The challenge of 5 per cent growth
India’s GDP grew at 4.8 per cent for the second quarter of the current year, July-September 2013. The data, released by the Central Statistics Office on Friday, are entirely in line with expectations. Together with the 4.4 per cent clocked in the first quarter, which marked a four-year low, economic growth during the first half of the year has been a meagre 4.6 per cent. Policymakers are banking on much higher growth rates — in the vicinity of 5.5 per cent — during each of the remaining quarters to pull the economy out of the sub-5 per cent growth trajectory. In 2012-13, the economy grew by 5 per cent, the lowest annual rate of growth in a decade. Companies shelved their investment plans in an uncertain and often adverse policy environment, while consumers cut back on spending in the face of high borrowing costs. The challenge has been to revive investment demand and spur consumer spending. There are no easy answers. Great significance is attached to the clearance of stalled and new projects by a special cabinet committee. However, it is too early to measure outcomes. Persistently high inflation and well-entrenched inflation expectations have dragged consumption down.
A more optimistic view is that the economy has seen its worst, and from now on a recovery is quite possible. Supporting this view is the mild upturn in industry and a sharp pick-up in agriculture. Industry rose by 2.4 per cent in the second quarter from a meagre 0.2 per cent in the previous quarter, on the back of improvement in the core sectors of mining, utilities and construction. The revival in exports has certainly helped in achieving a turnaround in manufacturing. It grew by 1 per cent in the second quarter compared to a decline by an identical margin in the first. Yet, too much should not be read at this stage into the improvement in this critical sector. However, agricultural growth — at 4.6 per cent compared to 2.7 per cent in the April-June quarter — might well be sustained and in fact spearhead overall recovery in the latter part of the year. The biggest dampener, however, is likely to be in one important sub-sector of services — community, social and personal services. Often considered to be a proxy for government spending, its growth rate has slumped to 4.2 per cent from 9.4 per cent in the first quarter. The government has the unenviable task of reining in fiscal deficits to within 4.8 per cent without drastically cutting down on essential government spending. Without this, a growth rate of 5 per cent or more will be unattainable.
NPA reduction, a key issue
The report on “Trend and Progress of Banking In India’’ is an annual publication, which the RBI has to submit to the government in terms of the Banking Regulation Act 1949. The report is an authentic account of the developments in the financial sector. Although the latest report, submitted to the union finance ministry on November 21, covers the period 2012-13, its relevance today is in no way diminished. This is because policy issues encompass a larger time frame than any one financial year. Trends, whether say profitability or deposit growth do not normally change abruptly.
Commercial banks dominate the financial landscape, accounting for over half of the financial flows in the economy. That, however, is not to deny the importance of NBFCs and co-operative banks. The RBI report devotes one chapter to each of these.
What are the principal challenges facing banks? The domestic economy is slowing down while at the global level there is only a modest recovery. Regulatory initiatives over the past year sought to enhance the quality of risk-based supervision, better oversight over financial conglomerates and improved coordination among regulators. Banks are being equipped to face the challenges of financial inclusion.
More specifically, banks need to address certain key issues. Reduction in the level of NPAs is a primary task. Simultaneously loan recovery methods have to be improved upon and strengthened. Financial inclusion should be implemented in a sustainable way. For this suitable business and delivery models will have to be developed.
Competition among banks and with the rest of the financial sector will increase. New banks are proposed to be licensed shortly. There is a need for decisive changes in the banking structure to enable it to grow in size, resources efficiency and inclusivity.
Asset quality
Elaborating on just a few of the above, the RBI report points out that the asset quality of banks is an important indicator of their financial health. It also reflects on the efficacy of their credit risk management and recovery environment. Not surprisingly, the asset quality of banks decreased significantly during the year .The level of stressed assets (both NPAs as well as restructured assets) went up. Banks should strengthen their due diligence and also follow whatever guidelines the RBI and the Government have formulated to mitigate this pressing problem. Credit appraisal and post-loan monitoring are other crucial steps which need to be improved upon.
The report makes a number of suggestions to spruce up the loan recovery system. It should focus on fairness and efficiency and try to preserve the value of underlying assets and safeguard jobs. Credit data must be shared and large exposures across banks monitored closely. There is an urgent need for accelerating working of debt recovery tribunals and asset reconstruction companies.
Another area which will engage policy makers to a greater extent than now is strengthening the role of banks in inclusive development. Access to bank finance is still poor for many categories. They include the poor, rural and small and medium industries. Although recently a very large number of bank accounts have been opened, the actual number of transactions per account is still small, suggesting inadequacies on both demand and supply sides.
Financial literacy will create awareness of bank schemes and thereby enhance the access to the financial system. Increased use of technology should help in achieving the goal of financial inclusion.
A third point highlighted in the report relates to competition in the financial sector. One of the major objectives of financial sector reforms, competition is expected to bring in greater efficiency for banks and a wider choice of services and products for their customers. Two important recent developments here are the licensing of new private banks and announcing clear guidelines for foreign banks to set up shop in India or expand their footprint in India. Awarding licences to corporate houses (among others) remains a highly controversial idea.
narasimhan.crl@thehindu.co.in
The RBI report captures the major developments and policy issues that will dominate public discourse.
India, a good bottom-up story
Kaku Nakhate , President and Country Head, Bank of America (BofA), is a career investment banker. A management graduate from Narsee Monjee Institute of Management Studies, Mumbai, 46-year- old Ms. Nakhate spent 19 years at DSP Merrill Lynch rising to be head of its global markets division before leaving the investment bank in 2009 when it was merged with BofA. She joined J.P. Morgan as its Vice-Chairperson in India but BofA lured her back within a year. BofA’s investment banking business has grown rapidly under Ms. Nakhate — it is at the top of the chart this year managing two landmark deals in Jet-Etihad and Diageo-United Spirits. In this interview with The Hindu , Ms. Nakhate dwells on the rupee, the outlook for the markets and the economy. Edited excerpts:
Where do you see the economy going in the next one year?
We’ve been slowing down for several quarters now, and it will take time for the capital equipment cycle to turn. We’ve been able to manage the twin deficits despite this being an election year.
Inflation is a concern but the good thing is that our agricultural output is likely to be good. While this will offer some relief in the short-term, we have to follow up with reforms.
On the ground we need to see projects starting such as power plants, road projects and so on. The time is right now for us to invest in the manufacturing sector.
We are very good in services but we have a young population today that needs jobs and for that we need to invest in manufacturing.
Do you think the rupee is fairly valued at Rs.60-62 to a dollar?
I think so. My personal view is that it will reach Rs.65 at the outer band but I don’t believe it will go down to Rs.70. On the other side, I don’t think we should let it appreciate beyond Rs.60.
The slide was indeed very fast but the fact is that there is a lot of pressure on other countries as well to create jobs. When the rupee appreciated from Rs.49 to Rs.45 some years back, we failed to add to our reserves and we are paying the price for that now. The depreciation from Rs.53 to Rs.62 has protected a lot of software jobs.
But what about the fall side, where this has added to inflation?
Partly yes, but you cannot have so many of our young people out of jobs. This bit on importing inflation is our own creation.
What’s your outlook for the stock markets?
I’m actually bullish in the short-term. Valuations are at a good level now. India has always been good as a bottom-up story. Leaving aside infrastructure sector, which still needs some clarity, I think we will see a rise ahead of elections.
Our research shows that certain sectors have come to an inflection point from a [PE] multiples point of view. There is no new capacity coming up and this means pricing power will return.
We are bullish on auto, especially because India is an export hub now and the success is largely because of the currency value. I think 60-62 is a sweet spot for the rupee. The technology sector continues to be good but I think it is at the highest market cap now. I think we should also start looking at sectors such as steel where companies have improvised.
What about election-related uncertainty?
I think so long as it is not a Third Front formation, it will be positive for the markets. The whole corporate world, including multi-nationals, wants Narendra Modi, especially those who have had experience in Gujarat. But I don’t know what his doability factor will be.
The Congress has also realised the pitfalls and will learn from its experience. I feel that the results of the State elections now will set a direction for the markets.
What do you think will be the impact on India when the Fed starts to taper off its bond-buying programme?
Compared to other countries, India is in a better position. The reason is that our internal debt is more than our external debt. So, the volatility on the interest rate will be measured. Having said that, I think the government is taking the right step in deepening the bond markets.
On the rupee, one can look at maybe 5 per cent downside. Where I think India will get affected is in the fund allocations.
There are two things that we are talking about: one is money moving back from emerging markets to developed ones, and two, money moving from debt to equity. Both these allocations will have some impact on India in terms of money flow. Right now, debt funds continue to have good allocations. India might get a higher preference within allocations but the whole pool of allocations will itself be less.
So are you then saying that we might not see the violent churn in the markets that we saw in the May-August period?
Well, part of the violent churn was also because of the steps we took on tightening. Those were wrong. The move from 60 to 68 was more a liquidity move. Today also the markets have become a bit illiquid.
The NDF (non-deliverable forwards) markets are now showing higher hedging cost which is a result of illiquidity. So, broadly, India will be less affected than others and both the Ministry (of Finance) and the RBI are on the same page to reduce volatility. It’s interesting also with the change at the Fed. (Janet) Yellen has to spell out her policy and if she says tapering has to begin then it has to begin.
She’s just starting off and cannot change her assessment. So, to my mind, it (tapering) will not be a first quarter (2014) event. The monkey is on the Fed’s back now. Our house view is that it is more towards March and maybe, even beyond. There is a deadlock event in January on debt and there is a Feb.7 deadline…. these are critical events that have to be kept in mind for tapering. That’s why we feel it is difficult.
Talking of Bank of America, is it right to assume that you prefer fee-based to fund-based businesses?
No, I don’t think so. We did a lot of landmark deals in investment banking but what we have been able to establish is a very good working relationship between fund and non-fund-based activities. It’s not just about doing a Diageo (USL-Diageo deal) but doing the funding part of it, the escrow part, forex part of it, and so on. It’s about how you are able to connect the different parts of business to optimise your revenue. I think the merger of Bank of America and DSP Merrill Lynch was perfect because there was little overlap. Our biggest growth in the last two years has been in the global transaction business. We were not aggressive in that space earlier, but today we are called in for every deal in transaction services. Investment banking is certainly more visible but we have done equally well in our transaction business, foreign exchange and so on. Citibank has been very strong with U.S. companies but you will now see us getting strong with multi-nationals. We’ve always had a strong equity franchise in India. We are currently number one and our research has also been voted as the best.
What are your thoughts on entering retail banking in India?
Currently we are not taking any steps in that direction. We need to be stronger first. It’s not in our consideration for the immediate future. There is no need to rush, and get every revenue in today. The reach also has to be there.
What do you think of the RBI’s proposal to persuade foreign banks to set up wholly-owned subsidiaries in India?
It’s definitely a step in the right direction, especially the one about allowing M&As. That can throw up a lot of opportunities. We are waiting for the details and final rules to be spelt out. The moment you decide to subsidiarise, there are a few things to note.
The counter-party becomes local, the country rating changes… when the rules come out, we’ll know if we are going to make it better for the client or make it worse by subsidiarising. It’s not so easy. We have been meeting our priority sector targets, and we will continue to do so. We don’t want to jump into it but see it and then take a call. We have to see what stand the new government takes. The best thing I hear from the RBI is that near-preferred status will be given. That, at least makes me think. The tax issue also has to be solved.
Iran and West Asian tensions
The November 24 deal reached in Geneva by Iran and what has come to be called the G6 may have settled one question over Iran’s temporary curb on part of its nuclear programme in return for a partial removal of Western sanctions, but it has opened up several issues of the greatest significance to West Asia. For example, Iran is now a potentially valuable partner for the United States as Washington prepares to withdraw most of its troops from Afghanistan in 2014. Tehran can help stabilise the country and deter the Taliban; in fact, Iranian troops briefly assisted the U.S. there in 2001. Secondly, Iran’s President Hassan Rouhani could help effect a settlement in Syria, where the Shia President, Bashar al Assad’s bitter obduracy has prevented a settlement and caused over 100,000 deaths in a terrible civil war, over which Western public opinion is strongly opposed to military intervention. Thirdly, Tehran already has considerable influence over Prime Minister Nouri al Maliki in Iraq, where the illegal 2003 U.S-led invasion provided space for revived Sunni-Shia tensions which still cause thousands of deaths every year. Furthermore, Kurdish and even Sunni political groups have for some time now drawn on Iranian advice in forming Iraqi provincial coalition governments and resolving disputes.
Needless to say, the Geneva deal has shocked most West Asian leaders. Saudi Arabia, which sees Iran as its greatest theological rival, has openly expressed its disquiet, but West Asian Arab countries made no attempt to participate at Geneva; indeed since 2008, proposals by Bahrain, by Iran itself, and by the former Arab League head Amr Moussa for regional security talks have come to nothing. In addition, Riyadh’s attempts to undermine Mr. Assad in Damascus and Mr. al Maliki in Baghdad have both failed. The standard responses to perceived security threats, such as using oil wealth to buy more weapons, even possibly including a nuclear umbrella, will not help the Arab leaders, because Iran is already cooperating with the G6, and increased weapons purchases would worsen a destabilising arms race. As for Israel, which shares many of the Arab countries’ interests, Prime Minister Benjamin Netanyahu says he is prepared to do ‘anything necessary’ to defend his country, and continues to approve settlements in the occupied territories. But the Arab leaders and Israel now face a radically altered political grammar, which they are struggling to understand. Above all, Mr. Rouhani has unquestionable democratic legitimacy, and even if justice for the Palestinians and democratic reforms in West Asia seem remote at present, it may not be long before those two issues are rightly at the top of the agenda again.
An economic agenda for India 2020
Setting a 2020 Perspective Economic Agenda for India requires clarity about the framework within which economic policy choices have to be made. There is a wide global consensus today that democracy and competitive market economy provide that framework. Democracy is a system of governance by consent of the people. Democracy has become the trend, the accepted system of government globally, and it is spreading worldwide.
Furthermore, devolved democracies better manage contradictions and conflicts arising out of a heterogeneous society and provide effective feedback through an independent press to enable corrective action by the government. It empowers people to question the authorities and make them accountable in an election.
Moreover, the comparative economic results in East and West Germany, North and South Korea, China before reform and China now, have conclusively proved that a competitive market system driven by incentives is superior to a coercive, state-controlled system, and that transparent democracy is a better system of governance than a closed dictatorship.
With the disintegration of the USSR into 16 countries in 1991, the comparative economic development theory has changed its focus from a study of alternative systems to alternative governance models of democracy, market system and globalisation, that is, change of focus from dictatorship vs. democracy, and state ownership vs. competitive market, to harmonising freedom and choice, with regulation, and how much public sector and how much private, and how the emancipating and enabling power of democracy is to be balanced with the development of a profit-driven and competitive efficient market — what regulatory democratic institutions must do to promote the efficient allocation of resources with good, transparent and accountable governance.
Governance norms, if properly enforced, can enable India to grow at 12 per cent a year by efficiently using the current 36 per cent rate of investment — by reducing the current incremental capital output ratio from 4.0 to 3.0. This implies a 36 divided by 3 per cent growth rate in GDP, or 12 per cent a year, which will mean a doubling of GDP every 72 divided by 12 years, or just six years, and that of per capita income doubling every seven years. This growth rate can take us to the league of the top three nations of the world, of the U.S., China and India, by 2020 and help overtake China in the next two decades thence. That should be the goal of governance for us today.
India is not yet an economically developed nation. While it has demonstrated prowess in IT software, biotech and pharmaceuticals, accelerated its growth rate to 9 per cent a year to become the third largest nation in terms of GDP at PPP rates, it still has a backward agricultural sector hosting 62 per cent of the people of India. Farmers are committing suicide unable to repay their loans, the national unemployment rate is over 15 per cent of the adult labour force, and there is prevalence of child labour arising out of nearly 50 per cent of the children not making it to school beyond the fifth standard. The country has a deeply malfunctioning primary and secondary educational system, 300 million illiterates and 250 million people in dire poverty. India’s infrastructure is pathetic, with frequent electric power breakdowns even in metropolitan cities, dangerously unhealthy water supply in urban areas, galloping HIV infections, and gaping holes on the National Highways.
To become a developed country, India’s GDP will have to grow at 12 per cent a year for at least a decade. Technically this is within India’s reach, since it would require the rate of investment to rise from the present 28 per cent of GDP to 36 per cent while productivity growth will have to ensure that the incremental output — capital ratio declines from the present 4.0 to 3.0. These are modest goals that can be attained by increased FDI and by use of IT software in domestic industry.
Need for more reforms
But for that to happen, more vigorous market-centric economic reforms to dismantle the vestiges of the Soviet model in Indian planning, especially at the provincial level, are required. The Indian financial system also suffers from a hangover of cronyism and corruption that have brought government budgets to the verge of bankruptcy. This too needs fixing.
India’s infrastructure requires about $150 billion to make it world-class, while the education system needs 6 per cent of GDP instead of 2.8 per cent today. But an open competitive market system can find these resources, provided the quality of governance and accountability is improved. Obviously, a second generation of reforms is necessary for all this.
But reforms are urgently required to be carried out to accelerate India’s growth rate to 12 per cent a year. India has many advantages today for achieving a booming economy: a demographic dividend, an agriculture that has internationally the lowest yield in land and livestock-based products, and also at the lowest cost of production, a full 12 months a year of farm-friendly weather, a highly competitive skilled labour force and low wage rates at the national level, the advantages of which have already been proved to the world by the outsourcing phenomenon. We have a young population (average is 28 years compared to the 38 years of the U.S., and Japan’s 49 years) that can be the base for it by ushering in innovation in our production process.
Since the worldview of economic development has now completely changed, economic development is no more thought of as capital-driven but as knowledge-driven. For application of knowledge, we need innovations. This means more original research, which needs more fresh young minds— the cream of the youth — to be imbued with learning and placed at the frontier of research.
Instead, for decades since Independence we had been told that India’s demography was its main liability, that India’s population was growing too fast, and what India needed most was to control its population, even if by coercive methods.
Globally, India today leads in the supply of youth — persons in the age group of 15 to 35 years — and this lead will last for another 40 years. We should not, therefore, squander this “natural resource”. We must, by a proper policy for the young, realise and harvest this demographic potential.
China is the second largest world leader in having a young population today. But the youth population in that country will start shrinking from 2015, because of the lagged effect of the one-child policy. Japanese and European total populations are already fast ageing, and will start declining in absolute numbers from 2013. The U.S. will, however, hold a steady trend thanks to a liberal policy of immigration, especially from Mexico and the Philippines. But even then the U.S. will have a demographic shortage in skilled personnel. All developed countries will experience a demographic deficit. India will not, if we empower our youth with multiple intelligence. Our past liability, by a fortuitous turn of fate, has become our potential asset.
Thus, India has now become, by unintended consequences, gifted with a young population. If we educate this youth to develop cognitive intelligence to become original thinkers, imbibe emotional intelligence to develop team spirit and a rational risk-taking attitude, inculcate moral intelligence to blend personal ambition with national goals, cultivate social intelligence to defend the rights of the weak, gender equality, the courage to fight injustice, and the spiritual intelligence to tap into the cosmic energy (Brahmand) that surrounds the earth, then we can develop a superior species of human being, an Indian youth who can be relied on to contribute to make India a global power within two decades. Only then, our demographic dividend will not be wasted. This has to be the core of the economic agenda for a new government in 2014.
(The writer is a former Cabinet Minister of Commerce)
The Indian financial system suffers from
a hangover of cronyism and corruption that have brought the government budgets on
the verge of bankruptcy
Loss and damage claims in climate justice
India joined nearly 140 countries in staging a walkout during the recent climate negotiations in Warsaw to oppose the attempt to avoid creating a strong institutional mechanism to address “loss and damage.” In the final moments of the conference, however, some form of compromise was found on loss and damage as well as a future course of action to “initiate or intensify domestic preparations for their intended nationally determined contributions” to reduce greenhouse gas emissions. Notwithstanding India’s overt solidarity with other developing countries, its lack of engagement in discussions on loss and damage indicates that it does not have a clear understanding of the broader ethical and political implications of the concept, nor how it could be important strategically.
Impact of extreme weather
The term “loss and damage” was introduced into international climate negotiations by small island nations and least developed countries in Cancun in 2010, and is now formally a part of the language of the United Nations Framework Convention on Climate Change. As a legal concept, it conveys the historical liability for climate change that is largely borne by the rich countries of the world. During the past century-and-a-half or so, carbon has been mined in enormous quantities from the depths of the earth and burned in engines generating vast amounts of goods and services while releasing about two trillion tonnes of carbon dioxide, much of which remains in the atmosphere today. Developed regions such as the United States, Europe and Japan are responsible for more than two-thirds of the stock of carbon dioxide, with the remaining portion due to India, China and the rest of the developing world.
Climate change is expected to cause severe droughts in some parts of the world and flooding in others, and coastal erosion and an increased frequency of extreme weather events such as cyclones, tornadoes, storm surges and heatwaves. One of the sad ironies, however, is that the countries that have emitted the least amount of greenhouse gases will suffer the worst impacts due to warming. People living on small islands, delta regions, those who will suffer droughts and floods and extreme events, are, for the most part, from poor countries, and the poorest from among them will be the worst affected. Bangladesh, which has been a minuscule contributor of greenhouse gases, will have most of its people at risk due to climate change.
Compensation
“Loss and damage” entails claims by the developing world from rich countries to provide compensation for the “losses and irreversible damage, including non-economic losses” (taken from G77 and China’s submission to COP 19 on loss and damage) associated with climate change. The idea is taken directly from tort law, which is probably why North America, Europe and Australia have been virulently opposed to having a separate track discuss the issue. Part of the problem is that the notion of loss and damage might also include non-monetary forms of compensation, whose character might sometimes be unclear. For instance, if small island nations like the Maldives and Kiribati were to become submerged as a result of sea level rise from climate change, the resulting disappearance of these nation states would require unusual measures of recompense, including mass migration to other countries and citizenship rights for the migrants, rather than just money.
In cases of civil negligence, in the U.S., but also elsewhere, courts have long established that where a proximate cause to a loss can be established, whether the action was intentional or not, the perpetrator will bear the liability and will have to pay for damages. This means that if enshrined in international law, the countries most responsible for historically caused losses associated with climate change will have to provide the most compensation for various identified damages that will mostly be in developing countries.
For India
India has long recognised the importance of equity in the climate dialogue, by stressing Article 3.1 of the Convention, which speaks of “common but differentiated responsibilities and respective capabilities.” India’s stance has been that every person should have equal access to development, implying an equal share of the earth’s carbon budget. That is to say, if carbon dioxide emissions were to be reduced globally, the rich should be the first and fastest to do so and the poor, the last. India has used its low per capita emissions to push the point that its engagement in emissions reductions efforts should be deferred until after countries with higher per capita emissions reduce theirs. Since the global climate negotiations in Durban, however, the centrality of this position has been shaken, in part because of a new understanding of the urgency and severity of global emissions reductions needed to avert climate catastrophe and also because of shifts in political positions.
Loss and damage belongs to the same overall framework of climate justice. For one thing, India will be one of the most severely affected countries by climate change, given its sheer size, climatic geography and the impacts associated with Himalayan glacier melt, droughts in various regions, coastal vulnerability from sea level rise, reductions in agricultural production, livelihood loss for the poor, increased severity of cyclones, and potential threats to the entire monsoon system. For another, compensation or reparation for damages associated with any country’s contribution to historical emissions amounts to a “duty to make amends” rather than an act of charity.
Paying attention to “loss and damage” from historical emissions maintains equity with regard to the current “stock” of the carbon space that has been unequally distributed among countries. With regard to “flows” or annual emissions of greenhouse gas emissions, India may want to join with other countries to develop a separate equity-based agreement that is consistent with its own understanding of climate justice. India itself may not be in a position to claim damages, depending on how its own responsibilities and capabilities are accounted for, but it is nevertheless in its clearest interest to understand the issue better and join forces with other developing countries.
( Sujatha Byravan and Sudhir Chella Rajan are based in Chennai and work on climate change policy.)
Compensation or reparation for damages associated with any country’s contribution to historical emissions amounts to a ‘duty to make amends’ and is not an act of charity
Tweak liability law, Canada tells India
India needs to “tweak” its civil nuclear liability law if it wants to attract foreign companies to achieve its ambitious target in atomic power generation, a senior Canadian diplomat has said.
“The way the liability has been framed in the Civil Nuclear Liability Act deviates from the global standards, and if it is not modified, it is hard to see any foreign supplier coming in a big way to India,” Canadian Consul-General Richard Bale told PTI on the sidelines of the Nuclear Summit here. An operator of a nuclear plant will be liable for damages worth up to Rs.1,500 crore. — PTI
Quality evaluation lab for spices opened
A state-of-the-art quality evaluation laboratory-cum-training centre was inaugurated on the premises of the Spices Board at the World Trade Avenue in Tuticorin on Sunday.
Union Minister of State for Commerce and Industry E.M. Sudarsana Natchiappan, who inaugurated the laboratory established at a cost of Rs. 8 crore, said it would boost the export spices through V.O. Chidambaranar Port.
Mr.Natchiappan said that on a yearly average spices exports is a two billion dollar trade and the Ministry is keen to boost it further.
With this new facility, samples for ten parameters could be tested. Besides, plans are also afoot to conduct training and undertake research and development project work in quality control of spices in order to improve its global presence.
This facility has come as a boon to farmers and exporters in the region, especially those belonging to Virudhunagar, Tuticorin, Tirunelveli, Theni, Sivaganga, Coimbatore, Ooty, Ramanathapuram, Madurai, Dindigul and Kanyakumari, he added.
This is the sixth quality evaluation lab after the ones operational at Kochi, Mumbai, Chennai, Guntur and New Delhi. Hitherto, exporters in this region were fully dependent on the board’s lab in Kochi for testing export samples.
But, now with the lab in Tuticorin, testing time for samples would reduce considerably.
Chairman of the Spices Board, Dr. Jeyathilak said around fifty major exporters had been exporting forty different spices and spice products through VOC Port. Sandeep Saxena, Agricultural Production Commissioner and Principal Secretary, said sixteen different spices were being cultivated on 1.65 lakh hectares across Tamil Nadu.
Orbiter on course to Mars
With the successful completion of the Trans-Mars Injection procedure by the ISRO, the earth’s dominance over the Mars orbiter is set to end.
S. Arunan, Project Director, Mars orbiter, ISRO, said on Sunday afternoon that after the successful firing of the spacecraft’s 440 Newton engine, “the spacecraft has gone into a highly hyperbolic orbit, it will leave the SOI (sphere of influence) of the Earth and enter into a perfectly sun-centric orbit.”
“The velocity required for the spacecraft to escape from the earth’s gravity has been provided to it and it will escape from the SOI of the Earth with a perfect sun-centric elliptical orbit,” Mr. Arunan explained.
M. Annadurai, Programme Director, Indian Remote-sensing Satellites and Small Satellites Systems, ISRO, said the total velocity given to the spacecraft at the end of 23 minutes of firing of the 440 Newton engine including the previous firings was 11.4 km per second. The spacecraft would travel 3.5 lakh km in 24 hours after the accomplishment of the TMI and it would cross the SOI of the Earth 72 hours after the TMI, Dr. Annadurai said.
“The health of the spacecraft’s system including its main and redundant systems are all right,” Mr. Arunan said. “The orbiter’s health is normal. It is in a perfect hyperbolic orbit now. It means the orbit is open. There is no ending. There is no apogee,” he explained. After the ground station at Canberra, Australia, acquired the spacecraft and started tracking it soon after the TMI was achieved, the Goldstone Deep Space Communications Tracking Station in the U.S. and the Indian Deep Space Network (IDSN) at Byalalu village, near Bangalore, would start tracking it. The IDSN at Byalalu has an 18-metre and 32-metre dish antenna to communicate with the orbiter. The medium-gain and the high-gain antenna on board the spacecraft would be used to communicate with it from the ground stations.
The spacecraft, which weighs 1,350 kg, carries 850 kg of fuel. About 198 kg of fuel were used for firing the 440 Newton engine for 23 minutes.
ISRO engineers said they were “bugeting” the fuel in a judicious way for three mid-course corrections of the spacecraft’s trajectory and its insertion into the Martian orbit on September 24, 2014.
With India’s spacecraft to Mars slung out of its earth-bound orbit in the early hours of December 1 and towards the sun-centric orbit, its 300-day voyage to the Red Planet has begun. The Indian Space Research Organisation (ISRO) accomplished this tricky manoeuvre called Trans-Mars Injection (TMI) of the spacecraft by giving commands to the spacecraft’s propulsion system to start firing at 00.49 hours on Sunday. The propulsion system came up with a cameo performance for 23 minutes, imparting the required velocity to the spacecraft. Eight control thrusters on board also erupted into life, aiding the propulsion system, called 440 Newton engine.
“The spacecraft is now on course to encounter Mars after a journey of about 10 months around the Sun,” said an ISRO statement. The orbiter is now in a hyperbolic orbit and it will escape from the sphere of influence (SOI) of the Earth around 1.15 a.m. on December 4. The SOI extends to about 9.25 lakh km from the Earth.
According to K. Radhakrishnan, ISRO Chairman, the TMI was a “crucial” manoeuvre because the spacecraft needed to be given the exact velocity to push it out of the earth-orbit, make it escape from the SOI of the Earth, then make it coast around the sun for about 300 days and ultimately insert the spacecraft into the Martian orbit on September 24, 2014.
On that day, the propulsion system will be fired again after it has idled for 300 days during its voyage in deep space. This ignition will lower the spacecraft into the Martian orbit.
