📰 Spectacular end to Naval drill
Tri-nation Malabar 2017 was one of the largest in the region in recent times
•As the sea turned rough and rain came pelting down, the trilateral Naval exercise Malabar 2017 between India, the United States and Japan had spectacular ending on Monday, with 15 ships coming up in a formation in the Bay of Bengal, around 90 miles from the Chennai coast.
•Around 10 a.m., USS Nimitz of the U.S., India’s aircraft carrier INS Vikramaditya , and Japan’s helicopter carrier and its largest warship JS Izumo , came up side by side in a symbolic manoeuvre, with smaller ships in the group following in tow. Malabar 2017 featured 95 aircraft, 16 ships and two submarines, making it one of the largest naval exercises in the region in recent times.
•Navy officials dismissed suggestions that the exercise was aimed at China. They maintained that the operation was to uphold freedom of movement, enforce the rule of law, and address common maritime challenges in the region.
•“We are increasing interoperability and that is going to be the key,” Rear Admiral William D. Byrne Jr. Commander, Carrier Strike Group, 11, U.S. Navy, told reporters on board the U.S. aircraft carrier. A floating mini-city with 5,000 personnel on board, USS Nimitz is nuclear powered and has desalination plants for its water requirements. It is capable of operating about 90 aircraft at a time, an official on board the ship said.
‘Operations beneficial’
•Rear Admiral Biswajit Dasgupta, Flag Officer Commanding, Eastern Fleet, Indian Navy, said complex operations were performed this year and that had been quite beneficial.
•The U.S. Charge D’Affaires, Marykay L. Carlson said Malabar 2017 was a message for the whole world about cooperation, and not specifically aimed at any one country.
📰 Centre’s ‘no’ to SC appeal on old notes
The Centre told the Supreme Court on Monday that it took a conscious decision to not give any grace period for citizens to deposit their demonetised notes after the cut-off date of December 30, 2016.
•Doing so would have defeated the very purpose of demonetisation, the government said.
•It was replying to the Supreme Court’s appeal to open a window for genuine people, like the terminallyill and invalids, to name a few, who were unable to deposit their demonetised Rs. 1,000 and Rs. 500 notes between November 9 and December 30 last year.
‘No justifiable reason’
•Noting that these people had over 51 days to deposit and exchange their old notes for the new currency through multiple outlets, the NDA government, in an affidavit filed through the Ministry of Finance, said now there exists “no necessity or any justifiable reason” to provide them a “grace period” till December 30, 2017, as many petitioners have sought in a bunch of petitions.
•“The very object of demonetisation and elimination of black money will be defeated if a window is opened for a further period...,” the Centre said.
📰 Centre seeks debate in SC on J&K special status
Plea said that non-residents in State faced discrimination
•The Centre on Monday asked the Supreme Court to debate on the special status granted to the State of Jammu and Kashmir, saying it was both a sensitive and constitutional matter.
•“It is a very sensitive matter. It is a constitutional issue. A debate is required,” Attorney General K.K. Venugopal submitted before a Bench led by Chief Justice J.S. Khehar.
•The top law officer was responding to a PIL plea filed by a Delhi-based NGO, We the Citizens, contending that the J&K government, given the State’s special autonomous status under Articles 35A and 370, was discriminatory against non-residents as far as government jobs and real estate purchases were concerned. The Bench agreed to schedule the case before a three-judge Bench after six weeks.
•Responding, the State government argued that its special status was sourced from the 1954 Presidential Order, which gave special rights to the State’s permanent residents. The hearing comes in the backdrop of an earlier Jammu and Kashmir High Court, which ruled that Article 370 assumed a place of permanence in the Constitution and the feature was beyond amendment, repeal or abrogation. The court said Article 35A gave “protection” to existing laws in force in the State.
•“Article 370 though titled as ‘Temporary Provision’ and included in Para XXI titled ‘Temporary, Transitional and Special Provisions’ has assumed place of permanence in the Constitution,” it observed. “It [Article 370] is beyond amendment, repeal or abrogation, in as much as the Constituent Assembly of the State before its dissolution did not recommend its Amendment or repeal,” the court said.
•It also observed that the President under Article 370 (1) was conferred with power to extend any provision of the Constitution to the State with such “exceptions and modifications” as may be deemed fit subject to consultation or concurrence with the State government. The High Court said J&K, while acceding to the Dominion of India, retained limited sovereignty and did not merge with it.
📰 China holds live drills near Arunachal border
Exercises by Tibet Military Command
•China on Monday held live-fire exercises in Tibet, in an area facing Arunachal Pradesh, which it calls South Tibet, escalating its “mind games” with India amid the standoff in the Doklam area.
•The state-run tabloid Global Times , citing the China Central Television (CCTV) said the exercise was conducted by one of the two brigades, which are part of the Tibet Military Command of the People’s Liberation Army. The brigade is responsible for frontline combat missions.
Frontline combat unit
•The state-run broadcaster also said the brigade has long been stationed around the middle and lower reaches of the Yarlung Zangbo River, which becomes the Siang and the Brahmaputra after crossing Chinese territory.
•In May 2016, China raised the status of the Tibet Military Command, as part of the overall military reforms, which included the formation of integrated tri-service regional theatre commands, geared towards joint operations. Analysts say Beijing was sending messages to India by conducting the exercise. It appeared willing to broaden a possible area of conflict beyond the current focus of the standoff in the Sikkim section, by including Arunachal Pradesh, the scene of the 1962 war.
•The exercises per se also appeared to be carefully calibrated, and were essentially “defensive” in orientation, with the testing of Chinese air defences as one of the major components. The Global Times pointed out that a video showed radar units identifying enemy aircraft and soldiers using anti-aircraft artillery to annihilate targets. It also showed soldiers using anti-tank grenades and missiles against bunkers and howitzers for artillery coverage.
📰 GM mustard policy: SC gives govt. time
‘It must be good-intentioned, informed’
•The government on Monday informed the Supreme Court that a policy decision on the commercial release of the Genetically Modified (GM) mustard crop is yet to be finalised.
•The Centre said it was poring through the various suggestions on and objections to the commercial rollout of the GM crops.
•A Bench, led by Chief Justice of India J.S. Khehar and Justice D.Y. Chandrachud, granted the government one week to report back on when the policy would be finalised. It said the policy should be good-intentioned and well-informed.
•The court had on October 17, 2016, extended the stay on the commercial release of the GM mustard until further orders. It had asked the Centre to collect public opinion before the release.
•The government had assured the court that there would be no commercial release of GM seeds till the views of the public were collected and placed before the appraisal committee.
Sowing without safety
•The hearing was conducted on the basis of a petition filed by activist Aruna Rodrigues, who had alleged that the government was sowing GM seeds without the relevant tests.
•Mustard is one of India’s most important winter crops, sown between mid-October and late November.
•Advocate Prashant Bhushan, appearing for Ms. Rodrigues, alleged the government was sowing the seeds in various fields and that the bio-safety dossier, which has to be made public by putting it on the website, had not yet been done.
•Alleging that field trials were being carried out without the relevant tests, Mr. Bhushan had sought a 10-year moratorium on them.
📰 Eco-bridges for the movement of tigers
Vegetation will camouflage fragmentation of forests along the Pranahita barrage
•In a first of its kind, Telangana State will have eco-friendly bridges over a canal cutting across the tiger corridor linking the Tadoba-Andhari Tiger Reserve (TATR) in the Chandrapur district of Maharashtra with the forests in Telangana's Kumram Bheem Asifabad district. The intervention requires the laying of fertile soil to grow grass and plants over the structure, so that fragmentation of the reserve forest is camouflaged.
•The ‘eco-bridges’ will be constructed at key spots along the 72 km-long, and at some places over a kilometre wide, right flank canal of the Pranahita barrage in the Bejjur and Dahegaon mandals, according to Chief Engineer (Projects) K. Bhagwanth Rao.
•One of the locations tentatively earmarked for the eco-bridge is a spot close to Sulgupalli in the Bejjur forest range. Here, the canal is over a kilometre wide and the need to facilitate the movement of wild animals is quite necessary.
•The concept emerged after visits by experts from the Wildlife Board of India and the Wildlife Institute of India. They were concerned about the large-scale destruction of pristine forest along the corridor, which would result in cutting off tiger movement between TATR and Bejjur.
•The Telangana Irrigation Department has given its consent for the construction of the eco-bridges. Recommendations on the size and locations of the bridges are awaited from the National Board of Wildlife, Mr. Rao said.
•In recent years, big cats from the TATR have ambled into the mixed and bamboo forests of the Bejjur range via the Sirpur forests. The TATR and its buffer area, which are contiguous with the Sirpur forests, boast of a speedily multiplying tiger population, the cause of the frequent migration of tigers into Sirpur and Bejjur.
📰 Industrial policy, clusters for manufacturing on anvil
Consultations on, survey initiated for new policy: Minister
•The process for formulation of a new industrial policy has been initiated and consultations are being held with stakeholders, Parliament was informed today.
•Commerce and Industry Minister Nirmala Sitharaman said consultations were on with industry bodies, academia, think-tanks, state governments and concerned ministries and departments of the central government. “Inputs are also being collected through a survey,” she said in a written reply to the Lok Sabha.
Manufacturing clusters
•The government is also preparing a national plan for manufacturing clusters with an aim to bring about convergence in development of industrial areas by central and state governments.
•Ms. Sitharaman said that inputs from central ministries and departments and states have been taken for development of an industrial information system. She said action for constitution of a committee to evolve a cluster framework had been taken.
•“Yes. Government is preparing a national plan for manufacturing clusters. The Plan aims to bring about convergence in development of industrial areas by the central and state governments so as to bring about optimal utilisation of resources,” she said in a written reply to the Lok Sabha.
•To a question on special economic zones, she said in April-June this fiscal, exports from SEZs stood at Rs. 1.38 lakh crore. The minister also said that in case of lack of substantive progress in the project or on a request by the developer, the Board of Approval cancels the letter of approval for the SEZ. So far, letters of approval of 109 SEZs have been cancelled.
📰 Spaces, not embraces
For India, the impact of a closer camaraderie with the U.S. is better judged by the challenges the superpower’s receding global role presents
•In early 1987, U.S. President Ronald Reagan had difficult choices to make on the future of Afghanistan. As the Soviet Union planned its pull-out, the U.S. government, more notably the Central Investigation Agency, had been arming mujahideen fighters trained by Pakistan’s Inter-Services Intelligence to hasten the process by pushing out the Soviet army. Prime Minister Rajiv Gandhi was, given his close ties with the Soviet leadership and a growing friendship with Reagan, trying to advocate a path of conciliation that clashed with Pakistan’s plans to control Kabul: a government of national unity supporting the newly appointed President Najibullah. After months of considering the Indian case for a “non-aligned” Afghanistan, however, Reagan and the U.S. Congress chose the other course, transferring funds, arms and responsibility for the outcome to Pakistan. The rest is history.
•In 2001, after the 9/11 attacks, U.S. President George W. Bush had a similarly complex decision to make on the future of Afghanistan. The attacks had brought a rare moment of global unity, one which saw Russia, India, China, Pakistan and Iran pledge support to the U.S.’s plan to defeat the Taliban and its al-Qaeda guests. Within months, however, the bonhomie was banished with three words, as Mr. Bush pronounced Iran, along with Iraq and North Korea, as the “Axis of Evil”, choosing Pakistan as its ally to continue its war in Afghanistan.
Trump’s geopolitics and India
•In 2017, President Donald Trump is in the same place as his administration finalises its Af-Pak policy review to be announced in July, and New Delhi once again has its hopes up that the U.S. will take a stern view of Pakistan’s support to the Taliban and its use of terror groups that target both Afghan and Indian interests. But while the Trump administration has openly called for a cut in military aid to Islamabad, New Delhi would be missing the wood for the trees if it doesn’t see how the U.S.’s actions in other theatres besides Afghanistan — West Asia, South China Sea and multilateral organisations — is equally important to India’s future.
•Mr. Trump’s first foreign visit was to Saudi Arabia, where he presided over a grand show of Arab-Islamic unity. His wholehearted support to Saudi Arabia, his call for a unity of the Abrahamic faiths (Christianity, Islam and Judaism) and his open call to isolate Iran, however, came unstuck within days. Saudi Arabia and several other nations decided to blockade Qatar, calling for it to cut ties with Iran, ban the Muslim Brotherhood and shut down the Al Jazeera media network which they said targets the rest of the Gulf’s leadership. External Affairs Minister Sushma Swaraj dismissed fears of any impact on India from the move. But the government must go beyond the obvious to assess its impact.
•To begin with, the move to squeeze Qatar’s ties with Iran will only serve to isolate Tehran further, a mere two years after it been brought out of sanctions, and will force New Delhi to curtail its links as well. In April this year, state-owned refiners including the Indian Oil Corporation said they would cut imports from Iran by 20% in a bid to pressure Tehran to award the Farzad-B gas field to a consortium led by ONGC Videsh. Iran reacted angrily, slashing the credit period given to Indian refiners from 90 days to 60 days. In the weeks that followed, it announced an agreement with Russia’s Gazprom for Farzad-B, and reports indicate Iran may also diversify Chabahar port’s dealings beyond India, by inviting China to help with managing its ports. It would follow naturally that as Mr. Trump, who has already convinced Prime Minister Narendra Modi to make India’s first order for crude oil from the U.S. this month, pushes for New Delhi to deal less with Tehran, Iran will look away from its cooperation with India on Afghanistan and more towards the growing alliance between Russia, China and Pakistan instead.
•For Afghanistan’s government too, the move to cut Qatar out effectively constricts its cooperation on promoting talks with the Taliban based in Doha, though India has always disapproved of the reconciliation process. Finally, Mr. Trump’s plans for troop levels in Afghanistan seem modest at best, and according to a leaked memo the White House, he would like the numbers of American troops to add to the current 8,400 capped at 3,900. Given that President Barack Obama’s 2009 surge of troops to 100,000 had little impact on the war in Afghanistan, this implies that the U.S. will simply cede more space to Russian-led efforts. India thus risks becoming partner to a player whose military role in Afghanistan is in decline over a more nascent alliance.
•A similar relinquishing of space can be gleaned from Mr. Trump’s moves with China. While New Delhi felt justifiably happy with the India-U.S. joint statement’s mention of China’s Belt and Road initiative in line with its concerns on sovereignty issues, the fact is that the Trump administration has baulked at much of the strong language the Obama administration preferred on the South China Sea. Instead of saying the two countries would “ensure” freedom of navigation, overflight and commerce through the Indo-Pacific region, the Trump-Modi statement only “reiterates the importance of respecting freedom of navigation, overflight, and commerce throughout the region”. No mention is made of the United Nations Convention on the Law of the Sea — under which a tribunal ruled against China’s claims in the South China Sea — which was referred to the previous year. The impact of this will only serve to embolden China’s moves on its other frontiers, most notably in South Asia, with the ongoing Doklam stand-off as one indicator. In the bigger picture, Mr. Trump’s geopolitical moves thus far can be seen as empowering regional bullies in their spheres of influence: Russia, China, Saudi Arabia and so on.
Ceding space globally
•Meanwhile, Mr. Trump is rapidly vacating the U.S.’s space in multilateral spheres. The U.S. has reneged on the Paris accord, something that was in sharp focus at the recently held G20 in Hamburg, and India faces a slashing of the climate change fund that was meant to help keep its commitments on renewable energy as a result. On free trade agreements like the Trans-Pacific Partnership, the U.S. has already voted with its feet. And at the UN, Mr. Trump’s obvious lack of interest in funding the world body will drastically cut resources for peacekeeping and other projects that India has an interest in.
•As a result, Mr. Trump’s decision on Afghanistan must be closely watched, but without unrealistic expectations. For India, the impact of Mr. Trump’s world view and international policies are better judged not by the closeness of his embraces with Mr. Modi, but the spaces that he is ceding across the globe.
📰 The post-IS proxy war
The defeat of the Islamic State is inevitable. But the next conflict has already begun, with Iran in the gunsights of U.S.
•After the Iraqi military, with U.S. aerial support, dislodged the Islamic State (IS) from Mosul, IS fighters have dashed to the new front lines in Iraq and Syria. They stand and fight when necessary, but are equally comfortable abandoning territory for more hardened positions. In Iraq, the IS remains fortified in small towns along the river Tigris, south of the Iraqi Kurdish enclave. Iraqi forces — including the Iranian-trained militias — have begun to move to the city of Hawija, where the new self-styled caliph, Abu Haitham al-Obaidi, is in command. The battle for Hawija will not take the nine months that it took to remove the IS from Mosul. But it will be as vicious.
•Meanwhile, U.S. bombers continue to strike the Syrian city of Raqqa, which remains in IS hands. U.S.-backed Syrian Kurdish fighters from the Syrian Democratic Forces are moving slowly to encircle the city. Their advance is entirely helped by the horrific levels of bombardment that the city has had to endure. The UN has complained of a ‘staggering loss of life’. Numbers are unavailable. The atmosphere is electric and the city could fall any day. Further south, near the border between Iraq and Syria, another war is brewing. This is perhaps the front line of the next major battle, for the future of both Iraq and Syria. The U.S. has made it clear that it would like to deny Iran any future role in either Iraq or Syria.
Iran’s great influence
•In Iraq, the Iranians have become indispensable. Their close allies govern in Baghdad, while their trained militias have been fighting alongside the Iraqi Army against the IS. Syria’s Bashar al-Assad would have lost Damascus without Iranian military support as well as the assistance of the Lebanese militia Hezbollah. It is impossible to imagine a scenario where Iran does not have influence in Damascus and Baghdad.
•Early into the Syrian war, the IS and various other rebel groups seized the border towns that link Iraq to Syria. This meant that Iran lost its crucial land bridge to resupply the Syrian government and Hezbollah. It had to rely on sending military hardware by an expensive air bridge. The U.S. pressured the Iraqi government to prevent these flights, and to cut off Syria from Iranian support. Iraq refused and continued to allow Iranian aircraft to carry material to Syria. But the land bridge could not be re-established.
•Over the past six months, Syrian troops, with the support of Iran-backed militias (including the Afghan Fatemiyoun Division) and of Russian jets, have moved closer to the border town of Tanf. The U.S., eager to prevent the reopening of these roadways that link Iran to the Mediterranean Sea, built a base at Tanf. U.S. Special Forces operated from there alongside anti-government groups such as Maghawir al-Thawra and Shohada al-Qaryatayn, both trained by the CIA in Jordan. This U.S. airbase sits perilously, surrounded by Syrian and Iranian troops. When these troops move near the base, U.S. aircraft target them. Syrian government officials say that the U.S. has airlifted some of their assets from this base to one of their eight bases in north-eastern Syria, from where they are conducting ground operations against the IS. In June, Iran’s leading strategist, General Qassim Soleimani, made a visit to Tanf. It is sign of how seriously the Iranians take this sector of the war.
•North of this base sits Syria’s main city in the east, Deir ez-Zor. Held by the government, the city has been under siege by the IS since 2014. It is in the vicinity of Deir ez-Zor that Syria’s remaining oil reserves sit. Mr. Assad’s forces have been eager to break its siege, not only to relieve the desperate civilians, but to control the oilfields and the border. Iraqi aircraft — with Syrian permission — have been bombing IS targets around the city.
•The U.S. would like to prevent such coordination, but it has been unable to do so. Pressure on Iraqi Prime Minister Haider al-Abadi to absorb the militias into the formal Iraqi Army, which would get an infusion of U.S. cash, has not worked. Russian and Iranian forces helped Mr. Assad take back Arak, a key town on the M20 highway from Damascus to Deir ez-Zor. It is likely that the Syrian government will beat the Americans to that part of the border.
•The defeat of the IS is inevitable. But this is not the end of the war. The next conflict has already begun, with Iran in the gunsights of the U.S. Clashes between the U.S. and Iranian forces in Syria could spiral out of control.
📰 After globalisation’s promise
Sluggish global growth should prompt India to look inward — at augmenting public investment to spur demand
•‘Hyperglobalisation’ has been used to describe the dramatic increase in international trade witnessed for about a decade and a half from the early 1990s up to the global financial crisis of 2008. The imagery intended is one of an increasing connectedness among nations leading to a virtuous cycle of economic expansion.
•By a trait common to every generation, we tend to assume that ours is somehow unique, in this case with respect to globalisation. However, if we are to take the long view, we would find that this is no more than a conceit. Starting some time in the last quarter of the 19th century, for close to 50 years, the world saw an expansion in trade that was actually as great or even greater than during the recently concluded phase. Then had also occurred an unprecedented movement of capital and of people. British capital flowed into building the railways across the world, immigrants moved from Europe to the United States and Asian labour was moved to the sites of deployment of western capital.
End of a phase
•So, the facts are that the world has seen the waxing and waning of global traffic in goods, capital and people. To be precise, the phase of high trade starting 1870 came to an end with the First World War and was to revive, slowly, only after the Second. Then, following the collapse of East European communism in the early 1990s, there was a resurgence in global trade. Now even this phase has somewhat abruptly ended with the global financial crisis.
•Economists who study trade flows have gone to the extent of claiming that hyperglobalisation was a one-time event unlikely to be repeated. Though some may hold that we ought to shun economists offering predictions with as much diligence as we should beware of enemies bearing gifts, it may pay us to heed their prognosis, for were it to be true, it has implications for economic possibilities in India. Note that even if vigour were to return to the global economy 25 years from now, that would still account for a significant chunk of the working life of an Indian, for which period alternative economic opportunities would have to be found.
Role of technology
•What underlies the scepticism expressed regarding a revival of global trade? The view is based on the observation that especially 19th century globalisation was underpinned by technological advances that facilitated trade. The advent of the telegraph is alluded to along with the invention of the internal combustion engine. The former enabled the communications infrastructure intrinsic to trade and the latter enabled the fast, reliable and cheap transportation of goods across seas. These advances, we are told, dwarf anything since, including the Internet, in terms of their capacity to expand trade. And, none is foreseen in the immediate future.
•This account of how advances in technology fuelled trade is of undoubted relevance but remains partial in that it leaves out the role of the growth in demand for these technologies. It was, after all, the growing market for British goods as Indian manufacturing was dislodged following military conquest and as British capital flowed into the laying of a rail network in parts of Latin America and Africa that provided the demand for development of cheaper communication and transportation technology. Therefore, it may as well be said that trade expanded as the demand for goods grew. However, it is yet true that when global demand expands, countries can exploit the trade route to grow their economies. This was the great promise of globalisation held out to the developing countries in the 1990s. Now, what does all this have to do with us in India today? A great deal, actually.
The slowdown and India
•If the world economy is set to grow slowly for the foreseeable future, a premise of much of the economic policy in India since 1991 would have to be replaced. It had been assumed then that globalisation was here to stay and India had only to hitch onto its current to ride to prosperity. This India has even successfully done in phases since. Now, however, we need to recognise that the game may have changed substantially — even if not irrevocably, as the experts claim. The shift that has taken place is visible most in the IT industry. Quarterly growth only inches forward there and insecurity grips its particularly young workforce. In retrospect, we can see the hollowness of the boast that had made the rounds a decade ago that India need not bother with manufacturing when it could leapfrog into a service economy led by IT exports. Now, “bricks and mortar” is no longer something to be spurned and soiling our hands may be part of the business of earning our living for some time to come.
•Recognising the diminished tempo of globalisation, India’s economic policymakers must address the growth of the home market, which is the demand for goods and services emanating from within the country. The immediate points of action and the appropriate instruments can be identified without much strain on our ingenuity. In the short run or the present, when the global economy is sluggish, only domestic investment can move demand.
•In India, we have been witnessing slowing or depressed private investment for close to five years by now. There is a view that this has to do with tight monetary policy. It is true that the real lending rate for firms has been rising as inflation is falling. Such a policy stance can be justified only by resorting to the claim that the Reserve Bank of India knows something about future inflation that we don’t, in particular that inflation is set to rise again soon. Barring this possibility, there is a case for cutting the repo rate now, and there is a clamour for this. But there are reasons to doubt the potency of such an action, one each from the supply and the demand sides. Given that they hold non-performing assets, the banks are extremely wary of lending. Any significant resumption of lending by banks may be hostage to their first resolving the bad loans problem. Ditto with the firms, which are themselves debt-laden. Are they likely to take on more of it, just because it is offered at a lower rate, before cleaning up their balance sheets?
On public investment
•Independently of the ‘twin balance sheet problem’, Keynesian economics has long recognised that lowering the rate of interest may not do much for private investment if the expected rate of return is depressed. The slowing of both global trade and domestic manufacturing may have had precisely this effect by lowering the long-term expectations held by private investors. We do, however, know how to buoy up flagging demand. You do this through public investment. In response to the argument heard at the highest level of policymaking that there are no viable projects to be had, one need only refer to a recent news report on the state of our roads and bridges. It is reported that 23 bridges and tunnels on India’s national highways are over 100 years old, of which 17 require rehabilitation or major maintenance. As many as 123 other bridges in the country require immediate attention and 6,000 are “structurally distressed”. Infrastructure is unique in that spending on it raises aggregate demand and when it actually comes on stream, it raises the productivity of investment elsewhere in the economy. ‘Roads and bridges’ are a metaphor for the public infrastructure that the Indian economy can fruitfully absorb today. For the country’s political leadership, the task is no longer to find trading partners to hug but to buckle down to the heavy lifting of expanding physical infrastructure.
