The HINDU Notes – 27th June 2020 - VISION

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Saturday, June 27, 2020

The HINDU Notes – 27th June 2020





πŸ“° ‘With industries not restarting production, ISRO projects affected’

As supply chains are yet to resume, planned launches and satellite activities have been delayed, says Chairman K. Sivan

•On January 1, 2020, the Indian Space Research Organisation set out an ambitious target of 25 satellite and launch missions for the year. With three months now lost due to the COVID-19 pandemic, leaving the space agency without a single home launch yet, ISRO Chairman and Secretary, Department of Space K. Sivan said though supply of hardware from industries has been affected, work at each centre is on track.

In the last three months how have ISRO and its centres been affected by the COVID-19 pandemic?

•Definitely there has been some impact on our programme because of the lockdown. But we are not able to assess it now. We are yet to get stabilised output. We have two kinds of activities. One is in-house research and development. The other one is project or mission related, done outside in industry. ISRO’s own activities are not affected. What is affected is the supply of hardware from industries.

•Most of our work is done outside in the industry and we are waiting for the industry to start functioning fully. Only then, after some time, can we review and make some assessments.

•At the same time ISRO is not keeping quiet. Each centre has its in-house facilities and is carrying out many developmental activities in full steam.

When do you think you can resume launching satellites?

•Because of the widespread impact of the coronavirus pandemic, project activities and mission work can be decided only later, when we can rightly assess the situation.

By hardware do you mean satellites, launch vehicles, rocket tanks and systems, etc? Could you please elaborate how hardware issues have impacted your projects?

•Yes. Hardware for all our programmes is affected. Most of our hardware comes from Mumbai and other cities but our vendor industry is not yet fully functional. Project work is affected because industry is not fully geared up for production; inter-state movement [of supplies] is affected and also because employees` movements are not normal.

•Around 500 small, medium and large industries contribute to the space programme ... The virus and its effect are spread across the country. Even if hardware is made, transporting it [to the respective centres] is the problem. We cannot move the rakes, vehicles or the trailers. For example, if they go from Thiruvananthapuram to Bengaluru or from Thiruvananthapuram to Sriharikota, they must pass through Tamil Nadu and will have to get quarantined.

To what extent do you think the COVID-19 pandemic has hit your annual plan of missions? Sometime in March, GISAT-1 was to have been the first domestic launch of 2020 but it got deferred.

•As I said before, all projects which require industry support are affected. Activities like satellite launch and making rockets available are affected. Not only for the SSLV, it could be Gaganyaan, Chandrayaan[-3] or every project. It is all interlinked. For a launch to take place, launchpad related activities at Sriharikota are done, not by the personnel there but by people from Thiruvananthapuram. Those teams are not able to travel. However, whether it’s SSLV, Gaganyaan or Chandrayaan[-3,] every in-house activity is going on without a problem

πŸ“° Hardship may push people into making drugs for a living: UNODC

Report looks at impact of pandemic on the illegal substances industry

•The United Nations Office on Drugs and Crime (UNODC), in its 2020 World Drug Report, has highlighted a wide range of possible consequences of the COVID-19 pandemic on illegal drug production, supply and consumption.

•The report, released on Friday, expressed concern over the adverse impact of the economic hardship caused by the pandemic. This could lead to an increase in the number of people resorting to illicit activities linked to drugs to make a living.

•As experienced during the 2008 economic crisis, it could result in reductions in drug-related budgets of the governments; overall increase in drug use, with a shift towards cheaper and more harmful drugs.

•The measures taken by governments to counter the pandemic inevitably had double-edged consequences on large-scale drug supply.

Double-edged sword

•Some countries, such as Italy, the Niger and countries in Central Asia, have experienced a sharp decrease in drug seizures, amid reports that drug traffickers have diverted their attention to other illegal activities, including cybercrime and trafficking in falsified medicines (in Balkan countries).

•Other countries, including Morocco and Iran, have reported huge drug seizures, indicating large-scale drug trafficking, while some have reported an increase in interdiction resulting from increased controls.

•The report, which is in six volumes, said the lockdown could hinder the production and sale of opiates in major producing countries. The key months for the opium harvest in Afghanistan are March to June. This year’s harvest took place during the pandemic.

•“A recent uptick in heroin seizures in the Indian Ocean could be interpreted as an indication of an increase in the use of maritime routes for trafficking heroin to Europe along the ‘southern route’. If confirmed, the shift ... would indicate a change in the strategy of drug trafficking organisations as a result of the COVID-19 measures,” the report said.

πŸ“° ‘Economy in deep trouble, to shrink 5%’

Balance-sheet recession looms: S&P

•S&P Global Ratings on Friday said the Indian economy is in deep trouble with growth expected to contract by 5% this fiscal.

•“India’s economy is in deep trouble. Difficulties in containing the virus, an anaemic policy response, and underlying vulnerabilities, especially across the financial sector, are leading us to expect growth to fall by 5% this fiscal year before rebounding in 2021,” S&P said in a report.

•In its report titled ‘Asia-Pacific losses near $3 trillion as balance sheet recession looms,’ S&P projected the region’s economy to shrink by 1.3% in 2020, but grow by 6.9% in 2021. This implies a loss nearing $3 trillion in output over these two years.

•“Asia-Pacific has shown some success in containing COVID-19 and, by and large, responded with effective macroeconomic policies,” said Shaun Roache, chief economist for Asia-Pacific at S&P Global Ratings.

Cushioning the blow

•“This can help cushion the blow and provide a bridge to the recovery. The recovery looks set to be weighed down by indebted balance sheets, however.”

•One risk now looming larger is yet another ‘balance sheet recession’ in which at least one important sector of the economy — the government, firms, or households — tries to bolster its weak financial position by saving more, paying down debt and spending less, S&P said.

•“The downturn caused by COVID-19 did not start as a balance-sheet recession but may end up as one,” Mr. Roache said. “This means less investment, slower recovery, and a permanent hit to the economy that will last even after a vaccine is found.”

•The pandemic caused a sudden stop in activity and to prevent a collapse, policymakers, helped by banks, have provided extraordinary financial support to firms and households.

•Banks may lend less than they normally would in a recovery to focus on the overhang from the pandemic. Private firms may prefer to stabilise debt rather than ramp up spending on new investments, even though demand is improving.

•S&P kept its forecasts for growth in the Chinese economy at 1.2% and 7.4% for 2020 and 2021, respectively.

πŸ“° Getting out of the ‘guns, germs and steel’ crisis

India’s choices are clear — to be bold and go on a rescue mission, or do nothing and hope the situation resolves itself

•India faces a “guns, germs and steel” crisis, to borrow from the title of Jared Diamond’s classic book on the evolution of societies and nations, Guns, Germs, and Steel: The Fates of Human Societies . There are Chinese “guns” on the borders. There are coronavirus “germs” in our bodies. There are “steel” makers and other businesses on the verge of bankruptcy.

•Arguably, this is the gravest confluence of military, health and economic crises threatening our nation in more than a generation. Each of these would qualify as an independent, large crisis by itself, warranting a specific resolution. The Chinese military threat calls for immediate and strategic action by our defence and foreign affairs establishments. The COVID-19 health epidemic is here to stay and needs constant monitoring by the Health Ministry and local administration. The economic collapse is an enormous challenge that needs to be overcome with prudent policy.





Stand-off and Kargil parallel

•The common thread across these is that its resolution requires significant financial resources. Standing up to a military threat by a superpower neighbour will pose an inevitable drain on the finances of the government.

•India’s war against Pakistan in Kargil in May 1999 provides hints of the financial burden of a military threat. India’s defence expenditure in the war year shot up by nearly 20% from the previous year. It also forced the then government to increase India’s defence budget for the next financial year to 2.7% of nominal GDP, the highest in decades.

•China is a far mightier power than Pakistan. In this face-off, 20 Indian soldiers have been brutally killed and many more injured by the Chinese Army. A portion of India’s land in Ladakh has been grabbed by China. Surely, India is bound to assert its rights, which will necessitate higher expenditure. India’s defence budget has been whittled down to just 2% of GDP for the financial year 2021. China’s defence budget is nearly four times larger. In all likelihood, the Chinese conflict will stretch central government finances by an additional one to two percentage points of GDP, as India staves off the current threat and shores up its defence preparedness.

Health care and economy

•The health pandemic has exposed India’s woefully inadequate health infrastructure. The combined public health expenditure of States and the central government in India is a mere 1.5% of GDP, compared to China’s at 3% and America’s at 9%. The COVID-19 epidemic is expected to linger on for another two years until a suitable vaccine is available at large. There is no option other than to significantly ramp up India’s health expenditure. Many public health experts are of the opinion that the central government will need additional funds of the equivalent of at least one percentage point of GDP to continue the fight against COVID-19.

•It is no secret that the extreme national lockdown has thrown India’s economy into utter disarray. India’s economy has four major drivers — people’s spending on consumption, government spending, investment and external trade. Spending by people is the largest contributor to India’s economic growth every year. For every Rs. 100 in incremental GDP, Rs. 60 to Rs. 70 comes from people’s consumption spending. The lockdown shut off people from spending for two full months, which will contract India’s economy for the first time in nearly five decades, regardless of a strong agriculture performance.

•Even prior to COVID-19 when the global economy was robust, India’s trade levels had fallen from 55% of nominal GDP in 2014 to 40% in 2020. Now, with the global economy in tatters, trade is not a viable alternative to offset the loss from consumption. Investment is also not a viable option at this stage since the demand for goods and services has fallen dramatically.

Incremental funds needed

•The only options then are to either put money in the hands of the needy to stimulate immediate consumption or for the government to embark on a massive spending spree, akin to the “New Deal” which was a series of programmes and projects instituted by U.S. President Franklin D. Roosevelt during the Great Depression of the 1930s. Based on estimates of loss of consumption, incomes and its multiplier impact, my estimate is that the government will need to inject incremental funds of five percentage points of GDP to absorb the economic shock and kick start the spending cycle again.

•Thus, India’s “guns, germs and steel” crisis will impose a total financial burden of an additional eight percentage points of GDP on the central government exchequer. Where will the government get such a large sum of money from?

•The government had expected a nominal GDP growth of 10% this year. It is clear now that GDP will not grow but shrink. There is much hullabaloo about a ‘V’ shaped economic recovery, which is a mere illusion. A 5% fall now and a 10% growth next year will be hailed as a sharp ‘V’ shaped recovery by economists and the International Monetary Fund. But as your local grocery store-keeper will elucidate, it only means that his total sales is a tad higher than two years ago. Central government revenues for this year were budgeted at 10% of GDP which will not be achieved. Revenues will likely fall short by two percentage points of GDP.

•In sum, the government needs to spend an additional eight percentage points of GDP while revenues will be lower by two percentage points of GDP, a combined gap of 10% of GDP. Potential new sources of revenue such as a wealth tax or a large capital gains tax are ideas worth exploring for the medium term but will not be of much immediate help.

The ‘junk rating’ risk

•The only option for the government to finance its needs is to borrow copiously, which will obviously push up debt to ominous levels. When government debt rises dramatically, there will be a fourth dimension to the “guns, germs and steel crisis”; a “junk” crisis. With rising debt levels, international ratings agencies will likely downgrade India’s investment rating to “junk”, which will then trigger panic among foreign investors. India thus faces a tough “Dasharatha” dilemma — save the country’s borders, citizens and economy or prevent a “junk” rating.

•Some economists argue that there is a magical third choice – to simply print how much ever money the government needs to overcome these crises. Economic theory states that if money is printed at will, it can lead to a massive spike in prices and inflation. This theory has fallen flat in the past decade in developed nations such as America where the creation of phantom money has not led to inflation. Hence, the Reserve Bank of India can just create money at will and transfer them to government coffers electronically, is the argument.

•There are multiple problems with this argument but the most important one is that regardless of whether money is printed or borrowed from others, it will still be counted as government debt and not escape a potential downgrade to a “junk” rating.

•The U.S dollar, by virtue of being the world’s reserve currency, has an in-built protection against a currency crisis that can be triggered by at-will printing of money, that other developing nations such as India do not possess. If there were indeed no costs to printing money whenever governments need, then why tax citizens at all? Countries could just print money for all their expenses every year. The magical third choice is not a magic wand that can give the Indian government the money it needs and, also prevent a ratings downgrade.

•The nation is at the precipice of an extremely challenging moment in her history. How India emerges from this crisis will shape not just India’s destiny but the world’s. The government’s choices are either to be bold and embark on a rescue mission, or do nothing and hope the situation resolves itself. On balance, it seems that the best course of action is to borrow unabashedly to pull India out of the “guns, germs and steel” crisis and deal with the consequences of a potential “junk” nation label.

πŸ“° The pandemic imposes a steep learning curve

Though online instruction will shape education in the future, there is much to absorb in the context of COVID-19

•Across the world, education has been drastically affected by the COVID-19 pandemic. Most instruction has moved online; across the country, schools, colleges, universities and research establishments have been shut with no idea of when it will be possible to safely reopen. Higher education has gone digital where possible; or else it has simply been put on hold.

•In the wake of the pandemic, other countries have embraced online education with mixed enthusiasm. Many universities in the United Kingdom and the United States have announced that the coming academic year will be held mainly online. At the same time, educationists and policy makers advise caution. Online education has not lived up to its potential.

•Given our diversity in institutions of higher education — private and governmental colleges and universities, research institutes, professional colleges, State and central universities and so on — the Indian education system has had a very heterogeneous response to the pandemic. The reactions also reflect the contrast in rural versus urban infrastructure, the variable quality of staff, and the diverse types of subjects that are taught.

•There will surely be serious long-term effects, considering the scale of the social, political and economic changes that have been occurring these past several months.

Subject-specific

•From a purely pedagogic point of view, it is clear that technology will play a bigger role in education in the coming years.

•However, it will be highly subject-specific. Courses that traditionally need a laboratory or practical component are an obvious example where online classes cannot offer an alternative. The adoption or integration of technology in education also depends on the specific institution and its location: there is a huge digital divide in the country in terms of bandwidth and reliable connectivity, as well as very unequal access to funding.

•Beyond classroom lectures and courses, there has been a serious impact on academic research in all disciplines. There is need for close personal interaction and discussion in research supervision, and it is not clear when and how doctoral research and supervision can resume. In addition, the related economic crisis has consequences for funding, both of research as well as for the maintenance of research infrastructure. These are very long-term effects.

•About a month ago we asked teachers and students across India to share their experiences of education during the crisis and to discuss their personal view of the future, keeping their institutions and subjects in mind. (These thoughtful articles can be read at Indian Academy of Sciences; https://bit.ly/3eCRSRh)

The hard truths

•Some things are self-evident. Not all students have equal access to the Internet, and more than half in any class in any institution are simply not able to attend lectures in real time for want of the required combination of hardware and electrical connectivity in their homes. This is more pronounced in rural areas and non-metro cities, and for lower income groups as well.

•Most teachers in India view online instruction with caution. The shift online is in response to a crisis and was poorly planned. Online teaching is a separate didactic genre in itself — one that requires investment of time and resources that very few teachers could come up with in a hurry. Many online classes are poorly executed video versions of regular classroom lectures. Across the board, teachers recognise this as unsatisfactory.

•Online higher education using MOOCs, or massive open online classrooms, has been encouraged by the Ministry of Human Resource Development for some time now via the National Programme on Technology Enhanced Learning (NPTEL) and SWAYAM platforms. (SWAYAM is a Hindi acronym for “Study Webs of Active-Learning for Young Aspiring Minds”.) If this is to make a serious difference, both the quality and quantity of online courses need to be enhanced. These are presently used to augment classroom instruction but if these can be taken for credit, it may help address the question of access to quality education. There is a positive aspect of even a partial move to online education: making lectures available online in public and open websites accelerates democratisation of knowledge and the wide distribution of learning opportunities.

An opportunity for change

•This is a chance to re-imagine higher education in India. For long this has been elitist and exclusionary; education has been less about learning and more about acquiring degrees. The pandemic can change that if we let it.

•Our higher education system can be more inclusive. If going online loses the human touch, the advantage of becoming available to many many more people who aspire to learn is worth the trade. If giving proctored examinations in a socially distanced world is more difficult, what needs to change is the idea of proctored examinations. There are simpler ways to validate pedagogy, some of which can be found in our own traditions. Gandhiji’s “Nai Talim” put a high premium on self study and experiential learning, for instance.

•Significant qualitative changes can come about if we plan now. Digital tools such as artificial intelligence (AI) — already used in teaching language — can be adapted to deliver personalised instruction based on the learning needs for each student. The use of AI can improve learning outcomes; in particular, this can be a boon for teaching students who are differently-abled.

•The adoption of online education needs to be done with sensitivity. What is needed at this time is imagination and a commitment to decentralisation in education. Pedagogic material must be made available in our other national languages; this will extend access, and can help overcome staff shortages that plague remote institutions. The state will have to bear much of the responsibility, both to improve digital infrastructure and to ensure that every needy student has access to a laptop or smartphone.

•Campuses across India are desolate now, empty and inactive. Estimates are that COVID-19 will be seasonal, recurring every so often till 2022 or maybe 2024. So when these institutions reopen, they must do so with extreme caution. Blended modes of education will be unavoidable: online instruction where possible, and limited contact for laboratory instruction and individual mentoring. If this can lead to the emergence of a new pedagogic paradigm, we would have made the sweetest use of this adversity.