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Issues that sectors such as residential real estate, credit markets and power generation amongst others have faced in India can be viewed through the lens of the “inability to generate a market-clearing price”. Fundamentally, both price discovery and price transparency for the sectors were lacking, which made it difficult for participants to create an equilibrium around demand and supply. For sure, at a fundamental level, issues such as creating excessive housing inventory, lending excessively to poor credit names and creating infrastructure assets such as power plants that do not have adequate demand are all symbolic of the core issue.
The inability of the ecosystem to signal to the developer, lender and investor that there is lack of fundamental demand for the asset being created and, therefore, the future does not bode well for the asset under consideration is at the heart of the current predicament facing the Indian economy.
Hence, while the real estate bailout fund announced by the finance ministry is a good step within the multi-pronged approach required to resolve the myriad issues around residential real estate in India, a sharp policy focus on ensuring that market-price discovery and transparency improve in the future is critical. Primarily, market-clearing prices that can both clear inventory as well as ensure that excess supply is limited are required. Additionally, it is essential to realise how vital the linkages between the various markets are. The credit quality of the real estate developer, the quality of the actual project that they are developing, the demand-supply dynamics in the local real estate market and the macro-economic factors such as GDP and income growth are all contributing factors.
While issues around macro-factors mentioned above are for the various stakeholders to figure out, we also need to realise the importance of developing the supporting credit markets and transmission mechanisms to boost sectors such as real estate and avoid the current issues in the future. A market mechanism that effectively communicates the gradual inability of a developer to service interest payments on a loan will guarantee that lenders do not continue to lend to such a developer.
And, such a developer will also be less likely to set-up projects where the money from both homebuyers and lenders such as banks gets stuck. Additional regulations, such as RERA, will ensure that there is more transparency while implementing the various individual projects. The above inter-linkages are an example of the intricacies within the system.
For instance, assuming two similar-sized developers face identical macro-demand for real estate, but one operates in a local market that is more distressed for real estate is a situation in which the market pricing mechanism must be able to price in this piece of information. A gradual decline in the capacity of the developer in the weaker market to service the debt and a fall in asset prices must be relayed to stakeholders to ensure that decisions made by lenders, buyers and other market participants are reflective of the information set available.
While price discovery and transparency are vital components of a well-functioning market, the capacity of market participants to set prices in reaction to demand-supply dynamics is no less so. It is crucial that the government carefully addresses sectors where it has implemented price floors and caps. While in specific areas, such as agriculture, support prices are needed, for others, it is essential to allow the market to set prices. On the other hand, the government must ensure a competitive environment.
For instance, in the healthcare market, if a business is procuring the inputs of production at market rates, then price caps can significantly hamper the long-term financial viability of the sector. Additionally, the classic downward spiral problem may crop up. Price caps lead to financially unviable businesses, thereby creating bad debt and significantly reducing the ability of companies to invest in research and development that results in mediocre products and services for the end-user.
The impact of price caps on sectors through effectively what is “rent-control” can create negative implications as discussed above such that reversing the trends can be an enormous task. Additionally, once industries lose global competitiveness, it is challenging to rejig and revive them. In this connection, issues such as oligopolistic behaviour by firms are of great importance. However, instead of price caps, perhaps institutions such as the Competition Commission of India are better equipped to ensure fair markets.
In summary, India must embrace market prices in generating economic and financial value. Lessons from the past suggest that creating market mechanisms that help direct the flow of capital into productive uses is imperative. (IANS)
Canadian researchers have discovered an overlooked gene that plays a major role in the development of antibodies, which help the immune system recognize and fight viruses including SARS-CoV-2, bacteria and other causes of infectious disease. The gene -- FAM72A -- facilitates production of high-quality antibodies by enabling the effect of an enzyme called AID (for Activation-Induced Deaminase), the researchers showed.
Immunologists have known for two decades that AID is essential to produce antibodies capable of clearing infections, but the full mechanism of its effect has remained unknown. "Our findings answer the long-standing question of how AID does its work," said Alberto Martin, a professor of immunology at the University of Toronto's Temerty Faculty of Medicine. "FAM72A helps AID to promote mutations in antibody genes that are essential for the development of effective antibodies," he added.
Genetic mutations that lead to lasting changes in DNA occur through a process called mutagenesis. | Pixabay
Genetic mutations that lead to lasting changes in DNA occur through a process called mutagenesis. In the context of antibody development, mutagenesis unfolds largely through the AID-driven mechanisms called somatic hypermutation and class switch recombination -- both of which help antibodies gain the diversity and potency they need to counter a wide range of pathogens.
The results published in the journal Nature will help researchers better understand antibody development broadly, but they also have implications for cancer. Uncontrolled mutagenesis in B cells that produce antibodies is linked to B cell lymphoma, and FAM72A is present at very high levels in other cancers such as gastrointestinal, breast, lung, liver and ovarian cancers.
"Our data show that high levels of FAM72A promote mutations in antibody genes, so increased levels of FAM72A could spur cancer development, progression or drug resistance by increasing mutagenesis,a Martin said. Martin's team is now exploring those possibilities. Intriguingly, unlike other mammals, humans have four gene versions of FAM72A and their roles in cancer and antibody production are still unknown. (IANS/ MBI)
Keywords: researchers, cancer, mutagenesis, antibody, development, antibodies, canada, COVID
Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India will set up a 50 megawatt (MW) solar power plant in Odisha's Sambalpur at a total cost of Rs 301.92 crore, moving steadily towards its goal to achieve carbon neutrality by 2024. MCL has placed a turnkey order to set-up a 50 MW solar power plant with a Chennai-based firm M/s Hild Energy Ltd, which will establish this green energy project within a timeline of 10 months, the MCL said in a statement on Saturday.
This solar plant would cater to the captive power requirement of MCL. The Central PSU had successfully set-up a 2MW solar power plant in Sambalpur in 2014. The company said it has pledged a target of installing 182 MW of solar power by 2024 in order to become a net zero energy company, aligning itself to use cleaner forms of energy for coal production.
The company said it has pledged a target of installing 182 MW of solar power by 2024. | Photo by Mariana Proença on Unsplash
This 50 MW solar power project will reduce CO2 emission by 91,020 tonnes per annum and carbon offsets of around 24,824 tonnes per annum, claimed the MCL. MCL is the leading production subsidiary of Coal India, having mining operations in Angul, Jharsuguda and Sundargarh districts of Odisha. Having achieved the highest ever capital expenditure of Rs 2,419 crore in the financial year 2020-21, the company has coal production and dispatch targets of 163 million tonnes and 182 million tonnes, respectively.
MCL was the coal mining company to introduce environment-friendly surface miner technology, which contributes over 95 per cent in coal production. As another environment-friendly initiative, the company has successfully introduced vertical rippers for blast-less over-burden removal in Hingula and Kaniha opencast projects. (IANS/ MBI)
Keywords: solar plant, carbon neutrality, Odisha, Sambalpur, Coal India, subsidiary, Mahanadi Coalfields Limited, solar energy
As the nation celebrated the 114th birth anniversary of his father - renowned poet Harivansh Rai Bachchan - megastar Amitabh Bachchan remembered his dad as he penned a heartfelt note for him. The actor took to his blog where he poured his heart out and also shared an unseen photo with his father. The image in question is from Big B's wedding in 1973, where the two are caught in a sweet moment as they look at each other.
Amitabh Bachchan wrote on his blog,
"My Father , my all .. November 27th his birth in the year 1907 .. Which makes it his 114th Anniversary .. He is in the heavens, with my Mother and they celebrate .. as do we , in thought word and deed .. (sic). But first."
He then posted the picture followed by elaborate paragraphs. The megastar wrote,
"Those rare moments when one would find himself rushing against the winds to prevent the distance between us and to close it down as soon as it can be. The day of my wedding and his expression of fulfilment to not just be in congratulation but instead to be in the face of a belief, a chime, an ultimate season of love and great passion, of the quarries of the fears and conditionings of these deprived gym routines kart ..(sic)". "This could have been unknown for long facilitating years, to give not expected versions and lastly large scale informations of the insides ; but as time passed by, as does now , they explained purposely, the values of education and similarity .. Be in peace and love .. (sic)",
the veteran actor concluded his note. (IANS/ MBI)
Keywords: Amitabh Bachchan, Harivansh Rai Bachchan, actor, blog, birth anniversary, 114th birthday