Today’s Editorials: What Every Newspaper Is Saying – Feb 23, 2024

by | Feb 23, 2024 | Current Affairs & GK Question Answers | 0 comments

 

All Newspaper editorials in one place – February 23, 2024

 


THE HINDU

February 23, 2024

The next frontier

Government must keep the regulatory environment of space sector clear

 

Space used to be the final frontier but its increasing exploration has changed that, replacing a romantic notion with narratives with financial, socio-economic, and geopolitical implications. Space technologies and space flight are expensive, risky endeavours that only national agencies were suited to engage in for decades. This is no longer true as private sector players are increasingly expected to complement, augment, and/or lead the way by identifying market opportunities and innovating rapidly. India started on this path in 2020 with state-led reforms that opened its space sector to private companies, then releasing the ‘Geospatial Guidelines’ and later the ‘Indian Space Policy’, creating the Indian National Space Promotion and Authorisation Centre (IN-SPACe), and passing the Telecommunications Act 2023 that, among other departures from the Indian Telegraph Act, 1885, provided for satellite broadband services. On February 21, the government opened the door to 100% foreign direct investments (FDI) in the “manufacturing of components and systems/sub-systems for satellites, ground segment and user segment” — up to 74% in satellite-manufacturing, operations, and data products; and up to 49% in launch vehicles, space ports, and their corresponding systems. As such, by stepping out of the way and allowing substantial FDI via the automatic route, the government has taken the logical next step in spurring the contributions of private space flight operators, technology-developers, and application designers to the national space economy, in line with ambitions outlined in the Space Policy.

 

The decision gives India the ability to take advantage of its less vitiated foreign ties to catch up with China’s more advanced position as a space power. While the Chinese programme benefits from not-inconsiderable private sector participation, its ability to attract foreign investments is hamstrung by its belligerent foreign policies and the Xi Jinping administration’s plan to modernise the military by, among other things, adapting civilian technologies for military use, though other countries, including the U.S., have similar policies. According to IN-SPACe chairman Pawan K. Goenka, a “significant” slice of the $37.1 billion that the space sector raised worldwide in 2021-23 went to space start-ups. Against this extended backdrop, new investments can add to India’s space economy by improving start-ups’ access to talent and capital; effecting a better balance between upstream and downstream opportunities, versus the current skew in favour of the former; boosting local manufacturing; and improving investor confidence. Finally, to sustain these winds of change, the government must keep the regulatory environment clear, reduce red tape, increase public support, and ease Indian companies’ ability to access foreign markets.

 

 
 

THE HINDU

February 23, 2024

Death of dissent

Putin’s is not a sustainable style of governance

 

The death of Alexei Navalny, who was serving sentences adding up to more than 30 years on various charges, in a remote prison in Russia’s Arctic region, is a chilling reminder of the status of dissent in the state Vladimir Putin has built. For years, Navalny was the Kremlin’s most prominent critic. He survived a poisoning attack in 2020 and was taken to Germany for treatment. He later returned to Russia to “fight for freedom”, only to be imprisoned again. The reason for his death is still unknown. After the poison attack, he did have several health problems. His lawyers had complained about his not getting proper treatment in jail and he had staged hunger strikes. His wife Yulia Navalnaya said Mr. Putin “killed my husband” and vowed to continue his fight. Whatever the reason for his death, the Russian state cannot absolve itself of this tragedy. Russian authorities were hell bent on destroying the political opposition that Navalny had built. In Russia’s managed system, there are opposition parties that the Kremlin tolerates and there are dissidents who are treated as enemies of the state. Navalny, who started his political activism as a far-right ethno-nationalist, fell into the second category. Boris Nemtsov, another opposition politician who also fell into the second category, was shot dead in 2015 in Moscow.

 

President Putin, who effectively has run Russia for 24 years, and has plans to extend it by six more years through this year’s election, did not face any major political threat from Navalny. Mr. Putin’s approval ratings remain high, according to independent polls such as those by the Levada Center. The election fray is tightly managed — two of the candidates who were critical of the Ukraine war were barred from contesting, while Mr. Putin’s rivals are actually praising his leadership. Navalny was sentenced for decades and there was no scope for organised protests. Still, the fact that he had to die like this in a prison suggests the extent of the state’s fear of voices of dissent. Three of Navalny’s lawyers are in jail, while two others are in exile. By keeping Navalny in jail, the state wanted to send a message to its critics — fall in line or face the consequences. And Navalny, who chose to go back to Russia even after the poison attack, paid the supreme price for his activism. The Kremlin is centralising more and more powers in its hands, while the country is fighting a prolonged war abroad. The state does not want any voices of criticism or organised protests. It may have established order through fear as of now, but Russia’s own history suggests that this is not a sustainable model of governance.
 

 
 

THE INDIAN EXPRESS

February 23, 2024

Crown of thorns

Pakistan’s new PM faces economy in crisis, shaky alliance. For Delhi, new government is reason for cautious optimism

 

It’s a chronicle of a coalition foretold. Given the fractured mandate in the February 8 general elections in Pakistan, and widespread perceptions that the army “managed” the polls, it is no surprise that the constituents of the new government are the same players that made up the Pakistan Democratic Movement alliance, which took office after Imran Khan’s ouster in 2022. Shehbaz Sharif of the PML(N) is set to be prime minister once more, while PPP president Asif Ali Zardari will be president, with Rawalpindi’s invisible hand guiding the ship. The PPP also gets the Senate chairmanship and the Khyber-Pakhtunkhwa and Punjab governorships while the chief ministers and Speaker of the National Assembly will be from the PML(N). Nawaz Sharif will play the grand elder to the alliance. Significantly, the PPP has chosen not to join the government — reportedly, it will merely vote with the ruling party on no-confidence and spending bills. Given the fragile alliance and the challenges he faces in office, Shehbaz Sharif may not be celebrating his crown of thorns.

 

Pakistan is suffering from a prolonged economic crisis — since 2011, its external debt has nearly doubled and its domestic debt has increased six-fold, while growth has slowed. It is on the way to a default on its debts, which will take the country even deeper into the abyss. Another IMF bailout, and even the economy’s medium-term viability requires hard choices and serious reform. The PM-elect will face the brunt of the ire against this inevitable belt-tightening even as the PPP — historically against pro-market reforms — will likely sidestep responsibility. Pakistan also faces a severe security challenge on its western frontier with Afghanistan and insurgencies in Balochistan. Then there’s the elephant that isn’t in the room. Despite Imran Khan being jailed and his party being disbanded, independents contesting with the former PM’s support have emerged as the single-largest block. Already, they are pointing to the “stolen mandate” and are likely to keep alive the new government’s crisis of legitimacy. General Asim Munir and the army’s support will be crucial for the government — both to manage internal differences as well as to govern.

 

For India, the new government in Pakistan may provide occasion for cautious optimism. Limited bilateral engagement could help strengthen the security gains of the past few years. For one, the 2021 ceasefire along the Line of Control in Kashmir has held, barring a few stray incidents. There has also been a drop in terrorist activity and support to terror from across the border. While Pakistan took a maximalist diplomatic position in the aftermath of the abrogation of Article 370, it is possible to open channels on specific issues. Given the unrest on its western flank, the army too has an incentive to work towards stability on the eastern front. The Sharifs, particularly Nawaz Sharif, have often displayed a willingness to engage with India. There was considerable personal warmth between Nawaz and PM Modi during the latter’s swearing-in in 2014 and the surprise 2015 visit to Lahore. If Islamabad and Rawalpindi are willing to begin a conversation in good faith, New Delhi should be open to the opportunity.

 

 

 
 

THE INDIAN EXPRESS

February 23, 2024

No BAIL FOR Mr Sisodia

Nearly year-long incarceration of former Delhi Deputy Chief Minister invites questions that need answers

 

On February 26 last year, the CBI arrested then Deputy Chief Minister of Delhi, Manish Sisodia, in a case related to alleged irregularities in a now-scrapped liquor policy. Two weeks later, the ED formally charged the senior AAP leader under the Prevention of Money Laundering Act (PMLA). Since then, on more than one occasion, the Supreme Court has told the two agencies that they cannot keep Sisodia “in jail indefinitely”. Yet in the past year, the judiciary has apparently stopped short of applying its impressive jurisprudence on civil liberties to Sisodia’s case. His bail applications have been rejected by lower courts, Delhi High Court, as well as the Supreme Court itself. On Thursday, a Delhi court extended the AAP leader’s judicial custody till March 12 and deferred, till March 2, a decision on whether it will take up Sisodia’s “regular bail application”. It cited a procedural complication: A review petition challenging the SC’s October 2023 decision to deny Sisodia bail is pending before the apex court.

 

The CBI is examining the criminal aspect of the liquor policy case and the ED is probing the money laundering dimension. Certainly, the two agencies must investigate all allegations of wrongdoing, and the law must take its course. However, the courts’ reluctance to apply the SC’s well-stated position that “bail is rule, and jail is exception” — underlined eloquently as late as 2018 in Dataram Singh vs State of Uttar Pradesh — to Sisodia’s case invites questions. This is especially so given that, during hearings, a two-judge bench had come down heavily on the investigating agencies for not producing enough evidence against the former Delhi Deputy CM. On October 6 last year, it asked the ED if it had any proof other than the statement of a co-accused-turned-approver. The Court had reminded the agency, then, of the stringent evidence-related requirements under PMLA and observed that the case would “fall flat in two hearings”. Yet, less than a month later, on October 30, the apex court denied bail to Sisodia.

 

On December 14, the SC dismissed the AAP leader’s petition to review its bail verdict. However, on February 5, the Court admitted a new curative petition filed by Sisodia. When it hears the case again, the SC must keep in mind its own powerful words in Gurbaksh Singh Sibbia vs the State of Punjab (1980): “The act of arrest directly affects freedom of movement of the person, and… an order of bail gives back to the accused that freedom on condition that he will appear to take his trial.”

 

 

 
 

THE INDIAN EXPRESS

February 23, 2024

Love’s no game

A class action lawsuit against dating apps may end up underlining this: There’s more to love than swiping right

 

Seen from one angle, it might seem like one of those love-turned-sour thrillers, like Fatal Attraction and Sleeping with the Enemy. Just consider the words being used in the class action lawsuit against Match Group, which owns popular dating apps like Tinder and Hinge: “Psychologically manipulative”, “addictive”, “predatory”. The six users dragging the company to court for “gamifying” the dating experience and “prioritising profits over marketing promises and customer’s relationship goals”, view these apps as the obstacle that keeps them from getting their romantic airport chase and teary reconciliation before the happily-ever-after.

 

It’s easy to villainise the “heartless corporations” even when they promise to help users make love connections and find The One. Because as it turns out, when Cupid puts on a suit and tie and begins considering the bottomline, it is in his/her interest to keep users coming back and paying for the option of swiping their way through a seemingly endless carousel of choices. After all, a match that ends up at the altar means the exit of two paying customers. Keeping the profits rolling in means ensuring that, as the late Amy Winehouse sang, love is a losing game — for the user.

 

Whether or not the lawsuit against Match Group ends up being a losing game too, dating app users might find it helpful to consider two things. Romantic love is only one of the many loves that enrich lives. And fairytales and rom-coms have propagated a very misleading idea about romance. Finding a connection — as these apps promise to help users do — is actually the easiest part. The real challenge is nurturing it and building it into a relationship. No app can help with that — or take the blame when things don’t work out as hoped.

 

 
 

THE TIMES OF INDIA

February 23, 2024

Your Job, Your Life

SOS from Indians working in Ukraine war zone shows why govts must monitor pvt agents

 

Indians rarely restrict a search for jobs to their own country. They are to be found across job markets. Globally, they are the largest international migrant population. In 2020, there were 17.9 million Indians working abroad. As a result, India is the largest recipient of international remittances. In 2023, World Bank estimated that India received $125 billion through remittances. To put this number in perspective, about $19 of every $100 that flows as international remittance ends up in India.

 

Account for diversity | Not all who leave India for work are skilled or equipped to deal with dubious intermediaries of overseas employers. For example, four Indians who were tricked into signing up with Wagner, a Russian mercenary outfit, have sent an SOS from the frontline of the Russia-Ukraine war.

They say that they signed up to work as army security helpers in Russia.

 

Push factor | India’s economy has always failed to generate enough jobs of quality. Even in urban India, more than 40% of the workforce is self-employed, a sign that decent jobs are inadequate. This scarcity allows criminals to exploit the desperation of youth.

 

Issue isn’t overseas jobs | Youth cannot be protected from exploitation by making it hard for them to take up jobs overseas. The large quantum of remittances that come in each year stabilises consumption patterns of vulnerable families.

 

Israel route | One way of preventing exploitation is to ensure a degree of oversight in recruitment. Recently, when the Israel government looked at filling skilled labour gaps in its construction industry by recruiting Indian workers, there were two layers of government involved in the process. This kind of oversight will help bridge the information gap between potential recruits and overseas employers. It also keeps out unscrupulous intermediaries.

 

The root cause of exploitation is the desperation among job seekers in India. It’s not limited to unskilled or very poor seekers. The so-called “dunki” routes of illegal migration cover people who can afford to fly. A better job market here will allow for emigration without stories of exploitation.

 

 
 

THE TIMES OF INDIA

February 23, 2024

Just Looking Like A Wow

Why social media influencers need to be consumed with a pinch of salt, or habanero chilli

 

A public diary of private life is not new, even if influencer economy pretends that it is. Anais Nin used to famously read hers out to adoring audiences back in the seventies. Do diaries always tell the truth? Are they always worth emulating? Of course not. So when social media influencers peddling third-rate advice misguide people into following it, it can be severely injurious. This week, Ruby Franke, a Utah mother of six with 2.3 million followers on her “sharenting” channel, has been sentenced to four prison terms for horrific parental abuse.

 

Variety packs | Not all influencers are created equal. Those with offline celebrity come with worshipping followers in tow. There are accounts that are in the Lamborghini mode and others that determinedly hang onto their nukkadfeel. There are young people whose profile dramatically changes as they skyrocket out of obscurity. Likewise, the damage that they can inflict also varies greatly. A bad bharta video may only cost you a few baingans. But non-scientific diabetes advice can be much more dangerous.

 

Expertise matters | Checking credentials and experience is particularly important when it comes to fitfluencers and finfluencers. The latter are under extra Sebi scrutiny now. These are areas in which disguised motivations for pitching, say a diet supplement or a real estate property or a stock, can deprive dupes of their health or wealth. But why would you look for such advice online? Isn’t it better to go to an actual doctor or gym or financial consultant? Sometimes the attraction is how ‘entertaining’ the social media expert is. Or how ‘free’.

 

Symptomatic sells | The tragic irony is your weakness is where you might be most vulnerable to hurt. Those with poor financial literacy may be more at risk of financial bamboozlement. Teenagers already suffering body dysmorphia may fall deeper into Chiborg and other rabbit holes, becoming critically desperate to look a certain way. And now as Lok Sabha elections near, celebrity political podcasters are doing especially brisker business. Except without all the usual media regulation and filters.

 

 

 
 

THE ECONOMIC TIMES

February 23, 2024

‘Tween Free Trade And Free Foodgrain

Resolve stockpiling and subsidies first

 

Farmers agitating on the outskirts of New Delhi for guaranteed crop support prices, and a five-year extension of a scheme to provide free foodgrain to over 800 million people, shape India’s position at the upcoming 13th WTO ministerial talks in Abu Dhabi on easing global farm trade. Food security can be ensured either by stockpiling, or by improving market access. India’s historical experience with market access during food crises has been gruesome, and it has determinedly chosen food sovereignty over free trade. This position blocks multilateral efforts to move more food from regions that produce excess to where the hungry mouths are. Stockpiling food at prices set by governments, once seen as a temporary measure on the road to farm trade liberalisation, has acquired permanency in negotiations.

 

Covid and the Russia-Ukraine war have bolstered the case for market intervention. The view that free trade is the best-available solution for global food security is conceded in theory, but not in practice. The inadequacy of market intervention to ensure self-sufficiency, or keep food prices in check, is also not in doubt. Trade is the most efficient mechanism to feed the world when the going is good. However, it becomes the first casualty when shortages loom. Hence India’s insistence on a permanent resolution on stockpiling and subsidies before farm trade can be liberalised.

 

In this line of thinking, it leads the part of the world that is structurally food-deficient. The way forward would be to reduce trade-distorting subsidies, a view shared by all WTO members. The road will have to pass through food security that cannot be guaranteed by trade, or rules designed to keep it free. The immediate reflex of any country is to hoard food during a crisis, and trade negotiators would achieve more if they factor it into their model for free trade. Farmers still surrounding New Delhi will be a force to reckon with at the Abu Dhabi WTO ministerial that starts next week.

 

 

 
 

THE ECONOMIC TIMES

February 23, 2024

Tap and Nurture Our Silver Economy

 

India has three key demographic trends: one, a rising population of young working-age people; two, a differential rate of population growth across different states; three, a growing ageing population. At present, the 60-plus cohort comprises about 10% of the population and is expected to reach 12% by 2030 and 20% by 2050. NITI Aayog’s recent ‘Senior Care Reforms in India: Reimagining the Senior Care Paradigm’ report is an important intervention for drawing up a robust plan to ensure senior citizens have productive and fulfilling lives.

 

Efforts to make senior citizens part and parcel of society is important. Data shows that 33% have depressive symptoms, and 30% low life satisfaction. To ensure their well-being, efforts must be made to improve infrastructure and capacities necessary for supporting health and welfare of the elderly, create evidence-based knowledge repositories for geriatric illness management, enable frameworks and monitoring mechanisms, and implement emergency response systems. The think tank’s reform plan has also called for introducing a reverse-mortgage mechanism to increase liquidity for seniors, mandatory savings plans, and tax and GST reforms on senior care products, while encouraging the private sector to design geriatric health insurance products.

 

It would be wrong to look at the segment as only family and state-support system recipients. Thanks to growing affluence and savings culture, they are also a growing consumer class. India’s silver economy is estimated to be about $7 billion. This makes the elderly a distinct set of consumers. Developing this market with targeted products and services will create new opportunities for seniors to live productive lives, which, in turn, will fuel economic growth.

 

 
 

THE HINDU BUSINESSLINE

February 23, 2024

Lessons from Chandigarh

Subversion of electoral process is unpardonable

 

The Supreme Court has made an unprecedented intervention in the Chandigarh mayoral election. Coming as it does just months ahead of the general elections, the lengths to which the bench comprising Chief Justice DY Chandrachud, and Justices JB Pardiwala and Manoj Misra went to ensure the integrity of the electoral process sends a clear message. It was a case of one political party subverting the electoral process.

 

The Court proved that it would not shy away from going the extra mile to protect the sanctity of democratic institutions and processes. On the face of it, elections in a small municipality hardly merit national attention. But the circumstances of this particular case were alarming. In the polling held on January 30, the BJP had 14 councillors in the 35-member House and an additional vote of the Chandigarh MP Kirron Kher who is an ex officio member of the House. The Shiromani Akali Dal’s one vote was also in favour of the BJP. On the other side, AAP had 13 councillors. But it had stitched up an alliance with the Congress which had seven, making this the first tangible test of the INDIA grouping. Together, they had a clear majority of 20. But the returning officer Anil Masih, who is a member of the BJP’s minority cell, declared eight votes invalid and the BJP emerged victorious. The Congress and AAP candidate moved the Punjab and Haryana High Court and later the Supreme Court with a video showing Masih had tampered with the ballot papers.

 

The BJP was prepared with what they presumed would be the outcome — the Court would declare this election invalid and there would be a re-election. That three AAP councillors have since joined the BJP does not appear to be a coincidence. Be that as it may, the judges waded right into what they described as a clear case of “subterfuge”, playing the video depicting the returning officer’s tampering with the ballot papers in the open court. Masih was asked to depose before the bench which questioned him about each of the ballot papers. The Court used its power under Article 142 of the Constitution to do “complete justice”. “This Court is duty-bound in exercise of its powers to do complete justice under Article 142 to ensure that the process of electoral democracy is not thwarted by such subterfuge. Allowing such a state of affairs to take place would be destructive of the most valued principles of democracy our country depends on,” said Chief Justice Chandrachud.

 

This was the “exceptional circumstance” forcing the Court to act literally as a returning officer, count the eight invalidated votes as valid and declare the AAP candidate as winner. The Court has initiated proceedings against the returning officer. This action comes as timely reminder that sanctity of the electoral process is central to the functioning of institutional democracy. Such malpractices tend to undermine confidence of the people in the electoral process. That’s why the apex court’s intervention becomes crucial.

 

 

 
 

BUSINESS STANDARD

February 23, 2024

The Nato conundrum

A possible Trump presidency is bad news

 

The second anniversary of Russia’s invasion of Ukraine approaches on February 24 but all eyes in Kiev, Moscow, and Brussels, headquarters of the European Union (EU) and North Atlantic Treaty Organization (Nato), will be focused on the US presidential election in November. Donald Trump, the near-certain Republican nominee, appears to have a strong chance of returning to the White House. That Mr Trump’s victory would be the worst possible outcome for the EU and Ukraine was underlined on February 10, when he stated that under him the US would not defend a Nato country that spends less than 2 per cent of its gross domestic product (GDP) on defence. On the contrary, he asserted, he would tell the Russians “to do whatever the hell they want”. This statement, which predictably loomed large over the Munich Security Conference last weekend, violates Article 5, the operating fulcrum of the 75-year-old agreement, which posits that an attack on one Nato member is construed as an attack on all. It is also, by implication, bad news for Ukraine, which is struggling with an acute shortage of defence equipment against a resurgent Russia, worsened by a resistance in the Republican-dominated Lower House of the US Congress to renew military and civilian aid. Ukraine is not a full Nato member but part of its decade-old “enhanced opportunity partner interoperability programme”, which means it cooperates closely with the group. Military setbacks to Ukraine would threaten European security.

 

Under-spending by Nato members has been an issue that irked Mr Trump and Presidents before him. But his latest threat — which The Economist has described as a “mobster’s racket” — ignores the fact that the 2 per cent investment guideline is not a binding commitment. It was a pledge first made in 2006 by Nato defence ministers as a means of smoothing burden-sharing arrangements and was reiterated in 2014, when Russia annexed the Crimea. Though the Trump administration had a valid point about most Nato members ignoring this commitment — in 2014, only three members spent 2 per cent or more of GDP on defence — the situation has changed since then because Europe fears an attack by Russia soon. By this year, 18 of Nato’s 31 members are expected to meet this target. The Baltic countries, which form the first line of defence in the event of a Russian attack, have started building a network of trenches and fortifications along their eastern border. Given the asymmetries in both conventional and nuclear weapons between Europe and Russia, it is unclear how far Nato can muster an effective deterrent without US military support. Analysts suggest that Europe will have to spend much more.

 

For India, the question is how it should respond to a possible Nato-minus-US configuration. The alliance has been the centre of the post-war security architecture. It is worth noting that in June last year, India rejected feelers from the US that it (India) should explore a Nato-plus engagement focused on China. The group includes Nato plus five US allies — Australia, New Zealand, Japan, Israel, and South Korea. Though this informal grouping could offer security cover in its territorial tensions with China, the foreign ministry’s position was that joining it would have limited New Delhi’s strategic autonomy, particularly given India’s participation in the Shanghai Cooperation Organization (SCO). New Delhi’s diplomatic balancing acts have stood it in good stead. Any alterations in transatlantic relations should invite a similar approach.

 

 

 
 

BUSINESS STANDARD

February 23, 2024

Recalibrating spend

RBI paper redefines the capex-revenue debate

 

The government’s commitment to rein in the fiscal deficit and limit borrowing from abroad was re-emphasised in the Interim Budget earlier this month. A gross fiscal deficit of 5.1 per cent of gross domestic product (GDP) has been budgeted for in FY25, reflecting a consolidation of 71 basis points over FY24 (Revised Estimate). The tax-GDP ratio has also increased from 10.1 per cent in FY14 to 11.7 per cent in FY25 (Budget Estimate), along with improvements in tax-revenue buoyancy. At the same time, restrained growth in revenue expenditure, coupled with the impetus provided to capital expenditure, signifies that a greater share of the borrowing is now directed towards financing capex. Notably, the secular decline in the ratio of revenue expenditure to capital outlay indicates the government’s efforts to improve the quality of expenditure, while remaining on the path of fiscal consolidation.

 

In this context, a recent research article published by the Reserve Bank of India does well to examine the linkages between economic growth and fiscal consolidation in the country. Interestingly, the paper redefines capex and looks at developmental expenditure (DE) instead — it is broader in scope as it includes social and economic expenditure, covering allocations for health, education, skilling, digitisation, and climate-risk mitigation. The purpose is to capture components of revenue expenditure that can actually result in physical and human capital formation, while discarding parts of capital expenditure that are not strongly growth-inducing. As against capex, which is budgeted to account for 3.4 per cent of GDP in FY25, DE is set to be around 4.2 per cent in the same year.

 

It is commonly believed that lower government spending depresses economic growth in the short run. But fiscal consolidation can boost growth in the long run through lowering of long-term interest rates, which crowds in private investment and, at the same time, creates the fiscal space for more productive expenditure such as public investment in physical and human capital and targeted social spending. To this end, measures suggested by the paper include the reskilling and upskilling of the labour force, investing in digitisation, and attaining energy efficiency. Employing a macroeconometric framework, the paper concludes that a 1 per cent rise in real DE can have a cumulative multiplier impact that produces a 5 per cent rise in GDP over four years. A uniform 5 per cent rise in employment (including training and skilling) in sectors with high labour productivity (such as chemicals, financial services, and transport) for one year can contribute more than 1 percentage point rise in GDP growth over the period 2024-31. Similarly, digitisation and reduced energy intensity can raise growth in the medium term by enhancing labour and capital augmenting technology growth. There are short-term pains (as seen in a sharp rise in the debt-GDP ratio), but the long-run gains more than offset the short-run costs, indicating strong complementarities between judicious fiscal consolidation and growth. Recalibrating government expenditure towards DE can reduce the general government debt-GDP ratio to 73.4 per cent by 2030-31, contrary to the International Monetary Fund’s projection that general government debt would exceed 100 per cent of GDP in the medium term. Recent announcements made in the Interim Budget, including the Rs 1 trillion corpus for scaling up research and innovation in sunrise domains and the “Rooftop Solarisation” scheme, are steps towards improving the quality of government outlay.

 

 

 
 

FINANCIAL EXPRESS

February 23, 2024

Set for a lift-off

The move to liberalise FDI in the space sector is welcome, but some more policy clarity is needed

 

The government’s decision to liberalise foreign direct investment (FDI) in the space sector should go a long way in propelling India into the next phase of space exploration and commercialisation. The new regime will allow 100% FDI in the manufacture of satellite systems without any prior approval and has eased the rules for launch vehicles. Before the policy change, such investments were allowed, but needed government approvals that would sometimes mean months of waiting. The government also divided its space sector into three broad categories for the purpose of investments: Companies that make rockets that launch satellites, those that make satellites and companies that make the parts for manufacturing satellites. The amended rules should grant greater access to technology for critical communication systems such as transponders, antennas and power systems. The higher FDI in satellite manufacturing and operations would also lead to easy entry for key global players in the sector.

 

This is important as while India is a major space-faring nation, it accounts for only 2% of the $500 billion international commercial market. This can now go up exponentially as the amendments are a distinct improvement over the current FDI policy. Consultancy firm Arthur D. Little has said that with its current trajectory, India’s space economy could reach $40 billion by 2040. However, India has the potential to claim a much larger share of the global space economy, amounting to $100 billion addressable opportunity by 2040. Currently, India’s space industry is valued at $8 billion.

 

Wednesday’s decisions are in tune with the government’s Space Policy 2023, which permitted private entities to undertake end-to-end activities in the space sector through establishment and operation of space objects, ground-based assets and related services such as communication, remote sensing, navigation, etc. The policy also defined the role of National Space Promotion and Authorization Center (IN-SPACe) as a single-window agency for the authorisation of space activities by government entities as well as non-governmental entities. The policy clarity facilitated IN-SPACe and the Department of Telecom to work speedily to ensure necessary clearances for private players in India. The private sector needed an assurance of a level playing field and regulatory certainty, and what was left was a clarity on FDI, which has now been provided.

 

Most importantly, the new regime will allow ISRO to transition out of the existing practice of being present in the manufacturing of operational space systems and instead focus on research and development in advanced technology. The country’s premier space agency should also be able to use its biggest asset, its qualified and talented manpower, to concentrate on cutting edge research and development and long-term projects. However, what is still missing in the policy is the lack of a timeframe for the necessary steps ahead, and the ambiguous role of IN-SPACe. For example, there should have been an indicative timeline for ISRO’s transitioning out of its current practices and a schedule for IN-SPACe to create the regulatory framework. There is a need for a separate regulator for the space sector. Since the policy accepts that the private sector is a critical stakeholder in the entire value chain of the space economy, a time frame is urgently needed to provide the necessary legal framework to translate the vision into reality. Now that FDI has been allowed, it’s good to remember that foreign companies would need this clarity.

 

 
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