Tuesday, February 8, 2022

India's Union Budget Analysis

 Key highlights:

A Union Budget is primarily the estimates of expenditure vs receipts of the Govt. In public financing the spending is first decided, then the receipts are taken into account.

Total expenditure for BE FY23 INR 39.4 lakh crore compared to INR 37.7 lakh crore in the RE FY23.

GDP growth of 9.2% estimated in FY22 and 8-8.5% in FY23. This is after a negative growth of -7.5% in FY21.

Supply side measures with a push for Infrastructure. Capex increased from INR 6 lakh crore to INR 7.5 lakh crore.

PM GatiShakti –Project for growth to be driven by 7 engines: Roads, Railways, Airports, Ports, Mass transport, Waterways, Logistics infrastructure.

Education sees increased budget.

External borrowing reduced on the back of increased forex reserves.

Fiscal deficit target to come down to 6.5% and goal of  4.5% by 2025-2026

National Tele Mental Health Program announced.

MSMEs get raise in Emergency Credit Line Guarantee Scheme (ECLGS) cover and INR 6000 crore outlay for MSME performance improvement over a period of 5 years.

However, some concerns as well:

No tax structure changes, leaving the middle class disappointed.

Crypto investors dejected due to 30% flat tax in the transactions along with 1% TDS.

Health de-prioritized assuming end of pandemic with 0.8% increase in allocation over last year’s revised estimates

Subsidies reduced(food, petroleum, fertilizer)

No demand side measures like fiscal stimulus or UBI(Universal Basic Income)

Inflation cpi and wpi high. Rising input costs and soaring crude oil prices affecting the economy

Rural development sees decrease in expenditure. Surprising given the brunt of the pandemic faced by the poor.

Fiscal deficit INR 1,661,196 = 6.4& of GDP. Will be covered by borrowings.

Disinvestment receipts lowered.

Increase in tax revenue, decrease in non tax revenue –

Increase in Debt receipts, decrease in non-debt receipts

GST could have been reformed by proposal to simplify tax rates. Record collection of GST could be partly due to high inflation.

High input costs affecting investment along with weakened demand.

Comments:

Instead of farm income which was supposed to be double this year as compared to that in 2016, the total expenditure has doubled in the FY23 budget(INR 39.4 lakh crore) viz-a viz FY17 budget(INR 19.7 lakh crore)

Much could have been done for MSMEs and poor. Guaranteed cover in Emergency Credit Line Guarantee Scheme (ECLGS) has been raised to INR 5 lakh crore till March,2023, but with the banks not willing to lend much to large corporates also, raises concerns about their attitude towards MSMEs.  MSMEs don’t get relief in the form of stimulus or any proposals for GST changes. Also no lowering of cost of capital, no change in assessment of working capital, supply chain disruptions in manufacturing MSMEs not addressed.

Demand side measures shouldn’t have been sidelined.

Crypto tax by itself not counterintuitive, but the rate could have been lower.

Health should not have been de-prioritized irrespective of whether the pandemic will be over this year or not.

Capex growth of 25% from INR 6 lakh crore in RE FY22 to  INR 7.5 lakh crore in BE FY23. Good for the infra but weak demand might discourage investors. Also 90% of business  is by MSMEs which might not get immediate relief from the capex which will be largely beneficial to the large corporates.

Focus on Mental Health a good step.

Rural development expenditure should have alleast remained the same .It is decreased by INR 653 cr as compared to RE FY22.

Budget structure aligned more towards growth with some fiscal consolidation. But supply side measures may not be effective in the short term as short term relief is the need of the hour post the pandemic. It was a mixed budget. Hope the next one is better.

Wednesday, January 26, 2022

SWIDDS – The Elixir of transformation


SWIDDS doesn’t seem to be so but it is an acronym and not a word by itself.

It is an acronym for Skill, Will, Discipline, Direction and Self-Belief. Sometimes it happens that people lose the plot when it comes to what they do. Whether it is studying as students, or working as professionals or performing any activity in any other area of life. It so happens that things go well initially but go haywire after some time and people don’t get an idea as to what and how that happened. Could it be due to some problem which has gripped your mind or life? Could it be due to indulgence in some activity which has distracted you and cluttered your mind? Problems are a part of life but if you get bogged down, then things can go for a toss. So what can be done under such circumstances. People resort to listening to motivational podcasts, watching motivational videos, attending life coaching sessions, or read self-help books. While these activities have their impact if followed religiously, I have something to add to the list in the form of an formulation; an acronym – SWIDDS - which captures the essence of transformation of life and encapsulates the process to reach your goals or fulfil your dreams. Let me explain the elements in it:

1.   Skill – This element reflects the need for constant improvement in your abilities to achieve great things. Skill is the foundation on which your output would be defined. The more you hone your skills the more you become confident of the task set out to be done. Be patient to learn and practice skills. Whether it is honing an old skill or learning a new skill, it is something which may take time to acquire, but is worth it.

2.   Will – Will is what gets you going. It is required just like a rocket requires initial thrust or an airplane requires initial lift. It relates to getting off your bed when your alarm rings or taking out that book which you wanted to read or calling out if something is wrong or putting on your work-out clothes to get going in your exercise routine. It all comes with the will to achieve something special, the desire to transform.

3.   Discipline – Whether it is staying in the present, following the process or staying focused on your goals, discipline ensures that you optimize and utilize the time for reaching your goals. It relates to self-control to sacrifice the present pleasures for achieving future bliss. Discipline is the constancy of purpose and consistency in the process.

4.   Direction – Ensure that you are headed towards the right direction from the transformation point of view. Focusing on the right things and techniques will help you in your career and life. Whether you are learning, watching or doing something, ensure that it adds value in your life.

5.   Self-Belief – No matter what, you should have belief in your abilities and efforts. There could be ups and downs in life but you should be resilient and face challenges with your head held high.

 

 

 

Sunday, January 23, 2022

CSK's IPL 2021 Redemption

"Definitely Not!"

"Definitely Not!" This is how MS Dhoni responded at the end of his 2020 IPL campaign after he was asked whether this would be his last IPL. These two words meant a lot for the Dhoni and CSK fans. These were not words but emotions.

Forgettable IPL 2020

The question though is why that question in the first place. Is it because he was ageing? Is it because he was out of form for some time or did it reflect the continuation of his decision of retirement from international cricket. Well, the reasons listed may have some connection but the more worrisome situation for the fans was that CSK failed to qualify for the play-offs for the first time since the inception of the IPL in 2008.

How did this happen? No one saw it coming. Well, there were several factors to it. Unavailability of Suresh Raina and Harbhajan Singh, Dhoni's lack of form, the lack of bowling attack necessary for UAE wickets(Yes, the matches were held in UAE due to Covid concerns in India), the form of several batters in the line-up. Basically the team was not the CSK we knew. They couldn't put up a decent score even on flat tracks. Somehow, as many experts observed, their style of play (steady at the start and slog at the end) was not working anymore especially with Dhoni struggling for form. Although they started their campaign well with a fine win over MI, they couldn't get their momentum going and lost the plot in the middle. The other teams were making the most of this. RCB,MI,DC had a wonderful season. SRH eventually made it through to the playoffs. MI beat DC in the final to win the IPL for the 5th time. CSK were standing at 3 titles. This made the MI fans go over the moon with all the celebrations. Calls for making Rohit Sharma the white ball captain had already started among his fans.T20 and ODI are the two white ball formats.

2021 Redemption

CSK won half the battle during the auctions held in Chennai. This was a mini auction where less players are available. They made the right purchases with Moeen Ali(spinning all rounder) and Krishnappa Gowtham(spinning all rounder) being among the costliest for them. They also made a surprise purchase with Cheteshwar Pujara(a specialist test match player) which was mentioned as a mark of respect for his heroics in Australia Test series, which India won. Their nature of play involved optimum utilization of all rounders. They were all set for redemption, with Dhoni's words of "Definitely Not" becoming a motto for them. However, there was a first twist in the tale. The schedule was unlike normal due to Covid concerns and no team got to play on their home grounds. Each team was made to travel only three times. CSK were to play 5 of their matches in Mumbai's Wankhede stadium. So the big question...how will they utilize the spinners/spinning all-rounders in that fast bowler friendly wicket? Veteran commentator Harsha Bhogle even went on to suggest in humour that CSK management should give the spinners few X-boxes since they would be sitting idle. One thing he forgot at that moment was that it was Dhoni's team he was talking about. Dhoni , apart from his finishing skills, is also known for bringing out the best from his bowlers in any condition. The 2021 campaign started with Covid cases surging in April and yet not peaked. However, the authorities claimed that all protocols were being followed. CSK started their campaign with a loss against DC which made their fans wonder if the situation will be the same this time too. But, CSK came back really well in the game against PK which was followed by a series of victories for the Super Kings.

What followed half way through the season was a second twist in tale. The matches were to be shifted to UAE again due to rising Covid cases in India. Yes, UAE, the same place where a terrible campaign for CSK had ended just a season before. The matches resumed in September. Perhaps it was fate that the first match in UAE was on the same date as the previous season i.e.,19th. This time again the CSK team restarted their campaign with a win over arch-rivals MI. However, there was something special about this win. This win came after the team recovered from a batting collapse in the first innings and Ruturaj Gaikwad had a huge role to play in the recovery. Gaikwad who scored three 50s in three matches towards the end of the 2020 campaign, all in winning causes(thus providing some relief to the fans), continued from where he left that season. His innings was an indicator of something special to come and he got the orange cap for scoring the most runs. But Faf DuPlessis, who missed the cap by a whisker, also had a huge role to play.

CSK won the their 4th title which was due to a combination of several factors, some of which were great captaincy, as usual, by Dhoni, excellent performance by the all-rounders, fast bowlers utilizing the UAE wickets well and a tremendous opening partnership by Gaikwad and DuPlessis in almost all games.

It was a wonderful occasion for the CSK fans, especially after the dismal performance in the 2020 season and the heartbreak in 2019 IPL final where CSK lost by 1 run against MI. This campaign of CSK shows that no matter what others say or however difficult the situation is, one must have self-belief and confidence in one's abilities.


Saturday, January 22, 2022

Covid-19 – The Invisible Tsunami

 The Outbreak

“Seven patients admitted in the hospital were exhibiting SARS-like symptoms.” So went the message on WeChat which is a Chinese social media app. This was sent by Dr. Li Wenliang, an ophthalmologist at the Wuhan Central Hospital on December 30th, 2019. SARS(Severe Acute Respiratory Syndrome) is a viral respiratory illness caused by SARS-COV or SARS associated coronavirus. ‘Corona’ refers to the pattern of the spike protein in the virus which resembles the corona of the sun. SARS-COV was responsible for the SARS outbreak in 2003 in Southern China which spread across 17 nations, with 8,000 people getting infected and 774 dead.

Dr.Wenliang’s message spread very fast on social media and he realized that he would pay the price for that. China, as we know, is a one party state with Communist Party of China(CPC) in complete control of the country. It has no tolerance for opposition and dissent. So the information given by Dr. Wenliang couldn’t resonate with CPC model of ruling the country. He, along with seven other doctors, was summoned by authorities for spreading rumours. The police called on the netizens to not spread or believe in rumours. Unfortunately, he contracted the virus while treating a patient infected with it and died later.

This was the sequence of events during the initial days of the outbreak. With today’s globalized world, it was a given that the virus would spread across countries. But this case was different. Almost whole world got infected with the virus and although the fatality rate for SARS-COV2 is 2.2% which is less than that for SARS or MERS (SARS-9.6% & MERS-34.4%), due to the very high infection rate, the absolute value of fatality increased a lot.

While the WHO declared COVID-19 a pandemic on 11th March, 2020, the virus had reached 114 countries infecting more than hundreds of thousands of people with more than 4,600 deaths.

Timeline of the key events following the outbreak:

·       8th Dec, 2019- First case in Wuhan(recorded)

·       31st Dec, 2019- First report of cases of Pneumonia in Wuhan

·       9th Jan, 2020- China announced the identification of a novel coronavirus as the cause

·       13th Jan, 2020- Case of a traveler from Wuhan confirmed in Thailand.

·       20th Jan, 2020- Human-to-human transmission confirmed

·       23rd Jan, 2020- Wuhan City locked down

·       29th Jan, 2020- Covid spread to all 34 provinces across China

·       30th Jan, 2020- WHO declared a PHEIC (Public Health Emergency of International Concern) alert

·       11th Feb, 2020- ICTV named virus SARS-COV 2 and WHO named disease COVID-19

·       28th Feb, 2020- WHO increased risk assessment to very high on the global level

·       11th Mar,2020- WHO declared COVID-19 as a pandemic

The Genetics of the SARS-COV2

The SARS-COV2 virus is part of the coronavirus family of viruses with it being the seventh one. Along with it, the other severe ones include SARS-COV and MERS. The mild ones include HKUI,NL63,OC43 and 229E. Coronaviruses are single stranded RNA viruses and zoonotic in nature, which means commonly affecting animals like birds, camels, pigs and bats. But they do get transmitted from animals to people sometimes.

The SARS-COV2, like its predecessor, has an outer fatty layer surrounded by spike proteins. These spikes latch on to human cells by binding to receptors called Angiotensin-converting enzyme 2 (ACE2). Then they undergo structural change by which they fuse with the human cell membrane and enter the cells. They replicate with the help of the host cell as they can’t replicate on their own. The RNA of the virus has the information for the copying process. Once inside the cell with the help of the spike protein, the virus commands the cell to produce RNA and proteins, which it needs to replicate. This process is hidden from the cell in a double-membrane compartment. The RNA copies are used in two ways. First for transmitting into next batch of viruses and the second to instruct the cell to make proteins. They newly produced virus leaves the host cell in a special compartment. Thus, several thousands of copies are made.

Covid-19 infection:

Test, Trace, Isolate

There are primarily two types of tests for COVID which are called diagnostic tests:

1.Molecular/PCR test

2.Antigen test

The Molecular/PCR test involves detection of RNA of the virus using Nucleic Acid Amplification Test like Reverse Transcription- Polymerase Chain Reaction. In this, the samples taken from back of the nose or mouth using a swab undergo a test. The first step in this test is the reverse transcription which means creating a complementary DNA from the viral RNA. This is done by adding a primer which binds with the complementary part of the viral RNA. The reverse transcriptase enzyme is utilized to extend this primer to complete the complementary DNA structure. Three steps complete the RT-PCR procedure:- Denaturation, Annealing and Extension. In the Denaturation step, the strands of the newly formed DNA are separated using high temperature reaction. Annealing involves binding a primer to one of the strands of DNA and Extension involves the utilization of DNA polymerase to extend the primer to complete the structure of DNA. There is also a TaqMan probe which also binds to the strand at one place. It consists of a fluorophore emitting fluorescence at one end and a quencher at the other end which does not allow the fluorescence to be detected at that stage. While extension, when the DNA polymerase reaches the TaqMan probe, the fluorophore gets separated through cleaving. The above process is repeated through a number of cycles till there is adequate amplification of fluorescence to detect the presence of the virus. The Indian Council of Medical Research(ICMR) recommended value of CT (Cycle Threshold) is 35 which means if the CT value is less than 35, then only the person is declared as COVID positive. This means lower number of cycles are required for detection.

The Antigen test is a rapid test where antigens (or antibody generators) are detected using a test kit under 15 minutes. The sample taken from a person is treated with a solution of salt and soap. If there is a presence of SARS-COV2 in the sample, then the antigens bind to the antibodies which are specific to the virus and are painted on the test strip. A coloured line appears on the strip which indicates the presence of the virus. But the accuracy of this test is questionable since it my might give a false negative result if enough viral antigens are not present in the sample.

There is also an antibody test which look for antibodies in the immune system which are produced in response to the virus. Antibodies may take several days or weeks to develop after an infection and may stay in the blood for several weeks or more after recovery. It is not recommended to used antibody test to diagnose an active COVID-19 infection.

After the outbreak, appropriate COVID protocols were released by the authorities in India and all over the world. The ideal scenario involved testing, tracing and isolation of the COVID patient which essentially meant preventing further infections. Unfortunately, there were gatherings taking place post the outbreak. People unaware of the seriousness of the pandemic didn’t follow the preventive measures properly.

Indian government announced a 21-day total lockdown in March, 2020. Most of the countries were in some or the other kind of a lockdown. The three preventive measures of masking, sanitizing and social distancing were put into place. Travellers were required to quarantine to mitigate the spread of the infection.

Economy vs Virus

Lockdowns naturally meant disruption in routine activities which affected the lives of millions of people around the world. While working from home became the norm for those who could do so depending on the nature of their work, this was not the case for others who had faced loss of income due to disrupted businesses. Even employees in general faced some pay-cuts due to financial constraints faced by the organizations they were working for. Many suffered from job losses.

Around 255 million jobs were lost in 2020 across the globe. According to United Nations Development Programme (UNDP) the global GDP fell by 3.3% in 2020. Migrant workers in India went back to their hometowns due to the lockdown since they were unable to make ends meet at their places of work. This led to a huge crisis in India. There was uncertainty of return of the migrants to their places of work. Decrease in migrant workers meant shortage of supply of labour force and in turn increase in wages. The migrants themselves had to face hardships by undertaking long, hazardous journeys back to their home towns. Uncertainty about their livelihoods led to anxiety and mental health issues. Thousands of migrant workers died during this period.

                    

Economic condition across the world as per below figure:   

                        

Vaccine Race

Usually making a vaccine would take more than 10 years and cost between $200 million and $500 million. But due to the gravity of the pandemic situation the process of vaccine development was speeded up. This increased the cost but the considering the economic losses which could be brought about by the pandemic, this was worth the investment. Different stages of development and production were undertaken at the same time.

There were several companies who developed and got approval for vaccine roll out. For eg: Pfizer-BioNTech(US&Germany), Moderna(US), Oxford-AstraZeneca(UK), Johnson & Johnson(US) and so on.

UK became the first country to start administering the vaccines to its citizens using Pfizer jab.

There are three methods of vaccine development:

1.      The whole-microbe method

2.      The subunit method

3.      The genetic method

In the whole-microbe method, one approach is to inactivate the disease-causing virus using chemicals, heat or radiation.  Covaxin, the first indigenously developed vaccine in India, was made using this approach by Bharat Biotech. Also, Chinese companies SinoVac and Sinopharm used this approach. Another approach is the live-attenuated approach using a weakened virus. The third one is to use a viral vector vaccine in which a safe virus different from the one causing the disease is used as a vector to deliver subparts or proteins of the original virus to trigger an immune response. Oxford-AstraZeneca, Johnson & Johnson and Gamaleya Research Institute(Sputnik-V by Russia) developed this kind of vaccine.

The subunit method uses very specific parts of the virus that would be recognized by the immunes system. Novavax(US) developed this kind

The genetic method uses genetically engineered mRNA or messenger RNA to give instructions to the cells for making the S protein found on the surface of the SAR-COV2 virus, which ultimately triggers the immune system. Pfizer-BioNTech and Moderna developed this kind of vaccine.

Variants and Waves

Variants arise due to mutations undergone by viruses. In India, three waves of COVID-19 have come, while others countries like for eg- US,UK, etc., have seen more waves which was primarily due to the new variants coming up in each wave.

Three types of variants have been classified by WHO:-

1.      Variant of Concern (VOC):- This variant can affect people and cause higher risk of severe illness or fatality. This is highly transmissible. There are five variants currently designated under this classification. Alpha or B.1.1.7(first reported in UK), Beta or B.1.351(first reported in South Africa), Gamma or P.1(first reported in Brazil), Delta or B.1.617.2(first reported in India) and Omicron or B.1.1.529(first reported in South Africa)

2.      Variant of Interest (VOI):- This variant is also potentially highly transmissible, although causing less severity than VOC

There are two variants currently designated under this classification.  Lambda or C.37(first reported in Peru), Mu or B.1.621(first reported in Colombia)

3.      Variant of High Consequence (VOHC):- This variant is less affected by preventive measures or medical treatment.

Currently there are no such variants.

The Delta variant in India, which brought about the second wave, was the most severe with increased fatality. The health infrastructure was under enormous pressure with lack of ventilators, oxygen cylinders and beds to treat patients who were getting infected and the spread increased tremendously with cases peaking at more than 400,000 a day and daily deaths of more than 4,000.

The Future

Several experts have mentioned that SARS-COV2 pandemic will be reduced to an endemic in near future. It could take the form of a seasonal flu. Vaccines might become more affordable in near future and more drugs for treatment may be available. As far as the origin of SARS-COV2 is concerned, there is still considerable debate in the public domain and within the scientific community as to whether it leaked out of a lab in Wuhan (Wuhan Institute of Virology) or from a wet market for animals at the same place.  Some suggest that the genetic features in the virus are unusual which indicates generic engineering by humans. At the same time, researchers have found out that the genome of SARS-COV2 is very similar to that of RATG13, a coronavirus that was first found in a bat. So this means natural origins of SARS-COV2 can’t be ruled out. However, RATG13’s genome is only 96% identical to SARS-COV2’s, which means that the closer relative of the virus, which passed to humans, remains unknown. Irrespective of the origins, lessons must be learnt from COVID-19. The scientific community, governments and health organizations across the globe should take preventive measures to avoid or at least reduce the probability of outbreak of such a pandemic in future. Virology institutes should be stringently monitored and the wet markets need to be effectively regulated. There should some mechanism designed to monitor the disruption of natural habitats of animals or birds and better platform needs to be provided for environmentalists to have their say. Health infrastructure should be prioritized and every country should be better prepared to face such pandemics if they occur in future.

References:-

https://www.statista.com

https://www.fda.gov

https://www.indiatoday.in

https://www.nature.com

https://www.latimes.com

https://www.oecd.org

https://www.ncbi.nlm.nih.gov

https://www.youtube.com/channel/UCGqQrz8HUV98ii7A_Pz1X_Q

https://www.youtube.com/channel/UCEPMCywJ6FPZpQ_aPEZt5JA

https://www.usglc.org

https://www.ncbi.nlm.nih.gov

https://www.orfonline.org

https://scroll.in

https://www.bbc.com

https://wellcome.org

https://www.who.int

https://www.healthcareitnews.com

https://www.nbcchicago.com

https://www.cbc.ca

IMF/BBC

Thursday, December 30, 2021

Battle of Plassey(1757)

 Battle of Plassey (1757)

This battle was fought between the British EIC led by Robert Clive and the Nawab of Bengal.

The Nawab of Bengal was Siraj-Ud-Daula. He was not happy about the Britishers not paying taxes and duties and misusing few trade privileges. Then there was the 'Black Hole ' incident where the Nawab held several Britishers in captivity in a prison meant for just six people. So these factors led to the battle. Robert Clive was initially not sure about battling the Nawab's army due to their superiority in terms of numbers. But the Britishers managed to make deals with two of the three commanders of the Nawab, who were Mir Jafar and Rai Durlab, who stayed neutral or fought for the British. Only the commander Mir Murdan was with the Nawab who was defeated by the British and the Nawab was also put to death.

So this was a summary of the Battle of Plassey which changed the course of Indian History, with the Britishers gaining power over Bengal

Tuesday, December 28, 2021

 Quantum Physics


So this write-up is regarding Schrodinger's cat thought experiment of quantum physics. This thought experiment was introduced by Erwin Schrodinger, an Austrian-Irish physicist. He was not sure of the Copenhagen theory which mentioned that the quantum states of two objects are not predetermined until observed. So Schrodinger gave an example of a cat in chamber with a vial of poison, a hammer and a radioactive material. When the radioactive material decays, the hammer gets triggered and the vial breaks. This leads to the death of cat, but in case this is not observed by a measuring device, then is the cat alive or dead? But still it was not enough to disprove the superimposed states theory. The observer effect was clearly seen in the experiments with the quantum particles.

Thursday, December 23, 2021

Dosanomics explained

So, this write-up is regarding Dr.Raghuram Rajan’s speech in 2016 at a Federal Bank event. So an engineering student asked that he mentioned about inflation control but in reality, let’s say,if we consider the example of Dosas. When inflation goes up, the price of Dosas also go up but when inflation goes down, the price of Dosa doesn’t get any lower. So why does this happen. So this was a valid question to which Dr. Rajan answered as follows. He mentioned about the role of technological improvements affecting the prices of products. So in areas where technological improvement has taken place the prices can be lowered but in areas like Dosa-making, that’s not the case. This is known as the Balassa-Samuelson effect.The person who makes the Dosas still puts the batter, spreads it around and takes it out. There is no technological change, while the rising wages do affect the prices of Dosas. To retain the workers who can migrate to sectors with improved productivity due to technology and with high wages, the wages of Dosa-makers get affected. Thus, the prices of Dosas don’t come down in times of low inflation.

So this was an interesting answer by Dr. Rajan to an interesting question