THE HINDU – CURRENT NOTE 30 APRIL
Don’t politicise triple talaq, find a solution, Modi tells Muslims
PM expresses hope that progressive members of the community will act
•Prime Minister Narendra Modi said on Saturday that he hoped progressive Muslims would come forward and help “Muslim daughters” in their fight against triple talaq.
•Speaking at a function in New Delhi to honour Basaveshwara, a Bhakti saint and founder of the Lingayat sect in Karnataka, Mr. Modi said: “I appeal to people in the Muslim community not to make this [triple talaq] a political issue. Come out and find a solution. That solution will have its own majesty, and generations will remember you.”
•The choice of occasion for the speech was significant since Basaveshwara fought orthodoxy in the 12th century Karnataka, leading to the founding of the Lingayat sect, now a numerically and politically dominant community in the State. Linking Basaveshwara’s fight for progressive values in society to other campaigns, Mr. Modi said: “I hope progressive Muslims will come forward and help our Muslim daughters in their fight [to] find a way out.”While other political parties such as the Congress have maintained that reforms in Muslim personal law have to come from within the community, the BJP has been stridently advocating against triple talaq, including in the Uttar Pradesh election campaign.
‘Not questioning validity’
•During the party’s national executive meeting in Bhubhaneswar earlier this month, Prime Minister Modi was quoted as saying, “We are not questioning the validity of triple talaq to create a conflict within the community but want to highlight the need for justice and to end shoshan [exploitation].”
The lowdown on the crackdown on H-1B visas
WHAT IS IT?HOW DID IT COME ABOUT?WHY DOES IT MATTER?WHAT NEXT?
•With a tool manufacturing company in Wisconsin as the backdrop, U.S. President Donald Trump has issued an executive order that pushes his slogan, ‘buy American, hire American’ into administrative action. Under the order, several federal departments have been directed to come up with a plan to meet the twin objective. The first objective is to give preference to American companies in government purchases and the second aims to reform guest worker programmes that allow foreigners to temporarily work in the U.S. The H-1B guest worker programme that brings in thousands of Indian technology workers is particularly in focus. Senior administration officials named Indian companies such as Tata Consultancy Services and Infosys while discussing how the programme is being gamed.
•The U.S. admits 85,000 foreign workers under the H-1B programme every year, 20,000 of them advanced degree holders. About 1,00,000 are reissued or extended, making a total of above 1,85,000 visas every year. In 2016, 1,26,692 of them went to Indians. The beneficiaries are selected through a lottery system as demand surpasses supply every year. The programme was established to bring high-skilled workers not available in the country. Critics of the programme, including Mr. Trump, say the programme is being abused to bring cheap foreign workers to the U.S. to undercut salaries and displace American workers.
•Wisconsin is a swing State that Mr. Trump won by less than than 23,000 votes in November. About one in six jobs in the State is a manufacturing job, compared with one in 11 for the entire country.
•For Mr. Trump, keeping the promise of working towards creating and protecting American jobs, or at least appearing to do so, is crucial for political survival. Reviving the American labour market is at the core of Mr. Trump’s America First political platform. The trickle of foreign workers is a minor factor in the overall disruption of labour, caused primarily by rapid automation of manufacturing and services.
•But a series of high-profile IT servicing contracts that involved displacement of long-serving American workers by Indian workers on H-1B visa in recent months, which angered the American electorate, made reforms of this programme inevitable.
•Both Democratic and Republican lawmakers agree that its original intent has been compromised, and American workers are being affected. They might disagree on details but lawmakers across the ideological divide are clamouring for reforms.
•The next season for H-1B processing is in April 2018. Some changes are possible only through Congressional decisions, but the executive can make some changes by itself. For instance, the number of foreign workers can be changed only by Congress, but the lottery system that selects them, the wage slabs that guide the process to ensure guest workers do not undercut American workers, and the enforcement of regulatory provisions are all executive decisions.
•Regardless of what happens to the several legislative proposals in Congress, some radical changes through executive action are almost certain before the next processing season. The better qualified and better paid among the applicants would be more likely to get an H-1B visa next year.
•From the visa seeker’s perspective, the number of Indians leaving for America under this programme is unlikely to change any time soon, but the composition of that crowd will change. The better and the brighter will find their route to America easier.
Franco-Russian ties: Orthodox & unorthodox
•It is hard to miss the symbolism of a structure that awaits you on the right bank of the Seine in Paris at the Pont d’Alma, a bridge built in the middle of the 19th Century to commemorate the Anglo-French victory over Russia in the Crimean War. The incongruent building with onion-shaped domes crowned by crosses reminds one of the gilded domes of St. Basil’s Cathedral in Moscow’s Red Square. This is the Holy Trinity Cathedral, part of a 4,800 sq. m. complex that also contains a Russian Orthodox “spiritual centre”, a school and an exhibition centre. The Eiffel Tower rises in the background.
•Small groups of people stop to look at the noticeboard, checking opening times and events. It is as if the cathedral has materialised from thin air, having not been there a year ago. But, of course, that is not what happened. “This took some eight years. It is a very complicated story,” says Polina Nedialkova-Travert, a teacher of Russian language and culture at University du Havre. The €100-million Russia-funded cathedral and complex, built where the French weather office once stood, emerged after years of political wrangling between the French and Russian governments. Discussions started in 2007 when the Patriarch of Moscow travelled to France to meet then President Nicolas Sarkozy. “The municipality of Paris didn’t approve the project,” says Ms. Nedialkova-Travert. Other designs were too classical or Spanish. “I saw the photos [of earlier designs]... they were really very strange,” she adds. The current design was conceived of by French architects Wilmotte & Associates. It took until 2010 for the land to be purchased for over €70 million and a few more years for it to be built. The complex finally opened in the autumn of 2016. Russian President Vladimir Putin was supposed to attend the opening but he didn’t, in the wake of bilateral diplomatic tensions over Russia’s role in Syria. Today, the complex’s exhibition centre houses a commemoration of Peter the Great, who ruled Russia from 1682 to 1725. “It is the 300th anniversary of his Paris visit,” says Valentina Kauffman, a tour guide and native of Russia. Peter was influenced by European ideas, so much so that he forced the Russian nobility to switch to European dress, and ordered men to shave their beards (or pay a beard tax). Upon his return to Russia, Peter built the Peterhof Palace near St. Petersburg. “A replica of Versailles,” Ms. Kauffman says. Three centuries may have passed since Peter came to Paris, but the presence of today’s Russian ruler is very much on people’s minds.
Hacking allegation
•Last Tuesday, Tokyo-based cybersecurity company, Trend Micro, reported that it had evidence that APT28, a group of hackers linked to Russian intelligence and allegedly behind the hacking of the Democratic Party’s systems in the U.S. last year, attempted to do the same with French Presidential candidate Emmanuel Macron’s En Marche! party. Russia has denied any involvement.
•Several presidential candidates in the April 23 first round, including far-right Marine Le Pen, the mainstream right’s Francois Fillon and left’s Jean-Luc Mélenchon, have had ideological or personal ties with Russia and its leadership. On May 7, Mr. Macron, a centrist, will face Ms. Le Pen in the presidential run-off. Ms. Le Pen had made headlines when she met Mr. Putin in Moscow late last month. Mr. Macron is expected to win with 62% of the vote, according to polls, but this is by no means certain as the Brexit referendum vote and Donald Trump’s victory last year have demonstrated. Many believe this still leaves the door open for the Russians in the futur proche .
When the eyes see more than there is
Hallucinations are among the possible side effects caused by medications for Parkinson’s disease
•Sixty-five-year-old Srinivas K.* has been experiencing distressing side effects from his Parkinson’s disease medication. Sometimes, he walks into an empty room and imagines it filled with people. Other times, he says, he ‘sees’ snakes or raindrops. “One time, I looked out of the window and saw it pouring, but when I stepped outside, there wasn’t a single drop of rain,” he tells other patients and caregivers at a Parkinson’s support group meeting in Bengaluru.
•Parkinson’s is a complex disease. A degenerative disorder, it results from nerve cells in the brain producing insufficient dopamine, a chemical partly involved in regulating movement. Many patients reach out to the doctor when they experience tremors, have difficulty walking, or feel increasingly lethargic.
•While incurable, drugs or surgery can slow the disease and visibly improve a patient’s quality of life. At times, however, these medicines can trigger distressing side effects. “Approximately 10% of patients being treated with a combination of levodopa and carbidopa develop hallucinations as a consequence of extended medication,” says Dr. (Col.) R. Varadarajulu, consultant neurologist at the Bangalore Regenerative Advanced Institute of Neurosciences, Bengaluru.
Many illusions
•Hallucinations can be visual, auditory or tactile. In patients with Parkinson’s, they occur mostly as visual images, experienced when they are awake and alert. Sometimes, if the patient has Parkinson’s with associated disorders such as Diffuse Lewy Body Dementia, hallucinations can occur even without the use of medicines.
•The nature of these hallucinations varies. “One patient imagines being bitten by a snake every night, while another sees rats. Yet another feels that someone is breaking into their house,” says Dr. Varadarajulu.
•Caregivers find it difficult to comprehend these “visions” of their afflicted loved ones. “For a few years now, my dad has been recreating scenes from the past. He starts to see me as a schoolgirl, in uniform, and asks me why I wasn’t at school. Incredibly, during these hallucinations, his own mannerisms would revert to those of his youth. He would start to walk upright sans tremors or stiffness. It was beautiful to watch him, but his mind was in a different place,” says Geetika Guha, whose 82-year-old father has been a patient for two decades.
•Another patient, who didn’t want to be identified, started to see people coming and leaving his room shortly after a hernia operation. “A friend who was with me post-surgery told me I was having visions,” he says. “It is highly disturbing when you cannot believe what you see, and it makes you question your sanity,” says another patient who has been having hallucinations for over a year.
•Instead of entering into conflict with the patient, caregivers should try to reassure the patient, say doctors. “The relatives should allay the patients’ fears, by explaining carefully what is happening to them,” says Dr. Varadarajulu.
•“When there is a chance that a high dose of levodopa or anticholinergic (drugs which reduce tremors) triggers the hallucinations, doctors try reducing the dosage,” says Santhosh N.S., neurologist at Vikram Hospital, Bengaluru. Other times, to counter the side effects of the drug, an antipsychotic medicine, clozapine, is sometimes administered to patients, who are not at risk of dementia.
Being active
•On the other hand, an active lifestyle and a positive approach can significantly delay debilitation. Stacey Kuruvilla*, 74, who has been living with the disease for ten years and goes for walks everyday, is an example. “I have difficulty walking and occasionally lose balance, so I hesitate to go alone. With my husband’s support I cover a few kilometres daily,” she says. When she first started to have difficulty walking, she went to a cardiologist. After several tests ruled her to be fine, he referred her to a neurologist. “He immediately diagnosed the symptoms and advised me to remain as active as I could,” she recounts. While she has her bad days, she says she’s steadily progressing. “A few years ago I couldn’t do much around the house, but now I do all the cooking by myself,” she adds. (*Names changed on request)
The importance of rights
Once people learn the culture of rights, they understand directly, without intervention from an external force, what they owe each other
•Fali Nariman recently remarked that we are fortunate to have a charter of rights in the Indian Constitution: the right to life, liberty, equality, freedom of expression, association, religion, education, and rights against various forms of exploitation. Why is this so? What is it in the discourse of rights that is absent in other constitutional moralities? The short answer is that a rights-based morality helps build a free and equal society. How so?
Underlining our moral equality
•Imagine two tracts of land equal in size, bisected by a fence, one belonging to me, an ordinary man with modest means, and the other to a very rich and powerful man, say, a local politician. Over a period of time, I detect that the entire fence has shifted towards my side of the land, substantially reducing its size and, correspondingly, increasing the size of the politician’s land. To reclaim my land, I have two options. Recognising the asymmetry of power between us, the first is to plead with him to restore the status quo. I request, I urge, I implore, but I dare not challenge him. He is mighty strong, and if he resolves to usurp the entire land, nothing can stop him. So, I supplicate with folded hands, hope that out of pity he will give it back to me. The second is to demand that he returns the land to me because I have a right over it. I do not ask him for a favour nor prostrate before him. I go to him as an equal, with dignity and self-respect, and demand what is rightfully mine. Moreover, since my right over the land is justiciable, I may seek the court’s intervention in restoring the fence to its original position. So, one of the functions of rights is to underline our moral equality — that no one is intrinsically superior or more powerful than me and my moral worth is the same as that of anyone else. The discourse of rights is a part of an egalitarian ethic, substantially different from the ethics of hierarchical societies.
•Another way of putting it is this: by representing their viewpoint, rights assist the vulnerable, the powerless. By empowering them, they help overcome their vulnerabilities. And not only the poor and the powerless. We live under conditions where strong emotional ties are sundered, where bonds of affection and loyalty are easily frayed, where conflict is lurking round the corner, where enough power is concentrated in states, corporations or communities to render all of us vulnerable. Rights help not only those who experience permanent vulnerability but also those who are sporadically threatened by it. Rights are protective guarantees when all else fails. They are ‘fallbacks’ which come into play when love and affection disappear (for instance, from family relations) or become impossible (as in a large society of relative strangers among whom love is inconceivable).
Interpersonal relations
•Rights have another advantage: they are grounded directly in ordinary interpersonal relations. The idea that human killing is wrong is part of virtually every ethic, god-dependent or not. What then is the difference between someone refusing to kill a person because god commands him not to and someone who refuses to do so because the person has a right not to be killed? It is this: in the first ethic, we don’t kill primarily because of our obligation to god. The moral value of the demands of others is secondary. In the other, we are constrained primarily because of what we owe directly to another person. We tell ourselves that regardless of whether god exists or not, we recognise that to be alive is such a significant interest of all humans that we have a duty not to deprive them of it. No matter how strongly it is in my interest to kill someone and even if my own god commands me to do so, I will refrain from killing, because the other person’s need to live puts me directly under an obligation not to kill.
•A mother does not have to be told that she needs to feed her child because god commands so, and must respond instantly to the cries of her child; analogously, humans must respond to the impersonal demands made on each other in formal settings, to each other’s rights. Once people learn the culture of rights, they understand directly, without intervention from an external force, what they owe each other. If a child has a right to education, the state must respond to this demand and fulfil it. If a person has a right to express her views, then all others must respond to her demand not to be prevented from doing so.
•There is an irony in Mr. Nariman’s remark; its undertones betray a lament that currently rights talk seems ineffective, toothless. But rights are important. They give voice to the powerless, address the vulnerabilities of all, help us meet demands we legitimately make on one another — which is why we are grateful to those who bequeathed them to us.
Why not have Aadhaar ear tags for humans also?
Taking exception to the fact that only cows have that privilege
•As you can guess, dear reader, the past week or so has been an extraordinary period in the life of your favourite columnist. I am overwhelmed and humbled by the love and affection showered on me by millions of loyal readers like you. I am touched that so many of you took the trouble to send me congratulatory messages – thank you.
•To be honest, I did not expect the government to act so promptly on the suggestion I’d made in my previous column that India should introduce 33% reservation for cows in Parliament. I am as thrilled as you are that they’ve taken it seriously, and as a first step in that direction, decided to issue UID numbers to all proud Indians who chose to be reborn as a cow.
•My Ola driver, Monu Nigam (not related to the singer who shaved his head), who has top-level connections in the Home Ministry, tells me that the government is working round-the-clock to provide every cow in India — regardless of age, breed, or sexual orientation — an UID number by June 2018 so that all of them can vote in the 2019 elections.
•If everything goes according to plan, bovine candidates would be able to contest the elections in 2024, by which time India would have in place the requisite legislation reserving 33% seats for cows in all democratic institutions from the Parliament downward.
Something like Aadhaar
•Right now, however, the government is grappling with a tricky issue: what to call the UID for cows? Monu says that for the time being, they are calling it “Aadhaar-like” (instead of Aadhaar) because some right-wing cows took exception to their UID number being referred to by the same name as “the despicable surveillance operation unleashed on humans”.
•I confess I’m with the cows on this. There are sound reasons why the cow UID should not be referred to as Aadhaar. First of all, unlike humans, cows are not required to share their hoof prints or get their irises scanned, which I think is a fair move by the government aimed at protecting the dignity and privacy of the cow.
•Second, cows don’t need to authenticate their identity with their UID number in order to access their midday meals. This, too, is a fair decision, as it would be both petty and cruel to starve a cow just because it doesn’t have an UID number.
•Given these critical differences from the Aadhaar, the UID for cows deserves its own name. My milkman Thodappam Kher (not related to any bald celebrity) says the Home Ministry may end up calling it ‘Cowdhaar’. Not a bad choice, though I would have simply gone with ‘Moo’, which is easier to pronounce for cows.
Equal rights for all
•Apparently, the Centre has told the Supreme Court that the ‘Cowdhaar’ number would have key biographic details of the cow such as age, breed, sex, lactation, height, colour, horn type, tail switch, and special marks. Also, a tag with the ‘Cowdhaar’ number would be affixed to the ear lobe of the cattle.
•Now, I am not saying this because I am a human being or anything, but I strongly believe the government should extend the same privileges to humans also. At present, the only biographical details of humans that are captured in Aadhaar are date of birth, name, sex, and address. It is high time humans also had their breed, lactation, colour, height, tail switch, and special marks recorded in the Aadhaar database. Also, every human with an Aadhaar number must get an ear tag. Are humans in any way inferior to cows that we only get a colourless plastic card while they get a yellow polyurethane tag in the ear of their choice?
•The government has cited cattle smuggling as the rationale for the ‘Cowdhaar’ ear tag. But everyone knows that human smuggling, or trafficking as it is popularly known, is a bigger menace. If we put an Aadhaar tag in the ear lobe of every Indian, the government would be able to track the location and mobility of all citizens in real time.
•This would make it much easier to catch terrorists, kill Maoists, and trap Vijay Mallya, who, incidentally, self-trafficked himself out of India. Thodappam tells me that the multibillionaire, whose belly closely resembles that of a cow, possesses a unique tail switch that can swat away any investigating flies from India. If only the CBI could part him from his diamond ear stud, we could easily fund Aadhar ear tags for everyone.
A mathematical marvel called Chand Baori
Imagining ancient India in one of the oldest and deepest stepwells
•Whenever we think of Indian architecture, we think of the Taj Mahal, the Khajuraho temples, and so on. But the most important contributions of Indian architecture were not majestic forts or beautiful tombs, temples and mosques; it was a unique water management system called a stepwell.
•As Gujarat and Rajasthan have low rainfall and are normally dry, rainwater harvesting and conservation of water were of utmost importance in these places, especially during periods of drought. Water has always played a major role in the lives of Indians, as seen in the practice of rivers being worshipped as goddesses, and so it was only natural that the places where people gathered to worship, bathe, or collect water for their daily needs became focal points in their lives.
•The steps and platforms built on the banks of rivers, known as ghats, may perhaps have been the inspiration for the baolis or baoris or vavs, as stepwells are called in Rajasthan and Gujarat. These also have places of worship and rooms for relaxation attached to them.
Anatomy of a stepwell
•In a stepwell, there is a central, vertical shaft with water, which spreads out to a pool with a broad mouth, around which steps are built. The baoli itself can be round, rectangular, or square, and built with the simplicity or magnificence of the means at the command of the builder. The number of subterranean passages and rooms all around also depended on the same.
•The depth of the stepwell depended on underground water levels, and thus inspired elaborate designs for the steps. These were the precursors of exclusive clubs in ancient and medieval India where people could hang out with each other, provide hospitality to guests from out of town, and also get water for their daily needs.
•This water management system was discouraged by the British who couldn’t digest the fact that the same water was used for drinking as well as washing and bathing. They already had their own exclusive clubs and smoke rooms, so they developed systems of pumps and pipes. This led to the drying up, clogging, and eventual deterioration of an ancient lifestyle.
•Though north India has many baolis, with Delhi alone boasting of around 30, some of which are still functional, my heart gladdened when I visited the one in Abhaneri in Dausa district in Rajasthan. It is one of the world’s oldest, deepest, and most spectacular stepwells.
•Called the Chand Baori of Abhaneri, it is a feat of mathematical perfection from an ancient time. It has 3,500 steps built on 13 levels, and with the most amazing symmetry as they taper down to meet the water pool. Said to be an upside-down pyramid, this baori was built between the 9th and 10th century by Raja Chanda of the Chauhan dynasty.
•The baori was attached to the Harshat Mata temple. It was a ritual to wash hands and feet at the well before visiting the temple. The temple was razed during the 10th century, but its remains still boast architectural and sculptural styles of ancient India. Harshat Mata is considered to be the goddess of happiness, always imparting joy to the whole village.
•Now there are railings, and so we can’t go down the steps. But the temperature at the bottom is five-six degrees cooler, and must have provided solace during the hot summer days and nights to the locals.
•Later, the Mughals added galleries and a compound wall around the well. Today, these house the remains of exquisite carvings, which were either in the temple or in the various rooms of the baoli itself.
•The Chand Baori is one of the few stepwells, or rather step pond as Morna Livingston writes in Steps to Water: The Ancient Stepwells of India , that showcases “two classical periods of water building in a single setting.”
•An upper palace building was added to one side of the baoli, which can be seen from the trabeated arches used by the Chauhan rulers and the cusped arches used by the Mughals. Access to these rooms is now blocked for tourists. Much as I wanted to, I couldn’t go in, and can only use my imagination.
Imagining the past
•If the stones could speak, they would recount stories of a time when royalty sat in these rooms, heard the pitter-patter of raindrops on the roof, saw rain splash on the beautiful steps, even as strains of raag malhar were sung by the court musicians of that period. Perhaps peacocks would have danced on the surrounding walls and court dancers would have performed with abandon on the platforms in front of the royal apartments.
•Though stripped of plaster now, these stone walls would have been filled with many paintings to emphasise the feeling of being in a beautiful moonlit oasis of happiness. The chanting of priests as they went down to pray must have accentuated the spirituality of the shimmering water pool, and the singing of the women as they went to collect water must have gladdened even the hardest of hearts.
•I can’t describe the feeling of awe that I felt when I stood there soaking in the ambience of the moonlit Baori under the bright rays of the sun.
Why immunise?
•A topic that is seldom discussed has suddenly made its way into the news and is making headlines. Are vaccines safe? Are they essential? Why does my child need vaccines? These are some of the questions being posed.
•For the first time, the government-run immunisation campaign — the measles-rubella (MR) drive — has faced challenges due to rumours spread on social media. Now, with reports of measles making a resurgence in Europe and in the United States, we all need to take stock of the reasons for these concerns. We also need to be afraid of what would happen if we didn’t immunise.
•A few decades ago, diseases such as polio, smallpox, and neonatal tetanus caused widespread disability and death among children worldwide. Clean water, sanitation, and access to health-care facilities alone could not have contained these deaths, so medical science came to the rescue.
•Science is under siege
•India is free of these diseases because safe, effective vaccines were developed. That science is now under siege. With rumours taking hold of people’s faith, the health of children is at stake not only in India but also in developed nations in Europe and the U.S.
•When vaccine coverage fell, the incidence of pertussis [whopping cough] peaked in 2012 in the U.S.; similarly, measles is now claiming the lives of innocent children in Europe. During India’s MR vaccination drive, social media was used as a tool to spread misleading information and hinder a critical government programme aimed at preventing a debilitating disease. In a country which lags behind in providing access to clean water, sanitation and adequate health care, a robust vaccination programme is essential to safeguard the health of our children. The damage these rumours can do is much larger in India when compared to our global counterparts. In a country of 1.2 billion people, with varying social and economic realities, prevention is always better than waiting for treatment. Vaccine-preventable diseases such as pneumonia, diarrhoea, and measles are significant contributors to child morbidity and mortality in our country. The risk is not only child death but also that children who do survive these disease are at risk of long-term effects such as suffering deafness, seizures, motor impairment, cognitive impacts and stunting.
Meeting rigorous standards
•Today’s vaccines are safer and more effective than before. They are tested through rigorous and continuous scientific study — years and years of data collected from tens of thousands of children — before they are licensed for use. Before a vaccine makes its way into the Universal Immunisation Programme (UIP), the Health Ministry and other competent technical expert bodies analyse, discuss and deliberate on the vaccine’s safety and efficacy, among other key considerations. Evidence suggests that the benefits of immunisation, (including hospitalisation costs and the broader benefits to families who do not miss work because of a serious illness in the family) are far greater than any cost of the vaccine. The economic and social dividends awarded to the community are substantial — particularly when one considers that vaccines are able to reach the poorest and most vulnerable who are disproportionately impacted by the tragic consequences of a severe disease.
•Every year, 2.6 crore children are born in our country and immunising the population has far-reaching effects that influence parents’ confidence in the health system. If we are to reap the benefits of reduced child mortality and avoid inheriting a population stricken with disease, we have to ensure their good health and well-being. Vaccines are technological advancements that will enable India to look forward to a healthier future and help secure India’s position among other strong and economically contributing nations.
•India has never needed science more than it does today. With population growth, climate change, new infectious diseases, antibiotic resistance and several new threats emerging each day, the need for new vaccines is urgent. Now is the time for all to work together to safeguard the health of our children, our future, and our India.
What’s powering the rupee?
The rupee is going from strength to strength, with the dollar-rupee rate breaking past the 66-level. We take a look at factors at play
•If awards were to be given for the unexpected events of 2017, the strong rebound in the rupee would be the front-runner. Towards the beginning of this year, no one expected the rupee to break out of the tight range between 66 and 68.85 that had shackled the currency for most part of 2016. But the rupee not only strengthened above the 66 level against the dollar but also went on to mark a 20-month high of 63.93 last week.
•This sudden spurt of strength follows a stolid show in 2016, when the Indian currency remained unfazed by some of the significant events that spelled a sea change for global markets.
•The first was the UK’s referendum to decide whether to stay in the European Union or not. While everyone expected the British to vote against the move, results favoured an exit.
•The British currency took a beating immediately after the referendum. The pound declined 20 per cent against the dollar, from 1.50 in June 2016 to 1.20 in October 2016.
•Another event that marked a significant shift in the global economic order was the victory of Donald Trump in the US presidential elections. This made the dollar index break the psychological level of 100.
•But the rupee was not unduly hassled by these events.
•So, what’s changed now to make the rupee suddenly spurt higher? Here are the two factors that aided the rupee rally.
Strong foreign flows
•The initial trigger that helped the rupee break the 66 level came in the second week of March this year after the BJP’s resounding victory in the State Assembly elections in Uttar Pradesh. This triggered a strong surge in Foreign Portfolio Investors’(FPIs) interest towards the Indian market.
•FPIs, who had bought just $646 million in Indian debt until then, went on a buying spree after the election results. For the month of March, they bought $3.92 billion in the Indian debt segment. April has also witnessed a strong foreign money inflow of about $3 billion in the debt segment.
•After selling $6.36 billion in 2016, FPIs have already poured in $7.52 billion in the first four months of this year. This inflow is higher than the $7.4 billion for the entire calendar year 2015.
•The inflows into the equity segment are also showing signs of a strong pick-up this year. FPIs have pumped $6.38 billion into the Indian equity segment, which is double the $3.19 billion and $3.18 billion flows seen in 2015 and 2016, respectively. With the first rate hike by the Federal Reserve already absorbed by the financial markets, there does not appear to be a great threat to foreign fund flows in the near future. FPI flows into debt will be strong if the rupee continues to strengthen as these are short-term flows that are greatly influenced by currency strength.
Weak dollar
•The second factor that has helped the rupee break the key 66 level is the recent weakness in the dollar. The US Federal Reserve’s stance on the rate hike front had pushed the dollar index below 100 over the last couple of months. Also, the new US President, Donald Trump’s remark that the dollar is extremely strong put further pressure on the greenback.
•After raising the Fed fund rate by 25 basis points in March, the Fed reiterated that there will be a total of three rate hikes in 2017. So, unless the Fed changes its stance and turns more aggressive over raising the rates, a strong recovery in the dollar is unlikely.
•The dollar index has come under pressure since the US Fed meeting in March and has tumbled 3 per cent since then, from around 101.5 to the current levels of 98.5. The dollar index has room to fall further to 98 or 97.5 in the near term.
•Inability to reverse higher from 97.5 may increase the likelihood of the index falling to 95-94 or even lower levels thereafter. Such a fall in the dollar index may help the rupee strengthen further.
•Also, the recent developments in Europe had been adding to the pressure on the dollar. The UK heading for early elections in June and the ongoing French elections have triggered a sharp rally in the euro and the pound in the last one month.
•The British pound, especially, is looking much stronger against the dollar. It is currently around 1.28. If it can sustain above 1.25, it can surge to 1.30 or even 1.35 in the coming months. Such a rally may cap any sharp rallies in the dollar index. The euro, on the other hand, has resistance near current levels at 1.10. A strong break above it can take it higher to 1.15 levels. With flows set to continue and dollar on a shaky wicket, where is the rupee headed now? We scanned through some of the key macro indicators to come up with some answers.
Trade and deficit
•After falling continuously on a year-on-year basis from December 2014, India’s exports are showing signs of recovery since September last year. Exports have surged 35.85 per cent, from $21.52 billion in August 2016 to $29.23 billion in March 2017. But this has failed to narrow the trade deficit as imports, on the other hand, have also surged at the same rate. India’s imports have risen 39.89 per cent, from $29.19 billion to $39.67 billion.
•The trade deficit, after widening to $13 billion in November 2016, narrowed to $8.9 billion in February this year. But a 45 per cent increase (year-on-year) in imports in March has widened the trade deficit to $10.4 billion. So, if the imports continue to rise at a faster pace than the exports, there is a possibility of the deficit widening further.
•Two major components that can keep the import bills higher are crude oil and gold. The outlook for both these commodities is bullish.
•Crude oil prices have been hovering around $50 per barrel over the last few months. The prices have been volatile, between $45 and $55 since December. The bias is bullish within this range. An eventual break above $55 will increase the likelihood of oil prices surging to $60 levels.
•Gold has been gaining sheen from the geo-political uncertainty between the US and North Korea and from the broader weakness in the US dollar. Prices have been rallying since December from the low around $1,125 and are currently at $1,250. A revisit of $1,350 levels is likely in the coming weeks. A strong break above $1,350 will open doors for a fresh rally to $1,400 or even $1,450.
Back to square one
•India’s current account had improved from a deficit of $7.08 billion to $0.3 billion in June 2016.
•But since then, the Current Account Deficit (CAD) has been widening and is back to $7.92 billion as of December 2016. Given that there is low possibility of the trade deficit to improve in the coming months, there is a danger of the CAD widening further. This is negative for the rupee.
External debt
•India’s external debt is also reflecting a mixed picture. While the long-term debt has come down sharply by 6 per cent, from around $398 billion in December 2015 to $372 billion in December 2016, short-term debt has not eased reasonably. Short-term debt fell 12 per cent, from about $96 billion in June 2013 to $85 billion in December 2014. But thereafter, short-term debt has been averaging around $83 billion over the last two years. However, strong forex reserves can help tackle the debt situation.
RBI and forex reserves
•The RBI has been building up its forex reserves consistently. The reserves have risen 7 per cent, from around $344 billion in April 2015 to $369 billion now. Also, as uncertainty continues to remain on the back of geo-political tensions between the US and North Korea, these reserves can be used to tackle any unexpected volatility in the market.
•Since the rupee has appreciated sharply in a very short span of time, there is also expectation that the RBI will intervene to arrest further strength in the currency. This can involve selling the rupee and buying dollars, which can bolster the reserves further.
Rupee overvalued
•The rupee appears overvalued when the Real Effective Exchange Rate (REER) is taken into consideration. A currency is considered overvalued if its REER is greater than 100 and it is undervalued if the REER is below 100. REER is a measure of valuing a currency against the currencies of its trade partners, adjusted for inflation.
•The six-currency trade weighted REER (with new base year of 2015-16) for rupee is at 106 as of March 2017 and the 36-currency trade-weighted REER is at 117, suggesting that the rupee is overvalued compared to its trading partners. Further strength can erode the competitiveness of the rupee in the international market. This is one of the factors that the RBI will take into account when deciding on its currency management policy.
Event risks
•The developments with regard to the US and North Korea will need a close watch. Any uncertainty may trigger a global risk-off trade. In that event, the dollar can rally, as money starts flowing into safe havens.The upcoming US Federal Reserve meeting will also need watching. If the Fed hints at additional rate hikes or a faster pace of rate hikes, then that may support the dollar. A series of key elections are lined up, which can create volatility.
•The second round of French elections is on May 7 and the UK snap election is up in June. The change in pace of developments in the Brexit process after the snap elections in the UK could be significant. Germany is heading for polls in September.
Takeaway
•Strong inflows and the weakness in the dollar are positives for the rupee. But the widening deficits, strong outlook for gold and oil prices, which can increase the import bills and over-valuation of rupee based on REER, are negatives for the rupee.
•Moreover, geo-political tensions and a series of upcoming elections may cause short-term volatility, capping the upside in the rupee.
•That said, the rupee can strengthen in the near term, but the strength is unlikely to sustain.
