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

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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.

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South Asia

Remapping Indian Occupied Kashmir: A Multipronged Travesty

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The second Presidential Order on the Reorganization of Jammu & Kashmir by India in 2019 is yet another outlandish decision to challenge the objectives of a peaceful coexistence. It is a call for altering an International Order more conversant to breach the democratic political norms, history and fundamental rights. Kashmiris are once again rebuffed of their demand for self-determination while being locked in an unprecedented brutal curfew entering into more than one hundred days. The desecration is obviously offensive.

Including the areas of Gilgit, Gilgit Wazarat, Chilhas and Tribal Territory of 1947, a part from the remaining areas of Leh and Ladakh districts of 1947 into the Indian Union is a violation of several United Nations Security Council resolutions passed decades ago. The Kargil District was already carved out.

Historically, there were 14 Districts of Jammu & Kashmir at the time of partition, which included Kathua. Jammu. Udhanpur, Reasi,  Anantnag, Baramullah, Poonch, Mirpur, Muzaffarabad, Leh and Ladakh, Gigit, GilgitWazarat, Chilas and Tribal Territory. The new districts included were Kupwara, Bandipur, Ganderbal, Srinagar, Budgam, Pulwama, Shupian, Kulgam, Rajori, Ramban, Doda, Kishtiwar, Samba and Kargil. The illustrative declaration of Muzaffarabad and MirpurKhas areas of Azad Kashmir which are under the administrative rule of Pakistan is an untenable denial of the history of the region.

To refresh their memories India needs to remember that at the time when Maharaja Hari Singh signed the controversial Instrument of Accession with India in October 1947, Gilgit was already inflamed with the passions of rebellion against Hindus and Sikhs living in Gilgit. While representing the will of his people, Muzzaffar, the raja orderly in Chilas said:

“The whole of Gilgit Agency is pro-Pakistan … we could never swear allegiance to Hindustan. Apart from religion, the Gilgit Agency is really a part of the NWFP and is therefore a part of Pakistan. If Kashmir remains independent, well and good … .But if the Maharaja through pig headedness and bad advice, political pressure or attractive remunerations accedes to Hindustan, then there will be trouble here!”

This was sensed by the British Administrator William Brown as well and decided to overthrow the then Governor Ghansara Singh in a bloodless coup d’etat in November 1947 and a provisional government was established by the locals of Gilgit. Raja Shah Rais was appointed as the president and Mirza Hassan Khan as the Commander-in-Chief. Pakistani political agent took over the region, once Khan Abdul Qayyum received a telegraph from Brown on November 16, 1947.

By May1948, the Gilgit Scouts had already taken over Baltistan, Ladakh and Skardu as well. Indian reinforcements were blocked at Dras and Kargil which helped them cut off Indian communications to Leh in Ladakh. However, Kargil was recaptured by them in autumn 1948 but Baltistan remained in control of Pakistan, after which India itself took the issue to the UN.

The current remapping of the region of Jammu & Kashmir is nonetheless not only a snubof facts but also adding into already destabilising factors in the region.The Pakistani parts of Kashmir to the north and west of the cease-fire line established at the end of the Indo-Pakistani War of 1947, or the Line of Control as it later came to be called, were divided into the Northern Areas in the north and the Pakistani state of Azad Kashmir in the south. The name “Northern Areas” was first used by the United Nations to refer to the northern areas of Kashmir. Pakistan has declared that “no step by India could change the disputed status of Jammu and Kashmir as recognised by the United Nations”, and has pledged time and again that it will continue to support the just struggle of the Kashmiris.

In an attempt to rewind the India of antiquity or revitalize the Indian Civilization lost in the international order of nation-states in the post WWI era, Narendra Modi’s arrogant Hindutva regime is non-realistic. The current attempt is a follow up of the Geospatial Information Regulation Bill (GIRB) passed by the Indian ministry of Home Affairs on May4, 2016, during his earlier tenure of rule on India. The Bill was meant to regulate the acquisition, dissemination, publication and distribution of geospatial information of India. It restricted the addition or creation of any information related to geospatial imagery, data acquisition through space or aerial platforms such as satellites, aircrafts, airships, balloons or unmanned aerial vehicles without the permission of the government of India. The Bill also made its violation indictable in contravention of the section 4 with a fine ranging from Rs. 1 crore to 100 crores or imprisonment for a period of up to seven years. The draft resolution had also decided to set up an Apex Committee, A Security Vetting Authority and an Enforcement and Appellant authority to only allow the distribution of maps considered right by the Indian government. It was deceptively declared to ensure the security, sovereignty and integrity of the state of India with impact on all who may or may not agree with the Bill defining the geographical boundaries of India. The spokesman of the Indian External Affairs Ministry Vikas Swarup once reiterated that the state of Jammu & Kashmir was an “integral part of India” and the GIRB was an “entirely internal legislative matter of India.”

Assaulting the international political system, human dignity, basic liberties and perpetual boundary disputes by the Indian offensive posture have added to the stressed political environment of the region. In case of the failure of the domestic proceedings to address human concerns, it becomes mandatory for the world community to ensure the respect of the world peace. History records that after the WWII, there had been 14 out of 21 major inter-state wars on territorial conflicts. Global history of cartography has always been closely linked. Situating the “geobody,” along with altering the archival documents by the nationalist regime of Modi largely emboldened by the Western powers for their own strategic and economic preferences, is a teasing question on the UN partiality. The history of border violations or failed negotiations over an issue increases the likelihood of armed conflict and nonbinding management.

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Kartarpur Corridor: A message of Peace and Prosperity

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Kartarpur corridor was opened on 9 November 2019 (Saturday). It paved the way for the Sikh community to visit one of the most important religious shrines without a visa. There are approximately 150 million Sikhs around the world, out of which around 120 million are living in India. The other countries having the Sikh community are Afghanistan, Pakistan, UK, Canada, and USA.  However, the origin of the Sikh religion in Punjab, which was divided into Indian Punjab and Pakistani Punjab in 1947 at the time of independence of the sub-continent from British rule. The partition of Punjab has divided many Sikh families between Pakistan and India.  Due to political rivalry, among Pakistan and India, has adversely affected the Sikh Community. Some of the family members have never met in the last 72 years and few of them have already expired already.

While Sikh, Muslims and other religions lived together for centuries, especially in Punjab, and enjoyed complete harmony as the language and cultures are identical. But after partition, in 1947, the rivalry between Pakistan and India kept them separated for 72 years. With the opening of this Corridor, the Sikhs community in India becomes the most beneficiary and they are grateful for the gesture of goodwill by Pakistan.

The Kartarpur Corridor connects between Pakistan and India, the Sikh shrines of Dera Baba Nanak Sahib (located in Punjab, India) and GurdwaraDarbar Sahib (in Punjab, Pakistan). The corridor is intended to allow religious devotees from India to visit the Gurdwara in Kartarpur, 4.7 kilometers from the Pakistan-India border, without a visa.

The Corridor was first proposed in early 1999 by the prime ministers of India and Pakistan, Atal Bihari Vajpayee and Nawaz Sharif, respectively, as part of the Delhi–Lahore Bus diplomacy. On 26 November 2018, the foundation stone was laid down on the Indian side and after two days, on 28 November 2018, the foundation stone on the Pakistani side was laid down by Prime Minister of Pakistan, Imran Khan. The corridor along with all its allied services and amenities was completed in a record time frame. The corridor was completed for the 550th birth anniversary of Guru Nanak Dev on 12 November 2019. As a special to mark the 550th birth anniversary, the Government of Pakistan has waved the fee amounting to US Dollars 20 for three days. It has created a huge good-will.

The corridor has not only connected the Sikh community on both sides of the border but also opened a new chapter of religious tourism in Pakistan. There are many other religious sites in Pakistan, which belongs to Hindus or Sikhs religion and may attract devotees and visitors in thousands of thousands in number. Kartarpur corridor is just a beginning, if it goes smoothly, many new sites will be open to Hindus and Sikhs as well.

This will also generate an opportunity for economic activities and enhance people to people contact. Promote harmony and understanding between the two hostile nations. In fact, Kartarpur Corridor is a message of Peace and Prosperity.

Pakistan is a peace-loving nation and a very responsible state. Prime Minister of Pakistan Imran Khan is well matured, visionary leader. He said on this occasion “Pakistan believes that the road to the prosperity of the region and bright future of our coming generation lies in peace”, adding that “Pakistan is not only opening the border but also their hearts for the Sikh community”. The Prime Minister of India, Narendra Modi, compared the decision to go ahead with the corridor by the two countries to the fall of the Berlin Wall, saying that the project may help in easing tensions between the two countries.

Previously, pilgrims from India had to take a bus to Lahore to get to Kartarpur, which is 125 km journey although people on the Indian side of the border could physically see GurdwaraDarbar Sahib Kartarpur on the Pakistani side. An elevated observation platform had also been constructed on the Indian side, where people use binoculars to get a good view.

Indian Prime Minister Modi has thanked PM Imran Khan for his good-will gesture. It is hoped that India will reciprocate in the same manner and provide an opportunity to the People of Pakistan and Prime Minister of Pakistan Imran Khan to thanks Indian Prime Minister Modi.

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The efficiency of German contribution in the Afghan peace process

Ajmal Sohail

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Germany is heavily involved in the afghan affairs since 9.11.2001; the country has brought in to being the modern Afghanistan thru launching the international Bonn conference “Bonn 1” in December 2001, the said conference toke place right after the collapse of the barbaric regime of Taliban in Afghanistan. Furthermore, it paved the way to engage several rival groups to establish an interim administration under the leadership of pro-American figure “Hammed Karzai”. Albeit the conference was a turning point in the Afghan modern history, but it encompassed numerous shortcomings because Taliban, Haqani Network and Hikmatyar band, who had been the main adversaries to the acting Government, were excluded from the process, which opened Pandora’s Box. Moreover, the national interests and apprehensions of the regional countries were not taken serious, which in turn caused destabilization and gloominess in Afghanistan.

Consequently, Pakistan and Iran who have been pursuing strategic depth in Afghanistan began to regroup, fund, train and outfit the Afghan government antagonists, which unfortunately incited a proxy war in the country. 

The second Bonn conference

Germany hosted the second Bonn conference in December the 5th 2011 to celebrate the 10th anniversary of the first Bonn conference, in order to renew the so-called mutual commitment to a table, democratic and prosperous future for Afghanistan.

In addition, the participants of the conference ought to shed lights on some issues such as governance, security, economic developments, regional cooperation, peace process and the way forward. The participants called for a political solution to achieve peace and security in Afghanistan, in order to ensure durable stability.

Additionally, it was discussed to promote capacity building in the country to uphold   a political process, to endorse negotiation and reconciliation. Unfortunately, the conference primarily focused on economic developments and continuation of democratization in the country, so that the peace process was sidelined and the root-cause of the instability and insecurity was not identified. Which ended up with further destabilization and blood-shed in addition, sparked fears and violence in Afghanistan.

Doha conference

In July the 7th 2019 Germany and Qatar hosted a conference in Doha Qatar, which was labeled intra-afghan dialogue. The hosting countries endeavored to bring about a framework in order to support the peace process in Afghanistan. In accordance with the joint statement, that the country is at a central crossroad to snatch the chance to accomplish peace, so the shortest concord linking the afghan adversary groups could be one of the essential factors of any process leading to such an objective.

It was also expect, that the conference would contribute to confidence-building amid chief rivals to hold up peace and constancy in Afghanistan. Although the conference did not have a tangible agenda, but at the end a resolution was released calling for reducing violence, avoiding to assail public institution and bringing civilian causalities to “zero”.  Despite the efforts of the conference hosting countries, the conference comprised inadequacies; the Afghan government, which ought to be the main party, was excluded from the direct-intra-afghan-dialogue.

Not only the ceasefire, which has been the only wish of the Afghans, was not sincerely addressed, but also no-part of the outlined resolution has been implemented. Regrettably convening of the conference did not put into practice the expectations of the Afghan people, so that the security situation fundamentally deteriorated.  

The third Bonn conference

Subsequent, to the walk out of the US president from the Afghan peace deal, Germany wants to jump in exerting its leverage to bring the Afghan rivalry bodies to the negotiation table. Germany is really concerned, if the US troops withdrawal will take place Kabul government would collapse and the positive developments have so far came about would be lost. Thus Markus Potzel Germany’s special envoy for Afghanistan and Pakistan, since some times endeavors to hold meetings with the representatives of both Taliban and the Afghan government, in order to initiate another round of peace talks.  

 Consequently, If Germany genuinely put forth its efforts, it will help to avoid political vacuum in Kabul, let the democratization process to flourish, women rights to thrive and the economic prosperity to boom. Germany enjoys full-scale leverage in the entire region and beyond, because Germany stationed the second largest troops in Afghanistan, the country is one of the main initiator of the NATO Resolute Support Mission for Afghanistan and it is one of the top 10 contributors to the reconstruction process and humanitarian assistance in the country.

Germany has very good diplomatic relations with almost all of the surrounding countries of Afghanistan; it has influence on all of the gulf countries including Qatar, Saudi Arabia and UAE, which are supposed to be the major patrons of Taliban.

In addition, Germany leads the EU commission and it is the number one economy in Europe and number 4 economy in the world. If it will put in 2% of its GDP to the NATO annual budget, Germany would be the second leverage enjoyer within NATO following the United States of America. So Counter Narco-terrorism Alliance Germany (cnt-alliance) express the need for the initiation of the third Bonn conference, which should include all opponents to be brought to the negotiation table, in order to form a framework of lasting peace, continuation of the political process, stability, Good and lean governance, economic prosperity, revival of democratic norms and revamping of human and women rights as well as confidence building amongst regional countries.   

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