1. SEBI’s plans to tackle market rumours
What are the measures proposed by the market regulator? Is misinformation affecting securities and impacting investor confidence? Do the proposals recognise the material importance of key personnel and senior management of listed companies?
The story so far:
The Securities and Exchange Board of India (SEBI) on November 12 floated a consultation paper proposing measures to effectively tackle market rumours. It reviewed disclosure requirements for material events and information under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
What was the need for review?
The central premise of the proposal is to ensure timely disclosure of significant events that may have a bearing on the price of a scrip. SEBI notes that while regulatory actions against non-disclosure of events do act as a deterrent for listed entities to withhold details of material events or information, timely disclosure is still very important. SEBI also seeks to ensure that unverified rumours do not shake investor confidence and affect decision-making. Listed entities too have sought that the regulator institute a certain uniformity in its guidance for disclosures, to help them better determine what constitutes a material event or information. In a related context, the market regulator pointed to provisions that require companies to put forth specific and adequate replies to all rumour verification queries raised by the exchanges. This could be with respect to certain ‘information’ circulating on social media or any other platform. It proposes that entities should confirm or deny any such reported event or information.
What disclosures are being proposed?
The proposed measures are directed towards preventing any false market sentiment or impact on the securities of a company. Recognising the “growing influence” of print, television and digital news media, it argues that companies need to keep pace and ensure that any rumours are verified or refuted. Thus, it is proposed that the top 250 listed entities, based on market capitalisation at the end of the previous assessment year, would have to clearly deny or refute such rumours.
It proposes companies disclose all information whose expected impact in terms of value exceeds 2% of either its turnover or net-worth as per the last audited financial statement, or 5% of the three-year average of absolute value of profit/loss after tax.
In order to avoid information asymmetry, SEBI has proposed that the listed entities need to also disseminate any communication with regards to the company made by its directors, promoters, key managerial personnel or senior management individually and not through the company. It recognises that it is difficult for an investor to keep track of multiple newsworthy announcements from diverse avenues. To this effect, it proposes that companies inform about any ratings actions, even if it was not requested for by the company or if a request was withdrawn. Further, companies also need to disclose any actions initiated by a regulatory, statutory, enforcement or judicial authority against any of its directors, key managerial personnel, senior management, promoter or subsidiary in relation to the entity. These may include investigation, suspension, imposition of penalty or fine, settlement of proceedings, debarment, sanctions, warnings, search, seizure, and default on the payment of fines, penalties and dues among others. The mentioned measure would thus, prevent information asymmetry as it would streamline access to verified information.
Other than this, the proposals also recognise the material importance of key personnel, senior management and directors to investors. They instil confidence in the functioning and affairs of the company. To this effect, it proposes that entities inform the exchange about their resignation(s) within seven days. Along similar lines, companies must also disclose if the MD/CEO is not available to discharge their duties for greater than a month.
Are timelines being revised?
The regulator observed that there was a need for quicker disclosure of material events since ‘information’ permeates very fast on social media and digital media. It makes a note of several instances where the disclosures were made only after the news had already circulated in the media. At times, the information was disclosed only after the exchange raised a query to the company. Therefore, SEBI proposes that disclosures pertaining to events or information emanating from within the company be made within twelve hours instead of the existing mandate of twenty-four hours. The cut-off remains unchanged for events emanating from external occurrences. Moreover, all decisions taken in a Board of Directors meeting are to be disclosed within thirty minutes from when it concludes. Companies must also inform, two days in advance, if any investor or analyst meet is scheduled.
2. Are El Niño-La Niña weather patterns changing?
What are the adverse effects of these recurring climate changes? What is the El Niño Southern Oscillation? How have these phenomena affected Indian monsoons?
The story so far:
A new study projects that climate change will significantly impact El Niño-La Niña weather patterns approximately by 2030 — a decade before what was earlier predicted. This is bound to result in further global climate disruptions.
What is the El Niño phenomenon?
El Niño is the warming of sea water in the central-east Equatorial Pacific that occurs every few years. During El Niño, surface temperatures in the equatorial Pacific rise, and trade winds — east-west winds that blow near the Equator — weaken. Normally, easterly trade winds blow from the Americas towards Asia. Due to El Niño, they falter and change direction to turn into westerlies, bringing warm water from the western Pacific towards the Americas. The phenomena of upwelling, where nutrient-rich waters rise towards the surface, is reduced under El Niño. This in turn reduces phytoplankton. Thus, fish that eat phytoplankton are affected, followed by other organisms higher up the food chain. Warm waters also carry tropical species towards colder areas, disrupting multiple ecosystems. Since the Pacific covers almost one-third of the earth, changes in its temperature and subsequent alteration of wind patterns disrupt global weather patterns. El Niño causes dry, warm winter in Northern U.S. and Canada and increases the risk of flooding in the U.S. gulf coast and southeastern U.S. It also brings drought to Indonesia and Australia.
What is La Niña?
La Niña is the opposite of El Niño. La Niña sees cooler than average sea surface temperature (SST) in the equatorial Pacific region. Trade winds are stronger than usual, pushing warmer water towards Asia.
On the American west coast, upwelling increases, bringing nutrient-rich water to the surface. Pacific cold waters close to the Americas push jet streams — narrow bands of strong winds in the upper atmosphere — northwards. This leads to drier conditions in Southern U.S., and heavy rainfall in Canada.
La Niña has also been associated with heavy floods in Australia. Two successive La Niña events in the last two years caused intense flooding in Australia, resulting in significant damage.
What were the study’s findings?
The combination of El Niño, La Niña, and the neutral state between the two opposite effects is called the El Niño Southern Oscillation (ENSO). Southern oscillations are large-scale changes in sea level pressure in the tropical Pacific region.
ENSO’s scale is significant enough to influence global climate. According to the study, published in the Nature Communications journal, increased SST variability from ENSO in the eastern Equatorial Pacific (EP) will emerge around 2030 ( error margin of +/- 6 years), more than a decade earlier than that of the central Pacific (CP) ENSO. If CP and EP are not separated, SST variability from ENSO will occur almost four decades earlier than previously suggested. Changes in the equatorial Pacific will be visible first due to a stronger increase in the EP-ENSO rainfall response, leading to increased SST variability.
What is the effect on India’s monsoons?
In India, El Niño causes weak rainfall and more heat, while La Niña intensifies rainfall across South Asia, particularly in India’s northwest and Bangladesh during the monsoon. At present, India, like the rest of the globe, is witnessing an extended ‘triple dip’ La Niña. As reported by The Hindu, this, in part, is why India saw surplus rain in September, a month that usually sees the monsoon retreat, for the third year in a row.
3. Centre sends experts to 3 cities to contain measles infection
The Centre on Wednesday set up high-level teams to tackle the measles outbreak in Ranchi, Ahmedabad and Malappuram.
The three teams will assist the respective State Health Departments in instituting public health measures and facilitate operationalisation of requisite control and containment measures.
Senior Regional Directors of the Regional Offices of Health and Family Welfare of Jharkhand, Gujarat and Kerala will coordinate with the respective teams regarding their visits.
The Central team to Ranchi in Jharkhand comprises experts from the National Centre for Disease Control and Ram Manohar Lohia Hospital in Delhi. The team to Ahmedabad in Gujarat has experts from the city’s Regional Office of Health and Family Welfare, Port Health Organisation, Mumbai and Kalawati Saran Children’s Hospital in Delhi. The team to Malappuram in Kerala will have experts from the Regional Health Office, Thiruvananthapuram; Jawaharlal Institute of Postgraduate Medical Education and Research (JIPMER), Puducherry; and Lady Hardinge Medical College, New Delhi, the Union Health Ministry said.
All the teams will have three members each.
The teams will also undertake field visits to investigate the outbreak. They are also expected to coordinate with the States for ensuring active case search in the area and with Virus Research and Diagnostic Laboratories for testing of the identified cases. Measles vaccination falls under the Universal Immunisation Programme. India has a target of eliminating the viral disease by 2023. Mumbai had reported cases on measles and the Centre had already sent a team earlier. Eleven children have died of the highly infectious disease in Mumbai.
4. ‘India cotton exports may miss forecast on high prices’
Export enquiries weak as Indian cotton is more expensive by 10 cents a pound compared with world cotton prices, says Rakesh Rathi, former president of Indian Cotton Association, Bathinda
Cotton exports this year may fall short of the 40 lakh bales estimated recently by the Committee on Cotton Production and Consumption, traders said.
According to Rakesh Rathi, former president of the Indian Cotton Association (ICA), Bathinda, export enquiries are poor as Indian cotton is still about 10 cents a pound more expensive when compared with world cotton prices.
“We started this season with very poor opening stock,” Mr. Rathi said. “Arrivals are not picking up as expected and domestic mills are gradually increasing capacity utilisation.”
Cotton arrivals in November usually surpass 1.5 lakh bales a day. At present, it is at 1.15 lakh to 1.3 lakh bales per day. In several areas, sowing and harvesting have been delayed. Further, farmers were waiting for prices to improve, he said.
President of Cotton Association of India (CAI) Atul S. Ganatra said farmers had sold raw cotton in the range of ₹10,000 to ₹15,000 per 100 kg in the last season while prices were currently in the range of ₹9,000 per 100 kg.
‘ICE futures lower’
“Prices are down 35% already,” Mr. Ganatra said. “So farmers are not selling. But, there are no signs that prices would improve. The ICE futures prices [for ginned cotton] are ₹50,000 a candy (356 kg) for March delivery whereas Indian cotton prices are ₹66,000 a candy now.”
CAI expects exports this season (Oct. 2022 to Sept. 2023) to be about 30 lakh bales. Since October 1, only 50,000 bales have been shipped compared with 7 lakh bales in the year-ago period, Mr. Ganatra added.
5. Editorial-1: Fixing India’s malnutrition problem
The Global Hunger Index (GHI) 2022 has brought more unwelcome news for India, as far as its global ranking on a vital indicator of human development is concerned. India ranked 107 out of 121 countries. The Government of India attempted to discredit the index immediately in its attempt to deny the findings of the report, even going so far as to term it a conspiracy against India.
The GHI is an important indicator of nutrition, particularly among children, as it looks at stunting, wasting and mortality among children, and at calorific deficiency across the population. And this is by no means an international conspiracy — India’s National Family Health Survey (NFHS-5) from 2019-21 reported that in children below the age of five years, 35.5% were stunted, 19.3% showed wasting, and 32.1% were underweight.
Government schemes are not delivering
Experts have suggested several approaches to address the problem of chronic malnutrition, many of which feature in the centrally-sponsored schemes that already exist. However, gaps remain in how they are funded and implemented, in what one might call the plumbing of these schemes.
For instance, the Government of India implements the Saksham Anganwadi and Prime Minister’s Overarching Scheme for Holistic Nutrition (POSHAN) 2.0 scheme (which now includes the Integrated Child Development Services (ICDS) scheme), which seeks to work with adolescent girls, pregnant women, nursing mothers and children below three. However, the budget for this scheme for FY2022-23 was ₹20,263 crore, which is less than 1% more than the actual spend in FY2020-21 — an increase of less than 1% over two years.
The other flagship scheme of the Government of India is the PM POSHAN, or Pradhan Mantri Poshan Shakti Nirman, known previously as the Mid-Day Meal scheme (National Programme of Mid-Day Meal in Schools). The budget for FY2022-23 at ₹10,233.75 crore was 21% lower than the expenditure in FY2020-21. Even if we accept that 2020-21 was an exceptional year (due to the COVID-19 pandemic), it is clear that the budgets being allocated are nowhere near the scale of the funds that are required to improve nutrition in the country.
An Accountability Initiative budget brief reports that per capita costs of the Supplementary Nutrition Programme (one of the largest components of this scheme) has not increased since 2017 and remains grossly underfunded, catering to only 41% of the funds required. The budget brief also mentions that over 50% Child Development Project Officer (CDPO) posts were vacant in Jharkhand, Assam, Uttar Pradesh, and Rajasthan, pointing to severe manpower constraints in successfully implementing the scheme of such importance. And while PM POSHAN (or MDM) is widely recognised as a revolutionary scheme that improved access to education for children nationwide, it is often embroiled in controversies around what should be included in the mid-day meals that are provided at schools. Social audits that are meant to allow for community oversight of the quality of services provided in schools are not carried out routinely.
To summarise, not only are key nutrition schemes underfunded, but it is also the case that the funds available are not being spent effectively. Fixing these schemes is the obvious answer to addressing India’s multi-dimensional nutrition challenge.
Cash transfers and the factor of reliance
Cash transfers seem to be a favoured solution for several social sector interventions in India today, and this includes the health and nutrition sectors. Much is made of the JAM trinity (Jan Dhan bank accounts, Aadhaar, Mobile). Equally appealing is the characteristic of cash transfers as a mechanism that yields rich political dividends. Riding on the digital infrastructure available in India, it is said that targeting the right beneficiaries (i.e., pregnant women and families with children under the age of five) is possible. Cash also has the advantage of expanding choice at the household level, as they make decisions on what to put on their plates.
But evidence of the impact of cash transfer on child nutrition in India is limited so far. Evidence from elsewhere too suggests primarily that while cash transfers improve household food security, they do not necessarily translate into improved child nutrition outcomes.
The effect of cash transfers is also limited in a context where food prices are volatile and inflation depletes the value of cash. Equally, there are social factors such as ‘son preference’, which sadly continues to be prevalent in India and can influence household-level decisions when responding to the nutrition needs of sons and daughters. This calls for a comprehensive social education programme — cash alone cannot solve this. Further, a study of the Mamata scheme in Odisha that targeted pregnant and lactating women, showed that there were persistent socio-economic discrepancies in the receipt of cash transfers, especially in comparison to entitlements received through the Public Distribution System (PDS). Thus, cash may be part of the solution, but on its own, it is no panacea.
Back to the basics
Malnutrition has been India’s scourge for several years now. Political battles over malnutrition are not going to help; nor is continuing to think in silos. It is clear that malnutrition persists due to depressed economic conditions in large parts of the country, the poor state of agriculture in India, persistent levels of unsafe sanitation practices, etc.
Cash transfers have a role to play here, especially in regions experiencing acute distress, where household purchasing power is very depressed. Cash transfers can also be used to incentivise behavioural change in terms of seeking greater institutional support. Food rations through PDS and special supplements for the target group of pregnant and lactating mothers, and infants and young children, are essential.
Persistently under-funded and poorly implemented public programmes (such as the erstwhile ICDS and MDM schemes) must take a large share of the blame for India’s malnutrition problem. But getting these schemes right requires greater involvement of local government and local community groups in the design and delivery of tailored nutrition interventions. A comprehensive programme targeting adolescent girls is required if the inter-generational nature of malnutrition is to be tackled.
The need of the hour is to make addressing child malnutrition the top priority of the government machinery, and all year around. A month-long POSHAN Utsav may be good optics, but is no substitute for painstaking everyday work.
6. Editorial-2: India is losing its cherished right to know
The most vital mandate of the Central Information Commission, the apex body under India’s transparency regime, is to decide whether certain information sought by a citizen ought to be disclosed or not. Its primary duty is to decide the disclosure or the non-disclosure of information. But the commission has seemingly relinquished this primary duty in cases of larger public importance.
Citizens can file applications under the Right to Information Act with any public body and are guaranteed a reply from the public information officer of that public body within 30 days. In case of a no reply or dissatisfaction with the response, the citizen can file an appeal at the departmental level and then a second and final appeal with the Information Commission. Each State has its own State Information Commission to deal with second appeals concerning State bodies.
At the centre, it is the Central Information Commission (CIC). Until the 2019 amendment to the RTI Act, Information Commissioners (ICs) appointed to the CIC were equal in status to the Chief Election Commissioner, and that of a Supreme Court judge. They had a five-year fixed term and terms of service. After the amendments of 2019, the Centre gave itself powers to change and decide these terms whenever it wished, thereby striking at the independence of the commission and those who man it.
From transparency to hurdles
The CIC was a functioning institution until four years ago. It had passed orders seeking transparency in many cases of public importance — from boldly pronouncing that political parties were under the RTI Act’s ambit, and hence accountable to the public, to ordering disclosure of the current Prime Minister’s education qualifications and the Reserve Bank of India’s list of willful defaulters of loans. The commission acted as a strong proponent of transparency in public life.
Now, the CIC has become more like a walking dead institution, where records will show that not a single order for disclosure has been forthcoming in matters of public importance. The present set of Information Commissioners have together adopted a new jurisprudence that has created additional hurdles in a citizen’s quest for accountability.
Cases at the CIC come up for a hearing roughly after a two year wait. If the matter is not already infructuous or lost its significance, one can look forward to the commission deciding one’s case. But in matters of public importance, such as cases seeking disclosure of files related to the national lockdown during COVID-19, or the case seeking disclosure of data pertaining to phone tapping orders passed by the Home Ministry, the Commission has adopted a new way of delegating its mandate — to decide cases — to the Ministry before it (the very same party that stands accused of prohibiting transparency). In most cases, the Ministries reiterate their earlier stand of non-disclosure, most often under vague grounds of national interest.
More worryingly, after these public authorities pass fresh orders, which are usually a reiteration of their earlier stand against disclosure, the CIC refuses to accept any further challenge to such orders, therefore, refusing to do its duty of deciding the cases. One of the cardinal rules of natural justice is that no one should be a judge in their own cause. However, the commission now allows, or rather wants, the very Ministry that stands accused of violating the RTI Act to act as the judge in their own cause and decide whether a disclosure is necessary.
A similar situation arose when the CIC refused to hear the Internet Freedom Foundation’s challenge to the fresh non-disclosure order passed by the Home Ministry in the phone tapping case. The organisation had the resources to challenge this before the Delhi High Court and enforce their right to a fair hearing before the Commission. But many do not, in a country where a small percentage of the populace has the access and the resources to justice redress. And it is not as though the Information Commissioners were not made aware of this problem with their orders. They were. Hence, the need to strongly protest such conduct on their part which continues.
Fairly simple to handle
More recent examples from CIC cases do not instill confidence about where India’s information regime is headed. In a case seeking disclosure of documents relating to the making of the Unlawful Activities (Prevention) Amendment Act, 2019, the commission has resorted to keeping the matter pending for final order for more than three months now, something which is unheard of. Unlike court cases, RTI matters do not involve complex legal arguments and are fairly simple to adjudicate. In another case related to disclosure of non-performing assets and top defaulters of a co-operative bank, the matter was listed out-of-turn to issue a “stay” order against the Bank’s First Appellate Authority’s order for disclosure. A stay order is unheard of and there is no provision in the RTI Act for the same.
One cannot help but ask whether actions or inactions such as these are meant to deliberately frustrate citizens who dare to seek answers from the powers that be, and reduce the efficiency of the RTI Act. The effects are already being felt. It is getting more difficult, if not impossible, to extract any information of importance under the present dispensation. Bureaucrats reject RTIs with glee with no fear of facing penal provisions outlined in Section 20 of the RTI Act, knowing fully well that they have a free hand under the Information Commissioners.
To even think of the possibility of the very institution mandated to guard India’s transparency regime to be responsible for its downfall should set alarm bells ringing as far as civil society and citizens who care and dare to question are concerned. Dark clouds surround India’s transparency regime. Citizens have to mount intense pressure on authorities to act and appoint commissioners of integrity. Lawyers have to help willing citizens take matters to court and seek justice. If there is a failure to do so, India will lose its cherished right to know.
7. Editorial-3: Space, not time
Equal tenure security for CEC and ECs will boost panel’s independence
The ongoing hearing before a Constitution Bench of the Supreme Court of India on the need to have a neutral mechanism for appointment of Election Commissioners raises important questions on the election body’s functional independence. The Election Commission of India (ECI) has generally enjoyed a high reputation for holding free and fair polls since the dawn of the Republic, although not immune to charges of favouring the ruling party. However, given the Court’s vocal concern about the ECI’s independence, the relevant question now is whether the Commissioners should be appointed on the recommendation of an independent body. Article 324(2) envisages a parliamentary law for the purpose, but no law has been enacted so far. The Government is pushing back strongly against the Court’s apparent inclination to devise an independent mechanism, possibly a selection committee that includes the Chief Justice of India. The perceived legislative vacuum could provide an occasion for the Court to frame a process on its own — something the Government, quite rightly, wants to avoid. There is no doubt an independent body doing the selection will enhance the ECI’s independence, but the Court will have to decide if it wants to spell out its composition or leave it to Parliament.
Justice K.M. Joseph, heading the Bench, has noted that Chief Election Commissioners (CEC) in the past had fairly long tenures, unlike in recent times. However, it should be remembered that since 1993, the ECI has become a multi-member body, comprising a CEC (chairman) and two Election Commissioners (EC). The current convention is to appoint ECs, and elevate them as CEC on the basis of seniority. In effect, it is the appointment process for ECs that requires scrutiny as it is here that there is scope for personal whimsy to play a role. The CEC has a six-year tenure, but should demit office on attaining 65. The Court has questioned the practice of appointing CECs close to that age so that they have only a brief tenure. However, it may be argued that even Chief Justices have brief tenures, but that does not undermine their independence. The Government has contended that a member’s whole tenure in the ECI should be considered, and not merely the duration as CEC. The real difference is security of tenure that could come from operational freedom and space. While Supreme Court judges have security of tenure — they can be removed only by impeachment by Parliament — only the CEC enjoys the same status. The ECs can be removed on the CEC’s recommendation. There is a good case for extending the same tenure security to the ECs too, regardless of what kind of appointment process is in place.
8. Editorial-4: Time to ease norms
Masks must remain mandatory only for the vulnerable, in health-care settings
As the third winter begins in India after the COVID-19 pandemic began in January 2020, fresh daily infections of the novel coronavirus — there was a small spike in July and August — have been dipping since the third wave peaked in late January 2022. Daily new cases nationally dropped below the 1,000-mark after November first week, and below 500 in the last four days. While the case decline may not be a true reflection of the actual level of infection in the population, given the low level of testing across the country, the test positivity rate and the number of hospitalisations due to moderate to severe COVID-19 disease are at a low level — a far cry from the peak of the second wave in 2021. COVID-19 deaths too have been very low, with many States not reporting any for days together; Kerala has been reporting some backlog deaths on certain days but nil fresh deaths on many days. Nationally, the case fatality rate was 1.19% as of November 22. The situation in India is vastly different from what it is like in a few other countries where the daily infections are witnessing a sharp spike. Even the extremely high transmissive Omicron sub-lineages and recombinant lineages have only caused a small spike in fresh cases but no concomitant increase in hospitalisations or deaths in India.
Given the very low number of cases and hospitalisations, the situation in India is no longer cause for concern. Even with most businesses and educational institutions back to functioning as in the pre-pandemic days and large gatherings being seen even in poorly ventilated places with almost no voluntary mask wearing, there has been no spike in cases since the peak of the third wave. This makes a strong case to ease any mandatory COVID-appropriate behaviour, masks included. A week ago, India made mask wearing optional for air passengers precisely because of the improved ground situation. It is only in hospitals and health-care settings that mask wearing should remain mandatory. The low level of infection notwithstanding, it is advisable that the vulnerable population including the elderly and those with comorbidities at least wear a mask to reduce the risk of infection. Long COVID is real and poses a risk even to otherwise healthy people. The virus is evolving, and the emerging variants of concern will, by default, be even more highly transmissive. Their lethality cannot be predicted as transmission happens prior to disease onset and so the selection pressure is for higher transmission and not disease severity.
9. Editorial-5: India’s G-force moment
G20 is usually about a lot of polite, sanctimonious motherhood — ‘wash your hand before you eat’ kind of statements. Decision-making happens only when all the 20 countries of the group given their consent on any major step. That, as any organisational theorist will tell you, is an impossibility.
However, given Prime Minister Narendra Modi’s acute ability to turn almost anything into an opportunity, India must push through a few tangible changes which will have a profound impact on the global system. The moment of India’s ascent to the G20 presidency coincides with the country’s 75th year of Independence. This opportunity must not be frittered away. Together, the G20 members represent over 80% of the world’s GDP, 75% of international trade and 60% of the population. There are a few wins possible for India.
Policy formulation
Traditionally, the presiding country usually comes up with its own policy formulation. For example, the Italian presidency’s agenda rested on the three pillars of people, planet, and prosperity. The Saudi presidency also had three objectives: empowering people, safeguarding the planet, and shaping new frontiers. India must come up with a formulation that showcases its true strengths.
First, the world needs new windows for financing climate infrastructure. Using the G20, India should press the International Monetary Fund (IMF), the World Bank Group and the Asian Development Bank to open new windows for financing climate infrastructure to support the Panchamrit goals. Traditionally, the IMF provides financial support for balance of payments needs. But now even countries such as India, which are economically sound, need finances for invests in climate-related infrastructure. Unlike the World Bank, the IMF functions exclusively via grants. It is flush with funds and is seeking avenues to invest. If India manages to persuade the IMF to open a window for climate financing, it would be significant.
Second, India should use the G20 to roll-out the India Stack on the global stage. India Stack is the world’s largest digital public utility and is growing by leaps and bounds. Some of its principal components are Aadhaar, UPI, eKYC, DigiLocker. Mr. Modi has often been asked, in various global forums, to share the design and implementation framework of India Stack. If India does this using G20 as a platform, it will enable the country to be showcased on the global stage and other countries to leapfrog their own systems. Showcasing India Stack would further enhance India’s prestige abroad.
Third, India could use the platform to push its own agenda and South Asia’s agenda on a global scale — for example, by coming up with an alternative financial mechanism to SWIFT, which is a U.S. monopoly; and taking baby steps for making the rupee more international.
Fourth, India should leverage the G20 to re-imagine the shareholding structures of the IMF and World Bank. This is easier said than done. While a lot of conversations have taken place around India’s position in the United Nations Security Council, that is yet to happen. Still, it is time to begin conversations around restructuring the World Bank and the IMF, so that they bear fruit sometime in the future. The current structures of the World Bank and the IMF are at variance with the emerging world in general and India in particular. India can use the leadership to re-imagine the shareholding structure in such a way that it reflects its global aspirations and power position and also those of other emerging markets.
Fifth, India, like the European Union, represents a multicultural and multi-religious quasi-federal structure. There are different States, or Europe-like countries, within India’s border. India has a rich culture. The G20 would be a good platform for India to showcase the multiple and myriad aspects of its composite culture so that the world begins to appreciate the richness and cultural tenacity of the country.
This is a big moment for India to showcase and influence soft power abroad, as the brilliant and powerful diaspora is doing right now. This can be a great moment to bring together the power of the diaspora and the power of Indian culture on a single platform. The world needs an alternative to the U.S.’s soft power and culture, which have been ubiquitous for a long time.
Lastly, India receives around 17 million-18 million tourists every year. Compare this to Las Vegas, a city in the U.S., which alone gets over 30 million tourists. India has a huge potential to boost tourism. Amitabh Kant, the IAS officer who was a key driver of initiatives such as ‘Incredible India!’ and ‘God’s Own Country’, is now the G20 Sherpa. Can the various G20 meetings not be held in the Top 25 destinations of India to power the tourism industry?
Building consensus
G20 is all about just one thing — reconciling the irreconcilable. If there is one country which has the stature to make this happen, it is India. The country has earned its stripes during tough external and internal times through its deft economic management (inflation is 11% and rising in the U.K.; 9% in the U.S., and 7% and falling in India). Further, the development and roll-out of COVID-19 vaccines in India was remarkable. India has justifiably earned global accolades for both these achievements and is thus well-positioned to beat into place a tough but necessary consensus on the G20 platform. If anyone can provide leadership and make this happen, it is India under the leadership of Mr. Modi at this moment.
10. Editorial-6: Milk inflation at a 7.5-year high, prices are lower in the south
The price rise will disproportionately impact women in poorer households
Earlier this week, Mother Dairy hiked the price of full cream milk by ₹1. This means a litre of milk will now cost ₹64. This was the fourth hike in price this year by the leading milk supplier in New Delhi.
A month ago, the Gujarat Cooperative Milk Marketing Federation, which sells milk under the brand Amul, raised the price of full cream milk by ₹2. On November 3, Aavin, the brand owned by the Tamil Nadu Co-operative Milk Producers’ Federation, also raised the price of full cream milk by ₹12 a litre, which makes the price of one litre ₹60.
Inflation of milk and milk products has continued to go up even though India’s overall retail inflation came down in October. Milk inflation accelerated to 7.7% in October, the highest level seen in 7.5 years. Inflation of ice cream accelerated to 10.5% in October — the highest level in at least eight years. Curd inflation was at 7.6%. And baby food inflation at 8.8% was again the highest in at least eight years. Chart 1 shows the inflation levels of milk, milk products and general retail inflation since 2015.
In November, the average price of a litre of milk in India was close to ₹55. In November 2017, it was ₹42 — about ₹13 cheaper. The rise in the price of milk was not uniform across all cities. Chart 2 shows the average price of a litre of milk in select Indian cities in November 2022 and the five past Novembers.
The chart shows a distinct pattern: the average prices increased mostly in the northern, western and north-eastern cities of India. While there were mild increases in milk prices in eastern cities, the average prices did not rise much in the southern cities of Chennai, Bengaluru and Ernakulam. Hyderabad was an exception in the south as it showed a sharp rise in average milk prices.
The average price of milk in November 2022 was lowest in Chennai at ₹40 per litre. In Ahmedabad, the price was ₹58 per litre and in Lucknow, it was ₹62 per litre. In many north-eastern cities such as Guwahathi and Agartala, it crossed the ₹65 per litre-mark.
While comparatively, milk prices have not increased much in the south, this trend may not hold too for long. While Aavin increased the price in early November, the Karnataka Milk Federation also planned a hike a few days ago, but did not implement it.
The rise in milk prices will hit the poorest the most. Chart 3 shows the average monthly per capita expenditure of urban households on milk and milk products in 2017-18. The data are presented for all the fractile classes: from the lowest spending to the highest. An average urban household spends ₹284 on milk per month. The households in the lowest spending fractile (the poorest 5% households) spend only ₹86 on milk and milk products in a month, whereas the highest spending fractile (the richest 5%) spends ₹598 — a gap of over ₹500. Thus, the price rise will have a greater impact on poorer households, which already have a high share of those who have not been drinking milk.
Only 52%-62% members in the poorest 20% households consumed milk or curd, whereas 86%-91% did so in the richest 20% of households. Table 4 shows the percentage of men and women who consumed milk in 2019-21 across various wealth quintiles. Also, there is a noticeable gap in milk consumption between men and women, especially in poorer households. So, the price rise will disproportionately impact women in poorer households more as they will be the first to give up drinking milk to compensate for the price hike, widening the inequality further.
