Connect with us

South Asia

The Indian Budget 2018: The Good, the Bad and the Ugly

Published

on

It won’t be a hyperbole to call the preparation of the Indian Budget the world’s toughest tightrope balancing act. In a country of 1.3 billion Indians, a gazillion sects and a country where the dialect changes every 20 kilometers, the Indian Budget is a unique unifying factor. Sitting in a small office, a select group of individuals charts the course of the Indian economy, soon to be the world’s fifth largest. A multitude of Intelligence and Security agencies are tasked to ensure that the Budget remains a secret before it is presented and the markets wait with a bated breath to gauge the winds that will blow with the onset of the Indian Budget. These winds can help the markets move at roaring speeds or topple the very applecart of their existence.

The Narendra Modi led National Democratic Alliance presented it final full Budget on Feb. 1, 2018. With elections due in eight states and the coming of the all-India General Elections, this budget was a final attempt by Modi to deliver on his promise of “Ache Din” (Good Days). But did he? Large sections of India is now restless. Farmers are suffering from a lack of good prices and mounting agricultural loans. Youth is suffering for the want of jobs. Businesses are under stress due to a new tax regime that they are yet to understand and comprehend. The Indian Middle class, BJP’s strongest supporters and among the minuscule few who actually pay a direct tax is reeling under high taxes. This was the last grab attempt to placate these sections and retain power for another five years. But what did it deliver? Sure enough, the budget contains a slew of measures for the agriculture and rural sectors, a new health insurance scheme has been announced for the poor and a small relief in income tax for the salaried class and senior citizens.

Let’s take a closer look at the Indian budget and break out the good, the bad and the ugly.

The Good

To placate the Farmers who have been protesting across the length and the breadth of the country, this budget promises to raise the minimum price offered to farmers for their crops. Stating that the focus of the government in the coming fiscal would be agriculture and rural India, the finance minister has announced that all Kharif crops will be paid a minimum support price (MSP) that is 50 percent more than the cost of production. It has also identified a need to invest heavily in the agricultural markets across India. It has also earmarked more money for rural areas, including that for irrigation projects and for aquaculture projects. The Kisan credit card will be extended to fisheries and animal husbandry farmers while Rs 2,000 crore provided for the development of agriculture market. The central budget directs state governments to purchase extra solar power generated by farmers using solar-powered pumps who have become cheaper after this budget.  The credit to agriculture would be raised to Rs 11 lakh crore in the coming fiscal from Rs 10 lakh crore. The budget provides for a 100 percent tax deduction for farm producer firms with Rs 100 crore turnover. There is a special impetus to promote “Operation Green”. In total, there has been a record allocation of Rs. 14.34 lakh crores for the agriculture sector.

In a bid to provide universal healthcare, the Budget announces a ‘National Health Protection scheme’ to provide health cover of up to Rs 5 lakh to each of the 10 crore poor families per year. Under the Aayushman Bharat programme, a total of 1.5 lakh centers will be set up to provide health facilities closer to the homes for which an outlay of Rs 1,200 crore to be allocated. A total of Rs 600 crore have been allocated for tuberculosis patients who will be provided with a grant at the rate Rs 500 per month during the course of their treatment. There are plans to set up 24 new medical colleges and hospitals by upgrading district level ones.  The budget lists that the PM JivanBimaYojana has benefited 5.22 crore families with more in the pipeline. And here we were really thinking that Obama-care was game changing?  Apart from all these announcements, the Budget contains a slew of announcements for the senior citizens of the nation like Incentives for Senior citizens like exemptions in income of Rs 10,000 from Banks FD and post offices and Rs 50,000 per annum exemption for medical insurance under Sec 80D.

With the finance minister promising a record infrastructure spending on roads and railways, construction and engineering firms, as well as train wagon-producers, could benefit. There is a plan to expand airport handling capacity by five times to handle 1 billion trips a year. It is estimated that Rs 50 lakh crore is needed for infrastructure building and the government will allocate Rs 7,140 crore for the textiles sector in next year.  National highways exceeding 9,000-km will be completed in 2018-19 and allocation of over Rs 1.48 lakh crore has been planned for railways. Regional air connectivity scheme shall connect 56 unserved airports and 31 unserved helipads for better connected and a closer India.

For the rural economy, the budget contains a slew of announcements. 8 crore poor women will get new LPG connections. Under the Prime Minister’s SaubhagyaYojana, it is estimated that 4 crore poor people will get power connection. A total spending estimate for this scheme is Rs 16,000 crore. Under the Swach Bharat Mission, the Government plans to construct 2 crore toilets in the next fiscal year. The government has set an ambitious target to provide a house for all by 2022. A total of 1 crore houses are to be built under Pradhan MantriAwasYojana in the rural areas. The Government will expand the PM Jan DhanYojana. All 16 crore accounts will be included under micro insurance and pension schemes for better returns and social outreach.

To formalize the economy, the Employees Provident Fund Act will be amended to reduce the contribution of women to 8 percent from 12 percent for first three years, with no change in employer’s contribution. The government will contribute 12 per cent of wages of new employees in EPF for all sectors for the next 3 years. The target for loan disbursement under Mudra scheme has been set at Rs 3 lakh crore for next fiscal.

The Bad

The government has extended Corporate Tax of 25% to companies with turnover up to Rs 250 cr in the financial year 2016-17. For a party always under a perception of being a corporate front, this will not go down well in the eyes of the media and the party will have a wild time dousing the flames. Also, 100% tax deduction is allowed to co-operative societies, the majority of whom have cooked books and shady members.

The long-term capital gains will now be taxed at a rate of 10% if exceeding Rs 1 lakh. The Education cess increased to 4% from 3% to collect additional Rs 11,000 crore but in turn, has put an additional burden on the tax paying middle class. The government’s decision to impose long-term capital gains tax on equity investments may dent investor sentiment for financial services companies, life insurers and providers of mutual fund products.

The Indian Defense Budget, while increased contains no clear roadmap to make India a manufacturing powerhouse and increase our armament production. Barely spending money is not good and while the outlays are increasing continuously, it is no secret that our outlay is minuscule in comparison to our GDP. Furthermore, most of the current budget is spent on personnel and maintenance costs, leaving very little for capital acquisition.  There is a serious need to quantify the defense budget and earmark separate funds for the capital acquisition.

The Ugly

Apart from a few scraps here and there like Rs 40,000 standard deduction, Mr. Modi has completely ignored the honest Indian Direct Taxpayer. A resentment is now brewing in this segment which has honestly been paying to tax and has time and again got pinched by every budget. In a nation where barely, 1.9% of the populations pays any tax, the honest Indian Taxpayer has become a minority of sorts, exploited and with no one to raise a voice for it. Hopefully, Modi can mollify this before the General Elections or all hell will break loose.

Conclusion

To conclude, the Indian Budget is prudent, not populist. The Indian Government deserves full credit for bringing out such a balanced budget so close to the General Elections. The fiscal prudence of this government has been lauded by international agencies and the recent budget is in line with the attempt of the government’s fiscal consolidation path. The Finance minister has set the fiscal deficit for 2019/19 (April-March) at 3.3 percent of the gross domestic product, slightly higher than expectations for 3.2 percent. Altogether, the budget has focused more “investments” than one-time hangouts. However, the devil lies in the details. There is a pertinent need for faster and smoother implementation.  The infrastructure projects will generate more jobs and ultimately, more usable projects on completion. R&D will generate more output for this nation. The government is ably trying to focus on both the “Ease of Doing Business” and the “Ease of Living”. Elections are upon the present dispensation and the Government must now focus on the implementation. If the 2014 election was about Ache Din, 2019 (or 2018) will be about the poor. The buildup initiated with the Jan Dhan and theUjwala Yojana, continued with the PAHAL andSaubhagyaYojana and now the AyushmanYojana and this Budget. The ingredients are all there. It now up to the chef Modi to cook his broth. But will his broth taste like sweet victory or a bitter-sweet defeat. This only time, and the Indian Rural Voter will tell.

South Asia

Importance of Analysis of Major Events of Pakistan

Published

on

Pakistan in the past 74 years of independence has gone through events some of which have even changed its geography as well as demography but thorough, honest, unbiased and transparent analysis have either not been carried out and if done recommendations have not been implemented in letter and spirit and defaulters have not been awarded penalties. In most cases lessons have not been learnt and corrective actions taken. Almost similar mistakes are being repeated. Aldous Huxley, an English writer said, “Reality cannot be ignored except at a price; and the longer the ignorance is persisted in, the higher and more terrible becomes the price that must be paid.

Soon after independence, the Quaid emphasized upon the constituent assembly to frame the constitution on priority. It passed the objective resolution on 12 March 1949, the main point being Pakistan shall be federation, wherein the state shall exercise its powers and authority through the representative of the people; the principles of democracy, freedom, equality, tolerance, and social justice as enunciated in Quran and Sunnah shall be fully observed. Subsequently four committees to frame constitution submitted their reports which could not sail through the assembly mainly because equal representation was proposed to both wings, East and West Pakistan whereas the population as per censuses of 1951, former had 42.0 and the later 33.7 million. The third draft, Muhammad Ali Bogra formula which was considered most appropriate proposed bicameral legislature, lower house based on population, total 300 seats (E Pak 165, 4 units of W Pak 135). Upper house to consist of 50 seats to be divided into 5 constituent units (10 each, E Pak, Punjab, NWFP, Sindh, Balochistan). In the meantime, Ghulam Muhammad, the Governor General (G G) dissolved the assemblies on 24 Oct 54, his decision was upheld by the Supreme Court (SC) headed by Justice Muhammad Munir under the law of necessity. Thereafter, PM, Muhammad Ali took the task of framing the constitution and Hussain Shaheed Suhrawardy of Awami League (PM from Sep 56 to Oct 57) agreed to E Pak and W Pak both as one unit, unicameral legislation, national assembly, 300 seats having equal representation. The first constitution was promulgated on 23 March 1956. In the first eight years of independence the constitution could not be framed, mainly because of denying democratic rights to East wing which were explicitly mentioned in the objective resolution. The same mind set prevailed which led to dismemberment of Pakistan in December 1971. Similarly, the precedence set to uphold the decision of GG under the law of necessity was followed subsequently in 1958,1977 and 1999. If we had capital punishment in the constitution of 1956, 1962 similar to article 6 of present constitution, that, “Any person who abrogates or subverts or suspends or holds in abeyance, or attempts or conspires to abrogate or subvert or suspend or hold in abeyance, the constitution by use of force or show of force or by any other unconstitutional means shall be guilty of high treason.”  It may have deterred the adventurous minds. It is pertinent to mention that, the Martial Law imposed by Gen Yahya Khan in March 1969, was declared usurper by the Supreme Court. Justice, Hamood ur Rehman had written in Asma Jilani case (PLD 1972 SC 139) that Gen Yahya Khan had no authority to abrogate, but no action was taken against any one. In short Pakistan has been governed by five constitutions (twice by the India Act of 1935, 1956, 1962, and 1973 in vogue), and four martial laws (1958, 1969, 1977, and 1999), and once emergency was imposed by Gen Pervez Musharraf, acting as Chief of the Army Staff, on 3 November 2007, and issued a Provisional Constitutional Order (PCO). This was declared illegal by SC, the case was tried in the court of law, the punishment was awarded, but the final decision by the SC is pending.  Four times elected governments were dismissed under article 58, 2(b) of the constitution, which gave discretionary powers to the president to dissolve the elected government. This clause has been finally removed by 18th amendment on 8 April 2010. It is pertinent to mention that Indian constitution was promulgated on 26 January 1950 and it has never been abrogated or held in abeyance. If we had carried out sincere analysis by committees or commissions comprising all stakeholders soon after the occurrence of events, we may have reached a workable solution of governance. The present constitution has undergone through many amendments. If more changes are required that can be done by the parliament. The need of the hour is to follow constitution in letter and spirit.  Make the three pillars of the state, judiciary, legislation, and administration strong. All other institutions are required to work strictly under the constitution, rules, regulations, and the oath taken by various authorities/personalities.

2.The 1965 war between India and Pakistan started on 6 Sep and cease fire was accepted by Pakistan without achieving desired objectives on 22 Sep. As per Tashkent declaration of January 1966 mediated by Ex USSR and signed by President Ayub Khan and Indian PM, Lal Bahadur Shastri our troops had to go back prior to 5 August 1965 positions (prior to start of war). We must have carried out through analysis at all level by the concerned political and military authorities and taken necessary actions. This would have certainly avoided Kargil battle of 1999 which also concluded without achieving desired objectives. Infect it resulted political crisis at home and tarnishing the image of Pakistan abroad.

3.The rule of Gen Zia is criticized from many angles. India occupied Siachen glacier in 1984 and his reaction was lukewarm. It is believed that he had created a political force to curtail the influence of PPP especially in the urban areas of Sindh like Karachi, Hyderabad and Mirpur Khas. The short gains impressed the rulers. Subsequently this party was not in the control of its creators; infect it turned against the security and law enforcing authorities. If we had carried out complete analysis of the prevalent problems at that time and tried to solve these politically; the incidents of losing life of many innocent people may have been avoided. Instead of learning a lesson, dharna of TLP, a political party of 2017 at Faizabad was supported by some political opponents of government at that time and intelligence outfits. The verdict of Qazi Faez Isa (Sup Moto Case 7/ 2017) is relevant. He had given details of the case and recommendations.   One of the recommendation is “The Constitution emphatically prohibits members of the Armed Forces from engaging in any kind of political activity, which includes supporting a political party, faction or individual. The Government of Pakistan through the Ministry of Defense and the respective Chiefs of the Army, the Navy and the Air Force are directed to initiate action against the personnel under their command who are found to have violated their oath.” Hardly any action has been taken. In the verdict, the case of 12th May 2007, when the deposed Chief justice was scheduled to visit Karachi and he was not allowed has also been mentioned. The roads were blocked with containers. A total 55 people were killed and hundreds suffered bullet injuries.  It says that “When the State failed to prosecute those at the highest echelons of government who were responsible for the murder and attempted murder of peaceful citizens on the streets of Karachi on 12th May, 2007 it set a bad precedent and encouraged others to resort to violence to achieve their agendas.” This clearly indicates that in the past we have not been analyzing each and every event and taking the required actions therefore, the conditions are deteriorating. In the recent incident, a Sri Lankan national Priyantha Kumara was brutally beaten to death on 3 Dec 21 over blasphemy allegations at the factory in Sialkot where he worked as a manager. The mob then dragged his body out on the road and set it on fire. This incident has tarnished the image of Pakistan all over the world. It is indeed a day of embarrassment for Pakistan. However, government has assured that strict action shall be taken against culprits. All the major political parties, renowned religious leaders have condemned this episode. The importance of blasphemy law cannot be denied. However, the wrong use of this law is becoming common which needs to be checked with iron hands. This is not first such incident. Mashal Khan was lynched by his fellow students in 2017, Shama and Shahzad Masih were burnt alive in the brick kiln in 2014. We need to take such incidents very seriously. Those who take law and order in their hands should be given exemplary punishments so that such incidents are not repeated. The need of the hour is to sincerely carry out analysis of each and every event by the committees of experts in the respective fields, stakeholders, and take necessary action without fear and in the national interest. This sovereign state has been bestowed upon us by Allah Almighty, it is our duty to preserve it intact. The peace and tranquility is paramount for the progress of Pakistan.    

Continue Reading

South Asia

Bangladesh’s Vaccine Policy: Cooperation beyond Geopolitical Lens

Published

on

photo: UNICEF/Vinay Panjwani

Since its outbreak, the COVID-19 pandemic has led to unprecedented devastation to every nook and corner of the world. Not being just a cataclysmic health crisis, the pandemic is subtly but substantially reshaping social norms, economic systems, diplomacy way-outs, as well as global leadership and rivalry. As of now, experts believe that this deadly virus is not going to completely disappear overnight rather will remain as a recurring event like the normal flu virus. However, acquiring herd immunity which insists on mass inoculation is the most acceptable solution to combat the worsening situation.

The world is becoming unable to meet the demands of the massive number of vaccines as only a handful of wealthy nations are producing them. In the wake of the current condition, every country, either rich or poor has its own game to play, rich ones for achieving so-called ‘vaccine nationalism’ and the poor ones for maintaining proper channel to procure them. As if conquering the pandemic bears testimony to not only a country’s economy and resources but also its strategy and diplomatic prudence.

By now, it is evident that Coronavirus traits are very complex as unpredictable mutations of it can jump back and forth across the globe. Today’s successful COVID-19 players might be a victim of tomorrow’s worst-hit outbreaks. For instance, the overconfidence emanating from India’s temporary triumph over vaccine manufacture caused sufferings for more than 90 countries. It is understandable why India’s worsening situation led to the failure of delivering 30 million vaccine doses as per a deal with Bangladesh. However, it was unfair not to deliver even a single dose after the sudden halt on vaccine export, for which Bangladesh has paid in advance.

Due to some unavoidable factors, for Bangladesh, Serum was the only feasible and proximate option for vaccines. Firstly, Bangladesh continued consistent efforts to keep all the alternate options simultaneously within the reach. Some of the vaccines like Pfizer and Moderna require extremely cold refrigeration which in terms of both storage capacity and commercial viability is untenable. WHO/GAVI backed initiative COVAX Facility has been proved inadequate to respond to the demand worldwide equally. Secondly, due to long term and consistent G2G liaison between Sheikh Hasina and the Modi Government, Bangladesh ranked the Indian source at the initial ladder. But it didn’t mean Bangladesh subsequently closed other avenues for future exigency. Thirdly, India’s initially successful ‘vaccine diplomacy’ was so overwhelming that it seemed India was just a step behind from becoming a ‘vaccine hegemony’ worldwide.

Over the sudden upside-down flip of India, Bangladesh had to make desperate diplomatic efforts to procure vaccines for which China and Russia nodded positively. Bangladesh inked a non-disclosure deal of 15 million Sinopharm doses with China. Also, Bangladesh received two consignments of 1.1 million of Chinese Sinopharm doses as gift. Up until now, Bangladesh is hopeful of joining to the China-led initiative of vaccine storage facility and collaboration with Russia to produce Sputnik V locally.

In such a pandemic situation when co-operation is urgent rather than competition, geostrategic gambit should not predominate in the South Asian region which is home to around 25% of the global population. As for Bangladesh, being densely populated with a population of more than 170 million, it is highly vulnerable to the risk of COVID-19 expansion and mutation due to acute intra and inter-regional people to people contact, if this particular region remains less inoculated. Currently, Bangladesh only needs 1.6 million AstraZeneca doses to continue the inoculation program that kicked off on February 7, 2021. Also, a burgeoning economy like Bangladesh, can afford to purchase sufficient vaccine doses as well as manufacture them locally. Not only that, Bangladesh should be called for particular attention for a full-fledged vaccine production scheme, as COVID-19 vaccines are considered as ‘global public goods.’

Despite not having a remarkable health policy, so far, Bangladesh has responded much better compared to other countries in South Asia regarding COVID-19 management. However, the condition might flip over uncanny circumstances anytime soon. Therefore, any vaccine procurement initiative should look through the prism of exigency, not preference for their allies, as downpour of misery on one corner is a failure to the entire globe.

Continue Reading

South Asia

Looming Humanitarian Crisis – Millions May Die in Afghanistan

Published

on

A mother and her child in the Haji camp for internally displaced people in Kandahar, Afghanistan. © UNICEF Afghanistan

There is a dire need for massive funds transfer to Afghanistan in present circumstances where banks and businesses have collapsed, the hunger crisis is also rising while the prices of basic commodities like shelter, fuel, and food have increased. There is a clear warning from World Health Organization (WHO) that within one year over 3 million children may suffer from malnutrition. UN World Food Program has also issued multiple warnings of deteriorating food insecurity in Afghanistan. The Winter season will also become too risky for the survival of one million children as the temperature will drop to an extremely low level. 

There are numerous cases of acute shortage of money, where families are compelled to even sell their babies and daughters as child brides. Public hospitals are facing a shortage of medical equipment; the nurses and doctors are not paid prompting them to quit. The majority of Afghans want to move to other countries for life security and a better future. Heavy human traffic from Afghanistan has gathered on borders with Iran and Pakistan. UNHCR has called on authorities of Afghan neighboring countries to cease the forced return of Afghans, noting that many of them may require refugee protection.

The private sector, which works for the progress of the country, has halted due to uncertainty. There is a serious and shocking analysis by UNDP that by July next year 97% of the Afghan population may fall under the poverty line. Millions of people are living hand to mouth and will face harsher economic crises due to troubling economies. 

Even $1.29 billion aid, recently announced from US and EU for Afghanistan & its refugees living in surrounding countries cannot solve the economic crisis permanently. This aid will only be able to postpone the human disaster for some time but it is not a permanent solution.

The world’s best economists are constantly warning that the present economic situation will lead to anarchy and chaos in Afghanistan. Abdallah Al Dardari, UNDP’s Afghanistan head, said, “I’m comparing Afghanistan with Venezuela, Lebanon, and so on; we haven’t seen such an immediate, abrupt drop”.

After the Taliban took control of Afghanistan, the first step by the Biden administration was to freeze the $9.5 billion foreign reserves. Taliban recently called on the US delegation in Doha for the unconditional and immediate unfreezing of Afghanistan’s financial assets.

IMF has also warned that this year Afghan economy will get contracted to 30%. During Ghani’s government, US aid accounted for 75% of the government budget and 45% of the country’s GDP. The majority of sectors of Afghanistan were run by foreign aid including a majority of public-sector jobs in the medical, teaching, policing, and legal sectors.

From the last few months, the life of millions of daily wagers/ working class has become hopeless. They gather in various downtowns for the sake of work but as the construction industry has halted so they get back without getting any work. They are unable to buy food for themselves and their families and live miserable lives. Another fact of the matter is that Afghanistan has long been dependent on imports of basic utensils.

In Ashraf Ghani’s government, the Afghan economy was fragile because of poverty and corruption. Customs, administration, and traffic officers, who have gone unpaid for months, are asking for more bribes. Things have become highly disorganized in all segments of the country.

Taliban have placed withdrawal limits on currency ranging from 200-400$ per week to counter complete currency collapse. Taliban have appealed to fill its billions of dollars vacuum from Qatar, Turkey, Pakistan, and China. Taliban are also pressing the US for the release of its frozen funds and they think that the humanitarian crisis in Afghanistan is increasing as a result of their frozen funds. Afghans are facing a shortage of crucial goods due to trade disruptions and the collapse of financial services which have supplemented traders’ woes that depend on U.S. dollars and bank loans for imports. Issuance of sanctions’ exemption, by the Biden administration at the end of September to ease out the process of aid, is still not enough.

Afghan interim government has to find the best economic team from inside and outside the country which should be able to bring some fruitful strategies and planning to solve this economic crisis. The International community needs to come together to join hands with the Afghan interim government to avoid the worst-case scenario in Afghanistan. The international community should also play its role in bringing “explicit humanitarian exemptions” for the delivery of aid to prevent a “catastrophe”.  Watchdogs like UNSC and the US government should do their utmost to raise the living standards of the Afghan people.

Continue Reading

Publications

Latest

South Asia3 hours ago

Importance of Analysis of Major Events of Pakistan

Pakistan in the past 74 years of independence has gone through events some of which have even changed its geography...

Environment7 hours ago

Excess salt in soils puts food security at risk

Improper water management, including insufficient supply and poor quality drainage systems, are contributing to excessive soil salinization – a problem...

Defense9 hours ago

U.S. nationalism and the arms market sales deals in the Gulf states

The idea of ​​“the feeling of nationalism and heading east to China and Russia among the Egyptian people has risen...

Development11 hours ago

With 1.3 million annual road deaths, UN wants to halve number by 2030

Road accidents are still responsible for 1.3 million annual deaths and 50 million injuries all over the world, but the...

Southeast Asia14 hours ago

Thailand and Kon La Krueng Co-payment Scheme: A Challenge towards Sustainable Consumption

The COVID-19 has impacted many people around the world, particularly the poor people who are unable to meet their fundamental...

Middle East15 hours ago

The question with contradictory US human rights policies towards Saudi Arabia and Iran

A cursory look at Saudi Arabia and Iran suggests that emphasizing human rights in US foreign policy may complicate relations...

Americas17 hours ago

New American extremist armed movements calling for democracy

The American interior has witnessed in recent years (the growth, spread and revival of a number of new armed extremist...

Trending