📰 Five-in-one: On BRICS summit
BRICS countries need greater connectivity and more inter-grouping trade to get ahead
•With storm clouds gathering over the world economy, trading arrangements in disarray and questions over the relevance of the World Trade Organization (WTO), the summit of leaders of Brazil-Russia-India-China-South Africa (BRICS) could not have come at a more opportune time. BRICS has proved its naysayers wrong since the idea of grouping the world’s “five emerging economies” was coined by a consultant two decades ago (BRICS was formed in 2006). India and China have buoyed the grouping with their growth, and even though the idea behind BRICS has been dimmed by sluggish growth in Brazil and South Africa, and Russia’s sanction-laden slowdown, the group has adapted to the times and proven its resilience. As a result, even at a time when the five countries are heading in different directions politically, they found ways to build a common vision for the world’s economic future with an emphasis on multilateralism and a joint statement at Brasilia that decried “unilateral and protectionist” actions. For India, in particular, the articulation of this vision comes at an important time, given that it faces its own economic crisis, and troubled trading ties with several nations. The failure of officials to resolve issues in time to join the Regional Comprehensive Economic Partnership (RCEP) had raised questions about whether India is reversing its market liberalisation and openness to trade. It is significant that Mr. Modi and Chinese President Xi Jinping used the BRICS platform for continued talks on bringing India back into the RCEP fold and focused on resolving their trade issues through the recently launched mechanism led by Finance Ministers.
•In their prescriptions, BRICS countries, which acknowledged the weakening of global economic growth in the statement, repeated their commitment to the WTO though the original promoter of the multilateral structure, the U.S., is retrenching its interest in the body. They also presented a vision for “rules-based, transparent, non-discriminatory, open, free and inclusive international trade”, while commending the BRICS-led New Development Bank, and the BRICS business council in ensuring that BRICS countries, major drivers of growth in the past decade, continue to represent “close to a third of global output”. Where BRICS has failed its founders is in the vision of interdependence between the five countries; despite their combined population accounting for 40% of humanity, intra-BRICS trade still makes up just 15% of world trade. Going forward, it is greater connectivity and more trade that will allow the BRICS countries to claim their rightful space, and provide the leadership and energy that the global economic order needs urgently.
The recent National Education Policy document, despite its lacunae, is a vast improvement over its earlier avatar
•It is not surprising that Jiddu Krishnamurti, arguably the greatest Indian thinker on education in the 20th century, does not find a mention in the most recent iteration of the New Education Policy (NEP) 2019. Krishnamurthi’s ideas on education and freedom — learning in a non-competitive and non-hierarchical ecosystem and discovering one’s true passion without any sense of fear — may have been too heterodox for a government report. Nonetheless, there are elements of contemporary global thinking that do inform the NEP en passant — the emphasis on creativity and critical thinking and the ability to communicate and collaborate across cultural differences, which are part of the global common sense.
•The near-final NEP, despite its lacunae, is a vast improvement over its earlier, almost-unreadable avatar. The report’s 55-page brevity is matched by a reader-friendly organisational structure: four chapters focussing on school education; higher education; other key areas like adult education, technology and promotion of arts and culture; and a section on making it happen by establishing an apex body and the financial aspects to make quality education affordable for all. While the commitment to double the government expenditure on education from about 10% to 20% over a 10-year period is still insufficient, given the enormity of the challenge, it is an unprecedented commitment to the sector.
•Education, for most of us, is a necessary public good central to the task of nation building and, like fresh air, is necessary to make our communities come alive; it should not be driven solely by market demand for certain skills, or be distracted by the admittedly disruptive impact, for instance, of Artificial Intelligence. This form of education should be unshackled from the chains of deprivation, and “affordable” education, for instance in JNU, is vital to ensure access to even the most marginalised sections of our country. Education policy, in essence, must aim to produce sensitive, creative and upright citizens who are willing to take the less-travelled path and whose professional “skills” will endure revolutions in thinking and technology.
Education is not a commodity
•A menu of choices provided by the private sector, which reduces education to the status of a commodity and views our youthful demography as human capital, is being doled out as panacea by instant India specialists to our educational challenges. This is a fallacy. We have to be conscious and deeply aware that there is no developed country where the public sector was not in the vanguard of school and higher education expansion, in ensuring its inclusiveness, and in setting standards. Even the sui generis Ivy League universities, created because of generous philanthropic endowments, function more like public institutions today. It was, therefore, essential for the government to produce a blueprint for reforms after widespread consultation; whether the present NEP report can deliver on this challenge is debatable.
•As an academic, I am of course delighted that the NEP’s stated goal is to “reinstate” teachers as the “most respected members of our society.” Empowerment of teachers remains a key mantra of the policy, and it is understood that this can only be achieved by ensuring their “livelihood, respect, dignity and autonomy”, while ensuring quality and accountability. If the NEP stems the rot in most institutions of learning — which leads to the erosion of autonomy of teachers even on academic forums — it would have achieved a major breakthrough. Indeed, such is the intolerant dictatorial attitude of many of our current university leaders that the act of intervening in academic debates itself seems like treason.
•Equally laudable is the emphasis on early childhood care and schooling more generally. The anganwadis remain the backbone of an early childhood care system but have suffered on multiple grounds, including lack of facilities and proper training. This, as the report recognises, needs to change; but the incremental and rather ad hoc changes proposed (in stand-alone anganwadis, or anganwadis co-located with primary schools, etc.) may not deliver. The idea of volunteer teachers, peer tutoring, rationalisation of the system of schools and sharing of resources does sound ominous. It is also not clear what strategies will be adopted, nor what resources will be committed, to strengthen the public sector, including the Kendriya Vidyalayas, the State government-run institutions and the municipal schools.
•Much has to be learnt here from examples even in the non-commercial private sector. The best example I know of holistic childhood education is that of Mirambika, a free-progress, experimental school inspired by the writings of the Mother and Sri Aurobindo.
•The NEP wisely recognises that a comprehensive liberal arts education will help to “develop all capacities of human beings — intellectual, aesthetic, social, physical, emotional, and moral — in an integrated manner.” India’s past, and its unique, culturally diverse matrix provide a rich framework, but delivering on a holistic liberal education programme requires much more than just proclamations.
•The proposal to establish a National Research Foundation, with an “overarching goal... to enable a culture of research to permeate through our universities” needs to be applauded and widely supported. But the creation of a National Testing Agency (NTA) has understandably generated scepticism. While, on paper, the NTA “will serve as a premier, expert, autonomous testing organisation to conduct entrance examinations for admissions and fellowships in higher educational institutions,” in reality, universities and departments may lose autonomy over admissions, even of research students. This is not an empty fear; the initial signs of this change are already visible in universities.
Concern about categorisation
•Equally serious is the concern about the division between research-intensive ‘premier’ universities; teaching universities; and colleges. The NEP suggests, “three ‘types’ of institutions are not in any natural way a sharp, exclusionary categorisation, but are along a continuum”. But the advantage of these divisions, per se, is neither intuitively nor analytically clear, given that high quality teaching and cutting-edge research comfortably coexist in most universities of excellence.
•The NEP draft will now be placed before the Cabinet; one hopes that many of the concerns raised are addressed before an official policy is finally announced, recognising also the enormous pressure from global educational “service providers” to capture the Indian education market.
•In 2003, I had the opportunity, as Vice Chancellor of the University of Jammu, to invite the then-Rashtriya Swayamsevak Sangh (RSS) chief K.S. Sudarshan for breakfast at home. Also invited were my colleagues in the university, K.L. Bhatia and Nirmal Singh. Addressing the issue of a section of Jammu chauvinists campaigning against my appointment (as a Kashmiri) to the Vice Chancellorship, Sudarshan said: “This is a vishvavidyalaya (university) — an academic universe, a global sanctuary of ideas which we can never be reduced to a space for narrow bigotry. We have to upload the highest principles here, not let academic positions or programmes be traded or let education become yet another business.” Given that the RSS is an important stakeholder in the NEP, it is critical that it guards against consumerist, neoliberal ideas of education “taking over” through the backdoor, while an apparent vigil of cultural nationalism is maintained in the front.
📰 Centre drops plan to bring in changes to Forest Act of 1927
The draft had mooted giving a wide range of powers to forest officers
•The Union Environment Ministry on Friday withdrew a draft amendment that proposed updates to the Indian Forest Act, 1927. Activist groups and some State governments had protested this proposed law after it was mooted in March.
•Union Environment Minister Prakash Javadekar told a press conference that the draft was withdrawn. “Let me clarify that this wasn’t a government draft, as such. We had just consolidated views from various States with a significant forest cover. Over a few months, we’ve learnt that this has led to wrong interpretations. So we are withdrawing the zero draft.”
Munda hails decision
•Union Tribal Affairs Minister Arjun Munda of the BJP, who was present at the press conference, “welcomed” the withdrawal. Mr. Munda is a former Chief Minister of Jharkhand, which has a significant tribal population and which will go to the polls next month.
•The Indian Forest Act, 2019, was envisaged as an amendment to the Indian Forest Act, 1927, and an attempt to address contemporary challenges to the country’s forests. The draft law had been sent to key forest officers in the States for soliciting comments and objections.
•It drew flak from activists as well as tribal welfare organisations.
•Last month, the Mizoram government rejected the draft. “The proposal to amend the Indian Forest Act was rejected after a consultative meeting of all stakeholders, including representatives of political parties, civil society organisations and officials,” Mizoram’s Minister of Environment, Forests and Climate Change T.J. Lalnuntluanga had said.
•“Forest-officer not below the rank of a Ranger shall have power to hold an inquiry into forest offences…and shall have the powers to search or issue a search warrant under the Code of Criminal Procedure, 1973…,” said a copy of the document. The Hindu had reported on this draft in March.
•Siddhantha Das, Director-General, Forestry, told The Hindu that an amendment to the Forest Act was due. “We will revise it and look at it with fresh eyes. But we will definitely have an amended Act and have wider discussions.”
•The legislation also proposes a forest development cess of up to 10% of the assessed value of mining products removed from forests, and water used for irrigation or in industries. This amount would be deposited in a special fund and used “exclusively for reforestation; forest protection and other ancillary purposes connected with tree planting, forest development and conservation,” the draft document noted.
•“We welcome this withdrawal,” said a statement by activist collective, Campaign for Survival and Dignity.
📰 NDRF to train unit to save heritage structures
•The National Disaster Response Force (NDRF) will soon come up with a specialized unit in each battalion to help preserve monuments and other heritage structures battered by disasters, apart from its basic responsibility of rescue and restoration.
•“There will be a set of personnel in each battalion of NDRF who will get the basic training on preserving monuments. These personnel will have some sort of insights as to how to preserve heritage structures in the pre and post disaster scenario,” Satya Narayan Pradhan, Director General of NDRF, told The Hindu, here.
📰 Groping in the dark on the economy
The government’s ever-shifting policy stances show its lack of understanding when it comes to economic challenges
•The July 5 Budget was presented originally as the government’s vision for the next ten years. But, only three months later, the government began revising it. The Budget, and the economic philosophy that had guided its formulation, were both completely rewritten through a string of amendments.
•The Budget’s provisions for collecting more in taxes from the incomes of the super-rich, Finance Minister Nirmala Sitharaman then explained, were aimed at redistributing wealth to bring about more equitable development. However, the tax rate hikes were rolled back later. Tax rates on corporate profits were reduced instead. Speculation is now rife about similar relief on individual incomes. In effect, the stated policy doctrine of redistributive taxation stands upended in a matter of weeks.
Shifting policy stances
•A few questions arise following these steps.
•First, is the government’s change of heart an outcome of serious deliberations, or merely a reaction to public outcry? Second, has Modi government grasped the nature of the economic challenge sufficiently? Or, finding itself unable to figure out what policies to follow, is it merely flitting from one type of policy stance to another?
•Third, why has the Modi government’s economic record come to be defined by its constantly shifting policy stances? Fourth, why has the public discourse not shifted away from the economy’s troubles?
•Narratives play a significant role in shaping expectations. Reviving expectations is necessary — but not sufficient — to reverse the slowdown in GDP growth, consumption and private investments. The tax cuts were bold and corrective but insufficient to revive optimism. Reform of the taxation policy regime is long-awaited and remains incomplete. If the sentiment in business circles remains bleak even after the tax cuts, it is because an economic revival will take many more reforms. More importantly, though, there is growing realisation among captains of industry that the government has consistently demonstrated an inability to settle into a set line of thinking.
•Back in 2014, ‘Make In India’, a manufacturing-driven strategy for economic growth and generating sustainable livelihoods, was announced from the ramparts of the Red Fort. More than five years later, the grand plan for replacing red tape with red carpets for factories is caught up in, well, red tape. Manufacturing is in a slump; its growth crashed to 0.6% in the April-June quarter this year. Later in 2014, the resolution for setting up the NITI Aayog proposed a ‘Bhartiya model’ in which the state would take on a curtailed role, with limited influence in the industrial and services sectors of the economy.
•The faith in market forces did not last long, though. The 2015 Budget reprised, as first pointed out by economist Jean Dreze, the Nehruvian strategy for growth — building physical capital with public investments. However, the 2015 Budget allocation of ₹70,000 crore towards this strategy proved too modest to generate an infrastructure push or stimulate an economy as large as India. Defence Minister Rajnath Singh recently reaffirmed faith in another ingredient of Nehruvian socialism: import substitution. In fact, contrary to the faith professed in market forces by the proposed ‘Bhartiya model’, the Modi government has resuscitated a host of pre-1991 policy tools that shrink rather than deepen markets — from price caps to import tariffs.
•Ideas rejected more than two decades ago during the liberalisation phase are back in circulation, such as printing rupees to cover up for shortfalls in tax collections and raising sovereign debt in foreign currency.
No ‘creative destruction’
•The BJP’s September 2018 political resolution explained away the hardships demonetisation and the messy Goods and Services Tax (GST) imposed on smaller firms as ‘creative destruction’. The implication was that the closure of informal-sector firms that had failed to cope with the GST’s byzantine compliance system was welcome as it had led to greater ‘formalisation’ of the economy. This was an inaccurate reading of the Schumpeterian principle of creative destruction. The only way the GST may have led to more formalisation of the economy is by putting bigger companies at an advantage over smaller ones in coping with the chaotic and ever-changing compliance system.
•The 2019 Interim Budget returned to the public spending-led approach with cash supplements for farmers and taxpayer-funded ‘welfare measures’ of toilets, tapped water, cooking gas and subsidised loans. Along with the Interim Budget’s income tax sops for the middle class, this approach was also supposed to rekindle consumption, and pump-prime the slowing economy. No such gains accrued. The economic pain continues unabated.
•The government’s economic philosophy resists easy characterisation because it changes so frequently. The ever-shifting policy stances are defended as “being responsive to public opinion”. Critics see it as evidence that the government is struggling to grasp the nature of the economic challenges and, therefore, groping in the dark.
•Policymaking has three essential ingredients: technical elements, administrative inputs and political goals and packaging. Technical inputs come from economists. The government has no stomach for plainspeak. Without saying so openly, it expects professionals to desist from speaking truth to power and assist party spokespersons in shaping narratives complimentary to the government. Naturally, it is losing economists who value national economic progress, personal integrity and professional reputations. Increasingly, as qualified economists are getting sidelined or fired, the chief determinant of economic policies is just politics.
•The government believes it will succeed in reversing the economic slowdown using an approach that has worked for it in consolidating political power. It is working on the assumption that the phenomenon of the personality cult can be replicated when it comes to the economy. This is a mistake. Even in a highly imperfect market economy like India, the government is merely another significant player.
