The National Green Tribunal Is Ineffective In Everything Except Bullying The Middle Class In The NCR Over Their Cars

A 2010 UPA era law put the latest cat amongst the pigeons. Was it influenced by the infamous National Advisory Council (NAC), Congress Chairperson Sonia Gandhi’s arch-leftist creation? But laws in India are a dime a dozen. After they are made however, everyone seems to take a very long rest.

Environmental issues have been concerning the powers-that-be from years before, illustrated by the enactment of The Environment (Protection) Act 1986.

This one enabled the central government to protect and improve the environment, control and reduce pollution and prohibit or restrict the setting up or operation of an industrial facility on environmental grounds.

 It was widely perceived to have been enacted in response to the Bhopal Gas Leak. The government of Rajiv Gandhi sought meagre compensation from  Union Carbide for the killed and maimed, but did frame this law.

There were five more legislations before 2010. The Public Liability Insurance Act and Rules 1991, amended 1992. The National Environmental Tribunal Act, 1995, amended in 2010. The National Environment Appellate Authority Act 1997. The Biomedical Waste (Management and Handling) Rules 1998.

The National Green Tribunal (NGT) was set up with the lofty objectives of conserving forests, protecting the environment, the nation’s natural resources, animal life, reducing pollution on land, water, and  to promote clean air.

 It has since failed in all these objectives. This was mainly because its orders were not obeyed. Most of them are either appealed in the Supreme Court, which effectively freezes action till the court decides, or stayed by one or the other of the high courts in the affected state.

The NGT has gradually learned it does better with individuals and corporate targets in the private sector. It was intended to take some of the load off the Supreme Court (SC), but has instead become just another layer in the legal system.

The forest timber mafias still operate with impunity, as do the poachers. The rivers continue to be polluted. Forest cover keeps on being reduced by encroachment. Mountain areas suffer more landslides due to felling of trees, rampant construction, and road widening. Clean air is a relative matter.

The NGT order to completely ban open burning of waste on land has failed utterly, with miles of paddy stubble burning every winter in three states, let alone at rubbish dumps the size of mountains in the Delhi area.

In the campaign of 2013 -14, prime ministerial candidate Narendra Modi often spoke of the ‘Jayanthi Tax’, in reference to UPA Environment Minister Jayanti Natarajan’s action of blocking several projects in Gujarat and all the mining in Goa. The NGT nurtured quite a tribe of activists in Goa that put a lot of miners out of work for years and caused loss of revenue to the Government of Goa.. The NGT provided the objections.

Certainly, her predecessor in the job, Jayaram Ramesh, was equally obstructionist. You couldn’t build a highway near a forest in his time.  

But was there really the hefty alleged payoffs before things would be cleared? The CBI found large amounts of unaccounted cash, as much as Rs. 25 crores of it. There are some ‘Birla Diaries’ with the Income Tax authorities with entries that suggest payola. However, Natarajan stoutly denied any wrongdoing. She was removed from her ministerial job nevertheless, and mounted a scathing attack against Rahul Gandhi thereafter.

The negative/positive effect of the NGT can be assessed from its so-called successes. It joined the queue to stop the establishment of the 12MTPA capacity steel plant valued at an investment of $12 billion, as estimated in 2005 by South Korean giant POSCO.

POSCO had the audacity to sign an MoU with the Government of Odisha. It is a wonder foreign investment still comes to India, given our fondness for bureaucratic and legal red tape, and some would say, hatred of commercial progress.

There were initial objections raised after a law, The Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, came into being that did not exempt the POSCO steel mine endeavour.

There were 8 tribal villages affected, of which seven gradually saw the merits in allowing the plant to come up.  One held out against the project. The Communists got involved to prevent the project as well. Various committees were set up and submitted lengthy reports. The Supreme Court was in favour of letting the project come up.

In 2011, the MoU expired, and was in the process of being renewed with additional conditions in favour of the tribals, in 2012. This never happened, as POSCO’s interest waned. It tried to launch another steel factory, almost half the size, in Karnataka instead, but this too floundered at the land acquisition stage. The original effort was a project badly needed by the Odisha economy, but Chief Minister Naveen Patnaik though better than using his political capital to see it through.

The NGT, recently come on the scene, put a stop to it as well. It was in order to protect the local tribals and forest dwellers who lived at the project site area from being relocated. The matter was also politicised by Congress leader Rahul Gandhi going to the POSCO site to make common cause. The UPA was in power at the centre.

In Tamil Nadu’s Tuticorin, the UK based Vedanta Group was running Sterlite Industries, a copper smelter plant working since 1995-96 producing about 4 tonnes of copper per annum. In March 2013, after a gas leak from the plant, and allegations of pollution, the Tamil Nadu Pollution Control Board in concert with the NGT, shut down the plant, even though nobody was killed.

Tamil Nadu, known for its excellent industrial relations, made a political exception this time, with the newly elected Stalin after the death of his father, and the DMK cadres, demonstrating to shut down the Sterlite Plant. This occasioned the complete import of India’s copper needs, ever since, from China instead.

More recently in 2023, the NGT has slapped a penalty of Rs. 10 crores on the Kerala government for its failure to check pollution of the Vembanad and Ashtamudi lakes listed as ecologically sensitive wetlands. It asked the Government of Rajasthan to close down the salt pans in the Sambhar Salt Lake that are near the wetlands in 2016. This battle over the wetlands carries on to this day in other parts as well.

 The NGT has been asking various states such as Bihar (deposit Rs. 4,000 crores in a ring-fenced account for the purpose), Uttarakhand, and Maharashtra ( deposit Rs. 12,000 crores in an escrow account), to adopt better waste management practices.  In 2022 it has fined West Bengal Rs. 3,500 crores for failing to effectively manage its solid and liquid waste.

The NGT has not even been able to completely stop single use plastics under 50 microns per its order, let alone the sand mafia, or illegal stone quarrying by blowing up mountain rocks with dynamite generating clouds of dust.

There is no clean Ganga yet after 12 plus years of its existence. There is an effort to clean up the Ulhas River in Maharashtra, again with little result via sewage treatment plants. And the Yamuna in Delhi, continues to be a malodorous drain. The NGT has issued stern notices to the Delhi Jal Board but the requisite sewage treatment plants have not come up. States upstream have also been given NGT notices but to little actual avail.

The NGT is headquartered in New Delhi, and headed by a retired Supreme Court judge. It also sits in Bhopal, Pune, Kolkata and Chennai. The NDA has resisted its encyclicals throughout its tenure, and now controls it somewhat, by wresting the appointment of its members from the control of the Supreme Court.

The NGT has suo moto powers as per the Supreme Court in 2021. This means, the NGT can take up issues on its own, even if no one comes knocking on its doors. One can protest an NGT order by taking the matter to the Supreme Court, but only during a narrow window of opportunity of some 60 days.

The  NGT’s claim to fame is in the banning of 10 year-old diesel cars in the NCR, with no reference to their mileage, maintenance or ownership. Even cars registered in other states outside the NCR, cannot ply within its limits without risking being confiscated, fined, or both.

The governments in the NCR don’t have any problem with complying with the 2015 order. They don’t pay for their vehicles, the taxpayer does. Still, they drag their feet till replacements are furnished.

And it is likewise for 15 year-old petrol cars. And the same black law was imposed on all 10 year-old diesel cars in six cities in Kerala. However, in Kerala, its high court promptly stayed the NGT order. The NCR has not been so lucky.

The 2015 order in the NCR was indeed challenged, but the SC upheld it without qualification. The order is a source of great muscularity on the NGT’s part. But it is a source of general discontent from middle-class owners of private vehicles.

Recently the TV News Channel Mirror Now took on a campaign to ask the Delhi Police not to seize and remove the old cars, without notice to their owners. The car registrations, even if they have further years to run, are cancelled. An arbitrary scrap value is allegedly paid in due course.

The slogan used by the TV channel is My Old Car Is Not Bekaar. They are picked up forcibly by privately contracted cranes, and sent forthwith to the scrapyard. And there, such cars are piled high, the visuals show, as capacity to turn them into scrap is highly limited, primitive, and yes, severely polluting.

The demand from car owners is for a review of the NGT order. One suggestion is based on the fact that many private cars are lightly used. Private car users are saying many of their cars have barely 50,000 Km on the odometer after 10/15 years of use. They are well-maintained and can pass any fitness test. It is inter-state/city taxis, lorries, buses, three-wheeler cargo carriers and the like, with perhaps 200,000 km done in the same period that should be looked at for their pollution potential.

Cars can indeed be sold outside of the NCR before the 10/15 year deadline. But to force this, means private owners are not only deprived of perfectly good vehicles, but receive meagre sale prices.

This high-handed ruling without any nuance also causes hardship to many, including elderly and retired owners who are hard-pressed or unable to buy new cars at ever rising prices. To point them towards public transport is both insensitive and impractical.

Both the NGT and the SC have, till now, refused to react to this public demand, even after more than seven years of public hardship. But neither have the politicians from the Delhi government or the Centre got involved to provide some relief.

It is as if they are promoting new car sales, including those of the electric cars with their Chinese lithium batteries, in concert with the automobile dealers.

The odd thing is, only three countries have such a tribunal- Australia, New Zealand and India.

 

(1,865 words)

For week starting 3^rd July, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

An Unprecedented Upgrade Of Indo-US Relations During Prime Minister Modi’s State Visit to The US Signals A Great Leap Forward in High-Technology, Trade, & Defence Manufacturing Agreements

There is a major upgrade in the Indo-American relationship. Not only did Prime Minister Modi’s State Visit yield a cornucopia of high technology, trade, joint venture and defence manufacturing benefits, but it is on a scale such that the whole world will have to recalibrate how it considers India going forward.

India has long been constrained to be at the top or second place when it comes to the purchase of foreign armaments involving billions of dollars.However, because of a strong Aatmanirbhar push lately, the picture is beginning to change.

Indian defence production values were in excess of Rs. 1 lakh crores for the first time in fiscal 2022, up from Rs.95,000 crores in fiscal 2021 and just Rs. 54,951 five years ago. India is now targeting Rs. 1,75,000 crores in indigenous defence production by fiscal 2024.

The technology transfer and joint venture format it now pushes vigorously should greatly enhance the indigenous defence manufacturing effort. India has also developed a defence equipment export target of $ 5 billion by 2025, up from $ 1.5 billion achieved in fiscal 2022.

This process is now starting to form a pattern.  The accountants will have to work out the savings against fully-built imports. 

On the 8^th of June 2023, after interminable negotiations, India’s Government owned Mazagon Docks (MDL) and Germany’s ThyssenKrupp Marine Systems (TKMS) signed an MoU and became front runners (in competition with the Spanish and the South Koreans), to submit a joint bid.

It is for an over Rs. 42,000 crore project to build six diesel-electric submarines. The German firm will provide the engineering, design, and consultancy support for the joint venture instead of selling much more expensive fully built submarines from German dockyards. The competition is also agreeable to collaborate, and this may have forced the German hand. These submarines for the Indian Navy are to have operation AIP which extends the underwater endurance and makes conventional submarines as good as they get at present India’s L&T will possibly make the AIP componentry for this.

How much of the Rs. 42,000 crores will fall to the Indian manufacturing effort?

The Indian submarine fleet is depleted, and has 10 old submarines - six Russian Kilo class, and four German HDW, plus six new Scorpene class submarines, built in collaboration with the French for Rs. 23,000 crores ( again, how much did we save by this?), and two nuclear submarines built in collaboration with the Russians (ditto). We have two aircraft carriers. One is a retired British carrier retrofitted in Russia at great expense, cost overruns and immense delays and the other built in India, albeit with Russian help but at target prices and dates. India now can make another and yet another 45,000 ton aircraft carrier by itself if need be.

But the days of aircraft carriers may be coming to an end, overtaken by UAV and drone technology, missiles, even nuclear submarines.

The Chinese, by way of contrast have over 50 diesel-electric submarines, and 10 nuclear ones. It is also building 8 diesel electric Yuan class submarines for Pakistan.

The fact that we are buying 31 armed Predator drones now help us keep track of the Chinese ships and submarines in the Indian Ocean, the Arabian Sea and the Bay of Bengal.

There is now unprecedented progress on military manufacturing in collaboration with the US. The agreements have come thick and fast during this visit between 21-24^th June 2023.

It is now down to equally dynamic implementation on both sides before the negative lobbies slow it down to a snail’s pace even if they can’t actually scrap it.

It is a game-changer because the US has decided to get off the fence with regard to military cooperation with India, despite Indian reluctance to become a formal US ally in the NATO Plus mould.

The handing over the GE F414 technology could mean two bites of the cherry. First over 350 to 500 engines for the Tejas MK2 and the AMCA MK1, over the next decade or more. And perhaps, who knows, the shifting of the F/A-18 Super Hornet Assembly line that uses the GE F414, alongside more than 60,000 of the engines exported elsewhere, to a much less expensive country like India. This could mean sales to India for early requirements such as those urgently needed for our aircraft carriers, and then US exports of upgraded versions of this venerable old plane, from the assembly line in India. A lot, of course depends on the latest avionics and the firepower the planes are equipped with.

The imminent induction of GE-F414INS6 turbofan fighter engines for the Tejas MK2, in the 98 KiloNewton thrust class is now a done deal, but for some ratification by the US Congress. The MoU agreement was signed on 22^nd June between GE and HAL. The engines, of which eight are already in India for the Tejas MK2 prototypes, will certainly speed up India’s under-production medium combat aircraft, the Tejas MK2. These engines are tried and tested, and currently power both the American F/A-18 Super Hornets, upgraded already from the F-16s, and Swedish Gripen fighters. GE has already supplied the less powerful 75  GE-404 engines for the Tejas MK1A, and another 99 are on order.

Only four countries design and manufacture commercial and military jet engines, including hypersonic and supersonic ones for the latter. The Four countries are - The US- via General Electric (GE) and Pratt & Whitney (P&W), Britain- via Rolls Royce, France- through Safran, and Russia- via Klimov, NPO Saturn and Aviadvigatel. The reliability of the Russian engines are not as good as the rest and of late there were complaints on the P&W commercial aircraft engines by GoAir.

The state-of-the-art 31 armed MQ 9B Sea Guardian/Reaper/Predator drones- they go by several names, with Hellfire missiles and guided laser bombs capable of flying and loitering at 40,00O feet are to be bought for $3.5 billion. They have over-the-horizon surveillance and attack capability and have delivered great results in the Afghanistan theatre against the Taliban. With MRO facilities to be set up in India, DRDO should likewise gain the experience to build such drones in the future and benefit their own drone manufacturing programme.

15 of the Predators are intended for the Indian Navy facing a challenge from increasing Chinese activity in the Indian Ocean, the Arabian Sea and the Bay of Bengal. Eight each are for the Army and IAF. All will be under the new tri-services commands.

These spectacularly capable drones will hugely upgrade India’s long-range intelligence surveillance and reconnaissance (ISR), and because they are armed, the strike missions when called for, along the LaC, LoC and elsewhere.

India currently has just two of these for naval reconnaissance only, on lease from America since 2020. Some 60% of the new Predator parts are to be manufactured by the Kalyani Group.

The American towed 155 mm Howitzers already in use in India, the M777, are on offer to be upgraded with precision guided long range ammunition. India already has 145 of these, of which 120 were made by Mahindra Defence Systems in a business arrangement with America’s BAE Systems. These lighter howitzers can be taken to mountain areas by helicopter if need be.

The Americans have also offered their Stryker eight into eight wheeled drive V-hull armoured infantry vehicle that saw action in Afghanistan. It is armed with a 30mm cannon and 105 mm mobile gun. India will be interested, again, if it comes with transfer of technology and local manufacture clauses.

 An American $ 2.7 billion chip unit from Micron is about to be established in India, probably in Gujarat.  In addition, Applied Materials will invest 4$400 million to build a collaborative engineering centre in Bengaluru to develop and commercialise technology for semiconductor manufacturing equipment.

Boeing, reacting to large commercial aircraft orders from India will also set up a $ 100 million pilot training centre. Google plans to invest $ 10 billion in India’s digitisation fund with a new Global Fintech Centre in GIFT City, Gujarat.

There will be more in the semiconductor field, an urgent strategic area for both India and America. A pact to also collaborate on quantum computing and artificial intelligence is being signed.

Collaboration on hypersonic missiles with the US is also on the cards. There will be a joint manned mission to the moon by 2025, between ISRO and NASA and other Space cooperation. There are pacts on communications inclusive of 5G and 6G, and a new a radio protocol.

The 4 lakh odd Indian people  on H-1B visas will have them renewed in America without their having to leave and then re-enter the country in future. America will open new consulates at Ahmedabad and Bengaluru, and India will open a new consulate in Seattle.

The list goes on, now that four ‘foundational agreements’ signed over the last few years have got the legal requirements out of the way, with two more on the anvil to eliminate future impedimenta.

India has also signed the new-fangled Global Mineral Alliance to secure access to the world’s minerals without Chinese hegemony creating monopolies despite their nearly 90% hold on present supplies. But there are several other untapped and partially exploited sources. India may also seek US know-how to extract its new finds of Lithium in Jammu and other Rare Earths it is rich in, despite importing all its requirements of both at present.

America has already sold $ 21 billion in defence equipment over the last 15 years, but this, now, is the great leap forward to paraphrase Chairman Mao.  Trade with India, currently at $ 195 billion, is sought to be increased to $ 500 billion to offset some of the difficulties of still having a trade of $ 700 billion with China, despite increasing prickliness and a general lack of trust between the two.

Another fighter engine, larger, more powerful still, in the 110 KiloNewton thrust class, is expected to come from another joint venture with GE next, for India’s forthcoming 5^th generation  Advance Medium Combat Aircraft (AMCA), for its MK2 version stealth fighter.

Prime Minister Modi’s US visit, after exchange of gifts including a laboratory grown 7.5 carat ‘green’ diamond, using solar power for energy, and exports of $1.67 billion of such diamonds, mostly to the US. There was a 19 gun salute, 5,000 Indian-Americans invited to assemble on the White House Lawns, bilateral meetings, a private dinner in the White House, another with the Vice President and the Secretary of State, a State Dinner in which India’s thrust on Millets was honoured, an address to the Joint Houses,meetings with the giant corporation heads of IT, and of course,  the lietmotif mega diaspora event.

Before getting into the government-to-government business in Washington, on the very first day of the visit, Prime Minister Modi met with several business heads in New York, including the colourful Elon Musk.

This might mean a prestigious Tesla plant in India for the famous high-end electric cars. Musk also spoke of his satellite-based internet system, Starlink that has proved itself very useful in the Ukraine War.

Prime Minister Modi also celebrated the 9^th International Yoga Day on the lawns of the UN in New York. This, with diplomats from 135 countries, and others, such as Hollywood actor and pro-Tibet activist, the 73 year-old Richard Gere.  

The usual human rights lectures and homilies of gratuitous advice from the American establishment, prompted by anti-India lobbies, were put on hold this time. Although some members of the Press, and, notably, former President Obama, did raise the usual propaganda-based questions.

However, the American National Security Adviser, Jake Sullivan, said, very diplomatically, each country has its own challenges to deal with, and admitted America has its own human rights challenges too.

The US State Visit ended after a final diaspora event at the Ronald Reagan Centre in Washington.

 It was followed by a short state visit to Egypt, the first by an Indian prime minister on a state visit, since 1997. This was on the 24^th-25^th  June.

In Egypt, Prime Minister Modi visited a venerable Shia mosque, the 11^th century Hakim Mosque, from the Fatimid Dynasty, traced as the origin of the Indian Dawoodi Bohra Community. The mosque has been gradually restored by the Bohra community right from the 1970s.  He also visited the Heliopolis Memorial to 3,799 fallen Indian soldiers in WWI.

This Egypt visit is reciprocal, after President Sisi came to New Delhi as Chief Guest for the Republic Day functions in January 2023. It holds great promise, because Egypt wants to buy and joint venture on a slew of military equipment, including establishing an assembly line with India’s HAL for Tejas aircraft.  

Indian defence delegations have visited India some 30 times in the last two years, and the Egyptians have also come to India some 7 times. Joint military exercises have been conducted for the first time. Trade with Egypt has been modest, but shows great potential for both sides. Egypt is a guest country in the ongoing G-20 activities in India under India’s 2023 Chairmanship.

On its part, Egypt has offered India space at the Suez Canal SEZ to boost Indian overseas trade.

This Egypt visit comes in the backdrop of a MoU just signed between India’s Hindustan Aeronautics Limited (HAL) and Argentina’s Fabrica Argentina de Aviones (FAdeA)  at the Paris Air Show. It lays out an intent to collaborate in the aerospace sector, to set up first a maintenance, repair and overhaul facility (MRO). Argentina has shown interest in buying 15 of the Tejas MK1A and other aircraft on the HAL platform. This, while Argentina is also considering the Chinese JF-17.

 

(2,268 words)

For Week starting 26^th June, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

The Great Dictator Objects But Don’t They Always?

Charlie Chaplin turned out a hilarious lampoon of Adolf Hitler, with an anti-war satire and black comedy, as a Black and White (B&W) film, his very first using sound. It was released in America on 31^st October 1940, before it joined WWII on the side of the Allies, but after WWII had been going already for a year.

Chaplin wrote, scored, produced, directed, and starred in it. Chaplin played both a poor Jewish barber and former soldier, living in a Ghetto, as well as the Great Dictator. The Dictator harangued, and the little Jewish barber mostly listened. The Great Dictator was Chaplin’s most commercially successful film, and was nominated for five Academy Awards.  The famous film still resonates, and was recognised later, as one of the most significant of the century.

 Adolf Hitler became Chancellor of Germany and absolute ruler on his climb to power. But soon, he set about repurposing his image. He became Der Fuhrer, or Father (of the nation). He encouraged all in the Nazi Party or in his opinion, ‘patriots’, to see him as such. 

US President Joe Biden has a method to his veering off his foreign office script. He has done it often enough with regard to China to not dismiss it as inadvertent gaffes.

American bipartisan delegations, including Congressmen, Senators, businessmen, and even the earlier Speaker of the House Nancy Pelosi visited Taiwan, without reference to China, much to its annoyance.

In addition, and in the face of threatening Chinese military drills in the vicinity of Taiwan, and finger-wagging warnings to America, Biden persisted in repeatedly sending mixed messages.

For the third time, for example, in November 2021, just a day after a virtual summit with President Xi Jinping, Biden said Taiwan was independent, contradicting official US policy.

He repeated it, when asked by reporters, that Taiwan was independent and free to make its own decisions. He also said America would come to Taiwan’s defence if it were to be attacked by China.

The American foreign policy officials then routinely scurry around to reiterate there has been no change, and indeed it did accept China’s ‘One China’ Policy. However, it was obliged to attend to Taiwan’s security concerns. This charade goes on, with now, the European powers also sending representatives to Taiwan on visits without informing Beijing. All this no doubt raises Xi Jinping’s blood pressure. He is not used to being contradicted at all in the vastness of China, and no doubt wishes that the world too should recognise the greatness of his infallible leadership.

Taiwan, of course, makes almost all of the world’s high-end semiconductor chips, and until new value chains can be established, (not an easy task), it is of crucial strategic importance to America. And also to the rest of the world, in which very little works today without electronic chips.

The Biden administration has already banned Red Chinese access to the highest level of semiconductor chips, so that they can’t be used by China to purpose high-technology weapons against America.

 Biden, it would appear, does his deviating from the script to needle Xi Jinping. And certainly not because he is senile or suffering from dementia, as has been suggested by some who like to play a sympathetic hand on China.

He has done it again by calling President Xi Jinping a ‘dictator’ just a day after Secretary of State Anthony Blinken visited Beijing. Blinken who went to China after five years, after a postponement or two, dragging his feet perhaps, was given a frosty reception by the Foreign Minister, the foreign policy chief above him, and Xi Jinping himself.

While China agreed to keep lines of communication open to avoid misunderstandings, it did not agree to a Blinken request for direct military-to-military communications. A telling picture showed Blinken in the middle of a conference table and Xi Jinping far away at another end of the table.

This crass attempt at highhandedness and to bully America, Chinese style, did not go down well with the No.1 economic and military power in the world. From the American point of view, China stands absolutely no chance of replacing it as the most influential power in the world.

Soon after, President Joe Biden called Xi Jinping a dictator at a fund raiser for wealthy donors for his re-election campaign, and refused to retract the statement when asked to clarify by reporters. He said it was ‘just not something I’m going to change very much’.

This despite a strongly written protest by the Chinese Ambassador to Washington, and criticism from other Chinese foreign ministry officials who called the remark ‘extremely absurd’ and ‘irresponsible’.

Xi Jinping, like other dictators, is sensitive to being called out, called names, or being made fun of.

Earlier some wags on social media likened him to Winnie the Pooh, the beloved Bear, because he looks remarkably like that character as drawn. Xi reacted  nothing like the gentle Winnie might have. He promptly banned everything about Winnie the Pooh in China. Dissidents of any kind are not tolerated and no negative reportage is allowed in China.

But Biden was not joking when he called Xi a dictator in his calculated manner. He thought it would have little effect on prospects of meeting Xi face-to-face in the future. They are likely to meet in New Delhi for the G 20 Summit Heads-of-State/Government in October 2023 for example.

Biden added ‘China has real economic difficulties,’ now, meaning post Covid. There is no need to worry about China he said, as if it was no threat to America at all.  It also implied that there is much wrong with the opaque Chinese financial system that the US administration knew about.

Biden also claimed Xi Jinping did not even know about the spy balloon over America that he had ordered to be shot down, suggesting Xi Jinping was out-of-touch.

The more muscular tone with regard to Xi Jinping and China may be part of election mode and largely aimed at his domestic audience. Biden is a very experienced politician, and does not want to appear soft on China with an eye on his Republican rivals.

Relations with China cannot be wished away by the US as trade stands, even now, at $ 700 billion between the two countries. There is irritation and lack of the old trust on both sides, but also much co-dependency. That is perhaps why the US is very keen to see Indo-US trade, currently at $ 195 billion, to rise to $ 500 billion as soon as possible. It is likely that several dependencies on China could be thereby reduced.  The progress on QUAD and AUKUS as well as the ramping up of the Indo-US relationship so spectacularly is rankling to Beijing.

 However, as Steve Tsang Director of the China Institute at London University School of Oriental and African Studies said, ‘My sense is that Xi may not want to overreact and put the relationship back on ice again’.

Meanwhile Biden in California, extending the mockery, said  Xi ‘wants a relationship again’.

The Republican Party reaction from Mark Rubio was approving of Xi Jinping being called a dictator. It’s true, he can give himself as many terms as he wants said Rubio. In March 2023, Xi secured a precedent breaking third-term as president, making Xi Jinping the most powerful Chinese leader since Mao Zedong.

 

(1,224 words)

June 23^rd 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

India Target Of USD 5 Billion In Arms Exports Will Be Led By Brahmos Missiles

The BrahMos is currently the world’s fastest Ramjet powered supersonic cruise missile, at speeds up to Mach 4, and pin-point accuracy on target. It is made in a joint venture company at BrahMos Aerospace that is 25 years old.

It is tested, tried and widely inducted in the Indian Armed Forces for use in land, sea-including both ships and submarines, air, for a range of up to 500 km, and ability to fly 49,000 feet in the sky, or 15 miles up, as well as skim the sea at just 3 or 4 metres.

It is very difficult to intercept because of its speed. New generation BrahMos now being tested, will be operationalised soon for ranges of 600 km and 800 km and finally, 1,500 km at higher speeds of Mach 7-8. It carries a conventional semi-armour piercing warhead.

‘From about $ 1.5 billion in 2020-2021, India targets to export $5 billion worth of military hardware by 2025,’ said Prime Minister Narendra Modi at the 14th Aero India in Bengaluru in February 2023.

The S1.5 billion already achieved is composed of exports to 80 countries. The US is a prominent customer for parts of platforms for the F16 fighter jets, Chinook and Apache helicopters. Armenia bought the Pinaka Multi Barrel Rocket Launchers, artillery guns, and a range of ammunition. Philippines, Mauritius and Ecuador bought Dhruv helicopters.

On the cards are additional orders for at least $ 1,100 million for the BrahMos missiles from the Philippines, Vietnam and Indonesia. This will be a good boost to India’s ‘Act East’ policy enunciated by the Modi government.

India has long and consistently been the top importer of armaments in the world in value terms, and continues to import billions of dollars-worth even today. This, while it ramps up its Aatmanirbhar defence manufacturing programme out of increasing concern for strategic autonomy, and the high cost of imported armaments that hold no secrets for our enemies. Next to crude oil and gas, armaments account for India’s biggest import bill.

The indigenous and joint-venture based manufacturing programme now accounts for 68% of all the items on the defence purchase list, over 300 items, with more being added.

Government owned Hindustan Aeronautics Limited (HAL) being expanded to manufacture more Tejas aircraft and India made helicopters, and the key Defence Research Development Organisation (DRDO), now also making light tanks for use in Ladakh and along the LAC, are leading the charge. Both were languishing and moribund before the Modi government took over as the preference was to import armaments with its pay off in terms of lucrative commissions. 

 Now the list of active players is growing with several government owned ordnance factories reorganised to put paid to ammunition shortages, government owned BEML, various shipyards, in both the public and private sector, other defence manufacturing programmes in private sector Tata, Mahindra, L&T, Kalyani, and Start Ups working on drones, radar, and bits of new technology.

India’s missile making programme including other platforms like the Akash and Astra, has been particularly successful. BrahMos Aerospace, a 50.5-49.5 percent joint venture between India’s DRDO and Russia’s NPO Mashinostroyeniya, has become internationally famous, and is beginning to notch up significant buying interest from multiple countries.

Currently, 76% in terms of content of the BrahMos missiles are India-manufactured, and this is likely to increase to 85% as Indian-made seekers and boosters are added. The present BrahMos DG Rane thinks it will become 100% Indian-made within three years or 2026. BrahMos R&D is carried out at its unit in New Delhi.

BrahMos was tested with an India-made seeker for the first time in in March 2018, and tested with an Indian propulsion system, airframe and power supply in September 2019.

We are already responding to most of the requirements from Indian Armed Forces, such as for lighter air missiles, longer ranges, more speed, via BrahMos design studios, with the manufacturing executed, almost exclusively in India. This has become a crucial factor both for speed of production, capacity enhancement, and keeping up with domestic and foreign demand.

Therefore, the chances of Russia preventing or slowing further development or sales in export for any reason are slight going forward. With the toll taken by the Ukraine War on the Russian armaments industry, it is just as well, though Russia is probably happy with its share of the India-based and export profits. It could, however, come under Chinese pressure in the near future. One option then could be a buy-out of the Russian share of 49.5% by India. However this might be diplomatically difficult and very expensive.

Alternatively, a similar set of missiles and its improved variants, rebranded and made in separate facilities, made 100% in India, would do away with the pitfalls of a joint venture. Our old Russian friends have made some recent changes in diplomatic policy. Profits, in the event, would also not have to be shared. Confidentiality would improve. Domestic consumption by Indian Armed Forces would come cheaper, and account for the bulk of BrahMos sales. And most importantly, Chinese pressure would no longer be a factor.

The growing Russia-China Axis, and Pakistan being added to the mix by Russia presumably under Chinese pressure, is a distinct worry. That there is a growing security risk with China’s penchant for reverse engineering other people’s armaments, with possible Russian help, is another problem.

Fortunately, India has other joint development options now. There is an American offer on the table, in addition to that of the Russians, to help develop urgently needed hypersonic missiles in joint venture. 

The name BrahMos comes from the Brahmaputra in India and the Moskva in Russia. The unit cost for the BrahMos is $3.5 million and for the BrahMos ER ( extended range) is $ 4.85 million. Cost competitiveness and reliability, along with flexible design options will increasingly become the hallmark of Indian arms exports.

A 300 km range variant is offered for export and has already been sold to the Philippines for $375 million. The missiles are under production and will be delivered by the end of 2023. Personnel from the Phillipines are currently being trained in their use. The Philippines is considering a further follow-on order for $ 300 million. These are for their shore-based anti-ship missile batteries.

Talks are ongoing with a dozen interested countries presently. Indonesia is likely to order $200 million worth by the end of 2023, of the Ship-borne missiles to be fitted on their warships. Other South East Asian navies in Thailand, Vietnam (looking to buy $625 million worth), Singapore, Malaysia and Myanmar, have expressed interest along with others, such as the UAE.

Meanwhile BrahMos Aerospace DG Atul Dinkar Rane recently said that technology bricks are being developed in-house for BrahMos hypersonic precision guided missiles to fly at Mach 7-8.

The BrahMos order book is presently at $ 6 billion, mostly from the Indian Armed Forces.

The missile industrial consortium that supports BrahMos has over 200 Indian defence firms from public and private sectors that design, develop and deliver critical components and sub-systems for one of the world’s fastest precision guided weapons.

The BrahMos unit at Nagpur makes the missiles for use in the air. It is currently working on a new generation (NG) missile that will be 50% lighter than the present 3,000 kg, and is expected to go into production in 2025-26. A new facility on 200 acres is coming up for the NG in Lucknow, Uttar Pradesh.

Flight trials for the NG are expected to start by the end of 2024. Lighter air BrahMos missiles will mean more of them can be carried by fighter aircraft. The present heavier missile can only be carried on the Su-30 aircraft, after modifications both in the missile and the aircraft.

Similar moves to carry them on other military aircraft need extensive modifications at its original weight of 3,000 kg. and this is proving impractical. The missile weight was whittled down to 2,550 kg but it is still too heavy, ideally speaking.  With the NG at about 1,500 kg., there are plans to fit one on the Tejas MK1 light combat aircraft (LCA) fighters with GE 404 engines. And perhaps two NG on the Tejas MK2 medium weight fighters with GE 414 engines. And certainly two on the heavier Sukhoi 30 and Rafale twin engine fighters. These BrahMos missiles will be complemented by a pair of the air-to-air 72 km range India made Astra missiles, to complete the suite.

 Squadrons of the Tejas MK1 are slated to replace the Soviet era MIG 21s and MIG 29s. The Tejas MK2 are expected to replace the ageing French Mirage fighters in the IAF line up. The AMCA stealth fighters are still in development, but may well get a boost from further cooperation with the Americans.

The Naval BrahMos has already been fitted on 10 Indian Navy ships with orders from 13 more ships. The eventual aim is to have BrahMos missiles on every Indian Navy ship and submarine. The Defence Ministry has approved a proposal for the purchase of 200 extended range BrahMos missiles for the Navy’s frontline warships.

 Componentry is manufactured, in part, at the BrahMos facility at Trivandrum. The integration complex is located at Hyderabad. Another production centre is at Thiruvananthapuram. A new facility is being developed at Pilani. A 200 acre campus for the NG is coming up at Lucknow.

India aspires to be a reliable ‘defence partner’ from its earlier position of being a big buyer. India will collaborate in the making of the American GE 414 engines for the Tejas MK 2 fighter aircraft in India. These are much faster, with greater thrust, than the earlier fully bought-out GE 404 engines used for the Tejas MK1. 

There is also a recent announcement that the American Lockheed Corporation and  Tata will make the C-130JSuper Hercules military transport aircraft in India.

India is also negotiating hard for the technology transfer in the imminent purchase of 31 armed Predator drones for $ 3.5 billion from the US. It also has its own armed drone project even as it has just two Predator drones on lease from America.

Airbus C295 military transport aircraft are already ordered on an imported basis, and will also be India-made shortly to make this country the biggest operator of this transport aircraft in the world.

Noting all this coming thick and fast, the Western press, such as the normally derogatory Economist of the UK, is calling India ‘America’s new best friend’ prior to Prime Minister Narendra Modi’s state visit to the US between 21-24^th June 2023. It represents India, not as a lumbering elephant as before, but a majestic Royal Bengal Tiger.

By 2025, BrahMos might not have the order book for the complete $ 5 billion export armament target, but it will certainly be a leading component of it, particularly as new generation longer range and faster versions are also offered in their export variants.

The TejasMK2 with the GE 414 engine armed with Brahmos NG and Astra missiles, will offer an attractive proposition for export. The Dhruv and Light Combat helicopter with their ability to fly higher than all other combat helicopters with a full suite of armaments will also find buyers abroad.

(1863 words)

June 15^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Unemployment In India Is A Big Problem Amongst Surging GDP Figures

Prime Minister Narendra Modi handed out another 77,000 appointment letters for prized and secure government jobs at his latest Rozgar Mela, taking the total of such appointments to approximately 3 lakhs.

However, the figure is not at the promised 10 lakh jobs, and unemployment continues to be a major problem in India. Even 10 lakh government jobs would not meet the considerable supply-demand mismatch.

The situation gives a degree of sustenance to the Communist charge of jobless growth, though the government is doing all in its power to cope with this massive challenge. Most developed countries deal with employment with a small and static population. And even then they have high unemployment rates, soaring inflation, and low or negative GDP growth.

India has grown and prospered despite a constantly increasing population, with millions added every year, mostly at the bottom of the pyramid. Things are infinitely better for all Indians since the economy began to be unshackled and incentivised from 1991. There are literally no shortages of anything that plagued the Socialist era. With a population four times as large as it was at independence in 1947, there are no food shortages, even though, for the first time in 15 years, orders have gone out to prevent hoarding of grain.

The government sector has historically seen huge over-employment during the Congress government and UPA years that followed a ruinous Socialist policy bent on redistributing wealth, but succeeding only in redistributing poverty. This resulted in massive inefficiencies and a bloated salary bill.

Industry was locked up under the Licence-Permit Raj, inflation was sometimes in double digits, GDP was quite tiny, with failing grades of growth at 1 or 2 percent per annum. Even in 2013, India was called a fragile economy, one of the ‘fragile five’, by the IMF and World Bank, and it is now cited as a ‘beacon of light’.

Those in the Opposition that cry out for greater government employment to fill what they call ‘empty seats’ in 2023, refuse to take this fiscal responsibility into account. They also promote the ‘freebie’ culture with scant respect for the effect it has on the balancing of revenue and expenditure to the maximum extent possible.

The latest populist hue and cry was raised with regard to the rapidly modernising railways, when the Balasore accident took place in Odisha. The accusation was that the Indian Railways is deliberately understaffed under the Modi government. However, it was probably intentional sabotage per the investigating agencies that resulted in the three train crash.

It must be noted that the Indian Railways, the main means of long-distance travel for the millions of poor and middle-class people, has come a long way in the past nine years. It was in a situation of near collapse in 2014. The Indian Railway network is not only transformed in scope now, expanded, electrified, and modernised, but it is also beginning to become profitable. Wagons and engines manufactured in India are being exported all over the world.

The total employed Indian workforce in the December 2022 quarter stood at 440.3 million with 11 million people entering the ranks of the employed. However, because of a fall in labour demand, 51% of this, or 5.6 million people were laid off, taking the total of the unemployed (but able and willing) to 36.1 million. The figures at the end of March 2023 are somewhat less robust.

These statistics are as per the Centre for Monitoring Indian Economy (CMIE). They are by no means comprehensive, and reflect only the data captured by them. Indian statistics are not only unreliable but chronically back-dated.

There is much urging to become self-employed and entrepreneurial on the part of the Modi government, so that such people who start and grow enterprises can themselves become employers. The number of the self-employed stood at  a modest but not inconsiderable 333 million in 2021. Have the Start Ups and grassroots enterprises become employment powerhouses in the last nine years? Not quite, but several, notably, have sprouted and survived.

The real problem for the world’s most populous country with 1.42 billion people, is that India’s number of employed is not rising in the context of its increasing working-age population. According to CMIE chief Mahesh Vyas, India’s workforce has not grown from a little over 400 million in the last five years. Only 40% of those age 15 years or above present themselves for work. The other 60% prefer to continue as dependents. This latter fact raises a plethora of questions too.

Earlier, it was common belief that the agriculture sector, that accounted for 18.3 % of GDP in 2022-23, absorbed 60% of the labour. But with increased mechanisation,(every benefit brings its own problems), and smaller holdings of land, many of the landless are either under-employed, providing services in the rural sector, or going off to the city in search of work.

In the cities, which now include not just the megapolises and metros, but B and C category large towns, the biggest employer of this migrant labour was, and still is, the housing and office construction sector. This sector constitutes about 8.2% GDP or Rs. 670,778 crores (US$131 billion), at factor cost 2011-12. The sector is expected to reach $1.4 trillion by 2025. It works across 250 sub-sectors from sanitary-ware to steel, cement, tiles and so on with linkages across sectors.

It could contribute much more, given the near endless demand, and with government encouragement. The construction sector, albeit in a smaller economy, was booming in 2011-12, before the Modi government cracked down on black money.  But it seems to be powering on once more. With dynamic shares of the GDP for all sectors, $1.4 trillion probably represents about 15%, but how much of infrastructure is included in the figure?

A second factor for its relative stagnation was frequent shut downs caused by a ban on construction in this labour-intensive sector due to dust pollution concerns. This also affected the relentless infrastructure development, but to a lesser extent, as it is mainly government led, and it can’t be bullied as easily.

But the stop-start nature of this pollution monitoring intervention adversely affected the migrant labour population working on the housing and offices, and dependent mainly on daily wages.

Most manufacturing today, that accounts for 16% of the employment figures, is also heavily mechanised and uses fewer people. As more and more companies are diversifying their manufacturing away from China, India has been registering a growth in manufacturing and consequent employment. This often also involves the MSME sector as outside suppliers. It also means more foreign direct investment (FDI), and more foreign exchange reserves currently reckoned at $ 595 billion.

The government’s thrust on Aatmanirbhar in defence and other manufacturing has also resulted in new employment opportunities. There is a concerted effort to take up the contribution of the manufacturing sector, at 13.98% in 2021, and 17% in 2022, to 25% of GDP by 2030. The GDP itself should be in the region of $ 10 trillion by then.

This is contrasted with the $ 3.75 trillion GDP today, putting India as the 5^th largest major economy in the world. The per capita income of Indians, very low because of the gargantuan population, though doubled recently, is also expected nevertheless to double once again by 2030.

By then India will have become the third largest major economy in the world, any time after 2028.

At present the biggest share of GDP is represented by the service economy at over 50%, and this sector also employs 23% of the working population.  

If the goal is zero percent unemployment it can come only via an expansion off practically every sector of the economy. With the use of Artificial Intelligence (AI) it should be possible to capture statistics in real-time in due course, a lacuna that has plagued our planners, working, almost always with faulty data.

Education and Healthcare must play a stellar role in the quality of the workforce which must be properly skilled and energetic in order to deliver the correct level of productivity.

While more and more women are joining the workforce, including aviation and the military, this trend needs to grow exponentially, so that a good half of the population can contribute their energy and talent. This towards the national objective of becoming and staying a developed country, despite our massive numbers in population.

It is turning the population to advantage, as we go towards 1.70 billion people, before beginning to decline in numbers post 2050, that will determine our future destiny. The fact that we shall have a young population between the ages of 15 and 35 till then, puts us at a basic advantage to China, Japan and the West, who all have ageing populations, and in most cases, declining numbers due to negative birth rates.

It is true that the absolute unemployment figures are in excess of 20% now even as most statistics narrow down the field to obscure this stark fact.

But, with the kind of effort being put in to transform and create new infrastructure including dedicated freight corridors in the Railways, Vande Bharat and Bullet trains, many new and other expanded airports, waterways, highways, ports - not only will the logistic costs come down to half, at about 7%, under the government’s Gati Shakti programme, but exports will continue to grow exponentially, creating yet another dynamic employment head.

It was reported at 21.4% of GDP in 2021, according to the World Bank, which is already fairly impressive. It is expected to touch $1.6 trillion in fiscal 2022 before dipping in 2023 due to depressed foreign economies. India’s export basket is now fairly diversified and includes services and machinery apart from agricultural exports. That the export figure is over 40% of GDP is noteworthy.

In terms of the crucial 2024 general election, the considerable and persistent unemployment around the country made up of those seeking jobs actively and others just loitering around looking for trouble, will be used as a potent Opposition plank. But the growth of sectors in trillions of dollars and the upward trajectory in employment will help.

Unlike the holistic approach taken by the Modi government towards all-round development of the economy, the Leftist approach would quite happily sacrifice growth for votes and blatantly bribe the citizen.

Fortunately, the Opposition is far from united. It may have a weapon in current absolute unemployment numbers, which it attempts to assuage with   promises, mostly unkept, of cash doles.

The Modi government has been big on welfare of a productive nature, such as housing and housing loans, gas and water connections, toilets, free rations, rural roads and infrastructure, electricity, direct benefits via bank accounts and Aadhar.

So, sowing disaffection on unemployment is unlikely to be enough to carry the Opposition into power.

(1,796 words)

June 14^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Battered Indian Baby In The  Extended Custody Of German Child Care Must Be Pleasing To Major Trade Partner China

A seven-month old Gujarati baby, Ariha Shah, hurt accidentally, badly enough to need hospitalisation, was taken over by the German Youth Welfare Office or Jugendamt on September 23^rd 2021, and held on to ever since. The child had a head bump, and injuries in the perineal area.

The Jugendamt, established in 1924, during the Weimar Republic, still feels like the Nazi midnight knock.  It has a track record of being arbitrary and particularly strict with ethnic minorities and immigrant workers such as Turkish, Polish and, in this instance, Indian people. They have the power to seize children away from their parents at will, for a plethora of reasons, including the presumed inability of a poor parent to look after its child.

The Jugendamt, like some over enthusiastic traffic crane operator on the New Delhi streets, gets paid by the German government based on the number of children it seizes and places in foster care.

 The German attitude towards India two years ago was very different from what it is becoming now. It was exemplified by the prejudiced and negative reporting in major publications such as Der Spiegel and broadcast media such as DW.

It must be noted that Germany was, and is, China’s biggest trading partner in Europe, and whilst ties have loosened after the Covid pandemic, the retirement of former Chancellor Merkel, and the advent of the Ukraine War with Russia, they are still very significant. And Russia is increasingly seen by the US, the EU and NATO as part of an axis with China despite its long-held supplies of oil and gas to Germany.

Current Chancellor Scholz, at the head of the biggest economy in the EU, now gone into recession, and soon to be overtaken by India, was amongst the first to visit Beijing after Covid. He was followed by the head of the second biggest EU economy France, its leader Emmanuel Macron.  The trade dependencies are enormous, as are the hard to break value chains.

China is always pleased to see any kind of anti-India stance from its European counterparts, and the bad publicity it generates against India.

The German child welfare organisation described baby Ariha’s injuries as ‘horrific’ and in line with their understanding of child abuse.  They took the matter to court advocating the child not ever be returned to her parents and the case has been ongoing for 20 months since. However, it is likely to come to a decision this very month.

An additional allegation of child sexual abuse of the baby was investigated but dismissed by the German authorities. The police case against the parents was also closed in February 2022. But the case against the parents was only dropped, said the Germans, because it was impossible to prove if the child’s injuries had been inflicted by the parents, relatives, or other people.

That a certain amount of carelessness operated, seems more than evident, no matter how loudly the parents proclaim their concern now.

The child, now two years old, is still in custody of the Germans, despite repeated representations from the parents, Dhara and Bhavesh Shah, now back in Mumbai, India but still working in Germany on German visas. They have demonstrated outside the German Consulate in Mumbai, along with other supporters. They have recently approached Maharashtra Chief Minister Eknath Shinde for help. He, in turn has written to the EAM urging him to meet and listen to what the parents have to say.

In addition, India’s Embassy in Berlin and the MEA at the mundane official level of spokesperson Arindam Bagchi, have been urging the German authorities to return the baby to India, and even Indian foster-care if the parents are not deemed acceptable.

As many as 59 Indian parliamentarians from both the Lok Sabha and Rajya Sabha, from 19 political parties, including the CPM, have written to the German Ambassador in New Delhi. They are asking for the repatriation of the child to India as she is an Indian national who deserves to grow up in the Indian cultural milieu.  They have collectively expressed the fear that the child’s Indianness may be compromised over the prolonged stay under the German child care system. The German Ambassador in India, Philipp Ackerman, has not commented, citing privacy issues.

The Germans in turn have tried, and recently succeeded, in placing the child with Indian foster parents in Germany. Ariha Shah has recently been shifted from one foster care parent to a specialised foster care arrangement, they said. However, they have firmly suggested the child is better off in perpetuity under their foster care.

The matter was raised when German foreign minister Annalena Baerbock visited India in December 2022, but no action has been taken to disrupt the court handling of the affair.

A similar situation obtained in Norway not very long ago, but due to the good offices of then Opposition leader and later EAM Sushma Swaraj , two children, siblings, were eventually returned by the country’s child services organisation  after they were taken away from the parents on similar charges.

However, there is a marked change in the geopolitical scenario now that may affect this case.

In recent times, there have been several high-level visits between Berlin and New Delhi, including two Modi visits to Germany in 2022, and a visit to New Delhi by German Chancellor Olaf Scholz in February 2023. Scholz is expected to come again for the G20 Summit later this year.

The German defence minister Boris Pistorius is currently visiting his counterpart in New Delhi, following on from the visit of the US Defence Secretary.

The Germans, it is reported, are likely to collaborate in the building of Rs. 50,000 crores worth of submarines in India, and the Americans are about to finalise a joint venture to produce GE fighter engines in Bengaluru, India. The French have also made several offers of military manufacturing cooperation.

This trend, of the NATO countries coming to show solidarity with India in the face of the perceived Russian-Chinese axis, and threat to world peace, is likely to only grow in pace and momentum.

Prime Minister Narendra Modi is going on a State Visit to the US this month which is likely to provide a huge momentum to the relationship. The American establishment has been making a series of highly supportive statements on India lately, including one praising the robustness of Indian democracy. The European governments are likely to take their cue from this strong official support from the US government for India.

This is in sharp contrast to routine and intemperate criticism from some Left Liberal quarters, such as the Washington Post, The New York Times, The CNN, The BBC, The Economist, The Guardian, George Soros, various Islamist and Khalistani organisations et al. However, they are on the fringe, and the establishment is firmly with the Modi government.

The Ariha Shah affair may not  need to be officially dealt with at the upper reaches of the Indian and German governments, but it is likely to come to a satisfactory end in the near future nevertheless.

(1,175 words)

June 6^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

An Indian Economy That Is Surging Towards $7 trillion in GDP and 3^rd Position Globally By 2027 Posts 7.2% Growth In Fiscal 2022

The end of the coolest May in 36 years in India’s capital New Delhi, brought the bracing news from the National Statistical Office (NSO), on May 31^st, that the annual growth rate for the last fiscal is 7.2%.

This matters more when the inflation rate has slowed to an 18-month low of 4.7%. 

Contrast this with European economies and those in the Americas which are seeing double-digit inflation in some cases, and next to no growth or recession as in Germany, the biggest economy in the EU.

India is now, and has been for some time, the fastest growing major economy in the world, described by the World Bank, IMF and other multilateral lending agencies as a ‘bright spot’ in a sea of gloom. And, despite our low per capita income, spread over 1.42 billion people, we are still 3^rd largest already in purchase power parity (PPP) terms.

This 7.2% GDP growth is on the back of 6.1% growth achieved in the January to March quarter that ends financial year 2022-23.

Of course, this 7.2% closing for fiscal 2022 comes after a 9.1% growth in fiscal 2021-22, to remind us of what is not just possible, but likely in the years ahead. Particularly, as it saw a 13.1% growth in April-June 2022. But even if we stay at no more than a sedate 6 to 7 percent growth year on year in the decade ahead, we will still become the 3^rd richest major economy.

 India is currently at $3.3 trillion in GDP. The projection is to reach $ 5 trillion in 2025, delayed somewhat by Covid and the vagaries of the Russia-Ukraine War. And a figure of $ 7 trillion or more by 2027 when we would have overtaken both Germany and then Japan.

Our foreign currency reserves have stabilised close to $ 500 billion, even as we extend rupee trades and UPI digital trades with a number of nations. This is despite rupee weakness and its declining value against the US dollar.

The rupee is weak because the dollar is strong and we hold most of our reserves in US dollars. And because we run substantial trade deficits with most of our biggest trading partners, including America and China.

This current scenario is on account of improved numbers from agriculture, at a 5.5% expansion. There are increasing attempts and awareness of modernisation in methods, resulting in efficiency, better yields, superior storage and cold-chain facilities. There are still too many people employed in agriculture. This is giving way to sweeping mechanisation, more than ever before.

But the fact is, even with inefficient agriculture, low yields, bad storage conditions, massive wastage, we are food grain surplus enough to feed several other countries in need, as was seen during Covid. Our sugar, again in surplus, is being exported at a good price currently.

Manufacturing, which is featuring much more strongly on the economic map than heretofore, saw a 4.5% surge in the January-March 2023 quarter, compared to a minus 1.4% in 2021, and just 0.6% growth a year ago. It is expected to seize a full 5% points by 2030 from the expanded GDP pie. That is will employ many people in the process, is one of the reasons why it is being given high priority by the government also.

Mining, up at 4.3% in the final quarter of fiscal 2022 compares to 2.3% in the same quarter a year previous. It has revived on the back of fewer environmental restrictions.

The construction sector grew 10.4% in the fourth quarter, up from 4.9% in the corresponding quarter in fiscal 2021, coming out of the doldrums, despite the Modi government’s sustained attack on black money often associated with this sector.

The government should encourage this sector because it has the ability to absorb much of the rural migration to cities in search of work as well as contribute almost, if not more handsomely, to the GDP, than agriculture.  

The services sector such as trade, hotels, transport, communication surged to 9.1% in the fourth quarter, up from 5% a year before. People have shrugged off the pandemic and are moving themselves as well as goods and services. Tourism too has picked up as has railway and air travel in modernised facilities.

There is also some fiscal consolidation based on good revenue collections, and this has actually reduced the fiscal deficit in 2022. By 2025, the government expects the fiscal deficit to be no more than 4.5% of the enhanced GDP figures.

To paraphrase an oft quoted saying, you can’t keep a good economy down. This has relevance because many developed economies which prefer to look at India as a place to sell to, are nervous about opportunities going forward, particularly with increased aatmanirbharta and the price competitiveness India offers.

India is actively wooing the relocation of supply chains from China, and a big company, amongst the very biggest, Apple, has responded to an extent. Semiconductor manufacture may soon come to India. In a decade, India can become a significant exporter of military equipment as well.

Some analysts however are projecting lower numbers in 2023-24, lower than fiscal 2022 estimates of just 6.5%, citing global headwinds and lower exports.

The lack of enough capital expenditure from all except the top tier such as Tata, Reliance and Adani in the private sector, is also a projected drag on growth.

However, consumption has picked up quite sharply, and could blunt this pessimism. Again, there are those who think consumption is linked to higher wages, and may not go up as much as all that.

Government expenditure on infrastructure development is expected to continue soaring as it tries to unclog all logistical bottlenecks to reduce costs by as much as 5%. So, this development acts as a foundational force for the Indian economy, and is also being used to connect neglected parts of the country.

The infrastructure sector embracing coal, fertiliser, electricity showed 7.7% growth in Jan-March 2023 and should continue to boom based on demand.

Arch-rival China, which is now being accused of inflating its GDP numbers and other statistics, grew its economy by only 4.5% in the Jan-March 2023 quarter. China claims $ 18 trillion in GDP even now, but objective observers from outside peg it more realistically at between $ 7 to $ 9 trillion, not very much more than double or treble that of India. This, despite 30 years of tremendous growth from the 1980s in the Deng years.  But this was before the woes of a global slow-down, Covid, the war in Ukraine, its own belligerence resulting in global supply chains being altered. This has coincided with very low growth or recession in most of the West.

The lack of revenue and a massive accumulated external and internal debt of over $ 23 trillion has also stymied most of China’s belt and road projects abroad. However, as a totalitarian near dictatorship, many Western investors and analysts have confidence in the Chinese story, and its ability to deliver, over and above the tumultuous volatilities of a democracy such as India.

It is this perception based on years of a profitable relationship, that prejudices many Western analysts to ignore the considerable distance in supply-side reforms that India has travelled in the last nine years of the Modi administration. They continue to carp about underperformance against India’s potential, and rich equity valuations in the Indian stock market.

Some, like Ridham Desai, now MD at Morgan Stanley, point favourably to India’s policy reforms, particularly transformative infrastructure development, massive growth in broadband subscribers, digital transactions that now account for 76% of GDP, steady growth in GST collections, a competitive corporate tax structure.

However, takers for the India story are largely amongst the lending and rating agencies, Western countries and their politicians who think they can turn it to their advantage, and the denizens of the domestic market.

The domestic market is the primary driver for India and has the ability to take it to No.3 even without a significant export market, albeit slower.

There is also some scepticism about the possible strength of the Modi and BJP win in 2024, a consecutive third term. If there is less than a majority for Prime Minister Narendra Modi and the BJP on its own, it will seriously affect India’s progress in future. This particularly with a highly Socialist section amongst the influential opposition parties, wedded to a culture of populism and ‘freebies’. The BJP under Prime Minister Modi’s leadership would be weakened, and it would have to compromise a lot at the head of a ruling coalition.

Some other long time India backers, like Christopher Woods, currently Global Head of Equity Strategy at Jefferies, says India’s resilience, both in its real economy and its stock market, has been impressive. He also thinks the stock valuations have been matched by earnings growth now. And he says, investors have begun to sell China, implying that more investment will come to India.

Also, though Woods did not say this, the monetary tightening stance of the RBI, that took up interest rates nearly 300 bps, is now over. As interest rates start coming down after a holding period, it will set off another economic boom in the real economy and a bull run in the stock market.

There are others, ethnic Indians like Ruchir Sharma of Rockefeller Capital Management and Fareed Zakaria of CNN, both long term commentators and critics on the socio-politico-economic scene in India, that have turned unequivocally bullish.

The tide has turned. It is India’s time and so we can surely expect to be presented with a very different set of options within a decade. Today’s economic numbers are a harbinger of this.

(1,612 words)

June 1^st 2023

For: Firstpost/News18.com

Gautam Mukherjee