📰 ‘Realism should shape India’s China policy’
Jaishankar bats for peace in new book
•Getting India’s China policy right will be “critical to India’s prospects” and doing so will require “going beyond traditional assumptions”, says External Affairs Minister S. Jaishankar in a new book. Indian assessments of China’s rise and of the gap in comprehensive national power “should be objective about its prospects in comparison” but at the same time, “where tested, it is essential to stand one’s ground,” argues Mr. Jaishankar in The India Way , a book that will be released on September 4.
Turning point
•A chapter of the book analyses in detail the twists and turns in the history of India’s relations with China and the road ahead for the relationship, and makes the case for the neighbours to seek an equilibrium as they manage their respective rises.
•Mr. Jaishankar, a former Foreign Secretary, was India’s longest-serving Ambassador to China for four years, starting 2009. Drawing on his time in China, he describes 2009 as “the turning point in China’s current rise”, when “the combination of a global financial crisis, a change in the U.S. Administration, and the consequences of the Iraq war now no longer made it necessary to hide its light”. He sees China’s 18th Party Congress in 2012, when Xi Jinping came to power, as marking the start of another new era for China’s relations with India and the world.
•The challenge India now faces, in his view, is “to manage a more powerful neighbour while ensuring its own rise”, and “in doing so, there must be an understanding on our part that this search for equilibrium is an infinite process”.
•“Some issues may be amenable to an early resolution but others may not,” he writes. “Today, the bottom line for the relationship is clear: peace and tranquillity must prevail on the border if the progress made in the last three decades is not to be jeopardized. The border and the future of ties cannot be separated.”
As decennial census operations are limited, India needs new ways to know its cumulative human capital and potential
•Since India’s crimes data recording system is not built to capture subtleties, we do not know what proportion of pregnancies in India start off without the consent of the woman, even though the veil of marriage may cover it legally and culturally. While physical and mental violence can be ascertained by a sensitive clinician, the intergenerational impact of a regretful and anxiety-loaded pregnancy is inadequately quantified by current clinical or epidemiological tools. Measuring and tracking matters of import is critical to individual, community as well as national well-being.
Parameters that are valuable
•If we equally value all Indians, we should not stick to decennial census operations alone and count ourselves the way we do — on lines that tell us how we can be sorted and addressed in the political economy; rather, we should do so to understand what our cumulative human capital and potential look like. What is valuable is measured frequently, at different life stages, and at disaggregated levels: birthweights; the heights and weights of our children when they enter school; school completion rates; perhaps the age, height and weight of a first-time pregnant woman; and most definitely, the number of women in the formal workforce who are on a par with men in terms of earning.
•Underage marriage of girls must become history. Ensuring secondary school completion of every child, especially girls in rural areas, has far-reaching impact, and needs to be pursued single-mindedly. Provisioning separate, functional toilets and sanitary pads for girls, and teaching boys biology and gender differences (of their own and female) are key enablers to ensuring gender parity in school completion rates. Teaching school-leaving girls and boys the notion of consent, and also the basics of contraception, will ensure that the start of every pregnancy will be a desired and happy one.
Births in the country
•Not every pregnancy ends up in a live birth — evocatively captured by the six-word allegedly Hemingway novel: “For sale: baby shoes, never worn”. A desired pregnancy is to be supported by a fully functional health-care system, able to anticipate complications before time and facilitating a safe delivery. Current stillbirth numbers in India are hard to pin down, but after accounting for background losses and abortions, there still remains a distressingly large number of still births, sometimes mis-recorded as early neonatal deaths.
•Despite the trend towards nuclear families, pregnancies in India still are familial events — outcomes are eagerly anticipated by more than just the parents, and stillbirths are a rude end to many fond wishes. A young, short and under-schooled woman is more likely to have a bad pregnancy outcome, or, a smaller than expected baby.
•A birth weight is much more than a number — it is a complex outcome, telling of how well the woman and her family eats, her status among them, and also of any particular condition that the individual mother or newborn child has. Tracking average birthweights by district and subdistrict on a regular basis is a fair proxy for food security, the status of women and the delivery of primary health care. For a nation with plans to assign digital health IDs to everyone, this is not a tall ask — what is additionally required is the making of this moving average data live and visible to the people and their government. It should also put to rest all debate about whether some Indians are born more equal than others.
Height-weight proportions
•A good start is a great advantage, but easily squandered if subsequent growth and development are blighted by the lack of adequate nutrition, first exclusively from the mother’s breast, then through locally available weaning and complementary foods; and repeated bouts of vaccine preventable or easily treatable illnesses. Parental hopes of a child growing up, going to school and becoming successful hit a major hurdle if the height-weight proportions at age five are not normal. Ensuring this marker is recorded for every child who enters school will also allow for a correlation with birthweights at the district level — giving a better understanding of multi-dimensional property.
•If India is to be truly taking advantage of its large birth cohort in the form of a demographic dividend, then the correlate of birthweight and five-year height-weight needs to be reviewed at the highest political levels regularly. It reflects the physical and cognitive nurture of human capital that the country can bank on for its future. Every child born in India is to be considered a ratna – a jewel and handled as such; some of them will go on to get the formal Bharat Ratna tag eventually.
Improved learning
•Schooling is a socio-economic and gender parity springboard if school completion rates show no gender, rural-urban or parental income divides. Consequently, India may not only bring down its maternal mortality ratios but also improve neonatal and under five mortality rates, through delayed marriages and exercising of reproductive choices by its empowered young women.
•Grading cognitively ill-equipped or ill-taught children on standardised tests is as much a waste of effort as letting large numbers of young people graduate through courses which are hopelessly out of sync with the expectations of the job interview board. The recently unveiled new education policy seeks to remedy this. It will be a while before we can measure any of the talked about, and hopefully intended, outputs or impact of this policy.
•Unimaginative teaching of anaemic children is a double whammy, partially addressed through protein rich mid-day meals. Deworming, school toilets, sanitary pads and bicycles for girls are progressive policy steps in the right direction; adding remedial training and affirmative feedback for teachers will be transformative. With better cognitive capacities and supportive environment, the stress of learning reduces, and outcomes improve.
•Improved learning should translate into better completion rates at post-secondary and baccalaureate levels but need not necessarily correspond to universal, meaningful employment. It is for the government and the corporate world to make opportunities and workplaces happen, irrespective of their gender. Right economic stimuli, anticipating potential workplace disruptions, supporting reskilling and retraining, and decriminalising entrepreneurial failure will go a long way in eliminating work and livelihood-related anxieties making their way back home as domestic violence. As a society, we need to understand and make leeway for failure, and not stigmatise it, whether at school in early childhood, during miscarriages of pregnancies, or when career and business decisions go awry. Stigma erodes self-worth and kills silently.
Timely data helps
•Together, these measurements will tell us far more about where we are, and where we as a nation will go. The tools to get these measurements exist; we just have to see them in real time to be able to take corrective actions where needed. Public health is about people, their continued well-being, and not just about controlling disease outbreaks. Data helps; timely, disaggregated, multidimensional data helps immensely in ensuring collective well being, physical, mental and social. People are India’s greatest possession and will remain so for the conceivable future, provided they are in a state of well-being. An ill-educated, anxious population is a tinderbox, capable of self-harm as well as being kindling for malice-driven mobilisation. Addressing this requires a whole of life and whole of society approach, and measuring the outcomes that matter, regularly. Hopefully the 2017 edition of the national health policy and the new education policy unveiled last month will be the twin rails that India rides towards a true demographic dividend.
📰 In ‘act of god’, coercive not cooperative federalism
In bridging the GST gap, the Centre ought to help States through the Consolidated Fund of India
•It is beyond anyone’s imagination that the Government of India would invoke the “Force Majeure” clause against its own people. Unfortunately, this has become reality at a time when every Indian State is massively burdened by the COVID-19 crisis and governance has been severely affected.
•Finance Minister Nirmala Sitharaman’s statement on Thursday that the financial crisis facing the States is a result of an “act of God” is symptomatic of the callousness with which the Narendra Modi government treats State governments. This abdication of responsibility strikes a cruel blow to the social contract that exists between the Government of India and State governments, who are equal representatives of the 1.3 billion citizens of India.
The basis
•The Goods and Services Tax (GST) regime was built on the promise that if States faced revenue deficits after the GST’s introduction, the Centre would make good the loss in the first five years. It was on the basis of this commitment that States extended their support to GST. States sacrificed their constitutionally granted powers of taxation in the national interest. That allowed the Centre to announce the dawn of “one nation one tax” at the stroke of midnight in 2017!
•When the GST compensation cess exceeded the amount that had to be paid to States, the Central government absorbed the surplus. Now, the economy has slowed down dramatically and the resources raised are insufficient. Instead of exploring other viable options, the Centre is orchestrating a charade and raising questions about whether it is legally accountable to pay compensation. A reading of the Goods and Services Tax (Compensation to States) Act 2017 and the Constitution 101st Amendment answer these questions affirmatively. Alas, the government’s objective is to obfuscate.
•It is one thing to say that there are no funds available but entirely another to assert that there is no commitment to pay compensation. This commitment has a history that begins with United Progressive Alliance era when many Bharatiya Janata Party-ruled States strongly pitched for a compensation mechanism to be a part of the Constitution itself. Paragraph 92 of the Standing Committee report shows that the Centre assured payment of compensation for a specified period, if there were such a loss.
Assurances made
•When the Narendra Modi government introduced the GST compensation cess, many States pointed out that proceeds from the cess may be inadequate to fund the losses faced by States after the rollout of GST. Allaying these apprehensions, the central government made the assurance that it would provide funds to meet States’ deficits. In the seventh meeting of the GST Council, the Chairman (then Finance Minister Arun Jaitley), observed that it was the constitutional commitment of the central government to provide cent per cent compensation.
•This was reinforced in the eight meeting of the Council. In the tenth meeting, the Secretary of the GST Council stated that the central government could raise resources by other means for compensation and this could then be recouped by continuing the cess beyond five years.
•Therefore, there was never any ambiguity in the minds of States that succour will be offered by the Centre. The constitutional framework that ushered in the GST does not provide an escape clause for ‘Acts of God’. States never expected to be disappointed so early. The central government has let them down by thrusting on them two options, both of which involve borrowing by States. This is akin to asking States to mortgage their future to sustain the present. Cooperative federalism has been transformed into coercive federalism.
Centre is best placed
•The central government has the ability to raise resources through means that are not available to States. Monetary measures are the monopoly of the central government. Even borrowing is more efficient and less expensive if it is undertaken by the Central government.
•Over the last six years, the Centre has continually cornered resources that should have been shared with States. The Fourteenth Finance Commission allotted 42% of central government tax revenues to States. However, Accountability Initiative’s analysis of State Budgets shows that States received only 30%of central tax collections during the 2015-19 period.
•The Centre raised an estimated Rs. 3,69,111 crore revenue through cesses and surcharges in 2019-20 alone. These are not shareable with States.
•Similarly, cesses on petroleum products have resulted in the Centre receiving 60% of petroleum tax revenues, with only 40% going to States. In 2013-14, the ratio was 50-50.
Equal representatives
•As equal representatives of the citizens of the federal republic of India, State governments expected the Centre to demonstrate empathy when they are bearing the brunt of the COVID-19 pandemic and lockdowns that were announced without consultation. This is the most appropriate time to provide them relief through the Consolidated Fund of India.
•Prime Minister Narendra Modi proudly described GST as a ‘Good and Simple Tax’ which would usher in a glorious economic future for India. Unfortunately, just three years later, the harsh reality is that States are staring at ‘grave and sordid times’ ahead.
📰 Chinese buyers help lift Indian steel exports
Purchases buck bilateral tensions
•India’s steel exports more than doubled between April and July to hit their highest level in at least six years, boosted by Chinese buying.
•Traders said reduced prices had driven the purchases as Indian sellers sought to get rid of a surplus generated by the impact of COVID-19 on domestic demand and generate much-needed income.
•It was unclear whether the sales broke any trade rules, but the China Iron and Steel Association said in a statement it was monitoring them.
•Leading Indian steel companies Tata Steel Ltd. and JSW Steel Ltd. were among Indian companies that sold a total of 4.64 million tonnes of finished and semi-finished steel products on the world market between April and July.
•That compared with 1.93 million tonnes shipped in the same period a year earlier, government data analysed by Reuters showed.
•Vietnam and China bought 1.37 and 1.3 million tonnes of steel respectively. The Chinese purchases are by far the largest since data was first collated in the current form beginning with the fiscal year 2015-2016.
•Neither Tata, JSW nor India’s ministries of steel and commerce responded to e-mails seeking comment.
•Vietnam has been a regular buyer of Indian steel, but China’s emergence as a leading buyer, replacing New Delhi’s traditional markets, such as Italy and Belgium, is more surprising.
•An already uneasy relationship between New Delhi and Beijing, became severely strained after violent border clashes in June, when 20 Indian soldiers were killed at the disputed Himalayan border.
•New Delhi afterwards tightened rules to restrict Chinese investment in India and initiated measures to curb its trade with Beijing.
Rhetoric vs reality
•The politics is at odds with market realities.
•Although China, the world’s leading steelmaker produces vast quantities, it needs imports as it ramps up infrastructure spending.
•Two industry sources said major Indian steelmakers offered a discount of at least $50 a tonne, selling hot-rolled coils and billets to China at $430-$450 per tonne against the $500 offered by most Chinese producers.
•Hot-rolled coils are mostly used to make pipes, automobile parts, engineering and military equipment.
•During the first four months of the fiscal year, China and Vietnam together bought close to 80% of India’s total hot-rolled coils exports, the data showed.
•Ji Renjie, a general manager at China’s Ningbo Henghou Group said the firm in May bought 30,000 tonnes of hot-rolled coils from India for July shipment and expected to take delivery of another cargo of a similar size in October.
•“I mainly do iron ore trades and just bought several cargoes of hot-rolled coils this year due to rosy profit margins,” Mr. Ji said.
