[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] T [/yt_dropcap]he BJP government in India has unveiled annual budget on February 01, trying for recovery after deadly cash crunch, unleashed by PM Modi by his shock therapy, making people feel badly stranded at a crossroads without cash and not really knowing where exactly to go for getting their own money deposited in banks.
While demonetization forces the people to deposit all their money to banks, especially in rural areas where economy is hidden, Jaitley claimed his budget is focused on increasing rural incomes and boosting infrastructure, besides ushering in long-pending reforms in the financial sector.
Prime Minister Narendra Modi’s surprise decision last November on a night as the results of US presidency poll were pouring in, to scrap high-value banknotes worth 86 percent of India’s cash in circulation has hit consumer demand, disrupted supply chains and hurt capital investments. PM Modi did find some space in international news but he could not equal or outsmart Trump’s grand victory defeating the “official candidate” Hillary. Clinton
As Gujarat CM, Modi had promised a vibrant economy during his 2014 maiden elections to parliament from Varanasi in UP, but India economy has only survived now- let alone becoming a strong one. That is below the target rate of 8 percent or more that Modi needs to create enough jobs for the 1 million young Indians who enter the workforce in India – a nation of 1.3 billion where half the population is below the age of 25.
Indian Finance Minister Arun Jaitley presented his budget as five states are going to assembly polls later this month the outcomes of which could decide the future politics of India as well as political alliances and equation. Arun Jaitley said that the impact on growth from the government’s cash crackdown would wear off soon. “We are seen as an engine of global growth,” Jaitley said as he delivered the opening remarks of his fourth budget.
Budgets are essentially statements on the status of national economy and they are meant to allocate resources for every sector of the nation and specify the sources of resources including taxes needed for developmental projects, etc. Generally the budgets remain as unfulfilled promises and project proposals as a lot of resources are being diverted and siphoned off by many “important” persons for their personal and private purposes, thereby making corruption inevitable at the source.
The budget talked about concessional tax rates being provided to those moving toward non-cash payment mechanisms, and making it mandatory for many Government transactions to move to digital, which again are important steps in this direction. The reduction of personal income tax at the lowest slab to 5 percent is more a gesture of goodwill for those who bore the pain of demonetization, rather than a big reward.
The budget makes clear the intention of the Government to fight black money and digitize the economy. Limiting the amount of cash per transaction to Rs. 3 lakh, reducing the limit of cash donations to trusts/political parties to Rs. 2,000 per person, and coming up with an innovative way of funding political parties (electoral bonds) are all excellent initiatives. The implementation, though, needs to be watched.
Jaitley’s chief economic adviser advocated slashing personal income tax and accelerating cuts in corporate tax rates. He cautioned, however, against pursuing debt-fuelled fiscal expansion. Still, economists are penciling in a federal fiscal deficit of 3.3 percent of GDP for 2017/18. That would be higher than the 3 percent pledged earlier but lower than 3.5 percent that the government has budgeted for the year soon to end.
The BJP budget has been in consistent with the government’s focus over the last two years on “fundamental” growth, rather than subsidies and loan waivers. It focused on increasing rural incomes and boosting infrastructure, besides ushering in long-pending reforms in the financial sector.
The rollout of a nationwide Goods and Services tax (GST), expected in July after years of delays, and could also weigh on economic growth. Countries that have introduced GST in the past have often faced a relative economic slowdown before the benefits of a unified tax regime feed through.
The budge, as well as the government, has not taken into account the suicides of farmers in rural areas, although the budget also provided for an additional Rs.20, 000 crores for the long-term irrigation fund under NABARD. The total allocations to rural, farm, and allied sectors saw a whopping 24 percent hike in outlay at over Rs 1, 87,000 crore.
The impetus given to affordable housing by according it the status of an ‘Infrastructure Industry’ and increasing the area eligible for affordable housing are steps in the right direction, which would ensure that more people in the country can afford to buy their own homes.
Reportedly, assets worth $7.6 trillion are stashed in tax havens across the globe. Jurisdictions known as ‘tax havens’ across the world offer powerful MNCs and rich individuals banking secrecy and the ability to sidestep financial regulations that apply to ordinary people. However, this secrecy sure hurts the public, as profits and wealth go untaxed, countries lose revenue and allocations in budgets shrink. Reportedly, assets worth $7.6 trillion are stashed in tax havens across the globe.
Not only the rich lords hoard black cash in the country, but the cross-border movement of money that is illegally earned, transferred or utilized (through trade manipulation, organized crime and corruption) or tax avoidance by multinational companies also cause over $1 trillion every year to illicit financial flows in developing countries, including India.
Double Taxation Avoidance Agreements (DTAAs) have been misused and exploited in the past, to avoid paying any taxes – resulting in double non-taxation – and re-routing black money through tax havens for investment in India. The General Anti-Avoidance Rules (GAAR) have also been adopted by the government, extends to deny double taxation avoidance benefits if deals in tax havens are found to be avoiding taxes.
The Union Budget has announced a few new laws to address financial crime – one for confiscation of property of economic offenders and another to deal with illicit deposit schemes. India will start exchanging information with other countries, and receive information regarding Indian citizens’ assets abroad starting September 2017, on an automatic and periodic basis.
Still, economists are penciling in a federal fiscal deficit of 3.3 percent of GDP for 2017/18. That would be higher than the 3 percent pledged earlier but lower than 3.5 percent that the government has budgeted for the year soon to end.
While opinions vary on how long the disruptions caused by Modi’s crackdown on untaxed and illicit wealth will last, there is near unanimity among economists that Asia’s third-largest economy needs a helping hand.
The issue of combating blackmoney was not given proper thoughts. The budget speech did not draw attention to a number of initiatives taken by the government in the past few months to curb the menace of tax avoidance.
Government of India should seek to address these loopholes in the norms of international taxation at the national level, while simultaneously support the establishment of a representative and well-resourced global tax body under the auspices of the UN.
Demonetization has only further complicated the life of common people and has not succeeded in India because basically every politician and official dealing with economic affairs are corrupt and make wealth illegally that the state defends. Black money also has not many headway in real terms because there is no visible evidence that black money is disappearing from Indian scene. Without sincere intention by officals and politicians nothing can be set right in the country- the rulers since 1947 has only added rot to Indian system which is now defunct. Importantly, no politician party seems to be sincere about abolishing corruption and black money as that could negatively affect the funding of politics and polls by the rich and corporate lords that shamelessly thrive thanks to state protection and policies in their favor.
Budget statements are just the usual gimmick to fool the poor voters.
India acclaimed to be a “bright spot” in the world economy, and Finance Minister Arun Jaitley repeated the same as he unveiled his annual budget, adding that the impact on growth from the government’s cash crackdown would wear off soon.
The BJP government’s budget has kept in pace with the economic policy of India for the last many years since the large scale privatization cum divestment program during the Congress reign with Manmohan Singh as finance minister to promote WB and IMF polices, to release the money of the state sectors for use by the private compote lords and global multinational magnets to increase their own wealth instead of taking care of welfare programs of common men.
The BJP budget this year was a usual one and as former finance minister Chidambaram said there are no real high lights. Those who had expected relief for those who suffered as Modi imposed demonetization without adequate preparation too launch his pet financial dream of ending black and other dirty money in the country. Now it is clear that the black money is here to stay no matter what measures the government adopt mainly because they only corporate lords who control the government want all these dirty cash circulation so that they could make more profits- after the objective of all governments – both elected and electionless – serve the cause of the rich and corporate lords and for which, unfortunately, common people vote a party to power.
The worst of the cash crunch is now almost over, leaving behind a shaky nation, and the government expects it to be fully cleared by the end of April. A private manufacturing survey showed business is slowly returning to normal. Still, the finance ministry forecasts that growth could dip to as low as 6.5 percent in the current fiscal year to March, before picking up slightly in the coming fiscal year to between 6.75 and 7.5 percent. That is below the target rate of 8 percent or more that PM Modi needs to create enough jobs for the 1 million young Indians who enter the workforce in India – a nation of 1.3 billion where half the population is below the age of 25.
The BJP which, like the Congress party, promotes the rich and corporate lords to sponsor cricket and IPL type joint sport exercise to keep the people under illusions, pursues the congress policies by keeping in view the goals of World Bank and IMF, denying subsides and freebies to poor and under privileged- thereby they want to remove the poor classes altogether and increase the illegal wealth of the rich. That is basic of capitalism that fuels wars of imperialism for acquiring more resources- now energy resources of West Asia.
The merging of the Railway Budget with the general budget was done seamlessly and was touted as a historic move, ridding us of the colonial era practice of separate budgets. However, the rationale for merging the railway budget with general budget this year as a new experiment has caused confusion as a separate budget for rail steadily raised the facilities and working of the sector, increasing rails and spending more resources year by year. Unlike other transport sectors, railways have achieved great strides over years and rail system today is not what it was say 10 years back. As the largest employment sector railways is also the cheapest mode of transport in India.
The nation expected the finance minister and PM Modi to give details of demonetization efforts of the fo government giving a brief about the amount of blackmoney it should get and what are the new techniques being employed to tackle this grave anti-national mischief by liquor-cricket bosses like Mallya- a BJP MP with links everywhere especially with cricket bosses and other corporate lords. The Modi government refuses to take the people into confidence on demonetization.
Perhaps, the intentions of the government to guide the country onto the path of inclusive growth are clear. While there will always be some misses and hits in the budget, the Modi Government, unlike the Congress and even Vajpayee governments that religiously promoted corruption and blackmoney as their key policy, has shown the political will to fight corruption and black money, which have become strong appendages of our economy.
Taxes the major revenues for the governments but the Modi government is eager to be sympathetic to big business houses with tax rebates. The minister’s roadmap in the FY-2015 budget promised to reduce the corporate tax rate to 25% within four years, even after three years.
In a difficult year, represented by growing global uncertainties, lower economic growth at home and increasing oil and commodity prices, the finance minister has done to sticking to the fundamentals and doing what is good for the economy, rather than for the vote bank.
While avoiding populist measures and focusing on investment activities that have a multiplier effect, Arun has also tried to garner additional resources through higher tax compliance, rather than higher tax rates. In fact, contrary to popular expectation, the definition of long term capital gains for property transactions was brought down to two years from three years.
India’s Unclear Neighbourhood Policy: How to Overcome ?
India has witnessed multiple trends with regards to its relations with its neighbours at a time vaccine diplomacy is gaining prominence and Beijing increasing the pace towards becoming an Asian superpower, whereby making these reasons valid for New Delhi to have a clear foreign policy with respect to its neighbourhood.
The Covid Pandemic has led to increased uncertainty in the global order where it comes to power dynamics, role of international organisations. New Delhi has tried to leave no stone unturned when it comes to dealing with its immediate neighbours. It has distributed medical aid and vaccines to smaller countries to enhance its image abroad at a time it has witnessed conflicts with China and a change in government in Myanmar. These developments make it imperative for New Delhi to increase its focus on regionalism and further international engagement where this opportunity could be used tactically amidst a pandemic by using economic and healthcare aid.
According to Dr. Arvind Gupta, New Delhi has to deal with threats coming from multiple fronts and different tactics where it is essential for New Delhi to save energy using soft means rather than coercive measures.. India under Vaccine Maitri has supplied many of COVAXIN doses to Nepal, Bangladesh and Sri Lanka where many have appreciated this move. The urgency of ensuring humanitarian aid during these periods of unprecedented uncertainty are essential in PM Modi’s Security and Growth For All ( SAGAR) initiative, which focusses on initiating inclusive growth as well as cooperation in the Indian Ocean Region.
This pandemic witnessed various threats coming in India’s neighbourhood through multiple dimensions which include maritime, land, cyber as well as air threats where adversaries are using these to put pressure on New Delhi to settle land as well as marine disputes as per their terms. These encirclement strategies have made it necessary for India to open up various options such as holding maritime joint exercises with like-minded countries, developing partnerships, providing economic as well as healthcare support to weaker countries plus having a clear insight about changing global dynamics and acting as per them.
This piece will discuss about various changing tactics, pros and cons which India has with respect to developing its national security vis-à-vis its neighbourhood, why should it prioritise its neighbourhood at the first place?
India’s Neighbourhood is filled with many complexities and a lot of suspicion amongst countries, some viewing India because of its size and geography plus economic clout as a bully where it is wanting to dominate in the region putting others aside. This led to New Delhi play an increased role in nudging ties first with its neighbours with whom it had multiple conflicts as well as misunderstandings leading to the latter viewing Beijing as a good alternative in order to keep India under check.
Ever since PM Modi has taken charge at 7 RCR, India’s Neighbourhood First Policy has been followed increasingly to develop relations, to enhance understandings and ensure mutual cooperation as well as benefit with its neighbours. The relations with Islamabad have not seen so much improvement as compared to other leaders in the past. Even though former Prime Minister Nawaz Sharif was invited for PM Modi’s 1st Swearing In ceremony in 2014, terrorist activities have never stopped which could be seen through Pathankot, Uri and Pulwama terror attacks which killed many of the Indian soldiers. Even though surgical strikes were conducted on terror camps in retaliation to these bombardments, Islamabad has not changed its heart at all about its security or regional demands. New strategies and friendships are being developed where Beijing has played a major role in controlling power dynamics.
The Belt and Road initiative, first time mentioned during President Xi’s 2013 speech in Kazakhstan, then officially in 2015, lays emphasis of achieving a Chinese Dream of bringing countries under one umbrella, ensuring their security, providing them with infrastructure projects such as ports, railways, pipelines, highways etc. The main bottleneck is the China Pakistan Economic Corridor when it comes to India’s security threats, passing through disputed boundaries of Gilgit and Baltistan in Pakistan Occupied Kashmir till Gwadar. Other projects have been initiated in Chittagong, Hambantota, Gwadar , Kyapkyou. These projects form a String Of Pearls in the Indo Pacific where New Delhi is being balanced against through economic plus development incentives being given to the member countries under the project. That’s why in the recent past, New Delhi is asserting its influence in the region, looking at new dimensional threats where Beijing’s threats in the maritime domain in the islands in East as well as South China seas are not being seen favourably in many countries such as ASEAN, US, Australia and Japan which is giving India an opportunity to look towards countries with a common threat. Amidst this great power struggle between Washington and Beijing, New Delhi is stuck between a rock and hard place i.e., having a clear and strong foreign policy with its neighbours.
In this region, India has a sole threat which is mainly Beijing where the latter has achieved prowess technologically and militarily where New Delhi lags behind the latter twenty fold. So, there is a need for improvising military technology, increase economic activities with countries, reduce dependence on foreign aid, ensure self-reliance.
South Asia is backward when it comes to economic development, human development and is a home to majority of the world’s population which lives below poverty line. The colonial rule has left a never-ending impact on divisions based on communal, linguistic and ethnic grounds. Even, in terms of infrastructure and connectivity, New Delhi lags behind Beijing significantly in the neighbourhood because the latter is at an edge when it comes to bringing countries under the same umbrella. Due to these, many initiatives have been taken up by New Delhi on developing infrastructure, providing humanitarian aid to needy countries.
There have been numerous efforts made by India with respect to reaching out to the Neighbours in 2020 through setting up of the SAARC Covid Fund where many Neighbourhood countries such as Nepal, Bangladesh and Sri Lanka gave contributions to ensure cooperation, joint scientific research, sharing information, healthcare kits where the countries contributed USD $ 18 million jointly towards this fund where New Delhi made an initial offer of USD $ 10 million.
New Delhi has even mustered ties with the Association of Southeast Asian countries during the pandemic under its Act East Policy where proper connectivity through the Northeast could be useful in easing movement of goods but currently, the infrastructure in Northeast needs more improvement where issues such as unemployment, poor connectivity are prevalent whereby disconnecting it from rest of the other states. This region could play an important role in linking Bangladesh, Myanmar to New Delhi along with the proposed India-Thailand –Myanmar Trilateral Corridor. Focus has also been laid to develop inland waterways, rail links and pipelines to ease connections between countries, making trade free and more efficient.
India is focussing on developing the Sittwe and Paletwa ports in Myanmar under the Kaladan Development Corridor, at the cost of INR 517.9 Crore in order to provide an alternative e route beneficial for the Northeast for getting shipping access
These above developments and power display by a strong adversary, give good reasons for New Delhi to adopt collective security mechanisms through QUAD, SIMBEX and JIMEX with a common perception of having safe and open waters through abiding to the UNCLOS which China isn’t showing too much interest in, seen through surveillance units, artificial islands being set up on disputed territories which countries likewise India are facing in context to territorial sovereignty and integrity. These developments make it important for India to look at strategic threats by coming together with countries based on similar interest’s vis-à-vis Chinese threat.
There is a need for India to develop and harness its strength through connectivity and its self reliance initiative ( Aatmanirbharta ) so that there is no dependence on any foreign power at times of need . Proper coordination between policy makers and government officials could make decision making even easier, which is not there completely because of ideological differences, different ideas which makes it important for the political leadership to coordinate with the military jointly during times of threats on borders. Self-reliance could only come through preparedness and strategy.
India is in big trouble as UK stands for Kashmiris
A London-based law firm has filed an application with British police seeking the arrest of India’s army chief and a senior Indian government official over their alleged roles in war crimes in Indian-administered Kashmir.
Law firm Stoke White said it submitted extensive evidence to the Metropolitan Police’s War Crimes Unit on Tuesday, documenting how Indian forces headed by General Manoj Mukund Naravane and Home Affairs Minister Amit Shah were responsible for the torture, kidnapping and killing of activists, journalists and civilians – particularly Muslim – in the region.
“There is strong reason to believe that Indian authorities are conducting war crimes and other violence against civilians in Jammu and Kashmir,” the report states, referring to the territory in the Himalayan region.
Based on more than 2,000 testimonies taken between 2020 and 2021, the report also accused eight unnamed senior Indian military officials of direct involvement in war crimes and torture in Kashmir.
The law firm’s investigation suggested that the abuse has worsened during the coronavirus pandemic. It also included details about the arrest of Khurram Parvez, the region’s most prominent rights activist, by India’s counterterrorism authorities last year.
“This report is dedicated to the families who have lost loved ones without a trace, and who experience daily threats when trying to attain justice,” Khalil Dewan, author of the report and head of the SWI unit, said in a statement.
“The time has now come for victims to seek justice through other avenues, via a firmer application of international law.”
The request to London police was made under the principle of “universal jurisdiction”, which gives countries the authority to prosecute individuals accused of crimes against humanity committed anywhere in the world.
The international law firm in London said it believes its application is the first time that legal action has been initiated abroad against Indian authorities over alleged war crimes in Kashmir.
Hakan Camuz, director of international law at Stoke White, said he hoped the report would convince British police to open an investigation and ultimately arrest the officials when they set foot in the UK.
Some of the Indian officials have financial assets and other links to Britain.
“We are asking the UK government to do their duty and investigate and arrest them for what they did based on the evidence we supplied to them. We want them to be held accountable,” Camuz said.
The police application was made on behalf of the family of Pakistani prisoner Zia Mustafa, who, Camuz said, was the victim of extrajudicial killing by Indian authorities in 2021, and on behalf of human rights campaigner Muhammad Ahsan Untoo, who was allegedly tortured before his arrest last week.
Tens of thousands of civilians, rebels and government forces have been killed in the past two decades in Kashmir, which is divided between India and Pakistan and claimed by both in its entirety.
Muslim Kashmiris mostly support rebels who want to unite the region, either under Pakistani rule or as an independent country.
Kashmiris and international rights groups have long accused Indian troops of carrying out systematic abuse and arrests of those who oppose rule from New Delhi.
Rights groups have also criticized the conduct of armed groups, accusing them of carrying out human rights violations against civilians.
In 2018, the United Nations human rights chief called for an independent international investigation into reports of rights violations in Kashmir, alleging “chronic impunity for violations committed by security forces”.
India’s government has denied the alleged rights violations and maintains such claims are separatist propaganda meant to demonize Indian troops in the region. It seems, India is in big trouble and may not be able to escape this time. A tough time for Modi-led extremist government and his discriminatory policies. The world opinion about India has been changed completely, and it has been realized that there is no longer a democratic and secular India. India has been hijacked by extremist political parties and heading toward further bias policies. Minorities may suffer further, unless the world exert pressure to rectify the deteriorating human rights records in India.
S. Jaishankar’s ‘The India Way’, Is it a new vision of foreign policy?
S. Jaishankar has had an illustrious Foreign Service career holding some of the highest and most prestigious positions such as ambassador to China and the US and as foreign secretary of India. Since 2019 he has served as India’s foreign minister. S. Jaishankar also has a Ph.D. in international relations from JNU and his academic background is reflected in this book.
His main argument is simplistic, yet the issues involved are complex. Jaishankar argues that the world is changing fundamentally, and the international environment is experiencing major shifts in power as well as processes. China is rising and western hegemony is declining. We are moving away from a unipolar system dominated by the US to a multipolar system. Globalization is waning and nationalism and polarization is on the rise (p. 29). The old order is going away but we cannot yet glimpse what the future will look like. This is the uncertain world that Dr. Jaishankar sees.
Dr. Jaishankar also argues that India too has changed, it is more capable and more assertive. The liberalization program that began in 1991 has made the Indian economy vibrant and globally competitive and it is well on track to becoming the third biggest economy in the world, after China and the US. The war of 1971 that liberated Bangladesh, the liberalization of the economy after 1991, the nuclear tests in 1998 and the nuclear understanding with the US in 2005, Jaishankar argues are landmarks in India’s strategic evolution (p. 4). So given that both India and the system have changed, Jaishankar concludes, so should India’s foreign policy.
But his prescription for India’s foreign policy, in the grand scheme of things, is the same as before – India should remain nonaligned and not join the US in its efforts to contain China. India will try to play with both sides it seems in order to exploit the superpowers and maximize its own interests (p. 9). But he fails to highlight how India can find common ground with China other than to say the two nations must resolve things diplomatically. He also seems to think that the US has infinite tolerance for India’s coyness. In his imagination the US will keep making concessions and India will keep playing hard to get.
Jaishankar has a profound contradiction in his thinking. He argues that the future will be determined by what happens between the US and China. In a way he is postulating a bipolar future to global politics. But he then claims that the world is becoming multipolar and this he claims will increase the contests for regional hegemony. The world cannot be both bipolar and multipolar at the same time.
There is also a blind spot in Jaishankar’s book. He is apparently unaware of the rise of Hindu nationalism and the demand for a Hindu state that is agitating and polarizing India’s domestic politics. The systematic marginalization and oppression of Muslim minorities at home and the growing awareness overseas of the dangers of Hindutva extremism do not exist in the world that he lives in. He misses all this even as he goes on to invoke the Mahabharata and argue how Krishna’s wisdom and the not so ethical choices during the war between Pandavas and Kauravas should be a guide for how India deals with this uncertain world – by balancing ethics with realism (p. 63). Methinks his little digression in discussing the ancient Hindu epic is more to signal his ideological predilections than to add any insights to understanding the world or India’s place in it.
One aspect of his work that I found interesting is his awareness of the importance of democracy and pluralism. He states that India’s democracy garners respect and gives India a greater opportunity to be liked and admired by other nations in the world (p. 8). Yet recently when he was asked about the decline of India’s democratic credentials, his response was very defensive, and he showed visible signs of irritation. It is possible that he realizes India is losing ground internationally but is unwilling to acknowledge that his political party is responsible for the deterioration of India’s democracy.
This is also apparent when he talks about the importance of India improving its relations with its immediate neighbors. He calls the strategy as neighborhood first approach (pp. 9-10). What he does not explain is how an Islamophobic India will maintain good relations with Muslim majority neighbors like Bangladesh, Maldives, and Pakistan.
The book is interesting, it has its limitations and both, what is addressed and what is left out, are clearly political choices and provide insights into how New Delhi thinks about foreign policy. So, coming to the question with which we started, does India have a new foreign policy vision? The answer is no. Dr. Jaishankar is right, there is indeed an India way, but it is the same old way, and it entails remaining nonaligned with some minor attitudinal adjustments.
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