India’s next mega scandal: Bad bank loans (Pakistan Observer)

Geopolitical notes from India

M D Nalapat

Friday, February 19, 2016 – The “Indian Express” was a newspaper known throughout India for its feisty reportage, even standing up to Indira Gandhi during the 1974-76 Emergency period, when almost all the freedoms enjoyed by the people of India got extinguished. However, subsequently the newspaper took on a new avatar, with outsize influence reportedly being wielded in its columns by individuals high up in the power elite such as Palaniappan Chdambaram, the Finance Minister of India during much of the period when Manmohan Singh was Prime Minister (2004-2014). Chidambaram is best known as the father of one of the most successful businesspersons in India, Karthi Chidambaram, who within a decade has joined the ranks of the super rich, being exceptionally proficient in discovering and making lucrative investments across the globe. The many trades of Karthi and the punters and brokers close to him need to be exhaustively studied by students of finance so as to discover the secrets behind the phenomenal success of the group in its trading activities, especially on the National Stock Exchange (NSE).

His unprecedented success has made the youthful Karthi talked about in hushed reverence by stockbrokers in Mumbai and Delhi, in particular for the unerring way in which he appears to have chosen winning positions on the spot market. His influence in Singapore, Dubai and Mauritius is known to be substantial. Of course, any link to his success and the fact that his father was Finance Minister must be taken as mere coincidence, and admirers of Karthi say that his success would have been on the same scale even if his father had been in a lesser position. Returning to the Indian Express, it would appear from its columns that the newspaper has recovered much of the élan of the past, with investigative reports appearing regularly, most recently on the writing off of loans amounting to Rs 1.14 lakh crores (2013-15) by public sector banks. Fortunately for the Union Ministry of Finance, the steep fall in oil prices from $ 140 to $ 28 a barrel has given the cushion needed to underwrite such massive write-offs, as less than a tenth of the benefit of the lower oil prices has thus far been passed on to the consumer, even though petrol and diesel prices were supposed to have been decontrolled and reflect market conditions.

There has been much tough talk about bank defaulters from Reserve Bank of India (RBI) Governor Raghuram Rajan, who is building up his resume by indulging in monetary experiments which will undoubtedly form the staple of classroom lectures when he returns to the US in a few years time. However, actual steps to punish the guilty within both corporatesas well as the banking system seems to be modest. Instead, the RBI has thus far succeeded in keeping secret details of just who the big defaulters are, and the extent to which such depredators are still getting access to massive bank loans even while defaulting on old loans. Certainly there are companies that have had loans go sour because of factors beyond their control, but there are also companies whose managements have systematically siphoned off (shareholder and bank) funds by over-invoicing imports and under-invoicing exports.

Under a brilliant jurist, Chief Justice T S Thakur, the Supreme Court of India has ordered the Reserve Bank do reveal the names of the top defaulters,. and it is hoped that this order will be complied with, as the public have a right to know just who the individuals and corporates are who have denuded them of so much wealth, without any visible efforts by the RBI at holding them or the bank executives who are their accomplices accountable. Prime Minister Narendra Modi has several times talked of his determination to stamp out corruption, and it is expected that he will order the Union Finance Ministry to ensure that the assets of the principal defaulters be seized and sold rather than follow the traditional practice of having the taxpayer pick up the tab.

Fortunately for the major defaulters, they have as many friends in the Opposition benches as they have in the Ruling side, which is why there has been so little political blowback to the reportage of the massive write-off of bank loans in just a few years. However, these days Civil Society is slowly emerging as a force for change, and it is inevitable that the bank write-offs will become a staple of the public discourse in the coming months. Prime Minister Modi, who won millions of votes because of his reputation for honesty, will need to move swiftly and decisively in the matter, including taking action against those who have given too long a rope to the mega defaulters, as otherwise his government will get scalded by the heat over the Rs 1.14 lakh crore bank loan write-offs to individuals who live the lifestyles of maharajahs, mostly abroad, with personal yachts, ets and villas where they entertain VVIPs with the cash they have borrowed and never intend to repay. For the moment, the spotlight is on the RBI, especially its tough-talking Governor. Will Raghuram Rajan match his words with action or will he follow the example of so many of his predecessors and try and give a free pass to those who have looted public funds?

Under Rajan, bad debts of India’s banks has grown significantly even while manufacturing has slowed because of his tight money policy, a series of measures suited to the US (the country in which he has spent almost all his adult life and to which he is expected to return after his stint in India). The RBI needs to take the lead in ensuring that the taxpayer not be made to pay for the follies of the public sector banks, which have made loans that are demonstrably bad and continue to do so. Raghuram Rajan has to ensure that the assets of the big defaulters be taken over and sold to cover the immense liabilities they have piled up, and which are silently being written off by bank managements that need to be brought to account for this in the years to come.

—The writer is Vice-Chair, Manipal Advanced Research Group, UNESCO Peace Chair & Professor of Geopolitics, Manipal University, Haryana State, India.

http://pakobserver.net/2016/02/19/indias-next-mega-scandal-bad-bank-loans-2/

http://pakobserver.net/2016/02/19/indias-next-mega-scandal-bad-bank-loans/

India needs a Modi budget, not another ‘babu budget’ (Sunday Guardian)

By M.D. Nalapat | 13 February, 2016

Prime Minister Modi must step in to ensure that the budget that will get presented on 29 February is of a post-colonial mould with lower taxes.

A few feeble efforts were made in the early years of Independence to ensure that Union Budgets reflected the economic imperatives of a free society rather than the colonial objective of squeezing out as much revenue as possible from the people within a matrix of control that made citizen advancement difficult if not impossible. Genuine experts in the unlocking of synergies within the fiscal system (so as to ensure high levels of per capita income growth) were appointed: Shanmukham Chetty, John Mathai and Chintaman D. Deshmukh among them. However, such men soon proved the exceptions, as in serial mode, Prime Ministers ensured that standard-issue politicians were placed in that role who were subservient in the formulation of policy towards officials. Because there is no separate Indian Finance Service, officials in the Ministry of Finance continue to view the budgetary exercise as a means of raising revenue rather than as an instrument of rapid progress in industry, agriculture and services. While preparing the budget, attention gets overwhelmingly focused on estimates of expenditure on schemes and personnel. Thereafter, a pairing takes place of such expenditure segments with possible revenue sources, which get taxed at the level needed to meet the budgeted expenses. Such an approach does away with the considerations of efficiency and productivity, which ought to have been uppermost in their calculation and approach. While the actual budget proposals are unknown, it is easy to predict the contours of any budget where the colonial officer cadre will be in the driver’s cabin so far as preparation in concerned.

They would, for example, oppose significant relief in income tax rates to Indian nationals, even in the instances when they themselves graduate to become Finance Ministers, as Manmohan Singh did in 1992. They would even seek an increase (perhaps from 14% to 16%) in Service Tax, another of the monstrosities introduced into the tax system by Palaniappan Chidambaram during the UPA days. Why an individual, who already pays Income Tax and the many other imposts levied on the productive in this country, should pay an additional burden of a third or more of his total direct tax burden simply for doing a paid service is a mystery, except if we posit that colonial-minded officials dislike citizens who perform services for others. Had there been no service tax, the sector would have continued to grow as exponentially as it did before Chidambaram stepped in, thereby creating tens of millions more jobs and a similar number of Income Tax payers. However, Services, a sector vital to the fulfilment of the generation of a million and more extra jobs a month has lost its momentum after being hit by an irrational tax. And after the recent imprisonment of the CFO of an online travel agency and the likely incarceration of his CEO as well, the number of those courageous enough to invest in creating growth in India will plummet further. In matters of finance, getting back the moneys lost — with interest — is more important than sending people to jail. Had North Block the good sense to design a scheme with lower penalties for money returning from foreign havens, it would not have got back a paltry amount less than a thousandth of the estimated funds parked abroad by Indian nationals since the 1990s. 

North Block babus will oppose extra investment in growth creators such as the Railways, although they will look kindly on the recommendations of the 7th Pay Commission and schemes such as NREGA, which keep people poor and dependent on handouts rather than endow them with the skills needed to generate income rather than absorb it, of course even collectively not on the scale of those robber baron favourites of officials and politicians who get their bank loans written off in the thousands of crores each year. And to help fund such expenditures, they may even press for raising imposts such as a long term capital gains tax, ignoring the fact that the “gains” caused by inflation are not, in reality, benefits at all. Of course, the babus will fight equally hard to affix within the budget such freebies as a zero income tax on dividends, whatever the amount disbursed to individuals fortunate enough to get tens and even hundreds of crores of rupees in such a form even as their cooks and gardeners pay taxes on the paltry salaries they earn.

And rather than ensure that public sector enterprises such as Coal India, NTPC or NMDC use the cash reserves accumulated by them to expand product and employment, the colonial mind will gravitate towards taking away such surpluses through forcing them to buy back their own shares from the government. What little appetite has remained within the managements of these public enterprises to ensure a level of efficiency enough to generate surpluses would vanish under such a regressive policy, but officials who know they will soon be moving on to higher charges in other departments or agencies will not care. In the colonial mind, the people do not count. Which is why it is imperative that Prime Minister Narendra Modi step in to ensure that the budget that will get presented on 29 February be of a post-colonial mould, with lower taxes and more incentives for innovation rather than Chidambaram’s growth-deadening focus on raising of revenue to pay for inflated costs and salaries that reversed the direction of growth in India, a malaise that is now visible in full view, and which only the intervention of Narendra Modi can ensure.

http://www.sundayguardianlive.com/opinion/3299-india-needs-modi-budget-not-another-‘babu-budget’

Mark Zuckerberg scores a zero in India (Pakistan Observer)

Friday, February 12, 2016 - WHEN a politician in India meets a businessperson in the open, the odds are that nothing illegal will take place. Deals are done behind thick curtains, and preferably in London or Dubai rather than Mumbai and Delhi. That Narendra Damodardas Modi, the Prime Minister of India, meets billionaire businesspersons is no secret, as many of such meetings get reported in the newspapers, complete with photographs. What he promises is that he will not allow such personal interaction to cloud his judgment, a vow that was kept in the case of Mark Zuckerberg, the founder of Facebook, whose personal fortune is valued at $ 30 billion. 

In the US, when meetings take place between billionaire businessmen and Senators or other VVIP politicians, such trysts are usually accompanied by donations to the politician in question. The US is regarded as less corrupt than India, a position it has secured by legalising what in India is considered by the Indian Penal Code as criminal. The legal limits for campaign financing in India are so ridiculously low that they are often crossed in the first few hours of an election campaign. An abundance of hypocrisy infects both the chattering classes as well as politicians in India, so they balk from removing limits to election expenditure, thereby making more transparent election funding in the country. The result is that almost all legislators break the law on entering office, by swearing on oath that the expenses they incur during a campaign are much lower than the actuals. Both the US as well as India are democracies, sharing the common factor that the richer a candidate is, the greater the chance of success in the political arena. Mark Zuckerberg forgot that the chemistry of politics in India is different from that of the US, so he would have calculated that the jamboree he organized for Modi at his international headquarters, combined with strategic partnerships with businessmen of the immense reach of the Mittals and the Ambanis, would ensure that he got his way with “Free Basics”.

This is a scheme in which a wall is created within the Internet, and only those sites which are within this wall enjoy a privileged position. Others are kept out, so that finally Facebook will become almost a supra government in India, collecting data on hundreds of millions of citizens that would give insights into how to lead them into actions such as the storming of Tahrir Square in 2011. It is hardly a secret that Secretary of State Hillary Clinton worked hard to leverage the technological dominance of the US into a means of control of the political process in countries with low per capita incomes. If Zuckerberg had succeeded in persuading the Government of India to go ahead with its Free Basics program, within a decade, it would have become the most powerful agency in India, reaching into hundreds of millions of homes and transferring data on the most intimate and personal habits of citizens of the Republic of India. 

Of course, such a danger did not stop at least two Cabinet ministers in the Modi government into becoming - outside the public view - apologists for Zuckerberg. Not so Prime Minister Modi, who ensured that his government refused permission to Facebook to go ahead with the plan to create a two-speed internet, the faster and free version to be those platforms Facebook admitted into its fold, while the rest would limp along and in several instances, get burdened with high prices for its services, thereby driving ever more customers towards Facebook. It is an inexcusable fact that India does not have its own platforms for services such as those provided by Facebook, Twitter and Youtube. In contrast, China has developed substitutes for all three, although it has made the mistake of banning the US versions rather than allowing them to compete with homegrown substitutes. India is run not by elected politicians but by a cadre of officials called the Indian Administrative Service (IAS),the successor of the British-era Imperial Civil Service (ICS). 

From the day of their induction into the portals of government, IAS officers are taught to regard their political “masters” with the same supercilious scorn shown by Humphrey Appleby towards his minister Jim Hacker. They are also made expert in fending off any threat to their complete domination of the key levers of government, and are coached in how to ensure that every major function of governance be run by an IAS officer. Hopefully the day will come when Prime Minister Modi ensures a level playing field not only between the IAS and other central government services, but between career bureaucrats and members of civil society drafted to undertake key tasks. 

The IAS has created a web of governance far more irksome than what was the case under the British. What they seek is that every activity by the citizen or another non-governmental entity be banned unless given permission by the IAS. The more roadblocks that are created, the more the points at which bribes can be collected. There has been talk about Prime Minister Modi ensuring that the up and down movement of files that creates hideous delays in the taking of decisions be shortened, ad hopefully such an innovation will take effect in the third year of his term, overcoming opposition from bureaucrats. 

The decision on Facebook leaves room for optimism about the third year of Modi’s 5-year term being different from the first two, for key civil servants wanted Facebook to be allowed to segment the internet through its cleverly thought out plan, but failed because Modi refused to allow the effective formation of a monopoly by an organisation with a record of creating chaos in Egypt, Syria, Libya, Bangladesh and Ukraine with the help of the NGOs nurtured by Hillary Clinton in order for the US to gain levers into civil society. Mark Zuckerberg scoring a duck means that the internet remains free for thousands of young innovators to create another Yahoo! Microsoft or Google, not to mention Facebook, Twitter and Youtube.

That is, if a culture of freedom gets established in India over the next few years, rather than a continuance of the colonial model of governance in which the state has all the power and the people are at its mercy. Banning Free Basics is not enough. For India to leap forward, there has to be administrative and legal reform, as well as a culture of free speech, goals that seem far distant at the present 

—The writer is Vice-Chair, Manipal Advanced Research Group, UNESCO Peace Chair & Professor of Geopolitics, Manipal University, Haryana State, India.

http://epaper.pakobserver.net/201602/12/comments-1.php

http://pakobserver.net/detailnews.asp?id=288958 

Bill Gates prescribes costly foreign drugs for India’s poor (Sunday Guardian)

By MADHAV NALAPAT | NEW DELHI | 6 February, 2016

Bill & Melinda Gates Foundation has been accused of promoting interests of US-EU Big Pharma.

Once close to the UPA, but now cosy with the NDA, the Bill and Melinda Gates Foundation (BMGF), an exceptionally well-endowed private foreign entity, operates in India as a “liaison office”. Thus far, it has not reported to the Ministry of Home Affairs under FCRA (Foreign Contribution Regulation Act) 2010 provisions, even though it has given nearly Rs 1,000 crore to Indian NGOs since 2007, with Rs 178 crore being given to NGOs in India during 2013-14 alone. Records show that the BMGF does not pay any taxes in India, nor is it registered as a society, trust, NGO or company in the country. However, unlike in a similar case, that of the Ford Foundation, the Ministry of Home Affairs has ignored this. Indeed, Home Secretary Rajiv Mehrishi, according to an official working in his ministry, is “appreciative” of the BMGF. This may, of course, be because the organisation has done appreciable work in several areas of public health in India. The Gates Foundation has spent heavily in India, and according to a well-wisher, “has made a considerable difference in matters relating to public health”. A negative point is that the Bill & Melinda Gates Foundation has been accused of promoting the interests of US-EU Big Pharma to the detriment of the pharmaceutical industry in India, which, despite scant assistance from the UPA and its predecessors—all of whom have been in thrall to foreign drug manufacturing entities—has nevertheless emerged as a major factor in the provision of affordable drugs to the underprivileged in all the locations where US-EU pharma giants have been unable to block market access to Indian products.

The expectation of the domestic pharma industry is that Prime Minister Narendra Modi will break the mould of support to videshi giants, rather than their swaseshi competitors and ensure that the machinations of US-EU pharma giants fail, so that Indian pharma products get a level playing field both in India and outside, rather than be discriminated against in the rush to embrace the hyper-expensive products of giant MNCs headquartered in the United States and Europe.

Despite government agencies in both the Centre as well as several states showing utmost consideration to the Bill & Melinda Gates Foundation by facilitating its numerous activities in India, and despite that organisation’s close links with top policymakers in the United States, including reputedly Bill and Hillary Clinton, both that country as well as the EU continue to discriminate repeatedly and unfairly against Indian pharmaceutical products, using fudged assessments of quality as well as multiple other means to ensure that much cheaper (but equally effective) Indian drugs do not find their way to pharmacy shelves in the US and the EU, despite the fact that these have been tested and found effective in India, and would benefit tens of millions of poorer patients. Worse, both the US and the EU aggressively block even the flow of drugs from India to Africa and South America, thereby condemning millions on both continents to death and incapacitation owing to Big Pharma drugs being unaffordable for them.

The BMGF Board has just three people and each is a billionaire: Bill and Melinda Gates and Warren Buffett. Both as a foundation as well as individually, each of these three hyper-rich individuals has invested substantially in US-EU Big Pharma stocks, thereby creating an apparent conflict of interest, while deciding which medication their foundation will champion. As a private foundation, the BMGF is only obliged to report its financial figures to the US government (so as to retain its tax-exempt status) and its functioning is, therefore, opaque in several respects. Each year, tens of millions of dollars get spent in publicity, the money flowing from numerous entities linked to the foundation.

Interestingly, groups funded by the BMGF are being directly embedded within key ministries in the Government of India, as well as in several state governments, notably Bihar, where Chief Minister Nitish Kumar has been in contact with Bill Gates himself. In other words, much of government policy in the field of health is getting outsourced to foreign agencies linked to the very drug multinationals who are working overtime to choke or to control India’s domestic drug industry.

However, it bears repeating that several useful campaigns have been launched by the BMGF. A source in the US described Melinda Gates as “the inspiration behind the foundation”. He added that she was “fully committed to improving public health in poor countries, especially among women and children” and that India was “a special concern to her”.

Almost always, US-EU Big Pharma products seem to be preferred over Indian alternatives when suggestions for vaccines and other drugs are made to governments by the BMGF, including for programmes in this country. This is despite the benefit to human life and welfare of the generics industry in India, which has become a special target of Big Pharma and their faithful cohort of regulators in both the US as well as the EU. This despite a growing clamour in both countries for abandoning the present path of giving the profit margins of huge pharmaceutical conglomerates in the US and the EU preference over the right of citizens to affordable medicine. Lobbying in the US by pharma companies (including those with manufacturing facilities in India) ensured that India was placed, on 30 April 2015, on the Priority Watch List in order to dilute its patent protection against attempts to create a Big Pharma monopoly in India. Surprisingly, a source in New York claimed that Economic Advisor to the Ministry of Finance, Arvind Subramanian had, in an earlier incarnation, “lobbied fiercely within the US Congress to impose sanctions on cheaper Indian drugs, thereby demonstrating the reach of Big Pharma in policymaking circles in India”. As part of its efforts at shutting down pharma production in India, the US Food & Drug Administration (FDA) issued notices to all the Indian facilities of Novartis, while the EU banned as many as 700 GVK products from its “open and free” market.

The BGMF funds international NGOs such as GAVI and PATH, which follow its policy of favouring the brands produced by US-EU companies such as Ely Lilly, Pfizer, GSK, Merck, Novartis and other such companies known for the high price of several of the medicines marketed by them. Although exact figures are difficult to come by, a health expert claimed that the “intolerably high prices of critical drugs produced by Big Pharma have resulted in as many as 38 million premature deaths in underdeveloped countries during the past decade”, and that this figure would have been “much more in case civil society groups in Europe had not agitated successfully for entry to cheaper substitutes from India for several extortionately priced drugs for killer diseases produced by pharma conglomerates in the developed world”. Because of the immense reach of Big Pharma as well as the BMGF, sources preferred to remain anonymous. This is in contrast to countries such as the UK, where whistleblowers have proliferated openly. Last month, the well-regarded UK based “Global Justice Now” brought out a report which detailed the awesome power of the BMGF, which in less than a decade has spent more than a billion US dollars on “advocacy”. In India, according to a health activist, “almost every health correspondent is being bombarded with favourable information about the BMGF”, and perhaps as a consequence, both in television as well as in print, negative comment on the giant organisation is almost zero”. However, it must be said that the foundation has several well-wishers, each of whom testifies to its immense pool of good work in India, and its generosity in funding health programmes and health professionals.

Interestingly, the Global Health Strategies (GHS) PR company, which is active in promoting goodwill for the BMGF, has been active in global campaigns designed to show that India is a country where violence against women and children is on the rise. Such negativism about the country has not dimmed its support within the political class in India, which extends across the political spectrum, with P. Chidambaram, Nitish Kumar and Kapil Sibal known to have a favourable view of the BMGF. In the case of Sibal especially, his personal contacts with the foundation are described as “frequent and close”. The foundation is also a member of the Global Investing Impact Network (GIIN), established in 2007 at a meeting chaired by the Rockefeller Foundation, and which contains such entities as JP Morgan and Goldman Sachs, known for their predatory search for profits from underdeveloped countries. It needs to be remembered that several such investors are active in the commodity speculation that has boosted prices of food staples in India. Recently, a small group of speculators based in Mumbai boosted the price of arhar dal, causing mass distress before the government finally moved. Speculation by cartels has been responsible for much of the rise in prices of several essential commodities during the Manmohan decade as well.

Another US-based organisation associated with BMGF is PATH (Program for Appropriate Technology in Health). This was involved in a vaccine trial, which caused deaths and illnesses among young girls. From 2009 onwards, 23,500 girls aged 9-15 were given vaccines which were intended to prevent cervical cancer. The trials were conducted in Vadodara in Gujarat and Khammam in Andhra Pradesh, both states in which the Bill & Melinda Gates Foundation had extensive influence. A vaccine (Gardasil) was produced by Merck and another (Cervarix) by Glaxo Smith Kline. By 2010, there were at least five deaths within the group of young girls in Andhra Pradesh and two in Gujarat. Had these taken place in the US, both companies would have had to pay billions of dollars in damages rather than escape with a much smaller financial liability. Also, unlike the US, in India the legal system means that suits and verdicts get delayed for decades. The PATH fiasco in both states is still winding its way through the courts and seems unlikely to get settled anytime soon.

Such comparatively derisory costs and penalties when compared to mishaps in trials conducted in the US or the EU are the reason why so many vaccine trials are being carried out by multinationals in India, thereby saving billions of dollars in expenses for pharma MNCs. Other NGOs linked to BMGF are GAVI and PHFI (Public Health Foundation of India), the latter being a wing of the Ministry of Health & Family Welfare (MoHFW), which works closely with operatives from PATH and GAVI. The potential ill-effects of mixing together multiple vaccines in the human body has not been given due attention in the pell-mell rush to approve vaccines for mass testing or usage in India, warn health professionals.

According to press reports in the UK, over half the consent forms used for the Andhra Pradesh and Gujarat vaccine trials had only thumbprints, as most of the parents and guardians were illiterate. The Daily Mail claims that many of the young girls interviewed were unaware that they were being subject to drug trials and that several suffered debilitating side effects. Interestingly, during the period when the trials took place, the BMGF held equity shares in Merck. Had the tests been a success, the vaccines produced by the two multinationals would have been included in the Universal Immunization Programmes of different countries across the globe, thereby generating huge profits for them.

In particular, foreign-made injectable vaccines are a favourite of the BMGF, which—according to a senior Health Ministry official—is seeking to introduce such vaccines into India without a local bridge trial. According to a senior official, the BMGF and its associated NGOs are working to ensure prime position for US-EU pharma products in the Family Planning 2020 and the Universal Immunization Programme. However, another said that such fears are unjustified, and that the foundation “has been of immense benefit to India, especially in the field of women and child welfare”.

Although the BMGF has influence even within the Union Cabinet, in India its reach has not penetrated as far as the Prime Minister’s Office. Both Prime Minister Narendra Modi as well as the Prime Minister’s Office (PMO) are known to have refused to intervene on behalf of the Bill & Melinda Gates Foundation in the matter of government decisions, thereby giving hope to domestic drug manufacturers that PM Modi will not allow foreign pharma giants to establish a monopoly over the domestic market. They regard it as imperative that the PMO point out to the BMGF the lower cost and equal medical effectiveness of Indian drugs over those produced by US and EU companies promoted by the foundation, so that Melinda Gates can fulfil her dream of better conditions for women and children. In the words of a senior official, “there is no way the global movement for better health launched by Bill and Melinda Gates can succeed without ensuring that a level playing field be given to Indian producers rather than relying only on the offerings of mega MNCs known for price gouging even in medicines essential for life”. 

Hopefully, the acknowledged idealism of Melinda Gates will prevail over the commercial instincts of Bill Gates and Warren Buffett, so that lower-cost options from India are given their due in the substantial work conducted globally by the Bill & Melinda Gates Foundation.

http://www.sundayguardianlive.com/investigation/3047-bill-gates-prescribes-costly-foreign-drugs-india’s-poor

Free Julian Assange now! (Sunday Guardian)

By M.D. Nalapat | 6 February, 2016

Assange has done the world a favour by revealing the hypocrisy of policymakers.

Policymakers in India are not known for backbone, else then Prime Minister Manmohan Singh would have offered asylum to Julian Assange when the founder of WikiLeaks sent the US security establishment into hysterical paroxysms by releasing thousands of secret diplomatic emails. 

If the outing of such communications has had the catastrophic effect on US interests, and indeed global security, that governments in the “free world” warned would soon occur, such damage appears to be invisible. The fact is that in democratic societies, greater transparency strengthens security and thereby the public interest.

Even individuals as inconsequential as this columnist have found mention in the cables, albeit in a less than complimentary way, apparently because of an opinion on Siachen given to an acquaintance, a professor of the University of Miami, who, at the time the discussion referred to in the cables took place, was in charge of the US embassy in Delhi. The view expressed in that meeting, which was that Manmohan Singh deserved to be hanged from the nearest street corner should he surrender military control over the Siachen glacier, was apparently not to the liking of the State Department, which has, over the decades, been obsessive in furthering the interests of the Pakistan army (as distinct from the Pakistan people) at the expense of India. It must be said that Julian Assange has done the world a favour by revealing the shenanigans of diplomatic discourse, as well as reveal what policymakers actually believe, as expressed in their secret conversations with US diplomats, as opposed to the lies they mouth in public on the same issues.

Not merely Julian Assange, this country ought to have given asylum to Edward Snowden as well. By doing so, it would have shown its independence from superpower pressures as well as done justice to an individual, who was, in common with Daniel Ellsberg of Pentagon Papers fame 45 years back, motivated solely by idealism rather than by personal gain in his actions. A bonus to India through giving Snowden asylum would have been insight into the way in which internal communications are being monitored by outside agencies. Hopefully, a time will come when the Government of India develops enough spine to ensure that Raisina Hill act in a manner which is autonomous of superpower and great power pressures rather than make compromises with the national interest in order to gain the favour of distant capitals.

For President Obama to lecture India about minority rights during his visit and thereafter fly off to Saudi Arabia and keep  silent about their treatment of women or non-Wahhabis is hypocritical. 

However, it is not India which is in the dock so far as Julian Assange is concerned, but Sweden, the US and the UK. In the case of Sweden, was it a coincidence that the charges of molestation against the WikiLeaks crusader were made soon after he became an “enemy of the state” in Washington, and not immediately after the actions which were described against the two complainants took place? It is difficult to imagine that individuals in good health would be unable to fend off unwelcome advances from a male who is clearly in less than stellar physical shape, and the way forward for Sweden would have been to have the trial in absentia, with Assange on videolink, so that the public could decide for themselves just who is telling the truth. By its role in the incarceration of Julian Assange in a room at the Ecuadorian embassy in London, the Swedish authorities have shown the extent to which Washington is a factor in their decisions. In the case of the UK, that it is a poodle of the US (and proud of that fact) is no secret, so it is understandable that the very country that gives lectures to others on the human rights of dissidents should itself act in such a detestable manner, by not even allowing Assange to have medical treatment outside the embassy without being arrested. 

In a rare display of independence, a UN body has found the detention of Assange to be indefensible and needing to be ended, but shame is not an emotion found in chancelleries out to make a point against those deemed to be egregious nuisances.

After its treatment of Bradley Manning, Julian Assange and Edward Snowden, with what moral force can Washington declaim against other capitals for alleged “human rights” violations? India has been a particular target of those in the Obama administration, who have subscribed to the agenda of think-tanks funded by the Wahhabi International, with allegations of “child slavery”, “minority oppression” and “denial of dignity to women” flying around discussions of the country. 

 Certainly, democracy in India is a work in progress, but for President Obama to lecture India about minority rights during his visit and thereafter fly off to Saudi Arabia and keep respectfully silent about that country’s treatment of those who are either women or non-Wahhabi is a new peak of hypocrisy. 

Julian Assange deserves his freedom. The man has been a welcome corrective to official deceit, and it is a matter of shame for Canberra that his own country, Australia, seems paralysed by fear when faced with the injustice being perpetrated on a citizen. 

The finest way the 21st century Anglosphere can assert its identity and its values would be for Washington and London to give Julian Assange back his freedom and his right to exasperate those in these and other capitals who have too much power for the good of their own people or the rest of the world. Free Julian Assange now!

http://www.sundayguardianlive.com/opinion/3007-free-julian-assange-now

Hillary banks on Afro-Americans, older voters (Pakistan Observer)

Friday, February 05, 2016 - FORTUNATELY for Hillary Clinton, who to her credit has never concealed her hunger for the Oval Office, most voters in the US act on the bass of hype rather than fact. President William Jefferson Clinton was brutal on the old, because of the fact that the favours he did for Wall Street such as the removal of the Glass-Steagal act resulted in millions of them losing much of their savings because of chicanery by financial conglomerates. As for African-Americans, besides the public hugs and expressions of concern, Clinton did little for them. Black Americans are much poorer now than they were when Bill Clinton was in office (1992-2001). However, he smiles and the hugs seem to have been enough, as this important segment of US voters is overwhelmingly in favour of Hillary Clinton rather than the candidate whose election would actually help them, Bernie Sanders. 

Airline companies are loath to hire the spouses of even their ace pilots to fly aircraft, as hospitals are of asking the wives of surgeons to don surgical masks and conduct operations, but millions of voters seem to have bought the Clinton line that being the wife of a US President is little different from the point of view of accumulation of experience than holding the job itself. Of course, Hillary Clinton was a US Senator as well as Secretary of State during the first,” Clinton Lite” term of Barack Obama, but her record in the first job was unspectacular while in the second, she was a disaster, going wholly wrong in making judgement calls on Egypt, Syria, Libya and much else. 

The sole beneficiary of her term in office as Secretary was a clutch of “human rights” NGOs with unrealistic prescriptions which proved disastrous when followed by the adoring Mrs Clinton friends recently in Iowa say that the Democratic Party organisation there was completely in the Clinton pocket, and succeeded in converting what ought to have been a win for Bernie Sanders into a narrow win for Hillary Clinton, through a Florida-style misuse of their powers and access to caucus. Apparently, there was non-stop communication between Hillary strategists and key Democratic Party office-holders in Iowa such that both worked hard at securing a decisive win for the matriarch of the Democratic Party’s most influential family. The Clintons have built up not merely a personal fortune but also a machine expert in trashing opponents and promoting the interests of Hillary Clinton through whatever means come to hand. 

It was a shock to them that even the connivance of local officials could not secure anything other than the most humiliating of “wins” for the former First Lady of the United Stares, who is famous in India for her love of Mughlai cooking, to which she was probably introduced by long-time assistant Huma Abedin, among the most effective personal staffers of any political leader in the US, who is known to have strong views on world leaders (including Prime Minister Modi of India) and has been very successful in grafting those views onto Hillary Clinton, whose roster of close friends includes Congress President Sonia Gandhi. Hope is the small town in Arkansas in which Bill Clinton was born, and the hope for the highest office in what is still the world’s most influential country has never dimmed in Hillary Clinton, who resigned as Secretary of State three years ago to avoid making more obvious errors such as her refusal to upgrade security at Benghazi in Libya despite several warnings of an imminent attack by the very elements she had helped weaponise, train and fund in 2011 while Secretary of State. 

Almost before she had left the State Department, Hillary began to work towards becoming the “inevitable” Democratic Party nominee for the 2016 Presidential poll, with a dutiful President Obama and a devoted ex-President Clinton giving her support in a manner not enjoyed by any previous candidate for the highest office of the world’s most powerful democracy. Her “Super Pac” financial backers and highly-paid staff ensured that every word she uttered was vetted to conform to the liking of key segments of the Democratic vote bank. Senator Bernie Sanders was ignored as being “too radical” for US voters. Unfortunately for Hillary Clinton, the steady impoverishment of the lower and middle classes since the close of the 1980s got coupled with explosive growth in the wealth of the top 1% of the population. Ordinary people have never had it so bad in the US since the 1930s,while millionaires have never had it so good. This has resulted in a revulsion towards the “establishment” politics and economics practiced by the Clintons, and has given an opportunity to Bernie Sanders to try and win the Democratic Party nomination.

Because of the Wall Street-created economic hardship of tens of millions of US citizens, he is in danger of overtaking Hillary Clinton in the party primaries. Only African-Americans and old people stand between Mrs Clinton and defeat. Both segments have ignored the reality that Sanders would be a better bet for them, and have flocked towards the Clintons. Will they realize their mistake in time and desert the Clinton camp? This question will be answered by the close of March, when the result of the primaries becomes clear on the Republican side, the party establishment is hoping that Senator Marco Rubio of Florida will overtake Ted Cruz and Donald Trump. The problem is that Rubio and Cruz are Cuban-American, not a Mexican-American, and hence not likely to be accepted as a full Hispanic by the latter group, thereby opening the door to the Democratic Party (non-Hispanic) candidate. 

As for Donald Trump, his shock defeat in Iowa has energized the establishment press, who have poured abuse on him to an extent seldom seen in Presidential contests in the US. However, he is still by far the strongest candidate, and in the elections, has the advantage over Hillary Clinton. However, should he be facing Bernie Sanders, and should the economy worsen in the months ahead, the US may elect its first “socialist” President ever. Should Sanders persist while in office with his equalitarian policies, he may meet the same fate of President Kennedy, who was seeking to withdraw US troops from Vietnam and work out a detente with the USSR, much to the anger of what President Eisenhower termed the “military-industrial complex”.

Just as politicians of extreme views have begun to emerge in Europe, so have they in the US. Politics as usual is, as the Italians say, finito. US policy post-Obama will be very different from what it has been for the past thirty years, unless African-Americans and older voters come out (and the young stay away) in numbers sufficient to elect Hillary Clinton to the job held for eight years in the 1990s by her husband.

—The writer is Vice-Chair, Manipal Advanced Research Group, UNESCO Peace Chair & Professor of Geopolitics, Manipal University, Haryana State, India.

http://pakobserver.net/detailnews.asp?id=288160

http://epaper.pakobserver.net/201602/05/comments-1.php

A friend of India wins in Taiwan (Sunday Guardian)

By M.D. Nalapat | 30 January, 2016

Ever since Prime Minister Narendra Modi took office in 2014, the image of India in East Asia has risen to the status of a Great Power.

TAIPEI: Unlike Sirimavo Bandaranaike, Indira Gandhi, Benazir Bhutto or Sheikh Hasina, the victorious candidate in the 2016 Presidential elections in Taiwan was not born into a political family. Tsai Ing-wen is, therefore, going to be the first non-dynast lady President (or Prime Minister) in Asia, if Tansu Çiller is excluded on the grounds that EU prejudices against the Muslim-majority country notwithstanding, Turkey is European. She is also the first female Head of State (and government) in any Sinic country. Some within the Democratic Progressive Party (DPP) may bridle at this, but the reality is that Taiwan is very much a part of the Sinic world. Indeed, a case could be made that the island is even more “Chinese” in its culture than the nearby Peoples Republic of China, ever since the Cultural Revolution and other vicissitudes caused by Mao Zedong demolished much of existing traditions within the country. In Taiwan, there is a four-month hiatus between the election and the takeover of power by a new government, a length of time unusual in its length, so DPP Chairperson Tsai will take over as President Tsai only on 20 May. The four-year term is unlikely to be anything other than a choppy ride.

Economic growth has been flagging, causing a constriction of salaries and a lack of adequately paying jobs, especially for the young. There are predictions that President Xi Jinping will respond to the Taiwanese people’s turfing out of Beijing’s favourite, the KMT, in favour of its bête noire, the DPP, not simply in the Presidential polls but in the country’s legislature as well. However, such a churlish reaction is unlikely. Xi will remember the hostile reception Beijing gave to the DPP’s first Head of State, Chen Sui-bian, when he tried, hesitantly, to extend an olive sprig to the Chinese leadership, only to be rebuffed. The experience ensured that Chen reversed his fledgling efforts at conciliation throughout the rest of his term, goading China whenever and wherever he could in a manner reciprocated with compound interest by the other side.

In a move which must have delighted the Chinese Communist Party, incoming President Ma Ying-jeou of the KMT put ex-President Chen in jail on corruption charges soon after taking office, and there the former President remained till recently, when he was released into house arrest on grounds of ill-health. Radicals within the DPP are looking forward to repaying the compliment in the case of President Ma, by bringing up issues relating to his term in office as Mayor of Taipei, as well as a case involving the interception of telephone conversations of members of the legislature, although hopefully such a precedent — of putting a former Head of State belonging to a different party in jail once his or her successor takes over — will not be followed by incoming President Tsai. Certainly there are those in the KMT, and quite possibly some in President Ma’s entourage as well, who merit prosecution and punishment, but it is doubtful that the current President of Taiwan is among them, vindictive though the jailing of his predecessor was.

More than domestic politics, what will worry incoming President Tsai will be the state of play between Taipei and Beijing. The new Head of State is very different from her DPP predecessor Chen Shui-bian, and in particular has way more experience in dealing with issues relating to China. On the other side of the Taiwan straits, President Xi Jinping is unlikely to adopt the tough approach of Jiang Zemin, who openly threatened Taipei with a show of military firepower. That ensured the defeat of the pro-China KMT in the subsequent elections.

Like others across the globe, the Taiwanese do not like being bullied, and should China react to the Tsai victory by seeking to cut back on economic and other links (for example, by forcing down the number of tourists visiting the island), it would hurt both economies as well as erode the goodwill in Taiwan for China, the country from where the overwhelming majority of the people of Taiwan migrated from, over the past two centuries. However, Xi is facing a challenge in his efforts to downsize the immense power of the “princeling” class over state enterprises, and is aware that Taiwanese businesses are core to the prosperity of the PRC, hence it is unlikely that Xi and Tsai will have the same tension-filled relationship as did Jiang and Chen.

During the eight years that Ma Ying-jeou has been at the helm in Taipei, the relationship between Taiwan and China has reached a level unprecedented in recent history. The odds for stability are therefore higher than for tensions to boil over. And importantly for India, this is a country that Tsai Ing-wen has often referred to, and which she admires as the world’s most populous democracy. Come 20 May, it is a certainty that linkages between India and Taiwan will grow at an accelerated pace. Since Prime Minister Narendra Modi took office in 2014, the image of India in East Asia has risen to the status of a Great Power, and Delhi is now firmly in the radar of all the capitals in the region.

http://www.sundayguardianlive.com/opinion/2877-friend-india-wins-taiwan

Mistura only hope for Turkey vs Russia (Pakistan Observer)

President Vladimir Putin of the Russian Federation needed a showcase for the advanced weaponry produced within his country, and secured that in Syria. Precision strikes by his air force and effective use of Russia-built ordnance by the Syrian military have ensured that the militarised anti-Assad forces are in retreat, such that within the year, three-fourth of Syria is likely to return in the control of the government led by Bashar Al-Assad. UN “Peace Envoy” Stefan de Mistura is ceaselessly trying to ensure that Damascus and Moscow lose at the negotiating table what they have gained on the battlefield, seeking to put in place a “transitional government” in Damascus that would soon do to Assad what US-backed Afghan fighters did to President Najibullah just over two decades ago. Since the 1990s, the UN system has become an extension of the NATO alliance, with the EU monopolising “peacekeeping” slots so that interests of the world’s most well endowed military alliance be promoted under the cloak of the UN.

That organisation now functions in such a way that the General Assembly has become a cipher, and control over operations has devolved to the Security Council (UNSC), where NATO has a majority within the Permanent Five. These - the US, UK, France, China and Russia – are the only countries which count in the New York headquarters of what was intended by idealists to be a World Government. Even India, which has a billion-plus population and an economy, which in Purchasing Power Parity terms is third largest in the world, has the same status within the United Nations Organisation as Lesotho or Fiji. Unless the US brings to the table the candidature of India (together with Brazil, Japan, Germany and South Africa) as a Permanent Member of the UN Security Council and forces a vote on each country, the chances of UN reform appear slight. Four of these five are likely to pass the test, with only Japan likely to fail due to a veto from Beijing, which is presumably why Washington is reluctant to bring the issue of UNSC expansion to a vote in the General Assembly as well as the UNSC. It suits each of the five permanent members of the UNSC to postpone the issue of UN reform and continue jointly exercising full control over UN operations, of course with major share of decisions going in favour of the NATO majority on the council. 

Each of the five is a nuclear weapons state, with Russia and the US being far ahead of the other three, although China is catching up in both numbers as well as in sophistication of technology. Policymakers across both sides of the Atlantic still behave, as though this is the 19th century, and hence go beyond prudent levels in their geopolitical challenges to rivals. An example is the way NATO has provoked Russia, buy first seeking to gobble up its periphery and convert them into bases against Moscow, and then imposing economic sanctions on Russia when that country retaliates against such a policy of containment. The US and the EU have made an error in persisting with sanctions on Russia, and not merely because the perilous state of the global economy makes such moves even more self-defeating than usual. These sanctions have resulted in a steady increase in the linkage between Beijing and Moscow, just as the isolation of Iran and Myanmar led to both coming close to China, a country too big to sanction, now that its economy is nearing the size of that of the US. Historically, relations between Turkey and Russia were adversarial during the period of Ottoman rule in the former and Tsarist control in the latter. Today, President Erdogan is visibly seeking to bring back lost glory of the Ottoman period, making moves designed to carve out an Ankara-controlled sphere of influence well beyond present borders of his state, while President Putin is as powerful in Russia as most Tsars were.

However, the present tension between Moscow and Ankara are because of Turkey, who is eager to establish control over Syria and recognises Russia as the primary obstacle to success in this endeavour. Shooting down a Russian air force jet that overflew Turkish airspace for only a few seconds was made possible because of the umbrella provided by NATO, which stands by Erdogan despite his policy of arming and facilitating elements that are indistinguishable from Daesh. However, should Russia retaliate to a fresh Turkish move by shooting down an aircraft of that country, it is very unlikely that anything other than strong language will come out of Brussels. Europe would be thrown into chaos, if there is armed conflict between NATO and Russia, given the fact that the armies of the alliance have proved themselves to be incompetent in the field of battle, being defeated even by such a raggedy bunch as the Taliban. 

The Afghan and Iraqi armies - which have deliberately been kept under-equipped by NATO - are showing themselves much more proficient in battle than the soldiers in NATO armies, whose sole purpose seems to be to preserve their own lives, no matter what “collateral” damage get inflicted in the process. Against Russian troops, NATO conventional forces are likely to face a rout, while a nuclear exchange would lead to incalculable damage to both sides. President Erdogan clearly did not factor in such a reality when he embarked on a policy of seeking to humiliate Russia into withdrawing from Syria Vladimir Putin’s response was to hit back by bombarding those forces in Syria who report to their Turkish commanders and Saudi and Qatari funders. So effective had the counter-attack been that it is clear that those who believed that Russian military equipment was no longer equal or superior to that of the US were wrong. 

Looking at their respective performance in Syria, it is clear that the SU-35 is far superior to France’s Rafeal although for diplomatic reasons. Prime Minister Narendra Modi is believed to have cleared the purchase by the Indian Air Force of the latter. The consequences of Syria go far behind relations with Turkey, which is why it was adventurous of President R T Erdogan to challenge Vladimir Putin. That challenge is being replied to in battlefields of Syria, and it is not to Turkey’s advantage. Ankara’s only hope is that Stefan de Mistura in his UN camouflage persuades Moscow to surrender its gains at conference table and agree to extremists entering the government in Damascus as Trojan horses.

—The writer is Vice-Chair, Manipal Advanced Research Group, UNESCO Peace Chair & Professor of Geopolitics, Manipal University, Haryana State, India. 

http://pakobserver.net/detailnews.asp?id=287389

http://epaper.pakobserver.net/201601/29/comments-1.php

BJP’s forgotten truth: Perception trumps reality (Sunday Guardian)

It is a wonder that Bollywood has yet to wake up to the star in its midst. The Hyderabad University ABVP student, who initiated a series of complaints which finally claimed the life of Rohith Vemula spoke about a gang of thirty students from a rival student body “assaulting” him. Only in the movies can an individual escape with so little visible damage from an attack by such a number. He further claims that the five students whom an obliging Vice-Chancellor expelled from the university also “attacked” him mercilessly. Looking at this physically unimpressive but apparent superman in our midst, it is a bit difficult to believe that both attacks — assuming they took place — were anything other than verbal. In common with other parts of India, Hyderabad too has bigots who look with unease at the way in which Dalit students have broken through scholarly and occupational barriers, and it is a fact that several from the “backward” communities resent having to compete in the job market with highly trained Dalits. Hence, to lump (economically prosperous and politically powerful) Kammas and Kapus with still disadvantaged Dalits, as apologists for the Vice-Chancellor have repeatedly done on national television, is to be frugal with the facts. It is hard to accept that the intervention of a Union Minister or repeated missives from the HRD Ministry to the university constitute anything other than an unusual interest in the campus politics of an institution autonomous only in name. Those who believe that universities in India are “independent” are ignorant of the reality of the control exercised by the MHRD and bodies such as the UGC on universities in India, a primary reason why they fare so poorly in international rankings.

To quote an example, a university in the South two years ago entered into routine MoUs with four universities in China, each of which incidentally has already more than one partner universities from India. However, in the case of this university, the MHRD — then under the control of globalised liberals such as Shashi Tharoor — ordered through its agencies that the MoUs be scrapped. Soon afterwards, the same authorities who have made it their business to stifle the autonomy of centres of higher education in India, declined to give permission to the same university (which is among the best in Asia in global rankings) to act as the mentor university of the proposed University of Afghanistan. Surely, having an Indian rather than a US or Pakistani university as mentor would significantly boost ties between Afghanistan and India, something which apparently escaped the minds of those in government who killed this proposal through refusal to give permission. Incidentally, in most other democracies, universities have genuine autonomy, and do not need such nods from government in their routine work. Since the Narendra Modi government took charge on 26 May 2014, educational institutions across the country have been waiting for a departure from Kapil Sibal’s chokehold over universities by the MHRD and its affiliates. Twenty months after the swearing in of the new government, they are still waiting for such a change. The same Stalinist attitudes prevail, as do the same bureaucrats who were in control of the levers of decision-making then and now. Prime Minister Modi is nearing the close of his second year of governance, and this columnist still believes that before the close of this period, he will liberate his government from the Nehruvian coils of a 19th century colonial system of rules and procedures designed to kill initiative and convert citizens into chattels of the state.

If Prime Minister Modi is facing headwinds in his efforts at crafting a 21st-century system to replace the British-Mughal era construct that has kept India in a state of poverty when other Asian powers have made rapid progress, much of the reason vests within his own party, which has been in a tearing hurry to ensure Modi does not get a second term. Had the Land Bill and the GST Bill got passed, especially in the first or second parliamentary session after the Modi sweep of the Lok Sabha polls, across the world confidence in the capacity of the NDA government to effect reforms would have shot up. Even in the case of the Land Bill, it was surely not impossible to reach out to opposition parties and get a modified version passed, while the Congress Party has several times assured the public that it would help pass the GST Bill if the three conditions set by it were accepted. For a starving man, half a loaf is better than nothing and ours is an economy which has within itself hundreds of millions of the destitute. However, the BJP adopted a stance that closes the door to such accommodation, as in its view, “no bill is better than a flawed” bill, i.e. a bill that incorporates the opposition’s suggestions. This is a wrong approach.

Even if both bills got passed with modifications, that would nevertheless have given a signal of pragmatism to the rest of the globe, and encouraged investment into India. Waiting indefinitely for Rahul Gandhi to change his mind and accept the BJP version or holding back on vital bills till the NDA secured a majority in the Rajya Sabha means that key reforms will get rolled out too late — if at all — to have an effect on the 2019 Lok Sabha polls.

Along with choosing a more effective team in the next reshuffle, Prime Minister Modi needs to pay attention to perception, for this affects voter behaviour even more than reality, especially if the real benefits of policy have yet to reach a level which would make an impact on voters. Looking at their arguments, BJP spokespersons seem to believe that they are arguing in a courtroom before a judge. Unfortunately for their party, the chemistry of the public is a tad different from that of a trained jurist, and arguments which work with the latter may fall flat with the former. Whether it be over the Hyderabad incident or elsewhere, the BJP seems to be disconnected from the voter in the fashioning of explanations meant to blunt criticism of its moves. The loss of the “independent” vote explains the BJP’s serial defeats in the year just past.

http://www.sundayguardianlive.com/opinion/2800-bjp’s-forgotten-truth-perception-trumps-reality

Union budget crucial for Modi (Pakistan Observer)

Within a month, Finance Minister Arun Jaitley will present the 2015-16 Union Budget, his third since taking over the post on May 26,2014. The first two budgets have been widely seen as following the same track as its predecessors, and certainly did little to unleash the “animal spirits” of corporate India, which continues to hoard cash reserves rather than make fresh investments in the country. Prime Minister Narendra Modi made his name in politics due to the efficient way in which he ensured the development of the state. People from across the country saw for themselves the relative absence of corruption and a prompt delivery of government services. Electricity flowed 24/7 rather than in fits and starts as in neighbouring Maharashtra, a richer state in taxation terms thanks to Mumbai being within its boundaries .

Schemes were introduced to ensure that even the poor got access to private health facilities, while roads were well-maintained. Of course, the Information Technology industry did not flock to the state in the profusion with which it did Bangalore in Karnataka, to an extent because of Chief Minister Modi remaining true to Mahatma Mohandas Karamchand Gandhi’s doctrine of prohibition of liquor. Night clubs were absent. Those living in the state were expected to go to bed early and abstain from alchohol, while a vegetarian diet was de riguer in government offices, again in deference to the culinary tastes of the abstemious Mahatma, who though born in a business caste, had a visible disregard for personal wealth to the extent that it caused some discomfort to family members.

Mahatma Gandhi’s approach to his family was in contrast to that of his friend Motilal Nehru, who lavished resources and attention on his son Jawaharlal and constantly lobbied the Mahatma until the younger Nehru was imposed on the Congress Party as its chief despite Vallabhai Patel having much greater support among the cadre. In contrast, Mahatma Gandhi refused to accept money from friends so as to give a good education to his children. one of whom ended up on the streets of cities across northern India begging for alms, ignored by his father. 2016 is going to be a crucial year for Modi, for unless he revives the economy and ensures a flood of new jobs, the political fortunes of the BJP are likely to remain bleak.

The party was almost annihilated in the Delhi assembly elections and reduced to a rump in the Bihar assembly months later, despite strenous efforts being made to ensure that politicians from Bihar played an outsize role in the Union Cabinet and even in the central government. Again following the teachings of Mahatma Gandhi, for the first time since 1965,a conscious effort was made by the central government to downgrade the use of English in governance and replace it with Hindi, and to slow down the growth of English-language schools and colleges, the way Pakistan in the 1970s gave primacy to Urdu over English, which has ensured that the international link language is not spoken in the country in the manner in which it would have had it been encouraged. Pakistan followed the example of Sri Lanka, where in the 1950s,the use of English (and Tamil) was discouraged and Sinhala promoted. However, energetically favouring Hindi across the board does not seem to have helped the BJP in Bihar.

The central government has been gifted a cushion approaching $ 70 billion because of the crash of oil prices. Unlike in the US, where the price of oil at the pump is not even double that of a barrel of crude oil, in India the retail price for petrol is close to ten times the price of crude, almost all the increase being accounted for by taxation. Crude oil prices have crashed but petrol prices at the pump have been lowered only slightly, even though a much bigger reduction would have had an immediate effect on bringing down inflation. Because Reserve Bank of India Governor Raghuram Rajan is fixated on US textbooks, he regards high interest rates as being price deflators, when common sense would show that such a measure adds to costs and therefore to prices. 

Similarly, the Union Finance Ministry continually raises taxes in various forms, including a recent cess to “make India clean”, something that does not seem to be taking place at any great speed. Of course, it must be said that the ministry is refreshingly straighforward. In its “Mid-year Economic Analysis 2015-16”, it admits that there is “uncertainty” about the accuracy of GDP date, and that there are often “mixed signals” (page 6). On pages 6,7,8 and 9,the analysis goes into considerable detail about why it regards important measures of economic health to be flawed. It is hard to believe that any other country has a Finance Minister as brutally frank about its statistics and its conclusions as India, as most put a gloss over the truth rather than reveal it openly to investors across the world. 

For those of average intellect, such as this columnist, it is difficult to understand parts of the analysis. For example, on page 5 it speaks of “steady recovery” but in the very next page, admits that this economic year is “difficult to understand”. While the analysis claims that “gold imports have stabilised”, it neglects to mention that this took place because gold prices during that period were unusually volatile and that in recent weeks, gold imports have once again risen sharply. Hopefully,those who prepared the analysis with such honesty will ensure that India gets the low tax and gentle compliance regime needed to entice tens of millions into the direct tax net. 

The system of high rates of taxation (especially for those in the services sector, who are being taxed twice over, and who consequently have seen the sector slow down considerably) has not worked, and it was a disappointment to many that first two budgets of the Modi government were so similar to its predecessors. Across the country, taxpayers present and future are hoping that Prime Minister Modi will not outsource the crafting of the 2015-16 Union Budget to anybody else, but will take control of the process so that innovative measures and substantial relief for the middle class will be provided. Sensible economic policies take nearly three years to strongly reveal their benefits, so this budget is crucial for Prime Minister Modi, who needs to show strong growth in 2019 in order to win a second term of office. 

—The writer is Vice-Chair, Manipal Advanced Research Group, UNESCO Peace Chair & Professor of Geopolitics, Manipal University, Haryana State, India. 

http://pakobserver.net/detailnews.asp?id=286714

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