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8 EDITORIAL NOIDA/DELHI

WEDNESDAY, OCTOBER 4, 2017

THE HINDU
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In need of a psycho-economic boost

All drivers of economic growth are sputtering — a scal and monetary stimulus would boost ‘animal spirits’
The short point is that investor
enthusiasm is lacking, especially
from the private sector. Added to
Carnage in Vegas their lack of demand is the reluct-
ance of supply of investible funds.
The ‘mass shooting’ must awaken the U.S. to
the dangers of lax gun ownership regulation Cautious banks
ajit ranade Banks, despite being ush with de-
Keynesian tools. Corporate in-
come tax can be reduced to 25% as
promised two years ago. Excise
taxes on petrol and diesel need to
be reduced. These are indirect
taxes, hurt the poor more, are re-
gressive and feed into general ina-
tion through logistics and energy

T
he famous Las Vegas Strip became the scene of a posits (partly thanks to demonet- costs.
bloody gun rampage when a shooter red high- hen a person decides to isation), are in no mood to extend

GETTY IMAGES/ISTOCKPHOTO
powered automatic rounds into dense crowds at a buy a at, it reects his or new credit. This is because of the Four steps
music concert, killing at least 59 people and injuring her optimism about the fu- increasing burden of bad loans On the spending side, the govern-
ture. There is condence that one (called non-performing assets, or ment can focus on the following
more than 500. This is the worst mass shooting in mod-
will have enough income owing NPAs). The ratio of NPAs has been four areas. First, provide fresh cap-
ern American history, although the June 2016 shooting in, to pay for the monthly instal- continuously going up for ve ital either to existing banks or the
at a nightclub in Orlando, Florida, came close with 49 ments. This optimism is not be- years. Either you have to write-o new “bad bank”. Second, provide
people dead. Perched high on the 32nd oor of a nearby cause of job security, but because the loans and book losses, or ask some version of a wage subsidy as
hotel, 64-year-old Stephen Paddock sat in a virtual of the belief that one will get a new shareholders to bring more equity an incentive to labour intensive
sniper’s nest, armed with a collection of 23 ries, some job, even if one becomes unem- chological atmosphere that is con- that we are in danger of the self-ful- capital. The new bankruptcy code sectors. A version of this was
of them automatic ones. And some of the semi-auto- ployed. The same is true for an en- ducive to risk taking about the fu- lling prophecy nature of invest- and procedure is promising, but is oered to the textile and garment
trepreneur setting up a new fact- ture, and inspire condence in the ment and consumer behaviour. as yet untested for timeliness and sectors last year, but can be impro-
matic ries were boosted to automatic-speed ring us-
ory or new business. It’s called risk people. The data need to be restated to un- eectiveness. There is also a sug- vised and extended. The successful
ing “bump stocks”. He was subsequently found dead in taking, but that is not to imply reck- derstand the seriousness of the gestion to collect all the bad loans model of Odisha in the garment
the room from a self-inicted injury. Initially, confusion less gambling. It reects the in- The Keynesian solution situation. GDP growth declining (that is, toxic waste) from the vari- sector can be replicated. Third,
prevailed over whether this attack was linked to the Is- vestor’s condence about the fu- John Maynard Keynes called these continuously for six quarters in a ous banks and move them to a give a big boost to aordable hous-
lamic State. Speculation mounted further after its ture returns on the investment. If the “animal spirits” which guide row, down from 9.2% to 5.7%. In- freshly capitalised bank, the so- ing, by funding land acquisition for
Amaq news agency reportedly claimed credit for the at- that condence starts to wane, buyer and investor behaviour. vestment share of GDP, which cre- called “bad bank”. The bad bank the builder, and interest rate sub-
tack. However, with the authorities saying there was no then potential home buyers refrain When those spirits are in a down- ates new factories and businesses would focus solely on liquidating vention for the home owner. The
or postpone their decisions. In- ward spiral, the end result could be for tomorrow, falling for almost the collateral, bringing in fresh States of Kerala and Maharashtra
evidence of a connection between Paddock and such
vestors adopt a wait-and-watch at- recession, if not outright depres- ve years. The latest data from the owners and managers to run dis- have interesting and replicable
terror groups, the authenticity of Amaq’s claim has titude. If everyone in the economy sion. His remedy was to suggest Centre for Monitoring Indian Eco- tressed companies. Once freed models. Fourth, keep a big focus
been questioned by several experts. Whether Paddock starts becoming extra-cautious, countercyclical policy, which has nomy show that even the project from NPAs, the existing banks can on exporters, especially in labour
had links to the IS or not, the Las Vegas shooting once the decline in condence and eco- become the hallmark of Keynesian- pipeline is drying up. Newly an- resume lending to the healthy sec- intensive sectors, including agri-
again puts the spotlight on a painful and oft-debated nomic activity becomes self-ful- ism. This includes an injection of nounced projects at ₹84,500 crore tors. This is a promising idea as culture. This includes a weaker ex-
policy issue in the United States — that of gun control lling. As the economy slows both scal and monetary stimulus. are at a four-year low. Even the well and worth pursuing. The gov- change rate, quicker refund of GST
reform. down, people say, “See I told you This involves increasing govern- stalled projects which have been ernment cannot shy away from credit and expanding the scope of
so! It was wise to not invest and ment spending or cutting taxes, or revived are only 6% during this funding the rescue of India’s bank- the Merchandise Export from In-
Despite authoring 15 attempts to bring common-
take unnecessary risk now.” both, and decreasing interest scal year, as against 25% last year. ing. It has to provide capital to the dia Scheme and Service Exports
sense gun control regulations to the oor of the U.S. This decline can happen even if rates. Despite many attempts at The value of stalled projects is at a new “bad bank” or to recapitalise from India Scheme.
Congress, former President Barack Obama had in the the economy is fundamentally discrediting the ecacy of Keyne- record high of ₹13.2 lakh crore. the beleaguered public sector All of these are short-term eco-
last days of his administration launched one nal at- sound. What causes investor or sian remedies, to this day policy- During the last years of the previ- banks, where most of the NPAs nomic stimuli, but can also provide
tempt to close loopholes in gun laws through executive home buyer condence to wane? It makers continue to repose faith in ous government, projects were reside. a psychological boost to the animal
action. These aimed at expanding background checks could be anecdotes, actual eco- them. Sure, the eects could last stalled due to delays in approvals This is where the Keynesian wis- spirits. Of course, consumer and
for gun ownership, boosting funding for federal agen- nomic evidence, broken trust in only for a short term, but if that and clearances, legal disputes and dom of stimulus is worth recalling. investor condence can return and
government or socio-political de- helps the economy into a higher charges of corruption. But these is- All four drivers of economic sustain only when the Keynesian
cies enforcing the laws, and improving treatment of
velopments. Not to overstate this, gear, or break out of the “pessim- sues were tackled, and yet new growth are sputtering. While reviv- boost is buttressed by credibility of
mental health conditions nationwide. Earlier, his most but there is an element of psycho- ism spiral”, it would have served its projects are not picking up. In fact, ing exports may need boosts like a implementing longer-term
ambitious push to tighten the lax regulation of gun pro- logy that keeps the economy chug- purpose. in terms of the number of new weaker rupee or more export- reforms.
liferation, oated in 2013 in the aftermath of the Sandy ging. The government’s role is as We are not quite in a recession, private sector projects announced linked incentives, consumption
Hook Elementary School shooting, was speedily shut much to provide the right policy nor are we anywhere remotely in the latest quarter, it is at a 13-year and investment sentiment can cer-
environment, as to provide a psy- near a depression. But the fact is low. tainly be boosted by conventional Ajit Ranade is an economist
down by hostile conservative lawmakers. At the heart of
the U.S. Congress’s reluctance to take steps to address
the regular occurrence of gun rampages in public
spaces is the insidious lobbying on Capitol Hill by the
deep-pocketed National Rie Association and a myriad
of gun manufacturers. After several mass shootings,
A legacy of liberalisation
NRA spokespersons have claimed that the only answer Before Sri Lanka ushers in new economic reforms, it must take a hard look at the story so far
to gun deaths is more guns. In President Donald Trump,
tion of wealth. Inequality has women, have slumped to third transport and distribution has
they may have found their strongest ally yet. Although
deepened: the Gini coecient, place in export income. However, abandoned producers to predat-
he described the Las Vegas shooting as an “act of pure which was 0.35 in 1973, worsened migrant remittances of mainly wo- ory middlemen, aggravating
evil”, during the 2016 campaign he had pandered to the to 0.48 by 2012-13. The richest 20% men in domestic work in West Asia agrarian distress.
gun lobby’s interest on occasion, particularly through of households command 52.9% of amounted to nearly $7 billion last
fear-mongering that if the Democratic agenda suc- income, or more than the rest com- year, or almost equal to earnings Mounting debt
GETTY IMAGES/ISTOCKPHOTO

ceeded, “Pretty soon, you won’t be able to get guns.” bined; the poorest 20% muster from textiles, tourism and tea All regimes have bridged the
b. skanthakumar only 4.5%. The bottom 40% of the combined. chasm between income and ex-
The gun lobby’s multi-generational success in this re-
population survive on under $2.50 Women’s work is the basis of the penditure with loans. External
gard is built upon a cultural proclivity for gun owner-

T
he Sri Lankan government re- per day. monetised and care economy, but debt has ballooned to $46.6 billion
ship rooted in the Second Amendment of the constitu- cently released its ‘Vision Ination is often runaway into their labour force participation (from under $942 million in 1976),
tion. Until Americans apply reasonable, if not stringent, 2025’ manifesto, heralding a double digits, whereas before 1970 rate has plateaued at under 36%, or diverting resources from public
restrictions to gun ownership, they are unlikely to es- new wave of economic reforms. Its it was under 3%. Cost of living has less than half that of men. spending to debt-servicing.
cape the regular visitation of such mass tragedies. timing coincided with the 40th an- spiralled and household debt Sri Lanka’s main food imports of Foreign direct investment last
niversary of the island’s embrace escalated. cessing zones. Employment in this wheat our, rice, sugar, milk and year was only $898 million,
of deregulation, trade liberalisa- Manufactured goods have sector has only reached over milk products, and sh and sh whereas foreign loans totalled
The cold facts tion, and privatisation ahead of the
rest of South Asia. While the cur-
soared in share of exports from
13.4% in 1977 to 77% in 2016, but are
470,000, or under 6% of the labour
force. That’s the same number as
products are unchanged. Demand
has risen along with population in-
$1.287 billion. This has been the
pattern despite generous incent-
It’s vital that India scales up surveillance rent government seeks to revive dominated by ready-made appar- those who leave every two years crease and household income but ives to private capital and wage re-
neoliberal momentum, there is no els which have negligible local for foreign employment. Liberal- not purchasing power. The rupee pression in the export sector.
to track various inuenza viruses assessment of the legacy of liberal- value addition. isation has failed to create decent is currently trading at 153 Sri The war between 1983 and 2009

E
ver since the inuenza virus known as H1N1 isation even on narrow economic
landed on Indian shores during the 2009 pan- benchmarks.
demic, outbreaks have been an annual occur-
rence. The worst was in 2015, when 2,990 people suc- Modest growth
Growth in gross domestic product
cumbed to it. This year the virus has been particularly
has been modest. It averaged 4.8%
active; mortality, at 1,873 by the last week of September, between 1978 and 2009 compared
is quickly catching up with the 2015 toll. In comparison, to 3.5% between 1971 and 1976.
ocial gures show 2016 to be a relatively benign year, Some of the initial expansion was
with an H1N1 death toll of 265. The problem with these from massive inows of grants and
ocial gures, however, is that they only capture H1N1 soft loans, as Western donors and
numbers, a practice that has been adopted in response multilateral agencies rushed to re-
ward a regime hailing the virtues of
to the severity of the 2009 pandemic. But inuenza was
high growth, foreign investment,
present in India even before 2009 in the form of H3N2 and free market capitalism.
and Inuenza B virus types. Out of these, H3N2 is cap- Average household income has
able of causing outbreaks as big as H1N1, and yet India risen rapidly, but so has concentra-
does not track H3N2 cases as extensively as it does H1N1.
This means that seemingly benign years such as 2016
may probably not be benign at all. Data from outside LETTERS TO THE EDITOR
government surveillance systems are making this fact
apparent. For example, a surveillance project for acute Bloodshed in Vegas
The United States is one of
febrile illnesses, anchored at the Manipal Centre for
the few countries in the
Virus Research in Karnataka, has found that inuenza world where people have
accounts for nearly 20% of fevers across rural areas in unhindered access to
10 Indian States — fevers that are often undiagnosed and rearms and unleash
classied as “mystery fevers”. During the years when violence and bloodshed to
the H1N1 burden is low in these regions, H3N2 and Inu- the detriment of peace and
enza B circulation tends to spike. tranquillity on the ground.
That a lone wolf inicted
All this indicates that India’s surveillance systems are
heavy human casualties is
still poor and underestimate the inuenza burden sub- not only shocking but also
stantially. If numbers are unsatisfactorily tracked, so bears testament to the
are changes in the viral genome. As a 2015 commentary failure of successive state
by a pair of researchers from the Massachusetts Insti- and federal administrations
tute of Technology pointed out, India submits a woe- in the U.S. to enforce curbs
fully small number of H1N1 genetic sequences to global when it comes to the access
and use of rearms by its
open-access databases for a country of its size and pop-
citizens. The Second
ulation. Sequencing is important because it can detect Amendment of the U.S.
mutations in genetic material that help the virus evade constitution, which protects
human immune systems, making it more deadly. Be- the right of its citizens to
cause India does not sequence a large enough sample of bear arms, warrants an
immediate review. A
viral genomes, it would be missing mutations that could
explain changes in the lethality of the virus. Put to- country which takes pride
in its vibrant and liberal
gether, the numbers data and sequence data will enable
democratic framework
sensible vaccination decisions. Vaccination is the best cannot aord to remain a
weapon that India has against this menace, because Os- mute spectator to the
eltamivir, the antiviral commonly deployed against u, scenario where the lives of
is of doubtful ecacy unless administered early its own citizens continue to
enough. Yet, India has thus far stayed away from vaccin- remain stake owing to its
ating even high-risk groups such as pregnant women liberal legal framework on
the access and use of
and diabetics, because inuenza is thought to be a more
rearms.
manageable public health challenge compared to mam- M. Jeyaram,
moths such as tuberculosis. Better surveillance of inu- Sholavandan, Tamil Nadu
enza will possibly change this perception by revealing
Industries that proted from and secure jobs. Lankan rupees to the U.S. dollar was disastrous but its economic
textile and clothing quotas, duty- whereas it was 8.60 SL rupees in impact was diuse as export pro-
free imports, tax holidays, free in- Agriculture in decline 1977, but with no corresponding duction of goods and crops was
frastructure, subsidised services Agriculture has drastically de- gain in export earnings. In 2015, in- outside the conict zone.
and lax environmental and labour clined in economic share to 7.1% in come from exports only equalled The promise of “inclusive and
regulations still depend on imports 2016 from 35.1% in 1970-71, and in 55% of the cost of imports, widen- equitable growth and develop-
of raw and semi-nished materials. export composition to 22.6% in ing further the balance of pay- ment” in Vision 2025 is deceitful,
This is a barrier to linkages in the 2016 from 94.6% in 1970-71. It is still ments decit. recycling as it does the market fun-
local economy and gobbles up net important to livelihood as over Chronic under-investment in damentalism that brought
foreign exchange earnings. 70% of the population is rural, and food production has intensied de- prosperity only to the few in Sri
Export-oriented industrialisa- marginally more are employed in pendence on imports and also in- Lanka.
tion is promoted as the cure-all for agriculture (27.1%) than in industry security as consumers are more ex-
all ills. Its labour force is mostly of (26.4%). posed to world market price B. Skanthakumar is with the Social
women in low-wage and highly ex- There has been limited diversi- uctuations. The withdrawal of Scientists’ Association in Colombo and
ploitative conditions, and where cation as tea, rubber and coconut state support in access to credit, in- author of ‘Growth with Inequality: The
unions are not allowed to organise predominate, as before 1977. Rev- puts and extension services as well Political Economy of Neo-Liberalism in
inside and outside export-pro- enues from tea, plucked mostly by as in direct purchase, storage, Sri Lanka’
Letters emailed to letters@thehindu.co.in must carry the full postal address and the full name or the name with initials.
incident is the necessity of called the massacre an “act religious lines in the ‘Left that occurred centuries ago. The ve-day game
adopting stricter measures of pure evil”, but it is not bastion’. The depiction of No development can take Test cricket, the ultimate in
to curb gun violence. The enough unless he calls for a Kerala as a ‘god-forsaken place in a fragmented the game of cricket, should
proliferation of rearms has total ban on gun use. country’ and as a ‘hub of society. continue to be played over
made it too easy for Nasir Soomro, jihadists’ does not go down The Prime Minister’s ve days (’Sport’ page,
individuals to obtain Karachi, Pakistan nicely with the people of the message of taking pride in ‘Between wickets’ – “Test
weapons. While it is State. The right wing may be religious diversity should cricket is irrational, let’s
impossible to stop all Saron vs red inclined to think that it can percolate to the cadres. The leave it that way”,
violent impulses, the The right-wing’s accusation tap religious identity for Taj Mahal is the pride of September 27). Test cricket
government can and should that the CPI(M) has been political gain in the State India irrespective of can be made more
make it much more dicult siding with “jihadi with high human whoever built it and absorbing and interesting if
for people to act on them. elements” is not worth development indices, but whatever it stands for. the International Cricket
Finally, the glorication of being taken seriously. that might just be wishful V. Subramanian, Council can consider the
violence needs to stop. Most Before accusing the Left of thinking. Chennai following: the game should
mass murderers gain infamy “murder politics”, the right G. David Milton, be restricted to a maximum
through round-the-clock wing should introspect over Maruthancode, Kanyakumari, Tamil Nadu Losing out of 400 overs. Each side
media portrayals. This leads how its cadres behave. The statistics (‘Datapoint’ – should play a maximum of
to a culture in which stories During his yatra in Kerala, Omitted “Nobels for noble work”, 100 overs per innings. Thus
of mass shootings circulate BJP president Amit Shah That one of the wonders of October 3) highlight the every Test match will
and gain momentum, should “raise the world, the Taj Mahal, plight of Indian institutions become result-oriented.
making further shootings a consciousness” on political did not feature in the in the eld of research. Spectators will also have the
greater possibility. violence against CPI(M) tourism booklet issued by Research in India has to be benet of watching players
Arun Anand, workers as much as against the Uttar Pradesh given the utmost priority at adopt playing styles of T20
Thiruvananthapuram his party cadres for his government is one more this point in time. It would and one-day internationals.
‘mission’ to be of some instance of the intent of the be great if world-class Teams struggle to bowl 90
■ John Lennon, one of the success (“Amit Shah to lead government to take its research institutions are overs in a day. Therefore,
world’s leading musician BJP march in Kerala”, ideology to the next level established in India. The play should be restricted to
activists, sang: “Imagine no October 3). (“Taj Mahal missing in U.P. zeal and the talent of 80 overs per day.
possessions/I wonder if you When it comes to the cult of govt brochure”, October 3). ambitious Indians ought to As far as poor attendance at
can.... ” Unfortunately, he political violence, leaders There are some who be made use of. The Test matches is concerned, I
too was a victim of gun must rise above continue to harp on the modernisation of Indian suggest that entry to
violence. The world is numb partisanship. excesses committed by the institutes can be achieved stadiums be made free of
after the brutal attack in Las Kerala, a State famed for its Mughals, but one cannot by collaborating with cost, except for some
Vegas. But this is not an communal harmony, has to ignore their rich foreign institutions. This enclosures. Players will
isolated incident as history now guard itself against contributions in the elds of would ensure that much have the benet of playing
will show. It is strange why attempts by the right wing art, literature, music, sought-after technological before large crowds.
America has such a soft to drive a wedge between poetry and architecture. No benets ow into and out of Mohan Thomas,
policy on the buying and communities. It is not easy purpose would be served in India. Chennai

the true scale of this public health issue. ■ The most important selling guns. President to spread religious hatred carrying forward Anji Naik Mudavath, more letters online:
takeaway from this horric Donald Trump may have and polarise people on ‘grievances’ over incidents Kharagpur, West Bengal www.hindu.com/opinion/letters/

CM A ND-NDE
YK