📰 Indradhanush 3.0 to fill gap in immunisation due to COVID
More than 29,000 children, 5,000 women covered on first day
•The States and Union Territories (UTs) have rolled out the Intensified Mission Indradhanush (IMI) 3.0 scheme to cover children and pregnant women who missed routine immunisation during the COVID-19 pandemic, the Health Ministry said in a release issued on Tuesday. More than 29,000 children and 5,000 pregnant women were covered on the first day, it added.
•“Various States and UTs have started implementation of the Intensified Mission Indradhanush 3.0, a campaign aimed to reach those children and pregnant women who have been missed out or been left out of the Routine Immunisation Programme. This is aimed to accelerate the full immunisation of children and pregnant women through a mission mode intervention. The first phase has been rolled out from February 22 for 15 days,” it said.
•The campaign is scheduled to have two rounds of immunisation lasting 15 days (excluding routine immunisation and holidays). It is being conducted in 250 pre-identified districts/urban areas across 29 States/UTs.
Remote areas
•Beneficiaries from migration areas and remote areas would be targeted as they may have missed their vaccine doses during the pandemic. As per the guidelines released for IMI 3.0, the districts have been classified to reflect 313 low risk, 152 medium risk and 250 high risk districts.
•The Ministry said adherence to COVID-appropriate behaviour (CAB) during immunisation activities has been strongly emphasised.
•The States have been asked to follow a “staggered approach” to avoid crowding at the session sites and even plan break-up sessions if a staggered approach is not effective.
•The sessions have also been planned in such a way that not more than 10 beneficiaries are present at the session site at one given point in time.
The increased tax burden due to excise duties cannot help growth
•There used to be a time — and this was well before India began to globalise — when each Union Budget announced sales tax increases on tobacco products, especially cigarettes. The demand for cigarettes being somewhat inelastic, the rise in tax was expected to be a shot in the arm for the revenue-starved government of our poor country.
Increase in excise duty
•India is less poor now, having risen to the rank of an emerging market economy. Yet, COVID-19 has ushered in a cataclysm. As opposed to a Budget estimate of 3.5% for fiscal deficit, the revised estimates show a 2.7 times larger deficit of 9.5% for FY 2020-21. Moreover, a comparison of the government’s revised Budget estimates with the original Budget estimates reveals a fall in receipts from every source of taxation except excise. The revised Budget shows a rise of Rs. 94,000 crore on account of excise duties alone. Presumably, the increase comes from the much-debated excise duty increases on petroleum and diesel. As far as the Budget documents go, the excise duty rise will hardly compensate for the huge falls in other tax revenues. It is not surprising, therefore, that despite the excise rise, the fiscal deficit continues to be higher than the Budget estimate. In fact, the larger excise duty collection is not large enough to have significantly reduced the inflated fiscal deficit figure.
•Given the nature of the products on which the excise duty has gone up, prices of commodities will rise in general, directly or indirectly. This is because all these commodities fall either in the category of final goods, which individuals purchase for personal consumption, or in the category of intermediate goods, which are used to produce a variety of essential services such as public transport, agricultural water supply, hotels and restaurants
•With annual output shrinking by an estimated 7.7%, it is straightforward to conclude that unemployment has risen significantly. The accompanying price rise will be the unemployed persons’ worst nightmare. The result will be severe inequality.
New philosophy
•As far as shrinkage in output is concerned, it is the unavoidable lockdown that needs to be blamed rather than the government’s mismanagement of the economy. The associated inequalities though cannot be delinked from policy and, as political opponents will argue, COVID-19-linked income inequities ought to have been addressed through higher taxation of the rich. Even though such criticism does not lack wisdom, it appears that the philosophy underlying the government’s economic policy framework has changed, a change that has not received adequate attention. In what follows, we shall address the issue from a pure economist’s point of view.
•In this context, it is well worth our while to pursue Volume 1 of the Economic Survey 2020-21. Chapter 2 of the document considers the basics of fiscal policy with reference to Olivier Blanchard’s 2019 presidential address to the American Economic Association. Professor Blanchard’s view may appear to run counter to our own Fiscal Responsibility and Budget Management (FRBM) Act, according to which the fiscal deficit must be capped under 3.5% or so. The idea underlying the prescription was that a fiscal deficit automatically transformed to government debt. Such debts along with their servicing liabilities have a tendency to magnify over the years, thereby imprisoning governments in debt traps, where present borrowings keep increasing to repay past borrowings and service charges. This leaves little room for growth enhancing expenditure and reduces a government’s credit worthiness in the eyes of lenders.
•Professor Blanchard, and following him the Economic Survey, propose a different viewpoint altogether. Debt-financed fiscal spending, according to them, could well be a driver of growth. It can improve the standard of living of the entire population, without necessarily removing inequality. The inequality, however, could well be benignant, for even though the rich will grow richer, the poor will escape out of poverty.
•A government’s fiscal expenditure, Professor Blanchard points out, has stronger multiplier effects during recessions than during booms. In an economic boom, state expenditure may crowd out private expenditure on account of a rise in the interest rate. During recessions, private expenditure is low in any case, on account of a rise in precautionary savings and the grim state of long-term expectations. The government, however, is not affected by such psychological constraints. Its fiscal expenditure produces positive growth and this in turn can generate a feel good factor for the private sector over time, raise animal spirits, and improve the state of the economy.
Blanchard’s argument
•What, however, constitutes the government’s spendable resource? The obvious answer is debt, or the fiscal deficit itself. What will prevent the government from sinking into a debt trap? Professor Blanchard shows that the debt-to-GDP ratio can be prevented from exploding if the rate of growth of GDP happens to be higher than the sovereign rate of interest. This is the case in developed economies. In such economies, debt financed government expenditure will create a positive primary surplus (defined as the total government receipts minus expenditure net of interest payments) out of which interest payments can be made to keep the debt-GDP ratio under control. There will, of course, be a maximum value that this ratio can attain, a value that is higher the larger is the excess of the growth rate over the interest rate.
•According to the Economic Survey, India’s average interest rate and growth rate over the last 25 years (leaving out FY 2020-21) have been 8.8% and 12.8% respectively. Hence, Professor Blanchard’s condition is satisfied, so that debt financing of recession ought not to raise FRBM issues involving fear of future taxation to address past debts. To some at least, the argument may sound like an excuse for not resorting to higher taxation of the rich to remove economic inequality.
•The philosophy of the Economic Survey, on the other hand, appears to be that expenditure causes growth, rather than distributional equality. With improved growth, standards of living will rise across the population, bringing affluence of a sort to the economically deprived even as it makes the rich grow richer.
•This, of course, is not to support excise duty increases, for it goes against the very principle of the Blanchard argument, which emphasises maintainable debt and expenditure as the vehicle of development as opposed to increased tax burdens. Therefore, there appears to be a contradiction between the government’s announced fiscal policy stance and the fiscal regime it is actually running. But then, Professor Blanchard’s argument requires the growth rate to exceed the rate of interest, which was not the case in FY 2020-21.
📰 Being petroleum-independent
It is time for India to adopt stringent fuel efficiency standards and a zero-emissions vehicle programme
•Speaking on the increase in petrol and diesel prices, Prime Minister Narendra Modi recently said the middle class would not have been burdened if the previous governments had focused on reducing India’s energy import dependence. He also emphasised the need for clean sources of energy. Expanding and diversifying energy supply is good, but if India is to reduce its energy import dependence, it must look towards first managing the demand for petroleum products. It is worthwhile to reflect on measures taken by the previous governments as well as the government under Mr. Modi in this context.
Steps in the right direction
•The UPA-2 administration under Prime Minister Manmohan Singh formulated fuel efficiency standards for passenger vehicles that are now in effect. It also constituted the National Electric Mobility Mission Plan (NEMMP). While well-intended, both these actions fell short in terms of ambition. India’s 2022 fuel efficiency standards for passenger cars are nearly 20% less stringent than the European Union’s standards. The NEMMP primarily focused on hybrid electric vehicles, and most of the incentives under the NEMMP went towards subsidising mild hybrids instead of electric vehicles. No wonder global manufacturers are rushing to deploy electric passenger cars in Europe while largely ignoring the Indian market.
•The government under Mr. Modi has undertaken several initiatives to increase energy security. Heavy-duty vehicles, which consume nearly 60% of the diesel used in the country, are now subject to fuel efficiency standards. The share of bioethanol in petrol has risen to nearly 8% by volume under the 2018 National Policy on Biofuels. The government has encouraged multiple fuel pathways in the transport sector including natural gas. Importantly, it has recognised the urgency for us to transition to electric vehicles. The Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme now focuses largely on electric vehicles. The government has also provided several additional fiscal and non-fiscal incentives to encourage a transition to electric vehicles.
•While these are steps in the right direction, there are many things that the government can and should do to reduce dependence on petroleum. First, the government should formulate a zero-emissions vehicle (ZEV) programme that would require vehicle manufacturers to produce a certain number of electric vehicles. Such programmes are in effect in China, certain States in the U.S., British Columbia in Canada, and South Korea. At present, the electric mobility initiative in India is driven largely by new entrants in the two- and three-wheeler space. Market leaders have adopted a wait-and-watch attitude. A ZEV programme would require all manufacturers to start producing electric vehicles across all market segments.
•The government should also strengthen fuel efficiency requirements for new passenger cars and commercial vehicles. Two-wheelers, which consume nearly two-third of the petrol used in India, are not subject to any fuel efficiency standards. A recent analysis by the International Council on Clean Transportation (ICCT) suggests that a standard requiring 50% reduction in fuel consumption by new two-wheelers by 2030 will not only lead to internal combustion engine (ICE) efficiency improvements, but also ensure that nearly 60% of all new two-wheelers sold in India are electric driven. Similar opportunities exist on the passenger vehicle and heavy-duty commercial vehicle fronts. Adopting stringent fuel efficiency standards and a ZEV programme by 2024 can result in India’s petroleum demand peaking by 2030, in spite of tremendous projected growth in economic and vehicular activity. Consumers will save money at the pump due to more fuel-efficient ICE vehicles. Those who switch to electric vehicles will save even more as these consume less energy and electricity is cheaper compared to petrol and diesel.
Complementary policies
•The FAME scheme focuses on two- and three-wheelers, taxis, and buses. It should be extended not only to all passenger cars and commercial vehicles but also to agricultural tractors. Extending fiscal incentives to all kinds of vehicles and stepping up investments in charging infrastructure are essential complementary policies. By next year, the GST rates for all passenger vehicles could be made proportional to their fuel efficiency level, instead of the present system that relies on vehicle length and engine size.
•As the economy recovers from the pandemic, the demand for petroleum products will rise, as will prices. But the government can save money for the consumer while enhancing long-term energy security by wielding the regulatory tools at its disposal.
📰 A proper transfer policy needed
It is time for India to adopt stringent fuel efficiency standards and a zero-emissions vehicle programme
•Speaking on the increase in petrol and diesel prices, Prime Minister Narendra Modi recently said the middle class would not have been burdened if the previous governments had focused on reducing India’s energy import dependence. He also emphasised the need for clean sources of energy. Expanding and diversifying energy supply is good, but if India is to reduce its energy import dependence, it must look towards first managing the demand for petroleum products. It is worthwhile to reflect on measures taken by the previous governments as well as the government under Mr. Modi in this context.
Steps in the right direction
•The UPA-2 administration under Prime Minister Manmohan Singh formulated fuel efficiency standards for passenger vehicles that are now in effect. It also constituted the National Electric Mobility Mission Plan (NEMMP). While well-intended, both these actions fell short in terms of ambition. India’s 2022 fuel efficiency standards for passenger cars are nearly 20% less stringent than the European Union’s standards. The NEMMP primarily focused on hybrid electric vehicles, and most of the incentives under the NEMMP went towards subsidising mild hybrids instead of electric vehicles. No wonder global manufacturers are rushing to deploy electric passenger cars in Europe while largely ignoring the Indian market.
•The government under Mr. Modi has undertaken several initiatives to increase energy security. Heavy-duty vehicles, which consume nearly 60% of the diesel used in the country, are now subject to fuel efficiency standards. The share of bioethanol in petrol has risen to nearly 8% by volume under the 2018 National Policy on Biofuels. The government has encouraged multiple fuel pathways in the transport sector including natural gas. Importantly, it has recognised the urgency for us to transition to electric vehicles. The Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme now focuses largely on electric vehicles. The government has also provided several additional fiscal and non-fiscal incentives to encourage a transition to electric vehicles.
•While these are steps in the right direction, there are many things that the government can and should do to reduce dependence on petroleum. First, the government should formulate a zero-emissions vehicle (ZEV) programme that would require vehicle manufacturers to produce a certain number of electric vehicles. Such programmes are in effect in China, certain States in the U.S., British Columbia in Canada, and South Korea. At present, the electric mobility initiative in India is driven largely by new entrants in the two- and three-wheeler space. Market leaders have adopted a wait-and-watch attitude. A ZEV programme would require all manufacturers to start producing electric vehicles across all market segments.
•The government should also strengthen fuel efficiency requirements for new passenger cars and commercial vehicles. Two-wheelers, which consume nearly two-third of the petrol used in India, are not subject to any fuel efficiency standards. A recent analysis by the International Council on Clean Transportation (ICCT) suggests that a standard requiring 50% reduction in fuel consumption by new two-wheelers by 2030 will not only lead to internal combustion engine (ICE) efficiency improvements, but also ensure that nearly 60% of all new two-wheelers sold in India are electric driven. Similar opportunities exist on the passenger vehicle and heavy-duty commercial vehicle fronts. Adopting stringent fuel efficiency standards and a ZEV programme by 2024 can result in India’s petroleum demand peaking by 2030, in spite of tremendous projected growth in economic and vehicular activity. Consumers will save money at the pump due to more fuel-efficient ICE vehicles. Those who switch to electric vehicles will save even more as these consume less energy and electricity is cheaper compared to petrol and diesel.
Complementary policies
•The FAME scheme focuses on two- and three-wheelers, taxis, and buses. It should be extended not only to all passenger cars and commercial vehicles but also to agricultural tractors. Extending fiscal incentives to all kinds of vehicles and stepping up investments in charging infrastructure are essential complementary policies. By next year, the GST rates for all passenger vehicles could be made proportional to their fuel efficiency level, instead of the present system that relies on vehicle length and engine size.
•As the economy recovers from the pandemic, the demand for petroleum products will rise, as will prices. But the government can save money for the consumer while enhancing long-term energy security by wielding the regulatory tools at its disposal.
📰 Human rights are everyone’s business
India must realise that a democracy cannot be reduced to only demanding praise from the rest of the world
•The ongoing protests by farmers against the three hastily promulgated agriculture laws have drawn international attention, with the denial of democratic rights to them by the government’s construction of military-grade barriers and shutting down of the Internet at protest sites getting strong statements of support from numerous international celebrities. The official response of the Ministry of External Affairs was disproportionate to the provocation, but it was not merely the reaction of a thin-skinned government. The argument put forth by the government pushed a more fundamental premise: it warned the concerned global voices that these matters — democracy and human rights, left unstated — were India’s ‘internal affair’.
•The recent arrest of the 22-year-old environmental activist, Disha Ravi, for amplifying the farmer protests internationally, unmasked the government’s designs to criminalise those who speak for human rights. This attitude was also visible in the Home Ministry’s directions to social media companies to block accounts of those expressing a point of view contrary to that of the government. A democracy which does not ensure and secure universal rights for all is a democracy only in name.
•Being respected, not having their dignity violated and having a sense of security is what everyone, anywhere should get, whether it is Syrians on an Italian shore, the Rohingya in Myanmar, Hindus in Pakistan or stateless refugees on a border in Mexico. No government has immunity because it violates human rights in its jurisdiction. Prime Minister Narendra Modi could not have been more misplaced as he was, when he spoke of ‘Foreign Destructive Ideology’ in Parliament to refer to global concerns for rights of protesting farmers. The belief that what India or what any other nation does to its people is an ‘internal matter’, is as misdirected a defence as the one a wife-beating husband deploys with his neighbours — that it is not their business.
Nation and the idea of rights
•India played a signature role in drawing the world together to oppose the apartheid government of South Africa, and it took till 1962 to override the sovereignty shield used by the government to continue oppressing the Black population. India stayed firm from the 1950s till a resolution was adopted and a United Nations Special Committee Against Apartheid was set up by the United Nations. India’s work, in consistently creating awareness and resistance against the demonisation of Nelson Mandela via the Rivonia trial in 1963, checked the Apartheid regime from awarding him the death sentence.
•The principle document signed in the last century, the Universal Declaration of Human Rights laid down the terms for the post-war world, it enshrined the rights and the freedoms of all people, living everywhere. It was not something that was forced down India’s throat by its colonial rulers. India was a member of the first Human Rights Commission, which was to draft the ‘international bill of rights’. The Universal Declaration of Human Rights was drafted from January 1947 till December 10, 1948, when it was eventually adopted by the General Assembly.
•Along with the Charter of the United Nations that was signed earlier in San Francisco in 1945, Indian freedom fighters did their best to influence it and make its brief wider and more effective. Mahatma Gandhi issued a press statement in April 1945 which was directed at participants of the San Francisco conference and he extensively quoted from the All India Congress Committee resolution of August 8, 1942: “While the AICC must primarily be concerned with the independence and defence of India in this hour of danger, the Committee is of opinion that the future peace, security and ordered progress of the world demand a world federation of free nations, and on no other basis can the problems of the modern world be solved.” A line is particularly evocative – “...Thus the demand for Indian independence is in no way selfish. Its nationalism spells internationalism.”
•At the time of the conference, Vijaya Lakshmi Pandit who went on to become the first woman President of the UN General Assembly, was on a year-long lecture tour of the U.S., and she had a deep impact on African-Americans battling entrenched racism at the time. Pandit powerfully advocated Mahatma Gandhi and Nehru’s ideas and emphasised their universality and the indivisible nature of rights that all human beings must enjoy.
•She sent a note to the conference, urging them to be bolder than they were to be eventually. Scholars agree that Pandit’s alliances with Eleanor Roosevelt, Black activists and others forged at the time, subsequently helped push for a more comprehensive adoption of the Universal Declaration of Human Rights in 1948. The work of Indians like Hansa Mehta, Minoo Masani and Lakshmi Menon conveyed the message as being the same as that of the freedom movement — of freedom from oppression for all human beings (https://bit.ly/3qLAGiA).
Rights are indivisible
•The makers of the Indian Constitution did not invoke paranoia about respecting Indian tradition, customs or hiding perverse practices. Dr. Sarvepalli Radhakrishnan famously said while commending the Objectives Resolution, or the basic road map of the Constitution, to the Assembly, that the endeavour was “a fundamental alteration in the structure of Indian society,… to abolish every vestige of despotism, every heirloom of inorganic tradition.”
•The triad of ‘Liberty, Equality and Fraternity’ engraved in the Preamble, drew significantly from the slogan which had proved influential following the French Revolution. It flowed from the realisation, in Dr. B.R. Ambedkar’s words, that given the vice-like grip of the “graded inequality” of the caste system, all three elements, together, were absolutely essential if Indians were to realise their full potential. To quote B.R. Ambedkar who on the eve of the adoption of the Preamble explained how Liberty, Equality and Fraternity were connected and locked into each other firmly: “Without equality, liberty would produce the supremacy of the few over the many. Equality without liberty would kill individual initiative. Without fraternity, liberty would produce the supremacy of the few over the many. Without fraternity, liberty and equality could not become a natural course of things. It would require a constable to enforce them.”
New Delhi’s recent moves
•To cite Atmanirbhar as a counter to international concerns about freedoms, equality and the right to dissent amounts to hiding behind the flimsy excuse of sovereignty to escape the bitter truth of the slithering slope of democratic rights India appears to be going down. The case the Indian government is making is all the more specious as its own immediate concern expressed, officially by its External Affairs Minister when visiting Sri Lanka, on the Sri Lankan government needing to do more to safeguard Tamil lives belies this principle. The starkest case where India made human rights of citizens of other countries its business was in 2019 when the Citizenship (Amendment) Act, offered a home for certain persecuted citizens of three foreign countries.
•When it comes to universal human rights and international attention, the premier example is of the liberation of Bangladesh which India led and shepherded by invoking these principles. That India chose to and continues to host the Dalai Lama, who attracts visible support from high-profile global celebrities, is a testament to New Delhi’s commitment to human rights. That the public concern from international celebrities is tantamount to foreign ‘intervention’ carries no weight, as this is not about the Central Intelligence Agency or Vladimir Putin’s Russia meddling in Indian electoral processes. In fact, the Bharatiya Janata Party has been cavalier about amending the Foreign Contribution (Regulation) Act, or FCRA, rules permitting itself, a political party, to whitewash foreign funds with retrospective effect, in 2016.
The issue is a reality problem
•The Prime Minister and his government have actively courted foreign approval. Two dozen foreign envoys were taken on a guided tour of Kashmir last week because getting a favourable opinion from foreigners matters to the government. At the height of tensions and the shutdown there, before Indian Members of Parliament were allowed, a delegation of far-right European Parliament members was bussed around deserted streets. The Prime Minister has personally appeared with celebrities in foreign lands during his numerous trips, seeking their approval. The craving for approval is natural for any publicity-seeking politician, but a democracy cannot be reduced to only demanding praise from the rest of the world and raising the bogey of ‘internal matters’ when international voices express solidarity with dissenters and raise serious concerns.
•Global concerns about democratic rights in India cannot be dealt with by arresting messengers, bullying ‘amplifiers’ or shutting down social media accounts. India does not have an image problem; it has a reality problem. Changing the reality and adhering to best democratic practices inside is the only durable solution if the Modi government wants its image ‘fixed’.
