📰 RBI will supervise cooperative banks
•Currently, these banks come under dual regulation of the RBI and the Registrar of Co-operative Societies. The move to bring these urban and multi-State coop. banks under the supervision of the RBI comes after several instances of fraud and serious financial irregularities, including the major scam at the Punjab and Maharashtra Co-operative (PMC) Bank last year. In September, the RBI was forced to supercede the PMC Bank’s board and impose strict restrictions.
•“I am very sure when this announcement was made, people have welcomed it, and depositors will get protection and benefit out of it,” Mr. Javadekar said, regarding the ordinance approved by Cabinet.
•The Cabinet also approved a scheme to provide interest subvention of 2% for a 12-month period to small borrowers with loans up to Rs. 50,000 under the Shishu category of the Pradhan Mantri Mudra Yojana. This relief had been announced as part of the Aatmanirbhar Bharat package last month.
India needs enhanced manufacturing capabilities and improved efficiencies
•The Centre’s decision to make it mandatory for vendors on the Government e-Marketplace (GeM) procurement platform to specify the country of origin of new products listed by them is on the face of it unexceptionable, aimed as it is at promoting India-made goods. Apart from the place of manufacture, the platform’s administrators have also sought details on the extent of local content and set guidelines on the percentage of localisation for enabling procurement in the case of bids of a specified value. However, the timing and thrust of the announcement — set in the backdrop of the government’s new-found push for self-reliance in the wake of the COVID-19 pandemic and its devastating impact on the global economy, coupled with the recent heightened border tensions with China — raises several questions. The government’s attempts to raise the share of manufacturing in the economy through the ‘Make in India’ programme have so far failed to significantly boost investment in new, cutting-edge technology-driven or export-oriented industries and instead only taken the country back to import substitution plants making goods predominantly for domestic consumption. To that extent, the drive for self-reliance and greater localisation risks once again eroding Indian industry’s global competitiveness by placing a premium on ‘Indianness’ over quality or cost.
•The Centre’s move with its GeM portal has also predictably kindled and amplified a gathering clamour for the identification and subsequent boycott of Chinese products including on private e-commerce platforms. The weaponisation of trade ties, especially one where India’s reliance on imports from China now extend̥s beyond smartphones and low-cost electronics to heavy machinery and active pharmaceutical ingredients, is a double-edged sword and fraught with risks for the Indian economy as well. India’s drug makers, who are seeking to entrench themselves as a pharmacy to the world amid the pandemic and accompanying rush for affordable generic treatments, depend on the northern neighbour for about 70% of their requirements of bulk drugs and intermediates. For India to wean itself off these dependencies will take time. The fact is that enhancing manufacturing capacities with improved efficiency and reduced cost would require an overhaul of bureaucratic processes. Attaining genuine self-reliance is a long and capital intensive process that would require far greater investment in education, skill-building and infrastructure. The GeM move on country of origin is at best symbolic. For now, policymakers ought to tone down any trade-linked rhetoric and give diplomats and military negotiators the room to smoothe ties.
📰 China, Kashmir and the ghost of August 5
Apart from Pakistan and its involvement in the Kashmir conflict, India may now have a third party in the game — Beijing
•Sometimes, a seemingly rhetorical statement or a symbolic political decision has the undesirable ability to fundamentally alter the material reality around a particular issue, especially when it comes to sensitive international disputes and conflicts. The impact of the Bharatiya Janata Party-led government’s decision on Kashmir in 2019 on the current China-India military standoff on the Line of Actual Control (LAC) is one such phenomenon. As a political scientist, I am aware of the apparent “methodological overreach” in my attempt at linking the two even though it might not be an analytical overreach. Consider the following.
•What is becoming clear now is that by “inventing” a rhetorical position around the issue of Aksai Chin, a territory India may never have intended to take back by force from China, New Delhi seems to have aggravated the existing Chinese sensitivities on it. Put differently, India’s infrastructure-building activities on its side of the LAC and the China’s China-Pakistan Economic Corridor (CPEC) connectivity to Pakistan were already on a collision course, and it seems the reorganisation of Jammu & Kashmir (J&K) on August 5 last year, and the rhetoric surrounding it, may have finally triggered a conflict that was building up for a long time.
The ground reality
•The impact of August 5 has been felt on two fronts — China and Pakistan. Official data show a steady rise in violence in Kashmir since 2014, and the August 2019 decision has done little to reduce this despite the restrictions of movement and a heavy security presence in Kashmir. Early trends on violence in 2020 show that the levels of violence will indeed cross those of 2019.
•The impact of August 5 goes beyond a mere spike in violence in Kashmir. Since August, retired Pakistani officials close to the establishment have argued that in the wake of India’s Kashmir decision, the Simla Agreement of 1972 — which forms a key basis of bilateral relations, including the management of the Line of Control (LoC) in Kashmir — is not valid anymore. The Pakistani side argues that the Indian decision vis-à-vis Kashmir goes against the spirit of the Simla Agreement since the agreement states that “pending the final settlement of any of the problems between the two countries, neither side shall unilaterally alter the situation....”. This of course does not take away from the fact that Pakistan has altered the situation in Pakistan Occupied Kashmir (PoK) several times over in the past.
•If this indeed reflects an emerging official thinking within Pakistan, this might have serious implications. For one, this would mean that the agreement governing the India-Pakistan border in J&K will no longer be the Simla Agreement but would, as a result, have to be the one signed between the two sides in Karachi in 1949, at the end of their first war in 1948. Since the Simla Agreement formalised several territorial changes which took place after 1949 and until December 1971, such territorial adjustments could become null and void. This raises two specific issues. For one, since the current ceasefire agreement between India and Pakistan (declared in 2003) is essentially a reiteration of the ceasefire agreement declared at the end of the 1971 war, this could mean an end to the existing ceasefire agreement between them. Second, if “Simla is dead”, does it mean that the LoC that came into being (replacing the ceasefire Line in 1971) also stands nullified? In other words, the entire basis of India-Pakistan negotiations on J&K since 1972 may cease to exist if Pakistan decides to undermine the Simla Agreement, or accuse India of having done so by the August decision and then decide not to abide by it.
The China challenge
•Let us return to the impact of August 5 on the current India-China stand-off. It was clear soon after the August decision that Beijing was deeply uneasy about India’s decision for at least two reasons. One, India’s strong official claim about a territory, Aksai Chin, that has been under the Chinese control; and two, bringing Ladakh under India’s central rule annoyed Beijing since it considers Ladakh’s borders to be disputed between them. From Beijing’s perspective, the August decision also complicated the ongoing boundary talks between the two sides. Pakistani appeals to Beijing to push back against India may have sharpened the Chinese reaction. There is also some similarity between the Pakistani and Chinese positions on India’s August decision: both sides argue that India changed the status of a territory (J&K) whose borders were still being negotiated.
•Foreign Minister Subrahmanyam Jaishankar’s visit to Beijing in August 2019 and his assurances to China that India’s decision had “no implication for the external boundaries of India or the Line of Actual Control with China. India was not raising any additional territorial claims. The Chinese concerns in this regard were misplaced” did not calm Beijing. Mr. Jaishankar was right about the implication of the reorganisation of J&K, but not the Home Minister’s statement about Aksai Chin. China took the position that India “continued to damage China’s territorial sovereignty by unilaterally modifying the form of domestic law” and that it was “unacceptable”.
Fallout of India’s official stand
•Cut to June 19, 2020. Prime Minister Narendra Modi, after an all-party meeting to discuss the LAC stand-off, stated: “Neither is anyone inside the Indian territory nor any of our border posts captured.” Notwithstanding the clarifications from his Office, leading to even more controversy, the question is whether this was a deliberate climb-down from the August rhetoric so as to calm nerves in Beijing. We do not know. What we do know, however, is that the climbdown, if indeed that was the case, was not only ineffective but may also have had the opposite effect. Going by the Chinese statements thereafter, the Prime Minister’s clarification has clearly been used by Beijing to justify its position on the LAC. It could now further embolden China to undertake more border raids and land capture attempts.
•For both India and China, the region is of great strategic importance. For India, Chinese aggression close to Eastern Ladakh could frustrate its hold over Siachen glacier and compromise its security in the western frontier given the close partnership between Islamabad and Beijing. For China, the region is important for the CPEC and its access to Central Asia, both of which are part of its “Belt and Road” grand strategy.
More worry
•More so, as a second-order consequence of the August decision, New Delhi may have unwittingly brought China and Pakistan closer than ever on the Kashmir question. From being somewhat neutral on the Kashmir question in the 1990s and 2000s, China today is an aggrieved party, or so it claims, in the Kashmir conflict. If Pakistani involvement in the Kashmir conflict were not enough, we now have China in the game as well as a much more powerful third party.
•Furthermore, we have always known that China and Pakistan shared a formidable strategic alliance and yet, by wisely deemphasising that and dealing with them separately — not as a strategic alliance — New Delhi had contained their combined effect on itself to a great extent. Not anymore. Our strategy should have been to continue to weaken the China-Pakistan alliance by engaging China economically, multilaterally and regionally. Instead we may have brought them closer than ever.
•The lesson is self-evident. A country the size of India can ill-afford to be narrowly tactical in its foreign and security policy decision making. Geopolitics in Southern Asia is changing way faster than we previously imagined and, therefore, our decisions should not be made based on tactical and political considerations, but on cold, clear-headed strategic assessment.
📰 The perils of follow the leader syndrome
To the thinking Indian, the management of the pandemic, among other issues, is both unsatisfactory and misguided
•André Gide, the French writer, once said, “Everything has been said before, but since nobody listens we have to keep going back and begin all over again.” These words only underscore the need to be vocal especially when one has the country’s best interests at heart, more so when India is passing through one of its most difficult phases since Independence.
Listen to the inner voice
•The novel coronavirus pandemic is causing great pain. But the reason for its most painful blow is its handling or mishandling by the government of the day, affecting not only the economy but also the very livelihoods of lakhs of Indians. We need to stir up our collective conscience, the inner voice that warns us that things are not normal. But how do we do it?
•We must remind ourselves of what B.R. Ambedkar said on November 25, 1949: “‘The second thing we must do as to observe the caution which John Stuart Mill has given to all who are interested in the maintenance of democracy, namely, not ‘to lay their liberties at the feet of even a great man, or to trust him with power which enable him to subvert their institutions.’
•‘... this caution is far more necessary in the case of India than in the case of any other country. For in India, Bhakti or what may be called the path of devotion or hero-worship, plays a part in its politics unequalled in magnitude by the part it plays in the politics of any other country in the world. Bhakti in religion may be a road to the salvation of soul. But in politics, Bhakti or hero-worship is a sure road to degradation and to eventual dictatorship’.”
•These words of caution hold good even today.
Managing disaster
•COVID-19 has posed a grave threat to India right from the the time of the national lockdown. And yet, even now, the planners in the country do not have a national plan to combat the disease. The Disaster Management Act, 2005 expressly defines “Disaster” as “a catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man made causes, or by accident or negligence which results in substantial loss of life or human suffering or damage to, and destruction of, property, or damage to, or degradation of, environment, and is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area”.
•The Act is comprehensive and provides for, inter alia, the constitution of a National Authority, a National Executive committee, the constitution of an advisory committee of experts in the field to make recommendations and to prepare a national plan. This plan must provide for measures for prevention or mitigation. The Act lays down “guidelines for minimum standards of relief, including “ex gratia assistance on account of loss of life... and for restoration of means of livelihood”. It enables the creation of a National Disaster Response Fund in which the central government must make due contribution and requires “any grants that may be made by any person or institution for the purpose of disaster management” to be credited into the same Fund. It also provides for a National Disaster Mitigation Fund, exclusively for mitigation. The Act also provides for State and local-level plans and for creating State Disaster Response Fund among others.
•The Act was not enforced for a long time even by the United Progressive Alliance/Congress government which enacted it. The Supreme Court of India intervened at the instance of Swaraj Abhiyan (Swaraj Abhiyan vs Union Of India And Ors) and Prashant Bhushan. Justices Madan Lokur and N.V. Ramanna directed, in 2016, that the Act be implemented, and in particular the preparation of a National Plan, a National Disaster Response Fund, or NDRF, and a National Disaster Mitigation Fund, or NDMF. So, for the first time, the government came out with a National Disaster Management Plan (NDMP), 2016, which dealt with various kinds of disasters; it was amended in 2019. So why is this National Plan not even in place? Without it, the fight against COVID-19 is ad hoc, and has resulted in thousands of government orders, confusing those who are to enforce them as well as the public.
Obtuse steps
•Worse still, the NDRF is inactive. On April 3, 2020, the government of India agreed to contribute its share to the NDRF. But curiously, “keeping in mind the need for a dedicated national fund with the primary objective of dealing with any kind of emergency or distress situation, like [that] posed by COVID-19”, a public charitable trust under the name of Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) was set up to receive grants made by persons and institutions out of the NDRF, in violation of Section 46 of the Act. The crores being sent to this fund are not even audited by the Comptroller and Auditor General (CAG) of India. It is a totally opaque exercise. Curiously on May 22, the government of India issued a notification to fight the locust menace by extending relief under the NDRF as also the SDRF. So, according to the government, the threat of locusts is more severe than the novel coronavirus. Clearly, the government of the day has not only ignored the binding
law but also circumvented it. The government has decided to fight the crisis in an ad hoc and arbitrary manner instead of the organised steps as mandated by the Act. In so doing, the experts have been sidelined.
•Unilateral decisions without the advice of others only cause problems, two classic examples being demonetisation that was forced on the nation in November 2016, and the national lockdown of March 25 that was thrust upon a one billion-plus people at four hours notice. To add to this is the face-off between India and China at the Line of Actual Control. To thinking Indians, the handling of these situations is not only unsatisfactory but also misguided.
•No one can deny that the Prime Minister means well, but his actions speak otherwise.
•With Parliament not in session and the judiciary virtually silent, despite its suo motu intervention in the migrants’ crisis, no one is even demanding the implementation of an immediate National Plan for COVID-19. It appears that constitutional bodies have not paid heed to Dr. Ambedkar’s warning.
•The media and civil society have to step in to guard the nation as they are the last bastions of a vibrant democracy. One can only think of the poem by Josiah Gilbert Holland, with the line, “...A time like this demands, Strong minds, great hearts, true faith and ready hands.”
•As Albert Einstein once said, “The strength of the Constitution lies entirely in the determination of each Citizen to defend it.”
•So, let us all take a vow to defend the Constitution of India. I know of no other way forward.
