Friday’s clashes in Patiala, one of the most important cities of Punjab, between two groups owing allegiance to different political parties could become the first major test of the new Chief Minister, Bhagwant Singh Mann. Supporters of the Aam Aadmi Party have claimed that certain vested interests were attempting to destablise the State government after their humiliating defeat in the recent assembly polls. They have alleged that the right-wing Hindu extremists including the BJP and expelled Shiv Sena leader, Harish Singla on one hand and followers of the Shiromani Akali Dal on the other, were responsible for these clashes. To send a stern warning to the miscreants, Mann has made it clear that there shall be zero tolerance for infringement which is aimed at disturbing the harmony and tranquility of the state where Hindus and Sikhs have co-existed for centuries.
He ordered the immediate transfer of senior police officials to send down a strong message to the force and has warned that any kind of violation of the rule of law would be dealt with sternly. The police have also registered five FIRs and the main accused behind the conspiracy has been identified and arrested. The BJP has come out and accused the AAP of being hand in glove with pro-Khalistani elements who wanted to create disturbances. Their assertion is that even before the elections, separatist groups from North America, Australia and Britain had extended their support to AAP. There was certainly a well-calculated conspiracy that could have its genesis in Pakistan where the ISI has been for years trying to create problems in the border state. Patiala is a historic city and was once the bastion of Captain Amarinder Singh and his family. It is also the home town of his bête noire, Navjot Singh Sidhu. Thus, for a curfew to be imposed in this place with internet services being suspended is something very serious. Punjab has gone through very difficult times in the 1980s and 90s and the earlier situation cannot be allowed to be repeated.
Detractors of the AAP feel that the new government was packed with inexperienced leaders who had negligible administrative acumen and could not thus administer this volatile region. However, it must be clearly understood that the AAP government would need time to settle down. Such incidents would test its patience and prowess. In the end, the government has to ensure the safety and security of all the citizens. The state is under huge economic debt and over the years, has seen the rise of substance abuse by the youth. Narcotics and arms smuggled from across the border have added to the problems and the ruling dispensation has to be extremely careful of these transgressions. The administration must crackdown on the miscreants and not allow them to do anything contrary to the rule of law. The responsibility on the shoulders of Mann and his colleagues is enormous and they have no option but to rise to the occasion and deal with the issue effectively and firmly. The country cannot afford to have instability in Punjab when the Centre is trying to straighten things up in the adjoining region of Jammu and Kashmir. Both the Centre and State must work together to meet the challenge of any external threat but maintaining peace in the region is primarily the responsibility of the State government.
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My brush with the PMO: Part 2
As I mention in my book, “Not Just A Civil Servant”, the real coal story wasn’t about the successful coal block auctions. It was about the record increase in coal production. In 2014, there were on an average more than 25 power plants that were declared critical daily for want of coal. This changed dramatically in subsequent years as the coal production rose by 33 million tonnes (which was more than the cumulative increase during the past 4 years) during 2014-15 and further by 44 million tonnes during 2015-16. By 2016, there was not a single power plat critical on account of shortage of coal. We were even toying with the idea of exporting coal to Bangladesh. This increase in production created another set of problems.
There were a select few “privileged” power producers who now wanted to make a “fast buck”. These generating companies had bid for tariff and they were supposed to make arrangement for coal themselves. Coal India Limited (CIL) was obliged to supply coal at the notified price (a price below the market price as this was adjusted in the tariff. The benefit of lower price was not retained by the generation company but passed on to the state-owned distribution companies) only to such power generating companies with whom they had prior agreement. There was no obligation to supply coal at notified price to these “privileged” few. These “privileged” power producers had succeeded in getting a special dispensation for themselves during the UPA regime when there was acute shortage of coal. Ironically the Comptroller and Accountant General who had gone to town with the irregularities relating to coal block auctions chose to remain silent on an equally scandalous dispensation being given to sect set of industrialists.
By 2016 coal production had increased substantially. In almost every meeting convened by the PMO whether relating to coal or otherwise, I was asked why was I not giving linkages to these “privileged” industrialists. Ultimately, I sent a note to the Principal Secretary raising following issues:
Should CIL coal be supplied at notified price to such entities?
Would not the benefits of concessionally priced domestic coal lead to undue gains for them as the Power Purchase Agreements were not signed on the basis of assurance/commitment of notified price coal?
Wouldn’t allotment of linkages to these tantamount to grant of undue favour or preferential treatment when there is no legal or contractual obligation to supply notified price coal to these plants?
Would this not amount to favour to the successful bidders (in PPA bidding) as bid conditions would be changed after the bidding process?
Would not assignment of linkages to such entities that did not bid in coal block auctions or did not win a coal block after bidding amount to gross disfavour to those that participated and won coal blocks in auction?
In subsequent meeting at the PMO when the issue came up for discussion yet again and I referred to the note that I had sent, I was given a dressing down that the PMO doesn’t take decisions. How true it was! Yes, we were told very clearly that PMO should not be mentioned in any decision that is taken by the Ministry/Department. Lessons were learnt from the mistakes of the previous government.
However, I stuck to my guns. And, I was moved from dark dungeons of coal mines to the bright lights of school education. Or, so I thought.
My visits to the PMO became few and far between as it was evident that school education was not high on the priority of the Government. The budgetary allocation for school education had kept coming down since 2014-15. It was Rs 55,115 crore for that year and as a percentage of GDP it was 0.52. For the year 2016-17, it came down to Rs 43,554 crore (0.36% of GDP). In one of the rare school education meetings at the PMO when I brought this to the notice of the participants, normally unflappable Mr P K Mishra got very annoyed. He appeared to be convinced that I was not providing the correct figures. There were indeed many occasions when those at the PMO were not prepared to face facts. I wondered how would they then convey facts to the PM.
It happened just three months before superannuation. There were a couple of paper leaks in the examination being conducted by the Central Board od Secondary Education (CBSE). The media was baying for Anita Karwal’s blood. She was Chairperson, CBSE. As she had chosen to set things in order in CBSE, a set of mafias were after her. (The entire story is narrated in “Not Just a Civil Servant”). After ascertaining the details, I was convinced that neither she nor the CBSE was to be faulted. It took some effort to convince the Minister who initially wanted to shift Anita to “diffuse” the crisis. Despite being convinced subsequently, he still wanted to take the PMO into confidence (A culture that had evolved over a period of time). Mr Nripendra Mishra was always available for guidance and this day was no different. Despite the short notice, he gave us time. A meeting was held at the PMO on 30th March. Mr Mishra backed my stand and asked me to go ahead to brief the media later in the afternoon but only after I had received the PM’s clearance through the PMO. I also suggested announcement of the future course of action with regard to the two papers that had leaked. This too was agreed upon. We now had something concrete to tell the media. The economics exam of class 12 was to be re-conducted and the decision on Mathematics paper for class 10 was to be taken subsequently on the basis of an enquiry into the extent and impact of leakage. The logic was simple. The class 10 exam was like an internal exam with virtually no implication on future admissions. Class 12 had much greater implications. (Subsequently, post enquiry, it was discovered that the class 10 paper leak was neither widespread nor did it have any impact on the outcome. Hence, no re-examination was done in this case and around 16 lakh children were saved from the trouble of having to appear again).
The press conference was originally scheduled at 5 pm on 30th March. The entire media was waiting for me but I was eagerly awaiting the clearance from the PMO. With every passing second, the suspense grew as everyone waited with bated breath. The clearance finally came at around 6 pm. This press conference was unarguably the toughest I ever had. Later I noted in my diary, ’The Conference took place in the afternoon in a packed hall. The aggressive posture of the media reflected angst. Fortunately, in the hour-long interaction I kept my cool and handled the questions reasonably well. One could clarify the approach of the government and the purpose seemed to have been served”. It was perhaps much more than that. It was the severest of all tests in my career.
Excerpted from “No More a Civil Servant”
Anil Swarup has served as the head of the Project Monitoring Group, which is currently under the Prime Minister’s Offic. He has also served as Secretary, Ministry of Coal and Secretary, Ministry of School Education.
RAHUL’S IDEAS FOR INDIA ARE NOT WELL FORMED
Among the many comments that Rahul Gandhi made about India’s socio-political situation at a conclave called “Ideas for India” in England recently, a few shook up the political, media and social media space, particularly when he said that “India is not in a good place”, that it has been soaked in kerosene by the BJP and all it needs is a spark to ignite the whole country. Another gem was about how the Indian foreign policy establishment has become arrogant and does not listen to the Europeans—something apparently a European bureaucrat had complained to him. Then there was the reiteration of one of his pet theories, which he has voiced in India as well: that India is not a nation but a union of states; that “India didn’t develop top down but almost emerged bottom up”, with the model being developed by Mahatma Gandhi. “All these states—Maharashtra, Assam, Tamil Nadu—they got together and created a negotiated peace,” Mr Gandhi said. Apparently, the Constitution does not mention India as a nation. He also said that in India there was an attack on institutions, on the election system, and that states were no longer able to negotiate and talk. He used the term “negotiation” repeatedly in the speech. Then he talked about waging a “national ideological battle” where India has to be rescued from “the deep state” that is “chewing the Indian state, much like what happened in Pakistan”. Supporting the concern of a section in the US and the West about the apparent slide of democracy in India, Rahul Gandhi added that “Democracy in India is a global public good… If it collapses it will cause a problem for planet and that is what USA is realising.” His oft repeated charge that the BJP caters to only a handful of the rich was also mentioned. He also said his party will have to launch mass movements on unemployment and state level issues in coordination with “opposition friends”. He pitched his party as the first among equals, by saying that the fight is actually between “the national vision of the RSS and the national vision of the Congress”. When asked why the Congress was not winning elections when the country’s ruling party was so bad, Rahul’s answer was, it’s because of “polarization and the total control of the media”. Apparently, the media does not allow any Opposition voices to be heard. He also confidently predicted a massive level of social problem, and a mass upsurge, something like in Sri Lanka, unless the Opposition handled the situation. He also seemed suitably impressed by China’s “vision”, while saying that both India and the US lacked a vision.
It is not known which history book the former president of the Congress party has studied, but the books that the rest of the country has studied do not mention Maharashtra, Assam or Tamil Nadu negotiating peace with the Centre to form India. Last read, Maharashtra came into existence in 1960 and Tamil Nadu in 1969 and all these divisions were linguistic in nature and decided by the Centre. In fact, not only does the Preamble of the Indian Constitution mention the word nation, B.R. Ambedkar in 1948 was categorical about the drafting of the Constitution: “The Drafting Committee wanted to make it clear that though India was to be a federation, the Federation was not the result of an agreement by the States to join in a Federation and that the Federation not being the result of an agreement no State has the right to secede from it. The Federation is a Union because it is indestructible.” In other words, India’s nationhood is non-negotiable. So to suggest that there is some sort of a contract between the Centre and the states, which may get frayed over a period of time is dangerous. It is almost as if Rahul Gandhi has been schooled into India’s “non nationhood” by the ultra-left. And therein lies the problem. It is difficult to dismiss such statements as stemming from ignorance; instead it seems to have stemmed from a belief system that has spread a lot of anarchy globally through the decades. If the idea is to pander to some sort of sub-nationalism in the name of federalism, then it amounts to stoking a very divisive fire. This is already happening in states such as Bengal and Tamil Nadu, among others. “Federalism” is being used as an excuse by some state governments to run their own writ, sometimes in defiance of Central rules. As a result, every decision taken by the state government is being challenged in court and then overturned, West Bengal being a case in point.
Also, it is but natural that Opposition parties will criticise the ruling party. A strong Opposition is the hallmark of a strong democracy. But Opposition must be constructive too. Portraying India as a cauldron of hatred, where things are about to go up in flames, comes across as an obvious attempt to scare foreign investors away; and feeding into the confirmation bias of the West about India. Does Rahul Gandhi seriously not understand that such statements end up hurting his own country? Also, why blame the Indian media—which thrives on the cacophony of the Indian political space—and India’s institutions for your lack of electoral success, when your own party members, some of your closest colleagues, are deserting you accusing you of being non-serious about your party’s political future?
As for his views on Indian diplomacy, it is bizarre that a man who wants to be Prime Minister of a sovereign nation, thinks being subservient to Western interests is great foreign policy.
And now we hear that Rahul Gandhi is hobnobbing with leftist groups in Britain and holding closed door meetings in Cambridge to devise means and ways to dislodge the Central government. It is not known how Rahul Gandhi can devise a strategy to win India sitting in Britain, unless the grand plan emerging from such sessions is to ensure that India hurts as much as Sri Lanka has, so that the streets rise up in protest to get rid of the government.
PM Modi’s Jaipur challenge to Opposition
The Prime Minister knows that the BJP’s biggest asset is its dedicated workers who have been trained with the vision of a strong country. It’s only when they become lethargic or disinterested that the party would lose its shine.
By panning out its strategy to stay in power for a long time, the Jaipur meet of the BJP has thrown a very big challenge to the opposition. The only challenge before the party is to keep its cadre and support base in tact by telling them the work the Government has been able to do for the poor and the needy and the fact that the Government has lived up to the mandate.
A corollary to that is an embarrassing question before the opposition, mainly the Congress. Can they rediscover themselves, give an alternative to the BJP by a more trustworthy nationalist ideology inspired by development and good governance, an ideology to fight corruption and jettison the baggage of the dynasty?
Unless the Congress and the opposition mend their ways and resort to constructive politics, they would become irrelevant in Indian politics at least for the near future. The disintegration of the Congress is on auto-mode and other parties cannot match a pan-India party like the BJP since they are inspired more by regional aspirations and may not have the desire or wherewithal to play a larger national role.
Prime Minister Narendra Modi’s address to the BJP office bearers’ meeting in Jaipur was significant in many ways. While Modi spoke of the vision and work of the Government to fill party leaders and workers with confidence, he also threw a big challenge to the opposition. The message was: the BJP is in power for a long haul. He urged party workers to work as per a 25-year vision without bothering much about opposition criticisms. “Har ghar Bhajpa, har Garib ka Kalyan” (BJP in every house and welfare of every poor) is the new guiding mantra.
As casteist, communal and corrupt forces are trying to join hands to put up some semblance of challenge to the BJP in 2024 Lok Sabha polls, the prime most question the country would consider is whether people would forget and forgive these forces for their acts of omissions and commissions. Lutyens’ Delhi and vested media is, perhaps, ready since they were the beneficiaries of the rot in the system and they would like to throw out any government that does not co-opt them. But they have been grossly outnumbered by those who want to see Modi come back again and again to deliver good governance the country has witnessed after a long time. No media manipulation or divisive agenda can derail the Government’s performance.
These opposition parties have failed to identify even one instance of corruption associated with the Government. Congress leader Rahul Gandhi tried to make a big issue out of Rafale deal but he got eggs on his face since facts proved that the Modi government had worked exclusively for national interest in getting such a fantastic deal. Transparency and accountability are the hallmarks of this Government that has used Information Technology to make these possible.
A strange phenomenon has been witnessed. Opposition leaders are making a lot of hue and cry about the economic situation in the country and the media is trying to complement that without looking into the basics. But this is not finding traction among people who have been cushioned by Modi’s welfare measures to absorb the temporary disruptions.
War in Ukraine has caused lots of disturbances in the supply chain and economic life of even many advanced countries have suffered. The US, the UK, Germany and many other countries are facing the brunt according to former chief economic advisor KV Subramaniam. But critics here are ready to lynch the Modi government for saving the country. India’s record on the inflation front is much better. Despite hiccups the Modi Government is doing well and people appreciate this. We are a robust economy and we would pass this period with remarkable success.
When opposition is bereft of substantial issues, they raise issues that can disrupt the life of the nation. But people are mature and do not support disruptive agendas. We have seen what happened during the anti-CAA protest all across the country. We have seen how farmers were given spurious arguments to oppose the three farm bills. At times they have raised the issue of language issue and at times the issue of Hindu-Muslim divide.
When the Prime Minister was talking to BJP leaders in Jaipur, he was precisely referring to these debates where opposition would try to provoke the BJP and engage into a meaningless interaction. The verbal war and the divisive debates lead to waste of constructive energy. Instead of that there is a need for party workers to address more serious issues.
Modi has given a higher vision to the party for the country and that is to work on developmental road map for the next 25 years. This needs that party workers must work assiduously at the ground level, associate with problems of people and use the platform of the party and the Government to get them addressed. All ministries of the government have been instructed to work with a missionary zeal to work for development and transform society.
The loss of National Democratic Alliance (NDA) in 2004 to a weak Congress was beyond anyone’s belief. The opposition may be hoping this would repeat and catch Modi unaware. But they should not commit the mistake of underestimating Modi. There would be no complacency in 2024 because he has been the Prime Minister for two consecutive terms. He knows exactly what would find favour with the people who are happy at the fast pace of development in all spheres of economic activities. Such unprecedented development efforts at such a fast pace was never undertaken before.
Modi knows the tricks opposition would apply during elections. He knows the answers to their barbs but would reply only during elections. He had said once that the Government would be in functioning mode for four and a half years. It is only during the last six months that the functionaries of the Government would come into election mode.
The Prime Minister knows that the BJP’s biggest asset is its dedicated workers who have been trained with the vision of a strong country. It’s only when they become lethargic or disinterested that the party would lose its shine. There is, therefore, a need to keep party’s ideological spine upfront and bind them with one thread.
A case in point is the last assembly elections in Jharkhand. The party lost not because the opposition was strong. It lost because some party workers had become disinterested and did not campaign enough or worked harder to bring voters out on the voting day. Despite undertaking massive development initiatives by the Raghubar Das Government, the party lost.
It is in this context that Modi’s message to party’s workers on working for welfare of people should be seen. He reminded that when the Jan Sangh was formed, workers used to get inspired by the vision of a strong country. At that time none had imagined that the party would one day come to power on its own strength and implement the vision they lived by.
Now that the party is in power, the task of workers is to ensure that the work of the Government reaches every section of the society. The welfare measures taken by the Government must reach the beneficiaries. People must know their rights and how to access government schemes. Party workers play a very significant role here since bureaucracy has limitations.
The Jaipur meeting was a resolve that people would develop stakes in this Government’s continuation if they know that it is working for them. As for example the Ayushman Bharat scheme has provided free medical care to even common people but even now not all are aware. The farmers are getting the benefits in terms of regular money from the Government, reliable and controlled inputs such as health of soil, hybrid seeds, neem coated urea etc. Schemes meant for the Scheduled Castes and Scheduled Tribes and Women are reaching them directly. The challenge is 100 per cent coverage and the Government is planning just that.
If the party is able to just make people aware of the tasks undertaken by the Government to take care of the poor and the needy and the way the country is marching forward on the development roadmap, the task would not be tough. The Opposition would refuse to listen since they can’t imagine that empowerment can be biggest vote mobiliser. They would harp on caste and communal divide and would not be able to match up to the challenge thrown by Modi.
The writer is the author of “Narendra Modi: the GameChanger”. A former journalist, he is a member of BJP’s media relations department and represents the party as spokesperson while participating in television debates. The views expressed are personal.
PERARIVALAN’S RELEASE LEADS TO FRESH DEBATE IN RAJIV GANDHI CASE
Thirty-one years after his arrest in the Rajiv Gandhi assassination case, AG Perarivalan, amongst more than half a dozen other convicts, was released by the Supreme Court which while invoking its special powers under Article 142 of the Constitution set him free. The Apex court order has been criticised by the families of some of the other victims of the incident that took place on 21 May 1991, at Sriperumbudur when Dhanu, a human bomb blew herself up while killing the former Prime Minister instantaneously.
The tragedy and its aftermath changed the course of Indian politics and though the Special Investigation Team constituted by the then government and headed by D.R. Karthekeyan had held the LTTE responsible for the gory act, till this day, the dreaded terrorist organisation never claimed that it was its operative who was behind the killing. The case continues to be shrouded in mystery as several unanswered questions remain. The role of Sivarasan, one-eyed Jack, and his other woman associate who were with Dhanu on the night of the killing remains unclear. There are theories that suggest that Sivrasan and the two women were rogue LTTE operatives who were engaged by some international agency to assassinate the former Prime Minister, who was poised to return to power after the ongoing elections at that time.
This theory is supported by the fact that if Sivarasan indeed was an LTTE operative, why did he not go back to Jaffna and remained as a fugitive in India till his suicide three months later in Bangalore. There are also many who believe that the photographs taken by Hari Babu, who was also killed in the incident were used by the police to make firm conclusions regarding the case when those photos could have been deception tactics used by the conspirators to cover their tracks. It is well known that whenever major conspiracies are planned, the cover-up is the most essential part and this was perhaps also done in the Rajiv Gandhi case as well. In other major assassinations around the world including those of the Kennedy brothers in the US, there are still many puzzles that could never be put together by the authorities.
Even in the Indira Gandhi case, no one knows why the ITBP commandoes shot Beant Singh, one of the assassins when he could have yielded vital information regarding the entire plot. There are certain aspects of the Rajiv case that also need to be ascertained like who for instance included Sriperumbudur in the itinerary while it was not there in the first instance. Fingers had been pointed at some Congress leaders but their roles were never properly examined by the detectives. Many officials who should have been charged with dereliction of duty on that day, were later rewarded and given important positions in the government subsequently. Rajiv Gandhi was a visionary whose life was cut short by a conspiracy, probably facilitated by some of the people in his own party. Now that Perarivalan has been released, the debate over the various dimensions of the killing may commence once again.
Inflation and food security: Facts versus propaganda
India is not mired alone in the shooting inflation. Today’s inflationary surge is global in nature and is being felt by most advanced economies (AEs), emerging markets, and developing economies (EMDEs).
India’s retail inflation measured by the consumer price index (CPI) soared to 7.79%, for April 2022. In March 2022, the figure for Consumer price-based inflation was 6.95% and 4.21% in April 2021. The recent spike in CPI is mainly on account of costlier food items. Despite perception to the contrary, the fact of the matter is that the Modi government has reined in inflation pretty well in the last eight years and even the surge in the last few months is largely due to a confluence of global factors, including the Russia-Ukraine War, that is a Black Swan event, that no economist or geopolitical strategist, predicted or bargained for. Also, after two years of a debilitating global pandemic, there has been a sudden demand resurrection, while the supply chain constraints have failed to keep pace with the rise in demand globally. So for armchair economists to single out India and allege that the rise in inflation is only India specific, is a lot of hogwash. Supply bottlenecks take time to get resolved.
Finance Minister Nirmala Sitharaman announced a slew of measures on Saturday that are supposed to provide a safety net for India’s poor, who are struggling to keep up with growing prices. ANI
For instance, if an industry was working at 40% or 50% capacity during Covid in 2020 and 2021, for it to work at 70% or 80% capacity in 2022, will take time. Scaling up takes time. Any industrial unit will not automatically switch from 40% to 80% in a jiffy. Alternative suppliers come with pricier freight, longer transits or differing quality, further accelerating food inflation. World supplies were already reeling from droughts in Canada and Brazil and transportation blockages in parts of the world, from rail logjams in the US to trucker strikes across Spain.
The added shock from the Ukraine-Russia war earlier this year sent most prices of most commodities to new record highs with corn and wheat futures in Chicago up more than 30% since the beginning of 2022, after having already risen by over 40-50% in 2021! The United Nations has that warned food prices already at an all-time high could rise as much as 22% more. A severe drop in Black Sea exports could leave as many as 13.1 million additional people undernourished, it said, deepening the rise in global hunger in a world still recovering from the effects of the pandemic. Collectively, Russia and Ukraine are responsible for more than 25% of global Wheat exports and for around 80% of the world’s supply of Sunflower Oil. Russia along with its ally, Belarus is also a huge source of fertilisers, accounting for around 15% globally. The war in Ukraine will undoubtedly have a major impact on its agricultural production and exports, putting even more pressure on a system already in crisis. Ukraine does indeed control Europe’s second-largest known reserves of natural gas, almost 80% of which are located east of the Dnipro river. While Russia is the world’s third-largest oil producer accounting for 10% of the global Oil production, Ukraine has total gas reserves of 5.4 trillion cubic metres (TCM), with proven reserves of 1.1 trillion cubic metres.
Hence, to cut to the chase, the moot point is, the Russia-Ukraine War has affected the prices of Oil and natural gas, with some estimates saying gasoline prices in the US could skyrocket to as high as US$ 6.2 per gallon by the end of this year. Today’s inflationary surge is global in nature and is being felt by most advanced economies (AEs), emerging markets, and developing economies (EMDEs). During the last two years, most Central banks followed easy money policies, with most governments announcing massive stimulus packages to repair the ravages unleashed by a debilitating pandemic, in the form of Covid-19. In 15 of the 34 countries classified as AEs by the International Monetary Fund’s World Economic Outlook, 12-month inflation through December 2021 was running above 5%. 2022 has only seen the inflationary tide rising further globally. While other countries have been reeling from pandemic-induced inflation, India has been keeping inflation largely under control. To put things in perspective, one must note that Wheat prices hit a high of US$ 13 per bushel from US$ 5 a bushel in the last two years, a massive 160% jump. Corn prices globally rose by a steep 45% year-on-year (YoY) in 2021 and have risen by another 37% in the first four months of 2022. Soybean prices rose from US$ 9 to over US$ 17 per unit in the last 18 months, a whopping 89% jump.
Inflation in the US continued to surge to a massive 8.5% and 8.3% in March and April 2022, after an equally steep rise of 7.9% and 7.5% in February and January 2022 respectively. That is the biggest year-on-year leap since 1981. The US’s fuel inflation rose by a whopping 32% YoY in March 2022 while food inflation went up by 8.8% YoY in March. The price of beef rose by 16%, flour by 14.2%, citrus fruits by 19.5%, and milk by 13.3% in March 2022 in the US. The annual inflation rate in the Euro Area rose to a record high of 7.5% in April 2022, up from 5.8% in February 2022 and 5.1% in January. The United Kingdom’s annual inflation rate rose in April 2022 to a steep 7%, up from 5.4% in January 2022, the highest level since March 1992, while Germany saw inflation at 7.4% in April 2022, the highest ever, in almost three decades. The Netherlands with inflation of 9.7% Spain with inflation at 9.8%, Turkey at 70% and Sri Lanka at 30%, have seen the highest inflation print in over 45 years. In Canada, property prices have hit their highest in decades, rising by over 50% in the last two years, due to which the Canadian government has banned outsiders from purchasing properties. Inflation as measured by the producer price index (PPI)increased 8.3% year-on-year in March 2022 after an equally steep rise of 8.8% in February 2022 in China.
78 out of 109 EMDEs are today confronting annual inflation rates well above 5%. In India, in contrast, the Modi government has fared much better and has indeed done a very commendable job in containing inflation. While retail inflation was 5.66%, 6.01%, 6.07%, and 6.95% in December 2021, January 2022, February 2022 and March 2022 respectively, one should not forget that for the better part of 2021, inflation was below 5%. For example, in September, October, and November 2021, retail inflation in India as measured by the consumer price index (CPI) was reined in at 4.35%,4.48%, and 4.91%. More importantly, food inflation in these months was minuscule at 0.68%,0.85%, and 1.87%. One must not forget that food inflation as measured by the FAO food price index (FFPI), hit its highest level globally in 2021, the highest ever since 1970. But India has reined in food inflation, pretty well, relatively speaking.
Under the inept Congress -led UPA, the highest food production achieved was about 257 million tonnes in FY13. The estimated foodgrains production for the agricultural year 2021-22 (July-June) is expected to be 316.06 million tonnes, which is an all-time record and higher than the 310.74 million tonnes recorded in 2020-21, which itself was a record. Wheat production is also expected to reach the highest ever level of 111.32 million tonnes during 2021-22, higher than the 109.59 million tonnes recorded last year. The total production of Rice (Kharif and Rabi both) is also expected to reach a record high of 127.93 million tonnes, higher than the last year’s Rice output of 124.37 million tonnes, which again was a pathbreaking record.
Why has global food inflation hit multi-decade highs? Droughts, floods, and inclement weather in large parts of the world’s food bowls and in Central America, Latin America, and some major oilseed-producing countries, are the reason for soaring food prices. For example, Ukraine, Argentina, China and Russia, the largest sunflower oil-producing nations, faced inclement weather in the last two years. Ditto was the case with Kazakhstan, Mexico, and Canada, among the big Safflower Oil-producing nations. As for Palm Oil, over 84% is produced by Indonesia and Malaysia combined and besides bad weather which hampered production, both these countries imposed many export restrictions during Covid, further distorting the demand-supply dynamics for Palm Oil importing countries like India. Things in Indonesia are so bad that police have been deployed for 24-hour surveillance of cooking oil production and distribution as rising food prices become a key political issue in the country. The Indonesian police task force, intelligence agents, and government employees are making sure companies are producing bulk cooking Oil as targeted and selling it for below the 14000 rupiahs (98 cents) a litre price cap. The less said about Sri Lanka’s traumatising economic crisis, the better. Fuel stations have run dry and even posh neighbourhoods have no electricity for almost 18 hours a day, with rural hinterland suffering from 24-hour power cuts. There is no diesel to run diesel generator sets either.
A few months back, the United Kingdom faced a situation where its gas stations ran almost dry. Whichever way one looks at it, India under Prime Minister Narendra Modi has managed the economy very well, sidestepping geopolitical upheavals and violent price gyrations in the fuel and food economy that many other countries have been grappling with, unsuccessfully.
In fact, India is even being the good Samaritan and has agreed to extend a one billion dollar credit line to Sri Lanka, so that it can procure essential items, food, and medicines. In February this year, India provided US$ 500mn via a loan facility to Sri Lanka for procuring Petroleum products and tackling its energy crisis. Sri Lanka has forex reserves of barely US$ 2 billion whereas India with almost US$ 600bn, has the 4th largest forex reserves globally, after China, Japan and Switzerland. Hence for ignoramuses to compare India with Sri Lanka, is plain hogwash. Be it Nepal, Afghanistan Myanmar or Sri Lanka, it is India under the Modi government that has come to the rescue of its neighbours by exporting food grains and other essentials to these countries.
Coming back to inflation, it is pertinent to ask, which two places in India have had the highest fuel price? Well, it is Parbhani in Maharashtra, where in early April 2022, petrol cost Rs 121.38 per litre and diesel, Rs 103.97 per litre. In Sriganganagar in Rajasthan, petrol shot up to Rs 120.73 and Diesel Rs 103.30 per litre, in April. In both the aforesaid states, Congress is in power, either directly or via an alliance.
In the Congress-ruled States, the average Petrol price is higher by Rs 18-21 per litre, compared to many BJP governed States. The reason for this difference is nothing but pure greed on the part of Congress regimes, whereby they refuse to cut VAT on Petrol and Diesel. So while Rahul Gandhi and his sundry bunch of protesters are crying wolf over rising fuel prices in India, the harsh truth is that Congress-ruled States are milking their taxpayers dry by refusing to cut VAT in any meaningful measure. So much for Rahul Gandhi’s hypocrisy!
Weather-related reasons apart, the pandemic-induced sharp bust-and-recovery patterns produced unpredictable and prolonged supply-side disruptions, leading to supply-side deficits, which, in turn, led to cost-push inflation. True, as the pandemic receded, demand saw a resurgence but more than “demand pull”, it was “cost push” inflation that wreaked havoc globally. That Central bankers kept buying bonds indiscriminately and governments kept pumping money into their economies to “pump prime” and resurrect them, only led to more speculative money finding its way into just about everything—gold, oil, bonds, commodities, wheat futures, corn futures, so on and so forth. Inflationary pressures globally, among other things, have been driven also by overheating in the aftermath of significant policy stimulus. Here again, the Modi government’s cautiously calibrated approach to infusing stimulus at the height of the Covid wave has been very effective.
In sharp contrast, some of the (AEs), the US included, unleashed gigantic fiscal stimulus packages, which were not focused and eventually ended up creating asset bubbles and soaring inflation, with very little attendant benefits.
The writer is an Economist, National Spokesperson of the BJP, and the Bestselling Author of ‘The Modi Gambit’. Views expressed are the writer’s personal. Parts II & III will be published later.
PM Modi’s governance style: Seen through the eyes of a military veteran
While watching the “Modi@20: Dreams Meet Delivery” book release function on a news channel, it occurred to me that I was perhaps one of the few retired senior officers of Indian military who had the opportunity to observe Narendra Modi closely for nearly four years in Gujarat when he was Chief Minister there. It was in 2010. I was sitting through the interview of potential civil servants at the UPSC, when I was head-hunted by a polite senior technocrat to advise the government of Gujarat on an exciting infrastructure project. Having been at sea most of my naval career and having had enough to do with the bureaucracy in Delhi, I politely declined the offer. However, the bureaucrat was persistent and, with a broad smile, asked me to check the details of the project. Mesmerised by the sheer audacity of the thought behind the project, which was to be built across the Gulf of Khambat, I set conditions for my acceptance. The first thing I told him that I would not report to any bureaucrat but the adviser to the Chief Minister. I knew next to nothing about him then.
Within the month I was in. The following four years were perhaps the most rewarding from the point of view of submitting reports based on interactions with the best experts in about 100 different areas who directly contributed to the preparation of a detailed project report. I resigned the week Modi decided to head to Delhi only because the project had completed about 90 percent of the compilation and I knew that without the firm hand of the Chief Minister at the wheel, it was doomed to be consigned to the bins of the bureaucracy. To those who may doubt the intent of my piece, in the preceding 8 years neither have I met Modi nor interacted with him in any which way. So, here is my take on his leadership as seen through a military lens.
While I was determined to make my team work in a timely and disciplined manner, I noticed that the bureaucracy had gotten used to arriving on time and submitting reports as scheduled. The progress of files was monitored through an app at the CM office. In all my decades of dealing with the MOD, I had rarely, if at all, seen disciplined and time-bound progress of files. For a change, decision-making was swift in this case. Most senior civil servants, who were not used to computers, were struggling to make power point presentations to the CM. I needed to submit my work to the technocrat, who was experienced and senior and the decisions of the CM were recorded before I returned to Ahmedabad in 10 days. For the first time in a long career, I did not have to wait outside anyone’s office. Seemingly controversial recommendations against “conventional wisdom” of governance were not questioned except on one occasion in four years.
The CM, while fully au fait with the project, was dealing with multiple issues of governance, including live video conferences with Panchayat-level leadership. The style of leadership is a favourite military theme. Having seen many top leaders of our own military, I was able to observe the leadership traits of the CM Modi from the side-lines without being hagiographic.
Consequently, the question that arose in my mind is how could a person not exposed to formal education and experience with governance be so well versed with data, facts and ask all the right questions on the subject? So I began to compare his style with the best military leaders of my time – about 40 years – and was able to find answers to most questions. Ironically, however, the military officers were all trained and exposed to styles of leadership before they ascended the ladder, step by step. Ergo, what then was this Modi model all about?
It has taken many years of observation after he took over as Prime Minister and despite the fact that I had predicted that Gujarat was not Delhi and that the bucket of crabs in Delhi would soon pull him down, I have had to eat my hat!
The only logical answer to my question is that serving as a pracharak gives one a rare opportunity to watch and study while working with the common man. I looked for documentation on how a pracharak is selected for grooming and traveling overseas. Modi grabbed every opportunity to watch and learn. I am yet to see a document on moulding a pracharak. Service before self, India first, welfare of the citizen (read soldier) are all military values, too. The pracharak learns how to be a professional and disciplined and not to look for gains both material and financial. Dedication to the cause that has served the Indian Military through the decades is a very similar model.
Have you wondered why Modi walks like a soldier and more importantly salutes like one? Is he a complete package with no flaws? Of course not, but neither did I meet one in the military, even as I adored just a few.
(The author is a retired C-in-C, Southern Naval Command.)
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