Geopolitics Leadership

India, smart power in the making!

G-2 – US and India – super power grouping may not work for either side. Emerging and critical tech at fulcrum of bilateral engagement K.A.Badarinath The very talk of stitching up G-2 super power group between US and India during Prime Minister Narendra Modi’s state visit is rather an unforgettable moment. In a fluid global situation, whether G-2 would finally be reality or not is something for geo-strategic experts to analyse, separate grain from chaff and derive the implications. US press has been abuzz with possibility of President Joe Biden ably assisted by secretary of state Jake Sullivan to bring focus to the idea of G-2 – US and India – forming a super power group. This is akin to what was talked about in early ‘80s by the US security establishment that attempted such a grand grouping with the then reluctant and recalcitrant China. Later, there were reports that President Barack Obama had revived this G-2 grouping with China when Hu Jintao was the powerful general secretary of Chinese Communist Party and country’s President. This grand idea of US – China group gained popularity after two major think tanks, Center for Strategic and International Studies and the Peterson Institute for International Economics had revived the conversation in 2011. Pomp and show that surrounds Prime Minister Modi’s visit as globally most popular leader, forming a G-2 – US and India – is something that needs deeper understanding and analysis. US, world’s largest economic power and strategic powerhouse thinking of India as a G-2 ally is elating. Jack Sullivan is reported to be harbinger of this idea, if at all it works for both sides. As G-2, identifying common rivals, partners and competitors, may not after all be a good idea for both US and India in an ever evolving world order. From US perspective, depending heavily on its allies like Japan, Australia and India to checkmate China in Asia theatre and elsewhere including Asia Pacific is a calculative move. At the same time, complete breakdown of relations between China and US is not a feasible preposition. In fact, this complex security matrix explains why democratic white house under President Joe Biden is interfacing with all the three – Japan, India and China – this week to finalize its Asia strategy. US being a great ‘strategic ally’, the first to go to, may continue to work for India. That does not allow Indian foreign affairs establishment under Subrahmanyam Jaishankar to shed the ‘independent policy’ stance that has come to smart focus in recent past. India’s independent policy stance gained credence for New Delhi’s stand on Russia – Ukraine conflict, Covid-19 management, multi-faceted engagement as G-20 President. Not becoming part of a military alliance has been stated policy of India and there’s little or no scope for a change in this stance. It’s in this backdrop that India not joining NATO forces should be viewed notwithstanding the standing invitation from US. In the Russia – European Union standoff, India refused to side with one group or the other unlike China and US taking respective sides. As G-20 President, batting for African Union’s full membership speaks volumes. At the same time, engaging with Shanghai Cooperation Organization and Quad with equanimity brought was recognized by world powers as a responsible way for the 1.4 billion strong India as the largest growing economy for two consecutive years and hat trick to be hit. In this backdrop, emerging and critical technologies, removing export controls on transfer of this knowhow by US to its most trusted partner India could be the starting point to taking bilateral relations one notch above. Artificial intelligence, quantum computing, space, semi-conductors, dedicated telecom infrastructure for strategic heft, biotechnology, aerospace are among areas where export controls may have to be lifted and shared with India. For instance, buying ‘predator’ drones to enhance surveillance and ‘jet engines’ must make technology transfer integral to the two governments level defence deal. Refurbishing and servicing the US Naval ships in India should become more of a common practice rather than one off events. Areas like education, affordable healthcare, vaccines, medicines; solar energy and green hydrogen as well as joint defence production deals can be the next big step for the two large democracies that are open, flexible and transparent in their relations. Independence in foreign policy engagement at bilateral level and multi-lateral issues is something that India takes pride in. And, this independence in policy will have to be assiduously protected, cherished and propagated for India to play a larger, responsible and compassionate power to reckon with. Smartness with soft power image of India goes well to realize her dreams of ‘Vasudaiva Kutumbakam’, world as ‘one big happy family’ that’s humane. (Author is Director and Chief Executive, Centre for Integrated and Holistic Studies, non-partisan think tank based in New Delhi)

Geopolitics Leadership

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Is China’s paradigm on ‘mutual success’ real?

Beijing has to come clean on larger issues, shift in outlook welcome. India never lost its ‘eastern wisdom’ while engaging with Western partners. Rohan Giri In an editorial, Chinese Communist Party’s mouthpiece, Global Times on May 30 indicated a possible shift in its India outlook. For a change, it captioned the edit, “We morally, emotionally support India’s de-colonization”. This comment on inauguration of a new Parliament building getting rid of the British colonial re definitely reflects Chinese establishment’s intent to go a wee bit soft on India. It has also garnered the attention of leaders across the globe. This change of heart, if it bears out in reality, cannot be ignored. Pleasing gestures like this editorial as exhibited by China present an intriguing subject for examination. As per reports from Chinese embassy and consulates, over 60,000 visas have been issued to Indians visiting China in first five months of this year. Furthermore, Chinese missions globally have affirmed their readiness to grant more visas for purposes such as business, studies, tourism, work, and family reunions, should the need arise. Global Times editorial last week emphasized India’s commitment to de-colonization and self-reliance. It applauded India’s efforts to remove vestiges of colonial authority, such as renaming iconic buildings and limiting English usage. The article advised India to focus on its national strengths rather than seeking legitimacy through techniques and accolades from outside sources. Rational interpretation to ‘outside sources’ would be India’s multi-nodal foreign policy engagement with western powers. While congratulatory editorial in Global Times is in order, its caution against Western manipulation is old communist line seeking exclusive engagement with India. Global Times asking India to embrace the Eastern Wisdom is possibly a benign attempt to wean India away into its fold. Its emphasis on ‘mutual success’ of China and India is yet another line that many in India’s Left and centrist political discourse also subscribe to. The editorial does not mince words while warning India to stay away from US with the standard communist dogma that US was fueling enemity between India and China. In this context, there are big questions that Chinese communist leadership will have to come up with plausible and convincing answers. President Xi Jingping and his cronies may have to come straight on Galvan border mis-adventurism that led to troop’s deployment on either side of Indo-Chinese borders. China will have to offer an explanation on its collaboration with Pakistan on terrorism in the United Nations (UN) and mutual prosperity pitch with India which may not go hand in hand. Continued expansionist bids in Eastern Ladakh and Arunachal Pradesh, opposition to G20 conferences in Indian state Arunachal Pradesh, Jammu and Kashmir, providing Chinese names to Indian cities and towns is something that China will have to justify. Can this be the template for China’s Paradigm of mutual success? Tsinghua University’s Center for International Security and Strategy in 2022 report on “Chinese Outlook on International Security” has toed a different line on India. The study has bracketed India on par with US vis-à-vis threat posed to Chinese interests. India’s threat to China has also been compared what was perceived in Japan vis-à-vis China even today. China has come up openly on its stand towards India rather than sending out mixed signals that confuse its communist cadres and their counterparts in India. Global Times editorial also said, “In Chinese society, few people believe that India’s economic and social development will become a threat to China. The vast majority of people believe that the two countries can succeed together. We hope India can demonstrate more clarity and confidence in its dealings with China and the West.” In last three years, India’s position on Chinese threat perception has been consistent. It has in no uncertain terms said on more than one occasion that threat from China has risen multifold. Global Times editorial exhorting India to stay away from Western manipulations has come ahead of Prime Minister Narendra Modi’s visit to Washington DC for a state visit later this month. China’s expectation that should not protect its defensive and offensive interests is rather unrealistic. India’s right to pursue an independent foreign and economic policy formulation, choice of friends in sync with its view seeking global peace needs to be respected. (author is operations manager at non-partisan think tank, Centre for Integrated and Holistic Studies based in New Delhi)

Leadership Technology

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Much ado about something

Digital India bill should democratize information highways, digital ecosystem, address stakeholders concerns & not limit benefits to a big few Prachi Mishra In a few days from now, Narendra Modi government is likely to come up with first draft of the much-awaited Digital India Bill. If one were to go by officials, the bill is intended at strengthening information technology, security and information infrastructure in India. The Bill, when finally adopted by Parliament and enacted, will complement the Digital Personal Data Protection Bill, 2022 and Indian Telecommunication Bill, 2022. In last two decades, after IT Act, 2000 became operative there have been astronomical developments in technological innovation. To keep pace with these innovations, the act’s regulatory framework was amended. The IT Act Amendment of 2008 and IT Rules 2011 were rolled out to define cyberspace and provided ground for handling of digital activities in India. But, the Act was inadequate to address present-day concerns of cyber security, crime and do justice to privacy concerns of Indian people. Emergence of Artificial Intelligence and Machine Learning, Quantum technologies, Metaverse, Big Data, Block chain, etc has thrown up new challenges in the regulatory framework. Given the limitations within the existing IT Act, a separate act has been in the work for a few months to address the growing digital and cyber demands of Indian people. In this backdrop, India’s economic interests can be furthered when the technological development and innovation apart from related regulatory framework is aligned. With growing penetration of digital technologies and increasing vulnerabilities of cyberspace, there is a need to ensure India’s national security was primacy. Reportedly, Digital India Bill, 2023 is intended at catering to India’s rising aspirations and become a catalyst in her growth and development while upholding people’s fundamental rights and country’s security concerns. Given the delicate balance that needs to be achieved through the new framework, the expectations from various stakeholders may have to be enlisted. Firstly, the Bill may have to address ethical concerns that are emerging as a consequence of disruptive technologies. Technological development will have to be seen as being morally correct, legitimate, and ethical. For instance, India should be able to address and counter adverse impact of artificial intelligence like deep fakes and misinformation. The new framework may evolve a robust and holistic mechanism to address issues related to cyber security. In 2022, as per CERT-in data, there were over 1.39 million cyber-attacks on India. This roughly over 253 per cent more than suck attacks reported for 2018. Hence, the Bill should put in mechanisms to resolve high volume and velocity of these cyber-attacks seen across sector, be it finance, banking, security establishment to political theatre. Also, with highly disruptive Quantum technologies round the corner, the Bill must suggest ways to ensure cyber security in the new environment. The proposed bill may have to find solution to tackle the manifold rise in misinformation, hateful content and fake news that’s become the new normal in India. In last couple of years, big technology firms like Facebook and Twitter have been at loggerheads with the government on dealing with mis-formation on their respective platforms. The Bill will have to reflect a possible consensus of all stakeholders on dealing with misinformation, disinformation and fake news that’s rampant. The bill’s provisions should be aligned with innovation. At present, India’s patent tally is dismal and most technology is imported from the Western countries. Be it hardware or software, India’s patents fall behind big time. The Bill should give impetus and incentivize innovation in digital technologies. Additionally, it should augur well for all the stakeholders of digital ecosystem and not restrict the benefits disproportionately to a handful tech firms. The new dispensation may have to address issues like liability, accountability, and ownership of data and its usage. Of late, there have been cases where social unrest resulted in violence and arson because content guidelines for these platforms were amiss. Or, even the existing norms were violated. The Digital India Bill, 2023 will be discussed at a time when India has moved many notches above in many different fields of technological and digital innovation. Being home to 113 unicorns and third largest start-up economy, India’s innovation ecosystem is booming like never before. Also, with the Semiconductor Mission, the strong impetus on adopting digital technologies, and the National Quantum Mission in place, India is bound to grow steadily in the coming years. Stakeholders expect the bill to empower them, democratize the information high way and digital ecosystem, aid other relevant economic policies. India should ensure that all voices of the entire stakeholder ecosystem are heard and it is enacted in time. (Author is Research Consultant at Centre for Integrated & Holistic Studies, New Delhi based non-partisan think tank)

Business Leadership Policy Technology

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Basking under the Sun!

India to hit a hat-trick as fastest growing economy, unparalleled transformation in nine years, per capita incomes to be $ 5200 by 2032. K.A.Badarinath For second year in continuum, India is the fastest growing economy globally with impressive 9.1 per cent and 7.2 per cent clocked in 2021-22 and 2022-23 respectively. Even with projected 6.5 per cent GDP growth for this fiscal ending March 31, 2024, India will top the global sweepstakes and hit a hat-trick. This means the moon for an economy that’s home to world’s largest population at 1.4 billion, an expanding aspirational class and the middle-income families that continue to move upward in the consumption and investment chain. From investors’ point of view, both domestic and foreign players would make merry given the healthy uptick in demand for goods and services within the country. This is significant as Germany has slipped into recession, top economies in Europe are on a downslide and the US continues to struggle out of a whopping $ 31.4 trillion debt crisis. The tentative deal between democratic White House and Republicans do not mean much given that President Joe Biden is in a tight corner. Prolonged war in Eastern Europe getting worse and Kiev’s drones hitting Moscow’s metropolis send out two firm signals. One, the shadow-boxing by big boys with Russia and Ukraine playing front foot continues to adversely impact geo-political and economic matrix. Secondly, there seems to be no abrupt end to this long drawn conflict notwithstanding peace overtures made by Indian Prime Minister Narendra Modi. Its impact is bound to be significantly felt as the global growth figures are expected to trim to 2.8 per cent in 2023 as against 3.4 per cent a year before. In the melee, Indian stock markets being valued fifth largest globally at $ 3.3 trillion after US, China, Japan and Hong Kong is something that one can rejoice about. It only indicates the investment appetite of both foreign players and domestic retailers that yearn to dip into the famed India growth story that’s only getting meatier by the day. Also, the confidence that investors repose in our regulator, Securities Exchange Board of India to run the show with zero payment defaults apart from strong and stable central government that commands huge credibility politically and with economic stakeholders. Three prime numbers that stand out are services, exports and agriculture sectors contribution to healthy GDP growth beating doomsayers’ diatribe on economic mismanagement. Secondly, front loading capital expenses and big private consumption has fuelled the Indian economy. Gross fixed capital formation at 11.4 per cent was highest in over a decade and its share in GDP accounting for 34 per cent. Private consumption rose by 7.5 per cent and its share was highest at 58.5 per cent. Most important signal in the macro-economic numbers was the confidence within the economic managers of Modi government that inflation can be contained to four per cent going forward. Unexpectedly healthy GDP numbers have special significance for Indian government led by Prime Minister Modi who has led from the front in last nine years. This bears out in the American financial services Morgan Stanley’s report released on Wednesday on nine years ‘transformation’ heralded by team Modi. Reforms undertaken across sectors in last nine years including governance laid the foundation for enhancing the per capita income to $ 5200 by 2031-32 from $ 2200 reported in 2021. And, over 46 per cent households would earn anything between $ 10,000 – 35,000, nearly double the proportion in 2021. Most important is that capital expenditure and fixed capital formation is expected to grow exponentially as percentage of GDP and share of Indian exports double to 4.5 per cent by 2031. As pointed out by government’s economy managers, scams and corrupt deals that marked 2004-14 decade are a thing of the past. From lost decade to performing and transformative ten years is what even Morgan Stanley seems to have surmised in its detailed report. Fourteen quarters of runaway inflation and 12 quarters of decline in economic growth and industrial production during 2004-14, pre-Modi era stands out as it culminated to virtual financial collapse that was triggered by the housing bubble burst in US that burnt the world with its contagion effect. Change is order of the day and India has arrived leaving behind the dark days! (author is Director & Chief Executive of Centre for Integrated & Holistic Studies, a Delhi based non-partisan think tank)

Geopolitics Leadership

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Naya Kashmir shines bright on global stage

Tourism, infrastructure development, rich cultural heritage, progress, inclusive growth, transformation & positive change defines ‘nature’s bowl’ Rahul Pawa The third G20 tourism working group meeting is currently underway in Srinagar, Jammu and Kashmir (J&K), capturing global attention as it showcases India’s rich cultural identity and vast tourism potential. This three-day event focuses on promoting sustainable and eco-friendly tourism, with the aim of driving economic growth, preserving cultural heritage, and fostering sustainable development in the region. Amidst the captivating sights of unprecedented development and delightful interaction between the people of Jammu and Kashmir and G20 delegates, certain entities and individuals persist in propagating an unfounded belief that J&K is engulfed in perpetual suffering. However, the reality on the ground reveals a different story. J&K is currently hosting its first grand international event since 2019 after it was designated a Union Territory (UT) following amendment to Article 370 of the Indian constitution. This amendment empowered residents of Jammu and Kashmir, as well as Ladakh, with the same rights enshrined in the Constitution of India and the benefits of central laws enjoyed by citizens across the country. Hosting of this historic international event by Jammu and Kashmir stands as testimony to region’s progress and newfound stability. It showcases the region’s intrinsic, inclusive, and vibrant nature, highlighting its rich cultural heritage, tourism potential, and commitment to sustainable development. As international delegates participate in this event, they witness firsthand the positive impact of the constitutional amendment, dispelling lingering misconceptions and emphasizing the region’s journey towards a more prosperous and harmonious future. Furthermore, this event goes beyond mere tourism promotion. It also places emphasis on creating employment opportunities, developing infrastructure, fostering interdepartmental coordination, and ensuring government’s accountability to the people of Kashmir. Through targeted initiatives and collaborations, the event aims to spur growth, thereby contributing to overall socio-economic progress of the region. The event places strong emphasis on infrastructure development, recognising its significance in facilitating seamless travel experiences, enhancing connectivity, and providing essential amenities for both tourists and residents. The focus is on building robust and sustainable infrastructure that supports the growth of the tourism industry while also benefiting the local communities. Additionally, the event seeks to foster interdepartmental coordination, recognising that effective collaboration among various government departments is essential for the successful implementation of policies and initiatives. By promoting synergy and communication between different entities, the event aims to streamline processes, enhance efficiency, and ensure the optimal utilisation of resources for the development of the tourism sector and related industries. Furthermore, the event underscores the importance of government accountability to the people of Kashmir. It aims to create a transparent and responsive governance framework, where the needs and aspirations of the local population are prioritised. Through open dialogue and consultations, the event seeks to ensure that the government remains accountable to its citizens, fostering trust and strengthening the bond between the authorities and the people they serve. Most importantly, this event goes above and beyond conventional tourism promotion by encompassing a multifaceted approach that reflects a holistic vision for the sustainable and inclusive development of Jammu and Kashmir. It aims to ensure that its people and communities thrive in a conducive environment, where their well-being and aspirations are at the forefront of the region’s growth and progress. Regrettably, there are individuals who persist in their unwillingness to acknowledge the positive transformations taking place in Jammu and Kashmir. However, their efforts are likely to falter when confronted with the prevailing reality on the ground. The G20 event in Kashmir, aptly named ‘Naya Kashmir’ (New Kashmir), stands as a powerful symbol that uplifts the spirits of the local population and sheds light on the remarkable progress achieved in the region. It serves as a testament to the unwavering resilience and determination of the people of Jammu and Kashmir, who have embraced progress and growth as a means to overcome the challenges posed by terrorism and pave the way for a more prosperous and harmonious future. The success of the G20 event in Kashmir extends beyond its ability to showcase the true essence of Jammu and Kashmir; it also lies in its capacity to dispel the unfounded beliefs and narratives perpetuated by a few. This event uplifts the spirits of the local population, instilling within them a profound sense of pride and optimism. Despite the persistence of challenges and the dissemination of misinformation by certain individuals, the G20 event in Kashmir stands as a shining example of the transformative power inherent in positive change. Ultimately, the G20 event in Kashmir serves not only as a celebration of India’s rich cultural identity and the immense tourism potential of the region, but also as a platform to showcase the indomitable spirit, resilience, and unwavering determination of the people of Jammu and Kashmir. It sends a resounding message that J&K is not a region condemned to perpetual suffering, but rather a land brimming with opportunities and possibilities waiting to be realised. (author is an international criminal lawyer and director of research at New Delhi based think tank Centre for Integrated and Holistic Studies)

Geopolitics Leadership

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Kashmir on way to new vistas

G-20 summit next week will showcase India’s commitment to transform the valley into cradle of human peace, tourism and economic activity Japanese Prime Minister Fumio Kishida showcased Hiroshima as harbinger of peace, fulcrum of development and civilizational connect by hosting G-7 summit. This high level global engagement happened 77-years after it was devastated by atomic bombs detonated by United States on August 6 and 9 in 1945 killing about 226,000 civilians. Change and makeover is law of life. And, Kashmir aligns perfectly well in India’s decision host the G-20 tourism working group next week in Srinagar. This provides perfect opportunity for India to showcase development, democratic transition, peace and tranquility brought to the paradise on earth in less than a decade. The decision to take G-20 to Kashmir may not be palatable to India’s adversaries that rake up non-issues. Showcasing Kashmir’s potential to become part of global tourism circuit cannot be missed by India’s friends and foes alike. Terror, islamist jihad and across the border meddling by non-constitutional actors is virtually a thing of the past as Jammu & Kashmir picked up pieces and moved on. Perceptible change that has dawned on Kashmir following the exodus of over 150,000 Hindus in 1990 is something to write home about. India’s decision to G-20 in Kashmir is part of its larger strategy to fully leverage its Presidency of the most influential global group this year and pep up the valley’s local economy and cater to upwardly mobile aspirations of the youth that have firmly said ‘no’ to violence, mindless killings in the name of jihad. The 200-odd meetings under India’s G-20 presidency have been spread to over 50 cities from Humpi in Karnataka to Siliguri in Assam moving away from the usual Delhi and Mumbai based engagements. Normally, cities spotlighted globally become big tourist destinations globally and that’s perhaps the idea in taking G-20 tourism summit to Kashmir. Let us not forget that Reykjavík, the capital city of Iceland turned into a global tourist hotspot after the US President Ronald Regan and General Secretary of Communist Party of Soviet Union Michael Gorbachev held their summit level talks in run up to nuclear power treaty between the two countries way back in October1986. Similarly Marrakesh, the western city of Morocco emerged as topline city for holidaying and tourism after it gave birth to the World Trade Organisation in 1994. Bringing new cities, locales and areas to global attention has not limited to leaders elsewhere. Historic summit level talks between Prime Minister Narendra Modi and Chinese President Xi Jingping held in Ahmedabad after landslide victory of the Indian leader in 2014 has etched in the memory of global tourism circuit. In fact, as reports suggest, this gave idea to President Xi to host Modi in Chinese province of Shaanxi. Shaanxi also being the birthplace of President Xi’s father emerged as a regular tourist destination for both domestic and international travellers. From being friction point between India and Pakistan since 1947, Kashmir has moved on unrest and violence. India’s significant focus to restore peace and stability, political changes in 2019 has begun pay off dividends in the form of development, attracting investments, and enhancing tourism opportunities. On August 5, 2019, Union Home Minister Amit Shah piloted a proposal in Parliament to end Jammu and Kashmir’s special status and this also led to bifurcation of the state into two Union Territories. The amendment in Article 370 of Indian Constitution also turned out to be the turning point for positive changes and integration that paved the way for prosperous future, including economy, infrastructure, governance, and social welfare. Massive makeover of road networks, bridges, tunnels, and power infrastructure and enhanced connectivity with rest of the country is just one part in Kashmir returning to normalcy. Completion of the Zojila tunnel, the Ujh multipurpose Project and the engineering marvel Chenab rail bridge — the world’s highest railway bridge — are among major infrastructure projects that provided heft to transportation as well as unlock the region’s immense economic potential. Revival of grassroots democratic institutions, such as Block Development Councils leading to delegation of governance enabled people to have direct say in their affairs. This decentralization of power fostered inclusivity, accountability, and efficient utilization of resources, ensuring that development reached every corner of Jammu and Kashmir. While showcasing the development thrust, India may also go overboard to sell Kashmir as cradle of peace ready to host the international travelers seeking to find an alternative to Swiss Alps. Hosting G-20 meetings in Kashmir is also a tight slap on anti- India propagandists, jihadists and their handlers globally. G-20 tourism summit should be seen as just a beginning in transformation of the Kashmir valley.

Business Policy World

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Mid-course correction is what the good doctor prescribed!

Even if US revises debt ceiling of $ 31.4 trillion, its risk ridden economy may precipitate a larger global crisis of larger magnitude K.A.Badarinath Looming debt crisis in United States with potential to default, showdown between Republicans that control the House and Democratic White House may not augur well for the global economy and developing countries like India. Owing to unsustainable economic policies over few decades and irresponsible handling of resources has led the largest global economic powerhouse into a big mess of its own making. Even if President Joe Biden manages to clinch a last minute deal with Republican top leadership to push up the debt ceiling beyond US $ 31.4 trillion, larger questions continue to haunt the Americans. Mobilizing loans through US bonds or debt paper may not be the immediate concern but potential default on June 1 is what may turn catastrophic to not only Americans but the entire world. For Americans, it means that Democrats will not be able fund their fancied social security payments on medical and health insurance, pension or social development projects. President Biden and his Democratic administration will have to put on hold all fancy projects like waiving students’ loans or fees to providing personal tax concessions to youngsters and new taxpayers Democrats understand the full importance of lifting the already unsustainable debt limit of $ 31.4 trillion. In fact, this also explains US President Biden’s decision to forego the scheduled Quad summit in Australia and head back home after G-7 leaders meeting in Hiroshima. Eventually, the Quad summit had to be called off with heads of US, Australia, Japan and India meeting briefly at Hiroshima on side lines of G-7 congregation. The larger issue that confronts US and the world is a wee bit different and difficult. There’s every possibility of US moving into economic recession thereby stymieing demand for goods and services globally. This will hit the economic growth sentiment internationally big time. Secondly, possibility of banks getting stuck with worthless dollar denominated bonds or debt paper in medium term cannot be ruled out unless both Federal Reserve and political leadership in US takes recourse to mid-course correction that involves massive spending cuts or improve the country’s revenues. Such a policy may be very unattractive for Democratic voters when they have to elect their President in 2024. Thirdly, to contain the contagion effect of US economy moving into abyss will be a herculean task. One cannot easily forget the global financial crisis triggered by real estate linked mortgages that turned worthless in 2007-08. This US housing bubble stirred a perfect storm to impact both large developing countries like India as well as least developed countries alike. Excessive risk exposure taken by banks was the biggest element in this crisis of the worst kind after great depression of 1929. Fourthly, if the US default finally happens, then countries like India having huge exposure to American green back will also face the heat. Thankfully enough, conscious diversification in her currency basket over last decade may limit the adverse impact on India. But, this diversification should go whole hog and consciously lead to pursuing ‘de-dollarization of Indian economy’ as a state policy. Fifthly, while exports to US become attractive and import bills get squeezed, demand slump globally will negate the advantages gained in trade deals. There’s no reason why India should not pursue a more independent trade and currency policy keeping herself at a safe distance from the Federal Reserve and recalibrate her linkages with Washington DC. Sixthly, Democrats and Republicans must work towards mid-course correction on economic and development front rather than recklessly going for borrowing more from Tom to pay Peter. In the past, publicly available data suggests that US debt limits were revised upwards 68 times since 1960. Limiting the fresh debt limit to US $ 1.5 trillion till March 31, 2024 and achieving concomitant cuts in spending by US $ 1.47 trillion would save the perilously placed US economy. Seventhly, precipitating a perfectly cooked crisis is not in anyone’s interest and hence reining in the fresh spending to less than one per cent as per Limit, Save, Grow Act of 2023 makes eminent sense. On the parallel, limiting the mop up of fresh debt and gradual reduction in existing debt stock would augur well for US economy that’s seeking to reposition itself and instil confidence with its trading and investment partners. US Department of Treasury report of 2022 clearly outlines the course correction to be adopted for reversing unsustainability of the country’s economy where primary budget deficits have grown exponentially. Going by conservative projections made in this report, it will take about 75-years to bring the American economy back on even keel. “The debt-to-GDP ratio rises continuously in great part because primary deficits lead to higher levels of debt. The continuous rise of the debt-to-GDP ratio indicates that current fiscal policy is unsustainable” the report had cautioned. The debt-to-GDP ratio was approximately 97 per cent at the end of FY 2022, and under current policy and based on this report’s assumptions is projected to reach 566 per cent in 2097, it pointed out. While pursuing a revised economy policy dispensation, President Biden should not easily forget the 2011 crisis that was triggered by US Congress. This pushed up the borrowing costs for treasury by a humungous US $ 1.3 billion in just one year. Also, US should not provide any leverage to China for en-cashing on its crisis. China is easily the largest holder of US debt paper, notes and long term bonds with valuations ranging from $ 859.4 billion to $ one trillion. China may like to leverage the US debt paper to rebalance its own resources position that again may not be looking too good. China’s own debt of US $ 14.34 trillion as of April 12, 2023 and swelling at a whopping $ 3.81 trillion annually may not be something to brag about by President Xi’s oligarchs driven communist party. Potential defaults in US, machinations

Geopolitics Leadership Policy

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Tactical Power Shift

India & Japan for open Indo-Pacific, game changing bilateral ties define Prime Minister Fumio Kishida’s visit to New Delhi Prachi Mishra Japanese Prime Minister Fumio Kishida’s two-day visit to India is part of on-going bilateral engagement between the countries agreed in 2006. Since then, Indian and Japanese leaders have consistently worked on strengthening ties and auguring a stronger and open Indo-Pacific. Prime Minister Kishida’s visit signals growing influence of QUAD. It is also significant as India and Japan presently hold the G20 and the G7 presidencies respectively. Kishida’s visit comes in the wake of San Shinzo Abe’s tragic death. Prime Minister Abe is regarded as a great friend of India seeking to reconnect two classical civilizations. Kishida’s statements have pointed to a turning point with continuity in bilateral strategic relations. Highlight of his visit was to unveil a plan on Open and Free Indo-Pacific for which he committed US $ 75 billion. Japan and India have a long and shared history of bilateral relations, strategic cooperation, and a resolve to build a peaceful Indo-Pacific. Historical connect India and Japan share centuries-old relationship. Their ties can be traced back to the sixth century when Buddhism was introduced in Japan and adopted as a way of life in Japanese society. In 752 AD, Bharatiya Buddhist monk Bodhisena consecrated the Todaiji Temple at Nara. The towering Buddha statue at Tara has weathered many storms and stood the test of times. All through the last few centuries, India and Japan have never been adversarial towards each other and their relations have been free of disputes. In the recent past, Swami Vivekananda, Netaji Subhash Chandra Bose, Rabindranath Tagore, and JRD Tata have been Indian cultural ambassadors to Japan[1]. In contemporary times, India and Japan signed a peace treaty after the Second World War which not only established India’s diplomatic relations in Japan but also uplifted morale of Japanese people who were recovering from the aftermath of the war. India also extended its iron resources to the war-torn Japan and helped immensely in its reconstruction. The first yen-loan was extended by Japan to India after Premier Nobusuke Kishi’s official visit to India in 1957. The two nations also find a lot of commonality in upholding democratic principles and rule of law. There have been umpteen trade and commerce deals between India and Japan. Set up in 1903, the Japan-Indian Association is the oldest global informal organisation in Japan. Economic and commercial cooperation Trade and commerce ties between India and Japan have steadily strengthened over last few decades. Both nations have a mutually beneficial relationship; Japan has tapped into India’s emerging and expanding market while India has relied on Japan for technology transfers and financial assistance. India-Japan Comprehensive Economic Partnership Agreement signed in 2011 is the most holistic agreement that not only facilitates movement of goods and services but also human resource, shared development of intellectual property, and custom processes. Japan has been the largest financial donor for India. Over the years, Japan has supported India in infrastructure and technological development in sectors like railways and roadways, power, and environment. The most recent and the most relevant projects are Ahmedabad – Mumbai High Speed Rail, Western Dedicated Freight Corridor, Delhi-Mumbai Industrial Corridor, and the Chennai-Bengaluru Industrial Corridor. The Delhi Metro Rail Corporation was also facilitated by Japanese assistance. Table 1 lists items of trade between India and Japan. Table 1. Import-export goods in Indo-Japan trade ties. Imports from Japan to India Exports from India to Japan Machinery and instruments Petroleum products Transport equipment Chemicals and compounds Iron and steel goods Fish and by-products of fisheries Electronic equipment and goods Metal ores and scrap Organic chemicals Clothing, textiles, accessories Tools Iron and steel products During financial year ending March 31, 2022, India was the 18th largest trading partner for Japan. Concomitantly, Japan was the 13th largest trading partner for India. Also, Japan’s foreign direct investment has soared in the last few years, with India becoming the 5th largest investing country for 2021-22. India has seen a sharp rise in the number of Japanese firms totalling to 1455 that operate in India. Fig. 1 and Fig. 2 show the value of trade carried out between the two countries since 2008. Fig. 1.Trade values of Indo-Japan trade. Source: Ministry of Trade and Commerce, Government of India. Ministry of Economy, Trade, Industry, Government of Japan. CIHS Analytics Fig. 2. Foreign direct investment from Japan to India in the last few years. Source: Ministry of Trade and Commerce, Government of India. Ministry of Economy, Trade, Industry, Government of Japan. CIHS Analytics. India has been the biggest recipient of the Japanese Official Development Assistance (ODA) loans in the last few years. India receives these loans from Japan under the latter’s “Act East” policy and “Partnership for Quality Infrastructure”. Table 2 summarises Japan’s ODA towards India. Table 2. Japan’s ODA towards India[2] Loans 312.25 billion Yen 2021-22 Grants 5.12 billion Yen 2020-21 Technical Cooperation 8.5 billion Yen 2021-22 The two countries have strengthened their relationship by focusing on developing strong supply chains through the India-Japan Industrial Competitiveness Partnership. Both India and Japan have also been striving for environmental protection and reduction of greenhouse gases. Their Clean Energy Partnership which was formulated in March 2022 focuses on achieving carbon neutrality and working towards energy security. Along with the Japan-India Energy Ministerial Dialogue, it also aims for a strategic cooperation plan in the fields of hydrogen, ammonia, and LNG. Science and technology cooperation Both India and Japan have benefitted from their science and technology cooperation over last several decades. While Japanese firms have revolutionised the Indian technology market, Indian software engineers, scientists, mathematicians, and technologists have contributed immensely to scientific research and development in Japan. India and Japan signed bilateral Science and Technology Cooperation Agreement in 1985 to foster an era of scientific advancement in the Indo-Pacific. Subsequently, the India-Japan Science Council (IJSC) was set up in 1993 facilitated several advancements. Till date, it has[3] Over 550 students have attended exchange programs through a

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Make the best with change in mind-set

Cooperatives can deliver $ one trillion economic expansion; provide work opportunities to millions and fuel boom in grassroots firms K.A.Badarinath Fourth pillar of Indian economy is on the resurrection mode. From state-owned public undertakings, private and foreign companies, cooperative enterprises considered as fourth engine of economic growth are in for a big makeover. Taking cooperatives seriously as grassroots enterprises to spur rural economy, create jobs and add rural wealth to India’s growth heft was something long overdue. And, this government seems to have got its heart and soul at the right place to revive the cooperative enterprises and help achieving double digit growth and take Indian rural people global. A year-long drive to rejuvenate these enterprises with huge potential across a dozen sectors in the spirit of ‘antyodaya’ as envisaged by Maharshi Arbindo and Vinoba bhave of ‘Godan’ fame is timely. Narendra Modi government’s two decisions in cooperatives sector last one year stand out especially the the rural enterprises that are mostly agricultural primary credit societies. As per government’s own data, over 36,000 such societies have turned dysfunctional with many of these enterprises unviable. Its decision to shut down cooperatives that are untenable is a good beginning to reform the sector that can boast of only half a dozen large multi-state enterprises that are really successful. But, 13-crore members’ network across 99,000 primary credit societies has every chance to add economic muscle to the Indian growth and bring about fundamental change in rural hamlets across the country. Revival of the primary credit societies also will have cumulative effect with balance sheets of 352 district central cooperative banks improving and 34 state cooperative banks getting healthier. These banks have had refinanced or recapitalized thousands of primary credit societies with Nabard’s funding support. Many of these banks were also in doldrums owing to losses or unrealized funds lent to the societies. Integration of these credit societies with focus on core agricultural lending with dairy cooperatives with 1.5 crore membership in two lakh cooperative enterprises would help diversify the risk and open up new business opportunities. Bringing in over 25,000 fisheries cooperatives with 38 lakh members would culminate into the grass roots enterprises taking up multi-modal business activities. This week’s decision to set up two lakh such multi-modal primary credit societies in agriculture, fisheries and dairy sectors over next five years would be an ice-breaker given that they can be carved out into sustainable companies and help reach out to last man standing. These new enterprises would help spread the cooperatives to 1.6 lakh panchayats without primary agriculture credit societies and two lakh villages or clusters without dairy linkages. Multi-ministerial coordination, phasing out overlap of infrastructure and judicious utilization of meagre resources making the new age cooperatives as enterprises for different products and services marks shift in economic pendulum. Harvard bred economists like Dr Manmohan Singh, Montek Singh Ahluwalia or Palaniappan Chidambaram had never believed that cooperatives and rural economic activity could be a game changer. These market and corporate protagonists may actually be irked by the policy shift relating to cooperatives. But, there’s no point in making them believe that cooperatives can deliver big time at grassroots. In fact these ‘highly respected western educated minds’ made fun of the Atal Bihari Vajpayee’s ‘Antyodaya’ anna yojana to feed the perpetually hungry poor people in India’s hinterlands. Their tribe had scoffed at the very thought of taking economic activity to villages in the spirit of anthyodaya as propagated by philosophers – thinkers, Dattopanth Thengdi and Deendayal Upadhyaya. Most significant in the entire strategy to revitalize cooperatives was to rope in successful companies like National Dairy Development Board and National Fisheries Development Board (NFDB) in bringing about sustainable change in the way cooperatives operate on ground zero. Their experience, expertise and reach would only help evolving sustainable grassroots enterprises in cooperatives in the new age. The new policy envisages bringing over 25 business activities under the roof of new age cooperatives. From cooking gas to petroleum products, food grains, fertilizers to seeds, fair price shops to community irrigation have been enlisted as business activities of these cooperatives hitherto segregated under either dairy development or spread of credit. While the new cooperatives policy is yet to take complete shape, setting up a dedicated multi-state enterprise to push grass roots products and services into export markets is yet another milestone in the policy shift heralded by the government. Several countries in Europe like France, Germany; Australia, Canada and Japan have sustainable cooperative models especially catering these countries exports basket. From banking, finance, insurance, pension funds, dairy to agricultural products and services, cooperatives have been the vehicles in these countries exports and domestic consumption. As per World Cooperatives Monitor of 2020, just the top 300 enterprises in this sector account for a whopping US $ 2.146 trillion economic activity. Cooperatives globally provide work opportunities to about 10 per cent of total employed personnel. If one were to go by figures of International Cooperatives Alliance, three million enterprises have over 12 per cent humanity as their stakeholders. A billion members of these cooperatives is what translates to large chunk of economic activity and trade is many countries. In the transformative shift that cooperatives are expected to undergo, a few riders are what matter the most. Hand holding and facilitation by creating conducive environment is what government’s role should be limited to. Allowing them to make most of the opportunities in rural India is what the bureaucracy will have to do. Strangling these new age enterprises with politicians or bureaucrats may not work. Past experiences cannot be forgotten in a hurry. Let’s not ignore what happened to IFFCO. There were several attempts by different governments to effectively make it a state-run enterprise by default. Resistance put up by then Fertilizers minister Ram Vilas Paswan to cut IFFCO’s umbilical cord with the government when the cooperative enterprise made desperate attempt to return the government’s paid up capital cannot be set aside. While IFFCO managed to retain its core cooperative

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A responsible budget sans fiscal profligacy!

All inclusive growth strategy is the foundation to an independent developed economy and ready Bharat to play a larger global role K.A.Badarinath Bharat’s finance minister Nirmala Sitharaman presented a responsible budget on behalf of the BJP-led government on Wednesday. It is on expected lines. Conservative in content and spirit, but the budget for 2023 – 24 has grand vision for taking Bharat to big boys club globally. It lays the foundation for Bharat’s centennial run in 2047 by the time it seeks to evolve as an independent, inclusive and developed economy that is sustainable. The Rs 45 lakh crore budget swan song is to best utilize the ‘amrit kaal’, intervening 25-years to get there and get big. It’s in continuation of the Bharat@100 line given in both the Presidential speech and pre-budget economic survey on Tuesday. Women’s empowerment, skilling our vast human resource, expansion of our tourism industry and achieving green growth as areas that have been identified in the grand vision presented for 2047. Seven priorities laid-out by Narendra Modi government in the budget point to reshaping Bharat’s economic and development paradigm. She gave the budget civilizational connect by christening these priorities as ‘saptarishis’ that guided this country for millennia. Nirmala Sitharaman who has now turned a veteran with her fifth budget presentation, tenth for the Narendra Modi government did not lose on basics. She pushed peddle hard staying the course on fiscal consolidation and not going for the easy option of ‘reckless spending’ or profligacy, hall mark of a government that faces polls in a year or so. On most parameters like fiscal deficit pruning it to 6.4 per cent in next financial year and 4.5 per cent by 2025-26 has been projected. Keeping the jobs-led green growth on track at 6.5 per cent in 2023-24 and achieve double digit expansion in medium term is what the government aspires to achieve. Even for current fiscal, the government managed to keep the deficit at 6.4 per cent on strength of tax revenues and expanded the spending to Rs 41.9 lakh crore. Grand standing on global vision and fiscal prudence did not mean that Prime Minister Modi or his protégé Sitharaman lost out on facing Lok Sabha elections in 2024 preceded by assembly elections in seven states this year. Jobs and environmentally sustainable growth was articulated by Sitharaman in the backdrop of ‘rozgar melas’ that Modi has been holding last six months giving out appointment letters to thousands of first time work seekers. Vocal middle-class voters that have been main stray of this government also got their due especially the honest taxpayers with across the board tax concessions, remissions and exemptions with limits rejigged. In the process, Nirmala Sitharaman had to forego Rs 35,000 crore revenue that the government could afford, given the buoyancy in tax mop up. From economic management side, this would spur further demand for goods and services having multiplier effect on growth impulses. But, opposition political formations are bound to criticize the last full budget of this government in present term as ‘election oriented’. Opening line of the budget speech itself was strong on political messaging as it enlisted youth, women, farmers, backward classes, scheduled castes, tribes and economically weaker sections to be targeted in making Bharat’s economy ‘inclusive’, open and prosperous. Budget is the third instance when the government chose to present its report card of nine years in governance. Nirmala Sitharaman’s numbers were impressive at 11.7 crore households getting toilets, 9.6 crore cooking gas connections, 220 crore Covid vaccinations for 102 crore persons, 47.8 crore jan dhan yojana bank accounts, 44.6 crore getting insurance cover and 11.4 crore farmers getting cash support of Rs 2.2 lakh crore. Not just addressing the voters’ class, Nirmala Sitharaman managed to keep the industry and markets trigger positive. Two big decisions that have had positivity include 33 per cent increase in infrastructure investment at a whopping Rs 10 lakh crore in 2023-24, way above Rs 7.3 lakh crore in current fiscal. This is three times what was possible in 2019-20. If one were to take the grants given to support capital assets in states, capital expenditure moves up to Rs 13.7 lakh crore translating to 4.5 per cent of GDP. Capital outlay of Rs 2.4 lakh crores to railways, Rs 75,000 crore to developing critical transport infrastructure and logistics is an addition. Second trigger was that most consumers across tax brackets got relief thereby allowing extra money for investment or purchases. Thirdly, the government managed to keep its public finances in order without making any major demand on industry through corporate taxes. Modi government’s budget also makes sincere attempt at building confidence in populace at large and swell with pride in their Bharat’s citizenship especially while making out a case for momentous G-20 Presidency and economic surge as fastest growing global economy. Formalization and digitization are factors that would be pushed by the government thereby weeding out corruption in government schemes and shrinking the informal economy. For instance, digital payments led to 7400 crore transactions valued at Rs 126 lakh crore in 2022 alone. Jobs in formal sector have also grown and this reflects in EPFO membership that swelled to 27 crore. Agriculture as a big priority is no surprise and shift to millets based natural farming is a big idea that government has sold through the budget. ‘Shri Anna’, an indic name for millets like Jowar, Ragi, Bajra, Kuttu, Ramdana, Kangni, Kutki, Kodo, Cheena and Sama, resonates as an initiative to make Bharat a global hub for these wholesome nutritious grains. Another significant shift is taking economic growth on green pathway. Apart from the dedicated hydrogen mission, Rs 35,000 crore was set aside to enable energy transition from carbon fuels, green credits, 500 waste to wealth projects with Rs 10,000 crore investment and renewable energy evacuation from Ladakh supported through budget resources of Rs 8300 crore. Skills development got a new heft in its 4.0 version with 47 lakh youth getting trained for taking up jobs

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