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Archives: News

  • G20 : Economic Cooperation ahead

    The deep void in global leadership

    Context

    The coronavirus’s flight across the world at lightning speed has exposed the total void in collective leadership at the global level.

    No global plan of action to combat the virus

    • No plan of action: Three months into the catastrophic war declared by an invisible virus, there is as yet no comprehensive, concerted plan of action, orchestrated by global leaders.
    • The G20 meeting: The G20 has just had a virtual meeting, at the prodding of Prime Minister Narendra Modi.
    • $ 5-trillion into the world economy: It is encouraging to learn that the G20 leaders have agreed to inject $5-trillion into the world economy to partially counter the devastating economic impact of the pandemic. This is indeed good news.
    • Need to do more: But taking collective ownership to fight a global war against the virus will require a lot more than writing cheques.

    SAARC meeting stands out in the world

    • Pandemic is not treated as a common enemy: World leaders are obviously overwhelmed with their own national challenges and do not appear inclined to view the pandemic as a common enemy against mankind, which it is.
    • Delay in reporting by China: China delayed reporting the virus to the World Health Organisation (WHO), and perhaps, contributed to the exacerbation of the spread of the virus across the globe.
    • Unilateral suspension of flight by the US: It was reported that the Trump administration did not even inform the European Union before it shut off flights from Europe.
    • Why the SAARC meeting stands out? It must be acknowledged that the initiative taken by Mr Modi in the early days to convene a meeting of South Asian Association for Regional Cooperation countries stands out in contrast to the pusillanimous leadership around the world.

    Need for leaders of nations to come together for collective global action.

    • Pandemic to persist: There is no evidence that, at the global level, the pandemic has abated yet and would be brought under control soon.
    • Massive lockdown, not a solution: To imagine that nations would be able to tame the virus soon with massive shutdowns might be just wishful thinking.
    • National shutdowns and physical distancing have been a challenge not only in the United States and some European countries, but it would also be more so in populous countries such as India.
    • At any rate, such lockouts come at enormous economic and social costs.
    • The utility of long suspension of international travel: As long as the virus is alive in some corner of the world, it would resume its travel across the world the moment international travel restrictions are relaxed.
    • Is it realistic to imagine that international travel will remain suspended until the last virus alive on this planet is extinguished?
    • This is a war. A good war against a bad enemy, and a common enemy, that respects no borders.
    • It is a global challenge to be fought by collective global leadership: If this global challenge is not a battle to be fought by a collective global leadership, nothing else is.
    • And yet, the typical response by all affected nations has been to impose ‘National distancing’ by closing borders.
    • While this is no doubt, a most appropriate response, there is a much bigger and emergent need for leaders of nations to come together for collective global action.

    Two reasons for the lack of collective global action

    • 1. Right-wing nationalism: The swing towards right-wing nationalism, as a guiding political ideology, in large swathes of the world, particularly in the U.S.
    • This ideology posits ‘global good’ being in conflict with and inimical to national interests.
    • 2. Ineffectiveness of the multilateral institutions: The United Nations was the outcome of the shared vision of the world leaders after World War II, that collective action is the only way forward to prevent the occurrence of another war.
    • That institution has notoriously failed to live up to its expectations to maintain peace among nations in the nearly 80 years since its formation.
    • Its affiliate organisations have, in several ways, failed to deliver on their lofty missions.
    • In particular WHO has proven to be too lethargic in reacting to pandemics in the past.
    • Its responses to COVID-19 has come under the scanner, not merely for incompetence, but also for lack of intellectual integrity.

    G-20 offers hope

    • A nimble outfit, not burdened with bureaucracy, is required to manage a global crisis of the nature that we are confronted with, today.
    • The G20, with co-option of other affected countries, itself might serve the purpose for the present.
    • What the global leadership must acknowledge: What is important is for the global leaders to acknowledge what every foot soldier knows: winning a war would require the right strategy, rapid mobilisation of relevant resources and, most importantly, timely action.
    • The following actions should come out of such a collective-
    • 1. Dealing with the shortages: The collective should ensure that shortages of drugs, medical equipment and protective gear do not come in the way of any nation’s capacity to contain or fight the pandemic.
    • Assistance from other countries: It is very likely that some nations that have succeeded in bringing the pandemic under control, such as China, Japan or South Korea, might have the capability to step up production at short notice to meet the increasing demand from other countries which are behind the curve.
    •  Development of information exchange: This would typically involve urgent development of information exchange on global production capacity, present and potential, demand and supply.
    • This is not to mean that there should be centralised management, which is not only infeasible but counterproductive, as the attendant bureaucracy will impede quick action.
    • A common information exchange could restrain the richer countries from predatory contracting of global capacities.
    • 2. Protocol among participant countries: Protocols might need to be put in place among participating countries to ensure seamless logistics for the supply chain for essential goods and services to function efficiently.
    • This might be particularly necessary in the context of controls on international traffic and national shutdowns.
    • There would need to be concomitant accord to eliminate all kinds of tariff and non-tariff barriers.
    • 3. Exchange of information: There needs to be an instantaneous exchange of authenticated information on what clinical solutions have succeeded and what has not.
    • A classic example is an issue relating to hydroxychloroquine, which is being used experimentally, bypassing the rigours of randomised clinical trials.
    • While there is no substitute to classic clinical proof, the more field-level information is shared within the medical community, the better will be the success rates of such experimentation.
    • 4.Cross country collaboration on the trials: This is a time to have cross-country collaboration on laboratory trials and clinical validation for vaccines and anti-viral drugs.
    • It must be acknowledged that WHO has already moved on this issue, although, perhaps, belatedly.
    • The best way to ensure speedy research is to pool global resources.
    • This attempt to collaborate might also bring in its wake an acceptable commercial solution that adequately incentivises private research while ensuring benefits being available to the entire world at affordable costs.
    • Such a framework might be necessary for sustained collaborations for future challenges.
    • 5. Easy movement of trained health professionals: There is a need to facilitate easy movement of trained health professionals across the world to train others and augment resources wherever there are shortages.
    • In other words, nations should come together to organise a global army to fight the pandemic, equipped with the best weapons and tools.
    • 6. The anticipation of food shortages: We must anticipate food shortages occurring sooner or later, in some part of the world, consequent to the national shutdowns.
    • Ironically, while we might have saved lives from the assault of the novel coronavirus, we might run the risk of losing lives to starvation and malnutrition, somewhere in the world if we do not take adequate precautions.
    • This requires not only coordinated global action; it would also turn out to be the test of global concern for mankind in general.

    Reconstruction of the global economy

    • Devastation no less than after the world war: Eventually, there is no doubt that human talent will triumph over the microscopic virus. But the economic devastation, that would have been caused as a result will be no less than the aftermath of a world war.
    • What should the reconstruction of economy involve? An orderly reconstruction of the global economy, which is equitable and inclusive, will eventually involve renegotiating terms of trade among key trading blocs, concerted action among central bankers to stabilise currencies, and a responsible way to regulate and manage global commodity markets.

    Conclusion

    Does India have the power to awaken the conscience of the Superpowers and catalyse collective global action? Remember, historically, it is always the weakling or the oppressed, who have caused transformational changes in the world order.

  • Animal Husbandry, Dairy & Fisheries Sector – Pashudhan Sanjivani, E- Pashudhan Haat, etc

    Amid the Lockdown, How can we efficiently manage our Agriculture and Livestock sector

    Context

    Amid lockdown, we need an action plan to manage our agriculture, livestock sectors.

    Need for an immediate action plan to manage the agriculture and livestock sector

    • The country produces around 52 crore litres of milk daily.
    • There are also 80 crore-odd live poultry, both broilers and layers, at any given time, supplying meat and eggs to consumers.
    • Link with the other producers: These birds and animals, in turn, support the livelihoods of poultry and dairy farmers, as well as those producing maize, soybean, mustard, groundnut, cotton and other coarse grains that are ingredients for livestock feed.
    • It is the government’s responsibility to ensure that farmers are able to keep their animals alive and market the crop that has been, or will be, harvested during the lockdown period.
    • We need an immediate action plan to manage our agriculture and livestock sectors in the interest of both producers and consumers.

    Issue of implementation

    • Ensuring free movements: The first thing is to ensure free movement of farm produce, livestock feed and veterinary medicines.
    • Implementing the already taken decision: It is obvious that not all issues can be addressed overnight. But the minimum the government can do is to ensure ground-level implementation of already-taken decisions.
    • The problem of implementation: Many essential services, for instance, were kept out of the purview of the lockdown. Food, feed and agricultural inputs have been specifically notified as essential services.
    • But there are several problems at the level of implementation that are coming to notice.
    • The Centre has issued various directives/notifications, many of them brief and general in nature.
    • Many of these have either not reached the local authorities and police personnel or are not clearly worded. As a result, the smooth movement of essential items has been affected.
    • There are also reports of conflict between the police and citizens, including people involved in the transportation and delivery of food as well as inputs to farms.
    • Why good food supply line matters? The government must do to ensure that people don’t go hungry and the measures it must take to make sure people don’t crowd a few outlets, increasing the chances of the virus spreading.
    • The government has announced that the beneficiaries of the public distribution system can avail three months’ ration at one go.
    • The challenge of delivery: The challenge is to ensure that fair price shops deliver the provisions in an orderly manner and their supply lines remain intact.

    Issue of poultry and maize farmers

    • Sharp fall in poultry items: In such times, prices of essential food items are known to shoot up. But in India, prices of food items like chicken meat and eggs have registered a sharp fall.
    • In Delhi’s Gazipur Mandi, for example, the price of broiler chicken has fallen from Rs 55/kg in January 2020 to Rs 24/kg in March.
    • This has also pushed the maize prices down as poultry is largely fed packaged maize.
    • The government may have to think of compensating poultry and maize farmers in due course.

    Suggestions for improving the implementation issue

    • Issue a single notification: The Centre must issue a single notification relating to food items in a standard format and uniform language so that all ambiguities are removed.
    • This needs to be finalised after consultations with the stakeholders and the state governments can release it to officials working at the grassroots.
    • The focus should be to address the problems arising from restrictions on the transport — between and within states — of agri-produce and inputs related to them.
    • Invoke the ESMA: Another suggestion is that the Essential Services Maintenance Act (ESMA) be invoked for the delivery of all essential services relating to food to prevent disruption of supplies.
    • Home delivery option: Home (street) delivery of these provisions, to avoid crowding, is a good option.
    • Roping in civil society: This is also an occasion to rope in civil society. NGOs, resident welfare associations, religious organisations and paramilitary forces can be engaged for orderly and safe distribution of food — both pre-cooked and fresh.
    • NGOs with experience in food preparation and distribution, such as Akshaya Patra, could guide local authorities.
    • People involved in this endeavour should be provided with safety gears.
    • The challenge of supplying perishables: These perishables-like fruits, vegetables and milk- must be sold in a packaged form in mobile vans. The weekly markets need to be temporarily suspended lest they spread the virus.
    • Vegetable vendors can work with civil society organisations as well as e-commerce players to do this job in a safe manner.
    • Retail distribution lines: Retail distribution lines need to be seamlessly linked to wholesale supply lines.
    • How to manage rabi season procurement? Procurement operations for rabi crops are around the corner.
    • Training and safety measures: The FCI and other procuring agencies need to be trained about safety measures and supplied safety gear.
    • Providing incentives to farmers for staggered selling: Farmers could be given Rs 50/quintal per month as an incentive to stagger bringing their produce to the market — say after May 10.
    • They will also need to be screened, given training and equipped with safety gear.

    Suggestions to prevent post-lockdown chaos

    • What will happen after the lockdown ends? Many plants are now shut or working at low capacity utilisation. Consumption by hotels and other institutions, too, is low. Nor is any export or import happening. But once the lockdown ends, there will be a rush to procure raw material, trucks and rail rakes.
    • Smooth recovery: Smooth recovery from the lockdown is as important as managing supplies during the lockdown.
    • Here are a few suggestions to ensure that the common man does not have to suffer hardships during and after the lockdown:
    • First– Place all food items, agri-inputs, packaging material and transport services under ESMA for a six-month period to prevent profiteering.
    • The MRP that was applicable in February should remain till October.
    • In the case of farm produce, it helps that we are looking at a bumper crop, which makes it all the more necessary to ensure its smooth marketing.
    • Second-Suspend APMC (agricultural produce market committee) laws for the next six months.
    • Traders with APMC licence are bound to act as cartels during rush hour, which will hurt both farmers and consumers.
    • Third-ESMA should apply to all utilities and transport services. State governments can make exemptions on a case to case basis: These exemptions should be subject to public scrutiny under the Right to Information Act.
    • The government should announce the above measures well in advance.

    Conclusion

    The government must start planning now to prevent post-lockdown chaos, especially profiteering in the event of shortages. Smooth recovery from the lockdown is as important as managing supplies during the lockdown.

     

  • Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

    A smarter supply line

    Context

    The government must ensure that people don’t go hungry and take measures to make sure that people don’t crowd a few outlets, increasing the chances of the virus spreading.

    Need for the package to compensate losses

    • Welfare package: The government has announced relief measures. Last week, the Finance Minister announced a welfare package of Rs 1.7 lakh crore.
    • This is too small to cope with the onslaught of the virus.
    • How much a comprehensive package would cost? A package to compensate all losses, including business losses, should amount to at least Rs 5 to 6 lakh crore, if not more.
    • How will the government find funds for this package?
    • Funds accrued as a result of oil price crash: The windfall gains that have accrued to it as a result of the crash in crude oil prices could come in handy.
    • Diver all the subsidies and development funds: The government could divert all subsidies and some development funds to fund this package and ask the country’s corporate leaders to help with funds.
    • Issue clarion call for voluntary donation: The prime minister could even issue a clarion call to those with a fixed income (say above Rs 50,000/month) to voluntarily donate at least 10 per cent of their salaries to fund the battle against the virus.

    Focus on supply lines of food and ways to achieve it

    • Why good food supply line matters? The government must do to ensure that people don’t go hungry and the measures it must take to make sure people don’t crowd a few outlets, increasing the chances of the virus spreading.
    • The government has announced that the beneficiaries of the public distribution system can avail three months’ ration at one go.
    • The challenge of delivery: The challenge is to ensure that fair price shops deliver the provisions in an orderly manner and their supply lines remain intact.
    • Home delivery option: Home (street) delivery of these provisions, to avoid crowding, is a good option.
    • Roping in civil society: This is also an occasion to rope in civil society. NGOs, resident welfare associations, religious organisations and paramilitary forces can be engaged for orderly and safe distribution of food — both pre-cooked and fresh.
    • NGOs with experience in food preparation and distribution, such as Akshaya Patra, could guide local authorities.
    • People involved in this endeavour should be provided with safety gears.
    • The challenge of supplying perishables:  These perishables-like fruits, vegetables and milk- must be sold in a packaged form in mobile vans. The weekly markets need to be temporarily suspended lest they spread the virus.
    • Vegetable vendors can work with civil society organisations as well as e-commerce players to do this job in a safe manner.
    • Retail distribution lines: Retail distribution lines need to be seamlessly linked to wholesale supply lines.
    • Buffer stocks: The government godowns are overflowing with wheat and rice — about 77 million metric tonnes (MMT) on March 1, against a buffer stock norm of 21.4 MMT on April 1.
    • How to manage rabi season procurement? Procurement operations for rabi crops are around the corner.
    • Training and safety measures: The FCI and other procuring agencies need to be trained about safety measures and supplied safety gear.
    • Providing incentives to farmers for staggered selling: Farmers could be given Rs 50/quintal per month as an incentive to stagger bringing their produce to the market — say after May 10.
    • They will also need to be screened, given training and equipped with safety gear.

    Challenge of mandi operations for fresh produce in large mandis

    • This pertains to mandi operations for fresh produce in large APMC mandis like Azadpur in Delhi and Vashi near Mumbai.
    • These mandis are usually overflowing with fruits and vegetables and the labour force at these centres usually handles the produce without safety gears.
    • The challenge of screening and providing safety kits to these workers is doubly daunting. The country is not fully prepared in this respect.
    • The safety of workers in mandis — and other workers who handle agricultural produce — should be accorded as much priority as the safety of frontline health warriors.
    • Suspend the APMC Act: We should also use this opportunity to suspend the APMC Act and encourage NGOs, civil society and corporate houses to directly procure from farmers.

    Issue of poultry and maize farmers

    • Sharp fall in poultry items: In such times, prices of essential food items are known to shoot up. But in India, prices of food items like chicken meat and eggs have registered a sharp fall.
    • In Delhi’s Gazipur Mandi, for example, the price of broiler chicken has fallen from Rs 55/kg in January 2020 to Rs 24/kg in March.
    • This has also pushed the maize prices down as poultry is largely fed packaged maize.
    • The government may have to think of compensating poultry and maize farmers in due course.

    Conclusion

    When things settle, it will be worth knowing how the virus spread from Wuhan to Iran, Italy, Washington, India and other parts of the world. Which organisation or nation failed to blow the whistle and alert the world in time? Was it China’s failure? Or that of WHO? Or was it the failure of all governments around the world to respond quickly to the outbreak? We need better global governance for pandemics to avert the next crisis.

  • Zoonotic Diseases: Medical Sciences Involved & Preventive Measures

    Convalescent Plasma Therapy

    With no specific treatment available for novel coronavirus disease and a vaccine at least a year away, the US Food and Drug Administration (FDA) has approved use of blood plasma from recovered patients to treat severely critical COVID-19 patients.

    Convalescent Plasma Therapy

    • The therapy seeks to make use of the antibodies developed in the recovered patient against the coronavirus.
    • The whole blood or plasma from such people is taken, and the plasma is then injected in critically ill patients so that the antibodies are transferred and boost their fight against the virus.
    • A COVID-19 patient usually develops primary immunity against the virus in 10-14 days.
    • Therefore, if the plasma is injected at an early stage, it can possibly help fight the virus and prevent severe illness.

    How often has it been used in the past?

    • This therapy is no new wonder. It has been used several times.
    • The US used plasma of recovered patients to treat patients of Spanish flu (1918-1920).
    • In 2014, the WHO released guidelines to treat Ebola patients with convalescent whole blood and plasma.
    • In 2015, plasma was used for treating MERS patients.

    How is it done?

    • The process to infuse plasma in a patient can be completed quickly.
    • It only requires standard blood collection practices, and extraction of plasma.
    • If whole blood is donated (350-450 ml), a blood fractionation process is used to separate the plasma.
    • Otherwise, a special machine called aphaeresis machine can be used to extract the plasma directly from the donor.
    • While blood is indeed extracted from the donor, the aphaeresis machine separates and extracts the plasma using a plasma kit, and the remaining blood components are returned into the donor’s body.

    WHO’s guidelines

    • WHO guidelines in 2014 mandate a donor’s permission before extracting plasma.
    • Plasma from only recovered patients must be taken, and donation must be done from people not infected with HIV, hepatitis, syphilis, or any infectious disease.
    • If whole blood is collected, the plasma is separated by sedimentation or centrifugation, then injected in the patient.
    • If plasma needs to be collected again from the same person, it must be done after 12 weeks of the first donation for males and 16 weeks for females, the WHO guidelines state.

    How optimistic is the latest move?

    • COVID-19 does not have a specific treatment, only supportive care— including antiviral drugs, oxygen supply in mild cases and extracorporeal membrane oxygenation.
    • Plasma can be infused into two kinds of COVID-19 patients— those with a severe illness, or individuals at a higher risk of getting the virus.
    • However, that while plasma transfers immunity from one person to another, it is not known if it can save lives in COVID-19 infection.
    • The treatment could be effective for patients in the age group 40-60, but may be less effective for people aged beyond 60 years.

    Can it be done in India?

    • India has facilities for removing 500 ml of plasma from a donor using aphaeresis.
    • For this experimental therapy to be tried out, the Drug Controller General of India will first have to grant blood banks approval for removal of plasma from recovered COVID-19 patients.
    • The procedure is simple and can be done in India, but it is important to control the risk of infection during transfusion, and the patient’s acceptance is required.
    • It’s like a vaccine. It will engulf the virus and kill it. But it is easier said than done. We may need a series of approvals which India has never done before.
  • Coronavirus – Health and Governance Issues

    Sections 269 & 270 IPC invoked against those accused of spreading COVID-19

    Sections 269 & 270 IPC invoked are being invoked against persons who malignantly do any act which is likely to spread the infection of any disease dangerous to life.

    Sections 269 and 270 of the IPC

    • Sections 269 (negligent act likely to spread infection of disease dangerous to life) and 270 (malignant act likely to spread infection of disease dangerous to life) come under Chapter XIV of the IPC.
    • The chapter is named ‘Of Offences Affecting The Public Health, Safety, Convenience, Decency and Morals’.
    • While Section 269 provides for a jail term of six months and/or fine, Section 270 provides for a jail term of two years and/or fine.
    • In Section 270, the word ‘malignantly’ indicates a deliberate intention on the part of the accused.
    • During the coronavirus outbreak, penal provisions, such as Sections 188, 269 and 270 of the IPC, are being invoked to enforce the lockdown orders in various states.

    Earlier instances of invocation

    • Both Sections have been used for over a century to punish those disobeying orders issued for containing epidemics.
    • The Sections were similarly enforced by colonial authorities during outbreaks of diseases such as smallpox and bubonic plague.
  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    PM-CARES Fund

    Our PM has called for donations to the newly instituted PM-CARES Fund which has been formed on popular demand to help fight the novel coronavirus.

    PM-CARES Fund

    • The fund will be a public charitable trust under the name of ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’.
    • The PM is Chairman of this trust and members include the Defence Minister, Home Minister and Finance Minister.
    • Contributions to the fund will qualify as corporate social responsibility (CSR) spending that companies are mandated to make.
    • The Fund accepts micro-donations as well.
  • Wildlife Conservation Efforts

    Species in news: Himalayan Ibex

    A recent study by scientists of the Zoological Survey of India (ZSI) has proved that Himalayan Ibex, distributed in the trans-Himalayan ranges of Jammu and Kashmir, Ladakh and Himachal Pradesh, is a distinct species from the Siberian Ibex.

    Himalayan Ibex

    IUCN/WPA Status:    Least Concern / Schedule I

    • Himalayan Ibex (Capra ibex sibirica) is widely found in arid and rocky mountain of Karakoram, Hindukush and Himalayas of Gilgit-Baltistan.
    • The males are characterized by heavy body, large horns, long bears while females have small body small horns.
    • The threats that Himalayan ibex face are the illegal hunting, human disturbance, habitat loss and competition for forage with domestic livestock.
  • Coronavirus – Health and Governance Issues

    [pib] National Teleconsultation Centre (CoNTeC)

    The Union Ministry of Health & Family Welfare has launched the National Teleconsultation Centre (CoNTeC).

     About CoNTeC

    • The CoNTeC is a Telemedicine Hub established by AIIMS, New Delhi, wherein expert doctors from various clinical domains will be available 24×7 to answer the multifaceted questions from specialists from all over the country.
    • It is a multi-modal telecommunications hub through which 2 way audio-video and text communications can be undertaken from any part of the country as well as the world at large.
    • The modes of communication will include simple mobile telephony as well as two way video communications, using WhatsApp, Skype and Google Duo.
    • The CoNTeC is also fully integrated with the National Medical College Network (NMCN) to conduct a full fledged Video Conference (VC) between the 50 Medical Colleges.

    How to Contact the CoNTeC?

    • A single mobile number (+91 9115444155) can be dialled from anywhere in the coutnry/world by COVID-19 treating doctors to reach the CoNTeC which has six lines that can be used simultaneously at present.
    • This number of lines can be increased in future if needed.
    • The incoming calls will be picked up by the CoNTeC Managers, who will then handover the call to the appropriate expert doctors from the clinical domains as desired by the calling specialists managing the COVID-19 cases anywhere in the country.
    • The Managers will guide the callers in establishing a two way video call using the WhatsApp, Skype or Google Duo as preferred by the caller.
    • The callers from the NMCN network can connect anytime using the Telemedicine infrastructure at their end.
  • RBI Notifications

    Will RBI’s big-bang monetary easing work?

    Context

    On Tuesday, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) convened for an emergency meeting, ahead of schedule, to discuss its response to the economic challenges posed by the Covid-19 outbreak.

    Bond market reaction to the RBI announcement

    • The MPC deliberated for three full days, but its decision would most probably have been sealed right at the onset.
    • For that day, the Indian bond market saw no trades in the first twenty minutes.
    • Fear and uncertainty in the market: The gap between the asking price and bids was so wide that the first trade for the day took place at 9:33 am. Gripped by uncertainty and fear about the future following the outbreak, the market had frozen.

    Measures by the RBI

    • Injecting the liquidity of Rs. 3.74 trillion: Responding to the market signal, the RBI rolled out a slew of measures from its armoury that will release liquidity of up to ₹3.74 trillion, or nearly 2% of gross domestic product, in the financial system.
    • This will facilitate the market’s orderly functioning.
    • Condition on LTRO-created-liquidity: In particular, the condition that the liquidity created through the Long Term Repo Operations (LTRO) tool must only be deployed in corporate debt securities was a direct response to the disruption in the markets seeing heavy sell-offs in the midst of thin trading volumes.
    • Comparison with measures by the Fed.: The US Federal Reserve, which has launched an unconventional asset sales programme for $4 trillion, has announced it will also directly buy corporate bonds to ease the tight market.
    • RBI has refrained from following suit, instead of passing the buck to banks via the conditional LTRO liquidity.
    • Banks are unlikely to step in to ease the tight corporate securities market.
    • Repo rate below the level seen in 2008: To combat the economic consequences of the Covid-19 pandemic, the MPC has dropped its policy interest rate by 75 basis points, taking it down to 4.4%, a multi-year low.
    • The rate is now lower than it was in April 2009, when the central bank had taken it down to 75%, responding to the global financial crisis.
    • In 2008, just four days ahead of a scheduled policy review, RBI had cut the policy repo rate by 1 percentage point, sending an extraordinarily strong signal.

    How the challenge this time is different from the 2008 crisis?

    • The nature of the current economic challenge is a lot different.
    • Economy at standstill: The shock back then had depressed demand, but the economy had not been brought to a standstill as it has now, with resources, including labour and capacities idling.

    Why the measures would not kickstart the economy

    • Effect of rate cut: When all economic activity has halted, and uncertainty about the future is soaring, there’s no way a rate cut—no matter how steep—can kickstart the economy.
    • Businesses cannot plan for the future and will not borrow.
    • Banks will hold on too, fearful of the risk of loans going bad.
    • As it is, even before Covid-19 struck, credit disbursement was sluggish.
    • Now, with a host of companies facing the threat of credit rating downgrades, the probability of lenders turning a little less risk-averse is even lower.
    • Who would be the beneficiary of the rate cut? The biggest beneficiary of RBI’s rate cut—which was bigger than market expectations—would be the government.
    • Reduced borrowing cost for the government: In one stroke, the MPC has altered the fiscal deficit calculation by reducing the government’s borrowing cost.
    • There will be savings on its outgo on interest payments for new and rollover borrowings.

    Three-month moratorium and issue with it

    • RBI also permitted banks and non-bank financial institutions to grant a three-month moratorium on loan repayments and reclassification of stressed loans as non-performing assets (NPAs).
    • This will provide relief by cushioning cash flow pressures for firms and individuals when incomes and revenues have dropped sharply due to the lockdown.
    • The forbearance on downgrading these loans will prevent a sharp spike in NPA levels for banks and NBFCs.
    • There could be a sharp rise in the bad loans: The risk now is that a few quarters after the end of the moratorium there could be a sharp rise in bad loans.
    • It could give rise to the NPA problem: In that sense, it amounts to kicking the problem of a potential spike in NPAs down the road.
    • The problem of evergreening: On balance, it is the right call given the extraordinary challenge of the lockdown—provided a new cycle of evergreening of loans by banks is not allowed in a repeat of what happened in the aftermath of the global financial crisis.

    Way forward

    • What more could RBI have done? Special credit windows for the worst-hit sectors like aviation, hotels and tourism may soon be required.

    Conclusion

    While prioritising financial stability is fine, the MPC’s inflation projection is puzzling. While refraining from providing estimates on growth and inflation, given that the spread, intensity and duration of Covid-19 remain uncertain, RBI said it expects food price pressures to soften going ahead on account of a blow to demand during the lockdown. The projection seems unreasonable when there are unprecedented supply-side bottlenecks.

  • Judicial Reforms

    Ayyappa and the Court

    Context

    In the several cases with potential significance, there was no effective hearing at the interim stages which created fait accompli. And which results in the status quo cementing itself.

    The Sabarimala case and ‘balance of convenience’ principle

    • Review petition pending: Millions of disciples have protested the Court’s 2018 verdict where gender equality was held to trump the tenets of the faith and rejoiced at the November 2019 order of the Chief Justice’s bench granting their cause a fresh lease of life.
    • As things stand, their review petitions are kept pending until the questions of law are determined.
    • Please to enter the temple declined: In December 2019, fervent pleas on behalf of certain women devotees to enter the temple were declined, although the 2018 verdict continued to hold the field.
    • Why declining the plea for entry matters? This was justified by the Court on a “balance of convenience”, thereby laying down a new principle for not directing the implementation of its own judgement.

    Pendency of Article 370 challenge case hearing

    • Nine judge bench: This year it was decided to put together the nine-judge bench to hear the cases on an urgent basis.
    • Kashmir case on the backburner: But with two judges from the ongoing Kashmir/Article 370 challenges also a part of the Sabarimala case, it would mean that the Kashmir issues would be put on the back burner in the middle of its hearing.
    • This is despite the advocates representing the right of women’s entry stating that they had no objection to the Kashmir cases being heard first.
    • Then, barely a day into the hearing, a strain of swine flu reached some of the members of the Bench, leading to a postponement of hearings till the middle of March.
    • Now, with a fierce pandemic enveloping the globe, the case is adjourned indefinitely.

    Criticism of administrative functioning of the SC

    • Over the last few months, the Supreme Court has been besieged by criticism of its administrative functioning.
    • Delay in the hearing of important cases: Cases that have customarily been heard with alacrity, like those concerning personal liberty, law and order and criminal investigation, have been posted after long intervals with the Government being granted the luxury of time to respond.
    • No effective hearing in cases with immediacy: Where immediacy is pre-eminent so that fait accompli may not be created, as with the validity of the Kashmir notifications, the CAA and the electoral bonds, there have been no effective hearings at the interim stage.
    • Thus, the status quo slowly cements itself.

    Reason for problems in administrative functions of the SC

    • Dual role played by the CJI: Since the early years of the judiciary, one person has been given the onerous dual charge of heading both the administrative and judicial functions of the court.
    • As a result, apart from sitting every day, reading briefs, hearing arguments and delivering detailed judgements, the Chief Justice has to also act as the final authority for all service-related matters of the Court’s 2,500 employees, issue office orders to streamline the registry.
    • The CJI also supervise measures for security and infrastructure, chair committees, correspond with and entertain judicial delegations, attend symposia, delegate subject matters among colleagues, constitute benches of varying strengths and interview candidates for the various courts.
    • In the old days, when the burden of cases was modest, these tasks would not have been challenging.
    • But in the present time, not only are they overwhelming, but they also bring in their wake a host of attacks on the person who occupies that high office.

    Need for the Chief Executive Officer in the SC

    • Administrative functioning of the SC: In all the administrative tasks, the Chief Justice is assisted by a team of registrars, who are headed by the secretary-general.
    • As they are junior judicial officers, they neither have the training nor the complete independence to take steps towards course correction.
    • The requirement of CEO: This is why the Supreme Court sorely requires a chief executive officer – an independent professional who is equipped with the day-to-day management of the Court and is not beholden to the judges in any way.
    • How it will help? The CEO will be charged with the entire mission of running the Court so that the judges can concentrate on what they are trained and experienced to do – adjudicate.
    • Operational autonomy: The CEO will, of course, have to be given adequate operational autonomy and be answerable to a committee of the Court, comprising judges and bar representatives, thereby providing for a professional process, much like in the corporate sphere.
    • With this, the judges will at least be spared the charges that they have had to withstand over the last few years.

    Conclusion

    It is only for politicians to concern themselves with public opinion, not for judges. They are weaponised by the Constitution to serve the cause of justice, and in this, as per Article 144, all civil and judicial authorities are enjoined to cooperate. Just a few blows of the gavel to any misadventures would be sufficient to send the message loud and clear: That the Court offers no sanctuary to the executive knaves.

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