India successfully fires heaviest launch vehicle
GSLV MkIII-D1 places heaviest satellite GSAT-19 into orbit
•India on Monday leapfrogged into a select group of nations having their own indigenous cryogenic engine technology, when the Indian Space Research Organisation (ISRO) successfully launched its heaviest launch vehicle, GSLV MkIII-D1, and placed the country’s heaviest satellite till date, GSAT-19, into a precise orbit.
•The rocket lifted off from the second launch pad into clear blue skies at 5.28 p.m., and soared above the moon which was rising in the evening, leaving a plume of smoke, a bright orange light shining below the rocket as the cryogenic engine fired up and took the rocket on its intended path.
•The GSAT-19, a communication satellite, expected to enhance India’s communication infrastructure, was placed into a Geosynchronous Transfer Orbit (GTO), 16 minutes after launch, with a perigee (closest point to Earth) 170 km and apogee (farthest point from Earth) 35,975 km. It will take about two to three weeks to be placed in its intended orbit.
•The satellite weighs 3,136 kg. This successful launch will enable India to launch 4-tonne class satellites from India. These were earlier launched from launch pads abroad.
•The cryogenic engine, which ignited roughly about 5 minutes after lift-off, and was firing for 640 seconds, “was a culmination of large amounts of work done over decades,” A.S. Kiran Kumar, Chairman, ISRO, told a press conference after the launch.
Russian design
•ISRO has been trying to master development of an indigenous cryogenic for decades and has used indigenous cryogenic engines on earlier GSLV flights but modelled mainly on Russian design.
•On this GSLV, no technological element was borrowed or adapted from any other space organisation, Somanath S., Director, Liquid Propulsion Systems Centre (LPSC), ISRO, said.
•“The cryo stage is a complex technology. We were making it for the first time; we faced no serious test failures or problems. That is a world record,” he said, adding that despite limited resources, “it is a marvel that we were able to achieve this.”
•When the indigenous cryogenic engine started firing, the mood at Mission Control was “upbeat,” Mr. Kiran Kumar said. He said the engine was being tested and perfected since December 2014.
•“More than 199 tests were done since December 2014. The entire team was confident,” the Chairman said, however adding that “there were some butterflies in the stomach.”
Business opportunities
•The GSAT-19 carries a Ka/Ku-band high throughput communication transponders. It also carries a Geostationary Radiation Spectrometer (GRASP) payload to monitor and study the nature of charged particles and the influence of space radiation on satellites and their electronic components, according to ISRO. “The spacecraft will open up a lot of new vistas in the field of Internet connectivity, broadband connectivity,” P.K. Gupta, project director, said.
•The successful launch of the GSLV MkIII- D1 also opens up business opportunities for ISRO. “Definitely the credibility of the system goes up and customers will have greater confidence,” Mr. Kiran Kumar said, adding that it would reduce insurance premiums. “As far as Mk III is concerned, we are planning two launches every year,” he said.
More in the pipeline
•Two launches are coming up, which will however, happen from Ariane in French Guiana. The first one scheduled for June 28, will be the GSAT 18, a 3.3 tonne satellite, and the second one will be a 5.8 tonne satellite.
•Work is on to launch two approved missions — Aditya-L1 and Chandrayaan-II — in the next two years, Mr. Kiran Kumar said. “Chandrayaan will be [launched] in the first quarter of next year, and Aditya… around 2018-19.” The ‘Aditya-L1’ will be placed in the halo orbit around the ‘Lagrangian point of the Sun-Earth system, according to ISRO.
NSE opens bourse at GIFT City
Trading to be allowed on derivative contracts
•The National Stock Exchange (NSE) on Monday unveiled its exchange at Gift City.
•The exchange will see trading on derivative products based on stocks, indices, precious metals and currencies.
•The exchange, NSE IFSC, will have two trading sessions initially. The market timings will be gradually extended based on demand. The first session will be between 8 a.m. and 5 p.m. Session two will start at 5:30 p.m. and end at 11:30 p.m.
•The trading hours will overlap with the timings in London and Dubai markets. This will allow investors to react to news developments over a longer period of time, said a release from the exchange.
•Incidentally, a large section of market players has been demanding longer trading hours in the equity market in India especially since the commodity markets are open for longer hours.
•According to the statement, trading will begin with stock derivatives on 10 stocks, index derivatives on Nifty, Nifty Bank and Nifty IT indices along with derivatives on gold, silver and currency pairs such as euro-dollar and pound-dollar.
•The stocks on which derivative contracts will be available initially are Axis Bank, HDFC Bank, ICICI Bank, Infosys, Larsen and Toubro, Maruti, Reliance Industries, SBI, Tata Motors and TCS.
•The NSE IFSC Ltd and NSE IFSC Clearing Corporation Ltd have been formed as 100% subsidiary companies of NSE and National Securities Clearing Corporation Limited respectively.
China lauds PM’s ‘peaceful border’ remark
Modi had said in Russia that despite the border dispute, not a single bullet had been fired in 40 years
•China on Monday welcomed remarks by Prime Minister Narendra Modi in Russia regarding the status of ties with India, and said a positive relationship between Beijing and New Delhi was of global significance.
•“We have noted the positive remark made by Indian Prime Minister Narendra Modi about the China-India [situation]. We welcome that,” Chinese Foreign Ministry spokesperson Hua Chunying said at her regular media briefing.
•“The two major countries, China and India, maintaining sound and steady bilateral relationship is of great significance,” she observed.
•Ms. Hua was responding to a question regarding observations by Prime Minister in St. Petersburg, where he had stressed, during a panel discussion, that despite their border dispute, the China-India frontier was peaceful for the past four decades. “It is true that we have a border dispute with China. But in the last 40 years, not a single bullet has been fired because of it,” he had observed.
•During an interview with Russia Television (RT), Mr. Modi had said that “the 21st century is the century of Asia”. “It means that both India and China will influence the situation of the world in the coming decades.”
•Earlier in the day, China’s Assistant Foreign Minister Li Huilai had welcomed the “multiple meetings” between Chinese President Xi Jinping and Prime Minister Narendra Modi, and pointed out that “healthy relations” between China and India would contribute “to Asia [as well as] world peace stability.”
•Mr. Li, however, did not confirm whether the two leaders would meet on the sidelines of the Shanghai Cooperation Organisation (SCO), which gets under way in Kazakhstan’s capital, Astana, on June 7.
NSG membership
•In response to another question, Mr. Li said that India’s bid for membership of the 48-nation Nuclear Suppliers Group “is more complicated what was imagined previously.” He added: “China supports the NSG to have several consultations to reach a non-discriminatory and universally applicable solution to all the members of the NSG.”
India to weather Qatar storm now
More than half of the country’s energy import needs are sourced from the Persian Gulf
•The government and energy officials said on Monday that the decision by seven West Asian countries, led by Saudi Arabia, to cut all ties with Qatar would have “no impact” on Indian interests. While most analysts say the move will not have an immediate effect, there will be repercussions for India too if the tensions continue and differences are not resolved.
•To begin with, India has tried to maintain a balance in the region, given the immense stakes and has traditionally stayed out of the “Shia-Sunni”, “Arab-Persian” or “Wahabbi-Salafi” divides thus far. With Qatar now estranged from Saudi Arabia and its allies, a further fragmenting West Asia will require even more deft diplomacy to keep these ties untouched by the tensions. Prime Minister Narendra Modi visited Qatar and received Emir Al-Thani in 2016 and has also forged very close strategic partnerships with the UAE and Saudi Arabia, which are crucial to his outreach in the region.
Trade and manpower
•India sources more than half of its energy import needs from countries in the Persian Gulf. Six million Indians live and work in West Asia and they sent home about $63 billion last year. Energy imports may not be affected immediately, unless the Gulf countries follow through with sanctions. However, as in the case of Yemen, Libya, Lebanon and other countries, any tensions in the region have an immediate impact on thousands of Indian workers.
•In Qatar in particular, there are 6,00,000 Indian workers, many of them on projects related to the 2022 FIFA world cup. Several Indian companies such as L&T have won contracts in constructing stadiums. In addition, India has significant trade ties with the country (Qatar is India’s 19th biggest trading partner, with about $9 billion in trade), though its trade ties are much stronger with the UAE and Saudi Arabia (which rank third and fourth, respectively, with about $49 billion and $26 billion, according to Commerce Ministry figures in 2015). After Mr. Modi’s visits in the region, India had hoped for considerable investments from both the UAE and Qatar’s Sovereign Wealth Funds.
Air travel
•Besides cutting off diplomatic ties, the Saudi coalition has also decided to cancel Qatar Airways flights to their countries. This will affect Indian passengers who want to use Doha as a hub to get to other destinations in the Gulf.
•At present, Qatar Airways flies about 24,000 passengers a week from India, ranking just behind the UAE’s Emirates and Etihad Airways. In recent months, Qatar Airways has confirmed that it wants to set up a fully-owned subsidiary domestic airline in India, for which it is applying for clearances. It is unclear how those plans will be affected, if at all, with the latest developments.
Fighting terror
•Saudi Arabia and the UAE are important partners for India on counter-terrorism cooperation and intelligence sharing. Yet it can’t be denied that together with Qatar, these countries have supported extremist groups that now control parts of Afghanistan, Syria and Iraq. Saudi Arabia now accuses Qatar of supporting IS and Al-Qaeda, washing its hands of its own previous support to rebels. It remains to be seen what impact it will have on the global war on terror.
Diplomatic mayhem
The Saudi-led bid to isolate Qatar could have far-reaching economic-political consequences
•The dramatic decision by Saudi Arabia, the United Arab Emirates, Bahrain, Egypt and Yemen to suspend diplomatic ties with Qatar could have far-reaching economic and geopolitical consequences. Tensions were brewing within the Gulf Cooperation Council for the past six years ever since Qatar started actively supporting the Muslim Brotherhood, a political Islamist movement that the Saudis and their close allies see as a threat to stability in West Asia. In 2014, Saudi Arabia, the UAE and Bahrain had temporarily withdrawn their ambassadors from Qatar over this. But a suspension of diplomatic ties as well as air and sea travel to and from Qatar is unprecedented. Saudi Arabia, the UAE and Bahrain on Monday asked Qatari diplomats to leave their countries within 48 hours and Qatari citizens within 14 days. Saudi Arabia blames Qatar for “harbouring a multitude of terrorist and sectarian groups that aim to create instability in the region”. But such allegations can be raised against most Gulf countries. It is an open secret that both Saudi Arabia and Qatar back their proxy militant groups throughout West Asia. Take the case of Syria, where the Saudis back Salafi groups such as Ahrar al-Sham, while the Qataris bankroll the armed wing of the Muslim Brotherhood. Both share the same goal: to overthrow the regime of Bashar al-Assad. In Yemen, Qatar is part of the Saudi-led coalition that has been bombing the country for over two years.
•It is not immediately clear what drove Riyadh to take this extreme step. Emboldened by President Donald Trump’s open embrace and anti-Iran agenda, the kingdom could be making a renewed attempt to rally Sunni countries under its leadership against Tehran. Qatar has historically played off both sides of the Saudi-Iran rivalry. Even as it joined the occasional GCC outbursts against Tehran, it maintained sound economic and diplomatic ties. Qatar’s ruler Sheikh Tamim bin Hamad Al Thani, who had a phone conversation with Iran’s President Hassan Rouhani last week, is reportedly critical of the Saudi-led efforts to drive up an anti-Iran agenda. It is to be seen whether Saudi Arabia has overplayed its hand. If Qatar continues to resist the GCC line, it could trigger a wider crisis in the region. Qatar is an economic powerhouse in the Gulf and hosts the headquarters of the U.S. military’s Central Command. The air war command for the U.S.-led fight against the Islamic State in Iraq and Syria is also in Qatar. So any prolonged attempt to isolate the country would not only have economic consequences — oil prices fluctuated soon after the decision was announced — but also complicate the fight against the IS yet more. What West Asia requires is a united front against terror and lowering of Saudi-Iran tensions. Opening new fronts in the rivalry will only destabilise the region further.
Taming the inflation monster
Looking back at a suggestion on stripping governments of their monopoly over the supply of money
•Inflation affects everyone. As prices rise, an individual’s ability to afford goods diminishes unless his income increases proportionately. Yet, it has become so common to see prices rise over time that inflation is consider normal, and even harmless. In fact, most economists today agree that a moderate price inflation is a sign of a healthy economy with sufficient demand to keep everyone employed.
•The most common cause of inflation is the increase in the total money supply in the economy. “Inflation is always and everywhere a monetary phenomenon,” economist Milton Friedman famously said to emphasise the influence of money supply on prices. But what explains the almost-unstoppable increase in the money supply in modern economies? After all, when the world used gold as its primary currency prior to the 20th century, both money supply and prices showed remarkable stability.
Reckless spending
•To rein in the supply of money, economists at the Chicago School favoured the adoption of a rules-based monetary policy that mandated central banks to maintain a stable rate of inflation. Such a policy was supposed to tie the hands of spendthrift governments that hoped to fund their expenses by recklessly creating new money. However, history suggests that governments invariably exert political influence over the decisions of the central bank, and thus over the supply of money too. “Choice in Currency: A Way to Stop Inflation,” a 1976 essay by Austrian economist Friedrich A. Hayek, offered a more novel solution to the challenge of controlling the money supply. Hayek proposed that governments be stripped of their monopoly privilege to supply money. Instead, private companies should be allowed to offer their own money in the market, thus competing with money issued by governments.
•This, Hayek argued, would discipline governments that create money in a reckless manner, as citizens can freely switch to alternative currencies that offered better value. In this context, it is worth noting that metals like gold already act as alternative currencies that citizens demand during times of high inflation.
Maha farm crisis
Reforms that de-risk agriculture are required for a long-term solution to agrarian distress
•A strike by farmers in Maharashtra continues to affect normal life, despite the State government’s announcement of an end to the strike last week. The farmers, whose demands include full waiver of farm loans, hikes in the minimum support price for agricultural produce and writing off of pending electricity bills, have been on an indefinite strike since June 1. As the strike nears the end of its first week, prices of essential goods such as milk, fruits and vegetables have risen steeply, causing distress to consumers. Some farmer groups agreed to call off their strike after Chief Minister Devendra Fadnavis promised that his government would waive farm loans of small and marginal farmers worth about Rs. 30,000 crore, increase power subsidies, hike the price for milk procurement, and also set up a State commission to look into the matter of raising the MSP for crops. He also promised that buying agricultural produce below their MSP would soon be made a criminal offence. Other farmer groups, meanwhile, have stuck to their demand for a complete farm loan waiver and continued with their protest. It is notable that the protests have come soon after the Uttar Pradesh government waived farm loans earlier this year, setting off similar demands in other States. Yet, while Maharashtra’s farmers have caught the attention of the government, the focus on quick fixes has pushed aside the real structural issues behind the crisis.
•At the root of the crisis is the steep fall in the prices of agricultural goods. The price slump, significantly, has come against the backdrop of a good monsoon that led to a bumper crop. The production of tur dal, for instance, increased five-fold from last year to over 20 lakh tonnes in 2016-17. Irrespective of price fluctuations, MSPs are supposed to enable farmers to sell their produce at remunerative prices. But procurement of crops at MSP by the government has traditionally been low for most crops, except a few staples such as rice and wheat. This has forced distressed farmers to sell their produce at much lower prices, adding to their debt burden. Not surprisingly, the whole system of agricultural marketing has led farmers to feel cheated, and it was only a matter of time before they organised themselves to protest. Going forward, any long-term, wide-scale procurement of crops at MSPs looks unlikely; even a one-time full loan waiver is considered unrealistic by the Chief Minister, given the State’s finances. The possible ban on buying produce below the MSP would just worsen the crisis by making it hard for farmers to sell their produce even at the market price. The only long-term solution is to gradually align crop production with genuine price signals, while moving ahead with reforms to de-risk agriculture, especially by increasing the crop insurance cover. Expediting steps to reform the Agricultural Produce Market Committee system and introduce the model contract farming law would go a long way to free farmers from MSP-driven crop planning.
Finessing data collection
Despite availability of employment statistics, data gaps need to be plugged
•The government has recently set up a task force headed by the Vice-Chairman, NITI Aayog to recommend a methodology to generate timely and reliable employment data.
•India already has several globally respected sources of employment statistics, which include employment and unemployment surveys (EUS) conducted by the National Sample Survey Office (NSSO) till 2011-12 at an interval of five years and annually with a thin sample; annual and sub-annual EUS by the Labour Bureau since 2011-12; the Census of India conducted every 10 years; an Economic Census conducted for agricultural (excluding crop production and plantation) or non-agricultural sectors at intervals; and other administrative data. However, with the changing times, new challenges need to be addressed.
Filling in data gaps
•These include the need to collect detailed information on informal workers — their earnings, and their working and living conditions, the need to reduce the time lag between the survey and release of data and the need to conduct short-term surveys for quick assessment of the impact of different policies on employment. A few data gaps need to be filled in, such as the absence of data on district-level employment for decentralised planning, data on circular migrant workers; the working and living conditions of women labour.
•There are two more areas of employment statistics that need the attention of the task force.
Complementing surveys
•Time-use surveys (TUS) to complement labour force surveys: It is now well accepted that TUS complement the labour force survey in two major ways. First, they can reduce, if not eliminate, underestimation of the workforce/labour force, which is known to be a major weakness of our employment statistics. This is because TUS, which collect comprehensive information on how people spend their time on different activities without missing any activity, are likely to capture even scattered, sporadic and irregular informal work of people. Also, under-reporting of workers due to the biases of investigators or of respondents is not likely to get in in this system of data collection. In addition, data on simultaneous activities are likely to net all work performed by people. They also throw additional light on the characteristics of the workforce-labour force that is not feasible under labour force surveys. This includes the scattered nature of work — mainly of informal workers, multiple jobs performed by workers; the time spent on work in hours and minutes (useful in estimating underemployment); and measuring time stress experienced by workers as reflected in their total time spent on work as well as the time spent on simultaneous activities. Our study that has compared in details the NSSO (1999-00) and TUS data (1998-99) on the workforce has shown that a TUS provides valuable additional information on the labour force in India.
•The working group set up for the 68th EUS has already decided that a TUS should be conducted after an EUS — in a staggered manner to collect additional and improved information on labour force.
The ILO resolution
•The task force should also take note of the Resolution by ILO (2013) on Statistics of Work, Employment and Labour Underutilisation which intends to set new standards for work statistics to guide countries in updating and integrating their existing statistical programmes in the field. It defines “work” as “any activity performed by persons of any sex and age to produce goods or to provide services for use by others or for own use” (this definition is consistent with the concept of General Production Boundary under the System of National Accounts). Under the resolution, there are five distinguished forms of work. The resolution has also presented a new labour force status classification, which includes persons in employment, persons in unemployment and persons outside the labour force — all defined slightly differently than earlier. In addition, there is a brand new concept of labour underutilisation, which includes time-related underemployment, unemployment reflecting an active job search by persons not in employment, and potential labour force, i.e. persons not in employment but who are willing to work under specific conditions.
•All countries including India are expected to develop their own system of work statistics keeping in mind its various uses and a national data collection strategy. As stated in the resolution, labour force surveys will be the main source of data for implementing the resolution. They will focus on employment and, where relevant, own use production of goods. Some countries may also include unpaid trainee work. Statistics on other forms of work will be collected periodically, either as add-on modules to a labour force survey or as part of a stand-alone, special purpose survey, including a time use survey. A TUS is expected to supplement the labour force data to implement the resolution. Again, a national TUS will have to be conducted periodically using sound methods and concepts to complement the modified labour force survey to implement the resolution.
•Finally, the task force should recommend modifications in a manner that comparability with old and new data is maintained — the new data should not be used to hide the declining rate of growth of employment of recent times. Unless policymakers know what is really happening, they will not be able to design correct policies.
India rejects Trump’s allegations on Paris pact
Did not sign agreement due to financial greed: Sushma
•India on Monday rejected U.S. President Donald Trump’s allegation that it had joined the Paris climate agreement for a large financial incentive. External Affairs Minister Sushma Swaraj described the allegation as “unreal” and said India did not join the agreement for “financial greed.”
•“First of all, there is no reality [in Mr. Trump’s allegation]. The Prime Minister has spoken about this issue and let me also emphasise that India has signed into the Paris agreement not because of pressure from any country nor for financial greed or fear of any country. We signed the agreement for our commitment to protection of climate,” Ms. Swaraj said, explaining in Hindi the reasons for India joining the agreement.
•“Worship of forests, worship of rivers, worship of mountains continue even now in India. These actions are part of India’s ethos that are five thousand years old. These are all heritage of India. That is why I am rejecting the allegations completely and that is why India will continue to remain in the Paris agreement framework, whether the U.S. continues in it or not,” she said.
Focus on visas
•Ms. Swaraj also flagged the growing focus on H-1B visas in the U.S. as an Indian concern, and said the government was alert to the risks on this front. “Since 2004 a cap has been in place for 65,000 visas. There are no changes in the lottery process and in visas for our Ph. D students; but, yes, we have concerns. I want to assure the country that we are in touch with U.S. Congress members and the Trump administration so that no amendments are brought to the law so that Indian interests are not hurt.”
•She, however, downplayed the chances of growing disagreement between India and the U.S. affecting the bilateral ties after Mr. Trump became President. “After the arrival of the Trump administration, India-U.S. ties have not diminished. Thrice Prime Minister Narendra Modi and Mr. Trump spoke on the phone. I spoke with my counterpart Rex Tillerson. Our Foreign Secretary met their officials. These meetings indicate that the Trump administration is trying to build the relationship between India and the U.S. as a relation of mutual benefit.
No Modi-Sharif meeting
•The External Affairs Minister, who addressed the media to mark the third anniversary of the Modi government, said that as of now, there were no plans of a meeting between Mr. Modi and his Pakistani counterpart Nawaz Sharif on the sidelines of the SCO summit scheduled in Astana for June 8 and 9.
•“As of now, there are no plans for any meeting... Neither from their side, nor from ours,” Ms. Swaraj said, stressing that India was willing to resolve all issues through dialogue with Pakistan.
•“We are willing for talks on all issues. Second, talks should be held between two parties. Third, terror and talks will not go ahead together — these are our three pillars. Pakistan needs to create humane conditions for facilitating humanitarian ties with India. I myself went for the Heart of Asia summit, but within a week we were given the attack on Pathankot,” she said.
