on the resilient formal sector households and firms is still to play out.

We expect real GDP growth to remain positive and rise further in Q4 2020-21. However, a worsening second wave implies that sequential momentum in Q1 2021-22 would likely be weaker, although year-on-year growth will still be above 30 per cent this quarter and overall growth in 2021-22 should be above the RBI’s projection of 10.5 per cent.

Nevertheless, there are risks and uncertainties to monitor. The virus could mutate and the speed of vaccinations could waver. Higher commodity prices-led terms of trade deterioration could squeeze firms’ profit margins and/or consumer real incomes, if passed on. Higher US yields and the risk of capital outflows could prematurely tighten domestic financial conditions.

Over the medium term, it remains to be seen if India’s fiscal activism will lead to a revival of the private capex cycle or if firms’ remain focused on debt deleveraging. With the smokescreen of forbearances finally lifted, this year will present a clearer picture of the extent of balance sheet scarring.

These factors weighed on the RBI during its April policy meeting, where it maintained policy rates and its accommodative stance, without changing its GDP growth outlook for 2021-22, while projecting headline inflation above 5 per cent for most of the fiscal year. To manage the yield curve, it is now experimenting with Federal Reserve-styled Quantitative Easing. It is a tough juggling act — to support growth with ample liquidity, manage long term yields, and yet stave off the inflationary impulse by-product. One of the balls has to eventually drop.

As for what happens next, we believe the RBI is particularly monitoring two dials on its dashboard: One, the economic impact of the second wave and two, whether cost-push pressures lead to higher core inflation. While the second wave has rapidly rivalled the first wave in terms of its magnitude, unlike the first tsunami, growth should have a much firmer footing this time around. There may be a few uprooted trees, but the foundations of the cyclical recovery are likely to remain strong, in our view. Once these risks recede, we expect a clear signal on policy normalisation to emerge with a higher weight to inflation, relative to growth. We expect explicit liquidity normalisation (implicit has already started, in our view), the policy stance to shift to “neutral” from “accommodative” in July-September, the normalisation of the policy corridor to take place in Q4 2021 (via a 25 bps reverse repo rate hike) and 50 bps worth of repo rate hikes in the first half of 2022. This gradual normalisation of liquidity and policy, alongside absorption of government borrowing, will call for careful communication and deft policy manoeuvring.

 Varma is chief economist for India and Asia ex-Japan, and Nandi is India economist at Nomura.

Courtesy - The Indian Express.


Creating drivers of change (The Indian Express)

Written by Yoginder K. Alagh

What are the big events and trends in the last half century that we must recollect as the nation celebrates the 75th anniversary of its Independence? A recent book by the retired Economics Services Officer, K L Datta, Growth and Development Planning in India, documents this journey from a policymaker’s perspective.

I was fortunate to be in the driver’s seat for a substantial part of that journey. I spent 19 years of my career at the Planning Commission, first planning the country’s food and energy reliance and then sustainable rural development that required engagement with the land, rivers, soils and climates of our country. Later, I stewarded the country’s premier university as it entered the select category of the world’s top hundred universities.

Datta was a colleague at the Planning Commission, who worked with me to define poverty. In this article, I cite his account, in which he has been generous to me. After finishing his IES training, Datta opted for the Planning Commission and was sent to me to decide if we would accept him.

I reportedly grilled the young recruit for three hours on his statistical training (I do not actually “grill” anybody, but we could have had a good discussion) and then asked him to join work, giving him a “brief” to work on defining poverty and frame it in an analytical context. A poverty line (Rs/person/day) was defined by a group of eminent economists in the early Sixties. Its report was not available, and its methodologies weren’t clear. I wanted some solid research that accounted for consumer behaviour in rural and urban areas and informed Datta that R Radhakrishna and Atul Sarma at the Sardar Patel Institute of Economic and Social Research in Ahmedabad had worked on the issue. They got on the job and the taskforce I chaired defined a line which separated the non-poor and the poor in urban and rural areas. The report was discussed and validated in 1979. The approach used in the report defined the Official Poverty Line (OPL), which lasted for a decade.

When a later term as Planning Commission member came to an end, I wanted the OPL changed since it had served its purpose. In response, the Lakdawala Committee was set up. The committee’s report, submitted in 1993, updated the poverty line according to prices. In 2009, the Suresh Tendulkar committee did the same but applied the OPL urban line for both urban and rural areas. I was, at times, a spectator to all this, but did not always keep quiet. I got a polite hearing, being the granddaddy of the process but nobody was willing to tamper with the “Alagh Poverty Line” — it was rejigged, not drawn afresh.

In 1979, we wanted to change the world that we had inherited. India’s food production was stagnating, and the Hudson Institute in the US had predicted that millions would die. We built a model based on data to give us the drivers to change that. Datta describes all that. In 1979, I was asked by the World Bank why we had not only met our original target of producing 125 million tonnes of grain — which five years earlier they had called the dreams of the wild-haired boys of India’s Planning Commission — but also surpassed it in two years. I said Indira Gandhi — who was then in the Opposition – had supported us. I also pointed out jokingly that coming from Ahmedabad I made sure there were “reserves”.

Datta gives the insider’s story. His account ends with the Planning Commission being abolished and rules-based resource allocation given up by the NDA government. In a chapter, Datta expresses his anguish at this development. My only hope is that somebody out there reads his book and takes action to build a road map for the implementation of the farm laws.

 The writer, an economist, is a former Union minister

Courtesy - The Indian Express.


How to defeat the virus and build a COVID-free India (Outflanking the virus) (The Indian Express)

Written by Shashank R Joshi 

A health workers takes a swab sample for Covid-19 testing (File Photo)

One of the smallest accidental wildlife viruses has spiralled and disrupted the planet and India is no exception. Unfortunately, after our first wave with multiple peaks, which varied according to time, mobility, population density and migration, argumentative Indians still want to rebel against the virus. It’s time we all came together to fight the sinister ravages of this tricky ever-changing RNA virus, which is slow mutating compared to its flu counterparts, but leaves a bad aftermath.

Once our first wave abated, everyone thought COVID-19 had departed and we faltered by letting down our guard in terms of masking and adherence to COVID-appropriate behaviour. This was boosted by a false confidence due to lower number of cases and fatalities. Large gatherings suddenly sprang up, and with the vaccine coming in, people got carried away. The COVID-19 virus battle is much more in the mind than in the body. A strong and resilient, strict and firm mindset is needed, not a rebellious, revengeful, reckless and careless one. Fatigue can’t be an excuse either, neither can self-confidence. India has enough masks, which is still the strongest vaccine, independent of the variants that may emerge.

The second surge started very subtly from small, less exposed population clusters in some districts from where it has rapidly spread to the rest of India. Clearly, in the second wave, we are seeing a more transmissible strain, possibly less virulent. It is a work in progress for genomic scientists and public health experts to delineate if it’s an imported strain from the UK, South Africa or Brazil or a home-grown mutant. Public health policing will still be the same but due to its rapid spread, possible evasion of RT-PCR testing or immune escape, it can have serious implications in the long run and we need to generate some high quality science data to understand this.

The current second wave pattern shows large clusters of invisible or asymptomatic COVID-19 cases which are in the community and which need to be contained. The symptoms of fever, dry cough, breathlessness are still very much around but lack of smell or taste, diarrhoea and others have crept up. COVID-19’s changing colours and unpredictable nature makes it difficult to recognise red flags for determining deterioration. The simplest and easiest test is to measure the oxygen saturation on a simple pulse oximeter and after a 6-minute walk record the reading — if it is below 94 per cent or shows a fall of 3 per cent you need to contact a health care facility and provider to seek oxygen, steroid and supervised care. Most asymptomatic cases or mild cases need to be vigilant, especially in the second week, as they suddenly get the “happy” hypoxia and worsen.

Clearly, we need to focus on saving lives and, without panic, organising digitally or physically supervised medical health care. Our health care facilities need to triage the most deserving cases and avoid asymptomatic or mild symptomatic cases in hospitals so we can keep beds for the most deserving cases. COVID-19 care is about close monitoring, right timing of the right medicine, prone position with breathing exercises including pranayama, oxygen and steroids in the moderate to severe cases under supervision. Most treatments like plasma, Remdesivir or others either don’t work or at best improve recovery by a day or two but don’t save lives. Every COVID-19 case should remember it’s a two-week time-table and be rested for at least two to three weeks based on medical advice.

We have unfortunately an overload of information that is not peer reviewed and misleading. Simple life-style measures like eating on time, eating slowly, eating right with exercises, adequate sleep and positive thinking contribute immensely to COVID-19 recovery. In pandemic times, we need to use our resources judiciously as our labs and radiology systems are overwhelmed just like our hospitals and staff. So test under appropriate advice and don’t panic on reports, but take prudent action under advice. Timing is crucial so that there is no delay in red flagging the serious cases.

The vaccine is the new mantra after COVID-appropriate behaviour of mask, distancing and sanitising. The vaccine’s primary goal is to protect the most vulnerable from death and severe diseases. These are all first generation rapidly developed vaccines which are all in research mode. All vaccines are safe, except a few contra-indications which your doctor will identify, like anaphylaxis. India is the vaccine pharmacy of the world and has developed some high-quality vaccines which are homegrown, some that are yet to become available. India led the world in polio and small pox and will do so in COVID-19 too. We should be proud of Indian science and the teams which have made this possible. India is part of the global alliance for vaccines and deserves congratulations for rising above vaccine nationalism by exporting them and fulfilling its global obligations.

We need to vaccinate all vulnerable groups which can succumb to COVID-19 independent of age, but we must also follow vaccine discipline. Our vaccine approach is calibrated, but soon will become more open and inclusive. The current focus is on saving the lives of the most vulnerable. We may need to innovate strategies to vaccinate, like using family doctors or paediatricians’ clinics or mobile vans or vaccine camps as well as avoid wastage by including exceptions in a mindful way.

Vaccines confer protection from disease but not necessarily infection. So post vaccine, even after full doses, we need to mask, avoid crowds and poorly ventilated spaces, distance and sanitise. We shouldn’t unmask while speaking, try to avoid crowds when eating. We need to use safer masking strategies like doubling up, using mask braces, ensuring that it is tight and well fitting. There has to be zero tolerance for violators of COVID norms, behaviour and protocols and we need to have a single-minded determination to conquer this nasty virus. We need to clear the virus from our environment using mind and body strategies and build a strong COVID-free India.

 The writer is consultant endocrinologist, Lilavati Hospital, and member Covid-19 Task Force, Maharashtra. He was awarded the Padma Shri in 2014.

Courtesy - The Indian Express.


Friday, April 9, 2021

World according to women (The Indian Express)

Written by Ambika Vishwanath

On March 31, the World Economic Forum released its annual Gender Gap Report 2021. India had slipped 28 spots to rank 140 out of the 156 countries covered. The index is based on four dimensions, where political participation maintains the largest gap globally, worse than the 2019 edition of the report. Within the 156 countries covered, women hold only 26 per cent of parliamentary seats and 22 per cent of ministerial positions. India in some ways reflects this widening gap, where the number of ministers declined from 23.1 per cent in 2019 to 9.1 per cent in 2021. The number of women in Parliament stands low at 14.4 per cent.

In a time when 104 countries still have laws preventing women from certain types of jobs, and over 600 million women live in countries where domestic violence is not punishable, a gendered approach has to be mainstreamed into broader policy objectives. This means going beyond conventional considerations of development assistance and domestic policies to include core areas of foreign policy, economics, finance, trade and security. This also means that along with increasing representation, women and marginalised sections of society need to have a voice to provide alternative perspectives to policy making.

A feminist foreign policy as a political framework explores this very realm, first introduced and advocated by Sweden in 2014. Feminist approaches to international affairs can be traced back to the 1980s. In many ways this translated to a bottom-up development approach, especially with a donor-based mindset that benefitted the recipient, albeit often with caveats. While this slowly changed in the 1990s, core areas of security and diplomacy were still the domain of men, and remain so. The realisation that it is not only necessary to include women in peacebuilding and peacekeeping but the wider gamut of diplomacy and foreign and security policy is growing, with data indicating that the inclusion of diverse voices makes for a better basket of options in decision making and is no longer simply a virtuous standard to follow.

Since Sweden embarked on this path, several other countries — Canada, France, Germany and, more recently, Mexico — have forged their own, adopting either a feminist foreign policy or a gendered approach to aspects of policy making. However, the current conversation around a feminist/gendered foreign policy is still largely in small circles in North America and Europe. Greater diversity in thinking will allow for a global policy to be tailored and thus operationalised in a wider geography, accounting for vastly divergent social norms and practices, and lived histories.

As a non-permanent member of the UNSC and recently elected to the UN Commission on the Status of Women for a four year term in September 2020, India has a key role to play. Gender considerations in India’s foreign policy are not new. Though located largely under the development assistance paradigm and peacekeeping, these have been incredibly successful. From 2007 when India deployed the first ever female unit to the UN Mission in Libya to supporting gender empowerment programmes through SAARC, IBSA, IORA and other multilateral fora, our programmes have been targeted at making women the engines for inclusive and sustainable growth. Many of our overseas programmes in partner countries have a gender component, as seen in Afghanistan, Lesotho and Cambodia. At home, 2015 saw a gender budget exercise within the MEA towards development assistance.

What is needed is a more formal designed approach that goes beyond a purely development model to wider access, representation and decision making. The WEF report and other similar indices is a call to do better on the domestic front; no matter how “feminist” our foreign and security policy might be, without balance at home it will not last.

In September 2020, India’s Permanent Representative to the United Nations, Ambassador T N Trimurti said our election to the CSW was a “ringing endorsement of our commitment to promote gender equality and women’s empowerment in all our endeavours”. We must now go further to sensitise and shape global discussions around gender mainstreaming. Our gender-based foreign assistance needs to be broadened and deepened and equally matched with lower barriers to participation in politics, diplomacy, the bureaucracy, military and other spaces of decision making. In doing this, India can easily claim a new unique feminist foreign policy adding to and smartly shaping the global conversation.

 The writer is co-founder and director, The Kubernein Initiative.

Courtesy - The Indian Express.


Layers of counter-insurgency (The Indian Express)

Written by Sajid Farid Shapoo

States must do more to synergise their efforts by launching coordinated operations, thereby denying Maoists any space for manoeuvrability.(Illustration by C R Sasikumar)

The killing of 22 security personnel by Maoists in Bijapur district of Chhattisgarh serves as a grim reminder that left-wing insurgency continues to be one of the biggest internal security threats for the country. Initial reports suggest that security forces in Chhattisgarh had launched a massive operation on April 4, after there were intelligence reports about the presence of top Maoist commander Hidma along with 60-70 Maoists in and around Tekulugudam Hill in Bijapur. As the forces reached the top of the hill and were combing through the intended “target” (Tekulugudam Hill), they came under heavy fire. It was then the forces realised that they had walked into a trap. The initial assessment indicates that there were around 300 Maoists, which included men and women belonging to the local tribal militia.

In the past few years, Maoist violence seemed to have been on a downward spiral. The government has, in fact, had some major successes in the form of arrests and surrender of important Maoist leaders. The figures associated with the key indicators of violence like the number of incidents also support the contention that “insurgency is on the downward spiral”. However, some experts believed that it was too early to sound the last post and cautioned that this drop could be the result of a “tactical withdrawal” by the Maoists, something which they have done in the past as well. The attack should thus serve as a wake-up call to those who had begun to get complacent about the Maoist threat. It appears that Maoists continue to hold on to their key strengths which include: (i) a robust and efficient intelligence network; (ii) the devolution of authority to local commanders; (iii) an ability to quickly readjust their strategy; (iv) extensive support from local tribes and the ability to organise them into a tribal militia for short-term tactical purposes and (v) domination of the local landscape.

This brings us to the most important question about the nature of the Counterinsurgency (hereafter COIN) strategy, which governments both in the states and at the Centre are adopting or should adopt. Debates about the utility of different COIN models in the Indian scenario have continued since India began dealing with its first full-blown insurgency in Nagaland in the 1950s. One school believes that given the Maoist insurgency posturing itself as a “people’s war”, the mandate is for a people-centric approach of “winning hearts and minds” that is built on the notions of competitive state-building to address economic and governance deficiencies.

The other school argues that an enemy-centric approach predicated on kinetic operations is best suited for the Maoist insurgency, where the fear of the population seceding from India is remote. The success of the erstwhile state of Andhra Pradesh in curbing the Maoist problem is often attributed to this enemy-centric approach. However, there is robust scholarly work available that shows that the Andhra government based its COIN strategy on a judicious mix of the enemy-centric and population-centric approaches. The successes achieved by the Greyhounds, Andhra’s elite special forces, could only be consolidated through the robust implementation of short-gestation-period developmental works in the Maoist-affected rural areas. Moreover, the erstwhile state is also the first state to have a comprehensive surrender-cum-rehabilitation policy.

After the 2014 guidelines of the central government were brought out, many states have crafted attractive surrender and rehabilitation policies. Odisha, for one, seems to have achieved fair success in its surrender policy but this was possible only after successful kinetic operations against Maoists. It is fair to say that a surrender and rehabilitation policy only works when there is sustained military pressure on the Maoists.

Another important question is whether the government should keep the option of talking to Maoists open. Debates about negotiating with insurgents and terrorists are often met with anger and, at times, disgust, at the possibility of sitting across a table from individuals who were responsible for some horrific violent acts. The US government had to share a table with the Taliban, which played host to al Qaeda as the latter prepared to kill thousands of innocent Americans. The willingness to talk to rebel groups seems to incentivise insurgents and may demonstrate that violence pays. Yet, time and again, governments face the distasteful reality of engaging with groups that have been involved in violent attacks against their forces and citizens. History is replete with examples that show the goal of ending terrorist violence or bringing an end to civil war invariably involves negotiating with the enemy, even the worst ones. And Maoists may not fall under the “worst” category, as successive governments have labelled them as “misguided” youth. Even the present central government’s surrender policy guidelines are aimed at bringing these “misguided” youth into the mainstream.

In the last decade or so, insurgency-affected states have started to undertake serious efforts to defeat the Maoist insurgency. Most of these states have raised special forces on the lines of Greyhounds, and are being given rigorous training in “counter-guerrilla” tactics and jungle warfare. A Maoist guerrilla can only be countered by a state guerrilla. The operating environment of these special forces has to demonstrate the employment of superior tactics to defeat the insurgents, something which at times seems lacking. Besides, the Maoists have mastered the art of exploiting the grey zone areas. The jungles around the interstate borders have always been the preferred hiding spaces for the Maoists. Soon after decimating the top state Congress leadership in Darbha in Chhattisgarh in 2013, the assault group moved to the Chhattisgarh-Odisha border to avoid any kind of kinetic response from the Chhattisgarh police. States must do more to synergise their efforts by launching coordinated operations, thereby denying Maoists any space for manoeuvrability. These efforts need to be supplemented by well-crafted development schemes. Proper implementation and timely disbursal of benefits add to the credibility of the government policies. It is also important to segregate the population from the insurgents both operationally and ideologically. The hawks and the doves need to be viewed and treated differently.

Indian counterinsurgency has to work with a dual objective of defeating the insurgents militarily and fully quell the insurgent impulses. This will need institutional overhauls. The conflict over the distribution of resources can be mended with economic development, but the bigger challenge would be to create a system where the tribal population feels that the government is representative, not repressive. Opening negotiation channels and policies like surrender and rehabilitation can give such a representative sense to the rebels that the government cares for them if they (rebels) are willing to shun the violent path. Lastly, the asymmetry in the distribution of power cannot solely be ironed out by just economic policies, it is critically important to create a system where the distribution of power is not controlled by the traditional elite.

 The writer is a senior IPS officer of the Madhya Pradesh cadre and a PhD scholar in Security Studies at Princeton University. Views are personal.


Wednesday, April 7, 2021

Portion control (The Indian Express)

Written by Thomas Zacharias

The problem of food waste is a relatively modern one. India is an ancient civilisation and we have been prudent about food for millennia.

Recently, on a food research trip to the Garhwal region of Uttarakhand, I watched a rather extraordinary traditional ritual. The entire mountain village of Satta in Tons Valley came together to slaughter, cook and honour a goat they had raised as a community for close to a year. Every part of the animal from head to tail was turned into something useful or delicious. Nothing was wasted. The community’s frugality is in stark contrast to how meat is consumed in most parts of urban India today, where the prime cuts are usually prized.

The problem of food waste is a relatively modern one. India is an ancient civilisation and we have been prudent about food for millennia. Our parents and grandparents, too, once approached food and cooking with the same prudence. Yet, somewhere along the way, we lost sight of this “waste not, want not” mentality.

Nearly 40 per cent of the food produced in India is wasted every year due to fragmented food systems and inefficient supply chains — a figure estimated by the Food and Agricultural Organisation (FAO). This is the loss that occurs even before the food reaches the consumer.

There is also a significant amount of food waste generated in our homes. As per the Food Waste Index Report 2021, a staggering 50 kg of food is thrown away per person every year in Indian homes. This excess food waste usually ends up in landfills, creating potent greenhouse gases which have dire environmental implications. Meanwhile, we continue to be greenwashed into amassing more “organic” and “sustainable” products than we really need.

This has been a problem for decades, and is worsening with time. It was only when the COVID-19 pandemic came along in 2020 that many of us began taking note. Affluent Indians were suddenly inconvenienced by things otherwise taken for granted, like procuring groceries or worrying about how long their supplies would last. We came to realise that the food we eat goes far beyond the few bites it takes for us to finish it. We started becoming more conscious of our food choices.

The pandemic not only exposed the problems on food waste but also compounded them. In the wake of the lockdown imposed last year, surplus stocks of grain — pegged at 65 lakh tonnes in the first four months of 2020 — continued to rot in godowns across India. Access to food became extremely scarce for the poor, especially daily-wage labourers. Although essential commodities were exempt from movement restrictions, farmers across the country struggled to access markets, resulting in tonnes of food waste. Meanwhile, instinctive hoarding by the middle class disrupted the value chain, further aggravating the situation.

So how can we, as individuals, bring about change? The astonishing statistics of food waste attributed to households and their irresponsible consumption patterns means that change needs to begin in our own homes. Calculated purchasing when buying groceries, minimising single-use packaging wherever possible, ordering consciously from restaurants, and reconsidering extravagant buffet spreads at weddings can go a long way. At the community level, one can identify and get involved with organisations such as Coimbatore-based No Food Waste which aim to redistribute excess food to feed the needy and hungry.

A strong sense of judiciousness in how we consume our food is the next logical step. We must attempt to change our “food abundance” mindset to a “food scarcity” one, working our way towards a zero-waste end goal. And for the food that is left behind? Feed someone else or, at the very least, compost it so it doesn’t end up in landfills. Be open to incorporating nose-to-tail cooking when it comes to meat and seafood (fish head makes a fantastic curry!). The roots, shoots, leaves and stalks of most vegetables are perfectly edible. Regional Indian recipes like surnoli, a Mangalorean dosa made with watermelon rind, or gobhi danthal sabzi made with cauliflower stalks and leaves in Punjab, are born out of the ideas of frugality and respect for our food. Bengalis adopt a root-to-shoot philosophy throughout their cuisine — thor ghonto is a curry comprising tender banana stems, while ucche pata bora are fritters made with bitter gourd leaves.

You can start with influencing simple decisions about your own food consumption, and then get people in your immediate community to join. Acquaint yourself with and support initiatives proactively working towards reducing food waste, such as Adrish, India’s first chain of zero-waste concept stores, which is focused on getting people to shift from harmful, artificial consumption to an eco-friendly, zero-waste lifestyle. Incidentally, adrish translates to “mirror”. And a long, hard look at ourselves and the way we consume is, perhaps, what we need right now to begin making even a small difference.

 The writer was, until recently, chef partner, The Bombay Canteen, Mumbai

Courtesy - The Indian Express.


Tuesday, April 6, 2021

Dysfunction in bond market ( The Indian Express)

Written by Neelkanth Mishra

The RBI sometimes buys bonds to inject money into the economy, but of late this space has been used to buy dollars to save the rupee from appreciation.

Does it even matter what interest rate the government pays on the debt it takes? Interest on government debt is a transfer from taxpayers to savers (who own government bonds), and as the debt outstanding is primarily domestic, it is just a transfer from one hand to the other within the economy. Tax for one is income for the other. Further, unlike private borrowers, who are greatly concerned about their cost of borrowing, decision-makers in governments are not directly affected by the interest rates on offer, and therefore are less worried.

However, the government’s cost of borrowing does matter. The large increase in debt to GDP last year means interest costs as a share of GDP could be 1 per cent point higher than earlier (for state and central governments put together), limiting its ability to spend elsewhere. But more importantly, this rate also affects the cost of borrowing for large parts of the economy. While public discourse focuses overwhelmingly on the rate set by the RBI, two add-ons to that RBI-set rate determine interest rates paid by private borrowers. If these had not risen over the past two years, effective borrowing costs would have been nearly 1 per cent lower than they are now.

The two add-ons are the term premium, and the credit spread. To simplify the jargon, the RBI sets the repo-rate, which is the short-term risk-free rate. That is, the loan must be repaid in a few days and there is almost no risk of default. The rate at which the government borrows is the long-term risk-free rate. It is risk-free as the government can, in the worst case, print money to service its repayments, but the lender wants higher returns given the longer duration of the loan. The difference between the repo rate and government’s borrowing cost, say on a 10-year loan, is called the term premium. When a private firm takes a 10-year loan, it would have some credit risk too, which means a credit spread is added to the 10-year risk-free rate.

Of the two, it is the term premium that poses the bigger challenge, currently, to policymakers. From an average rate of 73 basis points since 2011 (one basis point is one-hundredth of a per cent), and 120 basis points in 2018 and 2019, the 10-year term premium is currently 215 basis points, having risen 35 basis points since the budget presentation, and among the highest in the world.

Financial markets are forward-looking, and as the collective expression of the views of thousands of participants, efficient ones can occasionally “predict” what comes next. But the Indian bond market is not one such: The view some hold, that the rise in term premium reflects future rate hikes by the monetary policy committee (MPC), is mistaken, in our view. The Indian bond market is still too illiquid and not diverse enough to predict future trends. Even though some pandemic-driven measures are being withdrawn, the MPC continues to be accommodative, and for several months at least, headline inflation is unlikely to force an abrupt change. In any case, the spurt in yields after the budget points to the causality being fiscal instead of inflation-related.

But even the fiscal rationale seems weak. Compared to what the bond market was anticipating, the union budget projected higher bond issuance of Rs 80,000 crore in FY2020-21 and Rs 60,000 crore in FY2021-22. Since then, the Centre’s tax collection for FY2020-21 has been substantially ahead of target, and state governments have also borrowed Rs 60,000 crore less than expected. Further, 14 states (accounting for three-fourths of all state deficits) have budgeted FY2021-22 deficits at 3.3 per cent, far lower than the 4 per cent average expected earlier. Just these factors suggest that total bonds issued by the central and state governments should be lower than what the market had feared before February 1, when the union budget was presented. And yet, government borrowing costs have not returned to pre-budget levels.

In our view, this reflects dysfunction in the market. Why else would a government be borrowing at a higher cost than a mortgage on a house? While the latter, understandably, is against a collateral (the house), was the lending to a sovereign not supposed to be risk-free?

The roots of this dysfunction can be traced to residential mortgages being among the most competitive of loan categories, one where even public sector banks are active. On the other hand, there is a structural shortage in demand for government bonds; in such a market, the marginal buyer holds all the cards, and as any buyer would, demands higher returns.

Over 15 years, the share of banks in the ownership of outstanding central government bonds has fallen from 53 per cent to 40 per cent now, as policy has correctly tried to reduce financial repression (that is, forcing banks to deploy the deposits they collect into government bonds). But no alternative buyer of size has emerged to fill the space vacated: Despite improving penetration of insurance and formalisation driving growth in pension inflows, their share of bonds outstanding has in fact shrunk over the last 15 years. The RBI sometimes buys bonds to inject money into the economy, but of late this space has been used to buy dollars to save the rupee from appreciation.

As tinkering with the share of funds that banks, insurance or pension funds must deploy in government bonds may be inappropriate, the solution may lie in getting new types of buyers. The RBI opening up direct purchases by retail investors is a step in this direction, though it may not become meaningful for a few years.

That leaves us with tapping foreign savings. The share of government bonds that foreign portfolio investors (FPIs) can buy has been raised steadily, but without Indian bonds being included in global bond indices, these flows may not be meaningful, and would be volatile, as they have been over the past year. To enable inclusion in bond indices, the RBI and the government have earmarked special-category bonds which are fully accessible (FAR) by foreign investors.

The FTSE putting India on a watch-list for “potential future inclusion” in the Emerging Markets Government Bonds Index as “global index users … (have shown) … interest in Indian government securities issued through the (FAR)” is a step forward, and, one hopes, triggers similar actions by other index providers. However, this process needs to be speeded up. This is not just for the government’s own fiscal space, but also to ensure that the cost of borrowing in the economy is conducive to a post-pandemic recovery.

 The writer is co-head of APAC Strategy and India Strategist for Credit Suisse.

Courtesy - The Indian Express.


Monday, April 5, 2021

Home and the world (The Indian Express)

Written by Neetha N.  

At a time when four states and the UT of Puducherry are heading for elections, housework and recognising those who do it have become topics of public discourse. In the poll-bound states in south India, housework has figured in manifestos. In Kerala, the ruling Left government has promised pensions for people who do housework. Shashi Tharoor, Congress MP from Kerala, has supported the idea of paying home workers, an idea which was first floated by the actor-politician Kamal Hassan in December 2020. In Tamil Nadu, apart from Kamal’s Makkal Needhi Maiam (MNM), housework figures in the manifestos of all major political parties, though the amount of payment promised varies from party to party.

The need to recognise the burden of housework on women has been an issue for long, limited to women’s and progressive movements. But how does one read the sudden recognition of housework by political parties? Many may think that it was Hassan’s promise that triggered its inclusion. Political parties do compete in terms of their promises. But wages for housework as an electoral promise needs to be understood in the larger context of its timing.

During the lockdown, when many families were homebound without help or the option of eating out, the burden of housework became striking. Men, who usually do not participate in much housework, were partially forced to share the work. This helped in busting the myth of housework being easy. For many middle-class families, housework is more than basic cooking and cleaning. There is also care work such as educating or overseeing children’s overall development and taking care of the elderly, which has increased with online schooling and reduced options of hospitalisation. For the poor, while these were not the concerns, the struggle to keep everyone fed with little or reduced income and caring for the ill were the challenges.

The acknowledgement of housework by political parties is surely the beginning of a welcome realisation of the need to reorient society to women’s contribution to housework. But how does one explain the apathy of political parties to women’s employment questions — their reluctance to address women’s exclusion in employment?

Workforce participation rates of women have been declining even before the pandemic. The data and field reports during the pandemic indicate a worsening of women’s employment with the participation rates falling to 11 per cent, against 71 per cent for men as per CMIE data. The decline is biased towards urban areas with the rate falling to 6.9 per cent. This fall in female employment is a matter of critical concern but has not received the required attention from political parties. Volunteer workers (ASHAs, Anganwadi volunteers and other scheme workers), though a part of the state machinery, are not even acknowledged as workers and are denied all labour rights. Paid domestic work is another sector which has for long been neglected from the perspective of labour laws and policies. In India as per PLFS 2018-19 data, there are considerable wage differentials between male and female workers, be it casual or regular wage work. It is true that women are never free from housework even when they are engaged as paid workers and primary breadwinners, and unpaid housework impacts women’s participation and nature of paid work. But how paying for housework would help in addressing the larger issues is debatable, especially from the perspective of women’s equality.

Addressing exclusionary and discriminatory tendencies in the labour market is surely a way to redefine the labour of women and this also needs to be given the required attention. The current indifference around women’s employment can only be seen as an acceptance of a larger economic reality, with state after state competing to ensure cheap and flexible labour. In the given economic context, providing wages for housework may prove advantageous to employers, since a part of household expenses of ill-paid workers would be now taken care of by “state-paid” homemakers. This essentially frees the former from the onus of paying a wage that provides for the social reproduction of the next generation of workers.

  Neetha N is professor at the Centre for Women’s Development Studies, New Delhi

Courtesy - The Indian Express.


Why the Pratap Bhanu Mehta episode is not about academic freedom (The Indian Express)


A dear friend, whose sharp intellect and matching outspokenness I admire in equal measure, recently sent me a comment he called “Rejoinder to Pratap Bhanu Mehta”. My friend contended that in his earlier newspaper columns and television interviews, Mehta did not substantiate his arguments using academic rigour. The friend defined basic rigour as “requiring collection of verifiable data-evidence, and its rational or scientific analysis to come to academically justified conclusions”. With all due deference to my friend, I must strongly disagree.

My friend is hardly alone in using the term academic freedom while commenting on Mehta’s dramatic exit from Ashoka University. Virtually every comment on l’affaire Ashoka is centred on academic freedom. That is where the discussion gets muddied.

Mehta clearly wore two hats while he was at Ashoka or earlier at the Centre for Policy Research. He was an academic at his institution, conducting research and disseminating its findings, as well as teaching students as part of an academic syllabus. But he was and continues to be a widely-read columnist in a general broadsheet newspaper, writing on a wide diversity of topics of interest to him. In this latter role, he may draw upon his own research, but he clearly uses a variety of sources that shape his judgements and opinions.

It is incorrect to use academic freedom interchangeably with freedom of expression. The two concepts are not the same. Academic freedom implies an absence of restrictions on what one may research on one’s own or as part of an agency or teacher in an institution. This freedom is, however, bound by the rigour implied by my friend. Researchers are obligated to state clearly their objectives, sources of data, and methods of analysis. Moreover, the process of analysis must be replicable. This means that anyone else using the same dataset and method must be able to come to the same conclusions as the researcher. That is what the peer-review process emphasises. In the case of non-data-based conceptual or theoretical research, internal consistency embedded in inductive logic is the criterion to be used. But the theme of research or intellectual discourse through lectures, seminars or publication is entirely, and at all times, a matter of choice for the scholar.

Freedom of expression is a much more tolerant concept. A person expresses one’s own opinions or judgements based on one’s own thinking. The only limitation is that this should not provoke others to physical violence and acts of destruction. We in India and in some other countries often stipulate that freedom of expression should not cause offence to accepted social mores or religious beliefs of others. But liberal democracies such as the United States and countries of Western Europe do not impose such restrictions. In fact, the judiciary in the US has repeatedly ruled that pornography is protected by the right to free speech, however repugnant it may be to public morality. Similar logic makes it extremely difficult to obtain convictions on charges of libel and defamation. Only the right of privacy prevails over freedom of expression in liberal societies.

Seen thus, Mehta’s newspaper columns or media interviews are a matter of his exercising his freedom of expression. One may disagree with him in part or in totality, but that is no ground whatsoever for denying him his right to express his views.

A public commentator is often a bit of a tub-thumper, a sceptic, an agnostic, a polemicist even, who could be a thorn in the side of the elites. History is replete with dissenters enriching a society’s intellectual life. Consider our own çarvakas, who defied Sanskritic puritans to advocate consumerism; Socrates, whose defiance cost him his life; Martin Luther, who founded Protestantism; Emil Zola, whose J’accuse became a war cry for generations rebelling against arbitrary injustice, among others. Closer to our times, Linus Pauling, who won a Nobel for chemistry, was also awarded another for his peace activism which challenged the nuclear weapons orthodoxy. Noam Chomsky is as much known for his championship of dissent as he is for his linguistic theories. Paul Krugman regularly fulminated against the Republicans and former President Donald Trump in the pages of The New York Times and it did no harm to his solid reputation as a Nobel-winning economist.

Societies everywhere and at all times have been notoriously thin-skinned about such critics. Yet, for the most part, history has recognised their signal contribution, recognising them as the ultimate sentinels of liberty. We need to recall that great French pamphleteer-polemicist of the 18th century, François-Marie Arouet, better known as Voltaire. He held the French aristocracy, church and the bourgeoisie all in contempt and suffered his critics as fools. Yet he said, “I disapprove of what you say, but will defend to the death your right to say it.”

Talking of the Mehta episode as a challenge to academic freedom has been a grievous error. Academic freedom is important, but no one has called Mehta’s academic output into question (I doubt if many are even aware of what it is). Freedom of expression is, however, a far greater asset of democratic people and needs to be zealously protected. It is not that Mehta’s views are always acceptable. Although his column is invariably the first thing I read in the mornings when it appears, quite often I find it difficult to agree with him. Yet his contribution invariably enriches our intellectual life.

That is the real issue, and not what happens to Ashoka University, its promoters, donors, faculty and students.

This column first appeared in the print edition on April 5, 2021 under the title ‘The real loss at Ashoka’. The writer taught at IIM, Ahmedabad and was the founder-director of the Institute of Rural Management, Anand.

Courtesy - The Indian Express.


Saturday, April 3, 2021

Most wanted: a makeover for the police (The Indian Express)

Written by Prakash Singh  

The scandalous chain of events in Maharashtra, that started with the placing of a Scorpio car carrying gelatin sticks in front of Mukesh Ambani’s mansion in Mumbai and continued with the deposed police commissioner’s explosive allegations against the state home minister, is taking strange twists and turns.

The Supreme Court, while disposing of the petition of the former commissioner of police, Param Bir Singh, conceded that “the matter is quite serious and affects the administration at large” but directed that the petition be preferred under Article 226 of the Constitution before the Bombay High Court as the powers thereunder are wider. Referring to its own judgment in the Prakash Singh case, the court observed that it was “only a mantra recited periodically, wherever the occasion so suits, and there has been no seriousness by all concerned to ever implement the directions enshrined in the judgment”. And now, the Bombay High Court has pulled up Param Bir Singh for not filing an FIR against the home minister. The state government has, meanwhile, ordered a judicial inquiry.

The directions of the Supreme Court and the Bombay High Court are unexceptionable. The honourable judges, however, forgot that when existing institutions fail to deliver, the common man looks up to the judiciary to address a situation. Here, the state government was, in all likelihood, the principal beneficiary of the extortion racket. The bureaucracy was complicit and the police was in the dock. It was an extraordinary situation where an intervention by the Supreme Court was perhaps called for and would have been welcomed by the people of the country. With due respect, a great opportunity was missed.

The Bombay High Court is also technically correct when it says that an FIR should have been registered in respect of the allegations. But, considering that the police comes under the home minister, was it possible for any police functionary to lodge a report against him at a police station? We are not living in an ideal world and such an action has perhaps not been taken by police anywhere in the world. The court could have easily ordered the registration of an FIR on the basis of Param Bir’s letter to the chief minister and directed its investigation to be taken up by the CBI.

As things are, what would be the upshot? The prime movers in the nexus would get away. Lesser mortals would be held accountable and punished. People will, out of a feeling of helplessness, gradually forget the incident. Life would move on — until the country is jolted again by a similar scandal.

It may not be out of place to record that the unsavoury incidents which happened in Mumbai were building up over a period of about 25 years. The petition for police reforms was filed in the Supreme Court in 1996. Soon after, the government of Maharashtra filed an affidavit on November 2, 1996, stating that none of the recommendations was feasible or acceptable. The constitution of the State Security Commission, it said, would be “inconsistent with the spirit of the Constitution of India”. The Supreme Court, notwithstanding opposition from several states, gave its historic judgment on September 22, 2006. The government of Maharashtra again filed an affidavit on January 9, 2007, stating that there were “compelling legal and practical reasons why the implementation of the directions is not feasible”. Subsequently, in 2014, it passed the Maharashtra Police (Amendment and Continuance) Act, which was not in consonance with the letter and spirit of the Court’s directions.

In 2012, Julio Ribeiro, in an article in a national daily, wrote that the home minister was virtually de facto police chief of the state and that the director-general of police “has been reduced to a non-entity and a figure head”. Contempt petitions were filed against the government of Maharashtra more than once, but the Supreme Court, for inexplicable reasons, never issued any notices.

On March 9, 2014, in Aamir Khan’s TV programme, Satyamev Jayate, Sanjay Pandey, a senior officer of Maharashtra Police, clearly said that there was organised corruption in the police where money was taken on a regular basis from restaurants, liquor shops and dance bars, and the same was shared by the police hierarchy and the politicians. The extortion racket has thus been there in Mumbai for quite some time.

In 2020, Rashmi Shukla, Commissioner Intelligence, reported to the DGP about a network of politically connected brokers who were taking bribes for manipulating lucrative assignments for officers, but no action was taken. The truth was much too inconvenient to be probed.

So, the picture that emerges — well before Param Bir Singh’s letter bomb — is that we have a state government which does not believe in police reforms, that the state has had home ministers interfering in the day-to-day functioning of police, that the bureaucracy has been complicit in the unholy transactions, that prestigious police posting was available for a price, and that there has been organised corruption in the department. All the ingredients for an explosion were already there. Not that similar malpractices are not taking place in other states. The overall picture is the same, only the shades are different.

Certain inferences could be drawn even today. One, Sachin Waze could not have been acting on his own in placing the Scorpio with explosives in front of Mukesh Ambani’s residence. He would have done this with the knowledge and approval of his senior officers whose plan, in turn, would have been approved by the political bosses. What that plan was is still a mystery. Two, the MVA government and commissioner of police got along famously and there may have been a quid pro quo — until the commissioner was thrown out. Three, the extortion racket was arguably running with the knowledge of the coalition government; their defence of the state home minister is altogether unconvincing.

What is the way ahead? A crisis can be converted into an opportunity. It is high time that the unholy nexus between the politicians, bureaucrats, police and criminals is broken, that we debar persons of criminal background from entering the assemblies and parliament, that we restructure our police, giving it functional autonomy, and build a robust criminal justice system. The stakes are very high. The democratic structure of the country itself may be hurt if we do not bring about systemic changes.

This column first appeared in the print edition on April 3, 2021 under the title ‘Police needs a makeover’. The writer, a retired Director General of Police, has been campaigning for police reforms.

Courtesy - The Indian Express.

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