Discover more from The India Cable
Preparing for 2024, BJP to Jettison 1/4 UP MPs; Precipitous Decline in FDI in Modi’s Last Years in Office
Chandrayaan-3 lifts off, Senate committee recognises Arunachal, flood warnings don’t reach majority, ghost of Vyapam in MP, Supreme Court says UP has no respect, flagging off trains is expensive hobby
A newsletter from The Wire | Founded by MK Venu, Seema Chishti, Siddharth Varadarajan, Sushant Singh, Sidharth Bhatia and Tanweer Alam | With inputs from Kalrav Joshi | Editor: Pratik Kanjilal
Are you new to The India Cable or getting by with just the truncated newsletter? Once a week, we relax our paywall so non-subscribers can see for themselves the value of paying Rs 200/month (or Rs 2000/year) to get the most definitive daily picture of India in their inbox every day.
Snapshot of the day
July 14, 2023
At 2:35 this afternoon, India’s third lunar mission Chandrayaan-3 lifted off from Sriharikota. It will attempt a soft landing near the lunar south pole on August 23-24.
Angered by the silence of the Union government and the ineptitude of the state government, both run by the BJP, women in Imphal burned effigies of PM Modi, Home Minister Amit Shah and the Assam Rifles. However, PM Modi found time to call the Lieutenant Governor of Delhi from Paris to get up to speed on the floods in Delhi. One hundred and three women journalists, including editors, have appealed to the media fraternity to keep Manipur in the news, though Delhi is impressively flooded.
Mizoram state BJP vice-president R Vanramchhuanga has resigned in protest against the destruction of 357 church properties in Manipur. In his resignation letter to the state president, to whom he wished “success in life”, he said that the silence of the Centre showed that the “massive demolition” had the backing of the central and state authorities. “I never believed (this) earlier but now I am convinced the BJP is an anti-Christian party,” he wrote. “And it is my moral duty to leave the party as well as my designation.”
Yesterday, the European Parliament adopted three resolutions on the human rights situation in Venezuela, Kyrgyzstan and India. With respect to India, it notes that in Manipur, “intolerance towards minority communities has contributed to the current violence and that there have been concerns about politically motivated, divisive policies that promote Hindu majoritarianism in the area.”
As Modi works the Paris crowds, Jairam Ramesh has put up a very pertinent image from the monochrome era, showing Indira Gandhi with Charles de Gaulle. Apparently, they conversed exclusively in French.
Not to be outdone, the PM said at a diaspora event that 40 years ago, when Alliance Française opened in Ahmedabad, he beat the rest of the city to the draw and became its first member. Cynics smelt a rat but Modi did not completely mis-speak.
And here’s a more substantial thread on the Paris of Anglophobia and Indomania ― when Tipu Sultan’s ambassadors reached Paris to forge a treaty against the East India Company, and were mobbed by the public.
A US Senate Committee has passed a resolution recognising Arunachal Pradesh as an integral part of India, in spite of China’s aggressive territorial claims. The resolution, which reaffirms US acceptance of the McMahon Line as the international border, awaits a full Senate vote.
In February, the WHO had issued a warning about Indian pharma firm Galentic, which had exported several batches of contaminated ophthalmic antibiotics. The United Nations Children’s Fund and Médecins Sans Frontières, which buy the antibiotic, stopped sourcing from the company and jointly audited the production facility. Complaints from international buyers forced the company to recall ointment batches from 2020 till February 2023. But the Indian authorities only require the company to suspend production of the ointment for 25 days in September, months after WHO sounded the alarm.
As El Niño returns to India, the world’s biggest exporter of rice is planning to ban the export of all varieties except basmati, reports Bloomberg.
Modi isn’t just any old station master, so the bill for his hobby of flagging off Vande Bharat trains is steep. An RTI by a former railway employee has revealed that Southern Railways spent Rs 2.6 crore so that he could flag off two trains on the Thiruvananthapuram-Kasaragod route and the Chennai-Coimbatore route. Most of the money went to event management companies.
Wired magazine discovers that India’s current tech mania is creating problems where there weren’t any: “The Modi government is forcing low-paid workers to use a glitchy new digital registration system that fails in places with weak internet.” It is iniquitous that MGNREGA workers can expect to be paid not according to how much they work, but depending on whether they have internet access.
The Tata Institute of Social Sciences in Mumbai has tried to analyse how sensitive the patriarchy in Bollywood is to events in the real world. It looked at changes in the narrative of films, and the nature of their characters, after the Delhi gangrape of 2012, a watershed moment for perceptions about gender relations that was so emotive that it brought down governments. “They have concluded that though women-centric films give some reason for optimism, the box-office hits continue to be sexist and regressive and women and queer representation remains abysmal in them,” reports the BBC.
After Vyapam, another recruitment scam in MP
The ghost of Vyapam is back: the Madhya Pradesh Employees Selection Board (ESB) is again under a cloud as fresh allegations of widespread rigging in recruitment scams emerge. Concerns are mounting that the ESB is plagued with systematic fraud. The recent revelation that seven out of the top 10 scorers in the Group 2 recruitment examination, for positions including that of patwari, had taken the exam in a little-known centre in Gwalior, has raised eyebrows. This centre, called the NRI College of Engineering and Management, is owned by Bhind’s BJP MLA, Sanjeev Kumar Kushwaha. The exam, conducted in March and April, was written by a staggering 9.80 lakh candidates. The ESB announced the results on June 30 and suspicions of foul play surfaced on July 10. In response, the examining board has initiated investigations into the CCTV footage and computer logs of the centre attended by the seven toppers. Opposition parties are demanding an impartial inquiry.
Researchers starved of funds by bureaucratic delays
While the Union government promises increased funding via a National Research Foundation (NRF), India’s top researchers who should have received funds from central agencies in April for this financial year have been left in the lurch by bureaucratic delays. Their purchases are on hold and project staff has been unpaid for up to three months. The situation worsened with the Centre trying to implement a new method of transferring funds to IITs and IISc. The institutes are required to open zero-balance bank accounts that will be credited only after an expense is actually incurred, says the Times of India.
“After a lot of delays caused while trying to understand the new system and on the part of the bank, the money started getting reflected in early March. But on April 1, the balance became zero. To date, neither has all of the unspent balance come back, nor has any of the fresh grants for the new year come,” the dean of a STEM college said.
UP has no respect, says Supreme Court
Uttar Pradesh government officials have “scant respect” for its orders, the Supreme Court has observed, condemning a delay of almost a year in complying with its direction regarding remission of some convicts serving life terms.
“Nobody is above the law,” a bench led by Justice Surya Kant remarked when the state government submitted that it may not be proper to bind the governor – the constitutional authority who has to take the final call after the state’s recommendations on remission pleas – to a court-mandated deadline.
The court was livid that the UP government was yet to act on its direction, though it had been given three months’ time on May 16, 2022. In that order, the court had taken note of the fact that all the petitioners, lodged in Bareilly’s Central Jail, had completed more than 14 years of their actual sentence without remission. The state government must dispose of a prisoner’s remission plea within three months of it becoming eligible. “The amount of disrespect your authorities are showing, we think we will have to take some harsh steps. Your officers have scant respect for the orders of the court. That’s what is happening in your state,” the bench said.
Endless Karnataka-Goa water-sharing dispute continues
In a development that escalates the long-standing dispute over the sharing of the Mhadei River waters, Goa and Karnataka have raised the stakes. The controversy, extensively covered by Scroll, has reached a critical juncture as both states assert their claims. The Mhadei River, originating in Karnataka and flowing through Goa, has been a bone of contention for decades.
Goa has accused Karnataka of constructing check dams and canals to divert water from the Mhadei basin, adversely affecting its own water supply. Goa has complained to the Mhadei Water Disputes Tribunal, seeking immediate intervention to halt Karnataka's alleged activities.
On the other hand, Karnataka contends that the construction in question is intended for drinking water purposes and argues that it has not violated any laws. The state plans to present its case before the tribunal and defend its actions. As tensions mount between the two states, the dispute over the Mhadei River shows no signs of abating.
The Long Cable
Precipitous decline in FDI in Modi’s last years in office
Foreign investment inflows (FDI) into India may be drying up even faster in 2023-24 than in 2022-23, when net FDI inflows declined 27% to a mere $28 billion. It was the biggest decline in a decade. Many global analysts have expressed concern over the unprecedented decline in net FDI inflows in 2022-23. Now, it seems that 2023-24 could be a bigger cause for worry.
Speaking on CNBC TV18, a Grant Thornton analyst said there was a 92% decline in cross-border M&A deals in India in the first half of 2023 (they publish monthly data). One assumes that this deep, declining trend is not going to reverse during the rest of the year (both calendar and financial).
A 92% decline may reflect serious underlying trends. One, it will curtail overall FDI flows in 2023-24, because cross-border M&As are a big component. During the Covid year of 2020, Reliance Jio alone attracted $20 billion via acquisition of up to a 33% stake in it by Google and Facebook. Two big share acquisitions dominated overall FDI flows into India. Some big pension funds and sovereign wealth funds also invested in Reliance Jio in 2020. Other startups (unicorns) also got equity investments in 2020-2021.
The acquisition of technology shares formed a substantial chunk of FDI inflows into India in recent years. This has dried up in 2023, and is clearly showing up in the 92% decline in cross border mergers and acquisitions, as pointed out by Grant Thornton.
Global growth pessimism is an important reason for this big decline in cross-border M&As. Western corporations are cautious about making big investments. A rise of 4-5 percentage points in interest rates in the US and EU, which has sucked easy money out of the system, is another reason. Such moneys have found their way into India to do leveraged buyouts. Geopolitical strategy is also important. India had begun to shun Chinese FDI after the 2020 border clashes with China. China has been a large investor in Asian economies over the last 10 years. In fact, most top tech startups in India had big initial doses of Chinese investments, but are having to look for non-Chinese sources for subsequent rounds of funding. All these factors have come together to create a perfect storm.
The last two years of Modi’s tenure may bring in the lowest FDI. The government is trying its best to build a narrative projecting India is the fastest-growing economy post-Covid. But the reality is that there is a general decline in FDI flows globally, and India is not bucking the trend.
A lot of hype has been generated to attract FDI in chip manufacturing, with the government offering nearly $10 billion of direct subsidy to the Vedanta-Foxconn combine. This was launched by the PM himself in Gujarat last year. But the joint venture fell apart last week and there is no clarity on how the chip project will be revived. This, and the Micron chip assembly and testing plant announced during the PM’s US visit, are being touted as big potential FDI inflows in this fiscal. But experts in semiconductor manufacturing suggest that such complex foreign technology-led investments will take time to fructify, if at all. Merely throwing large subsidies around is not enough, as the Vedanta-Foxconn experience shows.
Meanwhile, Indian startups are also in a tight corner, as funding dries up and the much-touted ‘100 unicorns’ narrative is also becoming difficult to sustain. They are all drastically restructuring their business models, moving away from high burn rates to enforce profitability and unit economics as global liquidity supporting startups dries up. It has not helped that some of the poster boys among unicorns like Byju’s face serious corporate governance problems.
It appears that tech startups will also not attract much M&A linked FDI this year. Overall, it doesn’t seem like a pretty picture for the Modi government, which is projecting itself as a darling of global investors.
Former chief economic advisor to the Modi government, Arvind Subramaniam, said in his report that India has not been able to raise FDI inflows from the low annual average of 2% of GDP. In fact, in recent years, it has gone further down to 1.5% of GDP. China, South Korea and Malaysia received 3-4% of their GDP as FDI inflows in their high growth phase, says global investor and author Ruchir Sharma. If India were to achieve FDI inflows of 4% of GDP, it would receive close to $150 billion annually. This is nowhere in sight, though PM Modi has made heavy pitches to Japan, UAE and Saudi Arabia for chunky investments in infrastructure via their sovereign wealth funds. Even Modi’s much-vaunted personal rapport with the heads of Gulf states has not brought in the big ticket FDI flows promised during his numerous visits since 2014. An honest appraisal of FDI flows during the last nine years of the Modi government would not present a very happy picture. But as is this regime’s wont, this is easily buried under self congratulatory headlines.
Tacitly acknowledging that 2024 is not going to be a cakewalk, says the Indian Express, the BJP is considering rolling over a quarter of its MPs in UP, the state where it has the best prospects. Even MPs who were giant-killers in 2019 may be denied tickets if they are over 75 (the BJP’s unofficial cut-off age), or have not spent their MPLADS funds in line with the party’s objectives, or are not seen to be well-connected with the people. At especial risk will be MPs who earned controversy after their election, like Ajay Kumar Mishra ‘Teni’, whose son is charged with running over farmers at a protest.
Prime Number: 72% exposed to floods
A report by the Council on Energy, Environment and Water finds that 72% of India’s districts are vulnerable to floods, but only one out of four is equipped with adequate flood forecasting stations or early warning systems (EWS). Assam, Bihar, Uttar Pradesh, Odisha, and Sikkim have implemented the best early warning systems. Himachal Pradesh, which is now battling serious floods, has a fairly primitive system, which undermines its flood-preparedness.
In terms of population, 66% of Indians are exposed to extreme flood events, but only 33% of them are covered by flood EWS. It’s a poor contrast with cyclone warnings, systems for which have been developed quickly as the incidence of tropical storms grew ― one out of four Indians are exposed to bad weather, but warnings reach all of them.
Sanghamitra Chakraborty presents a tourist’s experience of Kashmir where, under the thin veneer of normalcy, the hurt of decades of violence is palpable. But only if you don’t buy the propaganda of the state, and understand that the superficial calm is far from normal.
Opeds you don’t want to miss
“The partner that the US government is cultivating and empowering is one of the most dangerous people in the world — dangerous not as a person but as someone turning the world’s most populous country into a tinderbox,” writes Arundhati Roy in the New York Times.
While trade is the basis of India’s relations with the rest of Europe, its relations with France rest on shared strategic interest, writes Christophe Jaffrelot in Le Monde diplomatique. But are democratic values, on which the US is also reaching out to India, really shared?
In TIME, Sunita Viswanath, executive director of Hindus for Human Rights, reminds Modi that he hasn’t said a word about Manipur though it is on the “verge of civil war”. Perhaps Macron can remind him of his duties.
Fear cannot force the people of Kashmir to respect India’s national symbols or the anthem, says Apoorvanand. And silence does not signify capitulation. It is the protest of the weak.
Opposition unity depends on the regional parties, precisely when they are going through their succession struggles, writes Sobhana K Nair.
Patralekha Chatterjee looks at what it means to have no recent census data.
V Raghunathan argues that India should establish a “National Centre of Reverse Engineering”, to accelerate the creation of wealth and military muscle, just as China has done.
Growing income inequality is not the only reason for the privatisation of essential services, which may be done independently within a neo-liberal dispensation, writes Prabhat Patnaik in The Telegraph.
The nemesis of karma has caught up with “the strongest PM that India has ever had”, writes P Raman. The man who had heckled Manmohan Singh, a dignified man of few words, as “Mauni Baba”, is now forced to be silent about Adani, Brijbhushan, Manipur and, most dangerously, China.
Today is World Snake Day. About 64,000 people die of snakebite in India every year (it’s an underestimate), and fatalities peak during the monsoon. Why aren’t we able to manage this public health issue? In The Hindu’s In Focus podcast, Sumanth Bindumadhav of the Humane Society discusses the role of snakes in the ecosystem, and why they should be protected.
On Karan Thapar’s show, India’s former Ambassador to France Mohan Kumar, who is now Professor of International Relations at Jindal Global University, looks at whether, if at all, Modi has transformed India’s relationship with France. Kumar was ambassador from 2015 to 2017.
Over and out
Walter Kaufmann was a Czech Jew who fled to India to escape Hitler’s Gestapo. He was a composer in Berlin and Vienna, and while he was in Bombay, from 1937-1946, he was director of music at All India Radio (and on the side, Zubin Mehta’s teacher). He composed the signature tune of the public broadcaster, which was played on AIR at 5.55 am every day for 5 minutes, leading into the day’s programme at 6 am. For ages, it was the Indian family’s wake-up call. Over the years, several news sites have carried stories on Kaufmann, who died in the US in 1984, most recently The Better India and Scroll.
Kolkata’s oldest bookshop, Dasgupta & Co, which has been in the hands of a single family from Jessore since they founded it in 1886, is venturing into public service and will transform part of its heritage premises into a free library. Work in translation will be its focus.
That’s it for today. We’ll be back with you on Monday, on a device near you. If The India Cable was forwarded to you by a friend (perhaps a common friend!) book your own copy by SUBSCRIBING HERE.