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Economic Highlights
Economic Concerns 2024: FOOD PRICES, POOR PVT INVESTMENT, By Dhurjati Mukherjee, 10 January 2024 |
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Open Forum
New
Delhi, 10 January 2024
Economic Concerns 2024
FOOD PRICES, POOR PVT INVESTMENT
By Dhurjati Mukherjee
The
economy is always a matter of debate and the new year has started with concerns
expressed by members of Reserve Bank of India’s monetary policy committee about
volatile food prices. The vegetable price inflation has been manifesting
since November and this is expected to continue in the months ahead. As Michael
Patra, RBI Deputy Governor rightly pointed out that food prices in India “are
the underlying component of inflation” and this is expected to continue in
2024. Moreover, climate will remain a key influence on food production and
inflation as El Nino conditions are expected to continue.
Another
important factor is that debt has been increasing fast and the International Monetary
Fund stated that it may reach “100% of debt to GDP ratio” by the year 2028.
However, the Finance Ministry clarified that the roll-over risk is low for
domestic debt and the exposure to volatility in exchanged rates tend to be on
the lower side. Reports indicate that the government will have to either trim
expenditure or target higher revenue for the current fiscal as the nominal GDP
is estimated to grow slower. Moreover, the fiscal deficit may reach 6% of GDP.
Also, high interest rates, fiscal consolidation and slowing global growth are
not quite favourable.
Recently,
Trinamool Congress leader, Derek O’Brien, stated that “from 2014 to 2023, the
price of rice has gone by 56%, wheat by 59%, milk by 61% and tur dal by 120%”.
According to him, 21 lakh workers from West Bengal have not received wages for
the last two year under the MGNREGA. Around 150 farmers are committing suicide
every day and India has 28 crore poor people, ‘the highest for any country’.
In spite
of all this, optimistically speaking the overall economic signs are quite
encouraging with the year-to-year data rise in the stock market estimated at
over 18% while the increase from October may be around 14-15% and the growth
momentum maintained. Forecasts have been quite positive with the IMF prediction
that India is expected to grow above 6% over the next five years, driven by
strong investment, strong economic fundamentals, digitalisation-driven
productivity gains despite widespread global uncertainty. The IMF, in its article
IV consultation report observed a robust public capex agenda, which will
support India’s wide-ranging infrastructure needs, is expected to boost growth
while crowding-in private investment and growth is projected at 6.3% in both
FY24 and FY 25.
“Noting
that India is one of the fastest growing economies globally, the directors
called for continued appropriate policies to sustain economic stability and for
further progress in key structural reforms to unleash India’s significant
potential”, as per the report. Further it pointed out that India’s economy
showed robust growth over the past year though headline inflation has, on
average, moderated although it remains volatile. But what is surprising is that
whether high GDP growth can be considered the index of true development though
urban-based economists are always found to glorify the high rates of growth?
An
important point that needs to be mentioned here is the lack of private
investment and the economic strength is manifest only from public sector
investment. It is intriguing that in spite of various incentives given by the
present government, private investment has not picked up to the desired scales
and is much lower compared to the other emerging economies of the world.
This
apart, assessing economic growth is just not the incomes generated but the job
potential of the investment made. In this connection, one may refer to the
central bank’s December round of consumer confidence which reveals that
consumers lowered their expectations of employment and prices as they expected
a change in the scenario. It is difficult to foresee or forecast any
perceptible change unless there is a surge in investment by the private sector
in 2024. There is also need to give a renewed thrust on manufacturing though a number
of initiatives have been undertaken by the present government.
It
cannot be denied that while attempts to strengthen the economy are in full
swing, there is a need to analyse whether the benefits are reaching all
segments of society. The moot question at this juncture is whether convictions
along with the positive settings will encourage businesses to take risk and
come out with substantial investments. It is well-known that the long-term
weakness in India has largely been due to the shyness of the private sector,
specially in manufacturing, though we see enough investments in safe sectors
such as health and education. Even after the pandemic, investment by the
private sector has not picked up to the desired extent. Moreover, employment-oriented
industries are more or less ignored by the corporate sector.
To
attract private investment, one may suggest that areas in backward regions
should be earmarked for private entities with `necessary infrastructure to
facilitate setting up of employment-oriented factories, which could not just
open up job opportunities for the skilled youth but also help change the
complexion of the area. This is indeed crucial for overall economic growth
because unless the youth are gainfully employed, the concept of true
development is lost.
The
disturbing fact is that the focus of the economy is on the urban sector which,
directly or indirectly, is benefiting the rich and the middle class. This
resulted in consumption increase but most economists believe consumption demand
has indeed been problematic with the top 40% of households going for excessive
expenditure. This points to the fact that the lower 20% of the population is facing
financial crisis due to stagnant income and is not in a position to increase even
its basic consumption, that is, of healthy food for themselves and their
family. This can be viewed from the fact that agriculture grew at a mere 1.2%
in the second quarter and full fiscal growth is likely to remain subdued as
kharif food production is estimated to fall and rabi crop faces stress.
In fact,
an economic analysis of per capita allocation of resources would reveal that
the rural sector, specially the backward regions, inhabited by scheduled tribes
and lower castes has been grossly neglected. As suggested earlier, some of
these areas could be transformed into industrial hubs for small-scale
manufacturing or even tourist attraction centres. There needs to be a plan
which should be prepared at the panchayat level and sent to the Centre via the
state government for infrastructural support. Both objectives of backward area
development and employment generation could be achieved through these
initiatives. A fresh look is required. ---INFA
(Copyright, India News & Feature Alliance)
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Der Hai Andher Nahi: BILKIS GETS JUSTICE, By Poonam I Kaushish, 9 January 2024 |
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Political Diary
New Delhi, 9 January
2024
Der Hai Andher Nahi
BILKIS GETS JUSTICE
By Poonam I Kaushish
Courts have
to dispense justice and not see that justice is dispensed with, this lexicon
comes to mind when one is faced with a heartbreaking and brutal account of Circa 27 February 2002: Three days
mayhem of rioting and killing which began after Muslims reportedly set fire to a
bogey of Sabarmati Express near Godhra, Gujarat carrying 60 kar sevaks returning from Ayodhya, sparking
revenge attacks by Hindu groups resulting in 1044 dead, of which 740 were
Muslims and 254 Hindus, 233 missing and 2500 injured.
Circa 3 March 2002: Witnessed
the worst horror when 21 years old and five months pregnant Bilkis Bano was
gang raped and her three-year old daughter among 14 family members killed while
fleeing the horror of communal riots. In November police state her case true,
but culprits not found. Next year April Bilkis approaches Supreme Court seeking
CBI investigation which is granted.
Circa April 2004:
Charge-sheet is filed against 20 people and Supreme Court transfers case to
Mumbai. In 2008 11 are convicted to life imprisonment for murder, 7 acquitted
and two abated due to death.
Circa May 2022: A
convict appeals Supreme Court against a July 2019 Gujarat High Court order
which ruled Maharashtra “appropriate Government to decide his plea for
remission on grounds that he had completed 15 years and four months of his life
term.” The Court allows the 11 convicts to appeal Gujarat Government for their
early remission which cedes their request and they are released 15 August
2022.
Shockingly, the convicts are given a hero’s welcome with band-baaja, garlands and sweets and seen
sharing the stage with a BJP MP, which receives nation-wide criticism and condemnation.
Given, a convict is a convict, and he cannot be felicitated on his release.
Sic.
Circa September 2022: A distraught Bilkis challenges remission
in Supreme Court and yesterday 8 January 2024 Court quashes Gujarat
Government’s order granting 11 convicts remission and orders the accused to
report back to jail in two weeks. Rapping the State Government for not having “any
jurisdiction to entertain application for remission or pass orders as it was
not the appropriate Government.”
Noting, “The Government abused
its discretion, usurped power of Maharashtra and is on ‘thin ice.’ The
incident took place in Gujarat but trial was shifted to Mumbai where a
special court convicted the accused in 2008. The appropriate Government to
decide on remission is the State where convicts were sentenced --- not where
the offence was committed or the accused were imprisoned.” Hence, Maharashtra Government
is the competent Government in this matter, it ruled.
More. It took Gujarat Government to task by avering convicts
came with “unclean hands and got the order through fraudulent means by basing
its order on an obsolete 1992 remission policy which was superseded in 2014
that bars convicts release in cases of capital offence. The State acted in
tandem and was complicit with what convicts
were seeking from Supreme Court.
“This is exactly what this Court had apprehended at
previous stages of this case and had intervened on three earlier occasions in
the interest of truth and justice by transferring investigation of the case to
CBI and trial to a Mumbai Special Court.” Ordering status quo ante, it reasoned that for convicts to apply for
remission again they have to be back in prison first.
Not a few argue, why should they be sent back to prison as they had
served 14 years of their sentence before their release? besides, they have good
sanskar so should not their liberty
be protected? Others opine: Should perpetrators of heinous crimes against women
get remission? A big No.
Questionably, it is
not only a question of Bilkis and violence but a much wider and larger national
problem --- of increasing anger. This has resulted in a total breakdown of
institutions, society, culture and ethical values. Replacing moral rules with
naked force, hypocrisy and fraud.
Killing yet another
signpost of an increasingly enfeebled system. Symptomatic of complete
lawlessness that has gripped the country. A new cult establishing an order of
hatred and rage. An eerie stillness filling the senses with smell of death,
mayhem and brutal carnage held hostage by rampant goondagardi.
Undeniably,
what happened to Bilkis is not only abhorrent but also unacceptable in
civilized society. A Government cannot be perceived to give patronage to
criminals. How can our jan sevaks condone
and bless convicts? As compassion and sympathy has no place before rule of law
which is dispassionate, objective to be preserved. If Rule of Law is violated,
the rod of law should descend to punish. The Rule of Law is the antithesis of
arbitrariness. It would be a transgression of it as the Rule does not mean protection
of a fortunate few.
The truth is that even
as we have achieved political and economic freedom we still remain hostage to
errant elements of society. Nothing justifies bloodshed or the call to commit
violence in direct contravention of the law. If anyone has angst against
authorities or person they should take up legal battle against them. Unless the
larger network fuelling such anger and intolerance is brought to justice it
will continue unabated.
Plainly rooting out
malignancy of violence and immorality requires major surgery but India’s
tragedy is that no one wants to rid itself of this rot gorging on our body
forgetting that violence does not achieve
anything. No matter what the provocation Rule of Law cannot be made to go for a
toss. Nothing justifies violence or the call for dangerous descent into anarchy.
Importantly, India is
at the moral crossroads. True, rules of the game have changed recklessly
without a thought for the future yet in our present all pervasive decadence,
interspersed with growing public distaste, cynicism and despair there comes a
moment of truth and reckoning. Clearly, it is high time we, the people realize that we are putting a premium
on violence and immorality.
Remember, a democracy
is only as good as the refinement of its people’s moral sensibility. Our moral
angst cannot be selective but should be just, honourable and equal.
The judgment holds the
mirror that time to end this senseless grudges and violence that our lives are
getting drenched in has come. It is distracting us from seeing or worrying
about real pressing issues: rising poverty, unemployment, health and bettering
lives. It should make people realize anyone
indulging in irrational brutality or looking to settle a score should think
twice, be it a Muslim or Ram bhakt.
We need to realise
India is a big country with enough room for all to live in peace and goodwill. The
aim should be to raise the bar, not lower it any more. Neither Lord Ram nor Allah
will forgive us for playing havoc in its name. Can a nation be bare and bereft
of all sense of shame and morality? And, for how long? After all, we are a
civilized country and cannot destroy it as we shape New India. What gives?
(Copyright, India News & Feature Alliance)
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SEBI Overturns Hindenburg: US CONCURS WITH ADANI GROUP, By Shivaji Sarkar, 8 January 2024 |
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Economic Highlights
New
Delhi, 8 January 2024
SEBI Overturns Hindenburg
US CONCURS WITH ADANI GROUP
By Shivaji Sarkar
The
Supreme Court decision denying a special investigation team (SIT) probe into the
Hindenburg report on Adani group of companies has not come as a surprise. The
Securities and Exchange Board of India (SEBI), stock market watchdog, stand
helped the process.
On
January 3, the SEBI leveraged the Supreme Court verdict to its advantage. On January
5, it addressed the primary concern raised by the Hindenburg report regarding
short selling, deeming it a non-issue. It has allowed short selling of share as
institutional and made disclosure of such trade’s mandatory. It justifies any
activity of such proportions any time. The Adani Group or anyone else for that
matter is now free to do it. The legal acceptance of short selling shares,
which led to Parliament logjams, widens the canvas.
More
interestingly only a month back on December 5, 2023, the US government said,
“short-seller Hindenburg Research’s allegations of corporate fraud against
billionaire and Adani Group Chairman Gautam Adani weren’t relevant and did not
impact the US decision to grant $553 million for a Sri Lankan port terminal”. The
US would not invest if it was not sure of its investments being safe. In fact,
the US has never given importance to the Hindenburg report.
Shortly
after the report came out on January 30, 2023, the Adani Group damned the allegations,
terming it “nothing but a lie” and said it was a “calculated attack” on
India. After the top court’s verdict, the group says the report was driven by
“an ulterior motive” to “create a false market to allow the US firm to make
financial gains”.
The
similarity of the approach of the US government, the Adani group, silence or no
surprise over the official system in India, and all attributing the fault to the
Hindenburg researcher may not be a coincidence. Except vague charges, nothing
concrete has been told about the researcher. The SC has not differed from its
observation of May 20, 2023, when its appointed panel said, “Prima facie there’s
no manipulation by the Adani group”.
Hindenburg
released a comprehensive report accusing the Adani Group of long-standing
malpractices ranging from stock valuations to offshore shell entities. The exposé came just before the Adani Group
was to launch $100 billion stocks. The gravity of the allegations spurred
various regulatory bodies to take notice of it. The SC acknowledged the
seriousness and initiated an investigation.
The SEBI
started its probe into market manipulation and fraudulent activities. The opposition
parties seized the opportunity to raise questions and demanded answers leading
to many logjams and sharp barbs in both Houses of Parliament. Citing the
magnitude of the allegations, the Opposition called for a thorough
investigation to ensure accountability.
It led
to suspension of Congress leader Rahul Gandhi and later Trinamool firebrand
leader Mohua Moitra. On these and host of other issues, even the December
winter session of Parliament witnessed uproarious scenes, resulting in
unprecedented suspension of 146 MPs. However, despite the top court’s ruling, it
remains a raging political issue, which may become volatile in the ensuing 2024
election battle.
The
Hindenburg Report had shaken the Adani stocks. The report said that its
two-year investigations reveal that “Rs 17.8 trillion ($ 218 billion)
conglomerate engaged in a brazen stock manipulation and accounting frauds over
the decades”. It disclosed that it held short positions in Adani company
through US-traded bonds and non-Indian-traded derivatives. It alleged Adani
improperly using tax havens and expressed concerns about its high debt levels.
This sparked a $150 billion meltdown in shares of Adani’s publicly listed
companies last year. The shares are still reported to be down by about $47
billion.
Within a
week of the 32000-word report, the Bombay Stock Exchange had deep scars.
Investors lost Rs11.8 lakh crore at BSE and Nifty. Bank stocks suffered the
worst collateral damage. Ripples continued through the year though now Adani
Group claims it made up the losses. The Adani group released a 413-page
response to clarify its position and lambasted Hindenburg for using the company
reports itself to malign it through short selling “to book massive financial
gain through wrongful means at the countless investors”.
Hindenburg
retorted short selling was a part of its research methodology to unravel the
manipulations. A short sell is defined as a trading strategy where an investor
borrows shares of a stock they believe will decrease in value, sells them, and
then hopes to repurchase the shares at a lower price to make a profit. It is
not illegal either in the US or in India.
In May,
a Supreme Court-appointed committee in an interim report said it saw, “no
evident pattern of manipulation” in the Adani group of companies and there was
“non regulatory failure”. Simultaneously, it cited many amendments the
SEBI made between 2014 and 2019. These constrained the SEBI’s ability to
investigate. The panel also said that its probe into alleged violation of money
flows from offshore entities had “drawn a blank”. Regulators are known to
modify rules to widen their ambit. In this case, just the contrary happens.
Newspapers
went to town with many stories. While rejecting the demand for a SIT to go into
the allegations, the SC also maintained that the reliance on newspaper articles
or reports by third party organisations as the basis for questioning
investigation by a specialised regulator does not make sense. It also rejected
reports by the Financial Times and the Organized Crime and Corruption Reporting Project (OCCRP), a global network of investigative journalists
with staff on six continents, in August. This is reminiscent of the 1950 SC rulings
on freedom of Press and expression. It was implied that newspapers are not
frivolous publication and editors were supreme in editorial decisions.
Independent
petitioners questioned the amendments by SEBI on foreign portfolio investors
(FPI), diluting the requirements of disclosure of beneficial owners. The court
on the contrary held that the amendments tightened the regulatory framework. On
the 2014 probe by Directorate of Revenue Intelligence (DRI) into stock
manipulation by Adani group, through overvaluation of power equipment purchased
from a UAE subsidiary, the SC noted the issue had already been settled in
favour of the Adani group.
Senior
lawyer Mahesh Jethmalani alleged that a group was filing cases with a political
motive at the behest of foreign forces. No judicious system could function with
such premise. Judgments apart, there could be different interpretations. It may
be a reprieve to a company but socially and financially stock manipulations are
grave and sensitive. It raises questions on issues of ethics, morality, and
securityof the investors.
Stock
manipulations are not new. These brazenly came to the fore in 1992 and there
have since been many shady activities during the last 30 years. The present
incident exhibits proliferation of sophisticated operations shaking confidence
in opaque manoeuvrings. ---INFA
(Copyright, India News & Feature Alliance)
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Rally, Protests, Merger: SOUTH INDIA GEARING UP, By Insaf, 6 January 2024 |
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Round The States
New Delhi, 6 January 2024
Rally,
Protests, Merger
SOUTH
INDIA GEARING UP
By Insaf
Ensuing general election and
consecration of Ram temple has kicked up a lot of heat and dust in southern
States. Protests, a rally and a merger hit headlines. In Congress-ruled
Karnataka, the arrest of a kar sevak in a 1992 case related to Babri Masjid
demolition violence in the state, triggered violent protests by BJP. It
also launched a campaign ‘I’m also a Karsevak, Arrest Me Too’ on Thursday,
accusing the government of indulging in “anti-Ram and anti-Hindu policies.”
Chief Minister Siddaramaiah rubbished it saying the kar sevak is a ‘social
miscreant and criminal suspect in multiple cases’ and warned ‘BJP leaders need
to understand that assigning caste and religious labels to criminals is
extremely dangerous.’ His colleague, MLC B K Hariprasad went a step further:
‘There’s absolute possibility of a similar (Godhra-like) situation created here
also…All arrangements should be made for those willing to go to Ayodhya so we
shouldn’t see another Godhra happening in Karnataka.’ The government, he said,
should be on high alert. BJP has demanded his arrest for instigating a “riot
for the Lok Sabha elections”. Mixing politics with religion is getting far too
toxic!
* * * *
Kerala Rally
In Kerala, the BJP had star
campaigner Prime Minister Modi launched the party’s election campaign. A
mammoth rally ‘Sthree Shakthi Modikkoppam’ (Women Power with PM Modi) in
Thrissur district on Wednesday last, preceded by a road show appears to have rattled
the Congress. Modi launched a frontal attack against it, other than the Left
parties, accusing them of delaying the women reservation bill and listed the
schemes his government had rolled out these past 10 years. Whether the ‘PM
guarantee’ will woo the women voters, like it did in Rajasthan, is to be seen,
the Congress had its workers stage a protest a day later near the stage from
where Modi spoke, over cutting of branches of a banyan tree for his programme.
They clashed with BJP workers as the tree is believed to have religious
significance and is adjacent to the Vadakkumnathan Temple. In turn, the BJP
accused the Congress of having its workers spray cow dung water on the venue of
the rally. The police had to be deployed and protesters were detained. Will God’s
own country be more accommodating to the saffron party?
* * * *
Andhra Merger
Andhra Pradesh gives some hope
to Congress. On Thursday last, founder of Yuvajana Sramika Rythu (YSR)
Telangana Party and sister of Chief Minister YS Jagan Mohan Reddy, Y S Sharmila
not just joined the grand old party but merged hers with it. Timely alright,
before ensuing Assembly polls and battle 2024. “Today, it would give him (YS
Rajasekhara Reddy, former Congress Chief Minister) great joy that his daughter
is following in his footsteps and is going to be a part of Congress itself,”
she said and added that it was his dream to see Rahul Gandhi as PM. Sharmila
had launched her party in July 2021 after differences cropped up between her
and Jagan Reddy. Interestingly, brother Jagan called on former Telangana Chief
Minister K. Chandrashekhar Rao at his residence in Hyderabad, the day of the
merger. In recent Telangana Assembly polls, she announced support to Congress,
as it ‘stood a chance of victory, and we didn’t want to break the anti-KCR
vote. Congress won and I am most happy that we contributed a part to that
victory.” Will this merger contribute again and revive Congress fortunes, is
the question.
* * * *
Delhi’s ED Match
A cat and mouse game is being
played out in national capital, Delhi. Chief Minister Arvind Kejriwal again
skirted the Enforcement Directorate’s summons, the 3rd in a row on
Wednesday. He accused the ED of trying to hurt his greatest wealth, ‘honesty’
and it’s the Centre which wants to arrest him to stop him from campaigning for 2024
election! Citing reasons such as Rajya Sabha polls, R-Day preparations and ED’s
‘illegal’ summons for non-appearance, he offered to cooperate provided summons
were ‘legally valid.’ Eight months back, he said, ‘I was called by CBI, and I appeared’.
He insists there’s no excise policy scam and colleagues (Manish Sisodia, Sanjay
Singh and Vijay Nair) are in jail ‘not because they were involved in corruption,
but they didn’t join BJP’. Rubbishing it, BJP said if he ‘finds ED notices
wrong, he should go to the courts, but he won’t as he knows it’s almost
impossible to get relief.’ Besides, those in jail aren’t getting bail, plus
every court is reprimanding them. Is a 4th summons on its way?
* * *
Jharkhand Plans Ahead
Jharkhand is doing one better
than Delhi. Not only has Chief Minister Hemant Soren skipped ED’s 7th
summon alleging the probe in money laundering case was ‘biased’ but is
preparing for the future. On Wednesday last, he convened a meeting of JMM-led
coalition ministers and MLAs at his residence to muster support and did get solidarity
from 52 (JMM, Congress and RJD) of the 81. His office posted on social media: ‘latest
political situation was discussed…All MLAs expressed confidence in CM. He
(Soren) said he’s always with them and will continue to be so…Any kind of
conspiracy against government won’t succeed…’ The meet, however, had many
guessing the resignation of MLA Sarfaraz Ahmad two days ago for ‘personal
reasons.’ Opposition BJP claimed he was told to resign ‘to facilitate Soren’s
wife Kalpana to contest the bypoll so she takes over as CM in the wake of any
eventuality.’ Soren has rubbished it, but time will tell, as ED keeps the heat
on and raided premises of Sahebganj DC Ram Niwas Yadav and Soren’s press
advisor Abhishek Prasad the same day.
* * * *
Blissful Lakshadweep
Lakshadweep can start hoping for a spot on the global
tourist map. If so, it has Prime Minister Modi to thank. “For those who wish to
embrace the adventurer in them, Lakshadweep has to be on your list. During my
stay, I also tried snorkelling - what an exhilarating experience it was!” he wrote
on X. Though he went to inaugurate the Kochi-Lakshadweep Islands Submarine
Optical Fiber Connection, lay foundation-stone for renovation of primary
healthcare facility and 5 model Anganwadi centres, among others, it’s the
pictures he shared on X which made news: “And those early morning walks along
the pristine beaches were also moments of pure bliss.” But trust Congress to promptly
play spoilsport. It posted on X too: “The Prime Minister of India is having
fun. Great photography is taking place on the seashore… Photos are being taken
in different dresses. A wonderful pose is being given: Sometimes relaxing on
the shore, sometimes playing with the waves of the sea.” And, “Manipur has been
burning for 8 months. People are still being murdered. Indian citizens are
being killed, rendered homeless, and tortured. But… Where is India’s Prime
Minister?”----INFA
(Copyright, India News & Feature
Alliance)
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EAM in Russia: A 2024 OUTLOOK, By Prof. (Dr.) D.K. Giri, 5 January 2024 |
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Round The World
New Delhi, 5 January
2024
EAM in Russia
A 2024 OUTLOOK
By Prof. (Dr.) D.K. Giri
(Secretary General, Assn for
Democratic Socialism)
The External Affairs Minister S. Jaishankar made a year-end
visit to Russia to enhance ties. He had extensive discussions with his
counterpart Sergey Lavrov and other stakeholders in India-Russia bilateralism
that has been strongly continuing since 1971. In addition to the usual trade
and diplomatic exchanges, it would be interesting to decipher the strategic
line the EAM would have taken for the New Year. Unarguably, India’s position
vis-à-vis the United States and Russia is perhaps the most important strategic
question India needs to address in 2024.
It may be in the fitness of things to allude to the US
thinking on China and Russia who are currently in a tight embrace. Whether
India agrees with the US perspective on this alliance and needs to align its
own strategy with the US thinking is another geo-political corollary New Delhi
ought to cognize. By far, the most arresting articulations have come from the
Republican candidate Vivek Ramaswamy. As he disclaimed himself, he was not
laying out his strategy vis-à-vis India-China-Russia as he has an Indian name,
it is his conviction that such a line would be in the best interest of the US.
The Republican candidate Ramaswamy wants to put his “laser
focus on pulling Russia out of its alliance with China. According to him that
will mean ending Russia’s war on Ukraine on reasonable terms that dilutes
Russia-China tie-up.” He says he would fly to Moscow and give a categorical
assurance to Putin that NATO will not include Ukraine into its fold. Ukraine
should no longer demand the retrieval of Crimea. At any rate, he would bring an
end to the war, which is inflicting heavy costs on the US and others, and more important,
which will reduce Russian dependence on China.
Strategically, Ramaswamy wants to balance economic issues
with national security concerns. His second premise is that the Chinese
Communist Party is the biggest threat to the United States. It is no longer the
Soviet Union which used to be the main adversary of the US as the former
broke-up in 1991. Ramaswamy said that he would be looking forward to expanding
relations with India in order to counter China. He emphasised, “the US should
have a stronger strategic relationship with India, including even a military
relationship in the Andaman Sea. Knowing that India, if necessary, could block
the Malacca Strait through which actually China gets most of its Middle-East
oil supplies. These are areas for real improvement in the US-India
relationship”. Furthermore, he cited India, Israel, Brazil and Chile as
countries he wants to build trade ties with in order to become completely
economically independent from China.
Jaishankar in his visit met the Russian President Vladimir
Putin, held discussions with Deputy Prime Minister and the Minister of
Industries and with his counterpart Sergey Lavrov. His interactions centred on
bolstering the Special and Privileged Partnership. As usual, the exchanges
covered multiple sectors such as trade and economics, energy, defence,
connectivity, cultural and people-to-people. Global and regional developments
also featured in their discussions. President Putin invited Prime Minister Narendra
Modi to visit Russia in 2024. Putin said to EAM, “we will be glad to see our
friend Mr. Prime Minister Modi in Russia”.
From the available accounts of the visit, not much
substantially accrued from EAM’s interactions with several leaders, officials and
a cross-section of agencies. A plenty of shibboleths and usual hyperboles was
on display. Even the tangled issue of India buying military gear after the US
sanctions following the Ukrainian war was not resolved. On the contrary, the
indication got reconfirmed that India’s traditional dependence on Russia for
military supplies is steadily declining. There were tight-lipped statements
both from EAM and Russians about the prospect of military trade between the two
countries.
Notably, Russian Foreign Minister Lavrov said that Russia
was ‘respectful’ of New Delhi’s need to ‘diversify’ military procurement and sources
for other technical requirements. It seems the decoupling between New Delhi and
Moscow on military ties is sinking in faster in Russia than in India.
Perhaps it is in order that New Delhi reviews its military
trade policy with Russia. Objective observers have long contended that India
has been at a loss in more than one way in its defence relations with the Soviet
Union/Russia. Talking of the present, India is awaiting delivery of several
defence equipments from Russia. To mention just one deal, India’s military
expected delivery of 70,000-80,000 Kalashnikov AK-203 assault rifles some of
which were to be built with Russian technology in Uttar Pradesh. That
consignment did not arrive. Consequently, Ministry of Defence approved the
purchase of 73,000 additional Sig Saur patrol rifles from the US on the request
of the Indian army. The Indian Army Chief General Manoj Pandey had confidently
announced that the Army would receive AK-203s by March, which did not
materialise.
There are quite a few logistical and transactional issues
currently on India-Russia military trade which may or may not get resolved
quite soon. Besides these, Russia’s defence industrial complex faces a few
challenges at the moment. Moscow needs to focus on manufacturing and supplying
defence products to the Russian army. Some of Russian companies have offered
alternative formats of cooperation in the global arms market. This gave a clear
message to Russia’s overseas clients, including India, that Russian defence
companies would not be able to meet the needs the overseas requirements due to
the ongoing war in Ukraine.
The second challenge for the Russian defence industries
stems from sanctions imposed by the West on Russia following the war. Third,
the setbacks and stalemate in the war put a question mark on Russian military
capability as many observers believe that the Russian army is struggling with
sub-standard defence material. Indian military experts are suggesting that it
is high time India ends its dependence on Russian military supplies and instead
becomes self-reliant or finds alternative suppliers.
The Russian declining military power as well as trade
foregrounds India’s need to align with the strategy being conceived by US
leadership as is evident from the utterances of one of the candidates mentioned
above. His rating in the opinion polls has apparently increased after he
outlined his foreign policy. There is a concern in Indian circles that while
Washington wants India to disengage from Russia, it continues to patronise
Pakistan and offers to make-up with China.
This is where Indian diplomacy has to weigh in. New Delhi
needs to drive home the strategic point that Russia is not USA’s main adversary,
it is China which is a threat not only to the US but to many other countries,
and if we recall catastrophic Covid, then to the entire world. This could
perhaps be one significant writing on the wall New Delhi should be cognizant of
from the EAM’s last week’s five-day visit to Russia. ---INFA
(Copyright, India News & Feature
Alliance)
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