Are agents Of Foreign Influence Joining Hands With Domestic Dissidents To Effect An Undemocratic Unconstitutional Coup Without Benefit Of Ballot?

The immediate news is of the Dream Party government in Tbilisi, Georgia, a small country located in the Caucus, withdrawing a draconian, Russian style ‘Foreign Agents’ bill. This, in the face of two days of vigorous popular protest. But the back story is interesting.

In the Caucus, the tiny populated 3.7 million people of Georgia want to be part of the increasingly tattered, battered, economically pressured, but still desirable EU to some. These people do not want to fall into the Russian sphere of influence.

At least 80% of Georgians, we are told, want EU membership. At the same time 20% of Georgia, namely South Ossetia and Abkhazia that want to break away, in a manner similar to the Donbass region of Ukraine, are already Russian occupied, as of 2008.

Russia now recognises these territories as ‘independent states’ and has stationed its troops there. The ruling Dream Party in Tbilisi is accused of being pro-Russia, and has not imposed sanctions on it after the commencement of its military action in Ukraine. Some Georgians have reportedly gone over to Ukraine to fight alongside, even as official Georgia acts as an unrestricted conduit for Western goods into Russia.

The ruling Dream Party is egged on by its founder, Bidzina Ivanishvili, an eccentric billionaire, a kind of right-wing counterpart to George Soros, the diabolical Hungarian Jewish billionaire angel of the Left, acting as a thorn in the side of the Modi government in India, amongst other places. 

Georgia’s Ivanishvili made his fortune in Russia and makes no bones about wanting to ally more closely with it. In the Western propaganda war against Russian influence, the role of the ordinary, EU leaning Georgian is naturally being exaggerated and Ivanishvili and the Dream Party are being vilified.

Several if not many elected governments around the world are concerned about a neo-imperial bid to weaken and/or topple them. The attempt is to effect regime change by a combination of inimical foreign money power, local subversion, dissidence, propaganda, threats to sovereignty and unity of the republic.

People on the ground are encouraged to mass protest to attract the media, conduct acts of arson and destruction of public property, mount illegal blockades, engender and instigate communal riots, all in the absence of success at the ballot box. There is a lot of clandestine money being funnelled in to finance such activities.

This lack of ability to win votes too is not being owned up to. Instead, it is likened to the effects of fascism with compromised institutions of government, unfair elections, crackdown on freedom of expression, communal, caste, and tribal bias, wherever applicable, and a general action to weaken democracy and perpetuate the hold of those in power.

The Modi government is constantly painted in these lurid colours by elements of the Indian opposition and their cheer leaders abroad. Dependent on foreign funding as such opposition is, from those that want to install a weak government in its place. They are hoping that it will be them, installed with this foreign help.

This methodology is now clearly out in the open in long established and vigorously functioning democratic countries like Italy and India. Both have moved against such forces with laws that scrutinise foreign contributions and the purposes they are put to.

Russia has had quite a draconian law, in place since 2012, against foreign intervention in its affairs, now receiving much attention in the Western media in the context of the NATO/EU war of Russia via Ukraine. Every clause is being mulled over to illustrate the totalitarian bent of Putin’s government, that did not seem to bother the West till about a year ago.

Others too are facing problems with unelected people using subversive street politics that cause both law and order problems and undercut democratic processes.

Israel is facing intense protests because its current right-wing coalition government under Benyamin Netanyahu is in process, and determined to reform its judiciary. It wants to stymie a largely Leftist cabal of judges out to subvert and overturn initiatives of the legislature and the executive. The popular protests there include a bizarre siding with the Palestinians against the government of Israel, that has encouraged sectarian clashes between Arabs and Jews.

India has in fact tightened a  Foreign Contribution Regulation Act (FCRA) Law in place since 1976, several times over the years, and most recently twice, in 2020 and 2022. There have been curbs put on a think-tank cum NGO funded partially by George Soros and his affiliates recently.

But that is not all. In addition to Russia, India, Italy, and of course Red China, countries that have anti-foreign influence laws include Belarus, seen as a staunch Russian ally, Hungary, Algeria and Zimbabwe.

The Dream Party Of Georgia has indeed retreated from a  mirror version of the 2012 Russian Law. The protests, probably instigated by Western forces in Georgia, saw the withdrawal of the proposed law for the time being. Ostensibly, the worry is that Georgia would be debarred from joining the EU in future. This, even though its candidature was denied in favour of Moldova and the war-torn Ukraine. The latter was however denied the possibility of NATO membership in the face of intense Russian objections.

All Georgia got, in turn, was a ‘European perspective’ status from the EU instead of an actual and formal candidate status. Joining NATO is not on the table.

The Russian law demands, amongst a plethora of restrictive and punitive clauses, the production of financial reports by a given foreign funds receiver on a quarterly basis, it wants to know the composition of the management bodies of such NGOs on a semi-annual basis, and a state audit annually if not at any time.

But the broader question that arises is why such laws are being put in place or tightened with increasing frequency nowadays, in more and more countries. Democratic process relies primarily on the voter to elect its representatives and the opposition to highlight the shortcomings of the ruling dispensation in parliament. But recent tactics seem to be a throwback to 19^th century style attempts to  overthrow an elected government by other means, short of, but not always excluding bloody revolution.

This desperate stratagem appears to be a phenomenon of economic turmoil and distress roiling the world after the twin blows of the Covid pandemic and the damaging war in Ukraine.

Even attempts at pension reform in France have occasioned massive street protests.

In Afghanistan, Iran, parts of Africa, there are ruthless suppressions of women and their rights, that have also seen brave and often bloody protests. These appear to be morally right against the excesses of brutal state power. But there is little or no foreign intervention to set things right.  Their problem is not the West’s problem.

Pakistan is facing civil war-like tendencies in facing up to its bankruptcy. And while there is some concern because it is a nuclear weapons state, it is nevertheless being largely left to its own devices. International law applies where the West has a vested interest.

Foreign intervention therefore is seen as an economic tool designed to effect hegemony over countries that are not falling in line with the strategic designs of powerful external forces. Weak and biddable governments suit such forces, not strong ones with the backing of its people, nationalistic, patriotic, and often right-wing.

But in Europe, experiencing rampant inflation, food shortages and high prices, fuel prices that are forever climbing, grain shortages as the wheat from Ukraine is difficult to access, high unemployment, things are coming to a head.

However, it is not NATO and the EU that appears to be winning in Ukraine despite putting in massive military and financial resources. The ability of the world’s mightiest military machine to subdue Russia and effect regime change is faltering. This is giving the lie to its infallibility and moving the tectonic plates of the world order.

New multilateral power blocks are forming that have the potential to change the strategic assumptions of the West. In the past, the two world wars completely changed not only the maps of Europe, and elsewhere, but the economic standing of Europe.

It led to the eclipse of the European colonial powers and the rise of America as the main challenger to the countries of the Warsaw Pact, the Iron Curtain, and the USSR.

Today, the churn will see a greater emergence of India, a moderation of Chinese imperialism vis a vis the United States, as it is likely to lose control of its ‘One China Policy’ in Taiwan, despite all its sabre rattling.

This will also be done to wrest its attempted control of the East and South China Seas and the maritime passages through them. The threat to all the countries in the littoral and Australia is also not acceptable to the US.

There will be new, stronger ties with allies for Russia, in West Asia, Africa and of course India. This is already coming to pass.

So, the foreign contributions laws and their attempts at neo-imperialism are, at best, only the tip of the iceberg. Much as the West and those it has bought over may protest them, a counter movement has started by the states affected, that will be difficult to snuff out.

Playing Chess with the nations of the world, instead of fair negotiations will simply not work, not the least because it is an outdated notion.

 (1,564 words)

March 11^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

India May Be A Strategic Quad Partner But Has Had No American Ambassador For Over Two years

The American Embassy in New Delhi has been operating throughout the Biden Administration without benefit of an ambassador. This has, no doubt, affected the pace (read-negligible), at which strategic and military cooperation initiatives have been advancing. Despite statements from on-high in America that India is an important strategic ally of the United States, and a highly valued, even ‘indispensable’ QUAD partner, and the signing of several strategic agreements between the two countries, not much change has been wrought on the ground.

Secretary of State Anthony Blinken described the US-India partnership, as the ‘most consequential in the world’.

It is a glaring fact that Beijing, or indeed bankrupt Islamabad, does not go for long without an American ambassador in place, and yet, India is purportedly the important ally in the region being built up as a bulwark against Chinese hegemony. There are American ambassadors in place in Sri Lanka, Nepal and Bangladesh as well. It is only India that seems to be a victim of America’s currently dysfunctional political system.

Routine matters at the New Delhi American Embassy too are not exactly in the pink, such as the issuance of visas to Indians. The healthy bilateral trade, such as pharmaceutical exports from India, particularly since the Covid pandemic, seem to be running on auto-pilot, monitored, no doubt by the Charge d’affaires in place.

The shadows in the empty Roosevelt House, the ambassador’s residence in New Delhi, have recently been compounded by friendly American overtures to Islamabad. These include a $450 million deal to refurbish Pakistan’s F-16 fleet, and once again calling Pakistan a strategic Non-Nato ally. There have been motivated statements against the Indian position in Jammu & Kashmir, voiced by the American Ambassador and other American Congressmen from so-called ‘Azad Kashmir’ known as Pakistan occupied Kashmir (PoK) in India.

There have been little beyond supportive words with regard to Chinese belligerence along the long LaC. Meanwhile, the Chinese are relentlessly building up infrastructure and offensive military capacity in various hotspots of illegally occupied Indian, Bhutanese, and Nepalese territory. Where are the American sanctions now, so readily applied to Iran and Russia?

Perhaps much more than this cannot be properly expected to be put on track and advanced without an American ambassador in place. An ambassador can drive processes and initiatives between India and America to provide sorely needed content and meaning.

India cannot be blamed however, if it doubts American sincerity, given its frequent changes in policy based on pulls and tugs in its State Department and Pentagon’s Foggy Bottom. American perfidy and covert activity via the CIA is commonplace, as is its knack of either exploiting or letting down its allies.

Ironically, some observers have noted that India was graced with distinguished and influential American ambassadors, when it was certainly not a strategic partner of the US. Perhaps it was keen on weaning India away from the influence of the USSR at the time.

Is there then, a certain complacence on the part of America now. Does it think that India has nowhere to go. That it has to rely on America and the West, given its strained relationship with China. And the preoccupation of Russia with the Ukraine that is drawing Russia closer into the dragon’s embrace?

Still, it must be noted that Russia has delivered three out of the four S-400 systems ordered from them to India so far through the conflict and despite American pressure against the purchase in the first place. So, if America is writing off the Indian relationship with Russia in spite of its over 50% reliance on Russian military equipment, engineering, spares, collaboration - it may be in for a surprise. Russia, in fact, and the USSR before it, have been steadfast allies of India over the decades. But after the Russo-Ukraine War it is unlikely that there will be any love lost between Slavic Russia, America, and European NATO.

 The latest person acting as head of the mission in New Delhi, is a 74 year old career diplomat of 38 years standing. Charge d’affaires A. Elizabeth Jones, has been holding the fort since October 26^th, 2022. America has appointed six such interim envoys to New Delhi since former US ambassador Kenneth Juster’s departure in January 2021.  In the past, a new ambassador has usually taken up the position within six to seven months after the former ambassador departs.

Even American senators, embarrassed by this unusual situation, are calling this an insult to India, which India, on its part, has graciously chosen to ignore. Former Indian Foreign Secretary Kanwal Sibal has suggested the Garcetti may as well stay in Los Angeles as his appointment has lost ‘priority’. There is not a great deal of time left before the first term of the Biden Administration comes to an end in 2024. It typically takes any ambassador about six months in-country to get settled in, said Sibal.  

The 52 year-old American ambassador designate, Eric Garcetti, apparently a good friend and associate of President Joe Biden, was first nominated in July 2021. He is accused of ignoring sexual misconduct involving a senior political aide under his watch. Garcetti, on his part, has repeatedly denied the charge.

Nevertheless, various Republican and even Democratic Senators have objected to Garcetti’s appointment to what is considered a strategically important diplomatic post.

Garcetti is a former Mayor of Los Angeles, and has not been confirmed by the US Senate. You would think that President Biden would substitute the controversial candidate with another. But instead, the incumbent was reconfirmed as the Ambassador to India designate afresh in January 2023.

Senate Foreign Relations Committee Chairman Bob Menendez scheduled a vote on Garcetti’s nomination as recently as on February 28^th 2023. However, Republican Senator Mark Rubio, the vice chair of the Senate Select Committee on Intelligence, placed a hold on his nomination. The vote is now postponed to March 8^th.

If this inability to appoint an acceptable ambassador to India is partly because of India’s independent stance on the Russo-Ukranian War, it doesn’t explain the two-year-plus delay.

India’s business dealings with Russia, including the buying of almost all its crude oil from Russia, at a time when Russia is suffering heavy American and NATO country sanctions, can’t be palatable to Washington. However, the war is just over a year old, and Garcetti has been in limbo for over two.

Meanwhile, US visa processing from India can take upwards of a year and statements to speed things up from time to time have not, as yet, borne fruit. Contrast this with the just one week it takes to obtain a US visa from Bangkok.

So what has really worked for the relationship? It is summit diplomacy that has largely kept the Indo-American relationship on track. Visible warmth from the high officials of America. Prime Minister Modi is shortly to visit Washington on a state visit. Recent visits to India by the secretaries of state, defence and treasury, have all been most cordial. Perhaps this is the big difference. Other countries have ambassadors. India has close relations with the very top of the American power structure.  This is more or less undeniable. It does not afford  Red China much room to smirk.

(1,197 words)

March 6^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

 

The G20 Foreign Ministers’ Meeting And Prospects

The Foreign Ministers’ meeting at the G20 will commence on March 2^nd 2023 at New Delhi. We know that Secretary of State Anthony Blinken from the US, Foreign Minister Qin Gang of China, and Foreign Minister Sergei Lavrov of Russia are definitely coming.

All the Foreign Ministers of the G20 countries as well as those from special invited guests - Bangladesh, Egypt, Mauritius, Netherlands, Nigeria, Oman, Singapore, Spain and the UAE are also expected.

 Anthony Blinken will also participate in a scheduled QUAD Security Dialogue meeting as well as the 8th Raisina Dialogue meeting to be attended by many other countries including QUAD partner Australia represented by Foreign Minister Penny Wong.

In the latter, all four QUAD  foreign ministers are expected together  to address a panel for the first time. However, it is uncertain, even now, whether the Japanese Foreign Minister Yoshimasa Hayashi will attend the G20 and the QUAD meetings because the Japanese DIET is in session. Japanese deputy  Foreign Minister Shigeo Yamada is likely to be despatched in Hayashi’s place according to media reports.

What this suggests about Japanese enthusiasm for the India hosted G20 and QUAD meetings diplomatically, despite close relations between Prime Minister Narendra Modi and the late Prime Minister Shinzo Abe as well as present Japanese Prime Minister Fumio Kishida, is at present a bit of a mystery.

It also raises questions, should Hayashi not attend, on the momentum of Indo-Japanese military cooperation in the light of Chinese aggression. Japan has recently met with China for security discussions for the first time in four years. China is concerned about Japanese pacifist policy changes and an ongoing military build-up. Japan has earlier announced in December 2022 its decision to collaborate with a pair of European nations, for the first time, namely the UK and Italy, for the development of a new fighter jet to enter service in the Japanese Airforce by the mid 2030s, that will, amongst other things, use Artificial Intelligence.

The Russian Foreign Minister, the veteran Sergei Lavrov, will attend the Foreign Ministers’ Meet at the G20 in New Delhi. The production of T 90 tanks, Sukhoi 30 MKI fighter jets, AK-203 assault rifles and other weapon systems and collaborations with Russia are in full compliance with India’s ‘Make in India’ policy thrust. India’s extensive cooperation with Russia is ongoing on multipole fronts.

The Finance Ministers’ Meeting ended without a joint statement, making do with a ‘Chairman’s outcome statement’ as India is not willing to condemn or censure Russia for the Russo-Ukraine War, and the same thing is likely to happen at the end of the Foreign Ministers’ meeting on March 3^rd.

Chinese Foreign Minister Qin Gang will mark his first visit to India after taking over from long standing former foreign minister Wang Yi. Though bilateral business between the two countries, particularly by way of Indian imports from China, have grown substantially, other areas of cooperation are frozen because of the deadlock over the tensions on the LaC since 2020.

 China would like to compartmentalise the disagreements on the LaC despite the skirmishes that have broken out and the major troop deployments and infrastructure build up on both sides. India however has made it clear to former Foreign Minister Wang Yi that it cannot be business as usual till the LaC tensions are resolved.

However, both China and India have been neutral to supportive of Russia despite considerable Western pressure. China has taken the initiative, possibly underlining its position as the No. 2 power in the world.

It has recently advanced a peace proposal to end the war in Ukraine that has evinced interest in both Moscow and Kiev, (with  Volodymir Zelenskyy proposing to go to China to meet President Xi Jinping on the proposals), but not so far, in Washington.

America sees the Chinese peace proposal as tilted in favour of Russia, presumably the ceding of considerable Ukrainian territory to Russia, even as the war has entered its second year as of February 24^th 2023.

That the QUAD meeting will follow soon after the Foreign Ministers’ Meeting in New Delhi is probably another irritant from China’s point of view, but not enough for it to stay away. China’s full participation in the G20 Foreign Ministers’ Meeting is a very positive gesture for an increasingly multilateral world. It is also a desire on its part not to be isolated and viewed as an absolute ally of Russia in a new Cold War 2.0.

The Ukraine-Russian War, it is clear, will cast a shadow over the entire G20 Summit deliberations in India. In session after session under India’s chairmanship the matter will crop up, even as India will try to make progress on consensus areas. These include Climate and Clean Energy, reform of the multilateral lending agencies, greater responsiveness to the needs of the large number of countries in the so-called Global South. India has repeatedly indicated its willingness to mediate and assist in the resolving of the Russo-Ukranian War if called upon to do so.

The G20 members together represent some 85% of global GDP, over 75% of the global trade, and 66% of the world population. In theory, they should collectively be a force for change in the world and the elimination of conflicts. But if they stay a house divided that is not possible.

The member countries include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, The UK, and the USA. It is remarkable however that many countries outside the G20 and some within it, the developing world, have refused to take sides in the Russo-Ukranian War.

It is unlikely therefore whether India will permit the Ukranian Foreign Minister Dmitry Kueba to address the gathering via a video link. The West of course, could well be pushing for it.

There could increasingly be Western media commentary suggesting that the Indian Chairmanship of the G20 is failing because of its stance on Russia. Pressure has come with the recent visits of American Treasury Secretary Janet Yellen who went on to visit Kiev as well in the wake of the Biden visit, and German Chancellor Olaf Schultz who tried to shift India’s diplomatic stance in favour of the West as well.

However, there is a growing admiration and support for India’s principled neutrality from many of the countries not captured ideologically by the Western camp. They are more focussed on the strong likelihood of India attaining the status of the third largest major economy in the world by 2027-2028. This is within this decade itself, as Columbia Professor Arvind Panagariya recently put it.

For Foreign Minister Subramanyam Jaishankar and Prime Minister Narendra Modi, this G20 Chairmanship will be a tight-rope walk through which good relations will have to be maintained with both the West and Russia. This via a consensus-based approach with multiple countries, both in the G20 and beyond. Recent humanitarian work done in Turkey will go some distance in blunting criticism for ‘Hindu Nationalist India’ from Turkey and the OIC.

In an increasingly multipolar world, troubled by high oil prices, food shortages, inflation, low growth, high debt, it is important to proceed on the basis of common ground rather than harp on differences. This may not satisfy on all parameters, but would deliver pragmatic, workable outcomes. India’s endeavour during this Foreign Ministers’ Meeting and indeed throughout this year, will be focussed on such practicalities.

(1,235 words)

February 28^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Great Budget For Capital Expenditure And Railways, Not Bad For Direct Taxes

Finance Minister Nirmala Sitharaman began her speech by calling this budget the first one in Amritkaal. The reference, and indeed the implicit branding, is towards the next 25 years, during which India is expected to change for the better beyond recognition.  India will become an $20 trillion economy over the period, with a reasonable per capita income as well.

A symbol in a budget initiative illustrates the point. India is going to give a big thrust to the R&D for laboratory grown diamonds which are otherwise indistinguishable from natural diamonds, except for massive cost advantages. In fact, many customers are sold these laboratory made diamonds abroad at the full price of equivalently sized natural diamonds. At present heaps of them are willy-nilly imported for processing in India, before being largely reexported. So, to grow them ourselves, will be a great boon. This is one new initiative that certainly went down very well in Surat.

For long there has been a school of thought that called for a doing away with  the thicket of exemptions in direct taxes. Last year, in response to this, the government offered a dual option. The old scheme with its various tax savings schemes, and another, with a lower taxation rate but no exemptions.

Unfortunately, there were few takers for the new scheme, because one could pay less taxes by using the various exemptions in the old scheme. This year, presumably to revive the new scheme, the Finance Minister Nirmala Sitharaman has sweetened it. This has been done to reduce, if not do away with the beneficial arbitrage aspects of the old scheme versus the new. The detailed calculations will have to be done, but if the new scheme is the more attractive now, it kills two birds with one stone. There will be less complicated tax calculations involved in using the exemptions, and actually lower tax liabilities just by going in for the new scheme. This works as long as the tax rates are not raised again in subsequent years.

On the face of it, the salaried middle class is very pleased.  The Finance Minister even reduced the surcharge on the highest slab to attract more of the well-heeled users.

Likewise, the stock market, that went up steadily during the minister’s speech, and stayed up after it ended. It got nothing, but at least there were no nasty surprises.

Cigarettes taxes have gone up 16%, but taxes on apparel, somewhat inexplicably, have also gone up.

The first half hour of the Finance Minister’s speech was concerned with the poorest of the poor, with a flurry of incentives and outreach efforts. There is an effort to encourage women in the rural workforce to increase their social security. Digitisation in agriculture, crop improvement initiatives with public- private cooperation, were spoken of. Millet production and popularisation is to receive a thrust. Fisheries and animal husbandry were also favoured, alongside more schemes for tribal people, particularly the most backward and vulnerable amongst them. The government will promote greater R&D in agriculture. Mangroves and wet lands are to be nurtured. Storage facilities are to be greatly enhanced for agriculture. However, there was no mention of the Blue Water Economy.

There is a careful consideration of the green economy to reduce India’s carbon footprint, in context of its its problematic dependence on fuel imports. Alternative fertilizers will be promoted, 10,000 bio-input resource centres will be developed.

There was a special mention of R&D for the pharmaceutical sector also.

There will be more nursing colleges, as many as 157 new ones. Digital and physical libraries for children. Mechanical cleaning of sewers and desludging- an absolute requirement for any civilised country.

Hydrogen production as an alternative clean fuel got an allocation of Rs. 19,700 crores. This is not a large sum as yet, but this initiative has great potential in a country that imports 80% of its petroleum. Unlike the thrust for electric vehicles alongside, which leaves a problem of a mountain of very large, and hard to dispose of spent lithium batteries. Hydrogen as a fuel can be indigenously developed, the green version is actually not too expensive to produce, and it does not have any residual waste problems.

There are moves towards youth empowerment. It is mentioned as one of the seven leading principles of Amritkaal, called the Saptarishis. There will be projects in coding, Artificial Intelligence, Robotics, 3 D printing introduced.

There is to be enhanced health infrastructure, and a mission for the elimination of Sickle Cell Anaemia.

There is to be a revamped Teacher’s Training Programme.

The entire budget is seeded with new ideas, even as old initiatives like the earlier Yojanas are strengthened. However, mention of some critical areas such as major defence manufacturing were not spoken of at all.

The boldest step in Budget 2023 is the enhancement of the capital expenditure budget to Rs. 10 lakh crores from Rs. 7.5 lakh crore. This represents 3.3 % of GDP, and is aimed at a faster development of infrastructure. The Indian Railways will receive a separate Rs. 2.40 lakh crores which will not only help modernise and grow the railways with new tracks, but turn it into a net revenue earner for the government,. This railway budget is nine times higher than the outlay in 2013-14.

Both these commendable allocations should go a long way towards reducing Indian logistic costs, a bugbear for international competitiveness in a season when we are trying hard to attract foreign manufacturers to relocate from China. The aim is to reduce logistics costs from the present 14%, to 9%.

There was no mention of the PLI schemes either in the minister’s speech. An exciting idea, not much elaborated on, is the thrust towards manufacturing one product per district of the country, largely expected to give a boost to handicrafts production and local employment. We shall have to see how the implementation turns out. Data storage centres too were highlighted.

Identifying the PAN card  for more than a direct tax identification device may turn out interesting for the millions who actually do not have one, particularly in the rural tax-exempt areas.

Tourism in India is always on the anvil for boosting, and this budget was no exception. Whether the development of as many as 50 new sites will be done with enough panache to attract new domestic and foreign tourists, remains to be seen.

However, religious tourism into Varanasi has proved very successful. More people went to Kashi than they did to Goa over the last year. Therefore Ayodhya should be a block-buster once the Ram Temple is built along with all the spanking new infrastructure there all around the city.

For an election year budget, even the last one before the general elections next year, it maintained its business as usual sangfroid while pointing out that tax collections were up and the economy was doing well. It was, as if,  the Modi government does not need to go in for populism even though the cost of living has gone up significantly with all everyday household products up by between Rs. 10 and Rs. 20. Compared to the rest of the world this is not a lot, but its nothing to be happy about. It remains to be seen how these price rises will affect the voting in nine assembly elections this year for a start.

(1,222 words)

February 1^st, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Expectations From Union Budget 2023: The Great Leap Forward

As an annual accounting exercise for the nation, the Union Budget has been a fairly prosaic thing with incremental steps, underlined, almost always, by a constraint from the resources available. Even then, it is not as if, the occasional budget such as P Chidambaram’s ‘Dream Budget’ of 1997, with its emphasis on lower taxes and the Laffer Curve that expected lower taxes to furnish bigger yields, did not happen.

After 1991, and the era of liberalisation, the breaking away from the Licence-Permit Raj, it was in a way expected.

The last year’s budget for FY23 speeded things up considerably, when capital expenditure for infrastructure development was enhanced 24% to Rs. 7.5 trillion, more than double what it was in FY20. It will no doubt be enhanced to at least Rs. 10 trillion for FY24, which represents about 3% of GDP. This more so because this budget has been spent at a rate 63% greater in the first eight months of this fiscal up to November 2022, at Rs. 4.47 trillion. Infrastructure development is something of a hallmark of the BJP/NDA government.

 But now, as the nation reaches out to Amritkaal over the next 25 years, bolder steps and an even quicker pace are called for.

The nation must lay the groundwork for huge resource mobilisation, not just via sovereign borrowing, but massive private sector investment from home and abroad. This means the India story, with its huge domestic market and large work-force, must turn even more attractive. The paradigm shift called for is for this Amritkaal vision to drive the Union Budget, rather than a constant worry about deficits going out of control.

We may not meet the fiscal deficit target of 5-4.5% of GDP for a couple of years more, but if the extra money is spent in a worthwhile manner, this will not matter. Particularly since most development commitments are paid out in tranches over several years.

This could be the last full union budget to be presented by the incumbent Modi government. Next year, 2024, it is likely to be a vote-on-account to service the government’s liabilities, till a new government is sworn in. But, like 2019, the Modi government, in its confidence, may choose to submit a full budget in 2024 as well, with the proviso that large portions of it must be voted into effect after the new government takes charge.

As before in 2019, the new government too is likely to be a BJP/NDA government once more, giving them a consecutive three terms. The Opposition at present, disunited, disparate, under-funded, at loggerheads with the electorate, does not seem capable of mounting a serious challenge. This state of affairs must be calculated into budget 2023 and 2024.

For 2023 what should we expect? There may be some easing of direct taxation norms to please the salary earning middle class as the nation goes into 9 assembly elections before the general election in 2024. Likewise enhancements in rural spending to revive demand, and a slew of populist welfare measures to blunt the opposition tendency to offer freebies.

GST collections have been growing, and is expected to top Rs. 273 trillion in this fiscal against an earlier estimate of some Rs. 237 trillion. GDP too is growing at about 7% year-on-year and is expected to do so for a decade to come.

Any election year duo of budgets for 2023 and 2024, must work in the prospect of higher revenue collections and growth in GDP to deliver both immediate and longer-term benefits.

There may be some incentivisation of existing business and industry by way of tax reliefs, with a much greater incentive for expansion into new areas and greenfield joint ventures with foreign entities. This might be incremental and not really the bold moves called for.

With the government’s massive spending plans on infrastructure, defence, civic services, healthcare, education, and welfare, many are expecting the current account deficit to be let slip by 0.5%. Based on projected revenue and GDP growth, India can certainly afford it.

 Where should India enhance its budgets- certainly in defence manufacturing and procurement with an effort at keeping the money in country as much as possible. Accordingly, the amount set aside for domestic defence procurement in 2022 is 68% of the defence services capital acquisition budget of Rs. 1.24 lakh crore. To encourage private sector participation from the likes of L&T, Mahindra and Tata, certain dockyards and so forth, some 25% of the domestic procurement budget, or Rs. 21, 149 crore, has been earmarked for them.  Policy wise, these are good steps, but the sums involved are much too modest.

This defence acquisition budget of 1.24 lakh crores is itself all too paltry for our needs, both in terms of domestic capacity enhancement, and export ambitions. 68% may sound impressive as a domestic manufacture figure, but the pie is much too small, and then there is just a small amount going to the private sector. It is not incentive enough for domestic armaments manufacture to take off substantially as required. That is why it takes us so long to manufacture a single Tejas jet at HAL for example. It has near cottage industry capacity.

We have long been first or second in defence purchases in the world, fattening the purse of the Russians, French and Americans while being hamstrung for spare parts and ammunition. And indeed hard pressed to get them to stick to agreed prices, purchase, and post-purchase commitments.

Relatively, things have improved dramatically compared to a near non-acquisition for some quarter of a century, citing paucity of funds. This deeply compromised our national security and emboldened our enemies.

Today we have revamped ammunition production domestically and emergency purchased armaments to plug a lot of yawning gaps, but we still have a long way to go to develop a proper deterrent capacity.   

The fact that in the Republic Day parade 2023 the government chose to only display Made in India weaponry emphasised the change in our strategic thinking.

But the defence procurement budget should be more like Rs. 5 trillion with a 10% increase year-on-year. The percentages of domestic and foreign procurement may well be narrowed further as a consequence. Our latest commissioned submarine has a lot of India made parts. So does our aircraft carrier.

This is the only way we can create a formidable deterrent, and grow an export market in weapons to rival the vastly more expensive and sometimes not as innovative offers from the West and Russia. Our indigenous light combat helicopter and the recently commissioned Prachanda helicopters can operate with full weapon loads at 18,000 feet, unlike any of the imported helicopters even from the US.

Israel is a very useful joint venture partner and a fund of information on how to get the domestic armaments industry going as well. The 30 centres of excellence in various states that India has developed with Israel in the development of crops for semi-arid regions and advanced agricultural techniques, is a step already in the works.

No country that will be No.3 economically by 2028 can afford to be begging the big Western manufacturers for high technology weapons.

Next, we need a brand new, state-of-the-art and well-funded department of Research & Development, for defence- with much bigger budgets for DRDO, industry, manufacturing, construction, pharmaceuticals, agriculture, perhaps even a fresh ministry to look after it. DRDO now boldly says it can develop all sorts of engines for aircraft and ships. It has just supplied the propulsion system for the new Kalavari class submarine. A few years ago it was thought to be incapable. What is its future with political encouragement and lavish budgets?

This emphasis on R&D is essential as India aspires to become the new manufacturing hub of the world, as well as develop its own technology breakthroughs via its heavy industry, electronics, software and the world’s largest number of Unicorns and Start-ups. Artificial Intelligence, fighter, payload carrier and passenger drones, breakthroughs in alternative energy deployment, could all result in short order.

The pharmaceutical industry, expected to grow to $ 130 billion by 2030, particularly in generics, needs a major injection of funds and incentives to truly emerge as an unchallenged pharmacy to the world. This, with a wide range of life savings, drugs, medicines and vaccines. Our internal checks and balances and quality standard maintaining procedures must be made fool -proof if we are going to take on the global pharma industry- and avoid black marks such as the recent cough mixture controversies.

What is already being done to modernise and develop infrastructure, roads, ports, tunnels, dams must continue at a fast pace. The Indian Railways is being made financially viable and changed beyond recognition from its 19^th and 20^th century versions. The multiplying city Metro systems are renewing travel in logjammed cities. The long sea bridges, near sea coast transport including RO-RO ships, riverine transport at a fraction of the cost, all this must continue surging ahead, and not suffer any paucity of funds. This is the big push to reduce logistic costs from a high of 14% to less than 9%. It sets up a virtuous cycle for industry and attracts more and more foreign investment. The government seems well seized of this.

The commendable launch of an indigenous 5G system and burgeoning digitisation must continue apace. This is conjunct on India’s space programme because it will be satellites that will now connect the remotest parts of the country rather than terrestrial towers alone. The Spacex satellite system that has provided Ukraine its communications during this war are a great illustrator of what is possible. Of course, with India’s sheer numbers, unit costs soon become manageable and commercially viable.

 The new Indian operating system to rival Android and the IOS platforms is an exciting development and must be backed with sufficient funds. It is said to be superior to IOS and Android but that needs to be proved on the ground as soon as possible.

The various PLI schemes expected to attract investment of Rs. 4 lakh crores must be vastly enhanced. Since its introduction in 2020 it has done much to galvanise 14 sectors of industry it applies to. India put out Rs. 2.5 trillion, which, in turn, is expected to add almost one percentage point to GDP per annum, and create 4 million plus new jobs. But the window of opportunity will not stay open for long. China is weak now. We should increase the PLI scheme to Rs. 5 trillion as well. It could attract as much as Rs. 10 lakh crores in investment at this time. We would be flattening the uneven field to compete with rivals trying to attract the China manufacturing ‘refugees’ at this time.

India will want to encourage more and more foreign entities to set up manufacturing here, not only for the exciting semi-conductor industry, but for every other company in any field that wants to relocate from China or elsewhere. This surge of manufacturing activity will grow our export markets exponentially, strengthen our currency to a desirable stability, and provide millions of new jobs backed by a much improved logistics infrastructure.

Budget 2023 must lay strong foundations and glide paths for Amritkaal even as it looks and feels like an election year budget.

(1876 words)

January 26^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Pharmaceutical Giant Pfizer Was Surprised By Indian Audacity At Refusing Indemnity To Its Expensive But Inferior Covid Vaccines

Red China is in the throes of an impossible Covid situation, persisting in 2023, as the Chinese New Year is being celebrated. It is an unstoppable movement of millions to meet with family, and go on holiday, mostly to Thailand, where Chinese are being let in with minimal restrictions.

Complete lockdown of entire cities, ruinous economically, have not prevented the infection of most of the population, with Covid variants. And deaths in their millions. The problem, even three years after it all began, is a flawed and ineffective Chinese-made vaccine, and a vaccination policy that concentrated on China’s armed forces and the young. Coverage was low, sporadic, never in excess of 30% of the population. The Chinese vaccine, exported to island idyll The Seychelles, where the Chinese have garnered influence, resulted in almost the entire population being infected.

India’s example in contrast, is nothing short of a golden beacon for friend and foe alike.

But recent remembrances were catalysed by the ongoing conference at Davos, with the Pfizer CEO refusing to answer questions on its lousy vaccine, as well as a tweet from Indian Union Minister of State for Skill Development and Entrepreneurship, Rajeev Chandrashekhar. The latter pointed at a thick-skinned trio of misinformation peddlers. They are vociferous Congress cheerleaders, including crafty senior lawyer Chidambaram, still facing various criminal cases, the vacuous Rahul Gandhi, also out on bail on financial irregularity cases, along with his mother Sonia Gandhi, and no-holds-barred amplifier cum His Master’s Voice, the impractical and Leftist Jayaram Ramesh.

All three bayed loudly for the importation of unproven Western foreign vaccines at the height of the pandemic, and cast doubt on the effectiveness of Indian vaccines being manufactured and disseminated at the time.

Pfizer, now much criticised globally, initially claimed more than 80% efficacy for its vaccine, quite fraudulently, just to boost sales. But it knew the truth internally, and therefore asked for indemnity against the vaccine’s ineffectiveness from India, which fortunately was not granted.

Later, on examination it was found, that the Pfizer vaccine had only 12% efficacy, and did not prevent transmission. Millions around the world were cheated and bodily harmed. In India, those who think ‘West is Best’ used Pfizer vaccines too, paying through their nose for vaccines that did not work.

The Indian fifth column, true to form, wanted to do everything in their power to derail the Indian response to the pandemic. Their prime agenda was to discredit the Modi government by hook or by crook. India’s home-grown vaccine, Covaxin, had 77% efficacy, and was provided to most people completely free-of-charge.

In addition, millions of doses were donated to other countries abroad and exported to the West. The Astra Zeneca vaccine, Covishield, also provided free to many, made under licence in India, had similar levels of effectiveness. Boris Johnson, then prime minister of the UK, was administered Covishield from India, and made a complete recovery.

India vaccinated over a billion of its own people using made-in-India Covid vaccines, and created herd immunity amongst a massive population of 1.4 billion. This is serving us in good stead today.

For an emerging economy born out of centuries of colonial domination by the British, followed by a spiteful British instigated partition that killed more than half a million people, displacing and beggaring millions more - getting a raw deal has become routine, almost as if it is fated.

Initially, it was expected, because of our hopelessly anglophile leadership, but persisted for decades after independence, because of continued Indian post-colonial attitudes of servitude and lack of confidence.

In fairly recent times also, unequal treaties have been the bane of a weak and politically fragmented coalition government in India. The most humiliating in recent memory, was the hard fought for but blighted nuclear power deal. Prime Minister Manmohan Singh, ever the installed puppet, made a success of the nuclear power deal, with the out-of-the-way help provided by the Republican US President George W Bush. But the blockers who hate India making progress found another way. They asked for an indemnity against liability for any nuclear accidents for the reactors the American supplied. The French followed suit. This bogged it down, and the only nuclear reactors commisioned at Kudankulam I and now 2, are those supplied by old reliable Russia.  They are also India’s biggest reactors. India and Russia are planning to go ahead with Kudankulam 3 and 4 as well.

Of course, the American NGO universe riled up the locals to delay both reactors commissioned in 2013 and 2016 by several years. They had done likewise to retard the progress of the Narbada Dam that has fed water to large dry areas, by quite a few years too.

The fact that emerging economy India is now a middle-income economy at No.5 in GDP in the world amongst major economies, is leading to a lot of discomfort not just amongst enemy countries like China and Pakistan, but the G-7 countries of the West too. Combined with a markedly nationalist tone in the conduct of trade, foreign affairs, and defence today, it is giving the erstwhile colonial powers the jitters.

We have vastly increased our petroleum imports from Russia, fighting its war with the West, NATO, EU and Ukraine. This independent line taken that has greatly suited Indian interests is infuriating to the West. It realises that as long as the Hindu nationalist government succeeds in retaining the confidence of the Indian people, they cannot dominate our policies to suit themselves. As a consequence, the latest salvo is aimed directly at Prime Minister Narendra Modi by the UK government owned BBC. The national broadcaster has used discredited and unproven innuendo to paint Modi as a communalist, responsible for the Godhra Riots of 2002. The purpose of dredging up the topic from twenty years ago is to influence the forthcoming assembly elections of 2023, and the general elections of 2024, against the BJP.

The reaction on the ground to BBC’s scurrilous propaganda has been sharp and prompt, and is likely to consolidate the BJP vote further. Further efforts of this order from the West bent on maligning and taming the present government in India cannot be ruled out.

However, at the same time, it is being recognised by the World Bank, the IMF and others, that India will become the No.3 economy by 2028, if the BJP wins another majority in 2024. So, the West, led by America, is keen on ostensibly allying with India, particularly in the QUAD, AUKUS, G-20 and other fora, both to contain China, and recognise the inevitable rise of a power whose time has come. Other alliances such as the I2U2 are also full of promise.

Middling powers such as Britain, burning with post-colonial envy, is setting about it all wrong if it wants to sign an FTA with India in the near future. Not only does India have options, it is quite willing to exercise them to its benefit.

Making up lies about India may be all that countries like China, Pakistan, Turkey, and indeed their fifth column supporters in-country are left with. But such shenanigans will neither unseat a highly popular government, nor provide any succour in the coming general elections. The visible progress that India is making on multiple fronts is a matter of pride for its citizens, and the Opposition are looking more and more like dangerous anti-national dissidents. Dissidents being aided and abetted by those forces who don’t want to see India grow and prosper. It is a back-handed compliment that we could well do without.

(1,255 words)

January 20^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee

 

Prime Minister Narendra Modi Is India’s Deng Xiaoping And Has Been Thus Inspired From The 1980s

Prime Minister Narendra Modi has been Chief Minister in Gujarat from soon after the dawn of the millennium in 2001. He was installed in the hot seat by the BJP party leadership including Prime Minister AB Vajpayee and Home Minister LK Advani, after a spell of some years in New Delhi as an assistant, an RSS Pracharak, and sometimes, an arresting TV commentator.

Of course, Narendra Modi has been an RSS Pracharak, winding his way through the dusty roads of Gujarat, and even in many places abroad, while on tour with his modest jhola, since before the Emergency, and at least the 1980s.

His ideas on development formed in those early years when not in power. He was not just spiritually inspired by Swami Vivekananda and others, but often wondered why a country with the calibre of its great men through the ages and recent times was not progressing as much as might have been hoped. Speeches he made in the eighties at RSS gatherings, that have survived, have made this clear.

In Gujarat, he was at the helm for fifteen years continuously, leading a majority BJP government.  During these years, he pulled close ideologically to the Deng Xiaoping model of development, its immense talent at manufacturing in China, which he sought to replicate in Gujarat. He was also drawn to the discipline and aesthetics of Japan. He met his friend and like-minded leader Shinzo Abe, during these years at the helm in Gujarat. There were regular Gujarat based development jamborees to which many foreign entities came.

Of course, some of his efforts were stymied and marred because he was perceived as a major threat by the UPA government.  Chief Minister Modi and his Home Minister Amit Shah were constantly put under pressure by the Centre, branded as Hindu communalists, and everything possible was done to tarnish their reputation. This even stretched to requesting foreign governments, including the US, to not even grant Modi a visit visa!

Modi’s innings in Gujarat did get off to a stormy start with the infamous Godhra riots in Ahmedabad in 2002. However, the people of Gujarat stood by his leadership, as they still do as prime minister, and gave him an uninterrupted three terms. Modi transformed Gujarat, his home state, into one of the most prosperous and developed states of the Indian Union in this time. There were no more communal riots in Gujarat after Godhra at all, and they have not returned even after Modi personally moved to New Delhi as prime minister in 2014, with Amit Shah in tow.

Modi’s imprint on the administration of Gujarat was so deep, and his continued nurture of the state so attentive, that the BJP has retained the state without interruption in the eight years since, winning yet another five-year term recently.

Today, Prime Minister Narendra Modi’s great emphasis on modernisation and infrastructural development continues at great speed. He seems singularly determined to transform India into a developed state, certainly in the top three of all major economies, but also into a major pilar of a multipolar world that is emerging in geopolitics.

Deng Xiaoping could only come back into contention after the end of the Mao Zedong era, and used 30 years of double-digit growth and exports to the US and the West to propel China into the No.2 slot. That Xi Jinping, now in his third-term in power, is increasingly trying to bring back the Mao era, replete with disastrous economic notions and hard imperialistic tendencies, does not bode well for the CCP, and the future of China under its leadership. It could even bring Communism in China down before very long.

This current state of affairs in China, including the resentments worldwide caused by the Covid pandemic perceived to have originated in, and still perpetuated by China, is seen as an economic opportunity by Modi’s India.

The BJP has always sought to steer a path between Socialism embraced by the earlier dispensation, and Capitalism, as in the private sector. A Welfare Statism, aimed at the bottom of the pyramid, has been in place in the Central Government, but alongside huge expenditure on infrastructure, to encourage entrepreneurship and manufacturing.

Now, the time has finally come to see manufacturing growing to claim more than 30 per cent of the economy, or more, up from about 25% now. This is expected to manifest via multiple fields, including electronics, automobiles, the digital revolution, space, the blue economy, alternative energy, defence manufacturing, semiconductors. A page, if you like, out of the Gujarat development book, that saw a higher growth rate for over a decade than the national average, with greater productivity, and indeed that of Deng Xiaoping’s keep your head down but work hard economics.  

As a democracy, introducing the GST regime, the bankruptcy law, demonetisation to reduce the influence of the cash economy, widespread digitisation of the financial and credit systems, amongst other initiatives such as the administration of the richest cricket club in the world- the BCCI, and even the ICC for a spell, have also contributed immensely.

Privatisation has been a bumpy road so far, though unloading Air India to an eager Tata has been a stellar accomplishment, because the government just ran it into the ground with ongoing and massive losses.

Modi had no occasion to try privatisation in Gujarat. It is, overall, much simpler to run one’s home state. At the Centre, to find buyers willing to pay fair value for badly-managed government assets is problematic, both politically and economically. Asset strippers are readily available, but not nurturing entrepreneurs, willing to take on largely unproductive government employees, and superannuated assets, besides the land and buildings.

However, the three Gujarati stalwarts, Ambani, Adani, and Tata, have been of the greatest assistance in moving into high investment infrastructure areas such as ports, airports, power, as well as in acquiring struggling businesses. Others, such as L&T, Mahindra, and Tata again, are now prominent in defence manufacturing too.

While India is broadly in favour of globalisation and free trade, the Modi government has placed national self-interest stage centre in the mix. It wants reciprocity and mutual advantage, or it tends to lean towards aatmanirbharta.

In a sense, both the tendencies of the RSS/BJP economic thought that favour globalisation on the one hand, and protectionism on the other, are being served via the prism of national self-interest.

Other thorns such as the failure of the Farm Laws in the face of stout opposition from vested interests; when to go in for genetically modified seeds for bumper crops at a cost; labour reform, and land acquisition difficulties, keep Modi’s India shackled to its feudal/socialist past to a significant degree. And this despite two majority governments at the Centre, that might become three in 2024.  

In reaction, the Opposition becomes more rigid in its cling to obsolete socialist dogma, but mainly because it does not want to be obliterated altogether.

All in all, a 7% odd growth in nominal GDP rates year-on-year, expected for the next ten at least, suggests the mixture of policies adopted by the BJP government with no hard-line ideological moorings works quite well. It is not only the fastest rate of growth in any major economy in the world, but is proving consistent in the post Covid scenario.

Modi’s own instincts to take over the world’s manufacturing and supply chains from China, including the raw materials and components, have to work alongside our democracy and historical baggage. However, India is not threatening in the perception of foreign investors. It is stable, and has the largest intelligent and young work-force in the world. Most understand the global lingua franca English, and can be readily skilled.  

Circumstances and contours are different from when China was inducted into the Western geopolitical matrix in the 1970s. Mao Zedong and Nixon may have agreed to cooperate, partially to bring the Soviet Union down, but it was Deng Xiaoping, domestically exiled under Mao, who could bring the promise to flower and fruit.

Likewise, a man of destiny in the shape and form of Prime Minister Narendra Modi is not only making a reality of his early vision, but opening the gates wide to the Amritkaal he often speaks of, this time, for the country.  

(1,372 words)

January 10^th, 2023

For: Firstpost/News18.com

Gautam Mukherjee