Another major issue affecting advanced and developing economies alike is global supply chains, which continue to be severely affected by the events of the past two years. Transport costs have skyrocketed. And unlike the oil-based supply shock of the 1970s, the COVID-19 supply shocks are more diverse and opaque, and therefore more uncertain, as the World Bank’s most recent report suggests.
File photo of a staffer at a petrol station pointing to the rising fuel prices as they had reached an all-time high, in Kolkata, in March. ANI
In EMDEs, currency depreciation (owing to lower inflows of foreign capital and downgrades of sovereign credit ratings) has contributed to inflation among imported goods. And because inflation expectations in EMDEs are less anchored and more attuned to currency movements than in AEs, the pass-through from exchange rates to prices tends to be faster and more pronounced. But again on this count, the Modi government has done a stellar job. Brokerage firm ICICI Direct said that unlike in 2013 when the Rupee depreciated drastically after the U.S. Fed announced monetary tightening, India currently holds the fourth largest forex reserves globally, at almost $600 billion, and also has had a surplus BOP, all through 2020 and much of 2021.
In the light of abundant foreign exchange reserves and the strong performance of the Rupee vis-a-vis its global peers, Rupee’s depreciation beyond Rs 80 per US Dollar in the calendar year 2022 is highly unlikely. Do note that most economists believe that even at 80, the INR is overvalued and hence there is little cause for worry, at this stage. Rupee, in May 2022 has been trading in a range of Rs 77.45 and 77.72 to the Dollar. The Rupee is likely to face resistance near 80 levels and strengthen back to 74-75 levels in the coming months, as India seems to be in a better position to withstand any major shock from the global monetary tightening that is currently underway. Don’t forget that only as recently as on 12th January 2022, the INR was at 73.77 to the Dollar. India’s forex reserves are equal to about 12-14 months of import cover. Given that the Rupee has enough cushion to withstand external shocks and is unlikely to breach the 80 to a Dollar level anytime soon, imported inflation on account of a depreciating Rupee has been kept in check and here again, the Modi government deserves kudos for the excellent handling of India’s external economy. The current INR depreciation is not India specific but part of a larger global trend, with most major currencies falling against the Dollar in May 2022 after the Dollar index reached 103.94, the highest since December 2002, on May 6, 2022, after the Fed’s 50 bps rate hike and hawkish commentary. US 10-year yield also hit its highest at 3.14%, since 2018, on May 4, 2022, though it has softened a tad bit since then, at just shy of 3%. Sterling fell to its lowest level in May 2022, since June 2020, after the Bank of England raised interest rates to their highest since 2009 and warned that the economy was at risk of recession. The Euro was also dented after German data showed that industrial orders in March 2022 suffered their biggest monthly drop since last October. The single currency has fallen as the region struggles with weaker growth and energy disruptions due to sanctions imposed on Russia after it invaded Ukraine.
India’s current account balance recorded a deficit of $9.6 billion in the July-September 2021 quarter, as against a surplus of $6.6 billion in the April-June 2021 quarter, but the deficit was mainly due to the widening of trade deficit, with economic recovery kicking in. A major achievement of the Modi government undoubtedly has been reining in the current account deficit (CAD). It is a well-known fact that a higher CAD leads to imported inflation, something the Modi govt has assiduously avoided. In FY18, FY19, and FY20, India’s CAD was 1.8%, 2.1%, and 0.9% of GDP respectively. In FY21 India reported a current account surplus (CAS) of 0.9% of GDP for the first time in over 17 years. For a fast-paced economy like India, a CAD of 2.5-3% of GDP is not a problem, ideally speaking. However, one needs to be reminded that in FY13, under an incompetent Congress, India’s CAD had snowballed into a dangerously precarious level of 6.8% of GDP, completely destroying India’s external economy and setting the stage for high inflation. Hence Congress has no business lecturing the Modi government on the handling of inflation or related matters.
The balance of payment (BOP) has remained in surplus on strong FDI inflows (FDI inflows into India stood at a robust $83.57 in FY22) and a narrower current account balance in the last few quarters. In FY23, even if the trade deficit widens as the economy reopens, strong inflows will keep the current account deficit in check. A fact worth mentioning here is that in 2021, the Rupee depreciated only 1.8% against the Dollar, outperforming its global peers such as Japan’s Yen, South Korean Won, South African Rand, and EU’s Euro which depreciated by a far higher level of 11.5%, 9.7%, 8.5%, and 7.9% respectively. More the depreciation, more the chances of importing inflation. It is because the Modi government has managed the current account balance very effectively, that the Rupee has not seen any untoward volatility, which in turn has helped India in reining in imported inflation, despite India being a net oil importer and a net Commodities’ importer.
A rise in risk appetite in the global markets helped the Rupee perform better than its peers in 2021. Inflation which largely remained under RBI’s comfort zone in the last year, helped the Central bank to maintain lower borrowing costs to support the economic recovery and this also contributed to Rupee’s steady performance. Food accounts for a much larger share of the average household consumption basket in EMDEs, which means that inflation in those economies is likely to prove persistent. Today’s higher energy prices will translate directly into higher food prices tomorrow (through higher costs for fertilizer, transport, and so forth). Food inflation is the most regressive form of taxation as it burdens the poorest, the most. And it is here that the Modi government, reached out to the last mile standing, via the PM Garib Kalyan scheme.
In the absence of global policy options to resolve supply-chain disruptions, the task of addressing inflation is largely left to the major Central banks. While the US is poised to undergo a modest tightening (by historical standards) in 2022, this is unlikely to be sufficient to rein in inflation. The US Federal Reserve’s tendency to do too little, too late is well known. The US and other advanced economies failed to tackle inflation quickly during the 1970s and they ultimately needed far more draconian policies, which led to America’s second-deepest post-war recession, along with a debt crisis. As the old saying goes, “A stitch in time saves nine.” So while the US and large parts of the developed world are likely to grapple with hyperinflation or stagflation, which could further deteriorate into a recession going forward, the timely moves by the Modi government to give over Rs 2 lakh crore worth of cash to farmers via PM-Kisan or say free food and free ration to the needy, collateral-free loans to MSMEs via the ECLGS scheme and liquidity support to the contact-sensitive sectors, have all worked wonders. The US Fed raised its benchmark rates by 25 basis points in March 2022 followed by a lumpy 50 basis point rise in May 2022, bringing the threshold benchmark rate from zero in February 2022, to a stiff 0.75% in May 2022. But this 75 basis point interest rate hike, may still not be enough to curtail galloping US inflation, what with the Fed running a massively bloated balance sheet that needs drastic surgery. There are of course talks of the US benchmark interest rate rising to 1.9% by July this year and 2.7% by the end of 2022 or early 2023. A rise in US interest rates, other things remaining the same, is usually associated with global risk aversion which in turn could keep the Rupee and all other currencies relatively weak. However, as mentioned above, the INR is unlikely to fall beyond 80 to the Dollar, due to supporting factors.
External geopolitical factors such as the Russia-Ukraine war and the resultant supply chain disruptions have led to an increase in the prices of several essential items such as energy, food, and metals. Many argue that since India imports a fraction of its oil from Russia, the ongoing crisis there should not have an impact on Indian fuel prices. These people miss the fact that the effect is felt on the Indian basket of crude oil, which has a direct impact on the price at which India buys Oil. The price of Oil available for import by India increased from about $73.3 a barrel in December 2021 to over $110 a barrel in the first week of April 2022. In March 2022, the Indian energy basket recorded its highest price at $128.24 per barrel, while Brent Crude went ballistic, beyond $130 per barrel for the first time since 2008, the highest in 14 years. Even in mid-May of 2022, Brent Crude has been trading at between $110-$113 a barrel.
India imports over 83% of its Oil requirement. In addition, since fuel prices are relatively unregulated in India, this means external events can have a significant impact on domestic fuel prices. However, despite this, prices of Petrol and Diesel were not changed since December 2, 2021, for 137 days in a row. LPG prices were not changed since October 6, 2021, or 167 days. The current hikes in Petrol and Diesel prices come against this background. The hikes in Petrol and Diesel in India by 5-10% in early 2022 are minuscule compared to the massive rise of anywhere between 52-58% in other countries, in the last few months. In the US, Petrol costs an average of between $4.5 to $4.637 per gallon, which is nearly 20% higher than the price just a few months ago. In the UK, Petrol prices have consistently been hitting all-time highs over the last month, with the latest price being between 1.6 to 1.79 pounds a litre. This is over 20% higher than it was a few months ago. In Germany, the price of Petrol has increased by 15% over the last few months alone.
Retail food inflation (CFPI), which affects the common man the most has remained benign in India through most of the year and slightly increased recently to 5.85% in February 2022 and 6.95% in March 2022, due to external factors. Average inflation for the period April-March 2021-22 stood at 5.85% as against 6.22% in the corresponding period the previous year, as in, the pandemic year. In the monetary policy announced on 8th April 2022, the RBI raised its inflation projection for FY23 from 4.5% to 5.7%, primarily on account of the phenomenal rise in global Crude Oil prices. But 5.7% is still lower than RBI’s upper band of 6%.
RBI maintained an “Accommodative stance” but hiked the Repo rate in May 2022, from 4% to 4.4%, for the first time since August 2018. Of course, with the 10-year benchmark yield hitting 7.4% recently and hovering largely around the 7.35-7.38% levels, at some point this year RBI will have to move to a “Neutral stance” and raise the Repo rate more frequently and sharply, to curtail inflationary expectations. But since calibration has been the essence of RBI’s policy, rather than lumpy hikes, any rate hike will also likely be a calibrated one, which is absolutely the right way to do it. Post the Repo rate hike, the standing deposit facility (SDF) rate stands adjusted to 4.15% and the marginal standing facility (MSF) rate, and the Bank Rate to 4.65%.RBI also hiked the cash reserve ratio (CRR) from 4% to 4.5%, to suck out excess liquidity of Rs 87000 crore from the system. To cut to the chase, the RBI has been very nimble-footed.
Since the Modi Government took charge in 2014, inflation has remained under control. Retail inflation crossed the 6% mark only eight times between May 2014 and March 2020, when the nationwide lockdown was announced to protect the nation from COVID-19. Post-pandemic, the rate of CPI inflation crossed the 6% mark only rarely, and that too only in response to external, largely uncontrollable factors. To set some context, it is important to note that the country experienced the worst era of inflation from 2010 to 2014 under the Congress-led UPA. (To be continued…)
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. Part one of the article was published last week.
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DROUPADI MURMU POISED TO BE THE PRESIDENT AFTER BJP CHOOSES HER
It is virtually certain that Droupadi Murmu, former Jharkhand Governor and Odissha’s Ex-Minister is going to be the next President of India after she became the unanimous choice of the NDA constituents as also some regional parties such as Biju Janata Dal and YSR Congress. The lady would also be the first tribal and the second woman to be the Head of the State and thus the country’s first citizen. Although the Opposition parties have fielded former Finance Minister and veteran politician Yashwant Sinha for the coveted post, it is most unlikely that the highly competent member of the Atal Behari Vajpayee’s Cabinet stands a chance given that it is all about the numbers game and they are heavily stacked against him. There is no doubt that Sinha would have been a very capable President but in choosing Droupadi Murmu, the BJP has made sure that the message of the Saffron Brigade’s commitment towards the tribals and economically depressed sections was reiterated. The tribals in large parts of the country have been voting for the BJP but under Prime Minister Narendra Modi, the party has learnt the art of consolidating its support base. It would have been an ideal situation if the next President had been chosen through a consensus instead of a symbolic fight that would ensue. Yashwant Sinha has been a part of the BJP and may have many admirers in his previous party. However, it is not expected that any of his erstwhile colleagues would vote in his favour and even his son and former Union Minister, Jayant Sinha, the sitting MP from Hazaribagh, has made it clear that he would be voting as a member of his party and not in any other capacity. Droupadi Murmu would no doubt be the next President in the current scenario but she will have to face enormous challenges which could be very new to her. The President is the supreme Commander of the Armed Forces and is also a part of the Parliament in our system. She would have a large set of advisers to see her through difficult times, but in the end, it would be her own discretion and understanding of the entire system that shall stand by her at all junctures. Many Opposition leaders are apprehensive about her capacity to deliver and are unfairly undermining her choice. However, they must understand that in a democratic set up like ours, everyone has the right to aspire and occupy the highest office of the land. She is not being foisted but shall be duly elected by members of the legislatures and Parliament. Therefore, her rise to the esteemed position would be completely legitimate and it would be totally unnecessary to find any kind of fault in her. In fact, once she gets elected, the entire Nation should solidly back her and wish her well for a promising tenure. It would have been unthinkable many years ago that a tribal would ever be the President but if the BJP and its allies are making it possible, it is a tribute to their vision and acceptance of the need to promote economically depressed and socially deprived sections of our society.
The endemic of gun violence: An American tragedy
The Senate passed a bill on Thursday aiming at overhauling the existing laws on firearms.
The debate over the unimaginable carnage due to gun violence and privation of stricter gun control laws in the United States has grown and faded over the years and gets stirred frequently by incidents of gun violence. Last month the mass shootings at the Elementary School in Uvalde, Texas, again reignited the fierce debate over gun control legislation in the country. Amidst the political divisions over how to address gun violence, the U.S. Supreme Court’s decision on Thursday to strike down a New York Law limiting gun-carrying rights of American citizens has expanded the existing gun rights in the United States. President Joe Biden was extremely disappointed by the Supreme Court’s decision, as it “contradicts both common sense and the Constitution, and should trouble us all”.
Guns have been woven into the fabric of American culture and politics since the Second Amendment (1791) to the U.S. Constitution affirmed that “the right of the people to keep and bear arms, shall not be infringed”. Gun legislations in the United States are built on the judicial interpretations of the Constitution and it was on the grounds of the Second and Fourteenth Amendments (1868) that in the case of District of Columbia vs. Heller (2008), the Supreme Court, in its landmark decision, declared the ban on handguns as unconstitutional, therefore, reaffirming the individual right to possess firearms and use them for self-defence.
According to the National Firearms Survey of 2021, more than 81.4 million Americans above the age of 18 years own firearms, which makes up for almost 32 per cent of the adult American population. But the actual numbers are believed to be much higher as the prerequisite for a permit or registration to purchase guns is not a necessary requirement in all American states. America’s problem with gun violence is not limited to mass shootings, although the use of firearms is disproportionately higher in incidents of mass shootings compared to other forms of shootings, they are still relatively rare. In 2021, mass shootings accounted for less than 2 per cent of the nearly 40,000 fatalities resulting from gun violence in cases of homicides, police shooting, domestic violence, accidents and suicides which make up the highest number of gun-related deaths in the country.
Over the years, the National Rifle Association of America (NRA), the US gun rights advocacy group has played a big role in pushing forward the idea that guns are necessary for self-defence. They believe that owning a gun is a basic right similar to their right to free speech, and gun control legislation is an effort to deprive law-abiding American citizens of their fundamental right to protect themselves. The NRA continues to oppose any effort to implement gun control policies and initiatives that override constitutional due process protections. It has shifted the narrative of gun politics where gun ownership is paralleled to patriotism and has become a political identity. Gun violence has taken more lives than any other public crisis in the US. Compared to other western countries, the US does not have an overall crime problem, but it certainly does have more lethal violence attributable to the prevalence of guns.
Over the years, the subject of gun rights has become an intensely partisan issue, with the Republicans voting in favor of protecting the gun rights and the Democrats voting against them and placing more importance on gun regulations. There are federal gun laws that apply uniformly across the whole United States, which ban convicted felons, people with mental illness and kids under the age of 18 years from buying guns. But the gun laws are not uniform across all states as there are state laws, and each state law has its own leeway to enforce their own regulations that are wildly at variance with one another. For instance, in Massachusetts which is a strong Democratic state, police permit and a background check to buy a gun is a legal requirement, whereas in Texas with a strong Republican state, there are laws that permit citizens to carry concealed hand guns without any permit. There are more than 20 states that do not require any permit for purchasing firearms. These differences reflect the underlying partisan divide which has grown wider in the last three decades and is the greatest political and ideological split between the Republicans and the Democrats compared to any other issue in the American political life.
The US Congress has repeatedly failed to pass tougher gun laws and legislative reforms even as public opinion strongly pushes for it, but the issue of gun control is a political battle than it is a public opinion battle. According to a Gallup poll conducted in 2021, only 52 per cent of the Americans believed in making stricter gun laws, a drop from 67 per cent in 2018. The United States is vastly divided on political partisan lines and gun ownership and these two divisions have created barriers making it difficult to move forward and overcome policy change at a national level.
President Biden considers gun violence as a public health epidemic and his plans to tackle gun control include investing in evidence-based community violence interventions to address the root causes of gun violence. After the mass shootings in Uvalde, the Biden Administration wants to toughen guns laws and make sure the ones that already exist are actually applied including zero tolerance policy for gun dealers who flout the rules. He also called for stricter laws to be imposed on ghost guns as these weapons are sold in parts and without a serial number so they cannot be traced. These are easily available kits which can be purchased online without a background check and can be turned into a fully functional firearm. Biden also wants to bring back the ban on assault weapons, mostly used in mass shootings. He himself authored the assault-weapons ban, which was in place for a decade until 2004.
Given the political climate and a divided Senate, President Biden has few realistic avenues to pursue gun control legislation without congressional action. The Democratic push for more gun control and regulation is often met with voters and politicians in Congress who believe that guns are not the problem and perceive it as an attack on the constitutional rights of law-abiding citizens. There is always a promising consensus on potential legislation, but usually the prospects of a bipartisan action on gun control fades within weeks of mass shootings. The Senate on Thursday (23 June) passed a Bipartisan Gun Control Bill in a 65–33 vote, which will next have to clear through the House of Representatives before going to President Biden’s for his signature. The bill is considered to be an important legislation as it revises the measures such as expanding background checks for gun buyers under the age of 21 years and offering funding to states that have emergency programmes in place to seize guns from people deemed dangerous by a judge. But as the Senate worked towards this gun safety legislation, the Supreme Court overturned a handgun restriction.
Through the influences of culture and politics, the United States has a very powerful gun-centric movement where both gun rights and gun regulations have been respected, but at the moment gun violence is a public health issue. Gun homicides are number one cause of deaths for all youth in America, the No. 1 cause of deaths for Black men and the highest rate of firearms deaths among the world’s wealthy nations. Mass shootings in other western countries like New Zealand, Switzerland, Canada and UK have prompted these nations to enact gun reforms by imposing measures such as bans on semiautomatic firearms, stricter background checks and national registry requirement. To tackle the tragedy of America’s accelerating epidemic of gun violence there is need to address the divide on gun control regulation and find a common ground between Democrats and Republicans for a bipartisan outcome, which respects the Second Amendment, makes a significant headway into preventing gun crimes, ensures public safety and earns a wide support in the Senate.
The author is a doctoral candidate at the centre of Canadian, US and Latin American Studies at Jawaharlal Nehru University.
Reforms needed to overcome ills of representative democracy
The first basic question is how many of us understand the difference between representative democracy and participatory/direct democracy? For the record, we are a representative democracy where selected representatives are expected to debate, provide inputs from their constituencies and enable passing of legislations that push India into the next century.
The question that repeatedly haunts us is what is wrong with India when there is so much The question that repeatedly haunts us is what is wrong with India when there is so much right happening around us. Why are path breaking reforms that were pending for decades, resisted after they are legislated? The back lash to the most recent much needed Military reforms, preceded by farmers bill, labour reforms etc. are perhaps symptoms of a disease that is yet to be fully understood.Its contours are obliquely discussed in debates both in print and social media.
The first basic question is how many of us understand the difference between representative democracy and participatory /direct democracy? For the record, we are a representative democracy where the elected representatives are expected to debate, provide inputs from their constituencies and enable passing of legislations that push India into the next century. That the Parliament does not function and that all political parties play to the gallery are there for all to see. But there is no angst, peaceful marches or even vandalism to show our rejection of petty politics on display. But repeatedly one hears seasoned journalists, academics and the educated commentators state that not enough consultations with the people have been done and hence the backlash. Really? On a variety of complex social, economic, industrial, military legislations or executive decisions, can we have open consultations with a billion people-largely uninformed due to literacy/education related constraints? No.
That is why we have a representational form of democracy. Here lies the next challenge. Due to the very nature of politics right from independence, sane, educated, well meaning and knowledgeable citizens do not wish to be in the money-muscle power driven elections. Even the most talented, patriotic, and affluent citizen cannot hope to win an election. Criminals and those who impress the poor with material or political promises of freebies will ensure that outstanding technocrats never succeed.Hence the preferred route of Rajya Sabha for the truly deserving.
Now, coming to “we the people.”Those of us who are educated, comfortable and well-endowed while participating incessantly on the social media and rarely in print, do not bother to vote, The only means to eliminate criminals and frauds from being elected is to participate with the EC to stem the tide of self-serving, corrupt or even dynastic politicians.Holding the political party accountable for noncompliance with manifestos and rejecting freebies with severe fiscal and financial liabilities on much needed public funds are essential features for reforms at the people’s end. We have a responsibility that we have will fully shunned, as we the people do not necessarily wish to participate in the process of finding the right people to represent us. The media does not believe in exposing our politicians to well informed debates.
The latest reform concerning the Military are being debated with elected representatives who neither know the ranks and structure of the Military nor even the difference between recruitment of soldiers and the selection process of officers. Just recently an educated politician referred to the former Army Chief Gen JJ Singh as Major. But he vaxed eloquent on the reforms per se.
Veterans who participate in debates are guilty of indirectly accusing the present military Veterans who participate in debates are guilty of indirectly accusing the present military leadership (who are the only accountable people for operations), of the most elementary consequences of such reforms: as if the knowledge resides only in them. By so doing in public, they are casting aspersions on the competence of the serving community. For the record they all begin their argument with how timely such a bold reform is. But……and this is precisely the first red flag for creating confusion that could affect the morale of the serving community, when the serving Chiefs have repeatedly assured that they will plug loop holes as they progress.
That the Parliament does not function and that all political parties play to the gallery are there for all to see. But there is no angst, peaceful marches or even vandalism to show our rejection of petty politics on display. But repeatedly, one hears seasoned journalists, academics and the educated commentators state that not enough consultations with the people have been done and hence the backlash. Really? On a variety of complex social, economic, industrial, military legislations or executive decisions, can we have open consultations with a billion people-largely uninformed due to literacy/education related constraints? No.
Perhaps such senior veterans were too busy in their careers and forgot to mentor and train their subordinates who now occupy decision making positions. You reap as you sow.
The most important lesson is that, when a decision is taken, after consultations with stake holders and the details are not available with the veterans, the best way is to communicate with the current military leadership directly. That would be of immense value than debating with an anchor on a TRP hunt and a panel of bumbling politicians.
Mr K Subramanyam, the doyen of the strategic community till the 1990s and the Chairman of the Kargil Review Committee, once said, “ the politician enjoys power without responsibility. The bureaucrat wields power without accountability and the Military assumes responsibility without direction.”
The recommendations of the Arun Singh committee report were to specifically address this lacuna by integrating the services with the MOD and creating a single point adviser to the RM/PM on matters military through CDS. It took 18 years to begin the process and create structures. We must learn to be patient with this new born set up. The new CDS is likely to assume duty soon. We are moving along the right path.
But India needs major reforms in administration, police and judicial sectors, along with labour, land and agriculture to to take her to the next level of eminence in international politics. There are enough lessons learnt to attempt all of these, if there a will.
Vice Admiral SCS Bangara, PVSM, AVSM (Retd.)
CORRECTING PAST WRONGS A DUBIOUS ENTERPRISE
Mohan Bhagwat, the RSS Sarsanghchalak, on 3 June took the entire nation by surprise when he famously said, “Everyday, we tend to raise new issues, we shouldn’t do that. Why should we pick up more quarrels? Gyanvapi is a matter of faith for us as part of our tradition. What we have been doing is all right. But why should we go about looking for a Shivalinga in every mosque.” The supremo of the RSS, the ideological fountainhead of the Bharatiya Janata Party (BJP), was referring to the Gyanvapi controversy, though older than the Ayodhya Babari–Ram Janmabhoomi dispute, which was revived after a local court in Varanasi ordered a survey of the mosque complex which Hindus claim was built on the rubble of a Hindu temple raged by Mughal Emperor Aurangzeb. It is interesting to note that the RSS ideologue further observed that the RSS was not interested to launch any agitation for the liberation of Gyanvapi as it has achieved what it set out to achieve on the Ayodhya dispute with Supreme Court verdict favouring a Ram Temple there.
Bhagwat’s remarks can be interpreted in two ways, however.
Anybody who has some sense of history would not disagree that upturning the historical wrongs is a dubious enterprise. Not so long ago a study by IIT Gandhinagar and Archaeological Survey of India (ASI) had revealed a three-storey structure and a Buddhist cave under the Somnath Temple in Gujarat. When the digging was in full swing for the Ram Temple in Ayodhya, Buddhist artefacts and other remains were found. Two PILs were filed in the Supreme Court to seek protection and preservation of the India’s non-Hindu ancient heritage. Justice Arun Mishra not only trashed the PILs but also imposed a fine on the petitioners. His opinion was not different from the six-judge bench headed by Chief Justice Ranjan Gogoi which simply did not consider the Buddhist claim on the site while delivering verdict in favour of a Ram temple. It is a well-known fact that Ayodhya was historically a Buddhist pilgrim centre.
Neo-Buddhists and Dalits have been quite vocal about how ancient Buddhists shrines were usurped or destroyed and Hindu temples were built over their rubble. Amid the raging Gyanvapi controversy, Ratan Lal, a Delhi University professor was arrested by Delhi Police on May 20 over a social media post on Shivlinga. A week or so before, a Lucknow University professor was manhandled and beaten up by ABVP goons for his not-so-favourable views on Gyanvapi issue. Both these professors are Dalits.
At a time when the RSS is going an extra mile to bring Dalits and Adivasis into the larger Hindu fold, such incidents may play spoil sport. It is no surprise then if this factor weighed on Bhagwat’s mind when he made his famous remarks.
Bhagwat chose to put things straight amid another fierce controversy that Nupur Sharma’s intemperate remarks, which she had made against Prophet Muhammad during a TV debate, had created. Sharma had been sacked by the BJP top brass so had been Naveen Jindal a day before, and the backlash from the Gulf and other Muslim countries had taken India aback.
Over 15 Islamic countries, including Saudi Arabia, Kuwait, Qatar, Oman, the United Arab Emirates and Iran, had denounced the remarks. Many of them had summoned Indian ambassadors. Sharma’s had made those ill-informed and intemperate remarks when Vice President Vankaiah Naidu was in Qatar heading a Indian business delegation there. The Grand Mufti of Oman Sheikh Al-Khalili had called for boycott of Indian goods so did some other Gulf counties.
The controversy had not only dented India’s image among Muslim countries, as National Security Advisor Ajit Doval now candidly admits, but had put the spanner in the works of Prime Minister Narendra Modi, who has been so assiduously building bridges with Gulf countries. He was the first prime minister to visit UAE in 2015 after more than three decades. India’s foreign policy since then has put building trade ties with Gulf nations on top priority, which is not misplaced by any yardstick as it is essential for countries energy security. According to an estimate, 4 million Indians work in the Gulf, making remittances of over $80 billion every year.
Barely three days before Bhagwat spoke, the US State Department had in a report slammed India for attacks on members of minority communities. The government had to pull all stops to control the damage the controversy was doing to the country globally. It was left to Bhagwat to rein in on elements whose acts were frittering all the gains that Modi had made all these years.
The lesson: seeking upturning of injustices of the past committed by Muslim rulers is one thing, but building bridges with Muslim countries is an entirely different ball game. Both cannot go hand-in-hand.
Chinese belligerence on Taiwan: Rhetoric or substance?
The larger geopolitical context of the duel by Beijing and Washington over Taiwan needs interpretation and analysis with reference to the size of the Chinese economy, its increasing military prowess and belligerent diplomatic behaviour in its neighbourhood.
During the recently concluded Shangri-la Dialogue in Singapore, the Chinese Defence Minister Wei Fenghe declared that “China will not hesitate to start a war” to stop Taiwan from declaring independence. Perhaps, a reaction to US President Joe Biden’s reiteration of the US commitment to defend Taiwan last month on the sidelines of the announcement of the Indo-Pacific Economic Framework (IPEF). The message from Minister Fenghe, however, was loud and clear: Taiwan is integral to the Chinese geopolitical imagination. President Biden, since the inauguration of his presidency in January 2021 has been critical of Chinese military activities over and around Taiwan and has expressed strong support for Taiwan. China, on the other hand, with increasing frequency and number of fighter aircraft involved, has violated the Taiwanese Air Defence Identification Zone (ADIZ). It has also made several naval incursions and forays into the Exclusive Economic Zone of Taiwan.
The larger geopolitical context of this duel by Beijing and Washington over Taiwan, however, needs interpretation and analysis with reference to the size of the Chinese economy, its increasing military prowess and belligerent diplomatic behavior in its neighbourhood. That Chinese attitude and actions have caused apprehensions and disturbed peace in Western Pacific is now an established reality. For the US, this translates into erosion of its pre-eminence in international affairs and geopolitical dominance, acquired after disintegration of the Soviet Union. Its reputation as the sole superpower is at stake in the international system in general and in East Asia in particular. Furthermore, its strategic bases in the region stand threatened and their utility questioned, if it remains an onlooker in the event of such provocations. The US efforts, therefore, are directed towards restricting Chinese influence through diplomatic rhetoric, multilateral forums and deep-rooted historical alliances in the region. US counter-measures to deter China at various levels can be identified in the region, though the official line is to refrain from the terminology of containment.
Economically, as a bulwark against the strength of Chinese trade and business in the region, the US announced the Indo-Pacific Economic Framework (IPEF) last month. A geo-economic bloc, created to rival the China led Regional Comprehensive Economic Partnership (RCEP), the IPEF excludes China along with Myanmar, Cambodia and Laos. IPEF focuses on four themes: Fair and Resilient Trade; Supply Chain Resilience; Infrastructure, Clean Energy and Decarbonization; and Tax and Anti-Corruption. These themes are reflective of the response to the disruptions of the supply chain caused by the Covid-19 pandemic; an oblique reference to the issues generated by Chinese debt-trap diplomacy; and the Sustainable Development Goals set up by the United Nations. Initial and substantial economic thrust to kickstart the venture may have to be borne by the US. Critical, however, to the success of the IPEF will be traditional US allies (Japan, South Korea) and India’s capacity to create alternative mechanisms to replace established Chinese raw-material acquisition and manufacturing networks.
With strong economic performance spanning three decades, China’s military expenditure has increased manifold. A substantial proportion of the expenditure is directed towards investment in defence technologies and innovations. Recently, the Peoples Liberation Army’s (PLA) twitter handles, in a show of strength, claimed that China has the best fighter aircraft in the world and the scientist at the PLA Rocket Force disclosed testing of hypersonic missiles. In both the instances, they tended to undermine US military capabilities. Combined with such rhetoric, frequent violations of Taiwan’s ADIZ, threatening US reconnaissance aircraft and accosting US aircraft carriers in the region, China’s actions disregard military conventions and established norms. To US’s credit, its armed forces stationed in the region, have responded firmly and have not been discouraged, especially with respect to Taiwan. Diplomatically, the US insists on China’s adherence to and respect for the “rules-based international order”.
US emphasis on the “rules-based international order” may sound hypocritical because its record in ratification and upholding of the United Nations Convention on the Law of the Sea III is not enviable. The United Nations Association of Australia defines the “rules-based international order” as a “shared commitment by all countries to conduct their activities in accordance with agreed rules that evolve over time, such as international law, regional security arrangements, trade agreements, immigration protocols, and cultural arrangements” (UNAA 2016). China violates the UNCLOS III with impunity and regularity in the South China Sea and has been constructing military bases on islands whose sovereignty is disputed with states like Philippines and Vietnam. Adherence to rules, conventions and norms which China disregards has value in maintaining peace in the international order and functions even in most difficult situations.
Geopolitically, US efforts to remain a prominent and meaningful actor in the region have led to the creation of the Quadrilateral (Quad) dialogue with Japan, Australia and India and the AUKUS with Australia and the United Kingdom. Both these groups (especially Quad) have been vociferous in their demands to uphold the “rules-based international order” and the members have frequently mentioned China. Whether these statements impact Chinese behaviour remains to be seen, but responses from Beijing over the years have been aggressive in tone and tenor.
The US, through the Quad, AUKUS and the IPEF, has caused frustration in Beijing as these forums involve major regional actors. Taiwan and its independence, however, clearly and visibly is the most sensitive issue for China which generates immediate responses from China. Warmongering over the issue at the Shangri-La Dialogue in Singapore is sensational and may signal the intent and emotions of the Chinese Communist Party-led government. Will these words translate into action? It remains to be seen. The US, with its rhetoric on the defence of Taiwan and accusations of destabilizing the region, has maintained its long-standing stance of One-China policy as evident through the Pentagon statement in Singapore. Chinese statement also focused on military cooperation, strategic cooperation and mutual trust and not turning conflicts and differences into conflicts and confrontations. In essence, the current rhetoric is intended to test the other side’s resolve on difficult issues, but serves its purpose as a deterrent vis-à-vis current events in Europe.
The author is Associate Professor of Political Geography and Geopolitics at the Centre for International Politics, Organization and Disarmament, JNU.
With strong economic performance spanning three decades, China’s military expenditure has increased manifold. A substantial proportion of the expenditure is directed towards investment in defence technologies and innovation. Taiwan and its independence clearly and visibly is the most sensitive issue for China which generates immediate responses from China. Warmongering over the issue at the Shangri-La Dialogue in Singapore is sensational and may signal the intent and emotions of the Chinese Communist Party-led government.
China is involved in various disputes with its neighbours—including India, Japan, the Philippines and Vietnam—but none approach the degree of danger faced by Taiwan. China increases its military’s amphibious lift as China militarily threatens Taiwan through means such as ballistic missiles or amphibious invasion, in Hong Kong on 27 July 2021. ANI file photo.
THE FIRE IN AGNIPATH
The Agnipath scheme is off to a fiery start given the protests across the country, especially in Telangana, Bihar and the national capital. The Congress led a delegation to the Rashtrapati Bhavan complaining that no one was consulted before the announcement, the scheme was not presented before the Parliament Standing Committee, and at the very least, should have first been implemented via a pilot project. There have also been concerns about jobs for the 24 year old Agniveers who will not be absorbed in the army. Some opposition leaders have also pointed out that as with most of the Modi government schemes, this too was announced in haste without thinking the on ground implementation through.
All valid arguments, though there are equally valid arguments on the other side, the dominant one being that there is a need for a leaner, younger army. As Manish Tewari, Congress Lok Sabha MP and a former Union Minister, told NewsX that armies across the world are going in for a lighter footprint, and what one saves from the pension budget can be spent on modernizing the armed forces. He also pointed out that the idea was not as sudden as it seems, for way back in 1999, the Kargil Review Committee had recommended the same, that we should go in for younger and a learner armed forces. Tewari also wondered as to the opposition against Agnipath when there was no opposition against the Short Service Commission (introduced about two decades ago).
Perhaps as a reaction to some of the protests, the government has come up with assurances that some of the Agniveers would be absorbed in the state and central police forces. In addition, in an obviously choreographed manner, some industrialists have also made statements of job offers. Again, this is a criticism that could have easily been avoided if the scheme had been announced with a mandatory transition arrangement.
The one criticism that the Modi government cannot avoid—even by those praising the scheme—which is the way it was announced and implemented. There was no security risk here as we were told the government explained as to why the abrogation of Article 370 was done in such a furtive and swift manner. This was no surgical strike against black money where secrecy was essential as with demonetisation. This is taking away the dreams of hundreds of youths who spent their lives growing up, training to join the army. Those who had given or studied for entrance exams pre-Covid but their recruitment was put on hold due to the pandemic. Yes the government has addressed some of these fears with a one-time relaxation of the admission age, but again, it’s a step that could have been thought of earlier. And if the opposition had been taken along during the consultation process, they would have lost some of their moral right to protest. So we come back to the same old charge of a non-inclusive government. Though given the mandate PM Modi has, it’s a charge he is not going to take too seriously, despite the opposition crying hoarse, time and again.
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