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Detailed News Articles: 28 May 2019

1.  Global implications of the mandate

Analysis:

  • Experts opine that the clear and decisive mandate for Prime Minister Narendra Modi is a defining moment in India’s democratic history.
  • As a matter of fact, its extent, which is manifest from the highest-ever voter turnout in a general election and the share of votes won by the winning coalition, creates its own very unique set of circumstances.

What are these unique circumstances?

  • To put this in perspective, as the world’s largest democracy, India has a staggering 900 million-odd voters, of whom about over 67% turned out, making it about a little over half-a-billion people participating in the general election of 2019.
  • Out of this, the winning coalition is estimated to have earned close to 300 million votes.
  • When we compare this with the next biggest democracy, the United States, which has a population of more than 320 million, the magnitude of the mandate earned by Mr. Modi becomes clear.
  • It is a unique moment for India that the rising aspirations of people in one of the fastest growing economies have resulted in this kind of a mandate.
  • Further, while it raises the bar on expectations, more importantly, it gives the leadership of the country the necessary wherewithal to take the kind of decisions that are needed to put India on a high growth trajectory.
  • At a time when two of the largest economic powers in the world, the U.S. and China, are locked in a trade war of sorts, this mandate opens the window for India to take advantage of economic opportunities that are likely to develop in the geopolitical space.
  • To get the Indian economy on the right trajectory, to spur our exports and to create jobs — while this kind of a mandate creates expectations, it also empowers the leadership to take the right decisions to realise the same.

An opportunity to steer geopolitics:

  • Experts opine that the poll result also paves the way for India to take its rightful place in the world order not just as a participant in the deliberations that happen at multilateral platforms but, more importantly, to set the course for the kind of change that we would like to see in the world.
  • India over the last five years has taken a leadership position in quite a few initiatives such as the International Solar Alliance, while facilitating global action on climate change through the Paris Agreement.
  • As a matter of fact, India has also projected its soft power through a global projection of yoga to shine the spotlight on how Indian spirituality can be a force for greater good.
  • Now, with this kind of a political mandate and the unique set of global circumstances it has been delivered in, the expectation is even higher that India would take up its rightful role in steering geopolitics in a host of areas. These areas range from:
  1. global trade to regional conflicts
  2. setting the global direction in emerging technology areas such as artificial intelligence and space exploration, to name a few.
  • It is also important to note that India’s democracy after Independence is a very unique experiment, just a few years away from turning 75.
  • As a matter of fact, there is no democratic parallel anywhere else in the world to the Indian context and the Indian experiment.
  • This is missing in the manner in which the global media, especially influential western media outlets, have tended to view India.
  • Experts opine that this mandate ought to be a wake-up call for global media outlets to shun their myopic view of the democratic discourse in India. They must now discard the stereotypes they still use in their reportage.

What else does the mandate imply?

  • The mandate also places Mr. Modi as first among equals within his peer group of world leaders today.
  • Further, while a whole generation of strong leaders have emerged from among the G20 nations, be it the U.S., Japan, Russia, Turkey, Australia, Indonesia or South Africa, only Mr. Modi can credibly claim to have been tested by the largest number of voters in a free and fair election.
  • The mandate gives India’s voice heft at key multilateral platforms.
  • The mandate also creates the opportunity for Mr. Modi to advance Indian values and advocate uniquely Indian ways of solving global problems.

Concluding Remarks:

  • Experts opine that the mandate also calls for a new creed of techno-nationalism as a counter to borderless techno-activism that has threatened Indian interests through its pursuit of innocuous agendas (net neutrality and privacy) which have advocated measures inimical to India.
  • Further, the political mandate also demands that India devise ways and means to stay ahead of the curve in emerging technology areas such as 5G and artificial intelligence, among others.
  • It also calls for out-of-the-box thinking as India can no longer risk being left out of setting the course for technology changes that will not only shape the global economy but also geopolitical dynamics.
  • It is important to note that India is also the largest open market to global technology majors which continue to locate their computing and storage infrastructure outside India and beyond Indian jurisdictions.
  • The mandate demands that India leverage the strength of its democracy and the power of its markets to ensure that the global platforms play by rules that do not hurt the Indian national interest.
  • In conclusion, while India continues to benefit from global digital innovations, this needs to happen within a framework that enhances Indian interests.

2. An India-US trade deal? No thank you

Analysis:

  • Experts opine that while the government formulates its policy priorities for NDA-II, grappling with the challenges confronting India-US trade ties is likely to be high on the agenda.
  • As a matter of fact, how this thorny issue is addressed by the government could have far reaching implications for India’s economic growth.

What does India’s list of grievances against the US include?

  • India’s list of grievances against the US include:
  1. problems encountered by its exporters of IT services,
  2. tariffs imposed by the US on exports of steel and aluminium products and
  3. the threat of the US to remove India from the list of developing countries enjoying preferential access to its markets.

What does the US’s list of grievances against the US include?

  • US complaints include:
  1. perceived barriers erected by India to its exports,
  2. India’s recent measures related to e-commerce and
  3. its perennial criticism of India’s intellectual property laws.

It is important to note that at the WTO, the two countries have divergent positions on many issues, including the crisis at the dispute resolution mechanism and WTO reform.

What is needed to iron out the differences?

  • In order to iron out the trade friction between the two countries, some strategic experts and foreign policy analysts have suggested that India should work towards a comprehensive bilateral trade deal with the US.
  • No doubt it should be a high political priority for India to have an enduring and mutually beneficial trade link with the US.
  • Crucially, experts opine that any move by India for a comprehensive trade deal with the US should come only after a detailed examination of the fundamental reasons bedevilling trade relations between the two countries.
  • Further, despite the gradually deepening links between India and the US on geo-political issues, an important question arises: why have the two countries failed to forge deeper trade ties?
  • Even a superficial analysis of the interests of the two countries would make it obvious that the path to strengthened trade relations is fraught with hurdles, many of which are insurmountable.
  • As a matter of fact, how does the US wish-list stack up against India’s interests and concerns? Experts point out that there are at least six grounds of concern, which arise from an India-US trade deal.

India-US trade deal: Grounds of Concern

  • Firstly, as the average tariffs in the US is 3.4 per cent, India’s exports are unlikely get any significant boost, even if the US were to reduce its existing tariffs to zero.
  • Secondly, India would be conceding considerable market access to the US by reducing/eliminating its tariffs from the existing average level of 13.8 per cent.
  • It is important to note that as India is not price competitive in a large number of products, the country may find it extremely difficult to face import competition under a zero-duty regime.
  • This would pose severe risk to the manufacturing sector and could frustrate the Make in India flagship initiative of NDA-1.
  • Thirdly, on the agriculture front, India’s farmers will be continuously exposed to the risk of being knocked out of the market by cheap and subsidised imports from the US. Tariff as a policy instrument would not be available to the government to regulate such imports.
  • The consequences of such a situation can be extremely alarming.
  • In particular, the horticulture sector, dairy sector and wheat would come under extremely intense pressure from US imports.
  • As a matter of fact, the prospects of doubling farm income are likely to get dented by a comprehensive trade deal with the US.
  • Fourthly, on the IPR front, India will get confronted by US to agree to its onerous demands, particularly for extending the monopoly protection enjoyed by the US pharmaceutical companies in India. This would require India to make crucial changes to its domestic laws and regulations, which would eventually destroy the generic pharmaceutical industry in the country.
  • This would result in a sharp increase in prices of medicines, thereby compromising the health of the sick and the needy in India.
  • Fifthly, the India-US trade deal would significantly erode the policy space currently available to the government to nurture the fledgling domestic digital economy in India.
  • As a matter of fact, we are already witnessing a strong backlash unleashed by the US-based digital giants against some of the recent actions of the government, including data localisation for credit cards and the press note seeking to contain the unfair practices indulged in by retail platforms.
  • Further, it is important to note that the trade deal will certainly be used by the US-based digital giants to ensure that their interests in India are strongly protected. This will compromise the digital future of our country.
  • Another important question arises:

Would the trade deal help India secure greater market access for its exports of services to the US?

  • If the past FTAs of the US are an indicator, the US is extremely unlikely to agree to India’s demands for more access for its professionals under Mode 4 of Services.
  • Further, given the strong emotions unleashed in the US against immigration, the US is not likely to show any flexibility to India in allowing the seamless movement of professionals.
  • On the other hand, India would be required to grant considerable access to US firms in many sectors, including for financial services.

What are the proponents of the India-US trade deal optimistic about? 

  • The proponents of the India-US trade deal are also optimistic on two issues, both of which need careful scrutiny.
  • Firstly, some experts have claimed that the trade deal will enhance India’s access to high technology. This is not only incorrect, but also goes against the grain of the consistent stand of the US at various inter-governmental forums that technology transfer is governed by patents; and that it cannot direct its firms to share high technology.
  • In essence, the trade deal will certainly not have provisions that would facilitate technology transfer.
  • Another aspiration being articulated by some supporters of the trade deal is that it will enhance US investments in India. However, the link between bilateral investment protection treaty (BIT) and investment inflows is extremely weak.
  • On the contrary, based on a rigorous empirical exercise, UNCTAD’s Trade and Development Report (2014) has concluded that “BITs appear to have no effect on bilateral North-South FDI flows”.
  • It is, thus, unlikely that the India-US trade deal will result in enhanced investment inflows from the US into India.
  • In conclusion, the stark reality is that a bilateral trade deal with the US would be extremely skewed and loaded against India’s economic interests.
  • As a matter of fact, the injurious consequences for India would far outweigh the export gains of a few billion dollars.
  • The proponents of the trade deal need to examine the nuts and bolts of a potential treaty and objectively assess its economic impact on the country.
  • India must not fall into the dangerous trap of initiating negotiation for a comprehensive trade deal with the US.
  • Instead, the two countries must continue to talk and address individual irritants in trade ties.
  • The time for a comprehensive India-US bilateral trade deal has not yet come.

3. Mt. Everest: learn from tragedy, tighten safety measures

  • Mount Everest, the world’s highest peak at 8,848 metres, draws adventurers from all over.
  • However, Mount Everest, which is located on the Nepal-China border is fast becoming a dangerous place to visit even for the hardened mountaineer.

Editorial Analysis:

  • The inherent risks were this month highlighted with a photograph by Nirmal Purja, a Gorkha ex-soldier.
  • The image, which went viral and altered the manner in which people worldwide imagine what it is to scale Mt. Everest, showed a long queue awaiting a final tilt at the summit, with all the dangers such a wait holds.

A Look at Specifics:

  • This season, at least 10 climbers have died or gone missing, including four Indians.
  • Experts have been calling for Nepal to restrict the number of permits.
  • Nepal awarded a record 381 for this spring, each fetching $11,000 (climbing from the Tibet side is more expensive).
  • Recently, 200 climbers ascended the summit, which is a new record for a single day.
  • Last year (2018), 807 managed to reach the summit.
  • In the year, 2012, the United Nations estimated that there were more than 26,000 visitors to the Everest region, and this figure has grown manifold since then.

Stuck due to bad weather?

  • Nepal officials argue that permits are not issued recklessly, and that jams such as this year’s near the summit are on account of spells of bad weather, which result in mountaineers being compelled to summit within a narrow time-frame.
  • Waiting in sub-zero temperatures at the rarefied altitude can be fatal — this season’s deaths were mostly due to frostbite, exhaustion, dehydration and lack of oxygen.
  • As a matter of fact, this year’s drama has caught the public imagination, as happened in 1996 when eight persons died in a single day amid an unexpected storm — events of and around that day were the subject of Jon Krakauer’s bestselling book, Into Thin Air.

Concluding Remarks:

  • The adventure industry that is built around the human desire to scale the peak has meant many amateurs take up the challenge, confident that support teams and specialised equipment will make up for their lack of adequate mountaineering experience.
  • The fallout is that in case of a disaster not only are some of them unable to manage, but they hold up others, putting them in harm’s way.
  • The commercial operations have led to the Everest being called the world’s highest garbage dump as many climbers discard non-critical gear and fail to clean up the mess.
  • The authorities must learn from this year’s tragedies and work out an optimum number of climbers and strengthen safety measures.

4.  Farmers’ issues were not centre stage

  • Experts point out that in November last year (2018), thousands of farmers marched to Parliament to highlight the agrarian crisis and demand higher crop prices, full loan waivers and drought relief.
  • As a matter of fact, there were quite a few such protests in 2018, and considering their scale, many believed that it was likely that the discontentment of farmers, who also make up an important voting bloc given that half the country’s population is engaged in farm-related work, would hurt the prospects of the BJP in the parliamentary election.
  • However, with the Narendra Modi-led Bharatiya Janata Party (BJP) winning with a thumping majority for the second time, the anti-government sentiment among farmers has to an extent been successfully neutralized.

Priorities while voting

  • Lokniti’s post-poll survey found that the majority of farmers did not vote on issues that directly concern them. Development (’vikas’) was important — 15% of farmers went to the polling booths with this as their single-most important agenda. Unemployment was second (10%).
  • Surprisingly, only 5% had farming or related issues as their most important agenda when they went to cast their votes.
  • This may also be considered a failure of farmers’ movements and the Opposition which did not politicise farmers’ issues sufficiently in the few months before the election.
  • It is important to note that farmers’ distress was very much on the national agenda until the beginning of the election year.

What did the Survey find?

  • Despite mass protests last year (2018), 68% of farmers were found to be satisfied with the performance of the BJP-led NDA government at the Centre, with 27% saying that they were ‘fully satisfied’ and 41% saying they were ‘somewhat satisfied’ when probed further.
  • The survey also found that among respondents who reported agriculture as their main occupation, 39% voted for the BJP (NDA 47%) and 20% voted for the Congress (UPA 26%).
  • These figures are almost the same as the overall vote shares of both parties.
  • In other words, farmers did not vote differently from the rest.
  • As far as their respective caste groups are concerned, 52% of upper caste farmers were found to have voted for the BJP and only 13% chose the Congress.
  • When further segregated, one finds that 41% of peasant proprietors voted for the BJP, which is 22 percentage points lower than the rest of the upper caste farmers.
  • The number of peasant proprietors who voted for the Congress was almost the same.
  • However, with 34% voting for the BJP and 18% voting for the Congress, the gap between the Congress and the BJP was much more narrow in the case of Dalit farmers.

Direct cash transfers: Role of PM-KISAN Yojana

  • The survey suggests that some action by the government at the eleventh hour, such as providing direct cash transfers through the PM-KISAN Yojana, and the ultra-nationalistic campaign of the BJP might have helped the party assuage the angry farmers and shift the narrative from farmers’ issues to development and nationalism.
  • PM-KISAN, under which ₹2,000 is transferred to the bank accounts of farmers with small land holdings every four months, seems to have made them swing in the BJP’s favour.
  • Further, among the farmers who had benefited from PM-KISAN and credited the Central government for the same, 56% voted for the BJP (NDA 65%) and only 8% chose the Congress (UPA 11%).
  • On the other hand, among those who credited the State government, the figures were almost the same for both (UPA 30%, NDA 29%).
  • As a matter of fact, two-fifth of those who credited the State government voted for parties other than UPA and the NDA.
  • Among farmers who had heard about India’s air strikes in Balakot, 42% voted for the BJP while 17% voted for the Congress. Contrary to this, among those who had not heard about the strikes, the gap was merely three percentage points, with 31% voting for the BJP and 28% for the Congress.
  • The cash transfers through PM-KISAN and the wave of nationalism just weeks before the election seem to have clearly swept farmers’ issues away from the centre stage.

Concluding Remarks:

  • In conclusion, with the BJP back in power, it is important to highlight three key promises made by the party to farmers in its manifesto. These include:
  1. zero-interest loans for up to ₹1 lakh;
  2. extension of PM-KISAN to the rest of the farmers; and
  3. pension to small and marginal farmers.
  • Finally, considering the fiscal burden these schemes would add, at the moment it doesn’t seem like they will be implemented in their entirety.
  • An important question arises: will these schemes merely end up as poll gimmicks or will they add anything substantial to farmers’ plates?
  • It might be too early to answer these questions.

Thank you!

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