Sanjaya Baru en Fri Mar 19 13:44:24 IST 2021 tough-for-singapore-to-balance-its-relationship-with-china-india-sanjaya-baru <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>It was just as well that Arvind Kejriwal was ticked off for his Singapore sling. Attempts to offer post-facto justification for his baseless remarks about a Singapore variant of Covid and a call for suspension of Singapore Airlines flights were totally out of line. Important public functionaries in the Union and state governments must learn to educate themselves about the foreign policy implications of their casual political statements before holding forth.</p> <p>&nbsp;</p> <p>Whatever Singapore’s faults as a defender of free speech, and the island republic has that problem, and the appropriateness of the high commissioner’s remarks about invoking a Singaporean law in response to Kejriwal’s remarks, the fact is that the Delhi CM made inappropriate remarks and was rightly rapped on the knuckles by the External Affairs Minister S. Jaishankar.</p> <p>&nbsp;</p> <p>In 1992, prime ministers P.V. Narasimha Rao and Goh Chok Tong launched a strategic partnership between the two nations that has since made Singapore the fulcrum of India’s policy towards south-east Asia and the Indo-Pacific. The city state has become a preferred destination for millions of Indian tourists, students and professionals. Even though China is Singapore’s most important trade and economic partner, India has emerged as a major security partner for Singapore. Balancing its relationship with China and India has been a tough diplomatic act for the island republic. However, in recent years, this relationship is being tested by a variety of factors including the increasingly tense China-India relationship, India’s uncertain approach to regional economic integration and Singapore’s disappointments in its business and economic relationship with India, made worse by the turn of events in Andhra Pradesh’s capital city project.</p> <p>&nbsp;</p> <p>An important backdrop to the Kejriwal kerfuffle is the issue of race relations in Singapore and communal tensions in India that political leaders in both countries must handle with care. Two developments over the past decade have created problems for the bilateral relationship. First, the growing profile of mainland China across the region and the consequent assertion of a pan-Asian Chinese nationalism; second, the communal politics of Islamic, Hindu and Buddhist extremist groups across the Indo-Pacific. Singapore has had to deal with the increasing assertion of both Chinese and Islamic elements at home and it has, so far, managed this well.</p> <p>&nbsp;</p> <p>While Singapore’s leadership has always been mindful of racial differences and tensions at home, and has for long pursued a range of social policies aimed at ensuring social cohesion, India is increasingly viewed in the region as a country with similar challenges, but one that is not doing enough to address them. On top of this, China-India geopolitical tensions are generating social discord between people of Indian and Chinese origin in the Indo-China region, as a whole, and in Singapore, in particular.</p> <p>&nbsp;</p> <p>Indian leadership must remain acutely conscious of the racial, religious and ethnic composition of its south-east Asian neighbourhood and manage its relations with the region with care. After all, before the region came to be called ‘south-east Asia’, it was referred to as Indo-China. The Indo-China region ran all the way through Myanmar, Laos, Cambodia, Thailand, Malaysia, Vietnam, Singapore and even Indonesia, because it was culturally shaped by the two great civilisations of China and India.</p> <p>&nbsp;</p> <p>Indian leaders and strategic analysts must appreciate that China’s rise and China-India tensions have cast a long shadow across the region. Even as the two Asian giants are engaged in a new ‘great game’ for influence, resources, markets and more across Asia, India’s image in the region has been dented over the past seven years.</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu May 27 15:38:31 IST 2021 sanjaya-baru-says-indias-assiduously-built-brand-equity-has-depleted <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>Over the past decade, India’s brand equity, assiduously built over the previous quarter century, has depleted. Several factors contributed to the waxing of Brand India in the two decades since 1991 and an equal number of them have contributed to its subsequent waning. Three prime ministers—P.V. Narasimha Rao, Atal Bihari Vajpayee and Manmohan Singh—were associated with building India’s brand as an emerging economy and rising power. While a weakening of the brand began in the last couple of years of the second Manmohan Singh government, there has been a precipitous decline under Prime Minister Narendra Modi.</p> <p>&nbsp;</p> <p>What then were the factors that built Brand India and what have contributed to its depletion?</p> <p>&nbsp;</p> <p>Till the 1980s, India was seen as part of a laggard south Asia that was being left behind by the impressive economic growth process under way in east Asia. The 1990s changed that. India’s improved economic performance after 1991, especially within a policy framework defined by liberalisation and the freer play of market forces, made the world sit up and view India as part of the ‘Asian miracle’. Even sceptical east Asians began to acknowledge that India was learning and was likely to catch up. As a consequence, doors opened to the east, and India became an active member of what came to be called the Indo-Pacific.</p> <p>&nbsp;</p> <p>A second factor powering Brand India was the emergence of the knowledge economy based on information technology and biotechnology. India’s contribution to the emergence of the software and data processing industry established it as a knowledge power in the new economy. India’s successful integration into world trade—thanks to membership of the World Trade Organization—with India’s share of world trade rising from 0.5 per cent in the 1980s to close to 2 per cent by the 2010s also shaped global perceptions about India. As doors opened to the west, Indians found themselves increasingly welcome in the United States, cementing that relationship.</p> <p>&nbsp;</p> <p>A third factor that helped promote Brand India was the emergence of India as a nuclear weapons power that had left its traditional rival Pakistan behind and was catching up with China as an Indo-Pacific power. The Rising India narrative was built on this foundation.</p> <p>&nbsp;</p> <p>Finally, and most importantly, India’s global stature was enhanced by the fact that its economic rise was seen as the success of a plural, secular and liberal democracy in a developing economy, offering a counter to China’s experience of economic rise as an authoritarian state. US presidents George Bush and Barack Obama said as much, defending their approach to India between 2000-2012.</p> <p>&nbsp;</p> <p>Over the last seven years, each of these aspects of India’s rise in the post-Cold War era has come to be questioned and challenged. Asia to India’s east is as wary of this ‘New India’ of Narendra Modi and Amit Shah as are the trans-Atlantic powers. Their combined desire to keep rising China under check has continued to help keep many doors around the world still open to an India that increasingly disappoints them. We owe President Xi Jinping a big ‘Thank You’ for this.</p> <p>&nbsp;</p> <p>Just as India’s emergence as an IT and software power burnished its global brand at the turn of the century, its nascent emergence as the ‘pharmacy of the world’, with the promise of affordable medicine, began to contribute to Brand India, until the incompetent handling of the Covid-19 pandemic unravelled the India story. The combination of ideological intolerance and administrative incompetence has depleted Brand India at home and overseas.</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu May 13 15:20:27 IST 2021 defining-india-power-elite-is-a-tough-task-sanjaya-baru <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>Few among the power elite in India seem willing to be classified as such. It seems a very Indian thing, this faux humility. The upper castes claim they no longer are the privileged. Business elites complain that politicians and bureaucrats have more power. Politicians lament that they are beholden to vote banks and money bags. Bureaucrats say they have always been only civil servants. All this adds to the additional complication that in India there are multiple hierarchies of power defined by class, caste, language, culture and so on. So, who are the power elite?</p> <p>&nbsp;</p> <p>An amusing reaction to my new book, India’s Power Elite: Class, Caste and a Cultural Revolution, has been a universal denial of their elite status and their elitism by the powerful. The IAS will tell you that they are no longer the elite corps they once were and that colleagues in the police and revenue services now rule the bureaucratic roost. Business leaders draw attention to tax raids and regulations to point fingers at politicians as the really powerful. Either money no longer fetches power or far too much of it is demanded in exchange for too little patronage. Military officers argue that they have been excessively subordinated to civilian control. Celebrities in the world of media, academia and even entertainment question my arguments about their power, drawing attention to the many attacks on their freedom by politicians in power. Even a powerful prime minister complains that government officials have become roadblocks and bottlenecks in governance. So, who are India’s power elite?</p> <p>&nbsp;</p> <p>When American sociologist C. Wright Mills wrote his classic study on The Power Elite (1956) in the United States, he had no problem identifying who controlled the levers of power in ‘post-war’ America. Business barons, military leaders, wealthy and influential celebrities and well-heeled politicians were Mills’s power elite. “The power elite is composed of men whose positions enable them to transcend the ordinary environments of ordinary men and women; they are in positions to make decisions having major consequences,” wrote Mills. “They are in command of the major hierarchies and organizations of modern society. They rule the big corporations. They run the machinery of the state and claim its prerogatives. They direct the military establishment. They occupy the strategic command posts of the social structure, in which are now centred the effective means of the power and the wealth and the celebrity status which they enjoy.”</p> <p>&nbsp;</p> <p>Inspired by Mills’s classic, I tried to define the Indian power elite and soon came up against the complexity of our society. Apart from the obvious additional dimension added by caste, the Indian reality presents a matrix of cross-cutting hierarchies that few sociologists have been able to clearly delineate in terms of their power. The socialist leader and political guru of the so-called “other backward classes”, Ram Manohar Lohia, offered a simple definition of who constitutes India’s power elite by identifying three features—upper caste status, inherited wealth and command over the English language.</p> <p>&nbsp;</p> <p>This simple definition, offered in the 1960s, has been challenged by the social, economic, political and what I define as cultural change over the past half century. Middle castes have acquired as much, if not more, political power as the upper castes; power has yielded wealth for the newly rich; and, English language is no longer such an important social differentiator. Change is afoot and my book tries to capture this change. Interestingly, many from the ‘old elite’ have called to concede the decline in their social standing, but many among the ‘new elite’ are irritated about being so identified.</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu Apr 15 15:41:45 IST 2021 bangladesh-is-looking-east-and-succeeding-says-sanjaya-baru <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>Bangladesh entered the fiftieth year of its liberation and creation registering the highest rates of national income growth among all south Asian economies. For a country that was regarded as the region’s basket case at its birth, Bangladesh has travelled a great distance. On the United Nation’s Human Development Index (HDI) Bangladesh is ranked 133 in 2020, just two steps behind India, and 20 steps ahead of Pakistan. This impressive performance is not statistical.</p> <p>&nbsp;</p> <p>Over the half century of a troubled existence, Bangladesh has managed to industrialise and invest in its human capabilities. Western multinationals, seeking to relocate out of China as they reconfigure their global supply chains, are increasingly looking at Bangladesh as a hospitable host country. An important factor that has shaped Bangladesh’s post-liberation developmental journey has been its own “Look East” and “Act East” policy. With this the south Asian nation is increasingly behaving like a south-east Asian one.</p> <p>&nbsp;</p> <p>Japan’s former prime minister Junichiro Koizumi once famously described India as being at the centre of a vast continent with a very different Asia on either side. To India’s west is a politically unstable Asia, remarked Koizumi, to India’s east is an ‘increasingly prosperous’ Asia. In which direction is India headed? That seemed to be Koizumi’s implied question.</p> <p>&nbsp;</p> <p>Bangladesh has so far addressed that question quite convincingly. It seeks inspiration from its south-east Asian neighbours, establishing beneficial economic links with China and the Association of South-east Asian Nations (ASEAN). It is also increasingly receptive to Indian and Pakistani investors. Indian investments have been steadily rising, in part to take advantage of Bangladesh’s export quotas and in part because of a more hospitable business environment.</p> <p>&nbsp;</p> <p>As a member of the regional grouping BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), Bangladesh was viewed as a likely bridge between south and south-east Asia, but it is a bridge that looks more longingly to its east. I would not be surprised if at some point Bangladesh seeks closer engagement with ASEAN, even membership, given the slow demise of the South Asian Association for Regional Cooperation (SAARC), an organisation that was in fact a Bangladeshi brainchild.</p> <p>&nbsp;</p> <p>The challenge to Bangladesh’s steady rise comes largely from homegrown religious radicalism, partly stoked by external inspiration and support. The recent military coup in Myanmar and the enduring presence of the military in Thailand should act as reminders to Bangladesh’s democratic forces that a retreat from hard won democratic freedoms is an ever-present possibility. Prime Minister Sheikh Hasina has unequivocally condemned the coup in Myanmar and has been able to keep the military at home under tight leash.</p> <p>&nbsp;</p> <p>Religious extremism, cutting across all regionally prevalent religions, is a more widespread regional phenomenon in evidence from west Asia into south-east Asia. India was grappling only with Islamic extremism till a decade ago and is now also dealing with the challenge of Hindu majoritarianism. Hasina has partially succeeded in recovering for Bangladesh its original secular identity. However, given the growing influence of religion on politics in most neighbouring countries, it remains to be seen how long Bangladesh can keep radical religious elements out of key institutions.</p> <p>&nbsp;</p> <p>Bangladesh’s recent success as a nation, and as an economy, holds many lessons not just for Pakistan, the parent country that it left behind in more senses than one, but for all regional countries. It shows the benefits of pursuing liberal economics and politics with a modern and forward-looking national elite and political leadership.</p> <p>Happy birthday, Bangladesh!</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu Apr 01 19:11:58 IST 2021 sanjaya-baru-canada-south-korea-and-vietnam-will-seek-membership-of-a-quad-plus <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>Everyone likes to be a member of an exclusive club, yet no one likes a club whose membership rules disbar you. That social paradox extends to the world of international relations. When Russia brought together Brazil, China and India to launch a quadrilateral group called BRIC, with the stated objective of creating a new world order, the US pooh-poohed it as a gathering of wannabes. A decade-and-a-half later the heads of government of Australia, India, Japan and the US have come together to form the Quad. China has dismissed it as a ‘talk shop’.</p> <p>&nbsp;</p> <p>When China invited South Africa and made BRIC into BRICS, many analysts argued that they lacked the concrete required to hold them together. It took three BRICS summits of long speeches, longer joint statements and no concrete agenda for India to finally come up with the proposal that the group set up a rival to the US-led World Bank in the form of a development bank, now called the New Development Bank. That China came to dominate BRICS and the bank was located in Shanghai was a natural consequence of the fact that China’s national income and its foreign exchange reserves are more than the combined national income and reserves of the other four.</p> <p>&nbsp;</p> <p>Quad’s success will be determined by the extent to which the US is willing to address the concerns of its three partners. In any club the most powerful set the terms of engagement. What Quad will achieve in geopolitical terms apart from putting China on guard, important as this objective is, is not yet clear. China’s protestations about Quad being a ganging up are vastly exaggerated given that it is itself a member of many such plurilateral groups that have kept one or the other Quad members out.</p> <p>&nbsp;</p> <p>What Quad has already achieved in geo-economic terms is to use the Asian demand for Covid-19 vaccines as an opportunity to create a four-way economic relationship that combines the benefits of American research, Japanese funding, Indian manufacturing capacity and Australian marketing network to supply vaccines to Asian developing countries. This is without doubt a smart idea and one that can ensure its equal ownership by all four partner countries.</p> <p>&nbsp;</p> <p>For the Indian pharmaceuticals industry, that has for many years faced an unequal playing field in overseas markets, the vaccine opportunity has been a boon. Countries that once sought to erect barriers to entry to Indian pharma are now laying out the red carpet. This is welcome news. The Quad have already demonstrated their ability to cooperate in the space of maritime security in the Indo-Pacific region and will continue to explore new areas for cooperation and combined action.</p> <p>&nbsp;</p> <p>For Prime Minister Narendra Modi, the formalisation of Quad and its elevation to summit-level meetings is without doubt the single most important diplomatic achievement of his prime ministerial career thus far. Modi had no remarkable foreign policy achievement of his own in his first term, like Manmohan Singh’s historic nuclear deal with the US. He did, however, take forward many initiatives of his predecessor, including the relationships with the US, Japan and Australia.</p> <p>&nbsp;</p> <p>The formalisation of Quad and the articulation of a clear purpose and agenda through a joint statement is a landmark development on the geopolitical and geo-economic front and a significant achievement for Modi. It has the potential to provide a framework within which India can once again secure a global environment more hospitable for its economic rise. It is entirely possible that over time countries like Canada, South Korea and Vietnam will seek membership of a Quad Plus.</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Fri Mar 19 13:45:21 IST 2021 v-should-follow-k <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>Students of economics become familiar with several letters of the English alphabet. If you do not know what Y, C, I, X and M mean, then you do not know the subject’s ABC. While the spokespersons for the government of India’s ministry of finance insist that the post-lockdown recovery of the Indian economy, now under way, has taken a V-shape—implying a sharp recovery in the growth rate of output after a sharp downturn—the consensus view of most professional economists is that the economy’s recovery looks more like the letter K.</p> <p>&nbsp;</p> <p>The letter K captures two distinct phenomena—a V on top of an inverse-V. The corporate sector and big business have seen capacity utilisation recover sharply, output rise and, importantly, a bounce back of profitability. Air travel across cities has resumed and flights are all full. Those who have the money are back to spending it and the stuff they spend on is helping the corporate sector experience of a revival of demand. While alphabetically K comes before V, economic policy, too, should focus first on K and convert K-shaped growth into a V-shaped one.</p> <p>&nbsp;</p> <p>The return of corporate sector profitability has not been accompanied by a restoration of all the jobs lost during the lockdown, especially contract and casual labour employment. Moreover, the V-shaped recovery in the organised sector is not seen in the micro, small and medium enterprises (MSMEs). Both Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi have admitted as such. The Union budget and the May 2020 package of the government recognised this problem and have tried to address it. Critics would say “not enough”, while the government would say it has done the best it can, given fiscal constraints.</p> <p>&nbsp;</p> <p>While there would be differences between spokespersons of the government and its critics on the effectiveness of the measures taken to address the problem of the MSMEs and the larger problem of unemployment, the fact is that there is universal recognition that these remain policy challenges for the government.</p> <p>&nbsp;</p> <p>Mahesh Vyas of the Centre for Monitoring Indian Economy, who has unabashedly focused on the challenge of inadequate employment, views post-lockdown job losses as worrisome and distressing given their pattern. “It is the urbanites who are losing jobs more than rural [people], women who are losing jobs more than men,” he said. “It is graduates and postgraduates who are losing jobs more than others. Youngsters losing jobs and not the older people. The composition of this loss of jobs is worrisome.”</p> <p>&nbsp;</p> <p>The loss of existing jobs is one challenge. Equally worrying is the decline in new recruitments. Think of a middle class family in which the father and/or mother have lost jobs and the young daughter and son entering the job market find no new openings. This segment of society lives below the V, in the world of the inverse-V. This phenomenon is not specific to India, but is witnessed in many market-economies around the world where security of employment is not guaranteed and no social security nets are provided.</p> <p>&nbsp;</p> <p>What is surprising, however, is that despite the differential impact of the lockdown and the post-lockdown recovery on different sections of society, class-based political mobilisation is still very limited. The ruling Bharatiya Janata Party has sought to pre-empt such mobilisation by keeping up the nationalist rhetoric, so that people’s anger due to a worsening of their economic situation is channelled into nationalist and communal campaigns rather than class-based mobilisation. How long the economic growth process remains K-shaped will depend on the distributional impact of the government’s pro-growth economic policies.</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu Mar 04 14:18:23 IST 2021 the-politics-of-u-turns <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>The stand taken by the BJP and the Congress on a range of policy issues including the farm laws issue, disinvestment and various budgetary initiatives has prompted spokespersons of both parties to point to each other’s reversal of stance over time. While Prime Minister Narendra Modi sought to embarrass the Congress by pointing to the views expressed on farm sector reform by none other than former prime minister Manmohan Singh, former Congress minister Jairam Ramesh has tweeted a statement by Modi when he was chief minister of Gujarat to show the PM’s own U-turn on the issue.</p> <p>&nbsp;</p> <p>Jairam quotes the report of a working group of chief ministers on consumer affairs, constituted in 2010 and chaired by the then chief minister of Gujarat, whose members included the chief ministers of Andhra Pradesh, Maharashtra and Tamil Nadu, that says, “We should protect farmer’s interests by mandating through statutory provisions that no farmer-trader transaction should be below minimum support price.” Modi presented this report to Singh in 2011.</p> <p>&nbsp;</p> <p>This is just one example. Congress leaders are busy quoting what BJP leaders said on various policy matters when their party was in opposition and BJP ministers are busy quoting what Congress leaders said when their party was in power. There are any number of issues on which the BJP in power has done a U-turn and an equal number of issues on which the Congress out of power has done a U-turn.</p> <p>&nbsp;</p> <p>Both parties have one advantage. Today’s BJP, led by Modi and Amit Shah, has not had any problem disowning the policies of yesterday’s BJP led by Atal Bihari Vajpayee and Lal Krishna Advani. Equally, today’s Congress led by Rahul Gandhi has had no problem dumping the policies of yesterday’s Congress governments headed by P.V. Narasimha Rao and Singh.</p> <p>&nbsp;</p> <p>This tactic of U-turns has not been confined to domestic economic policy alone, and has also extended to foreign policy. The BJP in opposition rejected the India-US civil nuclear energy agreement that was in fact initiated by Vajpayee. Back in power, under a different PM, the same BJP that opposed the nuclear deal quietly completed it by fudging its stand on the nuclear liability law.</p> <p>&nbsp;</p> <p>Parties come to power opposing some major initiative of the party in government and, once elected to office, go ahead and do precisely what they promised not to. Purists call this hypocrisy. Politicians call this pragmatism. Politics, they remind us, is the art of the possible. If it is possible to win elections saying one thing, while it is not possible to run a government without reversing one’s stance, then pragmatism demands a U-turn.</p> <p>&nbsp;</p> <p>Singh took a stoic view of such pragmatism. “Do not judge a political party by what it says when in opposition.” He would say, “Judge it by what it does when in government.”</p> <p>&nbsp;</p> <p>The remarkable continuity in policies—domestic and foreign—through successive changes of government validates Singh’s pithy, if cynical, observation. So all this business of pointing fingers and calling each other hypocrite is a waste of energy. The fact is that with the exception of BJP’s ‘Hindutva’ agenda and its communal politics, on almost all other policy issues the BJP and the Congress are often on the same page.</p> <p>&nbsp;</p> <p>In an increasingly personality-driven politics ideology plays second fiddle. Hopefully, voters would judge a political party by what it does rather than what it says and the impact of policy in practice on people would remain the final arbiter.</p> Fri Feb 19 12:26:10 IST 2021 budgeting-for-time <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>In a recent episode of Kaun Banega Crorepati, Amitabh Bachchan asked a contestant which finance minister had read out the shortest budget speech in Parliament. All of 800 words. The options given were: Rajiv Gandhi, H.N. Bahuguna, H.M. Patel and Nirmala Sitharaman. The 18-year-old contestant sought a lifeline. She has clearly not lived long enough to know that of the four named, only one was a non-politician, and so most likely to have delivered the shortest speech! H.M. Patel, the retired ICS officer who was prime minister Morarji Desai’s finance minister, is the right answer.</p> <p>&nbsp;</p> <p>The length of the finance minister’s speech has nothing to do with the task at hand, of seeking Parliament’s approval for the government’s revenue and expenditure proposals. Admittedly, Patel was merely seeking a vote on account in 1977 and not presenting a full-fledged budget and so restricted himself to an 800-word statement. However, there have been many other such vote-on-account statements from politician finance ministers and each of them was a long speech. With time, our 18-year-old will come to realise that no politician likes to give up the opportunity of holding Parliament’s and the country’s (with live TV coverage) attention.</p> <p>&nbsp;</p> <p>Nirmala Sitharaman broke the record last year with a speech that left her speechless. Mercifully, this year she spared us and herself the agony with a 110-minute speech—the shortest in recent times. Since the finance minister hogs the national attention through budget day and evening, the prime minister too manages to secure his airtime to remind everyone that he is the boss. As prime minister P.V. Narasimha Rao once famously said, “The finance minister is like the number zero. Its value depends on what number you place before it. The PM is that number.”</p> <p>&nbsp;</p> <p>Last year’s poorly crafted budget and badly drafted speech got both the PM and the FM a zero. This year, both have secured distinction. Sitharaman did what she was expected to by most analysts. To quote her, she has tried to “spend, spend, spend” her way out of the downturn. A brief policy statement forces a politician to focus. Sitharaman kept her focus on top-of-the-mind issues of reviving growth, encouraging investment, promoting savings and stimulating demand. If public spending can trigger private spending and demand perks up generally, there is the hope of real recovery. If the demand stimulus is not met by a supply response, inflationary pressures will mount. This is one downside risk that the government has to be alert to.</p> <p>&nbsp;</p> <p>The global intellectual climate of economists’ opinion has come to Sitharaman’s rescue. The discrediting of what has come to be called “neo-liberal” economics identified with the so-called ‘Washington Consensus’, over the past decade, has allowed Sitharaman to get away with a fiscal deficit of 9.5 per cent of national income (gross domestic product). She has buried, for all practical purposes, the Fiscal Responsibility and Budget Management Act and got away with it. While sovereign rating agencies may baulk at this, the finance ministry’s Economic Survey has shown them their place. Since the New York-based rating agencies march to Washington, DC’s tune, the foreign minister would be expected to dial DC and make sure the agencies do not step out of line.</p> <p>&nbsp;</p> <p>In spending more on welfare and infrastructure, Sitharaman has had to curtail the defence budget. Here, too, the foreign minister will have to step in to make sure diplomacy does the job for defence. Sitharaman should be happy with the overall response to her third budget statement. This should help ensure that she gets to present the fourth one too!</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu Feb 04 16:07:03 IST 2021 burnishing-the-padmas <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>A silver lining to the large and looming dark cloud of concern about institutional decay and falling standards is the revival in the status of the Padma awards. Instituted in the early 1950s, to recognise individual contribution to national development, social welfare and to the fields of culture, education, the sciences, business and economic development, the Padma awards have had a chequered career. While many distinguished awardees have helped elevate the status of the awards, some black sheep have brought disrepute to the award and the process by which nominees were chosen.</p> <p>&nbsp;</p> <p>Some years ago, a major controversy erupted around the UPA government’s decision to bestow upon a New York-based businessman, against whom various cases had been pending in law courts in the US and India, a Padma Bhushan. Less questionable but equally controversial have been awards to all manner of politicians, bureaucrats, journalists and economists by the governments of both Atal Bihari Vajpayee and Manmohan Singh.</p> <p>&nbsp;</p> <p>Even Bharat Ratna, the highest national award, has not been bereft of controversy. Many had questioned the posthumous award of Bharat Ratna to Tamil Nadu’s M.G. Ramachandran in 1987, when no such award had been given to a B.R. Ambedkar or a Sardar Patel. It was prime minister V.P. Singh who named Ambedkar to a Bharat Ratna in 1990 and prime minister P.V. Narasimha Rao who named Patel. Curiously, Prime Minister Narendra Modi gave Pranab Mukherjee a Bharat Ratna, but has so far denied it to Narasimha Rao despite demands from all around.</p> <p>&nbsp;</p> <p>Given the controversial past of Bharat Ratna and Padma awards, Modi may be credited with at least trying to elevate the status of these awards by encouraging the government-appointed nominations committee to increasingly pick individuals who have done worthy service to society. In the run-up to this year’s Republic Day, and before the list of this year’s awardees is made public, Lok Sabha Speaker Om Birla has invited some of the awardees from the last few years to share their work with members of Parliament. Twenty Padma awardees are expected to make online presentations on best practices from various fields of social work. This is a welcome initiative. It should help curb the cynicism associated with the awards process and allow the lotus to bloom again.</p> <p>&nbsp;</p> <p>This is not to deny that some undeserving or controversial individuals still do manage to get their names listed. I must confess I became increasingly cynical about Padma awards after observing the kind of lobbying that used to go on. I cannot believe it has ceased completely.</p> <p>&nbsp;</p> <p>In the end one must ask what national purpose such national awards serve. Apart from merely recognising good work, or gratifying friends and influencing people, the selectors must choose such individuals for these awards who may be regarded as national icons.</p> <p>&nbsp;</p> <p>When an engineer like Mokshagundam Visvesvaraya or a scientist like C.V. Raman was named a Bharat Ratna in the 1950s, they were also regarded as iconic heroes who have since inspired millions to excel in their fields. When Narasimha Rao named J.R.D. Tata to Bharat Ratna, and he is the only industrialist so far so named, he was holding JRD up as a national icon.</p> <p>&nbsp;</p> <p>The Modi government’s decision to honour individuals from the fields of social work and social development should be welcomed. However, India also needs icons in fields like science, engineering, medicine, architecture, teaching, municipal administration, farming, horticulture and rural development and so on, who can inspire others by becoming objects of national pride, regard and celebration.</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu Jan 21 15:09:17 IST 2021 politics-of-personality <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>Actor Rajinikanth’s decision to opt out of Tamil Nadu’s political sweepstakes will bring to an end a long era of personality-based politics in the state. While the Dravidian leader C.N. Annadurai’s challenge of the Indian National Congress in the 1960s had a distinct ideological edge to it, the subsequent evolution of Dravidian politics focused increasingly on personalities. Thus, Tamil politics revolved for close to half a century around the film personalities of M. Karunanidhi, M.G. Ramachandran and J. Jayalalithaa.</p> <p>While film actor Kamal Haasan has decided to remain in the state’s political arena, his is not the kind of personality that can spawn a cult in the manner in which MGR and Jayalalithaa managed to, and Rajinikanth had the potential to. Rajinikanth’s entry into electoral politics would have given the politics of personality cult a fresh lease of life in Tamil Nadu. With the thespian opting out, Tamil Nadu’s politics may return to the national norm of a mix of ideology, money power and wheeling-dealing. Neither the DMK’s Stalin nor any of the other leaders of the clutch of Dravidian parties, nor indeed the local leaders of national parties, have anyone with any charismatic appeal for the voter. Even national leaders like Narendra Modi and Sonia Gandhi have not been able to stir the Tamil voter to any significant degree.</p> <p>All this would make the political race in Tamil Nadu very interesting. In West Bengal, politics revolves around the personality of Mamata Banerjee. Neither the BJP nor the Left-Congress alliance has been able to offer a leader of equal standing.</p> <p>Wherever personalities have come to dominate politics—including at the national level with Modi creating a ‘personality cult’ around himself—the formula is quite simple and predictable. Political outcomes increasingly depend on the image of the leader rather than the leader’s performance.</p> <p>This phenomenon is observed at the global level, too. From the world’s oldest democracy, the US, where Donald Trump pursued the politics of personality, to China, where Xi Jinping does the same, we see the projection and assertion of individual personality in tandem with the pursuit of ideological politics. Those who find the media projection of Modi amusing—posing as he does with peacocks and foundation stones in fancy headgear and dress—should pay attention to the Chinese media’s projection of Xi. Chinese television projects Xi’s public appearances much like Indian television does of Modi’s.</p> <p>Twentieth century’s democratic leaders learnt their lessons in the politics of the personality cult from the populism of despots. Edgar Snow, the American chronicler of Mao Zedong’s thoughts and achievements, has captured it well in his account of the chairman’s dominance in China. Snow suggests that a key to comprehending Mao’s leadership is the central role played by the ‘cult of personality’.</p> <p>In one of his many conversations with Mao, Snow quizzed him on the issue. “In the Soviet Union, China has been criticised for fostering a cult of personality. Is there a basis for that?” Snow asked Mao. “There perhaps was,” replied Mao, without any hesitation. Mao then told Snow that while Stalin had been the centre of a cult of personality, Khrushchev never bothered to promote one around himself. “Mr Khrushchev fell,” Mao told Snow, “because he had no cult of personality at all.” Clearly, Mao’s message has been internalised not only by Xi, but also by many of his contemporaries in democracies around the world.</p> Thu Jan 07 16:11:08 IST 2021 bengals-long-march <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>It was in May 1943 that Netaji Subhas Chandra Bose gave his clarion call: “Comrades! Soldiers! Let your battle-cry be—‘To Delhi! To Delhi!’ Our task will not end until our surviving heroes hold the victory parade.... on Lal Qila, the Red Fort of ancient Delhi.” Eight decades later, the seat of power in Delhi continues to elude Bengal’s leaders. If Gujarat has nursed the grouse that Mahatma Gandhi chose Jawaharlal Nehru over Sardar Vallabhbhai Patel, Bengal too has had the grievance that Gandhiji was half-hearted in his support for Bose. Netaji managed to convincingly defeat Pattabhi Sitaramayya in the party elections of 1939, but it was a pyrrhic victory. Unable to win over Gandhiji, Bose was left with little option but to resign and eventually walk his own path.</p> <p>Bose and Patel had a reasonable chance of becoming free India’s first prime minister. Gandhiji’s decision to adopt Nehru queered the pitch. While Patel dutifully accepted Gandhiji’s decision, Bose revolted. A Gujarati managed to succeed Nehru’s daughter, when Morarji Desai became PM, and another one succeeded in ousting the Nehru-Gandhi dynasty. Bengal, on the other hand, has continued to miss the opportunity of hoisting Netaji’s flag on Lal Qila.</p> <p>The ‘historic blunder’ of the politburo of the Communist Party of India (Marxist) robbed Jyoti Basu of the chances of becoming the first Bengali PM. Rajiv Gandhi’s acolytes and the coterie around Sonia Gandhi managed to stymie the chances of yet another Bengali, Pranab Mukherjee. Interestingly, both Basu and Mukherjee nursed a grievance on this score till the very end.</p> <p>The north has had its PMs (Nehru, Shastri, Indira, Rajiv, V.P. Singh, Charan Singh, Chandra Shekhar, I.K. Gujral, Vajpayee and Manmohan Singh) and so have the south (Narasimha Rao and Deve Gowda) and the west (Morarji and Narendra Modi). The east never managed to get its own on Delhi’s throne.</p> <p>The coming assembly elections in West Bengal could once again offer Bengal the opportunity to throw up a national leader if Mamata Banerjee secures a third term. The verdict will decide not only who rules from Kolkata, but also who can potentially rule from Delhi if a credible coalition can be formed under Banerjee’s leadership. Little wonder then that the Bharatiya Janata Party is determined to ensure her defeat.</p> <p>Bengal has every right to feel aggrieved. After all, it was not only the first capital of British India but also India’s intellectual capital. It was not for nothing that Gopalakrishna Gokhale said ‘what Bengal thinks today, India thinks tomorrow’. Political analysts have often suggested that if in 1996 the CPI(M) politburo had allowed Basu to head the United Front government it may have lasted its term. After all, the wily and well-heeled communist had established a record of sorts remaining chief minister for twenty-three long years.</p> <p>More recently, it has been reported, Mukherjee has claimed in his yet-to-be published fourth volume of his autobiography that if he had been PM the Congress would not have suffered the ignominious defeat it did in 2014. Both Basu and Mukherjee were consummate politicians and had the ability to take friends and detractors along. Banerjee, on the other hand, has not yet demonstrated the capacity to be inclusive in her leadership. But then, neither has Modi. Perhaps the country wants tough-minded leaders.</p> <p>The 2021 electoral contest in West Bengal would then be between a tough-minded Banerjee and an equally tough-minded Modi. It remains to be seen whether Banerjee will be able to summon the ghosts of Netaji, Basu and Mukherjee in her support and once again give a spirited call to fellow Bengalis, “Delhi Chalo!”</p> Thu Dec 24 16:20:22 IST 2020 garden-city-fortunes <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>I lived my childhood in a locality of Hyderabad called Hardikar Bagh. My high school was situated near Kundan Bagh and my college in Bashir Bagh. Many localities in Hyderabad had the suffix ‘bagh’(garden) because that is how the founders of Baghnagar wanted the city to be. While Bengaluru has come to be known as India’s ‘garden city’, Baghnagar, now Hyderabad, was the original garden city. The sultans of the Qutb Shahi dynasty developed a city of gardens on the banks of the River Musi, across the plains from their rocky fort of Golkonda.</p> <p>&nbsp;</p> <p>The love affair of the Qutb Shahi sultan, Muhammed Quli Qutb Shah, with a Hindu dancer and singer, Bhagmati, has created some confusion about the city’s original name. Some historians insist the city was called Bhagnagar, after Bhagmati, and became Hyderabad when she converted to Islam and became Begum Hyder Mahal. This version fits well into the “love jihad” narrative of the Bharatiya Janata Party, though the BJP has now demanded that the city be named Bhagyanagar. Bhagya meaning fortune or destiny.</p> <p>&nbsp;</p> <p>Through the 15th to the 17th century, this urban settlement was referred to as Baghnagar and Bhagnagar in English texts and maps. Historian Andrew Petersen records in his History of Islamic Architecture that Hyderabad was originally called Baghnagar—a city of gardens. Narendra Luther, a civil servant-turned-historian, quotes the Italian traveller Abbe Carre recording in 1672: “This large town... Bhagnagar is full of strangers and merchants. Foreigners and others carry on the trade without restrictions to their nationality.” Mahomed Kasim Ferishta in his History of the Rise of the Mohammedan Power in India (1829) and H.C. Briggs in The Nizam, His History and Relations with the British Government (1861) have recorded that at some point in the 18th century, Baghnagar/Bhagnagar was renamed Hyderabad.</p> <p>&nbsp;</p> <p>It was the Congress Party that first gave currency to the name ‘Bhagyanagar’, creating the Bhagyanagar Urban Development Authority in the 1970s. Even if the romantic origin of ‘Bhagnagar’ is true, it was still not ‘Bhagyanagar’—the city of fortune/destiny—though that is what Hyderabad has become over the past two decades. Does it then all come down to the location of the letter H and the word’s pronunciation?</p> <p>&nbsp;</p> <p>I place greater trust in ‘bagh’ than in ‘bhag’ simply because so many localities of the city are called ‘bagh’ and the city of my youth was indeed a ‘garden city’ before concrete took over. While the story of the city’s naming as Bhagnagar is one of love and romance, the name Baghnagar is an equally romantic story of grace and aesthetics, and the ruler’s love for the beauty of nature, if not a woman. However, by contrast, both the political demand for its renaming and the name suggested, Bhagyanagar, are loaded with notions to do with power and wealth.</p> <p>&nbsp;</p> <p>That is a pity. Hyderabad for me will always be associated with romance, love, gardens, beautiful architecture, grace, hospitality and the confluence of many cultures. As the capital of a kingdom that covered a wide swath of the Deccan, Hyderabad was always truly cosmopolitan. Home to Telugus, Maharashtrians, Kannadigas, Tamils and the Kayasthas who came from the north to join the nizam’s government.</p> <p>&nbsp;</p> <p>While the Telangana Rashtra Samithi came to power demanding the ouster of “settlers” and “outsiders” from the metropolis, it soon realised that Hyderabad’s cosmopolitanism was its strength, its destiny and its true fortune. The city’s growth is a tribute to the creativity of the people who have come to make it—Telugus and non-Telugus, Hindus, Muslims, Christians, Sikhs and Parsis.</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu Dec 10 14:59:25 IST 2020 trade-tango-in-a-twist <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>Having turned its back on a regional trading agreement covering the Asia-Pacific region, the BJP now says that it would seek a free trade agreement (FTA) with the trans-Atlantic economies of the US and the European Union. Gopal Krishna Agarwal, the BJP’s national spokesperson on economic affairs, was reported saying, “We are positive that FTAs with the EU and US will benefit India and talks will be resumed.” Apart from the fact that this statement runs contrary to the view on FTAs espoused by many BJP worthies including Nirmala Sitharaman and S. Jaishankar, as well as the views of the Swadeshi Jagran Manch (SJM), it would also appear as if India is chasing two birds in a bush, having given up the bird in hand.</p> <p>&nbsp;</p> <p>There may be very good reasons why India opted out of the Regional Comprehensive Economic Partnership (RCEP) agreement. The two most important were that its signatories were not willing to alter the rules of origin that India felt would unfairly benefit China and were unwilling to widen the scope of the agreement to include services trade that India sought. An agreement that was in fact initiated by the Association of Southeast Asian Nations (ASEAN) ended up being perceived as China-led. While Japan made a friendly gesture by saying the doors are still open for India, the fact remains that Asia to India’s east has turned its back on her and signed up with China, at least on trade.</p> <p>&nbsp;</p> <p>While foreign policy analysts have called the Indian decision on RCEP a retreat from her ‘Look East/Act East’ policy and at odds with her Indo-Pacific strategy, trade economists have questioned the assertion that FTAs have contributed to India’s ‘de-industrialisation’. If Indian industrialisation has not proceeded at the required pace, the reasons are largely domestic—ranging from the ‘unease’ of doing business to the inadequacy of investment in infrastructure, in trained and productive human capital and, a much less discussed issue, the entrepreneurial and technological incompetence of the traditional business class.</p> <p>&nbsp;</p> <p>Despite all these hurdles, the Indian economy did reasonably well compared with her peers during the quarter century 1990-2015; a period during which the share of trade in national income went up from less than 20 per cent to more than 50 per cent. During the same period India’s share of world exports increased from 0.5 per cent to 1.70 per cent. The anti-trade rhetoric of the BJP gets little support from data.</p> <p>&nbsp;</p> <p>Faced with these anti-trade views of an SJM spokesperson in the 1990s, international trade economist Jagdish Bhagwati famously said, “If he is an economist, I am a bharatnatyam dancer!” BJP spokesperson Agarwal’s assurance that after rejecting RCEP, and FTAs in general, his party’s government would seek an FTA with the US and EU looks more like an impromptu twist and cha-cha-cha than methodical bharatnatyam.</p> <p>&nbsp;</p> <p>It also begs the question as to how India can get a more favourable FTA out of the US and EU than it was likely to get from its Asian neighbours. The record of multilateral and regional trade discussions over the past two decades, ever since the Doha Development Round of the World Trade Organization got grounded, suggests that both the US and the EU seek assurances that India is unwilling to give. The fact that they have become India’s geopolitical partners and share concerns about an aggressive, assertive and rising China does not mean they are willing to be accommodative on trade. That is precisely why even a ‘politically friendly’ Donald Trump administration was unwilling to be friendly on trade. Clearly, New India needs new thinking on trade.</p> <p>&nbsp;</p> <p><b>Baru is an economist and a writer. He was adviser to former prime minister Manmohan Singh.</b></p> Thu Nov 26 16:48:06 IST 2020 their-lotus-is-blue <a href=""><img border="0" hspace="10" align="left" style="margin-top:3px;margin-right:5px;" src="" /> <p>President George W. Bush first ran into prime minister Manmohan Singh on the ramparts of the Kremlin two months before Singh’s July 2005 state visit to Washington, DC. They were in Moscow to witness the Victory Day Parade celebrating the golden jubilee of the Soviet Union’s defeat of Nazi Germany. Pulling his wife Laura close, Bush reportedly introduced her to Singh saying, “This is the prime minister of India. He is Sikh. His country’s president is Muslim and his party president is Christian.” “Most Indians are Hindus,” Bush reminded his wife, adding “India is a great democracy.”</p> <p>The pluralism and liberalism that defined Indian society and democracy have long been its great strengths. That is why many in India and around the world have been worried about the growing assertion of Hindu majoritarianism. Indians celebrating the historic election of a person of Indian-African-American parentage, Kamala Devi Harris, as the first woman vice president of the United States, should sit back and ponder why there are so few representatives of minority communities in the Union council of ministers today. The parliamentary contingent of the ruling Bharatiya Janata Party, whose party symbol is the name of the US vice president-elect, does not have a single Muslim or Sikh in the Lok Sabha. The representatives of these two communities in the Union cabinet come from the Rajya Sabha.</p> <p>The very moving victory speeches of both Joe Biden and Harris emphasised repeatedly that the most important message of the US election verdict is that a majority of American citizens had rejected the white majoritarianism of Donald Trump and his extremist faction of the Republican Party. Trump did not do poorly in the elections and has in fact increased his support base, fighting hard to win on a narrow platform of white supremacy. But a rainbow coalition of Americans united to ensure that the US remains true to its own constitutional values. It is not as if white Americans have lost power. Biden is a true blue white, so to speak. The US power elite is predominantly white. Yet, even a symbolic sharing of power with non-whites does enable the integration of a diverse nation.</p> <p>In India, too, the power elite have always been Hindu, from upper and middle castes, and will remain so for some time. Yet, the “umbrella” nature of the Indian National Congress facilitated national integration. Learning from the Congress experience, as well as that of the coalitions that followed, prime minister Atal Bihari Vajpayee ran an inclusive government. He named a Christian as his defence minister and made a Muslim the nation’s head of state. In a plural democracy, such gestures cannot be dismissed as appeasement or tokenism. Vajpayee’s inclusiveness strengthened India, even though he believed in his party’s ideology of hindutva.</p> <p>The Hindu extremism of the present leadership has weakened, not strengthened, India. Much like Trump’s majoritarianism. The recent revival of a detestable and abhorrent concept of “Love Jihad”, with elected political leaders seeking to criminalise inter-community marriages, does no credit to India’s constitutional values of pluralism and individual human rights, not to speak of values such as humanism and secularism.</p> <p>The watchword of “unity in diversity” is no empty slogan. It is an idea that goes to the core of our national identity. It is the foundational principle of our Constitution. Indeed, it is captured by the ancient wisdom of&nbsp;<i>Vasudhaiva Kutumbakam</i>&nbsp;—the whole world is one family. The wisdom, greatness and the universal and continued appeal of Hinduism lie in its pluralism and liberalism. The sooner the present BJP leadership understands this, the better for India.</p> <p>&nbsp;</p> Fri Nov 13 12:40:05 IST 2020