📰 India’s ‘space economy’ valued at ₹36,794 crore
‘India’s space economy has evolved considerably and now accounts for about 0.23% of the GDP’
•A collaboration between two premier research and educational institutions in Thiruvananthapuram has shed interesting light on India’s “space economy”, the exact contours of which have remained largely vague even as the country’s space programme grew by leaps and bounds.
•In a first-of-its kind attempt at measuring the size of India's space economy, researchers from the Centre for Development Studies (CDS) and the Indian Institute of Space Science and Technology (IIST) arrived at a figure of ₹36,794 crore (approximately $5 billion) for the 2020-21 fiscal. The estimated size of India's space economy, as a percentage of the GDP, has slipped from 0.26% in 2011-12 to 0.19% in 2020-21, they found.
•The findings, outlined in a paper 'The Space Economy of India: Its Size and Structure' by CDS director Sunil Mani; V. K. Dadhwal, till recently Director of IIST; and Shaijumon C. S., Associate Professor of Economics, IIST, were the subject of a webinar on Saturday.
•By employing internationally-accepted frameworks, the authors have examined the annual budget for the space programme and its constituents; space manufacturing, operations and application. According to the paper, space applications accounted for the major chunk of this evolving economy, constituting 73.57% (₹ 27061 crore) of it in 2020-21, followed by space operations (₹ 8218.82 crore or 22.31%) and manufacturing (₹ 1515.59 crore or 4.12%).
•The budget outlay for space has considerable influence on the dynamics of the space economy, according to the study. ''India's space economy has evolved considerably and now accounts, on an average, for about 0.23% of the GDP (over 2011-12 to 2020-21). We have also noticed a decline in the budget for space-related activities, leading to a reduction in the size of the economy in the last two years,'' prof. Mani said. The budget outlay in 2020-21 was ₹9,500 crore, shrinking from ₹13,033.2 crore in the previous fiscal. The estimated size of the space economy shrunk from ₹43,397 crore in 2018-19 to ₹39,802 crore in 2019-20 and ₹36,794 crore in 2020-21.
•The study also found that the space budget as a percentage of the GDP slipped from 0.09% in 2000-01 to 0.05% in 2011-12, and has remained more or less at that level since then. In relation to GDP, India's spending is more than that of China, Germany, Italy and Japan, but less than the U.S. and Russia.
•While it has limitations, the study nevertheless is a first-time attempt at scientifically measuring the size of the space economy, Dr. Shaijumon said. Prof. Mani cited the inability to establish the size of the space-based remote sensing industry as a drawback. ''The next step for us would be to look at the impact of space economy on the Indian economy itself. The impact is both direct and indirect,'' Prof. Mani said.
•For the present study, the authors have relied on Indian Space Research Organisation (ISRO) and Parliament documents, the Comptroller and Auditor General’s (CAG) reports, data on intellectual property rights and other government data, in addition to Scopus-indexed space publications.
•The CDS-IIST research project has coincided with the new Central government policies opening up the sector to private players. These policies, according to the authors, are very likely to enlarge the size of the sector through enhanced private investment and improved integration with the global private space industry.
📰 PM Modi pitches for ‘local for global’ in the 87th edition
The Prime Minister praised India for achieving the export target of $400 billion
•After his ‘vocal for local’ pitch Prime Minister Narendra Modi in his 87th edition of ‘Mann ki Baat’ radio broadcast on Sunday made a call for ‘local for global’ while lauding the quantum jump in exports of Indian products.
•Praising India for achieving the export target of $400 billion, PM Modi said that at first instance, it might come across as a matter related to the economy; but more than the economy, it was related to the capability of India, the potential of India.
•“Our export figures stand at 400 billion dollars today and this means that the demand for items made in India is increasing all over the world. The supply chain of India is getting stronger by the day. Today we are exporting millet, mango and famous Nagaland chilli. The nation takes great strides when resolutions are bigger than dreams,’’ said the PM.
•Today new products from all corners of the country were reaching foreign shores be they leather goods from Hailakandi in Assam or handloom products from Osmanabad, fruits and vegetables from Bijapur or black rice from Chandauli, the exports of all of these were increasing, he said. The world famous apricot of Ladakh was gaining popularity in Dubai too and in Saudi Arabia, bananas were shipped from Tamil Nadu, the Prime Minister added.
•He attributed the success of “Make in India” drive to farmers, artisans, weavers, engineers, small entrepreneurs and MSME sector, among others, and pitched for making the local ‘global’ and augment the prestige of Indian products further.
•The Prime Minister also spoke about the need for yoga and cleanliness and urged children to take up water conservation issues on a war footing.
•He urged the entrepreneurs in Aayush-related start-ups to propagate their products in languages for audiences in non-English speaking foreign countries.
•Mr. Modi noted that during the last one year through the government’s GeM portal, the government had purchased items worth more than ₹ 1 lakh-crore.
•Close to 1.25 lakh small entrepreneurs, small shopkeepers from every corner of the country had sold their goods directly to the government, the PM said
•“There was a time when only big companies could sell goods to the government. However, the country is changing now; the old systems are also changing. Now even the smallest of shopkeepers can sell one’s goods to the government on the GeM Portal – this is the New India. She not only dreams big, but also shows the courage to reach that goal, where no one has reached before. On the basis of this very courage, all of us Indians together will definitely fulfill the dream of an Aatmanirbhar Bharat, a self-reliant India,’’ he said while also paying tributes to iconic Dalit social reformer Mahatma Phule of Maharashtra and his wife, Savitri Phule, for their works on girls’s education and against inequality.
•“Taking inspiration from the life of Mahatma Phule, Savitribai Phule, Babasaheb Ambedkar, I request all the parents and guardians to ensure education for their daughters. In order to increase the enrolment of daughters in schools, the Kanya Shiksha Pravesh Utsav has also been started a few days ago… the focus is on bringing back to school those girls who missed their studies for some reason,’’ Mr. Modi said.
•The Prime Minister also called upon every citizen to make his contribution towards saving every drop of water.
📰 Profit over public health
The draft TRIPS waiver dents the credibility of the WTO
•The pandemic has tested the resilience of the global community on various fronts such as whether it can unite to ensure the availability of COVID-19 medical products for everyone. In this regard, India and South Africa, in October 2020, gave a clarion call at the World Trade Organization (WTO) demanding that key provisions of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement be temporarily waived. The developed world, especially the European Union (EU), kept dragging its feet on this while the virus raged on. Now, the EU has conceded. A deal has been brokered between the EU, the U.S., India, and South Africa on the issue of the TRIPS waiver. This deal will now be presented to the entire WTO membership to be accepted at the forthcoming ministerial meeting. However, the waiver is a classic case of too little, too late, and represents a significant climb down from the original proposal of India and South Africa.
Waiver weaknesses
•First, the draft waiver includes only COVID-19 vaccines and not other COVID-19 medical products. This is a major handicap. Medicines also play an equally important role in combating the pandemic. For instance, the World Health Organization (WHO) has recommended baricitinib for treating severe or critical COVID-19. But according to the Médecins Sans Frontières, the generic version of baricitinib is not available in many countries because it is patented. This defeats the purpose of the TRIPS waiver, which was to ensure cheaper and faster availability of drugs such as baricitinib.
•Second, the draft waiver proposes to waive only patents and not other IP rights. India’s original stand was that all IP rights, not just patents, be waived. The accessibility of COVID-19 medical products can be held up due to many IP rights like trade secrets.
•Third, even on the issue of patents, the draft waiver appears to be old wine in a new bottle. For instance, the draft waiver allows countries to limit the exclusive rights conferred on patent holders under Article 28.1 of the TRIPS agreement through the use of Article 31, which permits the issuance of compulsory licenses. But this flexibility is already available under the TRIPS agreement. The only waiver is from Article 31(f) which requires countries to ensure that products produced under a compulsory license are predominantly for the domestic market. The draft waiver allows countries to export any proportion of vaccines to eligible countries. However, this waiver is subject to several notification requirements. Eligible members are obligated to prevent re-exportation of COVID-19 vaccines that they have imported. Furthermore, the eligible countries which issue a compulsory license for COVID-19 vaccines have to notify the WTO about the entity that has been authorised to produce the product, the quantities, duration, and the list of countries to which the vaccines are being exported. All these procedural requirements will increase the transaction costs and may deter countries from using the system. Not just this, the waiver adds a new TRIPS-plus obligation. Article 31(a) of the TRIPS agreement requires that permission for compulsory licenses shall be considered on a product-by-product basis. Concerning Article 31(a), the draft waiver clarifies that a single authorisation may be given to use the subject matter of multiple patents necessary for the production and supply of COVID-19 medicines. However, this entails a new obligation to identify and list all covered patents.
•Fourth, the draft waiver is not universal. Only those developing countries that exported less than 10% of world exports of COVID-19 vaccine doses in 2021 are covered for exportation and importation. There is no mention of least developed countries. Fifth, while the draft waives the obligation of a member to protect undisclosed information submitted before a drug regulator to claim marketing approval in the present context, it is silent on overcoming the challenges posed by protection to other trade secrets covered under Article 39.1 and 39.2 of TRIPS.
History repeats itself
•In the aftermath of the HIV/AIDS crisis in Africa , the WTO adopted a decision in 2003 waiving certain TRIPS obligations to increase the accessibility of medicines in countries that lacked manufacturing capability. However, this waiver was subject to stringent requirements because of which hardly any country made effective use of this waiver. The developed countries serving the interests of their pharmaceutical firms are all set to triumph, once again, over the public health concerns of humanity. This will further dent the WTO’s relevance and credibility. India has surrendered and will end up being on the wrong side of history. It is incumbent on the government to explain why it has accepted a strikingly withered-down version of the TRIPS waiver.
📰 The era of an unemployed India
There are many indices of proof that seriously contradict the tall claims of employment generation in India
•Reports on and the visuals of the recent agitations by railway job applicants reveal a widespread problem of massive job insecurity among India’s youth. Alarming figures of unemployment have been recurrent even before the huge dislocation unleashed by lockdowns imposed in 2020-21 in the wake of the COVID-19 pandemic. Much before the pandemic, the National Sample Survey Office (NSSO) reported a 6.1% unemployment rate in 2017-18, the worst in over four decades. The picture has proved more dismal in the ensuing months since April-May of 2020.
•For instance, in December 2021, the Centre for Monitoring Indian Economy (CMIE) estimated that nearly 53 million Indians were unemployed, a large proportion of whom were women. The unemployment rate was hovering at 7.91% in December 2021, and though there has been some talk of a dip in unemployment in January 2022, the figure still stands at a worrying 6.57%.
Exposing claims
•Percentages and data spun out by governmental agencies and policy think-tanks are open to contestation, but there are other indices of proof that seriously contradict the tall claims of employment generation. One such index is the downward pressure unleashed by the influx of overqualified youth aspiring for middle and lower rung government jobs, which, despite their modest pay, are highly coveted given the greater job security ascribed to them.
•Expectedly then, having advertised over 35,000 posts, the Railway Recruitment Board was swamped with over 1.25 crore applications; a significant proportion of which were postgraduate degree holders. This created massive insecurity among a section of candidates who met the minimum eligibility but were being forced to compete with candidates having higher educational credentials.
•With government jobs being limited, and reducing in number due to the contractualisation and outsourcing of several substantative posts, intense competition persists across various categories of jobs; a point brought to light yet again by the recent Railways’ recruitment controversy. As clarified by the Railway Recruitment Board and Union Railway Minister, for the second stage of testing that stoked protests, the huge number of aspirants for the lowest right up to the highest level of jobs advertised, eventually compelled the authorities to shortlist 20 times the number of candidates for all levels.
Explaining the scramble
•Shockingly, advertisements for even a handful of lower rung government jobs attract an overwhelming number of applications, leading at times to the withdrawal of such advertisements. In September 2021, news reports highlighted that among 18,000 applicants for some 42 posts (peon, gardener and cook) in the Himachal Pradesh secretariat, there were hundreds of doctorate and other postgraduate applicants. Earlier, in March 2021, more than 27,000 candidates with degrees such as BA, BSc, MA, MSc, MCom, MBA, engineering, etc. had applied for 13 positions for a peon’s job in the Panipat district court. Likewise, for 62 posts of messengers in the Uttar Pradesh police, in August 2018, there were a total of 93,000 applicants; 3,700 were PhD holders and 50,000 were graduates. This particular job vacancy required an education level of Class V and the selection criterion comprised a self-declaration that the candidate knew how to ride a bicycle.
•The desperate scramble for government jobs stems in no uncertain terms from the high job insecurity (easy hire and fire), poor basic pay, and long hours of work that characterise the bulk of jobs in the private sector. Historically, only a small number of employer-employee work relations in India — associated mostly with the formal sector — have been subject to state regulation. However, in recent decades, there has been a steady decline of state regulation of labour-capital relations in the formal sector. This deregulation has been coupled with a concerted push toward rapid privatisation of the public sector. Together, these developments have contributed significantly to periodic unemployment among both skilled and less skilled workforces, in addition to reducing avenues of gainful employment for new entrants in the job market.
A spillover effect
•The ramifications of this overall process are multifold. At one level, enhanced deregulation of employer-employee work relations in the formal sector has triggered periodic unemployment of higher skilled workers, who have been spilling over into and crowding lower-skilled, informal sector jobs. Likewise, the spillover effect of periodic unemployment within middle-rung and higher-rung professional jobs in India’s job market has pushed more qualified youth to crowd lower rung government jobs.
•This tendency itself has rendered a deep crisis for those with lower educational qualifications who strive for the more modest government jobs, and for whom such employment has traditionally been envisaged.
•Reduced expenditure by the state on health, education and the social sector as a whole has also ensured inadequate employment generation, despite the fact that the demand for ‘public goods’ has been growing exponentially. For a country with growing educational needs, especially with large numbers seeking to escape inherited poverty through avenues opened up by education, the marked shortage of government schools and public-funded universities is alarming to say the least.
•A closer look at the higher education sector itself reveals a steady increase in the number of student applicants. The scenario naturally calls for many more job recruitments of qualified teachers through the creation of new public-funded Higher Educational Institutions (HEIs) and an expansion of existing ones. However, successive governments continue to restrict and even delay recruitment of teachers to existing public-funded HEIs. For example, in a large public-funded university such as the University of Delhi, a recruitment crisis has intensified over the years with over 4,500 teaching posts being filled by ad hoc teachers and appointments to permanent positions being stalled repeatedly.
Antinomy of eligibility
•This recruitment crisis is also the result of an inexplicable delay in the grant of the second tranche of teaching positions that was to accompany institutional expansion in the wake of implementation of reservations for Other Backward Classes (OBCs). A recipe for a complete disaster continues to unfold in such universities as a large, highly skilled workforce of serving teachers defensively holds on to insecure temporary job contracts as more eligible fresh candidates enter the job market. One of the contentious consequences of such heightened competition has been the enforcement of higher and higher qualifications for entry-level teaching jobs in public-funded HEIs.
•In this way, another index of mounting job insecurity and unemployment is the arbitrary enhancement of educational qualifications stipulated for recruitment into better-paid government jobs, as well as new criteria for admission into professional training institutions. This tendency has not only manifested itself in public-funded HEIs wherein entry-level teaching positions now mandatorily require a PhD degree in addition to a Master’s degree and UGC-NET qualification. It is also evident in the barrage of common entrance tests for highly sought-after educational degrees such as in medicine (National Eligibility cum Entrance Test, or NEET), as well as centralised eligibility tests for recruitment into jobs such as school teaching (Central Teacher Eligibility Test, or CTET). As the number of seats and vacancies fail to be augmented, we see a systematic effort to ruthlessly eliminate a growing number of aspirants using astute tests and arbitrary criteria.
•In the backdrop of a large number of skilled and overqualified people languishing in the throes of unemployment, the shrill rhetoric of ‘Skill India’ rings hollow. We will see more instances of frustration and agitations by the youth in response to rampant unemployment. For the scores of educated aspiring youth, transcending the prevailing logic of the economy is a crucial starting point for envisaging a world free of unemployment. An economy that creates fewer jobs is one which overworks some while rendering large numbers unemployed. A tired India and an unemployed India are simply two sides to the same coin. The youth need to realise that their fulfilment of dignified employment cannot happen in isolation but is linked to how the sea of highly exploited labouring masses around them are also guaranteed their access to the basics — education, health and livelihood. A transformation of circumstances awaits newer sensibilities and a sense of solidarities.
📰 Poverty rose but income inequality fell
There are signs that this pandemic has not followed the usual script — of the poor bearing the brunt of the pain
•COVID-19 has upended Indian society. Over two-thirds of the country has been infected by COVID-19 and perhaps five million or so people have died, directly or indirectly, from the pandemic. The economy too has taken a beating. Even though there has been a V-shaped recovery, output remains about 10% lower than 2019.
•In macroeconomic crises, including the oil shock of 1990-91 or the global liquidity crisis of 2007-08, many expect the poor to bear the brunt of the pain. They are the most vulnerable, without contractual protections and adequate safety nets. But there are signs that this pandemic has not followed that script.
•Poverty certainly rose during the COVID-19 pandemic. We examined monthly data from nearly 2,00,000 households with a total of one million members from the Consumer Pyramids Household Survey through 2021.
•We found that extreme poverty, defined by the World Bank as the percentage of the population with an income below $1.90, rose from 7.6% in November 2019 to 11.7% in July 2021.
Income inequality
•However, income inequality actually fell. In 2019, the average monthly income of households in the top 25% and bottom 25% of the income distribution was approximately ₹45,000 and ₹8,000, respectively, in urban areas, and ₹22,500 and ₹7,500, respectively, in rural areas. While the average monthly income of the top quartile in urban areas fell almost 30%, to ₹32,500 by July 2021, the monthly income of the bottom quartile in July 2021 remained at pre-pandemic levels. In rural areas, the top quartile income fell by perhaps 20%, while the bottom quartile income grew slightly during the same period. The result is that inequality, measured as the percentage change in the income of the top quartile minus the income in the bottom quartile, fell by 15-20 percentage points. This is a robust finding: richer households saw larger drops in income all along the income scale, in rural and urban areas, within each State, and even within caste groups.
•This remarkable finding is not unprecedented. Historians observed the same dynamic during the plague in 14th century Europe. Given how much the world economy has changed since then, however, the explanations for India’s experience will differ.
Three sources of income
•To learn why inequality fell during the pandemic, we examined three sources of household income: government transfers, business profits, and labour income. Government transfers are cash or in-kind payments. Profits may be from any business, be it a food cart, a farm, or a manufacturing plant. Labour income is wages earned from hourly work or employment contracts.
•Government payments to the poor cannot explain the decline in inequality. To be sure, income support was not insubstantial. Households received roughly ₹400 per month in urban areas and nearly ₹500 per month in rural areas during the lockdown and the Delta wave. They received roughly half that much during the rest of the pandemic. However, even when government transfers were netted out from income, income inequality fell by over 20% points by July 2021.
•Business profits play a bigger role than transfers. The rich saw a larger decline in business income and depended more on that income than the poor. While just 7% of a bottom quartile household’s income is from a business, nearly 15% of a top quartile’s household’s income is from a business. Unlike labour income, business income is volatile because it is susceptible to changes in demand, and thus to aggregate income. We find that business income of the top quartile is four times more sensitive to the aggregate performance of the economy than the business income of the bottom quartile. Given the large negative effect of COVID-19 on the economy, this suggests that some of the disproportionate losses of the rich operate through business income.
•Labour income, however, plays a critical role (Table). Labour income is just over 65% and 80% of the income of the top 25% and bottom 25% of households. These are larger shares than those of government transfers or business profits. To explain the decline in labour income, we looked at supply-side and then demand-side explanations.
•Looking at supply, one might suspect the rich chose to work less than the poor, perhaps out of fear of contracting COVID-19. That was also our conjecture, but it proved wrong. When the economy contracted, people lost jobs and income. They tried to compensate by finding alternate work, sometimes even in other occupations. While this seems a natural response for the bottom 25%, it was even more true for the top 25%. While the minimum amount that the poor were willing to accept to take a job fell roughly 40%, the minimum amount fell more than 45% for the rich.
Demand for labour
•The better explanation for the disproportionate loss of labour income among the top quartile households is that demand for their labour fell more. The rich tend to work in the service sector, and demand for services fell more than demand for other sectors. While 30% of workers in bottom quartile households work in the service sector, 45% of workers from the top quartile households do. During the pandemic, consumer spending on services fell by 30%-40%, far more than the decline in spending on manufacturing or agriculture.
•The situation was reversed in manufacturing. That sector employs a larger share of bottom quartile workers than top quartile ones: 35% versus 15%. But manufacturing declined less than 20% during the pandemic. The progressive contraction of demand for services swamped the regressive contraction of demand for manufacturing.
•To be clear, our analysis does not suggest that the pandemic was good for the Indian economy. The loss of life and rise in poverty make it one of the larger disasters the country has borne. The reduction in inequality would be a silver lining if it were accomplished by lowering poverty rather than reducing the income of the rich.
•Nevertheless, by understanding the decline in inequality during the pandemic we can assess prospects for inequality after it ends. Once demand for services rises, along with aggregate income, both demand for the labour of the rich and the business income of that group will likely return. There is a risk that inequality will return to pre-pandemic levels.
