News & Events
EDITORIAL TODAY (ENGLISH)
- May 14, 2022
- Posted by: Maya
- Category: Editorial English Uncategorized
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 competitions..
1.Full circle: On cutting fuel taxes
Cutting fuel taxes is a must to ensure overall macroeconomic stability
As the ruling Bharatiya Janata Party marks the eighth anniversary of Prime Minister Narendra Modi’s government, retail inflation has accelerated close to the 8.3% level last seen in May 2014, when Mr. Modi assumed office in the last week of the month. For a government that prided itself on its inflation taming successes in the first five years, a combination of factors including the COVID-19 pandemic, high crude oil prices and now the war in Ukraine have created a perfect storm that sent the Consumer Price Index (CPI)-based inflation racing to a 95-month high of 7.79% in April. Food and fuel were the biggest culprits fanning last month’s furious pace of price gains that seem unabating. Food inflation as measured by the Consumer Food Price Index (CFPI) quickened to a 17-month high of 8.38% last month, with rural consumers experiencing it at 8.5%, a pace that was 41 basis points faster than that experienced by their urban counterparts. Ten of the 12 items in the food and beverages basket of the overall CPI registered sequential acceleration as well. Of concern are the prices of cereals and products, which constitute almost a tenth of the CPI and account for the key staples of wheat and rice that are essential for ensuring food security. Inflation in cereals accelerated by more than 100 basis points to 5.96% last month.
With both output and government procurement of wheat set to be lower than estimated earlier and exporters seeking to corner a greater share of the crop to tap the recent surge in global demand for the grain, domestic prices have already hardened and could pose a challenge to household budgets in the coming months. Edible oil is another constituent of the food basket meriting close monitoring on the prices front. While inflation in the price of the cooking medium slowed by 151 basis points from March, the pace was still a dizzying 17.28%, with the sequential rate also a sizeable 2.52%. With the war in Ukraine having shut the tap on sunflower oil supplies from the largest global source of the commodity, unless Indonesia rescinds its ban on palm oil exports in the near future, the immediate outlook for edible oil prices is far from reassuring. Ultimately though, with inflation now having turned far more broad-based and logging a strident pace in excess of 8% for four of the six sub-groups in the CPI, policymakers have their task cut out. While the RBI must continue to tighten monetary policy in order to protect the vast majority who have no hedge against inflation, the pass-through of high oil costs, reflected in double-digit price gains in the transport and fuel and light categories, leaves the Government with little option but to cut fuel taxes if it is serious about taming inflation so as to ensure overall macroeconomic stability.
More needs to be done to enhance WHO’s ability to respond to disease outbreaks
In the third year of the COVID-19 pandemic, Prime Minister Narendra Modi once again brought up the much-discussed issue of reforming the World Health Organization while addressing the heads of countries at the second global COVID-19 summit. That reforms are urgently needed to strengthen the global health body and its ability to respond to novel and known disease outbreaks in order to limit the harm caused to the global community is beyond debate. The long delay and the reluctance of China to readily and quickly share vital information regarding the novel coronavirus, including the viral outbreak in Wuhan, and its stubborn refusal to allow the global agency to investigate, freely and fairly, the origin of the virus have highlighted the need to strengthen WHO. But any attempt to build a stronger WHO must first begin with increased mandatory funding by member states. For several years, the mandatory contribution has accounted for less than a fourth of the total budget, thus reducing the level of predictability in WHO’s responses; the bulk of the funding is through voluntary contribution. Importantly, it is time to provide the agency with more powers to demand that member states comply with the norms and to alert WHO in case of disease outbreaks that could cause global harm. Under the legally binding international health regulations, member states are expected to have in place core capacities to identify, report and respond to public health emergencies. Ironically, member states do not face penalties for non-compliance. This has to change for any meaningful protection from future disease outbreaks.
While Mr. Modi has been right in calling for reforms in WHO, the demand for a review of the health agency’s processes on vaccine approvals is far removed from reality. Covaxin is not the first vaccine from India to be approved by WHO, and the manufacturer of this vaccine has in the past successfully traversed the approval processes without any glitch. The demand for a review of the vaccine approval process is based on the assumption that the emergency use listing (EUL) of Covaxin was intentionally delayed by the health agency, which has no basis. That the technical advisory group had regularly asked for additional data from the company only underscores the incompleteness of the data presented by the company. As a senior WHO official said, the timeline for granting an EUL for a vaccine depends “99% on manufacturers, the speed, the completeness” of the data. To believe that the agency was influenced more by media reports than the data submitted by the company is naive; the media were only critical of the Indian regulator approving the vaccine even in the absence of efficacy data. Also, the rolling submission began in July 2021 after the company had completed the final analysis of the phase-3 data. Any reform in WHO should not dilute the vaccine approval process already in place.
3.Get used to it: Ukraine war may last long. Policy should adapt to new normal
Finland is expected to formally announce over the weekend that it will apply for a Nato membership. Sweden may soon follow suit. Finland’s membership of Nato, when it does come through, will make it the sixth treaty member to share a border with Russia – Norway, Estonia, Latvia, Poland and Lithuania are the others. Russia has warned of consequences if Finland joins Nato. In all, geopolitical tensions are unlikely to subside soon. Consequently, the economic disruption caused by the tensions is also bound to be prolonged.
India is likely to experience the economic fallout mainly through two channels, commodity prices and financial markets. The Indian basket of crude has hovered around $105/barrel for a while. In addition, commodities, including agricultural products, have recorded a sharp increase in the price level over the last six months. Elevated inflation is now a global phenomenon and it may endure for some time. The combination of geopolitical risks and inflation has jolted financial markets which are linked through portfolio investors. As most major central banks have begun aggressive monetary tightening, RBI’s job has become more challenging. Foreign exchange rates are one of the vehicles of monetary transmission. Fluctuations in the rupee’s exchange rate against major currencies in the wake of actions taken by other central banks can undermine RBI’s efforts in reining in inflation.
But despite the looming uncertainty, none of the challenges are new. High inflation along with financial market volatility is a situation India has dealt with earlier. RBI’s cushion of about $532 billion in foreign currency assets should be adequate to smoothen the adjustment underway as economic agents adapt to recent developments. The one certainty in this environment is that both firms and individuals will adapt to the situation. A prolonged spell of high commodity prices may catalyse a faster pace of transition in energy systems.
4.Keep up Covid guard: Vaccines are plentiful. Improve booster messaging
After reducing the duration between second dose and the booster shot to 3 months for international travellers, GoI must reduce the general 9-month gap between second dose and boosters and ramp up messaging on importance of precaution doses. Other countries with advanced vaccination programmes administer boosters at much shorter durations. The US CDC prescribes a first booster for all adults five months after the primary series and a second booster for those over 50 or those who are immunocompromised, four months after the first booster. The UK encourages the first booster three months after the second dose.
Meanwhile, the Biden administration is preparing for 100 million Covid infections later this year. While India’s Covid trajectory has diverged from other nations in the months after the third wave in January, there’s no room for complacency. Data from the 2015-16 Demographic and Health Survey of households indicates 42% of diabetes and 56% of hypertension patients are unaware of their condition. These comorbidities are a key reason to encourage all adults to take boosters.
Vaccine supplies are plentiful now. Over 17.5 crore doses are lying unutilised. The low offtake of boosters isn’t surprising: Many people are assuming without evidence that the Covid threat has passed. Nearly 6 crore adults between 18 and 59 are eligible for boosters, but just over 12.5 lakh have taken the jab. The US prognosis of another tidal wave of infections must prod India also to improve its booster dose programme.
5.Retail inflation: The step ahead
Mint Street and North Block must maintain close coordination in making sure that our policy response does not throw the baby (of growth) out with the bathwater (of inflation) That the April inflation number would be higher than the 6
Mint Street and North Block must maintain close coordination in making sure that our policy response does not throw the baby (of growth) out with the bathwater (of inflation)
That the April inflation number would be higher than the 6.95% reading in March 2022 was a given, especially after the unscheduled rate hike by the Monetary Policy Committee (MPC) of Reserve Bank of India on May 4. Even then, the 7.79% Consumer Price Index (CPI) growth in April has caught analysts by surprise. What happens now? The most predictable response will be yet another round of interest rate hikes when the MPC meets in early June.
But will a monetary tightening be able to control inflation? There is good reason for scepticism on this count. Interest rate hikes are not going to bring down the cost of crude oil. This year’s Union Budget expected crude prices to be in the range of $70-75 per barrel. They have been trending above $100 for months now and could go even higher once the pandemic situation in China improves. A similar dilemma awaits policy makers on the food price front. A surge in global food prices has come as an insurance for farmers who have been facing rising cost of cultivation. But a premature and stronger than usual heatwave has hit yields for critical crops such as wheat. India is now faced with an unenviable choice between allowing farmers to exploit windfall export gains or acting pre-emptively to prevent even perceived shortages encouraging speculative activities which will fuel food inflation fires.