Editorials - 28-01-2021

The Finance Minister must move to an expansionary fiscal stance that prioritises job creation, public service provision

It is that time of year in India, when all eyes and ears turn to the Finance Minister to learn what she will unveil in the annual Union Budget. But it is a moot point whether, even in a year of the novel coronavirus pandemic and economic crisis, that speech will be of much significance. Indeed, it could be argued that there may be little point in listening to or poring over a speech that is likely to conceal more than it reveals.

What might be said

Going by past experience, we can make some predictions about the Finance Minister’s Budget Speech this year. It can be expected that it will be full of self-congratulatory declarations of how the country, the economy and the government’s finances have withstood the pandemic and how the economy is set on a path of revival. It will claim that the government’s policies have enabled the country to deal with the spread of COVID-19. It will downplay the completely inadequate health spending even in the face of the pandemic, and use absolute numbers rather than rates of change to suggest that public spending has been directed towards those in need. Ms. Sitharaman may take credit for controlling the fiscal deficit as much as possible despite the reduced tax collections, and even claim that she has been munificent to the State governments by increasing their borrowing limits. She will outline what will turn out to be completely unrealistic spending and taxation plans for the coming year. Meanwhile, the media will wait breathlessly for what they see as the crucial numbers: the ratio of fiscal deficit to GDP in the current year, and in the Budget estimates.

Largely formal sector-centric

Some of this will be only partly correct, much of it will be misleading, and some will be downright wrong. It is certainly true that COVID-19 infections are on the decline in India — as they are in the Asian region generally, including in countries that did not implement the extreme lockdown that India experienced. The “revival” of the economy that is being much touted is from the complete collapse of the first quarter of the currentfiscal year, and is largely confined to the formal sector, while most informal activities are still facing crisis. The “recovery” of employment is because of the absence of social security for the vast bulk of Indian workers, which forces them to seek out any income-generating opportunities, simply to survive. Wage incomes are significantly lower than before the lockdown. The stock market reaching stratospheric heights is really more of an indication of how divorced it has become from the real economy and its prospects. The past year has witnessed significant destruction of livelihoods and increases in material distress, poverty and hunger. To talk of economic recovery without factoring these in is untenable.

Now, consider the numbers that will be presented. We know from past Budgets, especially with this government, that the numbers for revenues and spending have been inaccurate, sometimes off by around Rs. 1,50,000 crore as in Budget 2019-20. This is not only because the actual data are available only for the first nine months. It is also because the Budget numbers are themselves a fudge, with excessively optimistic projections for revenue generation in the remainder of the year and reducing the actual expenditures of the central government by pushing items “off-budget”.

Expenditure estimates

The Finance Minister never seems to learn from her own experience of actual revenues being much less than the Budget projections: each year, this mistake is repeated and even amplified. The expenditure estimates are even more disingenuous, because they understate the actual expenditures that should be counted.

This concern has been repeatedly brought up by the Comptroller and Auditor General of India (CAG). A CAG report in 2018 identified at least three methods of reducing the stated expenditure: not paying for the full fertilizer subsidy by using “special banking arrangements”; not paying the central government’s dues to the Food Corporation of India (FCI) for the food subsidy, and forcing the FCI to borrow from the market; using other special purpose vehicles to pay for infrastructure investment, like the Long Term Irrigation Fund. In 2017-18, just those three items amounted to Rs. 1,29,446 crore, or 1.8% of GDP. To these could be added other strategies the central government uses to “reduce” its own spending, like not paying States their rightful dues under the Goods and Services Tax Compensation Fund, or not paying what State governments have already spent on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which is legally mandated.

These strategies are problematic not only because they are non-transparent: they also force other agencies (like State governments and public sector enterprises) to go in for expensive commercial borrowing that unnecessarily adds to their future interest costs. But what all this does underline is that the numbers presented in the Budget are not to be taken seriously, either for current year projections, or for the next year’s estimates. This also effectively means that Parliament is reduced to approving a piece of fiction.

CGA data and spending

So what do we have to go by, to gauge the real state of the government’s finances? The data from the Controller General of Accounts provide the most reliable information. They tell a rather disturbing story. Between April and November 2020, revenues of the central government predictably collapsed, by around 18%, or Rs. 181,372 crore, compared to the same period of the previous year. But despite that, expenditures should have gone up, because the lockdown-induced collapse in economic activity meant that public spending would be the only thing keeping the economy afloat.

Indeed, that is what the government promised: in three rounds of stimulus packages, it claimed to inject amounts of Rs. 1.7-lakh crore in March, Rs. 20-lakh crore in May and then Rs. 2.65-lakh crore in November. But it turns out that very little of these apparently large amounts involved actual commitments of more public spending. And the public accounts show that total spending of the central government increased by only Rs. 86,301 crore. That was only a 4.6% increase — not even enough to keep pace with inflation. In other words, the central governmentreducedits real spending over the period of the pandemic and economic crisis!

This fiscal stance obviously adds to the material suffering of the people and deprives them of basic goods and essential public services at a time of much greater need. But it is also a macroeconomically stupid strategy, because it adds to contractionary tendencies in the economy, and prolongs the severe demand recession facing millions of small and informal enterprises and hundreds of millions of self-employed workers.

As we saw after demonetisation, policies that destroy informal economic activities set in train processes of economic contraction that eventually come to bite formal enterprises as well. A similar process is under way in India now. Those who celebrate the higher profits of some large corporate houses or the gains in the stock market will find out soon enough that these are ephemeral if the vast bulk of the economy continues to stagnate or decline. Only if the Finance Minister realises this and changes course, moving to a more expansionary fiscal stance that prioritises employment generation and public service provision, would the Budget speech this year be worth listening to.

Jayati Ghosh taught economics at the Jawaharlal Nehru University, New Delhi and is now Professor of Economics at the University of Massachusetts at Amherst, U.S.

The draft science policy is a rambling document, but it contains nuggets of scientific vision and information

On March 4, 1958, under the leadership of Jawaharlal Nehru, for the first time in the history of independent India, Parliament passed a resolution on science policy. The resolution stated: “Science... has provided new tools of thought and has extended man’s mental horizon. It has thus influenced even the basic values of life, and given to civilization a new vitality and a new dynamism.” The resolution said the aim of the scientific policy was, among other things, to “encourage individual initiative for the acquisition and dissemination of knowledge, and for the discovery of new knowledge, in an atmosphere of academic freedom.” In effect, this resolution proved to be a springboard for the development of the country’s scientific infrastructure. Since that resolution, successive governments issued policy statements with varying emphasis on chosen objectives and goals, often echoing the existing national and global imperatives and the ruling dispensation’s ideology.

The 2020 draft policy

India’s Department of Science and Technology recently released a draft of the fifth Science, Technology, and Innovation Policy. This 62-page-long document presents the objectives and goals of our new science policy. The public is expected to provide feedback on this document before it gets finalised. But the problem with the document is that it is rambling and full of jargon and clichés, making the task of separating the grain from the chaff a major exercise in itself.

The new policy envisages technological self-reliance and aims to position India among the top three scientific superpowers. Though the names of the other two nations are not mentioned, it must be understood that they are the U.S. and China. For that to happen, the draft policy says, we need to attract our best minds to remain in India by developing a “people-centric” science, technology, and innovation “ecosystem”. It states that the private sector’s contribution to the Gross Domestic Expenditure on Research and Development should be doubled every five years. The 2013 policy had similar aims. The 2020 draft policy fails to discuss what we have achieved on these fronts since then.

Why does our R&D investment in science continue to hover between 0.5% and 0.6% of the GDP? Raising it to 2% of the GDP has been a national goal for a while. Despite strong recommendations in the past by several scientific bodies and leading scientists and policymakers, we are still well short of that goal. The 2020 draft policy blames this on “inadequate private sector investment” and adds that “a robust cohesive financial landscape remains at the core of creating an STI-driven Atmanirbhar Bharat.” It looks as if the government is trying to shift the responsibility of financing R&D to different agencies such as the States, private enterprises, and foreign multinational companies. But it is doubtful if the various funding models that are presented are workable or practical, especially during a pandemic.

The policymakers who drafted this report should have gone back to the self-financing revenue model proposed in the Dehradun Declaration for the CSIR labs back in 2015 and critically evaluated its success rate. Common sense informs us that the private sector cannot be expected to pay for basic research. This is because the return on investment in basic research takes too long from a private sector perspective. Only the government can have long-term interest to support such research. Participation of the private sector in basic science has not happened even in the U.S. The fact is that basic science research in India is suffering from the lack of adequate funding despite grand proclamations. Even elite institutes like the Indian Institutes of Technology are finding it difficult to run their laboratories on a day-to-day basis because of paucity of funds.

The draft policy visualises “a decentralized institutional mechanism balancing top-down and bottom-up approaches, focusing on administrative and financial management, research governance, data and regulatory frameworks and system interconnectedness, for a robust STI Governance”. This is easier said than done. This intention is in fact defeated in the document itself, where several new authorities, observatories and centres have been proposed, which may end up feeding up the already fattened bureaucracy in science administration. Decentralisation of administrative architecture is essential, but we need to explore the practical option of providing more autonomy to research and academic centres for financial management.

Some points are welcome. These include the fact that policymakers are considering alternative mechanisms of governance of the financial landscape; that they realise the administrative burdens of researchers and the problem of journal paywalls; and promise to explore international best practices of grant management.

It was reported in 2019 that more than 2,400 students dropped out from the 23 IITs in just two years, with over half of them belonging to the Scheduled Caste/Scheduled Tribe and Other Backward Classes. The number of suicides of students is also on the increase in the IITs. Caste discrimination could be one of the reasons for these tendencies. As a part of inculcating an inclusive culture in academia, the document promises to tackle discriminations “based on gender, caste, religion, geography, language, disability and other exclusions and inequalities”. It mentions more representation of women and the LGBTQ community, but is silent on how we are to achieve their proportionate representation.

Science and society

In the chapter ‘Science Communication and Public Enagagement’, concerns on the disconnect between science and society are valid. But the fact is that hyper-nationalism is not conducive to the propagation of evidence-based science and a rational outlook. It is also heartening to see that the document harks back to our constitutional obligation to “develop a scientific temper, humanism and the spirit of inquiry and reform.” But it is silent on how this can be achieved when pseudoscience is deliberately propagated in the name of traditional science with the help of some arms of the government. A recent instance is the proposal by the Rashtriya Kamdhenu Aayog to conduct a national examination under the garb of ‘cow science’.

The document does not mention how to stem the rot within, although it speaks extensively about science communication and scientific temperament. Our belief systems, values, and attitudes have an impact on the quality of research. That partly explains why Indians who have chosen to work in labs abroad are able to make path-breaking discoveries. The ruling dispensation has a moral obligation to facilitate an environment that encourages a mindset that constantly challenges conventional wisdom as well as open-minded inquiry among the students. Only a dissenting mind can think out of the box.

The document contains nuggets of modern scientific vision and information. But its digressive style impacts the reader’s attention. The document should prioritise important issues and amplify first the problems which have cultural and administrative dimensions. With the advent of new disruptive technologies, global competitiveness will be increasingly determined by the quality of science and technology, which in turn will depend on raising the standard of Indian research/education centres and on the volume of R&D spending. India has no time to waste.

C.P. Rajendran is an adjunct professor in the National Institute of Advanced Studies, Bengaluru. Views expressed are personal

The fiscal stimulus needs to continue in FY 2021-22 to speed up India’s economic healing

The forthcoming Economic Survey will tell us about the state of the economy based on available empirical evidence. The first advance estimates of national income published on January 7 project a contraction of 7.7% for real GDP. The Q2 GDP estimates published by the National Statistical Office, Ministry of Statistics and Programme Implementation (MOSPI) on November 27 had suggested an economic recovery in India. An improvement in the rate of contraction from 23.9% in Q1 to 7.5% in Q2 was seen as the beginning of a sustained recovery. The Ministry of Finance, in its Monthly Economic Review highlighted it as signifying a ‘V’ shaped recovery and as a reflection of the resilience and robustness of the Indian economy. The Monetary Policy Statement of the Reserve Bank of India (RBI) released on December 4, 2020 also projects positive growth in the remaining quarters of the financial year. A low fatality rate and rolling out of the vaccination programme have added to the optimism.

Growth rate of the economy had collapsed from 8.2% in Q4 of 2017-18 to a mere 3.1% in Q4 of 2019-20, sliding continuously for eight quarters. The policy stance adopted by the Union government against this backdrop was premised on the hope that private corporate investment will pick up momentum sooner than later, putting the economy back in the trajectory traced in the first decade of the new millennium. The RBI did the heavy lifting through five consecutive lowering of repo rate, adding to a total of 135 basis points from February to October 2019 along with liquidity infusion programmes. However, monetary-fiscal linkages are crucial to catalyse the demand.

Revise monetary framework

While being cautious of inflation, the RBI has decided to continue the accommodative stance in its latest monetary policy to support growth. It has retainedstatus quoin the policy rate of repo at 4%. The CPI inflation after crossing 7% has cooled off to 4.6% in December. Still, the real interest rates remain very low. The RBI expects inflation to ease to the specified band. The efficacy of the new monetary framework (NMF) — the agreement between the RBI and Government of India in February 2016 to adopt inflation targeting in India — will be reviewed in March 2021, and we flag the need for revising the framework.

The RBI is continuing its liquidity infusion programmes including the on-tap Targeted Long Term Repo Operations (TLTRO). This programme announced on October 9, 2020 for five stressed sectors has been extended to 26 stressed sectors notified under the Emergency Credit Line Guarantee Scheme (ECLGS 2.0). The RBI is also continuing its ‘operation twist’ — the elongation of debt maturity structure through simultaneous buying of long-term bonds and selling of short-term bonds — with Open Market Operations (OMO) of Rs. 10,000 crore scheduled for December 17, 2020.

Nevertheless, the RBI Governor has rightly pointed out that the signs of recovery are far from being broad-based and are dependent on sustained policy support. He has also pointed out that it is a no-brainer that Union Budget 2021-22 will be pro-growth.

Stimulus by the state’s moves

The economies which rebounded fast, post the global financial crisis, were the ones which resorted to significant fiscal stimulus. We argue for fiscal stimulus not based on “business cycle” arguments to trigger animal spirits, but from the perspective of much needed targeted state interventions in public health, education, agriculture and physical infrastructure, and to redress widening inequalities in the time of the novel coronavirus pandemic. In a context where private final consumption expenditure is sluggish, contracting 26.7% and 11% in Q1 and Q2, respectively, a “fiscal dominance” is expected in India for sustained economic recovery. However, India cannot afford fiscal stimulus at the rates of advanced economies, due to a lack of fiscal space. The pandemic has hit many crucial sectors and has left millions jobless. It is in this context that the Finance Minister has promised a “never before like budget” on February 1, 2021.

The Biden Plan of $1.9 trillion will make the pandemic response of the United States a massive $5.2 trillion one. Compare this with the $800 billion worth U.S. fiscal response to the global financial crisis. According to the International Monetary Fund’s Fiscal Monitor Database of Country Fiscal Measures, the fiscal stimulus for India is 1.8% of GDP. The corresponding figures are: for Brazil 8.3%, Russia 2.4%, China 4.6%, and South Africa 5.3%. The IMF, in its Fiscal Monitor, highlights the need to scale up public investment to ensure successful reopening, boost growth and prepare economies for the future. Subdued interest rates make this case even stronger.

Finance Minister Nirmala Sitharaman, in her interview on December 8, 2020 to Bloomberg TV, indicated that the “fiscal deficit fears will not derail government spending”. This announcement is welcome, given the much needed fiscal package for enhancing the public health infrastructure and the COVID-19 vaccine roll out, to address the falling effective enrolment rates due to the digital divide, the employment and livelihood crises and the need for strengthening social and physical infrastructure spending.

Plummeting private corporate investment in India is a matter of concern. A co-authored paper by Hrishikesh Vinod, Honey Karun and Lekha Chakraborty inThe Handbook of Statisticstitled “Financial, macro and micro econometrics using R” (bit.ly/3oNf6sn) using maximum entropy ensembles time series methodology showed that public infrastructure investment is the prime determinant of private corporate investment in India. The fear of financial crowding out emanating from high fiscal deficit is misplaced in the context of India.

Flexible fiscal rules

The path of economic recovery will be determined by the degree of containment of the pandemic and the sustained macroeconomic policies. Any abrupt withdrawal of ongoing economic policy support, both by the monetary and fiscal authorities, will be detrimental to growth in times of the pandemic. The fiscal rules at the national and subnational government levels need to be made flexible to enhance the fiscal space to deal with the extraordinary situation. The public debt deficit dynamics in India, therefore, needs a careful calibration in the forthcoming Budget 2021-22.

Emmanuel Thomas is Doctoral Fellow, Centre for Economic Studies and Planning, JNU, New Delhi and Assistant Professor, St. Thomas’ College (Autonomous) Thrissur, Kerala. Lekha Chakraborty is Professor, National Institute of Public Finance and Policy, New Delhi and Research Associate, Levy Economics Institute of Bard College, New York

Our choice of vaccine has to be dependent on whether the data have been gathered with scientific rigour

This is slated to be the year of minimising the impact of COVID-19. While mutants of the virus pose a new threat, the only viable strategy to curb COVID-19 has been to develop vaccines. The fast-paced scientific work done to develop the vaccines is unparalleled. Within a year of COVID-19 being identified, several vaccines have become available. What do we know about these vaccines?

Types of vaccines

The result of the trial of Pfizer and BioNTech’s mRNA-based COVID-19 vaccine was submitted to the U.S. Food and Drug Administration in December 2020. It showed 95% efficacy in adults ages over 65. However, the infrastructure for the delivery and storage of the vaccine under fastidious requirements of -70oC is not easy to achieve. Equally, this vaccine has come under a cloud, with 29 deaths of elderly people with pre-existing illnesses reported in Norway following administration of 42,000 doses. Moderna using mRNA-based vaccines and Johnson & Johnson using DNA-based vaccines are also being developed in the U.S. These vaccines are unlikely to come soon to India because of cost and storage requirements.

The first heterologous COVID-19 vaccine consisting of two components has been used in Russia with good initial reports. However, this adenovirus-based vector vaccine, Sputnik V, was released after Phase 2 studies in a very small number of volunteers and the protocols were not published. Other countries to get a nod for its use are Serbia, Argentina, Bolivia, Algeria, and Palestine. It has reportedly been administered in more than a million people in several countries without safety concerns. In India, Dr Reddy’s Laboratories is using Sputnik vaccine in a placebo-controlled Phase 3 trial with 1,500 volunteers. The results are expected by mid-2021.

The chimpanzee adenoviral vector vaccine by Oxford University-AstraZeneca is the only vaccine in India which has completed Phase 3 trial.The large placebo-controlled trial of 23,848 volunteers in the U.K. and Brazil has shown an acceptable safety profile along with increased antibody response by homologous boosting.The Drugs Controller General of India gave approval for its use in India on January 2 and it is being rolled out under the name Covishield.The Serum Institute of India in collaboration with AstraZeneca has produced a stockpile of 50 million Covishield vaccines which has been sent to all the States. This vaccine can be stored and transported easily.

Then we have the adenovirus vector-based Covaxin by Bharat Biotech, which is in Phase 3 trial with a goal of 26,000 volunteers. The results are expected only after three months or so. Yet this vaccine has been rolled out in India for restricted use in clinical trial mode which lacks clarity.

The States and priority group beneficiaries don’t have the option to choose whether they receive Covaxin or Covishield. Consequently, uptake amongst health professionals has significantly reduced. As per established protocols and ethical norms, the immunogenicity and safety data from Phase 1 and 2 trials are not enough for approving the clinical use of a vaccine. Without Phase 3 trial data, confidence in the safety and effectiveness of Covaxin will remain questionable. It is noteworthy that due to inadequate immune response of two vaccines using inactivated virus, Merck & Co in the U.S. abandoned its trials.

Zydus Cadila is developing two COVID-19 vaccines. The company’s novel DNA-based vaccine will complete Phase 3 studies by mid-March before applying for approval. It is appropriate for the company to wait until Phase 3 results are available.

In addition to these, there are at least two more vaccines in various stages of development in India. Biological E is working on a protein-based vaccine in collaboration with the Baylor College of Medicine, U.S. The company is conducting Phase 1 trial. Phase 2 trial may begin in March. Gennova’s vaccine is India’s first mRNA COVID-19 vaccine that can be stored at 2°C-8°C. Phase 2 trial of this vaccine is likely in March.

How do we choose a vaccine?

Our choice of the vaccine has to be dependent on whether the data have been gathered with scientific rigour. Each trial should involve an adequate number of volunteers; studies need to have a control or placebo arm; protocols of the studies should be in the public domain and in peer-reviewed scientific journals; and Phase 3 trials should be completed with an adequate number of volunteers and observation periods of adequate length with the results reviewed by experts. Trial outcomes need to be scientifically validated and should not be influenced by political pressure and deadlines. The aim must be to effectively and safely protect the population and make COVID-19 innocuous.

Upendra Kaul is Chairman Cardiology and Dean Academics and Research, Batra Hospital, New Delhi; and Meera Shah works in Public Health in rural India

Exporting limited quantities of Covishield is wise as India is unlikely to meet its vaccination target by July

Ten days after the massive COVID-19 vaccination drive began in India to immunise 300 million high-risk individuals first, only over 1.95 million people were vaccinated as of January 25. It is true that while the U.S. took 10 days to breach the one-million mark and the U.K. took 18, India took only six days. The number of people vaccinated each day has been slowly but steadily increasing since day one — from over 1.91 lakh on January 16 to about 3.35 lakh on January 25.

Yet, seen in the larger context, the number of individuals vaccinated so far pales in comparison to the number of children vaccinated each year under the universal immunisation programme. About 25 million children are born each year in India. Millions of children are immunised against 10 vaccine-preventable diseases within the first year of life across the country.

By end-December 2020, Serum Institute of India (SII) had already manufactured about 50 million doses of Covishield. Adar Poonawalla, Chief Executive Officer of SII, had told NDTV that the company manufactures 2.4 million doses each day. On January 11, SII signed an agreement with the Indian government to supply 11 million doses for local use.

A long way to go

At the current rate of 2 lakh jabs per day, it would take about eight years to immunise the target population of 300 million people with two doses of the vaccine. This is provided that COVID-19 vaccination is carried out on all seven days of the week. However, as the Health Ministry has recommended that COVID-19 vaccination should not affect routine immunisation and other health services, most States have been vaccinating only on four days a week. The most populous State, Uttar Pradesh, vaccinates only twice a week.

A single session can vaccinate only 100 people. Until January 25, 35,785 sessions had been held altogether, with the maximum number of sessions held on a given day touching 6,230 on January 21. India plans to vaccinate the target 300 million people by July, which would mean 600 million doses to be administered within the next six months. That would require 33,333 sessions to be held on all seven days to vaccinate 100 people per session to complete the vaccination target by July.

Faster vaccination

Ramping up the vaccination process can be achieved either by increasing the number of vaccination sites or the number of sessions in a site or both. Since each session should have five dedicated people, only large hospitals have increased the number of sessions held per day. The government has permitted vaccine sites to hold only up to seven sessions per day. Similarly, increasing the number of sites per day too would mean finding additional manpower and other resources for each site.

However, increasing the number of sites and/or sessions per day alone will not serve the purpose unless the site selection and number of sessions per site is based on a mapping of people in a given area who are eligible for vaccination. Since one of the priority groups included is people younger than 50 years with co-morbidities, only a bottom-up approach to first identify eligible young people with co-morbidities can help in deciding the number of sites and sessions needed in an area to cover the eligible population.

Given these complexities, India is unlikely to ramp up the number of people vaccinated per day before the target date of July, and hence very unlikely to utilise all the 50 million doses manufactured by SII by end-December before the vaccines reach the expiry date.

Covishield has a shelf life of six months from the date of production. The decision by the government to allow the company to supply limited quantities of vaccines to other countries before they reach the expiry date therefore makes eminent sense. Also, India stands to earn the goodwill of many countries by allowing the export of Covishield, much like in the case of hydroxychloroquine drug export.

prasad.ravindranath@thehindu.co.in

Inequality is widening across the world,and India is no exception

The world economy is slowly recovering from the devastation caused by the COVID-19 pandemic, but that is only partial solace. The recovery is uneven among countries, and within countries, but the emerging universal truth is that economic inequality is rising sharply in all countries. A new report by Oxfam has revealed that the 1,000 richest people worldwide recovered their losses from the pandemic within nine months as opposed to the world’s poorest who might take a decade to limp back to their pre-pandemic standing. Inequality was alarmingly high and destabilising social and political order in much of the world even before the pandemic struck. It is set to further aggravate, fear 295 economists from 79 countries, commissioned by Oxfam. Inequality in India has risen to levels last seen when it was colonised. The additional wealth acquired by India’s 100 billionaires since March when the lockdown was imposed is enough to give every one of the 138 million poorest Rs. 94,045, according to the report. An unskilled worker in India would take three years to earn what the country’s richest person earned in one second last year, the report calculates. The worsening inequality in income and opportunities impacts some sections disproportionately due to discrimination based on gender, caste and other factors. The poorer people were worst affected by the disease itself.

The focus on growth had led politicians and policy makers to accept rising inequality as inevitable for decades. Inequality came to be seen as a benign outcome of economic growth that led to reduction of absolute poverty. Concerns about inequality could also be easily dismissed as being informed by socialism. Any criticism of capitalism was viewed with scepticism in the mainstream of development debates, until the crisis of capitalism could no longer be ignored. The literature on capitalism and its linkage with democracy is now growing fast. There is now universal agreement among economists that the distribution of new wealth between capital and labour has become so one-sided that workers are constantly being pushed to penury while the rich are getting richer. This has social and political consequences as upheavals in democratic societies around the world show. The environmental costs of a development model that hinges on higher and higher growth are also obvious. On the one hand, there is an acknowledgment of the crisis among capitalist moghuls. The theme of the World Economic Forum at Davos this week is ‘the Great Reset’ which it says is a “commitment to jointly and urgently build the foundations of our economic and social system for a more fair, sustainable and resilient future”. On the other, measures that favour capital at the cost of labour continue; for instance, changes in labour laws in several States during the pandemic. Lip service is not enough to tackle inequality.

Farmers must suspend agitation and returnto talks without their maximalist approach

The chaos and mindless violence unleashed on the national capital by a section of protesting farmers on Republic Day were abhorrent. It is plausible that agents provocateurs infiltrated the farmers’ march but that does not absolve the leaders of responsibility. The chances of fatigued agitators breaking loose were high as were the possibilities of vested interests triggering violence. The leaders of the agitation should have taken note of the divergence in the rank and the rejection by certain recalcitrant groups of the routes for the march they had agreed with the Delhi police. True, no popular mobilisation can be held hostage to the threat of violent deviation by a handful, but there is judgement to be made at each turn. The leadership, itself an association of disparate individuals and organisations, should have been more realistic about its capacity to manage such a gathering. In the end, unruly elements took over the streets of Delhi. They broke barricades, thrashed, and tried to mow down police personnel. The police resorted to lathi charge and used tear gas, but, given the circumstances, showed restraint. More than 300 personnel were injured, at least 40 of them seriously. All this, and the march itself, was avoidable.

The Delhi police must investigate and hold to account individuals and groups responsible for the violence. Farmer leaders have the unenviable task of cooperating with the police in the investigation. False friends and real enemies of the agitators have painted them with a communal brush. Bringing the culprits to book is essential not only to salvage the reputation of an agitation that had remained largely peaceful for nearly two months but also to nip in the bud a dangerous communal slant before it slips out of control. The Centre has said it would continue to engage the protesters in negotiations. The offer of the government to keep in abeyance for up to 18 months the three controversial farm laws that are at the heart of the current face-off remains an opportunity for the leaders to seek a negotiated settlement. The agitators want the laws to go lock, stock, and barrel but their maximalist approach is unhelpful. They must discontinue the protest for now and disperse, while reserving the option of restarting it later. They should consider options short of a complete repeal of the laws. The Centre must consider more concessions, including the suspension of the laws until a broader agreement can be arrived at. It must make more efforts to allay the fears of those most affected by these reforms. The Centre’s imperious refusal to engage with political parties and State governments on critical questions of agriculture reforms has come back to haunt it. The resolution to this impasse can come only by involving them all.

Mr. G. Harisarvathama Rao, President of the Scavengers’ Union, writes as follows: Consequent on the requisition by the municipal authorities, it appears a large number of men gathered at the Municipal Corporation premises the day before yesterday from the several depots. Influenced by a few men amongst themselves, some of them presented a demand, that men should be paid at Rupee one a day, and women eight annas, as well as a rice allowance of Rs.4 a month. The authorities and the men could not agree and the meeting dispersed. Yesterday morning I called a meeting of all the scavengers in the Napier’s Park. Almost all the men attended. I asked the men to tell me what happened at the municipal corporation yesterday. They narrated what I have stated, and said that they would not go back to work until they got what they demanded last evening at the Corporation.

World agricultural scientists were to-day [January 27] called upon to unleash a “chemical and biological warfare” to control the onslaught of pests and plant diseases that has come in the wake of the high-yielding varieties. The Union Food and Agriculture Minister, Mr. Fakhruddin Ali Ahmed, who gave this call at the inauguration of the second international symposium on plant pathology here [New Delhi], said pathogens from the time of planting seed through harvest to the consumption stage took away between 10 to 20 per cent of the produce and had created a “dent” in the world’s granaries. He asked plant pathologists to reorient their research programmes and eliminate the ravages of diseases that affected plants. Mr. Ahmed said last years’ devastating epidemic of leaf blight in the United States highlighted the importance of co-operative endeavour of plant pathologists and plant breeders in crop improvement. The eight-day symposium, organised to celebrate the silver jubilee of the Indian Phytopathological Society, is being attended by 500 Indian scientists and more than 60 top agricultural scientists from 19 countries. Mr. A. H. Boerma, Director-General of the Food and Agriculture Organisation, said the tremendous promise of the high-yielding varieties carried with it a host of problems, creating greater hazards to plants, particularly in India.