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1. The central bank is showing signs of shifting away from its rigid
inflation targeting policy

Relevant for GS Prelims & Mains Paper III; Economics

There is nothing like a crisis to concentrate the mind. The salience of this saying may be
found in the changes taking place in the economic policymaking establishments of the
world. The COVID-19-triggered recession had led to some of their strongly held
assumptions being revised.

Shift away from dogma

Perhaps the most significant of them is the shift indicated by the Chair of the Federal
Reserve (Fed), Jerome Powell, declaring that the Fed will not let inflation stand in the way
of maximising employment. The practical counterpart of this is that the Fed will no longer
raise rates pre-emptively, i.e., in anticipation of inflation. The reason for this, he declared,
was that the Phillips Curve, the relationship between inflation and unemployment, may no
longer hold in the U.S. economy. Mr. Powell went on to say that he will even be guided by
the consideration of unemployment among vulnerable groups within the American
population, namely African-Americans and Hispanics. It took a lawyer to call out the
emperor. The Phillips Curve has been a mighty presence in the canon of Anglo-American
economics.

Yoked as much of India’s economic policymaking has been to intellectual developments in

the West one would expect some changes in how our own central bank, the Reserve Bank
of India (RBI), will change now that the Fed has. We are not disappointed. In the recent
reconstitution of the Monetary Policy Committee, which conducts monetary policy in India,
we can find a refreshing shift away from dogma. Not all its members may be macro-
economists in the conventional sense but their work conveys that they will not be governed
by rigid adherence to the model of inflation underlying RBI’s inflation targeting policy. This
change has not come a day too early, and India’s government and central bank have done
no one any favours by bringing it about. Data show that the model that currently guides
India’s inflation control strategy may be quite irrelevant. This is seen in the recent
behaviour of inflation. We know that output contracted by more than 23% in the first
quarter of this year. Despite this staggering decline the inflation rate did not budge, an
experience that flies in the face of the proposition that inflation reflects an ‘over heating’
economy, one growing too fast in relation to its potential. This view represents the RBI’s
official understanding of inflation, and presumably forms the basis of its policy of inflation
targeting. It was endorsed by the Government of India when it legislated the modern
monetary policy framework to enable the RBI to pursue inflation targeting. If the Phillips
Curve, which the RBI’s approach internalises, exists, inflation should have abated as India’s
economy contracted during the lockdown, implying a ‘cooling off’ as it were.

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So far the RBI has shown little time for a handy account of inflation that can explain the
recent experience of inflation in India. It had been imagined with developing economies in
mind, and is based on the idea that food prices are an important determinant of inflation
along with imported inflation. Accordingly, a macroeconomic contraction need not lower
inflation.

Model to forecast inflation

A committee somewhere may hardly be sufficient to bring about a change in the mindset of
a major arm of the Indian state. Hopefully, though, the economic havoc wreaked by COVID-
19 will lead to a more sober and rooted policymaking. We may even be seeing some green
shoots. A recent working paper of the RBI’s research department has received attention in
the media for suggesting that a more eclectic model than the one that underlies inflation
targeting does a better job of forecasting inflation in India. This model accepts a role for
food prices, a possibility that is missed when embracing economic models developed in the
western hemisphere, where food prices have stopped trending upwards over half a century
ago. Better late than never, we might say. That India’s central bank is finally alive to India’s
economy is surely good news for Indians.

Source: The Hindu

2. Strengthening Teaching-Learning and Results for States (STARS)

project

Relevant for GS Prelims & Mains Paper III; Economics

The Union Cabinet has approved a project partially funded by the World Bank to carry out
a reform agenda in the governance of school education, and improve data and assessment
systems at the national level, as well as teaching and learning outcomes in six States,
especially for early childhood and vocational education.

The project includes an emergency response component to help the government respond
to disaster situations which lead to school closures and loss of learning, such as the current
COVID-19 pandemic, according to an official statement issued after the Cabinet meeting on
Wednesday.

About the project

The Strengthening Teaching-Learning and Results for States (STARS) project will have a
total project cost of ₹5,718 crore, with the World Bank’s support amounting to about
₹3,700 crore ($500 million), said the statement.

A major component of the project is the establishment of PARAKH (Performance

Assessment, Review, and Analysis of Knowledge for Holistic Development) as a National
Assessment Centre. Included in the National Education Policy 2020, this autonomous

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institution under the Union Education Ministry will set norms for student assessment and
evaluation for all school boards across the country, most of which currently follow norms
set by State governments. It will also guide standardised testing to monitor learning
outcomes at the State and national levels, according to the NEP.

The other major initiative at the national level is to strengthen the Education Ministry’s
data systems to capture information on the retention, transition and completion rates of
students.

At the State level, the project seeks to improve education outcomes and school-to-work
transition strategies for better labour market outcomes in Himachal Pradesh, Rajasthan,
Maharashtra, Madhya Pradesh, Kerala and Odisha.

A similar project to be funded by the Asian Development Bank will cover Gujarat, Tamil
Nadu, Uttarakhand, Jharkhand and Assam and every State will partner with one other State
to share best practices, said the statement.

Education governance reform will be a major focus, with the World Bank’s project
document estimating that 83% of the project will be dedicated to the public administration
of education. Other areas of focus are assessment systems, teacher development, early
childhood, foundational literacy and numeracy, and vocational education, which are all
highlighted in the NEP as well.

The World Bank’s latest status report for the project, released earlier this month, also
includes plans to include private sector players in the government school system, in “the
area of school education governance, management, monitoring, teacher training, school
service delivery reform, and overall education service delivery.” This component has raised
concerns among some education activists, who have also raised red flags about the
emphasis on standardised testing and the use of information and communication
technologies in teaching.

Source: The Hindu

3. Beyond poaching: How rhino dung offers clues on health and natural
death

Relevant for GS Prelims & Mains Paper III; Environment

In conservation efforts for the greater one-horned rhinoceros population in India, the latest
strategy is an examination of rhino dung to understand health issues of the animal. Since
2017, the Rhino Task Force of Assam and World Wildlife Fund India (WWF India) have
been undertaking steps to study pathogens found in fresh rhino dung samples in Assam,
Uttar Pradesh, and West Bengal. WWF India has recently published preliminary reports —

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‘Prevalence of Endoparasitic Infections in Free-Ranging Greater One-Horned Rhinoceros’

— for Assam and West Bengal.

“The main objective of this initiative is to start a systematic disease investigation process
for the rhino,” said Dr Parikshit Kakati, Senior Program Officer Veterinary, WWF India, who
is among the researchers.

Why is such a project important?

While poaching is believed to be the main cause of death in rhinos, rhinos also die of
natural causes which have not been studied in great detail. “When a rhino carcass is found,
the first question asked is: ‘Is the horn intact?’ If it is not, it means it was poached.
Otherwise, it is considered a ‘natural’ death. There may be multiple reasons for a natural
death but it is rarely investigated thoroughly,” said Bibhab K Talukdar, chair, Asian Rhino
Specialist Group of International Union for Conservation of Nature/Species Survival
Commission; Asia coordinator, International Rhino Foundation; and CEO and secretary
general of the NGO Aaranyak.

According to the researchers, habitat degradation can lead to an increased exposure to

pathogens. “Due to increasing livestock pressure on protected areas, there is a possible
threat of pathogens getting transferred from domestic animals to wild animals.” Talukdar
said: “Diseases linked to habitat degradation are invisible causes of rhino death. For
example, a rhino might not get its regular feed, compelling it to instead feed on weeds etc.
This may cause problem in their health.”

How is the project being carried out?

Till date, there has been no systematic study on the prevalence of disease-causing parasites
and diseases caused by these in the rhino population in India. “In order to address this
knowledge gap, the present study is a part of a series that involves screening of pathogens
through a non-invasive method of dung sample analysis,” stated the report.

Samples were collected from UP’s Dudhwa National Park; West Bengal’s Jaldapara National
Park and Gorumara National Park; and Assam’s Rajiv Gandhi Orang National Park, Pobitora
Wildlife Sanctuary, Manas National Park, and Kaziranga National Park. The researchers
collected the samples fresh (not older than from the previous night), gave them unique IDs
and sent them to the Department of Parasitology in the College of Veterinary Science,
Assam Agricultural University, Guwahati.

What are the findings?

From the samples from Assam and West Bengal, the study concluded that parasites from
four genera were present in an estimated 68% of India’s rhino population. The overall
prevalence of endoparasites was 58.57% in Assam and 88.46% in West Bengal; results
from UP are pending.The endoparasites in Assam belonged to four genera: Amphistome
spp, Strongyle spp, Bivitellobilharzia nairii and Spirurid spp, while West Bengal reported
the prevalence of only Strongyle spp, Assam reported all four. “When comparing this

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[Bengal] study with that conducted in Assam, we find that the rhino population in West
Bengal has a higher prevalence rate of infection, but the occurrence of different parasites
were higher in Assam,” stated the report.

“These pathogens are quite common and not very alarming,” said Dr Kakati. Until now, the
studies just reveal that the pathogens exist. “Our second stage of investigation will
determine how harmful they are.” He said the study was still at a preliminary stage but
“extremely helpful”. “We now have a baseline for how often and what types of parasites are
found in the wild rhino population —a key step in determining the harmful effects the
parasites have on their rhino hosts,” he said.

The team will now branch out to examine bacterial fauna and viral agents, as well as a
hormonal study.

Source: The Indian Express

4. What pause in Johnson & Johnson Covid-19 vaccine trial means

Relevant for GS Prelims & Mains Paper III; Science & Technology

A COVID-19 vaccine developed by Johnson & Johnson subsidiary Janssen Pharmaceutica

has come under the spotlight after late-stage human trials were paused over a potential
safety concern. This vaccine uses the same approach as that of Oxford-AstraZeneca —
whose trials were globally paused over similar concerns last month.

What do we know about the pause?

Late on Monday, trials for Janssen’s vaccine candidate, including phase 3 testing with
60,000 participants, were put on pause after a participant developed an “unexplained
illness”. According to J&J, the illness is being reviewed by an independent Data Safety
Monitoring Board as well as J&J’s internal clinical and safety physicians. The pause —
decided by the company and not regulators — basically means the firm will temporarily
halt recruitment and dosing of participants.

What is common between the two trials that were halted?

In the Oxford-AstraZeneca trials, a participant in the UK had developed a serious reaction.
While AstraZeneca declined to disclose the nature of the illness, the patient had reportedly
developed a neurological disorder called ‘transverse myelitis’ — an inflammation of a
section or both sides of the spinal cord.

Other vaccines in large-scale, advanced human trials include mRNA vaccines from Moderna
and Pfizer, as well as “inactivated” vaccines (which involve killing the SARS-CoV-2 virus for
injection) from China’s Sinopharm. So far, none of these trials has been paused over
potential serious adverse events (SAEs).

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Janssen’s vaccine, like Oxford-AstraZeneca’s, uses a modified adenovirus — a common cold

virus — to act like a Trojan horse that can deploy the SARS-CoV-2 virus’s “spike protein” to
human cells. The Oxford vaccine uses a genetically engineered chimpanzee adenovirus; the
Janssen one uses a variant of a human adenovirus known as Ad26.

Are we seeing a pattern, then?

In the context of the halted trials, the similarities between the Janssen and Oxford-
AstraZeneca candidates may end with the vaccine platform. It is likely, some experts feel,
that the potential safety concerns flagged with both vaccines are more a coincidence than a
pattern. For one, there are several other adenovirus vaccines either in late-stage or post-
marketing trials without similar incidents, according to them. These includes candidates
developed by China’s CanSino Biological and Russia’s Gamaleya Research Institute. “With
the preliminary information that we have, it would be too premature to say that the issues
raised with the Janssen candidate have something to do with the (adenovirus) platform,”
said vaccine expert Dr Davinder Gill.

“Primarily, there is also the question of whether this illness is vaccine-related. As it

happened with the Oxford vaccine, once this incident is investigated a bit more, it may turn
out that the reaction was not necessarily caused by the vaccine,” he said. “But I think we do
have to keep an eye on these platforms.”

Gill said the adenovirus platform has been around for “at least” a decade, and a vaccine
with a different variant of this virus was previously used in HIV trials. “Of course, in that
case, it was tested on severely immunocompromised patients and, so it was a very different
type of setting,” he said. “There is a concern, I think, with Covid-19 — for the first time, we
are seeing these vectors being tested in very large patient cohorts. I think that, during these
studies, we will learn more about how safe and how well tolerated these vectors are.”

Does this suggest the J&J vaccine isn’t safe?

The pause is not a matter of major concern at the moment, as there is no clarity on what
caused the “unexplained” illness in the participant. It is not correct to assume this is a
vaccine-related issue at this stage, and the pause is a precaution being taken as part of
protocols. “Adverse events… even those that are serious, are an expected part of any
clinical study, especially large studies,” stated J&J in a statement. “SAEs are not uncommon
in clinical trials, and the number of SAEs can reasonably be expected to increase in trials
involving large numbers of participants. Further, as many trials are placebo-controlled, it is
not always immediately apparent whether a participant received a study treatment or a
placebo.”

Gill pointed out that a very diverse population is recruited into phase 3 trials. “These
people have all sorts of medical backgrounds and genetic predispositions, so it is not
uncommon that something like this pops up sometimes during clinical trials,” said Gill.
“Most of the time, it’s not related to the drug or the vaccine, but here, that needs to be
investigated,” he said.

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In any case, the real test of any Covid-19 vaccine, even one with a clean phase 3 record, will
come when it is launched and used in the larger community. “That is where any potentially
rare events that did not crop up during any of the trial phases will show up,” Gill said.

Do Indians need to worry?

The Janssen candidate has not yet been tested in India. Hyderabad-headquartered
Biological E in August struck an agreement with Janssen to produce the vaccine and, while
this is yet to start, the firm aims to make around 400-500 million doses a year. While
Biological E has not commented, the outcome of J&J’s investigations may impact the future
course of this agreement and determine whether this vaccine is tested on participants in
India as well.

What happened to the Oxford-AstraZeneca trials after the pause?

Following reviews, the UK government allowed resumption of trials within the week.
Shortly after, Serum Institute of India, which had been directed by the Indian drug
regulator to pause its own testing of the Oxford -AstraZeneca candidate during the global
pause, was given permission to resume its trials. It is currently conducting mid- to late-
stage human trials of the vaccine. Trials for this vaccine have also resumed in South Africa,
Brazil and Japan. However, the US is still looking into potential concerns with this adverse
effect and, amid broadened investigations, trials there are yet to resume.

Source: The Indian Express

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