📰 Rural jobs scheme | Getting wages harder than the labour
Multiple bank visits, repeated rejections and biometric errors mar payment system, says study.
•For most rural workers dependent on the Mahatama Gandhi National Rural Employment Guarantee Scheme (MGNREGS), their labour does not end at the work site. According to a study by LibTech India released on Wednesday, many of them are forced to make multiple trips to the bank, adding travel costs and income losses, and face repeated rejections of payment, biometric errors and wrong information, just to get their hands on their wages.
•For example, take a worker in Jharkhand who puts in a week of hard labour to earn ₹1,026 which the government credits directly into her bank account. The study found that almost 40% of the workers must make multiple trips to the bank branch to withdraw their money.
•It costs an average of ₹53 a trip, and as the branch is usually at the block headquarters a significant distance from her home village, and the time spent at the bank is three to four hours, a worker will also lose the day’s wages while she attempts to withdraw her money. Paying ₹100 for travel for two trips, plus ₹342 for lost wages, plus about ₹25 for food, the worker may spend ₹392, effectively shelling out a third of her weekly wage just to withdraw it.
Pandemic blues
•“Even in regular times, these last mile challenges make it hard for workers to access their own wages in a timely manner. During the COVID-19 pandemic, the situation is exacerbated as transport becomes harder, and there is no question of physical distancing at a rural bank,” says LibTech researcher Sakina Dhorajiwala, who is one of the lead authors of the report.
•The study, based on a 2018-19 survey of almost 2,000 workers in Jharkhand, Andhra Pradesh and Rajasthan, was sponsored by a research grant from Azim Premji University. “In the two years since we did the survey, there has been little change in the number of bank branches per capita in rural areas, so most of these challenges remain. There is only one branch per 20 gram panchayats,” she said.
•The study found that only one in 10 workers get an SMS message that their wages have been credited. A third of workers must visit the bank branch just to find out whether their wages have been credited. Another quarter of respondents said despite being informed that their wages had been credited, they found that the money was not in the accounts.
•At the bank, 42% of respondents from Jharkhand and 38% from Rajasthan had to spend over four hours to access their wages. Only 2% of Andhra Pradesh workers faced such a long delay. Overall, 45% of respondents had to make multiple visits. Average travel costs for each visit amounted to ₹31, even without taking wage losses into account.
•Customer service points and banking correspondents were meant to reduce the gap between workers and banks and bring service delivery to the doorstep. It is true that travel costs are lower at ₹11 per trip, although multiple visits are still needed in 40% of cases. However, 40% of workers reported facing biometric authentication failures at least once in their last five transactions at such agencies, and 7% reported that all five of their last transactions had failed due to biometric authentication issues.
•Almost 13% of workers had rejected payments, which are transactions that are stuck due to technical errors of the payment system, bank account problems or data entry errors. About 77% of them had no idea why their payments had been rejected, which means that rectification is not possible and all future MGNREGS payments to these individuals will also be rejected. In fact, government data show that about ₹4,639 crore worth of payments were rejected in the last five years, and about ₹1,236 crore is still pending to be paid to workers.
•“The pandemic has caused a situation where people are desperate for work. But we have found that people who have faced repeated, unresolved rejections simply lose faith in the system, and drop out of the workforce. Why should they work if they cannot get paid?” said Ms. Dhorajiwala.
Spending, both by the Centre and the States, need to go up very significantly, it says
•The Fifteenth Finance Commission has mooted a greater role for public-private partnerships to ramp up the health infrastructure and scale up public spending on health from 0.95% of GDP to 2.5% by 2024, its chairperson N.K. Singh said on Wednesday.
•While public outlays should focus on primary health care at the panchayat and municipality level, private players should be relied on for specialty healthcare, he said, hinting that the Commission has recommended steps to fix the skewed availability of healthcare across India as poorer States have the worst facilities.
•Mr. Singh recommended substantial improvements in the working conditions for doctors in government hospitals, many of whom are hired on a contract basis by States, and the creation of an Indian Medical Service cadre as envisaged in the Civil Services Act of 1951.
•“The Finance Commission recommendations will turn out to be a shining example of public-private partnerships… We have sought to, in our report, address the multiple challenges and hopefully, there would be momentum in giving the health sector the priority that it certainly deserves,” he said at a session hosted by the Confederation of Indian Industry on resetting healthcare systems.
•“The total spending of around 0.95% of GDP is not adequate both in relation to our peer groups, and in relation to the commitments under the National Healthy Policy of 2017. There is no doubt that public spending, both by the Centre and the States, need to go up very significantly. And the endeavour must be to raise public spending from 0.95% of GDP to 2.5% of GDP by 2024,” Mr. Singh said.
•While India doesn’t have adequate health infrastructure, the picture is “exceedingly skewed” among States with the poorest States having the worst health infrastructure. “It’s somewhat unfortunate… So how does one address the skewed nature of the availability of health infrastructure among the States of India, particularly those which are most vulnerable,” he asked.
•Seeking greater attention on the role of paramedics and frontline health workers in countering the pandemic, Mr. Singh said the Commission was amazed to learn that doctors in many States are engaged on a contract basis and underlined the need to improve their working conditions. He also suggested the constitution of an All India Medical Service as envisaged in the Civil Services Act of 1951, terming it as “quite amazing” that no action has been taken on this till date.
•To achieve better healthcare parameters, public-private partnerships must be considered “in a holistic way” instead of the current situation where the government only turns to the private sector in times of emergency, Mr. Singh said.
•“For that, a working relationship is needed and this relationship can be built only if, first and foremost, the trust deficit that exists [between industry and government] now is bridged. Private sector investment in health has an exceedingly important role to play,” he said.
•“The government must do what it is expected to… it is duty-bound to address the issue of health deficiency at the level of municipal corporations and village panchayats. The primary health centres must be the central focus of public outlay, I think the private sector participation can be at other levels of speciality and at levels where they are better placed due to their innovative skills,” he said.
📰 Army completes building extreme weather habitat for troops in eastern Ladakh
•As India and China continue deliberations on a proposed disengagement and de-escalation plan to end the stand-off in eastern Ladakh, the Army has completed building extreme weather habitat for thousands of additional troops to remain deployed through the harsh winter.
•“In order to ensure the operational efficiency of the troops deployed in winters, the Army has completed the establishment of habitat facilities for all the troops deployed in the sector. Apart from the smart camps with integrated facilities, which have been built over the years, additional state of the art habitat with integrated arrangements for electricity, water, heating facilities, health and hygiene have been recently created,” an Army source said on Wednesday.
•The troops in the front line were accommodated in heated tents as per tactical considerations of their deployment, the source said. The construction was completed by mid-October. Adequate civil infrastructure had also been identified to cater for any emergent requirements, the source added.
•The altitude in Ladakh where troops are deployed ranges from 14,000-18,000 feet and the area experiences up to 40 feet of snowfall from December onwards. Coupled with the wind chill factor, the temperatures dip down to minus 30-40 degrees, disrupting road access to the areas for sometime. The Army has deployed thousands of additional troops and equipment in eastern Ladakh and along the Line of Actual Control (LAC) since the stand-off began in early May.
Extreme weather clothing
•The Army recently procured 15,000 extreme weather clothing from the U.S. under the bilateral logistics pact, Logistics Exchange Memorandum of Understanding (LEMOA), for the additional troops deployed in Ladakh. “The order was placed in early July and the deliveries have been completed. In addition to the requirement, additional reserves have also been catered to and supply orders as required have been placed,” a second source said.
•Last week, Army Chief Gen. Manoj Naravane said “there was no shortage whatsoever of any kind” with respect to extreme weather clothing and equipment for the troops deployed in Ladakh. The equipment normally catered to a certain number of troops at any point of time. They “had to go in for certain emergency procurements” for the additional troops due to the ongoing situation.
•Gen. Naravane said that over the years they have been going in for indigenous suppliers, and out of the extreme weather clothing and equipment, of some 10-12 items, six were done by local suppliers and the contracts for another four were also being done by Indian suppliers. The Army did annual advanced winter stocking to stock up rations and supplies during the summer months to cater for the winter period from November to May. This year, the Army had to significantly ramp up the stocking efforts for the additional troops.
•Last month, Vice Chief of the Army Lt. Gen. SK Saini raised the issue of continuing dependence on imports for specialised clothing and mountaineering equipment, and called for attaining self-reliance and reducing imports. The Army has been maintaining troops in high altitude areas of the Siachen glacier at heights of 20,000 feet for decades.
📰 Explained | Who won the war over Nagorno-Karabakh?
Armenia and Azerbaijan agreed to end military operations in and around Nagorno-Karabakh in a ceasefire brokered by Russia
•The story so far: After six weeks of fierce fighting, Armenia and Azerbaijan agreed to end military operations in and around Nagorno-Karabakh in a ceasefire brokered by Russian President Vladimir Putin. Some 2,000 people, including combatants and civilians, are estimated to have been killed in the war. Armenian leader Nikol Pashinyan has described the decision to accept truce as “painful”, while Azerbaijan’s President Ilham Aliyev, backed by Turkey, has claimed victory. Russia, which has enforced the ceasefire, seems to have reinforced its influence in the South Caucasus.
What led to the war?
•In 1991 when the Soviet Union collapsed, the newly independent Armenia and Azerbaijan went to war over Nagorno-Karabakh, which had been an autonomous region within Azerbaijan during the Soviet years. Armenians have made historical claims over the enclave, which is largely populated by ethnic Armenians. By the time the all-out war came to an end in 1994, Armenia had captured Nagorno-Karabakh and seven surrounding districts from Azeri forces, which amounted to some 13% of Azerbaijan’s territory.
•In September, Azerbaijan President Aliyev launched the offensive vowing to take back Nagorno-Karabakh and other Armenian-occupied districts. In six weeks of fighting, Azeri forces, backed by Turkey-supplied armed drones and other equipment, cut through Armenian defences and retook territories, including some 40% of Nagorno-Karabakh itself.
How the ceasefire was achieved?
•Russia, which has a security agreement with Armenia, remained neutral in the early days of the war when Turkey threw its weight behind Azerbaijan. Russia brokered a ceasefire two weeks into the conflict, but it didn’t hold. When Azerbaijan defeated Armenian troops and captured territories, Armenian Prime Minister sought Russian help. But Mr. Putin said the security guarantee is for Armenia, not for the Armenians in Nagorno-Karabakh. But Russia was apparently concerned about the rapid change in the status quo and the more assertive security role Turkey was playing in its backyard.
•By the third week of October, Russia established small military outposts along the Armenian border, apparently to prevent the conflict spilling into mainland Armenia and also to send a message to Baku. In the same week, Russia conducted a massive air strike in Syria’s Idlib against Turkish-backed militants, killing dozens of them, which is seen as Moscow’s warning against Turkey. Mr. Putin accepted Azerbaijan’s victory (as the ceasefire allows Azeri troops to control the territories they have seized) but prevented a total defeat of Armenia. Under pressure from a decisive Moscow, both sides agreed to cease the operations.
What are the terms of the ceasefire?
•According to the ceasefire, Armenia agreed to withdraw its troops from much of the territories around Nagorno-Karabakh. The core of the enclave with ethnic Armenians and Stepanakert as its capital would remain outside the control of Azerbaijan. Baku will build a road linking the newly captured territories to Nakhchivan, an autonomous republic of Azerbaijan which had been geographically separated from the mainland. As the broker of the truce, Russia would send some 2,000 peacekeepers to the region, who would patrol between the Azeri troops and Nagorno-Karabakh, including the Lachin corridor, which connects the enclave with Armenia.
•In sum, Azerbaijan gained territories, but not the whole of Nagorno-Karabakh. Armenia lost territories it controlled since the 1990s but avoided a total defeat as much of Nagorno-Karabakh would remain independent of Azeri control. And Russia gained a bigger foothold in the region with its troops being deployed within Azerbaijan.
Did Russia get what it wanted?
•It’s complicated. That Russia could enforce the ceasefire and keep Turkey and western countries out of the final talks shows that Moscow remains a dominant power in the South Caucasus. Moscow had also wanted to send peacekeepers to the region (the Lavrov Plan), but both Armenia and Azerbaijan were not open to the idea earlier. Now, Russia can do that . But the war also showed that the Russian dominance in the region could be challenged. Turkey backed Azerbaijan throughout the war against Moscow’s wishes and made sure that the Azeri side prevailed. On Wednesday, Turkish Parliament approved sending troops to the region to join an observation post despite the ceasefire mandating only Russians to deploy peacekeepers. If Turkey continues to play an assertive role in the region through its ally Azerbaijan, a reluctant Moscow would face a new rival in its backyard.
Is the conflict over?
•It’s not. The war has altered the balance of power in favour of Azerbaijan. It stopped short of taking the entire Nagorno-Karabakh for now, but it doesn’t mean that it won’t go for it again. The status of Nagorno-Karabakh remains unsettled, which means the conflict has only been postponed, not resolved.
📰 Coronavirus | ICMR warns against indiscriminate use of convalescent plasma therapy
Issues specific criteria for potential donors and recipients
•The Indian Council of Medical Research (ICMR) has warned against indiscriminate use of convalescent plasma therapy (CPT) for treating COVID-19. On Wednesday, it released report of an open-label phase II multicentre randomised controlled trial (PLACID trial) conducted across 39 public and private hospitals on the use of CPT in management of cases with moderate infection.
•The report concluded that the therapy “did not lead to a reduction in progression to severe COVID or all-cause mortality in the group that received CPT as compared to the group that did not receive CPT.’’
•Benefits of CPT in improving the clinical outcomes, reducing severity of disease, duration of hospitalisation and mortality in patients were dependent on the concentration of specific antibodies in convalescent plasma that could neutralise the effects of SARS-CoV-2, the ICMR said.
•It stated that CPT could be used with specific criteria, including that a potential donor, be men or women who had never been pregnant, could give plasma after 14 days of symptom resolution (testing negative is not necessary). A potential recipient should be in the early stage of COVID-19 (3-7 days from the onset of symptoms, but not later than 10 days) and should have no IgG antibody against COVID-19 by appropriate test.
•PLACID is the world’s largest pragmatic trial on CPT conducted in 464 moderately ill-confirmed affected adults in a real-world setting, wherein no benefit of use of CPT could be established, the ICMR said.
•A release issued by the Council noted that similar studies conducted in China and Netherlands have also documented no significant benefit of CPT in improving the clinical outcomes of hospitalised patients.
•CPT involves the use of plasma from people who have recovered from the infection to aid the immune response of those still fighting it.
Three-fourth of recoveries from 10 States
•Meanwhile, according to data released by the Health Ministry, on Wednesday, India reported 44,739 recoveries in the last 24 hours against 38,617 newly detected cases. 74.98% of the new recovered cases are contributed by 10 States/UTs, with Kerala, Maharashtra and Delhi reporting maximum recoveries, noted the release.
•“Delhi reported 6,396 cases in the last 24 hours, Kerala 5,792 while West Bengal reported 3,654 new cases. 78.9% of the 474 case fatalities that have been reported in the past 24 hours are from ten States/UTs with Delhi (99), Maharashtra (68) and West Bengal (52) reporting the maximum,’’ said the release.
📰 Reinventing cities: On urban planning and disease spread
A new urban development paradigm should focus on cutting disease spread
•Prime Minister Narendra Modi’s call for a reimagining of urban planning and development to make cities and towns healthy and liveable after COVID-19 reflects the reality of decrepit infrastructure aiding the virus’s spread. At the Bloomberg New Economy Forum, he emphasised resetting the mindset, processes and practices for safe urban living, and acknowledged that governments actually do little for the working millions. In the first hundred days of the pandemic, the top 10 cities affected worldwide accounted for 15% of the total cases, and data for populous Indian cities later showed large spikes that radiated into smaller towns. Rapid transmission in Mumbai, Delhi, Bengaluru and Chennai was the inevitable outcome of densification and an inability to practise distancing norms. In globally recognised Dharavi, which has one of the world’s highest slum densities, epidemiologists attribute a seemingly low viral impact to screening and herd immunity. The pandemic’s full social impact, especially among the poorer quintiles, has not been adequately measured here or elsewhere, and as the Prime Minister said, it is only clear that the cities “are not as they were before”. If governments are serious about the reset moment — he likened it to a post-World War reconstruction plan — they must resist returning to business-as-usual.
•Good, affordable housing is the cornerstone of a sustainable and healthy city, but it also represents India’s weakest link. Unlike speculative housing investments, well-designed rental housing that is key to protecting migrant labour and other less affluent sections remains poorly funded. Mumbai is estimated to have added only 5% of rental housing in new residential construction (1961-2000), and that too led by private funding. The post-COVID-19 era, therefore, presents an opportunity to make schemes such as the Centre’s Affordable Rental Housing Complexes deliver at scale, focusing on new good houses built by the state — on the lines of the post-war reconstruction in Europe, Japan and South Korea. The Ministry of Housing, which has thus far focused on a limited set of expensive showpiece smart cities, could work on this imperative with the States, digitally aggregating and transparently publishing data on demand and supply for each city. It is also an open secret that laws on air pollution, municipal solid waste management and water quality are hardly enforced, and tokenism marks the approach to urban mobility. Past scourges such as cholera, the plague and the global flu pandemic a century ago led to change — as sewerage, waste handling, social housing and health care that reduced disease. Governments are now challenged by the pandemic to show the political will to reinvent cities.
📰 Amid a judicial slide, a flicker of hope on rights
It is reassuring that there is a signal from the Supreme Court about thinking and speaking about personal liberty
•There can be no better way for a judge of the Supreme Court of India to mark his birthday by celebrating the glorious constitutional duty that has been entrusted to him and his peers as officers of the highest court in the land. Last week, Justice D.Y. Chandrachud did precisely this, when he remarked, “[W]e are a constitutional court... If we as a constitutional court do not lay down law and protect personal liberty, then who will?” It was a salve for those who have doubted the Court’s ability to protect basic human freedoms in the country.
An expeditious hearing
•But even as the Court seems to have shown some self-awareness after an arguably long time, the circumstances in which this statement was made diminished its value considerably. The statement was made during the hearing that concluded in granting interim bail to TV anchor Arnab Goswami in a matter that was listed a mere one day after the petition was filed.
•The application before the Supreme Court was in appeal against the decision of the Bombay High Court to refuse to entertain Mr. Goswami’s habeas corpus petition, citing procedure that no bail can be granted in a petition under Article 226 of the Constitution and requiring him to apply to a lower court for appropriate relief. The Bombay High Court, in issuing that order, merely followed the law. In response, in a unique turn of events, Mr. Goswami sought relief — simultaneously — from both the trial court (a sessions court) and the Supreme Court. This is arguably the first time that an accused has moved both the lowest and highest courts together.
•The larger concern here is the decision of the Supreme Court to offer, barefacedly, Mr. Goswami special treatment of an order that ordinary citizens of this country cannot even dream of. Indeed, the entire process, starting with the original application at the Sessions Court in Alibaug, to the High Court in Mumbai, to the top court, was concluded in a total of only seven days. The extraordinary speed at which the judicial system seems to have worked to entertain Mr. Goswami’s plea is one thing to note. But observers are also surprised that the Supreme Court listed the matter for the very next day after receiving the petition, despite having placed the case under the Defect List after identifying a host of defects (at least nine) in his petition. If similar leeway was given to every citizen, the judicial system would be viewed with less suspicion and more benevolence.
•In these circumstances, it comes as no surprise that an individual like Kunal Kamra, a comedian, makes certain remarks, albeit crude, on the series of unfortunate events; arguably, this is the view of a large section of the general public. This case has now become a textbook example of what power and influence can do for you in this country. Mr. Goswami, whom I regard as an exemplar non-journalist in the Indian media today, covered his bases by being the ‘loudest voice in the room’, and his arrest had many in the corridors of the Secretariat buildings scurrying to suddenly, and uncharacteristically, defend “free speech”.
The executive’s actions
•For the past few years, particularly since the Bharatiya Janata Party-led government took power at the Centre, the performance of the judiciary has deteriorated to disappointing lows. It no longer stands on the pedestal of chief protector of freedoms: the government has done so much damage to personal liberty, but the courts, and especially the Supreme Court, have watched this indiscriminate and often, literally, violent trampling of dissent like mute spectators.
•This is hammered home in incident after incident, and case after case: in the haphazard arrests of students and teachers made after the Delhi riots; in the treatment of dissenters against the patently unconstitutional Citizenship (Amendment) Act; in the persecution of veteran public intellectuals and social justice leaders in the wake of the Bhima-Koregaon violence; in the blatant disregard of the case of the political detenues in Kashmir... The list is disappointingly long and getting longer still.
•Most recently, the 83-year-old Jesuit priest and tribal rights leader, Father Stan Swamy, who is suffering from Parkinson’s disease, and has been arrested in connection with Bhima-Koregaon, requested to be given a straw and a sipper in jail. Instead of granting him immediate relief, which would have been the most appropriate humanitarian response, the National Investigation Agency (NIA) court gave the prosecution two weeks’ time to reply. Elsewhere, the Supreme Court had earlier refused to entertain the petition of a journalist from Kerala, Siddique Kappan, who has been detained without any basis in Uttar Pradesh for over a month now, directing him to lower courts instead. The Court has now agreed to take up the matter later this week only after the journalist’s family approached the Court again, seeking similar treatment as Mr. Goswami, asking if they were not citizens of this country.
Bail applications
•That the Supreme Court’s lightning response to Mr. Goswami’s plea is an exception to the rule is highlighted by the general position the Court appears to have taken in bail matters. In its April 2019 decision, in National Investigation Agency vs Zahoor Ahmad Shah Watali on the interpretation of the Unlawful Activities (Prevention) Act (UAPA), the Court essentially created a new doctrine that an accused must remain in custody throughout the period of a trial, even if evidence against the person is eventually proven inadmissible (and the accused is acquitted). The Supreme Court said that in considering bail applications under the UAPA, courts must presume every allegation made in the first information report to be correct, and the burden rests on the accused to disprove the allegations. This is virtually impossible in most cases. The litigious impact of this is tragic: bail hearings under the UAPA are now a mere farce; and high barriers of proof mean that individuals can be detained indefinitely.
•But wait, it gets worse. The Supreme Court’s interpretation was on the UAPA alone, and not on general criminal procedure. But it has left a glaring loophole for rampant abuse by the government, police and prosecution alike. It has now become commonplace for dissenters to be charged (usually without any valid proof) with sedition or criminal conspiracy and under the UAPA. It no longer matters that evidence is weak. Once the UAPA is included in the first information report, lower courts have their hands tied. Bail must be refused outright, without examining the evidence, for this is what the Supreme Court has directed.
•This pattern of arrest, first information report, prosecution and outcome have been followed in many cases involving dissent since the Supreme Court decision came about. The effect is dangerously reminiscent of the draconian preventive detention laws dating back to the dark days of the Emergency, where courts universally deprived people access to judicial remedy.
A relegation
•Whatever Justice Chandrachud might eloquently and passionately espouse in court, the bitter truth is that personal liberty has been relegated to the background in Indian jurisprudence today. A recent study by The Indian Express of 10 cases involving free speech that were heard by the Supreme Court earlier this year revealed that the Court gave relief only when the state and the petitioner were in agreement, and refused to do so when the state expressed objections.
•This article would not have been written if Justice Chandrachud’s observations were the norm, i.e., wherever personal liberty is involved, the matter is taken up the next day and resolved at the earliest. But his observations come as a ray of hope: it is reassuring that there is at least someone in the Supreme Court thinking and speaking about personal liberty. As custodians of the Constitution, this is the bare minimum that a Supreme Court judge should be doing. Could it be that the sentinel on the qui vive is slowly coming to life again?
📰 The need for ‘maximum government’
The current crisis has provided us with an opportunity to rethink our health, economic and climate policies
•In the new set of relief measures announced by the Finance Minister, job creation has moved to the forefront. This shows that the government has finally accepted that the unemployment rates are very high, a fact it has so far been suppressing or dismissing. This is a welcome change given its usual ostrich-like behaviour when it comes to hard economic facts. But recognising a problem is only the first step towards solving it. What hasn’t changed, to our dismay, is the government’s core belief in ‘minimum government’, which ties its hands when it comes to fiscal measures even in such harsh economic conditions, created to a great extent by its own lack of governance during the COVID-induced lockdown. As a result of that lockdown, Indians got both a COVID-19-induced health crisis and, in an attempt to control it, a severe economic crisis.
The ball is in the people’s court
•If you look at these relief measures, announced in three tranches — Atmanirbhar 1.0, 2.0 and 3.0 — what the government seems to be saying to the people and businesses is: ‘if you do this, we will award you with this and this’. The ball is being put in the court of those who are suffering instead of the government taking the responsibility of steering the economy out of this turmoil. Take Atmanirbhar 1.0, for example. Out of the ₹20.9 lakh crore package, ₹17.9 lakh crore worth of measures were below-the-line ones, such as credit guarantees and liquidity easing. Things are not very different in the other two tranches as well. These measures are made on the assumption that they will induce the business sector to start the virtuous cycle of investment and induce households to increase consumption despite evidence to the contrary.
•Corporate investment is limited by sales and/or credit. While drying up of either sales or credit can bring about a decline in investment, a revival in investment requires a revival of both. This is a very important lesson for a policymaker. The fact that sales are low means factories are running below capacity. If the existing equipment is not being fully utilised, why would businesses add further to capacity just because the cost of loans has declined or the access to credit has been eased? While this is, in general, true for both big businesses as well as MSMEs, for the latter, sales/profits are even more binding as a constraint because the pockets of MSMEs do not run as deep as those of the big fish. So, however detailed the credit package may be for MSMEs, in times of deep economic crises, they will not deliver as they will be wary of taking more loans.
•As for the households, if there is a cloud of doubt over future incomes (or dwindling current income), they would not be inclined to take more consumer or housing loans just because credit is easily available at lower rates of interest. If I am not sure of a regular salary in the immediate (or even distant) future, which affects my capacity to pay EMIs on these loans, however low they may be, I won’t take the risk of taking a loan.
•Moreover, even if there were takers for these loans, if the banks are burdened with bad loans as a result of past decisions, they may be wary of releasing credit. In order to increase their margins to cover for these losses, the banks, since early 2019, data from the Reserve Bank of India confirm, have chosen not to pass on the fall in the policy rate to the consumers in which case the very premise of a fall in the cost of loans is violated.
•The data suggest something more. On the one hand, banks are functioning well below their capacity in terms of extending credit. On the other, despite a fall in investment, there is consistent growth in the corporate sector’s current assets, a proxy for their liquidity position, which means the sector is not short on liquidity.
•Such credit lines, guarantees or the low cost of loans, therefore, hardly have an effect on reviving demand in the economy. These actors can at best play a supporting role, not the lead one. What does this mean for the magnitude of the stimulus? Neither do these numbers show up in the government’s books (which is by design) nor in the business or household balance sheets. It means these figures just stay on paper. They are something for the government to brag about. Unfortunately, this seems to be the preoccupation of this government instead of really engaging with the economy and trying to find real solutions.
The demands
•If none of this is working, what can? A lot has been written about this, so I will just summarise the demands here. The foremost demand, from which others follow, is that FRBM should be kept in abeyance, both for the Centre and the States, and the government should inject a fiscal stimulus of at least ₹10 lakh crore and borrow to finance it or, if required, monetise the deficit. This stimulus could comprise, among other things, free ration and other essentials like oil, soap and cooking gas for a period of six months; cash transfer till employment opportunities are back; and an urban employment guarantee law. Given that this pandemic has exposed the precarious health sector, we can spend our way out of this crisis by building a robust public health infrastructure on the principle of public provisioning instead of walking down the insurance route which has spectacularly failed in the U.S. This has also opened an opportunity to think about climate change. There cannot be a better time than this for a green deal, which addresses both the demand and supply side of emissions as well as acts as the much-needed fiscal stimulus which has long-term implications. A comprehensive green deal can be planned, partly financed by the government and partly by carbon tax, which not only changes the energy mix of the economy but also makes the poor and the marginalised a part of a sustainable development process.
•This crisis has provided us with an opportunity to rethink our health, economic and climate policies. We can choose to act on these or walk down the beaten path. Whatever we choose, it will be good to remember that the future generations will never forgive us for losing an opportunity to fundamentally change course.
📰 The storage tale of two vaccines
Moderna’s vaccine offers great promise, especially for developing countries, compared to Pfizer’s vaccine
•A week after Pfizer announced encouraging results of its mRNA vaccine for COVID-19 based on an interim analysis of a large Phase-3 trial that is underway, data from the Phase-3 trial of the vaccine of the U.S.-based Moderna revealed very encouraging results. The interim results of Moderna’s mRNA vaccine show that it has 94.5% efficacy in preventing COVID-19. The interim analysis, which was based on 95 cases, found that 90 participants in the placebo group had symptoms of COVID-19, while only five participants in the vaccinated group had developed symptoms. Importantly, Moderna revealed that the vaccine might be able to prevent severe disease.
A striking difference
•More than the marginally better efficacy of the Moderna vaccine compared with the Pfizer vaccine, the striking difference lies in better thermostability at relatively higher temperatures. The stability of the Moderna vaccine at -20¬¬ degrees C for up to six months, 2 degrees C-8 degrees C for 30 days, and at room temperature for up to 12 hours will be critical for the broad roll-out of the vaccine in most countries, particularly in developing countries.
•In contrast, Pfizer’s mRNA vaccine requires storage at -70 degrees C to -80 degrees C, which makes vaccine shipping and storage logistics a nightmare even in developed countries. If making available storage facilities at such low temperatures for hundreds of million doses of the vaccine is a challenge even in the U.S. and other developed countries, it will be impossible for countries in the Global South to establish such facilities at scales in a short time. Against this background, Moderna’s vaccine offers great promise.
•While Pfizer will surely be examining the possibility of reformulating the vaccine to make it stable at higher temperatures without compromising the effectiveness of the vaccine, the ready availability of such a vaccine from Moderna increases the probability of wider access in most countries when millions of doses are manufactured. On November 12, Germany-based CureVac too reported that its mRNA vaccine is “stable” for up to three months at 5 degrees C and up to 24 hours at room temperature.
•Most districts in India that are under the universal immunisation programme already have facilities to store huge volumes of the oral polio vaccine at -20 degrees C. Hence, Moderna’s mRNA vaccine can be made available in most parts of the country as it remains stable for 30 days at 2 degrees C-8 degrees C. However, no vaccine manufacturer in India has tied up with Moderna to make the vaccine in India, and as on October 31, “discussions about the terms of India’s potential participation” in GAVI’s COVAX Advance Market Commitment for COVID-19 vaccines were only getting “underway”.
A novel technology platform
•The Pune-based Gennova Biopharmaceuticals Limited, a subsidiary of Emcure Pharmaceuticals Limited, is also developing a mRNA vaccine. It has completed animal trials and may soon begin human clinical trials. According to the CEO, Dr. Sanjay Singh, the vaccine has been found to be stable for more than 45 days at 2 degrees C-8 degrees C.
•Apparently, Gennova was very clear from the beginning that a mRNA vaccine that requires extremely cold storage facilities will not be feasible for India and hence worked on a novel technology platform that will allow the vaccines to remain stable at higher temperatures.
•Improving the thermostability of mRNA vaccines boils down to the nature of the lipid nanoparticle that binds the mRNA and the clean mRNA preparation in cGMP (current Good Manufacturing Practice) conditions. The charge interaction between the lipid nanoparticle and the mRNA renders stability to Gennova’s vaccine at higher temperature — 2 degrees C-8 degrees C, says Dr. Singh.
•Margaret Liu, a vaccine researcher who chairs the board of the International Society for Vaccines, explains lipid nanoparticle encapsulation as “putting chocolate inside a candy coating so the chocolate doesn’t melt”. Despite the encapsulation with lipid nanoparticles, mRNA, which is very fragile, might fall apart, thus necessitating storage at low temperatures.
