Inflation is back as a talking point in the public arena, some would say belatedly, for wholesale price inflation has been in the double digits for over 12 months. India’s official measure of inflation, the rate of change of the consumer price index, has now breached the Reserve Bank of India (RBI)’s upper target of 6% for three months continuously. At the conclusion of the April meeting, the Monetary Policy Committee had already warned that the focus will henceforth be on inflation. Yesterday it raised the repo rate somewhat sooner than was expected by the market.
It may appear contradictory to ask whether the RBI’s stated policy of ‘inflation targeting’, implemented through changes in the interest rate, can control inflation, but we show here why that would be justified.
Discourse on inflation
The discourse on inflation engaged in by Western central banks, which has been adopted in toto by their Indian counterpart, is so abstruse that it is not understood even by many economists. So, we begin with an explainer.
The starting point of this discourse is that inflation reflects an excess of output over its ‘natural’ level. Inflation targeting refers to the policy of controlling inflation by raising the interest rate over which the central bank has control, i.e. the rate at which it lends to commercial banks, the so-called ‘repo rate’. This, it is argued, will induce firms to stay their investment plans and reduce inventories, lowering production. As economy-wide output declines, becoming equal to the natural level of output, inflation will cease. This story does not just legitimise a policy of output contraction for inflation but sees it as optimal. The natural level of output itself is the productive counterpart of the natural level of employment, the level that obtains in a freely functioning labour market. So, at the natural level of output, the economy is deemed to be at full employment.
It is left unstated, but salient in the context, that the natural level of output is unobservable. Hence inflation as a reflection of an “overheating” economy is something that must be taken on trust. Surely it is disturbing that India’s official model of inflation control is based on so unscientific a foundation. At least, the view of inflation that had ruled the central banks of the west before they adopted inflation targeting was based on something tangible, namely, the growth of the money supply.
Not surprisingly for a theory based on an unobservable variable, the proposition that inflation is due to an overheating economy fares poorly when put to a statistical test for India. We are not aware of a single demonstration of the empirical validity of the model of inflation presented in the RBI report of 2014, which recommended a move to inflation targeting. On the other hand, in our published research, we explain inflation in India in terms of the movement of the prices of agricultural goods and, to a lesser extent, imported oil. The implication of this finding is damaging for the claim that monetary policy can control inflation, for neither the price of agricultural goods nor that of imported oil is under the central bank’s control. The only route by which monetary policy can, in principle, control inflation is by curbing the growth of non-agricultural output, which would in turn lower the growth of demand for agricultural goods. As the demand for agricultural goods slows, so will inflation, but this comes at the cost of output and employment. At least, this is the theory. Whether this takes place in practice depends upon the extent to which changes in the repo rate are transmitted to commercial bank lending rates.
Agricultural goods prices
The implication for the policymaker that inflation is driven by agricultural goods prices, as is the case in India presently, is that the focus should be on increasing the supply of these goods. This could be a win-win solution, for as agricultural production grows faster, the economy expands without inflation. Ideally, food prices should decline, for the consequent rise in demand for other goods will propel the economy forward. But the product mix of agriculture becomes relevant here. Growing per capita income in India has shifted the average consumption basket towards foods rich in minerals, such as fruits and vegetables, and protein, such as milk and meat. But the expansion of the supply of these foods has been lower than the growth in demand for them. So a concerted drive to increase the supply of food other than rice and wheat holds the key. There was a time when the leadership of the RBI understood this, but now its leadership appears unwilling to acknowledge native wisdom.
Increasing agricultural supply at steady if not declining prices is not going to be easy for political reasons. The States have not shown themselves to be particularly sensitive to the charge that they do little to ensure a supply of cheap food for the rest of the country, or even themselves in some cases. When they do produce surpluses, their only concern is that these be procured by the central government at the highest price. The stances of the leaders of wheat-producing northern States and rice-producing southern ones reflect this. Under these circumstances, a nation-wide project for producing food cheaply remains a distant dream. Now that the farm laws have been repealed, it is the time to initiate a discussion on how such a project can be taken forward. Costly food threatens the health of the population, as people economise on their food intake, and holds back the economy, as only a small part of a household’s budget can be spent on non-agricultural goods.
Monetary policy manouvres, typified by the RBI’s raising of the repo rate yesterday, is not an efficient solution for an agricultural price-driven inflation. Any lasting inflation control would require placing agricultural production on a steady footing, with continuously rising productivity. This would require a re-orientation of farm policy. Since the time of the Green Revolution, the focus has been on raising output, that too of the superior cereals. The inflation caused by continuously raising procurement prices for these crops and slow growth elsewhere in the food-producing sector has been swept under the carpet. The time has come to end this folly. Until then, inflation targeting by a committee accountable to no one will remain a charade.
Pulapre Balakrishnan is at Ashoka University, Sonipat and M. Parameswaran is at the Centre for Development Studies, Thiruvananthapuram
Nepal’s economic challenges are real, but suggestions that it is already in deep crisis and may be going the Sri Lanka way are probably premature, unfair and unjustified. The surging trade deficit remains a big concern as it is expected to reach $18 billion this fiscal year. A Balance of Payments (BoP) deficit and a spiralling debt liability will pose a very grave risk to the economy that is already in deep trouble. Nepal’s central bank statistics show the country’s inflation averaged 7.14% in the current fiscal, which is the highest in the last 67 months.
Emerging scenario
There are other worrying trends. The country’s debt to Gross Domestic Product (GDP) ratio has crossed over 40% as of the second quarter of the current fiscal year. What is needed is a prudent fiscal management plan. So is the need to boost demand and empower Micro, Small and Medium Enterprises (MSMEs) with soft institutional liquidity support. To emerge from the shocks caused by the BoP deficit to the tune of NR258.64 billion, the decrease in remittance inflow and the fall in the country’s foreign exchange reserve by 16.3% to NR1,171 billion (in mid-March 2022 from NR1,399.03 billion in mid-July 2021), industry needs hand holding by the government and a rationalisation of taxes. Such a collaborative effort will help in increasing national economic productivity and mitigating the systemic risk on the economic front.
A lack of pragmatic policy interventions in Nepal and an abrupt move to reorient economic planning towards ‘self-sufficiency’ has exposed the structural vulnerability of Nepal’s economy. It is also true, and unfortunate, that Nepal’s economy is overtly politicised. Tensions between the Finance Minister, Janardan Sharma, and the Governor of the Central Bank, Maha Prasad Adhikari, with Mr. Sharma suspending Mr. Adhikari for alleged failures in discharging his responsibilities have undoubtedly contributed to the uncertainty. Mr. Adhikari has been reinstated on orders by the country’s Supreme Court, but the damage has been done.
In the short run, the government’s revenue and expenditure should be assessed for minimising the establishment cost. Especially so, it is needed for provincial governments where the operational part must be dealt with frugally to not burden the economy beyond a point. While several drastic measures such as an import ban on luxury goods and reducing working hours have been announced, these have not quite succeeded in allaying fears of an impending crisis. The ban on imported goods that have no competent alternatives in the domestic market will only hurt the economy until the production of domestically-consumable goods is increased. Fortunately, there are some positive signs of an economic recovery appearing, with tourism picking up thanks to the easing of visa and entry restrictions and foreign remittances also showing an upward trend. These need to be consolidated.
India will, undoubtedly, go the extra mile to help Nepal ensure a speedy and comprehensive recovery. India has not hesitated in being generous and in coming to Sri Lanka’s help despite political considerations which might have suggested other approaches. In Nepal’s case, Prime Minister Sher Bahadur Deuba is a known friend of India who likes to accord priority to development rather than playing to the political gallery.
His recent visit to India was successful in terms of reaching an important understanding on economic cooperation projects. It should be possible for Nepal to expect generous Indian support for its economic recovery to be based on broad-based consensus in Nepal which will also eventually help in resolving bilateral irritants that keep cropping up every now and then.
What Nepal’s national economy is facing today is a sort of crisis in the making.
Of late, the government is finding it difficult to overlook the difficult trade deficit but unfortunately with wrongly-placed measures such as curbing the autonomy of the Nepal Rastra Bank (NRB) and vilifying import per se instead of making interventions for much-needed structural economic reforms. The NRB underlines problem areas such as rising inflation, BoP deficit, decreasing remittance inflow, depleting foreign exchange reserves and burgeoning imports beyond an acceptable level. The NRB’s projection of a looming crisis has no takers in the Finance Ministry — that is on making strange short-term provisions rather finding the way out to avert a crisis in making.
Nepal is in dire need of augmenting its preparedness on the domestic economic front along with a need-based infrastructural haul to impart the right momentum to an economy that is overtly politicised and not inspiring enough for big business ideas to prevail and flourish. Nepal’s political economy should get the traction of national consensus to fulfil the aspirations of the people and also reposition the country to the global state with its strengthened economic prowess.
To not give an adverse response to the usual flow of goods and services, the government should lift the ban on imported goods which do not have competent alternatives in the domestic market. Until such time as Nepal makes a move to increase the production of domestically-consumable goods and end the cartel of businesses embracing competition and innovations, it would be helpful if Nepal remains open to successfully complete a mandatory transition of present sort.
There is no magic wand to ensure economic reforms and avert a crisis-like scenario. Nepal’s neighbour and the world’s largest democracy, India, is a fine example of a country that braved a severe BoP crisis in 1991 and transformed the economy through a sustained wave of economic reforms without letting political preferences override significant economic matters. In the time when isolation cannot steer the growth impulses of the economy, it is important for Nepal to cope with the shortage of industrial production and pressure of trade imbalance through excessive imports but without stopping to remain open to the world for healthy collaboration.
Geopolitical changes
The broad geopolitical and economic trends are also suggestive of doors opening to more active Nepali participation in the Indo-Pacific economic agenda, with the Nepalese Parliament approving the $500 million Millennium Challenge Corporation (MCC) grant from the United States; this could substantially upgrade energy cooperation between India and Nepal, and also India agreeing to the United Kingdom, the European Union and other major investment partners working together in third countries on development projects. Interestingly, the Nepalese seem to have independently made a reassessment of risks in recklessly deepening ties with China, thanks in large measure due to Beijing’s missteps, and the style and the substance of Chinese-delivered assistance.
There is much greater receptivity and a “felt need” across the political spectrum and in public discussion of the genuineness of India’s friendship aimed at contributing to the welfare of people of Nepal. The decision of the Government of India to set up an inter-ministerial standing group under the chairmanship of the Foreign Secretary, to coordinate sections and ensure more rapid follow-up of project decisions is also a welcome step.
Business leaders in India should be encouraged to be proactive in looking for new opportunities in expanding and diversifying trade and investment ties with Nepal including exploring possibilities in the context of a reset of supply chains in the post COVID-19 situation. There is no doubt that the economic challenges in the post COVID-19 situation, and the overall churning in the geopolitical environment have created an opportunity for both countries to devise innovative approaches to long-standing issues and to aim for new horizons in bilateral cooperation.
It is vital that Nepal deepen its economic ties with India and facilitate joint ventures that create immense economic opportunities. India’s unwavering commitment to peace and prosperity in Nepal and its complementarity in its relations with Nepal will help in creating a healthier economic ecosystem in Nepal. While the economic scenario is troubled — and it is unlikely that Nepal will emerge from it soon — it would be wrong to assume that a condition akin to a breakdown is inevitable in Nepal. Economic adversity has created the space for course correction and Nepal should be encouraged to devise a fresh approach to achieve this through calibrated efforts.
K.V. Rajan is India’s former Ambassador to Nepal. Atul K. Thakur is policy professional, columnist and writer with a special focus on South Asia. The views expressed are personal
At the Telangana Rashtra Samithi (TRS)’s plenary held in Hyderabad recently, when the Telangana Chief Minister, K. Chandrasekhar Rao, made his intentions clear about expanding the party’s national footprint by going at “misgovernance” by the Bharatiya Janata Party hammer and tongs, it was apparent that he was sticking to the script prepared by the high-profile election strategist, Prashant Kishor.
‘A common agenda’
Mr. Kishor had flown down to Hyderabad after his attempt to make headway with advising the Indian National Congress party and even finding a role in it misfired. Mr. Kishor was in confabulations with Mr. Rao over two days and drew up a blueprint on how the TRS could execute its “go national” action plan. Mr. Rao’s assertions at the plenary looked to be much in sync with Mr. Kishor’s strategy of the Opposition taking on the BJP in the 2024 general election. As if on cue, Mr. Rao, laying bare his national political ambitions, spoke of India needing an “alternative political agenda, and ridding the country of the religious hatred spread by the BJP ruling at the Centre”. He laid emphasis on a common agenda for India and not so much on a political front “to make someone a Prime Minister”. An agenda was needed that included an integrated agricultural policy and reorienting the goals of sectors such as industry to meet the aspirations of the people. He noted that people were tired of the BJP’s single point programme of stoking religious passions across the country and wondered if the United Progressive Alliance was better.
Plan for 2023 is unclear
These are familiar semantics that have matched Mr. Kishor’s efforts in trying to build alternative political formations across the country to fight the BJP. In recent interviews to the media, Mr. Kishor, who quit his Indian Political Action Committee (I-PAC) group, revealed his future political trajectory of being on the other side of the BJP camp, citing how the saffron party has drifted away from the basic principles of the Indian Constitution. He went on to suggest a “realignment, redesigning and rebooting” of national and regional parties to counter the BJP, putting on the table an “alternative narrative”, all this while exuding confidence that defeating the BJP in the 2024 Lok Sabha elections was indeed in the realm of possibility. In his view, it was not necessary to have a grand pre-poll alliance or project a particular leader as a prime ministerial candidate.
Mr Kishor and his I-PAC’s strategy for the TRS to realise its pan-India dream may look sound and attractive going by the dramatic preview presented by Mr. Rao at the plenary, but there is no clarity yet on his formulation for the Telangana Assembly elections due in 2023. The TRS will be seeking a mandate for a third term from voters who appear fatigued with the governance and the policies for over eight years now. Mr. Kishor has his task cut out and there is expectation that he will wipe out a two-term load of anti-incumbency.
Unfulfilled promises
Notwithstanding its tall claims, many of the promises made by the TRS remain unfulfilled. Opposition parties, the Congress and the BJP, contend that but for a handful of villages in Gajwel (Mr. Rao’s Assembly constituency), Siddipet (represented by Mr. Rao’s nephew and Finance Minister T. Harish Rao) and Sircilla (represented by Mr. Rao’s son, IT Minister, K.T. Rama Rao), not many double bedroom houses have been built anywhere in Telangana. Under “Mission Bhagiratha”, a programme to supply tap water, only 40% of the households have been covered. Round-the-clock free power supply promised to the farm sector is patchy. A plethora of problems haunt the 23 newly carved out districts. After failing to convince the Central government to procure the entire stock of paddy from the State, the TRS government grandly announced that it would do it on its own, but finds the going tough.
The financial situation is not too comfortable either. Far from having in place proactive policy decisions that could checkmate the BJP, the TRS government has been spending beyond its means on non-productive schemes and freebies and then approaching the Centre for relaxing Fiscal Responsibility and Budget Management norms and the allocation of more funds. The Rythu Bandhu, the farmers’ investment support scheme, involves an annual outgo of about Rs. 16,000 crore. Another new scheme, Dalit Bandhu, which extends Rs. 10 lakh assistance to each beneficiary, is estimated to cost about Rs. 17,000 crore annually. The TRS government has been heavily dependent on loans from various agencies, touching a whopping Rs. 2.41 lakh crore, since the formation of Telangana in 2014.
So will Mr. Kishor’s magic strategy help the TRS turn the tide and pull off a hat-trick? Mr. Rama Rao is sceptical. “People should understand [that] Kishor’s I-PAC is just to supplement our efforts. If we don’t have public support, they can’t save us, PK [Prashant Kishor] or some outsider can’t save a sinking ship....” It is widely believed that Mr. Rao’s national foray is also meant to keep the top political seat in Telangana warm for Mr. Rama Rao. Detractors also point to the fact that Mr Rao, for all his claims of being a veteran political strategist, may have sent out a signal of being on shaky ground by hiring the services of I-PAC.
I-PAC’s plan of action for the TRS was kicked off amid huge confusion caused by Mr. Kishor’s running with the hare and hunting with hounds strategy— attempting a lateral entry into the Congress in Delhi while lending political advice to the Congress’s arch rival in Hyderabad, the TRS. Among other inputs, he is believed to have almost suggested to the Congress to go for an electoral alliance with the TRS. It caused a furore within the Telangana Congress while the BJP watched with glee at how the two parties plunged into chaos. With Mr. Kishor clearing the air, there was relief in the Congress and TRS camps.
Some gains for the BJP
Leaving aside the commissioning of a professional political strategist for the elections, the issue is about how the TRS plans to take on a resurgent BJP in Telangana. The BJP has posted some handsome wins in elections to the Greater Hyderabad Municipal Corporation and by-elections to the Dubbak and Huzurabad Assembly constituencies. But for platitudes, TRS has not much to offer. It has not come up with any concrete plan to check the strident hate and polarising campaign being run by the BJP in Telangana. BJP leaders appear to be getting away making provocative speeches, the recent example being that of the BJP MLA, T. Raja Singh, during the Rama Navami procession in Hyderabad. The TRS’ unwritten understanding with the All India Majlis-e-Ittehadul Muslimeen (MIM) often comes in handy for the BJP to question the TRS’s moral authority to speak and act against communal parties. Yet, with its sights set on grabbing national political space and attention, the TRS still recognises the BJP as being its main political rival.
K. Venkateshwarlu is a senior journalist based in Hyderabad
According to the Centre for Monitoring Indian Economy (CMIE)’s Consumer Pyramids Household Survey, employment in India fell from 408.9 million in 2019-20 to 387.2 million in 2020-21 and then recovered to 401.8 million in 2021-22. The recovery in 2021-22 was inadequate. Employment was still 1.7%, or 7 million short of the employment level of the pre-pandemic year of 2019-20. But this overstates the impact of the pandemic. Employment was on a declining trend even before the pandemic: it was falling at the rate of about 0.31% per annum. If that trend had continued uninterrupted by the pandemic, employment would have fallen by about 2.5 million from 408.9 million in 2019-20 to 406.3 million in 2021-22. And so, the hit to employment that can be attributed to the shock of the pandemic is about 4.5 million jobs, which is the more lasting net impact. The immediate impact was much bigger. Nearly 78 million jobs were lost during the quarter of June 2020, which roughly coincides with the first wave of COVID-19. Similarly, 13 million jobs were lost during the second wave during the quarter of June 2021. Most jobs lost during lockdowns were of the informal kinds. These come back when the restrictions on mobility were lifted. If the economy expands by about 7.5% in 2022-23, we expect about 6 million jobs to come back. That would still leave a deficit of a million even as many more get added to the working age population and the labour force.
As India struggles to generate the jobs it requires to engage all the additional people who enter the labour force in a year, the count of the unemployed and those out of the labour force keeps rising. In 2021-22, the unemployed who were actively seeking work but were unable to find any were estimated at 33 million. This was higher than the pre-pandemic levels. The 7 million jobs lost over the two years since the COVID-19 outbreak is unevenly distributed, so it may be difficult to cover most of this loss anytime soon.
Working from home
It has been seen in the past that women suffer job losses disproportionately during economic shocks. This was true during the pandemic. Women accounted for less than 11% of all jobs in 2019-20, but they accounted for nearly 52% of the 7 million job losses since then. In urban India, it was worse: women accounted for only 9% of total employment but accounted for a massive 76% of the job losses. The impact of this is a sharp fall in the labour participation of women. The female labour force participation rate among urban women was abysmally low at 9.4% in 2019-20 and fell to 7% in 2021-22.
Hopes that working from home would help women to join the labour force in large numbers have been belied. Working from home with the rest of the family also at home made it harder for women compared to the hardship of commuting to work. It is going to be difficult to cover the 3.6 million loss of employment among women during the pandemic.
Working from home also does not help those who have to go to work such as small traders/vendors and daily wage labourers, who account for the largest share of employment in India. Before the pandemic, in 2019-20, about 131 million or 32% of the total employment was in this form.
In April 2020, 79 million small traders and daily wage labourers lost employment. By July 2020, most of them were back to work. The lockdowns demonstrated both the vulnerability and the flexibility of this category of workers. They could enter and exit the labour markets with ease. Employment in the form of small traders and daily wage labourers was declining at the rate of 9.3%. In the two years of the pandemic, this rate of fall fell to 2.4% per annum.
The pandemic has reversed a trend of rising entrepreneurs. The count of entrepreneurs who, like small traders and daily wage labourers, also have the freedom to work when conditions permit has also come down – from 78 million in 2019-20 to 75 million in 2021-22. This fall of about 1% is in sharp contrast to the 13% per annum growth in entrepreneurs before the pandemic. But we expect entrepreneurship to rise again principally because of a lack of salaried jobs.
The biggest relative fall in employment is in the category of salaried employees (6.8%). About 5.9 million salaried employees have lost employment in the two years of the pandemic. Unlike daily wage labourers, small traders and entrepreneurs, salaried employees cannot go back to work at will. Except for a few high-skill jobs, finding a new salaried job is difficult. Investments into new large enterprises make this task particularly difficult. A salaried job is also the most coveted form of employment. But until the investment cycle restarts, it may be difficult to see any uptick in salaried jobs. Employing women and providing salaried jobs are the two big challenges that the pandemic has posed that are going to be difficult to tackle soon.
Mahesh Vyas is Managing Director and CEO, CMIE
Kerala Chief Minister Pinarayi Vijayan triggered a political storm last week when he sent Chief Secretary V.P. Joy to Gujarat to study the techniques in the Gujarat Chief Minister’s e-governance dashboard system. The UDF criticised the visit, especially in the light of Mr. Vijayan’s and the CPI(M)’s uncompromising political position vis-a-vis BJP-ruled Gujarat. The Kerala Chief Minister and his party have often shown contempt for anyone praising the Gujarat model. In fact, in 2013, the CPI(M) had demanded the expulsion of the then Labour Minister in the Congress-led UDF government, Shibu Baby John, who had visited Gujarat on his way back to Kerala from New Delhi for half a day to learn more about its highly feted skill development programme.
Though the Minister later declared that Gujarat’s skill development model was inappropriate for Kerala, the CPI(M) refused to back down on its demand. Earlier, in 2009, when a CPI(M) MP, A. P. Abdullakutty, spoke highly of then Gujarat Chief Minister Narendra Modi and his State, he was expelled from the party. He then joined the Congress and was elected MLA twice, but was ousted from the Congress for the same reason. Mr. Abdullakutty is now the national vice president of the BJP.
Against this backdrop, Mr. Vijayan’s desire to learn governance from a BJP-ruled State took Kerala by surprise. The Opposition parties predictably slammed the CPI(M) for what they called its double standards. While BJP State president K. Surendran remarked that the decision to send the Chief Secretary to study the dashboard system showed that the Chief Minister had realised the merits of the Gujarat model, the CPI(M) State leadership was at pains to defend the decision, particularly in the absence of Mr. Vijayan who is out of the country for medical treatment.
The Gujarat CM Dashboard, developed in 2019 under former Chief Minister Vijay Rupani, is considered an e-governance marvel with 3,400 indicators of 20 government sectors, 740 web services and APIs and integration of 183 eGov applications.
After his Gujarat visit, Mr. Joy called the dashboard a “first-of-its -kind initiative” and said that it effectively monitored delivery of public services and gave feedback directly from beneficiaries. Through the system, the Chief Minister can monitor the implementation of various schemes and basic services such as State transport, street lights and drinking water supply in any part of the State. Mr. Joy was also quoted as saying that he was keen on setting up in Kerala a centre similar to the Vidya Samiksha Kendra (Command and Control Centre for Schools) in Gujarat.
This is not to say that Kerala is lagging behind in IT-enabled governance. At present, the State has statistics to monitor the timely delivery of 471 dashboards in 38 departments connected to 53 websites. Many of these are worth emulating: Kerala’s COVID-19 dashboard, for instance, was adopted by many States in India.
Mr. Vijayan’s willingness to risk some political capital and adopt slightly more advanced administrative techniques from a State ruled by an ideologically incompatible party can be seen as a bold move to infuse more efficiency and transparency in governance. Amitabh Kant, CEO, Niti Aayog, put this in perspective when he said: “Glad that the Kerala delegation visited Gujarat to study its data-driven monitoring model for schools. Many states have benefitted from Kerala’s human developmental model.
“Similarly, in a large country like India, Kerala must learn from best practices of other States. This is federalism.”
biju.govind@thehindu.co.in
The penny has dropped. After stubbornly holding off from acting to tame inflation, which has steadily eroded consumers’ purchasing power and derailed broader economic momentum, the RBI’s rate setting panel on Wednesday announced an ‘off-cycle’ increase in benchmark interest rates. The Monetary Policy Committee voted to raise the policy repo rate by 40 basis points to 4.4% with immediate effect. RBI Governor Shaktikanta Das rationalised that letting inflation remain elevated at current levels for too long risked ‘de-anchoring inflation expectations’ and consequently hurting growth and financial stability. While Russia’s invasion of Ukraine and the subsequent western sanctions on Moscow have roiled the outlook for prices on a range of commodities, including wheat, edible oil, crude oil and coal, Indian households’ perception and expectations of inflation have been running well above the RBI’s upper tolerance threshold of 6% for more than two years. That the RBI has been forced to act now, after insisting that price pressures were ‘transitory’, is a belated yet welcome acknowledgment that the economic costs of failing to anchor price stability can potentially be far more deleterious to growth than a relative decrease in the availability of low-cost credit. To cite Mr. Das: “Sustained high inflation... hurts savings, investment, competitiveness and output growth. It has pronounced adverse effects on the poorer segments ... by eroding their purchasing power.”
In explaining its decision to raise borrowing costs for the first time in 45 months, the MPC has acknowledged that the overall outlook for inflation has darkened considerably since it met last month. Prices are on a tear globally and inflationary pressures are broadening worldwide. The IMF last month posited that the war in Ukraine was poised to not only slow global growth in 2022 but would also cause inflation to accelerate by 2.6 percentage points to 5.7% in advanced economies this year, and spur a more appreciable quickening of 2.8 percentage points in the case of emerging market and developing economies. With central banks in advanced economies led by the U.S. Federal Reserve pursuing a path of policy normalisation, the prospects of volatility in capital flows adding pressure on the exchange rate and consequently heightening the risks of imported inflation have also surely queered the pitch for the RBI. The fact that the novel coronavirus is still lurking and it could trigger a fresh wave of infections, as seen in China, adds considerably to the uncertainty. Monetary authorities have also rightly pointed to the impact that the increases in domestic pump prices of petroleum products have had on inflation. The onus is now squarely on the RBI and fiscal authorities to move in lockstep and take every possible measure including cutting fuel taxes to keep inflation from running away and landing the economy in stagflation.
Prime Minister Narendra Modi’s three-nation visit to Europe comes at a time when the continent is facing its biggest security crisis since the end of the Cold War. In Germany, Mr. Modi and Chancellor Olaf Scholz reiterated the partnership between the two countries. Berlin has also announced €10 billion for bilateral cooperation. In Copenhagen, Mr. Modi attended the India-Nordic summit with leaders of Denmark, Norway, Sweden, Finland, and Iceland. In the last leg, the Prime Minister will hold talks in Paris with French President Emmanuel Macron, who was re-elected recently. While bilateral issues are at the centre of these meetings, the elephant in the room is the Russian invasion of Ukraine. Mr. Modi’s trip comes a few days after the President of the European Commission, Ursula von Der Leyen, visited India. New Delhi’s neutral position on the war has triggered both criticism and engagement from the West. India has seen several high-profile visits from the West, with some top officials pressing New Delhi to cut back on trade with Russia, a traditional strategic partner. Among the Nordic five, Sweden and Finland are now considering dropping their decades-long neutrality and seeking NATO membership.
In Germany, however, both sides showed pragmatism over the Ukraine question. Germany, like India, has deep economic ties with Russia — if for India it is about defence supplies, for Germany, it is for almost 40% of its gas import requirements. While the Russian aggression has prompted Germany to raise its defence spending and join the western sanctions regime, it has been reluctant in sending weapons to Kyiv, compared to other NATO members in Eastern Europe. While Mr. Scholz urged Russian President Vladimir Putin to “stop this senseless murder and withdraw your troops”, Mr. Modi’s response was more measured. He said that no party could emerge victorious and that dialogue was the only way out. India and Germany also unveiled the contours of the next level of their partnership. Germany has said India is its “central partner” in Asia and that close cooperation would continue to expand. Europe is expected to take a more securitised approach to foreign policy from now, given the direction of the Ukraine conflict. In the post-Cold War world when Europe witnessed relative stability, India managed to build strong ties with both the West and Russia. But that era of multi-directional partnerships is facing its strongest test now with the West seeking to “weaken” Russia and Moscow warning of a new world war. The challenge before New Delhi is to build a stronger strategic future with Europe without immediately disrupting its complex but vital partnership with an increasingly isolated, angry Russia.
New Delhi, May 4: Demand for outright nationalisation of foreign oil companies and charges of corruption and bungling of high officials marked the Lok Sabha debate to-day on the demands for grants for the Ministry of Petroleum and Chemicals. References were made to “deep ties” between foreign oil companies and bureaucracy. The Government was asked not to “shield” guilty officials and was accused of “criminal complacency” in the vital sphere of the nation’s economy. The nationalisation demand was made on the ground that Anglo-American oil companies had been putting up “fancy” prices for crude and reportedly repatriating even substantial portions of their reserves. Mr. Dinen Bhattacharya (CPM-WB), initiating the debate, said that foreign monopoly companies had “clandestinely” increased their refining capacity over the years in a bid to subvert indigenous production. The Soviet Union had offered to supply crude at cheaper costs but the companies refused to refine crude from any source other than their own. Supporting the demand for nationalisation, Mr. Inderjit Gupta (CPM-WB) said that the foreign oil companies had drastically reduced employment particularly in the eastern region.
British warships conducted another bombing raid on the air strip at Port Stanley, capital of the Argentine-occupied Falkland Islands, the British Defence Secretary John Nott told the House of Commons while Argentina announced that its second largest warship, the cruiser General Belgrano had sunk following a torpedo attack by a British submarine. Nott informed members of Parliament, “A further sortie was made to render the airstrip unusable for light supply communications and ground attack aircarft operating within the islands. Nott’s announcement came after British Prime Minister Margaret Thatcher defended the sinking of the Argentine cruiser General Belgrano with 1,433 men aboard with criticism of the attack mounting in Britain.
Talks between India and China on the border question and other important issues will begin on May 17. The 11-member Chinese delegation led by vice foreign minister will reach Delhi on May 15 for the talks.
While the situation in Punjab was normal, tension gripped parts of Haryana including Kurukshetra where an idol of Guru Ravi Das was found disfigured. The deputy commissioner of Kurukshetra has assured people of SC communities swift action against the culprits.
Two Soviet climbers reached the summit of Mount Everest. They were the first from their country to scale the 29,028 foot high peak. Vladimir Balyberden and Eduard Myslovsky reached the peak in the afternoon of May 3 and were there for more than 30 minutes.
On Wednesday, in a surprise move, the monetary policy committee (MPC) of the Reserve Bank of India (RBI) voted unanimously for an off-cycle hike in the benchmark repo rate by 40 basis points. While both the timing and the quantum of the hike were unexpected, the off-cycle meeting, held just a month after the last one, is perhaps the clearest indication that the committee has been underestimating the price pressures in the economy, and has fallen behind the curve when it comes to managing inflation. As the RBI Governor’ statement suggests, this hike is just the beginning of the tightening cycle. Considering that in the initial days of the pandemic the MPC had cut the repo rate in two tranches of 75 basis points and 40 basis points, the decision to raise rates by 40 basis points now suggests that another 75 basis points’ hike will be needed to simply revert to the pre-pandemic level.
In recent times, there has been marked variance between actual inflation and the RBI’s forecasts. In its February policy, the RBI had projected inflation at 4.5 per cent for 2022-23. Two months later, it raised the forecast to 5.7 per cent. However, considering current trends — global commodity prices remain elevated, food price pressures are likely to continue, and core inflation remains elevated signaling that price pressures are broad-based — it is increasingly likely that inflation will come in significantly higher than even the revised forecast, more so in the first half of the year. In fact, it is quite likely that actual inflation will surpass the upper threshold of the RBI’s inflation targeting framework for three quarters of this year as well. Breaching the threshold will compel the RBI to write to the government to explain the reasons for its failure to rein in prices, and recommend remedial action. No central bank will relish the prospect of having to explain why it missed keeping inflation within the target. Consistently underestimating inflation will also raise questions over the central bank’s forecasting abilities, and erode its credibility.
Through the pandemic, the RBI, under Governor Shaktikanta Das has exuded confidence in its handling of the crisis, marshalling a range of policy instruments to support the economy during this tumultuous period. On Wednesday, it appeared as if the central bank was less certain. The MPC has hiked rates even as it has retained its accommodative stance. It has also chosen not to provide an updated inflation forecast even as it acknowledges that “global price shocks pose upward risks to the inflation trajectory presented in the April MPC resolution.” Granted there is considerable uncertainty over the trajectory of inflation — the geopolitical situation and supply chain disruptions due to spikes in Covid infections in economies will impart upside risks to inflation. But surely the decisions of the MPC are guided by some expectation of future inflation. These should have been disclosed.
In 1973, in the landmark Roe vs Wade judgment, the Supreme Court of the United States made the right to abortion constitutional up to the point of foetal viability, establishing a benchmark for abortion laws across the world. Now, a leaked first draft of the Court’s majority opinion in an ongoing case has revealed its momentous move to overturn the judgment and the 1992 verdict that partially upheld it. In an apparent nod to the Conservative right wing’s anti-abortion position on the issue – Republicans have packed the highest court with conservatives who are expected to lend support to measures such as rolling back abortion rights and expanding gun rights — the majority opinion in the draft cites, “It is time to heed the Constitution and return the issue of abortion to the people’s elected representatives”.
The leaked draft has sounded the alarm with regard to the curtailing of essential freedoms guaranteed by the Fourteenth Amendment of the US Constitution. In his note of concern posted on social media, former President Barack Obama and his wife Michelle wrote that should the repudiation come to pass, “it will relegate the most intensely personal decision someone can make to the whims of politicians and ideologues”. In essence, in overlooking the checks and balances of Roe vs Wade and in disabling personal agency, the matter will no longer be set within the paradigm of women’s rights. It is also likely to impact the larger framework of human rights, tilting it away from the poor and the voice-less.
While the judgment will be a significant turning point in the US’s position on individual freedoms, its tremors will also be felt across the world. In India, 50 years after the Medical Termination of Pregnancy (MTP) Act was passed in 1971, key changes were brought in by the MTP (Amendment) Act, 2021, including the right to terminate unwanted pregnancies caused by contraceptive failure, regardless of the woman’s marital status. In a climate in which the state is seeking increasing control over the lives of citizens, the amendments might seem more mindful of a woman’s right to bodily autonomy and privacy. The fact is, however, that they do not go far enough. Under the Indian Penal Code, 1860, abortion remains a criminal offence under Section 312. Both the MTP Act and its amendment simply provide an exception to the criminalisation. Notwithstanding the landmark 2017 Supreme Court judgment of Justice KS Puttaswamy that upheld the right to privacy of Indian citizens, by its undue deference to patriarchal structures that make the consent of others — doctors, partners, family members, and even the state — critical to the woman’s awareness of and access to abortion-related services, the law makes the right to abortion, and, by extension, to her body, individuality and life, limited and hemmed in. When the US Supreme Court passes its final judgment on the matter, it would do well to remember how dangerously easy it is to set a precedent for backsliding on hard-won rights and freedoms. The choice is clear: To make the woman’s battle-scarred body a site of further contestations and power-play, or to work towards expanding freedom and choice and inclusivity. To be “pro-life” should not, and does not, mean to be anti-women.
Written by Gautam Bhatia
One of the more high-profile legal cases arising out of the riots that took place in Delhi in February 2020 has been that of Umar Khalid, who is accused under the Unlawful Activities Prevention Act (UAPA) of being part of a “larger conspiracy” to destabilise the government. It is notable that a large part of the case against Khalid centres upon a speech that he delivered at Amaravati at the time, as part of the protests against the Citizenship Amendment Act. It is equally notable that because of the stringent provisions of the UAPA, at the time of writing, Khalid has spent more than 500 days in jail without trial — one of many to be similarly incarcerated.
It is in this context that the proceedings of Khalid’s bail hearing before the Delhi High Court last week have raised several eyebrows. During the hearing, when it was pointed out to the Court that the speech contained no calls to violence — and that on the contrary, it specifically called for peaceful protest — the Court responded by highlighting several parts of the speech that it found “obnoxious” or “unacceptable”. These included, for example, an accusation of “jumla” against the prime minister — which the Court implied crossed the “Lakshman Rekha” of free speech — as well as references to “krantikari” and “inquilab” (words that are commonly used in Indian political jargon to signify “revolution”).
Admittedly, observations made by judges in the cut-and-thrust of oral argument do not always appear in the court’s final order. It is also true that judges sometimes raise strongly-worded objections to lawyers’ arguments simply to test their rigour under questioning. However, even with both these caveats in mind, the wide circulation and reporting of the Court’s remarks make it important to clarify when — in India — can an individual be jailed merely for something that they have said.
As one might expect, civilised societies do not, as a regular matter, jail people for speech. The response to speech that one finds “obnoxious” or “unacceptable” is not to use the heavy hand of the state and the law-enforcement machinery to silence someone, but to meet them with counter-speech (that may also be “obnoxious” or “unacceptable”).
There are two general exceptions to this. The first is hate speech, which is closely linked to discrimination and violence against vulnerable and marginalised groups (for example, in history, there was a close link between antisemitic speech and the economic and social boycott of the Jewish people, which eventually led to the Holocaust). The second is incitement to violence. The reason why incitement to violence does not fall within the protection of free speech is that — by its very nature — it leaves neither the time nor the scope for response or reason. When we think of incitement to violence, we think of a speaker egging on an already-enraged mob to burn down a neighbourhood. The analogy often used is that of falsely shouting “fire” in a crowded theatre, in order to trigger a stampede.
In India, certain forms of religious offence are also criminalised, but that is not relevant to the present case. What is relevant is that outside of these narrow exceptions, the worth or worthlessness, the obnoxiousness (or lack thereof), and the acceptability or unacceptability of speech are to be judged in the public sphere, and not by courts (and especially not when it is the bail application of an individual who has spent more than 500 days in jail without trial). It is most certainly not the courts’ prerogative to draw a “Lakshman Rekha” around the prime minister (or any other politician), and dictate what form of criticism is or is not permissible. Doing so is to confuse matters that belong in the domain of civility and good taste with matters that are criminal; and especially where an individual’s freedom is concerned, courts bear a heavy responsibility not to conflate the two.
Indeed, when we step back from legalism for a moment, and consider Khalid’s speech from the perspective of simple common sense, we find that the statements that the Court picked out are well within the mainstream of Indian political discourse. Politicians have — and will continue to — accuse each other of a lot worse than “jumla”. And anyone remotely plugged into Indian politics knows just how mundane and quotidian the word “revolution” is: Not only do we have a political party called the “Revolutionary Socialist Party” in Parliament, but as recently as March 2022, the Aam Aadmi Party called its election victory in Punjab a “revolution” that would spread to the rest of the country. Under normal circumstances, nobody would bat an eye at words like “krantikari” and “inquilabi” — a political heritage that all Indians share — being used in a political speech; in fact, one would be surprised at their absence from a political speech!
This is also why another observation by the Court — that Khalid is an “intelligent man” who might be using indirect speech to goad his audience to violence — must be examined with care. Neither the Court, nor anyone else has access into an individual’s mind: What we do have is a tangible record of events — of things done and spoken. And when the question is whether or not a person deserves to be in jail for years without trial, it becomes even more important to tread carefully. An enthusiastic political speech, a fiery political speech, a political speech that takes aim at opponents through satire, parody, or even by generating a sense of outrage — these may offend people’s sensibilities and ideas of civility, taste, and good behaviour — but these are not reasons to deprive an individual of their freedom. As the guardian of civil rights, the Court bears the burden of ensuring that the “Lakshman Rekha” does not turn into a weapon to permanently silence democratic dissent.
This column first appeared in the print edition on May 5, 2022, under the title ‘Unfreedom of speech’. Bhatia is a lawyer and author of Offend, Shock or Disturb: Free Speech Under the Indian Constitution
The burly W G Grace, magnificently bearded, stands with a bat cradled in his hands on the edge of the boundary, ready to go in to bat. Above his head ran the text, “Coleman’s Mustard”. On his jersey, it said, “Like Grace”; below him ran the line, “Heads the field”. It was 1900, and Grace was the first sportsman to endorse a product that wasn’t cricketing equipment. He was the first superstar cricketer, its first shamateur who milked it as much as he could monetarily — he took the equivalent of more than £1 million from the game in an era when a tradesman made £200 a year. But he was also the creator of modern batting as we know it.
In the words of his contemporary, K S Ranjitsinhji, “He was not only the finest player born or unborn, but the maker of modern batting. He turned the old one-stringed instrument into a many-chorded lyre. Where a great man has led, many can go afterwards but the honour is his who found and cut the path. The theory of modern batting is in all essentials the result of WG’s thinking and working on the game.”
It’s a testament to his legacy that the Wisden Almanack finally decided to amend his statistics this year, excising a couple of hundred runs, two centuries, as they were deemed not to be against first-class teams. That it stood for 150 years, when all and sundry knew the illegality, says much about his star status. That Wisden’s decision was accompanied by articles around the cricketing world sighing about the move, says much about the relevance and hold of the preeminent player of the Victorian age. He was a practising doctor, who it was said would often treat people of lesser means for next to nothing, and also ensured that a fair amount of his patients were rich enough to subsidise his philanthropy. He was a player who bullied umpires, claimed bumped catches, ran out batsmen after he himself had acquiesced to them leaving the crease, kidnapped a cricketer from another team because his team were one man short, ensured he got enormous appearance fees for playing in games. But he was also the man who played in benefit games to help out other cricketers, and cashed his popularity to help county grounds get profitable.
It’s to Ranjitsinhji’s observation that we must first turn our attention. Above all else, Grace, till 1880 when he was at the peak of his powers, was the preeminent batsman of his time. Before him, batsmen showed a preference either for back foot-play or forward play. They were strong on one side, good in attack or defence. Grace married it all together, ending the categorisation, and was the first batsman to be fluent off back and forward play, strong all around the field, and equally strong in attack and defence, even though he preferred to pick runs while defending with angled nudges.
In the words of C L R James, a famous Marxist thinker who also wrote on cricket, the central feature of Grace was his uninhibitedness. “He was not in any way inhibited. What he lacked he would not need. All that he had he could use. In tune with his inheritance and his environment, he was not in any way repressed. All his physical and spiritual force was at his disposal to do what he wanted to do.” It’s been said that before Grace, batsmen didn’t know what could be made of batting. In his younger days, while he was still fit, he was a pretty good bowler too, and in his declining years, he specialised in slow mix-up stuff from around the stumps, which was good enough to bowl out Ranjitsinhji and trouble a young Victor Trumper, Australia’s best batsman before Bradman.
He let himself go physically in the late 1800s in his middle age, which unfortunately coincided with the emergence of Test cricket. Hence, his Test average of 32 from 22 games doesn’t quite reflect his stature and the imprint he left on the game.
To reduce Grace to just a player, though, doesn’t do justice to his towering stature that packed in crowds all across England and Australia. On his honeymoon, which of course coincided with a profitable tour of Australia, he got a fee of £1,500 from the organisers (worth at least £100,000 today). On his second trip down under, a fifth of the entire cost went to him. In 2016, a bat, supposedly of Grace’s, was auctioned for £3,500.
However, there were also some murmurs against him during his day. The caricaturist Max Beerbohm, famous in the early 1900s, once portrayed him with bulging biceps, holding a miniature bat in one hand and a huge cheque in the other. In the background, a funeral procession of a neglected patient was shown.
He played well past his physical decline, unable to tear himself from the game he adored.
Here is one final Grace story, one for the road.
In his 50s, he once hurt his hand when stooping to stop a ball at The Oval in Surrey and protested that the ball wasn’t properly conditioned. A hurt opposing Surrey captain insisted that all their balls were conditioned for two years before they were used. An adamant Grace demanded the ball had to be inspected — by himself of course. He then proceeded to strip away the outer layers of the ball, unravelled the string, prised open the inner wood cube at the centre of the ball, and unfolded the piece of newspaper coiled inside. He found a recent date printed on it, showed it all around to validate his claim, scorned the opposing captain, and only then allowed the game to continue. No one is bigger than the game is a maxim valid for everyone except the good Doctor.
This column first appeared in the print edition on May 5, 2022, under the title ‘By the grace of WG’. sriram.veera@expressindia.com
A recent international Deloitte survey reports how women’s workplaces are driving them out of full-time jobs, while the pandemic years have only made things worse in terms of burnout and work/life balance. A few vignettes from our study of educated, middle-class, non-working women in Delhi illustrate this:
“My husband has a lung problem; he and my teenage kids are on their computers and I am in the kitchen the whole day. We have our allocated spaces to avoid Covid; he can’t work if he has doubts…”
“Hygiene and care is important and I need to be with my teenage children once they’re home, I cannot leave them to the maids. But I’m in the kitchen all day since Covid arrived”.
“I did a PhD from AIIMS in biotechnology and worked there, then my husband moved from Delhi and we had a daughter… Since Covid began, I did some online classes with school children, so I can manage my child and WFH husband”.
In India, low and declining levels of women’s workforce participation demonstrated in official data has stimulated research seeking to understand demand and supply side drivers. Another approach is to look at factors influencing decisions of non-working women. NSS data suggests that non-working women respond positively when asked if they are willing to work part-time. What relevance does this have for educated women? Based on interviews before and during the pandemic, we explored some of these questions. There are societal patterns that have emerged in the social milieu of education and work, wherein boys become family breadwinners while girls prioritise functions of care and reproductive work. How does this play out in the lives of women?
One respondent said: “I have a lot of girl cousins, and what I saw was that they went to school and college while they waited to marry”. Anita, in her mid-40s, with a postgraduate degree in management and 12 years of corporate sector experience, gave up her job to support her children at the crucial “end of school and college entry” moment. Sudesh, in her mid-40s, with long experience in HR, started her own recruitment company. Concerns over the security of her school-going children, apart from domestic responsibilities, mean that she now works intermittently. Neera, in her late 40s, has a Bachelors and Masters degree in English and Management respectively; and 10 years of corporate sector experience. Having married a colleague, she had twin girls, hoped to get back to work, but one of the twins was autistic: “This was the end of corporate work for me; autism is a complex condition with medical, behavioural, and developmental issues, you have to immerse yourself in finding solutions.”
“Marriage is not so important these days, career is,” said 47-year-old Mohini, while speaking about her daughter, although she quit work once her daughter was 7. “My job was not a 9-to-5 one, I never got home before 7 pm; I had no time to see to my daughter,” Mohini added. She started a handicrafts business, which is on hold now as her child approaches the school-leaving stage. Another respondent said: “I got married and was on night shifts. Work was not possible without family support and there was no one to take care of the kids. ”
Running through all these conversations are rigid workplace demands, lack of sustained family/social support, personal responsibility to guide children and ensure their security. This reflects absence of good-quality childcare, counselling and mentoring. These inexorably influence choices. Educated women, however, exercise agency. Many in our sample actively engage in voluntary and paid activities including teaching, home-based marketing, consulting, tutoring etc. Periods of hectic work are interspersed by spells of no work. Such productive work contributes to society and economy, but being intermittent and often unpaid or voluntary, it goes unrecorded. For women to work consistently, during pandemics or otherwise, we need stronger supportive infrastructures. Then we may not face the bewildering situation of poverty driving women into the workforce, while education seems to drive them out of it. The choice then need not be between familial care and pursuing careers.
This column first appeared in the print edition on May 5, 2022, under the title ‘The working woman puzzle’. Khullar is an independent researcher and Co-Editor of Asian Journal of Women’s Studies and Sudarshan is a Trustee and former director of the Institute of Social Studies Trust
The RBI has decided to take the bull by the horns. It has raised the repo rate by 40 basis points and the cash reserve ratio (CRR) by 50 basis points to fight inflation. We believe these simultaneous policy announcements of adjusting both the rate and quantum of liquidity is a clever ploy. Interestingly, research clearly shows that the credibility and reputation of the central bank is best recognised only when the market response to central bank liquidity operations is stronger. To that extent, the RBI seems to have killed two birds with one stone and has emerged stronger as an inflation targeting central bank. In fact, the surprise mid-term announcement by the RBI Governor today is a clear departure from past practices. It also signals the extraordinary times we live in.
The most interesting aspect of the rate hike today is the continuation of the accommodative policy stance. While the markets seem to have been taken aback, we believe today’s rate hike should be seen more from a strategy perspective, rather than as a change in the monetary policy stance. We believe this is a pragmatic decision as the CRR hike may be just an attempt to build up a war chest on the liquidity front. To be more precise, liquidity inflows to the financial system could be either policy induced by the central bank (for example changes in reserves, open market operations etc) or non-policy induced (foreign exchange reserves, government cash balances, and currency in circulation). Given that non-policy induced liquidity inflows have been recently impacted (outflows of portfolio capital) and given the huge size of the government borrowing programme, the RBI also needs to support the market through some means. Impounding bank reserves through the CRR (Rs 87,000 crore) could give some space to the central bank to conduct open market purchases of bonds from banks and thus inject concomitant liquidity some time in the future if the need so arises. The RBI had followed a similar strategy during 2003-08 when the market stabilisation bonds were introduced, the CRR was also hiked. The CRR rate hike is thus an important tool to possibly manage G-sec yields. The markets may have missed the fine print of this move.
Across the world, major central banks have of late gone on a rate hike spree, waking up to the realisation of inflationary pressures not being transitory in nature. The US Fed has been on the offensive battling a 40-year high surge in prices. It has tapered its bond purchase programme drastically while suggesting in no uncertain terms the pace of rate hikes needed to combat inflation. The European Union has been slow to respond but voices are growing to correct the path at the earliest. Banks like the Central Bank of Brazil or Russian Central Bank have almost jumped the gun (in keeping the benchmark or key rates in double digits.)
Emerging economies have been doubly hit — the days of easy liquidity are well behind them even as their economic resources remain constrained to support an uneven proportion of population coming out of the strains induced by successive waves of the pandemic. To this extent, the decision by the RBI to frontload the rate hikes ahead of the Fed decision is again an attempt to stem capital outflows.
Including the RBI’s decision today to push the benchmark rate to align with the current market realities, 21 countries have increased interest rates so far. Of these, 14 countries have hiked rates more than or equal to 50 bps. Markets are also expecting a 50-bps rate hike by the US Fed in its policy meeting concluding today – the biggest since 2000. It would also be the first time in 16 years that the US Fed will hike borrowing costs at two consecutive meetings.
A historical disaggregation of India’s retail inflation (as measured by CPI) to ascertain the various macro-factors that drove inflation dynamics, indicates that the inflationary pressures can be attributed mainly to adverse cost-push factors, coming from supply-side shocks in food and fuel prices, even as weak aggregate demand conditions continued to exert downward pressure on inflation. The RBI statement thus cites food inflation as a major source of discomfort.
Additionally, nominal rural wages for both agricultural and non-agricultural labourers picked up during the second half 2021-22. However, such wage growth has remained soft. The weighted contribution of wage growth in CPI build-up remains modest and this is a good sign as far as anchoring of inflationary expectations is concerned.
Measures to ameliorate supply-side cost pressures would be thus critical at this juncture, especially in terms of a calibrated reduction of taxes on petrol and diesel. On the policy side, however, it would mean that even after rate hikes, inflation may continue to remain high for some time.
As retail loans have increasingly been benchmarked to the external rate (mostly to RBI’s repo rate) with quarterly reset clause, the loans benchmarked to the repo rate may increase in the range of 35-40 bps, passing on the hike in full, as banks don’t keep a wider spread in retail loans to remain competitive in the market. As of December 2021, around 39.2 per cent of the loans are benchmarked to external benchmarks, so the increase in repo rate will increase interest costs on consumers and may impact them from the next quarter onwards.
The MCLR (Marginal Cost of Funds based Lending Rate) linked loans have a share of around 53 per cent in the overall loan kitty. With the rise in CRR and expected future hikes in the benchmark rates, there would be an increase in MCLR due to a negative carry. Furthermore, if banks raise the deposit rates then the cost of funds will also increase and subsequently the MCLR will increase too.
The RBI, in our view, has acted prudently in responding to market forces that could impact India’s growth prospects if inflationary concerns were not addressed now. At the same time, by pledging to remain accommodative to spur, and reinvigorate growth, it has reaffirmed its commitment to being a trusted partner in the growth of the country. We also believe the rate hike will be beneficial for the banking sector as the risk will get re-priced properly. However, be prepared for a series of rate hikes now.
This column first appeared in the print edition on May 5, 2022, under the title ‘First of many hikes’. The writer is Group Chief Economic Advisor, State Bank of India. Views are personal. He thanks Ashish Kumar for inputs.
Written by Rajesh K Pallan
I first met Shiv Batalvi when I was doing my graduation at Guru Gobind Singh Republic College, Jundiala (Jalandhar) in 1972. Sant Singh Sekhon was the principal and I was one of the members of the welcome committee organising a festival of poets. Batalvi was the cynosure of all eyes: The venue was crowded just because of him. The festival started without Batalvi. Other poets came on the stage but the audience kept looking away from the podium and waiting intently for the poet of the day.
Batalvi came late and went straight to Sekhon, raised his eyebrows with an intoxicating smile signalling him to arrange some whiskey. As Batalvi was already tipsy, Sekhon advised him to drink after the function ended. But Batalvi told Sekhon that he would drink later as well. As soon as Batalvi came on the podium, the audience stood up to get a glimpse of the poet whose songs had struck a chord in all of Punjab.
A pall of silence enveloped the atmosphere as Batalvi started singing in his pensive mood: “Kee puchhde ho haal fakiraa daa/ Saada nadeeyon bichhre neera da”. After singing one song, he signalled and Sekhon asked us to arrange another shot of whiskey in the green room; Batalvi emptied the glass in a single draught and resumed singing his famous lyric:
“Bhathee vaaleye, chambe deeye daaliye,/ peeraan daa paraaga bhunn de;/ tainu diyaan mein hanjooyaan daa bharra”.
That night, the police had a tough time controlling the crowd, which was keen to look at Batalvi from close quarters; an old woman kissed Batalvi on his forehead.
The art of poetry exists in sifting, selecting and arranging words in order and embellishing them with meaningful thoughts. Batalvi’s selection of words and their placement in the context was superb. He resurrected the myths and symbols, and employed them in his poems in a strikingly new manner — the “collective unconscious” of the people of Punjab but now long forgotten. He gave them a local habitation and a name.
Batalvi’s verses bristle with words, symbols and myths that lend a unique complexion to his poetry. His imagery is strikingly novel and the way he transfers the epithet is fascinating as in “Maaye nee maaye, mere geetan de naina vich birho dee rarrk pavve”. In the same poem, he says: “Aakh nee maaye ehnu, rovve bulh chith ke nee, jagg kitte sunn na lavve”.
Only Batalvi could write so powerfully instructing all and sundry to keep one’s grief insulated from others. Often, he harks to the imagery of a bird, Shikra, which was seldom thought of as material of literature: “Mayye nee naaye, main ikk shikra yaar bamaayaa/ Ikk udaaree uss aisee maaree, oh murh vatanee naa ayaa.” Batalvi interweaves the folklore of Heer-Ranjha into his song by his subtle reference: “Churee kuttan ta oh khandaa nahee, assa dil daa maas khuyayaa”.
Like Allama Iqbal was obsessed with the imagery of “shaheen” (falcon), Batalvi was fascinated with the imagery of “snake”. It seems he borrowed words like “Birha, Tu Sultan” from the scriptures.
Readers of Batalvi’s poetry would know that he wrote an inimitable orison (arti) on Guru Gobind Singh at the behest of his close friend. In this orison, one can witness the reflection of a civilisation looking at itself in a mirror and castigating the machinations of lesser mortals. Batalvi’s voice is one of self-effacement, in which he speaks about his inadequacy to rise to the pedestal of sanctity as exhibited by Guru Gobind Singh. This was also an articulation of a divine voice delineating the tragedy of an epochal moment — an age’s “weakness” in the face of “power” so much incapacitated and decimated that Batalvi (a “mask” for the dejected and defeated man) could not approach the powerful Guru Gobind Singh, let alone worship him.
“Mein Kis Hanjoo Da Diwa Baalke Teri Aarti Lawaan/ Mera Har Geet Buzdil Hai, Mein Kehrra Geet ajj Gaavaa?
In the Kaliyuga, the honest few like Batalvi could comprehend that the bruised could be healed if purification of the word and the tongue is affected, weaning the misguided souls away from spewing venom of vilification with their darkened tongues:
“Main Chahunda Ess To Pehlaan
Ke Teri Aartee Gavvan
Mein Maile Shabad Dho ke
Jeebh Dee Keelee Te Paa Aanwa
Te Maile Shabad Sukkan Teek
Teri Har Pairh Chumm Aanwaa
Teri Har Pairh Te
Hanjoo Da Ikk Suraj Jagaa Aanwaa”.
Batalvi’s melancholy verses invite close comparison with those of Bulhe Shah — the only difference being that Bulhe Shah found solace through his faith in God whereas Shiv yielded to Bacchus in the broken mirror of his tortured self:
“Assan Ta Joban Rutte Marnaa
Tur jaana bhare Bhare Bharaye
Hijar Tere dee Kar Parkarmaa
Joban Rutee Ji vee Mardaa
Phull Bane Ja Taraa
Joban Rutee AAshiq Marde
Jaa Koyee Karmaa Vaala”
Such a strong fascination for death is perceptible in this poem that the inner desire to live is also quite visible as Shiv refers to “Joban” (Youth) many times in this poem.
In a scintillating interview with Batalvi, celebrated Punjabi playwright, Balwant Gargi has dwelt at length on the many aspects of his multi-splendoured personality. In that interview, Batalvi expresses his deep fascination for snakes and explains that snakes, for him, are “a symbol of death, poison and sex”. He explained that “a lot of poison exists in me and when this poison travels in my poetry, it becomes nectar. This poison tears me apart, and also stings me like an embodiment of the power of Lord Shiva, the Destroyer”.
In a strikingly confessional tone, Batalvi asked Gargi, “Do you know why I drink? The girl I loved intensely had an aversion for alcohol and I drink because I visualise her while drinking; and, moreover, drinking is the only solution left for me to remember her!”
While elucidating about his magnum opus, Loona, Batalvi told Gargi, “It was 1963. On the clay roof of my house, I desired to write something which should be different from the writings of others. I wrote its first Canto of Loona in one go on a single day. I did not write it for three months; then I wrote its dialogues. While writing Loona, one Shiv was dying and the other Shiv was taking birth… Loona was integrated into my persona — torn, shattered and cursed. I modelled the dialogues of Ichhraan on my mother and those of Salvaan are modelled on my father who was a hard-nosed, cruel and callous parent.”
An “organic sensibility” is what differentiates the poet from lesser mortals; and Batalvi, like John Keats, possessed it in an abundant measure. A rarely-quoted anecdote about Batalvi goes that once he wrote an entire ghazal with a piece of coal on a wall. He was travelling in an auto-rickshaw in Chandigarh with one of his companions, when all of a sudden, he exhorted the rickshaw-puller to stop. Batalvi then asked for a pen and a piece of paper from his companion. When his companion failed to do, he turned to the rickshaw-puller. The helpless rickshaw-puller shook his head. Batalvi stepped out of the rickshaw and found a piece of coal and started to write on the wall. He kept on writing and when he finished writing, he called his companion and asked him to copy the transcript on the wall.
Shiv’s companion was thrilled. He noticed that his friend was probably lost in some thoughts, so he left him on his own. Next day, when he went back to note down that transcript, he was taken aback to learn that what Shiv had written on that wall the previous night was actually a ghazal. That ghazal became one of his finest piece of work.
In a 1970 interview available in the BBC’s archives, he said that “there was no dearth of love in his life as such but he could not paint its complete picture.”
Whatever reason we attribute to Shiv’s grief and anguish, the pangs of separation ceaselessly lacerate his heart as he laments:
Aseen kacheyaa Anaara deeyaa Tahneeyaa
Payeeaan Payeeaan Jhuk Vee Gayeeyaan
Aseen Kaceyaa Gharaa deeyaan Kandhaa
Payeeyaa Payeeyaa Bhur Vee Gayeen”
Rarely does one find a grief-stricken person replicating his grief totally, transparently and, more significantly, so triumphantly as Batalvi portrays his own anguish and grief:
Mein Te Mere Geet Dohaan Jad Bhalke Mar Jaana
BIrho De Ghar Jaayeean Saanu Kabree Labhan Aunaa
…………………………………………………….
Kise Kise de Lekhee Hundaa, Enna Dard Kamaunaa”.
The recipient of the Sahitya Akademi Award at the age of 30, Batalvi was a man in a hurry who rushed his way up the higher echelons of Punjabi poetry with a welter of intense emotions couched in pregnant metaphors and similes garnered from the plethora of popular myths and symbols and went off the stage of life leaving both his admirers and Punjabi poetry orphaned., Batalvi lives on as an enigmatic poet who presents an “objective-correlative” to his love-lorn persona by calling his beloved “Shikra”.
Pallan is a Canada-based writer
The Reserve Bank of India’s monetary policy committee took the financial market by surprise yesterday. A little over three weeks after the six-member MPC voted unanimously to hold the policy repo rate at 4%, they changed course and increased it to 4.4% in an off-cycle meeting. It’s the first increase in repo rate since August 2018. RBI will separately increase the cash reserve ratio maintained by banks by half a percentage point to 4.5%. This is expected to suck out Rs 87,000 crore of liquidity. Monetary tightening is well underway now.
MPC was expected to nudge up interest rates later this year. The question therefore is, what triggered an unscheduled meeting to advance this? The answer is a combination of elevated inflation and the uncertainty around inflation’s trajectory. A volatile geopolitical situation has fuelled a surge in prices of many commodities. The pain has already shown up in India – retail inflation in March was 6.95%, led mainly by a jump in food prices. This surge in inflation has come at a time when even if aggregate demand is back at pre-pandemic levels, it’s not yet robust. The abrupt turn in monetary policy, therefore, was catalysed by a further apprehension.
The surge in fuel and food prices has come at a time when the price level of other items of consumption (core inflation) has remained high at around 6% for a year. MPC appears to fear the potential second-round impact of high commodity and food prices which occurs when firms raise sales prices and employees seek higher salaries to adjust to changing circumstances. Therefore, the primary aim of an increase in repo rate at this juncture is to head off the second-round effects and preserve macro-financial stability. As yesterday’s changes work their way through the economy’s full spectrum of interest rates, borrowing costs on personal and home loans will rise. For savers in fixed income instruments, rates are set to increase.
The key takeaway from the announcement is the return of inflation as an important macroeconomic challenge. This will force RBI to prioritise fighting inflation over stimulating economic growth. It does shift the onus onto both GoI and states to adjust fiscal policy to adapt to the emerging situation. For a start, taxes on pump prices of petrol and diesel need to be lowered to ease price pressure. Separately, agricultural policies need adjustments to ensure that food prices do not rise too high. The right fiscal policy will insulate the economy from a demand shock at this critical juncture.
As the war in Ukraine enters a new phase with Russia now concentrating its military operations in the Ukrainian east and south, EU is preparing a new sanctions package that takes aim at Russian oil. With the earlier sanctions failing to debilitate Moscow’s war-making capacity, realisation has been growing that Europe has to cut the billions it’s paying to Vladimir Putin for energy. It’s against this backdrop that the new sanctions propose EU members ban import of Russian crude within six months and halt purchase of Russian refined oil products by the end of the year. Missing still, however, is any concrete plan to cut off gas imports. Nonetheless, banning Russian oil is significant as EU was importing around 3-3.5 million barrels daily before the war. That was sending around $400 million in daily payments to Moscow.
However, agreeing on the new measures won’t be a cakewalk. With the proposed sanctions giving Hungary and Slovakia a longer Russian oil phaseout period of 20 months, other EU members like Czech Republic and Bulgaria have argued for similar leeway. Russia also appears to be working on a strategy to divide EU as exemplified by its move last week to halt gas flows to Poland and Bulgaria.
Meanwhile the US is moving to get a whopping $33 billion in fresh aid to Ukraine. In fact, the West may be changing its goalpost from defending Ukraine to eroding Russia. This suggests the conflict won’t be abating any time soon and disruptions to the global economy will also be prolonged. India is already walking a diplomatic tightrope over the conflict plus facing economic challenges such as high inflation. As Prime Minister Narendra Modi asserted during his Europe tour, there will be no winning party in this war, everyone will suffer, with the impact on developing and poor countries being more serious.
India is in the process of building the infrastructure it requires. The bulk of this will be built in the current decade at a time when the impacts of climate change are becoming more visible, intense and frequent. A climate-constrained world is the context in which the developing world will build its infra, while the developed world will have to retrofit. The infrastructure being built today will have to be qualitatively different from that built before - it has to be resilient to climate shocks and disasters.
Ensuring that countries have the capacity to factor in the risk that disasters and climate-change impacts pose to infrastructure requires economies working together and finding solutions that work. The Coalition for Disaster Resilient Infrastructure (CDRI), launched by India in September 2019 and promoted since, is a response to bridge the capacity-solutions gap. CDRI is a multi-stakeholder global partnership focusing on opportunities and challenges to build climate and disaster resilience in transitioning infrastructure systems. On Wednesday, Narendra Modi underlined this in a pre-recorded message at the CDRI's international conference in New Delhi.
Infrastructure is not just about creating assets but about providing people quality service in an equitable manner. Two issues should be at the core of any infrastructure development - how to ensure systems are resilient to climate shocks, and how infra systems can provide sustainable solutions in a dependable fashion to people. For India, CDRI is also about leveraging its capacities to provide support to other countries through systems like the Infrastructure for Resilient Island States (IRIS) that was launched in partnership with Britain at COP26 in Glasgow last year.
<
Read in source website
Narendra Modi's three-nation European tour should put to action a new 'Look West' policy that involves not just strengthening ties with the EU but also with key EU member states. At the very onset, there was the need to ensure that India's policy of neutrality vis-a-vis Russia's war against Ukraine is understood, clearly and with context, by its European allies. France and Germany, like India, cannot disregard the implications of a closer relationship between Russia and China for the security architecture and rules-based open order in Europe and the Indo-Pacific. The pandemic and the war have reiterated the importance of diversifying supply chains and reducing dependence on fossil fuels - and, for India, on Russian defence equipment. This ties in well with Europe's commitment to achieve climate neutrality and energy security.
France, Germany and Denmark are individually taking forward policies and actions to address the climate challenge. India, too, has set ambitious climate and environmental goals. Despite some setbacks, India is committed to a clean energy transition for its own strategic interests. For each of these four countries, securing clean energy options is critical. This is an area of partnership, which includes the ₹10 billion that Germany will invest in renewable energy (RE) in India and the invitation to get Germany on board on green hydrogen (GH) under India's National Hydrogen Mission.
Modi's visit came close on the heels of European Commission President Ursula von der Leyen's visit to New Delhi and the decision to set up the EU-India Trade and Technology Council. France now holds the rotating presidency of the Council of the European Union. Besides deepening the already strong bilateral relationship with France and Germany, and adding new dimensions to the relationship with Denmark and the Nordic countries, the visit sets a forward-looking agenda as partners focused on new possibilities and opportunities that now bear a new sense of urgency. It needs a subcontinental-continental shift.
<
Read in source website
Taxation laws are arguably the most complex pieces of legislation in India. At the same time, they are required to be read strictly and the scope of latitude in interpreting them is minimal. A raft of Supreme Court (SC) judgments held that the court will take recourse to the golden rule of strict interpretation while dealing with taxation statutes. It has evolved as trite law that their interpretation would not depend upon contingency — until a day ago, when justices MR Shah and BV Nagarathna created a new judicial precedent when the court invoked its extraordinary powers under Article 142 of the Constitution to prevent over 9,000 cases from gutting the top court’s board.
Article 142 empowers the SC to issue any directive that it deems appropriate “for doing complete justice between the parties”. The ruling ushers in a paradigm shift in tax jurisprudence where interpretation of a financial statute has been juxtaposed with the rights of the entities involved and avoided a possible deluge of cases that a judgment may result in. The SC used Article 142 to hold that around 90,000 tax reassessment notices, issued on or after April 1, 2021, under the 1961 Income Tax Act should be treated as issued as per the new requirement of the 2021 Finance Act.
This means that any notice sent to an assessee under the old regime should be treated as only a show cause notice as per the new law and the procedure envisaged under the 2021 Act shall ensue. It added the pending cases before the high courts could also be disposed of in the light of its directions. The departure from the conventional norms is a welcome move, for the SC has not only sought to minimise the pendency, but added a new dimension to the manner in which constitutional courts read financial statues.
The shortest leg of Prime Minister Narendra Modi’s three-nation tour of Europe – a stopover in Paris for a meeting with French President Emmanuel Macron on Wednesday – was one of the most substantive parts of the visit. This was the first meeting between the two leaders since Mr Macron’s nailbiter of a win in the French presidential election last month, and they outlined a more ambitious agenda for the next stage of the bilateral strategic partnership, including joint development of defence equipment, cooperation in the Indo-Pacific and climate transition. France is one of India’s closest strategic partners on the global stage and has provided robust backing for India’s global efforts to counter terrorism and tackle terror financing, especially at bodies such as the Financial Action Task Force (FATF), while retaining its position as a supplier of frontline combat jets and submarines. It has also been a key partner in areas such as space, civil nuclear technology and digitalisation, and the two countries jointly launched the International Solar Alliance in 2015.
Both leaders called for an immediate end to the war in Ukraine in order to promote dialogue. They also agreed to step up coordination to cope with the global implications of the conflict. They have done their bit in recent weeks to end the war – Mr Modi suggested direct talks between the Russian and Ukrainian presidents while Mr Macron has had numerous phone calls with his Russian counterpart Vladimir Putin to create conditions for a negotiated solution. And unlike other European countries that aspire to a role in the Indo-Pacific, France is an actual Indo-Pacific nation with 1.5 million French citizens on island territories and nine million sq km of its exclusive economic zones in the region.
Mr Modi’s meeting with Mr Macron was thus an opportunity for the two leaders to take stock of the considerable work being done by the two countries and to set the stage for closer cooperation in the next stage of their strategic partnership, ranging from maritime security cooperation in the Indian Ocean to defence collaboration and further steps to cope with the unprecedented challenges being faced by Europe’s long-standing security architecture. Probably more than most other nations, India and France are better placed to take on a greater role in efforts to end the Ukraine crisis and to work for a more multilateral world order.
India was hit by a power crisis last week, when the daily peak power shortage rose to 10,778 MW (April 28) and the energy deficit reached 5% at the national level, with some states experiencing steep deficits of up to 15%. Consequently, discoms resorted to load-shedding, resulting in long hours of outage for many households and rationed supply for economic activities.
In October 2021, India experienced a similar crisis induced by coal shortages. Monsoon-induced coal shortages and power crises are annual events in Indian electricity. However, an early summer power shortage, as seen this time, is unprecedented. The current crisis can be explained by three interlinked factors: A demand surge, supply disruptions and dysfunctional cash flow.
First, the heatwave and revival of economic activities after Covid-19 disruptions propelled electricity demand. In April 2022, average daily energy requirement increased to 4,512 million units (MU) from 3,941 MU in April 2021, registering a 14.5% growth, compared to average year-on-year growth of around 5%. The jump from March to April was 6.5%. With 236 GW of thermal power plants (TPPs) running at 59% capacity utilisation, much below their capability, India could have managed this demand surge by ramping up thermal generation. Thus, the crisis is not a problem of generation infrastructure.
Second, the TPPs’ inability to ramp up power generation is explained by critical coal stockpile levels at plant sites. While TPPs are required to maintain stockpiles approximating two-three weeks of fuel needs, more than 100 plants are operating with fuel stocks below 25% of the required level, and over half of these have stocks below 10%.
Does this imply a coal production problem? Not really. In 2021-22, Coal India (CIL) increased its production by 4.4% and its supply to the power sector by 21.4%. CIL has 56.7MT coal ready to dispatch, enough to fuel the TPPs for three weeks. However, the coal didn’t reach plants on time, partly due to a shortage in railway wagons. Inflation in imported coal prices also had some impact. Power production from 17GW TPPs, which run only on imported coal, has slowed down. The Centre capped imported coal to 10% for another 72GW plants that require blending with domestic coal. Cost implications are a deterrent for the utilisation of imported coal-fired TPPs.
The third factor is a cash flow problem in the electricity sector. The inability of discoms to recover costs has resulted in outstanding dues of over ₹1 lakh crore to power generation companies. Consequently, gencos default on payments to CIL.
At the root of the current crisis lie multiple structural fault lines. First, the chronic insolvency of discoms has disrupted upstream supply chains. This has been a longstanding policy priority but fixing this through prepayment, cost recovery and bailouts is misplaced. It creates no incentives to plan fuel reserves for a sudden demand surge. Second, utilities do not undertake effective resource planning that allows them to keep everyone’s lights on. Instead, given legacy shortages, political and economic expediencies have historically determined whose lights stay on. Finally, periodic power shortages and their management have been opportunities to leverage political legitimacy. With every crisis, states blame the Centre for faulty coal allocation and dispatch, and the Centre blames states’ inability to pay upstream suppliers. The result is band-aid solutions to suppress the crisis rather than fixing structural fault lines.
The risks with the current, short-term approach are twofold. First, early summer shortage is unprecedented, but not unforeseeable, and may be part of a pattern. The annual power shortages, which has generally been a month-long post-monsoon phenomenon, could turn into prolonged seasonal shortages. Second, a knee-jerk reaction to the current crisis may generate pressures to redirect investments to fossil resources, risking long-term energy transition consistent with India’s efforts on climate action.
The shortages testify that coal dependency is neither predictable nor cheap. A strategic approach to the energy transition that harnesses the low-cost power promise of renewable energy and opportunities for diversification in energy mix is critical to address persisting power shortages. Policy focus should be on long-term structural solutions that address distribution financial viability and a robust mechanism for resource planning. That will depend on alignment of political conditions with long-term reforms and achievement of energy transition goals.
Ashwini K Swain is a fellow, Centre for Policy Research
The views expressed are personal
If you have ever found yourself wondering why the accelerator pedal is not doing its thing, and then looked down to see that if handbrake was on, you know exactly what India’s young are going through – a desperate urge to be rich, but being held back by an old poverty narrative that paints the rich as morally corrupt and evil.
India’s poverty narrative comes from being generationally poor for centuries that, at its worst, saw the devastation of the British empire-made Bengal famine. When the people of a country, generation after generation, have no hope of escaping poverty, the only way to retain some dignity is to make poverty a morally superior way to live. This is done by casting the rich as evil, who have snatched away what is not theirs.
Hindi cinema captured this narrative of the evil rich man (usually a man) from the debauched money lender of Mother India (1957), to the epic mere paas ma hai scene in Deewar (1975) where the morally corrupt but rich brother has his gadi (car), bangla (bungalow) and daulat (riches), but the morally superior and poor police officer brother has the mother and her blessings. Post-liberalisation, it took a decade for cinema to begin reflecting a new reality where wealth was sometimes a backdrop or an aspiration, but the causality between wealth and moral crookedness was broken. Dil Chahta Hai (2001) was that watershed movie that had young adults going to the disco, leading well-off lives without being debauched or evil, and the female lead drinking wine without being a bad girl. In the two decades of the new century, Hindi cinema moved to second-order problems that can only affect people not thinking about the next meal – a sperm donor in Vicky Donor (2012), a late-age pregnancy in Badhai Ho (2018), or even a prematurely receding hairline in Bala (2019).
The movies reflect a change in the lived reality of millions of middle-class Indians (estimates of their number range between 30 and 700 million). Post 1991, and especially after the turn of the millennium, signs of a better life are unmistakable – whether it is cars stuffed into the narrow lanes of a Delhi Development Authority colony or air conditioners and washing machines being bought by domestic helps.
Attitudes towards debt and enterprise have changed as well. A loan for education, a vehicle, home or even vacation is a statement of confidence of the ability to earn more in the future and pay it back. Personal loans (including home loans) have gone from being negligible 50 years ago to driving the banking and finance industry. Reserve Bank of India data shows personal loans grew to 21% of total bank credit in 2019-20 from less than 4% in 1980-81. Homes were built till the 1990s at the end of the career. In the 2000s, ownership age dropped to between 35-45 years and a 2019 Survey by Anarock saw 20% home aspirants in the 25-35 age group, with 7% under 25. Debt has stopped being a dirty word.
Thirty years ago, a job meant stability and respect and good middle-class kids did not become businessmen. The last decade has seen a wave of entrepreneurship across the country. From 733 new startups in 2016-17, the number rose to 4,000 in 2021, bringing the total number of start-ups to 61,400 by January 2022 (Economic Survey 2022). Still nascent, the flame of enterprise is now beginning to burn brighter. Of course, the desire for a government job is still the driving force behind many such start-ups.
While the aspiration to be rich is manifest in collective behaviour, the narrative of money being bad and the rich being evil is still around in conversations at dining tables and in living rooms, and in newspaper headlines and social media posts. The moral uproar over the opulent houses of the rich and how much they spend on their weddings is just one case in point. The outrage over Mukesh Ambani spending his tax-paid money on his kids’ weddings drove the news agenda for weeks. Members of Parliament introduced 10 bills to limit expenditure on weddings since 1988. The last one was tabled in 2018. Political posturing and social media chatter too have an underlying thread of discomfort with the rich. Profit seems to still be a dirty word, even if tax is paid at the marginal rate of 42.7%. The critics seem to be unable to see that behind what is being condemned as ostentatious are industries, businesses and services that make money and pay salaries – consumption feeds not just the Gross Domestic Product but millions of households.
A nation emerging out of generations of poverty and a socialist political mind-set needs a change in narrative. “I want to be rich” should not be shamefully imagined but be owned and aspired for; how to do it and what to make of it are second-order questions. A collective narrative is a powerful driver of change as it has the power to become self-fulfilling. In Narrative Economics: How Stories Go Viral and Drive Major Economic Events, Robert Shiller documents how popular narratives drive recessions, depressions and other major economic events. A change in the poverty narrative to an I-want-to-be-rich one has the potential to drive the next few decades of economic growth in India.
Monika Halan is an adjunct faculty at NISM and currently a visiting fellow at the German Institute for Global and Area Studies, Hamburg exploring India’s changing perception of money
The views expressed are personal
Converting our hard-earned democracy into a police state is simply unthinkable, and if the Assam Police is thinking about the same, the same is perverse thinking,” Barpeta sessions court judge, justice Aparesh Chakrabarty, said while granting bail to Gujarat Member of Legislative Assembly (MLA), Jignesh Mevani. He criticised the state police for filing a “false FIR” and “abusing the process of the court and the law”. It took a courageous judge in a small town to remind the police of their foremost constitutional duty to the rule of law.
Ironically, just a day after this judicial pronouncement, India’s power elite assembled at a conference of chief justices and chief ministers (CMs), being held after a six-year gap, in the Capital’s Vigyan Bhavan. Among the front-row attendees was Himanta Biswa Sarma, Assam’s all-powerful CM who is also the state’s home minister. Could an Opposition MLA such as Mevani have suddenly been picked up at midnight from Gujarat by the Assam Police and brought to distant Kokrajhar without the knowledge of the CM or Gujarat’s law enforcement authorities? Two Bharatiya Janata Party (BJP)-ruled states were accused of conspiring to teach a lesson to a fiery MLA whose tweets targeted the prime minister (PM). Could there be a more glaring example of the misuse of State power to settle political scores?
This is not an isolated case. Within days of a new Aam Aadmi Party (AAP)-government taking over in Punjab, the Punjab Police filed a series of FIRs against AAP leader Arvind Kejriwal’s critics, including his friend-turned-foe, Kumar Vishwas. In West Bengal, CM Mamata Banerjee is accused of using state police to “fix” her opponents. In Uttar Pradesh (UP), Yogi Adityanath’s government has routinely slapped criminal cases against critical journalists, including sedition charges. In Maharashtra, Uddhav Thackeray’s government is accused of intimidating detractors through malicious police action. Is there any CM who can claim to have not abused their executive authority for practising “revenge politics”?
At the Vigyan Bhavan function, seated on the podium was thePM who, as the pre-eminent national figure, is expected to set the tone for the rest. But can Narendra Modi or the Centre effectively combat the oft-repeated accusation by Opposition leaders of exploiting central agencies to browbeat potential rivals? The actions of the Enforcement Directorate in selectively hounding Opposition leaders leave the Modi government vulnerable to the charge of setting the stage for vindictive politics.
It isn’t as if this streak in Indian politics and the well-oiled neta-police complicity surfaced only in 2014. We can stretch the time machine back to Indira Gandhi and the Emergency, and every regime since to find instances of police partisanship backed by executive overreach that reveal contempt for the criminal justice system.
Recall how the Jayalalithaa-Karunanidhi “war” in Tamil Nadu in 2001 led to the disgraceful sight of the Dravida Munnetra Kazhagam (DMK) patriarch being dragged out of his bed at 2 am by the police and being bundled into a police van like a convicted criminal. Personal animosities in states such as Tamil Nadu made its political culture especially prone to such acts of brazen retribution.
The difference is that what was once seen as the exception is now the rule across India. The Mevani case is perhaps the starkest recent example, but can there be any justification for the jailing and sedition charges on Navneet Rana and her husband Ravi Rana, for threatening to recite the Hanuman Chalisa outside the CM’s residence in Mumbai?
The other difference is that many courts, instead of acting with a sense of urgency and fair play, tend to procrastinate or take a politically expedient stand. Why, for example, have courts dawdled on the numerous habeas corpus petitions challenging the mass detention of Jammu and Kashmir politicians after the effective nullification of Article 370? Why should Delhi High Court (HC) be sermonising on the use of words such as “jumla” by student-activist Umar Khalid, while allowing his bail petition to drag on? And how can the Supreme Court reconcile the remarkable alacrity with which it granted bail to celebrity anchor Arnab Goswami — justly — with its unconscionable failure to grant relief to a less-known journalist Siddique Kappan? After all, if the UP Police is allowed to detain Kappan for 20 months on highly tendentious “terrorism” charges, then we may as well write the obituary of the constitutional guarantees of life and personal liberty.
The biggest difference though is the absence of a concerted civil society pushback. Why, for example, isn’t there greater outrage over how civic authorities used bulldozers to demolish homes in riot-hit areas with scant regard for due process?
Unfortunately, hyper-partisan cheerleaders have allowed personal affiliations and political prejudice to influence their better judgment as law-abiding citizens. Then, be it the case of ordinary Indians or politicians in the public eye, the law must not be subverted with such impunity. The men in khaki uniforms need to be sent constant reminders that their loyalty is not to their political masters, but to the Constitution first and last.
Post-script: Within days of the Barpeta judge’s observations, the Assam HC put a stay on the adverse comments after an appeal by the state police. This raises troubling concerns: Will the judge be transferred for taking a stand in a high-profile case? And will the officers who were willing accomplices in framing false charges be penalised or be promoted instead?
Rajdeep Sardesai is a senior journalist and author
The views expressed are personal
The recent round of heatwaves across the country forced many state governments to change school timings and curtail outdoor activities for students. Worried about their children's health due to extreme heat, parents in Delhi urged the city government to either revise the school timings or advance the summer holidays. Such demands are not unexpected and will become much more vociferous as the impact of the climate crisis becomes more pronounced.
Children worldwide have inherited a problem that is not of their making.
Last year, Save the Children, a non-profit, released Born into The Climate Crisis: Why we must act now to secure children's rights. According to a report, which was developed by an international team of leading climate researchers led by the Vrije Universiteit Brussels (@VUBrussel), children born in 2020 will be more often hit by the climate crisis in their lifetime than their grandparents.
The report said that children in low- and middle-income countries would continue to bear the heaviest burden of these dangerous climate crisis impacts. Moreover, for the most vulnerable children – including those exposed to multiple hazards, those living through conflict, those most profoundly impacted by Covid-19, and those experiencing inequality and discrimination – the impacts of the climate crisis will be made worse, placing their access to rights and essential services at additional risk.
Involve children in climate planning
There's still time to turn things around, but we must act now. One of the key ways to do so is to factor children into climate planning.
"Investing in children is also economically sound because they will grow up with the knowledge of how to address the root causes of the climate crisis and adapt to its impacts. Children are telling us repeatedly how the climate crisis is impacting them, how urgent is it for us to act, and how they want to be involved in finding solutions," the report added.
This is exactly what some schools in Kerala's Kottayam district are doing under the guidance of Meenachil River Protection Council (MRPC), a non-profit. The student groups are helping MRPC to run a high-tech flood alert system.
Every morning volunteer students record the rains their area has received over the past 24 hours with the help of rain gauges installed at their homes. Then they log on to a website, run by MRPC, and upload measures collected, adding to the series of rain monitoring data collected from different parts of the Meenachil river basin.
"Students from almost 80 schools and several colleges are involved in the project. We have already installed rain gauges in over 150 locations along the river basin, besides scales to measure the river's depth at 10 points," MRPC's secretary Eby Immanuel told me over the phone. "Many of these students lost families and friends in recent climate-induced flashfloods and understand that the climate crisis is for real. Naturally, they are interested in doing their bit." The data that MRPC's volunteers generate are shared with the district and disaster management authorities.
The importance of micro monitoring
"Today's children will be exposed to far greater climate change risks than most living adults. What MRPC and the schools in Kerala are doing can be easily scaled up for better monitoring of the climate crisis, raising timely alerts and plan adaptation measures," says Roxy Mathew Koll (@rocksea) a climate scientist at the Indian Institute of Tropical Meteorology, Pune. Koll is also deeply involved in the MRPC project.
"If you look at the climate crisis, it's a global problem, but its impacts are localised based on local topography and geography. So, solutions need to be localised," explains Koll.
"To plan adaptation strategies we need good, solid data. The India Meteorological Department cannot reach beyond the district level, but people at the village level are witnessing the impacts (drying rivers, frequent landslides). The climate crisis is affecting their and their children's lives, livestock, and farms. It has come as a requirement for them to understand what is happening around them and so these kinds of micro efforts that can join the dots to provide a larger picture," he added.
Koll wants the movement of measuring rain to expand across India and is working on a handbook that educational institutions and panchayats can use to track climate changes.
"India needs uniform guidelines for environmental monitoring equipment (such as rain gauges) so that every school can measure in the same way. Only then we can compare data and use them for policymaking," he said.
"In Kerala, the government is planning to spend a considerable amount on environmental monitoring in schools. This is a great move, and it can be expanded to other related things such as monitoring soil condition, water quality, air pollution etc. and this data can then be used for designing adaptation policies. Once a school leads the way and sets an example communities will also take it up."
In its reports, the Intergovernmental Panel on Climate Change has also mentioned that only a national-level climate crisis will not be not enough; the local administration and citizens have to work together to tackle the challenge.
The importance of such micro-level interventions and the involvement of citizen groups, especially the young, is best explained by what eminent ecologist Madhav Gadgil said after visiting the MRPC project areas.
"It is the people at the ground level who are suffering from the adverse [environmental] impacts... and it is for cooperative groups of citizens to properly document the situation in the field, share it openly with the public and promote positive actions."
The Kerala schools and MRPC are doing just that.
The views expressed are personal
The initial public offering (IPO) of insurance behemoth Life Insurance Corporation of India (LIC) opened on Wednesday — the largest one ever in the history of corporate India in absolute terms. It is perhaps a red-letter day for the Indian equity markets and people in general. It gives an opportunity for people to be a part of the growth of the biggest insurer, which they nurtured for several decades.
LIC is ranked fifth globally by life insurance Gross Written Premium (GWP) and 10th globally in terms of total assets. It has the biggest assets under management of Rs 40 lakh crores as of December 31, 2021, which is slightly more than the assets managed by the entire Indian mutual fund industry and more than three times the assets managed by all private life insurers in India.
Listing of LIC IPO is the biggest achievement for the government as it did so against several accusations of selling the family silver. It is also a significant development as it comes amidst the recent worsening of global circumstances, which forced the government to almost halve the stake to be divested to 3.5 per cent from the initial five per cent at a reduced valuation.
At the upper end of the price band of Rs 902-Rs 949 that it has set, the government expects to raise about Rs 21,000 crores, which would still be the largest such sale in India. Going by the outcome of the sale of the IPO portion reserved for anchor investors, one does not need to have any doubt that the IPO would be a stupendous success.
Though LIC has the lion’s share in the life insurance market, the life insurance penetration in India is still just 3.2 per cent in the calendar year 2020 as against 7.6 per cent in Singapore, 6.4 per cent in South Korea and 3.4 per cent in Thailand. The protection gap for India is also the highest at 83 per cent in the calendar year 2019, which still offers a huge scope for further business.
The successful listing of LIC would be a win-win for the government, policyholders, and investors. It would help the government to bridge its fiscal deficit by fulfilling its disinvestment goals for this financial year to an extent and would allow people to be a part of LIC’s growth story. Going by its post-IPO market capitalisation of Rs 6 lakh crores, LIC would be the fifth-largest company after Reliance Industries, TCS, HDFC Bank and Infosys.
LIC’s post-listing market capitalisation is valued at 1.1x of its embedded value (EV) of Rs 5,40,000 crores, while its listed peers with a significantly lower market share are trading with EV multiples of between 2x to 4x. Even if one values LIC at 2x of EV, its market capitalisation would be Rs 10.8 lakh crores — the third largest in India. If LIC is valued at 4x, the highest valuation commanded by some of the private insurers, LIC’s market capitalisation would be Rs 21.6 lakh crores, which is more than the most valuable Indian company Reliance Industries.
Kerala chief secretary V.P. Joy’s recent visit to Gandhinagar to study the dashboard system for e-governance in Gujarat is full of portent for good governance if picked up by other states.
The dashboard monitoring system was started in 2019 when Vijay Rupani was the chief minister. Apparently, Mr Joy was impressed with it and said it was good for monitoring the delivery of services and collecting citizens’ feedback. It is evident that Mr Joy’s visit had the support of the Left Democratic Front (LDF) government of Kerala, even though Opposition parties in the state read “politics” in the visit. But clearly, the Pinarayi Vijayan government believes that adopting e-technology for good governance transcends partisan politics.
Sources have informed DKB that the decision to study the “Gujarat model” was taken after a recent meeting between Prime Minister Narendra Modi and Mr Vijayan in the capital. After returning to Kerala, the chief minister directed Mr Joy to study the system.
Interestingly, a similar “experiment” by Punjab chief minister Bhagwant Mann when he sent a team of state IAS officers to the Delhi government “for training” has been criticised by Opposition parties and some sections of the public for being against the interests of the state. Mr Mann was accused of being “remote-controlled” by the AAP government led by Arvind Kejriwal. Yet, politics apart, this new “trend” shows that state governments are now willing to overlook partisan politics and seek expertise from wherever it is available.
Shah Faesal blames it on idealism
After resigning from the civil service in 2019, Kashmiri IAS officer Shah Faesal is back in babudom and now blames his misplaced idealism for his action. Sources have informed DKB that the Centre has accepted Mr Faesal’s application for withdrawing his resignation and reinstated him in service early last month.
Mr Faesal was the first Kashmiri to top the civil services exam and served in the state in various capacities including in the education and power development departments. He had resigned in protest after the Centre repealed J&K’s special status.
After a failed attempt at forming a political party, the Jammu & Kashmir People’s Movement, Mr Faesal had tried to go to the United States but was detained at Delhi airport and sent back to Srinagar and placed under detention, which was revoked four months later. For some time, he had been dropping hints of his return to bureaucracy. The home ministry and the department of personnel and training (DopT) accepted his plea and reinstated him. His new posting will be announced soon.
Interestingly, another IAS officer Kannan Gopinathan, from Kerala, too, had resigned from service to protest against the abrogation of Article 370. He has become an activist.
Not quite an interim woman
The uncertainty has finally ended. Following the superannuation of J.B. Mohapatra, the Centre has appointed Sangeeta Singh as interim chairperson of the Central Board of Direct Taxes (CBDT) for three months or until the appointment of a regular chairperson. It is widely accepted that she will be “regularised” after some time. There had been intense speculation in Delhi’s babu corridors on whether the government would retain Mr Mohapatra or let him retire. In the end, it let him go.
Sangeeta Singh was one of the two women members of CBDT eligible for Mr Mohapatra’s job, the other being Pragya Sahay Saksena, member, legislation and systems. Before her elevation, Ms Singh was member, audit and judicial.
Even in the run-up to the appointment, many believed that Ms Singh had a slight edge over her rival for having held two additional charges. Moreover, she is in the good books of the powers that be. The new chairperson has also edged out two other senior CBDT members Anuja Sarangi and Nitin Gupta, on the way to the coveted post.
The Reserve Bank of India-led Monetary Policy Committee (MPC), in its off-the-cycle meeting, has raised the repo rate — the rate at which the Central bank lends — by 0.4 per cent or 40 basis points and increased the money that banks are required to park with the RBI by 0.5 per cent or 50 basis points. The monetary tightening after four years of an easy run is aimed at reining in stubborn inflation and preparing the Indian economy to navigate in the global high-interest rate scenario.
While the RBI had indicated that its focus would shift to inflation management instead of economic growth, many stakeholders did not expect the RBI to be so aggressive in its approach. Since inflation was primarily driven by supply constraints, many analysts and investors believed that the RBI would be easy on monetary tightening. However, the central bank’s decisions, apart from making borrowing funds from it costly, would suck out Rs 87,000 crores from the Indian banking system, worsening the impact on borrowers.
The RBI decision shook the Indian equity markets, with the Sensex losing over 1,300 points and the Nifty shedding over 300 points. The hit was Rs 6.7 lakh crores on the wealth of investors. It invited a barge of criticism from investors, who complained of inadequate communication from the central bank about its intent, while several corporates were worried about the rising interest rates adding to the multitude of woes that they are facing in the aftermath of the Covid pandemic, rising commodity prices, shortage of raw materials, increasing shipping costs, the shrinking buying power of consumers, and uncertain geopolitical and geo-economical landscape.
A look at the global interest rate map would allow one to understand the reason behind the RBI’s unexpected move to hike interest rates. Except for China, the Eurozone and the countries which see the insignificant flow of foreign funds, all countries have increased their policy rates. Hours after the RBI’s rate hike announcement, the US Federal Reserve hiked its policy rate by 0.50 per cent or 50 basis points — the most aggressive since 2000. It also announced the reduction in its $9-trillion balance sheet, which would further accentuate the rate hike impact on the borrowers. Immediately after, the Bank of England too increased its policy rate by 0.25 per cent or 25 basis points to make the cost of borrowing the highest in 13 years.
This is the global policy background in which the RBI had to operate. Whether the RBI rate hike would cool down supply-shortage-driven inflation is clearly unknown, the higher rate would surely prevent the flight of investors, who look for an interest rate arbitrage to invest in countries that have developing economies.
A growing economy, lower inflation, interest rate arbitrage and policy stability are the key factors that foreign investors look for before investing in an emerging economy. Persisting with a lower interest rate when the economic rate is not greatly enticing could be suicidal if the foreign investors flee the country as they had in 2013 — colloquially referred to as the Taper Tantrums. The RBI’s decision, though it pinches every pocket, was the need of the hour for the greater good of the country. The lower interest regime in the country is all but over.
The potential US Supreme Court decision to do away with federal abortion rights, which is to be made within the next couple of months but revealed now in a leaked draft that has been confirmed as accurate by the chief justice, shows a cynical disregard for women’s rights and lives. It is no mere matter of curiosity that the highest judiciary of the land of the brave and free is contemplating getting rid of legislation that has been in place for close to 50 years and which gave women a sweeping freedom of choice.
The world’s oldest democracy seems ready to trample on individual rights when most of the free world is going the other way, including the Catholic majority countries like Ireland which eased its abortion laws when it came to light that the lives of people were in peril. The Roe versus Wade ruling of 1973, which enshrined the right to access abortion, for whatever reason and within a time-frame in which a woman’s life is not medically endangered, was a prominent landmark in US history. To overturn it now in the more modern era sounds ridiculously undemocratic.
To take away the right of the body of a woman to uphold the nebulous theory that the yet-to-be-born has an equal right to life flies in the face of logic. The issue has got so caught up in US domestic politics that the Republican states have been constantly at it in trying to abridge the federal rights, with Oklahoma governor signing a bill just this week banning any abortions after six weeks of pregnancy while Texas and Mississippi have severe restrictions in place.
The issue transcends religion even if, ironically, it comes at a time of a Catholic in the White House in Joe Biden who, however, is against the overruling of the Roe versus Wade judgment, arguing as he does that it could spell the beginning of curbs on other personal rights of people. The dangers of illegal abortions among millions, who may be affected if indeed the decision weights in as leaked, are too large to be ignored. The point is a woman’s right over her body may be taken away in the United States in 2022 and that says it all.
April was the cruellest month. Not quite breeding lilacs out of the dead land or stirring dull roots with spring rain, as imagined by T.S. Eliot in his 1922 poem The Waste Land. But more prosaically, sheltering in air-cooled rooms if you were privileged and wrapping a wet cloth around your head if you had no choice but to work outdoors. April 2022 ended as the third warmest over India in 122 years.
New Delhi, where I live, sizzled at 43.5 degrees Celsius just a few days ago.
Prayagraj in Uttar Pradesh made national headlines with 46 degrees Celsius last week. However, soon heatwaves will slide out of the front pages as temperatures plunge, even if temporarily.
But to think everything is therefore “normal” will be a big mistake.
The dangerous rise in temperature, along with humidity, in many parts of India as well as South Asia, is yet another reminder of the brutal impact that climate change is having in our region and elsewhere.
This is not future shock. Climate change-fuelled extreme heat is a reality, is happening, and while the Central government’s heatwave advisory about “staying indoors, drinking sufficient water, using oral rehydration solution (ORS), and eating seasonal fruits and vegetables with high water content” was certainly timely for those of us who can afford to avoid outdoor exposure and fruits and vegetables despite soaring prices, it is important not to lose sight of the big picture in India.
That relates to the millions of informal workers, living hand to mouth on daily wages, who have no choice but to be exposed to the heat and cannot afford all the protective measures.
Cities and states are developing heat action plans, but the focus must remain on the most vulnerable. On moral as well as economic grounds.
“The countries most vulnerable to productivity losses are those with a high share of agricultural and/or construction employment and those that are located within the tropical and subtropical latitudes, such as Cambodia, Thailand, Vietnam, India, Bangladesh and Pakistan…” says a 2019 study by the International Labour Organisation (ILO). It says the country in southern Asia that is most affected by heat stress is India, which lost 4.3 per cent of working hours in 1995 and is projected to lose 5.8 per cent of working hours in 2030.
Although most of the impact in India will be felt in the agricultural sector, more and more working hours are expected to be lost in the construction sector, where heat stress affects both male and female workers, the report notes.
So how prepared are we? Clearly, just the temperature in a city or region will not give us an idea of the magnitude of heat vulnerability or those at highest risk of heat stress. For that, we need to look at many other factors including terrain, social determinants, demographic composition of the population etc.
But one key lesson to be learnt is that being prepared is not necessarily just a function of resources. Ahmedabad is legitimately seen as a pioneer in building heat resilience. It was the first city in India and South Asia which developed a heat action plan after more than 1,300 recorded deaths during a heatwave in May 2010. The Ahmedabad model is not perfect but has inspired action in many other cities and states.
What is just as inspiring is the response of Odisha, one of India’s poorest states, now widely acknowledged as a pioneer in disaster preparedness from cyclones to heatwaves, all of which are becoming more frequent and more severe due to climate change.
“Tackling Heat Waves in Odisha”, a 2016 study by Odisha-based environmentalist Ranjan Panda for the NGO ActionAid, flags important issues in two districts -- Nuapada and Sambalpur. The report makes the point that while Odisha has done well to reduce deaths due to heatwaves, it needs to do more to reduce the range of vulnerabilities related to heatwave conditions. The report not only urged the Odisha government to increase the ex-gratia payment to victims of heatwaves to Rs 4 lakhs, on par with other calamities, it also made an important recommendation of having a database of all affected persons. The state should have a system in place for maintaining data about all victims, irrespective of whether they died or not, or whether their families were compensated or not. This will help future preparedness, the report notes.
An April 2022 issue brief by the National Research Development Corporation (NRDC) on expanding heat resilience across India notes that the Odisha State Disaster Management Authority (OSDMA) conducts studies to identify threshold temperatures for different cities and regions. Given the state’s distinct geophysical regions, it is critical to determine region-specific thresholds that combine temperature and humidity which together cause heatwave-related morbidity and consequent mortality, the report says. The state is also working on building capacity among healthcare workers and setting up dedicated sections in hospitals for treatment of heat-related illnesses and stepped-up staffing during periods of heat stress.
This year, Odisha has taken a decision to restrict the use of public transport services during peak hours in the summer so that passengers do not face heat-related health issues. The state government has directed district administrations to raise check dams using sand packs in small streams and to store water near tubewells for stray animals and birds. These are just a few among many initiatives taken by the state to build resilience in the face of extreme heat.
Over centuries, Indians have learnt many commonsense ways to adapt to heat stress. But there are limits to such adaptation. In March and April this year, large parts of India have already faced the kind of heat people expect in May and June. And it is not as if May and June are going to be significantly less hot. So, we are not only facing higher temperatures, we are also facing longer summers. And as the monsoon clouds gather, the extra humidity will only add to the heat stress till it starts raining.
We really have no option but to control our own emissions that are leading to climate change, and absolutely insist that the rest of the world does the same.
The world is now 1.17 degrees Celsius warmer than at the start of the Industrial Age. Experts say that at the current rate of emissions, it will be over three degrees warmer by the end of this century. We can barely live with the impacts of climate change now. How will we handle a situation that is many times worse?
The Supreme Court’s judgment that bodily integrity and personal autonomy of individuals are protected under Article 21 of the Constitution, while deciding that no person can be vaccinated against his will, is welcome for more than one reason.
It is reassuring that the court has been consistent with its practice to interpret Article 21 in such a way that the horizon of individual rights and the state’s responsibility is expanded to suit the notions of a modern democracy with respect to the right to life. It is also important in that the judgment has come at a time when many of the fundamental rights people have traditionally enjoyed have come under question with the state finding nuanced ways of snatching them the legal way and the courts being less than enthusiastic about stopping the state and protecting the people.
That the issue of bodily integrity has come up in the backdrop of a pandemic — Covid-19 — must be given some allowance while seeing it in its entirety. The court seems to be uncomfortable with the idea that the government could limit the access of unvaccinated people to some public areas. There can be two opinions about it. It could be argued that there is very little point in allowing a person to reject a treatment, or vaccination, and then limiting the liberties of such persons with respect to movement. Advocates of unlimited personal freedoms would support such an argument. But the crude fact is that we have a public health issue in the form of a pandemic, and public health is as much a responsibility of the private individual as it is of the government. There must be a democratic way to reconcile these two conflicting rights.
One of the ways to settle it is to start an aggressive awareness campaign on the concepts of modern medicine, including vaccination, and the role they have played in improving the duration and quality of life on earth. The proof of the pudding is in the eating, they say. Persuade everyone to agree to taste it.