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Xi Meets Modi on Request, Offers High-Minded Sermon on Ladakh; For INDIA and BJP, 2024 Polls Hinge on Economic Plan, not Rhetoric, Hype
Bhutan and China begin border delimitation, docs shoot down new medical code, criminal bills only one-fifth new, Indian consulate supports expelled Hindutva speaker, ISRO should be less frugal now
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 and Anirudh SK | Editor: Pratik Kanjilal
Snapshot of the day
August 25, 2023
China’s Foreign Ministry said today that at PM Modi’s request, Xi Jinping had met him in Johannesburg. “President Xi stressed that improving China-India relations serves the common interests of the two countries and peoples, and is also conducive to peace, stability and development of the world and the region,” the statement reads. “The two sides should bear in mind the overall interests of their bilateral relations and handle properly the border issue so as to jointly safeguard peace and tranquillity in the border region.” Indian “sources” have responded by saying the meeting was in held following a ‘long pending Chinese request’.
Russian President Vladimir Putin will not participate in the G20 leaders’ summit in India on September 9-10, continuing his streak of being absent from international fora ever since Russia invaded Ukraine. A visit to Turkey may also be cancelled.
NASA’s budget is about 16 times bigger than that of ISRO, which, with a moonshot that cost just $75 million, has cemented its reputation as the global leader in frugal space missions. It is believed to use several hacks to slash costs, one of which is in the public domain ― ISRO missions cut the volume of fuel required, and thereby the size of the craft and engines, by using earth’s gravity like a slingshot. Frugality will help it to dominate the lucrative launch vehicle market, for which the government is likely to allow foreign investment, says Nivedita Bhattacharjee in Reuters. But budgets will have to be larger for future projects like probes to the sun and to Mars, and manned missions.
Business Standard lists the contributions of 16 Indian companies to Chandrayaan-3, from old faithfuls like Keltron and Godrej to new generation companies like Omnipresent Robot Tech.
M. Rajshekhar takes a deep dive into the Adani corporate machine’s acquisitions in the infrastructure sector, looking at the recent purchase of the Gangavaram and Krishnapatnam ports in Andhra Pradesh as well as of Mumbai airport. All were mature assets yet the Adani group was able to get the promoters to sell. In a two part article, he explains how the process worked.
Following a representation by the Indian Medical Association, the National Medical Commission has put on ice its ethics guidelines for doctors notified on August 2, which required them to prescribe generic medicines, not have conferences sponsored by pharma companies, not endorse products and digitise patient data. The sticking point was the insistence on generics which, doctors believe, may not be as effective in India as products of large corporations. Now, the ethical frame of reference dates back to circa 2000.
While discharging three men accused of rioting in 2020 in North-East Delhi, a judge of the Karkardooma Court noted that the investigating officer had filed chargesheets in a “predetermined and mechanical manner” and may have “manipulated evidence”, reports LiveLaw.
Himachal Pradesh will remain under a weather yellow alert all of today. The director of a geological institute tells the Hindustan Times that indiscriminate development cannot be allowed in the hills. A landslide vulnerability map to identify zones at the highest risk needs to be used to plan development and construction.
Bhutan and China’s joint technical team to delimit their shared boundary has held its first meeting. A swap of their disputed territories – which includes Doklam, where India and China stood off in 2017 – will have ramifications for New Delhi, due to the proximity of the ‘Chicken’s Neck’.
Kuki groups say that HIV drugs are being held up on highways passing through Meitei areas, endangering long-term patients in the state.
Kuki-Zo MLAs have publicly refuted a statement made by Manipur Chief Minister Biren Singh that he is in touch with Kuki legislators. “It is hereby clarified by all the 10 Kuki-Zomi-Hmar MLAs that we have not been in touch with CM N Biren Singh since the outbreak of the communal violence in April 2023,” they said.
Nearing completion of early-stage trials, Hyderabad-based vaccine manufacturer Indian Immunologicals Limited expects to commercially launch a dengue vaccine by early 2026, Reuters reports. Other manufacturers, including the Serum Institute of India, are also in the race.
The Telangana High Court has nullified a second MLA’s election in one month. Both candidates had concealed properties in their affidavits.
In the latter half of the Nineties, widespread use of diclofenac painkiller among humans slashed the population of vultures in India, to whom it is toxic. The Economist notes that this was followed by a 4% rise in the human mortality rate in areas where vultures were common. The reason is that carcasses did not completely enter nature’s cycle, and pathogens from necrotic tissue entered the water supply, threatening humans. Literally, there were thousands of extra deaths for want of vultures.
The Kashmir Files, which has been widely panned for using the plight of the Kashmiri Pandits to fuel hatred of Kashmiri Muslims, has won a National Film Award in the ‘National Integration’ category. “Giving the Nargis Dutt Award for the Best Film on National Integration to a film that is divisive changes the meaning of the term. Integration cannot mean subjugation,” says Aakash Joshi.
A schoolteacher in Muzaffarnagar, Uttar Pradesh can be seen on camera getting the boys in her class to come up and slap a boy standing at the front. “Mohammadan [i.e. Muslim] kids are like this”, she says, which suggests the boy is being hit for being Muslim. The local police said they are looking into the matter after the video went viral.
New criminal laws only one-fifth new
Union Home Minister Amit Shah introduced three new criminal law bills to replace the colonial-era Indian Penal Code, Indian Evidence Act, and Code of Criminal Procedure with laws “by Indians, for Indians”. But experts argue that the new bills are neither anti-colonial nor transformative, and are only mild reversions. Plagiarism checks reveal that the Bharatiya Nyaya Sanhita, Bharatiya Nagarik Suraksha Sanhita Bharatiya Sakshya Bill of 2023 share 82-833% of its content with the Indian Penal Code, 1860 the Code of Criminal Procedure, 1973, and the Indian Evidence Act, 1872. Far from reforming the criminal justice system, the bills include numerous backward clauses, favouring increased police authority at the expense of citizens, and are merely “housekeeping exercises”.
Delhi advocate Shahrukh Alam noted that certain provisions are ambiguous and grant greater discretion to the executive: “State violence is concentrated, and practices already occurring are formalised.” “As a legislation seeking to do away with colonial legacy, the language is surprisingly Victorian,” Rebecca John said. She gave the example of Clauses 86-90 in the Nyaya Sanhita, dealing with offences relating to causing the miscarriage of a pregnant woman, which continue to use the archaic description of a woman with child being “quick”. “No one uses such language anymore in Britain, let alone India,” she said. Alam criticised the bills for reiterating and re-emphasising the colonial element of our criminal laws. “The bills don’t engage with the colonial frames in our criminal laws,” she said. “Instead, it makes them more powerful.”
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Why Urban Indians put up with polluted air
Shikhar Singh and Tariq Thachil have a new paper out on the subject of politicians not being held accountable for air pollution. “Against conventional expectation, we find residents are aware of the adverse impact of air pollution, do not privilege growth over curbing emissions, and view elected officials as responsible for fixing this problem. However, partisanship and sensitivity to personal costs of mitigation policies reduce political accountability pressures.”
Green hydrogen industry seeks demand assurance
India’s National Green Hydrogen Mission aims to produce 5 million metric tonnes by 2030, but experts are not optimistic. Critical for meeting India’s target of net zero by 2070, it has an initial budget of Rs 19,700 crore. But the transition to green hydrogen is hindered by high costs, infrastructure adjustments and policy changes which could take a decade to implement. A major obstacle is manufacturing electrolysers, critical for splitting water into hydrogen and oxygen. Global electrolyser capacity is short, raising concerns about infrastructure development. “There are two challenges: how do you bring down costs and how do you build the supporting infrastructure,” Charith Konda, Energy Finance Analyst at the Institute for Energy Economics and Financial Analysis (IEEFA) to IndiaSpend. “Green hydrogen will need high pressure cylinders, pressurised pipes, all this infrastructure has to be built. The industry is saying this is a good mission, but they need demand certainty. Unless guaranteed offtake is there, why should they invest in such a capital-intensive sector?”
India at risk of mass violence
India faces 7.4% chance of a new mass killing by 2023, estimates the Early Warning Project. With risk ranking it 8th highest among 162 nations, the nation faces approximately 1 in 14 odds. The report reads: “Our interactive Change a Country’s Risk Factors tool indicates that if this variable remained the same as last year, India would be ranked first in this year’s assessment with an 11 percent increase in risk. In 2022, the Hindu nationalist-led government’s systematic discrimination against the country’s Muslim minority has continued to intensify amid mounting reports of violence — met with impunity — and efforts to restrict Muslim rights. Hindu nationalist leaders have continued to propagate hate speech, including religious leaders’ calls for mass killings of Muslims in December 2021. Several states saw large-scale and violent incidents targeting Muslims in recent months, which involved Hindu nationalist processions engaging in derogatory anti-Muslim chants and the desecration of mosques.”
Gang warfare ravages Rohingya camp in Cox’s Bazar
Cox’s Bazar, a haven for Rohingyas escaping the military crackdown in Myanmar, which is now the world’s biggest refugee camp, has been turned into a dystopia by drug smuggling and human trafficking gangs. “There are a million people without any opportunities. That creates space for criminals. They are violent and need to be held to account,” Meenakshi Ganguly, deputy Asia Director at Human Rights Watch tells BBC.
Gang violence killed 48 this year up to mid-July, surpassing the 2022 toll. The Rohingyas’ frustrations are exploited by armed groups like ARSA and RSO. UN and aid agencies struggle with reduced funding, and Bangladesh’s resources are strained and the ultimate solution is repatriation to Myanmar. Though lauded for its refugee support, Bangladesh is grappling with dwindling aid and escalating challenges.
The Long Cable
For INDIA and BJP, 2024 polls will hinge on an economic plan, not rhetoric and hype
The BJP government at the Centre projects ‘positive optimism’ and ‘strength’ for those betting big on India’s rising growth potential. As we near the 2024 Lok Sabha election, we’ll hear a lot more rhetorical activism, hype over reality, fiction over fact, around what the Modi Government did right to make India a ‘shining’ star amidst a darker universe of struggling, recession-affected, debt-ballooned economies. But a closer look at the Indian economy’s own macro numbers reveals a different picture.
Gross Fixed Capital Formation, which reflects the productive capacity and (private) investment scenario for an economy, has been on a volatile-declining trajectory for India post 2021. Higher volatility in GFCF also reflects weak investment demand and lower capacity utilisation by firms. While services have recovered reasonably well since the pandemic, industrial production and manufacturing growth remain woefully inadequate in creating quality jobs and a better growth environment.
The increase in loan growth or supply of loanable funds may be aiding the volatile rise of GFCF numbers, but a lot remains unclear on the ‘realised growth potential’ as much of these numbers haven’t actively contributed to a sustainably higher growth trajectory. At the same time, a rise in loanable funds will result from the RBI’s monetary policy and the Union government’s fiscal policy. So far, amidst rising inflation, higher interest rates (that affect borrowing-lending patterns) will reduce the ability of banks to provide cheaper credit to the private sector.
If we look at the numbers more closely, India’s core inflation rate was higher than the bank loan growth from late 2019 till mid-2022, and since then, loan growth has jumped higher than the inflation rate.
Over the last few weeks, though, a higher inflation rate is threatening the banks’ ability to continue providing more credit under the RBI’s status quo (in interest rate). On food inflation, price patterns have remained extremely volatile (reflected in a higher variance from the mean) and made the basic household consumption basket more expensive for the average income earner. This isn’t a recent phenomenon.
CPI has continuously gone up since 2014 under the Modi government, amidst stagnating and falling incomes for the middle and lower income/consumption classes (see here). While the rural economy totters in a recession-style slowdown, price rise has made the situation for low income earners worse. It is also severely hurting the ability of India’s urban middle income earners to save, which is essential for creating liquid deposits with banks (which turn it into credit).
WPI (Wholesale Price Index), on the other hand, has been sharply declining from post-2022, which signals a deflationary spiral accentuated by a demand-side problem affecting the manufacturing/industrial sector. Private firms are less optimistic (contrary to the PM and FM’s optimistic rhetoric on India shining) and aren’t investing big capital in new production capacity, when foreseeable demand for consumer and capital goods isn’t picking up.
Most private investment is being anchored by select big capital business groups (from Adani to Ambani) that have a monopolist advantage (from existing wealth endowments) for the purpose of acquisition of ‘new asset frontiers’ ― for business expansion, not for capacity building for growth expansion. It reflects the regressive alliance between big capital and the Indian state (signalling the rise of high cronyism and oligarchic capitalism).
Exports have risen, but at the cost of imports. The current account to GDP levels have worsened to pre-2014 levels, from before the BJP came to power. This reflects a failure in India’s industrial and trade policy to pivot towards areas where it has competitive and comparative advantage. This author has repeatedly argued the potential for India’s rapidly growing service sector to not only contribute more to exports, but also to jobs and overall growth.
Three principal challenges for the next government for prioritising economic governance and social cohesion for a healthy economy would relate to:
1) boosting the macro-employment rate for all; 2) raising private investment across sectors in a sustainable way (especially in labour-intensive, job-creating areas); 3) tackling the high variance in core and food inflation, while managing the rising government debt for a fiscal consolidation plan.
India’s tryst with jobless growth has been prolonged through the Modi government’s term. Growth in good paying jobs (in the organised sector) hasn’t happened at the expected rate or pace, nor has it been a priority for the government to address this in fiscal and budgetary allocations.
On the contrary, rising government capex has come at the cost of lowering allocations for job security-based welfare programs like MGNREGA. States have limited resources and tools to channelise resources towards worker-intensive growth plans, or create jobs by their own fiscal interventions.
A lot of change has to come, and it must be driven by the Central government, which under Modi-Sitharaman has failed to even acknowledge that ‘job creation’ and high unemployment are challenges. A job-focused social security plan is also an immediate need.
Point 2) has been raised and discussed earlier. This essay, written earlier, provides a detailed context-dependent analytically summary of where the private sector has failed to align itself with the government’s fiscal push. In short, higher capex-based spending outlay hasn’t really crowded in private investment. Thousands of crores spent on the PLI scheme hasn’t yielded positive growth or job dividends.
Point 3), on the debt concern needs closer attention. When central spending is proliferating (as a percentage of GDP), and the government continues to squeeze the fiscal autonomy and borrowing capacity of the states (particularly the Opposition-run), external debt borrowings and the government’s debt to GDP numbers are a cause of concern. It not only raises questions about the effectiveness of a pre-designed fiscal consolidation plan, but also on the viability of the BJP government’s spending preferences.
One may continue seeing the central government spending more on PLI at the cost of welfare programmes, nutrition schemes, along with other social capital needs: healthcare and educational spending, but, with rising concerns about government debt, the fiscal space for the government to do more on capex and welfare may shrink after the election.
At least on the economic front, the BJP government (to come back to power), and the Opposition (to defeat the BJP), may both require a clear, cohesive, economic plan and theory of economic change to address present structural problems in the medium to longer term, while offering more than hollow optimism and rhetorical hype.
(Deepanshu Mohan is associate professor of economics and director, Centre for New Economics Studies, Jindal School of Liberal Arts and Humanities, OP Jindal Global University)
In a widely circulated video of PM Modi with South African President Cyril Ramaphosa in Johannesburg, while talking about ISRO’s feat on the moon, he said that India had finally landed on the “south part of China” before he could correct himself. The Modi government has steadfastly refused to tell the nation about the dark side of Ladakh. No structured discussion or Parliamentary question on China has been allowed in the Lok Sabha since trouble broke out in April 2020. But China is clearly top of the mind. Modi was also heard telling Ramaphosa that Russia failed to do what India had now done.
Prime Number: $346 billion
With a spend of $346 billion, India had the fourth biggest fossil fuel subsidy in the world in 2022, in absolute terms. But the pockets of motorists were set on fire and inflation remains punishing because the per capita subsidy is very low. Go figure.
The Indian consulate in Chicago tried to pressure the Parliament of World Religions to reconsider their decision to axe Nivedita Bhide from the global interfaith conference, says Azad Essa in Middle East Eye. “India analysts and academics told MEE that the letter illustrated the Indian government’s sensitivity to any criticism as well as its guardianship of Hindu nationalism on the world stage.”
Opeds you don’t want to miss
“In its long journey, ISRO is still in the mode of improvising technologies… The big challenge now is to get into the scientific breakthrough mode,” says Parsa Venkateshwar Rao Jr.
Kancha Ilaiah Shepherd explains why we must rebel against Bibek Debroy’s proposal for a new constitution.
The BJP has reopened the debate on caste among Muslims, but Muslims are less differentiated along class and caste lines than Hindus: While Hindus form an extremely unequal community, with upper castes being very resilient net gainers, Muslims are experiencing collective deprivation, write Christophe Jaffrelot and Kalaiyarasan A.
It would not have been difficult to influence the CAG – led by an officer from the Gujarat cadre – to sound the all-clear in the accounts of the Dwarka Expressway. But the Modi government chose to put Gadkari in the box, says Vivek Deshpande, amidst talk of his cold war with Modi.
When Amit Shah blamed the violence in Manipur on the influx of refugees from Myanmar, he endorsed, “the divisive rhetoric propagated by the Imphal-centric political class and civil society who lay all blame for the violence in Manipur on the state’s Kuki community,” writes Angshuman Choudhury in Frontline.
In the Berkley Forum at Georgetown University, Kalpana Jain provides a crash course on how the Modi government has taken over the discourse, from controlling the coverage of newspapers to changing the contents of textbooks.
“If we turn to the US to learn about bigotry and lynchings, we must turn to China to learn of murders in the name of a paramount leader,” says Omair Ahmad about RPF constable Chetan Singh’s train slayings.
“Art binds people to each other but sometimes when prejudice starts informing the craft, cinema becomes a tool to shape hostile propaganda against a community. Some are blunt, others are sharp,” writes Anuj Kumar.
Raza Ahmad Rumi analyses the turmoil in Pakistan and the political future of Imran Khan. Can the former PM make a political comeback, or has his confrontation with the Pakistan Army and ISI brought his career to an end?
Harsh Mander, activist and author, speaks to lawyer and author Arvind Narrain, and journalist Priya Ramani, about his book Burning Pyres, Mass Graves and a State that Failed its People.
Over and out
The British Museum, a fine repository of the spoils of the clash of civilisations, has had hundreds of small items stolen from its display cases since 2013. Their provenance is largely unknown, but since they date from the 15th century BC to the 19th century AD, South Asian artefacts very likely figure in the loot.
Ironically, the museum has always responded to demands for the repatriation of heritage objects ― even Melina Mercouri’s high-profile campaign in the 1980s for the return of the Elgin Marbles ― that they are safer in its hands. Now, the UK Telegraph reports that Despoina Koutsoumba, director of the Association of Greek Archaeologists, has said the institution can no longer persist with its claim. The Greeks are quite sure that their heritage has been lost in the heist.
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