Editorials of all Newspapers January 31, 2024

by | Jan 31, 2024 | Current Affairs & GK Question Answers | 0 comments

 

All Newspaper editorials in one place – January 31, 2024

 

 

 

THE HINDU

January 31, 2024

Economic encomium

A glowing 10-year report card must not stoke complacency

 

Ahead of the Interim Budget for 2024-25 on Thursday, the Finance Ministry’s 10-year review of the economy with some forward outlook, serves as a proxy to the annual Economic Survey. The review signals GDP will grow close to 7% in 2024-25, with scope to go ‘well above’ 7% by 2030. From about $3.7 trillion this year, India’s economy will expand to $5 trillion in three years, making it the world’s third largest, and could hit the $7 trillion dollar mark by 2030, it reckons. Splicing India’s growth story into two phases — 1950-2014, and a ‘decade of transformative growth’ since 2014 — the review stresses that the state of the economy was ‘far from encouraging’ when Prime Minister Narendra Modi ‘assumed power’. Growth was hobbled by structural constraints such as tardy decision-making, ill-targeted subsidies and a large informal sector, while inflation was unpalatably high. Post-2014 reforms have restored the economy’s ability to grow healthily with “longer and stronger” economic and financial cycles, and made India the fastest growing G-20 nation, it argues. The review asserts that India’s 7% growth when the world is growing 2%, is ‘qualitatively superior’ to 8%-9% achieved when the global economy grows 4%, perhaps, hinting at a few years of the UPA era. This is debatable as India’s economy is generally delinked from the world with domestic activity driving growth more than exports.

 

Now that the twin-balance sheet problem inherited from the UPA days has turned into an ‘advantage’, as the review stresses, it must translate into a wider private investment revival. That would hinge on a broad-based consumption rebound rather than the K-shaped recovery the government vehemently dismisses. Four years of 7%-plus growth, post-pandemic, would be commendable indeed. However, India needs to grow faster to create jobs at the scale its youth need and ensure that a rising growth tide lifts most boats, if not all. The review expects an ‘all-inclusive welfare approach’ to help enlarge the consumption base by expanding the middle class. But those dependent on handouts, such as the 800 million that need free food by the Centre’s reckoning, must progressively shrink for growth to be meaningful and equitable. The report rightly mentions reforms in learning outcomes, health, easier compliances for smaller firms, as priorities, with some critical changes at the ‘sub-national government’ level to accelerate growth. It is also essential that flaws in reforms such as GST are fixed and some of the blunt policy tools deployed, for instance, import licences and price controls on deregulated products, that send convoluted signals about India’s ‘open market with predictable policies’ pitch, are reconsidered.

 

 

 

 

THE HINDU

January 31, 2024

Vetting for vendetta

Mechanism to scan cases for political motive cannot address issue of cover-up

 

The Supreme Court’s suggestion for a mechanism to eliminate the perception of vendetta behind the use of investigative agencies against political opponents is sound in principle, but may not address all aspects of the problem. A case under formal investigation may be scrutinised for its legal tenability or political motive, but such a mechanism can do nothing about offences and allegations that are covered up for political reasons. During a recent hearing on a bribery case against an Enforcement Directorate (ED) officer in Tamil Nadu, the ED sought the transfer of the probe to the CBI. It also charged that the State police was not sharing details of FIRs it had registered on complaints against Ministers, officials and others in instances of corruption and illegal mining. The ED, presumably, wants to probe the money-laundering aspects of these offences, whereas the State government believes these details will be used to target its ministers and officials as the State is run by a party opposed to the ruling BJP at the Centre. The Bench’s idea that an independent, pan-India mechanism to vet such cases appears reasonable. However, much of the criticism of the use of central agencies against political adversaries of the BJP stems from the view that similar allegations against its party members and allies across the country are seldom investigated.

 

Corruption allegations abound in several States against key political figures seen as friendly to the Centre, but the Opposition parties believe the CBI, ED and Income-Tax Department are hardly active there. The Bench is right in observing that offenders should not be spared only because they claimed to be victims of vendetta. Its remarks disapproving of retaliatory arrests are also salutary. However, despite the Solicitor-General’s argument that the courts could intervene in the case of vindictive action, it has to be noted that the ED’s power to summon and arrest anyone, and the difficulty in obtaining bail in money-laundering cases, renders the Union government quite invincible if it chose persecution in the name of prosecution. An unsavoury instance of how far politics over the use of central agencies can sully institutions is the recent episode of a Calcutta High Court judge ordering a CBI probe into charges against the ruling party in West Bengal, and a Division Bench staying the order. The single judge chose to ignore the Bench’s order, accusing its presiding judge of political motive. In a welcome move, the Supreme Court formed a Bench of its senior-most judges and transferred the whole case file to itself for disposal. The perception of vendetta can only be removed if all agencies chose independence over subservience.

 

 

 

 
THE INDIAN EXPRESS

January 31, 2024

Price of distortion

Government’s move takes fertiliser industry back to full-control era before introduction of nutrient-based subsidy system

 

THE CENTRE’S FERTILISER subsidy bill has more than trebled from Rs 81,124 crore to Rs 2,51,339 crone between 2019-20 and 2022-23. Even the current fiscal’s budget estimate of Rs 1,75,100 crore is likely to be overshot in the final numbers. Not for nothing that the Narendra Modi government wants to derive maximum mileage, political as much as economic, from this humongous spend. Since November 2022, all subsidised fertilisers are being marketed under a common Bharat brand, with companies having to print this (along with the Prime Minister’s One Nation One Fertiliser scheme’s logo) on two-third space of every bag and leaving only the balance one-third for their own name, logo and other product information. Now, the Modi government has capped the profit margins companies can earn from sales of di-ammonium phosphate (DAP), muriate of potash (MOP) and other subsidised non-urea fertilisers. The maximum retail prices (MRP) of these fertilisers cannot be more than 8-12 per cent higher than their total cost of sales.

 

The government’s argument would be that when so much of taxpayer money is being spent on fertiliser subsidy, the benefits should also accrue to farmers. One way to ensure this is by making companies reveal their actual cost of production/imports, distribution and other expenses. Based on this self-assessed and duly audited cost data, they will be allowed to set MRPs that generate “reasonable” profit. Any unreasonable profit, in excess of 8-12 per cent, will have to be refunded with interest and adjusted against future subsidy payments. In short the current detailed cost monitoring and price control regime in urea will henceforth be extended to all other subsidised fertilisers. While urea is a controlled fertiliser—its MRP is fixed by the government—the likes of DAP, MOP and complexes (with varying nitrogen, phosphorus, potash and sulphur content) will also practically cease to be “decontrolled” fertilisers.

 

The flip side to the Modi government’s move is that it takes the fertiliser industry back to the full-control era before the introduction of the nutrient-based subsidy (NBS) system in April 2010. Fertilisers are basically food for crops. NBS was supposed to foster product innovation, with newer and better fertilisers providing more balanced nutrition. That dream didn’t materialise, as urea was excluded from NBS; its fixed MRP led to over-application, worsening nutrient imbalance and declining crop yield response. Farmer interest is better served by freeing up MRPs, encouraging balanced nutrient use and fertiliser products customised to different crop and soil-type requirements. The Rs 1,00,000-1,50,000crore annual fertiliser subsidy can be converted into a direct income support scheme, be it on a per-farmer or per-hectare basis. Either way — India has about 10 crore farmers and 14 crore hectares net sown area—the benefits would be more than from distorted nutrient pricing.

 

 

 

THE INDIAN EXPRESS

January 31, 2024

After Niharika

Student suicide in Kota points at onerous pressure on the young. PM Modi touches a chord with his advice to parents

 

I AM A loser. Worst daughter… This is the last option,” wrote Niharika Solanki, who died by suicide in Rajasthan’s Kota on Monday in the second such incident reported in the city this year. The 18-year-old, the eldest of three daughters of a security guard, had been preparing for the Joint Entrance Examination (JEE). Solanki’s desperation echoes that of many other students whose inability to crack high-stakes competitive examinations such as JEE and NEET has seen a disquieting spike in student deaths in the country. Last year, Kota – the ubiquitous pit stop on this arduous road to “success” —saw 29 student deaths by suicide reported in its many coaching centres, the highest ever in a single year. The National Crime Records Bureau 2022 annual report, released in December last year, showed that students and the unemployed constituted 7.6 per cent and 9.2 per cent of the total number of suicides, respectively.

 

This is, of course, indicative of a deeper malaise that begins at home, often as an ambition dreamed up by parents for their children and ends with make-or-break attempts at securing a seat at one of the hallowed institutions that promise upward mobility and job security. The cost of aspiration is steep—interminable hours of studying in coaching centres away from home, loneliness and despair, and the unrelenting pressure of making it to a bigger, brighter future, not just for oneself but for one’s family. In his annual Pariksha pe Charcha interaction with students. Prime Minister Narendra Modi urged parents to not treat their children’s report cards as their calling cards, working instead on mutual understanding and realistic goals. Reminiscent of his call to parents to hold their sons, not daughters, accountable in the context of incidents of sexual violence, in his inaugural Independence Day speech from the ramparts of the Red Fort, this was a reminder from the highest office of the land that change requires everyone to own responsibility, a conscious effort to open up minds, and rethink ways of seeing.

 

The future need not be one of anxiety and duress, of expectations so onerous that they become the sole metric of achievement for young people like Solanki. A recognition of potential can be a gesture of confidence but it can just as easily sharpen itself into a jagged edge of despair in a country of more than 1.4 billion, where over 50 per cent of the population is under 30, and where generating employment opportunities remains a problem in a fast-growing economy. To address the crisis, a lot more needs to be done — by parents, but also by teachers, institutions and policy makers.

 

 

 

 

THE INDIAN EXPRESS

January 31, 2024

Mona Lisa smiles

And no amount of soup-throwing protests will change that

 

THE MONA LISA keeps on smiling, pumpkin soup hurled at it notwithstanding. The woman inside the painting has been witness to war, revolution, theft and vandalism, for reasons as varied as nationalism, love, climate change, disability rights, and now, the latest, food and economic security. Through it all, she smiles knowingly, and to some, annoyingly.

 

Earlier this week, protesters from a French group called Food Counterattack threw pumpkin soup at arguably the Louvre’s most iconic exhibit “What is more important” the protesters can be seen shouting in a video, “art or the right to healthy and sustainable food?” While the deliberately starving artist or the penniless writer, whose only fuel is coffee and cigarettes, might disagree with the framing, most people would probably agree that food matters more. What many might also ask, though, is: What’s a painting got to do with it?

 

In 2022 and 2023, Vincent Van Gogh’s Sunflowers, The Scream by Edvard Munch, The Girl with the Pearl Earring by Johannes Vermeer and Leonardo Da Vinci’s masterpieces were subject to food attacks — from cake smears to tomato soup — by protesters. Their causes were often just — climate change and the excesses of the fossil fuel industry, for example. Or as in the current case, the need to ensure food security and nutrition for the marginalised. But the target was wrong. Time was when protesters would protest outside the buildings and offices of the rich and powerful. Artworks on public display, on the other hand, are one of the only ways that those without means can access the rarefied world of what was once “high” culture. Perhaps in this, like so much else, social media is to blame. It seems like the all-caps scream of the troll has bled into real life, replacing for some the meaningful engagement and anger of a thoughtful protest Whatever the case, behind her protective glass shell, the Mona Lisa smiles.

 

 

 

THE TIMES OF INDIA

January 31, 2024

Cerebrally Speaking

Neuralink’s human trial can, in part thanks to Musk, be pivotal in brain-computer iFnterface tech

 

Sometimes science news feels like science fiction. The mobile phone was a star in Star Trek long before it became one in real life. Drones were in Dune, space station in Arthur C Clarke’s writing. Brain-computer interface is something scientists have been working on for decades. Yes, most of what it promises remains in sci-fi realm. But Elon Musk’s company Neuralink putting its first wireless device in a human brain does mark a tech advance that is as significant as exciting.

 

What exactly is new? | Like all scientific advancements this one is very much built on its predecessors. In 2021 for example, Australian ALS patient Philip O’Keefe used a neural interface to put out a social media update: “hello, world! Short tweet. Monumental progress.” Where Neuralink scores is in junking cumbersome equipment.

 

Who benefits today? | Initial users will be those who have lost the use of their limbs, Musk tweeted. This describes volunteer bases across most brain-computer interface experiments. For this category of patients, taking control of their phone or computer, and thereby almost any device, just by thinking, would be transformative.

 

Who could benefit tomorrow? | If one category of potential patients will depend on their brain to bypass diseased bodies, a second will be those suffering brain diseases. Idea is that processes like deep-brain stimulation could help fight Alzheimer’s and Parkinson’s, even depression and addiction. Finally, a third category could use neural interfaces to amplify abilities such as memory and concentration.

 

Is tomorrow very far? | Clinical experiments have so far not gone beyond a few dozen Earthlings. Irrespective of what its most passionate proselytisers claim, this technology is nowhere close to becoming accessible like cardiac pacemakers or artificial knees. However, the Neuralink event underlines that we do need to start talking about how it will be shared and regulated.

 

Will it get funded? | Musk’s involvement has of course put the experimental science of controlling computers with the mind in the limelight. One aspect of this is that from low Earth orbit satellites to EVs, he has a reputation for deploying extraordinary resources and delivering. But a rising tide lifts all boats. Other companies and researchers in the field may also now find fund-raising smoother sailing. Also think: a radical expansion of human brain capacity could throw a spanner in AI stories.

 

 

 

THE TIMES OF INDIA

January 31, 2024

What 7% Hides

GOI eco review right on growth momentum. But sustaining it needs reforms. And millions need quality jobs

 

GOI’s review document of a decade’s economic journey highlighted the strong growth impulse propelling India’s economic momentum. India’s performance this year is set to beat expectations. And IMF says it will remain the fastest growing major economy next year.

 

7%+ trajectory | GOI’s advance estimate of economic growth in 2023-24 pegged it at 7.3%. Last year, Economic Survey estimated a baseline GDP growth of 6.5%, which gives a sense of the unforeseen economic momentum.

 

Jobs challenge | The review identifies building a skilled workforce as a challenge going forward. This aspect represents one of the low points of India’s economic performance. GOI’s jobs data shows a marked worsening in quality of employment. Since the pre-pandemic phase, 2018-19, there’s been a shift of workers back to agriculture. The least productive sector of economy is now supporting a larger share of the workforce.

 

Impact on consumption | Private consumption makes up about 61% of GDP. The drift of workers back to agriculture, which now supports 45.8% of the workforce, will depress rural wages. This, in turn, will be a drag on consumption. It’s already shown up in data. GOI’s advance estimate of GDP for 2023-24, projected private consumption to expand 4.4% while headline growth is expected to be 7.3%.

 

Reforms need acceleration | Two critical reforms that were rolled out last decade were GST and bankruptcy code. However, India can no longer afford to put off reforms to improve the productivity of factors of production such as land and labour. Changes in these areas are prerequisites to improve Indian industry’s competitiveness. Moreover, these reforms will also pull a larger proportion of the workforce out of agriculture and into manufacturing.

 

India’s growth momentum is stellar. It needs reforms to keep it going, and jobs to make it more meaningful.

 

 

 

 

THE ECONOMIC TIMES

January 31, 2024

Evergrande Collapse, Deconstructive China

Liquidation order could hit economic growth

 

Liquidation of Evergrande by a Hong Kong court this week piles on the pressure for China to prop up its collapsing property market. Beijing will have to take a call on protecting foreign creditors when homebuyers have stopped purchases. Since real estate is key to the Chinese economy — where households park around three-fourths of their savings and foreign bond holders have pushed enormous credit to developers — some form of taxpayer-led rescue is inevitable. Question is, how long will the government hold out on stimulating the economy, a key component of which will need to address persisting house price deflation? China may have greater controls over contagion. But its equity markets are slumping as global manufacturing evaluates alternative production bases.

 

Getting homebuyers and taxpayers to underwrite losses of foreign creditors should be a stretch for Beijing, which has choreographed China’s rapid economic growth by funnelling household savings into infrastructure. Investment-led export growth has depressed domestic consumption and is now faltering as China’s trade surplus with the rest of the world slows. Reviving consumption becomes even more difficult with real estate denting household wealth. And, unless China rebalances demand between investment and consumption, it will struggle to grow even at its current diminutive rate compared to its high investment phase.

 

A cooling Chinese economy is not good news for the world — except in economies positioning themselves for export-led growth, such as India. These stand to benefit from rising foreign investment and an elongated commodity downcycle. Fragility of China’s recovery is, in some manner, inversely related to India’s economic momentum. But, for all the obvious gains, there are lessons to be drawn from the Chinese model that has tested the limits of export-led growth. Even before that, Japan’s housing market collapse triggered decades of recession. China still has the option to avert the eventuality. It would do itself and the world a favour by acting with dispatch.

 

 

 

 

THE ECONOMIC TIMES

January 31, 2024

Better Judicial Infra Serves Justice Well

 

A well-functioning judiciary is a critical component of the social contract between citizens and the state. For the judiciary to operate smoothly, it requires an enabling and robust infrastructure framework. On Sunday, Prime Minister Narendra Modi stated that his government is committed to strengthening judicial infrastructure. This is welcome news.

 

Judicial infrastructure has three dimensions: physical infrastructure (courtrooms and lawyers’ chambers), digital infrastructure (video-conferencing devices and internet connectivity), and human resources (judges and their support staff). While challenges exist in all three areas, special attention is needed for physical and digital infrastructure, especially in lower courts. According to a Vidhi Centre for Legal Policy report, most lower court complexes in Gujarat, Sikkim and Tripura are inaccessible through public transport. Additionally, less than half of the surveyed courtrooms — 40%, or 266, of 665 court complexes — had functioning washrooms, and only 11% of washrooms were accessible for those with disabilities. A 2021 survey by CJI’s office found that only 41% of lower courts had studio-based video conferencing facilities.

 

Successive law commissions and chief justices, including CJI D Y Chandrachud, have called for the upgrade of court infrastructure. Several studies, including National Court Management Systems constituted by the Supreme Court, have shown a direct connection between physical infrastructure, personnel strength, digital infrastructure and the pendency of cases. While funds have been a recurring challenge, response of the states on this issue has been lukewarm. In several judgments, the top court has highlighted the constitutional goals of justice: accessibility, affordability and speedy justice. To achieve these, judicial efficiency is a must, and that cannot happen without a robust infrastructure. The Centre, states and the higher judiciary must address this challenge together.

 

 

 

THE HINDU BUSINESSLINE

January 31, 2024

Tax tale

Data point to strides in expanding direct tax base

 

The Centre has been remarkably successful at meeting its fiscal deficit targets in recent years. Buoyant tax collections have had a big role to play in this. The latest time-series of tax data throws light on this growth. The data, compiled by the Central Board of Direct Taxes, highlights three positive trends. First, there has been a ten-fold expansion in the Centre’s total tax revenues in the last two decades from ₹3-lakh crore to ₹30-lakh crore, endowing the Union with enormous spending power.

 

This has made possible universal welfare schemes such as the PM Garib Kalyan Yojana. The growth in tax collections during the UPA period (FY05-FY14) averaging 14 per cent was much higher than during the recent NDA rule (FY14-FY23) at 11.6 per cent. But the latter was marked by the Covid setback to economic activity and a cut in corporate tax rates. Tax revenues in the last three years (till FY23) have managed to bounce back, reverting to their historical growth rate of over 14 per cent. Second, it has been a long-standing lament that the economy rests on an extremely narrow tax base. The data show that there has been considerable improvement on this front.

 

The number of entities filing returns has more than doubled from 3.3 crore to 7.4 crore between FY14 and FY23, with the growth in individual filers (3 crore to 6.9 crore) accounting for the bulk of this increase. Given that a majority of return-filers declare zero tax liability, the expansion seems to be driven by tax laws mandating returns for individuals claiming rebates, and the imposition of PAN and tax collection at source on a host of new transactions. Hopefully, tax revenues from these assessees will improve once their incomes rise beyond the exempt threshold. Third, the contribution of direct taxes to total tax revenues which had dipped to 49.6 per cent in FY17 has recovered to 54.6 per cent in FY23. Direct taxes are more progressive than indirect taxes which impose an equal burden on the rich and the poor.

 

One aspect of the tax data that needs attention is the sluggish growth in corporate tax revenues relative to personal income tax. In the last nine years, personal tax collections have grown at an annual rate of 14.6 per cent while corporate tax revenues have grown at 8.6 per cent. Companies were granted significant tax relief just ahead of Covid, with their base tax rate cut from 30 to 22 per cent, even as the top slab for personal taxpayers was kept at 30 per cent. Yet, as the economy has rebounded from Covid, personal tax collections have expanded by 69 per cent in the last three years (FY20-FY23), while corporate tax collections have expanded by 48 per cent. National income statistics and household savings data suggest setbacks to personal income post-Covid, while corporate earnings have multiplied. It is perhaps time the anomaly between personal and corporate tax rates is corrected by granting relief to individual taxpayers.

 

 

 

 

BUSINESS STANDARD

January 31, 2024

Economic prospects

Interventions needed to support long-term growth

The Department of Economic Affairs on Monday came up with a review of India’s economic performance over the past decade. Although it is not the Economic Survey, which will be released before the full Budget after the Lok Sabha election, the review highlights the reforms implemented by the Narendra Modi government. It notes the economy is expected to grow 7.3 per cent this financial year and many believe growth will be around 7 per cent even next financial year. Growth in the economy has indeed exceeded expectations, and the fact that India is growing at this rate despite relatively unfavourable global conditions is commendable. The government implemented several reforms over the past decade and recovery from the pandemic has been stronger than expected. However, there are challenges that could affect potential growth over the medium to long run.

 

Among the most notable reforms, the government has implemented the Insolvency and Bankruptcy Code, 2016. Along with the merger of public-sector banks and their recapitalisation, it helped address the twin balance-sheet problem. As a result, the Indian banking sector is currently in its most favourable position in over a decade. Healthy corporate and bank balance sheets have not only reduced macroeconomic risks but will also support private investment. Another noteworthy reform implemented in the past decade is goods and services tax (GST). After years of relative underperformance, the tax system is showing signs of stabilisation and increased revenue. The government should now aim to rationalise rates and slabs to further improve its performance. The government took several other initiatives, such as the Real Estate (Regulation and Development) Act, decriminalising minor economic offences, liberalising foreign direct investment in various sectors, and adopting flexible inflation targeting.

 

Some of these reforms will support growth over the medium to long run. However, there are at least two important issues that need immediate policy attention. The government opted for increased capital expenditure to support growth after the pandemic, which slowed fiscal consolidation. As a result, according to estimates, India’s public debt is expected to increase this year, partly because of lower nominal growth. Public debt worth well over 80 per cent of gross domestic product is always a source of macroeconomic vulnerability for a country like India. Higher debt and interest payments are also affecting government spending. As an analysis by this newspaper showed, with an increase in interest payments, expenditure on health and education as a proportion of total expenditure has declined in recent years. The government thus needs to reduce the fiscal deficit at a faster rate to bring down public debt.

 

The other big policy challenge is generating quality employment. The review notes the unemployment rate, according to the annual Periodic Labour Force Surveys, declined from 6 per cent in 2017-18 to 3.2 per cent in 2022-23. Policymakers, however, should read these numbers carefully and not underestimate the nature of the challenge. It is worth noting that over 57 per cent of workers reported to be self-employed and over 18 per cent were helpers in their household enterprises. Meanwhile, about 22 per cent reported to be engaged in casual labour. The employment mix underscores that the Indian economy is unable to create quality jobs at the scale required. This factor alone has the potential to significantly undermine India’s long-term economic growth prospects.

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BUSINESS STANDARD

January 31, 2024

Gender preference

Girl child continues to face discrimination

 

Socio-economic advancement, better educational facilities for women, and extensive government programmes have improved health outcomes for girls and narrowed the gender gap in child health inputs and outcomes. However, India still has to go a long way. A new research paper — published recently by the National Council of Applied Economic Research, which explores various dimensions of differential investment in sons and a fertility preference to have sons — could be useful in framing policies in this context. The data from the National Family Health Survey reveals India has closed most of the gender gap in child investment over time, yet girls continue to fare worse than boys on most indicators related to health and nutrition. For instance, despite improvements in India’s average female-male infant survival and vaccination ratios, they remain below the international average. Further, boys tend to follow a more diversified dietary pattern and are more likely to be exclusively breastfed than girls. States in the Hindi heartland — Uttar Pradesh, Bihar, Delhi, Rajasthan, and Madhya Pradesh — continue to suffer from high levels of excess female under-five mortality in the country.

 

Other than differential investment in children based on gender, the paper also finds evidence of son preference and favouritism towards the eldest son. In India, eldest sons continue to do better than younger sons on various indicators like stunting and infant survival. Cultural controls are strongly associated with a male-skewed sex ratio in the country. A cultural preference for sons in India may be expressed as “son preference” or “daughter aversion”, arising from patrilocality, patrilineality, the cost of dowry, and old-age support from sons. The problem of “missing female children” remains pervasive in the country. An estimate by economist Amartya Sen in the 1990s showed that nearly 100 million women were missing across the world — almost 40 million in India alone. Indians continue to take advantage of weak enforcement of the Pre-Conception and Pre-natal Diagnostic Techniques (PCPNDT) Act, which bans sex selection. The willingness to have at least one son leads parents to engage in sex selection. This results in the sex ratio getting skewed more towards males and the last child in the family is especially skewed towards sons. The paper also notes the sex ratio at last birth is now considered a better way of capturing “son preference” than the overall population sex ratio.

 

The paper provides some valuable policy insights. It gives evidence of the relative ineffectiveness of free health services in reducing preference for sons. Policies, therefore, must focus on offsetting parents’ time and hassle costs like providing payments to them for having healthy girls. Similarly, female education has proven to have little impact. Development and educational attainment lead to smaller desired family sizes and, hence, couples are more likely to resort to sex-selective abortions. Low fertility levels are positively associated with a male-skewed desired sex ratio. The provision of financial incentives for having daughters also helps little due to the problem of infra-marginality of payments. Instead, the government must strictly enforce the PCPNDT Act and empower schools to deliver timely health interventions. The absence of social security also encourages families to have male children, with the hope that they will take care of their parents in old age. This is, to be sure, a complex problem and various steps taken by the government have improved gender outcomes. However, the desired change remains a slow process.

 

 

 

FINANCIAL EXPRESS

January 31, 2024

Making planes in India

Airbus’s deal takes India closer to assembling civilian aircraft

 

The possibilities of assembling a civilian passenger aircraft in the country are definitely a policy priority of the government. This objective appears within striking distance with Airbus inking an agreement with the Tata Group to manufacture the H125 helicopter from its civilian range in the country. The two companies had earlier decided to build the C-295 military transport aircraft, which entails purchasing a certain number of aircraft in a flyaway condition and the rest to be assembled in Vadodara.

 

India thus will be the sixth location where Airbus will operate its final assembly lines besides France, Germany, US Canada and China. At the foundation ceremony of the Tata Airbus C-295 aircraft manufacturing facility in Vadodara in end-October 2022, Prime Minister Narendra Modi stated that India would soon be manufacturing big passenger aircraft proudly bearing the words “Made in India”. The policy intent in this regard has gathered momentum after the historic fleet acquisition plans of the Tata Group’s flagship carrier Air India and Indigo.

 

Towards this end, civil aviation minister Jyotiraditya Scindia met with Airbus Global CEO Guillaume Faury with the aim of bolstering India’s position in global aviation. The minister underscored India’s status as one of the fastest-growing economies and emphasised the nation’s commitment to the Make in India flagship initiative. With a focus on self-reliance and indigenous manufacturing, India envisions itself as a potential global hub for aircraft production. The meeting with Airbus’ CEO aligns with this vision, as collaborative efforts on civilian helicopters and C-295 military transport aircraft will create a manufacturing ecosystem that could propel India into the final assembly of civilian planes. This is perhaps an idea whose time has come as India’s fleet requirements are pegged at 2,000 in the next 15 years.

 

While the higher level of policy ambition is to be welcomed, the process will take more time and strategic intent to bear fruition. Airbus and Boeing have so far resisted the policy pressures for civil final assembly lines, citing the critical mass of their investments in engineering, supply chain and maintenance in the country. Boeing sources $1 billion in products and services from the country and has announced a plant in Hyderabad to convert its 737 passenger planes into dedicated freighters to cash in on the e-commerce boom. The big question is what is the demand that Airbus and Boeing are looking at to undertake final assembly? If a final assembly line is justified if it turns out 5 to 10 aircraft a month and there is overall demand for 120 a year, then the massive domestic fleet expansion orders indicate that the time is right.

 

Persuading them to set up shop in India calls for greater strategic intent. If the H125 helicopter and C-295 deals are taken as exemplars, there is a warrant to similarly reconfigure the historic fleet orders by domestic airlines to ensure that a certain proportion is finally assembled here. Otherwise there is no deal. An equally efficacious option is to use the evolving ecosystem to assemble an indigenously designed civilian passenger aircraft that is truly Made in India But this will take a lot of time—perhaps more than a decade—and substantial resources like the Chinese single-aisle C 919 incurred as it debuts at the international airshow at Singapore next month.

 

 

 

FINANCIAL EXPRESS

January 31, 2024

Reddit flirts with Wall Street and potential disaster

 

THE EARLIEST MENTION I can find of Reddit’s ambitions for an IPO comes from a Variety report in 2 017—co-founder and CEO Steve Huffman told a conference audience that taking the site public was the only “responsible choice” but that the “time frame was pretty far out” More than six years later, with an IPO finally looking imminent, he was certainly right on that second point. That first one, however, is still in doubt There’s a reason the social network has taken so long to go public: There’s a good chance it might all fall apart.

 

Lately, (mostly) millennials have started to discuss the internet with a hint of mourning. As the first generation that grew up with it in their lives, they hold a special attachment to those pioneering web days, when they would ask friends and crushes whether they would “be online” after school, and information and belonging came through communities of forums and blogs. That may be rose-tinted nostalgia. But to me and others, this was a time when groups on the internet kept to themselves—and could, therefore, be themselves. Not every online space was for everyone—but that didn’t matter, because “everyone” wasn’t there. Over time, these silos, where communities were self-governed by their own moral codes and values, started to coalesce under just one or two gigantic roofs. Facebook was where your friends, family and colleagues were. Twitter was the “global town square.”At first, this seemed invigorating— the collective hive mind offered an intoxicating force for change.

 

But soon these roofs would gain an unscrupulous master in Wall Street. Requiring huge injections of money to pay off early backers and provide the capital needed to expand, the dominant social networks headed to the public markets. From then on, quarterly earnings became do-or-die. Each quarter meant getting bigger—more users doing more things more often and for longer. Users noticed the difference: ads shoved down your throat; an emphasis on divisive content; and a user experience that left you feeling miserable and manipulated. Throughout this time, Reddit has been an outlier, the last big social network to resist this ugly transformation. Yes, it attracts more than 2 billion visits every month. But it is better thought of as a huge network of forums, almost like the old days, divided by subject matter like sports teams, local communities, celebrities or practically anything else. Across them all, an army of volunteer moderators keeps things in order with remarkable dedica tion. There is simply no other site like it on the modem internet.

 

Yet despite its enduring popularity, no one has ever seemed to know quite what to do with Reddit. Fearful of breaking the delicate balance holding it together, the site’s corporate owners have always been reluctant to make sweeping changes. Advertising is relatively unintrusive. Monetisation and gamification have been kept to a minimum. Any other approach would be too risky—its users could turn on the company in an instant. For this reason, Reddit has plodded along in private ownership.

 

But the chance to go public may finally be here. Builders of large language models that power tools like ChatGPT have already scraped Reddit, a treasure trove of data, something the company feels it should probably be paid for in the future. It would create a lucrative and consistent revenue stream.

 

But getting this right for the site will be tricky. For starters, top posters might reasonably believe they deserve a cut of the proceeds from their contributions. The volunteer moderators might demand to be compensated for keeping that data clean and relevant, given that it will now help A1 companies already worth billions of dollars.

 

On a grander scale, the site is at constant risk of revolt if any changes are seen to be Prioritising the interests of investors over users. Expect anger as Reddit’s content gets locked down, and harder to use, to protect its commercial value. One such move, restricting access to its data by third-party apps, has already provoked outrage and a multi-day boycott. The discord seems to have been quelled, for now, but the Reddit community has proved its ability to aggressively force change. Just ask the short sellers driven to ruin by the r/WallStreetBets community pumping the price of GameStop and other so-called meme stocks. Or former CEO Ellen Pao, who was forced to step down after a huge user revolt over her decision to fire an employee responsible for overseeing a popular subreddit, r/AskMeAnything. Redditors are right to fear what the future holds for a publicly owned Reddit. They’ve seen this story before. If needed, they will mobilise at a moment’s notice, knowing they can send the company’s share price into a spin.

 

 
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