News & Events
In this section, we are presenting our readers/aspirants compilation of selected editorials of national daily viz. The Hindu, The live mint,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.Who’s manipulating the currency, US?
America’s decision to place India on its currency manipulator’s watchlist is ludicrous. The US Fed’s policy of keeping interest rates ultra-low, along with America’s allies in Europe and Japan, is responsible for both the dollar’s plunge and surging flows of capital to emerging markets, like India, in search of reasonable returns. These capital inflows make the rupee appreciate out of line with real economy concerns. Seen from India’s perspective, the US should be pointing fingers at itself when it comes to currency manipulation.
The US uses three benchmarks to judge currency manipulators: a bilateral surplus with the US of over $20 billion, a current account surplus of at least 3% of GDP and net purchases of foreign currency of 2% of GDP over a 12-month period. India met the first and the third benchmarks while its current account surplus has been below the threshold level. The country has a marginal current account surplus due to the Covid-induced economic contraction that dented imports. Else, India consistently has run a current account deficit (barring in 2004).
What pushed up the exchange rate is the strength of the unabsorbed capital flows, not export earnings and current account inflows (read as it applies to trade). India was added to the watchlist first in December 2018, and later removed in 2019, only to be added a second time in December 2020. The Biden administration has now retained India with China, South Korea and Japan, among others.
The RBI does not intervene in the currency market to peg the rupee at any artificial level, its goal is to prevent disruptive volatility. And the US cannot grudge India’s central bank its right to smoothen the rupee’s external adjustments, particularly with its own burden of culpability.
2.Oxygen supplies can be augmented with logistical and societal innovation
The severe shortage of medical oxygen (MO) amidst a massive surge in Covid-19 infections pan-India compounds an already grim situation. But it is fully within our resources and skills as a nation to boost supplies: what is required is logistical and societal innovation.
The home ministry notification on ‘uninterrupted supply’ of MO across states, and to divert industrial oxygen output forthwith, is commendable, but not sufficient. Pre-Covid, the demand for MO was barely 700 metric tonnes (MT) per day; it rose to over 2,800 MT daily following the pandemic and is now 5,500 MT/day and rising. But the Empowered Group-II (EG) has averred that domestic production capacity is over 7,100 MT/day. However, it is not sufficient to think in terms of bulk capacity.
Industrial oxygen capacity is concentrated in the eastern region while the demand for MO comes from Maharashtra and Delhi. Oxygen has to be transported, and that traditionally has employed cryogenic containers, of which there is a shortage.
Patients receive oxygen in cylinders. These bottles must be manufactured in sufficient capacity. The shortage of oxygen-carrying cryogenic containers can be offset by transporting truckloads of the bottles, empty ones to the oxygen-producing plants and refilled ones back to where the demand is. What’s needed now is innovative digital solutions and improved logistics to match rising MO demand with supply.
The EG is reportedly floating a tender to import 50,000 MT of MO. Let this go ahead. In tandem, we need measures for local, decentralised production of MO and bottles, apart from a campaign to end hoarding of available oxygen by individuals and institutions. Various companies are chipping in with oxygen and containers. Onsite MO plants at large hospitals can reportedly be built at relatively modest cost. One recent tender for 162 such plants has an outlay of just over `200 crore. The shortage of MO cylinders can be met with creative thinking by startups that make use of available materials and innovative software, if these are challenged to
3.The only endgame: Vaccines have shielded over 99.9% of Indian recipients from Covid
ICMR’s release of data indicating that just 0.02-0.04% of those who received first or second vaccine doses have caught the Covid infection, makes a watertight case for inoculating all adults as rapidly as possible. But even as Covid cases are skyrocketing in India, just over 8% of the population has been administered the first dose. In other words, too few of us have been inoculated to have an effective impact on the infection spread in this deadly second wave. Taking the long-term view, vaccinating more people from now on will prevent third or fourth waves. Widespread vaccination is the only Covid endgame in humanity’s arsenal.
According to ICMR, infections occurred in just 17,145 of 10.03 crore persons and 5,014 of 1.57 crore persons who took the first and second Covishield doses respectively. For Covaxin, the corresponding number is 4,208 and 698 persons among 93.56 lakh and 17.37 lakh recipients of its first and second doses respectively. Unfortunately, just over 21 lakh inoculations happened on Wednesday, paling before the 43 lakh daily jabs on April 5. Worrying vaccine shortages are being reported even as demand is poised to spectacularly explode from May 1, when young people join the rush.
In countries with advanced vaccination programmes, covered populations are showing lower hospitalisation and death while these have increased among those still awaiting shots. In the UK, hospital admissions have fallen faster in older age groups. In the US too, hospitalisation rate is declining in older groups vaccinated more even as it is rising among younger adults. Given lower immunity among elderly persons, vaccination’s impact is evident in the above phenomenon. But until everyone is vaccinated, inoculation is no individual passport to freedom. Experts are unanimous that until a society can declare herd immunity, all the pre-vaccination Covid appropriate behaviours like masking must continue.
Despite the data, communication is critical: Too many scare stories are propagating on social media of inoculated people still getting infected. In this alarmist feeding frenzy the exception, not the 99.96% norm, can get amplified. Covaxin’s interim data of 78% overall efficacy and 100% efficacy against severe Covid disease is encouraging. Instead of political haggling over vaccine prices, iron out the many bottlenecks that have eroded India’s vaccine throughput. Manufacture more, import fast. Also spare a thought for 40% of the population, below 18, not figuring in the vaccine discourse.
4. Don’t wait and watch: Immediate recapitalisation of banks is needed to keep the flow of credit going
The ongoing second wave of Covid-19 has introduced a big element of uncertainty in India’s economic prospects for 2021-22. Given this backdrop, FM Sitharaman did well to reassure industry during a recent engagement with its representatives. She promised that government will support recovery and urged them to wait and watch to assess the situation. The surge has come at an inopportune time. In the current financial year, RBI forecast the economy will bounce back with an annual growth of 10.5%. It’s early days but there is now a higher downside risk to that forecast.
One way to mitigate the fallout of the current situation is for government to selectively advance some of its proposed spending. An area where there is compelling need is recapitalisation of public sector banks. The Budget proposed a recapitalisation of Rs 20,000 crore, which now needs to be done at the earliest. Last year’s stimulus was based mainly on monetary policy measures. Not only was RBI’s policy rate lowered, it was complemented by measures to enhance the potential supply of money. However, it hasn’t had the desired effect on banks on account of risk aversion arising from an uncertain environment.
Right now, the uncertainty has been exacerbated by a combination of localised lockdowns and disruptions due to a surge in infections. The outcome will be to make banks even more risk averse as the resilience of smaller firms is being severely tested. RBI’s January financial stability report estimated that 14.8% of bank advances can turn bad by September under a severe stress scenario. This scenario will choke the flow of credit even to firms that are strong enough to survive. One way to head off a situation of dwindling credit flow is to reassure banks by recapitalising them early. That’s what the government should do soon.
5. Oxygen: Beg, borrow, steal
Successive governments have overlooked these issues, this government also took its eye off the ball, and citizens now are paying the price. As the Delhi High Court said, “beg, borrow, steal” — but find a way to help citizens to breathe.
On Thursday, the home ministry ordered that there will be no restriction on inter-state and intra-state supply of oxygen-related goods, and reiterated that the supply of oxygen for industrial purposes, except that exempted by the government, is strictly prohibited. The order came on the heels of three related developments. One, states and Union territories such as Delhi alleged that their oxygen supply was being blocked by neighbouring states. Second, hospitals moved the Delhi High Court, which directed the Centre to supply oxygen at any cost (and it speaks of the enormity of today’s crisis that hospitals have to go to court to find ways to procure and buy oxygen in the first place). And three, the Supreme Court asked the Centre to present a national road map on Covid-19 management, including the oxygen distribution plan. Prime Minister Narendra Modi also chaired a high-level meeting to review oxygen supply across the country.
As the brutal second wave of the pandemic has hit India, there has been almost a war over oxygen cylinders among states, and between states and the Centre. This is both a symbol of an existing crisis in Indian federalism, as well as a further blow to the federal compact. And there is little doubt that the Centre has to take a larger share of the responsibility. At a time when patients and their families are desperately looking for hospital beds, medicines and oxygen, the Centre should play the role of an unbiased administrator, unveil a proper distribution pattern, and unclog the legal and administrative bottlenecks to ensure fair and timely distribution of medical supplies. But that hasn’t happened so far because it failed to anticipate the scale of the crisis and need for oxygen.