* Editorial 1

There has to be a focus on human capital formation and in addressing the real reasons for the economic slowdown

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On Independence Day, the Prime Minister expressed confidence that India would be a $5-trillion economy in 2024, a line that has been picked up by ruling party leaders, Ministers and also senior government officers.

However, this is surprising as the impact of economic growth on major development goals — examples being improvement in education, health and overall human development/human capital formation; expansion in productive employment for all and environmentally sustainable development, etc — depends on the nature and composition of growth.

Share in wealth

The economic growth experience in India in recent decades has shown that growth has had an adverse impact on all these developmental goals. To start with, Credit Suisse, for example, has shown recently that 1% of the wealthiest in India increased their share in wealth from 40% in 2010 to more than 60% in the last five years, and the richest 10% in India own more than four times wealth than the remaining 90%. That is, if we proceed on the same growth path, a large part of the increase in wealth and GDP will be claimed by the top 10% richest population in India. In other words, the top 10% will take away the lion’s share of the $5-trillion incomes if and when we reach the target of $5-trillion economy.

Gaps in education, health

Our growth experience so far shows that the rate of growth of employment has declined with increasing economic growth; we have now reached a stage where the economy is suffering from the highest ever unemployment rate. With rising population and, consequently, the labour force, India will soon experience demographic disaster rather than demographic dividend. The story of health and nutrition is also quite similar. The literacy rate has grown very slowly and according to the United Nations, India’s literacy was 71.1% in 2015. India is now far behind many African countries such as Rwanda, Morocco and Congo in terms of literacy. According to the Annual Status of Education Report (ASER) 2018, about 70-74 % children (in the age group 6-14 years) go to school regularly; far fewer go to secondary school. The quality of education is far from satisfactory, if one is to read ASER 2018.

There is an urgent need for a quantum jump in public expenditure on education in order to fill wide gaps in infrastructure, training and retraining of teachers and to ensure a strong follow up on the quality of education. However, as against the norm of 6% of GDP, the government spend is around 4% of GDP on education. It is the same when it comes to the story of health, where the decline in malnutrition, particularly among women and children is very slow; against the norm of 3% of GDP, the government spends around 1.5% of GDP on health. Finally, in the process of growth in India, there has been a severe depletion and degradation of environmental resources. A recent Intergovernmental Panel on Climate Change report has warned India of the seriousness of climate change and its severe adverse impact on the environment and the livelihood of masses.

Another major concern about reaching the aim of a $5-trillion economy is that at present the economy is experiencing a severe slowdown; it would be very difficult to raise the rate of growth to reach $5 trillion in 2024 unless we focus on human capital formation and address the real reasons for the slowdown. As NITI Aayog has observed recently, the present crisis is the worst crisis India is facing since the Independence. The rate of economic growth, at 5%, is the lowest in the last few years. Also, the rates of savings and investment in the Indian economy have declined, as also exports and total credit. Among the major industries, the automobile industry is experiencing continuous decline, which has led to the retrenchment of 3.5 lakh workers so far. Apart from the ancillaries of the automobile industry, many other industries are declining fairly rapidly too — examples are diamond cutting and polishing, textiles and garments, and several Micro, Small and Medium Enterprises (MSME).

Crisis in agriculture

All this has affected trading and business units. Agriculture is in crisis today on account of rising costs of inputs and low prices of produces, and low public investments in this sector. Again, agricultural real wages are in decline and non-farm wages are constant if not declining; urban wages are also declining in recent years. As a consequence of all these developments, there is a crash in the aggregate demand in the economy.

What is needed urgently is for the government to increase public expenditure in investing in agriculture — in infrastructure, inputs, extension, marketing and storage and training — and in providing profitable prices to farmers. It should also raise funds for the Mahatma Gandhi National Rural Employment Guarantee Act to push up demand by following a Keynesian approach.

It should raise public employment by filling all vacant sanctioned posts in the Central and State governments, which would be around 2.5 million jobs. The government should also regularise contract, casual and “honorary” jobs and make them regular jobs. Increasing additional jobs for ensuring basic health and good quality education up to secondary level to all so that any meaningful skill formation is possible should be another aim. Human capital formation will give a big push to start-ups and MSMEs. And, finally, the government should also focus on promoting labour intensive sectors such as gems and jewellery, textiles and garments and leather goods. The government should not worry about the fiscal deficit ratio as these measures will address the major problems of the economy.

Fall in demand

What we witness, however, is that public expenditure is declining continuously in the last few years, As the Centre For Monitoring Indian Economy Pvt. Ltd. has pointed out, public expenditure has declined to the minimum in the last five years. Steps such as rolling back some budgeted tax proposals, providing a stimulus package to industries, raising foreign direct investment flows, reducing Goods and Services Tax to help industries are not likely to increase much aggregate demand in the economy. Also, reduction in repo rate by the Reserve Bank of India and asking banks to pass on reduced rates to customers, recapitalisation of banks by ₹70,000 crore to raise liquidity in the economy and other steps to ease credit flows to the economy are all supply side measures; the real problem is a crash in the aggregate demand.

Let us hope that the government looks at the weaker sectors and sections to get out of the crisis if not to improve their well-being.

Indira Hirway is Professor of Economics, Centre for Development Alternatives, Ahmedabad

Islamabad would dilute its Islamic credentials if it were to establish diplomatic ties with Tel Aviv

Sujan R. Chinoy

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Recently, Israeli and Pakistani scholars and opinion-makers appear to have speculated about the possibility of the two states establishing diplomatic ties. This has cast fresh light on the changing dynamics in the region and Israel’s growing diplomatic reach and success.

Ever since Israel’s founding in 1948, it has been the endeavour of the Jewish state to overcome its regional isolation and enhance diplomatic relations with as many countries as possible. Apart from Turkey (1949), Egypt (1979) and Jordan (1994), none of the states in the region have recognised Israel. In fact, the Organisation of Islamic Cooperation (OIC) routinely pillories Israel for its “occupation” of Palestinian lands. The latest in this long acrimonious saga is the OIC’s call to convene an emergency session to discuss Israeli Prime Minister Benjamin Netanyahu’s remarks that, if re-elected, he would definitely annex the Jordan Valley in the West Bank and the northern Dead Sea.

The regular and scathing indictment by the Islamic world notwithstanding, Israel has been successful in gradually expanding its diplomatic profile beyond its immediate neighbourhood. Israel has established diplomatic relations with a large majority of the 193 UN member states.

India-Israel links

India established full diplomatic ties with Israel in January 1992. While many factors brought these two democracies together, it is a fact that both have successfully tackled state-centric threats throughout their history. Israel has successfully dealt with the gauntlet thrown down by the combined Arab opposition in 1948, 1967 and in 1973. India has prevailed over an acutely hostile and implacable Pakistan in every conflict since Partition. Both Israel and India have been victims of asymmetric warfare such as terrorism, which they continue to tackle with resolve.

Thanks to the dynamism infused in India’s foreign policy by the Indian Prime Minister, India’s interactions with the Gulf Cooperation Council (GCC) states have witnessed an impressive upward trajectory in recent times, encompassing economic and security ties. High-level political engagement with the West Asian region has been another hallmark of the Narendra Modi government.

No doubt, mutual apprehensions about Iran have nudged Israel and the Gulf states closer. Israel continues to look beyond the confines of its immediate region for greater economic and diplomatic Lebensraum. The Indo-Pacific region too is fast emerging as a prime focus of its endeavours.

While Israel established diplomatic ties with China at the same time as with India (January 1992), their relations have been primarily limited to the economic realm due to the American embargo on selling sophisticated weapons systems to Beijing. Israel, however, is expanding its arms sales to India and to countries in Southeast Asia.

Under a changing rubric, Israel is also looking at increasing its diplomatic footprint in South Asia and beyond. Forging closer ties with populous Asian Muslim countries such as Bangladesh and Indonesia would help it to gain greater legitimacy in the Islamic world.

Investment in the Arab world

Pakistan, however, is a different kettle of fish. The president of the Jerusalem Institute for Strategy and Security, Prof. Efraim Inbar, recently published an opinion piece in the Israeli newspaper, Haaretz, titled ‘Israel would welcome ties with Pakistan – Should India Worry?’ (https://bit.ly/2lWr8EE). He argues that Pakistan’s national interests would better be served by having ties with Israel, particularly since Israel carries weight in Washington and could perhaps mediate on recurring U.S.-Pakistan tensions. Concerns regarding Iran were also cited as a point of convergence.

A rapprochement between Israel and Pakistan appears to be far-fetched. The fly in the ointment is that Pakistan is considered the “sword-arm” of the Sunni world. Islamabad has invested considerably in the security of the Arab monarchies, including in Saudi Arabia and Jordan. Pakistani military units have been stationed in these countries to promote internal stability. Pakistani leaders such as Nawaz Sharif have sought and received refuge in the Arabian Peninsula.

Pakistan has used the platform provided by the OIC to drum up support for its stand on Kashmir, just as the OIC has done for the Palestinian issue. If Pakistan were to establish diplomatic ties with Israel, it would dilute its Islamic credentials and lead to a weakened support base within the OIC on Kashmir, a point acknowledged by Pakistani commentator Ayesha Siddiqa in an opinion article in the same newspaper following Prof. Inbar’s piece. The regime in Pakistan would also face the heat from its many domestic conservative Islamist groups. More importantly, in a recent interaction with the media, military spokesperson Maj. Gen. Asif Ghafoor refuted the possibility in response to a query about Pakistan’s recognition of Israel, stating that such stories were part of a propaganda war aimed at turning the general public against the country’s military.

The Iran factor

Iran is recognised as a potent threat by Israel and the Shia-Sunni divide in Pakistan is frequently a point of friction between Iran and Pakistan. However, as Ms. Siddiqa notes, Israel cannot expect Pakistan to be used against neighbouring Iran and risk the dangers of escalation in sectarian conflict, given that more than 20% of its population is Shia. Pakistan is unlikely to take any steps that could rock its relations with Iran. In April 2015, Pakistan’s Parliament had turned down Riyadh’s request to join a Saudi-led military intervention in Yemen to fight the Houthi rebels supported by Iran.

India has successfully walked a tightrope between Israel and Palestine, and Israel may well hope to do so between Pakistan and India. However, it is not in Israel’s interest to seek diplomatic ties with a state that sponsors terrorism.

While it is the sovereign right of nation states to decide such matters, it appears that the idea of diplomatic ties between Israel and Pakistan remains, for now, a pie in the sky.

Sujan R. Chinoy, a former Ambassador who has served in Saudi Arabia, is Director General of the Institute for Defence Studies and Analyses, New Delhi. The views expressed are personal

Promoting greater use of Hindi is fine, but the language of homogenisation is best avoided

It may be customary for the Union Home Minister, who is also in charge of the Department of Official Language, to make a pitch for greater use of Hindi in official work on the occasion of ‘Hindi Diwas’, observed every year on September 14. However, Home Minister Amit Shah’s remarks this year have raised the hackles of political leaders in some States that do not speak Hindi. The possible reason for the pushback from south Indian leaders to his pitch is that he went beyond the usual general remarks on promoting Hindi, and made sweeping claims that Hindi alone could unite the country, and it was the language which should become India’s “identity” globally. Embedded in his tweets as well as a speech on the occasion was a note of resentment against the continuing influence of English. The Kerala Chief Minister dismissed as absurd the claim that Hindi was a unifying force, and even saw in Mr. Shah’s remarks an attempt to trigger a controversy and to divert attention from real issues. Former Karnataka Chief Ministers Siddaramaiah and H.D. Kumaraswamy and DMK president M.K. Stalin questioned Mr. Shah’s remarks and saw in them an attempt to impose Hindi on their States. Few would disagree that imposing a language on the unwilling is hardly unifying, but could turn out to be divisive. Further, national identity cannot be linked to any one language, as it is, by definition, something that transcends linguistic and regional differences.

It is time the Centre realised that the creation of linguistic States has obviated the need for a campaign against a “foreign language” allegedly fostering a slave mentality. Regional languages have become the official languages of the States, and the continued use of English has a strong utilitarian value. While the development of Hindi is undoubtedly a constitutional command the Union government cannot ignore, the manner in which it is done should not give the impression to the States that there is creeping imposition of Hindi. It was only a few months ago that the Centre defused a controversy when it got a paragraph removed from the draft New Education Policy that indicated the mandatory teaching of Hindi. The fact that the ruling Bharatiya Janata Party is seen as a ‘Hindi-Hindu’ party that encourages unbridled homogenisation also works against it whenever such controversies emerge. It would be disastrous for the country’s famed diversity if the promotion of Hindi is considered a step towards a ‘one nation, one language’ kind of unity. Mr. Shah has spoken simultaneously about the increased use of the mother tongue, but detractors would only see it as an attempt to sugar-coat Hindi imposition and the sidelining of English. According a hegemonic role to the “most-spoken” language in the country may promote cultural homogenisation, but that is hardly desirable in a country with a diverse population, a plural ethos and is a cauldron of many languages and cultures.

As past lessons remain unlearnt, man-made tragedies recur with alarming regularity

There is a familiar ring to boat tragedies in Andhra Pradesh. Unsuspecting tourists, mostly from cities, craving to capture a bewitching river view and meeting with a watery grave. The government of the day announces a hefty ex-gratia, promises deterrent action against all those responsible and initiates steps to prevent such tragedies. But the wheel is not broken, and very soon another tragedy strikes. The latest boat tragedy on the Godavari in which eight tourists drowned and 37 are still missing, is no different. The private operator took on board over 70 tourists who were hoping to see the scenic beauty of Papikondalu, without any permission and ventured into the river that has been in spate for days now. Apparently the inexperienced crew could not cope with a sudden current of water at Kachuluru, one of the most dangerous spots enroute. The boat tilted and capsized within minutes and only those wearing life jackets could save themselves. Among the reports that came from the accident spot, there was one that suggested that some tourists removed their jackets as it was sultry, some wanted to have lunch and some more thought it would come in the way of taking selfies. Only a thorough investigation will bring out all the facts.

Police records show over 100 people perishing in boat mishaps during the last three years, the major one being on the Krishna in November 2017 when 22 tourists lost their lives. And all of these tragedies were avoidable if simple precautions were in place — having only experienced crew with valid licences, provision of life jackets for all and not setting out when the river is in full flow. Were any lessons learnt from these recurring mishaps? The accident on the Krishna jolted the N. Chandrababu Naidu government into action and a committee was formed to formulate preventive steps. The committee highlighted the multiplicity of the departments concerned — ranging from irrigation to director of ports — with permitting rides and monitoring and checking illegal ones. It pointed to lack of coordination. For instance, when the river touches the danger mark, the irrigation department should send out a warning to all concerned not to allow any rides. Without a single regulatory body, the result was this typical bureaucratic phenomenon of passing the buck. The committee suggested making the directorate of ports as a nodal agency and the AP Inland Vessel Rules were brought into effect. Nobody knows what happened to these rules and other decisions. To prevent such man-made tragedies, the government must pin responsibility on officials instead of resorting to mere palliative steps.

Language politics

The Narendra Modi government 2.0 is becoming a perennial headache. It seems to have a multitude of anti-people policies and programmes in its kitty and releases them one after another, having scant regard for the sufferings of the people. After the abrogation of Kashmir’s special status and the release of the expensive National Register of Citizens, the Home Minister is hinting at a ‘One Nation, One Language’ policy (Front page, “Only Hindi can work to unite country, says Amit Shah”, Sept. 15). He could not have made this statement without the concurrence of the Prime Minister. The two are like Scylla and Charybdis, taking the country from one crisis to another. India is a multilingual country consisting of people speaking multiple languages and dialects and yet living in harmony. The mother tongue is a marker of identity of every individual and the Centre would do well not to tinker with the right of an Indian to communicate in his mother tongue.

Manoharan Muthuswamy,

Nabadwip, West Bengal

The BJP seems to have either ignored or forgotten the upheavals that rocked Madras in the 1960s consequent to the then-Central government’s decision to impose Hindi. Sensing the strong opposition to the move in South India, the Centre gave an assurance that English will continue to be the associate official language. One is at sea as to why the Home Minister has made a statement on this topic now. Doesn’t the government have more urgent problems to be addressed?

Mani Natarajan,


More transparency

At a time when aggressive efforts are being made to reduce the iconic Right to Information (RTI) Act to sheer insignificance, the Rajasthan government’s launching of ‘Jan Soochna Portal’ is laudable. Simultaneously, it is an honour to the citizens of Rajasthan, which occupies the pride of place as one of the first in the country to witness the beginning of the epic movement for RTI in the 1990s. The current move will undoubtedly lead to greater transparency in government schemes, and thus set Rajasthan on the path to becoming a corruption-free State. This will, above all, go to win the people’s faith in the working of the State government. The Centre and other State governments must take a leaf out of Rajasthan’s book. They must understand that it is transparency that ultimately wins the common people’s hearts (Editorial, “Effort worth emulation”, Sept. 16).

Samiul Hassan Quadri,

Bikaner, Rajasthan

A project stalled

Train 18’s launch was a proud moment for the country. The whole process of design and manufacture cost only around ₹100 crore, half of what a similar project would cost in many nations. It was no less an achievement than Chandrayaan and arguably of far more immediate practical value for Indians. Many countries, particularly those in South-East Asia, even evinced interest in purchasing the model. One would have thought that an achievement of this magnitude would receive the wholehearted backing of the government. But, incredibly, it got shelved, due to issues like non-transparency in procurement of parts. Surely, if there were irregularities, they could have been addressed without throwing the baby out with the bathwater (Op-Ed page, “Mission successful, end product defunct”, Sept. 16)?

Sunil K. S.,

Gudalur, Tamil Nadu

Concerns of Kashmiris

It is heartening to see grassroots-level coverage of the situation in Kashmir. One feels solidarity with the average Kashmiri, whose fundamental right to exist peacefully has been repeatedly violated. While the newspaper has done its duty in highlighting the concerns of citizens there against the perceived high-handedness of the state, one wonders if these voices of dissent would elicit a response from the corridors of power. Here, the balanced and sensitive approach of former Prime Minister Atal Bihari Vajpayee on the issue comes to mind. Without the goodwill of the Kashmiris, no fundamental policy decision regarding their homeland can succeed. And such sensitivity and realisation is what differentiates statesmen from mere politicians (Ground Zero, “Valley of discontent”, Sept. 14).

Rosen Brar,

Patiala, Punjab

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