All Newspaper editorials in one place – February 01, 2024





February 1, 2024

Winners and losers

Elections in Pakistan go according to the script written by the Army


The back-to-back jail sentences former Pakistani Prime Minister Imran Khan was handed out in two different cases just a week before the February 8 parliamentary elections, show how roles have been reversed in Pakistan’s convoluted political space dominated by the shadow hands of the establishment. In 2018, when Mr. Khan’s Pakistan Tehreek-e-Insaf (PTI) was elected to power, the Opposition Pakistan Muslim League-Nawaz (PML-N) and the Pakistan People’s Party had accused the military of electoral rigging in favour of the former cricket star, who was the preferred choice of the generals. A year earlier, Nawaz Sharif, the PML-N leader, had to resign as Prime Minister over the Panama Papers allegations and later go into exile after his conviction and disqualification. Today, Mr. Khan has been disqualified and is serving lengthy sentences, while Mr. Sharif is back, leading the PML-N. Given the way how the military and other state institutions went after Mr. Khan and his party, there was little surprise in the court proceedings and the verdicts. On Tuesday, he was sentenced to 10 years by a special court in what is commonly called the ‘Cipher case’, on charges that he leaked state secrets, while on Wednesday, another court sentenced him and his wife to 14 years in the Toshakhana case, for keeping some of the gifts they had received while he was in power.


Mr. Khan was forced out of power in April 2022 after falling out with the military establishment. He accused the military and the United States of conspiring to oust him and, at a rally, waved a paper, purportedly a diplomatic cable sent by the then Pakistani Ambassador to the U.S. in 2022, as evidence, which came back to hit him as a violation of the Official Secrets Act. His lawyers complain that they were replaced by state attorneys in the middle of the case and that Mr. Khan was not allowed to give a proper defence in the ‘Cipher’ trial, which took place inside a jail. His arrest in May led to large-scale protests. But since then, the authorities have unleashed a systematic campaign to weaken the PTI — many of its leaders are in jail, while several others have left under pressure or are on the run. Recently, a court barred the party from using its iconic cricket bat symbol in ballots. Many PTI workers are contesting as independents. While Mr. Khan is in jail and his party is in tatters under state repression, Mr. Sharif seems to be enjoying the support of the invisible power centre in the electoral arena, which makes the elections look like a fixed match. Mr. Sharif might make a political comeback, but the real winner in the unfolding developments in Pakistan, which is grappling with enormous economic challenges, is the military and the real loser, the country’s democracy.






February 1, 2024

Three generations

The Australian Open gave space to players from different eras


World tennis is a broad church. There is space for the time-defying geriatric stars, the calm and collected mid-career practitioners, and the rapidly blooming ambitious youngsters. The 2024 Australian Open was conclusive proof of this as Rohan Bopanna, Aryna Sabalenka and Jannik Sinner marched to victories. Of the three, fans could be forgiven if they did not anticipate Bopanna’s triumph, despite the Indian having had one of his best seasons in 2023 — eight finals, two titles — and entering the competition as the World No.3. Bopanna had reached only two Grand Slam men’s doubles finals before (US Open — 2010 and 2023) and had not gone past the third round in Australia over 16 previous visits. But the 43-year-old, partnering Matthew Ebden, conjured one of the most irresistible dashes to the crown to become the oldest man to win a Major. He also reached No.1 in the doubles rankings, again the oldest male to do so. Twice in the last five years, Bopanna was resigned to quitting. The loss of cartilage in his knees meant he could not train at optimal levels. But he found alternative techniques to spruce up his body, recalibrated his mind and renewed his focus, and ended up occupying the centre stage at an age when sportspersons are generally relegated to the margins.


Sabalenka’s triumph in women’s singles over the fast-rising 21-year-old from China, Zheng Qinwen, was an affirmation of the Belarusian’s status as one of the game’s biggest stars. The 25-year-old’s defence of the title she clinched in 2023 was also proof of her consistency. She did not drop a set all fortnight, and in a women’s field that has often been synonymous with a state of flux, she has now finished semifinal or better at six straight Slams. Sinner, in contrast, came with no such performance baggage, for he had only reached one Major semifinal earlier (Wimbledon 2023). But in the second half of 2023, by winning his maiden ATP Masters 1000 trophy (Toronto), reaching the final of the season-ending ATP Finals and carrying Italy to its first Davis Cup since 1976, he had acquired the reputation as men’s tennis’ next superstar. With a sensational come-from-behind five-set victory over Russia’s Daniil Medvedev — a former World No.1., 2021 US Open champion and two-time finalist in Melbourne — Sinner only burnished these credentials. Ending 10-time titlist and World No.1 Novak Djokovic’s 33-match winning streak in Australia should count among Sinner’s greatest achievements. The 22-year-old now joins Carlos Alcaraz as this era’s latest generational talent. It was apt that the first steps were taken at a tournament that highlighted inter-generational success.






February 1, 2024


Inconsistencies that riddled mayoral poll process in Chandigarh threaten to reduce it to a charade, must be addressed


NEVER HAVE THE mayoral polls of the Chandigarh Municipal Corporation witnessed so much drama and such rancour. What started as a low-profile election held every year to elect a new mayor, a post more titular than powerful was transformed into a high voltage battle once the Aam Aadmi Party joined hands with Congress for the three posts of mayor, senior deputy mayor and deputy mayor. The announcement, made three days before the elections were scheduled to take place on January 18, seemed to change the complexion of the electoral process. The numbers seemed stacked in favour of the newly-minted alliance with 13 AAP and seven Congress councillors pitted against 14 of the BJP. Senior AAP leaders predicted it would be the first win for INDIA, the anti-BJP alliance at the national level. But as things turned out, they had underestimated their opponent’s will to win, at any cost.


The sequence of events bears recounting. The January 18 election was called off a few minutes before it could start. Reason: The presiding officer, a nominated councilor, who was also an office-bearer of the BJP, had apparently been taken ill. The Chandigarh administration tasked with holding these polls pushed them to February 6, citing among other reasons law and order and preoccupation with preparations for the Republic Day. Many were left wondering how an election that required the counting of a mere 36 votes could depend on the health or well being of one individual when the deputy commissioner was the prescribed authority. Finally, an intervention of the Punjab and Haryana High Court led to the polls being held on January 30. On election-eve, media personnel were barred from entering the Municipal House; the polling was beamed on an outdoor screen. Inside, amid chaos, the BJP pulled off a surprise victory with 16 seats, surpassing the alliance’s 12, after eight of the latter’s votes were invalidated. The mayoral candidate of the alliance has sought relief from the High Court, which has asked the UT administration to respond in three weeks.


A day after the debacle, amid charges and counter-charges, there is speculation about horse-trading, and allegations of alliance councilors being cloistered away in secret locations before the polls. The humdrum corporation has turned into a political minefield. At stake, above all, is the basic question of fairness and transparency. The inconsistencies that have riddled this poll process threaten to reduce it to a charade. They also raise apprehensions about deviations from, and distortions of, due process when the stakes are higher, in larger arenas.





February 1, 2024

Mind and matter

Brain-computer interfaces, like the one tested by Neuralink, could be a paradigm shift. The pitfalls must be avoided


WITH NEURAUNK, AS with so many of Elon Musk’s ventures, it is important to separate science from speculation, product development from wishful thinking. Musk announced on X (formerly Twitter) on January 30 that “The first human received an implant from @Neuralink yesterday and is recovering well. Initial results show promising neuron spike detection.” Given that Neuralink had received approval from the US Food & Drug Administration in September last year, the announcement was somewhat expected. Last year, there was controversy over the company’s disclosures, which led to investigations into dead study animals and the transportation of hazardous materials. The surgery, however, marks an important milestone — the beginning of human-computer interfaces that can possibly address physical and cognitive limitations and disabilities. Moving forward, who controls the technology and how it is distributed will be important in determining its impact.


Neuralink is building on work done by laboratories and companies that came before it —the first Brain-Computer Interface (BC1) dates back to the 1970s. The wireless device implanted by Neuralink contains a chip and arrays of electrodes, which are meant to register thoughts related to movement. Eventually, if successful, the device should enable people with disabilities to move a cursor or type just by thinking about it The initial users are likely to be people who have lost their limbs. But as with SpaceX and Tesla, the claims made by Musk around Neuralink’s BCI make it seem like the science fiction future is now. Musk envisions a future where Neuralink’s brain implants seamlessly merge with cognitive functions, offering a direct interface between the human mind and computers. Whether or not this comes to pass, it is important to approach the technological frontier with a discerning eye.


The first concern is around privacy. Who will control the data extracted from brains, and how can it be ensured that it is not exploited for nefarious purposes? As with Al, regulation must go hand-i n-hand with the development of BCIs. Second, the development of significant medical technologies must not end up being a monopoly — publicly-funded research can help minimise the cost to the end user, who need not be only a customer who can afford the prohibitive cost of cutting-edge interventions. The Oxford Astra-Zeneca Covid vaccine, for example, was developed with public funds from multiple countries, and arguably reached far more people than its private-sector counterparts. Finally, if and when the technology gets closer to mass use, a dialogue involving experts, ethicists, and the public is essential to guard against its misuse, or even enthusiastic over-use. BCIs represent a potential paradigm shift in the relationship between people and technology. Its pitfalls, though, must be avoided.





February 1, 2024

Fraulein Laiser returns

A Klimt artwork has been found after nearly 100 years. It reiterates the Austrian artist’s radical appeal


In June last year, Austrian artist Gustav Klimt’s Lady With a Fan sold for a staggering $108.4 million at Sotheby’s, London, to become the most expensive artwork to be sold at an auction in Europe. It was one of the artist’s two unfinished paintings, both portraits of young women, found in his studio in Vienna following his death from Spanish flu in 1918. The other, Portrait of Fraulein Lieser, commissioned by a wealthy Jewish industrialist, had been lost for nearly a century, its sole record a black-and-white photograph archived in the Austrian National Library from the time of its last exhibition in 1925. Now, the discovery of the latter in a private collection in Vienna has renewed anticipation of another blockbuster sale when the 31 -by-55-inch portrait goes to auction in late April in the Austrian capital.


Portrait of Fraulein Lieser shows a clear-eyed young woman in a green dress and a richly embroidered blue coat. While the exact identity of the woman – and the fate of the painting during the period between 1925 and 1960, when it was acquired by the family of the present owner—remains unresolved, it is a classic Klimt, reminiscent of his later-era preoccupation with portraits commissioned by Austria’s elite.


The excitement over the portrait is indicative of Klimt’s larger legacy. He might be best known for The Kiss, an elaborate oil-on-canvas rendition of a couple in embrace, but as one of the leaders of the anti-establishment Vienna Secession movement that upended contemporary understanding of the purpose of art, Klimt’s radical appeal lay in his melding together elements of craft and design in his art. The sumptuous and the sensual, the abstract and the everyday came together on his canvas in a rich riot of metallic hues and textured details. It had always driven up the price of his work, especially his portraits. In 2006, for instance, his 1907 portrait, Adele Bloch-Bauer I, sold for $135 million. It remains to be seen if Fraulein Lieser has a similar fortuitous afterlife.





February 1, 2024

Mission Federalism

16th Finance Commission will have to find a fair way through high intensity GOI-states fiscal disputes


Sixteenth Finance Commission’s work is set to get started following yesterday’s announcement of its members. Commission’s terms of reference were set out in December along with the appointment of economist Arvind Panagariya as its chairman.


Federalism’s lynchpin | As an institutional arrangement, finance commissions are at the heart of India’s federal architecture. Mandated by the Constitution, FCs are primarily meant to recommend a division of resources between GOI and states. In the process, they also set out how the resources that flow to states from GOI are to be distributed among them. GOI’s budget arithmetic is influenced by an FC’s recommendations. This makes FCs more important in resource transfers, even if it is budgets that hog attention.


Two asymmetries | Expenditures incurred by states as a percentage of GDP are greater than that of GOI. However, for administrative efficiency, GOI is empowered to raise most of the taxes. It leads to vertical asymmetry in India’s federal system. Separately, states are very different in terms of financial needs and capabilities. Addressing these two asymmetries smoothly determines how harmonious a federal system is.

Limited ToR | FCs function according to terms of reference (ToR) they are given. 16th FC has a limited ToR compared to its predecessor’s. 15th FC was given three terms that determined the incentive structure underpinning grants given to states. That level of detailing is missing in ToRs for this FC. It’s not unusual for FCs to be given ToRs halfway through their functioning. Therefore, there’s a possibility the current ToRs will be expanded.


Data gaps, delimitation fears | 16th FC will function against the backdrop of inadequate data and political anxiety among southern states about the possibility of delimitation of parliamentary seats. A delay in conducting 2021 Census deprives this FC of valuable data, particularly a recent baseline for population projections. While delimitation is unrelated to an FC’s remit, politics around it is unlikely to leave 16th FC untouched. It will require deft handling as FCs are far too important to be ensnared in political cross-currents.


FCs make their recommendations after extensive consultation with both GOI and states. FC’s functioning over the next 21 months before the October 2025 deadline will make it a real-time experiment in federalism. It’s critical that its effort is seen as being even-handed.




February 1, 2024

Keep The Faith

Chandigarh mayoral election raises questions. HC must decide on the matter quickly


Punjab & Haryana HC, which immediately heard AAP’s allegation of vote tampering by presiding officer during counting process of Chandigarh’s mayoral election, has given UT’s municipality and administration, in charge of conducting the mayoral poll, three weeks to respond. By Indian judiciary’s clock, that’s like an early date.


Don’t drag this | Arvind Kejriwal has held INDIA would have won had 8 votes not been declared invalid. Losing parties raising a storm is routine, but widely shared doubts on any poll process is damaging. So, given questions on the mayoral polls’ integrity, three weeks is perhaps too long a wait. Official recording of counting process was surely done. That can be made available for perusal almost immediately.


No poll is minor | Urban local body (ULB) and even mayoral polls are turning contentious. Chandigarh’s controversial Jan 30 mayoral election comes almost a year after Delhi’s fraught one, which was finally held in a fourth attempt after Supreme Court stepped in. Even in Chandigarh, HC decided on Jan 30 for the election after it was put off once. In Maharashtra, too, at least 24 of 28 municipalities are without elected representatives, and no ULB election has been held in almost two years.


India’s calling card | Trust in India’s election process is at the core of successful elections since 1951-52. Political parties are key stakeholders. Multiple CECs have time and again reiterated their “business is of maintaining trust”. Faith in free and fair elections incentivises parties and voters; India’s multi-polar party system has taken shape basis election-process integrity. No system is foolproof – corrective measures are taken when malpractices come to light. This time should be no different. Counting of 30 paper ballots took no time, settling the dispute should not take months.






February 1, 2024

Curate a Burgeoning Indian Art Market

Retail art buyers pushing up this ecosystem


More Indians are putting value of the monetary kind in contemporary artworks than ever before. And much of this healthy, wealthy and wise build-up is due to more artists putting out their works in the market in a systemic manner that is far less scattershot and more visible than before. The ongoing ‘The Art of India 2024’, as well as ‘India Art Fair’ that starts tomorrow — both in Delhi — do two things simultaneously: one, bring contemporary art out into the ‘open’ for a far larger demand to be created across price slabs; two, break the barrier between established art by past masters or well-established artists — usually sought after by institutional collectors — and top-notch upcoming artists sought after by the multiplying spending classes who are increasingly appreciating the value of possessing good, contemporary art.


Much like the retail investor in the stock market, the retail art buyer in the art market is pushing up this till now undervalued ecosystem in India. Picking up valued works by contemporary lesser-known artists push their value, quite like non-blue-chip stocks waiting to enter their ‘blue’ period. Galleries coming together under a common roof of art fairs — Delhi, by virtue of these collectives, becoming the de facto art capital — are, in a way, emulating the market dynamics of what the Paris Salon did for the 18th-19th-century European art world and artists, and the Biennales do today in more developed art markets.


Art, like all culture, maintains a strong, yet asynchronous, relationship with capital — the former thrives on the latter, while underplaying a 1:1 relationship. As an asset class, it also is a powerful marker and shaper of cultural power. Let’s frame it, hang it and curate it to its full potential. Retail art buyers pushing up this ecosystem.





February 1, 2024

Germany’s 4-Day Week Experiment


Germany’s experiment with a 4-day work week is unlikely to maintain productivity at current levels. But it could serve as a safety valve for wage inflation and draw part-time workers into more regular employment. Evidence from similar experiments in other countries suggests productivity gains from a better work-life balance do not offset the reduction in man-hours. Labour productivity is a function of a wide array of variables — employee motivation being one. Factors such as slow spread of the digital economy have a bearing in Germany alongside declining fertility and inadequate immigration. Moonshots like truncated work weeks owe their origins to a world economy scaling down hyper-globalisation with suboptimal effects on factor markets such as labour.


Europe’s manufacturing powerhouse is losing its productivity advantage to Asian economies with surplus labour. Attempts to shore up productivity through controls on movement of capital and labour are typically unsustainable. They may keep inflation at bay for a while, but economic growth will remain a function of exporting capital and importing labour. For economies staring at labour shortages, a policy mix of easier immigration and overseas investment remains consistent. Progressive trade fragmentation doesn’t dilute the logic of globalisation, although its pace can be debated. This applies even if Germany makes a quicker transition to a knowledge economy from manufacturing.


Advanced economies have a bigger stake in pushing free trade in goods and services than emerging economies eyeing a bigger slice of manufacturing. The model of shifting factories to China may be broken, but not that of shifting factories abroad. Emerging economies are also placing big bets on AI and energy transition to catch up. They could have an edge because pushing out the technological frontier has a bigger impact on them. Experiments with work expanding to the time devoted to it do not hold out the transformative potential of larger investments in IT or alternative energy sources.




February 1, 2024

Capital trends

Govt capex focus must be backed up by private efforts


A standout feature of Budgets of recent years has been the salutary focus on capital expenditure. The recently released Finance Ministry’s limited review of the economy reaffirms this commitment, and rightly so. However, in order to lift the investment rate from about 30 per cent of the GDP by about five percentage points in a few years (a prerequisite to hit a growth rate of about 7 per cent, given an incremental capital output ratio of five), all actors will have to pitch in — corporates, households and government. So far, the private non-financial sector has not matched the government’s capex push, even as there are signs of an uptick.


The role of industry is central, as government spending (Centre and States) accounts for just below 17 per cent of total investment, with the households and corporates roughly making up the remaining 83 per cent on an equal basis. The review rightly notes that the Centre has “rebalanced its fiscal expenditure” by raising its capex from 12 per cent of total expenditure in FY18 to 22 per cent in FY24 (₹10-lakh crore). If the share of the Centre and States, broadly speaking, in total investment is up from 9-11 per cent in the past decade to nearly 17 per cent now, as observed by analysts, it tells us that there has been a trend shift. But this order of capex increase could hit a fiscal wall. The private sector cannot but pick up the tab, while the government focuses on efficiency of its investment. The review of the economy notes with respect to an Axis Bank study, that investment by private non-financial companies has improved, having jumped 22 per cent between FY22 and FY23 from ₹4.8-lakh crore to ₹5.9-lakh crore. This exceeds the pre-Covid (FY19) level of ₹4.6-lakh crore. But the jump, as a study by Motilal Oswal Financial Services observes, has been driven by listed companies which account for about 30 per cent of the corporate GVA.


Listed entities’ share in total corporate investments has risen from 26 per cent in the pre-Covid period (FY16-FY21) to 33.5 per cent in FY23. In other words, the listed space has not been badly affected by Covid, whereas the unlisted space has. A clutch of firms is investing in sectors such as oil and gas, telecom, healthcare, metals and technology. Investment in auto, chemicals and cement could pick up. Historically, oil and gas, power, metals, telecom and automobiles have driven investment. As for the other sectors, notwithstanding increases in capacity utilisation, the flat toplines pose a constraint in terms of future outlook.


It appears that there is a demand constraint to investment. To begin with, the government can provide a boost to affordable housing. Above all, it is a historical truth that Indian industry rarely displays risk appetite or ‘animal spirits’, and instead asks for more — ever since the days of the Bombay Club. This is a mindset problem.





February 1, 2024

Measuring corruption

India remains a middling performer


The latest Corruption Perception Index (CPI), prepared by Transparency International, suggests that corruption in the public sector in India remained an issue in 2023, with India’s global ranking slipping to 93 out of 180 countries from 85 in 2022. The ranking represents relative standings; the country’s CPI score dropped to 39/100 from 40/100 (a higher score denoting a better record). The Transparency International commentary suggested that no significant conclusion could be drawn from this marginal change. The report identified the passage of the telecommunication law, which expands the state’s surveillance powers as a possible red signal. But a glimpse of India’s CPI score and ranking over a longer time period suggests that corruption is a genie that India is yet to defeat decisively.


Since 2012, India’s CPI score has been range-bound between the upper 30s and lower 40s. It registered its best performance in 2018 and 2019 at 41 in both years. This is, in fact, not a great deal different from China’s record, which has been similarly range-bound, with its latest score dropping to 42/100 from 45/100. In terms of ranking too, India mostly moved between the mid-70s and mid-80s, with the best performance in 2015 at 76, up from 85 the year before. To be sure, the veracity of these findings can be open to question since they are based on the subjective perceptions of businesspeople and experts. The CPI score, considered a more consequential metric than country rankings, draws on three data sources picked from 13 different corruption assessments collated by a variety of institutions including the World Bank and World Economic Forum. Perhaps the fact that India shares its rank with Kazakhstan and Lesotho needs to be treated with some caution. The CPI covers such metrics as bribery, officials using their public office for private gain, excessive red tape, the ability of the government to control corruption in the public sector, and so on. It specifically excludes, among other things, citizens’ direct experience of corruption, money laundering, tax fraud, illicit financial flows or informal economies and markets, since all of these are difficult to track. Since these are fairly common elements in most developing economies, including India, it is possible that the CPI captures a partial picture of corruption in these countries.


India’s marginal elevation to the 40s in terms of CPI score since 2016 could be a reflection of key changes in public asset distribution policy from discretionary licensing, the source of the telecom and coal scandals that felled the United Progressive Alliance, to the auction format. The margin for public corruption may have narrowed also with the introduction of such institutional mechanisms as goods and services tax and insolvency law. But given the magnitude of government expenditure in the economy and the efforts to attract manufacturing investment through extensive production-linked incentive schemes, the real game changer would lie in reforming the judicial system. India has been a poor performer on this score. A quick and robust justice-delivery system by itself can become a big deterrent. In the World Justice Project Rule of Law index, one of the indices on which the CPI score is developed, India registers a score 0.49 (score range from 0 to 1, with 1 indicating the strongest adherence to the rule of law). This is roughly the same as Vietnam, India’s key competitor in China-plus-one investment.







February 1, 2024

Raise standards

The higher education sector needs further improvements


The latest All India Survey on Higher Education (AISHE) for the academic session 2021-22 has highlighted the vast improvements and significant growth seen in the higher education ecosystem over the past few years. According to the survey, student enrolment has steadily increased over the years, particularly female enrolment, which registered an all-time high of 20.7 million — a 32 per cent increase since 2014-15. The gender parity index, or the ratio of the female gross enrolment ratio (GER) to male GER, stands at 1.01 at the all-India level, indicating the increase in enrolment is in favour of females. The strength of female faculty in higher education institutions (HEIs) has also jumped by almost 22 per cent between 2014-15 and 2021-22. Clearly, the latest numbers show that significant gains have been made in closing the gender gap in higher education. Attention has also been drawn towards embracing social diversity and inclusion inside the classroom. The representation of students from Scheduled Castes, Scheduled Tribes, Other Backward Classes, and minority backgrounds has increased considerably. At the same time, enrolment remains highly concentrated in a few geographical areas of the country. Only six states constitute 53.3 per cent of total student enrolment.


The survey results also capture the significantly high government presence in higher education. Close to 59 per cent of the total registered universities are managed by governments, while the corresponding number for colleges stands at 21.5 per cent. Government expenditure on the education sector, at around 3 per cent of gross domestic product, is not sufficient to meet the emerging needs. This calls for a greater presence of the private sector. Recent initiatives by the government to encourage foreign universities to set up campuses in India and also expand the footprint of Indian universities abroad are a welcome step. Two Australian universities have already received approval to set up campuses in GIFT City. At the same time, elite Indian institutions like the Indian Institutes of Technology have established their presence in Africa and West Asia.


According to the survey, student enrolment in science, technology, engineering, and mathematics (STEM) is approximately 26 per cent of total enrolment, with the females outnumbering the males. While this looks promising, more Indians need to acquire the appropriate skills to work in an increasingly technology-driven world. Industry often complains that Indian graduates are not employable. The survey raises another crucial issue — the presence of international students in Indian institutions, an important indicator in the global ranking of universities. In less than a decade, the number of foreign students in the country has surged. Yet, a large chunk of students continues to come from South Asian nations, with Nepal accounting for the biggest share. There is a need to review policies if India is to attract more international students from other regions. In this context, it is worth noting that there is a massive shortage of teachers across higher educational institutions. There are also concerns involving curriculum, publication, and the research profile of faculty. Over 30 per cent of teaching positions are reported lying vacant in 45 central universities across the country. Higher enrolment and pass rates are not a panacea for problems plaguing India’s higher education. Additionally, efforts to enhance industry-academia linkage and the adoption of more structural processes in academic appointments can go a long way in improving outcomes in the sector.




February 1, 2024

Indigenising energy

Decarbonisation is a necessary long-term goal, but medium-term plan must include hiking production


THE GOVERNMENT HAS set an ambitious target to eliminate imports of coal varieties that can be extracted from indigenous mines by FY2 6, after having cut imports’ share in domestic consumption of the fuel from 26% in FY20 to 21% in the current fiscal. End-use restrictions for captive coal mines are no longer there, and more and more mines, including partially explored ones, are being auctioned off to the private sector. On its part, Coal India has substantially increased its production in recent years, and there is a promising shift in focus to tech-intensive, but highly-rewarding underground mining. Also, capital-intensive in situ coal gasification is set to get support in the form of viability gap funding, boosting hopes that the country’s plentiful, difficult-to-extract coal reserves would be converted to combustible gas.


All this, and the rise in the share of non-fossil fuels in the electricity capacity from 31% in 2014 to 43% in 202 3 are kosher. But the picture continues to be grim in the oil and gas sector. India’s oil production has stagnated for several years, leading to even higher import dependence (87.5% in April-December this fiscal compared with 77.6% in FY14). Though benign global prices—and lately discounted Russian Urals supplies—and a relative slowing of demand helped the country contain its oil import bill, it was still a humongous $158 billion in FY23. As forecast by Opec, India will still be the largest contributor to the incremental oil demand till 2045. Its oil consumption might not peak till late 2030s, if not early 2040s.


While the doggedness with which the government seems to be acting to slash coal imports inspires confidence, the strategy for the oil and gas sector seems to largely revolve around containing import costs using intelligent sourcing strategies. The focus is much less on boosting domestic production, and securing “equity oil” from overseas hydrocarbon ventures. At the heart of the problem is the lack of many lucrative new hydrocarbon finds. Of course, the open acreage licensing policy has allowed firms to carve out areas they want to explore, and ended gold-plating (high capex claims by investors), as the bid variable is now revenue share, instead of profit-share after all cost deductions. The regime has led to an increase in active acreage, but it’s yet to reflect on production, which came in at a new low of 27.8 million tonne in FY23,as against 35.9 MT in FY15. ONGC’s DWN-98/2 block in the deep waters of the Bay of Bengal going on stream recently has been a rare piece of good news after a long time.


New gas-based thermal power units don’t seem to have economic rationale for the time being—green power costs less than Rs. 2.5 /unit while gas-based power is estimated to cost Rs. 6.4/unit, given the ceiling price of $6.5/unit for gas from ONGC-OIL’s legacy fields. However, gas is still competitive for transportation and cooking. Since gas from the “difficult fields” is being allowed to be sold at a substantial premium, domestic production could pick up—the Reliance-BP combine’s MJ field in the KG-D6 block is promising. The long-term strategy to slash import reliance for energy necessarily involves decarbonisation efforts. However, the medium-term goals must include scaling up domestic production of hydrocarbons, besides support to bio-fuels and hybrid vehicles. Public capital investments in charging infrastructure for electric vehicles must be designed and implemented without further delay.




February 1, 2024

Wind power is starting to learn Big Oil’s secret


FOR THE FOSSIL fuel industry, every crisis has always contained both danger and opportunity. It’s a trick the renewables business has struggled to master.


John D Rockefeller created Standard Oil Co. by paying liquidation prices for rival refiners amid an industry-wide glut—and then using his control of processing to squash the cycles of boom and bust in oil drilling, too. Losing its monopoly on Iranian crude after a 1953 coup spurred BP Plc to explore fields in Alaska and the North Sea that would sustain it for decades. The global oil market exists largely because of the way the eight-year closure of the Suez Canal after the 1967 Arab-Israeli war prompted shipping companies to develop unprecedentedly large tankers.


The darkest art behind this history of survival lies in the way companies have used their moments of weakness to bend governments to their will. European Union capitals more than doubled their fossil fuel subsidies to €123 billion ($133 billion) in 202 2 to offset cost increases following Russia’s invasion of Ukraine. The UK issued additional carbon allowances to industry last year, causing the price of domestic permits to drop to about half those in the EU and cutting costs for polluters. The US government in 2022 promised to buy crude to refill its Strategic Petroleum Reserve whenever prices dip below a $67-$72 per barrel range, encouraging domestic production by creating a price floor that other energy producers would kill for.


The wind industry often still appears to be failing at this game. In September, a UK auction for offshore licenses closed without any bids after developers warned that the government’s ceiling prices were too low, given the rising costs of materials and finance. Two months later, Orsted A/S took a $4 billion impairment as it cancelled two projects off the coast of New Jersey, citing the same factors. Within weeks, Siemens Energy AG had to seek a €15 billion support package, half of it from the German government, after losses from its wind unit hurt its ability to win new contracts.


In retrospect, that conflagration appears to have nurtured the seeds of the industry’s renewal. The UK in November lifted the price ceiling on offshore auctions by 66%. A month later, Orsted announced it would go ahead with its Hornsea 3 project, taking advantage of the new rules. The 2.9 gigawatt offshore farm will be the world’s largest when completed in 202 7, and was widely predicted to have been on the verge of cancellation.


Far from collapsing, the offshore market seems to be resetting at prices that better reflect developers’ costs — exactly what the industry was lobbying for. At an auction last week, New Jersey issued licenses totaling3.7gigawattsataprice23°/o higher than the previous record, according to estimates by Bloomberg NEF analyst Atin Jain.


The good news seems to be spreading to turbine manufacturers, too. General Electric Co. said last week it will target an April date for the spinoff of its Vernova energy unit, suggesting there is appetite from equity investors for such stocks. While losses offshore are still dragging down a renewable division that comprises about half of the Vernova business, margins are improving in onshore and the order book is up 40%,accordingto the unit’s Chief Executive Officer Scott Strazik.


Managers of large-scale engineering projects aren’t stupid. Striking the best price with the government is only one small part of making money. The real advantage comes from dealing with your subcontractors and timing the market’s deflationary and inflationary periods, so you can reel in the cash when margins are widening, and get out of mispriced projects early. By paying fees to cancel old marginal contracts, offshore developers are able to take advantage of more profitable opportunities.


Those hoping that the transition to green power was going to usher in a less cutthroat era for the energy business might be disappointed. Those hoping renewables will win, however, will be glad to see it If we’re to switch to a zero-emissions economy, the future of energy is going to have to be every bit as good as its past at using lobbying, financial engineering, and regulatory arbitrage to its private benefit.


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