Chennai techie finds Pragyan, the rover on-board Chandrayaan-2, intact while assessing NASA images
In some good news for India, which is grappling with the twin woes of an ailing economy and the deepening Coronavirus crisis, a Chennai-based techie has claimed that the rover onboard Chandrayaan-2, the Indian Space Research Organisation’s (ISRO’s) moon mission, is intact on the lunar surface and had even moved a few metres. India’s second mission to the moon had ended in disaster as a last-minute software glitch led to the Vikram lander crash-landing on the lunar surface, just 500 metres short of touchdown. Yes, we were ambitious to land on the dark side of the moon, which bigger space-faring nations have not attempted, but the rover’s presence is reassurance that while we need to refine our efforts, they have all not gone to waste. And ISRO needs to follow through the Chandrayaan series in mission mode.
Since the failure of the Chandrayaan-2 last year, things have not gone too well for ISRO, with its GISAT-1 launch being mysteriously called off on March 4, a day before take-off citing an ambiguous “technical reason.” Plus, the space agency, which had a very busy schedule for this year — with around two dozen launches, including Aditya, India’s first solar probe — is having trouble keeping its commitments. Due to the pandemic playing spoilsport, ISRO, too, had to go into a lockdown mode. India’s ambitious human space flight programme Gaganyaan, is in trouble because the astronaut training of the four test pilots of the Indian Air Force has been stopped. Besides over 100 manufacturing units in the private sector, that are contracted to manufacture components for ISRO’s missions, are shut and the work of producing rockets, satellites and scientific instrumentation is on hold right now. But what is most encouraging is that the rover was found by a Chennai techie, Shanmuga Subramanian, from NASA’s images. He had earlier helped NASA find the debris of the Vikram lander, earning him plaudits from the space agency and the gratitude of an embarrassed ISRO. His persistence should be a reason for inducting him and others like him in our space-faring projects. Space nerds should be identified from school and encouraged. It was difficult to detect the rover because it was on the South Pole of the Moon, which is not always well-lit and was missed by the NASA flyby on November 11 possibly for this reason. Not just this, it seems that the rover uploaded commands to the lander, which could not relay them back. Is some data stored there? But with the Vikram lander going silent, we will never know. Whether this translates into any gains for ISRO, only time will tell. But for now, there is something to cheer about in the Indian space community.
Courtesy: The Pioneer
After a boom run lasting decades, is Reliance Industries finally admitting that growth is slowing down?
If there is anything like a sure shot on the Indian bourses, it is the Reliance Industries’ scrip. Even after being pummelled by the Coronavirus lockdown and crashing oil prices, its share price has recovered smartly over the past few trading sessions as investors believe that India’s largest private company will emerge from the crisis stronger than before. That faith was redoubled after American technology giant Facebook made an unprecedented $5.7 billion investment into Reliance Jio, the telecommunications arm of the conglomerate. So why is the firm raising Rs 53,125 crore from the markets through the largest rights issue in Indian history? On the face of it, things are not going too bad for the company as despite the negative economic sentiment even before the Coronavirus impact, its consolidated profit was stable and revenues rose by over five per cent.
Well, Mukesh Ambani has stated time and again that he wishes the Reliance Industries reduces its debt load. After the Government first stalled the potential $15 billion investment in Reliance’s uber-profitable oil and gas business by the Saudi Arabian oil major, Aramco, it was speculated that things might not be all kosher between Prime Minister Narendra Modi and Ambani. While that is just speculation, the fact is that today, with a collapse in oil prices, Saudi Aramco may not be able to invest in Reliance in the first place. And while Reliance can raise debts across the world, even in India, with its stellar record of repayment, Ambani realises that it will likely be easier for him to capitalise on his company’s reputation to raise funds much more easily. At the same time, raising money from investors will not increase the debt burden on the company, particularly when the economy will most likely be fragile over the next few quarters. At the same time, Ambani also likely realises that the world is pivoting away from oil and plastics, the two cornerstones of his business. The current pandemic might just be a turning point as to how the public consumes these products. Raising money now will likely keep Reliance’s war chest ready as the company starts new consumer ventures over the next few years and prepares for a new world, a more sustainable one. But what impact will Reliance Industries’ rights issue have on the overall capital market? It will almost certainly reduce the appetite for any new public issue over the next few quarters as it will suck a huge amount of money out of investors’ pockets. That would have been the case in a healthy market, but in this market, it means that any other public offering will probably have to offer a deeper discount than earlier planned to get the public to bite.
(Courtesy: The Pioneer)
Google faces an anti-trust probe in the US on charges of stealing content from honest but smaller entities
A much-anticipated congressional hearing via videoconference put four of the US’ most prominent Big Tech CEOs, whose companies have a combined market value of about $5 trillion, on the mat. Google owner Alphabet Inc’s Sundar Pichai, Facebook Inc’s Mark Zuckerberg, Apple Inc’s Tim Cook and Amazon.com Inc’s Jeff Bezos deflected accusations from US lawmakers that they crippled smaller competitors in their greed to capture a bigger market share. Pichai, who is the CEO of both Alphabet and Google, took the worst beating from conservatives on the House of Representatives Judiciary Committee’s anti-trust panel. The search engine has been accused of stealing content. It apparently used reviews from Yelp Inc and threatened to delist it from search results if it objected. A report will take some time coming but the biggest challenge for the sub-committee would be to establish whether Google and other tech firms operate as illegal monopolies in their areas of dominion. While it is not illegal for a company to be the biggest and the best in its field, exclusionary conduct or monopoly power by disadvantaging and harming competitors is not permitted. This is because after establishing a monopoly, companies may squeeze suppliers or impose higher prices on consumers. For instance, Google’s search business stifles rivals by favouring its own services while its subsidiary YouTube pushes content to users. Mostly, answers to common questions can be found in “answer boxes” at the top of a results page. Google gets those facts/news from other websites as a result of which users don’t visit the sites of the original content. This starves other websites of valuable traffic and revenue. Plus, Google has paid Apple billions of dollars to be the default search engine on the Safari web browser on iPhones and iPads. Rival firms will never get a level-playing field if the search engine corners such a significant market share.
Apart from genuine worries about monopoly and ethics of business, this review can be said to be a part of the Trump administration’s bid to bring the big technology firms to heel for what is mostly considered to be their anti-Republican attitude. President Trump has had a number of run-ins with many of them and has even threatened to take action against them with executive orders. In fact, Republican Jim Jordan, who was part of the hearing, accused these firms of being “out to get conservatives.” It is time for US regulators to mull if the existing rules are sufficient to rein in these behemoths given their market power and if the laws should be amended. That again is a long haul.
(Courtesy: The Pioneer)
Edge computing will be a game-changer for businesses around the world owing to its capability to derive insights from data in real-time
Edge computing is quickly emerging as the next big thing in technology. From mobile devices and cell towers to refrigerators and industrial control systems, the data being generated at the edge by these platforms has enormous business value. However, what is less clear right now is how best to unlock its potential. At its basic level, edge computing brings computation and data storage closer to the devices where it is being gathered, rather than relying on a central location that can be hundreds of kilometres away. This is done so that data, especially real-time data, does not suffer latency issues that can affect an application’s performance. In addition, companies can save money by having the processing done locally, reducing the amount of data that needs to be processed in a centralised or cloud-based location.
Edge computing was developed due to the exponential growth of Internet of Things (IoT) devices, which connect to the internet for either receiving information from the cloud or delivering data back to the cloud. And many IoT devices generate enormous amounts of data during the course of their operations.
However, in one form or another, edge computing has been around for decades. Industrial control systems, for example, are an early form of edge computing that populated manufacturing floors. Telecommunications networks have deployed content delivery networks since the 1990s. What’s changing now is the type of applications that need low latency and intense levels of data, which require both the amount of computing power that can be employed at the edge and the raw network bandwidth being made available.
As these vectors continue to increase, it becomes more feasible to satisfy the requirements of a much wider array of innovative applications at the edge of the network capable of driving a broad range of innovative business outcomes.
A catalyst for automation: Edge computing platforms have the potential to automate every business process imaginable, using machine and deep learning algorithms deployed at the very edge of the network. According to a report by Forrester Research, the total edge computing market size is expected to grow from $2.8 billion as recorded in 2019 to $9.0 billion by 2024. Instead of waiting for data to be analysed by an application residing in the cloud or the local data centre, algorithms will optimise business processes in real-time, based on events as they occur.
Everything, from connected cars to innovative, augmented and virtual-reality applications, depend on the ability to process and analyse data in real-time at the network edge. Field service technicians, for example, will be able to leverage augmented reality applications to visually compare broken equipment to the actual state it should be in.
Harness the power of edge computing to stay competitive: Business and information technology leaders that fail to recognise the possibilities of edge computing will soon find themselves lagging behind. In some cases, it may be an existing organisation employing edge computing platforms to gain a competitive advantage. When used correctly, edge computing can result in efficiencies, new revenue streams, improved customer experiences and even risk-mitigation.
In India, as many organisations have embarked upon the journey to becoming 100 per cent digital, there will be a need to adopt edge computing to automate business processes in the near future. In fact, every instance of digital business transformation will soon be driven by edge computing platforms capable of processing data in real-time. Gartner estimates that by 2025, a whopping 75 per cent of enterprise-generated data will be created and processed outside the traditional, centralised data centre or cloud.
With many relying on cloud and hyper-converged infrastructure to deal with this data explosion, a shift of computing to the edge can be highly anticipated. While the edge evolves and starts making its place in today’s world, we can expect it to become even more disruptive than the existing cloud environment.
Although edge computing is not a new concept for many around the world, it is still at a very nascent stage in India and is on the path to breaking traditional cloud computing limits. Rather it represents a profound transformation of business processes that will soon eclipse the cloud in terms of strategic importance.
While early goals of edge computing were to address the costs of bandwidth for data travelling long distances because of the growth of IoT-generated data, the rise of real-time applications that need processing at the edge will drive the technology ahead. To conclude, edge computing will be a game-changer for businesses around the world owing to its capability to derive insights from data in real-time. This will help in increasing business efficiency while cutting costs as it will eliminate the need for ample cloud storage for data.
(The writer is President and Managing Director, Dell Technologies, India)
Given the region’s rich tradition of innovation and adaptation, we have immense potential to re-tool our cities, surroundings and services
COVID-19 is a direct threat to the health and well-being of all people in the World Health Organisation’s (WHO’s) South-East Asian Region. For as long as the virus spreads, the lives of the region’s nearly two billion people will be at risk, whatever the transmission scenario. The WHO and its member States in the region must continue to dig deep and aggressively minimise transmission, responding to every case, cluster and evidence of community transmission. But to complement such measures, we must also adapt our cities and surroundings, especially as public health and social interventions, including physical distancing, are relaxed or re-applied based on local epidemiological evidence.
The need of the hour is for all to think innovatively and retool our environments to meet the many demands of the new COVID-19 normal. For example, hand hygiene facilities can be installed at the entrance to public or private commercial buildings and at all transport locations. Workplaces can stagger hours, increase ventilation and encourage staff to work from home as much as possible. Plus, we can all take personal measures to minimise the risk of bringing infection home, which is especially important in multi-generational households.
Proactive efforts to protect vulnerable groups, including internal and returning migrants, are especially needed. Challenges associated with inadequate housing and access to water exacerbate the risk of the disease spreading. So does inadequate community engagement and communication. Key WHO guidance on protecting and engaging vulnerable groups can help local authorities implement high-impact measures that are equity-oriented and which can be integrated into emergency planning ahead of the monsoon and flu seasons. Health services, too, should be modified and strengthened, not only to treat COVID-19 but to address the many indirect health impacts the virus has, quite apart from its adverse effect on the provision of essential health services, which the WHO is vigorously supporting member States to minimise.
Take mental health for instance. The economic uncertainty the pandemic is causing, in addition to the fear of contracting the disease, has increased the prevalence of mental health issues, which may be exacerbated by substance use or difficulties accessing mental health services and psychiatric medicines.To help all people access the mental healthcare they need, health leaders can invest in appropriate services and ensure existing mental health services continue to function. Psychiatric care can be provided over the phone or online. Community support groups can continue to meet in person while observing physical distancing guidance or they can meet virtually. Health facility administrators can ensure that all health workers know where and how to access the care they need to stay mentally well and resilient.
Services for intimate partner violence require similar attention. COVID-19 has increased stress, disrupted social and protective networks and decreased access to services, all of which can exacerbate the risk of intimate partner violence. With families spending more time at home, the likelihood that a woman in an abusive relationship will be exposed to violence has dramatically increased.To help provide the necessary care, health facilities can identify and offer information on locally-available support services such as hotlines, shelters and counselling services. Health workers themselves can make a difference, for example by listening empathetically and without judgement, in addition to providing appropriate medical treatment. Plus, the use of telemedicine to safely address violence against women must be urgently explored.
Nutrition remains a core concern, too. Across the region, broken supply chains, loss of livelihoods and truncated incomes have the potential to severely impede access to healthy diets, rich in whole grains, fruit and vegetables. School closures have resulted in many underprivileged children missing out on school meals. Disruptions to nutrition services — especially those supporting maternal and child health and nutrition — could impact millions of vulnerable people in ways both chronic and acute. It is the duty of all stakeholders in the region to protect the nutritional status of the most vulnerable and to strengthen the health services and programmes on which they rely. Stakeholders can adapt existing nutritional services, for example by providing digital counselling or additional take-home supplies. They can also streamline referral pathways for nutritional services and expand nutrition-sensitive social protection and community programmes. Given the region’s rich tradition of innovation and adaptation, we have immense potential to re-tool our cities, surroundings and services to meet the many demands of our new COVID-19 normal. There is not a moment to lose. The WHO and its member States in the region will continue to strategically respond to the pandemic, fully committed to controlling and suppressing its spread, strengthening and maintaining health services and empowering individuals and communities to stay safe, healthy and well. Our battle continues, as it must.
(The writer is Regional Director, WHO South-East Asia.)
With India having created “air bubbles” with some countries such as France, the UAE and the US and advanced negotiations on with Germany and other nations, it is heartening to see that international commercial air travel is restarting. An “air bubble” is a form of a bilateral air traffic agreement but one that follows the entry rules set by various nations related to registration and quarantine protocols. In India, for example, travellers from abroad are still mandated to undergo one week’s institutional and a week’s home quarantine. The “air bubbles” also prevent direct “sixth freedom” air traffic, a connecting one. International travellers will not, for example, be able to connect through Dubai or Paris airports while coming to India unless specifically allowed by the Indian Government. However, one wonders how an immigration-free zone such as Europe’s “Schengen” area will be managed. The increased flights will hopefully see better utilisation of air fleets and present airlines an opportunity to make some money. However, if experience from India’s domestic flights resuming operations is any indication, the volume of passengers might be minimal after an initial rush as few people have an urgent non-personal reason to travel this time.
So these “air bubbles” could be a start as it remains to be seen whether commercial air traffic can ever re-emerge from the pandemic. For example, many airlines made significant volumes of connecting air traffic but with restrictions as well as the risk-averse nature of most people to deal with another large airport, how will airlines like Emirates and Singapore Airlines cope? Emirates, for example, has already retired the earliest of its A380 superjumbo aircraft and laid off thousands of employees as the Indian air traffic that sustained that carrier has vanished overnight. Even storied airlines like British Airways have announced that they will retire their entire Boeing 747 fleet, joining Australia’s Qantas and Dutch airline KLM in retiring the “Queen of the Skies.” While airlines highlight how safe travel onboard is, drastic reductions in service, thanks to the pandemic, and the lack of passenger confidence have made certain that many of them will not re-emerge from the crisis. Bubbles or not, the aviation industry itself sits on a precarious bubble.
(Courtesy: The Pioneer)
Like cab aggregators, micro-mobility apps have mushroomed in a post-pandemic world
As the country limps back to normal from a post-COVID lockdown, there has been a major change in consumer behaviour with apps and e-commerce ruling the roost. Doorstep deliveries are the new normal, from essential items like food and groceries to electronics and lifestyle goods. But one could not have expected even the future of our mobility, namely bicycles, to land at out doorstep. Micro-mobility service providers like Yulu and Smart Bikes are shifting their existing battery-operated two-wheeler network from non-functional zones, such as metro stations, to residential complexes where people are using them to run errands or do the short commute rather than take the auto or cab. With public transport systems yet not fully functional and given the sense of insecurity among the people to use them in these testing times, e-vehicles have emerged as a reliable, safe, cheap and personal mode of travel, especially for those who feel vulnerable. Besides, there are health benefits; you can foster an active lifestyle. And you can ride towards a fossil fuel-free future, notching up green miles.
Cycling for everyday transport has not been a part of the Indian scheme of things unlike say, New York, which introduced 40 miles of new NMT lanes for cyclists in the wake of the pandemic or Italy, which got 22 new miles of cycling lanes. The transition towards a non-motorised form of transport has been long overdue in our country. A survey by the Institute for Transportation and Development Policy had estimated that the use of bicycles in major cities around the world would increase by 50-60 per cent. While the current plan is being run on a pilot basis in Delhi at a select few residential complexes, to achieve the long-term goal, we need to expand our infrastructure and develop more cycling tracks and sidewalks. To ensure that people, too, inculcate behavioural changes and make the shift to safer modes of transport, schemes such as car-free days and cycle-to-work programmes can be launched. What better time to start than now? The pandemic also has a big lesson for urban planning.
(Courtesy: The Pioneer)
Madhya Pradesh is at a very crucial juncture where it has to focus on the future while living through the present
The word “migrant” in the term migrant workers is not only distressing but also exhibits the hard reality and high level of uncertainty of their lives. Lack of skills in these workers for the kind of opportunities that are available has been a primary concern. It has not only created but has significantly increased the gap between work and the worker.
Irudaya Rajan, one of India’s leading experts in population studies, says: “The one thing that the 2008 global economic crisis taught us was that jobs matter.” As India is battling CoVid-19 and the widespread economic havoc caused by the outbreak, issues related to migrant workers remain to be addressed. Right from the movement to their respective villages, to generation of work opportunities for them post the lockdown, are some of the big challenges that have emerged.
The Government of Madhya Pradesh, under the leadership of Chief Minister Shivraj Singh Chauhan, has become one of the first States to address the post-lockdown challenges with respect to migrant workers. He launched the Shram Siddhi Abhiyan on a virtual platform while interacting with sarpanches and labourers from across the State. Under this scheme, the workers will be categorised into skilled and unskilled, depending upon which the State Government would provide job opportunities. Unskilled workers would be provided with job opportunities under MNREGA whereas skilled labourers would be provided with work according to their ability. Elaborating upon the meaning of the word, sarpanch, Chauhan said, “‘Sa’ means samandarshi (impartial), ‘ra’ means ratna (gem), ‘pa’ means hardworking and ‘ch’ means watchman. The sarpanch plays an important role in protecting the village.” According to Chauhan, these local institutions and their representatives will play a major role in the effective execution of various policies of the scheme and in reaching out to the last man in the village.
The State Government has also decided to provide five months’ free ration to people who don’t have ration cards. This will not only help the poor people tackle present-day challenges but will significantly reduce the burden on supply in rural parts of the State, as the consumption in rural areas would increase with the rise in the number of returnees.
According to the 2011 census, 72.3 per cent of the State’s population is from rural areas. Therefore, the return of around five lakh migrant workers to the State would eventually increase the pressure on the rural economy, which is largely dependent on agriculture. The only way to ease this burden on the rural economy is by creating more jobs through increased investment opportunities in the State.
The State Government recently made 32 amendments in four State laws and 13 Central laws, which not only reduce the regular interference of Government officials but also create a healthy environment for investment in the private sector. Though a part of these reforms have been criticised by various trade unions and associations, the major focus should be on the output that would benefit the labourers as well. A reform does not necessarily mean complete scrapping of the law. Investment would help in creating more job opportunities in the State.
As per data, out of 22,809 gram panchayats in the State, MNREGA projects are going on in 22,695. So far 21,01,600 labourers have found employment. This is almost twice as compared to last year. Not only this, the State Government has also decided to restart the Sambhal Yojna, which was scrapped by the Congress-led Government.
This scheme primarily used to focus on workers employed in the informal sector but now it will be extended to migrant workers, too. Monetary help will be provided to the workers, right from the birth of a child to the death of a labourer. This not only highlights the proactive approach of the State Government in addressing futuristic challenges but also underlines the importance of social development for the deprived classes. Therefore, recent amendments to the labour laws and introduction of schemes like Shram Siddhi Abhiyan would collectively address the challenges faced by the migrant workers and unemployed population of the State in the post-CoVid phase.
Like the rest of the country, Madhya Pradesh, too, is at a very important juncture where it has to focus on the future and live through the present. So far, bringing the migrant workers home has proved to be one of the greatest efforts by the State Government. But the major challenge lies in effective implementation of policies. That depends on the systematic coordination between the executives and the locally-elected representatives. It would not only benefit the migrant and unemployed workers but also provide a sense of social security to them. Eventually, it would also revive the rural economy. As is often said, “The greatest opportunities lie in the most difficult challenge.”
(Writer: Rohit Kumar; Courtesy: The Pioneer)
To emerge stronger in the medical devices sector, we need to collaborate with the global med-tech industry for its R&D-driven approach
The outbreak of the pandemic has considerably highlighted the need for India to redefine its goals and priorities for the future. It has paved the way for necessary amendments required in the country’s health infrastructure at the primary and secondary level. It is often said that the experiences and lessons of the past shape our future. One relevant question to be raised in the status quo would be how much a country like India, that houses a population of 1.3 billion, has learnt from the outbreak? And what measures is it taking to battle the ongoing crisis at a time when the world order seems to be away from the normal?
With the push for “Vocal for local” gaining momentum in the country, many experts have time and again pointed out the gradual shift in global supply chains, highlighting India as one of the most favoured destinations for investment and growth in the world. However, one question remains unanswered. Will India be able to provide a stable business environment to drive future investments in manufacturing and other services, without being willing to provide market access to global firms? Also, is the Indian health technology sector sufficient to cater to the needs of the domestic market?
The answer to this question remains ambiguous. As per Invest India, the medical device and equipment market in India is only worth $5.5 billion, further highlighting the nascent stage it is in. While the domestic industry has the capacity to manufacture and export low-risk medical devices and equipment, India still lacks an adequate supplier ecosystem and thus the capacity to manufacture high-risk, life-saving, critical care medical devices and equipment. At a time when India imports nearly 80 per cent of its medical devices and has an unstable policy environment, it is important for the country to build capacity within the existing subsets of the health infrastructure, rather than just focussing on becoming self-reliant by adopting a one-sided approach.
The Government, in its action plan to fight Covid-19, recently announced an exemption on basic customs duty and health cess on the import of select medical equipment. This includes surgical masks, ventilators, personal protection equipment and Coronavirus-related test kits till September 30. This comes at a time when the Government in its 2020-21 Union Budget had claimed that the intention to impose a five per cent health cess was to boost the growth of the domestic industry and generate resources for health services. With an additional health cess in place, many health experts speculated that companies would pass on the additional burden to patients with an expected pressure of three-five per cent on pricing.
Another pressing concern is whether India needed a pandemic as a wake-up call to understand the need for adequate medical equipment in the country. It is not a hidden fact that the medical devices sector has always been the backbone of the health infrastructure. The med-tech sector has always shown its commitment towards public health and has ensured uninterrupted supply of medical devices despite numerous challenges. Therefore, it may prove to be disastrous for India’s public health if the Government were to adopt an inward-looking approach and only boost domestic manufacturers. This, even after being well-aware of how most of the domestic industry players are not even close to their global counterparts when it comes to research and development (R&D) facilities, manufacturing units and matching up to the universal quality and safety standards.
To emerge stronger in the medical devices sector, India needs to globally collaborate with the med-tech industry for its innovation and research-driven approach. Considering the nascent stage the Indian medical devices industry is in, it becomes important to look beyond the surface and understand how investment from trusted players can help the small and medium industries of the country to contribute to R&D so that they can do value-addition to their medical devices. India cannot aim to achieve its goal of becoming self-reliant overnight with no significant presence of local manufacturers and products that measure up to global quality and innovation standards.
Although the Government is doing everything it can to strengthen its resolve to make affordable healthcare available to its citizens, the approach to solve the affordability issue without laying emphasis on quality healthcare is not the right way forward. What India needs right now is better access to quality healthcare, with an innovation-driven approach. Just like the Government exempted customs duty on Covid-19-related medical equipment, it should also consider removing the additional cess from high-risk and critical care medical devices so that there is no supply issue in the country at large. With the progress India is making, it would not be wrong to say that with the right long-term vision, there is no stopping it from becoming self-reliant. However, till then, India should take one step at a time, starting from focussing on bridging the gaps in its existing healthcare infrastructure and drawing inspiration from what the global med-tech sector has to offer.
(Writer: Tanu priya; Courtesy: The Pioneer)
The Railway Ministry wants to run private trains by 2023 but why will any operator bid?
The Ministry of Railways wants private operators to run a few long-distance express trains in India. Last week, it expressed its intent to invite participation for 109 pairs of routes for a project that would entail private sector investment of about Rs 30,000 crore. The announcement has brought out the usual suspects, both for and mainly against the proposal. But this offer could be stillborn simply because it makes no sense for any private operator. The railways has put a cascade of conditions without any iota of responsibility. This proposal is as silly as the railways’ ill-fated idea that shifted to an airline pricing algorithm, minus any proper maths, which would have allowed for prices below average as well.
The problem is quite simply that Indians have tasted cheap airfares on long distance routes. And while rail fares could still be fractionally cheaper, travelling by train will only be an option for those going to places that are far removed from the aviation map. How can one justify the 17 hours taken to travel between Delhi and Mumbai on a train when an aircraft takes just two hours and a couple more to get home for more or less the same price? The value of time has certainly hit train travel across the country. It is doubtful that the Railways will recover anytime soon. However, private train operators could manage interesting high-end luxury travel concepts where the value of time is less than that of the travel experience. It is unlikely that new private operators will be allowed on India’s new high speed line. So it is curious why the Railway Ministry thinks it has a product that others will want to buy. Luxury is the only way. Train operators across large countries in the world are doing just that: Moving from being mass transport operators to becoming purveyors of luxury. Sure, limited passenger operations might remain but railways are moving to being commuter options in urban areas or moving the whole hog to high-speed. This idea might be praised or criticised but the realities of the world mean that it is an idea whose time passed a decade ago.
(Courtesy: The Pioneer)
In the deflationary pressure induced by the pandemic, what remains inexplicable is the hoarding of funds by the Government, which creates a suffocating liquidity trap in the market
As the Indian economy witnesses a major downturn, predictably a negative growth, the dichotomy between monetary and fiscal policy becomes an irritant. Monetary management by allowing for a nearly Rs 13 trillion loan to the corporate, MSME, agriculture and other sectors of the economy is a huge release of capital stuck in the banking and non-banking sector. Arguably this would have turned the wheels of industrial production but COVID-19, with its multiple slowdown effects, won’t allow it to happen. Critics have pointed out that the absence of open chest financing of Government debt and securities, as well as no last- resort cash support to about 14 crore jobless migrant workers, have depressed the economy both in the short and long-term. This impacts productive activity negatively in the secondary and tertiary sectors of the economy with falling demand.
In the absence of fiscal stimuli, distressed and risk assets in the market stand in the way of any attempt at recovery. Monetary stimuli in the absence of effective demand cannot boost the business cycle. A huge shortfall in revenue, from both tax and non-tax sources, has only created a spurt in public debt and the consequent rate cut for controlling debt has created a precarious imbalance between real output and interest rates. Failing interest rates create a vicious cycle of inducing stress in asset-based funds that now have to look for stimuli from financial institutions to survive from debt. In effect, resources of the Reserve Bank of India (RBI) and the available Government funds for loans run the risk of turning into NPAs even in the short-term. So circulation of higher liquidity in situations of Corona-induced insolvency presents a slippery slope for the management of the macroeconomic policy.
The stimulus package of Rs 20 lakh crore for macroeconomic management has not shown signs of much-needed neutralisation of the liquidity trap by raising demand for credit. The package establishes that there is no liquidity crunch and indeed India’s foreign reserve reaches a peak of over $500 billion, covering much of its import bill. In such a situation, the demand for Government securities and bonds should have gone higher but the demand situation is such that it prods the investors to hold back such securities. In contrast, the Reliance JIO deal, by raising funds through rights issues in the stock market, received a preferential treatment from the Ministry of Corporate Affairs to only offset its huge debt without corresponding expansion of the credit market, which could have helped the banks to offset the situation of a liquidity trap. Had the Government issued new bonds and securities using the cut in the rate and generated some additional funds like its blue-eyed boy Reliance, that would have probably eased excess liquidity. Instead, given the increasing rate of macroeconomic unemployment, almost at 14 per cent, the need for additional funds for employment generating activities by way of stimulus packages announced by the Government got immobile in the widening liquidity trap. The Government has already printed currency notes worth Rs 1.6 lakh crore and only succeeded in creating a good accounting ratio between its income, expenditure and debt instead of flinching itself out of the liquidity trap.
What can extricate the economy from the liquidity trap is the generation of demand, demand and more demand. Significantly, two correlated and yet highly-fluctuating monetary instruments, like India’s foreign reserve touching a record $500 billion as external trade falls and the Government’s internal borrowings from the market plummeting only to pull down repo rates, present a hard picture of control of fund flows. It is not clear how the RBI shall channelise reinvestment of cheaper borrowings into production, while such investments in the stock market at present do not ensure gains. It is in this grim scenario that the Centre’s declaration of flexibility in tax slabs to industries, as part of the stimulus package, only helps the businesses to keep afloat. Deflationary pressure continues unchecked in the product market as the Government scampers for attracting investment through floating rate bonds.
The recent increase of employment in agriculture with the Centre’s Rs 1.5 trillion package has generated some demand, yet it does not show signs of revival. Reverse migration from cities to rural areas is an immediate cause of such increased demand but last-mile delivery issues do not allow it to be an impact of the Government’s Rs 1.5 lakh crore package. In effect, if one combines a stalemate in foreign trade and piling reserve with falling rates of investment and profit, the stimulus on the demand side cannot overcome this simultaneous fall in both supply and demand. Restarting the economy to offset the slump in income and demand, combined with fresh doses of investment in greenfield areas through stocks, are still to gather much momentum against the early signs of a recession. Recessionary trends in the manufacturing sector combined with a deflationary fall in the Wholesale Price Index produce a cascade of compression in the economy, making rating agencies predict negative GDP growth for at least the next two years.
A very paradoxical question to ask is, does a programmatic infusion of demand as the stimulus package enforce austerity and fund crunch arising out of an inherited fiscal deficit at the level of nearly five per cent of the present GDP? The question could be further teetered by asking whether recessionary trends at the macroeconomic level require an open chest funding for every sector of the economy, starting with the most distressed. The behaviour of risk assets such as Franklin Templeton and DHFL withdrawing $25 billion from the Indian stock market further depresses the already sluggish demand. Does this recessionary symptom cause a decrease in the capacity of the State and the Government to respond to the chain of fiscal demands without saving its back by generation of additional income through revenue and extra-revenue routes?
Possibly this question brings out the reason why the Centre is raising the prices of petrol, diesel and other fuels when crude prices are at the lowest. Could this be the only means to generate extra revenue so that fiscal deficit can be covered up and profits made by oil companies could be used for funding a longer crisis? Given the lockdown-induced loss of capacity, the Government is adopting this easy route in spite of its deleterious impact on the prices of essential goods. The situation returns to the same vicious cycle as fall in income, investment, interest, wage and demand make it impossible to revive the economy despite good supply side management in terms of monetary policy. Post lockdown, the economy then looks like a quicksand that eats up the stimulus without the desired impact. The economy continues to move in the trajectory of decline in real GDP and rates of profit. This lies beyond the scope of monetary and fiscal readjustments as the Centre struggles to maintain the fundamentals of the economy.
Nothing could have been more treacherous than the Chinese aggression at this time of crisis. Though the Government is able to make large payments for defence purchases such as Rs 3 billion to the US, Rs 2.1 billion to Israel, Rs 16 billion to Russia, yet there is a seeming lack of funds for medical preparedness to fight COVID-19 and defence preparedness to fight China. With a heady mix of growing income inequality, falling consumption and revenue and stressed assets in money markets, a Government with its hands full of funds does not have many options to spend. As a result, the much- needed panacea of Direct Cash Transfer to 25 crore migrant workers and other rural labourers has not been taken up by an internally and externally-shaken Government.
One requires a proper framework to understand such a dysfunctional state of the economy. Economist Thomas Piketty’s famous thesis on India’s growth story, in terms of the falling contribution of people at the bottom and an artificial attempt by the Government to keep rate of interest lower than the rate of return from capital, seems to dominate the money market. The absence of an appropriate scheme for re-distribution of profit and income for social good turns advantages in the money market ineffective as prognosticated by Piketty and Paul Krugman.
In the deflationary pressure induced by the pandemic, what remains inexplicable is the hoarding of funds, which creates a suffocating liquidity trap in the market. Piketty’s suggestion that India should initiate a universal basic income scheme could have balanced out this excess liquidity in favour of increased demand had the Government succeeded in kicking off the economy at the level of pre-lockdown productivity.
Instead, the Government’s austere move to curtail public expenditure due to revenue shortfall is in sync with the existing recessionary trend in the economy. The Chinese perception of this economic recession is the salient factor that prompts China to create a war-like situation with India in the interest of augmenting its own internal demands.
(Writer: Prasenjit biswas; Courtesy: The Pioneer)
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