Seasonal Magazine's Latest Issue - Cover Story - Interview with Federal Bank's CEO, Shyam Srinivasan by John Antony

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Managing Editor Jason D Pavorattikaran Editor John Antony Director (Finance) Ceena Associate Editor Carl Jaison Senior Editorial Coordinator Jacob Deva Senior Correspondent Bina Menon Creative Visualizer Bijohns Varghese Photographer Anish Aloysious Office Assistant Alby CG Correspondents Bombay: Rashmi Prakash Delhi: Anurag Dixit Director (Technical) John Antony Publisher Jason D Pavorattikaran

LASTING LESSONS FROM COVID-19 As much as Covid-19 is a once in a century crisis, it offers lasting lessons for all from individuals to countries, to make a better world. The world needs to save

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Saving is not possible if there isn’t enough income. Savings can’t be done by reducing essential spending, as consumption needs to be grown. There should be surplus income for all entities. Governments should find ways and means to generate more tax revenue from more sources rather than burden certain segments more. Tax rates should be light so that it encourages growth and profits, and thus compensates in itself. When it comes to corporates, secular profits should be aimed at, and not just lofty valuations that disappear overnight. And coming to the workforce, minimum wages should be set so that there is something substantial to save for those who draw even the minimum wages. The world needs to be in stable and liquid assets

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Everyone needs to save. Not just individuals and families, but small businesses, corporates, NGOs, charities, villages, cities, states, and whole governments need to save for a rainy day. Or an extended rainy season like how Covid-19 proved to be. Needless to say, the richest entities and countries with the deepest wealth are the ones who are going to outlive this crisis and thrive again with the least damage. And its converse needn’t be said even this much. The world’s poor – be it individuals or companies or countries – are taking the biggest hit, even if they have not taken a huge direct hit already from the pandemic. And this will continue for years to come, if not decades. Hopefully, world will wake up to the fact that saving is not what is left after spending, but a judicious percentage of one’s income. The world needs more income

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EDITORIAL

During good times, the world tends to save in multi-bagger investments like real estate and stocks. The even more brave-hearted goes a step further and invests or trades in items like crude and currency futures. But in bad times, these are the first assets to come crumbling down and lay shattered there for years. In contrast, a stable asset like gold has put up a blistering performance, despite some initial hiccups, even during this unprecedented lockdown in human history. Similar is the case with bank deposits, whether it is short-term or long-term deposits. Despite being looked over often for their lacklustre returns, bank deposits increasingly make sense now, due to lower inflation and ready liquidity. The world needs to fight autocracy It is no coincidence that modern world’s only pandemic arose from China. In fact, in hindsight at least, the world was only waiting for China to deliver this devastating blow. Because, China had covered up the first 2002-04 SARS Corona Virus outbreak brilliantly, taking 15 long years before admitting that its origin was from bats and civets in its Yunnan province. Neither WHO nor any superpower including USA took China to the task for this, as there were only 8000 cases worldwide and less than 800 deaths, and all nations thought it convenient not to ruffle the Chinese feathers. This emboldened the autocratic regime in China to do an encore when Covid-19 broke out in late 2019. It would never have happened if China had a decent

Opposition Party or a free press. The world needs sensible tourism More and more details are emerging that Covid-19 has primarily been a tourism disease. Starting from the mid-1990s and accelerating by the early part of this past decade, China has been leading in worldwide outbound tourism. Since, 2013, China has not yielded its number one spot in global outbound tourism, and in value terms is double that of the second player, USA. And where are the Chinese tourists going to? Predominantly to USA and Europe. No wonder then that these were the regions devastated by Covid-19 pandemic, and not countries like India or the African nations which the Chinese tourists shun. China could have at least prevented its tourists from going abroad, but it didn’t because that would have upset its inbound tourism, which is ranked number two in the world behind USA. The world needs to take care of its poor However hard and sweeping Covid-19 would rage across the world, there is very little chance that it would kill more than another epidemic which has been devastating the world since decades. Yes, hunger kills 25,000 people daily but the world simply doesn’t care because it mainly affects only the poor in nations across Africa and Asia. But Covid-19 comes across as much more severe as the rich and middleclass who calls the shots in this world are not spared by it. Will Covid19 change this world’s apathy? Not likely, unless the world wakes up to the fact that it makes immense economic sense too to handhold the poor nations and bring them up so that they become viable and thriving markets that contribute to the growth and sustenance of humanity on this planet. The world needs to look beyond capitalism It was perhaps destined in history that Covid-19 came and destroyed hundreds of millions of jobs worldwide, at a time when capitalists across the world were planning to replace millions of jobs through automation, artificial intelligence and robots. Now, they wouldn’t be able to do it, because for governments across the world, the first priority now becomes protecting jobs. The greatest positive impact from Covid-19 would be the realization that every emerging technology is not useful for humans at large. Automation or artificial intelligence may be good for the tech firms that peddle it and their financiers, but if these technologies stand to drive out millions of humans from their jobs, they need to be avoided, well, like the Corona virus itself. Countries across the world are now all set to incentivize jobs rather than investments for the first time in modern history. The world needs to prioritize better Covid-19 came at a time when the defence expenditures of most large nations were rising year after year. In fact, it has been rising steadily for the last five years, from 2015 onward, and now stands at nearly $2 trillion or Rs. 150 lakh crore. But this has not been like this always. After the Global Economic Crisis started in 2009, and when the

realities sunk in by 2011, global defence budgets kept reducing for the next three consecutive years. No great war or geopolitical tension arose in those three years, due to these lower defence budgets. But when the world’s economic situation again got better, the global arms lobby again made governments to spend more. Now, Covid-19 is sure to break that trend once again, as governments realize the futility of spending billions in defence, even when they stand without funds to fight a medical issue. The world needs to choose carefully where it invests India is no China. We need not even tell the global investors this, as they know it already. We can’t compete with the Chinese on the scales of infrastructure or speed of execution, at least for a foreseeable future. But should that matter anymore? We have numerous other strengths including a thriving democracy, a free press, capable engineers & managers, adequate resources and excellent English language skills. Companies who have burnt their hands in China now think that they have seen the worse. Not by a long shot. All large nations can wreck companies if they want, but most democratic nations with a reasonably independent judiciary would not ever do that. But the same can’t be said of an autocracy as powerful as China and that would be the real risk for global companies there. If India can untangle its legal and other myriad statutory requirements, and provide a consistent policy framework, there is no reason that we can’t attract many global firms looking to diversify beyond China. The world needs to have common sense Covid-19 would go down in history as the greatest intelligence failure of all time. America, Russia, Britain, and France, as well as the world’s emerging superpowers all failed bitterly in unearthing any intelligence from China regarding the depth of this crisis. This is despite investing hundreds of billions of dollars into creating and maintaining sophisticated surveillance mechanisms that include dedicated satellites. Instead, only a little bit of common sense would have saved hundreds of thousands of deaths worldwide, not to say trillions of dollars in resources and millions of jobs. This is because, as far back as December 2019, a handful of scientists and doctors in the West kept saying that there is every chance that the disease is spreading from humans-to-humans, unlike the official Chinese lie of no human transmission. A simple travel ban from China, and for those who have visited China recently would have saved the world. But that would not have been tech-driven intelligence, but plain common sense. John Antony SEASONAL MAGAZINE

CONTENTS

URGENT CURES FOR THE COVID-19 ECONOMY

DREAMING BIGGER NOW TO BE THE FIRST CHOICE BANK How well each organization is going to perform in the post-Covid world may feel like a mystery, but to a large extent will be determined by how well they were running in the pre-Covid era. Coming to the banking sector, the performance metrics may seem to be all in hard numbers, but in reality is much more, having to do with prudent policies and relationships with each and every customer. This is an area where Shyam Srinivasan led Federal Bank is likely to show much resilience in the coming quarters and years. The 89 year old bank has seen and survived too many economic and political upheavals, including World War II, Indian Independence, Indo-Pak wars, Indo-China war, Bank Nationalization, Gulf War, Economic Liberalization, Dotcom Burst, Kargil War and Global Economic Crisis - to be fazed by the current pandemic, the lingering effects of the lockdown and the current standoff with China. Even during the last decade, which was one of the toughest for the Indian banking system, Federal Bank swam against the current to emerge as a bank of relevance across India, from being a regional bank focused on Kerala. Even during the current crisis, which is truly unprecedented in modern human history, Federal Bank is staying focused on growing those strengths which are relevant now in this crisis. For instance, on the deposits front, it is doing extremely well thanks to its leadership in overseas remittances

URGENT CURES FOR THE COVID-19 ECONOMY INDIAN HEALTHCARE & ECONOMY CAN'T COPE WITH A MAJOR OUTBREAK: SOMDEEP SEN, ROSKILDE UNIVERSITY The sudden lockdown announcement has meant that millions of migrant workers, who play an indispensable role in the economies of Indiaâ&#x20AC;&#x2122;s SEASONAL MAGAZINE

WHY INDIA NEEDS MEGA INTERVENTIONS In a conversation with Seasonal Magazine, Prof. MD Nalapat, noted academician and senior journalist, says he is a believer of Indiaâ&#x20AC;&#x2122;s great future, but only if India does mega interventions and undertakes massive reforms.

AN EXCLUSIVE CHAT WITH MANI SHANKAR AIYAR' As issues of national importance remain unsolved due to a multitude of reasons, the pandemic hit the country when it was least ready for it. As the nation seeks solutions in the aspects of economy, policy, domestic as well as international affairs, the familiar voice of Mani Shankar Aiyar offers some insights. A veteran in the realms of politics and diplomacy, Aiyar has worked extensively in these fields and has frequently given his voice on issues that matter.

REVIVAL STRATEGIES FROM AN ARCHITECT OF HIGH GROWTH

LOCKDOWN AFFECTS COUNTRIES LIKE INDIA MORE: CHRISTOPHER WOOD, JEFFERIES

Lockdown in countries like India and Indonesia are more disastrous for human welfare and economies since there is no help for small businesses and neither are there unemployment benefits, said Christopher Wood, Global Head of Equity Strategy at Jefferies.

MAKING POLICY THROUGH CRISIS In these precarious times, different stakeholders and activists are on the lookout for accurate policies to address the manifest issues that the pandemic has caused or otherwise exposed. Dr. Dipa Sinha, particularly known for her work in the Right to Food campaign, has also worked extensively in the fields of Public Healthcare and Gender.

GOVERNMENT BORROWING FROM RBI NOT PREFERRED: NK SINGH, CHAIRMAN, 15TH FINANCE COMMISSION Though the government faces a tough challenge in funding the economy reeling from the Covid-19 pandemic, NK Singh, Chairman, 15th Fifteenth Finance Commission, said borrowing money from the Reserve Bank of India is not the preferred option. Section 5 of the Fiscal Responsibility and Budget Management Act allows RBI to directly lend money to the government

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CONTENTS UNLOCKING STORIES FROM THE WORLD OVER Nations across the world are witnessinr further cautious easing of COVID-19 restrictions following signs the pandemic may be slowing, with hard-hit Italy set to follow Spain in allowing people outside after weeks of confinement.

A FORMER CHIEF ECONOMIC ADVISOR SHARES HIS INNOVATIVE VIEWS Seasonal Magazine recently caught up with Dr. Arvind Virmani, Chairman of Foundation for Economic Growth & Welfare (EGROW) AND former Chief Economic Advisor to know his views on how to steer the economy back to growth, as part of our cover story, Urgent Cures for the Covid-19 Economy.

PASSIONATE ABOUT INFRASTRUCTURE DEVELOPMENT NitinGadkari has always been passionate about infrastructure development, so much so that he requested Prime Minister NarendraModi in 2014 to allot him that portfolio. Today, he handles this crucial domain’s key components like Ministry of Road Transport & Highways, and Ministry of Shipping. And along with these, Gadkari has been entrusted with an even more crucial segment as far as India is concerned – the Ministry of Micro, Small and Medium Industries which accounts for the bulk

AN OBJECTIVE AND SANE VOICE The voice of Parsa Venkateshwar Rao Jr has been that of an objective and centrist political commentator. He can pick holes easily in secular and liberal arguments, as much as he can easily pick holes in right-wing arguments. Even while objectively criticizing the BJP led

S&P CALLS FOR ADDITIONAL FISCAL STIMULUS IN INDIA Global ratings agency S&P has said additional financial stimulus is “necessary” in India to fight the COVID-19 pandemic, despite the country's weak fiscal position. The stimulus is necessary to support the vulnerable segments of the society and also to prevent additional structural damage to the economy amid the lockdown which has suddenly stopped the business activity, S&P said in a report.

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DETAILS EMERGE ON HOW DEEPLY LOCKDOWN IS HURTING THE ECONOMY India’s manufacturing activity slumped to a record low in April as business activities came to a near standstill after the Centre imposed a nationwide lockdown on 25 March to contain the spread of covid-19, a private survey showed.

WHY DOES INDIA’S RENEWED INTEREST IN THE RIC MATTER? India can utilize the RIC grouping to secure a greater role for itself in the Eurasian strategic, political, and economic affairs, which would solidify its status as a continental power. Moreover, the RIC serves as a hedge against strategic dilemmas in India’s relationship with the United States. As the world turns increasingly multi-polar, India’s emphasis on the RIC will compliment its policy of ‘issuebased alignments’.

US REPORT SAYS CHINA HID COVID-19 SEVERITY TO HOARD MEDICAL SUPPLIES Chinese leaders intentionally concealed the severity of the pandemic from the world in early January, according to a four-page Department of Homeland Security report.

WHY IS WARREN BUFFETT SELLING SELECTIVELY AND BUYING NOTHING

Berkshire’s earnings released recently suggested that an otherwise jubilant Buffett, widely followed by investors the world over, did not buy stocks in March quarter. His company, in fact, sold $6.1

ISLAMOPHOBIC POSTS INVITE TROUBLE FOR SOME INDIANS IN UAE Three more Indian expatriates in the United Arab Emirates have been sacked or suspended from their jobs for Islamophobic social media posts days after the Indian ambassador to the Emirate Pavan Kapoor warned Indians there against putting out such posts on social media, a news report said on Saturday. SEASONAL MAGAZINE

FEDERAL BANK

DREAMING BIGGER NOW TO BE THE FIRST CHOICE BANK FEDERAL BANK MD & CEO SHYAM SRINIVASAN'S INTERVIEW

How well each organization is going to perform in the post-Covid world may feel like a mystery, but to a large extent will be determined by how well they were running in the preCovid era. Coming to the banking sector, the performance metrics may seem to be all in hard numbers, but in reality is much more, having to do with prudent policies and relationships with each and every customer. This is an area where Shyam Srinivasan led Federal Bank is likely to show much resilience in the coming quarters and years. The 89 year old bank has seen and survived too many economic and political upheavals, including World War II, Indian Independence, Indo-Pak wars, Indo-China war, Bank Nationalization, Gulf War, Economic Liberalization, Dotcom Burst, Kargil War and Global Economic Crisis - to be fazed by the current pandemic, the lingering effects of the lockdown and the current standoff with China. Even during the last decade, which was one of the toughest for the Indian banking system, Federal Bank swam against the current to emerge as a bank of relevance across India, from being a regional bank focused on Kerala. Even during the current crisis, which is truly unprecedented in modern human history, Federal Bank is staying focused on growing those strengths which are relevant now in this crisis. For instance, on the deposits front, it is doing extremely well thanks to its leadership in overseas remittances and the spike in inflows due to the temporary return of NRIs and the strong rupee. And on the credit side, it is a leading player in the gold loans business, which is witnessing robust growth in this current crisis as the product of choice of both lenders and creditors. At the same time, its extreme prudence or conservative stance in risky products like personal loans, even during boom periods, is now helping the bank in its maintaining its asset quality. At no point in time has Federal Bank crossed a Gross NPA level of 3%, which is admirable in a country where the banking system NPAs have crossed 10%. The bank is a leader in digital initiatives and technology adoption and now excels in areas like digital origination and has implemented EMI products on Amazon’s e-commerce platform. Seasonal Magazine recently caught up with Shyam Srinivasan for a freewheeling video interview, where he talked about the bank’s various strategies as well his suggestions for reviving the economy. The bank which progressed much on his last year’s strategies of ‘Presence to Prominence’ in key geographies and ‘Prominence to Dominance’ in its home market of Kerala, has added a new vision this year, to emerge as the ‘First Choice’ bank for customers by doing every service in a distinguished way. On the economic front, this veteran banker strongly feels that the banks are flush with funds now and if there is a demand stimulus to excite the private sector and consumers, growth will come back in India. SEASONAL MAGAZINE

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Federal Bank could wind up FY’20 on a good note. Despite the marked economic slowdown in the country during the past few quarters and despite the gathering Covid clouds during much of February and March, the bank’s Q4 saw operating profits surging from low single digits during Q3 & Q2, to a healthy 27%. This shows that the bank’s long-term strategies have been working out well. The performance was well rounded with both Net Interest Income (NII) and Other Income rising impressively. NII grew 10.90% to Rs. 1216.01 crore from Rs. 1096.53 crore in the corresponding quarter last year. The Kerala headquartered bank also made some smart moves on the Other Income front including the timely share sale in Yes Bank shares, that helped Other Income to surge 72.72% to Rs. 711.11 crore in the three months of Q4 from Rs. 411.72 crore a year ago. The traditional private sector lender’s strategies in combating asset quality issues too are working out well. The fourth quarter saw asset quality improvement with Gross Nonperforming Assets (GNPAs), falling to 2.84% from 2.99% in the December quarter and 2.92% in Q4 of last fiscal. Post-provision, the Net NPA (NNPA) ratio was at 1.31% against 1.63% in Q3 and 1.48% in the corresponding YoY quarter. Despite being a traditional private sector lender, Federal Bank has to its credit one of the most extensive and up-to-date technology deployments, especially in retail banking. This has continued to help the bank perform well on the deposits front, where it clocked a robust 13% rise. This is impressive as the 89 year old bank is not competing head-on with newer and smaller banks on the deposit rates front, but rather leveraging the trust factor, long-term relationships and the conveniences it can offer through better technology deployment. Even with such overall good performance, the bank saw a 21% dip in net profit during the quarter. Federal bank reported a net profit of Rs. 301.23 crore for the fourth quarter compared to Rs. 381.51 crore in the corresponding year-ago period. This was mainly due to surging provisions. Provisions rose by more than three times SEASONAL MAGAZINE

to Rs. 567.50 crore, compared to Rs. 177.76 crore in the year-ago quarter. In the December quarter, the bank had set aside Rs. 160.86 crore in provisions. Like in most banks, the rise in provisions was led by pandemic concerns and Federal Bank made a Covid specific provision of Rs. 93 crore. Post the moratorium of loans announced by the government, 35% of Federal Bank’s loan book is now under moratorium. While this is slightly higher than some of its peer banks, it reflects the kind of long-term relationships the bank has with its customers, and which it will continue to pursue. While the trend in banking business has been to beef up provisions at the drop of a hat, Federal Bank has so far steered clear of this, applying provisions judiciously. Due to this, the bank’s Provision Coverage Ratio (PCR) may seem lower at 53.39% , compared to larger and aggressive new generation banks, but then Federal Bank has never been in the business of extending risky loans for pushing growth. This is a distinction the bank will continue to adhere to according to MD & CEO Shyam Srinivasan, who confirms that the bank will never resort to any outrageous lending in the post-Covid scenario too. The bank is on a reasonably strong wicket on the capital front. Its Capital Adequacy Ratio (CAR) stands at 14.35% which is comfortable enough to avoid any capital raising this year. Federal Bank’s focus this year will be on preserving capital and growing its deposits franchise further. The bank has some unique strengths on the deposits front. Federal Bank is a leader in the country on the inbound remittances business with 15% market share. This is a significant business as India itself is number one in inbound remittances from worldwide, thanks to its huge expatriate population, which still cares for extended families back home. While the remittance business is facing headwinds due to the pandemic, lockdown, salary cuts and job losses worldwide, Federal Bank is continuing to bet big on this business, as its long experience has taught the bank that this business always rebounds after crises like wars and economic setbacks.

With this insight in mind, during the lockdown itself, Federal Bank had tied up with US based world leader in remittances, MoneyGram, for crossborder direct-to-account transfers, thereby improving customer convenience. The appreciation of rupee vis-à-vis dollar and other major currencies also bodes well for this business. On the loans front too, the bank has an ace up its sleeve. It is a leader in the gold loan business in the banking sector, unlike many of its peers who are only discovering or beefing up this business now. Federal Bank’s headquarters and significant footprint in Kerala is also helpful for this business, as Kerala has been a traditional stronghold of the gold loan business.

On the credit front too, the bank has an ace up its sleeve. It is a leader in the gold loan business in the banking sector, unlike many of its peers who are only discovering or beefing up this fully secured lending business now.

Federal Bank expects strong growth in gold loans this year, and unlike most other loans, its full secured nature due to pledged gold at an adequate margin of safety ensures that it wonâ&#x20AC;&#x2122;t contribute to NPAs in the future. The rising gold prices also ensures that this business can also grow due to higher loans to existing customers, apart from wider customer acquisition. And unlike in earlier days, gold loans have been maturing from just for personal needs to being for small business needs.

it will also apply regular credit judgment before offering such credit.

The bank is also open to extending credit to select corporates and MSMEs, after due diligence. It is now in the process of tailoring specific cross-sell programmes to existing customers who have established track records. While it feels that the credit guarantee scheme is a good way to support MSME clients,

Seasonal Magazine in conversation with Shyam Srinivasan, MD & CEO, of Federal Bank Ltd.

In these tumultuous times, Federal Bank can also have leadership continuance if it so desires. Even with RBI's new proposal to limit tenure of bank CEOs, professional & non-promoter bank CEOs like Shyam Srinivasan, who has completed a decade, can still have longer tenures if needed. RBI move is to build a robust culture of sound governance and professional management.

Can we start by asking about your bank's moratorium and where it stands now? Roughly about 35%. That's what we had said when we finished our results. Yes,

it is still at the same level. About 3435% of the book is in moratorium. Do you think it is a wee bit more than peer banks maybe? See the moratorium book heavily depends on what your overall portfolio is like. If you have, let's say, a very heavy gold loan business, then the moratorium - our gold loan moratorium is less than 3%. But the business banking is 79%. So you see a spectrum. So I think 30% is more or less the industry average, it won't be very different. And second, in moratorium, those banks that have given opt-in, versus those who have given an opt-out, experience is different. For business banking, we get an opt out, which means everybody gets it. If you don't want you can opt out. So the SEASONAL MAGAZINE

moratorium will be higher. For some businesses, we give opt in where it is less than 18%. So it's sort of wide range. 35% looks probably standard and banks would all be in the 30s percentile. Some are 38%, but broadly that's what it is. But the real picture will emerge only in September. After the moratorium period is over, that is, in September which is now the new 'March'. Because September is when you will do what you would have done in March. March is the month of moratorium. So you'd have to see how things are in September. You have already mentioned about another dimension which is the gold loan business. You have been very bullish on gold loan business now, I remain very, very positive. It is doing well. And I think it will continue to do well for the foreseeable future. Both because there's a demand as gold prices are high. It's less cumbersome, it's easier for the bank and the customer. And I think slowly customers have understood that banks are good gold loan lenders now as for about four years earlier it was slow. I think it's coming back so we are quite happy with gold. Can customers avail gold loans from you? Can they walk into the bank and become a customer? Once they avail, they become customers. There is no limitation on that. I mean certainly we will try to cross sell other products but pure gold is fine as long as the gold is bonafide and it's not stolen gold. We're happy to do. Where would you peg the growth approximately this quarter and this year on the gold loan business growth? Is it because there are not many other avenues apart from gold loans? Last financial year, our YoY gold loan business grew 29%. I'm hoping it'll grow higher this year. As I said, it's a win win for both customer and us. We have innovated quite a bit on gold product, in the service and in the distribution. We have our digi-gold, which we had a few years ago. But we have revamped and launched it. So instead of keeping your gold in your own locker, keep it in the bank's locker. And you get an overdraft on it. So you only pay when you draw money, otherwise you don't pay. So it's a win win. We are seeing great success with the product. SEASONAL MAGAZINE

What about on the personal loan front before COVID-19? We were not very big on unsecured personal loans. We normally don't do new to bank. We do existing customers based on track record. For almost 18 months, we were doing it digitally. So if you had an account with us, based on your account behavior, we would offer a credit line which you can click on your phone and take the money. But now we are much more tighter on that. Because generally we don't do unsecured credit in a very big way. Our philosophy over many years has been to be more conservative, which is why our NPAs never cross 3%. Even when India's NPAs hovered around 10% mark, Federal Bank has never crossed 3%. Net NPAs never crossed 1.3% or 1.5% maximum. So we've been conservative and I'm happy to be conservative, which is the right thing for a bank. How is the co-branding of credit cards going on now? It's okay, but it's not a big part of our business. But in the course of this financial year, maybe by end of March next year, we will certainly have our own card launch. So, yes we are working on that. What about Provision Coverage Ratio and where does the bank stand on that? Is it lower than other comparable peer banks? Our coverage ratio including technically the "written-off" is 73%. Without technical, it is 54%. Last quarter we raised our coverage ratio by 800 basis points and we provided extra by 250 crores in Q4. You may have noticed, we provided access because we had some one time gains on investments in treasury and I put the entire money into provision. Otherwise our profits should have been another 200 crores higher. We didn't want to do that. Compared to peer banks, 70% is quite comparable. You must understand that provision cover is created to ensure that when, God forbid, there is a loss you have already provided so that it doesn't incrementally affect your book. Now each bank has a different product mix. If you're a very high unsecured portfolio or your security levels are low, you need very high coverage. When you have a high security, you need a lower coverage. In Federal Bank, we've been

doing this reporting for two years based on Indian accounting standards or the new accounting standard - IFRS. Our loss given default, which means when you have a loss or an NPA, the maximum loss on that account if it's an unsecured one, it is hundred percent. Let's say you have a house of one crore and the loan is say 80 lakhs. Even the for-sale value of the security instead of one crore is 60 lakhs, you recover 60 and your loss is only 20 lakhs. So loss given default is only 20 lakhs. Our loss given default on the whole portfolio has never crossed 38%. When I have coverage ratio of 53%, I have much higher coverage than the losses I would ever incur. With all due respect, the media doesn't understand anything too much. They'll simply take one number and report. Provision cover is to make sure in the event of a loss you are covered right?When our provision coverage is 53 or 73%, depending on which number you pick, and the loss given default is 38%, you have excess coverage. I actually can release 15%. This quarter, we took it from 46 to 53% because we expected that in the COVID world, losses can go up & your security value may come down. So the house with just one crore may suddenly become 80 lakhs or 70 lakhs. That is why I said provide more so it gives us the cushion. At 53% loss cover, we are okay. There was also a specific COVIDrelated provision of 93 crores. Do you think it is sufficient as of now? See, COVID provision has to be seen along with credit provision. Both are the same. Just that COVID provision is not in the coverage ratio but treated as a standard provision. When, God forbid, an account becomes NPA, then you will take the COVID provision and put it in standard credit provision. The COVID provison is only an excess extraprovision created as a buffer. The requirement is only 31 crores. RBI mandate was 31% and we have provided three times this mandate. So, it is not an issue. What has been the impact on remittance business? Remittances are doing extremely well. Whenever Middle East has any challenges, for instance if people are relocating, they will bring the money in.

And we are the best bank for that. Secondly, rupee is at 76. Again, people will send money. So at this point in time remittance is in very good shape. We'll see how the next six months go. We don't know what the situation will be in September or October. How the Middle East is going to be? How, you know, whether job losses are going to happen at big time? Now the good news is oil has become slightly stronger. So they may not be having as many job losses as it was visualized. I've seen that from the time of Kuwait war, we've looked at this whole remittance stuff and that this would drastically affect Kerala. In the last 10 years, I've seen it very closely. There will be some trouble. It was said that around six lakh people will come back but I think three lakh have come back or will come back. Suddenly around two lakh will go back. Maybe not go to the Middle East but places like UK or anywhere people will find livelihoods. But one lakh people coming back is something we can live with. We need to worry about what damage COVID would cause in the next one year. If we can deal with that damage, everything else can be solved. That is the unknown or the wild card.

This would also be translating into deposit growth? Yeah, it will. In fact, we're sitting on excess liquidity. We are growing higher than the market but there's no market growth because demand has to come here. We'll take some time - another three, four or five months. See, everything has come back to about 75% of the original level if you look at all across the country. A number of RTGS transactions, NEFT transaction, Fast Track transactions, whatever you look, everything is between 65 to 75%. By September-October, it may come to 85%. Maybe by end of the year, it will come to 95-100%. But you are expecting 120% because you want it to grow. So, I think if by 2021, we'll be lucky if business volumes improve. See, one quarter is totally gone. First quarter was virtually no growth for anybody. Next quarter will be like 2-3% growth. So, the full year if you grow at 8-10%, you've done brilliantly. You have been telling about some cross selling opportunities & how to tap the cross selling opportunities. Can you tell us some specific examples?

The whole personal loan book, which is almost 2000 crores, we did it only by digital origination on existing customers. So say you are a customer of Federal Bank - let us say a liability customer for two years. Based on your average balance, based on your usage, we do a lot of data mining. And we make a preapproved offer to you and say here is a credit limit of 50,000 available. And you can click and take the money. Now we've launched this with Amazon and a few others. On EMI product, if you are a Federal Bank customer and you're shopping on Amazon, you put in your card number, it runs a back end engine and it immediately computes by saying whether we can give you an interest free EMI for 12 months. So if you buy 5000 rupees or 20,000 rupees on Amazon, instantly you can make it an EMI transaction. So you pay zero interest over 12 months. And this is all done by back-end analytics and therefore the cross sell is based on existing customer behavior with the bank. We are data mining and continuously making cross sell offers. Uusually if you're a card customer, you'll have a liability relationship, we give you an insurer and we'll give you the usual stuff. Basically, SEASONAL MAGAZINE

everything that is tried to increase penetration per customer. You are now mulling a new fundraise of Rs. 12000 crore for equity component. Can you take us through the specifics of that? In the forthcoming AGM, we're looking to seek shareholder approval for getting a resolution passed. Once we have that, in the course of the next 12 months, we can raise equity, if we need. Right now, we're not looking at any capital raise. It's an enabling resolution. But since the AGM is coming in July 16, we will hopefully get the resolution approved by shareholders. And once that resolution is there, we'll see how the market goes and where the capital requirement is. In our mind, at least till March 2021, we don't need new money. But the next AGM is usually next time this period ie; June-July. So we are trying to get an approval in place so that whenever the need arises, or the next month we will raise money. Normally in my last 10 years, we raised money only once. We are not a bank that goes to the market every three months or three years. We go once in like five-seven years depending on when we need. The last time we raised money was in 2017 July at about 116 rupees. Today the stock is on 56-57 rupees. So suddenly the stock has had its own share of waiting. Hopefully we will come back to at least 100 bucks in the next one year, which is when we should raise money. Even last year we had approval of 8000 crores and we took 300 crores from the market. This was raised about 12 months back. Any plans for acquiring any microfinance companies or any diversification? Right now nothing on the horizon, but we are open to making acquisitions if something good comes up. But at this juncture, we cannot rush to anything because we have to see how the credit portfolios or everybody behaves. So, we will be watchful at least three-four months to understand the credit portfolio. So, we have nothing on the cards but continuing to do our basics right. We will wait till September, see how the market shapes up & how the moratorium customers are behaving. Only then we will think about next steps. Because this is very unpredictable environment. So we're not doing anything at this juncture. What is the status on the startup fund you had mooted? I would say it has been very modest. The SEASONAL MAGAZINE

startup environment is facing a lot of changes and challenges. Either you make it very big with private equity support or you are not able to scale up and you're just folding up. The whole environment for startups is different from what it was three or four years back. So we are having fun but we have no major action going on. Along with two other funds, we have put in the money but that's not a core expertise of our bank. So we will let them do it but we are feeding into that. You've been seeing how the economy has been shaping up over the last few quarters. Any suggestions or improvements required? The main thing is that demand has to come back, right? There's a lot of liquidity. So that's not a problem. Banks have money and banks are willing to lend provided there is a demand. For the demand side, banks cannot do much. So it has to be a bunch of things like the government intervention, the private sector getting excited by the opportunity and beginning to invest. And to some extent, like you said, there is a fear also that people are nervous about what is going to happen in terms of health. So economic activity is not at full blast. But having said that, like I said, 70-75% has come back. Some of the bigger cities like Mumbai, Chennai are all still in very precaurious states. Meanwhile, Tamil Nadu has gone into very severe lockdown. While Mumbai & Delhi have opened up, unfortunately, they are facing extreme health issues and challenges today. Virtually, everybody we know has somebody who is faced with some challenge in Mumbai. To that extent, movement is still modest as people are quite watchful. So the full blast economic activity is at least six months away or till when one of these vaccines or medicines work. In that context, demand stimulus is the most important thing. But even if you give a lot of money, demand comes when people are feeling better. And you will not work to buy that extra shirt, pants, TV, fridge and car if you have little nervousness. Everybody's just buying essentials food and medicine. This is a psychological challenge more than financial challenge. So emotionally we have to be charged up. And that takes time. What will inspire people to spend more? Some confidence giving is required. The only good news in all this is if the stock market starts doing better. Psychologically, people will feel like okay thinking that the world has come back. For somebody holding a Reliance share, for him/her life

is fine, right? In fact, it's doubled. The stock value has gone up twice. Unfortunately only when western India ie; Mumbai & Gujarat gets full blast, India will fire on all cylinders. Unfortunately that part of country still needs some more actual health related intervention. Demand generation happens in Maharashtra & Gujarat in a very big way. Having said that, I think rural India is doing better, farming and agri income will be better. So it won't be all bad news, but it will certainly not be what it should have been. You know, if we were expecting India to be, say, from 2.8 trillion to 3.2 trillion, it won't happen. It may become 2.5 trillion and then you have to work one more year because everything will get reset only by 18 months. And it goes back and then climbs back up. That's an unfortunate outcome of COVID-19 and I don't think anybody can escape it. So we just have to wear a wet towel around the stomach and sit quietly for a while (laughs). What all are your new strategies for steering the bank in this tumultuous time? Last year, we focused on two strategies, 'Presence to Prominence' in chosen geographies and 'Prominence to Dominance' in our home market. We have seen consistent gains and recorded a healthy increase in market share across key geographies and segments, and our visibility among the top quartile banks, both in terms of business and governance has amplified in the last financial year. While these twin strategies will continue, we have added a new one this year, to be the â&#x20AC;&#x2DC;First Choiceâ&#x20AC;&#x2122; bank. Our bank has always been respected as a thought leader in customer-centric approach backed by relevant innovation. While we continue to be deeply rooted in our fundamentals, we realize it is time to dream bigger. The last decade saw us emerge from a regional player to a bank of relevance across India, and now we are determined to build ourselves to a bank that is First Choice. It is not just being the best in customer service and having the right set of products and processes; but being able to distinguish ourselves in everything that we are and do, be it products, processes, design, people and value creation. We are mindful that being the First Choice is a tall task. This is a pursuit of excellence and there would be no finish line until we become the most admired bank, digitally enabled and serving the micro, small and medium establishments in the country.

REVIVAL STRATEGIES FROM AN ARCHITECT OF HIGH GROWTH Interview with Dr. Montek Singh Ahluwalia

Dr. Montek Singh Ahluwalia is perhaps best known as Deputy Chairman of India’s Planning Commission during 2004 to 2014, which included the country’s best growth years of 2004 to 2008. However, an even higher contribution of this Oxford trained economist has been his pivotal role in a small team of economists under Finance Minister Dr. Manmohan Singh who were in charge of drafting India’s far-reaching economic liberalization program between 1991 to 1996. Starting his career as the youngest Division Chief at World Bank when he was just 28 years old, Dr. Montek Singh went on to become the architect of India’s 11th and 12th Five Year Plans, and could also witness the economy’s deep issues during the tumultuous years of 2009-14 when Global Economic Crisis derailed the Indian economy and caused the NPA crisis which continues to this day. A recipient of Padma Vibhushan, he is also the author of BACKSTAGE: The Story Behind India’s High Growth Years. Seasonal Magazine recently hosted an interview and interactive session with Dr. Montek Singh Ahluwalia.

Interview: John Antony, Managing Editor Host: Carl Jaison, Features Editor Research & Compilation: Teres Sajeev, Research Intern SEASONAL MAGAZINE

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While our economy is grasping for breath in the middle of the crisis this pandemic has cast us into, the voices of the ones who saved us earlier, should be listened to with fervor. In this extensive interview, Dr. Montek Singh Ahluwalia, the Former Deputy Chairman of the Planning Commission and one of the most experienced economists in the country, shares his insights on measures to revive the economy and other pressing problems in these changing times. On being asked about the possibility of going back to “India’s high growth years” mentioned in his recent book, he emphasizes the need to get the GDP up and going towards a target of at least 6.5% before being ambitious of a growth rate around 7.5%. He also points out that the huge export demand in those years will be absent now. On fiscal deficits, he remarks that the government should be allowed to expand beyond the specifications in the rulebook because besides the need to increase the demand in the economy, the fall in tax revenue should also be accounted for. India has an urgent need for high quality infrastructure. To finance that without hurting the fiscal deficit he said that the government should leverage on untapped tax revenue by setting up an independent committee to look into tax reforms now and accept its proposals in the next budget. We should take lessons “from the book of 1991 reforms,” he says. In respect to the Centre’s provision for the States he endorsed the request of Punjab’s Chief Minister that States should be provided a Covid Grant and the Finance Committee report due this October should be pushed to the next year. This is given that states have little leeway as GST practically took away all its taxing capacity. On the looming migrant crisis he shed light towards understanding the situation that led to the crisis in the first place such as the lack of a general social safety net in contrast to providing special entitlements to migrants alone. Most importantly he emphasized the need to understand the ambiguity of the situation and difficulty for anyone to make strong recommendations now because, “This is an absolutely SEASONAL MAGAZINE

unprecedented situation for the whole world. We don't have easy rule books that have rules that are tried and tested.” Seasonal Magazine in conversation with Dr. Montek Singh Ahluwalia, former Deputy Chairman of India's Planning Commission: India went into the lockdown believing that it will limit the virus threat. But nowadays we hear that the lockdown was more for ramping up the health infrastructure. Do you think this has been achieved as infection rates and deaths are spiking in red zones as well as in some orange zones? Let me preface my comments with three points, which I think we should all keep in mind when we look at the current scenario. First is that this is an absolutely unprecedented situation for the whole world. We don't easily have a rule bookthat are tried and tested. So we got to keep that in mind. Second, we're not the only country affected. So there's a lot of experience elsewhere. So whatever we say about things are working or not working in India, we want to keep in mind what's happening in other countries. And the third is actually even today, there are huge uncertainties. So whatever I say, please keep in mind, that these are some overarching limitations within which you have to look at these comments. Now, let me come to your specific question. I mean, I know that there was an impression given that somehow if we would have been in a lockdown for 21 days, then we would be able to overcome coronavirus. I think there was a comparison made, Mahabarath took 18 days, and this is going to take 21 days. I think the role of a lockdown always was to flatten the infection curve and stretch out the period during which infections build up, which gave you a little more time to build up the health infrastructure. So now the question arises, did it flatten the curve? But the short answer is we suddenly had relatively few infections during the lockdown period. We don't have the counter comparison, what it would have been without the lockdown. And I think there is a

problem that you know, we're not doing enough testing. So there are big questions about what is actually the rate of infection even today. But the real issue is assuming that some flattening during the lockdown took place, did we actually succeed in building up health infrastructure? Now, I don't have the information on that. I don't think the information on how much was built up was made public. This would require details on what did the central and the state governments do? I think we do know that some steps were taken, that some equipment was procured. Some additional beds were arranged that exactly what they were, I really don't know. So we're not in a position, I think firmly to say that during this two week period, this is what we actually did, in terms of strengthening the hospital facilities. And suddenly we're not in a position to say, well, this was enough. Because to say the latter, that it was enough, you have to have some model on what the infection rate would be and I have not seen any estimates. Now, this is all to be put into the general cover that there is huge uncertainty. I mean, all these epidemiological models are very approximate, and models borrowed from one country may or may not apply in India. So, I don't know whether that's a good answer to your question. But that's the way I see it. It certainly wasn't meant to put an end to the virus. The only thing it could have been meant for is to stretch out the nature of buildup of infection, in order to allow the health infrastructure to be built. You had recently opined that hand holding the weaker section of the society is an even more pressing issue than reviving the economy back to growth. Can these two objectives be also synergetic? They clearly have to be synergetic. The reason I said what I did was that it was quite clear that the lockdown was going to have a very negative effect on growth. I mean, after all, the red zones count for almost half the GDP, and the lockdown was virtually complete in the red zones. And so for the first two months, production in the red zone would have collapsed. It did collapse. The government has not actually given an estimate of what will be the negative

effect on GDP. Although I think the Governor of the RBI has said that GDP growth will be negative. In my view, we should be expecting maybe 5% decline in GDP this year compared to the previous year. Now, having said that, it's not going to be a 5% decline evenly for everybody. I mean the negative impact is going to be concentrated in certain sectors and in certain states. Especially as far as groups of people are concerned, the poor, those who are employed in the informal sector and even those who are contractual employees in the so called formal sector, they experience a huge job loss because if companies are experiencing a big decline in production, they obviously layoff labor, especially contract labor, who are not technically their own employees. So the problem really is that you have a massive negative effect on the income of the poor. Youâ&#x20AC;&#x2122;re seeing in these huge migrations that are taking place, people going back from urban areas back to the rural areas. Now, to my mind, I mean, that is a human tragedy.

Definitely we should be doing more to provide a basic income support for this group. But at the same time, we do have to make the economy recover, because if the economy remains totally depressed, then the problem will spread beyond the poor, and even affect the middle classes or the higher income groups. Now, of course, you know, higher income groups also lose income, but that doesn't affect the essentials for living like food and essentials. They have a lot of margin. I'm talking about the bottom 30-40% of the population, which doesn't actually have a margin. And they're the ones that are most hit. And I think that we need to do more for them for sure. What are your views on RBI, helping the government to monetize higher deficits than targeted on the grounds that this is an exceptional crisis and an exceptional year? Will it cause any serious issues like a run on the rupee as critics point out? Well, actually, let's take a step back before the issue of monetization of the

deficit as it is just one part of the story. I think the first thing we need to do is to be clear, what is it that will cause the recovery to take place? I want to digress a little. I expect that you can see a massive negative growth in the first quarter. And you know, even though by the end of June, it may be said that the lockdown is now being relaxed. The truth of the matter is that it will take the economy a certain amount of time to get back to normal. So I certainly don't expect to see a recovery to normal in the second quarter. So really, between now and September, we're going to have a significantly depressed level of GDP. From that depressed level, yes, the second half of the year, you may see an improvement. Now the issue is, first of all, what can the government do to counteract this? Well, first thing is that you've got to put an end to a lockdown. Because if the lockdown is in place, then essentially you're not allowing supply to increase, maybe if you believe that you have to control infections and so on, but then you must be willing to take that cost. SEASONAL MAGAZINE

But you should be clear that, unless we can actually get rid, of the lockdown, there's not going to be much recovery. So what are the things you can now do? Well, I think that you know, we've had a massive reduction in demand, partly because people have lost income. And partly also because you know, export demand is very low, the global economy is very low. So if you want to get the economy back to something like normal, you have to act on the demand side to stimulate the economy once you started relaxing on the supply side, that's where the fiscal deficit issue comes in. I mean, clearly, government can always spend more. If private spending has gone down, that will increase the fiscal deficit. That's not the only thing that's going to increase the fiscal deficit, fiscal deficit is also going to increase because the fall in income and output has led to a huge fall in tax revenues. So you're going to have a loss of tax revenues. I don't think you're going to get much privatization revenue this year. You're going to also have some increase in expenditure. Although the package of 20 lakh crores doesn't have very much of direct increase in expenditure beyond what was already in the budget, I've seen some estimates. And the direct fiscal stimulus is only about 1% of GDP, some people think that's actually much lower than most other countries are doing. So the question that comes up is, should the government be doing a

bigger stimulus on demand and living with a higher fiscal deficit? My view is that it is an exceptional situation. People will understand that the fiscal deficit, you can't apply the rules to the fiscal deficit that you would apply normally. So for the current year, you have to allow the fiscal deficit to expand. And then the next question is, how do you finance that? My view is that the debate on direct monetization of the fiscal deficit is a little bit irrelevant. I mean, in the sense that the RBI can so to speak, support this borrowing, even if it doesn't directly buy government bonds in the primary. They can buy in the secondary market, they can sort of transfer some of the accumulated reserves, which is the same thing as monetization. The short answer, therefore, is that this year, whether the RBI monetizes or doesn't monetize is less critical than what's the size of the fiscal deficit that you can tolerate. And I think indirect monetization is going to take place. And there's nothing wrong with it.That doesn't mean that this is not a problem. Because after all, if our capacity to produce GDP is permanently impacted, then we cannot expect that we will maintain everybody's income and consumption at last year's level. But if what we're saying is thatit's been impacted this year and let's say from next year onwards, we are going to get back to some sort of reasonable norm, then what the rating agencies need to do is if your fiscal deficit is going through the roof

this year - it will go through the roof what are you going to do about it next year? Is it going to continue in that way? Here you have a problem because we don't have a very good reputation for maintaining our promises about bringing the fiscal deficit down in future years. This government and also the previous governments kind of failed to keep up those promises. But you know what is past is past. You would have to put across a credible picture that although the fiscal deficit is higher this year, we really want to bring it down next year. If that picture is credible, then I think rating agencies will understand that this year is not the one to watch out. The thing to watch out is are we going to do what we say we're going to do for next year. On this line I personally think the government would be much better off coming clean on this issue and sayingâ&#x20AC;&#x2DC;look for a variety of reasons, the fiscal deficit is going to be much higher. But we promise you, we're going to bring it down andthis is what we're going to do to bring it down.â&#x20AC;&#x2122; I don't think they've taken that line today. For example, there's a lot of talk that we're going to borrow, maybe 2% of GDP more. That's not going to be enough because the decline in tax revenues alone will take up that space. So we're going to have more fiscal deficit increase than is currently being accepted. If the RBI refuses to monetize it, it just means that interest rates will shoot up. Because I don't think that a huge fiscal deficit can be easily financed by bringing in money from outside because money coming in from outside will look at the macro situation. I personally think that the RBI should not object to indirect monetization deficit. And that's what's going to happen in due course. The lingering images from this crisis have all been of the migrant laborers. Do you think this could have been better managed by allowing them a fixed time to get to their native places before imposing the lockdown? Well, you know, it's as I have always said, there's no rulebook. Whoever organized the lockdown didn't really have a rulebook that they could go to, but that doesn't mean we should not in

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retrospect& try to see what could have been done better. Certainly, I thinkthat we could have given a warning. There was no merit whatsoever in imposing the lockdown suddenly. In Bangladesh, they gave four days warning, in South Africa, four or three. In an environment where people are away from home, and when a lockdown is going to prevent people from moving, it makes sense to give a warning. The idea of warning is that it enables people to decide what they can do and those that really have to get back home can do so. So I think that could have been done a lot better. I also feel that that if we had made very clear what the consequences of a spread of infection would be, it will be less of a panic than what we have seen. It wasn't clear - what would be the consequences of getting infected? The idea that if you got infected, you would be quarantined in some government facility would be enough to send people back home anyway. You know what our impression of government facilities are. So I think yes, it should have been much better managed. But it's hard to prove that, you know, in the absence of precedent, these kind of things happen. Now, with the reverse migration having taken place, do you think that will be a major roadblock in getting the economy to work again? I think that will be a roadblock, even in the sense that when people move, there are some fixed costs to movement. And there's also a huge uncertainty about moving back. I'm pretty sure that migrants will ultimately come back. But right now, nobody's quite sure. When the relaxation proceeds, if the infection rate shoots up, what is the government going to do? I mean, are they going to reimpose a lockdown? As long as there is a fear that, you might get caught in a second lock down people are not likely to move back easily. So I think we have a problem in the sense that you may have people who want to move back, but they will not move back suddenly. And therefore, the return to normalcy in terms of getting your labor force back will be more problematic than people think. Many economists, including Dr. Abhijit Banerjee have affirmed that

this is the perfect time to implement a Universal Basic Income of Rs, 1000 or Rs. 500 per month for all Indians and that without such a measure, India is set to go into a deep crisis. Does India have that kind of money and is it possible? Well, you know, as a general rule, I am not in favor of making permanent institutional changes to deal with what is a current crisis. No doubt that the current crisis is a serious crisis. If you take a look at all the different instruments we have for providing more income to the poor, we can do a lot more than what we are doing already. Whether there is a case for a universal basic income is a longer termreform. Everybody who has argued for a universal basic income has said that if you get rid of all the useless subsidies you have and convert it into a universal basic income, the country will be better off. I'm not sure that the universal basic income in other words, as an income that everybody would be entitled to, is really the answer. Remember that almost no country has it. So to my mind, a poor country that has fiscal problems committing itself to a universal basic income without abolishing any subsidies. I don't think makes sense. I do think that if you make a list of the 10 or 20 different schemes that you already have, each one of them is leaky. Now, these are targeted schemes. They do not reach out to middle income or taxpayers - they're only meant for the poor. Yes, there are leakages. Some people who really aren't eligible benefit while some people who are poor don't benefit. But in the middle of a crisis, I am not convinced that we should be making what is actually a structural change for the future. That is something we should think about when we go back to a normal situation. You cannot be sure about when that will be. Remember, if we go down by 5% GDP in the current year, by next March, some degree of normalcy on this will have restored on the health. When I say normalcy, I don't mean that there will be no infection but people have got used to it. So from that level onwards, you may get a rebound. Instead of a minus 5%, this year the economy may grow at 5% compared

to the current year, but that'll only take you back to where the GDP was in 2019-20. That means in the year 202122, the GDP will only go back to where it was in 2019-20. So 5% growth next year should not be counted as a sort of aâ&#x20AC;&#x2DC;return tohigh growthâ&#x20AC;&#x2122; as it is only a recovery to a more normal production. The real test is what happens in 202223. And that is really going to be difficult. I mean, can we get back to the sort of higher growth rates that we've had in the past and we have had periods when we grew over 8 percent. We've had a longer period when we flew in about seven and a half percent, then it slowed down. I would say as of now, the longer term growth potential for India is lower anyway because the global growth potential is lower. So the world is entering into a somewhat different set of policy configurations, a lot of the openness and the globalization that encouraged more efficient developing countries to expand their markets will not be available. We probably won't be able to do at 7.5% but could be 6.5%. Now on present prospects, I'm not even sure if we can do that. So our job right now should be to work out what is needed to get the economy at least to grow at 6.5% in 2022- 23. And there are many things we have to do to make sure that happens. What are your views on the Rs. 20 lakh crore package announced by the government? Is it really a stimulus or will at least some parts of it work like a stimulus? We will first have to decide what the definition of stimulus is. If your definition of stimulus is that additional expenditure beyond the level that was already built into the budget is what you call stimulus, then the stimulus in this package is much less than 20 lakh crore. Almost all of the 20 lakh crore is a prediction of credit that will be given to the banks based on liquidity that's been injected by the RBI and some credit guarantees schemes to businesses. Now, expanding credit for businesses is a good thing. From that point of view, I would complement the Reserve Bank of India. On the liquidity side, they have done what is necessary. But that by itself does not ensure SEASONAL MAGAZINE

recovery. I mean if businesses are broke, not making money, not facing any demand and losing cash you will end up giving a lot of credit. This is just going to lead to a debt service budget, which it can't sustain, and it'll default on these loans. The fact that the credit is guaranteed by the government is a comfort to the banks but that doesn't necessarily contribute to reviving the economy. So I think that the credit is good, but I don't call it a stimulus. What we need for the stimulus is a much broader set of measures that would get the economy back on track. And I think a lot of that has to do with stimulating demand. A lot of that has to do with restoring trust that private investment can pick up. Improving the ease of doing business and implementing many of the reforms that have been talked about now for several years but have not actually been implemented. Now the government has mentioned some of them, and let's see whether they're able to do it or not. You are heading Punjab’s Advisory Council for strategies to come out of this crisis along with Dr. Manmohan Singh. Are Punjab’s current issues comparable to other states? Do you think the Center needs to do more for the states as they have been the ones on the front line fighting this crisis? Let me clarify on this. The Chief Minister asked me to head a group of experts to advise Punjab on what he calls the medium and longer-term strategies once the COVID crisis is overcome. Dr. Manmohan Singh is advising him separately & is not part of my group. I'm sure that he is giving a lot of advice to the Chief Minister. We have not yet submitted our report. So it’s a bit preliminary for me. But we are going to look at what Punjab needs to do. Is Punjab in a similar situation to other states? Well, you know, all states are different. Punjab, for a long time, used to be the number one state in the country in terms of per capita income. And you know, for the last 10 years, it's been slowly losing ground on the state. Frankly, I think Punjab’slong term objective should be not to get back to the performance that it had before the COVID crisis becausethat performance SEASONAL MAGAZINE

was causing Punjab to slip. Punjab’s objective should be to get back to grow faster than the rest of India, if we can. We're kind of trying to raise the sort of issues that are relevant for Punjab to achieve that objective. Should the Centre do more for the States? Certainly. Most of the expenditures that governments have to undertake are expenditures that are done by state governments: health, education and also social benefits of various kinds and so on. Whereas most of the revenue actually goes to the Centre. Then of course, there is a Finance Commission mechanism for sharing the divisible pool of taxes with the states. One, the Central revenue is going to be much less than was projected. When the state's budgets were formulated, the central government projected a growth rate of GDP of something close to 7% in real terms. It’s going to end up being minus five, I think. So this means that the revenue that was projected, and on which shares were decided for the states is going to be much less than it was earlier expected. So the question arises, should the Centre compensate the states for the shortfall? You know, I think the Centre could do that if it was willing to increase its own fiscal deficit. But what the Centre has done is that they've said, well, we'll let you borrow. They've done that. So whereas earlier, the state's deficit was capped at 3% of GDP. Now it's been capped at 5% of GDP. So the states are allowed to borrow more. But you know, the states have very high debt obligations. If you're denying states the direct revenue grounds that would have come from the Center and simply being allowed to borrow? That's not an equivalent compensation. So I think that is a little unfair. The Chief Minister of Punjab had said in a letter that he wrote to the Prime Minister that the Central government should give a COVID-19 grant to the states to compensate for the revenue loss. And actually to tell the finance commission, which is supposed to submit its report for the next five year period this October, to go back to its calculations, recommend what additional ground should be given, raise that money through borrowing, give the grant and postpone the longer term

Finance Commission’s Five Yearrecommendation one year later. I think this is important. The second thing you have to remember is that the GST, which we all think conceptually is a good tax, takes away taxation capacity from the states. They no longer have what used to be a state's tax and it cannot now be increased by the states it can only be increased by the GST council. I think the shortfalls in the GST revenue was huge. So really the states don't have the sort of leeway to make up revenue. And that's why they need more assistance. Based on your book, 'Backstage: Story Behind India’s High Growth Years', and as an architect of the response in those days, do you think India can ever go back to such a high growth period again? What would be the imperatives for that to happen? Well, that's a tough question because you know right now, our big challenge is how to get back to the GDP of 201920. Because we're going to be 5% below that this year. And even if we grow by 5%, next year, we'll still be back at 2019-20. However, there's no doubt that as said in my book,the UPA was in power for 10 years of which the first seven of those years were outstanding. The last three of those years was when the growth slowed down, still positive, but it slowed down.

Now if you look at those first seven years, the growth rate will always ascent. We were all very enthusiastic about it and positive. And then the growth slowed down. I mean, some slowing down was unavoidable. The economy grew at 7.6%. It's never done that before. But that was a period when the global economy except in the last couple of those years was actually doing very well. So can we go back to 7.6%? It all depends on how determined we are to fix our own problems because India has a lot of unutilized potential. There will be productivity gain if India does the reforms that are necessary. The real question is: are we willing to do those reforms? Do we know what those reforms are? And is there a political consensus? Now, I would certainly say that, you know, in the medium term, in order not to be unrealistic, we should set a target of trying to get back in the year 2022-23. Trying to get back to somewhere between 6.5% and 7% in 2022-23. I think if we do that, that'd be a pretty good start, then we can see how we can go from there. Would you agree to the fact that the Finance Ministry faces a conflict of interest when allocating funds to various ministries since they are also responsible for maintaining the fiscal deficit? Moreover, without financial authority to disburse funds does the

NITI AAYOG run the risk of losing its credibility? My understanding is that NITI Aayog doesn't play any role in financial allocation. So I don't see how their credibility is involved. In the old days, the Planning Commission was the institution that discussed with every ministry, what is needed in terms of expenditure. And then the Planning Commission would discuss with the Finance Ministry, about how much money is available. And the two together would advise the Prime Minister who would make the final decision. I think that process no longer exists because the NITI Aayogdoes not get involved in financial allocation. So this whole issue is somehow decided now between the Finance Ministry and the Prime Minister's Office so I have no idea how that actually functions. When you say conflict of interest, governments should manage conflicts of interest whether you do it through one mechanism or another. All governments are faced with conflicting objectives. The sign of a successful government is that you give weightage to those objectives and take a correct decision. I don't think I view the Finance Ministry's job as simply controlling the fiscal deficit. I mean, after all in certain circumstance the real job of the Finance Ministry is to determine what is the optimum fiscal deficit. Optimal fiscal deficit is not a balance. So there's a real question, what do they regard today as the optimum fiscal deficit? Personally, I feel they should come out and say so. At present no one has. And I think if somebody were to bring up that case, this is what you think this would be, then we can have a debate on it. Due to the pandemic, there is an absence of much actual data and quarterly GDP estimates are based on more assumptions than ordinarily used. The provisional estimate of Q4 growth rate is of 3.1% released by the Ministry of Statistics. Do you consider it as an overestimation like many others and is it in the continuation of the data quality issues are regularly faced by the NSSO or specific to the current pandemic situation?

I think I'm sure that the pandemic has made life more difficult. I don't know how they're handling it, but you should accept that. However, I think on the data side, we do have a problem. I mentioned this in Backstage, India's statistical system had a very high reputation for being independent of government and providing the best estimate that is possible of GDP. And I think that over the last several years that independence has gone down. It looks increasingly, as many people have criticized, that the data are held back. If it is not suitable, or if it doesn't present a positive picture, it is a disaster. This is like trying to treat a patient after breaking the thermometer. So you really can't measure the temperature. I don't know what the data will be later. But you know, if you look at the revisions that have been made quarter by quarter, to the Indian GDP in the last several quarters, every two quarters later, the previous two quarters GDP is lower. Whether that will continue or not, we have to see. Questions from the Participants: Next two questions are from Dr. Madhukar Angur, Founder Chancellor, Alliance University, Bengaluru: With this pandemic well, a lot of sectors have been affected. One of which has been education. How do you see this pandemic unraveling itself in terms of the future of education across all levels? We are moving towards different modes for delivering education like online or distributed ones, how will be you will perceive this to affect our education system? I think I'm not knowledgeable enough in this field. But I talk to people in this field and I think universities abroad are thinking very hard. They have really never got away from the bricks and mortar campus style of education and there's a lot of socio cultural preferences or baggage associated with it. Kids go for three years. They need to be in a campus. The campus must be attractive and all of those things. On the other hand you have technology allowing us to exchange thoughts with your teacher without any of this. People have been saying that top universities will have to SEASONAL MAGAZINE

change. But you know the pandemic will only make that more so.

issues that should be taken up and changed.

One of the problems is that, even after we declared that the pandemic is over, there will be a resistance towards gathering together in large crowds. These fears, once they're created are very difficult to get over. Once you have a vaccine and a cure and if all get vaccinated so that they don't feel too vulnerable this won’t be a problem. That may take a take a couple of years, to get the vaccine identified. Getting coverage will take even longer. I think all kinds of new methods of education will be experimented. Not just an issue of new methods of education, it also affects the reach of a university. I mean the number of people that can be taught through this method and how the best lectures can reach out to people. Well, it's a revolution and I honestly, don't know what the impact would be.

Recently in education we have focused a lot more on research and dissemination of knowledge. Universities worldwide have also been focusing on this for decades. However, the unemployment rate, for instance in the United States right now is alarming. Even what we have seen in India is disheartening. When we look at the organizations, their workforce has three constituents: a critical genius component, a specific skill component and an easy to fill component. The easy to fill component had the most amount of workers being laid off. In this scenario, should universities be focusing on developing the specific skill component?

If I were running a university or responsible for a university, I would put a lot of high level input into thinking how it's going to change, but most importantly what I'm going to look at is what others are doing. I mean, as I said in the beginning ours is not the only country facing this problem. I think our universities should be better informed about what's happening elsewhere. What is MIT doing? What is Harvard doing or Princeton doing? Part of the problem is that most of the big universities have a high remuneration for the top professors which you recover by a high fees from the students. This may no longer be feasible. Funds are drying up, government funds are drying up. My guess is that in India the regulatory system should encourage innovation and competition. For instance, if you are running a private university, you're allowed to do online education or distant learning but only within the state were you are accredited. You are not allowed to do it in another state. Technically, if you are established in Bengaluru, and you have excellence, and somebody from Punjab wants to get educated, they should be allowed to do that. There is no reason why these antiquated antediluvian regulation and license permit raj should exist. These are very difficult to change. But I think these are SEASONAL MAGAZINE

I genuinely agree with the proposition. First of all the case for short term questions derives if nothing else, from the fact that the old style of education models that you get educated between the ages of eighteen and twenty one and after that you don’t learn anything and just go to a job and keep learning there is no longer true. People are going to switch occupations, I mean there is still a case for a basic degree. But people will have to learn to keep acquiring skills. And you know we underestimate, what this means. My grandson is ten years old and he knows more about my IPhone than I do. Clearly I am not adequately educated to use this technology so we need to have a lot more of that. I mean universities need to do that. My feeling is that that universities will respond quickly if demand for employability surfaces. What I am not very sure about is leaving the universities particularly the public sector universities to determine what the right skill is. Because there are huge vested interest in declaring certain skill are important once they exist. So I think we need to create flexibility where different kinds of skills are taught and we leave it to the market to determine who is going to take what courses. Next question is from Dr. Sudhakar Rao, Director – Branding, ICFAI Group:

In 2011, the census states that there are about 45 crore migrant labourers in the country. Almost a decade since then we don’t know how many migrant labourers are there. As an Economist, how do you suggest that we can make an estimate of the number of migrant labourers existing in an area so that subsequent administrative action is based on this data? I know in Punjab for example, similar problems of not knowing how many migrant workers are there. But we first need to step back and analyze why the migrant crisis has arisen. For example, between two workers who does an identical work in a factory in the city, one comes from a rural area 30 miles away and another comes from a rural area from a different state a 100 miles away. The first person is not a migrant and the second one is. What is the entitlement we are really thinking of? Are you going to have different entitlements if you are a migrant and if you are not a migrant? Or, should you be having uniform entitlements and then stretch out the relevant social safety net across the board? Focusing on migrants alone is like they are not citizens of India. It is evident in case of larger states. If a person migrates from East Uttar Pradesh to Noida, which is next door to Delhi, you are not considered a migrant under the census definition because he is still in his own state. What we need to be clear about is why the migrant workers suddenly uprooted themselves. Obviously there was either a lack of trust in something or a feeling that their rights will not be protected. If we had established a situation of trust and they would have stayed where they were then the question would be how we look after them. That is a relevant question. Whether someone is sick or not sick. Did they feel that if they fall sick in an urban area, in a state that they don’t come from they might simply be not looked after? Whereas if they go back to their state they will be looked after. I think we have a major problem of a lack of a social safety net. But that is there for both migrants and nonmigrants. We certainly need to strengthen that basic social safety net. It is probably true that a migrant whose

family home is hundreds of miles away feels more insecure for any given social safety net than a person whose family is only fifteen miles away. But you can’t have a system where you are getting special privileges because you are a migrant, which another worker in the same company doesn’t get. Next question is from Ms. Sucharita Saha, a management student at IIM, Ahmedabad: The economic recovery will depend on the steps that are taken after the lockdown is lifted. India has imposed one of the strictest lockdowns in the world. How would you predict the recovery of countries that has imposed a strict lockdown vis-a-vis countries that have not? Calculation by a group in Oxford does suggest that we have had a very strict lockdown. But we need to ask ourselves, was it imposed that strictly? So if we were to adjust the provisions of the lockdown to how it was implemented, I doubt it was very strict. Second, a lot of research that has been done shows that there is no relation between the strictness of the lockdown and the beneficial effect. There are countries in Europe that have been very strict and counties that have not been. A lot depends on whether the habit of individuals achieve social distancing. Let me give you an example, if 50% of Mumbaikars live in slums with 8-9 people in a room. A lockdown means you can’t go out and you stay in the room with another 8-9 people. This is very different from what a lockdown does in Germany where you are restricted to a house where you are effectively practicing social distancing because there are much fewer people. So I am not sure if anyone thought what this strict lockdown would mean in practice and for that reason it may not have led to the effect that you expect. Now, lockdowns means you cannot go to work. Factories are told you can start, provided you maintain social distancing. But many of our factories are so crowded and it is virtually impossible to maintain social distance unless you can cut the workforce to 30-40%. So what are we going to do in that dimension also becomes important.

When we talk about a recovery, I still do not have an estimate from the government. They cannot make an assessment of the fiscal deficit without estimating the growth rate. So there is huge question mark on those things. I stated that the GDP should grow by 6.5% because once we get back to normal we cannot get to a GDP over 7% quickly. So we need to try for a 6.5% growth at least. What would it take? One, it is very clear and everyone is in agreement that India needs a lot more high quality and more efficient infrastructure. Infrastructure is expensive. Who is going to produce this expensive infrastructure? The government has a program which says that we are going to have a national investment pipeline and some numbers have been given. The numbers assume a certain amount will come from the private sector, a certain amount from the states and certain amount from the Central government. This projection of investment is not tied up with other projections which would be made consistent with the overall fiscal deficit. For example, if we are going to end up with a fiscal deficit of 6% of GDP and we want to get it back to 3% of GDP in two or three year, we need to have a turnaround of 3% of GDP just for the fiscal deficit to get back to square one. If in addition to that of we want to invest in the infrastructure, adding to the fiscal deficit, then the turnaround needed is more, say 5% of GDP. Where is that going to come from? In my view, some of that will come from cutting wasteful expenditure. Then we should create a public support for cutting wasteful expenditure and what is that. Most of it has to come from much better tax revenue. In my view, that is untapped resource. Many studies have shown that given India’s per capita income we should be raising an extra 4 to 5% of GDP. So something is wrong with our tax system. It is not just the rates of tax but it’s the method of administration .GST is an example; a wonderful idea but got messed up in implementation. I have said in different contexts that we should take some lessons from the book of 1991 reforms, which I also talk about in my book Backstage: The Story

Behind India’s High Growth Years. In 1991 the government setup an expert committee headed by Raja Chelliah, including some of the tax experts in the country to lay out a framework of tax reform. I think we need to do that now. This cannot be done in secret within the government. One cannot expect the current Finance ministry which is responsible for GST to come up with reforms. It is not human to say I am sorry I got that wrong. They will probably say that this was actually right but a little thing has caused a problem. We need a fresh look. We need an outside look, an expert look and let the expert report be made public. Set up a committee of nonpolitical experts, draft a report and let the government say that in the next budget we will do everything that the report says. Let me give a small example. Most businessmen say that the worst thing about working in India is the unpredictability and the unreasonableness of the tax assessments. Our tax rules are so vague and can be interpreted anyway you like. The present position I saw is that if the economy is going down we won’t be able to raise the tax revenues that we are talking about. The department of revenue sent an instruction to all tax assessment officers that your tax target remains the same. This mean each of these officers are supposed to achieve 13% increase in taxes as the budget mentions, even though the GDP is going to be much lower and therefore you expect a cut in taxes. Obviously what they are going to do is make unreasonably high demands. You can’t blame these officials when they are clearly instructed from authorities. What makes it worse is that, no tax official is punished if the taxes they levied are ultimately shot down through the appeals process. They are only held responsible for what they levy. Many businessmen say that compared to other countries dealing with our tax authorities is hugely difficult. You cannot blame the tax authority if you do not have realistic tax assessments mechanisms. SEASONAL MAGAZINE

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By Kuber Bathla

ALL GUNS BLAZING AN EXCLUSIVE CHAT WITH MANI SHANKAR AIYAR' As issues of national importance remain unsolved due to a multitude of reasons, the pandemic hit the country when it was least ready for it. As the nation seeks solutions in the aspects of economy, policy, domestic as well as international affairs, the familiar voice of Mani Shankar Aiyar offers some insights. A veteran in the realms of politics and diplomacy, Aiyar has worked extensively in these fields and has frequently given his voice on issues that matter. On the Indian economy, Aiyar believes that reducing the level of interdependence on other nations in the matters of trade will only affect the economy in a harmful manner. He does not put faith in the goal of Atma Nirbharta and believes that there are no concrete policies to back the Prime Minister’s claims. As the economy was already in a mess before the outbreak, it is important to have someone better at the helm to navigate through the crisis, he said. On the idea of labour laws being dismantled to encourage employment, Aiyar said that it is “not only a stupid proposition, but it’s also a cruel proposition”. He said that despite the low number of people who benefit from such laws, it is important that we do not sacrifice our democracy for a

“perceived high rate of growth”. The only way to deviate supply chains towards India is to have a very efficient policy- macro and micromanagement. This, coupled with a hope that Indian firms will create enough opportunities to become a better prospect of investment for the Americans, as compared to China. A part of instilling confidence in investors also lies in handling the migrant labour crisis in a better manner, something which the government has failed to do. On the issues of foreign policy, Aiyar makes it quite clear that only a strong neighbourhood shall help India to have better relations with other nations that lie across the Pacific and the Atlantic. He says, “We ought to be evaluating our relationships with the United States on the one hand, and China and Russia on the other hand, on a completely fresh basis so that we go back to first principles of non-alignment”. He also blames Hindutva and the government’s pro-Hindu policies for being detrimental in the ailing relations with India’s archrival Pakistan. The goal is to be secular and remain true to the ideals envisioned by the founding fathers of the constitution. Calling for a behavioural change on the

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part of the government in the healthcare sector, Aiyar said, “We are prioritizing defence, heavy investment, private sector, and not prioritizing the two sectors- health and education- that are aching for government intervention. And so long as investment in public goods is as low as they are, and so long as the Panchayats are not made an integral part of last-mile delivery of both education and health, I'm afraid we are going to continue to live with completely wrong priorities” Envisioning a strong opposition in the coming years, Aiyar believes that it is necessary for the Indian National Congress to create a public forum for ideas and discussions, so as to lead the party towards the right direction. Seasonal Magazine’s Kuber Bathla speaks to Mani Shankar Aiyar in this wide-ranging interview: How do you think, in the postCOVID age we can have prevention, self-reliance and globalisation on the same tangent? MSA: I think that is a very overarching goal. We need to recover, economically. And to recover, we need ourselves and the world. I don’t see how by reducing the level of interdependence in the name of Atma Nirbharta, we can achieve the ultimate goal. So I think Mr Modi’s prescriptions are just rhetoric. There’s no logic of policy to them. Therefore, I see the recovery taking a very long time, and in any case, our economy was in a complete mess long before any of us had heard the word COVID. There were structural problems, particularly demand, that needed to be attended to, but the government was showing no inclination to do that, and was pushing ahead with its political agenda, which came a cropper in December, when all these protests broke out in 100 campuses in India and Shaheen Bagh, with maybe lakhs of imitations of Shaheen Bagh in the rest of the country. There has been no attention paid to economic issues since May last year, although it is these economic issues that have been dominant. So in the absence of a leadership that does understand economics, but is excellent at highempty rhetoric, I am afraid I cannot see the way forward. I only hope that the inherent forces in our economy will help us recover. SEASONAL MAGAZINE

Do you think that dismantling labour laws for rapid industrialization would lead to economic stability in the long run? (Given the context of Uttar Pradesh) MSA: It’s not only a stupid proposition, but it’s also a cruel proposition. India has been a member of the ILO (International Labour Organization) since its inception in 1919, and has, among developing countries, the most advanced labour law. Now it’s true that only about 8% of our workforce, which is in the organized force, is able to avail of these advantages. But in reducing organized working force conditions, to those of unorganized working force conditions, I don’t see how there is any great economic benefit involved. Yes, perhaps we need to relax some of these laws, in view of the fact that India, in 2020, is no longer as poor as it was when I was your age. But nevertheless, having a decent wage and proper conditions for workers’ safety and for the safety of their employment are all necessary characteristics of a democracy. I don’t think we should be sacrificing democracy in the alter of a perceived high rate of growth. So what the UP Government has done is perhaps a trailer of what the Union government is going to do, and it’ll be a very sad day when we decide that the welfare of people like Modi and me is much more important than that of a migrant worker, who today is walking home because the government had a very sudden lockdown and made no arrangements for the disruption that it would cause.

I DON'T SEE HOW BY REDUCING THE LEVEL OF INTERDEPENDENCE IN THE NAME OF ATMA NIRBHAR BHARAT, WE CAN ACHIEVE THE ULTIMATE GOAL. SO I THINK THE PM'S PRESCRIPTIONS ARE JUST RHETORIC. THERE'S NO LOGIC OF POLICY TO THEM

Should India continue to spend resources outwards as there are many opportunities now? (in terms of investment, incentives, tax breaks, or the use of corporate diplomatsespecially since China’s supply chain has been greatly affected and India can become the centre of the world's supply chain) Or should it focus inwards, given the crisis that the country is facing (in terms of low demand)? MSA: I think, to begin with, we should concentrate on mending our broken economy. That means, undertaking policies that will restore growth initially to the very low level at which it was before covid struck, and eventually getting back to the rates of growth that Manmohan Singh had engendered in our economy. And that requires very efficient policy- macro and micromanagement- that has not been in evidence for the last six years. Therefore, I do not foresee a miracle that will teach people like Modi who never went to University, and Nirmala Sitharaman who may have got some degree in Jawaharlal Nehru University, but has displayed no economic expertise in her new capacity as the finance minister. I am very sceptical of the possibility of getting back to even December 2019, let alone to 2007, when we were growing at over 9%, and it was feasible to talk about us hitting 10%. Now unless we repair our broken Economy, all this wild talk about people taking investments out of China and bringing them to India is just daydreaming. There are many other economies, COVID affected, in south-east Asia particularly, where they can relocate and where the economy has not been broken, either pre-COVID or post-COVID. So I think instead of talking this kind of rhetoric, I am putting our hopes on Americans suddenly pulling out of China and desperately looking to go somewhere, and finding in India the golden opportunity. I think all this kind of rhetoric should be put to one side, and in a realistic manner we need to rebuild our economy and were we to ever get back to Manmohan Singh's 9% rate of growth, then automatically there will be a great deal of economic investment in India by those looking for alternative supply chains. What kind of mechanisms do you think are necessary to instil

confidence in investors that over medium term both fiscal as well as financial stability will be maintained? MSA: I think you're going into a lot of jargon with that question. The most important thing is for the world to recognise that we are humane enough to look after millions upon millions who till yesterday were employed or selfemployed and who today are struggling to get back to their villages, swearing that they'll never come back to the industrial centres of the country. In a country where the most important economic hubs are the most significant corona hubs, it is our metropolis that is really badly affected by the coronavirus, and Gujarat, for some strange reason, is showing a much higher level of corona infections and particularly deaths than any other state in India that is of comparable demography. So there is a lot to fix here, in terms of just pulling ourselves out of the abyss into which we've been pushed, instead of talking the kind of Language that is inherent in your question. Until we get back from the abyss unto the brink, I think it's absurd to look at the high mountains and say, 'One day I'll reach there'.

ON SAARC, INDIA HAS GIVEN SMALL SUMS OF MONEY, AND SMALL AMOUNTS OF ASSISTANCE TO OUR NEIGHBOURS, BUT WITH NEPAL, WE'VE STOKED A HUGE RUMBLE, AND WE DON'T KNOW WHAT WE'RE GOING TO DO ABOUT IT AARC (or South Asian Association for SAARC Regional Co-operation) has always been rendered as an ineffective organisation in the international domain, but its performance during COVID-19 has been impressive in terms of coordination and cooperation. What do you think should be the future of this organization, and Indiaâ&#x20AC;&#x2122;s role in it? MSA: Will you please tell me that apart from having a teleconference, that was widely publicized, what other steps have been taken? Yes, India has given small sums of money, and small amounts of assistance to our neighbours,

but with Nepal, we've stoked a huge rumble, and we don't know what we're going to do about it. We've never in the Modi era been able to handle our relationship with Pakistan. Our relationship with China has been deteriorating. It had deteriorated with Bhutan, in the past, although I think the King has been very sensible in pulling back from deterioration. [With] Bangladesh, our relationship has wrecked, by this attempt at identifying Muslims as Bangladeshis and threatening to send them back. There's no great improvement in our relationship with Sri Lanka. In the Maldives, yes, things are better, but that's not because of us, that's because of the Maldivians, having got ridden of their previous government. So I see nothing in our South Asia policy, that could be called constructive. Therefore, by definition, SAARC, maybe, is a PR exercise. Mr Modi is much more an EM than a PM- is much more an Events Manager than a Prime Minister. And that is why we see this tattered South Asia policy, despite his having said, at the beginning of his tenure, 'Neighbours First'. What do you think is the reason

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behind Western countries handling the crisis in a poor manner and the oriental nations doing relatively better? Does this indicate anything about the future of International Politics? MSA: Well, I think as far as the Western world is concerned, we must distinguish between the United States and Europe. The United States is run by a man called Narendra Donald Trump, and he's made a complete mess of handling this whole crisis, and the only thing that he has achieved is 'Howdy, Modi!' and 'Howdy, Donald!'. I don't think this is the way to run foreign policy. We are at the most serious crisis in the identity of Asia in the last 70 years. The cold war was fought between the United States and the USSR, and then we were nonaligned. Now, a second cold war is starting up, particularly under Trump, and in that, we are getting increasingly aligned with the United States of America, and because we are in Asia and they're on the other side of the Pacific and the Atlantic, if the second cold war deteriorates into the third World war, then India will be Belgium, on whose soil the war will be fought. So instead of taking this moment to proclaim our friendship with the United States, especially in defence matters, at a time when there's a needless propagation given by the US to China and an equally needless reciprocation given by the Chinese, I think we ought to be adopting a Non-aligned posture, exactly as Europe's posture in the last couple of years is. Now I don't know if your viewers have followed what happened at the World Health Assembly, but at the WHA held only about two weeks ago, Donald Trump and through him his health secretary, had announced that they had a number of goals for the assembly. One was to get China condemned for what it had done- they failed miserably. The other was to get the Director-General of the WHO condemned- they failed miserably. And the third was to get Taiwan in with observer status so that they could caucus snook with the People's Republic of China, and on all three they failed- not because India said anything (India said nothing at all)- but it was the Europeans who tied up with the Chinese to refuse to be distracted from this pandemic by the domestic politics of the Republican frontrunner SEASONAL MAGAZINE

A SECOND COLD WAR IS STARTING UP, PARTICULARLY UNDER US PRESIDENT DONALDTRUMP, AND IN THAT, WE ARE GETTING INCREASINGLY ALIGNED WITH THE USA. IF THE SECOND COLD WAR DETERIORATES INTO THE THIRD WORLD WAR, THEN INDIA WILL BE LIKE BELGIUM, ON WHOSE SOIL THE WAR WILL BE FOUGHT. in a domestic election in the United States, in the coming November month. And he goes on and on about sleepy Joe when he ought to be dealing with the pandemic. And that is why, long ago, several weeks ago, the number of people who've died in America as a result of the COVID pandemic is higher than the biggest American tragedy of my generation, which was the American invasion of Vietnam. They had 58 thousand young boys of your age (I was your age then) killed in Vietnam on a useless war, and now they killed about 70-80 thousands of Americans in this Pandemic, where everyone else has a much more restricted kill [death rate]. Europe has been adversely affected, but it's dealing with it, and therefore what appeared like a very dangerous situation in countries like Spain, Germany and Britain seems much more under control, than the United States that's now burning because of what was done to this young man Lloyd. So I think when you talk of the West, which is a very old phraseology: There's an America, there's a Europe and there are some parts of Asia which are under the American heel. Bug the dream of the 21st century being the century of America in Asia is I think completely over, and we ought to be evaluating our relationships with the United States on the one hand, and China and Russia on the other hand, on a completely fresh basis so that we go back to first principles of non-alignment, i.e. not neutrality, but participation in world affairs without being 'Parti Pris' as the French say, â&#x20AC;&#x2DC;without having to bend to one side or the other in advance of dealing with the merits of a questionâ&#x20AC;&#x2122;. And that requires a very stable

neighbourhood. So until Mr Modi can get a hold of his South Asia policy, he will not have a hold of his Asia policy, and therefore will not have a hold over foreign policy as a whole. I don't think foreign policies consists of holding mega rallies of NRIs in some stadium in Houston, or indeed on the eve of the pandemic hitting India, getting two lakh people together to say 'Namaste Trump', which has led to 'Namaste Corona' in Ahmedabad in Corona, which is the worst affected city of its size in India today. What Modi did to Ahmedabad, his friend Trump is doing to the United States. According to Stephen Cohan, South Asia is the least economically intertwined region of the world, having merely 5 per cent intraregional trade. India and Pakistan have acted like realists, with a major focus on maximising their military power rather than focus on things like economic interdependence. Do you think there should be, or there could be, a change in the coming years? Yes! If we can get rid of Modi. No, if we can't get rid of him. By present reckoning, the opposition is in too much disarray to be able to even take advantage of the present political problems of Modi, let alone what they'll deal in four years from now. So I have an extremely pessimistic reading of India-Pakistan relations in the remaining Modi years, however many they may be. I doubt that we'll ever get back to the Manmohan-Mussharaf phase, where even the problem of Kashmir was being sorted out, but for an accident of history would have now been behind us. So we need an enlightened leadership to have an enlightened neighbourhood policy, and if we're going to head towards Hindutva, a Hindu India, then you can kiss goodbye to all your young generation hopes. There's no way in which India and Pakistan can get together, so long as Mr Modi is fulfilling Jinnah's dream of having two nations on the subcontinent. We said in 1947, 'You can have your Islamic Pakistan if you want, but we are not going to become a Hindu India, and that is why Jinnah was able to realize only half his dream. But now, his forces are working on India, and we're moving from being a secular nation to being a Hindu nation- a nation which discriminates on religious matters

against its own people- and that is why the protests that had broken out in December and January will have to be resumed once this COVID crisis is over. What do you think should be the role of rural governments in collecting data, taking into account factors like caste and gender, for coming up with welfare schemes and institutions that might help in development? MSA: As far as figures on caste are concerned, a very deliberate decision was taken to not include them in the census, except for Scheduled castes (SCs). But states have made their own arrangements to collect information about what is called the backward castes. And since the Mandal agitation of 1990, I'm afraid we have moved in a backward direction, and where we were hoping that Indians could move out of their caste configuration of their own standing in society and their position visa-vis other Indians, I am afraid we have regressed in the last 30 years, and the dream that we have back in the 1980s, in fact, let me take you back to the 50s, when the Kelkar committee report on the backward classes was first submitted, and chairman Kelkar actually wrote in its premise, that he hoped his recommendation would not be implemented because it could lead to the renewed caste-ization of the Hindu society. But these are now realities to contend with, and I think most states have a fairly clear idea as to who are the backward castes, and by subtracting them from the total number of Hindus, you can get the number of the forward castes, especially by taking into account the Scheduled Castes and Scheduled Tribes. So I don't see that as a practical way forward. There are many other things that we can do. We have discovered that the Muslims of India are the least beneficiaries of the processes of progress that had taken place in the first 65 years or so of India's independence and we were beginning to address those issues when we lost the government, and now I see nothing but discrimination against the Muslims and alienation of our minorities and had seen today how some Christian pastor in Tamil Nadu has escaped with 16 stitches on his head and [I think] 9 stitches on his arm. So this kind of religious intolerance which characterized the 20s and led to the partition of India is going to lead to the partition of our country

again- The disintegration of our country, not the partition. Unless we firmly return to the path of Gandhi and Nehru, which is Secularism, and a determined effort to get rid of the caste system progressively, if not in a sudden go. It has been seen that countries with better surveillance technology have done better when it comes to handling the crisis. (Case in point: Vietnam) What do you think, then, is the future of surveillance in India? MSA: I am afraid I am not sufficiently technically competent to answer that question, but I certainly see surveillance of an authoritarian kind- of the kind that the government of India today is attempting to impose on our nation- as a throwback to the period of the emergency. And therefore, where the emergency was an aberration in the evolution of our Democracy, I'm afraid the kind of surveillance and authoritarianism that we've been seeing evolving over the last 6 years is what is, to use a favourite phrase of the journalists today- the new normal. Therefore, I am very apprehensive of it, but I do confess that I'm too technologically challenged to be able to answer your question satisfactorily. Do you think that, in terms of a behavioural change, both Indian citizens and the government may start spending more on healthcare and hygiene in the post-COVID-19 world? MSA: You're talking about the behavioural change of the people or our government? What we need, most importantly, is behavioural change on the part of the government. The government needs to prioritize education and health above all other

WHEN THE KELKAR COMMITTEE REPORT ON THE BACKWARD CLASSES WAS FIRST SUBMITTED, CHAIRMAN KELKAR ACTUALLY WROTE IN ITS PREMISE, THAT HE HOPED HIS RECOMMENDATION WOULD NOT BE IMPLEMENTED BECAUSE IT COULD LEAD TO THE RENEWED CASTE-IZATION OF THE HINDU SOCIETY

considerations. We are prioritizing defence, heavy investment, the private sector, and not prioritizing the two sectors- health and education- that are aching for government intervention. And so long as investment in public goods is as low as they are, and so long as the Panchayats are not made an integral part of last-mile delivery of both education and health, I'm afraid we are going to continue to live with completely wrong priorities. We need a situation in which the top politicians of India look to become the health minister and the HRD minister, and not the defence minister and the finance minister. That is the day when we will be able to secure the required behavioural change on the part of the government, and after that we can look after the behavioural change on the part of the people. I don't think the answer lies in wearing masks and keeping a social distance, which in any case can only be done by people like you and me because we have already secured our own health parameters. It can't be done in the slums of India, it doesn't need to be done in the villages of India. Behavioural change is required of the government, not of the people. If you could propose ideas for resurrecting the Congress party, what would those be? MSA: You know it's very difficult for me to answer your question because I am a member of the Congress Party. I have put out my ideas in my columns, and I have happily been not reprimanded for that. But I do think these issues need to be very very seriously tackled, but cannot be tackled on a public platform. And by creating controversies outside of the framework, that the party has or should have, and maybe that's why we should start 'should have'- to have a full democratic open discussion of these issues. After all, this is our party- it's not your party, it's not the party of the opposition (of those who want to see a Congress Mukt Bharat)- these are issues that relate to the congress party itself, and I regret that we do not seem to have a forum where ordinary members of the congress like myself can be heard. Maybe that's what needs to be done, but if you would take the trouble of reading some articles that I have written on the subject, particularly before the COVID outbreak, you'll see that I do have ideas, but I don't want to discuss them on this open public platform. SEASONAL MAGAZINE

By Teres Sajeev

MAKING POLICY THROUGH CRISIS SEASONAL MAGAZINE'S INTERVIEW WITH DR DIPA SINHA, ASSISTANT PROFESSOR (ECONOMICS), AMBEDKAR UNIVERSITY

IN THESE PRECARIOUS TIMES, DIFFERENT STAKEHOLDERS AND ACTIVISTS ARE ON THE LOOKOUT FOR ACCURATE POLICIES TO ADDRESS THE MANIFEST ISSUES THAT THE PANDEMIC HAS CAUSED OR OTHERWISE EXPOSED. DR. DIPA SINHA, PARTICULARLY KNOWN FOR HER WORK IN THE RIGHT TO FOOD CAMPAIGN, HAS ALSO WORKED EXTENSIVELY IN THE FIELDS OF PUBLIC HEALTHCARE AND GENDER.

Talking about the Public Distribution System, she asserted that it is equipped to cater to 60% of the population, but it had failed during the pandemic due to sheer insensitivity towards the plight of the people. In the context of our failing Public Healthcare System, she highlighted the importance of putting a united front to fight the pandemic along with our Private sector after due negotiations with them. However, universal healthcare is a long-term goal that can be secured only through increased spending on healthcare, particularly the public healthcare because that alone will ensure access. The key to Atmanirbhar Bharat is to create demand for domestic goods from the domestic economy. The way to make this happen she said, “is through external stimulus in the form of fiscal spending by the government”. Referring to the package for agriculture, she said that it is not a crisis response for sure and elaborated on the necessary steps that can be taken to support farmers. She also talked about the status of women altering after the lockdown, SEASONAL MAGAZINE

primarily because the few jobs available will be secured by men first. To handle the migrant workers crisis in the long term she advocated the strengthening of Migrant Workers Act and thereby ensuring their registration to provide them entitlements. While concluding she pointed out that in India, we don’t have the luxury to talk about the lives vs. livelihood debate as people don’t have lives if they don’t have livelihoods. “The question for us is how do we allow livelihoods to continue while ensuring that the infection spread is slowed down and that people who get infected can access healthcare.” In this interview with Seasonal Magazine, Dr Sinha (DS) shares her insights on some of the pressing issues of this crisis: the role of public services, the effectiveness of Atmanirbhar Bharat and the impact of the situation on vulnerable populations. In the past 4 months, 6.5 million tonnes of grains rotted in the godowns, more than what was distributed through the Pradhan Mantri Garib Kalyan Anna Yojana. Should this be considered as pure negligence or is there a deeper systemic failure that needs to be addressed with respect to our Public Distribution System? DS: We have to understand that our Public Distribution system does have some inefficiencies, but it has been a system that has been in place for a very long time. Firstly, relative to its size its infact quite efficient in reaching out to the largest number of beneficiaries in the country. Secondly, whatever few phone surveys have been there till now shows that of the various schemes the government has undertaken to provide relief as a result of the lockdown, the PDS has been the most successful. It has been managed in a manner to reach the most number of people. But on the other hand what we see is a situation of very high food stocks in the FCI godowns. In fact the highest amount historically, 80 million tons, which actually allows us to give more people and give more grain. That is something that has not been forthcoming. It is more

because of the insensitiveness towards the plight of the people than anything else. I will give you one example, the Garib Kalyan Anna Yojana announced 5kg of additional grain for the poor for three months during the period of lockdown for those who have ration cards. Whereas people who were outside the PDS network, who did not meet whatever eligibility criteria there was to get a ration card or because the population figures were not updated, did not receive ration during this time of crisis. Since we have grain in hand, it would have been very simple to distribute it even to those who don’t have a ration card. That would not have required any additional infrastructure because there are already fair price shops that provide ration to 60% of the population. So it would not take any additional effort to do it. Infact it is insensitivity, because on the one side you had huge stocks of grain and on the other side, you had the infrastructure to distribute the grain. But you still did not distribute it. Several reports demonstrate that the public healthcare system in India is succumbing to the excess demand and is not equipped to fight a pandemic. Do you think that this makes a case for India to follow suit like several countries who have passed an order to bring hospitals in private sector under public control for a limited period? What are the steps we can take to ensure universal healthcare at this crucial juncture? DS: So taking your first question, I do think this should be done. It is not something that should be set in the

THE WASTAGE OF 6.5 MILLION TONNES OF GRAIN IN THE GODOWNS OF FCI, IS IN FACT JUST INSENSITIVITY. ON ONE SIDE YOU HAD HUGE STOCKS AND ON THE OTHER YOU HAD THE INFRASTRUCTURE TO DISTRIBUTE IT. IT CANNOT BE ATTRIBUTED TO A STRUCTURAL ISSUE IN THE PDS.

context of India alone as many countries are already doing this. This is a global pandemic. It is a situation of crisis and we need to pool in all our resources so that we ensure that they are not just efficiently distributed, but also equitably distributed. Data shows that due to the neglect of the public healthcare system over the years, people are now largely dependent on the private sector. This is the case for both out-patient and inpatient care. Additionally, we also know that the regulation of the private sector in health in India has been very weak. This is the reason why it has been possible for things like overcharging to happen. To avoid this and ensure that there is some equity in the system, the government has to bring in the private sector as well. That cannot be by force. It should be done after negotiations with the private sector. Some kind of coordination so that beds and human resources which is very important is made available for the government to be able to address this crisis. The issue of universal healthcare is much larger and would require longer time, because we have such a weak public healthcare system in the country. For example, India has the highest out of pocket expenditure on healthcare in the world. Almost 67% of the health expenditure that people make in our country comes from their own pocket. And this is really high even compared to a country like the US where healthcare is largely privatised. There are huge gaps in availability of infrastructure and availability of human resources. All of this ultimately relates to the fact that we have been underspending on health for a very long time. While the WHO recommends that the national health policy of the country should spend at least 3% of the GDP, we spent only 1.2% of the GDP: Centre and States combined. First thing to do to move towards universal healthcare is to increase the spending on health. Increase in spending should be in a manner by which public health systems are strengthened because they reach out to the far corners of the country and they are more accessible to the poorest of the poor. SEASONAL MAGAZINE

India has witnessed an unprecedented level of unemployment even before the lockdown and now the situation has become worse. Would adapting the NREGA by increasing its ambit be enough to address this crisis? DS: To address the issue of unemployment NREGA is an important piece in the puzzle. NREGA is available for unskilled work for whoever demands work at minimum wage and that is something that can be done immediately where work sites are open. But that can’t be the solution to the employment problem in our economy where we have been facing a jobless growth. For employment more would need to be done. You would also have to look at the skilled labour. The biggest problem with employment currently is due to the lack of demand in the economy. The purchasing power is less, production is not happening and employment is not being generated. For the immediate need, NREGA and something similar in the urban areas would take care of the immediate livelihood issues of the people. But that cannot be your only employment strategy. The pandemic has brought the discussion on implementing universal basic income back to the table. Do you think this is viable for India? If yes, what is the best mechanism and infrastructure that India can use for this? DS: While the pandemic has brought the issue back on the table, all these are issues of long term welfare policies. Many of the concerns regarding universal basic income was raised before the pandemic and still continue. Firstly, the policy of Universal basic income in the context of India has been talked about as a supplement for the other services that the state provides. Whereas in advanced country it has been talked about as an additional input, and this makes a huge difference. Thus in India it comes at the cost of NREGA, at the cost of PDS, at the cost of health services and at the cost of free education. Then I think there is a problem. Because it is not that money is the only gap and market takes care of everything else. We know that there are market failures. SEASONAL MAGAZINE

Secondly, the amount of universal basic income that needs to be transferred to have a significant difference is very high and that will have a much higher fiscal cost than all other programmes put together. On the other hand, it doesn’t mean that there is no space for cash transfers within the welfare system in the country. We have always had cash transfers which are important cash transfers like the old age pension, disability pensions, scholarships at schools and so on. All of these definitely need to be enhanced and at the time of the pandemic I think we should use all of these available list and these bank account numbers to make cash transfers, because like we have been saying people have lost their livelihood, there is a huge food insecurity going on. So it is not enough to run the PDS or community kitchens. Alongside these we need to make cash transfers as well. I think currently the best platform that it can be done is using the couple of lists that the government have including the NREGA job card list because that is linked to the bank account and we know that it is a fairly reliable list. We could use other lists of old age pension, maternity entitlements and other social security pensions. Some transfers have been done but the concern was regarding the quantity that has been transferred. For instance, Rs.500 was transferred in the Jan Dhan Yojana account. The opportunity cost of going to the bank during the lockdown and withdrawing the money was so high that one wonders what help it would have done to the people. From studies we also know that it is not predominantly the

TO ENSURE EQUITY IN HEALTHCARE, THE GOVERNMENT HAS TO ROPE IN THE PRIVATE SECTOR TO FIGHT THE PANDEMIC. IT SHOULD BE DONE NOT WITH FORCE BUT THROUGH NEGOTIATIONS WITH THE PRIVATE SECTOR.

poor who have the Jan Dhan account. So it is better to use this from the social welfare schemes and make the transfer. The transfer also has to be a significant amount. The agrarian economy has faced a backlash due to disruptions in activities such as harvesting, sale of produce and purchase of inputs during the lockdown. Added to this the Minimum Support Price by 2.9% for kharif crops is the lowest increase in the past 5 years. How do you think the Atmanirbhar policy that contained an explicit promise for an era of opportunities for our farmers, contribute to this distress? DS: Unfortunately the one concrete intervention that the Atmanirbhar package had for the farmers was the increase in MSP. But when we look at the MSP data, it is the lowest increase in the last 10 years. So this is not going to help so much. Another intervention was the PM Kisan. Here again the amount of cash transfer has not been specified. One of the things that could have been done and still do is to expand PM Kisan to include tenant farmers, wage labourers and give a higher amount as well. The Atmabirbhar has otherwise announced things that have been there in the policy field for a very long time and some of them have been done in some states. For example, opening up of Agriculture Produce Market Committe, relaxing the Essential Commodity Act and so on. I don’t think these things are going to make a huge difference to farmers’ income. This is not a crisis response for sure. This is part of other reform processes which is opening up agriculture to the market which is on the agenda of the government. I don’t agree with a lot of them. But that is not something that can be anyways be seen as something of a relief response for the current crisis. For me as a relief response, there would be a higher increase in the MSPs. There would be procurement of not just of rice and wheat but of other crops as well, as currently access to market was a big issue. There should be decentralised procurement. For example, making

procurement possible in every Panchayat so that farmers don’t have to go far away and distancing norms can be applied. These are the kind of things that I looked forward to, but did not come. The announcement of Atmanirbhar was followed by several provisions for MSME’s including dues worth Rs.5 lakh crores to assist them. However experts opine that the micro enterprises that comprise a majority of MSME’s are still largely neglected. What are the measures that can be taken to combat this? DS: While there are some credit easing measures: the MSME’S need easier access to credit, writing off outstanding loans. All of these measures would matter when these micro enterprises will be able to restart their business and even take these loans when there is a demand in the market. We know that there is a demand crunch. So apart from measures that directly target them we should have other measure like wage support for those working in micro enterprises. It is easy to say that you have to continue to pay your workers even when there is no production, but this is not easy to do. On the other hand what we need to do to revive the sector, is to revive demand in India where it has been stagnant for some time now and the situation is even worse now. We need to put money and thereby purchasing power into people’s hands. People who demand these small manufactured goods which are labour intensive. This will generate the classic Keynesian model multiplier mechanism and that is what is required now. Here I will come back to cash transfers, PDS, NREGA etc. All of this contribute to increasing purchasing power of people who spent a large proportion or all of their income on consumption goods which tends to be labour intensive. We should do this along with whatever we are doing like credit and skill enhancing, market access and so on. If we really want to be Atmanirbhar, we need to get the demand for our domestic goods coming from our domestic economy itself. In the current crisis where GDP is falling at such huge rates and wages are stagnant, this can happen only

IN INDIA, UNIVERSAL BASIC INCOME WILL COME AT THE COST OF MNREGA, PDS, FREE HEALTH AND EDUCATION. THIS IS A PROBLEM BECAUSE MONEY IS NOT THE ONLY GAP & THE MARKET TAKES CARE OF EVERYTHING ELSE. WE SHOULD INSTEAD FOCUS ON CASH TRANSFERS THROUGH EXISTING LISTS LIKE NREGA JOB CARDS

when there is an external stimulus and that stimulus can come in the form of fiscal spending by the government which is missing in the Atmanirbhar package. The lockdown has exposed a huge population of migrant workers in our country that is left unattended to in the policy spectrum. What are the immediate measures that should be undertaken to protect migrant workers who have returned to their homes with their livelihoods lost? Moreover, what are the long-term policies that can be undertaken to cater to this population? DS: Now there are millions of people who have gone back to their homes. They have gone back at a time when the economy is at a low. Therefore, immediate livelihood would be the primary concern with the meagre resources available in the rural areas. We must note that these migrants went out looking for work precisely because there was no work or resources available in the places where they come from. So now when they have gone back in an even worse situation, then obviously that is going to put pressure on everyone in the rural areas. Therefore the NREGA for example should be something that has to be immediately started. It has been started in several places and we can see that the demand is very high. The wage rate of NREGA has to be increased and the current NREGA provision that provides 100 days of work for per household should be expanded. Now with migrant workers going back that limit will has to be done away with. Either it has to be converted into an individual entitlement and not per household or it has to provide work

double the quantity for whoever is demanding work. Then how do you deal with it in the longer term would depend on the overall economic model that the country has been following. We have to go back to the structural reasons for such an uneven development, where every few years we have a crisis in the agriculture sector and agriculture is absorbing fewer and fewer labour which is seemingly a normal process of the structural transformation. But on the other hand the manufacturing sector or the good quality employment and services are not able to absorb people. So we have a large amount of self-employment and casual employment but very few regular employment available both in rural and urban areas and that is also uneven across states. Migration is not something that will end. People will go back looking for livelihood opportunities and we are one country where that should be allowed. What we should do is that Migrant workers Act can be strengthened. We have to think from the point of view of the migrants and the entitlements of the migrants and their families and not look at them as cheap labour for the destination space. One of the things that came out quite starkly in this crisis is that many states use the labour of migrant workers for essential services or for our cities to continue functioning. But the minute there was a crisis and they could not work on the services due to the lockdown they were suddenly, the Bihari construction worker who was helping us in Delhi and not a worker who helped us built buildings. He was a Bihari who was not the headache of the Delhi government and they were sent back. I think this attitude should change and we need to have better laws for their welfare. Registration of workers is something that was being talked about for a very long time and once again now. This will enable them to access their entitlements. All of these things have been in the pipeline for a very long time. I think as the middle class also, we must really now acknowledge the fact that migrant workers contribute to our lives and to keep the city functioning. Therefore they SEASONAL MAGAZINE

have to be paid minimum wages, given housing and other basic facilities. I just want to add one more point that is something even I am doing while I am speaking to you. When we speak of migrants we are only speaking of the working class. There itself you can see the class bias and difference that we are making. I am a migrant in Delhi and teach in a university but I don’t feel like a migrant here. It has not become impossible for me to live here in this crisis. But a migrant construction worker, migrant vegetable seller, migrant domestic worker, as soon as their activity stopped, they were made to feel as if they don’t belong her. And that they have to go back. So this crisis at one level showed us how badly we treat our workers. This is where I think the change needs to begin. There are also many policy initiatives that are required, starting from legislation to having programmes, regulation, registration, social security and so on. In your book, “Women, Health and Public Services in India: Why do States differ?” you point towards women’s status, specifically education as one the most significant factors that contribute to better health outcomes in states. How do you think the ramifications of the pandemic will alter the status of women? DS: Already we are seeing a lot of reports on the gendered impact of the pandemic. Much more than the pandemic, it is a combination of pandemic and the lockdown, both in the household and in the labour market. Firstly, for instance all over the world domestic violence rates have surged with men staying at home, with general high level of stress and domestic violence is one of the ways in which it has been coming out. The mainstream definition of labour market participation and the data around it since the last three NSSO surveys and even before that with a slight improvement in between we find that the female labour force participation has infact declined. The number of women who can participate in what is termed

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as economic activity is very low in India and among them who can participate in paid employment is even less. That is becoming more in this context with returning migrants, high levels of unemployment, the few jobs that are available will be all taken away by the men. So there will be even fewer opportunities available for women as far as employment is concerned. On the other hand there are certain sectors that have exclusively women workers where there has been an increased pressure on them to work much more. For example, frontline health workers, like the ASHA and Anganwadi workers, ANM etc. These are all, all women cadre and from day one of the pandemic they have been involved in various activities in the community, to create awareness, contact tracing, bringing people to the health system and so on. They did not even have proper safety equipment. These are also very poorly paid cadre of work. If you look at the policy, ASHA workers are honorarium workers who are just paid for the work they do as an incentive, without a regular salary. An additional Rs. 1000 to do what has almost become a full day work for them like taking surveys, accompanying people to the healthcare. Then there are Anganwadi workers who are poorly paid. The pressure on all these workers have increased with the health crisis that we now have, at the same time the

IF WE REALLY WANT TO BE ATMA NIRBHAR INDIA, THE DEMAND FOR DOMESTIC GOODS SHOULD COME FROM THE DOMESTIC ECONOMY. IN CURRENT CRISIS, THIS CAN COME THROUGH EXTERNAL STIMULUS IN FORM OF FISCAL SPENDING BY GOVERNMENT WHICH IS MISSING IN THE ATMA NIRBHAR PACKAGE

conditions of work are very poor and they need training, handholding support and better incomes. Finally the other way in which we see women being unevenly affected by the pandemic is the burden of care work within the household, increasing. So now in our country, most of the household work and caregiving work is undertaken by women, among all classes and more so among the poor because there is no support of technology. With schools closing, midday meals not happening, Anganwadis not running, there is more work in terms of cooking and taking care of people. With more people falling sick there is additional caregiving required and this falls on women. As of now we are not seeing a gendered response to this crisis. As far as the mainstream understanding goes, men are affected with Covid more than women. However, they have been affected by the lockdown and the crisis both within the household and outside. In terms of malnutrition we already have 37% of our population stunted, huge prevalence of anaemia among women and children. Firstly, we know that diets have reduced in terms of quantity and quality. Within the household women eat least and eat last and this will make it worse for women. We don’t know what effect it will have on anaemia

prevalence. Regular doses of immunisation are also disrupted and we don’t know what is happening to child malnutrition as well. Adding one more thing regarding women and healthcare, there are several reports on women finding it hard to access delivery and pregnancy care during this lockdown. Because all other health services have been disrupted with hospitals and health centres being put aside completely for Covid services. There is also an impact that you will see on other kind of health conditions and this is also uneven with women getting lesser access than men. In your recent report ‘The Twin Crises of Covid-19 and the Modi government’s response’, it was estimated that around 750 people have died due to the lockdown. What is your stand on this lives versus livelihood debate? Do you think such a trade-off really exists? DS: Firstly, the number is likely to be a huge under estimate. We didn’t do the estimate but quoted from reports of researchers that estimated the number of deaths that are reported in the media and are likely to be due to the lockdown due to starvation, suicides etc. This number has risen to over 850 already. That is to highlight that the cost of the lockdown has been tremendous on people’s lives, many more could have died, many lives have been disrupted. I think posing this as a lives versus livelihood contradiction is misplaced, particularly in a poor country like India, There is no lives versus livelihood where so many people have no lives if they don’t have livelihood. In our country it is not like people have savings and people can work from home for a few months or so. More than 90% of the Indian labour force most of them are paid either daily or weekly wages and they really lead a hand to mouth existence. So if for so many months they do not have incomes that means hunger and otherwise an economic distress. That is why I think the kind of lockdown we had was misplaced for our conditions. We had the most stringent lockdown in the world. In an economy which cannot afford it, without even

THE PRESSURE OF WORK ON ALL WOMEN CADRES LIKE FRONTLINE HEALTHWORKERS, ASHA AND ANGANWADI WORKERS IS INCREASING DUE TO COVID19 . THEY ARE INVOLVED IN CONTACT TRACING, BRINGING PEOPLE TO THE HEALTH SYSTEM ETC. THEY ARE POORLY PAID AND HAVE POOR WORKING CONDITIONS

preparing for the kind of protection mechanism that needed to have been in place. This lockdown would have made sense if those six weeks were used to improve the health capacity and put in place mechanisms to slowdown the spread of the disease. Therefore we really need to move ahead from this debate. The question for us is how we will allow livelihoods to continue while ensuring that the infection spread is slowed down and that people who get infected can access healthcare. That is how we need to pose the question.

Delhi were most affected initially. But now with migrants going back, there is spread of virus to newer states. Physical distancing, we have to recognize that it is not something that can be equally practiced and that is not because of anything else other than it not being possible. In slums, they stay in congested houses 10x10m rooms and use common toilets. We have to think about what physical distancing would mean in this context. We could avoid crowding in places like malls and schools. But even in the day to day lives of so many people, physical distancing is not possible. Along with physical distancing, we should focus on other measures as well. Which is to ensure hygiene, particularly hand washing and providing masks. This again requires infrastructure and support. Even though we may not be able to provide larger living spaces to people in slums, arrangements can be made so that there is water supply, soap and masks are available.

The recent ICMR report stated that India’s peek is likely to occur in MidNovember. This would necessitate the adherence to physical distancing measures for a longer period. How do you think this will affect the vulnerable population who cannot afford physical distancing?

Soaps could be distributed through public distribution system. There was a video that showed that in Kerala auto rickshaws had hand washing systems installed in it. All slums should have public places where people can wash their hands. Bus stops should have places where you can wash your hands. We also have to provide mask and sensitise people to wear it because now the WHO and GOI is saying that masks are helpful. Of course all this should be done along with this physical distancing, but the viability is limited given the living conditions.

DS: I am not an epidemiologist. So I don’t know about the data and the ICMR data which says the peak will come in November has not been owned up by ICMR. But I know that the peak has not come yet and the peak is not going to come at the same time across the county. The infection started at different times in different countries and States and infection soared quickly in states which had a higher number of people coming from abroad. Therefore Maharashtra,

There should be continuous circulation of messages without stigmatising people who are infected or are potentially infected. Currently in this environment of fear we can also see a lot of stigma. It is as if anybody who has Covid is to be blamed because they did not take enough care. We have to understand that the disease has progressed and it is coming from places that you don’t know. SEASONAL MAGAZINE

WHEN DR. PC THOMAS, FOUNDER AND PRINCIPAL OF GOOD SHEPHERD INTERNATIONAL SCHOOL OF OOTY PASSED AWAY FOR HIS HEAVENLY ABODE, HE IS NOT JUST LEAVING BEHIND HIS LEGACY OF BUILDING ONE OF THE FINEST INTERNATIONAL SCHOOLS IN INDIA FROM SCRATCH. IT IS SURELY AN INDOMITABLE LEGACY THAT TRANSFORMED HIMSELF FROM A HUMBLE SCHOOL TEACHER TO ONE OF THE MOST RESPECTED EDUCATIONALISTS IN THE COUNTRY, BUT WHAT HE LEAVES BEHIND IS A FORMIDABLE TRAJECTORY THAT HE NOT JUST SET FOR THE SCHOOL, BUT ONE IN WHICH HE LED THE SCHOOL TILL HIS LAST BREATH, TO REACH AMAZING HEIGHTS. BUT LIKE ALL GREAT VISIONARIES, HE WAS NOT ONE TO REST ON HIS LAURELS, AND OUTLINED HIS FINAL AMBITION FOR GOOD SHEPHERD INTERNATIONAL SCHOOL, WHEN SEASONAL MAGAZINE INTERVIEWED HIM IN DEPTH A FEW QUARTERS BACK.

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Well before that itself, he had led Good Shepherd International School to a Top10 International School of India. But this pioneering educationalist’s vision was to make GSIS to be Asia’s top ranked school and one among the world’s top10 schools. But at the same time, he made it clear that he was not willing to make any ideological compromises to achieve his lofty objective. For example, Dr. Thomas was not willing to branch out to India’s bigger metro cities, to ramp up admissions multi-fold. One fine school was enough, he told us. Again, he was not willing to compromise on the issue of allowing day scholars in the school. As a veteran teacher who had worked in various kinds of schools, even as the headteacher, he understood the value of inculcating discipline in his students. His clear view was that a school can be for day scholars or for residential students, but not for both. Mixing both would be worst for discipline, he had told us. Even

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students who were residents of Ooty had to be residential at GSIS and to drive home that point to all, Dr. Thomas and his pillar of strength, wife Elsamma Thomas, made their kids Jacob and Julie to be residential students at GSIS. Elsamma, daughter of renowned Malayalam film actor Jose Prakash, has been heading Good Shepherd Finishing School, while Julie is now in the top management of GSIS. Forget such ideological compromises, Dr. Thomas was not even willing to compromise on any aspect of quality living for his students. For his students to get the healthiest food, he created the school’s own organic farm for sourcing unpolluted vegetables, a cattle farm of 450 cows for the milk, and a poultry farm with 50,000 birds for the eggs and meat! Coupled with such quality of living initiatives was his penchant for breaking new ground in cutting-edge academics as well as sporting prowess. The school was the first in India to install

a state-of-the-art 3D Printer for enabling next-generation student projects and startups, at a time even renowned engineering colleges didn’t have a 3D Printer, and even now most colleges don’t have one. The twin campuses at Ooty are spread over 180 acres, and have extensive sporting facilities, but Dr. Thomas also encouraged students to visit slums and teach English to economically weaker students. A wellknown humanitarian and philanthropist, Dr. Thomas was also a Rotary Governor. Under the aegis of Rotary and Dr. PC Thomas Foundation, he was actively involved in tsunami relief and rescue, which attracted wide attention. Ask any 14 year old what he or she wants to become, and the answer would be inventor, scientist, engineer, doctor, researcher and those kinds of aspirational roles in our society. Only a very few would tell about an ambition to be a teacher, as at 14 years, most would be fed up with studies, teachers

and schools. And almost none would answer this question like this – “I want to run a great school.” Yet, this is what a 14 year old Keralite boy answered to this question, decades back. Almost all his friends laughed at his ambition. But young PC Thomas, hailing from Ettumanoor in Kerala, was determined enough to see his dream through. He started his career as a teacher at Loyola Public School of Trivandrum, then shifted to Sainik School there itself, and later became the Principal of a 150 year old international school in the hill station of Ooty, in Kerala’s neighbouring state of Tamil Nadu. While serving there, young Thomas decided to act on his ambition to start a fine school of his own. But he didn’t have a lot of money to buy land and build a campus.

including equestrian with 30 thoroughbred horses, polo ground, golf course, swimming pools, grounds for all popular outdoor sports including a cricket ground, which is the highest cricket ground, not just in India, but in the whole world! Now, under the visionary guidance of Dr. PC Thomas, GSIS is expanding its bigger Palada campus with an additional 4 lakh sq ft of construction for housing new worldclass cubicle based hostels and a new Indoor Sports Complex where all students can play simultaneously!

engineers and entrepreneurs in USA, India and elsewhere are GSIS alumni. GSIS was the first school in India to install a state-of-the-art 3D Printer and a Design Technology Lab which give its students a head start in designing, innovating and inventing. With such initiatives it is no wonder that over 35 renowned universities from across the world come to GSIS every year to invite students to their institutions for higher studies. Dr. Thomas next aim is to make GSIS the very best in Asia and one of the Top-10 schools in the world. SEASONAL MAGAZINE IN CONVERSATION WITH DR. PC THOMAS, FOUNDER, GOOD SHEPHERD INTERNATIONAL SCHOOL, OOTY.

Today, this is known as the Baroda Palace Campus of the Good Shepherd International School. 44 long years have passed since then. GSIS has grown from strength to strength, branching out from the original ICSE syllabus to the more international IGCSE and IB curricula. A fully residential school, the integrated nature of GSIS would stun anyone as the campus is fully self-sufficient with its own organic farm for sourcing unpolluted vegetables for students, a cattle farm of 450 cows for the milk needed by students and a poultry farm with 50,000 birds for the eggs and meat!

Dr. Thomas is a visionary edupreneur who dreams and executes larger-thanlife visions like how he sends 50 of his students each year to NASA for their renowned Space Camp program. Yet, Dr. Thomas is particular that his students have their feet planted firmly in the ground realities of India, and inspires them to do a lot of charitable and relief works for the afflicted and the downtrodden segments of the society. A firm disciplinarian, Thomas has brushed aside all temptations to diversify the Good Shepherd brand to start international schools in India’s metro cities or to admit day scholars or to get into related fields like higher education. Unlike most of his peers, he is a firm believer of quality over quantity. Says, Dr. Thomas, “My professional ambition was to build just one fine school in all respects, not to be the largest or fastest growing school chain. Schools are not saloons or parlours to be replicated fast.”

GSIS is also renowned for having the most extensive sporting facilities

He derives his satisfaction from the fact that some of the finest surgeons,

One day in those days he came across an advertisement by the erstwhile King of Baroda to sell off the famous Baroda Palace at Ooty. Thomas had no hope of getting the property as many buyers were there to buy the prestigious property at sky high prices. Yet, he met the Maharajah and conveyed to him his need for a ready campus and building to create a noble institution in education. Much to his surprise, the King agreed and conveyed to all other bidders his decision to hand over the land and palace to PC Thomas at a much lesser rate than the prevailing market rate.

You have a vision for making GSIS one of the Top-10 schools in the world, and Asia’s best. What have been your initiatives in this regard, and how far do you think GSIS has progressed in this direction? As you know, excellence in schooling is driven by mainly two factors, one is the infrastructure or facilities, and the other is the quality of teaching as well as learning. For long, Good Shepherd International School has been running on two campuses – the Baroda Palace campus for the lower grades and the newer Palada campus for the higher classes. Now, we think we need better integration and are planning to shift all the activities to the Palada campus. We already have enough classrooms at Palada for this integration, but I want more supporting facilities to be built. Towards this, we are constructing 4 lakh SEASONAL MAGAZINE

sqft of additional space at Palada. This will enable GSIS to have additional facilities for students, main of which is that each student will have his or her own cubicle rather than a dormitory to study and sleep in privacy. Research also shows that students learn better when they play better. So, the additional construction also houses a new Indoor Sports Complex catering to most sports. GSIS is already a leader in sporting facilities, but this one is so huge that all students can play indoors even if there is unexpected rain or adverse weather. We are also building a new hospital, in addition to the one we already have.So, altogether, the campus is being upgraded to a world-class facility. Some of these buildings are already ready, but we will wait for the full construction to be completed by 2020 before shifting the classes at Baroda Palace campus to the expanded Palada campus. You mentioned the quality of the teaching and learning processes. How is GSIS implementing this? The very best schools in the world have only 15 students per class. This ensures that each student gets individual attention from the teacher and ensures better teaching/learning outcomes. At GSIS, we are very close to this gold standard, with less than 20 students per class. Very few schools in India have such a facility. Secondly, many schools canâ&#x20AC;&#x2122;t afford the kind of highly educated, specialist teachers for advanced subjects. But we employ such teachers too for the benefit of our students. Is Good Shepherd International School, a fully residential campus? Absolutely. Even if a student is a resident of Ooty, we will not allow him or her as a day scholar. There are no exceptions to this rule. Even my grandchildren studying here are boarders. This is because, in my own long experience, mixing day scholars and boarders in one school is the worst thing we can do to destroy the discipline in a campus. Many international schools in the metro cities have learned this the hard way. Instead, we strive to be a true home away from SEASONAL MAGAZINE

home for all our students. This is a fully integrated campus with all facilities. We are also very holistic and self-sufficient in sourcing the highest quality food. Towards this, we run our own organic farm which supplies all the fresh vegetables we need. We have 450 cows for sourcing pure milk for our students. Our poultry farm has 50,000 birds for the best quality eggs and meat. You have been following innovative programs like sending 50 of your students every year to NASA for a visit. What led to this, and can you explain the relevance and positive outcomes from this long-running program? I have been a leader at Rotary for long, in various capacities, and used to visit USA. On one such visit, some Rotary friends there took me to Huntsville in Alabama which is a major center for NASA. We visited the US Space & Rocket Center (USSRC), which is a sprawling museum, set up by the state of Alabama with the support of NASA and US Army Missile Command. USSRC is the worldâ&#x20AC;&#x2122;s largest spaceflight museum and carries original and uniquely valued exhibits like the hardware used for the first moon landing. When the authorities there came to know that I run a school, they offered to welcome our students for annual visits. USSRC has been running the renowned Space Camp programs with advanced simulators, for students, and that is how these study trips of GSIS to USA started. Every year we send around 50 students, and in one year we sent 62 of our kids. Usually we send students from grades 6 to 11, since grades 10 and 12 will be busy with their board exams. There are four programs at Space Camp suitable for different age groups and a few of our students have even attended all the four programs. This has been a life changing experience for the participating students as they get to experience the most challenging real world applications of the science and maths they study. Inspired from these tours, some of these students have went on to study subjects like aeronautics, space research etc. We have been

sending our students to this US facility for more than 10 years now, and I have also been appointed as an ambassador for the program who can recommend students from other schools for the program. While in America, we also take our students to other renowned landmarks like Universal Studios etc. For around Rs. 4 lakhs cost per student, which is all inclusive, this has been a real inspiration for the participating students. You have been a pioneer in the finishing school activity. How has the GSIS finishing school evolved during the last 5 years to meet the changing college and workplace requirements? We were pioneers in this concept, and this is the 14th year of operation for our finishing school. Our courses are quite unlike what passes off as finishing school courses these days in the metros, which are purely oriented towards winning IT and BPO jobs. Our finishing school on the other hand focuses on all round grooming, personality development and skill development in fields like business English, accounting, fashion designing and French. The finest international or national bodies in these fields like the National Institute of Fashion Technology (NIFT) come and administer the relevant professional tests here. We also have different tenures like two month summer courses to nine-month programs. This is not for our regular students, but for students who have studied in other schools. Girls enrol here after plus-two, graduation or even post-graduation. All our finishing school courses are also fully residential. Going beyond smaller objectives like winning a job, our finishing school equips ladies to start their own firms like boutiques etc. My wife and partner, Elsamma is in charge of the finishing school. Some time back, GSIS became the first school in India to procure a 3D Printer. How has it helped the aspiring students with their projects, and what all have been you more recent procurements or initiatives to make your students abreast with the latest technologies?

GSIS has design classes from grade 7 onward. We have a good Design Technology Lab in which this 3D Printer is the main attraction. We got it imported from abroad at a high cost and it has been working excellently, proving to be of much use to our students who are interested in design. We were the first school in India to install this, and even now most premium schools and even renowned engineering colleges donâ&#x20AC;&#x2122;t have it. Apart from the high cost, it also requires highly qualified faculty like the teachers we have employed in our lab. The Design Technology Lab and the 3D Printer are great aids to those students who have the flair for design, architecture, engineering, modelling, graphic design, biomedical engineering and several such buzzing fields. The 3D Printer enables the students to build and test rapid prototypes. Since the equipment is still very rare, we also get student visitors from other schools and colleges. Being an international school, which are the world bodies that accredit your courses, or with whom you are affiliated? We have several affiliations and accreditations, among which I will mention just two here. GSIS is accredited with the New England Association of Schools and Colleges (NEASC), which is a United States based accreditation association providing educational accreditation for all levels of education, from pre-kindergarten to the doctoral level. NEASC serves over 2,000 public and independent schools, technical/career institutions, colleges and universities in the six New England states, plus International Schools in more than 65 nations worldwide. Founded in 1885, NEASC is perhaps the oldest and most prestigious accreditation bodies based in USA. GSIS is also affiliated to Council of International Schools (CIS) which includes more than 1300 premium institutions comprising of 738 schools and 583 colleges and universities across 116 countries. With the advent of nuclear families SEASONAL MAGAZINE

and further with parents working thousands of miles away from each other, there has been an increasing trend to send even pre-schoolers to boarding schools. What are GSIS initiatives to ensure a home away from home for such tiny tots? Yes, there is such a trend which is driven by a real social need. We see these doctor couples, often working in different cities, in overnight shifts etc and these situations happen both in India as well as abroad. We too used to have LKG and UKG classes. But being a fully residential school, we have realized that this is not the way to go. Without doubt, young children need to be with their parents. That is much needed for their proper development. Keeping this in mind, we have already stopped KG classes, and gradually we are phasing out even grades 1 to 3. By 2020, we will have only grades 4 to 12 at GSIS. GSIS has been famous for its sporting facilities including equestrian, polo and golf. What all have been your latest initiatives in this regard? Yes, we already have one of the largest sports facilities among all schools in India. And as I told you a while back, we are now constructing a huge indoor sports complex. A new synthetic track is also being made. Our last completed project was a full-sized cricket ground, which happens to be the highest cricket ground in the world. As such it is also useful for high altitude training activities for sportsmen. While GSIS and its locale of Ooty have been greatly synergistic so far, considering the new scale of activities and growth in India’s biggest metros, do you have plans to start campuses in such cities? We won’t do that ever. We are running an excellent school and that is enough for me. Education is not a business like saloons or parlours which can be replicated fast. In fact, due to our success and the brand image, we have many offers to start GSIS institutions at various big cities. Many people are coming with franchise arrangements too. But we are SEASONAL MAGAZINE

not open to any such arrangements. At the end of the day, we should have professional satisfaction. For that, the way to go is run this one school with full dedication and excellence.

Start-ups have been changing the face of business across the world and even in India. What are GSIS’ initiatives in facilitating start-up activities in the campus?

Does GSIS promote an alumni network, and can you share the achievements of some of your greatest performers in the corporate and social entrepreneurship sector?

GSIS, as well as all our teachers, provide all support to promote student start-ups. In fact, our Design Technology Lab with its 3D Printer is great at fostering inventions and innovations. We also see a lot of our alumni working in prestigious MNCs for a while, and then starting out on their own ventures, and some of them have become very successful. It goes on to reveal the kind of courage and independence we have fostered in them from the young age.

Absolutely. We have a great alumni network, that too across the world. You will be surprised to know that many major US cities have a GSIS alumni group. At least 50 of our students would be there. They keep in touch with each other and meet together occasionally. Our students have went on to become some of the best surgeons in USA as well as best engineers in companies like Microsoft etc. We, on our part, run a website for alumni to register and network with each other, as well as hold a mega annual event for alumni in April of every year. Dates are fixed one year in advance and invitations sent early, so that our former students can come from places as far as North America, Europe, Australia etc. All get inspired by the warm stories that get shared in these annual events.

For many years now, GSIS has been having the three curricula of IB, IGCSE and ICSE. How far have these syllabi evolved during recent years, and what would be the approximate students strengths under each syllabus? We started off with ICSE, 42 years back, and for many years of our existence we were only an ICSE school. Then I personally visited Cambridge in UK for discussions regarding IGCSE and that is how this second curriculum came into being here. Growth wise, in recent

years, the number of ICSE students have been dropping and the number of IGCSE students have been steadily increasing with students from the major metros especially Mumbai, Delhi, Bengaluru, Chennai etc preferring it. Demand for ICSE still continues to be strong from students hailing from West Bengal, Bihar and neighbouring states. Now, ICSE students are around 20% of our strength. Regarding IB, its adoption came about after I personally visited Geneva to meet with the IB authorities. We never employ agents or agencies to do these kind of work. IB is perhaps the best syllabus especially for those who have already made up their mind to attend colleges or universities in USA and UK. We offer IB only in grades 11 and 12, so they form only around 120 students. So, the majority of our students are now IGCSE students. How well does GSIS perform in overseas academic placement of your students? You will be surprised to know that admission teams of around 35 universities from USA and across the world visit GSIS campus every year. This is because, our previous generations of students have made their mark in higher studies at these and other universities

like Harvard, other Ivy League universities etc. For the benefit of our students, for them to interact directly and properly with the university authorities, we also conduct an annual exhibition of universities in our campus, and teams from these institutions participate enthusiastically. Our students also get generous scholarships from almost all of these universities. What do you think is the most neglected dimension today in India when it comes to providing highest quality education to our students? Our education sector is performing, but there is no doubt that a lot more can be done. The biggest deficiency is the poor teachers training. Except for in medical education perhaps, the brightest minds are not considering teaching as an option at all. Teaching is often regarded as the last resort job. This is the case in schools as well as colleges, and the plight that engineering colleges face today with lakhs of vacant seats is also due to this extremely deficient quality of teachers. We have an HRD Ministry that oversees these affairs, and I would put the affairs of this ministry as much larger than the Indian Ocean itself. It tries to do everything from kindergarten to doctoral level, and ends up being

unable to do much in any of these domains. This should change, with schools having a separate ministry, colleges having another, professional colleges having yet another etc. We recently celebrated 71 years since Independence, and we have had several Education Commissions, and all their reports are simply gathering dust in some offices. As a veteran, I have read most of these commission reports and they were all outstanding. But none of their recommendations got implemented. The most famous of these, the Kothari Commission, had this poignant warning too, â&#x20AC;&#x153;that the destiny of India will be determined in its classrooms.â&#x20AC;? But, unfortunately, that report too got no attention from the successive policy makers. Your students have attracted attention for visiting slums and teaching English to poorer students. What prompts you to lead in such activities? You see, as a premium school, we get to teach children from affluent homes. And it is so easy for them not to understand the real plight of the downtrodden in this country. That is why you see so many rich young people dress like mad, drive racing cars and get into all kinds of trouble. But you will never find a GSIS student with such insensitive behaviour. Because, I have always personally believed that it is extremely important to look after the downtrodden and help them in all ways possible. I have inculcated these values into each generation of our students and they go all out to help the poor around the school. They visit the slums, teach their kids English, give provisions to them, and even gift them larger items like cots etc. I have given them a free hand to take whatever food items as needed from our stores to give to the poor, even if what they want is 1000 packs of biscuits. Once a poor old lady was crying and blessing our students when they gifted her a cot. We also do a lot of relief work when disasters like Indian ocean tsunami, Chennai floods etc struck. Now, we are also doing the same for those suffering from the Kerala floods. This kind of social participation is much needed if we want our students to grow up as top contributors to our society. SEASONAL MAGAZINE

IDFC FIRST BANK

STARTING TO WITNESS A REVIVAL IN DEMAND

Starting branch business earnestly in areas where lockdown has been lifted, IDFC First Bank is witnessing a pleasantly surprising revival in demand, especially in segments like consumer durables segment. The new age private sector bank has also come out with an excellent set of numbers for Q4 that signal a positive turnaround on year-on-year basis. Thanks to MD & CEO, V Vaidyanathan’s foresight during the lockdown, the bank is also on a strong wicket on the capital side, having raised Rs. 2000 crore through a preferential issue which was subscribed by marquee institutional investors during the lockdown period. Multiple rating agencies have reaffirmed their rating for the bank with a stable outlook, and the stock has recovered over 37% from the late March lows.

IDFC First Bank has reported the first green shoots of growth post the lockdown. The bank which is a noted player in the consumer durables segment, has recently disclosed that it is seeing a revival of demand in this segment in regions where the lockdown has been lifted, like Bengaluru. This is especially important for IDFC First Bank as retail loans accounted for 61% of the loan book and consumer loans comes to 17% of the book. IDFC First bank had recently come out with its Q4 results. The private sector lender formed by the merger of IDFC Bank and the NBFC Capital First made a significant positive turnaround in this last quarter of FY’20.. It reported a net profit of Rs. 72 crore for the quarter ended SEASONAL MAGAZINE

March 31, compared to a loss of Rs. 218 crore a year earlier in the corresponding quarter. The turnaround was holistic as it was led by a 40% rise in net interest income, as well as fees. The asset quality of the new generation bank improved sequentially, with the ratio of gross non-performing assets to advances (GNPA) at 2.60%, improving from 2.83% in the December quarter. Due to Covid19 concerns, the bank which is known for its conservative and cautious approach, made a provision of Rs. 225 crore, whereas the regulatory requirement was only for Rs. 25 crore. Following the Reserve Bank of India’s order to extend the loan repayment schedule for term loans

V Vaidyanathan, MD & CEO, IDFC

by another three months to 31 August, IDFC First Bank has clarified its status on moratoriums. While it has provided for 100% moratorium for rural financing, overall, the percentage of customers opting for moratorium stands at only 35%.

Soon into the lockdown, when V Vaidyanathan rushed in to raise Rs. 2000 crore as fresh equity from the market, there were people who either thought it was unnecessary or as a move that will result in dilution. But the way things have

Multiple rating agencies including Brickworks and ICRA have reaffirmed their ratings for IDFC First Bank with a stable outlook. The bank has adapted well during the lockdown and post lockdown periods, by launching facilities like Video KYC for customers desiring to open Savings Accounts. The bank is comfortably placed on the capital side and will not be looking to raise further capital for now.

MULTIPLE RATING AGENCIES INCLUDING BRICKWORKS AND ICRA HAVE REAFFIRMED THEIR RATINGS FOR IDFC FIRST BANK WITH A STABLE OUTLOOK. THE BANK HAS ADAPTED WELL DURING THE LOCKDOWN AND POST LOCKDOWN PERIODS, BY LAUNCHING FACILITIES LIKE VIDEO KYC FOR CUSTOMERS DESIRING TO OPEN SAVINGS ACCOUNTS.

unfolded since then, proved that the IDFC MD & CEO was perfectly wise in his decision. In fact, the market trusts his acumen in reading the signals, and that is why the fresh equity raise had strong support from institutional investors as well as key stakeholders. The market knows this is a banking stock that can rebound as and when the lockdown eases and normalcy returns to the banking sector. The already troubled Indian banking sector went in for a further fall recently when the Finance Minister said that debts related to Covid-19 will be excluded from the default category under the Insolvency and Bankruptcy Code (IBC) for a period of up to 1 year. While there are some experts who

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feel that the move is not very useful for companies, as IBC proceedings were already under suspension for one year, the way banking stocks fell showed that it is indeed a negative move for the banking sector. It is clear that there is more to read in the fine print, and one clue might be that the Finance Minister also said that the minimum threshold to initiate insolvency proceedings has been raised to Rs 1 crore from Rs 1 lakh. The move is supposed to protect the smallest of micro, small and medium enterprises (MSMEs), from insolvency proceedings. While nobody will dispute the fact that Covid-19 related debts, especially in the MSME sector, should be considered sympathetically, what this government move to protect the sector will entail is that the individual banks have no much say in segregating between genuine MSMEs and fraudulent companies that may use it as an escape route. Another reason is that, this 1 year moratorium will just postpone the

BUT THE MAIN THING HERE IS THAT V VAIDYANATHAN HAS THE KNACK TO EXPECT SETBACKS AND ACT WELL AHEAD IN TIME. IN ANOTHER INSTANCE, IDFC FIRST BANK’S POLICIES FOR ATTRACTING DEPOSITS HAVE KEPT IT IN GOOD STEAD IN THESE TROUBLED TIMES. RECENT FIGURES SHOW THAT DUE TO THE UNCERTAINTIES AND RISKS WITH STOCKS AND MUTUAL FUNDS, INVESTORS ARE MAKING A BEELINE FOR BANK DEPOSITS, ESPECIALLY TO THOSE BANKS THAT OFFER THE BEST RATES.

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pain for banks. These must be the reasons why banking stocks reacted badly to the recent move by the government. But the main thing here is that V Vaidyanathan has the knack to expect setbacks and act well ahead in time. In another instance, IDFC First Bank’s policies for attracting deposits have kept it in good stead in these troubled times. Recent figures show that due to the uncertainties and risks with stocks and mutual funds, investors are making a beeline for bank deposits, especially to those banks that offer the best rates. And IDFC First Bank, with its 7.25% interest rate across tenors, is one among the top-five

banks in offering higher interest rates. Such policies have ensured that the bank’s CASA deposit has grown by 157%. Before Covid-19 struck and disrupted all sectors, including banking, IDFC First Bank has also been growing its retail loan book admirably. The private sector lender, which was formed by the merger of IDFC Bank and Capital First, has a loan book that has two streams – the legacy infrastructure loans that basically came in from IDFC Bank, and the newer retail loan business that the combined entity has been pursuing. During the past year, the bank could grow its retail loan book by an impressive 30%. The bank’s stated aim is to grow this retail book to a dominant position and phase out the legacy loan book gradually. Before the lockdown came, this seemed achievable by IDFC First Bank, given how well its retail loan unit

had performed over the last year, and even before it as the NBFC, Capital First. While Covid-19 and the resultant lockdown has thrown most banks into disarray, there is a high chance that IDFC First Bank would be among the first few banks to rebound in lending activity, due to a particular expertise. The mainstay of its retail loan book as well as of its former avatar Capital First, has been MSME loans. Since this sector has been one of the hardest hit in the lockdown, government support to revive it too has been to the maximum extent, with the government facilitating a package of Rs. 3 lakh crore as additional debt for MSMEs. The government is also extending credit guarantees for all eligible MSME loans. And when that growth phase kicks in shortly, IDFC First Bank would be one of the most ready banks to tap into it. And even if it takes more time than expected, the recent equity raise of Rs. 2000 crore would serve to meet any contingency arising from Covid-19.

The bank’s Rs. 2000 crore equity raise was subscribed by two of its major stakeholders, IDFC and Warburg Pincus, which also served to maintain their stakes in the bank at the previous level. While the main promoter IDFC invested Rs. 800 crore, the US based private equity giant Warburg Pincus invested Rs. 200 crore. The other half of the issue was subscribed by noted institutional investors, ICICI Prudential Life Insurance which invested Rs 600 crore, and HDFC Life Insurance and Bajaj Life Insurance which invested Rs. 200 crore each. The bank is also likely to be one of the two beneficiaries of a proposed scheme by Reserve Bank of India (RBI) to adopt a differentiated strategy to implement a holding company structure for banks. Banks that do not have subsidiaries in insurance, asset management, and broking may be exempted from having a non-operative financial holding company (NOFHC), which had proven to be a hassle for many of the newer banks.

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MANAPPURAM FINANCE

MANAPPURAMâ&#x20AC;&#x2122;S GOLD LOANS TO REBOUND POST LOCKDOWN? Non Banking Finance Companies (NBFCs), together with banks, tend to do well during economic booms when credit growth is high. But NBFCs focusing on gold loans, like Manappuram Finance, have historically done even better during difficult periods for the economy. This is a peculiar strength of the gold loan business that is putting the focus back on players like Manappuram, even in this most difficult period for lenders, due to Covid-19, the extended lockdown and moratorium on loans.

he first reason why gold loan NBFCs like Manappuram performs well during economic stagnation, is about the product itself. Periods of economic difficulties are marked with poor income growth for both individuals and small businesses, but at the same time they have to keep meeting their essential requirements. The normal way out for individuals and small businesses then is to take a personal loan or small business loan to stay afloat. However, this is the same time when reluctance to lend is maximum from most banks and NBFCs. This is understandable, as by the time individuals and small businesses apply for fresh or add-on loans, banks and NBFCs would be stressed out the maximum as repayments from their larger accounts like corporate, MSME and home loans would be getting defaulted. They would have no risk appetite to take on further unsecured credit like personal loans or small business loans. This is where a secured loan product like loan-against-gold, commonly called as gold loan, excels. Most households and small business SEASONAL MAGAZINE

owners in India have some personal gold holding as jewellery and they resort to monetize it through gold loans. Even stressed banks and NBFCs have no issue in offering gold loans, as it is fully secured with a pledge of the customer’s gold. That is why even some public sector banks have started dedicated gold loan verticals during this lockdown period. In other words, gold loan is a unique and preferred product in stressed times by both borrowers and lenders. But if many entities offer gold loan, won’t this be a crowded market? Theoretically yes, but there are other considerations. Dedicated gold loan companies like Manappuram have a distinct edge in this business due to various reasons. Gold loans are offered by everyone from local moneylenders to large private and public sector banks. Gold loans from local moneylenders tend to be the costliest and least secure for borrowers, as these lenders in the unorganized sector are basically loan sharks. At the other end of the spectrum, gold loans from PSU banks tend to be the cheapest for borrowers, but come with many hassles. For instance, many public and private banks prefer to give gold loans only to their depositors, and even for such customers it is a time-consuming process as most banks don’t have dedicated staff to handle gold loans at the branches. Between these two extremes, dedicated gold loan companies like

Manappuram Finance offer the optimum experience. As organized players regulated by Reserve Bank of India (RBI), they offer competitive interest rates, high security and above all, lightning fast disbursals for customers. This explains the high growth experienced by gold loan companies, especially during the last two decades. A pressing question , however, is whether the current crisis due to Covid-19 and the extended lockdown is similar in impact with earlier crises like demonetization and the global financial crisis of last decade. While Covid-19 is definitely more serious than earlier crises, it has also unleashed one of the most favorable conditions for the growth of gold loan companies, which is the soaring gold price. As most other asset classes fell due to the crisis, global funds kept on buying gold as the only secure investment option. Obviously, better gold prices translate to higher loans, and it has always been one of the clearest markers for the growth of gold loan companies. For dedicated players like Manappuram, it offers an added advantage as they have open credit lines with most of their small business customers, who can avail additional loans from the existing gold pledges due to the higher prices now. A second question with regard to the uniqueness of the Covid-19 crisis is how the government ordered moratorium on loan repayments would affect Manappuram. But here

too, the firm has witnessed a huge strength with over 90% of its gold loan customers not opting for moratorium. One reason for this is that the pledged gold is almost 100% made up of personal jewellery of the household, and most customers care deeply about it and would like to conclude the loan as planned to redeem the jewellery which has high sentimental value, and now more real value too as gold price is appreciating. The foresight of Manappuram’s MD & CEO, VP Nandakumar during the good times has also come to the rescue of the firm during these difficult times for NBFCs. The firm has been an early mover and leader in offering online gold loans that disburse and collect EMIs digitally. During the ongoing lockdown, the firm could disburse over Rs. 300 crore digitally. Manappuram's profit after tax grew 43% year-on-year (YoY) at Rs. 392.7 crore in the quarter ended March, compared to Rs. 274.6 crore in same period last fiscal. Total income rose 38.7% to Rs. 1618.2 crore in Q4, against Rs. 1,166.5 crore in the yearago period. The business is quite secure too for gold loan companies like Manappuram which have followed a prudent Loan-to-Value (LTV) ratio. LTV denotes what percentage of the pledged gold’s value is offered as loan. While RBI allows an LTV of 75% on gold loans, Manappuram’s average LTV is only around 60% or lesser, which provides enough security in case gold prices correct. SEASONAL MAGAZINE

DETAILS EMERGE ON HOW DEEPLY LOCKDOWN IS HURTING THE ECONOMY

down as per the latest rules announced; several restrictions in 'red zones' will hamper backward and forward supply chains; and the large disruption in labour with many employees returning home to rural India may create manpower issues," she added.

INDIA’S MANUFACTURING ACTIVITY SLUMPED TO A RECORD LOW IN APRIL AS BUSINESS ACTIVITIES CAME TO A NEAR STANDSTILL AFTER THE CENTRE IMPOSED A NATIONWIDE LOCKDOWN ON 25 MARCH TO CONTAIN THE SPREAD OF COVID-19, A PRIVATE SURVEY SHOWED. he Nikkei manufacturing Purchasing Managers’ Index (PMI) for India declined to 27.4 in April from 51.8 in March, recording the sharpest deterioration in business conditions since data analytics firm IHS Markit began recording data 15 years ago. A figure of above 50 indicates expansion, while a sub-50 print signals contraction. The survey by IHS Markit tracks new orders, output, jobs, suppliers’ delivery time, and stocks of purchases for around 400 manufacturers. The decline in operating conditions was partially driven by an unprecedented contraction in output. “Amid widespread business closures, demand conditions were severely hampered in April. New orders fell for the first time in two-and-a-half years and at the sharpest rate in the survey's history, far outpacing that seen during the global financial crisis," IHS Markit said. "In the latest survey period, record contractions in output, new orders and employment pointed to a severe deterioration in demand conditions.

Meanwhile, there was evidence of unprecedented supply-side disruption, with input delivery times lengthening to the greatest extent since data collection began in March 2005," Eliot Kerr, an economist at IHS Markit, said. Total new business received little support from international markets in April, as new export orders tumbled. Deteriorating demand conditions saw manufacturers drastically cut back staff numbers in April. The reduction in employment was the quickest in the survey's history. The only silver lining was that the 12-month ahead future output index recovered from its March lows, and was well above the 50 mark, though markedly lower than the longterm-average. Pranjul Bhandari, chief India economist at HSBC, said with partial easing of the lockdown from Monday, she expects economic activity to pick up, led by postponed consumption and inventory restocking demand. “As such, the April reading is likely to mark the bottom of the PMI series. Yet, the recovery could be shallow and shortlived given we expect 50% of the economy will continue to be locked

India has extended its countrywide lockdown by another two weeks until 17 May, taking the lockdown period to eight weeks. Lockdown restrictions for restarting economic activities have been substantially relaxed especially for the green and orange zones with no or low incidences of coronavirus cases. However, with the substantial disruption in economic activity, many economists now project India’s gross domestic product to contract in FY21. Standard Chartered Bank recently slashed its growth forecast for India to a contraction of 2% from a growth of 0.7% projected earlier, holding that the two-week extension in lockdown will be a significant drag on growth. “The top 10 states in terms of GDP, which together contribute 70% of India’s GDP, have 35% of their districts categorised as ‘red zones’ (areas with high infection rates), on average. Most of the lockdown relaxations are not applicable in these areas," said Anubhuti Sahay Head, South Asia Economic Research at Standard Chartered Bank. Given that industrialised states have a high proportion of red zones, and their infection rates have yet to show signs of deceleration, economic activity is likely to resume at a very gradual pace even after 17 May. Against this backdrop, Standard Chartered Bank believes economic activity will take much longer to return to normal levels, she added. SEASONAL MAGAZINE

Islamophobic Posts Invite Trouble for Some Indians in UAE Around eight Indians have landed in trouble in recent weeks for their reported Islamophobic social media posts.

THREE MORE INDIAN EXPATRIATES IN THE UNITED ARAB EMIRATES HAVE BEEN SACKED OR SUSPENDED FROM THEIR JOBS FOR ISLAMOPHOBIC SOCIAL MEDIA POSTS DAYS AFTER THE INDIAN AMBASSADOR TO THE EMIRATE PAVAN KAPOOR WARNED INDIANS THERE AGAINST PUTTING OUT SUCH POSTS ON SOCIAL MEDIA, A NEWS REPORT SAID ON SATURDAY. he three now join nearly half a dozen others who have similarly landed in trouble in recent weeks for their reported Islamophobic social media posts. A spokesperson for Azadea Group that operates Eataly, a chain of high-end Italian restaurants in Dubai, confirmed that Rawat Rohit who was employed with them as a chef has been suspended and is facing a disciplinary probe. In another incident, the Sharjah-based Pneumics Automation said they had suspended their storekeeper Sachin Kinnigoli until further notice. “We have withheld his salary and told him not to come to work. The matter is under

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investigation. We have a zero tolerance policy. Anyone found guilty of insulting or showing contempt for someone’s religion will have to bear the consequences," the firm’s unnamed owner was quoted as saying. Similarly, Dubai-based Transguard Group said they have cracked down on an employee who had posted several anti-Islamic messages on his Facebook page under the name of Vishal Thakur. “Following an internal investigation, the actual identify of this employee was verified and he was stripped of his security credentials, terminated from our employment and handed over to the relevant authorities as per company policy and UAE Cybercrime Law. As of this statement, he is in the custody of Dubai Police," a Transguard spokesperson said in a statement. The latest sackings and suspensions come days after both the former and current Indian Ambassadors to the UAE cautioned their countrymen about the UAE’s strict hate speech laws. Similar warnings were issued by missions in other GCC countries. Indian ambassador to the UAE, Pavan Kapoor in a Twitter post had said that “discrimination was against India's moral fabric" and warned citizens that India and the UAE valued non-discrimination. He also retweeted another post by Prime Minister Narendra Modi that said covid-19 doesn’t “see race, religion, colour, caste, creed, language or borders before striking." The UAE outlaws all religious or racial discrimination under a legislation passed in 2015. Former Indian ambassador Navdeep Suri had also cautioned Indians about the UAE’s hate speech laws and similar warnings have been issued by Indian missions in other Gulf Cooperation Council states.

CREATE A 'LICENSE' TO LET ETAILERS LIKE AMAZON SELL ALCOHOL: LIQUOR BODY TO GOVT

IS NOT HAVING AAROGYA SETU APP A PUNISHABLE OFFENCE?

The liquor industry, restaurants and food aggregators have urged the government to permit home delivery of alcohol. All India Brewers' Association suggested creating a "special license" for e-commerce firms like Amazon and food delivery firms like Zomato and Swiggy to sell liquor from licensed retailers. It also mooted creating an online liquor ordering platform, owned by state excise departments.

GOVT'S FINANCIAL STIMULUS NOT ENOUGH, FISCAL DEFICIT MAY RISE TO 14%: EX-RBI GUV

es, not having Aarogya Setu app is a punishable offence, says Noida police. Those living in the district, which includes Noida and Greater Noida, as well as those entering from outside, need to have the app installed on their smartphones, according to an order circulated recently. Those living in the district, which includes Noida and Greater Noida, as well as those entering from outside, need to have the app installed on their smartphones, according to an order circulated on the night of May 3 and in force from the following day. “All those with smartphones who do not have the application can be booked under Section 188 of the IPC (disobedience to an order duly promulgated by a public servant). After that, a judicial magistrate will decide if the person will be tried, fined or let off with a warning,” said Akhilesh Kumar, DCP, Law and Order. “If people download it instantly, we will

let them go. We are doing this so people take the order seriously and download it. But if they do not download it after repeated warnings, we will have to take action,” said Kumar.

Former RBI Governor Duvvuri Subbarao said the financial stimulus of ?1.7 lakh crore announced by the government on March 26 on account of lockdown "isn't sufficient". He said the government needs to spend more and cap its borrowing. Subbarao added the combined fiscal deficit of Centre and states this year as budgeted is 6.5% of GDP, but would reach 13-14%.

In case someone does not have mobile data, he said, “we will give them hotspot so they can download it there and then”. And if there are other issues such as lack of phone storage, the officer said they will take the person’s number and call to check whether they have downloaded the app. Gautam Budh Nagar Police Commissioner Alok Singh said, “Checks will be conducted at borders and checkposts at random.” Police will also check for implementation when they are out on patrol duty. “If a person does not have a smartphone, they will be asked to get one or fetch it from their homes,” said Singh. “Who does not have a smartphone these days? People may say that they do not have their phones or that their phones are switched off, but we cannot make any exceptions.”

FACEBOOK OVERSIGHT BOARD MAY TAKE UP CASES ON ITS OWN, SAYS ONLY INDIA MEMBER Facebook's newly constituted Oversight Board may take up some cases on its own to decide whether certain content should stay on its platforms, said the board's only Indian member Sudhir Krishnaswamy. Cases would revolve around 5-6 categories, including hate speech and nudity. Additionally, content-moderation team may refer a case to the board or users may bring up cases, Krishnaswamy added. SEASONAL MAGAZINE

WHY IS WARREN BUFFETT SELLING SELECTIVELY AND BUYING NOTHING BERKSHIRE’S EARNINGS RELEASED RECENTLY SUGGESTED THAT AN OTHERWISE JUBILANT BUFFETT, WIDELY FOLLOWED BY INVESTORS THE WORLD OVER, DID NOT BUY STOCKS IN MARCH QUARTER. HIS COMPANY, IN FACT, SOLD $6.1 BILLION STOCKS IN APRIL AND ADDED TO THE ALREADY HUGE $137 BILLION CASH PILE AND ALSO TO GOVERNMENT TREASURY HOLDINGS.

uffett’s speech, delivered online, made two-three prominent points. He does not see deep value in the market even after the recent crash. He is concerned because, he is unable to gauge the pandemic risk. But he feels that one should keep owning shares of companies that one knows better and sell stocks of companies where fundamental impact of the pandemic is difficult to gauge. Buffett was once a staunch opponent of aviation stocks. Later in 2016, he changed his stance and bought shares in four American airlines. But the Sage of Omaha now says his company has dumped all the airlines stocks recently, even at losses. Berkshire had an 11 per cent stake in Delta Air Lines, 10 per cent in Southwest Airlines, 10 per cent in American Airlines and 9 per cent of United Airlines SEASONAL MAGAZINE

as of December 31. “The airline business changed in a very major way. The future is much less clear to me about how the business will turn out. The world changed for airlines, and I wish them well, but it's one of the businesses we own directly that are going to be hurt.” Berkshire saw $68.48 billion erosion in the value of shares the company held as of March 31. But it largely included unrealised losses. The Buffet company did not sell shares substantially. This is even as the portfolio suffered a 27 per cent hit compared with a 20 per cent fall in the S&P500 index during the same period. Buffett does not see deep value BUFFETT WAS ONCE A STAUNCH OPPONENT OF AVIATION STOCKS. LATER IN 2016, HE CHANGED HIS STANCE AND BOUGHT SHARES IN FOUR AMERICAN AIRLINES.

emerging in the US market. He feels the recent fall does not factor in unknown risks associated with the pandemic, and so, he has stayed on the sidelines. “You do not want to get yourself in a position where those interruptions can affect you either because you're leveraged or because you're psychologically unable to handle, looking at a bunch of numbers.” he said. But then why isn't he selling more? Buffett gave the example of a farmer whose neighbour offered him $2,000 for an acre of land he owns. A day later, the same friend offers the farmer $1,200 for the same piece of land. A day after, this friend of farmer cuts the offer price to $800 per acre. “Are you going to let this guy drive you into thinking I better sell because this number keeps coming in lower all the time? It's a very important matter to bring the right psychological approach to owning stocks,” Buffett said.

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EMPATHY IN CRISIS ICFAI GROUPâ&#x20AC;&#x2122;S SUDHAKARRAO SHOWS THAT A SMALL ACT OF KINDNESS CAN GO A LONG WAY

Leaders are born out of a crisis. But what do you call a leader who selflessly takes up responsibility & empathizes with the sufferings of people? The crisis unleashed by the pandemic is unprecedented, leaving scores of vulnerable people even more vulnerable. As governments emerge out the crisis with more questions than solutions, the lockdown has had a harrowing impact on disadvantaged sections of society. Facing with massive health and economic crises, in many cases, the government has almost given up on handholding the most affected groups of people like migrant workers, selfemployed, small-scale traders etc. But that did notdeter SudhakarRao, DirectorBranding, ICFAI Group from stepping up to the task & doing his bit.

Under his stewardship, the Alumni associations of Osmania University and IIM Bangalore, Hyderabad Chapter hadjointly taken up a noble initiative of providing Dry Ration to needy people duringthese difficult circumstances caused due to Covid-19. The “Feed the Needy” drive involvedthe distribution of essential food rations with a motto statingthat “No individual should sleep with an empty stomach”.Each packet would feed a family of 4 people for 15 days. Each packet comprised of essential items like 10 kg rice, 1 kg dal, half kg oil, 1 kg salt, 200 gmmirchi powder, 1 kg potato,1 kg onion, 1 kg tomato, ¼ kg green mirchi, 1 dettol soap. Ensuring the distribution of high SudhakarRao

quality food items, the SudhakarRao-led team raised sufficient funds to carry out this exercise that benefited people at various locations in and around Hyderabad. A pocket of needy wasidentified and then the drive was conducted at that location. The team was able to distribute around 5000+ kits that totaled to about 20,000+ individuals for a sustained period of 15days. It is also noteworthy that the beneficiaries of this drive were not covered under any scheme provided by the government, highlighting the graveness of the situation and the urgent need to ensure the basic sustenance of people. Broadly, the categories of beneficiaries included migrant workers, sanitation workers, nonration card holders, security staff, mentally challenged and destitute orphans, home guards, cab drivers, inmates of old age homes, priests of small temples, construction workers etc.

The efforts were well coordinated at the local levels. Based on leads received from social workers & NGOs, a list of needy was prepared with the help of local coordinators and was vetted by the tahsildar to verify whether they are already receiving any support from the government. Volunteers who are active in those pockets handle transportation and distribution. The support from police & revenue officials were solicited before hand to ensure effective implementation of the initiative. Despite his best efforts, SudhakarRao laments the complete apathy of the situation faced by stranded guest workers who have no jobs, no livelihood and many who do not have the wherewithal to reach their families. In a poignant reminder of our duty and commitment to fellow citizens who have faced the brunt of this crisis, Raodedicates a heartfelt tribute in which he describes our collective failure to do what mattered most: display humanity.

I FAILED.AG I FAILED. AGAIN. (DEDICATED TO HUNDREDS OF THOUSANDS OF GUEST WORKERS; TO THE FEW I MET AND THE MANY I FAILED TO MEET). As you walked away from the soulless cities I failed to notice blisters on the soles of your feet. All my men - builder friends &contractor comrades defaulted on wage dues, hid their deceitful heads under the veil of pandemic. No word of support nor any food for hope I failed to cut the piling deficits of trust I failed again. Not a wagon chugged for you, nor a vehicle moved. The wheels of economy didn’t turn for you Until you erupted in protest, the tracks didn’t open. Opened a bit, but failed to move you. Govts that I voted for in good faith, remained unmoved too. I failed again. Air pockets opened, purse strings loosened- for others. The calculator started working when it’s your turn - who will bear how much? When you are torn between the Centre and States, I failed to realise how much I owed you. No colour, no zone, nor any containment. Never a priority ! In 130 crore population where are you? No name, not even a number, how many are you ? I failed to keep your count and your countless efforts to build this country. How’s that you are a migrant in the same country? Lived in camps, under tents, in bastis, behind the walls, in abandoned parks or railway tracks. Tucked away like livestock and sometimes alongside “dead” stock I failed to fathom the magnitude of your misery.

GAIN. Food stocks in godowns are enough & more bumper crops to boast about, once more. How’s that you sleep on hungry stomach Nothing to eat, not a morsel of rice, no piece of roti, desperate to eat even a dead dog lying on the highway ! I failed to decipher the ascent of mankind in food chain. Who Cares? I failed again. For a country of this size, this standing and grandstanding relief packages Where’s the military evacuation? Where are the drones of surveillance? What bigger emergency they are reserved for? When will I deploy what I have, in order to rescue the have-nots? l lost sight of the last man who’s falling short of his mark. I failed to have a vision. 60 long days of irreversible stasis and still counting. And helplessly staring at the unending saga of your trek You covered a lot of ground bro, while I lost as much From atop the ivory towers I failed to keep my ears to ground.

(SudhakarRao heads Branding of the ICFAI Group that includes 11 ICFAI universities, 9 ICFAI business schools, 7 tech schools, 7 law schools and a huge distance learning program.He is also the Cochair for education subcommittee on FICCI Telangana State Council.Rao studied Mechanical Engg at graduate level and went to IIM Bangalore to pursue Post Graduate Program in Management.)

The Light, Sound and Air shows, all in good spirit but I failed to show up in the face of your misery. From the vanity of man-made skyline the disproportionately privileged “I” plummeted to zero empathy. I failed, again.

COVER STORY

URGENT CURES FOR THE COVID-19 ECONOMY

Each week growth prediction continues to be revised down. The latest is from IMF which says that the whole of Asia including India would witness 0% growth this year. So far, India has fared well in containing the health side of the crisis. It remains to be seen whether the containment measures would be as effective when India opens the floodgates to let its NRI sons and daughters in. On the economic side, experts are already predicting that the 40-day lockdown will cost India upward of Rs. 15 lakh crore. The multi-trillion dollar question that India and most nations are now pondering is whether when the infection rates come down, whether they can afford to depend on milder social distancing, masks, and handwashing, instead of the painful lockdown model. In any case, on the economic side of the disaster, a slew of innovative measures would be called for. Seasonal Magazine, on our part, proposes more than half a dozen ways to resurrect the Covid-19 economy. We would also like to listen to what our esteemed and knowledgeable leaders and resource persons think of these ideas, in this podcast, and also about your own ideas in battling this enormous crisis. SEASONAL MAGAZINE

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URGENT CURES FOR THE COVID-19 ECONOMY

LET GO OF FISCAL & MONETARY DISCIPLINE: BOOST SPENDING & CASH FLOW hy should this strategy be the very first one to rescue the economy from Covid-19? Simply put, this is because almost all of the remaining points are likely to run into this sacred wall of economics called fiscal and monetary discipline. Hence it makes ample sense to dismantle this wall first. Those who still harp on fiscal discipline have no idea really on what the economy is up against. Just like Covid-19 has been unprecedented in human history, its economic aftermath is also going to be unprecedented, and comparable to the Great Depression of the 1930s. And it is a sobering point to remember that the world came out of the Great Depression through both fiscal expansion and monetary expansion, and not fiscal or monetary discipline. Even the most sacred gold standard was done away with in the 30s to recover from the Great Depression. And it is a fact of history that those nations that were the first to let go of fiscal and monetary discipline were the first to recover, back then. For sure, government debt will go up, inflation will rise, and currency would turn weaker, but then, there is no other way an impending depression can be averted. SEASONAL MAGAZINE

Actionable Points: Allow India’s fiscal deficit to GDP ratio to go beyond targets like 3.3% to China’s and USA’s figures like 5%. Similarly, do not allow inflation target ranges like 4-6.5% affect growth. Allow rupee to devalue moderately in a natural way, removing the artificial curbs which are costly and not fully effective.

HANDHOLD THE POOR: DIRECT BENEFITS TRANSFER e may be the worldâ&#x20AC;&#x2122;s third largest economy by GDP, but the undeniable fact is that we are a poor country, with just 116th position in per capita GDP. Around 94% of our population works in the informal sector including agriculture, MSME and self-employment, with not much social security, job guarantee, unemployment benefits or pensions. Over 65% of households have no own homes, and 13% households have only single room homes with no proper walls or roofs. Over 30% of households are doing manual labour on daily wages. Around 67% of India lives in its villages, where 75% of the households earn less than 5000 rupees per month. All these have resulted in around 50% of India living below the poverty line. No calculations are necessary to realize that Indiaâ&#x20AC;&#x2122;s poor would be affected the most by the Covid-19 crisis as well as the lockdown deployed to counter it. That is why much more needs to be done to handhold the poor with additional Direct Benefits Transfer or Direct Cash Transfer, than the Rs. 1500 being transferred now to Jan Dhan accounts in a staggered manner. This can also by way of augmenting the pay to the MGNREGA recipients and transfer of benefits like essential food kits to all below the poverty line. This also makes ample economic sense as only such grassroots level money supply would kickstart consumption now.

Actionable Points: Central Government should procure essential food items and other basic household consumption items on a large scale at discounted rates, and offer them as food / home kits to the poor, with around 40% funding coming from state governments.

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URGENT CURES FOR THE COVID-19 ECONOMY

BOOST MOST HARDHIT INDUSTRIES: LENDING, HOUSING, TOURISM, TRAVEL nlike most economic crises, Covid-19â&#x20AC;&#x2122;s economic impact is unique in that it made most industries come to a near standstill, except for agriculture, food staples, pharmaceuticals and banking. Even in these segments, demand has nosedived, making operations next to unviable. But as and when Covid-19 passes, most industries are expected to revive significantly, with a few significant exceptions. These are the lending businesses, housing sector, hospitality and travel. Major lenders like banks, NBFCs & MFIs would be hit by a wave of bad loans that will aggravate the Non Performing Assets (NPAs) crisis going on since 2009, which will stress their balance sheets further. The housing and real estate sector is expected to take a major hit as even the sectorâ&#x20AC;&#x2122;s leading stakeholders are predicting that real estate prices are set to fall by 20% as demand vanishes. This can even make highly leveraged realty companies to go bankrupt. But the greatest hit is likely to be taken by the travel and tourism industries as it is quite clear for the world population now that the highest

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risk and hardships from Covid-19 were to the world travelers. While leisure travel would be the more serious hit, business travel too would suffer as global trade is more likely to be conducted over digital channels like video conferencing and e-commerce. As such, these industries should be supported by way of recapitalization (for lenders) and tax cuts and other incentives, if millions of jobs are to be protected.

Actionable Points: Pursue radical measures in travel and hospitality industries by allowing them to take in advance booking in flights and hotel rooms for even multi-year periods at better discounts, so that cash flow will happen now. Escrow accounts with banks can be provided to safeguard customer interests.

CUT INTEREST RATE SIGNIFICANTLY: LEARN FROM THE GREAT DEPRESSION he principal way in which countries battled the Great Depression of the 1930s was by monetary expansion. The principal bottleneck prevailing then against increasing money supply was the gold standard. For every dollar or pound printed, countries used to set aside an equivalent amount of gold, which was the guarantee that the money had value. But that also meant that to print money, a central bank had to buy gold which proved to be an unviable way in a crisis like the Great Depression. The world needed to print money to come out of the Depression, and there was no way it could be done while adhering to the gold standard. Hence, one by one, the major economies did away with the gold standard, hoping that the products and services that the money bought would itself act as its guarantee. It was a big gamble, but one that the world pulled off successfully, even though it was not done in unison, but across two decades. Quite similar is the situation now. There is no gold standard to do away with though. The primary weapon available now is cutting the interest rate, and that is what most governments have done, with some of them cutting it to near zero, like 0.10%. Indiaâ&#x20AC;&#x2122;s central bank too has cut the rate by 75 bps, but the question is whether there

is room for more. Of course there is, but the RBI is probably waiting to see how much medicine is optimally needed. There are other considerations too like protecting senior citizens who depend upon fixed deposit interest as livelihood. But, even while providing for their needs through a special interest regime, businesses from the biggest to MSMEs, Self Help Groups (SHGs) and the Self Employed should be provided credit much more cheaply, or Indiaâ&#x20AC;&#x2122;s economic recovery as well as competitiveness would be deeply hit.

Actionable Points: Corporates, MSMEs, SHGs and Self-Employed entities should be extended credit for business activities at 4% interest for a stipulated period to tide over this crisis. The last two categories can be offered up to Rs. 25,000 as urgent loans for their working capital requirements, with strict caution that default would automatically disqualify them from such future handholding measures.

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URGENT CURES FOR THE COVID-19 ECONOMY

REDUCE GST RATES, WIDEN TAX NET: COLLECT LOWER RATE FROM MORE SEGMENTS he implementation of the unified Goods and Services Tax (GST) was long awaited in India, and at its core it has been designed to boost tax revenue significantly, to meet the rising government expenditure and budget deficit that funds the economic development of the country. And it was never designed to provide industry with any tax breaks or incentives, except for the unified Input Tax Credit (ITC) mechanism which is more of a transparency measure, given how the tax rates have increased post GST implementation. Tax collection can be increased by either higher tax rates, or by widening the tax net to include more people and products, or by both. While implementing GST, the government obviously went in for the low hanging fruits first, which was increasing the rates to the current tax net, so that revenue targets can be quickly met. But this has had the undesirable side effect of hurting many industries and the industry clamor for more rationalized rates. Several adjustments followed, as well as a

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corporate tax cut, but even before Covid-19 hit, the writing on the wall was clear â&#x20AC;&#x201C; more needs to be done on the GST front, if industrial growth was to be revived. But the government was in a fix as solutions that matched longterm and short-term goals were hard to come by. But now, Covid-19 changes all that. There is now no going forward possible without significant rationalization in GST. But, of course, this has to be made without making a major dent on the existing revenue collection. The only way possible seems to be unleashing the animal spirits of the economy by deep cuts in the higher slabs and expecting tax collection to still go up in the medium to long term as growth kicks in and revenue and profits rise. At the same time, the tax net has to be widened for all potential people, products and services, by keeping the tax rates super low.

ACTIONABLE POINTS: GST ON ALL ESSENTIAL CONSUMPTION ITEMS USED BY EVERYONE TO BE REDUCED TO 1%, WHEREAS THE HIGHER TWO SLABS BE FIXED AT 7% AND 14%, IN SUCH A WAY THAT OVERALL TAX COLLECTION IS NOT OVERLY AFFECTED.

BOOST PUBLIC CONFIDENCE AND SENTIMENT IN EVERY POLICY DECISION andhiji was once asked about how leaders and bureaucrats should decide on which route to take. This was his answer - “Recall the face of the poorest and weakest man you have seen, and ask yourself if this step you contemplate is going to be of any use to him.” Times have changed, but not his timeless wisdom. Every policy decision that the Central and State Governments take should be guided by this. This should also make immense sense to the political and bureaucratic class too, as not just the political fortune but the economic fortune is also at the bottom of the pyramid. Many things can be added to what the Father of the Nation said. One is that every policy decision should also boost public confidence and sentiment. Be it tweaking the fuel prices, or the various taxes, or the interest regime, everything should be done by taking into consideration a question like what Gandhiji posed – will this add to the public confidence and sentiment or erode whatever confidence and sentiment now exist? Many steps may be technically warranted at various stages, but good leadership is also ensuring that such steps don’t destroy the public confidence and

sentiment. No government can save a nation on its own. It requires concerted efforts from the citizens. And citizens will do collective miracles if their confidence and sentiment are high even in these trying times. There may be shortterm pain for the government and policymakers in embracing generous decisions, but ultimately such decisions would also help the work of the governments.

ACTIONABLE POINTS: EXPLORE ALL PRODUCTS AND SERVICES AND SCHEMESWHERE A LITTLE BURDEN ON CONSUMERS CAN BE EASED, LIKE FUEL, FOOD, INSURANCE ETC.

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URGENT CURES FOR THE COVID-19 ECONOMY

A FORMER CHIEF ECONOMIC ADVISOR SHARES HIS INNOVATIVE VIEWS By Akshita Goyal

SEASONAL MAGAZINE RECENTLY CAUGHT UP WITH DR. ARVIND VIRMANI, CHAIRMAN OF FOUNDATION FOR ECONOMIC GROWTH & WELFARE (EGROW) AND FORMER CHIEF ECONOMIC ADVISOR TO KNOW HIS VIEWS ON HOW TO STEER THE ECONOMY BACK TO GROWTH, AS PART OF OUR COVER STORY, URGENT CURES FOR THE COVID-19 ECONOMY.

hief Economic Advisor (CEA) is a celebrated post in India. Dr. Manmohan Singh, who went on to become the country’s Prime Minister, was India’s Chief Economic Advisor between 1972-76 under then Prime Minister Indira Gandhi. Dr. Raghuram Rajan was International Monetary Fund’s (IMF), Chief Economist and Director for Research before he became Chief Economic Advisor under Dr. Manmohan Singh and later under PM Narendra Modi. Another leading economist, Kaushik Basu who was also CEA under Dr. Singh in UPA-2, later became Chief Economist of World Bank. In other words, only economists of the highest caliber have been entrusted with this crucial duty by most governments. However, despite their exemplary expertise their performances have varied, as it involved various other factors too like the prevailing economic challenges, the ruling government’s overall policies, election agendas, global issues and so on. Dr. Arvind Virmani, who was a top performing Chief Economic Advisor, handled the crucial post between 2007 to 2009, in UPA-1 under Dr. Manmohan Singh and could guide the economy to one of its best performances ever. Later, Dr. Arvind Virmani was appointed as the Executive Director at the International Monetary Fund (IMF), Washington DC, representing India (as its Ambassador to IMF),

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as well as Bangladesh, Sri Lanka and Bhutan. Other significant roles that Dr. Arvind Virmani has handled include Principal Advisor, Planning Commission; Member, Telecom Regulatory Authority of India (TRAI); Appellate Tribunal for SEBI Act; and Chief Executive of Indian Council for Research on International Economic Relations (ICRIER). On the academic side of his career, he was Affiliate Professor, George Mason University (and Distinguished Senior Fellow, School of Public Policy - CEMP, GMU). A noted author in economics and other related areas, Dr. Arvind Virmani has published 33 journal articles and 20 book chapters in the areas of macroeconomics, growth and finance, international trade & tariffs and international relations. His books include, The Sudoku of India’s Growth, From Uni-polar To Tri polar World: Multi-polar Transition Paradox, Propelling India From Socialist Stagnation To Global Power, and Accelerating Growth and Poverty Reduction – A Policy Framework for India’s Development. Currently, Dr. Arvind Virmani is the Chairman of Foundation for Economic Growth & Welfare (EGROW), a non-profit, multi-disciplinary public policy organisation engaged in independent, high-quality research in the areas of macroeconomic policy, public welfare, national security and diplomacy. Seasonal Magazine recently interviewed Dr. Arvind Virmani for our cover story, Urgent Cures for the Covid19 Economy. Here are the excerpts of this interaction:.

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URGENT CURES FOR THE COVID-19 ECONOMY SEASONAL MAGAZINE RECENTLY INTERVIEWED DR. ARVIND VIRMANI FOR OUR COVER STORY, URGENT CURES FOR THE COVID-19 ECONOMY. HERE ARE THE EXCERPTS FROM THIS INTERACTION:

n infective virus has thrown off the normal in our lives and caught us off guard. Such emergencies called for urgent responsiveness and attentiveness on the part of the Government. As in many other countries, Indian government took a quick step of imposing a lockdown. During such VUCA (Volatile, Uncertain, Complex and Ambiguous) times, we had a chance to interact

with Dr. Arvind Virmani for our cover story, Urgent Cures for the Covid-19 Economy. Starting with his views on the 'Life versus livelihood' debate, he affirmed that while lockdown was a necessary shock, it will be extremely costly if extended. He cited an EGROW Foundation research paper which estimates the effect of lockdown on the economy to be 5% of annual GDP in a month. Going deeper, he explained that for this calculation, researchers broke the economy into 3 sectors- essential, contract services and the rest of the economy. As the data speaks, Essential services constitute around 40% of the economy size. In the Essential goods and services sub-sector, we asked about his views on whether the government should distribute these to the poor or cut the tax rates for these to increase their affordability. In response, Dr. Virmani emphasised that if the sector has been in operation

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throughout the period of the lockdown, no such tax concessions are required. In his tenure as the Chief Economic Advisor to the Government of India, he had strongly advocated the case of direct benefit transfers (DBT) rather than provision of goods. He believes that DBT is a flawless procedure that is completely sealed and avoids leakages given that the alternative of goods provision through Fair Price shops is administratively inefficient. When we were discussing the topic of how the Government is mitigating the damaged economy under lockdown, Dr. Virmani suggested that the legal asymmetry is still left to be addressed. The tax payment obligations for the essential goods and services industry and that for the rest of the economy can't be straightjacketed. Clear differentiation and concession ought to be made for the industries which have been completely closed shop under lockdown. This will not only help the hard-hit industries (like Auto, capital goods and construction) spring back into action post-lockdown but also assuage business sentiments. For the question of payment of wages to daily labourers, he asserted that the Government can't expect the businesses to bleed losses when they have got no compensation apart from an extension of the moratorium on loan repayments. As we moved onto discuss a course of action to use this crisis as an

DWELLING ON THIS IDEA OF GIVING MSMES INTEREST-FREE FUNDS, DR. VIRMANI DREW OUR ATTENTION TO A PROVEN FACT THAT MOST INTEREST SUBSIDY SUPPORT HAS BEEN MOST EFFECTIVE WHEN THEY HAVE BEEN ROLLED OUT FOR A LIMITED PERIOD OF TIME.

opportunity for long-term reform, Dr. Virmani astutely pointed out that the time is ripe to encourage diversification of supply chain. He applauded the RBI's move to reduce the repo rate for it increases the extent of monetary transmission and maintains adequate liquidity. In a lighter vein, Dr. Virmani also said that in times of crisis, interest rates must be negative. On the welfare side, he said that the misery of poverty can be eliminated and not just alleviated through the largest three welfare programmes with Aadhar as the vehicle. Another pragmatic suggestion offered by Dr. Virmani was that of a negative income tax to ensure redistribution of wealth from the haves to the haves-not.

THE TAX PAYMENT OBLIGATIONS FOR THE ESSENTIAL GOODS AND SERVICES INDUSTRY AND THAT FOR THE REST OF THE ECONOMY CAN'T BE STRAIGHT-JACKETED.

With this isolation period in the backdrop, we routed our interaction to the suggestions of eminent researchers NYU's Marti Subramanyam and Ashoka's Anisha Sharma. They had mooted a Government SPV providing armâ&#x20AC;&#x2122;s length pseudo-equity up to 25% of profitable MSME's revenues which can later be brought back by the MSMEs. Dwelling on this idea of giving MSMEs interest-free funds, Dr. Virmani drew our attention to a proven fact that most interest subsidy support has been most effective when they have been rolled out for a limited period of time. Moreover, he is of the opinion that after simplification of the tax structure under GST, tax payment history of MSMEs must be used as an indicator of offering credit guarantees. Covid-19 has presented the economy with a brand new challenge-one that would lead the Government to learn and unlearn dynamically as the agents in the economy gradually emerge out of the lockdown. Given the promising status as of today and the buoyancy of Indiaâ&#x20AC;&#x2122;s growth in the past, Dr. Virmani urges us to look forward.

(Akshita Goyal is currently an ISB PGP candidate of 2021 batch) SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

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adhav Das Nalapat has never been an Editor who minces his words. Long back, it cost him his job as the Editor of the leading Malayalam daily, Mathrubhumi, which was in earlier days led by his grandfather VM Nair as Managing Director and Managing Editor. Later, MD Nalapat switched to English journalism and became the Resident Editor of The Times of India. Even a sterling career there had to be cut short due to his passion for honest storytelling. But he had other arrows in his quiver, as he was a gold medallist in Economics from University of Mumbai. He joined Manipal University as a Professor and is now also the university’s Honorary Director in Department of Geopolitics & International Relations. But journalism in his blood beckoned him again and in 2011, he joined iTV Network where he is currently the Editorial Director overseeing channels like India News, NewsX etc and the weekly newspaper, The Sunday Guardian. Prof. MD Nalapat speaks from his heart, much like his renowned mother, Kamala Das (Kamala Surayya) better known by her pen-name Madhavikutty, who was one of Kerala’s and India’s most beloved writers of prose as well as poetry. Prof. MD Nalapat is an expert in several domains, of which economics, foreign policy and China studies rank high. Like in all issues, he has an uncanny knack for unearthing the hidden and Covid-19 is no exception. In this interaction with Seasonal Magazine for our cover story ‘Urgent Cures for the Covid-19 Economy’, he displays this same flair.

Often times, global cooperation and consensus bring good results. However, in some cases, when the whole world thinks alike, it might be a recipe for disaster. Chinese President Xi Jinping imposed severe lockdown in Wuhan, which then led WHO to recommend the same to the entire world. This has witnessed economies of countries fall like a pack of cards. As countries succumbed, one by one, to the might of the coronavirus pandemic, the simple solution was to enforce lockdowns and shut down businesses. While it has certainly contributed to low casualties in countries like India, there are still questions left unaddressed in terms of the economic relief and job security of peoples. In a wide-ranging interview, Prof. M D Nalapat, Editorial Director of iTV Network and ViceChair at MARG, Manipal University provides his thoughts on a variety of themes including the conduct of WHO and China in the context of the pandemic, the lack of imagination to ease lockdowns, the emerging geopolitical realities and how India can emerge unscathed and issues of free speech and press freedom. Exhorting the government to initate longer interest payment deferrals and revise colonial-era business regulations, he believes that the road to recovery is indeed paved with difficulties. In spite of the challenges facing India, Prof. Nalapat is confident that PM Modi can turn the tide and implement gargantuan reforms in the coming years. Seasonal Magazine’s Carl Jaison speaks to him Q. Do you think this crisis has laid bare the weaknesses of those nations that have no significant social security mechanism for their masses like unemployment benefits, universal insurance, universal pensions etc? Where do you see India standing in this regard? Prof. Nalapat: See, if you look at the question of Covid, we are not yet sure about the actual toxicity of the disease for the simple reason that we are not sure about exactly how many people have been infected in any population. SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY Now in India, for example, we have got the red, orange and green zones. Now it could be that the red zones where there had been a lot of testing and the green zones may be zones of less testing. So in a sense you have been penalizing zones which are tested a lot. And you may be leaving out other zones where there may be equal number of cases that are not tested. So there are a lot of increasing reports coming that the fatality for Covid 19 is roughly the same as that of the flu possibly even for the common cold. And I have seen a lot of studies certain epidemiologists have pointed out not to lose your sense of proportion over this particular virus. It is true that it is a very contagious virus and it does affect populations but the reality is that the actual fatalities per actual number of cases is relatively low, according to data. So the reality is that we are looking at fatality in terms of the discovered cases. Now I think everybody will agree that the discovered cases is definitely maximum about 8 or 10% of the actual cases. So there are some studies which say that 50 times or 100 times or 140 times the reported cases. So in that situation we are not yet sure with the toxicity. The second point on which there is a lot of discussion about is regading some of the so-called treatment methods of covid. For example, the focus on it being a pulmonary disease is also causing lot of deaths because of the blood clotting. Such blood clotting leads to thrombosis, coronary thrombosis, neuro thrombosis etc. I am not a doctor but I am just looking at the data which people have send me and which experts who are doctors who have studied are telling me. So they are saying that many of these cases deaths are caused by thrombosis and not so much pneumonia as by thrombosis. So reality is we know so little about this disease. But what exactly happened? Q. What would be your take on the evolving relations between countries, say for example US-China and India-China in the post-COVID19 geopolitical setting? SEASONAL MAGAZINE

As soon as the information reached the top Chinese leadership, President Xi Jinping he immediately locked down the entire city of Wuhan consisting of 11 million people. And that is what created a global panic, if I may say so, that if the Chinese are locking down an entire city and locking down an entire province and this has never happened before in the history of any country as far as I can remember, then there is something terrible about this epidemic. Now the interesting thing is that the WHO, even after the lockdown was saying that it is not a big deal and not to worry about it as there is no human transmission. WHO claimed that even travel is perfectly safe. At that time, Boris Johnson of UK said that WHO is WHO, and it canâ&#x20AC;&#x2122;t go wrong. And the flights from Wuhan were flying into the UK even after the city was locked down. People who had come in from Wuhan to other Chinese cities Hongkong or Thailand could safely go to United States and also to the UK. The first thing after these developments, and that is what caught my attention, was the response of North Korea. Kim Jong-un was the first leader, from

IT IS TRUE THAT IT IS A VERY CONTAGIOUS VIRUS AND IT DOES AFFECT POPULATIONS BUT THE REALITY IS THAT THE ACTUAL FATALITIES PER ACTUAL NUMBER OF CASES IS RELATIVELY LOW, ACCORDING TO DATA.

around 26th of January, to impose a first lock down in the sense of barring the Chinese from entering North Korea. This was done around the same time as the Wuhan lock down. We all know North Korea depends on China. And now he has a lot of information on China. Singapore also did that. We were also among the first dozen countries to do that and I really congratulate Prime Minister Modi for acting in a very bold way and for being among the first few countries to initiate lock down. But the reality of the situation is that, you know, till today we are not sure about the actual number of deaths or thousand covid patients because we are not sure how many people are covid

patients. Now I will give you my hypothesis. My hypothesis is that China imposed lockdown because of Xi Jinping and the rest of the world followed the Chinese lock down example as an instruction from WHO, in a sense, almost without thinking. The US, European Union, and all kinds of countries did an immediate and total lock down. As a consequence, their economies have gone for a toss. Now if you look at the situation in Sweden, for example, there has been no lock down and there has been no drastic number of deaths either. Tens of millions of people dying, corpses littering the road,billions of people falling terribly ill, I mean it was a doomsday scenario. So all these doomsday scenarios led governments to obey the instruction and go into a lock down. So what happened? Because of these lockdowns, the US and Western European economies have crippled and they are battle-weary at a time when China is coming back into normal activities. Including countries like Sweden where I don’t see a lorry load of corpses as we have seen in Italy. In Sweden, the deaths are low while Italy is struggling with casualties despite

harsh lockdowns. It is nothing compared to, for example, American deaths, even after the lock down. They say that incubation period of the coronavirus is about 14 days and therefore in a sense lots of deaths are coming after the lock down. And so deaths are still climbing in the UK despite the lockdown, so my point is very simple. The Chinese, thanks to WHO, got a massive advantage specifically over the US and Western Europe, a massive economic advantage because of WHO’s recommendations of ‘Lockdown Now’. Q. Whether nations had partial or full lockdowns, almost all had 100% lockdown of their educational campuses and certain business centres. Even WHO has expressed that one of its greatest concerns is how the pandemic may spread once again when the schools, colleges and offices are reopened. When and how do you see normalcy returning? My view is you have got lockdown instructions from fundamentalists. The entire WHO is a lock down fundamentalist organisation. Stop all activities. Stay at Home. I am not very sure social distancing can be a controlling measure. With ‘stay at home’ recommendation of WHO, the entire word went into to a lock down and today the Chinese have recovered. Frankly speaking, the Chinese have got a system of digital acivity for the last several years. Xi Jinping has gone into digital currency, block chain, and he has fought for crypto currency. Now the WHO recommendation has happened either as a coincidence or it has happened as an accident. I am sure the professors of WHO, Director Generals and all great doctors there honestly thought that this is going to

NOW THE INTERESTING THING IS THAT THE WHO, EVEN AFTER THE LOCKDOWN WAS SAYING THAT IT IS NOT A BIG DEAL AND NOT TO WORRY ABOUT IT AS THERE IS NO HUMAN TRANSMISSION. WHO CLAIMED THAT EVEN TRAVEL IS PERFECTLY SAFE.

be a worst thing than the plague. As I wrote in the Sunday Guardian, the WHO thought this is a worse tragedy for human kind than Genghis Khan. May be they really believe it. I am not alleging any bad intend on the part of anybody. But many things happen without bad intend. The world went into the First World War without any much bad intend. The second World War was because of the rascal Hitler with a very bad intend. So I am not a conspiracy theorist who says that China created this in a lab and released it to the world and that the WHO, being a puppet of China, went ahead and asked every country to impose a lockdown. That’s absurd. Q. Do you think the world suffered a lot from Covid-19 due to lack of democracy and free press in China? If it had originated in India, would the situation have been very different due to democratic norms and a thriving press? Look, I was the editor of a Malayalam paper for sometime. Whatever circumstances, I left that newspaper and I made it clear to my journalists that I’m totally for 100% freedom for the press but that it wasn’t practical. I told them, realistically, that only 95% freedom is allowed which means nobody connected with our paper should be attacked. This annoyed a lot people I’m sure but you can ask many of those journalists about the freedom I gave them. In a way, my career was cut short there. But I have no regrets about that. The same thing happened in the Times of India. I wrote some very important articles about Sonia Gandhi, her family, her educational qualifications and whatever happened as happened. Then I went to Manipal University which is a real haven and I would really like to give credit to Ramdas Pai. He gave protection to free thought in the university and diversity of thoughts and views. I have happily been in Manipal University and since 2011 I have also joined the iTV network. Let me narrate an incident on press freedom outside India. I had tried sending a piece to a famous US institute with a Middle East desk on the crisis in SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY Syria back then. I wrote to the editor saying that he may not like it but Bashar al Assad is still the best bet in Syria. The editor, in fact, quite liked it. I had even predicted that the Arab Spring would become a Wahhabi winter! The Americans are famously protected by the First Amendment. Guess what happened? The governors of the institute called up the editor and asked him to take remove my article for publication saying that they don’t want any story that is friendly to Bashar alAssad. Try this with any of the other famous papers and publications. You’re going to get a similar response, regardless of the so-called freedom of press enjoyed in these countries. Therefore, freedom of press is permitted within the bandwidth of any publication and that every publication has got its interests. So, I want to basically point out that freedom is a relative thing. Q. A lot has been said about India standing to gain when MNCs shift out their manufacturing operations and supply chains from China. Do you think there is really such an opportunity emerging, and what are your views on whether Indian companies can capitalize on it? I can tell you one thing: even Chinese companies are anxious to move to India. It’s because Artificial Intelligence (AI) is going to be the spear of world primacy. Why do you think the Americans have woken up to this fact about the Chinese? It’s because the Chinese are almost better than they are when it comes to AI. One of the important ingredients of AI is metadata. The Chinese have got a huge strove of data of their 1.3 billion people. Guess which other country has metadata amounting to that size of population? This explains why Huawei would like to come to India. Huawei, today, is 40% cheaper than the competition. They are willing to spend close to 50,000 crore more to setup 5G because what they’re looking for is meta-data. The Americans are also on the lookout for this prized possession. Why do you think Facebook invested in Jio? It’s because Jio is sitting on a pile of Indian meta-data. We are SEASONAL MAGAZINE

possibly the only country that doesn’t worry about where the meta-data goes. We don’t bother about it but this is the platinum of the future. If you’re talking about data being the gold, meta-data is the platina. The other reason why people want to come to India is because they think in some future year, the policy makers in this country will implement good economic and business policies. For example, like reduction in taxes, regulations. One hopes it can be economic reforms like that done by Deng Xiaoping. Indian PM P.V Narasimha Rao made semi-reforms. My hope is that PM Modi is the one to do comprehensive reforms. In 2013, when he visited China, I had written for the Sunday Guardian about this very same point. Can he be India’s Deng Xiaoping? However, Xiaoping brought in investments from anywhere in the world. Also, each Mayor in a provincial town in China had immense power in terms of sanctioning reforms and measures. Even each branch managers had the wherewithal to sanction loans up to a certain amount. In short, a mayor in China has more power than even a cabinet minister in India. We have a very centralized system of governance. PM Modi has done a lot to decentralize. Even former PM Rajiv Gandhi tried to strengthen the Panchayati Raj, bring in reforms in telecom but couldn’t fulfill it whereas someone like Narasimha Rao was able to do semi-reforms. I was listening to the Economic Advisor, Sanjeev Sanyal who was essentially saying that we need to give ‘bullets’ for economic growth like from a ‘revolver’. However, let me tell you, at the very least we need to be giving bullets from an artillery rifle. Forget bullets; we need missile-like

MY VIEW IS YOU HAVE GOT LOCKDOWN INSTRUCTIONS FROM FUNDAMENTALISTS. THE ENTIRE WHO IS A LOCK DOWN FUNDAMENTALIST ORGANISATION. STOP ALL ACTIVITIES. STAY AT HOME. I AM NOT VERY SURE SOCIAL DISTANCING CAN BE A CONTROLLING MEASURE.

intervention! For a mega-move, we need at least 5% of GDP spent additionally to recover from COVID19. If India wants to reach the superpower status in next 5 years, which I believe we can, we need that 5% GDP spending. However, we are still doing last-minute interventions. Case in point: the RBI’s proposal to defer interest payment for 3 months. We needed a minimum of 6 months and 3 years of long-term planning to tide over this. You have your credit card bills, electricity, interest payments; where is the money going to come from in this scenario? Every week people are losing their jobs. Some companies managed to pay salaries this month but with every passing month it is going to get more and more difficult. Very soon, they will have to start firing people. Q. Despite the collateral damage of over 2.2 lakh deaths worldwide, there is a view that economic bounce-back from Corona might be swifter as infrastructural damage is not there, like that exists in weather related calamities like tsunamis, cyclones or floods or manmade ones like wars. Is there a case for hope in this regard for India? In the PM, we have a man who has got a bold vision. The lockdown was incredibly difficult to implement but it has been a success. Now this has to be met by an equally bold fiscal and monetary infusion into the economy. Secondly, there has to be some changes from this kind of a lockdown. For instance, a green zone could be where there are more cases but less testing because in the absence of testing, we really don’t kow the rate of infection among populations. When you then talk about a zone being red, is it really that serious? Frankly, as long as we start testing, we might need to re-look this policy. In another scenario, let’s say my office is in the green zone but my factory is in the red zone. What do I do then? In a recent case from a state whose Chief Minister I would not want to name, there was a proposal introduced by a bureacrat. The restriction was if one COVID case is there, the entire factory will have to shut down for three months! This is a

superpowers were allocating huge resources to mammoth wars that never came, whereas they were totally unprepared for this war that has already taken over 2.2 lakh lives. Do you think the self-defense strategies of nations are set to change post this pandemic?

ridiculous idea. This is what happens when you have bureaucrats making conditions. And none of them havent even gone near a factory or even own a business. We have to have belief that we have the chance to become the techno superpower of the world. For that, we need to have sensible regulations. We need experts from industries who are domain specialists. It is not an accident that the Atomic Energy Commission has done well despite sanctions. ISRO has done wel despite sanctions. The secretaries to these departments are both scientists. They are not civil servants. I think we should follow that example more often. I’m sure PM Modi is on the right track and is the right person to take the country forward. Even back in 2006, I knew he was the right person and I have full confidence in his ability. We need a complete makeover of the regulatory system, including the system of going through the legal process. For instance, the Green Tribunal. Don’t get me wrong – I’m all for a green country but to make India green as the ‘green fundamentalists’ wants it to be, that is only possible in a country with 70-80 million in population. The problem here is our system is still largely inherited from the colonial one. For instance the Epidemics Act is 130years old and that is being used in the

BECAUSE OF THESE LOCKDOWNS, THE US AND WESTERN EUROPEAN ECONOMIES HAVE CRIPPLED AND THEY ARE BATTLE-WEARY AT A TIME WHEN CHINA IS COMING BACK INTO NORMAL ACTIVITIES.

COVID-19 epidemic. The British, now, are changing their laws every year. But we haven’t changed their law for over 200 years. But I am positive because I believe our country and its youth are in a position today like never before. Our youth is one of the most brilliant in the world. If you look at the hightech jobs in the U.S, they are mostly represented Indian-Americans. Even China and Taiwan are accepting Indian students because of their potential. I know a person named Y.S Rajan who told me numerous stories of how young scientists were not encouraged and even sometimes demotivated by litigations against them. Therefore, PM Modi must end the license raj and British colonial raj. I hope a blueprint is prepared that calls for a complete transformation of this country and then we might see some great results. Q. Most of the world, especially its superpowers and aspiring

Well, I frankly don’t think wars and walls are going away. We’ll surely need walls say in a our Western borders visà-vis Pakistan and other sensitive areas. There are about 15 million people who have come in from Bangladesh in the last 15 odd years. But many of them are going back because their economy is doing really well and in some respects, much better than the Indian economy. We have a great relationship with Bangladesh and should ensure that continues. As for defence, we need to have 40 million people in some kind of arms training and make NCC compulsory in universities. We have to teach some discipline to our students and this must seep into the population. Frankly, the way the economy is going, many are going to be unemployed or feel under-skilled. So I don’t want to see people shouting hate slogans and raise communal slogans and fighting amongst religious groups. The idea of the internet came from defence and the technologies used in defence are what we use today like GPS. So, let’s be absolutely blunt about this: defence is not a problem and the reality is that we live in a world where security is very important. I would imagine that this idea of a militarily trained population is not very welcome in social circles. But India needs to be a force for stability. Look at the Middle East and the Gulf. In the next two-three years, we are likely to see mass protests against the ruling dispensations. See what happened after they removed Saddam Hussein from Iraq and all stability was lost. We need to have alliances where the partners jointly have the men and material needed. Democracies of the world must unite against radical elements apart from authoritarian regimes. I’m a peacenik and I am UNESCO Peace Chair but the tragedy is that unfortunately I don’t see peace in the horizon anytime soon. SEASONAL MAGAZINE

UNLOCKING STORIES FROM THE WORLD OVER NATIONS ACROSS THE WORLD ARE WITNESSINR FURTHER CAUTIOUS EASING OF COVID-19 RESTRICTIONS FOLLOWING SIGNS THE PANDEMIC MAY BE SLOWING, WITH HARD-HIT ITALY SET TO FOLLOW SPAIN IN ALLOWING PEOPLE OUTSIDE AFTER WEEKS OF CONFINEMENT. ore than 2,43,000 people have been killed and 3.4 million infected worldwide by the virus, which has left half of humanity under some form of lockdown and pushed the global economy towards its worst downturn since the Great Depression. With signs that the spread of the disease is coming under control, parts of Europe, Asia and the U.S. have begun to lift restrictions to try to inject life into economies crippled by weeks of closures and ease the pressure on populations weary of confinement. After a two-month lockdown, Italians on Monday will be allowed to stroll in parks and visit relatives. Restaurants can open for takeaways and wholesale stores can

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resume business, but there was some confusion about the extent of the easing. Romans were doing aerobics on their rooftop terraces and exercising indoors on Sunday and the squares in the city centre were mostly empty on the last day Italians were obliged to remain within 200 m of their homes. “On the one hand, we’re super excited for the reopening, we’re already organising various activities the kids will be able to do with their grandparents outdoors, workshops in the garden, that sort of thing. The kids can’t wait to see them,” said Rome resident Marghe Lodoli, who has three children. “On the other hand, it’s disorientating. The rules are not clear, and we’re not sure if just using common sense will do.” Italian authorities have said some

preventative measures are still needed in a country that has the second-highest number of virus deaths in the world after the United States. Several industries, including automobile sector and construction, have already restarted work. But Italy’s 20 regions have imposed their own regulations, leading to some confusion over what people can and cannot do. Veneto and Calabria lifted their lockdowns early and allowed bars and restaurants to open with outdoor tables. Elsewhere in Europe, Germany will continue its easing on Monday, while Slovenia, Poland and Hungary will allow public spaces and businesses to partially reopen. In another sign of life returning, Germany’s Minister for the Interior and Sport said Sunday he supports a resumption of the country’s football season this month as long as teams respect hygiene conditions. The British government will unveil its own “roadmap” to ease the country out of lockdown this week, after Prime Minister Boris Johnson said the country was “past the peak” of the outbreak. With health experts warning the disease could hit hard once again, governments are trying to balance easing up restrictions to help battered economies

against the risk of fresh outbreaks. Despite moves to ease curbs across the globe, more than 4.6 billion people are still on some form of lockdown or obligation to stay confined at home. Most governments are sticking to measures to control the spread of the virus – social distancing and masks in public — and more testing to try to track infections even as they relax curbs on movement. Face masks will be mandatory on public transport starting Monday in Spain, where people were allowed to go outdoors to exercise and walk freely on Saturday after a 48-day lockdown. Even as some European countries gradually lift restrictions, officials in Moscow — the epicentre of the contagion in Russia — urged residents to stay home. With cases increasing by several thousand each day, Russia is now the European country registering the most new infections. European leaders are backing an initiative from Brussels to raise •7.5 billion euros ($8.3 billion) to tackle the pandemic and raise funds for efforts to find a vaccine for COVID-19, the disease caused by coronavirus. Italy’s Prime Minister Giuseppe Conte, French President Emmanuel Macron, and Germany’s Chancellor Angela Merkel gave their support in an open letter in weekend newspapers. With pressure growing on governments

worldwide to balance public health requirements with the need to ease intense economic pain, some nations in Asia announced similar easing measures. South Korea - once the second worsthit nation on the planet - said it would ease a ban on some gatherings and events as long as they “follow disinfection measures”. Thailand allowed businesses such as restaurants, hair salons and outdoor markets to reopen so long as social distancing was maintained and temperature checks carried out. But experts have cautioned that many countries are still not through the worst. The Philippines suspended all flights into and out of the country for a week starting Sunday in a bid to ease pressure on its congested quarantine facilities. Iranian President Hassan Rouhani announced mosques would reopen across large parts of the Islamic Republic, after they were closed in early March to try to contain the Middle East’s deadliest COVID-19 outbreak. Mr. Rouhani warned, however, that while Iran would reopen “calmly and gradually”, it should also prepare for “bad scenarios”. U.S. leaders face immense pressure to ease virus measures as the economy has been hammered with tens of millions left jobless.

The United States has the most coronavirus deaths in the world and President Donald Trump is keen for a turnaround to help reduce the economic pain. Florida is set to ease its lockdown on Monday, as authorities in other states wrestle with pressure from demonstrators — some armed — who have rallied against the lockdowns. There are also signs that the pandemic is slowing down in some parts of the United States. In New York City, the epicentre of the U.S. outbreak, an emergency field hospital erected in Central Park is set to close, the Christian charity running it said on Saturday, as virus cases decline in the city. But authorities are wary of letting their guard down too fast, with fears the virus could wreak havoc in the most vulnerable communities in the United States. A massive wave of infections is sweeping through America’s prison population — the world’s largest at 2.3 million — with coronavirus deaths on the rise in jails and penitentiaries across the country. Riots over inadequate protection and slow responses by authorities have already broken out in prisons in Washington state and Kansas. “Things are beyond breaking point at this facility,” said Brian Miller, an officer at Marion prison in Ohio. “Right now it’s hell.” SEASONAL MAGAZINE

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AN OBJECTIVE AND SANE VOICE Seasonal Magazine in conversation with veteran political commentator Parsa Venkateshwar Rao Jr.

The voice of Parsa Venkateshwar Rao Jr has been that of an objective and centrist political commentator. He can pick holes easily in secular and liberal arguments, as much as he can easily pick holes in right-wing arguments. Even while objectively criticizing the BJP led government for some of its policies, he can with the same objectivity show that why the usual ‘crying-wolf’ style of BJP’s detractors is being counterproductive to the hilt. Parsa Venketeshwar Rao Jr supports only democratic and constitutional remedies to controversial laws, as he believes that their legal or constitutional validity should be respected by all. Such a uniquely centrist and objective standpoint is rare to find among today’s commentators who either tend to gravitate to the left or to the right. The greatest value that he proposes for the society is to have respect for individual freedom. And his greatest hope is in the electoral process. In an impressive career that spanned several leading newspapers in India as well as abroad, he spent the most time with Indian Express (for over 13 years) which was early on in his career, and then with DNA (for nearly 10 years), later on. Born in Hyderabad and currently based in New Delhi, his earlier overseas assignments included Singapore’s The Straits Times and UAE’s Gulf Today. Other leading media houses for which he has worked include India Today and Tehelka. As a noted political commentator, his columns have been published in Dubai’s Gulf News, Beirut’s The Daily Star, Singapore’s Today, and other leading Indian newspapers including The Times of India, New Indian Express, The Asian Age, Deccan Herald and Deccan Chronicle. Apart from his sharp objectivity in politics, his writing reflects his love and prowess in history and English, incidentally two subjects he studied for graduation and post-graduation. Also, a prolific author of books, his major works include, ‘Rajiv Gandhi to Narendra Modi’, ‘Mullah Omar and Robespierre: Essays in the Politics of Ideas’, ‘Lokpal: Facts & Arguments’, ‘Indian Politics Since 1991: Reforms and Revivalism’ and the ‘Emergency: An Unpopular History’.

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URGENT CURES FOR THE COVID-19 ECONOMY Seasonal Magazine in conversation with veteran columnist and political commentator Parsa Venkateshwar Rao Jr. Despite initial differences, most governments across the world have followed the same strategy of imposing a lockdown. However, due to how well the lockdowns were adhered to, and numerous other factors, the death tolls in countries have been varied. How do you think the lockdowns will affect the prospects of the ruling regimes generally, and especially in India? I think they will remain ambiguous because the governments would claim that the lockdown was necessary to restrict the toll or casualties. They would argue that, without the lockdown, loss of lives would have been greater. They would fall back on the defence that they took a very hard step which was only to save the lives. That is likely to be their rationalization. Quite a related phenomenon is how the Opposition parties in various countries have performed during the crisis. Generally what could be seen was that political opposition became subdued or even irrelevant in most nations and countries, as rulers started wielding greater powers and hogging the limelight even more. How do you assess the performance of Indian opposition parties at both the Central and regional levels? Even before the wake of COVID-19, the Opposition parties have not been very prominent or vocal enough. Their numbers were restricted in Parliament and they are not in power in many of the states. So, they were already marginalized. Therefore, when the crisis erupted, the ruling party could take over the reins and not pay attention to what others have to say. But, this doesn’t mean that the Congress has not taken any steps to air its views. In terms of its impact on the government, I think there has been very little of that. Stranded migrant workers across India and their plight have emerged as a grave issue in India. As anywhere in India could be reached within half a week by train or bus, do you think more time could have been given to the migrant workers so that they are safely at home, before imposing the lockdown? Is this a case of the poor and downtrodden and their unique situations failing to garner the required SEASONAL MAGAZINE

attention of the political and bureaucratic machinery? I think, firstly, when the government had announced its plans for a lockdown they had not fully grasped the magnitude of the issue. They had to take a decision fast and therefore it was a panic response. This was the case in many other countries as governments realized that healthcare systems are fragile and medicines were in short supply. About the issue of migrant workers, they were never on the radar as it were. However, they had not given a thought even to government’s own functioning or on whether public transport should be going or not. There was no planning and thinking. Whether it was good or bad – we can just debate about and argue about it. Where do you stand on the issue of lives vs. livelihood after these many days into the lockdown? Do you think it’s time to change the strategy? I feel it can’t be an ‘either/or’ question. It may be a convenient formulation but I doubt if it will serve any purpose, taking a side. When the lockdown was announced, the main problem facing the government was how to reduce impact of the pandemic and what are the ways to do that. We have a fair idea on what to do when there is a flood or a delayed monsoon – but I don’t think we have ever taken stock of a problem of this nature and magnitude. It is a medical emergency. To cope with this, you need to have certain infrastructural facilities. The government had to consider the idea of keeping transport options open to carry people around. They had to ensure supplies were not disrupted between state borders. But given that this is a medical emergency, there was not much that could be done as there was no template.

I THINK THEY WILL REMAIN AMBIGUOUS BECAUSE THE GOVERNMENTS WOULD CLAIM THAT THE LOCKDOWN WAS NECESSARY TO RESTRICT THE TOLL OR CASUALTIES. THEY WOULD ARGUE THAT, WITHOUT THE LOCKDOWN, LOSS OF LIVES WOULD HAVE BEEN GREATER.

Do you think India should be moving towards being a welfare state with unemployment benefits, universal health and life insurance etc, in the wake of this crisis? You see, India has always toyed with the idea of creating a welfare state. It first came into force after World War II. There was a Great Depression before it when the markets were unstable and unreliable. We had Franklin Roosevelt’s New Deal, and Soviet Union’s planning system among others. However, in the case of Europe, you had a vibrant economic system which produced goods and was able to distribute them effectively. This is a basic paradox in economics: once you create a welfare state, are you ready to sustain it? Take the Soviet example. In such a system, if there was agricultural failure or monsoon delay, the state would not be able to keep the welfare model afloat. Let us remember one thing: even if the BJP Government is right-wing, their economic policies indulge in leftist, statecentered models. The Ujjwala Yojana, the Jan Dhan Yojana are all examples of this. But, the question is do they have the economic means to sustain it. Do you think India should ensure a Universal Basic Income for all its citizens, starting with the 40-50% of its citizens falling below the poverty line? It is a good idea but works only in countries with smaller populations. Because of the numbers involved in India, it is an open question as to whether Universal Basic Income will work out. The assumption with which people argue for UBI is based on the tax collections available to state exchequer at its disposal. They think that the money used from this can be used to pay income instead of other schemes. So, for instance, if you provide UBI, you won’t need to pay for education or free healthcare. These people think that UBI is the most efficient way of redistributing money instead of providing other welfare schemes. Normally, a crisis of this enormous scale, should have united different communities in India. But unfortunately, due to the Tablighi conference and its aftermath,

communalism has not remained on the backburner even now. Now with hundreds of recovered conference members coming forward to offer their plasma for treatment, do you think extreme right wing populations will be more accommodating in their position? Or is India hopelessly divided along communal lines? The BJP’s majoritarian brand of politics doesn’t allow for reconciliation, doesn’t allow for harmonious functioning of different sections of society. Unless the party in power changes its ideological orientation, it will be very difficult. There is a constant tendency to blame the minority sections for any problem because they can easily be made out the villains. But it seems to have dawned upon the party that to vilify one community during a pandemic is not a desirable strategy because you need everyone to cooperate. Right now, the conviction is lacking. In a world that was already deglobalizing, Covid-19 has proved to be a booster rocket, with national boundaries and national identities going to be fiercely guarded. Does this bode well for the world and humanity's progress? Keeping aside the idea of a global community or village, what is likely to happen is people will want to fall back on their national identities. But the question is how is this going to be sustained? If you want to avoid exchange of goods or reduce export or imports, where is your foreign exchange reserve coming from? So, to think that to use the nationalistic line or fervor to develop the economy is a tempting idea but not practical. They will be forced to do business with outside trade partners, make compromises and do a give and take. There is a naïve idea in India that we can get all those companies leaving China into our country like MNCs. This means you are open to the idea of a global economy. And the goods produced by these MNCs are going to be sold beyond national boundaries. If you want to take advantage, you need to embrace globalization to its fullest. What do you think of India’s moves to further cooperative measures in the South Asian region to fight the

pandemic? Should India start to have global positions on some of these issues? India has a got a very large economy and trades with all major countries. But still, India hasn’t taken its leadership role very seriously. It is not enough to send hydroxychloroquine to countries. We need to back that up with investment in science and technology and transfer to countries that need them. The Americans did this and the Russians also did. The Chinese are currently trying to do this in many parts of the world. India, however, is unable to do it because we lack capacity. It is not enough to speak in idealistic or rhetorical terms. Income inequality has been a bane of India as well as several developing economies. Do you think that if it were properly addressed earlier on, we would have been in a much better state to face this crisis? Income inequality is a worldwide phenomenon. The crisis has only served to highlight this. India is still among the lower and middle-income countries. We still need huge economic growth to have notions of income redistribution being effectively implemented. The acuteness of the inequality is not as great as in developed countries because of the scale of the economy. We haven’t yet reached that scale. We need to provide people with basic living standards and education and health. Inequality is a problem for our economic growth and if we don’t have the basic minimum for our large population to sustain themselves, then it might take us years to reach where we want to. There is a solid economic reason why we need to increase the purchasing power of the people. You have recently written about the leviathan state and why it is not ideal for the future of democracy. Do you think governments and administrative machinery would go back to their normal powers post this lockdown, or that there would be lasting changes in the way we are governed? My suspicion is that the right-wing governments, especially the one in India, wants to maximize the powers of the state. Because the ruling party wants to remain in power and would like to wield powers to its advantage like not done before. The

pandemic crisis and the economic downturn provide it with ample opportunities. This is a dangerous thing. The maximalist state is bad for economic growth and democratic culture. People should be free to make their own choices and not be regimented, which is what any state would like to do. That’s why I’m against the maximization of state power on the issue of principles. You can turn to China and say such a model has worked for them but we don’t want that example. We want to balance the freedoms democracy affords us with the affluence of a growing economy. I don’t think we should fall for the idea of being a great nation but being in subservience to the state. As a keen commentator on giants who strode this earth like Gandhi and Marx, where and in whom do you find the philosophical resources to encourage humanity to try again? What would be your philosophical response to the challenges humanity is faced with today? My own preference is for individual freedom, his moral right to make choices in all fields whether it is economic or political or any other. He should also have every right to choose what he wants to do with his life and not be regimented into a state-run economy. I think big is very bad. We need more competition and free market is essential to keep the economy going because that’s what allows for individual freedom. People in the past have emphasized this but they don’t have all the answers. I would perhaps pick the liberal thinkers like John Locke. To an extent, I would also go back to Edmund Burke although he is considered a conservative thinker. He argued for the freedom of American colonies when the British were refusing to leave by the end of the 18th century. He turned completely against the French Revolution but that is mostly because of the violence. Burke understood the importance of traditions but also individual aspirations. Any thinker who valued individual freedom and believed in the moral choice felt this and went hand in hand. You take away freedom and you don’t have morality left. Among 20th century thinkers, I would suggest people read John Rawls’ works. SEASONAL MAGAZINE

URGENT CURES FOR THE COVID-19 ECONOMY

CAN HARARI’S PRESCRIPTIONS PREPARE US FOR THE FUTURE? When Yuval Noah Harari speaks, the whole world listens. Trained as a historian, Harari is a popular voice amongst the current generation of homo sapiens (and likely to inspire upcoming generations of our species). His impeccable knowledge and insights on pressing issues facing humanity today such as climate change, nuclear weapons, the impact of Artificial Intelligence (AI) are second to none. He explores subjects as varied as philosophy to science to military history and is a best-selling author of the books Sapiens: A Brief History of Humankind (2014), Homo Deus: A Brief History of Tomorrow (2016), and 21 Lessons for the 21st Century (2018). In the prevailing scenario of the COVID-19 pandemic, Harari discusses themes such as how the human race dealt with past pandemic incidences, how governments are coming to speed with surveillance technologies, on the lack of global leadership and why more globalization, not less, is the solution. COVID-19 VS PAST PANDEMICS We are in a better situation compared to the pandemics in history. More importantly, we have all the scientific knowledge to stop this pandemic. We understand perfectly what is happening today. We are no longer blind and powerless. The big question is whether we know how to use our power responsibly. ON UNITED STATES When Ebola struck in 2014, the US led the efforts to stop the crisis. Similarly, in the 2008 economic downturn led the world. Now the US has resigned from its position in leading the country. Now, America is SEASONAL MAGAZINE

first. First in sick people, first in dead people. To develop a vaccine, we need countries to pool their resources together. To deal with the economic impact (of the novel coronavirus pandemic)... unless we have a global economic plan, we could have a global depression. The world is losing confidence in American competence. People are looking at the United States and thinking, ‘Hey, if this is how they deal with... in their own country... maybe it’s good the US is not leading the world anymore.’ THE REAL BIG PROBLEM There is a lot to criticise about China’s

initial response to the coronavirus crisis... We could have prevented the entire pandemic if China had been more open initially. But, generally speaking, I am happy to see China is helping other countries in dealing with this crisis. The ideal situation would be if countries realise you cannot rely on one country, one leader... we need to encourage global solidarity. The real big problem is not the virus, it’s the inner demon within human. We now see hatred... hatred for each other, other countries. If we allow this kind of hatred to spread, it will prevent us from dealing with the current crisis and poison internal relations for years to come.

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ON RELIGION

ON SURVEILLANCE The most likely and immediate danger is surveillance. Previously surveillance was above the skin... now it’s under the skin. Previously governments wanted to know where we went, we met. Now governments want to know what’s happening inside your body. Previously, governments could know you are watching video online, but didn’t know what you felt like. But imagine this kind of biometric surveillance that tracks your heartbeat, your body temperature... the person monitoring you can know how you feel like, your emotions. It could lead to a totalitarian regime that even George Orwell could not imagine. It is possible to have both health and privacy... it should be possible with system. Yes, we need a system to monitor such pandemics... we should have a separate healthcare authority to be in-charge of this surveillance. The surveillance should also go both ways... it should not just be the government monitoring the people but also people monitoring the government. DICTATORSHIPS NOT MORE EFFECTIVE At a time like this people when people are afraid for their lives, for their jobs, many of them dream about a strong powerful leader that knows everything and will protect us and they are willing to let go of all democratic checks and balances and just trust in one big leader. That’s extremely dangerous. First of all, because such a big leader will not leave once the crisis is over... there is always a new emergency coming. Secondly, dictatorships are just not more effective than democracies at a time like this. People imagine that dictatorships are better because they can make decisions faster. But the problem is if this one man [the leader] took a wrong decision, usually he will never admit it. He will blame others SEASONAL MAGAZINE

AT A TIME LIKE THIS PEOPLE WHEN PEOPLE ARE AFRAID FOR THEIR LIVES, FOR THEIR JOBS, MANY OF THEM DREAM ABOUT A STRONG POWERFUL LEADER THAT KNOWS EVERYTHING AND WILL PROTECT US AND THEY ARE WILLING TO LET GO OF ALL DEMOCRATIC CHECKS AND BALANCES AND JUST TRUST IN ONE BIG LEADER. and ask for even more power to deal with the others. In a democracy there are more involved in making decisions... so we see even in emergencies democracies work better than dictatorships. For example, China — an authoritarian regime — dealt with the crisis relatively effectively, but so did South Korea, Taiwan, New Zealand, which are democracies. And according to some measures, these countries actually dealt with the crisis better than China without becoming dictatorships. END OF GLOBALISATION? We might see a certain going back (in terms of economic globalisation and integration)... Many countries are now completely dependent in exports... and you can’t just produce everything on your own. I think we will see some restructuring of the global economic system, but I don’t see a complete collapse.

There will be some revision [with people’s relationship with religion]. The thing about religious leaders... they are not very good at stopping epidemics, that’s not their expertise. The real expertise of religious leaders is making excuses. They are very good [at that], it is what they do... they promise something, it doesn’t happen and they have best excuses on why it didn’t happen. So it may be the same with this crisis. They can’t really protect people from this disease but they are now working... inventing all kinds of stories and excuses... about why this disease is spreading. I think some people will be convinced with these excuses and will go on believing in these religious leaders... but I hope that at least some people will realise that if you have choose between a scientist who can actually cure you and a religious leader who is best at making excuses, it’s better to go with the scientist. ON INDIA’S RESPONSE I am not an expert on India [so can’t comment on the response]... but I think India faces an enormous challenge... In previous epidemics India was very hard hit... During the Spanish Flu epidemic, India was the hardest hit. I can’t comment on how the Indian government is responding because I don’t understand enough... but I would urge people to react not with hatred but with solidarity... both with other countries and especially with different communities within India. I was very worried about some stories I heard that some people are blaming the epidemic on minorities... on Muslim minorities... even saying that it’s a deliberate act of terrorism... this is complete nonsense, is extremely dangerous... we don’t need more hatred, we need solidarity, we need love between people.

Excerpts from India Today Group’s EConclave Corona Series

WORLD NEVER HAD A MORE URGENT TASK THAN COVID-19 VACCINE, SAYS BILL GATES One of the questions I get asked the most these days is when the world will be able to go back to the way things were in December before the coronavirus pandemic. My answer is always the same: when we have an almost perfect drug to treat COVID-19, or when almost every person on the planet has been vaccinated against coronavirus. he former is unlikely to happen anytime soon. We’d need a miracle treatment that was at least 95 percent effective to stop the outbreak. Most of the drug candidates right now are nowhere near that powerful. They could save a lot of lives, but they aren’t enough to get us back to normal. Which leaves us with a vaccine. Humankind has never had a more urgent task than creating broad immunity for coronavirus. Realistically, if we’re going to return to normal, we need to develop a safe, effective vaccine. We need to make billions of doses, we need to get them out to every part of the world, and we need all of this happen as quickly as possible. That sounds daunting, because it is. Our foundation is the biggest funder of vaccines in the world, and this effort dwarfs anything we’ve ever worked on before. It’s going to require a global cooperative effort like the world has never seen. But I know it’ll get done. There’s simply no alternative.

Although eighteen months might sound like a long time, this would be the fastest scientists have created a new vaccine. Development usually takes around five years. Once you pick a disease to target, you have to create the vaccine and test it on animals. Then you begin testing for safety and efficacy in humans. Safety and efficacy are the two most important goals for every vaccine. Safety is exactly what it sounds like: is the vaccine safe to give to people? Some minor side effects (like a mild fever or injection site pain) can be acceptable, but you don’t want to inoculate people with something that makes them sick. Efficacy measures how well the vaccine protects you from getting sick. Although you’d ideally want a vaccine to have 100 percent efficacy, many don’t. For example, this year’s flu vaccine is around 45 percent effective. To test for safety and efficacy, every vaccine goes through three phases of trials:

The world is creating this vaccine on a historically fast timeline.

Phase one is the safety trial. A small group of healthy volunteers gets the vaccine candidate. You try out different dosages to create the strongest immune response at the lowest effective dose without serious side effects.

Dr. Anthony Fauci has said he thinks it’ll take around eighteen months to develop a coronavirus vaccine. I agree with him,

Once you’ve settled on a formula, you move onto phase two, which tells you how well the vaccine works in the

Here’s what you need to know about the race to create a COVID-19 vaccine.

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though it could be as little as 9 months or as long as two years.

people who are intended to get it. This time, hundreds of people get the vaccine. This cohort should include people of different ages and health statuses. Then, in phase three, you give it to thousands of people. This is usually the longest phase, because it occurs in what’s called “natural disease conditions.” You introduce it to a large group of people who are likely already at the risk of infection by the target pathogen, and then wait and see if the vaccine reduces how many people get sick.

After the vaccine passes all three trial phases, you start building the factories to manufacture it, and it gets submitted to the WHO and various government agencies for approval. This process works well for most vaccines, but the normal development timeline isnâ&#x20AC;&#x2122;t good enough right now. Every day we can cut from this process will make a huge difference to the world in terms of saving lives and reducing trillions of dollars in economic damage. So, to speed up the process, vaccine developers are compressing the timeline.

SAFETY AND EFFICACY ARE THE TWO MOST IMPORTANT GOALS FOR EVERY VACCINE.

In the traditional process, the steps are sequential to address key questions and unknowns. This can help mitigate financial risk, since creating a new vaccine is expensive. Many candidates fail, which is why companies wait to invest in the next step until they know the previous step was successful. For COVID-19, financing development is not an issue. Governments and other organizations (including our foundation and an amazing alliance called the Coalition for Epidemic Preparedness Innovations) have made it clear they will

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support whatever it takes to find a vaccine. So, scientists are able to save time by doing several of the development steps at once. For example, the private sector, governments, and our foundation are going to start identifying facilities to manufacture different potential vaccines. If some of those facilities end up going unused, that’s okay. It’s a small price to pay for getting ahead on production. Fortunately, compressing the trial timeline isn’t the only way to take a process that usually takes five years and get it done in 18 months. Another way we’re going to do that is by testing lots of different approaches at the same time. There are dozens of candidates in the pipeline. There are over 115 different COVID-19 vaccine candidates in the development pipeline. I think that eight to ten of those

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look particularly promising. (Our foundation is going to keep an eye on all the others to see if we missed any that have some positive characteristics, though.) The most promising candidates take a variety of approaches to protecting the body against COVID-19. To understand what exactly that means, it’s helpful to remember how the human immune system works. When a disease pathogen gets into your system, your immune system responds by producing antibodies. These antibodies attach themselves to substances called antigens on the surface of the microbe, which sends a signal to your body to attack. Your immune system keeps a record of every microbe it has ever defeated, so that it can quickly recognize and destroy invaders before they make you ill. Vaccines circumvent this whole process

by teaching your body how to defeat a pathogen without ever getting sick. The two most common types - and the ones you’re probably most familiar with - are inactivated and live vaccines. Inactivated vaccines contain pathogens that have been killed. Live vaccines, on the other hand, are made of living pathogens that have been weakened (or “attenuated”). They’re highly effective but more prone to side effects than their inactivated counterparts. Inactivated and live vaccines are what we consider “traditional” approaches. There are a number of COVID-19 vaccine candidates of both types, and for good reason: they’re wellestablished. We know how to test and manufacture them. The downside is that they’re timeconsuming to make. There’s a ton of material in each dose of a vaccine. Most of that material is biological, which means you have to grow it. That takes

time, unfortunately. That’s why I’m particularly excited by two new approaches that some of the candidates are taking: RNA and DNA vaccines. If one of these new approaches pans out, we’ll likely be able to get vaccines out to the whole world much faster. (For the sake of simplicity, I’m only going to explain RNA vaccines. DNA vaccines are similar, just with a different type of genetic material and method of administration.) Our foundation - both through our own funding and through CEPI - has been supporting the development of an RNA vaccine platform for nearly a decade. We were planning to use it to make vaccines for diseases that affect the poor like malaria, but now it’s looking like one of the most promising options for COVID. The first candidate to start human trials was an RNA vaccine created by a company called Moderna. Here’s how an RNA vaccine works: rather than injecting a pathogen’s

antigen into your body, you instead give the body the genetic code needed to produce that antigen itself. When the antigens appear on the outside of your cells, your immune system attacks them—and learns how to defeat future intruders in the process. You essentially turn your body into its own vaccine manufacturing unit. Because RNA vaccines let your body do most of the work, they don’t require much material. That makes them much faster to manufacture. There’s a catch, though: we don’t know for sure yet if RNA is a viable platform for vaccines. Since COVID would be the first RNA vaccine out of the gate, we have to prove both that the platform itself works and that it creates immunity. It’s a bit like building your computer system and your first piece of software at the same time. Even if an RNA vaccine continues to show promise, we still must continue pursuing the other options. We don’t know yet what the COVID-19 vaccine

will look like. Until we do, we have to go full steam ahead on as many approaches as possible. It might not be a perfect vaccine yet and that’s okay. The smallpox vaccine is the only vaccine that’s wiped an entire disease off the face of the earth, but it’s also pretty brutal to receive. It left a scar on the arm of anyone who got it. One out of every three people had side effects bad enough to keep them home from school or work. A small—but not insignificant— number developed more serious reactions. The smallpox vaccine was far from perfect, but it got the job done. The COVID-19 vaccine might be similar. If we were designing the perfect vaccine, we’d want it to be completely safe and 100 percent effective. It should be a single dose that gives you lifelong protection, and it should be easy to store and transport. I hope the COVID-19 SEASONAL MAGAZINE

vaccine has all of those qualities, but given the timeline we’re on, it may not. The two priorities, as I mentioned earlier, are safety and efficacy. Since we might not have time to do multi-year studies, we will have to conduct robust phase 1 safety trials and make sure we have good real-world evidence that the vaccine is completely safe to use. We have a bit more wiggle room with efficacy. I suspect a vaccine that is at least 70 percent effective will be enough to stop the outbreak. A 60 percent effective vaccine is useable, but we might still see some localized outbreaks. Anything under 60 percent is unlikely to create enough herd immunity to stop the virus. The big challenge will be making sure the vaccine works well in older people. The older you are, the less effective vaccines are. Your immune system—like the rest of your body—ages and is slower to recognize and attack invaders. That’s a big issue for a COVID-19 vaccine, since older people are the most vulnerable. We need to make sure they’re protected. The shingles vaccine which is also targeted to older people - combats this by amping up the strength of the vaccine. It’s possible we do something similar for COVID, although it might come with more side effects. Health authorities could also ask people over a certain age to get an additional dose. Beyond safety and efficacy, there are a couple other factors to consider: How many doses will it be? A vaccine you only get once is easier and quicker to deliver. But we may need a multidose vaccine to get enough efficacy. How long does it last? Ideally, the vaccine will give you long-lasting protection. But we might end up with one that only stops you from getting sick for a couple months (like the seasonal flu vaccine, which protects you for about six months). If that happens, the shortterm vaccine might be used while we work on a more durable one. How do you store it? Many common vaccines are kept at 4 degrees C. That’s around the temperature of your average refrigerator, so storage and transportation is easy. But RNA vaccines need to be stored at much colder SEASONAL MAGAZINE

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temperature - as low as -80 degrees C which will make reaching certain parts of the world more difficult. My hope is that the vaccine we have 18 months from now is as close to “perfect” as possible. Even if it isn’t, we will continue working to improve it. After that happens, I suspect the COVID-19 vaccine will become part of the routine newborn immunization schedule. Once we have a vaccine, though, we still have huge problems to solve. That’s because… We need to manufacture and distribute at least 7 billion doses of the vaccine. In order to stop the pandemic, we need to make the vaccine available to almost every person on the planet. We’ve never delivered something to every corner of the world before. And, as I mentioned earlier, vaccines are particularly difficult to make and store.

MY HOPE IS THAT THE VACCINE WE HAVE 18 MONTHS FROM NOW IS AS CLOSE TO “PERFECT” AS POSSIBLE. EVEN IF IT ISN’T, WE WILL CONTINUE WORKING TO IMPROVE IT. AFTER THAT HAPPENS, I SUSPECT THE COVID-19 VACCINE WILL BECOME PART OF THE ROUTINE NEWBORN IMMUNIZATION SCHEDULE. There’s a lot we can’t figure out about manufacturing and distributing the vaccine until we know what exactly we’re working with. For example, will we be able to use existing vaccine factories to make the COVID-19 vaccine? What we can do now is build different kinds of vaccine factories to prepare. Each vaccine type requires a different kind of factory. We need to be ready with facilities that can make each type, so that we can start manufacturing the final vaccine (or vaccines) as soon as we can. This will cost billions of dollars. Governments need to quickly find a mechanism for making the funding for this available. Our foundation is

currently working with CEPI, the WHO, and governments to figure out the financing. Part of those discussions center on who will get the vaccine when. The reality is that not everyone will be able to get the vaccine at the same time. It’ll take months—or even years—to create 7 billion doses (or possibly 14 billion, if it’s a multi-dose vaccine), and we should start distributing them as soon as the first batch is ready to go. Most people agree that health workers should get the vaccine first. But who gets it next? Older people? Teachers? Workers in essential jobs? I think that low-income countries should be some of the first to receive it, because people will be at a much higher risk of dying in those places. COVID-19 will spread much quicker in poor countries because measures like physical distancing are harder to enact. More people have poor underlying health that makes them more vulnerable to complications, and weak health systems will make it harder for them to receive the care they need. Getting the vaccine out in low-income countries could save millions of lives. The good news is we already have an organization with expertise about how to do this in Gavi, the Vaccine Alliance. With most vaccines, manufacturers sign a deal with the country where their factories are located, so that country gets first crack at the vaccines. It’s unclear if that’s what will happen here. I hope we find a way to get it out on an equitable basis to the whole world. The WHO and national health authorities will need to develop a distribution plan once we have a better understanding of what we’re working with. Eventually, though, we’re going to scale this thing up so that the vaccine is available to everyone. And then, we’ll be able to get back to normal—and to hopefully make decisions that prevent us from being in this situation ever again. It might be a bit hard to see right now, but there is a light at the end of the tunnel. We’re doing the right things to get a vaccine as quickly as possible. In the meantime, I urge you to continue following the guidelines set by your local authorities. Our ability to get through this outbreak will depend on everyone doing their part to keep each other safe.

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URGENT CURES FOR THE COVID-19 ECONOMY

GOVERNMENT BORROWING FROM RBI NOT PREFERRED: NK SINGH, CHAIRMAN, 15TH FINANCE COMMISSION

hough the government faces a tough challenge in funding the economy reeling from the Covid19 pandemic, NK Singh, Chairman, 15th Fifteenth Finance Commission, said borrowing money from the Reserve Bank of India is not the preferred option. Section 5 of the Fiscal Responsibility and Budget Management Act allows RBI to directly lend money to the government under exceptional circumstances. This would mean the RBI directly buying government bonds in the primary market. Singh, however said that “Whether it should be acted or not acted upon, or would be the most preferred SEASONAL MAGAZINE

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option? In my view, it’s not.” Some states have demanded that the central government should increase their market borrowing limit to 5% of the state GDP from 3%. Singh said this would require a complete revamp of state FRBM Act. The cost of borrowing for states is high, and increasing the limit to 5% will still pose a similar challenge, he said. The Economic Advisory Council to the 15th Finance Commission, in a meeting recently, highlighted the importance of a carefully designed fiscal response, and not just its size, given that the shortfall in the government’s revenue will be high due to subdued economic activity, according to a statement by the commission.

INDIAN HEALTHCARE & ECONOMY CAN'T COPE WITH A MAJOR OUTBREAK: SOMDEEP SEN, ROSKILDE UNIVERSITY he sudden lockdown announcement has meant that millions of migrant workers, who play an indispensable role in the economies of India’s major cities, were left in a double bind, without any source of income, yet unable to return home. Thousands of people thronged city bus depots and train stations, while others walked for hours to reach their villages. Neither is India’s public health care system, nor its wider economy, is ready to cope with a major outbreak. A 2019 study exposed the dire state of the health care sector: with only 1.4 percent of India’s GDP allocated for health spending, public infrastructure was already severely under-resourced when

the pandemic began. India only has one doctor in the public health system for every 10,189 people. In total, there is a shortfall of 600,000 doctors and 2 million nurses. Add a pandemic to the mix and the results could be catastrophic. In midMarch, the Ministry of Health and Family Welfare estimated that there was one isolation bed available for every 84,000 people, and one quarantine bed for every 36,000. There were also just 40,000 respiratory systems in the entire country.

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URGENT CURES FOR THE COVID-19 ECONOMY

FURTHER LOCKDOWN WILL DEVASTATE THE ECONOMY: OMKAR GOSWAMI, Omkar Goswami is Chairperson, Corporate and Economic Research Group (CERG) and Member, Economic Advisory Council to the 15th Finance Commission. mposing a nationwide lockdown involving 1.3 billion people for 40 consecutive days is hard enough. Getting out of it could be harder still, unless we are crystal clear and totally unambiguous about our basic intent. Let me start by stating something upfront. In today’s scenario, and for the foreseeable future, there will be enormous conflicts between epidemiological concerns of health and the basic rationale of earning a livelihood. Moreover, given the nationwide fear of the pandemic and anxieties about how it may overwhelm the country’s sparse medical facilities, I suspect that when there is a hard choice to be made between health and livelihood, politicians may veer in favour of health. The economic consequences have been devastating. How can one mitigate this disaster? The key to it lies in getting people back to work as soon as possible, with such safety as can be feasibly maintained. I had interacted with three outstanding empirical economists who shared their estimates in considerable detail. Though subject to corrections, what they suggested is that real GDP growth will contract from around 5.5% in 2019-20 to – 0.4% in 2020-21. If these estimates turn out to be true, this will be the deepest contraction that India has seen since the downturn that occurred in 1979-80, when real GDP growth plummeted from 5.5% in the previous year to –5.2%. To lock down any further will further devastate the economy — almost to a point of no return. It is time to totally lift the

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lockdown from May 4. Let state governments continue making their call between health and livelihood. Some will opt for full lifting. Others won’t. But after 40 consecutive days, it is time for earning a livelihood. The lockdown was like the chakravyuh that you can enter, but never exit. So, cut the Gordian knot.

LOCKDOWN AFFECTS COUNTRIES LIKE INDIA MORE: CHRISTOPHER WOOD, JEFFERIES

ockdown in countries like India and Indonesia are more disastrous for human welfare and economies since there is no help for small businesses and neither are there unemployment benefits, said Christopher Wood, Global Head of Equity Strategy at Jefferies. Wood said the situation in countries like India and Indonesia is in contrast with the US where the Small Business Administration's Paycheck Protection Programme will provide up to $349 billion in forgivable loans to small businesses to pay

their employees for eight weeks during the health crisis. In countries such as India, with young demographics, such a lockdown causes more human suffering than Covid-19 itself, said Wood. This continuing lockdown is, unfortunately, making it ever more inevitable that India will suffer a consumer lending cycle," the Hong Kong-based ace analyst said. There is also a growing risk of forbearance on local lenders. He is also concerned about the continuing weakness in the rupee amid negative consequence of lower remittances from the Middle East as a negative consequence of fall in crude oil prices. SEASONAL MAGAZINE

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PAS INFR DEV

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SSIONATE ABOUT RASTRUCTURE VELOPMENT

NITINGADKARI HAS ALWAYS BEEN PASSIONATE ABOUT INFRASTRUCTURE DEVELOPMENT, SO MUCH SO THAT HE REQUESTED PRIME MINISTER NARENDRAMODI IN 2014 TO ALLOT HIM THAT PORTFOLIO. TODAY, HE HANDLES THIS CRUCIAL DOMAIN’S KEY COMPONENTS LIKE MINISTRY OF ROAD TRANSPORT & HIGHWAYS, AND MINISTRY OF SHIPPING. AND ALONG WITH THESE, GADKARI HAS BEEN ENTRUSTED WITH AN EVEN MORE CRUCIAL SEGMENT AS FAR AS INDIA IS CONCERNED – THE MINISTRY OF MICRO, SMALL AND MEDIUM INDUSTRIES WHICH ACCOUNTS FOR THE BULK OF INDIA’S INFORMAL SECTOR. VETERAN JOURNALIST SHEKHAR GUPTA RECENTLY INTERVIEWED MINISTER NITINGADKARI FOR NDTV’S OFF THE CUFF. HERE ARE SOME EXCERPTS. SG SG: In an eventful juncture in our lives where we are all learning to use technology, we bring to you a fresh edition of “Off the Cuff” a digital version. And we speak today with one of the most outspoken and one of the most accessible ministers in this government, that is, NitinGadkari. My old friend and also the former President of the BJP at a very young age. So, NitinJi, Welcome to Off the Cuff. (You took some time for us and that too from Nagpur. People are stuck where they are in these times and, it is no different for ministers. You could’ve called for a plane to pick you up.) NG NG: The lockdown in also enforced in Delhi and the offices are shut down. So I’m also working from home and in contact with the Officers. Related to MSMEs, I have talked to associations like Plastic Association, Chamber of Commerce, FICCI, CII, etc. Interestingly, I interacted with more than 6000 scholars across 50 universities around the world via video

conferencing for more than 90 minutes. For the first time, I understood the importance of outreach and connectivity through online medium that I had somewhat underestimated in the past. I’ve reach approximate 35 million people in last fifteen days. It’s really a surprise for me and I was lacking on this front previously. I have realized the impact made by technology and media on our lives and currently, I’m experiencing the same. SG SG: Although you have multiple portfolios (the highway construction most prominent of them), the MSME sector is in turmoil. MSME is integral to the economy for it offers employment to many people in the country. Neither it has loans nor does it have demand. MSMEs lack capital to pay off their employees due to which they are losing their jobs and taking their route back to home. Everyone is eagerly waiting for many days that a relief package will be announced. Will the government come up with a relief package for SEASONAL MAGAZINE

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MSMEs or not? If yes, what kind of package could it probably be? NG NG: Shekharji, I agree with you on the importance of MSMEs for it contributes 29% to the growth of our country’s economy. It also contributes 48% share of total exports by our country. MSMEs have created 110 million jobs so far in India. Recently, I was talking to stakeholders in spa industry and was surprised to know that they have generated employment for 6 million people. So it is natural for MSMEs and small industry to provide an economic base to the country. As you rightly said, these sectors are facing numerous problems. The biggest problem faced by the sector, even before the coronavirus struck, that they don’t get paid swiftly for the procurements they supply to the Public Sector Undertakings (PSUs) in various central and state governments. The nonpayment of this amount, which is already very high, results in the erosion of working capital for these MSMEs. Working capital is extremely important for the functioning of MSMEs. We have already taken three decisions in this regard. Firstly, RBI has increased the working capital in MSMEs by 20%. Secondly, I am under talks with the state government (especially in Maharashtra) to make sure that state banks also release another 20%. It is currently in the review process. Thirdly, we have deferred monthly EMI by three months in the industry. In addition to that, we have restricted 600,000 MSMEs by March 31st through the banking system. We hope to re-structure 2.5 million MSMEs by December 31 st. Another problem that impedes the MSME sector is importing new technologies. The production cost can only be reduced by reducing the logistics, capital and labor costs. SG SG: All these measures will bore fruit in the long term. However, in short term, the patient is on deathbed and requires immediate life support. Every government in the world is doing something to preserve jobs. I know in India it is very difficult to give money something like that. But suppose you say something imaginative that for MSMEs below a certain level (for ex, SEASONAL MAGAZINE

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spa, salons etc. that contribute to 6 million jobs), the employees whose share in the Provident Fund is bore by the company. Suppose the government gives that share to the company for six months on the condition that no workers will be fired by the company. Are you thinking on such lines or is it not going to happen? NG NG: Yes, we are thinking on these issues. We are offering the maximum possible relief that can be offered by the government on various levels – be it on departmental level, from Ministry of Finance, on PMO level. We are exploring all possible options. Shekharji, let me tell you one thing. The Government of Japan has allotted 12% of their GDP to combat the coronavirus pandemic. However, there is a stark difference between the economies of India and let’s say countries like Japan and USA. For instance, some of the state government are in crisis to the extent they don’t have enough funds to pay salaries to their employees. The revenue collection for centre has also plummeted. Banking systems are also facing big challenges despite our planning and inputs. In a nutshell, most stakeholders are in a state of difficulty. At the end of the day, I understand that saving the MSME sector will be vital to ensure the economic security of the country. As you mentioned out-of-thebox solution, I got a suggestion that around Rs. 80,000 crore is deposited in the ESI funds. Recently SantoshGangwarji came up with an order that Rs. 15,000 relief will be provided to all the companies employing less than 100 labourers. I requested him to waive off the 15k limit as well as the 100-labourer limit so that all can benefit from the scheme. We have definitely took some concrete steps and are also taking some of them. The relief package for the MSME sector will also be soon. We have done our homework and sent the plan to Ministry of Finance for their approval. We are also expecting that a decision will be taken soon and the Govt. of India backs the MSME sector in times of crisis. We hope to fight back the crisis taking all stakeholders together in an inclusive and integrated manner.

SG: When do you think the relief package will be approved? NG NG: See, I’m in Nagpur these days and finished the things at my end. I feel that it will be out soon enough. SG SG: One week or five days or …? NG NG: I cannot comment decisively from here. The decision will be taken by the Finance Minister and PM.However, I expect that a decision will be taken soon. SG SG: Many people approach you with their problem. What do they think is the biggest problem they’re facing? I’m not limiting myself to the MSME sector but talking in general. You’re a political leader and have been a young former President of the party. So what’s your take on the situation in the country? NG NG: The country is facing a crisis these days.Not only our country, but the whole world. From USA, Japan and Germany to UK, Spain and Italy, the situation in these countries are manifold worse than ours. Most significant of all, that people are disappointed all across the world. Pessimism prevails. Irrespective of the economic strata, people are frustrated about the uncertain future. I also advised my

friends in media sector to show some positive attitude in such times. We shall overcome, we shall win and we shall survive the crisis. This attitude needs to be cultivated among all. I see masses scared and disappointed whenever I meet them. This is not a good sign. The government alone cannot change the mind-set. Different stakeholders like the government, media, religious preachers, intelligentsia etc. should work together and spread positivity across the society. Inspire confidence and get away with negativity. I often try to motivate people through song ‘Hum HongeKamyaab’ (‘we shall overcome’) and poetry ‘KoshishKarneWalo Ki HaarNahiHoti’ (‘the ones who try never lose’). In my student-life in Nagpur University around 1977-78, we all used to lose elections. We did not win any seats and were often disappointed. At that time, I got the opportunity to read the memoirs of President Richard Nixon. He was widely ostracized in the States due to Watergate scandal. People even objected him to purchase a property in Washington DC. There was a motivating line in his biography, which goes like this – “A man is not finished when he is defeated, a man is finished when he quits.” I believe that the government, journalists, politicians

and social workers should imbibe this fighting spirit in the masses. SG SG: We cannot run away from the reality that millions of people are running away from the pandemic out of fear. We are seeing a Biblical mass migration – like the one when Moses rallied his people – where masses are running towards their hometowns. The lockdown was enforced on a very short notice of 4 hours. We didn’t make any preparations. Now they are walking long distances on foot. As a down-toearth person, you can understand how heart wrenching it is. Due to this, the psyche of masses is already broken. It is continuously becoming hard to address the migration issue. Do we not have any plans? NG NG: It is true that fear dwells in people’s minds, especially Bihar and UP, from where most of the labour migrates to different parts of the country. Moreover, they have started walking afoot. As they are walking down the highways, I advised the toll operators to arrange for food and water supplies for them. Many civil society organizations have also come forward to join the initiative. For example, many people from Hyderabad are coming to Nagpur. Recently, the government has talked about re-

opening railways. I got a list stating the fact that 80,000 people, only from Vidarbha region, are stuck in Mumbai and Pune and wish to come home. People should follow the guidelines issued by state and central governments. It includes washing hands frequently, wearing protective masks, maintain one metre distance from people, arranging food and shelter in the industry premises, limited travel in one bus and ultimately gradually reopening the economy. We have opened 60-70% of highway construction contracts in NHAI. Generating employment for migrant labourers is a key measure to address their fears.I’ll tell you an intriguing fact. From the concerned represntatives from Chandrapur and Garchiroli (also a Naxal-prone area), I came to know that over 10,000 people, who are from Telangana, are separated from their family in these two districts. I wrote to letter to Chief Minister of both states requesting them to let the stay in these districts. As both districts are free from the virus, it is advisable that the economic projects here are re-instated. It will cease the migration of these labourers. We have to resolve the problem from case-to-case basis. SG SG: As you said that the spread of virus is not uniform across all the areas, the centre painted the map of India into red, green and orange zone like a brush on the canvas. A district is a big unit to determine the zones. It might be possible that one of the taluka/tehsil in a district have 50 cases while the others are virus-free. Don’t you think, we closed the country more stringently than actually needed? NG NG: Let me talk about Nagpur as a case study. There are 12 assembly constituency within the district. Out of these, six are predominantly rural and do not have any cases. Four out of the other six urban constituencies are also doing well. The remaining two constituencies of Central Nagpur and East Nagpur has the cases. Even there, the cases are concentrated to two-three wards each. That’s why I invited District Collect and Commissioner at home and instructed them not to shut down the whole district. We can seal off the problematic areas completely and offer SEASONAL MAGAZINE

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some relaxation to the remaining places. Similar advisories are issues from Centre, down to the states and then district collectors. It is the authority of district collector to enforce these advisories. The situation will be monitored from district-to-district and as you said, it is important to re-start the life that has been on a standstill in these areas.

Participant Questions Questions: PQ1 PQ1: Do you think that India’s MSME sector can benefit from the conditions prevailing in China? If yes, what measures are you taking in this regard? NG NG: I agree and will explain you with an example. Recently, India imported 15 million PPE kits through special delivery from China. When there was a shortage, I search for a donor and took a capital amount of Rs. 1 crore. Along with MP VikasMahatme and MSME Joint Director (Nagpur), we offered the capital to a local ready-made garments company by the name ‘Orange Cluster’. They employ 1500 women and also manufacture branded clothes for Peter England.They manufactured the kits on a rate of Rs. 550-650 and deployed it in the nearby hospitals. With a production capacity of 10,000 kits per day, per kit cost has come down from Rs. 1200 to Rs. 550 now. I’ve circulated the video among all the District Collectors. So, there is no need for dependency on China. For instance, the plastic pump for sanitizer and shampoo bottles was also imported from China till recently. In a video conference with the President of Plastic Association, I suggested him to manufacture those pumps. They’ve begun work on that. Similarly, many products like plastic utensils, incense sticks etc. were mostly imported from China. The tiles industry at Morvi has also been revived after technology and production inputs and has total substituted the imports from China. We are also working on a book project on exports and imports done by India in recent years. India will make a relevant policy to benefit the MSME sectors. SG SG: I believe that import substitution is a concept from 1970s and probably won’t be applicable in the future. What SEASONAL MAGAZINE

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are the sectors where we can compete on a global level and China is currently leading the race? NG NG: I have identified some sectors. For example, I was particularly interested in the biofuel sector. We used Jatropha oil for powering the helicopters in the Republic Day parade this year. Biofuel sector can be developed considered the varieties of plants that grow in our forests.Secondly, ethanol. Since last 12 years, I’ve been making a case for the ethanol sector in our country and now effects are visible. We produce ethanol using molasses and sugarcane juice. India has a surplus stock of rice and wheat for three years and of sugar for two years. The warehouse storages in Haryana and Punjab are full. Recently, we have secured the permission of making ethanol from the surplus rice and corn that might be spoilt in the warehouses. For instance, India imports $9 billion worth of edible oil and it meets only 10% of the domestic demand indigenously. The productivity should be enhanced by adopting best research practices in the countryside. Similarly, we have identified many sectors. We are offering solar charkha worth Rs. 45000 each to 1 million women. The women will produced cotton fibre using the devices and government will then buy that cloth. There are many such schemes.Many printing paper mills in our country has shut down due to the virus.I’ve suggested the people from Ballarpur paper mill that we can grow bamboo in our fields and supply it to maintain the production of paper. There is a lot of wasteland in the country. India imported paper worth Rs. 40,000 crore, paper pulp worth Rs. 45,000 crore and wood worth Rs. 60,000 crores. We have to change our forests and environmental laws. For instance, we made a case on the Cabinet level for Bamboo being classified as a grass legally so that it can be harvested for industrial purposes. Bamboo is a raw material for making textiles, bioethanol, pickles, furniture etc. SG SG: Just for the record, newsprint paper is not made of bamboo but from the woods of virgin forest. However, let it be. PQ2 PQ2: How will you complete the annual target for making 4500 km roads

in this fiscal year considering the circumstances? How will your projects work if there are many labourers who are migrated back to their homes? NG NG: In my tenure as a minister, the road construction rate in the country increased from 2 km/day to 30 km/day. We cleaned Ganga to the extent of 8090%. Despite the popular skepticism on the proposal of waterways, we see a multi-modal hub at Varanasi and Sahibganj today. The hubs at Haldia and Ghazipur are in progress.As of today, 28 million tonnes of cargo in being transported in the river Ganga. I proposed the Sagarmala project worth Rs. 16 lakh crores at a time the budget allocated for the department was Rs. 800 crore. We raised adequate capital to kick start infrastructure projects worth Rs. 6.5 lakh crores. We have different models like PPP, BOT and Hybrid Annuity Model to conduct these projects. SG SG: But who will arrange for the labour…? NG NG: We have progressed towards bringing the labour back from the labour camps. Around 70% of our projects have begun functioning now. The ports have reopened, 60-70% traffic is back on the national highways and procurement issues in steel and cement have been addressed. I expect that labour will revert back in sometime

once employment opportunities are created. SG SG: I think that normalization of traffic will take time as we do not see traffic on the highways these days. NG NG: I agree that the situation in Mumbai and Pune is problematic. Delhi highways were also restricted and we have come up with makeshift solutions. Trade at ports have also begun. We have to learn to live beside the virus by adapting our lifestyles. We must begin all economic activities after taking sufficient preventive health measures alongside the pandemic. There is no other option. PQ3 PQ3: Hydrogen cells, electric vehicles and many other technologies have revolutionized the transport worldwide. What is India’s stand on such projects and what is the government doing to support these initiatives? NG NG: I recall taking a test drive of a hydrogen cell-driven car developed by Toyota near the Dhyanchand Stadium, Delhi. This is the future. However, producing hydrogen from water is costly and it has to be produced from biomass. The research is in progress in India and all over the world. As the Transport Minister, I totally support such future-oriented technologies. For instance, we are also trying to utilize LNG for long-distance transport services. We have produced bio-CNG from garbarge and even 80 buses are

operating on it in Nagpur. Thus, these are some alternate fuel suggestions. Similarly, electric vehicles industry is also approaching to the helm gradually. Note that the automobile industry in India is worth Rs. 4.5 lakh crores. India will be the leading hub for automobile production in next five years. With the scrapping policy on cards, we will ensure that automobile brands will find manufacturing in India attractive to meet this target. SG SG: Please explain us about the scrapping policy. NG NG: Usually, cars are reduced to scrap after operating for 15-20 years. So, scrapping involves equitable methods to extract raw materials like copper, aluminium, iron, steel etc. from these used cars. In foreign countries, these cars are reduced to a rubble in garbage plants. In 7 major ports, we have deepened the depth of ports from 12 metres to 18 metres. This will facilitate heavier ships (upto 200,000 tonnes weight) in the port that will bring scrap from these countries on a very cheap rate.Kandla will be projected as the manufacturing hub of this scrap. The relevant raw materials will be isolated and recycled to produce new parts for the automobiles. This will drastically reduce the material costs and costs of spare parts which will make our automobile industry competitive. It will be economically beneficial for the nation. PQ4 PQ4: On one hand, the NRIs were evacuated to the country in chartered flights. On the other hand, the migrant labour is walking towards their homes. Moreover, there has been a controversy regarding railway fare of these labourers. Is it really a government of rich? NG NG: To begin with, it is challenging to evacuate the people from outside the country. Most of the international airlines are called off. Also international travel was the most prominent reason that the coronavirus struck in the country. Flying off people from outside is tantamount to increase the risks of the virus. Two things are pretty important in this regard. Firstly, if a vaccine could be developed then there is no harm in opening the borders…

*SG repeats the question* NG NG: Most of the migrant labourers hail from UP and Bihar which are densely populated states. If they have been sent from the hotspots earlier, it risked the spread of infection in their home states. Without a mechanism, it would’ve led to disastrous consequences. The formalities, coordination among the authorities is not that easy as it seems. SG SG: Won’t the person on foot curse the government? NG NG: We have come up with camps in various places and asked people to stay in those camps. The governments and corporations have arranged for their essential supplies. Migrating to home states amidst the risks of coronavirus is also very risky. Thus, the problem is two-faceted. So there is important to come up with a vaccine as soon as possible and also to identify the cases. Developing a robust infrastructure for coming up with testing mechanism is also crucial to tackle with this peculiar situation. We had to take hard measures for preventive purposes. SG SG: Don’t you think that the migrant issue had to be deliberated before enforcing the lockdown? It seems that the government was caught unprepared for this crisis. NG NG: Various stakeholders of society like welfare organizations, political parties etc. came up with community kitchens. The government deposited an allowance in 340 million Jan Dhan accounts to provide relief to the poor. It also announced a relief package worth Rs. 180,000 crores for the poor and downtrodden of the society. Although the government has tried its best, the problem is too complex to come up with simple solutions. PQ5 PQ5: Will you incentivize scrappage policy now? NG: NG:To incentivize the scrappage policy, with measures like tax exemptions etc., deliberations with Finance Ministry is going on. They have also different perspectives regarding the issue. I can make concrete claims only when the official policy comes out. We’ve tried our best from the end. PQ6 PQ6: Have you identified the industries which we might be able to incentivize SEASONAL MAGAZINE

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the manufacturing shifts from China to India? Because people may not dislike China but nobody wants their supply chains to one country now as they want to diversify. NG NG: Firstly, we have empowered the Joint Secretaries to coordinate with the state government to work out the clearance logistics so that we can offer transparent, time bound, corruption free and result oriented services. Secondly, we are coordinating with the ambassadors from various countries to understand their country-specific needs in the matter at hand. Thirdly, we have also extended our support to manufacturers who want to shift their production from China to India by offering them land and logistical support. The land acquisition costs on the Delhi-Mumbai Expressway is relatively cheaper. These industrial clusters will be well-connected by waterways, seaports, airports, rail-based and road-based transport. We have also appealed private investors to settle smart cities and smart villages around those clusters. For instance, I’ve requested the leather industry in Dharavi to draft a proposal for land acquisition in Thane near the highway. They can grow their residential areas around the cluster there which in turn will also improve the living standard of the workers. SG SG: Is the Delhi-Mumbai Expressway still on or is it setback? NG NG: [exclaims that SG doesn’t know about the project]the route of the project will be as follows:Delhi – Sohna – SawaiMadhopur – Alwar – Ratlam – Jhabua – Vadodara – Mumbai. This is a 12-lane concrete cement road project. It will reduce the distance between Delhi and Mumbai by 220 km. The land acquisition has been 100% successful. 32 packages out of 62 are operating day and night. In three years, we’ll be able to drive the total distance in 12-13 hours. The time taken by cargo trucks will be reduced to 28-32 hours from 3 days. PQ7 PQ7: The project cost is around Rs. 1.11 lakh crore (figure not sure). About 45% of the investment cost will be bore by the centre and states. How will the project be funded when the economy SEASONAL MAGAZINE

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is on the verge of collapse? NG NG: I disagree on the claim as there is no shortage of capital in my sector. We constructed Mumbai-Pune Expressway, Worli-Bandra Sea Link Project along with 55 other flyovers in my last tenure. The expected annual toll income is Rs. 40,000 crore at the end of this year and will hopefully rise to Rs. 100,000 crore in next five years. I will leverage this capital and monetize my project. I’m pitching the project ideas to stakeholders in insurance funds, pension funds, banking sector, foreign investments and institutions like World Bank and ADB. There are 480 projects which are economically viable even after accounting the costs of land acquisition. RBI has also agreed to offer us a 30-year loan for infrastructure development. State Bank Governor has agreed to fun Rs. 50,000 crore for the project. The growth in roadways sector is unprecedented and I’m target to initiate projects worth Rs. 15 lakh crore in next two years. I had a personal dream of making a highway till

KailashMansarovar from Pithoragarh (Uttarakhand). It is exciting to share that the task of cutting across the Himalayas have been completed. The road will be completed in six months after which we can directly go to Mansarovar pilgrimage from India to China via roadways. The four-dham road project connecting Badrinath, Kedarnath, Gangotri and Yamunotri is also on fullfledge. We have also made a 16-lane road from Delhi to Meerut. SG SG: Due to economic slowdown amidst corona, will it be possible to raise adequate funds considering the government advisory to reduce capital expenditure? NG NG:The market conditions of today will promote capital liquidity in the future. There is hardly any viable alternative to infrastructure sector to increase capital flow in the market. Waterways, power, transport, communication, ports, railways are the key investment sectors. Innovative investment models should be developed to raise capital for

the project. NHAI has demonstrated it really well.We also expect foreign investments as 100% FDI is allowed in the infra-sector. In this light, we are confident that enough investment will be made. My experience as a minister in last five years points that infra-sector will play a key role in reviving the economy. PQ8 PQ8: Is the government planning to tinker with direct or indirect taxes this year? Are you planning to increase or decrease them or will they stay unchanged? NG NG: It is a right question asked to the wrong person. Only Finance Minister is able to answer that question appropriately. The issue is not related to my department. PQ9 PQ9: Why don’t you make such rule for easing the liquidity, so that the buyers pay the pending amount immediately to the suppliers? NG NG: As I mentioned earlier, this is the biggest problem that plagues the MSME

sector. Most stakeholders do not play small industries their share at time. We are seriously pondering over the issue and have secured Rs. 40000 crore payment successfully. It is a life-or-death question for survival of the MSME sector. We can’t make stringent laws amidst the lockdown on this issue.However, we are planning to come up with a sort of rolling fund that is guaranteed by the government. We should come up a solution in cooperation with the banking sector. PQ10 PQ10: Is Uddhav Thackeray doing a good job during the pandemic? NG NG:I don’t feel that it is the right time to indulge in politics. We should tackle the crisis above our differencesbased on caste, creed, religion and language. I am in close coordination with Uddhavji, AjitPawar and many leaders in the government of Maharashtra to work together. I havetaken the responsibility of Maharashtra in these tough times. I often offer suggestions and pitch new ideas to the government wherever possible. Therefore, I suggest we rise above the politics and wipe out the coronavirus first. SG SG: Do you have an advice for Bombay (Mumbai) on how to handle the crisis? NG NG: Mumbai must be decongested. Mumbai does not belong to people from any particular region or language. It is surrounded by ocean from three sides. The population density and economic activities should be transported to the outskirts of the city – towards Thane and nearby underdeveloped talukas. The resources and infrastructure are being saturated in metropolitan cities like Mumbai, Delhi, Bangalore, Kolkata, Chennai etc. They need to be decongested. We should know the infrastructure limits in these cities. The industries there should be decentralized. SG SG: Many governments have drawn detailed plan for revamping the conditions in Dharavi. For some reason or other, these plans have not been able to materialize. Don’t you think this is the chance to redeem the people of Dharavi? NG NG: Dharavi houses many people from

Charmakar community – the people who are involved in making products from leather. I wrote to their association and invited them to form a cluster near the planned DelhiMumbai Expressway. We propose to create smart villages around the cluster. Offer the people nicely-built houses to live. Economy, Ecology, Environment. These are the three Es to live in a sustainable way for the future. From this single step, we can successfully migrateupto 150,000 people from Dharavi. There are people from plastic and scrap industry too. We have to segregate people from different sectors and organize them industrially for this to happen.Similar steps has to be taken in Delhi-NCR region. We should provide incentives for industry to shift away from the metropoles. We should think out-ofthe-box solution to take the industry to the countryside in a profitable and sustainable manner. There is no permanent solution to these problems if status quo is maintained. SG SG: Don’t you think sometime that you are the right man in the wrong place? You are competent enough to be the Finance Minister. NG NG: When we formed a government in 2014, I wilfully requested the Prime Minister for the infrastructure portfolio. Infrastructure development is my passion. In any case, it is our PM’s mandate to allot different portfolios and responsibilities to the ministers. I’ll do whatever task is given to me with utmost passion. Politics is an instrument of socio-economic reform. I’m thankful to the Almighty for offering me whatever I have today. I’ve more than 60 years of old today and will happily devote my remaining years in the socio-economic development of the country. I’ll serve the nation inn whatever responsibilities are given to me. Apart from the government work, I have come up with a facility that employs over 15,000 people in the agricultural and development sector. It works on the motto of ‘Waste to Wealth’ and all knowledge skills like technology, entrepreneurship, innovation are imparted in that facility. SEASONAL MAGAZINE

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THE STARTUP GIANTS:

WILL THE PANDEMIC PROVE THEIR LEADERSHIP PROWE With 39,000+ startups and 33+ unicorns, India is today home to the third largest startup ecosystem, behind only the US and China. Out of this veritable list, there are three that stand out for their growth and value proposition. Today, PayTM founder and CEO Vijay Shekhar Sharma, Oyo Hotels and Homes founder and CEO Ritesh Agarwal and BYJU's founder Byju Raveendran manage ventures that contribute close to half of the total revenue to the GDP from the startup ecosystem. Given the challenges thrown open to the startup sector and the larger corporate industry due to COVID-19, the three young entrepreneurs suggest ways how the sector can bounce back and provide specific industry diagnosis especially for the hospitality, digital payments and online education spaces. Touching upon whether Covid-19 pandemic will burst the start-up bubble or if the companies will sail through the hard times, they address the prospects of Chinese investments into cash-strapped Indian startups and their individual plans to redraw their blueprints for the post-pandemic economy.

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SS?

Q. How bad has the pandemic and lockdown been for the hospitality industry? Ritesh Agarwal: Travel and hospitality industries are most affected. Within travel the other industry most impacted is aviation. Nobody is going to be excited to hop on a plane or go on holiday. I do believe it was wise to impose lockdown sooner rather than later as it allowed to control cases. Initially, in the second week of March, we saw the impact was roughly 10-15 per cent of our global revenue but over time it has increased to over 50 to 60 per cent and we believe it may get worse. Q. How has Oyo dealt with lockdown losses? Ritesh Agarwal: As we saw the size of revenue drop our immediate response was to cut all controllable costs like marketing, capital expenditure. When that was not enough we decided we will not announce any lay-offs but we did

have to announce some furloughs for a couple of weeks. We are sticking by our customers and communities. Globally we have offered free stays for healthcare workers. And lastly, our focus is how do we ensure we provide safe experiences for customers who will travel in coming times. Q. How has a growing demand for online education impacted BYJU's? Byju Raveendran: Few sectors have been positively impacted by this and hence our focus has to be on acceleration. Almost 1.5 million students are forced to stay home and online learning is the only option for the time being. We have made our learning material available for free and we have also scheduled free online classes to replicate regularity of school sessions. We saw an immediate 3x increase in the number of users and it continues to rise. Six million new students joined the platform and overall we crossed 50 million students on our platform. Also, time students are spending on the

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platform has massively increased. Q. Has the lockdown changed attitudes towards online education? Byju Raveendran: We are seeing a behavioural shift. Students obviously love the medium but parents are also accepting this format due to forced homeschooling. Students are realising how much better this can be rather than just reading a book and teachers are getting prepared. The technology has always been there but people are now taking it up due to the pandemic. What has not happened in years will now happen in months. Online education is becoming an integral part of education. It is not a replacement of mainstream education, it is a good complement. Q. Digital payments are down. Has that impacted PayTM? Vijay Shekhar Sharma: I am happy because two things have happened. Even though offline shops did not open up, our online stores blew through the roof. In a decline month, we had only a 3 per cent decline in users. Other categories worked very well for us. And another feature that took off is contactless delivery. There is a huge

acknowledgement of digital payment and contactless ordering. Q. With the Facebook-Jio deal and the development of WhatsApp digital payment platform, how much will PayTM be impacted? Vijay Shekhar Sharma: It is an honour to be recognised among such big names. And the market requires a huge amount of investment. The more people enter the market, the better. This is not a zerosum game. When more players come into the field, customers become savvier. We have moved from payment services to financial services such as banks, lending etc. At our current pace of growth, we can announce our breakeven much earlier than accepted. Q. Oyo planned to be the biggest hospitality firm in the world. Will it now scale down operations? Ritesh Agarwal: The coronavirus has impacted 1-2 quarters of our growth trajectory. We are now focusing on new kinds of travel, weekend travel which requires driving rather than flying. Coorg will be the new Switzerland, Goa will be the new Thailand. If we predict these trends correctly, while market size may shrink, we will have a good opportunity to use our model. We will have a more measured business aspiration going forward. It is very hard to predict a growth plan till the world comes back to normal. we are reviewing and evolving our plans. In times like these, people look back home. We will focus on our core markets like India, Saudi Arabia, Europe and even the US. Q. Will BYJU's be able to retain new users once classrooms reopen?

We are seeing a behavioural shift. Students obviously love the medium but parents are also accepting this format due to forced homeschooling. Students are realising how much better this can be rather than just reading a book and teachers are getting prepared. SEASONAL MAGAZINE

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Byju Raveendran: We had to change two aspects of our business model. First, offline to online sales. Which is much more efficient. We are back to pre-crisis numbers in terms of revenue which we expect to double soon. Parents are realising that kids are spending screen time learning something useful. Even stakeholders who were hesitant to try the online model will realise how technology can be used effectively. Nothing will go back to how it was before. Education won't be 100 per cent offline or online and we will reap the

The coronavirus has impacted 1-2 quarters of our growth trajectory. We are now focusing on new kinds of travel, weekend travel which requires driving rather than flying. Coorg will be the new Switzerland, Goa will be the new Thailand. benefit of that. At a time when no investment is happening, we have seen investor interest like never before. Q. What is the tech kings advice for Oyo which has been hit by the pandemic? Vijay Shekhar Sharma: Cash is king. Money in the bank is the biggest asset you can carry, don't it be spent. Stop expenditure wherever possible. Not the time to spend big. Byju Raveendran: There were sunny days till some months ago and now the weather is forecast so just keep your wickets till the easy overs come. Q. Could this be the end of the road for young start-ups? Vijay Shekhar Sharma: Tough times are when you do things differently. Now you cant throw quick money on a problem. For about a year, access to investment will be tough. If you want to solve a problem, do it creatively with lesser resources and it may end up benefitting you in the long run. Right now, everyone is on the same boat. So endless opportunity is there. Just hang on. Q. Tech deals falling out across the world? What is your advice?

Ritesh Agarwal: Crisis is a time of building great companies. Oyo was built after the 2009 crisis. My belief is 3 things, firstly be closer to your customers and employees ask them for ideas, you will be surprised by their solutions. Secondly, try to reserve as much cash as possible and lastly use technology in every manner possible. Not every startup is a tech start-up but use it to reach your customers. Byju Raveendran: Not just young startups, all are facing rough patches due to circumstances out of our control. pandemic or no pandemic startups are doing things in an insurgent mode. In such a time, paramount to take stock of the situation regularly. no point in having yearly or even monthly plans. weekly or daily plans are the order of the day. for most start-ups, it is about survival and not long term strategy. during a crisis, good startups will adapt faster because of the young and aspirational workforce. Every crisis brings about new challenges which means enough opportunities exist to address new problems. Find a problem you truly care about. Q. How can start-ups turn this crisis into an opportunity? Vijay Shekhar Sharma: World is going virtual. The arrival of the virtual

World is going virtual. The arrival of the virtual economy in the mainstream. This crisis will make technology-led companies mainstay. Right now these companies are clubbed separately into Big Tech. Now, soon the division will be over.

economy in the mainstream. This crisis will make technology-led companies mainstay. Right now these companies are clubbed separately into Big Tech. Now, soon the division will be over. Q. What will it be like to run hospitality firms in a post-pandemic era? Vitesh Agarwal: I think in this new world, 2-3 things will happen. Tech will be the order of the day. Hospitality has avoided using technology. In this new world, zero-touch will rule the roost. Since people don't travel, if people take vacations they will seek out more places near cities or pilgrimages. When those happen, making sure tech increases social distancing and high-level hygiene and sanitation is maintained are going to be important. The third is specific examples like using tech to reduce information asymmetry. Companies will have to use tech to change their operations. Q. How will online learning cater to social aspects (peers) of classroom learning? Byju Raveendran: I don't think things will go completely one way after the crisis. Some blend of best of both practices will be the new normal. When you learn from a personal screen, every student can have a front-row seat. If you get the format right, you can engage their attention. You can have the best of teachers giving lessons while mentors give personalised feedback. You can learn hard skills like maths or science online but not important skills like empathy. So having people next to you will always be an advantage. Hopefully, a mixed-format will evolve which will be far more impactful.

XIAOMI'S LAUNCHES ITS FLAGSHIP 108MP SMARTPHONE, MI 10 5G Xiaomi is launching its premium flagship smartphone Mi 10 5G in an online live stream event today. Along with the 108MP smartphone, the company is launching a set of IoT products like a smart streaming device and wireless earphones. Xiaomi said that the pre-orders of the smartphones will get exciting discounts and a 10000mAh Mi Power Bank, worth Rs 2,499, free.

WE WELCOME GOVT'S DECISION OF CAUTIOUSLY STARTING PASSENGER TRAINS: CHIDAMBARAM Congress leader P Chidambaram on Monday appreciated the Centre's decision of "cautiously" starting passenger train services. "We welcome the decision of the government...The same modest opening should be started with road transport and air transport," Chidambaram tweeted. The Congress leader added that this is "the only way economic and commercial activity can effectively begin".

Q. Will reduced economic interaction with China impact Chinese firms that invest in start-ups?

DELHI GOVT TO PROVIDE RS 5,000 AID TO CONSTRUCTION WORKERS FOR 2ND MONTH

Ritesh Agarwal: Capital providers across the world will need to think about where to invest. Good companies will continue to raise money.

The Delhi government on Monday decided to provide another financial aid of Rs 5,000 to the registered construction workers amid the lockdown. The decision was taken at a meeting of the Construction Workers' Welfare Board, chaired by Labour Minister Gopal Rai. We deposited Rs 5,000 into their bank accounts last month and we will do it this month as well, Rai said.

Byju Raveendran: Since we have good fundamentals we will continue to attract investors not just from China but from all over the world. Last year, close to $11 billion flowed into Indian start-ups. Maybe 6-12 months down the line you will see investors come in. The Indian ecosystem is maturing fast.

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