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At the bi-monthly review of RBI’s monetary policy today, Raghuram Rajan, the Central bank governor announced his decision to keep interest rates unchanged at 7.25 per cent, maintaining status-quo of RBI’s cautionary stance towards easing the economic environment in the country.
The announcement came in the backdrop of an uncertain monsoon season and a sudden surge in inflation (both food and non-food inflation) along with the spiraling down of global oil prices.
As of now RBI’s Consumer Price Index (CPI) inflation forecast for January 2016 stands at 6 per cent, down a notch from its prediction two months ago. On the other hand, growth expectation for the current year stands at 7.6 per cent.
“We held the policy rate of 7.25 per cent as we await data on whether the recent increases in inflation, including non-food are temporary and whether the monsoon will continue to be near-normal”, remarked the RBI governor in his media interaction.
Another factor which has had a bearing on Rajan’s decision to hold the interest rates is that the effects of transmission of three rate cuts implemented by RBI since January this year, are yet to actualize.
The repo rate (the rate at which the RBI lends to other commercial banks in the country) has been reduced by a combined 75 basis points since January. A basis point is one hundredth of one percentage point.
Following the decision, investors at Dalal Street turned cautious, resulting in the Sensex and the Nifty snapping a four-day winning streak. Both indices shed half-a-percentage point, closing at 28,071 and 8516 points respectively.
While RBI has been forthright in stating the necessity of determining interest rates based on a medium-term view and an emphasis on ensuring stability of the economy, there have been calls for a reduction in interest rates from market players, such as industrialists, businessmen and consumers alike.
Monsoon has so far vitiated concerns of a below-average crop in the agriculture sector. Investment flows have been tardy, both in infrastructure and plant and machinery. The policy statement itself highlighted a decline in lending rates, which as per the RBI noting, has led to an escalation in the inflation-adjusted growth in credit this year.
The writing is clear on the wall. The signals should serve as an impetus for the RBI governor to lower down interest rates yet he has decided to hold his horses before announcing any further cooling down of interest rates.
Meanwhile, the fracas caused by the standoff between the Indian government and the RBI Governor over who should be responsible for the determining the interest rates has subsided. In this regard, Raghuram Rajan’s decision to accept the government’s proposal of a Monetary Policy Committee (MPC) is laudable.
The landmark decision will result in stripping the Governor’s veto power over interest rates and holds the prospects of sparking a domino effect; decentralization of the current modus operandi of the Central Bank besides reducing pressure on an individual for making a critical economic decision.
Concerns raised by financial experts over a clampdown on the independent functioning of the RBI have now been put to rest by the Governor himself.
The transmission problem has been a rather pricking issue for some time now. It cannot (and should not) be used as a ruse to procrastinate lowering of interest rates. Rajan should be the first person to sort out the kinks in that department.
As far as the issue of bad loans (bad debt) is concerned, it is the prerogative of the Indian government to bring in a Bankruptcy Code so that both infrastructure companies and banks are freed from bad loans, lenders can stem their losses and the locked-up assets can be redeployed elsewhere.
Still, however, keeping in mind the overall situation of the economy, it is surprising that Rajan has chosen to stick to his dovish stance on interest rates. As an economist of high repute, Rajan should be bold and forthright in making the decision to lower interest rates.
S.E.E. has unveiled plans to build a space station module that contains a sports and entertainment arena as well as a content studio by December 2024, reports variety.com.
Named SEE-1, the module is intended to host films, television, music and sports events as well as artists, producers and creatives who want to make content in the low orbit, micro-gravity environment. The facilities will enable development, production, recording, broadcasting and livestreaming of content.
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S.E.E. intend to produce its own content and events in the module as well as making it available to third-parties. Axiom Space, who in January 2022 won NASA's approval to build a commercial component of the International Space Station (ISS), will undertake the construction of SEE-1. The module will dock on Axiom's commercial arm, named Axiom Station, which will also host other commercial ventures, including space tourism.
Space Entertainment Enterprise (S.E.E), the company co-producing Tom Cruise's upcoming space movie.Metro/wikipedia
Axiom Station will then separate from the ISS in 2028.
S.E.E., which was co-founded in the UK by entrepreneurs and producers Elena and Dmitry Lesnevsky, is currently planning a fundraising round.
"SEE-1 is an incredible opportunity for humanity to move into a different realm and start an exciting new chapter in space," said Dmitry and Elena Lesnevsky in a statement.
"It will provide a unique, and accessible home for boundless entertainment possibilities in a venue packed with innovative infrastructure which will unleash a new world of creativity. With worldwide leader Axiom Space building this cutting-edge, revolutionary facility, SEE-1 will provide not only the first, but also the supreme quality space structure enabling the expansion of the two trillion-dollar global entertainment industry into low-Earth orbit."
"Axiom Station, the world's first commercial space station, is designed as the foundational infrastructure enabling a diverse economy in orbit," said Michael Suffredini, president/CEO of Axiom Space.
"Adding a dedicated entertainment venue to Axiom Station's commercial capabilities in the form of SEE-1 will expand the station's utility as a platform for a global user base and highlight the range of opportunities the new space economy offers."
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"SEE-1 will showcase and leverage the space environment in an unprecedented way," Axiom chief engineer Dr Michael Baine said. "The inflatable module design provides for around six meters diameter of unobstructed pressurized volume, which can be adapted to a range of activities - including an onboard state-of-the-art media production capability that will capture and convey the experience of weightlessness with breathtaking impact."
Richard Johnston, COO of S.E.E. added: "From Jules Verne to 'Star Trek,' science fiction entertainment has inspired millions of people around the world to dream about what the future might bring. Creating a next generation entertainment venue in space inspire opens countless doors to create incredible new content and make these dreams a reality."
(Keywords: New film studio, space, 2024, Richard Johnston, COO of S.E.E, "From Jules Verne to 'Star Trek,' science fiction, entertainment, space environment)
By Rohit Vaid
Till now, activities associated with laying of power and telecom transmission and distribution lines, roads, highways, railways and construction of facilities such as hospitals, affordable housing, power generation units, water treatment plants, SEZs and certain type of hotels amongst others were given such status.
Besides, these sectors are a part of harmonised master list for infrastructure sub-sectors. However, in April 2021, exhibition-cum-convention centre was included in the list. "Given the focus around electric vehicle, and need for significant investment in charging stations, if the government adds the sector in infrastructure list, the benefits arising out of it will be significant," said Vishal Kotecha, Director, India Ratings and Research. "Infra tag on sectors increases ability to raise funds, access to dedicated funds and lenders, foreign capital, lower interest rates among others."
Given the focus on electric vehicles, the advantages of including the industry in the infrastructure list will be enormous. Free SVG
In recent years, lenders have taken a severe hit on their books consequent to cater to the unique financing requirements of the infra sector. This necessitated regulatory changes and government support from time to time. "The pandemic has hit the retail, hospitality and automobile sectors hard and the need for credit and liquidity support is real and urgent," said Vipula Sharma, Senior Director - Ratings and Head - Infrastructure Ratings, Brickwork Ratings.
"Any likely move to reclassify lending to these sectors as infrastructure lending will enable the banks to lend at concessional rates and extended timeline which in turn would give the sectors time to recover from the three years of repeated extended closures and rebuild their businesses. It would also enable access to funds from a larger set of institutions and funds."
Furthermore, as the economy continues to recover from the prolonged pandemic, the sustainability of the recovery is clearly the key fiscal and monetary policy objective. Consequently, Centre would need to focus on not only enhancing public capital expenditure further in infrastructure but also encouraging the private sector including foreign players to invest in the sector.
The economy is still recovering from the pandemic, and the recovery must be sustained. Unsplash
Lately, the Centre has already taken an initiative to kickstart private sector capital expenditure through the Production Linked Incentive (PLI) programme that has already covered 13 sectors with an aggregate outlay of Rs 1.97 trillion spread over the next few years. "We believe there is a case for considering 'infrastructure sector' status to the healthcare and the EV charging eco-system. The criticality of adequate healthcare infrastructure across the country has increased significantly after the pandemic and the 'infrastructure' tag can be extended to not only hospitals but also diagnostic centres," said Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research. "As regards EV, the government has started to provide cash subsidies for EV purchases but the need of the hour is to build the charging infrastructure in an expeditious manner. The 'infrastructure' tag can clearly help attract funds to the EV ecosystem." (IANS/ MBI)
(Keywords: lending, power, hospitals, rate, capital, government, pandemic, funds, budget, ratings, sector, infrastructure)
A team led by chief scientist Ravi Shankar, is working on two combinations to provide the safest medication to coronavirus patients. "Experts say that a combination of antivirals with different mechanisms can be more effective to counter the viral pandemic. We are working on two combinations - Umifenovir with Molnupiravir (an antiviral) and Umifenovir with Niclosamide (anti-parasitic)," he said.
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Molnupiravur drug has received only Emergency Use Authorisation in India and abroad. Though its usage showed reduced hospitalisation during clinical trials, its biggest drawback are the side-effects, he added.
"Now, we are trying to keep a low dosage of Molnupiravir in its combination with Umifenovir which may weed out the side-effects such as the risk of cartilage and muscle damage. If successful, it will make Umifenovir more effective in Covid-19 treatment," said the chief scientist. The other combination is Umifenovir with Niclosamide.
Niclosamide is known for its efficacy for Covid treatment but the biggest challenge is that its high dosage is required for treatment and that leads to side-effects. A safe and efficacious combination of Umifenovir with Niclosamide is being researched on for the exact dosage in the combination that can give positive results, he added.
CDRI director Prof Tapas Kundu said: "CDRI is working round-the-clock to develop drugs that can help in treating all variants of Covid-19, besides being economical and safe for people. We have achieved a major breakthrough with Umifenovir and are hopeful of developing a new drug to win the pandemic battle."
Molnupiravur drug has received only Emergency Use Authorisation in India.Wikipedia
(Keywords: CDRI director Prof Tapas Kundu, Niclosamide, Covid treatment, Umifenovir, Molnupiravir, safest medication, coronavirus)