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Confrontation To Cooperation: INDIA NUDGES DONALD TRUMP, By Dr. D. K. Giri, 17 April 2020 Print E-mail

Round The World

New Delhi, 17 April, 2020

Confrontation To Cooperation

INDIA NUDGES DONALD TRUMP

By Dr. D. K. Giri

(Prof. International Politics, JMI)

 

The pandemic has thrown people and leaders into an unprecedented situation across the world. Such never-seen-before crisis should propel people to co-create new ideas to combat the problem and conduct relations within and across the countries. But not Donald Trump, who has been consistently corny on issues like trade deficit, sanctions, and retaliation etc. The witty British Prime Minister Churchill had said, “A fanatic is one who does not change the subject, nor does he change his mind”. We could perhaps call Donald Trump a trade surplus fanatic. He has been advocating reducing American trade deficit for the last 30 years or so even before he held any office.

 

The foregoing frustration on our “new ally” stems from his uncalled for, impromptu remark to a journalist in a presser, about retaliation on India if the latter did not lift the embargo on export of hydroxychloroquin to the US as requested by him and his senior officials. Quite a few Indian commentators reacted strongly to the threat issued by Trump to an independent, sovereign country like ours. Moreover, they found the Indian Prime Minister kowtowing to Trump instead of perhaps taking him on for such a belligerent position.  I was much less concerned; rather saw an opportunity for India to have one up on USA and the rest.

 

Before I explain my optimism of a new paradigm in international politics in the wake of this pandemic, let us reread what exactly Trump said and the consequences of his pesky posturing. The press conference went like this. A journalist asked him, “Do you think India will lift the sanction on the anti-malaria drug?” He answered, “I will be surprised if he (Modi) would not. I spoke to Modi. He is doing terrific. And you know he would, because India does very well with the US”.  Then the journalist provoked as they usually do, “If India does not release the drug, will there be retaliation, Mr. President?” Then Trump did what he normally does, showing hubristic outburst of power mindless of diplomatic faux pas, “of course, there will be retaliation, why would not there be?”

 

Donald Trump could have dodged the instigating journalist and said, it may not come to that or some such assurance that he will get India to oblige. Trump is not known for his humility or soft speaking. On the contrary, he is accused of often committing diplomatic gaffes and fibbing at home. I have maintained that we should not worry about Trump’s utterances but watch his actions.

 

Nonetheless, note what he tweeted after HCQ was released, “Extraordinary times require even closer cooperation between friends. Thank you India and the Indian people for the decision on HCQ. Will not be forgotten”. He was as usual effusive in his praise for the Prime Minister, “Thank you Prime Minister, Narendra Modi for your strong leadership in helping not just India, but humanity, in this fight.”

 

Prime Minister Modi responded warmly, “India-US partnership is stronger than ever. India shall do everything possible to help humanity’s fight against COVID-19”. So far so good!  One would like to go beyond these diplomatic niceties and nudge the partnership into a deepened cooperation. The ball is in New Delhi’s court. One is not ruling out confrontation completely from international politics. That will be a moral utopia and geopolitical naiveté. Cooperation between partners and allies is what is advocated.

 

New Delhi needs to debunk the myths associated with Trump on trade deficit-- such as the US must not have deficit with any country; trade deficit means losing jobs and competitiveness and so on. New Delhi is not a competitor with the US, rather an economic collaborator. If the economies of partners are weakened, it may raise security complications, which is again an American obsession or a priority as the biggest power and economy.

 

Arguably, if Mexico’s economy goes down with American tariffs or other trade restrictions, illegal immigration will spike upending the US national security. If Philippines economy is affected by negative trade terms, it may be swayed by Chinese money. Not to forget Philippines is a defense treaty ally of the US. Similarly, if India is squeezed with trade imbalances in its favour, it will lose its leverage in India-Pacific region, which the US wants India to have in order to counter China’s expansionism. So trade deficit should not be seen in isolation. Donald Trump likes trade wars. He needs to be nudged away from engaging in such wars with friends, partners and allies.

 

Having made this strategic move, New Delhi must focus on signing the trade deal sooner than later. It has been long overdue, but not happening perhaps for a paradox that needs to be addressed. That is, India and USA have deepening defense relations whilst having continued trade tensions. New Delhi could not afford to live with this dichotomy, mismatch between security and trade.

 

In particular, the immediate issue is to ask Trump to restore duty free entry of the $6.2 billion of Indian exports under the GSP, a concession which Trump cut off in 2018. Modi has done more than he should have in ‘Howdy Modi’ rally by endorsing Trump’s candidature for his November re-election. About 4 million voters of Indian origin may tilt the electoral scale in Trump’s favour if he would assuage their anxieties about India. To be sure, they will not be persuaded by threats of sanctions, but won over with an amicable deal between India and the US.

 

The last point one would like to make is about India making its choice of partners. It was good of the government not to be excited by Trump’s occasional outbursts including the latest one, which was not so harmful as his prevarications on Kashmir. But the message must go that it is the US, not China that India wants to make security and trade pacts. Quite a few people worry if India has come out of the non-aligned psyche. As a seek-sorrow, India often likes to run with the hare and hunt with the hound.

 

It seems there are still China apologists in our foreign policy establishment and intellectual circles. The Left solidarity had shifted from former USSR to China. The Left still has its intellectual influence amongst people in high places. Our China-ambivalence confuses our partners. A clear line on confrontation with some cooperation with others is the need of the hour. The pandemic should give us time for careful reflection. The Coronavirus, which we should call Wuhan virus, gives us a wide window to see things through. ---INFA

(Copyright, India News & Feature Alliance)

New Delhi

15 April 2020     

Restless Labour: GOVTS NOT DOING ENOUGH, By Insaf, 18 April 2020 Print E-mail

 

Round The States

New Delhi, 18 April 2020

Restless Labour

GOVTS NOT DOING ENOUGH

By Insaf

 

Words without deeds don’t count. A simple message which sadly both the Centre and States seem to ignore, in the midst of growing restlessness among daily and migrant workers across the country. Even after the first 21-day lockdown, a system is not in place to make this vulnerable section feel cared for. Instead, their captivity in cities is extended till May 3 following extension of lockdown. With borders sealed and uncertainty of getting two meals a day, these workers yearn to go back home, for not only is the relief package too little, but they miss and are concerned about their families. There is bound to be a reaction and impatience is rising. So we saw on Tuesday last, a 2,000-strong crowd of migrant workers gathered at Mumbai’s Bandra railway station demanding passage back to their native States. But they were dispersed, faced lathicharge and sent packing to their ill-equipped shelter camps. This despite, New Delhi asking all States and UTs to take “welfare measures, including provision of food, shelter, medicine, mobile and video call facilities and counselling, for migrants living in shelter homes across the country.”

 

However, it takes two to tango. New Delhi must aid the States well and give a relief package they seek. The lockdown has caused misery to tens and thousands of poor labourers. Last week saw hundreds of workers employed in textile industry of Surat, Gujarat, pouring on to streets demanding transport and permission to go back to their villages; In Delhi, migrant labourers reportedly set three shelter homes on fire on Sunday last, after an argument with staff over food; in Aurangabad, a sub-divisional police officer and a health department team were attacked on Wednesday last and a BDO and three cops roughed up in Areraj, East Champaran when they went to create awareness on social distancing; the same day, 150-odd migrant labourers and their families, natives of MP and Chhattisgarh, staying around Katraj area, Pune, started their journey home, about 1,000 km away, on foot only to be sent back before they could cross the city limits; hundreds of chili-pickers from Vidarbha and MP districts in AP and Telangana are demanding to go home as their task is over; on Thursday last 30 textile workers in Surat were stopped by police while trying to return home on foot...Such distressing stories are never ending, some not even reported. Time to see the writing on the wall. 

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Secular Fibre Damaged

The country’s secular fibre gets further damaged. COVID-19 adds another casualty to its long list i.e. the virus is encouraging enmity between different groups on grounds of religion. Ahmedabad, in state of Gujarat, may just have scratched the scars of the 2002 communal riots as it signals distressing news: the 1200-bed Ahmedabad Civil Hospital has separated wards handling coronavirus patients for Hindus and Muslims! A report quotes its Medical Superintendent saying ‘usually wards were separated on basis of gender, but in this hospital, they have segregated wards on the basis of faith, and this was done as per State government’s decision.” But the BJP-ruled government denies it: ‘no such instructions were given ...patients are kept in different wards based on their medical condition, severity of symptoms and age, purely based on treating doctors’ advice.’ However, patients accounts suggest names of 28 men admitted in the first ward were called out (belonging to one community) and they were all shifted to another without citing any reason. The direct action obviously has sent disturbing messages, in the backdrop of reports from other States like UP, Haryana, Punjab wherein members of minority community are said to be discriminated in form of vegetable vendors either being stopped from selling their goods or people being told not to buy from them. The trend is frightening indeed and must be contained.

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Kerala’s Phased Relaxation

God’s own country continues to lead the way. On Thursday last, Kerala spelt out its plans of a phased easing of lockdown. Chief Minister Vijayan, praised for his deft handling of the pandemic, committed to follow Centre’s guidelines and announced grouping of districts into 4 Zones based on number of active/positive cases: Zone 1 has 4 districts with higher restrictions, where full lockdown will continue till May 3; Zone II with 3 districts will have partial exemptions from April 24 as positive cases are less; Zone III with 5 districts, including capital Thiruvananthapuram, with minimum cases will see partial relaxation after April 20 with shops/restaurants (only parcel) to remain open till 7 pm, though hotspots will remain sealed; Zone IV with 2 districts with no cases, will have minimum restrictions, travel will be allowed after April 20, but use of masks, sanitisers will be mandatory. General restrictions such as inter-State/inter-district travel won’t be permitted during the lockdown period; restrictions on public transport, closure of education and training institutes, religious places, cinema theatres and places of public gathering remains. However, soon there will be a phased opening up of construction and traditional sectors like coir, cashew, beedi and handicrafts; agriculture sector, plantation sector, cooperative institutions, among others. Getting the people back to normal life is now the goal. 

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Breather For Convicts

Thousands of convicts and undertrials will taste freedom again, albeit briefly. The pandemic ironically will give them a breather. Most governments have readily agreed to follow Supreme Court’s directive to reduce overcrowding and prevent virus’ spread in prisons.  Rajasthan is the latest State to release 638 inmates either on “interim bail” or “emergency parole,”; Delhi released 419 inmates of 3,000 proposed from Tihar Jail; Tamil Nadu 1,180 from 9 central prisons; Odisha 80 so far of 1,727 inmates proposed; Assam 41; Gujarat shall release 1,200 prisoners; UP and Maharashtra 11,000 each from 71 and 60 prisons respectively, MP 12,000-odd; Punjab 6000 and Uttarakhand 855. However, governments need to think long term. National Crime Records Bureau 2018 statistics reveal India has over 4.5 lakh prison inmates-- about 17.6% more than their capacity. Examples being: TN has a capacity of 10,000 but has over 18,000 inmates; UP houses double -- 1,04,011 instead of 58,914; Maharashtra 36,195’s instead of 24,032; MP 45,000-odd against a capacity of 29,000 etc. Prison authorities must set their house in order. Sooner the better.

*                       *                       *                       *                       *                       *                       *

Alcohol Go-Ahead

Assam and Meghalaya may have raised many an eyebrow. Liquor shops in both these north-eastern States have been allowed to open their shutters since Monday last for seven hours a day! The order of Excise department in Assam to the Deputy Commissioners says shops can open from 10 a.m. to 5 p.m. and work with bare minimum staff, not more than 50%, provide hand sanitisers to customers and staff while handling the bottles and cash. Further, wholesale warehouses, bottling plants, distilleries and breweries too can be open but must accommodate staff within their premises and arrange food and other amenities for them. Any violation will invite cancellation of their excise licence, is a warning. Meghalaya has justified its decision saying consumption of alcohol is a way of life in the State. The ruling MDA had first allowed home delivery of alcohol, but later withdrew its order and now has approved opening of wine shops and bonded warehouse from 9 am to 4.p.m. subject to strict compliance similar to Assam. Will other States follow suit, is worth a watch. ---INFA

(Copyright, India news & Feature Alliance)

New Delhi

17 April 2020

 

 

Pandemic Side-Effects: WANTED UNITED ACTION, By Dr S. Saraswathi, 16 April 2020 Print E-mail

Events & Issues

New Delhi, 16 April 2020

Pandemic Side-Effects

WANTED UNITED ACTION

By Dr S. Saraswathi

(Former Director, ICSSR, New Delhi)

 

The Government of India has announced the second phase of the lockdown throughout the country till 3 May 2020. Stricter enforcement of restrictions is expected. Will life be the same before and after the pandemic and lockdown? COVID-19 pandemic has given rise to many social side-effects in the fight against it, touching human life not only physically, but in numerous other ways.

 

The Ministry of Home Affairs has sought a report from the West Bengal government regarding dilution of lockdown measures by increasing the number of exceptions that could have resulted in the spread of COVID-19 infection in the State. It has pointed out that violation of their orders issued under the Disaster Management Act of 2005 is liable for penal action - a political-administrative issue arising as a side-effect of epidemic control.

 

West Bengal Chief Minister has reiterated that the lockdown in the State would continue with a “human face”. Irreproachable. But, pandemics like COVID-19 will not respond to soft human approach or friendly gestures of even a popular leader, and needs to be put down with an iron hand. The loss and inconveniences of lockdown can be rectified, but the loss due to the spread of the epidemic cannot.

 

A gruesome attack on a police party doing their duty of checking curfew passes in which the hand of a sub-inspector was cut with a sword by a group of people in a vegetable market in Patiala reveals the occupational hazard involved in the job of epidemic control. This is in addition to the risk of catching the disease faced by all workers in the field.  

 

Lockdown, globally recommended as unavoidable course to contain the epidemic, is the centre around which individual and social life is organised today. It is accepted as a weapon, but its terms are bitter, creating conflicts.

 

Violations of lockdown rules are happening in all States numbering in thousands and fetching fine amounts in lakhs besides seizure of hundreds of vehicles which are cited as proof of concerned State Government’s efficient enforcement of the lockdown. Rather, they are evidence of the inherent incapacity of our people to submit to disciplinary rules which is habitually ignored under normal conditions. It has increased the responsibility of governments and law enforcing agencies to be vigilant in checking violations – an unnecessary additional burden while engaged in a life-saving mission. 

 

As the health impact of the disease is felt wherever it has attacked, its multiple side-effects in non-medical and non-health matters are enormous, even beyond the threat of nuclear war. It brings to the fore social responsibility of people in all walks of life to contain, fight, and eradicate the disease. There is no news these days in the media or informally among people apart from matters relating to the pandemic. Nothing has so far united people of the entire world as the concern over the growth of the pandemic and efforts to find a remedy.

 

Globalisation is undergoing a trend towards strong team work against the disease.  Simultaneously, a stimulus to promote national self-sufficiency is also growing. The UNO, FAO, and WTO have warned the nations of the risk of worldwide food shortage if the epidemic is not managed in time. In India, State governments are already taking steps to carry on agricultural activities without disruption.

 

Over a month ago, when China, Iran, and USA were already facing the wrath of the epidemic, and COVID-19 was knocking at our doors, WHO chief warned the world: “We are in unchartered territory. We have never seen a respiratory pathogen that is capable of community transmission, but which can also be contained with the right measure”. The community becomes the focus for action.

 

All epidemic diseases have a strong social side as serious as health aspects and it effecting social changes. For, they are primarily related with social interaction. Hence, every man and woman, as a human being, has got a duty to contribute actively or passively to fight the epidemic and has no right to protest against or disobey orders and regulations. Religion and conventions cannot be excuses for violations of epidemic control orders. Any action, that is deliberately done that could aggravate the situation, is a crime against the nation and against humanity.

 

In a country where there are people who think that spitting in a public place is their right, COVID-19 has given an opportunity to learn basic hygiene. In a village in Tamil Nadu,  sometime ago long before this epidemic, a school teacher was reprimanded for advising a  student to wash his hands before taking lunch as making a casteist remark! Today, we are constantly advised how to wash our hands.

 

Making lockdown a success is a joint responsibility of law enforcing agencies and the community. We have to pool human resources and the services of leaders from various fields – political, administrative, educational, religious, media, entertainment, sports, etc. Industrialists have to restore manufacturing of goods that are now affected. The corporate world has an additional social responsibility in the task of maintaining financial stability and in recovery and extending support to welfare activities.

 

COVID-19 has conclusively proved that governance is not the exclusive domain of political leaders, but needs the active participation of people. The Prime Minister holds extensive discussions with various leaders including religious leaders to find ways of facing the crisis.

       

Acknowledgement of the importance of experts in various fields to provide guidance at every point is an important outcome of this health emergency. Apart from doctors, paramedics, health and sanitary workers, the role of economists, social scientists, social workers, and media personnel has become vital in handling the crisis. Politicians and generalist civil servants heading the bureaucracy presently need the advice and active involvement of experts as equal partners in governance. It signifies the value of facts, truth, reason, and impartial judgement to guide action.

 

The epidemic has psychological impact which is already emerging as a problem. Studies are launched to assess community perception on the impact of this pandemic. The ban on liquor in many States is affecting addicts mentally. But, the Kerala Government’s proposal to relax prohibition for some time has been disallowed by the court.

 

Total lockdown is said to be world’s biggest psychological experiment likely to cause stress-related problems. Quarantine is not just physical discomfort, but a mental agony that would last for lifetime. 

 

Mental state of daily wage labourers facing loss of wages, employees facing possible retrenchment, small traders and vendors unable to carry on their business and of families separated by lockdown restrictions on movements, create fear and sense of uncertainty difficult to overcome. The only remedy is to impose more rigorous restrictions and stricter enforcement for faster elimination of the epidemic. 

 

Unforeseen rise in incidents of domestic violence has been reported in many countries including India as a fall-out of lockdown forcing people to stay at home. Divorce cases are reported to be increasing.

 

Such side-effects of the World War against COVID-19 pandemic are many more, and must be conquered with united and determined action. – INFA

(Copyright, India News & Feature Alliance)

New Delhi

14 April 2020

 

 

COVID19 Silver Lining: GOVT HALTS MPLADS LOOT, By Poonam I Kaushish, 14 April 2020 Print E-mail

Political Diary

New Delhi, 15 April 2020

COVID19 Silver Lining

GOVT HALTS MPLADS LOOT

By Poonam I Kaushish

 

As the lockdown continues, the corona virus infested season has a silver lining. Wherein Prime Minister Modi turned the maxim: Government money is nobody’s money, on its head by underscoring all to tighten their belt. Hardest hit were our Right Honourables who stared bleakly at a 30% cut in salaries for a year and the discontinuation of their infamous MPLADS (MP Local Area Development Scheme).  Surely, life for our Oliver syndrome afflicted Jan Sevaks will never be the same again.

Predictably, the Opposition cried foul and lamented the lack of funds, ‘how will we look after our constituencies they wailed.’ But their pleas fell on deaf ears. Kudos to the Government for biting the bullet! Would usher in a new bahaar in governance?

 

In the last 27 years since its inception in 1993, the MPLADS and MLALAD are synonymous with an open licence to loot of the aam aadmi’s hard earned money. So deep is the malaise that India’s dalit messiah Mayawati brazenly directed her MPs in 2003 to part with a part of the “commissions” they made from their MPLADS for Party coffers. She said, “Arre bhai sub miljul kar khao”.  Adding, that even the most honest MP makes Rs one crore annually by sitting at home. 

 

Even a ‘sting’ recently whereby some MPs were caught seeking bribes for doling out contracts under the MPLADS made not an iota of difference.  In a tell-all an MP revealed, “Local leaders who already control Rs 400 crore of the panchayat samiti and zilla parishad monies, want the funds and won’t let me spend Rs 1 crore of the Rs 5 crore I receive annually on items which are important to showcase I am an MP.” Sic.

Most scandalously, data analysis of the Ministry of Statistics on MPLADS utilisation show that MPs elected in 2014 unspent money has risen by 214.63% (Rs 551.25 crores) between the 15th and 16th Lok Sabha and have not utilised their funds as effectively as MPs who were elected in 2004 and 2009.When compared with the 14th Lok Sabha, this rise is even greater i.e. 885.47%.

In the 16th Lok Sabha, this amount further rose to Rs 1,734.42 crores. This exponential rise in the unspent amount is despite the fact that funds released by the Government dipped from Rs 14,023.35 crores in the 14th Lok Sabha to Rs 11,232.50 crores in the 16th Lok Sabha. Bluntly, even though the funds available to the MPs saw a marginal decrease the money left unspent grew exponentially.

 

When it comes to a State-wise comparison of utilisation of MPLADS only four of 37 States and Union territories fully utilised their funds. With 81.63% utilisation, Assam is the worst performing, followed by Rajasthan 82.12%, Lakshadweep 82.2% and Tripura 82.39%. On the other hand, MPs of Delhi had the best utilisation 115.13%, Chandigarh, Telangana, Puducherry and Sikkim all of which achieved more than 100%  use of their funds.

 

Pertinently, Modi lead by example by spending  97.33% funds. The unutilised amount in his Lok Sabha constituency Varanasi is Rs 2.27 crores. Congress’s Rahul Gandhi 80.52% and Samajwadi founder Mulayam Singh 88.54% funds.

 

More.  Various CAG reports have pointed out that these funds meant for public good are siphoned off to greedy private pockets. Utilisation of the fund ranged from 37% to 52% during 2009-2014. In 23 States works under the scheme had not been inspected, 90% of district magistrates did not maintain an assets or works register.

In 6 States, 12 districts showed advance released as ‘utilised’ in ‘utilisation certificate’, thus inflating expenditure figure which peaked during elections. In a sample audit of 106 constituencies, it was found that of a total expenditure of Rs 265 crores reported by the collectors, Rs 82 crores, (31%) was not incurred at all.

The modus operandi is simple. An MP/MLA in connivance with the DM ensures a cut out of every scheme recommended by inflating the cost and taking kickbacks from the contractors. The babu is happy and he makes the MP happier. A smart duo nets up to a maximum of Rs 2.5 crore of Rs 5 crore and an honest duo a minimum of Rs 1 crore. Asserted one, it is a "kind of financial rehabilitation package for the political cadre." For their “protection”, or for other “services”.

Indeed, if you think this is damning, think again. Many cases were found where money was sanctioned for maintenance of roads where none existed. There was underpayment of wages, fake muster rolls and bogus expenditure to the tune of 30%. All one needed was to pay a price and the money was yours for the asking.

Anything was game. Shockingly, funds were used for projects prohibited under the scheme: memorials, office or residential buildings, commercial organizations, private or cooperative institutions, places of religious worship and purchase of inventory or stocks. Sadly, there is evidence of Parliament itself sanctifying violations.

In fact, the loot system has been perfected to such an extent that the CAG could detect only 13 cases of suspected fraud and misappropriation of funds in 7 States involving Rs 118.36 crore. It recommended scrapping MPLADS and wanted the funds  transferred to local Governments, as suggested by the National Advisory Council.

Sadly, there is no agency which can stop public funds from being wasted. Notwithstanding, expert views expressed by various committees. In 2002, the National Commission to Review the Working of Constitution sought “immediate discontinuance of the MPLAD Scheme”, saying it was “inconsistent with the spirit of the Constitution in many ways”. In 2007 the Second Administrative Reforms Commission said “schemes such as MPLADS and MLALADS should be abolished”.

Former Chief Justice of India Justice. Venkataramiah, called it an “assault on the Constitution”. Said he, “The scheme not only interferes with the federal scheme but also with the healthy Constitutional principle of separation of powers. There is no provision in the Constitution, conferring power on individual MPs for spending public money or giving directions to any officer, particularly an officer belonging to a State public service, on any matter.

In fact, India is the only country where legislators have the powers to dispense money and favours. In the US, the State imposes penalties for Government finance officers who mismanage public funds. Not only are they removed but barred from holding public office for four years and thereafter until restitution is paid. “When somebody’s got the cheque-book with taxpayer money in it, they’re armed and dangerous and it’s important that people have the way to correct the situation ... before another election comes around”, said a Senator.

Sadly, our leaders act like modern-day feudal maharajas. Whereby they expect the aam janata to prostrate before them. Thus, in this leech infested environment of the uundata takes it all, our carpet baggars refuse to let up. Time for citizens to stop the loot.

What next? Modi has shown the way, even if it’s thanks to corona. It is time to have a serious rethink on continuing the MPLADS. Morally, Parliament has to come clean on MPLADS. The public need to know how it has been (mis)used all these years and what is being planned to correct it. It is time to apply the brakes. Cry a halt to the open licence to loot and scoot! ---- INFA

(Copyright India News & Feature Alliance)

New Delhi,

11 April 2020

 

 

Lockdown & After: BRUTAL RECESSIONARY PHASE, By Dhurjati Mukherjee, 15 April 2020 Print E-mail

Open Forum

New Delhi, 15 April, 2020

Lockdown & After

BRUTAL RECESSIONARY PHASE

By Dhurjati Mukherjee

 

The combination of continued lockdown and slowdown since the third quarter of the previous fiscal is going to hit the country harder like nothing it has faced in the past three decades. Other than the Centre, States such as Maharashtra, Uttar Pradesh, Punjab, Kerala, West Bengal, Telangana and Odisha, who favoured extension of lockdown, will need to prepare a blue print and refine it as time goes by to tide over the crisis.

 

The IMF Managing Director Kristalina Georgieva recently observed at a joint news conference with WHO chief that as the global economy has come to a virtual standstill because of the pandemic, the world is now into a recession that will be ‘way worse’ than the global financial crisis. Obviously, India would be greatly affected as flow of funds from the western world would be slower in the coming months. Some economists are of the opinion that such recessionary phase may continue beyond June but that would be disastrous for the economy.  

 

Meanwhile, Fitch Ratings slashed India’s growth forecast for the current fiscal to a 30-year low of 2 per cent from 5.1 per cent projected earlier, while Moody’s also cut India’s growth forecast for calendar 2020 to 2.5 per cent, obviously due to economic recession gripping the global economy following the pandemic. Goldman Sachs estimated just 1.6 per cent growth, mainly due to the pandemic outbreak. For the next financial year, the Asian Development Bank instilled hope by projecting GDP growth at 4 per cent as it thought “the country’s macro-economic fundamentals remain sound” and hoped the economy to recover strongly.

 

As is generally agreed, the capitalist model followed in India has done very little to promote welfare, including social infrastructure development, which would have benefitted the impoverished sections. Prof. Amartya Sen, one of the many critics, questioned the major assumptions of this model that sufficient production of goods will ensure their availability to all. This has not happened in the country as the top-down approach failed to meet expectations of beneficiaries. This is also reinforced by the widening inequality between the rich and poor as also amongst the urban and rural sections of the population.

 

In such a critical situation, there are expectations of how quickly people will get back to work, keeping in mind the need to follow social distancing. While the industrial sector will not take long, small businesses may have problems adhering to government guidelines. As regards migrant workers and those who may take time to resume their normal activities, they need to be specially taken care of, perhaps through direct benefit transfer at least till May-end.  

 

An estimate by a well-known Left economist is: “If we add all cash transfers announced by Finance Minister Sitharaman, the amount comes to a mere Rs 34,000 crore, which is less than 10 per cent of what civil society organizations were asking for”. This is peanuts but it goes without saying that unlike the US and Europe, which can spend around 8 to 10 per cent of GDP without fear of a ratings downgrade, this is not the case with India, already suffering from a huge fiscal deficit.   

 

Meanwhile, the ILO has warned that around 400 million (40 crore) informal sector workers are at risk of falling deeper into poverty during the coronavirus crisis, prompting calls by the government to cushion the staggering blow. In its latest report, ‘ILO Monitor Second Edition: Covid-19 & the World of Work’ observed the crisis as the “worst global crisis since World War-II”.

 

Nagging fear, which may turn into a reality is that small traders and farmers would have a very rough time in the coming months as labourers may not be available, plus manufacturing would have to do with two or three workers and not getting requisite experienced hands.  Moreover, tiny units, which are more or less supported by households, too would require special attention. 

 

Resources would be a big constraint as disinvestments cannot be carried out in the first quarter of the current fiscal with stock markets having receded to very low levels. Thus, there would be a need to curtail unnecessary expenditure and focus on immediate needs. Mention may be made in this connection of banning foreign travels of government officials and even ministers, reduced allocation of funds to projects that could be delayed, reducing by say 5 per cent of defence expenditure and finally suspension of the Rs 20,000 crore Central vista construction and beautification project in Capital, Delhi. However, the decision to suspend MPLADS scheme for two years, till 2022 should have been given better thought as it would impact development activities in rural constituencies. Perhaps, the Centre would have done well to consider reducing it instead by 50 per cent only for this fiscal.

 

Importantly, the RBI will need and has to take a more active role by helping banks and financial institutions in the next three months. Some moratorium on loans needs to be considered and capital requirements, as far as possible may have to be met. Also there has to be a concerted strategy of boosting up the capital market by the LIC, SBI etc. as foreign investments may not be forthcoming. 

 

While COVID-19 spells doom, the government will need to change thinking and strategy. The thrust has to be rural India. As it is, 3000 children die every day from hunger and starvation and one in four children are malnourished in the country! All this points to the need for developing health infrastructure, specially in backward districts, sub-divisions and rural India per se.

 

Insofar as the private sector is concerned, so far there is no information how much of financial support it will get from the government--in all likelihood meagre. As examples of private nursing homes stare us in the face, wherein these were set up by getting land at subsidised rates from the government, but low income groups can’t afford these for treatment.

 

The focus on development as reiterated by this writer has obviously to be on the Gandhian model whereby economic inequality should not be allowed to widen further by linking consumption and sharing resources with the masses given that one is only a trustee of what one has and not strictly its legal owner. Unfortunately, this philosophy is spoken off by politicians and corporate leaders but not followed in letter and spirit. The scenarios may vary but it is good to believe that by May-end, the pandemic should show signs of receding, at least in India. There is hope.---INFA

(Copyright, India News & Feature Alliance)

New Delhi

13 April 2020

 

 

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