News & Events
in this section, we are presenting our readers/aspirants compilation of selected editorials of national daily viz. The Hindu, The livemint,The Times of India, Hindustan Times, The Economic Times, PIB etc. This section caters the requirement of Civil Services Mains (GS + Essay) , PCS, HAS Mains (GS + Essay) & others essay writing competition.
1.Revamping Monetary Policy Target
This newspaper does not believe that, in an interconnected world of large cross-border capital flows and transnational supply chains that can halt production in one part of the world because another part of the world is in disarray, on account of a pandemic or geopolitical tensions, monetary policy’s sole goal can be price stability. Financial stability could become paramount and monetary policy might need to act in tandem with fiscal policy, rather than in glorious autonomy from it. Be that as it may, controlling inflation will remain an important goal of monetary policy. Inflation measured by what index? The Economic Survey says that wholesale prices and core consumer prices (that is, excluding energy and food prices) better correlate with demand than the Consumer Price Index (CPI). Why not target these for inflation control, rather than CPI?
Food and energy have a combined weightage in excess of 50% in the CPI, and inflation in either is driven mainly by supply-side factors, over which monetary policy has little impact. Further, many components of food inflation are transitory and neither call for nor are influenced by monetary policy tweaks. Yet, changes in CPI anchor inflation expectations, given its role as the headline target that guides the monetary policy stance. Weather-induced supply shocks and food’s large weightage in the index can lead to forecast errors, as a recent RBI paper noted. So, the notion that the current inflation targeting framework is biased towards keeping interest rates high is not entirely misplaced. That can cause serious damage to economic growth.
The Survey’s recommendations to update the base year of CPI from 2011-12 and to incorporate price data from modern ecommerce make eminent sense.
2.Spend and Grow, Borrow to Spend
Amidst unprecedented economic contraction, the Union budget needs to act on the Survey’s prescription to step up investment in social and physical infrastructure to boost growth. The budget must enunciate concrete strategy to better coagulate funds for infrastructure, healthcare, education, and also augment income support. Where is all the money to fund expanded investment and provision of relief to come from? From stepped up borrowing, without worrying about the likely reaction of rating agencies, whose rating has been biased. As the Survey argues, as the anticipated growth rate is higher than the rate of interest, the consequential debt is wholly sustainable. The point is that increased recourse to deficit financing is necessary, to not just plug the large infrastructural deficit in the here and now but also to crowd-in private corporate investment.
In tandem, we need forward-looking tax design to improve allocative and distributive efficiency across the board. The finance minister surely needs to eschew any new taxes and rationalise existing levies so as to incentivise investment and capital expenditure. Any populist move to win public approval by levying additional taxes on the rich would prove counterproductive — economically in the short run, and politically as well, in the long run. The securities transaction tax, which is at variance with global practice, must be done away with, to shore up a range of risk-mitigation derivative products necessary for a vibrant market for corporate bonds. And bonds are the surest form of modern arm’s-length finance.
The pandemic has hugely affected state revenues. It would make sense to replace cesses on petro-fuels with taxes shareable with the states. The budget needs to revamp infrastructure viability gap funding in healthcare, education and solid waste management. Public investment in healthcare reduces out-of-pocket expenses in healthcare. Note also that barely 2% of our urban areas have both sewage treatment plants and sewerage systems. Fixing this will foster growth and health.
3.Vaccine stimulus: As rollout extends to frontline workers, it has to keep picking up momentum
With the Economic Survey emphasising that India’s economic recovery, projected at 11% GDP growth in 2021-22, will ride on its vaccination drive, the second phase commencing today to simultaneously vaccinate frontline workers is critical. Through Thursday and Friday the country upped its game, vaccinating over 1.1 million health workers. The category of frontline workers is much larger, so the scale of the exercise will need to grow proportionally and in complexity. A continually expanding vaccine programme will also have a positive impact on economic revival, including by bailing services sectors.
India has set broad targets of vaccinating 10 million health workers, 20 million frontline workers and 270 million elderly and those with comorbidities, before moving to the general population. While most countries struggle to secure enough vaccine doses, India currently has a problem of plenty. Companies like Serum Institute and Bharat Biotech have really risen to the task of vaccine manufacture. SII’s tie-up with Novartis for manufacturing the latter’s vaccine, which this week demonstrated encouraging efficacy, further bolsters our position. India has reportedly booked 1 billion doses, which should be ready for rollout by the time the priority groups are inoculated.
Ensuring January recipients return for their second doses in February is the next challenge. This requires scaling up the number of sites and inoculations per session so that the first dosing for frontline workers doesn’t slow down. Ensuring every vaccination site – nearly 10,000 sites now from 3,000 originally – functions at 100% capacity alongside periodic scaling up of capacity to 1 million daily recipients and beyond becomes important, given India’s shift to a vaccination centred strategy to halt the pandemic. Especially as new mutations and the prospect of re-infections have sparked a global call for accelerating vaccinations.
Of course this is not a substitute for virus suppression through masking, testing and contact tracing. The importance of not letting down the guard prematurely is highlighted by Kerala whose infection tide just isn’t ebbing. Further, coverage of beneficiaries varies widely between states, pointing to significant vaccine hesitancy. Lagging states must study the success of Odisha, Haryana and Rajasthan, to gain public trust. By preventing another Covid surge, rapid inoculation will be more effective than a fiscal stimulus package in preserving the hard won economic gains. If states are lacking in financial resources to boost vaccination, Centre must step in and offer help.
4.Digital (un)democracy: Frequent internet shutdowns make a mockery of ease of doing business
Over the past week farmer protests have been met with a painful slowing down of internet services in several parts of Delhi, plus their suspension at Singhu, Ghazipur, Tikri and adjoining areas. In Haryana mobile internet and SMS services were suspended in 17 districts. This is in fact becoming standard operating procedure in states across India. Despite all the research showing that digital blackouts encourage rumours not peace, abuse of this blunt instrument is growing. Education, health, the public distribution system, banking, every sector becomes collateral damage, as access to the internet has become a fundamental requirement for so many of citizens’ essential transactions.
Note that government itself is at the forefront of this civilisational shift with the Digital India campaign. Indeed digital platforms became lifesavers during the Covid lockdown, facilitating everything from work from home to medical services. Recourse to frequent internet shutdowns actually reflects a schizophrenia in governance. For example, the just released Economic Survey 2020-21 bats for online schooling to reduce inequalities in educational outcomes, and there is wide consensus on this. But at the same time states now resort to suspending internet services to prevent cheating in exams, something that leaves educationists scratching their heads. Jammu & Kashmir meanwhile has not had full resumption of internet services since August 2019.
Even as Indians look forward to 5G technology to usher in a digital revolution, existing services are really in the global backwaters – we ranked 129th in the world for mobile internet speed and 65th for broadband speed in December. Government can’t champion a digital economy with subpar internet speeds and by enforcing the most internet shutdowns in the world. Digital is supposed to empower people while internet shutdowns have an undemocratic feel.
5. Why the FIRs against journalists is wrong | HT Editorial
Even as the media must improve its reporting standards, the political regime must step back, for FIRs will have a chilling effect on free speech and liberty.
When news events are still in progress, journalists must follow a simple rule — report, but only after verification. If the event is particularly sensitive, there is an even greater onus on journalists to be more careful. And that is why when a set of journalists, on January 26, reported that a protester had died due to police firing, they weren’t meeting the highest standards of their profession. Later disclosures, including a video released by the Delhi Police, showed that the protester died when his tractor overturned. Journalists who got it wrong must introspect; the temptation to shoot off tweets without verification must be resisted; and media institutions must have stronger vetting processes.
But this cannot justify what appears to be a politically-driven campaign to legally entangle journalists for a host of crimes they did not commit. In five states where the police force is controlled by the Bharatiya Janata Party — Uttar Pradesh, Madhya Pradesh, Haryana, Karnataka, and Delhi — first information reports (FIRs) have been filed against journalist Rajdeep Sardesai and others on charges of sedition, criminal conspiracy, effort to break public peace, promote religious enmity and more. This is wrong, for a mistake in reporting — which Mr Sardesai, for instance, immediately corrected when new information came to light — cannot be treated as akin to a conspiracy against the State. The fact that fake news and hate speech are a staple on Indian news television — but little is done about it since it often suits powers-that-be — lends the current case an air of selectivity. Even as the media must improve its reporting standards, the political regime must step back, for FIRs will have a chilling effect on free speech and liberty.