The India Cable: Bengal Polls Explain Rate Cut ‘Oversight’; India Shoots Down Sputnik V

Plus: India's attempt to deport Rohingya girl fails, US Hindutva groups get Covid funding, Nagas ‘flag’ problem, Sachin in hospital with Covid-19 and Kochi is workplace of the future

From the founding editors of The Wire—MK Venu, Siddharth Varadarajan and Sidharth Bhatia—and journalists-writers Seema Chishti, Sushant Singh and Tanweer Alam. Editor: Pratik Kanjilal

Snapshot of the day
April 2, 2021

Pratik Kanjilal

Al Jazeera reports that four organisations with links to Hindu supremacist groups were among five Hindu bodies that have received Covid-19 relief funding of $833,000, according to the US government’s Small Business Administration. They are the Vishwa Hindu Parishad of America (the Indian VHP is designated a religious militant organisation in the CIA World Factbook), the RSS-affiliated Ekal Vidyalaya Foundation, Hindutva ideologue Rajiv Malhotra’s Infinity Foundation and SEWA International. The fifth group, the Hindu American Foundation is not known to be linked to the Sangh parivar though its stand on caste discrimination in California is controversial . Earlier, the South Asian Citizen Web had found that US charities donate millions of dollars to RSS-affiliated organisations. 

The Modi government has extended the Armed Forces (Special Powers) Act in three districts of Arunachal Pradesh besides four police station areas in three other districts bordering Assam by another six months, declaring them “disturbed” in view of continuing activities of banned insurgent groups. 

At the Haridwar Kumbh, unhappy with arrangements at their camp, sadhus of the Nirmohi Akhada have assaulted a mela official. It is clearly a violation of pandemic norms on social distancing. Earlier, of course, Tirath Singh Rawat, CM of Uttarakhand, had said the faith of devotees will overcome fear of Covid.

The Gujarat Assembly has passed a law against inter-religious conversion by marriage as part of the BJP’s political agenda of communal polarisation, while Narendra Modi took a Hindutva majoritarian line during his campaign in Bengal. Normally, it would have qualified as a violation of the Model Code of Conduct by the BJP leader, but not in the Election Commission’s new normal

In a humiliating move which points to an absence of leadership in the Modi government, the Finance Ministry has issued a formal order for withdrawal of a cut in interest rates on small savings schemes. As we reported yesterday, the announcement of the U-turn on a detailed order issued on Wednesday, which was described as an “oversight”, was made on Twitter yesterday morning by the finance minister. 

The farmers’ protest is going strong. Haryana’s deputy chief minister was forced to fly 8 kms from Hisar airport to the town as farmers had blocked the road and were raising slogans that were too embarrassing for Dushyant Chautala to face. 

Plans by the Indian government to assign digital identification numbers to plots of land could exclude rural and indigenous people who do not hold title, and further marginalise those without internet access. The 14-digit Unique Land Parcel Identification Number (ULPIN) was launched in 10 states earlier this year and will be rolled out across the country by March 2022, authorities at the Department of Land Resources told Parliament this week. 

India yesterday joined a growing number of countries demanding a comprehensive investigation into the origins of the Covid-19 outbreak in China as it backed the World Health Organization chief’s proposal to deploy additional missions. Issued separately from the joint statement of 14 countries led by the US, the Indian statement supports many of its elements. The joint statement had named China but the Indian statement is carefully worded and does not name China. No surprises there. Even when 20 soldiers were killed by the Chinese in border clashes, Prime Minister Modi had not named China. At the UN, India took a stance on Myanmar, denouncing the violence there (while deciding to deport Rohingyas on the same day). 

India may have to review its vaccine code, and quickly. Persons aged 18-45 accounted for more than 50% of the Covid-19 cases in Tamil Nadu, Health Secretary J Radhakrishnan has said. Today’s data shows a single day rise of 81,466 new Covid-19 cases, while 469 fatalities have pushed the death toll to 1,63,396.

The demand for diesel in March 2021 rose 28% over March 2020, the month of the sudden lockdown, but a more realistic comparison with March 2019 shows that demand for diesel, a bellwether for economic activities, still fell short by nearly 5%

US President Joe Biden has let the ban on foreign workers’ visas, in particular H-1B, lapse as the notification issued by Donald Trump expired. This will benefit thousands of Indian IT professionals. 

Argyreia sharadchandrajii, a new flowering plant species discovered recently in Kolhapur in western Maharashtra, has been named after Sharad Pawar for “his immense contribution to Indian agriculture” as Union minister. Kochi in Kerala has been identified as one of the 21 places in the world to look out for, in a Cognizant white paper on the future of work. And Sachin Tendulkar has Covid-19, and is in hospital as a matter of caution.

Myanmar refuses Rohingya deportee, Mizoram wants foreign policy change

The Modi government’s deplorable attempt to deport a 14-year-old girl from Assam to Myanmar failed when Myanmar refused to accept her. A team of Assam Police from Cachar district accompanied her to the Indo-Myanmar border in Manipur’s Moreh, where she was supposed to be handed over, but the immigration department of Myanmar refused to open the gates. The girl is not willing to go to Myanmar as her parents are in Bangladesh, but was being forcibly deported to Myanmar. The UN human rights office and the UN refugee agency have called on Myanmar’s neighbours to offer refuge and protection to those fleeing violence and persecution.

Mizoram Chief Minister Zoramthanga has said that he would ask the Modi government to change its foreign policy to accept refugees fleeing military oppression in Myanmar. He further said that the “people who came from Myanmar are our brothers and sisters. We have family ties with most of them. And once they come to Mizoram, we have to give them food and shelter from the humanitarian point of view. We want Myanmar to be a democratic government and not a military government.” Kerala Chief Minister Pinarayi Vijayan has this to say about the big lesson from Myanmar: “Let's not be under the false impression that CAA-NRC's detention camps are meant only for a certain community. Myanmar's example is before us. Anyone who isn't preferred by the ruling dispensation can end up in it. That's how fascism works. Secularism shouldn't be compromised.“

Adani’s Myanmar connection under fire

The Adani affair with Myanmar gets murkier. A joint media release by the Australian Centre for International Justice and Justice for Myanmar alleges that in response to the March 30 report ‘Port of Complicity: Adani Ports in Myanmar’, on Adani Ports’ business with the Myanmar military, the company had issued a factually misleading statement that omitted its links to military-controlled conglomerate Myanmar Economic Corporation (MEC). Adani Ports leased land from MEC for up to US$52 million. “Adani Ports’ direct business with MEC exposes shareholders to major international law, corruption and reputational risks,” the report says. 

Yesterday, the UK announced further measures targeting the Myanmar regime: “The sanctions against [military-linked conglomerate] Myanmar Economic Corporation (MEC) have been enforced for its involvement in serious human rights violations by making funds available to the military, as well as its association with senior military figures. Designating MEC will prohibit funds and economic resources being made available to any subsidiaries ‘owned or controlled’ by MEC as defined by the Global Human Rights sanctions regime.”

India shoots down Sputnik V 

Indian authorities have denied emergency use authorisation to Russia’s Sputnik V coronavirus vaccine. Following a surge in coronavirus cases in the national capital, all schools in Delhi will remain closed until further orders. Speaking on the danger of Kumbh becoming a super-spreader event, Dr K Srinath Reddy told the Financial Times, “If people can work from home, people can pray from home. There is no reason to believe that piety has to be an outdoor public event.” 

India aims to vaccinate 250 million people by the end of July but experts say the pace needs to pick up further. Two testing laboratories in Surat, Gujarat, have been shut down for issuing fake Covid-19 negative certificates.

Trade moves stumped, India, Pak will play cricket

The attempt by PM Imran Khan of Pakistan to reboot trade with India, beginning with cotton and sugar imports, proved to be a non-starter. Pakistan Foreign Minister Shah Mehmood Qureshi said the decision has been deferred, and normalisation of ties is impossible until decisions taken on Aug 5, 2019, are reconsidered by India. There could be another rethink today. But Indian and Pakistan blind cricket teams will definitely play each other in a three-nation T20 series in Dhaka. The Pakistan Blind Cricket Council has said that Pakistan, India and Bangladesh will take part in a three-nation event in Dhaka from today. “Pakistan and Indian Blind teams will face each other on April 4,” one official said.

On April 5-6, Russian Foreign Minister Sergey Lavrov will visit New Delhi for talks with Foreign Minister S Jaishankar. But he will then visit Islamabad for a similar duration. US Special Presidential Envoy for Climate John Kerry will travel to New Delhi, Dhaka and Abu Dhabi April 1-9. He will hold consultations on increasing climate ambitions ahead of President Biden’s Leaders Summit on Climate, scheduled for April 22 and 23.

Joblessness rises 

The urban unemployment rate climbed to 7.24% in March, 25 basis points higher than the previous month, according to monthly data of the Centre for Monitoring Indian Economy. The already high female joblessness rate in urban areas has also climbed almost two percentage points to 19.07%. The labour force participation rate (LFPR), adults who are working or actively seeking employment as a proportion of the working age population, in urban India also fell, indicating the poor health of the labour market. It shrank by almost 3 million people in March compared to February, CMIE data showed.

Court corners BJP, UIDAI on Pondy Aadhaar leak

Refusing to accept the BJP’s explanation that its workers collected mobile numbers of voters door-to-door for campaign communications, the Madras High Court has taken a serious view of the allegation that bulk promotional SMSes sent by the BJP in Puducherry were only to Aadhaar-linked mobile numbers. “The UIDAI is required to answer how details and particulars furnished to it and in confidence by citizens in the hope that confidentiality would be preserved… [it] may not have been able to respect such confidentiality,” the court said. It also reminded the Election Commission of its own stand in the action taken report that it is under Constitutional mandate to protect voters’ privacy. The Court has been informed that the EC is considering whether the BJP in Puducherry has violated the Model Code of Conduct. 

The Long Cable

Poll-bound states among biggest small savers, forced FM to withdraw rate cuts

MK Venu

West Bengal, where two out of eight phases of polling are over, is seen as the bellwether state in the ongoing Assembly elections, and its results will be read as the political balance sheet of the BJP. Also, it accounts for 15% of national gross small savings collections, the highest in India. West Bengal and three other states where elections are underway account for 25% of total small savings. That explains why the Finance Ministry withdrew within 24 hours its decision to cut interest rates on PPF and NSC deposits by nearly 100 basis points. Mind you, this was on top of the 100 basis points plus cut on small savings deposits in March 2020. 

India is a poor country, and most Indians still put their money in small savings and bank deposits. Less than 4% are invested in the stock markets, which heavily influence all critical economic policies. Since over 96% of voters are invested in small savings deposits, the Modi government realised it would be imprudent to cut interest rates during elections. Hence the quick backtrack. After the polls and before the UP elections due early next year, a cut in the small savings rate is not ruled out. UP accounts for 11% of total national small savings ― a substantial figure, though much less than West Bengal’s. 

This is the new economic theology of the Modi sarkar ― keep interest rates at rock bottom in the name of reviving the economy, and thus improve corporate balance sheets. The stock markets have already given a thumbs up to this policy. It doesn’t matter that such low interest rates erode ordinary people’s incomes. 

Policy is supposed to balance the needs of the fixed income saver and the corporate borrower. However, post pandemic, a new theology has emerged ― low interest for corporate/individual borrowers at any cost. Forget about the real income of the small saver or bank depositor, which has actually turned negative in the same period due to inflation. Prices of oil, metals and other commodities are rising gradually. There is upward pressure on 10-year government bond yields in India, as well as in the US, due to rising commodity prices. Yet, the government seems determined to further cut the small savings rate for depositors! 

The preponderance of the stock market in determining economic policy is well-known.

The Modi government has been obsessed with bringing down interest rates as a supply side measure to improve corporate balance sheets. The interest cost of the BSE 500 companies has dropped substantially in the last one year as the Reserve Bank of India has ensured massive liquidity injection and has kept 10-year government bond yields as low as possible by promising to subscribe to about 40% of the Centre’s net borrowings. RBI believes that keeping 10-year government bond rates low will help keep all other interest rates low. The small savings rate is supposed to undergo quarterly adjustment linked to the government bond rates. 

While the Centre’s focus remains on supply side measures to kickstart the economy, very little thought has gone into the real incomes of ordinary people, which are substantially eroded according to many credible surveys. The RBI’s periodic consumer confidence survey also confirms this. The inequality survey recently released by the Pew Research Centre in the US confirms that millions of households have either slipped below the poverty line or below the middle class income bracket. This is bound to have a profound negative effect on aggregate demand in the economy. 

In the midst of such wanton income destruction, the government continues to rely on more supply side measures like cutting interest rates, with little regard for the fortunes of small savers and bank depositors. The Modi government believes these deep supply-side measures are creating a ‘V-shaped’ recovery. But data released for February shows a negative growth of 4.6% in eight key core sectors.  

The reality is that the government’s supply-side theology is floundering badly, as people’s incomes and savings remain depressed and the poor prospect of new employment or incomes is making things worse. 


Not by Hindu-Muslim alone

The Rs 10 rate cut on cooking gas cylinders, an embarrassing U-turn on the interest rate of small savings, declaring Ambedkar’s birth anniversary an official holiday, and the prestigious Dadasaheb Phalke award for Tamil superstar Rajinikanth in the last 24 hours is a sign that the BJP realises there is limited attraction for its majoritarian communal agenda and that it needs to focus on other issues and concerns during the ongoing assembly elections. As the economy flounders, overtures are made to Pakistan, Chinese troops remain deployed on friction points in Ladakh and the second wave of the pandemic rages, Hindu-Muslim polarisation can only take the party so far.

Prime Number: 20%
That is the percentage of passenger trains which have resumed service as special trains after the lockdown was announced due to the pandemic in March last year. In addition, 77% of mail and express trains and 91% of suburban trains have started running but again, as special trains. They have higher fares, offer no concessions except in certain categories and operate as fully reserved, no-frills services. 

The Railways plan to resume all train services to pre-Covid levels over the next two months but they will all be run as special trains. They seem to be following the PM’s dictum of “aapda mein avsar”, and maximising profits from the service which has historically transported billions across India at very affordable fares.

Nagas ‘flag’ the problem: ‘agreement’ is actually deadlock

The Modi government had claimed a ‘historic’ agreement with India’s oldest insurgency, the Naga insurgency, early in its tenure. But matters continue to deteriorate there. Now, the NSCN-IM has said that the “serious deadlock” on the Naga political issue after more than two decades of political dialogue is a matter of “diplomatic error”. “The Naga national identity, symbolised by the Naga flag and Constitution cannot be sacrificed,” the group said in its statement.

Deep Dive

Why Thunberg matters

Greta Thunberg, the teen climate activist who tweeted in favour of the farm protests and originated the ‘toolkit’ which led to the arrest of young Bangalore activist Disha Ravi, has a unique effect on her audience, according to a study in the Journal of Applied Social Psychology. “There are a lot of people who think she has done nothing,” says Anandita Sabherwal, lead author of ‘The Greta Thunberg Effect’, and a doctoral student at the London School of Economics. “Our research shows that is not true, that she has changed [people’s] mindset.” Sabherwal’s paper found that people who had heard of Thunberg were likely to feel a stronger sense of “collective efficacy”. The sample size was about 1,300 US adults, but Sabherwal thinks the effect may be even more pronounced in young people, who were not included in the survey.

Nambi biopic heads for release 

Actor Madhavan plays Nambi Narayanan, the cryogenic engineer at ISRO who was falsely accused of espionage, in R Madhavan’s epic biographical drama film Rocketry: The Nambi Effect. The trailer was released yesterday.

Does China understand India?

Zhang Baijia is former deputy director of the Party History Research Office of the Chinese Communist Party Central Committee, with affiliations to Peking University,  Renmin University and CASS. He delivered a talk at Tsinghua University’s diplomatic history workshop in October 2020 on ‘China’s Frontier and Asian Studies’. He devotes some time to India, trying to understand why China’s research about its neighbours is so weak. 

David Cowhig, former US State Department official and a China expert, blogged about the talk, and this bit stands out: “At the time of the 1962 China-India War, the PRC seriously overestimated India’s military strength. The result of the war was deep resentment on the Indian side that made border issues even harder to resolve. Another problem is that China does not understand India.”

Op-Eds you don’t want to miss

  • Karan Thapar explores the utterances of BJP leaders ranging from the Prime Minister to the least known MLA, which include the offensive and the ludicrous and cover subjects as varied as religion, mythology, history, couture, cuisine, aspects of the cow and, of course, sex.

  • A new rail line from Sichuan to Tibet will pose a security challenge to India as it will help China mobilise the 77th Group Army and consolidate its hold on the border defence villages along the Sino-Indian border, writes Suyash Desai.

  • Sherry Rahman, Pakistani Opposition politician and former minister in PPP-led administrations in the past criticises the Imran Khan government’s (stillborn) overtures to India. “Before unilateral or backchannel-led steps are taken by Islamabad to move further into terrain it has not been able to manage,” she says, “a clear-eyed assessment of a policy review is needed”.

  • Gaurav Jain and Raghav Chopra write on the need to regulate the use of artificial intelligence by police in India. The prevalence of deep-rooted biases makes it harder to expunge the societal prejudices of the designers of these programmes from the data and the technologies they develop.

  • A slick action movie functioning as a propaganda vehicle, selectively calling upon particular aspects of the Indian film formula ― that’s the future of the Indian war movie, writes Samir Chopra.

Listen Up

Evaluating elections

Bilal Zaidi, founder of the political tech start up, in conversation with Sweta Daga, gets to the brass tacks of the electoral campaign system in India. This conversation evaluates ongoing practices – which are looked upon as tradition in our electoral democracy – their shortcomings, opacity and often, poor accessibility to citizens.

Watch Out

What Biden means

Edward Luce, US national editor and columnist at the Financial Times, talks about the dynamics of US politics, and the impact of the newly elected US government on the world, especially India. He delivered the annual Girish Karnad Memorial/Kamaladevi Chhatopadhyay Lecture

Over and Out

The ICC cricket committee, led by Anil Kumble, has made changes to the way LBWs will be adjudged under the Decision Review System (DRS), introducing a slight increase to the area of the stumps a ball must be shown to be hitting for a not out decision to be overturned. This ‘wicket zone’ will now be extended all the way to the top of the bails, having previously gone only to the bottom of the bails, which is why deliveries just clipping the bails ended up returning an umpire’s call verdict. The umpire’s call in the DRS debate was in the spotlight recently, when India captain Virat Kohli claimed it caused a lot of confusion.

Laxmibai & Bendre ― in Dharwar, a couple went retro for their pre-wedding photoshoot. The photographer is an MBA, formerly with an MNC, who has turned his hobby into a calling. 

And the temple of King Ashoka is in Ningbo, China. It reportedly contains a piece of the Buddha’s skull but to see it, you have to follow a gamified registration process that involves reciting the Heart Sutra three times ― in Chinese. 

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.