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The Hindu Editorial Analysis | 7th May’20 | PDF Download

 

 Back home

  • Mission “Vande Bharat” by the External Affairs Ministry
  • After nearly two months, stranded Indians across the world will begin their journey home.
  • 15,000 nationals from 13 countries in the first week.
  • The last flights allowed to land with incoming passengers were on March 22.
  • Standard Operating Procedures released by the Home Ministry, only those who have “compelling reasons to return” — people whose visas are expiring, who face deportation, with family emergencies, medical issues including pregnancy, and students who have lost their accommodation — will be allowed to return in the first phase, which is open to only Indian nationals at present.
  • Mandatory institutional quarantine for 14 days.
  • Bear the costs for travel arrangements and accommodation.
  • The returnees will no doubt be grateful to the government for its efforts, Indian diplomats who have helped keep them informed, organised food and shelter, and also to airline and naval crews who will carry out these operations despite the risks of infection.

Prepare for 2 things

  1. Second wave of the novel coronavirus
  2. Rapid increase in Indian expatriates needing to return
  3. Weekends can become productive.
  4. Less vehicle, less pollution.
  5. Work-Life balance
  6. Optimal use of land
  7. Empowerment of Women, Divyangs

Blame game

  • Trump’s recent attacks on China
  • Trump holds China accountable for the infection spread. He has attempted to tie the virus to a virology lab in Wuhan.
  • His administration officials accuse Beijing of withholding information about the virus.
  • President went so far as to seek compensation, threatening to impose more tariffs on China.
  • U-turn given his initial appreciation of his Chinese counterpart Xi Jinping.
  • 6 months left for the U.S. Presidential election
  • Question: what shape this renewed anti-China rhetoric will leave U.S.-China relations
  • Both sides agreed to an initial trade agreement in January that cut some U.S. tariffs on Chinese goods in return for China’s pledges to buy more American products.
  • China, which has brought the virus situation at home under control, has sent economic and medical assistance to the hardest hit countries.
  • Even the U.S. is importing personal protective equipment supplies from China.
  • Trump halted funding for the World Health Organization last month, China stepped in with an additional $30 million grant for the agency.
  • Resuscitating multilateralism with India’s help
  • The value of multilateralism and the necessity to preserve it.
  • Cooperation among nations is must.
  • New Delhi, together with like-minded partners, could assume leadership in strengthening constructive transnational cooperation.
  • USA is busy in election and China is facing a global crises of credibility.

WTO & WHO

  • The underpinning assumption of the post-war multilateral system was that peace and prosperity went hand in hand.
  • Multilateral institutions are not weapons.
  • Misuse of existing rules.
  • Weaponisation of global supply chains.
  • Weaponised Interdependence.

Reforming multilateralism

  • Strengthening global supply chains which are based on the promise of ensuring global stability and the attendant promise of peace and prosperity.
  • Like-minded countries Cooperation
  • First-order values — such as pluralism, democracy, liberalism, animal welfare rights, and more.
  • India: pluralism, democracy, and liberalism.
  • India can enhance global value chains.
  • Alliance for Multilateralism: an initiative launched by Germany and France.
  • China: may recover faster than most economically, its military might remains intact, but its image as a reliable partner has suffered a huge dent.
  • China should me made to follow global rules.
  •  A war-like state and a bond to the rescue
  • Politicians and epidemiologists across the world have used the word “war” to describe the situation the world is currently in..
  • War-time methods of raising financing.
  • One such method that has been used as early as the First World War is the Consol Bond.
  • The bonds, which paid out an interest of 5%, were issued in 1917 as the government sought to raise more money to finance the ongoing cost of the First World War.
  • Citizens were asked to invest with the advertising messaging: “If you cannot fight, you can help your country by investing all you can in 5 per cent Exchequer Bonds. Unlike the soldier, the investor runs no risk.”
  • Most of the Consol bonds in the United Kingdom are owned by small investors, with over 70% holding less than £1,000.
  • The proceeds of the bonds could be used for everything — from Personal Protective Equipment for doctors to a stimulus for small and medium-sized enterprises.
  • There is no denying the fact that the traditional option of monetising the deficit by having the central bank buy government bonds is one worth pursuing.
  • Consol Bond: make citizens active participants
  • An attractive coupon rate for the bond or tax rebates could also be an incentive for investors.
  • The government can consider a phased redemption of these bonds after the economy is put back on a path of high growth.
  • Several economists, former Finance Ministers and central bank Governors have made the clarion call for a large stimulus to pull the economy back from the brink.
  • We definitely need to go beyond current revenue receipts to fund the complete stimulus.
  • The government has to spend anywhere between ₹5-lakh crore and ₹6-lakh crore as stimulus.
  • Shortages in indirect taxation collections.

Everyone wants a good stimulus

  • While pleading for less or no government, corporate India wants to always privatise profits and socialise losses.
  • Everyone goes running to the government seeking bailouts.
  • You cannot ‘stimulate’ an economy during a supply-side lockdown.
  • It is like trying to jump-start a dead engine when you also have a flat tyre!
  • So, any ‘good stimulus’ can only come into effect post lockdown and extensive consultations are on with everyone for that.
  • Government revenues too will be seriously hit.
  • From 2-3% of GDP
  • Disinvestment target itself is 1% of GDP
  • So, the effective fiscal deficit is going to be somewhere around 7.5 %
  • So, while everyone is talking of how the U.S. government has set aside $2 trillion for bailouts or 9% of its GDP, no one is ready to face the trade-off that India’s starting point is going to be at around 7.5% of GDP fiscal deficit.
  • Can we still formulate a stimulus package comprising 10% of GDP, to be footed by the Central government alone?
  • Some prominent commentators: bailouts should be based on need and not affordability.
  • Bank managers should be incentivised to lend and the government should indemnify loans given during this period.
  • The government owes about ₹1 lakh crore on tax refunds and also had promised to make up for any difference to the States, if the GST did not grow by 14% per annum.
  • This is the time for it to transfer this to the States as a grant, for one year, to offset the revenue loss to States.
  • There is talk of going to the International Monetary Fund (IMF).

NEWS

  • Top Hizb commander killed in Kashmir: police
  • Terror group Hizbul Mujahideen’s “operational commander” Riyaz Naikoo, who was on the run for eight years, was among the three militants killed by security forces in south Kashmir in the past 12 hours.
  • Delhi Police suffers first COVID-19 death
  • A 32-year-old Delhi Police constable died on Tuesday night, hours after developing the symptoms of COVID-19.
  • At least two government hospitals refused to admit him, his colleague alleged.
  • Indians returning on Navy ships may have to pay up
  • Not just trains and flights, the government has decided that passengers who will be brought back by naval ships will also be charged for the service.
  • While the charges will be “reasonable” or nominal, sources said a final decision would be taken by the Ministry of External Affairs (MEA).
  • Over 80 BSF men test positive in single day
  • Over 80 Border Security Force (BSF) personnel tested positive for COVID-19 on Wednesday, taking the total number of such cases in the force to 154.

  • Ahmedabad to shut down for a week
  • Grocery stores, vegetable outlets will remain closed till May 15; pharmacies, milk parlours will be open
  • Maharashtra sees big surge
  • A total of 1,233 new COVID-19 cases were reported from Maharashtra on Wednesday, as the State crossed yet another grim milestone to breach the 16,000 mark.
  • Its cumulative case tally soared to 16,758, while a further 34 fatalities saw the death toll rise to 651.
  • Delhi to release quarantined Tablighi members
  • Around 4,000 persons will be released over the coming days, says a govt. source
  • Fall in key treatment categories
  • Police arrest ‘Bois Locker Room’ group admin
  • Legal system geared to favour the rich: SC judge
  • Microwave oven turns sterilisation unit
  • Rajat Kumar Panigrahy, Principal of the government Industrial Training Institute (ITI) in Odisha’s Berhampur, has started transforming discarded microwave ovens into ultraviolet (UV) sanitisation chambers for the disinfection of mobile phones, pens and other small objects carried by medical staff working in COVID-19 hospitals.
  • Why Govt should not reduce price of fuel?

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