📰 The status of eVTOL: a soon to be reality?
What powers electric vertical take off and landing aircraft? What new regulations and policy changes does India need to better integrate electric vertical aircraft?
•The Government of India is exploring the possibility of inviting manufacturers of Electric Vertical Take off and Landing (eVTOL) aircraft to set up base in India. Aviation Minister Jyotiraditya Scindia has been reported as asking Beta Technologies, which has a partnership with the Blade group (it has a presence in India), to look at the Indian market.
•An eVTOL aircraft is one that uses electric power to hover, take off, and land vertically. This is technology that has grown on account of successes in electric propulsion based on progress in motor, battery, fuel cell and electronic controller technologies and also fuelled by the need for new vehicle technology that ensures urban air mobility (UAM).
•The global market for eVTOLs was put at $8.5 million in 2021 and is to grow to $30.8 million by 2030. The demand will be on account of green energy and noise-free aircraft, cargo carrying concepts and the need for new modes of transport.
•The story so far: The Union Civil Aviation Minister, Jyotiraditya Scindia, has said that the Government of India is exploring the possibility of inviting manufacturers of Electric Vertical Take off and Landing (eVTOL) aircraft to set up base in India. The Minister had been on a visit to the U.S. and Canada in April and in his interactions with key players in the industry, it was said that several eVTOL players were ‘keen on setting up production centres’ in the country. In late May, while speaking at “India@2047”, which was part of the seventh edition of the India Ideas Conclave in Bengaluru, the Minister also said that India is in ‘conversation’ with a number of eVTOL producers — the implication being a futuristic vision for India.
What is eVTOL?
•As the acronym suggests, an electric vertical take-off and landing (eVTOL) aircraft is one that uses electric power to hover, take off, and land vertically. Most eVTOLs also use what is called as distributed electric propulsion technology which means integrating a complex propulsion system with the airframe. There are multiple motors for various functions; to increase efficiency; and to also ensure safety. This is technology that has grown on account of successes in electric propulsion based on progress in motor, battery, fuel cell and electronic controller technologies and also fuelled by the need for new vehicle technology that ensures urban air mobility (UAM). Thus, eVTOL is one of the newer technologies and developments in the aerospace industry.
•An article in Inside Unmanned Systems, a leading business intelligence platform, describes eVTOL as being “a runway independent technological solution” for the globe’s transportation needs. This is because it opens up new possibilities which aircraft with engines cannot carry out in areas such as manoeuvrability, efficiency and even from the environmental point of view. The article adds that there are an estimated 250 eVTOL concepts or more being fine-tuned to bring alive the concept of UAM. Some of these include the use of multi-rotors, fixed-wing and tilt-wing concepts backed by sensors, cameras and even radar. The key word here is “autonomous connectivity”. Some of these are in various test phases. There are also others undergoing test flights so as to be certified for use. In short, eVTOLs have been likened to “a third wave in an aerial revolution”; the first being the advent of commercial flying, and the second, the age of helicopters.
Why are the developments in powering eVTOLs?
•An article in Avionics International says the roles eVTOLs adopt depends on battery technology and the limits of onboard electric power. Power is required during the key phases of flight such as take off, landing and flight (especially in high wind conditions). There is also the important factor of weight. BAE Systems, for example, is looking at formats using a variety of Lithium batteries. Nano Diamond Batteries is looking at “Diamond Nuclear Voltaic (DNV) technology” using minute amounts of carbon-14 nuclear waste encased in layered industrial diamonds to create self-charging batteries. There are some industry experts who are questioning the use of only batteries and are looking at hybrid technologies such as hydrogen cells and batteries depending on the flight mission. There is even one that uses a gas-powered generator that powers a small aircraft engine, in turn charging the battery system. But whatever the technology, there will be very stringent checks and certification requirements.
What are the challenges?
•As the technology so far is a mix of unpiloted and piloted aircraft, the areas in focus include “crash prevention systems”. These use cameras, radar, GPS (global positioning system) and infrared scanners. There are also issues such as ensuring safety in case of powerplant or rotor failure. Aircraft protection from cyberattacks is another area of focus.
•A third area is in navigation and flight safety and the use of technology when operating in difficult terrain, unsafe operating environments and also bad weather.
How did it begin?
•There is general agreement that the eVTOL world is moving forward based on the spark provided by NASA researcher Mark D. Moore who came up with the concept of a personal (one man) air vehicle while working towards his doctorate. Called the “Puffin” and thought of in 2009-10, it was about four metres tall and with a wingspan of 4.4 metres. It had 60hp electric motors that powered two propellers. Its other specifications included a four-point landing gear, a weight of 272kg, 45kg of batteries, a pilot payload of about 90kg, fetching it a total weight of 407 kg. Its top speed was under 245 kmph with a range of about 80km. A prototype was unveiled in 2010 and the concept was discussed at a conference on aeromechanics in 2010, according to an article in Electric VTOL News. In his paper, “NASA Puffin Electric Tailsitter VTOL Concept”, Moore described “electric propulsion as offering dramatic new vehicle mission capabilities, .... but the only penalising characteristic” being “the current energy storage technology level”.
Are there any big players now?
•Since then there have been a number of ideas by industry, such as the Volocopter VC1 from Germany and the Opener BlackFly from the U.S. The top aircraft manufacturers, Airbus and Boeing, have also joined the race. Airbus unveiled its prototype, Vahana Alpha One or the Airbus Vahana (from the Sanskrit Vahana), at the Paris Air Show in 2017. It was pitched as a “cost-comparable replacement for short-range urban transportation” based on a fan-run tilt-wing design. Prototypes made test flights. Airbus then shifted to the “CityAirbus” project (air taxi) which has propellers and direct-drive electric motors.
•Boeing is working on the Boeing Passenger Air Vehicle, as an “American autonomous personal air vehicle prototype”. However, the major disruptors have been start-ups, backed by huge dollar flow.
•A company, Lilium, started in 2015, which claims to be the “developer of the first all-electric vertical take-off and landing eVTOL jet”, says that it is moving towards developing prototypes “designed to extract over 100kW of power from a system weighing just over 4kg” — which gives us an idea of the advancements. Its Lilium Jet theory has been designed for concepts such as private flights, six-seater passenger flights, or no seating for the zero-emissions logistics market.
•It says that the concept looks to connect towns and cities (40km-200km) at speeds of up to 300km/h. It has called this as aimed at Regional Air Mobility, which it clarifies is not to be confused with Urban Air Mobility (UAM) — connecting intra-city points over shorter distances, or less than 20 km. It is also working on a seven-seater model, for use in existing helipads; In the U.S., for example, this would mean approximately 14,000 possible locations. The power demand across different phases of flight and the predicted range have been discussed in detail in a technology paper.
•China, Israel and the U.K too have programmes to look out for.
How does one get an idea of the kinds of eVTOLs?
•Electric VTOL News, for instance, has a World eVTOL Aircraft Directory. Started in 2016 and listing half-a-dozen known designs, it has now progressed to categorising almost all known electric and hybrid-eVTOL concepts. Categories are: “Vectored Thrust”, where any thruster is used for lift and cruise; “Hover Bikes/Personal Flying Devices”, which are single-person eVTOL aircraft and in multicopter-type wingless configurations; “Lift and Cruise”, where independent thrusters are used for cruise and lift without any thrust vectoring; “Wingless (Multicopter)”, or where there is no thruster for cruise but only for lift; and “Electric Rotorcraft” or eVTOLs that use a rotor, such as an electric helicopter or autogyro.
What about certification?
•Some companies have concepts that are aimed at dual certifications by regulatory agencies in the western world. In March this year, the Federal Aviation Administration (FAA) and the United Kingdom Civil Aviation Authority announced being engaged in discussions focused on “facilitating certification and validating new eVTOL aircraft, their production, continued airworthiness, operations, and personnel licensing”. Both bodies also highlighted the need to maintain very high safety standards. Further to this, eVTOL technology is to use existing regulatory frameworks despite being in the form of new and emerging technologies. The FAA has clarified that it plans to certify eVTOLs as powered-lift aircraft (an existing category) but in future, “develop additional powered-lift regulations” for innovation in operations and pilot training. It plans to use a “special class” process in 14 CFR 21.17(b) to oversee the unique features of emerging powered-lift models. But this certification will use the performance-based airworthiness standards found in Part 23 of the FAA regulations. The FAA’s important clarification that the changes will be gradual has been welcomed by eVTOL developers, who are leaning on the Part 23 framework as the bedrock for type certification.
•EVTOL certification is also complex because of planned operations within urban areas, new battery systems and the need for higher levels of automated redundancy.
How has the progress been?
•The Paris summer Olympics 2024 is expected to be the big moment, according to an article in Bloomberg. France is working on two dedicated routes to transport passengers. Landing and takeoff zones at the Pontoise-Cormeilles-en-Vexin hub are being tested on parameters such as noise levels, integration of drones and eVTOLs with existing air traffic, battery charging and also maintenance.
How will it be in India?
•Mr. Scindia has been reported as asking Beta Technologies, which has a partnership with the Blade group (it has a presence in India), to look at the Indian market. An official from Blade India told The Hindu that Blade is an urban air mobility company that aims to connect places that are heavily congested and also not well connected by air services. The concept of ‘Advanced Air Mobility’ comes in, i.e., connecting places through vertical aircraft and thus skipping road travel. This is being done now by helicopters, but eVTOLs will step into this space.
•The official said that Blade U.S. is currently working with electric vertical aircraft (EVA) manufacturers such as Beta Technologies and has partnered with them for an all electric fleet by the year 2024. eVTOLs are noise free, have a zero carbon footprint and are more affordable. Beta technologies and other EVA manufacturers have been extended an invitation to manufacture in India.
•Amit Dutta, Managing Director, Blade India is the chairperson of the Confederation of Indian Industry (CII) Taskforce for Urban Air Mobility. In his suggestions for policy and regulation changes to better integrate EVAs, he has advised regulatory authorities in India to look at: formulating regulations for pilotless vehicles, airworthiness certifications, and the need for a pilot’s licence; implementing efficient energy management systems, onboard sensors, collision detection systems and advanced technologies such as artificial intelligence; having in place infrastructural support such as take-off and landing zones, parking lots, charging stations and what are called vertiports; creating a robust air traffic management system that is integrated with other modes of transportation, and putting in place a database to ensure operational and mechanical safety.
•In addition to this, there are psychological barriers that need to be overcome when it comes to flying in a fully autonomous aircraft. Therefore, the official added, there needs to be a document that outlines compliance for eVTOLs and also aligns frameworks to meet the standards adopted in commercial aviation, especially when it comes to safety. The current timeline for certification with India’s Directorate General of Civil Aviation is two years. The Blade India official says that there is a need for a committee to spell out the guidelines for eVTOL operations and speed up the process.
What is the value of the market?
•The global market for eVTOLs was put at $8.5 million in 2021 and is to grow to $30.8 million by 2030. The demand will be on account of green energy and noise-free aircraft, cargo carrying concepts and the need for new modes of transport.
•According to the Blade India official, the UAM market is expected to expand at a compound annual growth rate of 25% between 2018-25. By 2025, it is anticipated to be a $74 billion market. This includes the eVTOLs market since UAM ideally focuses on the use of eVTOLs, the official added.
The U.S. has been carefully constructing the framework and India, despite endorsing it, needs to be wary of hurdles
•On May 23, the Joe Biden administration took a significant step to turn the clock back to the Obama Presidency by launching its own version of a “pivot to Asia” through the establishment of the Indo-Pacific Economic Framework for Prosperity (IPEF) with other partner countries — Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam and the United States. Within days of its launch, IPEF expanded its membership to the Pacific Island states, with Fiji joining the initiative.
•An American initiative to bring together its allies in the Indo-Pacific region to enhance economic cooperation is bound to lead to comparisons with one of former U.S. President Barack Obama’s pet projects, the Trans-Pacific Partnership (TPP), which was spiked by Donald Trump immediately after he took over the reins in Washington. The IPEF reignites the twin ambitions of the U.S. to provide economic leadership and to challenge China’s hegemony in the region.
A tag that fits
•The U.S. Trade Administration had touted the TPP as “Made in America” (https://bit.ly/3MT7KA6), a tag that seems equally appropriate for the IPEF. At its launch, the IPEF was proposed as an elaborate framework of rules covering four pillars, namely, fair and resilient trade, supply chain resiliency, clean energy decarbonisation, and tax and anti-corruption. It is not clear whether the original signatories to the IPEF were fully in the know of the details that were unveiled at the launch of the initiative, for there is no record of any prior discussion. However, evidence is available that suggests that Washington has been carefully constructing the framework ever since President Biden had first spoken about it in October 2021 during the East Asia Summit, in the presence of all IPEF signatories except Fiji.
•Following its usual process of coalescing the views of all major business interests and the political establishment, the Biden administration sought public comments in March from “interested parties” on the four pillars to assist its trade administration for developing the U.S.’s position in IPEF negotiations. Not surprisingly, major corporations, including Google, Microsoft, IBM, Intel and Cargill and influential industry associations such as the Biotechnology Innovation Organization and the Pharmaceutical Research and Manufacturers of America (PhRMA) responded to the call. The IPEF was also discussed in considerable detail in the U.S. Congress, a process that is vitally important to secure bipartisan support for the Biden administration to conduct negotiations to translate the framework into reality.
On IPRs
•The Biden administration has announced that under the “fair and resilient trade” pillar, it “aims to develop high-standard, worker-centered commitments” covering labour rights, the environment and climate, the digital economy, agriculture, transparency and good regulatory practices, competition policy and trade facilitation. The clear focus of this agenda is to focus on issues which the U.S. considers vital to further its interests. One notable exclusion from this list is intellectual property rights (IPRs) that have generally been at the heart of the U.S.’ economic engagements with its partner countries. One possible reason for excluding IPRs could be that these are seen as the major reason why only 16.2% of people in low-income countries have received at least one dose of the COVID-19 vaccine until today. But with several corporations, including those from the pharmaceutical and electronics sectors, and members of the Congress making a strong pitch for their inclusion, IPRs could soon figure in the IPEF negotiations.
•Promoting “fair and resilient trade” defines the U.S.’s agenda on trade, side-stepping its pursuit of the free trade ideal. The reason behind this shift could be that for most IPEF signatories, import tariffs are passé. Only four of the 14 signatories have average tariffs in double digits. The U.S. Secretary of Commerce, Gina M. Raimondo has, thus, affirmed that the IPEF is “intentionally designed not to be a same old... traditional trade agreement” (https://bit.ly/3tipOMd). The primary objective of the IPEF is to ensure a high degree of regulatory coherence and to make market access contingent upon realisation of regulatory standards. It must be pointed out that standards and regulations in most developed countries often create discretionary/discriminatory barriers to trade and overcoming these barriers is usually beyond the capacities, both institutional and otherwise, of lesser developed countries.
Contentious issues
•Two contentious issues that are generally included in free trade agreements (FTAs) involving the U.S., namely, labour rights and the environment and climate change, are duly included in the IPEF. Enforcement of labour rights using trade rules is quite contentious, having been rejected by the members of the World Trade Organization (WTO) on several occasions. WTO members had arrived at a consensus that the “internationally recognized core labour standards” of the International Labour Organization (ILO) should be used to deal with issues pertaining to labour rights. They had also rejected the use of labour standards for protectionist purposes.
•As regards the environment, the United Nations Framework Convention on Climate Change (UNFCCC) had cautioned that “measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade” (https://bit.ly/3as4BZz). The IPEF could threaten abrogation of these decisions at the WTO and the UNFCCC.
Data portability
•A third set of issues, whose ramifications on the future of the digital economy and beyond can be far reaching, are those related to standards on cross-border data flows and data localisations. Control over data, the driver of the digital economy, will increasingly determine the dynamics of economies, and hence the issue of data portability assumes critical importance.
•Although China was not mentioned at the official launch of the IPEF, possibly for diplomatic reasons, the second largest economy has been at the centre of Washington’s strategies for the Indo-Pacific, especially with regard to supply chains. However, the crux of the American narrative on this issue is the hope that U.S. manufacturing giants, most of which have made China their preferred production bases at least since the 1990s, would move to the other countries in the Indo-Pacific. But even if these corporations move to countries other than China, how can the U.S. ensure supply chain resilience?
What New Delhi has to watch
•What could India expect from the IPEF? While endorsing the IPEF, Prime Minister Narendra Modi had spoken of India’s aspiration to participate more substantially in the supply chains in the region. However, this would have its challenges. For instance, while addressing the needs of the digital economy, the U.S. has emphasised the importance of “high-standard rules... on cross-border data flows and data localization” (https://bit.ly/3xb0M2G). On this issue of data localisation, the Government of India has not yet taken a clear position. In 2019, its likely preference was revealed in the Draft National e-Commerce Policy, wherein it had backed restrictions on cross-border data flows. The key challenge for India is to sustain this diametrically opposite view to an uncompromising position of the U.S. on data localisation.
•India should also be wary of the considerable emphasis that is being given to strengthening labour rights in the on-going discussions on the IPEF, both by corporate interests and members of the Congress. In a Senate Finance Committee hearing in April, Elizabeth Warren, one of the more vocal voices among the Democrats extolled the United States Trade Representative, Katherine Tai, who would be leading the discussions on the “fair and resilient trade” for “incorporating strong, enforceable labor and environment standards to demonstrate [the U.S.s’] commitment to the importance of these areas in [the U.S.’s] competitiveness and in our terms of trade (https://bit.ly/3tcUMFp). How would India’s preference for a “flexible labour market” gel with the regime that the U.S. is proposing for the IPEF?
📰 Boost for boosters
With the approval of Corbevax as a booster dose, India will have a heterologous shot
•With the Indian drug regulator greenlighting Corbevax as a booster dose for all adults above 18 years who have received two doses of either Covishield or Covaxin as part of primary vaccination, a heterologous booster shot has come a step closer to being administered to people. Though booster shots have been administered since January 10 beginning with health-care and frontline workers, and people over 60 with comorbidities, India has been using the same vaccine for both primary vaccination and booster (homologous boosting). In clinical trials, a booster dose using a vaccine that is different from the one used for primary vaccination — technically called heterologous boosting — produced higher immune responses when compared with a same vaccine for primary and booster vaccination. A trial by the Christian Medical College, Vellore, too found the same result. As expected, Bio E’s phase-3 heterologous booster vaccine trial using Corbevax in people who have received two doses of either Covaxin or Covishield did produce significantly higher immune responses. But with the control group not receiving a homologous booster shot but only a placebo, the trial failed to bring out the enhanced immune responses by using Corbevax as a heterologous booster. Any vaccine administered as a booster — immaterial of being homologous or heterologous — months after primary vaccination will, by default, increase the immune responses. The trial has thus only shown that Corbevax as a heterologous booster increases the immune responses but failed to show that heterologous boosting with this vaccine produces superior immune responses than homologous boosting with Covishield or Covaxin. It is all the more surprising that the booster trial used a placebo for the control arm as even the phase-3 clinical trial to study the immunogenicity of Corbevax for primary vaccination used the comparator vaccine Covishield for the control group.
•With Corbevax being approved as a heterologous booster based on a poorly designed heterologous booster trial, the drug regulator can be expected to soon greenlight Covishield and Covaxin as heterologous boosters based on the results of the CMC Vellore trial. Especially as the trial clearly demonstrated the advantages of heterologous boosting compared with using the same vaccine for primary vaccination and boosting. While the National Technical Advisory Group on Immunisation (NTAGI) is quite likely to approve Corbevax as a heterologous booster shot without much delay, it remains to be seen whether it greenlights it for all adults above 18 years. Given the greater likelihood of NTAGI approving Corbevax as a heterologous booster, the Government is not likely to side step the expert group, as in mid-March. As booster shots have been rolled out for all adults above 18 years, the Government should not hurry to approve Corbevax without NTAGI’s nod.
📰 World’s first fishing cat census done in Chilika
The lake has 176 of the globally threatened species
•The Chilika Lake, Asia’s largest brackish water lagoon, has 176 fishing cats, according to a census done by the Chilika Development Authority (CDA) in collaboration with the Fishing Cat Project (TFCP).
•This is the world’s first population estimation of the fishing cat done outside the protected area network.
•According to the CDA, phase 1 of the estimation was conducted in 2021 in the 115 sq.km marshland in the north and north-eastern section of Chilika and its surrounding areas. Phase 2 was conducted in 2022 in the Parikud side along the coastal islands of Chilika.
•A total of 150 camera traps were deployed in two phases with each fixed in the field for 30 days. Spatially explicit capture recapture method was used to analyse the data, the CDA said in a statement.
‘Participatory spirit’
•“It was truly participatory in spirit since local fishermen and villagers of Chilika were the primary participants in this exercise. Without their support, the world’s first such population estimation outside protected areas on this globally threatened cat, would not have been possible,” said Susanta Nanda, Chief Executive Officer, CDA.
•“Ten graduate and postgraduate students also volunteered during the exercise. Chilika Wildlife Division staff actively facilitated and participated in the estimation. Such a participatory effort involving multiple stakeholders for studying this elusive and threatened species sets a wonderful precedent,” said Partha Dey, co-founder, TFCP.
•The CDA said the globally threatened cats are found in wetlands in major South and Southeast Asian river basins starting from the Indus in Pakistan till the Mekong in Vietnam and in Sri Lanka and Java. They are found in 10 Asian countries but have stayed undetected in Vietnam and Java since the last decade or so.
•“Wetlands in Asia are being lost at alarmingly rapid rates and proper data on their current status or even baseline data are missing. The status of many wetland species remains understudied and highly threatened. Tracking specialist species such as the fishing cat gives us an indication of what might be happening to these ecosystems, which are safeguards against climate change and droughts,” said Tiasa Adhya, the co-founder of TFCP.
📰 Rivers facing heavy pollution: CSE
Three of every four river monitoring stations in India posted alarming levels of heavy toxic metals such as lead, iron, nickel, cadmium, arsenic, chromium and copper.
•In about a fourth of the stations, which are spread across 117 rivers and tributaries, high levels of two or more toxic metals were reported.
•Of the 33 monitoring stations in the Ganga, 10 had high levels of contaminants. The river, which is the focus of the Centre’s Namami Gange mission, has high levels of lead, iron, nickel, cadmium and arsenic, according to the State of Environment Report, 2022 from the environmental NGO, the Centre for Science and Environment (CSE).
•The report is an annual compendium of environment-development data and is derived from public sources.
•India has 764 river quality monitoring stations across 28 States. Of these, the Central Water Commission tested water samples from 688 stations for heavy metals between August 2018 and December 2020.
•Of the 588 water quality stations monitored for pollution, total coliform and biochemical oxygen demand was high in 239 and 88 stations across 21 States — an indicator of poor wastewater treatment from industry, agriculture and domestic households.
•India dumps 72% of its sewage without treatment. Ten States do not treat their sewage at all, as per the Central Pollution Control Board.
Coastline erosion
•Over a third of India’s coastline that is spread across 6,907 km saw some degree of erosion between 1990 and 2018. West Bengal is the worst hit with over 60% of its shoreline under erosion.
•The reasons for coastal erosion include increase in frequency of cyclones and sea level rise and activities such as construction of harbours, beach mining and building of dams.
•While the global average of the Ocean Health Index, a measure that looks at how sustainably humans are exploiting ocean resources, has improved between 2012 and 2021, India’s score in the index has declined over the same period, the CSE report underlines. India’s total forest cover has registered a little over a 0.5% increase between 2017 and 2021 though most of the increase has taken place in the open forest category, which includes commercial plantations. This has happened at the cost of moderately dense forest, which is normally the area closest to human habitations. At the same time, very dense forests, which absorb maximum carbon dioxide from the atmosphere, occupy just 3% of total forest cover.
•India has a forest cover of 77.53 million hectares. But recorded forests — the area under the forest department — are only 51.66 million. This gap of 25.87 million hectares — a size bigger than U.P.— remains unaccounted, the organisation noted.
📰 Modinomics and the long distance to the finish line
The Indian economy needs a new economic policy that has clear objectives unlike the incoherent announcements now
•On May 31, 2022, in its press note on provisional estimates on national income, the National Statistical Office (NSO) released the 2021-22 fourth quarter GDP growth rate figure at 4.1% (April 1-March 31, 2022 in annual equivalent terms) compared to fourth quarter figures for the previous year, 2020-21.
•In the first quarter of 2020-21 (April 1 to June 30), GDP growth rate according to the NSO, was –23.8% ,which is when the COVID-19 pandemic began spreading.
•The combined subsequent and remaining three quarters of 2021-22 annualised growth rate was negative, and thus for the fiscal year of four quarters, the GDP annual 2020-21 was placed at -4.8%.
Points to note
•The following two conclusions are important to the Narendra Modi government for a badly needed reality check. First, which I have detailed in my earlier Opinion articles in The Hindu is that the Indian economy had been declining in growth rate since 2016 and fell below what was earlier sneeringly referred to by economists in the Congress-ruled period (1950-77) as “The Hindu Rate of Growth” of 3.5%-4% per year growth rate in GDP.
•Second, the Modi government should recognise that during the present Prime Minister’s tenure since 2014, his plan for “Vikas” is more genuinely akin to the Hindu rate of growth planning of Jawaharlal Nehru. No P.V. Narasimha Rao tenure type structural reforms were systematically implemented. The decline in GDP growth rate from 2016 till today is thus a national shame for a dispensation that claims to bring “Vikas” to the country.
•Not only has the growth rate of GDP been consistently declining since 2016 but the brazen but rosy predictions that were impossible to achieve without major reforms, such as a $5 trillion GDP by 2024-25, have been publicised in the media, (which in 2019, when Mr. Modi announced the goal, meant a 14.8% per year growth rate in GDP).
•I am prepared to debate publicly with any Government official to prove to the Indian public that “Modinomics” to date is a gigantic failure. That is, to prove that no announced macroeconomic goal has been achieved during the Modi tenure as Prime Minister so far from 2014 till date.
What is needed
•What the Indian economy needs today is a new economic policy that is based on clearly stated objective targets, priorities, a strategy to achieve the targets, and an intelligent and transparent resource mobilisation plan. At present we have an incoherent hotchpotch set of public announcements, with no accountability or logic.
•The Atal Bihari Vajpayee government lost badly in 2004 despite the confidence in advancing the general election by six months before the due date because of the imaginary paradise of “India Shining”. The Bharatiya Janata Party (BJP) could not make an electoral comeback for 10 years after the debacle in the 2004 elections.
•The BJP was lucky to come back in 2014 because of the Supreme Court judgments cancelling the 2G Spectrum licences, hopes of Ram Mandir re-building, and a failing economy.
Democracy’s dynamics
•Today, the BJP is in its eighth year of its tenure as the ruling party. Although some socio-religious successes have helped to raise the morale of party workers, the 2024 general election is still not a done deal. State elections in West Bengal and Punjab are also not good omens. In the recent elections in Uttar Pradesh, the margins of victory were mostly very narrow. My own reading is that economic failure, which is fast becoming the main issue, could drastically unsettle even the most conservative forecast in 2024. Democracy could be threatened by desperate political extremists.
•In every nation, democracy is structured on four pillars: electoral legitimacy, constitutional safeguards, functionally independent institutions, and embedded accountability. Mere elections are not sufficient for a democracy.
•But there is a conflict between the market and democracy that requires to be resolved: a flourishing and vibrant democracy that empowers a relatively poor uncorrupted majority to vote, and hence can influence legislation against the relatively rich capitalist and entrepreneurial minority, and a thriving market economy driven by a rich empowered minority with disproportionate access to capital, skills and media and other networks has the capacity to undermine the electoral system through strategic funding of the same.
•Therefore, there is a need to understand the dynamics of democracy especially since, in India, even economic reformers such as Narasimha Rao have so far lost elections.
•Thus, designing reforms is most important because leaders initiating reforms must win elections. Let us understand how a democratic Japan came to have such an opaque financial system with no prudential norms or accountability because of cronyism that had to be pleased, or how the United States that had no proper regulation in place for the new sophisticated financial products gave free play to so much greed that it led to the global financial crisis in 2007-09.
•Economic reforms in a democracy can be electorally successful if so designed that the losers from it (usually touts who organise quotas and licences for the rich for a price, and who, because de-regulations implicit in reforms make them immediately lose the “rent”) do not hijack the election, while the unorganised poor who cannot see early returns from reforms are kept satisfied by reducing unemployment and controlling galloping inflation.
•Deregulations should also not mean that we reject government intervention for safety nets, affirmative action, market failure and creating a level-playing field.
Empower institutions
•Democratic institutions have to be empowered to guard against public disorder arising from rapid de-regulation, as it happened in Russia, post-1991. The Russians underwent chaos and misery. Thus, dictatorship has returned for the Russians.
•Thus, the trade-offs as between public order and de-regulation, through affirmative action, social security and a safety net, are essential to create a stake for the poor in the system, levelling the playing field to create hope, ensure transparency, accountability, and trusteeship (philanthropy) as also corporate governance to legitimise profit making that drives the market system.
•Market systems are not a free-for-all. It is capitalism with rules of transactions. With that proviso, market system capitalism works since the principal driver is capital and its deployment for innovation to raise productivity.
