“2015 – Year of Active Pharmaceutical Ingredients” launched

“2015 – Year of Active Pharmaceutical Ingredients” launched; Chemicals & Fertilizers Minister assures Pharmaceutical Industry of reforms to make India self-sufficient in Bulk Drugs

The Union Minister of Chemicals & Fertilizers Sh. Ananth Kumar has assured the Pharmaceutical Industry that appropriate decisions will be taken soon so that India becomes self-sufficient in the Bulk Drugs. Speaking at the launch ceremony of “2015 – Year of Active Pharmaceutical Ingredients” here today he said that the Government is committed to usher in reforms and good governance, and promote the concept of “Make in India”. He said that the Government had set up Katoch Committee to look into various issues concerning the bulk drugs, and its recommendations have been received which will be implemented expeditiously after taking the Cabinet’s approval. Sh. Ananth Kumar said that the Bulk Drugs constitute the backbone of the Pharmaceutical Industry and the sector needs to be incentivized so as to take on the challenge from cheap imports. The Minster said that there can be no compromise with the quality, environmental requirements or regulatory necessities but the issues hampering the growth of the industry have to be addressed. He said over-dependence on imports from one country for bulk drugs is detrimental to the country’s interest and hence, paradigm shift is necessary. Sh. Ananth Kumar said that in formulations, India is a world leader and there is no reason why we should not be in the bulk drugs sector also. He said the Government is committed to support the bulk drug industry and revival of Public Sector Undertakings of the sector is on the anvil. Discussions with State Governments are also going on to solicit their cooperation for setting up Mega Pharma Parks. He called upon the industry to tap the skilled manpower and potential of the country and come up with an action plan for strengthening the Bulk Drugs Sector. Speaking on the occasion, Minister of State for Chemicals & Fertilizers Sh. Hansraj Gangaram Ahir said that more research and development activities need to be taken in this sector. He called for industry-government cooperation to give boost to the Bulk Drugs Industry. Secretary, Department of Pharmaceuticals Dr. V.K. Subburaj said that there is an urgent need to bring about self-sufficiency in the field of Active Pharmaceutical Ingredients (API). He said that the Government is taking steps to reduce dependence on imports and initiate good policy measures to support the industry. India is very much dependent on import from a single source for basic chemicals, intermediates and APIs for many commonly used medicines. To avoid the price and supply risks associated with such situation and ensure assured and sustained availability of these basic inputs to formulation sector, there is a felt need to focus the attention to promote the manufacturing of API in India. This is also consistent with the avowed objective of the government regarding ‘Make in India’. In recognition of the situation, Department of Pharmaceuticals has declared the Year 2015 as the Year of API. The Government will take measures to facilitate the growth of the sector and also interact with the industry on a more regular basis to improve G2B interactions and promote better and more coordinated efforts to achieve the objective of ‘Make in India’, especially for the API sector.

11 Indian and 13 foreign satellites launched during January 2012-February, 2015

During the last three years (January 2012-Februrary, 2015), India has successfully launched 24 satellites consisting of 11 Indian satellites and 13 foreign satellites. The details of the satellites are as follows: a)      11 #Indiansatellites: RISAT-1, Satellite for Argos and Altika (SARAL), IRNSS-1A, IRNSS-1B, IRNSS-1C, INSAT-3D, Mars Orbiter Mission Spacecraft, GSAT-14, GSAT-10, GSAT-7 and GSAT-16; b)      13 foreign satellites: SPOT-6 (France), PROITERES (Japan), SAPPHIRE (Canada), NEOSSat (Canada), NLS 8.1 (Austria), NLS 8.2 (Austria), NLS 8.3 (Denmark), STRaND-1 (UK), SPOT-7 (France), NLS 7.1 (Canada), NLS 7.2 (Canada), AISat (Germany) & VELOX-1 (Singapore). The expenditure incurred on the launching of each of these eleven Indian satellites into the space is given below:  (` in crores) SN Name of the Satellite Launched by Expenditure incurred on  Launching 1 RISAT-1 PSLV-C19 90.00 2 SARAL PSLV-C20 85.00 3 GSAT-10 Procured Launch 406.82 4 IRNSS-1A PSLV-C22 90.00 5 Mars Orbiter Spacecraft PSLV-C25 108.34 6 GSAT-14 GSLV-D5 173.00 7 GSAT-7 Procured Launch 485.29 8 INSAT-3D Procured Launch 485.15 9 IRNSS-1B PSLV-C24 90.00 10 IRNSS-1C PSLV-C26 90.00 11 GSAT-16 Procured launch 581.00 There was no satellite failure in the process of launching during the above mentioned period. 27 satellites operational in the country and action has been taken towards developing 26 indigenous satellites There are 27 satellites that are operational in the country currently. This information was provided by MoS in the Prime Minister’s Office and Minister of State in the Ministry of Personnel, PG & Pensions, Dr Jitendra Singh in a reply to Lok Sabha today. These are as follows: (i) 11 Communication Satellites namely, INSAT-3A, INSAT-3C, INSAT-4A, INSAT-4B, INSAT-4CR, GSAT-7, GSAT-8, GSAT-10, GSAT-12, GSAT-14 and GSAT-16. (ii) 12 Earth Observation Satellites namely, Resourcesat-2, RISAT-1, RISAT-2, Cartosat-1, Cartosat-2, Cartosat-2A, Cartosat-2B, Oceansat-2, SARAL, Kalpana-1, Megha-Tropiques and INSAT-3D. (iii) 3 Navigational Satellites namely, IRNSS-1A, IRNSS-1B and IRNSS-1C (iv) 1 Mars Orbiter Mission (a) As part of XII Five Year Plan (2012-17), action has been taken towards developing 26 indigenous satellites, which includes (i) 6 Communication satellites namely GSAT-15, GSAT-9, GSAT-6, GSAT-6A, GSAT-7A and GSAT-11 (ii) 13 Earth observation satellites namely, Resourcesat-2A, Cartosat-2C, Cartosat-2D, Cartosat-2E, GISAT-1, GISAT-2, INSAT-3DR, INSAT-3DS, Cartosat-3A, Cartosat-3B, Technology Demonstrator Micro Satellite (TD-MS), Hyperspectral Imaging Satellite and RISAT-2A; (iii) 4 Navigation satellites namely IRNSS-1D, IRNSS-1E, IRNSS-1F and IRNSS-1G; (iv) 3 Space science satellites namely Astrosat, Chandrayaan-2 and Aditya. 95 Ku-band (a part of K band) transponders onboard indigenous communication satellites are being utilized for various communication applications. Replying to the discussion, the minister said that the government is also working on resolving the connectivity issues in the hilly areas.

Agreement on the New Development Bank and the #BRICS Contingent Reserve Agreement

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval for establishing the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement (CRA). The New Development Bank will mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement existing efforts of multilateral and regional financial institutions for global growth and development. The establishment of the Bank will help India and other signatory countries to raise and avail resources for their infrastructure and sustainable development projects. It would also reflect the close relations among BRICS countries, while providing a powerful instrument for increasing their economic cooperation. The BRICS CRA proposes to provide short-term liquidity support to the members through currency swaps to help mitigating BOP crisis situation, in case such a situation arises. The BRICS CRA will help India and other signatory countries to forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability. It would also contribute to strengthening the global financial safety net and complement existing international arrangements (from IMF) as an additional line of defence. The Agreement will enter into force and the Bank will begin operations only after all member countries deposit their instruments of ratification with Brazil. It will also provide the force of law to the commitments made by India in the inter-governmental agreement of the NDB including privileges and immunities that are to be extended to the Bank and its employees as specified in the Articles of Agreement. Central Banks of the member countries will also have to finalize an Inter-Central Bank Agreement containing the operational details of swap transactions and the Standing Committee`s Operational Procedures (SCOP) before the arrangement can be operational. Signing of the Agreement for the establishment of the New Development Bank is expected to allow India to raise and obtain more resources for the much needed infrastructure development, the lack of which is coming in the way of inclusiveness and growth as of now. Besides, the governance structure and decision making in the Bank will be equitable unlike the existing multilateral development banks. So far infrastructure financing in India has been done from two public sources: Government and existing multilateral development banks. These have been supplemented by private sector contributions through Public-Private Partnership projects. However, in the context of fiscal consolidation, declining resources of existing MDBs and risk-averse private sector, the New Development Bank to be established by BRICS countries will make available additional resources thereby recycling the savings accumulated in emerging countries which are presently being locked up in Treasury bonds having much lower returns. Signing of the Agreement is the first step towards economic cooperation of BRICS countries for pursuance of common goals. BRICS CRA will ensure equity and inclusiveness by providing a backup safety net arrangement in place that will allow the Government of India to go ahead with its necessary and bold policy decisions without being concerned about the international economic development that may lead to domestic imbalances and worsen BOP position. The BRICS CRA is expected to serve the needs of our emerging economy in boosting access to additional foreign exchange reserves, should such situation arise. So far IMF support is the primary safety net that is available to India in case any BOP crisis situation arises. Pending the IMF governance reforms, India does not have much say in the IMF decisions. The proposed CRA will provide an alternative approach. This will also provide yet another window for our economy to engage with the BRICS in a more fruitful manner.

National Solar Mission

Implementation of Project for setting up of 15,000 MW of Grid-connected Solar PV Power plants through NTPC/ NTPC Vidyut Vyapar Nigam Limited under National Solar Mission

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval for the implementation of the scheme for setting up of 15,000 MW of Grid-connected Solar PV Power projects under the National Solar Mission through NTPC/ NTPC Vidyut Vyapar Nigam Limited (NVVN) in three tranches namely, 3000 MW under Tranche-l under mechanism of Bundling with Unallocated Coal based Thermal Power and fixed levellised tariffs, 5,000 MW under Tranche-ll with some support from Government to be decided after getting some experience while implementing Tranche-l and balance 7,000 MW under Tranche-Ill without any financial support from the Government. Successful completion of additional 15,000 MW capacity of Grid-connected solar PV power generation projects, mainly in the private sector, with largely private investment, under the National Solar Mission would accelerate the process of achieving grid tariff parity for solar power and also help reduce consumption of kerosene and diesel, which is presently in use to meet the unmet demand. In Tranche-l, which will be Batch-II of Phase-II of the National Solar Mission, 3000 MW capacity of solar PV power plants will be based on bundling of solar power (3000 MW) with unallocated thermal power (1500 MW) in the ratio of 2:1 (in MW terms), for which the required 1500 MW unallocated thermal power has been made available by the Ministry of Power. The bundled power will be allotted to various States that come forward to (i) provide land for setting up the solar power projects and (ii) purchase a major portion of the bundled solar power for consumption within the State (iii) ensure connectivity to the solar power project. The capacity allotted to each such State will be set up through developers, to be selected through international competitive bidding by NTPC /NVVN. Both private and government companies would be free to bid for projects. 1000 MW capacity out of the 3000 MW under the bundling scheme will be set up on land already identified in Andhra Pradesh. The balance 2000 MW capacity under the Bundling Scheme will be allotted in other interested States that come forward. It is estimated that implementation of Tranche-l of the scheme will entail total investment of over Rs.18,000 crore, all of which will be met by project developers, mainly private. A Payment Security Mechanism / Working Capital Fund with an estimated corpus of Rs. 2300 crore to cover 3 months payment for bundled capacity of 3000 MW of Solar Capacity with 1500 MW NTPC Coal Power, will be set up to ensure bankability of PPAs and timely payment to developers. This will be evolved through collaborative efforts of Government of India and Solar Project Developers. The modalities for setting up of Payment Security Mechanism / Working Capital Fund will be finalized subsequently. Accruals from encashment of Bank Guarantees, penalties on developers, etc. will also go into this fund. Some capacity will be earmarked out of the total procurement under this scheme with provisions of domestically manufactured solar cells as well as modules. The quantity to be fixed with Domestic Content Requirement (DCR) in each tender will be prescribed by Ministry of New and Renewable Energy (MNRE) based on the prevailing market conditions from time to time. Bids received under both the categories (one with DCR requirement and the other without any such requirement) will be evaluated and successful bidders selected independently. Further, this DCR will also be technology agnostic that is applied on both the crystalline silicon and thin film SPV cells and modules. Background The first Phase of the #NationalSolarMission (2010-2013) had a target of 1100 MW for Grid-connected solar power generation capacity, against which 1685 MW was set up in the country under various schemes. Further capacity addition of 9,000 MW comprising 3,000 MW under Central schemes and 6,000 MW under State initiatives/ other mechanisms was envisaged In the 2nd phase of the Mission (April 2013-March 2017). Now that sufficient experience is available in India in this field and the Government is keen to expeditiously promote solar power in the country, it is proposed to give a quantum jump to development of solar power in India through market driven approach, wherein the role of subsidies and direct Government support is gradually phased out. Specifically, it is proposed to significantly enhance capacity addition in the 2nd phase itself under Central schemes through various mechanisms.

NASA rover clicks stunning selfie on Mars

The selfie scene is assembled from dozens of images taken by the Mars Hand Lens Imager camera on the rover’s robotic arm.

NASA’s Curiosity rover has clicked a selfie showing the vehicle at the “Mojave” site on the Red Planet where its drill collected the mission’s second taste of Mount Sharp.

The latest self-portrait shows a sweeping view of the “Pahrump Hills” outcrop on Mars where NASA’s Curiosity rover was working for five months.

The selfie scene is assembled from dozens of images taken by the Mars Hand Lens Imager (MAHLI) camera on the rover’s robotic arm.

“Compared with the earlier Curiosity selfies, we added extra frames for this one so we could see the rover in the context of the full Pahrump Hills campaign,” said rover team member Kathryn Stack at NASA’s Jet Propulsion Laboratory, Pasadena, California.

“From the Mojave site, we could include every stop we have made during the campaign,” he added.

Pahrump Hills is an outcrop of the bedrock that forms the basal layer of Mount Sharp, at the centre of Mars’ Gale Crater.

The component images for this self—portrait were taken in late January, while Curiosity was at a drilling site called “Mojave 2”.

At that site, the mission collected its second drilled sample of Pahrump Hills for laboratory analysis on Earth.

NASA’s Mars Science Laboratory Project is using Curiosity to assess ancient habitable environments and major changes in Martian environmental conditions.

Save lives, fight air pollution

The alarming level of air pollution in Indian cities, highlighted in reports from academia across the world and global agencies, has at last woken up people who matter in India. What has struck home is that Beijing, till now widely reported as among the most polluted cities in the world, has been overtaken by Delhi, which has risen to the top of the poor air quality league.

The most alarming is a recent report in The Economic Timesby Urmi Goswami citing research by environmental economists from Chicago, Harvard and Yale that finds that well over half of the Indian population may be set to lose three years of their lives due to the adverse effects of breathing air with highly excessive levels of pollutants.

It has been known for some time that the air that people breathe in Indian cities is among the worst in the world. Over half of the most polluted cities in the world are in India, said aWorld Health Organization report released in the middle of last year. Later in the year, the Union environment ministry announced the launch of an air quality index, so that citizens can make sense of complex air quality data covering several measures. But India still remains severely lacking in monitoring and instant transmission of air quality data that people can access and decide, for example, whether to send children to school, or even for adults to go out on a particular day.

Those who can afford it are taking precautions. Embassies are buying air purifiers for their staff to install in their homes. At least one has advised diplomats to consider if they should bring their children to India or not. Private companies have begun to install air purifiers in their offices. It is boom time, say people who are in the air-purification business.

Some action, with the right approach, may be on the way. The new chief minister of Delhi, Arvind Kejriwal, is reported to have asked his environment and forest department officials at their first review meeting to set aside all their prepared presentations and come up with "offbeat" ideas on how to quickly get to work on the city's air pollution.

Things have come to such a pass because there has been a conscious attempt by politicians across the spectrum and businessmen to reduce pollution issues to being merely the pet concern of "environmentalists", whereas it is they who articulate the concerns of the majority that is to raise incomes and remove poverty. The Left in West Bengal chalked up a miserable environmental record during its three-decade rule because "class struggle" came before "fraternity" - the need to unitedly look after the environment, a public good that affects all.

The current rulers, the National Democratic Alliance, following the same tradition, have promised to see through the clearances for mining and power projects that were held up because of the perceived damage they would cause to the scant forest cover of the country and its environment. And businessmen have cheered them along the way.

"Air pollution is an urgent public health problem that deserves policy attention," Michael Greenstone of the University of Chicago, who led the study, is quoted in the news report referred to earlier. "In approaching the issue of air pollution as one of public health, it would be possible to break the perception and understanding that addressing environmental issues like air pollution and economic growth/development are somewhat opposed to each other."

There is no trade-off between environment protection and development. The only development that works is "sustainable development". This has to be appreciated by politicians, businessmen and economists.

Here is a short list of offbeat solutions that can be quickly adopted. First, sharply ramp up clearing solid waste in urban areas, so that municipal sweepers and also the public do not have to burn garbage that is not collected. A big change can be brought about in this area in weeks.

Second, sharply increase the number of buses that run on compressed natural gas, so that clean and comfortable buses are regularly available to people who would like to stop taking out their cars for routine journeys like office commutes. The timing, route and frequency of bus services can be monitored by fitting them with GPS sensors and a stick-and-carrot approach adopted to ensure compliance while allowing the buses to be privately run and operated. This system has already been adopted in Indore.

Third, once a vastly improved bus service is in place in a year or two, economic disincentives can be put in place to discourage the use of private cars by raising the tax on them and introducing a congestion surcharge in inner city areas. This has been done in many cities in the world.

Fourth, in central and eastern India, coal continues to be used to light household fires, severely affecting air quality, particularly in winter. This can be discouraged by ensuring the supply of low-emission briquettes in three to four years, and subsidising their price.

A watershed 14th #FinanceCommission

It is clear that the far-reaching recommendations of the 14th Finance Commission, along with the creation of NITI Aayog, will radically alter Centre-state fiscal relations

The report of the Fourteenth Finance Commission (FFC) was tabled in Parliament yesterday. The government has accepted its far-reaching, indeed radical, recommendations that have the potential to redefine Indian federalism in a long overdue and desirable manner. This piece describes the key recommendations and highlights some of their major implications. It is based on updating assumptions in the FFCreport, which is the only source of data used in the numbers presented below. The discussion below, especially the estimates, should be seen as illustrative at best.

Vertical and horizontal devolution
The FFC has increased the amount that the Centre has to transfer to the states from the divisible pool of taxes by 10 percentage points, from 32 per cent to 42 per cent. Its radical nature is indicated by the comparison with the previous two Finance Commissions (FCs) that increased the share going to the states by 1 and 1.5 percentage points, respectively. So, the FFC recommendations represent a ten and six-and-a-half fold increase, respectively relative to the previous two FCs. Had the new share been implemented in 2014-15 (Budget estimates), the Centre’s fiscal resources would have shrunk by about 1.20 lakh crore (0.9 per cent of gross domestic product or GDP). If the comparison were to be in terms of overall (tax plus non-plan grants) devolution, the increase would be roughly comparable to that in tax devolution.

In addition, the FFC has significantly changed the sharing of resources between the states — what is called horizontal devolution. The FFC has proposed a new formula for the distribution of the divisible tax pool among the states. There are changes both in the variables included/excluded as well as the weights assigned to them. Relative to the Thirteenth Finance Commission, the FFC has incorporated two new variables: 2011 population and forest cover; and excluded the fiscal discipline variable.

Several other types of transfers have been proposed, including grants to rural and urban local bodies, a performance grant, and grants for disaster relief and reducing the revenue deficit of eleven states. These transfers total approximately 5.3 lakh crore for the period 2015-20.

Uniformly large addition to states’ resources
The impact of FFC transfers to the states needs to be assessed in two ways: gross and “net” FFC transfers will clearly add to the resources of all the states in absolute terms and substantially. They will also increase resources when scaled by states’ population, net state domestic product, or own tax revenues, with the latter connoting the addition to fiscal spending power.

Implementing the FFC recommendations alone would undermine the centre’s fiscal position substantially. The philosophy of the FFC report is that there should be some corresponding reduction in the central assistance to states (CAS, the so-called plan transfers). Thus, greater fiscal autonomy to the states would be achieved both on the revenue side (on account of states now having more resources and more untied resources) and on the expenditure side because of reduced CAStransfers. The exact mechanism for implementation will be discussed in the months ahead but the legally backed schemes as well as flagship schemes that meet core objectives, such as rural livelihoods and poverty alleviation, will be, and need to be, preserved.

The net impact on the states will depend not just on the transfers effected via the FFC, but also the consequential alteration of CAS. Under some simple assumptions about how the latter will be distributed, we find that all states will end up better off than before, although there will be some variation amongst the states.

Increase in progressivity of overall transfers
The FFC transfers have a more favourable impact on the states that are relatively less developed, which is an indication that they are progressive, that is, states with lower per capita net state domestic product (NSDP) are likely to receive on average much larger transfers per capita . The correlation between per capita NSDP and FFC transfers per capita is -0.72 based on some broad assumptions about FFC transfers. This indicates that the FFC recommendations do go in the direction of equalising the income and fiscal disparities between the major states.

In contrast, CAS transfers are only mildly progressive: the correlation coefficient with state per capita GDP (over the last three years) is -0.29. This is a consequence of plan transfers moving away from being formula-based (Gadgil-Mukherjee formula) to being more discretionary in the last few years. Greater central discretion evidently reduced progressivity.

A corollary is that implementing the FFC recommendations would help address inter-state resource inequality: progressive tax transfers would increase, while discretionary and less progressive plan transfers would decline.

Weakening fiscal discipline?
Will FFC transfers lead to less fiscal discipline? There are two reasons to be optimistic. First, in the last few years the overall deficit of the states has been about half of that of the Centre: in 2014-15 (Budget estimates) for example, the combined fiscal deficit of the states was estimated at 2.4 per cent of GDP compared to 4.1 per cent for the Centre. So, on average, states, if anything, are more disciplined than the Centre.

Based on analysing recent state finances, we find that additional transfers toward the states as a result of the FFC will improve the overall fiscal deficit of the combined central and state governments by about 0.3-0.4 per cent of GDP. Moreover, nearly all the state governments have enacted fiscal responsibility legislations (FRLs), which requires them to observe high standards of fiscal discipline such as keeping the deficit low.

Further, as part of the new Centre-state fiscal relations, for example, under the NITI Aayog, mechanisms for peer assessments and mutual accountability could be created, and incentives could be provided for maintaining fiscal discipline. This is becoming routine practice in many federal structures where sovereignty is shared between the members. The FFC recommendations and the consequences they entail offer an opportune time for instituting such mechanisms.

Conclusions
With the caveats noted earlier, the main conclusions are that the FFC has made far-reaching changes in tax devolution that will move the country toward greater fiscal federalism, conferring more fiscal autonomy on the states. This will be enhanced by the FFC-induced imperative of having to reduce the scale of other central transfers to the states. In other words, states will now have greater autonomy both on the revenue and expenditure fronts.

This, of course, is in addition to the benefits that will accrue from addressing all the governance and incentive problems that have arisen from programmes being dictated and managed by the distant central government rather than by the proximate state governments.

To be sure, there will be transitional challenges, notably how the Centre will meet its multiple objectives given the shrunken fiscal envelope. But there will be offsetting benefits: moving from CAS to FFC transfers will increase the overall progressivity of resource transfers to the states. Another is that overall public finances might actually improve by more than suggested by looking at the central government finances alone.

In sum, it is clear that the far-reaching recommendations of the FFC, along with the creation of the NITI Aayog, will radically alter Centre-state fiscal relations, and further the government’s vision of cooperative and competitive federalism.

The necessary, indeed vital, encompassing of cities and other local bodies within the embrace of this new federalism is the next policy challenge, a change that we would like to see.