The Ukraine war is upending India’s dream budget and now gets further bruised with a high rise in crude prices and retail inflation beyond the 6 per cent toleration limit of the RBI.
The nation has to tighten its belt, go slow on reckless infrastructure spending, and be austere as indicators go for a toss amid efforts of the government batting for a better economy as its energy expenses and defence alertness is to cost more.
The government need not shy away on the crucial indicators as crude jumps to pressure prices – 11th month double-digit wholesale index at 13.1 percent and the retail CPI touching eight-month high at 6.1 percent in February. As also people spend less and shift to buy unbranded cheaper products.
Oil and gas are to bleed the country even as it looks for alternative sources but has little capacity to face western sanctions that have crashed Russian stocks by 50 percent and currency by 20 percent. The war hardens the international market, soars energy prices, and makes exports difficult despite a plunging rupee at Rs 76 to a dollar. Imports are growing at $ 616.91 billion, a 55 percent increase, exports at lower volumes at $ 335.88 billion. The trade deficit at $ 228.92 billion rises by 47 percent.
The US and Britain frown upon India’s bid to buy more oil from Russia at discounted rates. Meddling through a new cold war of sanctions is not easy. It thaws India’s relations with Iran, a dependable friend. It is also likely to fetch lower prices for LIC privatisation move. Indian business and consumers are at the mercy of global winds.
Each move or a change has costs. So far the nation is carrying out on its budgetary path but it is fraught with chances of compromising on extra expenses. Borrowings are high and a likely cut on infra spending of budgeted Rs 10 lakh crore looms large.
The criticality increases with youth unemployment rising to 26 percent in first quarter of 2021 and headline joblessness remaining at 12.7 percent and government seeking to spend Rs 1.58 lakh more mainly for PM Awas Yojana takes from National Small Savings Fund and urea support. The rural India that had shaken the country on farms bill remains unstable and urban shaky
Prime Minister Narendra Modi has during his election campaign repeatedly told the people about his government’s herculean efforts in keeping its development objectives intact despite the hardships. The economy remains shaky as the private sector is unable to maintain the façade of keeping up their efforts and depends on government for support.
As per the World Inequality Report, the country stands out as poor and very unequal with the top 1 percent of the people holding more than one-fifth of total national income in 2021 and bottom half just 13 percent. Average Indian’s income is Rs 204,200 or about Rs 17,016 a month and the bottom still less at Rs 53610. “India stands out as a poor and very unequal country with an affluent elite”, the report says.
So the average Indian wants to rush to the jobs but the National Education Policy, in its bid to align it with the affluent US, has decided to keep the young bound in schools and universities for about two more years, delaying the primary education by a year at age six, though not at all needed, and graduation by another. As education is getting prolonged, its funding by parents also becomes more expensive with high delayed fee payment, if not default, and dropouts. If a child for any reason loses another year his joining the productive employment is to be delayed by three years and would remain an economic burden on the society.
Apart it raises government and societal expenses for apparently not much betterment in term of extended time. The intended changes in syllabi could be made within the present timeframe. It is a misnomer that change has to be expensive. It also needs to correct its mistaken stress on Ph.D., considering it to be research. The Ph.D. certainly is not research, exceptions apart. Austerity can be achieved by cutting down on similar superfluous expenditures. If two years are saved for education, it means a minimum savings of Rs 2.5 lakh by each student and in terms of faculty and infra cost billions by the government and society every year.
Prime Minister Modi needs to intervene to correct this NEP anomaly. Let Indians complete education faster, cheaper and the world follow it. Extending terms do not make education better. But if the Indian youth joins the workforce early, they can make the competition tougher for the rest of the world.
As of now, it must do away with the unnecessary subsidy of Rs 2908 crore increased from Rs 800 crore for electric vehicles (EV). Similarly, it needs to review infra projects that defy Intergovernmental Panel on Climate Change (IPCC) norms. It also can consider cuts for many other infra projects.
Such austerities are needed in various areas and the country must reconsider its decision to rush for EV. Maruti-Suzuki chairman RC Bhargava has appropriately suggested not going for it merely for the issue of emission or pollution. He says, “EVs are not clean cars. These are far more expensive and do not suit Indian needs. EVs depended on coal-fired thermal plants will not reduce carbon emissions or greenhouse gases in the next 10-15 years. In other words, it virtually goes against the basic concern of the IPCC.
“If we just adopt whatever strategies the US and Europe are following, I don’t think we will be doing justice to what we need to do in India,” Bhargava says.
So India needs to rethink its investments in unsettled EV technology, the building of charging stations and making the country dependent on imports of batteries. The battery, unless made with elements found in India would remain extremely expensive and supply uncertain.
So India may continue with CNG and consider incentivizing it something it does not now.
Inflation, low manufacturing, and high toll-like fees are hitting the country. But these are not being addressed. The infra increases incomes of large groups and rent-seeking but does not accelerate growth. India to grow has to carefully cut on infra and spend more on merchandise production. Times are difficult and complex solutions have to be worked out.
An average Indian wants to rush to find a job but the National Education Policy, in its bid to align it with the affluent US, has decided to keep the young bound in schools and universities for about two more years, delaying the primary education by a year at age six, though not at all needed, and graduation by another. As education is getting prolonged, its funding by parents also becomes more expensive with high delayed fee payment, if not default, and dropouts.
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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.)
ANIL BAIJAL’S TENURE AS DELHI LT GOVERNOR WAS INSIGNIFICANT
Anil Baijal was always rated by his peers as one of the most competent bureaucrats of his time. Considered extremely close to Mr L.K.Advani at one juncture, he was appointed as the Home Secretary by him. It was said at that time that if and when Advani would become the Prime Minister, Baijal would be his first choice for the position of principal secretary. However, that did not happen and the 1969 batch IAS officer occupied key assignments at the Centre. After Najib Jung decided to resign suddenly as the Delhi Lt. Governor, the Union government brought him as his successor. Surprisingly Baijal maintained a low key and other than getting into showdowns with the Aam Aadmi Party dispensation in Delhi, he was virtually not accessible. When Shaheen Bagh protests were happening, he chose to take a back seat and it was the Home Minister himself who had to take the lead. It was unthinkable that Baijal by choice was perhaps just bidding his time. Finally earlier in the week, he tendered his resignation citing personal reasons. The speculation remains that he could be given an important assignment by the Centre. However, the point is that the post of the Lt.Governor, especially for Delhi is vital and the LG acts as the agent of the Centre in overseeing both the police and the land management. The DDA is headed by him and he is the nodal functionary for many important decisions. Delhi has over the years had several Lt. Governors but there is a near unanimity that there has been none better than Vijai Kapoor who held the office during the tenure of Atal Behari Vajpayee as the Prime Minister. The advantage which Vijai Kapoor had was that he had served the city in almost every capacity from ADM, SDM, Municipal Commissioner, Head of Delhi Electric Supply Undertaking to Chief Secretary. Therefore, no one knew the city better than him. He did not require the assistance of any aide to guide him on how to tackle a problem. He himself knew what it would be and could solve the most complicated issues with great ease. Vijai Kapoor had very cordial relations with then Chief Minister Sheila Dikshit and also enjoyed the confidence of the Centre. He could delicately balance the relationship and deliver. This quality has been lacking in many of the other Lt. Governors who essentially served as “Laat Sahebs’’ rather than servers of the common people. Other than Vijai Kapoor, Delhi has also some notable LGs such as Jagmohan, who held the position twice, H.K.L.Kapur, Tejinder Khanna and Najib Jung. In the 1970s, the late AN Jha became the city’s first LG. One of his successors, Kishen Chand, served during the emergency but later on being hounded by the Shah Commission, allegedly committed suicide by jumping into a well near Shahpur Jat village in South Delhi where the Asiad Games complex later came up. DR Kohli was also a very distinguished bureaucrat who was the LG during the Janata Party rule. The point is that it is the prerogative of the Centre to appoint the LG but it is equally up to the chosen person to deliver and leave a mark on the city’s history.
Explaining India’s neutrality in the Russia-Ukraine war
The Russo-Ukraine conflict not only tells us about the grave challenges to the liberal international order, but tellingly indicates the weaknesses inherent in the nation-state system that has become the standard model of state formation since the post-War era. Born out of the Westphalian treaty of 1648 signed at the aftermath of a thirty-year conflict between the Catholics and Protestants, the nation-state model is not only a product of the Western modular form unsuited for universal application but having roots in the principles of power politics and competition, it is also unequipped to address the problems of security and identity. In other words, the roots of the present Russo-Ukraine conflict are entrenched in the nation-state system that exacerbates power competition and at the same time fails to address the deep-seated security issues that embeds a country’s identity. What Russia is doing today is simply redrawing its national boundaries to address the problems of security posed by the West and NATO but that which is challenging the sovereign equality based international order. In fact, Russia is behaving typically like an empire. Tellingly, Russian aggression suggests the failure of nation-state based international order in safeguarding the territorial boundaries and securing global stability. It is in this context, India’s neutral position to the Russo-Ukraine war should be understood.
Newly appointed Ambassador of India to Ukraine Harsh Kumar Jain hands over 7,725 kg of humanitarian aid to Ukraine Deputy Health Minister Oleksii Yaremenko, in charge of Humanitarian Aid and EU Integration, in Kyiv on Friday. ANI/ India in Ukraine Twitter
India’s primary security threat emanates from its northern periphery where China is posing the greatest challenge. It must be noted that China has always behaved like an imperial state and has nationalised its periphery in Xinjiang and Mongolia well before the conclusion of the Second World War. With the foundation of the Communist China in 1949, it appropriated the Westphalian sovereign state system to formalize its national boundaries by invading and occupying Tibet in 1950. This brought India face to face with China on its border for the first time in history. And thus, began the protracted dispute on the India-China border which today has become a principal threat to India’s national security and territorial integrity. The border settlement has remained elusive not simply because of Chinese irredentism but more so because of the nature of the Westphalian state system that measures power of a state in terms of strictly demarcated borders. Clearly then, for India, standing up to China is not simply a matter of national security but also of identity and power.
When territorial integrity is the essential basis of national power in the Westphalian based nation-state system, then the national interest of a country demands that its policies should be squarely based on addressing the threats posing to its national borders. Arguably, it is the China factor which has principally led India to pursue neutrality instead of aligning with the liberal world order led by the US. It, however, does not mean that New Delhi has the guarantee of Moscow’s support in the event of a plausible Chinese aggression on the border. In fact, a mutual hatred for the West has brought Russia- China much closer to each other than it had been in any time in history. But given the predictiveness of India-Russia relations which has had a long saga of relationship based on mutual trust and support and given the underlying deep-seated mutual mistrust and clash of interests that has historically characterized Russia-China relations and that which has brought them into a collision in 1969, Russia’s neutrality, if not support, in any India-China war can be reasonably expected. Regarding the question of Western support for India, there is clearly a consensus in the West in the post-pandemic era of a rising China threat. And that should be enough ground for sustaining the Indo-Pacific security architecture.
But beyond the simple logic of realism that prompts India to adopt a neutral position, there is a deeper rationale premised on the civilizational value of Vasudhaiva Kutumbakam. This concept basically means viewing the world as one family, making no distinction between the self and the other (abheda). It means then a clear absence of ‘Us’ and ‘Them’ binary in India’s philosophical tradition which otherwise defines the Western perceptions and thoughts and that which also undergirds the nation-state narrative. Prime Minister Modi has alluded to the concept of Vasudhaiva Kutumbakamright from the time he assumed leadership of this country in 2014. One may brush it aside by calling it a utopian concept untenable in the international system characterised by realism and power-politics and the presence of a military threat from across the borders.
Arguably, Vasudhaiva Kutumbakam points to the notion of a non-bifurcated world view, where one has an independent space not tied to any binaries. In this context, India is neither comfortable in identifying itself squarely with the liberal order defined by the West because first, universalism and pluralism embedded in the notion of Vasudhaiva Kutumbakam are not same as Western liberalism, and second, Western liberalism is embedded in the binary of ‘Us’ and ‘Them’ which naturally views the world as a divisive and conflictual arena. Nor India is comfortable with Russia or China whose world view is largely imperialistic and hegemonistic. Russia’s invasion was clearly to pre-empt the loss of Ukraine as a buffer against NATO. The same is with the Chinese whose irredentist approach is aimed at expansion and encroachment upon the territories of the ‘other’. Therefore, India whose territories are not secure in the sovereign state based international order, the best policy option is found in the concept of neutrality.
Seen in this perspective, the neutrality option is not a continuation of the non-alignment approach. Nehru’s non-alignment was formulated when India was weak and confronted grave security challenges domestically. Therefore, he advocated distance from power-politics which was indeed a façade of freedom of action in the realm of foreign policy. Prime Minister Modi’s neutrality opens doors for a multi-alignment and proactive foreign policy approach that imparts greater maneuverability and leadership capability. This explains the Prime Minister’s just concluded tour to the European continent. This allows India’s criticism of the massacre in Bucha. This gels with India’s abstention on votes at the United Nations condemning Russia. This also, and quite significantly, explains India’s disapproval of the use of force in unilaterally changing the status quo. And above all, this allows a greater security option for India to operate in the nation-state based international order. Neutrality then, clearly flows from the position of strength and the belief in the ideal of a non-bifurcated world order embedded in Vasudhaiva Kutumbakam as an alternative vision for global order and peace.
Abanti Bhattacharya is a professor in the Department of East Asian Studies, University of Delhi.
Will Finland and Sweden joining NATO lead to peace in Europe?
Finland and Sweden’s decision to join NATO is a wise one. It will assist the smaller nations in deterring Russian plans to attack Europe.
Finland and Sweden which share democratic values are among the most innovative, peaceful and happiest countries in the world. After decades of abstaining from military alliances, the two Nordic countries, Finland and Sweden have applied to join NATO. There are two opposing viewpoints. Some experts believe it will be a historical catastrophe that will cause chaos throughout Europe. However, some experts believe it will make Europe more secure and united than ever before. The big step by both the countries will set an example for small Baltic Sea countries like Lithuania, Latvia, and Estonia for their peace and prosperity. In the event that Finland and Sweden join NATO, Russia would wind up its military ambitions in Northern Europe.
Finland and Sweden have maintained their NATO neutrality for over 75 years, throughout and after the Cold War. Before Russia invaded Ukraine, public opinion in both nations was overwhelmingly in favour of nonalignment. In fact, this pillar of foreign policy was so well-established and revered that the term “Finlandisation” was coined many decades ago to describe when a country is induced to favour or refrain from opposing the interests of a more powerful nation, despite not being politically allied with it.
However, Vladimir Putin’s invasion of Ukraine has thrown everything into question. An opinion poll conducted in Finland in early May found 76 percent support for joining NATO, with only 12 percent opposition; this represents a significant shift toward membership since the invasion. The majority of the Finnish Parliament voted in favor of NATO membership in a recent vote, with 188 in favor and 08 opposed.
WHAT ARE THE RISKS?
President Putin has frequently cited the potential expansion of NATO into Ukraine as justification for his invasion. Therefore, the addition of Sweden and Finland to the alliance would be perceived as provocative.
According to the Russian foreign ministry, both countries have been warned of the “consequences” of such an action. Dmitry Medvedev, a close ally of the Russian leader, has warned that Moscow’s deployment of nuclear weapons in Kaliningrad, the Russian exclave between Poland and Lithuania, may be precipitated by NATO membership. Former Minister of Finland, Alexander Stubb does not discount these threats, but suggests that cyberattacks, disinformation campaigns, and occasional airspace violations pose a greater danger from Russia.
ERDOGAN’S TOUGH TALK?
Turkey joined NATO in 1952 and is a very important part of the group. It has the second-largest military in the group of 30 countries, after the United States. Turkey shares good ties with Russia and using this momentum as a bargaining tool to block NATO membership for the two Nordic countries but it seems that it would be short-lived.
WOULD NATO MAKE FINLAND AND SWEDEN SAFER?
Both Finland and Sweden will make Europe safer after joining NATO. The small Baltic Sea states will be surrounded by NATO nations, rendering it hard for Russia to conduct military operations in the Baltic Sea and surrounding regions. Swedish and Finnish Navy would have an equal chance against the Russian Navy.
In addition to the tactical and technical advances in military and logistical cooperation, the general consensus is that it would bring more stability to the region and would halt Putin’s ambition.
WHAT IS RUSSIA’S REACTION?
In the short term, there is speculation that Russia might attack Finland and Sweden as it has already warned all the European countries to maintain the status quo. The Prime Ministers of Denmark, Iceland and Norway have issued a joint statement welcoming the decisions of Finland and Sweden to apply for NATO membership. The joint statement said that “Should Finland or Sweden be victim of aggression on their territory before obtaining the NATO membership, we will assist Finland and Sweden by all means necessary.”
The geopolitical experts are assessing potential “retaliatory steps” as cyberattacks and hybrid attacks in the long-term goal on Finland and Sweden. The Cyber retaliation from Russia, which sees the expansion of the alliance as a direct threat. Such attacks would not have the severity that Moscow launched against Ukraine amid the Russian invasion of the country.
The energy sector could be another potential arena for Russian retaliation and punishment against NATO’s expansion. As it has traditionally supplied approximately 40 percent of the EU’s gas imports, Russia holds a strong position in this field.
Overall, Finland and Sweden’s decision to join NATO is a wise one. It will assist the smaller nations in deterring Russian plans to attack Europe. Additionally, it will preserve peace and stability in the region. The Baltic Sea states would be encircled by NATO nations. It will aid in preserving the status quo in border regions. The nations will once again feel secure and unite for their prosperity. Their joining NATO will further motivate the Ukrainian cause and strengthen the NATO and Europe alliance.
Rajesh Mehta is a leading consultant and columnist working on market entry, innovation and international affairs. Neeraj Singh Manhas is a Director of Research, (Indo-Pacific) at Raisina House, New Delhi. Views expressed are personal.
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