📰 Kushinagar airport now hub of Buddhist tourist circuit
Facility will provide connectivity to key Buddhist pilgrimage sites
•Prime Minister Narendra Modi on Wednesday inaugurated the Kushinagar International Airport in Uttar Pradesh, which will help connect key Buddhist pilgrimage sites.
•Kushinagar is an important Buddhist pilgrim destination, and is believed to be the final resting place of Gautam Buddha. It is also at the centre of a Buddhist tourist circuit, which includes Lumbini (Nepal), Sarnath and Bodhgaya.
•Other Buddhist destinations nearby include Nalanda, Sravasti and Kapilavastu.
•An inaugural flight of Sri Lankan Airlines landed at the airport earlier in the day, bringing a large contingent of Buddhist monks and Sri Lankan Ministers, including Sports Minister Namal Rajapaksa, nephew of President Gotabaya Rajapaksa and son of Prime Minister Mahinda Rajapaksa. They met Mr. Modi at an event at the Mahaparinirvana Temple here.
Diplomats attend
•Diplomats from 12 countries where Buddhism is practised, including Mongolia, Myanmar, Vietnam, Cambodia, Thailand, Bhutan, Republic of Korea, Nepal and Japan, were also present.
•“There is a special focus on the development of places associated with Lord Buddha through better connectivity, and creation of facilities for devotees. Lumbini, the birth place of Lord Buddha, is not far from here. Sarnath, where Lord Buddha gave the first sermon, is also within a radius of 100-250 km. Bodh Gaya, where Buddha attained enlightenment, is also a few hours away. With the launch of this airport, I, as a representative of Poorvanchal, have also fulfilled one of my commitments to this region,” Mr. Modi said.
•With the Uttar Pradesh Assembly election slated for early next year, several Union Ministers had also flown in from Delhi.
•Apart from Civil Aviation Minister Jyotiraditya Scindia, Minister of State for External Affairs Meenakshi Lekhi, Tourism Minister G. Kishan Reddy, Law Minister Kiren Rijiju and Minister of State for Parliamentary Affairs Arjun Ram Meghwal were present.
•In his first comments on Air India since privatisation, Mr. Modi said, “the decision on Air India will give new energy to the aviation sector in the country.”
•Chief Minister Yogi Adityanath said, “This will be Uttar Pradesh’s ninth airport, seven of which have been developed in the past seven years alone. The State will get 11 more airports in the years to come, including two international ones.”
•However, the airport is yet to see any scheduled commercial flights, which will be launched by SpiceJet next month when it will operate four weekly flights from November 26 from Delhi. From December 18, SpiceJet will also connect the airport to Mumbai and Kolkata.
•Though the airport is yet to be connected with international destinations, Secretary of the Ministry of Civil Aviation, Rajiv Bansal, told The Hindu that Thailand sends the largest number of tourists to this region, and he expected charter flights from there.
•On the sidelines of the Kushinagar airport inauguration, Mr. Namal Rajapaksa presented to Mr. Modi a Sinhala-Tamil-English translation of the Bhagavad Gita.
•The Sri Lankan delegation also brought relics from the ‘Rajaguru Sri Subhuthi Maha Vihara’, a famed Buddhist shrine located 40 km south of Colombo.
Exposition of relics
•Indian officials would organise an exposition of the relics in several cities, including Kushinagar and Sarnath, a statement from the Indian High Commission in Colombo said.
•On Wednesday, Mr. Namal Rajapaksa met Foreign Secretary Harsh Vardhan Shringla and had a “cordial and productive conversation,” the Indian mission said in a tweet.
Has domestic production stagnated? Why is supply insufficient? How are power companies placed?
•The story so far: India could be on the verge of a power crisis as the stock of coal held by the country’s thermal power plants has hit critically low levels. Many power plants are operating with zero reserve stock or with stocks that could last just a few days. Some States have witnessed partial load-shedding aimed at saving power. Finance Minister Nirmala Sitharaman, however, is reported to have termed worries about a possible shortage of coal and power supplies “absolutely baseless” and is said to have asserted during the course of a trip to the U.S. that India is now a power-surplus country.
How bad is the problem?
•According to data released by the Central Electricity Authority, as of Wednesday, India’s 135 thermal power plants overall had on average coal stock that would last just four days. In all, 112 of the 135 power plants are operating with stocks that are at critical or super-critical levels. The government usually mandates the power plants to hold stocks that would last at least two weeks. It has, however, reduced this requirement to 10 days now to avoid hoarding and ensure more equitable distribution of coal among the plants. India relies on coal to meet over 70% of its power needs, and Coal India Limited (CIL) supplies over 80% of the total coal. The current coal crisis comes amid a broader energy crisis across the world with the prices of natural gas, coal and oil rising sharply in the international market.
What has caused it?
•The current crisis in the availability of coal has been the result of lacklustre domestic production and a sharp drop in imports over the last few years. According to BP Global Energy Statistics, domestic coal production in India has stagnated since 2018. It peaked at 12.80 exajoules (EJ) worth of coal in 2018. At the same time, the amount of coal imported from other countries to meet domestic demand, too, has dropped significantly. Coal imports have dropped from the peak of 6.46 EJ in 2016 to 4.22 EJ in 2020. Stagnating supply did not cause trouble last year with the economy shut down to tackle the COVID-19 pandemic. But the rise in power demand this year has exposed the government’s inability to push domestic production or compensate for insufficient domestic production by increasing imports. In fact, the government last year said it would stop all coal imports by FY24.
•Many factors have been blamed for the insufficient supply of coal this year. These include short-term issues like flooding in coal-mining areas, transport issues, labour disruptions in major coal-mining countries and the sudden rise in power demand as the economy revives from the pandemic. But it should be noted that deeper structural problems have plagued the power industry in general for long. Populist politics has ensured that the price that many consumers pay for power is not commensurate with the production costs. In FY19, for instance, the revenues of distribution companies covered only about 70% of their total costs. This has discouraged private investment in power generation and distribution even as the demand for power continues to rise each year. It has also increased the debt burden on public sector distribution companies as they have not been compensated for the losses they incur while selling power at subsidised rates. According to the credit rating agency ICRA, the consolidated debt of public sector distribution companies is expected to hit ₹ 6 trillion in FY22.
•It should also be noted that the mining of raw materials such as coal is nearly monopolised by public sector companies like CIL that are not run primarily for profits. In fact, CIL has kept the price of its coal low even as international prices have risen significantly this year. It has also been forced to share some of the pain of power generation and distribution companies.
•According to the government, indebted power generators and distributors owe over ₹21,000 crore to CIL. So, overall, there is very little financial incentive that major producers across the supply chain, including miners, possess to ramp up production.
What lies ahead?
•In recent years, many countries have been trying to cut down on their fossil fuel consumption in order to meet emission targets. But with the current energy crunch, which is prevalent not just in India, fossil fuels are likely to make a strong comeback. India and China, the top two consumers of coal in the world, are expected to further increase production of fossil fuels. The Indian government has been pushing CIL to ramp up production to meet the rising demand and cut down on the country’s reliance on imported coal. However, it is expected to ease restrictions on imported coal in the near future to tide over the crisis. The government last week mandated the thermal power plants to blend imported coal with domestic coal up to a limit of 10%. Meanwhile, China, which consumes half of the world’s coal output and has committed itself to reducing its carbon emissions by 65% by 2030, is set to install more coal-powered power plants to meet its rising energy needs. Structural problems that have plagued the Indian power industry, however, are unlikely to be resolved anytime soon. Allowing the price that consumers pay for power to be determined by market forces is likely to remain politically unpopular, so fundamental pricing reform is unlikely. But with coal selling at high prices in the international market and CIL unable to meet production targets, many power generators may be unable to increase their output unless they are allowed to price their output freely.
📰 Plugging the leak: On the GM rice controversy
India must assuage importers that its produce is compliant with trade demands on GM foods
•Since June, the export of about 500 tonnes of rice from India has triggered an uproar in several European countries on the grounds that it was genetically modified (GM) rice. This emerged during a check by the European Commission’s Rapid Alert System for Food and Feed that was testing rice flour by the French company Westhove. In June, France had issued a notification for unauthorised GM rice flour, identifying India as the point of origin, and alerting Austria, Belgium, the Czech Republic, Germany, Italy, the Netherlands, Poland, Spain, the U.K. and the U.S. as the possible destination of products made with the flour. So in August, the American food products company Mars, fearing GM contamination, announced that it was recalling four of its product lines of ‘Crispy M&M’. GM-free rice that is tagged as ‘organic rice’ is among India’s high-value exports worth ₹63,000 crore annually. India does not permit the commercial cultivation of GM rice, but research groups are testing varieties of such rice in trial plots. So the suspicion is that rice from some of these test-plots may have “leaked” into the exported product. The Indian government has denied this possibility with a Commerce Ministry spokesperson alleging that the contamination may have happened in Europe “to cut costs”. However, India has indicated that it will commission an investigation involving its scientific bodies.
•India’s history of crop modification using GM is one of test-plants finding their way to commercial cultivars before they were formally cleared. Thus, Bt-cotton was widely prevalent in farmer fields before being cleared. Though they have not been cleared, Bt-brinjal and herbicide-tolerant cotton varieties too have been detected in farmer fields. Though the Genetic Engineering Appraisal Committee is the apex regulator of GM crops, it is mandated that trials of GM crops obtain permission from States. Because of the close connections between farmers and State agriculture universities, which are continuously testing new varieties of crops employing all kinds of scientific experiments ranging from introducing transgenes to other non-transgenic modification methods, and the challenges of ensuring that trial plots are strictly segregated from farms, there is a possibility that seeds may transfer within plots. Because many Indian farmers are dependent on European imports, the Centre must rush to assuage importers that India’s produce is compliant with trade demands. The fractious history of GM crops in India means that passions often rule over reason on questions of the safety of GM crops, and so India must also move to ensure that research into all approaches — GM or non GM — should not become a casualty in this matter of export-quality compliance.
📰 For change: On same-sex relations and society
Changes in law on same-sex relations must be along with an attitudinal change in society
•A recent advisory from the National Medical Commission (NMC) emphasising the need to avoid derogatory references to the LGBTQIA+ community in medical textbooks or teaching methods has underscored the value of institutional awareness on issues concerning queer and trans people. The advisory came after the Madras High Court voiced concern over “unscientific and derogatory information” in some textbooks. The NMC cautioned medical universities, colleges and other institutions to avoid such references while teaching subjects relating to gender. The institutions were also asked not to approve books with such references, while textbook authors were instructed to amend what has been written on issues such as virginity and homosexuality. The circular represents the fruition of efforts by Justice N. Anand Venkatesh, who framed guidelines in an order in June, to protect the community’s rights. He had expanded the scope of a writ petition filed by a lesbian couple for protection against harassment into one that went into the status of those who did not conform to gender identity assigned at birth or to hetero-normative sexual orientation. The court’s attention was then drawn to psychiatry, forensic medicine and toxicology textbooks. Justice Venkatesh had suggested that the NMC and the Indian Psychiatric Society bring in necessary changes in the curriculum.
•The judge had directed the police not to harass sexual minorities, but later noted with consternation that such harassment was not only continuing, but sometimes extended to NGOs and other allies of the LGBTQIA+ community. He mooted changes to the police conduct rules to provide for punishing erring police personnel in this regard. He also noted disparaging references in the media. He found that a psychiatrist had referred a gay man for cognitive behavioural therapy, while prescribing anti-depressants and drugs meant to treat erectile dysfunction under the wrong impression that sexual orientation required some sort of therapy. In the course of the hearing, the judge had subjected himself to counselling so that he could overcome his own mindset, limitations in understanding and lack of exposure to issues of gender non-conformity and to go beyond the binary understanding of sex and sexuality. Judicial intervention generally has a salutary effect on the behaviour of the state, its institutions and structures. However, barring specific directions, the spirit of judicial orders, especially with regard to social issues, rarely percolates to every limb of the administration. The queer and gender non-conforming people have found an ally in the court, but they would need greater effort on the part of the authorities at various levels, if their rights are to be protected. In any case, any change in law in terms of recognising same-sex relations or understanding self-identification of gender must be complemented by an attitudinal change in society at large.
📰 The global tax revolution
New regime may bring in ‘Golden Era’ of direct taxes
•International tax jurisprudence received a shot in the arm when 130 countries agreed to introduce a new global tax regime for taxing multinational corporations (MNCs) operating the globe over. For over a century now, the corporate tax system was based on the application of the twin principles of the source rule and the residence rule. All that a MNC had to do to avoid high tax in a country where they did business was to get registered in a tax haven. Globalisation allowed MNCs to replace fears of double taxation with the joys of double non-taxation by exploiting mismatches between the tax laws of various countries and by cutting taxable profits. A digitalised world made their task easier.
•Tax havens came in handy for the MNCs. It became easier with the rise of intangible assets, which could easily be shifted from one country to another. But shifting of profits to low tax havens deprived poor countries of revenue by as much as 5% as compared to an alternative system where profits are taxed based on the current location of companies, revenues, their employees and their wage codes. Small countries wanted investments on a grand scale. That could be achieved with low direct taxes. Countries like Belgium, Britain, India and Indonesia brought in Digital Services Taxes on the local sales of foreign firms with online platforms. The U.S. objected and threatened retaliatory tariffs.
•Hence, realisation dawned on all the countries that the time had come for a radical change in the tax system. U.S. Treasury Secretary Janet Yellen announced that it was time to end the “race to the bottom” on corporate tax. Egged on by the Organisation for Economic Co-operation and Development (OECD), 130 countries achieved a historic agreement in June on a more stable and fairer international tax architecture. As per the agreement, MNCs would no longer pay taxes in the country where they register their headquarters for tax purposes, but would pay in the country where they generate their sales. A minimum global tax of 15% on profits would be introduced in all countries.
•Google, Alphabet, Amazon, Facebook, Apple, and various other Chinese corporations and German companies like Volkswagen, Daimler and Siemens would henceforth pay more taxes in countries where their markets flourished.
•How did this happen? The Global Financial Crisis of 2008 forced all countries to change the international tax rules to prevent base erosion and profit shifting. Anti-abuse provisions, new transfer pricing documentation provisions, countering harmful tax practices more effectively taking into account transparency and economic substance and the introduction of an effective dispute resolution mechanism were the objectives that were agreed upon.
•The OECD estimates that the proposal to levy 15% minimum tax on global corporations that do business in each country would fetch additional $150 billion per year and move taxing rights of over $100 billion in profits to different countries. Taxing rights would be reallocated so that a slice of the profits could be levied according to the location of a company’s sales. A minimum rate of 15% would be levied on such a slice of profits. As per the agreement, countries where MNCs operate would get the right to tax at least 20% of the profits exceeding a 10% margin.
•India, China, Russia, Germany and other countries have signed the agreement, which has to be implemented from 2023. But there are hurdles to cross. India would have to reconsider the equalisation levy. Revenue from the equalisation levy should be compared with the 15% global minimum tax. The Ministry of Finance said significant issues, including the share of profit allocation and the scope of subject-to-tax rules, would have to be addressed and a consensus agreement had been reached on October 8. The draft rules would reset the system for international taxation and subject MNCs to new nexus and profit allocation rules.
•Simultaneous implementation of the law by all the signatories to the agreement would be a stupendous job. If achieved, it may herald the dawn of the ‘Golden Era’ of direct taxes. Revamping India’s Direct Tax Code to sail with the concept of global minimum tax requires effort, which is easier said than done.
📰 The carbon markets conundrum at COP26
Success in Glasgow hinges to a great extent on the conclusion of one of the most technical and highly contentious issues
•If climate negotiations are compared to a game of diplomatic chess, Article 6 of the Paris Agreement would be the king to be checkmated and captured for concluding the Paris Agreement Work Programme (PAWP) at the 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC). Article 6 of the Paris Agreement introduces provisions for using international carbon markets to facilitate fulfilment of Nationally Determined Contributions (NDCs) by countries. The success of COP26 at Glasgow hinges, to a great extent, on the conclusion of carbon markets discussions. Despite several rounds of high-level meetings, it remains one of the most technical and highly contentious unresolved issues of the PAWP.
A sensitive issue
•Developing countries, particularly India, China and Brazil, gained significantly from the carbon market under the Clean Development Mechanism (CDM) of the Kyoto Protocol. India registered 1,703 projects under the CDM which is the second highest in the world. Total carbon credits known as Certified Emission Reductions (CERs) issued for these projects are around 255 million which corresponds to an overall anticipated inflow of approximately U.S.$2.55 billion in the country at a conservative price of U.S.$10 per CER. Therefore, logically, India has a lot to gain from a thriving carbon market. However, with the ratification of the Paris Agreement, the rules of the game have changed.
•Unlike the Kyoto Protocol, now even developing countries are required to have mitigation targets. Developing countries are faced with a dilemma of either selling their carbon credits in return for lucrative foreign investment flows or use these credits to achieve their own mitigation targets. This has made Article 6 a highly sensitive issue that requires careful balancing of interests and expectations.
What should be debated
•For developing countries, the new market mechanism is much more than a tool for achieving mitigation targets under the NDCs. Much like its predecessor, it should help promote sustainable development and assist climate change adaptation in the developing countries. It should encourage private sector participation and attract foreign investments to support low carbon development. While over 50% of the countries have communicated their intention of using market mechanisms to achieve NDC targets, India is not one of them as it aims to rely on domestic mitigation efforts to meet its NDC goals. It is the developed countries that would rely more on market mechanisms for achieving their climate targets as they would be comparatively low-cost options.
•The three critical issues that would be hotly debated in Article 6 negotiating rooms are CDM Transition, Accounting rules and Share of Proceeds to the Adaptation Fund. Let us examine them one by one.
•CDM transition: The CDM projects have gone through due diligence and credits have been issued under UNFCCC oversight. Therefore, the Article 6 mechanism should honour the previous decisions and allow for a smooth transition of these projects and credits to ensure not only the viability of these projects but also inspire trust among the private investors in the UNFCCC decision-making process.
•However, some countries have cast doubts on the environmental integrity of these credits and while there is greater acceptance for transition of projects/activities, the same is not the case for transition of credits. If the decision regarding transition of CDM is not favourable, it could lead to a loss of billions of dollars worth of potential revenue to India alone. A possible landing zone can be that the new supervisory body to be formed under the Paris Agreement can re-examine the validity and rigour of such credits.
•Accounting rules: Article 6.4 mechanism is meant to incentivise the private sector and public entities to undertake mitigation activities for sustainable development. Under this mechanism, a country can purchase emission reductions from public and private entities of the host country and use it to meet its NDC targets. However, this does not automatically imply that emission reductions transferred from a host country be adjusted against its NDC targets. It must be appreciated that these reductions represent additional efforts of the private sector or public entities to mitigate greenhouse gas emissions, and in fact raise global climate ambition. This is also in line with the provision of Article 6.5 of the Paris Agreement wherein the host country is not required to undertake corresponding adjustment for the projects outside its NDC.
The path ahead
•Being a developing country, India does not need to undertake economy-wide emission reduction targets at this stage of its development. This means, not all mitigation actions fall within the purview of its NDC. Therefore, it can significantly gain from the market mechanism under Article 6.4 by selling emission reductions that lie outside its NDC. The counter view of developed countries, that this will deter raising ambition levels, is flawed as such efforts will in fact be additional to what have been committed in the NDC. Robust accounting will ensure that there will be no double-counting of emission reductions.
•Share of Proceeds (SOP) to the Adaptation Fund: For developing countries, adaptation is a necessity. However, it remains severely underfunded compared to financing for mitigation activities. While developing countries emphasise that the SOP must be uniformly applied to Articles 6.2 and 6.4 to fund adaptation, developed countries want to restrict its application to Article 6.4. This would disincentivise the Article 6.4 mechanism and limit voluntary cooperation to the cooperative approaches under Article 6.2 favoured by developed countries.
•In a way, carbon markets allow developed countries to keep emitting greenhouse gases while developing countries benefit from the revenue generated from the sale of their carbon credits. Central to the discussions on Article 6 is equitable sharing of carbon and developmental space. Climate justice demands that developing countries get access to their fair share of global carbon space. As developing countries are nudged to take greater mitigation responsibilities, a facilitative carbon market mechanism that respects the principles enshrined in UNFCCC would greatly help accelerate their transition to low carbon development and would be a win-win solution for all countries.
📰 The outlines of a national security policy
Once cybertechnology becomes a key variable in the defence policies of a nation, land size or GDP size are irrelevant
•National security concepts have, in the two decades of the 21st century, undergone fundamental changes. These fundamental changes reveal that a large country, in terms of size of geography, population and GDP, will not deter any country. Cyber warfare has vastly reduced the deterrent value of these sizes since cyber weaponry will be available even to small island countries, and the capacity to cause devastation to a large nation by cyber warfare is within the reach of even small and poorer nations.
An equaliser
•Innovations in weapons moved from stones in the pre-historic era, to bows and arrows, and later to cannons and guns in the 19th century. These were followed by aeroplanes, nuclear bombs, and intercontinental missiles in the 20th century. In the 21st century, the world is moving to cyber weapons-based warfare which will also immobilise current tangible advanced weapon systems in a war.
•Therefore, in the 21st century, after cybertechnology enters as an important variable in nations’ defence policies, the size of a country will cease to matter. Sri Lanka, or North Korea, empowered by cybertechnology, will be equal to the United States, Russia, India or China, in their capability to cause unacceptable damage. Weapons in the 21st century will merely mean a cyber button on the desk of the nation’s military and the leader of the government. Geographical land size or GDP size will be irrelevant in war-making capacity or deterrence.
More innovations
•These fundamental changes are entirely due to the earlier 20th century innovations in cybertechnology and software developments. Drones, robots, satellites and advanced computers as weapons are already in use. More innovations are around the corner. Some examples of further innovations are artificial intelligence and nanotechnology.
•Warfare, therefore, will be no more just mobilisation of weapons or be dependent on the size of the armed forces of men. It will be cyber warfare. From remote controlled drones to artificial intelligence driven weapons systems, etc., will matter in the 21st century.
•Hence, national security in the 21st century covers not merely the overt and covert operations but, more crucially, electronic operations from a remote centre beyond the front lines of ground forces or air power to track enemy assets by these newly weaponised cyber instruments of technology. Tracking those cyber warfare centres of the adversary will need a new national security policy.
•By credible accounts, China, recently, publicly cautioned Indians to sit up and take notice by using cybertechnology to shut down Mumbai’s electric supply in populated areas of the city, for a few hours. This was to overawe Indians as we were clueless for hours as to what went wrong till reports emerged about a possible cyberattack . Thus, each nation will have to prepare more for bilateral conflicts in the 21st century that are based on cyber warfare rather than in multilateral acts of conventional war or rely on military blocs for mobilisation.
The four dimensions to this
•National security at its root in the 21st century will depend on mind-boggling skills in four dimensions:
•Objectives: the objective of the National Security Policy in the 21st century is to define what assets are required to be defended, the identity of opponents who seek to overawe the people of a target nation, by unfamiliar moves to cause disorientation of people. Although the novel coronavirus is perhaps accidental, it has completely destabilised peoples globally and their governments in all nations of the world over, and also derailed the global economy because nations were most unprepared for such a pandemic, even conceptually. So far, nearly two years of the pandemic have left several millions [or more] dead with most economies having been driven to the edge of disaster. Normal life has been disrupted. Never before has there been such a virus attack of this dimension. This is a preview of the kinds of threats that await us in the coming decades which a national security policy will have to address by choosing a nation’s priorities.
•Priorities: In such scenarios of uncertainties about the future in the 21st century, national security priorities will require new departments for supporting several frontiers of innovation and technologies such as hydrogen fuel cells, desalination of seawater, thorium for nuclear technology, anti-computer viruses, and new immunity-creating medicines. This focus on a new priority will require compulsory science and mathematics education, especially in applications for analytical subjects. Every citizen will have to be alerted to new remote controlled military technology and be ready for it.
•Strategy: The strategy required for this new national security policy will be to anticipate our enemies in many dimensions and by demonstrative but limited pre-emptive strikes by developing a strategy of deterrence of the enemy.
•For India, it will be the China cyber capability factor which is the new threat for which it has to devise a new strategy.
•The agenda for the new strategy will be critical and emerging technologies, connectivity and infrastructure, cyber security and maritime security. But, alas, India by trying to befriend nations on both sides of the divide ended up with no serious ally internationally. The position of India is much like that of the bat species in the Panchatantra.
Methods to use
•Resource mobilisation: The macroeconomics of resource mobilisation depends on whether a nation has ‘demand’ as an economic deficit or not. That means, for example, if demand for a commodity or service is in deficit or insufficient to clear the market of the available supply of the same, then liberal printing of currency and placing it in the hands of consumers is recommended for the economy to recover the demand supply parity. This then is one way of facilitating resource mobilisation in a demand supply balanced market. A way to increase demand is by lowering the interest rate on bank loans or raising the rates in fixed deposits which will enable banks to obtain liquidity and lend liberally for enhancing investment for production.
•If it is ‘supply’ that is short or in deficit compared to demand, then special measures are required to incentivise to encourage an increase in supply. The bottomline is that except for endowments of nature, a true economist adept in macroeconomics and inter-sectoral impact, will not despair for a lack of resources. Macroeconomics has many ways to generate resources without taxation. Printing of notes of currency is one way when there is a demand shortage.
