Lockdown Flattened Wrong Curve: Rajiv Bajaj In Chat With Rahul Gandhi
NEW DELHI, June 4: A "draconian" but "porous" lockdown to slow the spread of coronavirus ended up "flattening the wrong curve" and left the country with the worst of both worlds, industrialist Rajiv Bajaj said in a video interaction with Congress leader Rahul Gandhi.
"We tried to implement a hard lockdown which was still porous. So, I think we have ended up with the worst of both worlds. On one hand, a porous lockdown makes sure that the virus will still exist and as you said, it is still waiting to hit you when you will unlock. So, you have not solved that problem," Bajaj, Managing Director of Bajaj Auto, said in the online chat aired this morning.
"But you have definitely decimated the economy. You flattened the wrong curve. It is not the infection curve, it is the GDP curve," he said.
Bajaj commented that a hard lockdown implies an airtight, impervious lockdown. "And to the best of my knowledge, this has not happened anywhere in the world. To physically constrain yourself to your home and see absolutely no one," he noted.
The industrialist also commented in his conversation with the Congress leader, "We are not seeing a smooth, concerted, rhythmic movement towards unlocking. Unfortunately, India not only looked west, it went to the wild west. I think we stayed more towards the impervious side."
This is the latest in a series of interactions that Rahul Gandhi has had with economists, experts, industrialists and others since the country went into lockdown in late March. He has earlier held chats with Raghuram Rajan and Abhijit Banerjee.
Bajaj, whose father Rahul Bajaj is one of India's most respected corporate leaders, shared that he had been advised that he would land in trouble for speaking to Gandhi.
"I shared with someone that I am speaking with Rahul and the first reaction was - mat karna (don't do it), this can get you into trouble," he remarked. "Why take the risk, he said."
Asked by Gandhi about a perceived "atmosphere of fear" in the country, Bajaj said in terms of being tolerant and sensitive, India needs to mend a couple of things.
The Congress MP shared, to a question from Bajaj, that a lockdown like this "brings the fear of death in the mind of people" and that is something tough to get rid of.
"It (lockdown) was also imposed suddenly. The bitter-sweet thing you said is shocking to me. See, rich people can deal with it as they have a home, a comfortable atmosphere, but it is completely devastating for the poor people and migrants," said Gandhi.
He also reiterated concerns about the impact of the lockdown on the economy.
"Whoever is going to invest in India is going to invest not because of your image, they are going to invest because of what you are and what you have... So the first logic has to be, defend that economy," Gandhi said.
"If you don't have an economy left, there is nothing."
Moody’s downgrades India’s sovereign rating
NEW DELHI, June 1: Moody’s Investors Service on Monday downgraded India’s sovereign rating to ‘Baa3’ from ‘Baa2’, saying there will be challenges in implementation of policies to mitigate risks of a sustained period of low growth and deteriorating fiscal position.
“Moody’s has today downgraded the Government of India’s foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2. “Moody’s has also downgraded India’s local-currency senior unsecured rating to Baa3 from Baa2, and its short-term local-currency rating to P-3 from P-2. The outlook remains negative,” the agency said in a statement.
The negative outlook reflects dominant, mutually-reinforcing, downside risks from deeper stresses in the economy and financial system that could lead to a more severe and prolonged erosion in fiscal strength than Moody’s currently projects, it added.
“The decision to downgrade India’s ratings reflects Moody’s view that the country’s policy-making institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector,” the statement said.
‘Baa3’ is the lowest investment grade - just a notch above junk status.
Moody’s had in November 2017, after a gap of 13 years, upgraded India’s sovereign credit rating by a notch to Baa2 from Baa3.
Summer crop prices hiked 50-80% for Indian farmers
NEW DELHI, June 1: The Union Cabinet on Monday approved federally fixed minimum support prices (MSP) for 14 kharif or summer-sown crops, which will offer 50-83% profit over cultivation cost, agriculture minister Narendra Singh Tomar said.
The announcement came as the June-to-September monsoon for 2020, predicted by the India Meteorological Bureau to be normal, made its onset over Kerala, its first port of call in the Indian mainland, on June 1, as predicted.
A normal monsoon will likely lessen the strain on the agriculture economy from widespread disruptions caused by the Covid-19 pandemic. The summer rains are critical because nearly 60% of India’s net arable land lacks irrigation and nearly half the population depends on a farm-based livelihood.
The MSP for paddy, the main summer staple, has been raised by Rs 53 to Rs 1,868 per quintal for the 2020-21 crop year, which will give a return of 50% over cost of cultivation, according to an official statement.
“(The) government has increased the MSP of Kharif crops for marketing season 2020-21, to ensure remunerative prices to the growers for their produce,” a Cabinet statement said.
The highest increases in MSP are for nigerseed (Rs 755 per quintal) followed by sesamum (Rs 370 per quintal), urad (Rs 300 per quintal) and cotton (Rs 275 per quintal). “The differential remuneration is aimed at encouraging crop diversification,” the official statement said.
For cotton, the MSP has been increased by Rs 260 to Rs 5,515 per quintal, Tomar said. The support prices of arhar or tur, a type of lentil, has been fixed at Rs 6,000, which represents a 58% return over cost of cultivation.
The increase in MSP for kharif crops is in line with the Union Budget 2018-19 announcement of fixing the MSPs at a level of at least 1.5 times of the countrywide weighted average cost of production, which aims to give at least 50% returns for each crop.
According to official calculations, the returns to farmers over cost of production are estimated to be highest in case of the coarse cereal, bajra (83%), followed by urad (64%), tur (58%) and maize (53%).
“To correct demand-supply imbalances, the government has realigned the MSPs more in favour of oilseeds, pulses and coarse cereals to encourage farmers to shift to these crops,” said Abhishek Agrawal, an analyst with Comtrade, a commodities trading firm.
Fresh indicators show the country’s farm sector, which employs nearly half the population, has coped well with the Covid-19 crisis, with a larger summer crop area than last year, higher sales of fertilisers and seeds, and better prices, leading Reserve Bank Governor Shaktikanta Das to last month call it a “beacon of hope”.
The farm sector is poised to grow at least 3% in 2020-21, despite disruption in the economy due to the coronavirus pandemic. According to government think tank Niti Aayog’s assessment in April, agriculture will aid overall growth.
There are other indicators too, ranging from sowing to input sales, which show the agriculture economy is heading into the summer-sown or kharif operations in decent shape.
Farmers have planted rice in about 3.48 million hectares (1 hectare equals 2.4 acre) compared to 2.52 million hectares during the corresponding period of last year, an increase of nearly 37%, official data as on May 21 show.
The area under pulses -- a major summer crop with up to 70% share in farm incomes in some states – stands at nearly 1.28 million hectares against 0.96 million hectares during the same period of last year, which is higher by one-third (33%).