India’s double burden of malnutrition

Among large cities, Kolkata and Hyderabad have the greatest proportion of obese people in India

Malnutrition in India has always been synonymous with under-nutrition. Not anymore. Data from the latest round of the National Family Health Survey (NFHS) shows that obesity among adults is nearly as big a problem in the country as under-nutrition. Even as under-nutrition continues to remain extraordinarily high in the poorer parts of the country, obesity has reached endemic levels in some of the richer parts of the country, the survey of over 6 lakh households conducted in 2015-16 shows.

When the previous round of NFHS was conducted in 2005-06, the proportion of underweight men and women in the country was found to be nearly three times the proportion of overweight men and women, respectively. The latest survey shows that the proportion of overweight women in India at 20.7% is only 2 percentage points lower than the proportion of underweight women. The trend among men is similar, with nearly one in five men overweight today.

While the proportion of underweight adults has fallen over the past decade, the proportion of overweight adults has shot up sharply. Individuals who have a body mass index, or BMI, of 25 or more are considered overweight while those with a BMI less than 18.5 are considered underweight. Women seem to be affected more by both forms of malnutrition compared to men. More women than men are obese, and more women than men are underweight, the data shows.

According to some scholars, the twin problem of high malnutrition and growing obesity may have a common cause: a high proportion of low birth weight babies in India. According to one hypothesis (the so-called thrifty genotype hypothesis), under-nutrition in the pre-natal stage programmes the foetal tissues to utilize food efficiently, making it difficult for low birth weight babies to deal with an abundance of food in later life. The double malnutrition trap can be particularly dangerous for Asian economies such as India, where urban populations are rising, and where people increasingly face a sedentary lifestyle.

A look at district-level data, however, shows a clear divide between districts which have high concentration of underweight men and women and those which have high concentration of obese or overweight men and women. At one end of the spectrum are districts such as Purulia in West Bengal and Malkangiri in Odisha, where nearly one in two women are underweight. These districts are among the poorest in the country, and have been hotbeds of leftwing extremism for many years. At the other end of the spectrum are cities such as Kolkata and Hyderabad, where four out of every 10 women are overweight. Delhi and Mumbai also figure in the top quartile of districts with high levels of obesity but the proportion of obese people in these cities are lower compared to Kolkata and Hyderabad.

Kolkata is somewhat of an outlier in West Bengal, which has a relatively low proportion of overweight women. Hyderabad though reflects a state-level trend. Along with other southern states such as Kerala and Tamil Nadu, Andhra Pradesh has among the highest levels of obesity in the country.

A look at the district map suggests that most of the high-obesity districts are clustered largely around the two ends of the country: the extreme north and the extreme south. The undernourished districts are largely located in central India. There seems to be a strong correlation between affluence, obesity and lifestyle diseases. Districts with a higher proportion of rich households (those with TV, computer, phone, and motorised two-wheeler/four-wheeler as per census 2011 data) tend to have a higher proportion of obese people and lower proportion of underweight people.

The link between malnutrition and sanitation is even stronger. Districts with low levels of toilet access have high levels of undernutrition and low levels of obesity. The converse is true for districts with high levels of access to toilets.

The stark nutritional divide across the country in many ways mirrors the divide in growth and development across the country.

The puzzle of India’s sovereign ratings

The argument that high debt-to-GDP ratio is the reason for not upgrading India, is fundamentally flawed

India has been languishing at the bottom of the investment grade ladder in the ratings universe. In fact, to put it on record, India has had a net rating upgrade only once in the last 25 years. One of the common arguments made by rating agencies for not upgrading India’s rating is its high debt to gross domestic product (GDP) ratio. At 69.5% of GDP, the agencies argue that this is on the higher side and effectively acts as an enabling factor for crowding out private investment. This argument that high debt to GDP ratio is the reason for not upgrading India is, however, fundamentally flawed, for two reasons.

Click here for enlarge

First, there are a number of countries which are rated above India but have a significantly higher gross general government debt. In fact, most of these countries have debt positions which have been worsening over time but this has not affected their ratings much. India, on the other hand, has been consistently on the path of reducing its debt to GDP ratio to its present level from a peak of 84% in 2003.

One may think that it may be because of other macro fundamentals of these developed countries. If we look at major economic indicators of India in comparison to developed countries, India fares reasonably well in most of these. India is the fastest growing economy in the world, with a low unemployment rate and improving inflation and current account trajectories.

Next we look at how India is performing with respect to the group of countries that are rated one or two notches higher—almost all of them are developing countries. Here again we see India is performing much better in terms of macro performance, albeit with higher gross general government debt, but much lower external debt.

Thus, it seems the only indicator or figure that matters to rating agencies for the sovereign ratings of developing countries is the domestic debt to GDP ratio. The performance on other indicators does not get its due importance.

The other reason why we think the rating agencies’ rhetoric is fundamentally flawed is that it is the composition of the government debt to GDP per se that matters for any discussion on debt solvency. For India, public debt is mostly internal. As a conscious strategy, issuance of external debt (denominated in foreign currency) is kept very low in India. Overseas investors account for only 4% of the total government bonds and the majority of the investment comes from scheduled commercial banks, insurance companies, Reserve Bank of India and provident funds (accounting for around 85%).

It is ironic that Japan, which has a composition of government debt profile almost similar to that of India (bank and insurance companies account for 50% of the government debt), is rated at A+ with a debt/GDP ratio of 239%.

Interestingly, if we plot the debt/GDP and rating action (proxied by a numeric scale) for countries like Portugal, Ireland, Italy and Spain during the worst years of the financial crisis (2008-2011), we find there is little causation between the rating actions and movements in domestic debt/GDP. In fact, the regression coefficient (dependent variable is the rating action and independent variable is debt/GDP) is weak and not statistically significant. This result shows that even in periods when the European debt crisis was at its worst phase, there was little evidence to support rating actions acting as a leading indicator of deterioration in economic fundamentals.

There is another aspect to this debt to GDP ratio. Based on stock prices on the Mumbai stock exchange, as on 30 April 2017, the market capitalization of public sector undertakings (which includes Centre and state-level public enterprises, public sector banks as well as other companies where Centre and/or states and/or government companies and financial institutions have the single largest shareholding) stood at Rs13.7 trillion. These assets are equivalent to around 12% of the overall gross government debt. This also provides an additional comfort in debt management, and we wonder whether they are taken into account while examining India’s debt solvency.

Our primary concern is, however, different. Despite robust macro fundamentals, India may not witness a rating upgrade soon. This is because with the fiscal responsibility and budget management (FRBM) committee emphasizing attaining a 60% debt to GDP ratio with a ceiling of 40% for the Centre and 20% for the states, by 2023, the rating agencies will get a reason to maintain the status quo, despite the other visible advances which India has made.

The interesting point is that even in the FRBM committee report, there have been conflicting opinions about the 60% target of debt to GDP ratio. The methodology for arrival of the 60% number has been questioned. Furthermore, the fiscal deficit number of 2.5% to be achieved in the medium term also seems to have been arbitrarily arrived at and is based on unrealistic assumptions. In fact, the dissent note by chief economic adviser (CEA) Arvind Subramanian clearly states that India is not in any dire situation that it should adopt such a drastic reduction in debt and fiscal numbers. Moreover, the country was able to do significantly well when the debt to GDP ratio was as high as 84% in 2003 without failing to meet any of its debt servicing obligation. We also second the opinion of the CEA about focusing on primary deficit, rather than targeting multiple indicators (namely debt to GDP ratio, fiscal deficit and revenue deficit) to maintain the sustainability of our fiscal position (FRBM Review Committee Report Volume I, Annex-V).

The world has a $400 trillion problem

Governments in most countries will need to work on increasing retirement savings in order to avoid the looming pension crisis

Union finance minister Arun Jaitley, in his 2015 budget speech, acknowledged that most people in India do not have any kind of insurance and, as the population ages, it will also be pensionless. He announced steps for creating a social security system. This included insurance and pension schemes, mostly for the underprivileged segments of society. But India is not the only country that is facing social security problems.

The advancement of healthcare facilities in most parts of the world has resulted in a significant increase in life expectancy. But increasing life expectancy does not necessarily mean that quality of life is also guaranteed to improve in the future. Since people will spend more time in retirement, the level of consumption in those years will depend on savings accumulated during the working age and the kind of security provided by the state. As things stand today, with rapidly ageing populations and the state of government finances in most countries, the future looks challenging.

According to a recent report by the World Economic Forum, the retirement savings gap in eight countries—Australia, Canada, China, India, Japan, the Netherlands, UK and US—will reach about $400 trillion by 2050. The savings gap in 2015 was about $70 trillion. It is important to note that the annual savings gap is estimated to grow by 10% in India, compared with 7% in China and 5% in the US. As a result, the savings gap in India is estimated to escalate to $85 trillion by 2050. Globally, things have also got complicated because of lower returns on investment over the last decade.

The problem can worsen significantly if people live longer than is expected at present. The International Monetary Fund, in its “Global Financial Stability Report” (April 2012), for instance, noted: “…if everyone lives three years longer than now expected…the present discounted value of the additional living expenses of everyone during those additional years of life amounts to between 25 and 50 percent of 2010 GDP (gross domestic product). On a global scale, that increase amounts to tens of trillions of US dollars, boosting the already recognized costs of aging substantially.” The retirement savings gap will not only affect the quality of life of retirees, but can also pose macroeconomic challenges. As the proportion of retirees rises in the population, a shortfall in retirement income will affect consumption and growth. It will also affect fiscal sustainability as governments will have to spend more on retirees even in countries that do not have a state-funded retirement system.

In order to improve financial security, the report suggests that policymakers should focus on three key areas—providing a safety- net pension for all, improving access to retirement plans, and encouraging initiatives to increase the rate of contribution. The study further notes: “It should be the responsibility of the government to provide a pension income for all citizens that acts as a ‘safety net’ and prevents those who miss out on other forms of pension provision from dropping below the poverty line.” This is a worthy goal, but fiscal constraints may prevent many governments—especially in developing countries—from doing so.

The pension challenge in India will be fairly acute. According to the UN Population Division, the share of population aged 60 or above will rise to 19% by 2050, compared with 8% in 2010. The government recognizes the problem and has implemented several reforms in the sector. For instance, it established a pension regulator in 2003 and moved new government employees (except in the armed forces) to a defined contribution-based National Pension System (NPS) from 2004. The NPS was opened to all citizens on a voluntary basis in 2009 and the government offers tax benefits to contributors.

However, all this may not be enough. The biggest problem for India is that about 90% of the workforce is in the unorganized sector and lacks proper access to retirement-saving instruments. Even those who are investing may not be aware how much money they will need after retirement and what it takes to attain that goal—though this is not an India-specific problem. People generally lack the ability to make complex calculations and give more importance to their near-term needs than a longer-term requirement like retirement saving. Therefore, it is important that both the government and the makers of retirement products place adequate emphasis on spreading awareness. Further, it will also be important that products are simple and easily available. Technology can play a big role in making products available to savers. In India, generating more employment in the formal sector will help address the problem to some extent.

As the governments in most countries lack fiscal space, they will need to work on increasing retirement savings in order to avoid the looming pension crisis. Mobilizing savings for retirement could be a big opportunity as it would provide long-term savings which could be used to fund economic growth.

Can the global economy prepare for the looming pension problem? 

Nepal signs mega hydro project deal with Chinese firm

As per the agreement, the storage project would be built under engineering, procurement, construction and finance (EPCF) model. Under this model, CGGC will help arrange funds required to develop the project

Nepal has signed a major deal with a Chinese company to develop a 1,200 MW hydroelectric project, the biggest hydro project in the landlocked country that could resolve its perennial power crisis. Nepal’s Ministry of Energy Sunday signed an MoU with China Gezhouba Group Corporation (CGGC) for the development of teh much-touted 1,200 MW Budhigandaki Hydroelectric Project.

The agreement was signed at the prime minister’s residence, in the presence of outgoing prime minister of Nepal Pushpa Kamal Dahal ‘Prachanda’ and Chinese Ambassador to Nepal Yu Hong, The Kathmandu Post reported. As per the agreement, the storage project would be built under engineering, procurement, construction and finance (EPCF) model. Under this model, CGGC will help arrange funds required to develop the project.

The funds will be mobilised in the form of soft loan or commercial loan from Chinese financial institutions on terms and conditions acceptable to the Nepal government. CGGC will also undertake the overall responsibility of executing the project.

The Chinese developer, according to the MoU, will also conduct additional studies and investigations on the project if required. The MoU has given one year’s period to the Chinese developer to conduct assessment of the hydropower project and arrange necessary funds for its development.

This understanding, according to Energy Ministry officials, will not bind the government legally or financially to hand over the project to the Chinese company for construction, as the final agreement is yet to be signed. The government has allocated a budget of Rs 5.33 billion for the project’s development in the current fiscal year.

The EPCF model of project development, under which the contracting firm makes all the arrangements including mobilisation of financial resources to build the project, is considered to be one of the most effective and efficient models for development of huge infrastructure projects.

CGGC is currently building 30MW Chameliya Hydropower Project in the far west and 60MW Upper Trishuli 3A Hydropower Project in the central region.

The Budhigandaki Project has been touted as a key project to resolve the perennial power crisis in the country. The government has been raising infrastructure tax of Rs 5 from sales of every litre of petrol, diesel and aviation fuel to collect funds to build the project.

GSLV Mark III to open up 4-ton satellite launch market for India’

GSLV Mark III to open up 4-ton satellite launch market for India’
The heavy-lift GSLV Mark III rocket, slated to be launched by space agency ISRO tomorrow, would open up opportunities for India to launch 4-ton class of satellites of foreign countries, according to a senior space scientist.

Tomorrow’s launch of the first developmental flight of the rocket is a “great milestone” as ISRO is almost doubling the capacity to launch satellite from 2.2-2.3 tons to 3.5-4 tons, former ISRO Chairman K. Radhakrishnan said.

“Today if India has to launch communication satellites beyond 2.3 tons, we have to go abroad (to launch them). We (will) have self-reliance in launching communication satellites (once GSLV Mk III becomes operational), and also we will be able to attract foreign customers,” he said.

“It’s rather a simpler vehicle, and a vehicle with better payload fraction. And it’s going to be future workhorse vehicle (of ISRO),” he said.

Mr. Radhakrishnan was closely associated with the GSLV Mk III programme, approved in 2000, as director of VSSC (Vikram Sarabhai Space Centre) and then chairman of Indian Space Research Organisation (ISRO). He is now an adviser to ISRO.

“We are getting into the next level of capacity. PSLV is a stable line at the moment. GSLV is better than that. Here we are getting into a vehicle which is going to be more cost-effective.

“And there is a lot of opportunity to launch communication satellites of India as well those of other countries because 4-ton is a good range for communication satellites,” he told PTI in a telephonic interview.

“It should open up (international market for ISRO). After a couple of developmental flights to establish, I am sure there will be opportunities for launching even foreign communication satellites,” Mr. Radhakrishnan said.

GSLV Mk III can launch normal communication satellites that are in the market.

“If you look at the global communication satellite scenario, it has gone up to 6 to 6.5 tons at the moment...that’s the high power satellite but much of the volume is used for...and mass also for propellants for keeping long life of satellite.”

“If the satellites switch over to electric propulsion from chemical propulsion, the mass could be kept at 4-ton level. From that scenario, GSLV has a long operational life and there are opportunities for launching communication satellites of India and other countries,” he said.

“Comparable vehicle (for GSLV Mk III) today is Ariane-6 which is getting developed in Europe. That’s for about 6.5 tons. Once chemical propulsion of the satellites is replaced by the electric propulsion for which work is going on, then they will also come down in mass.

“GSLV Mk III will be a candidate for them (foreign customers) to consider. Mass is an issue for communication satellites. People are trying to bring in electric propulsion,” the eminent scientist said.

Cryogenic rocket engine has been developed from scratch: Isro chief

Cryogenic rocket engine has been developed from scratch: Isro chief
Isro chief A.S. Kiran Kumar speaks to Mint on the launch of GSLV Mark III, the largest launch vehicle ever built by India’s space program
Twenty-sixteen was a remarkable year for the Indian Space Research Organisation or Isro, with nine launches placing 32 satellites in orbit, the most ever in a single year until then, and the successful testing of a Reusable Launch Vehicle-Technology Demonstrator and a SCRAMJET, both developed indigenously. The first half of 2017 saw an even bigger leap—with a world record 104 satellites deployed from a single launch.

Now comes the next big step, the launch of the Geosynchronous Satellite Launch Vehicle or GSLV Mark III, the largest launch vehicle ever built by India’s space program. The GSLV Mark III has been in development for over 15 years, with multiple failures and a gritty focus on developing a completely indigenous cryoengine. The previous class of GSLV, the Mark II, had a cryogenic stage modelled on a Russian engine, now dropped in favour of home-grown technology.

The Mark III’s launch has been made possible after years of patient testing of its various stages and components, including the cryoengine, which also powered the Mark II on its four successive launches starting from January 2014.

The Mark III will be used for injecting heavy satellites into orbit, which is currently mostly outsourced to Arianespace, the launch service run by the European Space Agency, because India has not had a rocket powerful enough for such launches.

Mint spoke to Isro chairman A.S. Kiran Kumar in the week leading up to the launch. Edited excerpts from an interview:

The launch of the Mark III has been a long time coming. In fact the first launch was scheduled back in 2010 when the Mark II had a failure and you had to drop it. Are you nervous about this launch?

No, not really. We have gone through the various steps needed and each process now many times. Yes, because of our cryoengine development problems we had to reschedule, and to overcome those problems and develop the indigenous cryo for Mark II, we needed to do a lot of testing.

So whatever we were developing for Mark III test facility, to some extent we had to modify so we could test Mark II. Now we have had four consecutive successful launches of the Mark II with the cryoengine. That process of realizing a fully functional cryoengine also gave us a lot of inputs and as far as the Mark III’s cryo stage is concerned, we’ve now gone through almost 200 tests, from sub units up to stage level.

So we are confident of the whole process. Now all the things are assembled and waiting. It’s going through its final checks at Sriharikota and the satellite is integrated on the heat shield. So now we have to wait and like any event, until the event is over, you wait.

Tell us more about the CE-20, the cryogenic rocket engine that you developed for Mark III.

It was a very big challenge because this engine has been developed from scratch. It’s a fully independent realization. We had to establish new facilities at Mahendragiri (Isro’s liquid propulsion systems centre) and other places. We’ve done full duration engine level on more than one hardware, then we’ve done the stage tests.

Whereas in the case of Mark II we had initially some interaction with Russia, there was a version of theirs from which we had flown a number of the missions. But here, it’s a completely independent system, with a different design, and the advantage of that is that you know the ins and outs of it.

You know each stage. For example, in the previous version, the turbo pumps are all fitted inside the tank so once it’s put inside, we don’t have access to the pumps and there are limitations on testing them.

Here, the stage configuration itself is designed in a different way so that it’s completely testable but then it has a small penalty because in terms of Isp performance (Specific Impulse, a measure of the efficiency of rocket engines—the total impulse delivered per unit of propellant), this will be slightly less than the other one.

You are hoping that this will be the rocket that will now carry India’s heavy satellites. What kind of cost saving will that result in?

Well we don’t disclose numbers, but you are looking at nearly 25% savings. To give you some example of costs, we launched the INSAT 3DR (a heavy communication satellite) on GSLV Mark II. Previously, when we have launched the same class of satellite through Ariane, you can say that for the launch cost of that we are now able to make both the launcher and the satellite. In remote sensing, Low Earth Orbit satellites or even planetary missions, we are doing everything indigenously.

But we still depend on foreign procurement for heavy satellites. For example the GSAT17 is launching end of June from Ariane. In the very near future, this will not be required. The payload on the Mark III with be the GSAT19, a heavy communication satellite with multi-beam capability, a forerunner to our high throughput satellite.

We have been continuously developing both our technology and our capacity. There is a continuous demand for launches for smaller satellites now, both for national missions—navigation, remote sensing, etc—as well as commercial demand globally. So that was and is an opportunity we wanted to take. As you build your capacity, whatever excess capacity is there you can make use of it commercially.

The 10 facts you need to know about ISRO’s GSLV-Mk III

The 10 facts you need to know about ISRO’s GSLV-Mk III
The GSLV-Mk III-D1 launcher would carry GSAT-19 satellite which has a mass of 3,200 kg.

The Geosynchronous Satellite Launch Vehicle-Mark III (GSLV-Mk III), the heaviest rocket ever made by India and capable of carrying large payloads, is set for launch from the Satish Dhawan Space Centre in Sriharikota on June 5, 2017.

Here are a few facts you need to know about the rocket.

1. GSKV-Mk III is capable of launching four-tonne satellites in the Geosynchronous Transfer Orbit (GTO).

2. The rocket is also capable of placing up to eight tonnes in a Low Earth Orbit (LEO), enough to carry a manned module.

3. GSLV-Mk III’s first developmental flight, D1, will carry on June 5 the GSAT-19 satellite — developed to help improve telecommunication and broadcasting areas.

4. This is India’s first fully functional rocket to be tested with a cryogenic engine that uses liquid propellants — liquid oxygen and liquid hydrogen.

5. It took about 25 years, 11 flights and over 200 tests on different components of the rocket for it to be fully realised.

6. The 640-tonne rocket, equal to the weight of 200 fully-grown Asian elephants, is the country’s heaviest but shortest rocket with a height of 43 metre.

7. GSLV-Mk III is a three-stage vehicle with two solid motor strap-ons (S200), a liquid propellant core stage (L110) and a cryogenic stage (C-25).

8. ISRO successfully conducted the static test of its largest solid booster S200 at the Satish Dhawan Space Centre (SDSC), Sriharikota on January 24, 2010. The successful test of S200, which forms the strap-on stage for the GSLV, makes it the third largest solid booster in the world. The static test of liquid core stage (L110) of GSLV-Mk III launch vehicle was done at ISRO's Liquid Propulsion Systems Centre test facility as early as March 2010.

9. C-25, the large cryogenic upper stage of the GSLV, is the most difficult component of the launch vehicle to be developed. ISRO successfully ground-tested the indigenously developed C-25 on February 18, 2017.

10. If successful, the GSLV-Mk III — earlier named as Launch Vehicle Mark-3 or LVM-3 — could be India’s vehicle of choice to launch people into space