Since most of India’s growth is occurring at the top end, with a few corporate entities raking in a disproportionate share of profits and unemployment being very high, likely, large segments of the population are witnessing negative growth. The contentious issues and problems, internal and external, economic and social confrontation, will choose the next Lok Sabha
By Arun Bhatnagar
- For 2022-23, the IMF has cut India’s growth forecast to 6.1%, giving rise to two special worries
- The unemployment rate in the country stands at 7.8% and youth unemployment is particularly high
- China does not see India as an equal or a predominant strategic threat; that position is reserved for the United States
- by 2023, the total tonnage of the Chinese Navy could be double that of the US, resulting in significant impact on the INDIAN OCEAN REGION
American fiction author Gayle Forman quoted in ‘Just One Night’, which reads: ‘You win some, you lose some. And sometimes you win and lose at the same time…’.
After the results of the by-polls to seven Assembly seats across six States – Bihar, Haryana, Maharashtra, Uttar Pradesh, Odisha and Telangana – were declared, the attention of political analysts and commentators got focused on the upcoming elections to the Himachal Pradesh and Gujarat Assemblies.
In the by-polls, of the four seats the BJP won, the Saffron Party Already held three; the new addition was Adampur in Haryana where a grandson of former Congress Chief Minister, Bhajan Lal, emerged victorious.
By-elections are to soon follow in five Assembly constituencies and to a Lok Sabha seat (Mainpuri, Uttar Pradesh), coinciding with the Gujarat elections in early December, 2022.
In a close fight in the Himachal Pradesh polls, both the BJP and the Congress have much at stake. The former have dropped 11 sitting MLAs from their list of candidates in order to counter anti-incumbency (and, perhaps, an underlying confidence-deficit) while the Congress is hit by factionalism in the State unit.
As a dominant party, the stakes for the BJP are particularly high; the results might – alongside those in Gujarat – be a fairly accurate pointer as to the direction in which the electoral winds are blowing. This will also be significant for the contests in Rajasthan, Madhya Pradesh, Chhattisgarh, Karnataka, Telangana and other States next year which would, in turn, perceptibly impact the 2024 Lok Sabha elections.
In Himachal Pradesh, the bipolar nature of the electoral battle is unlikely to change. The Aam Aadmi Party (AAP), which is in the fray in all 68 seats, has yet to find a foothold, despite a convincing win in Punjab.
Ultimately, anti-incumbency, voter anger and AAP’s absence could tilt the balance towards the Grand Old Party (GOP) but it is pressed for resources.
The AAP are considerably better placed in Gujarat and have – unlike the Congress – named a chief ministerial candidate based, as they contend, on popular ratings. The Party could well emerge a king-maker.
The incumbent Chief Minister, Bhupendrabhai Patel, is leading the BJP charge, with the Prime Minister and the Union Home Minister very much in the picture. One of the slogans is ‘Modi naam kevalam’ (one and only Modi).
Should the BJP prove unable to achieve a clear majority, a shaky coalition could be a possible scenario or, alternatively, taking the respective numbers into account, a single-party government may become feasible (with outside support), with the object of isolating the BJP.
A former president of the Gujarat Congress, Bharatsinh Solanki, has said that the Congress should have ‘no objection’ to the Aam Aadmi Party (AAP) offering its support. He expressed the view that “be it Shankersinhji (Shankersinh Vaghela), Chottubhai Vasava (of Bharatiya Tribal Party), NCP or anyone else, if the AAP supports the Congress, we will take it … We have to fight fascist, communal forces … Be it price rise, hooch tragedy, Morbi (bridge collapse)… who will protect the people from such situations’.
If the AAP are in second place in Gujarat, Arvind Kejriwal’s lieutenant, Isudan Gadhvi, a former journalist, might conceivably make a bid for chief ministership.
According to the International Labour Organization (ILO) data India’s youth unemployment, that is, from among people aged 15 to 24 years who are looking for work, the percent that does not find any, stands at 28.3%. This places in a much poorer state than Asian countries like Indonesia, Malaysia and Bangladesh
For some time now, the Ruling Party at the Centre has been extolling the benefits of a ‘double engine sarkar’, which is all very well for purposes of self-projection, till a tragedy of the magnitude of the one at Morbi (in Gujarat) strikes one squarely in the face.
The developments at Morbi could hardly have come at a worse time.
The Gujarat government and the district administration are, prima facie, responsible for the man-made disaster. The State, its ministers and officers had a duty and obligation; proper governance is a key component of the constitutional framework and the top political and bureaucratic class cannot rest content with self-congratulatory advertisements. They cannot be absolved of accountability and must necessarily accept undiluted responsibility for failures and shortcomings.
At the centre of public debate and discussion – through the coming fifteen months or so – are likely to be the contentious issues and problems, internal and external, economic and social, which confront a vast electorate that will choose the next Lok Sabha.
WIN SOME, LOSE SOME
On the domestic front, India’s story is, at best, mixed.
In 2021-22, its GDP growth was 8.7%, which was among the highest in the world. This was good but, against this, one has to offset the fact that much of it was the growth of climbing out of the pit into which the country had fallen the previous year.
In 2020-21, India’s growth was minus 6.6%, which placed it in the bottom half of the global chart; for 2022-23, the International Monetary Fund (IMF) has cut India’s growth forecast to 6.1%, giving rise to two special worries.
First, since most of India’s growth is occurring at the top end, with a few corporate entities raking in a disproportionate share of profits, and unemployment being very high, it is likely that large segments of the population are actually witnessing negative growth. The second worry is not so much about India’s dropping rank in the world, as about how India’s performance has been sliding compared to its own past performance.
These are polarising times and one often hears that the Indian economy is doing dismally, even as others proclaim that it is a blazing success. The truth lies somewhere in between.
The Indian rupee has been doing very poorly (especially in comparison to the stated target of the political leadership to strengthen it) and inflation, at 7.41%, is high, but these are global problems. Virtually all currencies are losing out against the US dollar, and inflation is a global phenomenon.
Where India is doing especially poorly is in employment generation. The unemployment rate stands at 7.8% and youth unemployment is particularly high. According to the International Labour Organization (ILO) data, collated and presented by the World Bank, India’s youth unemployment, that is, from among people aged 15 to 24 years who are looking for work, the percent that does not find any, stands at 28.3%. This places India in the cluster of troubled West Asian nations, such as Iran, Egypt and Syria and in a much poorer state than Asian countries like Indonesia, Malaysia and Bangladesh.
What makes the growth story more worrying is that the slowdown started much before the COVID-19 pandemic. It began in 2016, after which, for four consecutive years, the growth rate each year was lower than in the previous year. Growth in 2016-17 was 8.3%. After that it was, respectively, 6.9%, 6.6%, 4.8% and minus 6.6%. This downward spiral, stretching over four years, has never happened before in India, since Independence in 1947.
NEED TO BUILD TRUST
Given the strong fundamentals and an abundance of talent, there seems little reason why a large expanse of the economy should be languishing, with so many people witnessing contraction in incomes. Shouldn’t the Government of India shift the policy focus from a few rich corporations to the larger segments of the population – small businesses, farmers and daily wage-earners?
There is a need for fiscal policy interventions to transfer income from the super-rich to these segments; there is ample space for this since inequality in India has risen disproportionately over the last few years.
Even though a divided society is often easier to rule, we need to pull back from this and create an ethos of inclusion and trust, the erosion of which can slow down investment and adversely affect job creation and growth.
Growth in 2016-17 was 8.3%. After that it was, respectively, 6.9%, 6.6%, 4.8% and minus 6.6%. This downward spiral, stretching over four years, has never happened before in India, since Independence in 1947
In the domain of foreign affairs, if the Russians can today coerce a neighbour and get away with it, could China follow a similar direction in the future? That is an unsettling thought, especially for New Delhi.
India can probably resist Pakistani and Chinese aggression with its conventional capabilities, but on nuclear capability it ranks below China and, possibly, also Pakistan. The thermonuclear test of 1998 likely failed, the West is currently at odds with Russia and India is trying to protect a longstanding relationship with Moscow.
More satisfactory contacts with China and Pakistan could obviate the need for New Delhi to test again.
A well-known nuclear scientist and Field Director of the Defence Research and Development Organization (DRDO) during the Pokhan-II tests in May, 1998, Krishnamurthy Santhanam, disclosed that these were not a total success, despite the claims of APJ Abdul Kalam (later, Bharat Ratna) and Anil Kakodar (later, Padma Vibhushan).
The Indian authorities were under public pressure to mount further tests and ended up not signing the CTBT test ban treaty. Santhanam’s statement was, subsequently, endorsed by P K Iyengar (1931-2011), former Chairman of the Atomic Energy Commission and a vocal opponent of the Indo-US nuclear agreement.
Should India be compelled to retest its thermonuclear weapons, there would be consequences for Indo-US ties, because the entire US-India civil nuclear deal and India’s integration into the global nuclear order, particularly with respect to
the Nuclear Supplier Group (NSG) waiver, were both premised on the assumption that India would not test nuclear weapons again.
NEED TO ANALYSE
In November, 2022, another Chinese research and space-tracking vessel was in the Indian Ocean Region (IOR) when India was scheduled to test missiles in the Bay of Bengal. The over 22,000-tonne Yuan Wang-6 was closely monitored by the Indian Navy; it is under the command of the Strategic Support Force of the People’s Liberation Army and entered the IOR through the Sunda Strait of Indonesia.
Since China’s long-term intentions are cloaked in opacity, India needs to periodically analyse the geo-political scenario with circumspection, look back to detect what may lie ahead and also keep the people apprised, broadly, of the realities. Domestic volatility in China has often had a fallout on the neighbourhood in the past.
There is a need for fiscal policy interventions to transfer income from the super-rich to these segments; there is ample space for this since inequality in India has risen disproportionately over the last few years
India’s 1962 military defeat was attributable, in no small measure, to the stark reality of hugely under-equipped troops (albeit led by courageous commanders) and a complacent political leadership (Nehru-Menon) that should have better recognized the writing on the wall.
China has begun to consider only the United States as its equal and to look at the rest of the international order through the prism of power politics. The other countries – including Permanent Members of the Security Council – are apt to be regarded by Beijing as weights and measures that are to be placed on the weighing scales of the Sino-American balance.
However, the United States recognizes that ties with India constitute an extremely consequential bilateral partnership in the changing geopolitical scenario and China’s rapidly increasing influence.
India has come a long way, post-1962, but China is also very much a ‘big power’ in its own right and has a former ‘big power’ as junior partner, more or less.
According to one estimate, by 2023, the total tonnage of the Chinese Navy could be double that of the US, resulting in significant impact on the IOR.
At a plenary meeting in Paris in October, 2022, the Financial Action Task Force (FATF) decided to remove Pakistan from its ‘grey list’, but said that Islamabad will have to continue its work to further improve systems to combat terror-financing and money laundering.
The FATF had placed Pakistan on its list of countries under increased monitoring (or the ‘grey list’) in June, 2018 for failure to control terror activities, such as of the Lashkar-e-Taiba (LeT) and the Jaish-e-Mohammed (JeM).
India is a FATF member and hence party to all its decisions that are made by consensus. Consequently, the country also agreed to the decision to take Pakistan off the ‘grey list’.
There seems unease in New Delhi because the United States, hitherto consistent in demanding action on terrorism from Pakistan, is becoming lenient on this score, after the Shehbaz Sharif government took office and particularly given reports of Islamabad’s operations in Afghanistan.
The threat of Pakistan being shifted from the ‘grey list’ to the ‘black list’ of the FATF wasn’t a realistic possibility, considering the opposition to such a move by its staunch friends viz. China, Turkey and Malaysia.
The United States have refrained from declaring Pakistan a ‘state sponsor of terrorism’ under American law, and expending diplomatic capital on building a consensus that was bound to be resisted by the Chinese.
The China-Pakistan axis rests on the foundation of the Sino-Indian border war of 1962. Initially, Beijing did not embrace the relationship but matters moved forward with passing years. Today, the bilateral ties are extremely important for both countries.
WHAT REALLY CHANGED?
The answer comes not only from the one factor that has driven the alliance – India – but also from China’s own global ambitions, in the longer term.
With little hope of a settlement on the Sino-Indian frontier, New Delhi became a concern for both Beijing and Islamabad. Cementing the relationship in 1963, Pakistan ceded the Shaksgam Valley (an area claimed by India) to China who provided arms, economic aid and the materials to build a nuclear weapons programme to Pakistan.
Since China’s long-term intentions are cloaked in opacity, India needs to periodically analyse the geo-political scenario with circumspection, look back to detect what may lie ahead and also keep the people apprised, broadly, of the realities
China does not see India as an equal or a predominant strategic threat; that position is reserved for the United States. In the India-Pakistan conflicts of 1965 and 1971, China did not intervene militarily on Pakistan’s side. Some years later, things changed again.
The China-Pakistan relationship now raises the spectre that India might, one day, face a two-front war, a scenario that would have appeared implausible a decade ago.
The Chinese Foreign Minister, Wang Yi, met his Pakistani counterpart on the sidelines of the U.N. General Assembly. The rhetoric in China refers to Pakistan as an ‘iron-clad friend’.
Previously, Beijing largely avoided involvement in the Kashmir issue, despite its cordial contacts with Islamabad. However, a shift occurred in their stand in the wake of the launch of the China-Pakistan Economic Corridor (CPEC) which includes projects in the POK. Mian Shehbaz Sharif was the first foreign head of government to travel to China after the 20th National Congress of the Communist Party in which President Xi Jinping won a third five-year term in office. He was followed by the German Chancellor, Olaf Scholz.
Scholz’s one-day Beijing visit reflects the importance of Germany’s trade ties with China (the world’s second-largest economy), particularly in the auto and manufacturing sectors.
He received a formal welcome from Xi Jinping. China’s decision to invite Sharif within a week of Xi’s new tenure was a clear sign of the exceptionally close ties between Beijing and Islamabad. Xi is believed to have told Sharif that ‘Pakistan is a priority in China’s neighbourhood diplomacy’. He also said that both sides should ‘create conditions’ to carry forward the upgrading of the Main-Line-I railway connection between Karachi and Peshawar.
The Pakistan PM’s trip came at a time when the cash-strapped nation is struggling to secure billions of dollars for payment of debts and to bridge the trade deficit. The Islamic Republic owes the Paris Club countries around US$ 10.7 billion. The country’s Finance Minister, Ishaq Dar, has announced that Pakistan would be getting about US$ 9 billion from China and US$ 4 billion from Saudi Arabia, on top of assurances for about US$ 20 billion in investments. He quoted Xi Jinping as telling Shehbaz Sharif:
‘Don’t worry, we will not let you down’.
From time to time, the US keeps announcing an intention to beef up India’s military preparedness against China which assumes that India is not averse to taking on the Chinese, even though the armed forces would rather use what the US gives against Pakistan.
The United States and India have lost ground to China in the Pacific Islands. The former was caught ‘napping’ when China made inroads into the Solomon Islands (independence from British colonial rule in 1978) who signed a Security Pact with Beijing that alarmed Washington DC.
On its part, India has had cordial relations with Pacific countries, notably Fiji. During his last outing to the USA, the Indian External Affairs Minister (EAM) interacted with Justin Tkatchenko, Foreign Minister of Papua New Guinea (independence from Australia in 1975) to discuss ‘ongoing cooperation with the Pacific Islands’. The meeting was held on the sidelines of the first US – Pacific Island Country Summit, hosted by the Biden administration. It was a belated acceptance of the fact that China has stolen a march in the Region, but for which the Summit might never have taken place.
The threat of Pakistan being shifted from the ‘grey list’ to the ‘black list’ of the FATF wasn’t a realistic possibility, considering the opposition to such a move by its staunch friends viz. China, Turkey and Malaysia
In addition to a Review – the Universal Periodic Review (UPR) for India at the Human Rights Council (HRC) – her senior diplomats may face the prospect of a Special Session of the Council on Iran’s crackdown on protestors, as demanded by the German Foreign Minister, Annalena Baerbock.
According to the Indian side, the timing of Germany’s move was inconvenient with the Session for the UPR also being scheduled for November, 2022.
An evaluation of the overall performance of the NDA, post-2019, will weigh with millions of voters in 2024, more so in the urban areas.
Regardless of the outcomes of December 8, 2022 (when the counting of votes is to take place), three significant aspects may manifest themselves. First, in a prestige battle for the BJP – in Gujarat and Himachal Pradesh – the margins and vote-shares will be important. Any dip for the Party could be construed as an indictment of the leadership. Secondly, if the GOP slips, a churn in the National Opposition, with more constituents challenging Congress’ position, will not be too far away. Third, an aspirational force like the AAP will need to perform impressively in Gujarat to reinforce its role as a centrist player.As with politics in virtually all countries where free polls are held, elections aren’t over until they are over.