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Daily Important News from The Hindu (21 Apr 2023)

1.     PSLV-C55 mission: ISRO to carry out in-orbit scientific experiments using spent PS4 (Page no.6)

2.     Numbers game (Page no.10)

3.     A new edge to the fight against tuberculosis (Page no.10)

4.     The olive branch effect of the Beijing Accord (Page no.10)

5.     India’s fighter jet conundrum (Page no.12)

6.     ‘War against inflation not yet won’ (Page no.18)

7.     India’s real GDP growth likely accelerated to 4.9% in Q4: ICRA (Page no.18)

PSLV-C55 mission: ISRO to carry out in-orbit scientific experiments using spent PS4

The Indian Space Research Organisation (ISRO), which is scheduled to launch the Polar Satellite Launch Vehicle C55 (PSLV-C55) mission on April 22, will carry out in-orbit scientific experiments by using the spent PS4 (fourth and final stage of PSLV) as an orbital platform. The PSLV-C55 will have Singapore’s TeLEOS-2 as primary satellite and Lumelite-4 as a co-passenger satellite.

The PSLV-C55 mission has the PSLV Orbital Experimental Module (POEM), where the spent PS4 of the launch vehicle would be utilised as an orbital platform to carry out scientific experiments through non-separating payloads.

This is the third time that PS4 will be used after satellite separation as a platform for experiments. According to the space agency, the POEM has seven experimental non-separable payloads. The PSLV-C55 mission is a dedicated commercial mission. The TeLEOS-2 and Lumelite-4 satellites are intended to be launched into an eastward low inclination orbit.

The ISRO said that the TeLEOS-2 satellite is developed under a partnership between DSTA (representing the Government of Singapore) and ST Engineering. Once deployed and operational, it will be used to support the satellite imagery requirements of various agencies within the Government of Singapore.

The TeLEOS-2 will be able to provide all-weather day and night coverage, and be capable of imaging at 1m full-polarimetric resolution.

ANALYSIS-

Practice Question-

What is the primary satellite that will be launched during the PSLV-C55 mission by ISRO on April 22?

A) POEM

B) Lumelite-4

C) TeLEOS-2

D) PS4

Answer: C (TeLEOS-2)

Numbers game

Create economic opportunities to reap India’s demographic dividend

The latest State of World Population Report, an authoritative analysis by the UN, has officially stamped what has been known for a while: that India will become the most populous country in mid-2023, surpassing China’s 142.5 crore by about 3 million. These estimates are based on official country data as well as extrapolating birth, mortality and international migration trends. India has had a vacillating relationship with the size of its population. In the ‘socialist’ era, the growing population was a convenient excuse to explain India’s poverty and the state’s inability to improve average standards of living. These seeded deranged ‘sterilisation’ programmes that violently compromised dignity and freedom. Globalisation and the opening up of the economy in the 1990s saw India as a vast, untapped market, with ‘fortunes at the bottom of the pyramid’ that framed population as an advantage. India’s large working age population — or the demographic dividend — relative to the developed countries, where the workforce was ageing, has provided labour-wage arbitrage and valuable economic opportunities. Indian numbers are behind the skilled and unskilled labour that power workforces in West Asia and Africa, undergird business process outsourcing projects from developed European countries and the United States, and are increasingly a significant component of university enrolment abroad.

This relative prosperity, though unable to solve India’s crisis of economic inequality, has, however, busted the myth of forced sterilisation and legal limits on family sizes being key to population control. Despite overtaking China, India’s population growth is slowing. The National Family Health Survey reported in 2021 that the total fertility rate had, for the first time, dipped to below the replacement level of 2.1. India’s population is forecast to grow from its current 1.4 billion to 1.67 billion in 2050 before settling at 1.53 billion in 2100, with the peak at 1.7 billion sometime in 2064, according to UN estimates. While the pendulum of opinion regarding population has swung from ‘disadvantage’ to ‘advantage’ in national discourse, it is relevant to analyse the question while factoring in newer developments. Earlier population debates did not account for the climate crisis and the fact that many migrants, after years of skilled and unskilled labour abroad, were becoming permanent immigrants: over 16 lakh Indians have renounced citizenship since 2011, including 2,25,620 people in 2022, the highest during the period, the External Affairs Minister told Parliament in February. Economic opportunity, more than national pride, shapes the working population’s aspiration and, in its absence, a naturally decelerating population will be of limited advantage.

Analysis-

Practice Question-

Q1) What is the forecasted population of India in 2100, according to the State of World Population Report by the UN?

A) 1.4 billion

B) 1.53 billion

C) 1.67 billion

D) 1.7 billion

Answer: B (1.53 billion)

Explanation: According to the State of World Population Report by the UN, India's population is forecasted to grow from its current 1.4 billion to 1.67 billion in 2050 before settling at 1.53 billion in 2100, with the peak at 1.7 billion sometime in 2064. Therefore, the correct option is B.

Q2) According to the State of World Population Report by the UN, when is India expected to become the most populous country, surpassing China's population?

A) It has already surpassed China's population.

B) By the end of 2021.

C) In mid-2023.

D) In 2050.

Answer: C (In mid-2023)

Explanation: The latest State of World Population Report by the UN has officially stamped that India will become the most populous country in mid-2023, surpassing China's population. This estimate is based on official country data as well as extrapolating birth, mortality and international migration trends.

A new edge to the fight against tuberculosis

At the One World TB Summit in Varanasi, Uttar Pradesh on March 24, 2023, Prime Minister Narendra Modi instilled fresh energy to the global tuberculosis (TB) elimination response and reiterated India’s commitment to spearhead this effort. Mr. Modi further emphasised the importance of innovation and the need to “find new ways and formulate new strategies” to achieve the desired outcomes. The Prime Minister’s remarks are critical as we look to redefine India’s and the world’s TB elimination response — with innovation and research being central drivers of change.

Lessons from the COVID-19 response

The COVID-19 pandemic provides a good reflection point — even with innumerable challenges, countries were able to counter COVID-19 by drawing upon the innate human spirit to adapt, learn, experiment, and innovate. The pandemic has shown us that together, we can overcome unprecedented adversity. And if we could do it to overcome COVID-19, we can, and must certainly, do it to end TB.

Over the last few years, India has made significant progress in its efforts to end TB. India’s National TB Elimination Programme, or the NTEP (previously known as the Revised National Tuberculosis Control Programme, or RNTCP), has introduced several measures to find, notify and treat TB cases, with case notifications rising from 15.6 lakh in 2014 to over 24 lakh in 2022. This reflects the programme’s expanded reach and improved detection measures.

Further, novel approaches including engagement with the private sector, launch of social support provisions and introduction of diagnostic tools and new drug regimens, have improved TB management. However, while these efforts have been commendable, lack of widespread awareness about the disease and lack of access to quality care continue to be a challenge. The recent National TB Prevalence Survey (in India) found that 64% of people with infectious TB did not seek care. As a result, national-level estimates suggest that for every person notified with TB, we miss detecting almost two more cases.

To address this challenge and truly bring transformative change in our TB response efforts, we will need to introduce disruptive approaches and new tools to change the way we prevent, diagnose, and treat TB. India has long recognised the importance of investing in health research and development, especially in recent years. The Mission COVID Suraksha programme to develop vaccines was a good example of a public-private partnership, with clear goals and outcomes. The huge number of diagnostic tests developed and a variety of different vaccine platforms show that our manufacturing sector is robust and can scale rapidly.

It is also heartening to see the establishment of centres of excellence, which will facilitate collaboration between Indian Council of Medical Research laboratories and the private sector. It is possible, therefore, to strengthen and expand research and development efforts for TB, to develop new tools that will help India (and other developing countries) meet the End TB targets.

Prioritise TB vaccine trials

First, for any infectious disease, a vaccine is what makes elimination possible. We do have the Bacille Calmette-Guérin (BCG) vaccine for TB, but it does not adequately protect adolescents and adults who are at the highest risk for developing and spreading TB. While COVID-19 vaccines were developed within a year, we must prioritise and pick up the pace to find an effective TB vaccine. There are currently over 15 TB vaccine candidates in the pipeline; we must ensure that their clinical trials are prioritised to assess their efficacy in various community settings and for different target groups.

Second, testing for, and diagnosing TB needs to become more accessible and affordable so much so that each person with suggestive symptoms or frontline worker can test and get results within minutes, at minimal costs. Point-of-Care Tests (POCTs), such as home-based tests for COVID, allowed decentralised, rapid and low-cost diagnostics to provide results within minutes. New innovations such as nasal and tongue swab-based tests for TB can be a game changer by reducing diagnostic delays. Further, handheld digital x-ray machines (with artificial intelligence-based software) can now be taken to villages and urban settlements to screen large numbers of high risk individuals, safely and conveniently.

Third, the development and introduction of new therapeutic molecules can play a crucial role in the long run. While we continue to invest in drug discovery, we must also scale up newer and more effective regimens and also dip into our armoury to re-purpose existing drugs for TB. Shorter, safer, and more effective regimens do exist and include the 1HP regimen for latent TB infections, the four-month regimen (HPZM) for drug-susceptible TB, and the six-month regimen (BPaL/M) for drug-resistant TB. The evidence on these regimens is clear; timelines for scale-up, however, have been too long.

Appropriate policy frameworks

Finally, part of the process of strengthening the innovation ecosystem also involves creating regulatory and policy frameworks that smoothen the rollout of proven tools to reach people with as little delay as possible. This requires greater collaboration: not just between policymakers, scientists, product developers and clinical researchers across the country and even across regions, but potentially even between governments. Harmonisation of standards and regulatory processes between countries can enable mutual recognition of evidence-based standards and licences and save critical time towards rollout.

The COVID-19 pandemic proved India’s apt title: pharmacy of the world. Our scientific ingenuity during the pandemic has cemented our position as pioneers in innovation in the life sciences. In this spirit, we must create a strong platform that channelises investments in research to bring in a paradigm shift at every stage of the TB care cascade — prevention, testing, and treatment. With its G-20 presidency, India has another historical opportunity to build a global health architecture that creates equitable access for all. Let us use this opportunity to call for the collaborative development of transformational tools and approaches that cater to not only our own needs but also that of the under-represented but disproportionately affected developing world. TB should no longer be the leading infectious disease killer globally, in the 21st century, and India can lead the way.

Innovation lies at the core of ending tuberculosis — India can lead the way

ANALYSIS-

Practice Question-

What did Prime Minister Narendra Modi emphasise at the One World TB Summit in Varanasi, Uttar Pradesh on March 24, 2023?

A) The need to prioritise COVID-19 response efforts over TB elimination efforts.

B) The importance of investing in health research and development to end TB.

C) The need to engage with the private sector for TB elimination efforts.

D) The success of India's National TB Elimination Programme in ending TB.

Answer: B) The importance of investing in health research and development to end TB.

Explanation: Prime Minister Narendra Modi emphasised the importance of innovation and the need to "find new ways and formulate new strategies" to achieve the desired outcomes and bring transformative change in TB response efforts. He highlighted the significance of investing in health research and development, including the need to prioritise TB vaccine trials, testing, and diagnosis. The article also mentions that Modi reiterated India's commitment to spearhead the global TB elimination response at the summit.

The olive branch effect of the Beijing Accord

Just over a month after the Beijing Accord restored ties between Iran and Saudi Arabia, the regional landscape is witnessing not war, death and destruction but ministers and diplomats dashing from one capital to another to discuss initiatives to promote political and economic cooperation.

The Foreign Ministers of Iran and Saudi Arabia have met in Beijing to discuss the details of mending their relations — opening embassies, operating direct flights and facilitating issue of visas. Officials of both countries have since gone to the respective capitals to reopen their diplomatic and consular missions that have been shuttered for over seven years.

Saudi and Omani diplomats have been in Sanaa to discuss the terms of a ceasefire in Yemen. And, the Syrian President, Bashar al-Assad, isolated for a decade, has been a welcome guest in Oman and the United Arab Emirates, while the Syrian Foreign Minister, Faisal Mekdad, has visited Egypt and Saudi Arabia.

Truce in Yemen

Yemen is an early test-case for the resilience of the Saudi-Iran accord. The Saudis need an early exit from their costly Yemeni misadventure and want Iran to facilitate this by ending military supplies to the Houthis. But the kingdom is also aware that direct talks with Houthi leaders are essential for any peace process to move forward.

In early April, it was reported that the terms of a truce have been finalised between the Saudis and the Houthis: a ceasefire, an exchange of prisoners, the reopening of Sanaa airport, free access to Hodeidah port, the lifting of the blockade of Taiz by the Houthis, and the reunification of the Central Bank and payment of salaries to government employees from the oil revenues. These have been contentious issues in the past; clearly, the Saudi side has made major concessions to obtain the truce. Once the truce holds, the second stage of negotiations will cover: withdrawal of all foreign troops, the shape of the new political order, and the affirmation of a unified state. These discussions will be an intra-Yemeni matter. But, given the number of political groups in the country and the deep divisions between them on ideological, political, tribal and sectarian lines, it will be a formidable challenge to obtain agreement on these issues.

Again, as of now, it is unclear what role the United Arab Emirates (UAE) will play in the peace process, given that it controls several Yemeni ports, the strategically important islands of Perim, at the Bab al Mandab, and Socotra, in the Gulf of Aden, and supports the separatist Southern Transitional Council based in Aden.

However, the mood in Yemen is one of cautious optimism; a Houthi spokesperson has said that “an atmosphere of peace hangs over the region”.

The accommodation of Syria

The earthquake that devastated Turkey and Syria in early February this year encouraged diplomatic engagements with Damascus, which have accelerated after the Saudi-Iran accord. Soon after the earthquake, Mr. Assad received delegations from Lebanon, Jordan and the UAE, spoke to the leaders of Bahrain and Egypt, and visited Oman on February 20.

After the accord that brought together the two countries that had been on opposite sides in the Syrian conflict, Mr. Assad visited Russia and the UAE, signalling the end of Syria’s political isolation over 10 years. In Abu Dhabi, the UAE President, Sheikh Mohammed bin Zayed Al Nahyan, welcomed Mr. Assad by saying that it was “time for Syria to return to the Arab fold”.

Syrian Foreign Minister Mekdad’s visit to Cairo in early April, was the first such visit in a decade; this was followed by a visit to Jeddah. Saudi Arabia is expected to invite Syria to attend the Arab League summit in Riyadh in May, thus completing Syria’s political rehabilitation.

Russia’s principal ongoing effort is to reconcile Syria and Turkey: but further engagement is proving difficult as Syria insists on full Turkish military withdrawal from northern Syria. Substantial interactions are expected after the Turkish elections on May 14.

An emerging regional order?

The (now former) United States President, Barack Obama, in March 2016, in an interview with the Atlantic magazine, had urged Saudi Arabia and Iran “to find an effective way to share the neighbourhood and institute some sort of ‘cold peace’”. Ironically, in these hectic diplomatic interactions across West Asia, the U.S. is on the sidelines, often as a disgruntled observer. Clearly, the region has shrugged off the U.S. yoke and is taking foreign policy decisions independently of American wishes — the Beijing Accord illustrates this most dramatically.

Saudi Arabia has become a “dialogue partner” of the Shanghai Cooperation Organisation and wants membership of BRICS. It will continue to buy weapons from the U.S., but is also diversifying its suppliers; it has bought ballistic missiles from China and has recently purchased Chinese technology to manufacture its own missiles. Saudi Arabia and Russia remain solid partners in the “OPEC +” conclave to manage oil production and prices.

Iran already has substantial defence, energy, economic and logistical connectivity ties with Russia and China — the three countries carried out another joint naval exercise in March. Iran has a central place in the Belt and Road Initiative, and is working with Russia to close the small gaps in the 7,200-km International North-South Transport Corridor that links Moscow with the western coast of India.

These developments presage two scenarios: one, a West Asian cooperative order founded on diplomatic engagements among regional states. This will in turn be part of a larger order, embracing Eurasia and the Indian Ocean, that is defined by multipolarity and encourages regional states to pursue their interests through diverse interactions and alignments. China can be expected to be at the centre of much of this diplomatic activity.

Diplomacy is replacing conflict across West Asia, with foreign policy decisions being made independently of American wishes

ANALYSIS-

Practice Question-

What is the current state of Saudi-Iran relations according to the article?

A) They are engaged in a costly Yemeni misadventure

B) They are discussing initiatives to promote political and economic cooperation

C) They have made no progress towards mending their relations

D) They are supporting the separatist Southern Transitional Council based in Aden

Answer: B) They are discussing initiatives to promote political and economic cooperation. The article mentions that the Foreign Ministers of Iran and Saudi Arabia have met in Beijing to discuss the details of mending their relations, including reopening embassies, operating direct flights, and facilitating the issue of visas.

India’s fighter jet conundrum

The Indian Air Force is trying to keep up its strength of fighter squadrons as its fleet struggles with the gradual phase-out of existing jets as well as delays in the order and procurement of new jets. It is also placing much hope in indigenously manufactured aircraft

Against the sanctioned strength of 42 fighter squadrons, we are today at 31 squadrons which won’t go up in the next decade, but on the contrary can go further down by 2029, an Indian Air Force (IAF) representative informed the Parliamentary standing committee on defence as per a report tabled in Parliament last month. This sums up the conundrum faced by one of the world’s largest Air Forces in modernising its fleet which has been beset with unending delays in procurement.

“As far as going from 31 to 42 squadrons, I will not be able to say by when it can be accomplished”, the representative added noting that they have been trying for the past many years to move forward, but there are certain procedures that have to be followed. If what has been ordered is delivered, and the case for 114 Multi-Role Fighter Aircraft (MRFA) has progressed, then by 2030 we can be between 29 to 31 squadrons, the IAF rep said assuring that it will not go below that. The bulk of the heft to arrest the drawdown and ensure it doesn’t fall below 29 squadrons rests on the 83 Light Combat Aircraft (LCA)— MK1A, LCA-MK2 and MRFA. The decision on MRFA is essential to arrest this drawdown, the House Panel was informed.

Phase-outs and orders

It must be noted that of the 31 squadrons at present, the three Mig-21 squadrons will be phased by 2025. Also, the Jaguars, Mirage-2000s and Mig-29s will begin going out by the end of the decade. For instance, by 2027-28 the first of the MIG-29s, inducted in the late 1980s, will start going out and by early 2040s, when most of these types will be phased out, some of the earlier batch of SU-30s will also start going out.

The IAF has in total contracted 272 SU-30s. A deal to procure 12 additional SU-30MKIs to replace the ones lost in accidents as well 21 additional MIG-29s from Russia has been stuck, though both IAF and Russian officials state that it has only been delayed but is on track.

India has an ambitious plan lined up for the acquisition of over 500 fighter jets, a bulk of them to be indigenously designed and manufactured, with a majority of them being for the IAF. However, these are at various stages of development. Their manufacturing and timely deliveries are critical.

Speaking at an event in October 2022, IAF Chief Air Chief Marshal V. R. Chaudhari conceded that even with the LCA-Mk1A, LCA-Mk2 and the MRFA “we will still be at 35-36 (squadrons) by middle of next decade.”

Apart from the new inductions planned, the IAF is confident that increasing the low availability rates of Su-30 and other fighters in service will offset some of the shortfall in the interim. However, that could be potentially impacted due to the Ukraine war, which has already affected payments to Russia for deals underway as well as delays and uncertainty in timely supply of spares for equipment in service.

Indigenous fighter ecosystem

The LCA which is the fulcrum of the indigenous jet development programme, originally intended as a Mig-21 replacement, has seen a series of delays and has now come back on track. The LCA achieved Initial Operation Clearance (IOC) in December 2013 and Final Operational Clearance (FOC) in February 2019. The IAF had earlier signed two contracts with Hindustan Aeronautics Limited (HAL), for 20 IOC configuration aircraft including four IOC trainers on March 31, 2006 and for 20 FOC configuration jets along with four trainers on December 23, 2010. On this, the IAF representative noted that they were supposed to get the 40 LCA from HAL much earlier but they are getting them now. Even now, we are two aircraft short of 40, the representative noted.

Two decades since the first flight, in February 2020, the Defence Ministry signed a ₹48,000 crore deal with HAL for 83 LCA-MK1A. The HAL officials said the project is on track to begin deliveries from February 2024. HAL will be delivering the first three aircraft in 2024 and 16 aircraft per year for the subsequent five years, the Defence Ministry has said. Last month, HAL inaugurated the third LCA assembly line, with the need now being to ramp up production rate.

In addition to the LCA-MK1A, an even more capable and a larger LCA-MK2, which received sanction from the Cabinet Committee on Security (CCS) in September 2022 at a total cost of ₹9000 crore, is expected to be ready for production by 2027. Moreover, the fifth generation Advanced Medium Combat Aircraft (AMCA) is awaiting CCS sanction, the development of which would take 10 years after that, according to Dr. Girish S. Deodhare, Director General of Aeronautical Development Agency (ADA). The project cost of AMCA is estimated to be around ₹15,000 crore.

The LCA-MK2 will be similar to the Mirage-2000 in terms of capability and will be an important fillip as several jets currently in service begin going out. There is also a Twin Engine Deck Based Fighter (TEDBF) on the drawing board for the Navy’s aircraft carriers. Dr. Deodhare had said that they are looking at six squadrons of LCA-Mk2, seven squadrons of AMCA and upto 100 TEDBF. At Aero India, HAL officials said that they expect an additional order for upto 50 LCA-Mk1A. A squadron typically has 18 aircraft. The TEDBF is expected to take first flight by 2026 and be ready for production by 2031. Speaking on the sidelines of Aero India, Navy Chief Adm R. Hari Kumar said that they may get upto 45 TEDBF by 2040. For the Navy, a decision for 26 carrier based fighters is expected shortly, a contest between Boeing F/A-18 E/F Super Hornet and the Dassault Aviation Rafale-M.

The other critical programme, the MRFA, is a reincarnation of the earlier Medium Multi-Role Combat Aircraft (MMRCA) contest for 126 jets. The MMRCA began when the Request for Information (RFI) was issued in 2007 and dragged on for a decade only to end up in knots and give way to the emergency procurement of 36 Rafale jets, earlier shortlisted under the MMRCA, under a €7.87 billion deal with France. The RFI for 114 MRFA was issued in April 2019 to global aircraft manufacturers but there has been no progress and the project is yet to receive the Acceptance of Necessity (AoN), the starting point of the procurement process. Given the huge budgetary outlays committed for the indigenous programmes, it has to be seen how the finances for the MRFA, which involves the manufacturer to set up plant in India, would be managed.

Evolution of the LCA

While the LCA project did see long delays, it has also evolved in tune with the changing technological requirements. It was conceived in the 90s’, but what the IAF is flying today is very different from what was actually conceived at that point of time. According to the IAF, what was envisioned in the beginning and what we are flying today are two different architectures. “The one we are flying today is called federated architecture. If I can use the word, it is, plug and fly. You can integrate any new weapon or any new system much easily now”, the IAF rep said. Further, the House panel was informed that as far as avionics, airframe and other parts are concerned, we are very close to where the world is, except for some technologies like actuators, which are undergoing flight testing at the moment, according to the IAF. Also, critical technologies like flyby wire are not shared by anyone and were developed indigenously over time.

Stressing on indigenisation, the Air Force submitted before the standing committee, “If we keep buying them from the open market in the world, we will never become self-reliant. So, we need to give a push to our own industry also. We need to hold their hands and Air Force is committed towards that.”

THE GIST

Against the sanctioned strength of 42 fighter squadrons, the IAF today is at 31 squadrons. The bulk of the heft to arrest the drawdown and ensure that the number doesn’t fall below 29 squadrons rests on the 83 Light Combat Aircraft (LCA)— MK1A, LCA-MK2 and MRFA.

India has an ambitious plan lined up for the acquisition of over 500 fighter jets, a bulk of them to be indigenously designed and manufactured, with a majority of them being for the IAF. However, these are at various stages of development and procurement.

The LCA which is the fulcrum of the indigenous jet development programme, originally intended as a Mig-21 replacement, has seen a series of delays and has now come back on track.

“If we keep buying them from the open market in the world, we will never become self-reliant. We need to give a push to our own industry also”

ANALYSIS-

Practice Question-

What is the main challenge faced by the Indian Air Force (IAF) in modernizing its fleet?

A) Lack of funds to procure new aircraft

B) Delayed deliveries of ordered aircraft

C) Shortage of skilled personnel to maintain aircraft

D) None of the above

Answer: B) Delayed deliveries of ordered aircraft

Explanation: The article states that the IAF is facing a conundrum in modernizing its fleet due to unending delays in procurement. The IAF representative informed the Parliamentary standing committee on defense that, against the sanctioned strength of 42 fighter squadrons, the IAF is currently at 31 squadrons and may not be able to increase this number in the next decade. The bulk of the heft to arrest the drawdown and ensure that the number doesn't fall below 29 squadrons rests on the 83 Light Combat Aircraft (LCA) and MRFA, but delayed deliveries of these aircraft could further exacerbate the problem. Therefore, option B is the correct answer.

‘War against inflation not yet won’

Premature to declare end to tightening cycle, says RBI MPC’s Varma; no further ‘withdrawal of accommodation’ remains to be done, repo rate is already at 6.5% — a level that prevailed at the beginning of previous easing cycle in Feb. 2019, he says

The war against inflation has not yet been won, and it would be premature to declare an end to the current tightening cycle, RBI’s Monetary Policy Committee (MPC) member Professor Jayanth R. Varma remarked in his statement in the last MPC meeting, the minutes of which were released by the Reserve Bank on Thursday reveal.

Mr. Varma had expressed reservations on the second resolution, namely: “MPC decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target.” While supporting growth, he wrote, “I cannot put my name to a stance that I do not even understand. At the same time, it is clear that the war against inflation has not yet been won, and it would be premature to declare an end to this tightening cycle.” He flagged the need for heightened vigilance in the face of the fresh risks [an oil output cut by OPEC+ and monsoon-related] that have emerged.

‘Warning signs’

“On the growth front, early warning signs of a possible slowdown are visible to a greater extent than in February. In the current situation of high inflation, monetary policy does not have the luxury of responding to these growth headwinds,” he wrote.

It is almost “axiomatic’ that monetary action can cool inflation only by suppressing demand. However, policymakers must be vigilant against overshooting the terminal policy rate, and thereby “slowing the economy”, he added.

On the MPC’s stance, he said, “I fail to comprehend its meaning. I am unable to reconcile the language of the stance with the... fact that no further ‘withdrawal of accommodation’ remains to be done... the repo rate has already been raised to the 6.5% level prevailing at the beginning of the previous easing cycle in February 2019.”

ANALYSIS-

Practice Question-

What is RBI MPC member Professor Jayanth R. Varma's opinion on declaring an end to the current tightening cycle in India?

A) It should be declared immediately

B) It is premature

C) It is not necessary

D) None of the above

Answer: B) It is premature

India’s real GDP growth likely accelerated to 4.9% in Q4: ICRA

India’s real GDP growth is likely to have picked up pace to 4.9% in the last quarter of 2022-23 from the 4.4% uptick recorded in the October to December 2022 quarter, rating agency ICRA said on Thursday.

For the full year gone by, ICRA has retained its 6.9% GDP growth projection, a tad lower than the 7% projected by the National Statistical Office that will release its Q4 growth estimates at the end of May.

“Notwithstanding higher volumes for most indicators, India’s GDP growth is likely to moderate to 6.9% in 2022-23 from 9.1% in 2021-22 given the margin compression in some industrial sectors owing to higher commodity prices, even as the services sector displayed a robust performance in the year,” Aditi Nayar, chief economist and head — Research and Outreach at the firm told The Hindu.

However, when considered against pre-pandemic levels of 2019-20, the GDP growth last year would be about 10% higher, sharply over the 2.8% uptick seen in 2021-22, Ms. Nayar reckoned. ICRA has forecast India’s 2023-24 GDP growth at 6%.

A mixed picture

The signals from economic activity in April are mixed so far, the agency said, citing a 28% month-on-month drop in vehicle registrations and a 6.6% fall in petrol sales, even as diesel sales rose 8.4% sequentially.

Electricity demand in the current month has contracted 1.9% from April 2022 levels.

Growth may slow to 6.9% in FY23 from 9.1% the previous year on higher commodity prices

ANALYSIS:

Practice Question-

What is ICRA's projection for India's GDP growth in 2022-23?

A) 4.4%

B) 4.9%

C) 6.9%

D) 7%

Answer: C) 6.9%