📰 ‘Delighted’ by Trump’s decision to join Houston rally, says Modi
''It highlights the strength of the relationship and recognition of contribution of Indian community to American society and economy,” he says
•Prime Minister Narendra Modi has welcomed the White House announcement that U.S. President Donald Trump will join the “Howdy Modi” event for Indian-Americans on September 22 in Houston, Texas. He said he was ‘delighted’ by the decision.
•“The special gesture of President [Donald Trump] to join us in Houston highlights the strength of the relationship and recognition of the contribution of the Indian community to American society and economy,” Mr Modi tweeted.
•Organisers of the “Howdy Modi” event, which is expected to bring about 50,000 Indian Americans to the NRG stadium in Houston, said they had been informed about the possibility of Mr. Trump at the event about “8-10 days” ago, but had been told to wait for a formal White House announcement.
•The President’s decision has also cleared some of the worries over a plan by a group called “Friends of Kashmir” to stage a “peaceful rally” against Mr. Modi's appearance, as the U.S. secret service would ensure none of the protesters can gather too close to the venue.
•Officials have also been concerned about 20 U.S. Congressmen, mostly Democrats, who have written petitions to the President and Congress, criticising the Indian government’s moves on Kashmir, and demanding an end to detentions and the communication lockdown in Jammu and Kashmir. As a result, those involved in the event are also keen on ensuring “bipartisan support”, and stressed the number of Democrat and the Republican lawmakers who will attend, highlighting attendance of Senate majority leader and Democratic party member Steny Hoyer at the rally.
•“This unique event brings together the President of the world’s most influential democracy, the Prime Minister of the world’s largest democracy, and a bipartisan delegation of Governors, Members of Congress, Mayors, and other public officials,” a statement by the organisers, the Texas India forum, said.
•Details of the format of Mr. Trump’s appearance are still being worked out, said head of the BJP’s foreign affairs department, Vijay Chauthaiwale, who landed in Houston to make preparations just hours before the White House announcement. Mr. Modi has been previously joined by heads of state when he addressed the Indian diaspora in Canada, U.K., Israel, Kenya and Sweden. It also remains to be seen whether Mr. Modi will speak primarily in Hindi during the event, as he did in the previous events in other countries.
•Members of the Indian immigrant community in Houston said they were particularly happy about Mr. Trump’s decision, as one of the themes of the event, expected to be showcased in a film at the beginning is “navigating the complexity of having a hyphenated identity as an Indian and an American”. The Houston rally had been proposed in 2017 as well, when Mr. Modi last visited the U.S., but had been put off over concerns that a large gathering of immigrants would send a problematic message to the Trump administration which has taken a very tough line on immigration.
•“As an Indian American, I am proud to see Houston preparing to welcome PM Modi. Houston is the energy capital of the world and the most diverse city in America,” Indo American chamber of commerce founder Jagdip Ahluwalia told The Hindu. “The news of our President, Donald Trump joining this is a sign of the growing importance of the U.S.-India relationship,” he added.
“A terrible state of affairs... These are formidable reasons [for the lockdown]... These are security matters,” Justice S.A. Bobde, on the Bench, said.
•The Supreme Court on Monday found the government’s statistics of thousands of instances of death, terror and violence in Jammu and Kashmir from 1990 as “formidable reasons” leading to the August 5, 2019 lockdown that followed the withdrawal of the special rights and privileges of Kashmiri people with the reading down of Article 370.
•Attorney General K.K. Venugopal reeled out numbers in an effort to prove that the restrictions stopped the bloodshed in the Valley and there is no dearth of facilities for the ordinary Kashmiris.
•The top law officer told a Bench led by Chief Justice of India (CJI) Ranjan Gogoi that since 1990, 41,866 persons have lost their lives in 71,038 terror incidents. This included 14,038 civilians; 5,292 security personnel and 22,536 terrorists
•“A terrible state of affairs... These are formidable reasons [for the lockdown]... These are security matters,” Justice S.A. Bobde, on the Bench, said.
•Solicitor General Tushar Mehta submitted that “not a bullet has been fired after August 5”.
•Justice Bobde asked the government to file an affidavit with the details. The government was also asked to restore normalcy, keeping in mind national security.
•The court asked petitioners like Kashmir Times editor Anuradha Bhasin to approach the Jammu and Kashmir High Court with “local” problems like lack of Internet and mobile connectivity.
•“This [lockdown] was done by the Union of India. Public transport is not functioning, there is no way to communicate. Only a few landlines work. Media freedom is crippled. This is the 43rd day,” senior lawyer Vrinda Grover argued for Ms. Bhasin.
•Senior advocate Sanjay Hegde said the least the Kashmiris expected was that “a child can go to school quietly and the mother is assured the child returns home safely”.
•Mr. Venugopal denied the allegation of lack of facilities during the lockdown. He said 10.5 lakh people were treated as out- patients, 67,196 admitted as in-patients and 10,699 major and 53,297 minor surgeries performed. Ninety per cent of the medical shops were open and 8.9 lakh LPG cylinders delivered at homes.
•Mr. Mehta, on his part, claimed that the “exploitation” of farmers had come to an end with a scheme launched by the government.
•At this point, the CJI stopped the law officers from going into further details.
•The CJI later took a serious view of an oral submission made by senior advocate Husseifa Ahmadi, appearing for child rights activists Enakshi Ganguli and Dr. Shanta Sinha, that it was difficult to access the J&K High Court. Mr. Ahmadi made the statement when the court asked him to approach the High Court. The petition had tried to draw judicial attention to media reports of detention of children aged between 10 and 18 in J&K.
•Instead, the CJI sought a report from the High Court Chief Justice on the basis of Mr. Ahmadi's statement. The CJI said he would speak to the High Court Chief Justice to verify the claim and, if necessary, even go there. The CJI warned that if the claim proved to be untrue, accountability would follow.
Nod for Azad’s visit
•The court further agreed to a request of senior Congress leader Ghulam Nabi Azad to visit four districts - Srinagar, Baramulla, Anantnag and Jammu. Mr. Azad gave an undertaking to the court that he would not indulge in any political rallies while there. He is visiting to meet the daily wagers engaged in fruit trade, tourism and infrastructure in the four districts.
•“I want to go talk to them. They have suffered from the losses and wastage,” senior advocate A.M. Singhvi, for Mr. Azad, submitted.
•When the CJI asked Mr. Mehta about Mr. Azad's request, Mr. Singhvi said, “I am a former Chief Minister of the State. I was turned back thrice in August from the airport... I do not need his permission to enter my own State”.
•Senior advocate Raju Ramachandran, for CPI(M) general secretary Sitaram Yechury, submitted that his J&K party colleague, M.Y. Tarigami, was brought to Delhi on the court's order and treated in the AIIMS.
•The court allowed, Mr. Tarigami, if he so wishes, to return to J&K.
•Mr. Ramachandran said the government order of detention of Mr. Tarigami had not yet been placed on record. “So many days have passed... if there is no order, please declare me free. Please put it on record that once I go back, I should be provided my security and given my freedom to move. Legality of my 40-day detention is in doubt,” he submitted.
Vaiko’s plea
•The court also issued notice to the government on a separate habeas corpus petition filed by Rajya Sabha member Vaiko to know the whereabouts of former Jammu and Kashmir Chief Minister Dr. Farooq Abdullah.
•Mr. Vaiko's counsel said Dr. Abdullah was believed to be “under detention” and there was no access to him. He was scheduled to visit Chennai on September 15 for a programme following the abrogation of Article 370 - in court and set him free.
📰 The slow climb to the trillion economy peak
There has to be a focus on human capital formation and in addressing the real reasons for the economic slowdown
•On Independence Day, the Prime Minister expressed confidence that India would be a $5-trillion economy in 2024, a line that has been picked up by ruling party leaders, Ministers and also senior government officers.
•However, this is surprising as the impact of economic growth on major development goals — examples being improvement in education, health and overall human development/human capital formation; expansion in productive employment for all and environmentally sustainable development, etc — depends on the nature and composition of growth.
Share in wealth
•The economic growth experience in India in recent decades has shown that growth has had an adverse impact on all these developmental goals. To start with, Credit Suisse, for example, has shown recently that 1% of the wealthiest in India increased their share in wealth from 40% in 2010 to more than 60% in the last five years, and the richest 10% in India own more than four times wealth than the remaining 90%. That is, if we proceed on the same growth path, a large part of the increase in wealth and GDP will be claimed by the top 10% richest population in India. In other words, the top 10% will take away the lion’s share of the $5-trillion incomes if and when we reach the target of $5-trillion economy.
Gaps in education, health
•Our growth experience so far shows that the rate of growth of employment has declined with increasing economic growth; we have now reached a stage where the economy is suffering from the highest ever unemployment rate. With rising population and, consequently, the labour force, India will soon experience demographic disaster rather than demographic dividend. The story of health and nutrition is also quite similar. The literacy rate has grown very slowly and according to the United Nations, India’s literacy was 71.1% in 2015. India is now far behind many African countries such as Rwanda, Morocco and Congo in terms of literacy. According to the Annual Status of Education Report (ASER) 2018, about 70-74 % children (in the age group 6-14 years) go to school regularly; far fewer go to secondary school. The quality of education is far from satisfactory, if one is to read ASER 2018.
•There is an urgent need for a quantum jump in public expenditure on education in order to fill wide gaps in infrastructure, training and retraining of teachers and to ensure a strong follow up on the quality of education. However, as against the norm of 6% of GDP, the government spend is around 4% of GDP on education. It is the same when it comes to the story of health, where the decline in malnutrition, particularly among women and children is very slow; against the norm of 3% of GDP, the government spends around 1.5% of GDP on health. Finally, in the process of growth in India, there has been a severe depletion and degradation of environmental resources. A recent Intergovernmental Panel on Climate Change report has warned India of the seriousness of climate change and its severe adverse impact on the environment and the livelihood of masses.
•Another major concern about reaching the aim of a $5-trillion economy is that at present the economy is experiencing a severe slowdown; it would be very difficult to raise the rate of growth to reach $5 trillion in 2024 unless we focus on human capital formation and address the real reasons for the slowdown. As NITI Aayog has observed recently, the present crisis is the worst crisis India is facing since the Independence. The rate of economic growth, at 5%, is the lowest in the last few years. Also, the rates of savings and investment in the Indian economy have declined, as also exports and total credit. Among the major industries, the automobile industry is experiencing continuous decline, which has led to the retrenchment of 3.5 lakh workers so far. Apart from the ancillaries of the automobile industry, many other industries are declining fairly rapidly too — examples are diamond cutting and polishing, textiles and garments, and several Micro, Small and Medium Enterprises (MSME).
Crisis in agriculture
•All this has affected trading and business units. Agriculture is in crisis today on account of rising costs of inputs and low prices of produces, and low public investments in this sector. Again, agricultural real wages are in decline and non-farm wages are constant if not declining; urban wages are also declining in recent years. As a consequence of all these developments, there is a crash in the aggregate demand in the economy.
•What is needed urgently is for the government to increase public expenditure in investing in agriculture — in infrastructure, inputs, extension, marketing and storage and training — and in providing profitable prices to farmers. It should also raise funds for the Mahatma Gandhi National Rural Employment Guarantee Act to push up demand by following a Keynesian approach.
•It should raise public employment by filling all vacant sanctioned posts in the Central and State governments, which would be around 2.5 million jobs. The government should also regularise contract, casual and “honorary” jobs and make them regular jobs. Increasing additional jobs for ensuring basic health and good quality education up to secondary level to all so that any meaningful skill formation is possible should be another aim. Human capital formation will give a big push to start-ups and MSMEs. And, finally, the government should also focus on promoting labour intensive sectors such as gems and jewellery, textiles and garments and leather goods. The government should not worry about the fiscal deficit ratio as these measures will address the major problems of the economy.
Fall in demand
•What we witness, however, is that public expenditure is declining continuously in the last few years, As the Centre For Monitoring Indian Economy Pvt. Ltd. has pointed out, public expenditure has declined to the minimum in the last five years. Steps such as rolling back some budgeted tax proposals, providing a stimulus package to industries, raising foreign direct investment flows, reducing Goods and Services Tax to help industries are not likely to increase much aggregate demand in the economy. Also, reduction in repo rate by the Reserve Bank of India and asking banks to pass on reduced rates to customers, recapitalisation of banks by ₹70,000 crore to raise liquidity in the economy and other steps to ease credit flows to the economy are all supply side measures; the real problem is a crash in the aggregate demand.
•Let us hope that the government looks at the weaker sectors and sections to get out of the crisis if not to improve their well-being.
📰 Israel, Pakistan ties a bridge too far?
Islamabad would dilute its Islamic credentials if it were to establish diplomatic ties with Tel Aviv
•Recently, Israeli and Pakistani scholars and opinion-makers appear to have speculated about the possibility of the two states establishing diplomatic ties. This has cast fresh light on the changing dynamics in the region and Israel’s growing diplomatic reach and success.
•Ever since Israel’s founding in 1948, it has been the endeavour of the Jewish state to overcome its regional isolation and enhance diplomatic relations with as many countries as possible. Apart from Turkey (1949), Egypt (1979) and Jordan (1994), none of the states in the region have recognised Israel. In fact, the Organisation of Islamic Cooperation (OIC) routinely pillories Israel for its “occupation” of Palestinian lands. The latest in this long acrimonious saga is the OIC’s call to convene an emergency session to discuss Israeli Prime Minister Benjamin Netanyahu’s remarks that, if re-elected, he would definitely annex the Jordan Valley in the West Bank and the northern Dead Sea.
•The regular and scathing indictment by the Islamic world notwithstanding, Israel has been successful in gradually expanding its diplomatic profile beyond its immediate neighbourhood. Israel has established diplomatic relations with a large majority of the 193 UN member states.
India-Israel links
•India established full diplomatic ties with Israel in January 1992. While many factors brought these two democracies together, it is a fact that both have successfully tackled state-centric threats throughout their history. Israel has successfully dealt with the gauntlet thrown down by the combined Arab opposition in 1948, 1967 and in 1973. India has prevailed over an acutely hostile and implacable Pakistan in every conflict since Partition. Both Israel and India have been victims of asymmetric warfare such as terrorism, which they continue to tackle with resolve.
•Thanks to the dynamism infused in India’s foreign policy by the Indian Prime Minister, India’s interactions with the Gulf Cooperation Council (GCC) states have witnessed an impressive upward trajectory in recent times, encompassing economic and security ties. High-level political engagement with the West Asian region has been another hallmark of the Narendra Modi government.
•No doubt, mutual apprehensions about Iran have nudged Israel and the Gulf states closer. Israel continues to look beyond the confines of its immediate region for greater economic and diplomatic Lebensraum. The Indo-Pacific region too is fast emerging as a prime focus of its endeavours.
•While Israel established diplomatic ties with China at the same time as with India (January 1992), their relations have been primarily limited to the economic realm due to the American embargo on selling sophisticated weapons systems to Beijing. Israel, however, is expanding its arms sales to India and to countries in Southeast Asia.
•Under a changing rubric, Israel is also looking at increasing its diplomatic footprint in South Asia and beyond. Forging closer ties with populous Asian Muslim countries such as Bangladesh and Indonesia would help it to gain greater legitimacy in the Islamic world.
Investment in the Arab world
•Pakistan, however, is a different kettle of fish. The president of the Jerusalem Institute for Strategy and Security, Prof. Efraim Inbar, recently published an opinion piece in the Israeli newspaper, Haaretz, titled ‘Israel would welcome ties with Pakistan – Should India Worry?’ (https://bit.ly/2lWr8EE). He argues that Pakistan’s national interests would better be served by having ties with Israel, particularly since Israel carries weight in Washington and could perhaps mediate on recurring U.S.-Pakistan tensions. Concerns regarding Iran were also cited as a point of convergence.
•A rapprochement between Israel and Pakistan appears to be far-fetched. The fly in the ointment is that Pakistan is considered the “sword-arm” of the Sunni world. Islamabad has invested considerably in the security of the Arab monarchies, including in Saudi Arabia and Jordan. Pakistani military units have been stationed in these countries to promote internal stability. Pakistani leaders such as Nawaz Sharif have sought and received refuge in the Arabian Peninsula.
•Pakistan has used the platform provided by the OIC to drum up support for its stand on Kashmir, just as the OIC has done for the Palestinian issue. If Pakistan were to establish diplomatic ties with Israel, it would dilute its Islamic credentials and lead to a weakened support base within the OIC on Kashmir, a point acknowledged by Pakistani commentator Ayesha Siddiqa in an opinion article in the same newspaper following Prof. Inbar’s piece. The regime in Pakistan would also face the heat from its many domestic conservative Islamist groups. More importantly, in a recent interaction with the media, military spokesperson Maj. Gen. Asif Ghafoor refuted the possibility in response to a query about Pakistan’s recognition of Israel, stating that such stories were part of a propaganda war aimed at turning the general public against the country’s military.
The Iran factor
•Iran is recognised as a potent threat by Israel and the Shia-Sunni divide in Pakistan is frequently a point of friction between Iran and Pakistan. However, as Ms. Siddiqa notes, Israel cannot expect Pakistan to be used against neighbouring Iran and risk the dangers of escalation in sectarian conflict, given that more than 20% of its population is Shia. Pakistan is unlikely to take any steps that could rock its relations with Iran. In April 2015, Pakistan’s Parliament had turned down Riyadh’s request to join a Saudi-led military intervention in Yemen to fight the Houthi rebels supported by Iran.
•India has successfully walked a tightrope between Israel and Palestine, and Israel may well hope to do so between Pakistan and India. However, it is not in Israel’s interest to seek diplomatic ties with a state that sponsors terrorism.
•While it is the sovereign right of nation states to decide such matters, it appears that the idea of diplomatic ties between Israel and Pakistan remains, for now, a pie in the sky.
📰 Digital certificate of origin system unveiled
Commerce Minister Piyush Goyal also launches steel import monitoring system
•In continuation of Finance Minister Nirmala Sitharaman’s announcements on Saturday to revive the export sector, Commerce Minister Piyush Goyal launched the common digital platform for the issuance of certificates of origin and a steel import monitoring system (SIMS).
•Mr. Goyal also provided more details about the enhanced export credit insurance scheme for banks that lend working capital to exporters. Regarding the SIMS, Mr. Goyal sought to allay concerns that this would be a licensing system, adding it was merely a tool to capture information about steel imports.
•“The new export credit insurance scheme will be called ‘Nirvik,” Mr. Goyal told the media. “At the moment, the Export Credit Guarantee Corporation (ECGC) gives a cover of 60% of the loss to banks. The new scheme will give 90% coverage of the principal and interest of the loan for pre- and post-shipment credit, and half of this will be provided in 30 days.”
•He said claim inspection would be waived for up to ₹10 crore. For claims higher than this amount, inspection of bank documents and records by ECGC officials will be mandatory. The previous limit for document inspection was ₹1 crore.
•Mr. Goyal added that the existing premium rate would be lowered, and loans categorised into two broad categories of those below ₹80 crore and those above that amount. Loans above ₹80 crore will be further divided into those that are not for gold, jewellery or diamonds, and those that are.
•“The benefit to banks from this increased cover is that this is in effect a credit enhancement scheme,” Mr. Goyal said. “The rating for the bank loans to exporters becomes AA due to this enhanced insurance cover.”
•Mr. Goyal added the public sector banks had agreed to give the ECGC-covered loans at a rate that is a maximum of 2.2% higher than the prevailing repo rate, and this would be adjusted as the repo rate changes.
•“As you know, for exports to countries with which India has free trade agreements (FTA), exporters have to show a certificate that the consignment originated in India,” Alok Chaturvedi, the Director General of Foreign Trade, added. “With the launch of the common digital platform for the issuance of certificates of origin, now, these certificates can be obtained online and all the issuing authorities will be on the same portal.”
•Mr. Chaturvedi said India was speaking to its trading partners and the countries it had FTAs with to ensure they accepted the digital certificates.
•“We have received complaints from officials that collecting data on what grade of steel was being imported, how much was being imported, from where, and what the domestic market potential is quite difficult at the moment,” Mr. Goyal said.
•“I want to assure the export community that the SIMS is not a licensing mechanism, and that nobody will be stopped from importing.”
•The mechanism, through which importers of steel will have to register their import between 60 days and 15 days before it arrives in the country, is only meant to collect information about the steel imports in the country.
