Category: Opinion

Boosting consumer spending; incentivising investment in manufacturing; and pro-active wooing of foreign capital are three things crucial to jump-starting India’s economy

When former Indian Prime Minister Manmohan Singh made some dire observations on the state of the Indian economy recently in a video statement, it wasn’t surprising that a Bharatiya Janata Party spokesperson would quickly label him as being “a puppet” who was being used by people behind the scenes (read: Congress leaders). Such facetiousness is not unexpected of BJP spokespersons whose flippant one-liners serve little purpose than to make a mockery of the very people who utter them. Dr Singh is an accomplished economist with a distinguished career—besides being prime minister for two terms, he has been India’s finance minister, governor of India’s central bank (the Reserve Bank of India) and has headed the erstwhile planning commission. When Dr Singh speaks (and he rarely does) on the economy, it would be wise to listen.

In his statement, released to the press and aired on news TV channels, Dr Singh attributed the Indian economy’s travails—slow growth; lack of investment; demand, and jobs—to an “all-round mismanagement” by the Modi government. In the last quarter, GDP growth had sputtered to 5%; the manufacturing sector’s growth had dropped to an abysmal 0.6%; and companies had to resort to large-scale lay-offs (in the auto sector alone, an estimated 350,000 people are estimated to have lost jobs).

Dr Singh called the poor state of the Indian economy a manmade phenomenon and blamed a number of decisions that were taken by the Modi regime during 2014-2019 for the economic debacle, particularly actions such as demonetisation and a haphazardly-implemented Goods and Services Tax (GST) regime.

While the Modi government, now into its fourth month in power after it was re-elected should heed voices such as Dr Singh’s, here is a road-map that could significantly help in getting the economy back on tracks.

Reviving consumer demand. There are no sure-fire quick-fix solutions to boosting consumer spending but a number of factors can be made to act together, complementarily, to increase consumer confidence (currently at a low level in India) and make people fork out for consumer products. Chief among them is the interest rate. India’s monetary policy has in the past six years been weighted towards tackling inflation, which spiralled out of control in 2013. However, inflation rates in recent years have been moderate—and they now hover at levels lower than the 4% that the central bank thinks are normal. This could be a cue to reduce interest rates in order to boost demand and consumer buying.

Selective tax cuts on goods and services, property, and other indirect forms of taxation could also help in boosting spending and, thereby, mitigating the resulting loss in revenue from tax cuts by the increased volume of transactions.

Increased government spending is yet another factor that can have a multiplier effect on the economy and lead to a rise in overall spending. The government has recently been handed a windfall of Rs 1.76 lakh crore by the Reserve Bank of India but as of now there is little public awareness of what it plans to do with that. Could it not be channelled into government spending and, therefore, create ripples of upbeat consumer confidence all-round?

Increasing domestic investment. One of the Indian economy’s biggest problems is that its manufacturing sector has remained sluggish for a prolonged period. Industry contributes less than 30% of India’s GDP, while the services sector contributes nearly 55%. During the Modi regime 1.0 several big plans, including the “Make In India” scheme, were flagged off. But this has led to little in terms of outcome. Partly the decline in the manufacturing sector’s growth is on account of the travails of small and medium sized enterprises, which were hit hard by demonetisation and the complexities of the new GST system. While demonetisation cannot be reversed, it is possible for the government to take a close look at GST and see whether it can be further simplified.

Lower interest rates too will obviously boost manufacturing as will the measures to increase consumer demand. The central government could also work with states to see how each of them could incentivise domestic investment in manufacturing—either by proffering tax reliefs or other incentives. Japan’s manufacturing boom in the post-World War II era was catalysed by its powerful Ministry of International Trade and Industry (MITI), which worked closely with different Japanese industries to grow markets for Japanese products—both domestically as well as globally. India has the NITI (National Institution for Transforming India) Ayog. It replaced the earlier Planning Commission and works mainly as an advisory think tank. It may not be a bad idea to make NITI work like MITI did in Japan during the 1960s and 70s.

Encouraging foreign investment. India liberalised its policies on foreign direct investment (FDI) in 1991 and since then, in absolute terms, FDI has increased year-on-year. But in recent years, despite the government’s attempts to attract more foreign investment—both direct as well as through equity infusions—the growth rate of FDI has faltered. A good measure of FDI growth is by looking at foreign investments as a percentage of gross fixed capital formation (GFCF). And here’s the bad news. Gross FDI as a proportion of GFCF has actually dropped sharply in India: from over 32% in 2008-09 to a little over 8% in 2018-19. The government may tom-tom the “success” of its Make In India and other incentives but the numbers speak volumes.

Recently, foreign investment was opened up for the coal sector. And foreign investment limits were relaxed for retail businesses and for online media. However, those may not be enough to boost FDI significantly. India’s coal has lower calorific value than in many other countries; besides, although India has the world’s fifth largest coal deposits, global concerns about fossil fuel and its environmental effect have dampened the enthusiasm of multinational energy giants in expanding their coal businesses.

The need of the hour could be to actually form industry-government alliances in India that could target specific groups of foreign investors by way of roadshows where the objective should be to seal deals and hammer out incentives such as tax rebates. What India needs now is more than a flurry of announcements. The government-industry alliances could be sector-wise, or even as initiatives by separate state governments with leading businesses in their respective states. What India needs now to boost the economy is not a flurry of announcements at hyped-up press conferences, but focused and single-minded action.

]]>

It is not a day too soon there is promise of India coming down with some force on the single use plastic, which the quintessential bottle holding still water principally represents. In the available order in the country, hardly anything of importance will move till the prime minister himself will herald a campaign. For example, the Swachh Bharat Abhiyan, a five-year mission launched with great fanfare in 2014 coinciding with the 150^th birth anniversary of Mahatma Gandhi took wing nationally because Narendra Modi made it his signature policy. Even then, we will be far from a ‘clean India’ by this yearend because of citizenry apathy. Hopefully, he will do better with putting a stop to the use-once-and-discard plastic items.

On the Independence Day speaking from the ramparts of Red Fort, Modi said: “Can we free India from single use plastic? The time for implementing such an idea has come. May teams be motivated to work in this direction.” Earlier on the World Environment Day in 2018, the then minister for environment, forest and climate change Harsh Vardan said attempts would be made to phase out use of single use plastic by 2022. Not unexpectedly, nothing worth telling has happened since the minister spoke. Except for a good number of states notifying full or partial ban on single use plastic.

But as is not uncommon in India, the state level fiat is respected more in violation than in observance. What is to be remembered is that the petrochemical industry has a strong lobby and this is the reason why violations happen with impunity. Is it any surprise then that the country’s leading retailers such as Big Bazaar, Reliance Retail and V Mart are far from being environment friendly as they continue to give buyers the bought items in plastic bags? An example of the triumph of convenience and consumer preference over keeping the environment clean.

Plastics, the emblem of postwar consumerism are described as the workhorse of modern economy. They are finding a wide range of applications because of their light weight, robustness, easy formability and price advantage over competition. Riding on these strengths, global annual production of plastics advanced from 15m tonnes in 1964 to over 350m tonnes presently. Consulting firm McKinsey says in case the present rate of demand growth is sustained, albeit defying the spasm of popular disgust against the harmful effect on environment and health, then plastics output will take a leap to 600m tonnes by 2034. Confidence about demand growth is high among producers, particularly in the US. The North American market is seeing record amounts of capacity in the pipeline.

Not surprisingly green activists and others are alarmed by the development. The concern is because not only are there emissions of enormous quantities of greenhouse gases in the course of production of plastics, the environment suffers further damage as overwhelmingly large portions of used plastics go into landfills, or are burnt or are left to litter everywhere from city streets to seashores to foothills of mountains. We do this without realising that plastics escaping the established waste collection system will be floating on the earth for centuries, all the time causing harm to the environment. The intended life of single use plastic products is not even a year but for the laxity on the part of administration in India and elsewhere they virtually get an infinite life.

A report co-authored by McKinsey, Ellen MacArthur Foundation and the World Economic Forum estimates the negative externalities of plastics at $40bn, including pollution impact and that is more than the industry’s annual profits. The report gives the warning that if the future demand growth for plastic products remains at the current rate then the global plastic-waste volume will climb to 460m tonnes a year by 2030 from 260m tonnes in 2016. The present waste volume is already a major environmental concern. But the waste size forecast for the future will take the problem to “a whole new level,” says the report. A chart prepared by culling information from multiple sources shows the recycle rate of plastics at lower than 40 per cent compares poorly with steel at 80 per cent, aluminium cans and glass at 78 per cent and beverage carton at 43 per cent. What particularly raises despair is the rate of recycling rate at a pathetically low of 10 per cent for polyethylene, which is the most commonly produced plastic.

As against the growing public discontent over the poor rate of plastic recycling, the World Steel Association and International Aluminium Association are upholding the virtues of circular economy under which not only the end of life metal products are collected and shredded for recycling but facilities have been built in production systems for optimum reuse of water and energy. Public anger besides that is forcing more and more governments to take action against single use plastics – as many as 127 countries have either banned or levied taxes on disposable plastic bags – the industry will have to contend with competition emerging from alternative biodegradable products such as wood fibre bottle, recently unveiled by brewer Carlsberg. Is it not time for jute goods makers to put their house in order to regain the market lost to plastic bags used in packing foodgrains and sugar? Unfortunately, ownership of jute mills, except for a few, has moved from respectable corporate houses to traders who lack foresight.

Modi hasn’t spelt it out in any detail, but his angst must be occasioned by almost a third of all plastic packaging leaks amounting to more than 8m tonnes a year finding its way into the oceans polluting waters. No wonder we read frequently reports of marine species such as whales, turtles and fishes perishing due to their unwittingly ingesting plastics thinking these to be food and choking themselves to death. To everyone’s horror, microplastics have been found in the remote reaches of the Arctic. Not only in tap water, but plastic fibres are found in more than 90 per cent of bottled water.

No wonder then plastics manufacturers are finally trying to find fixes of popular concerns. Some independent companies are working on breaking down plastics into their components for conversion into new materials. Scientists say waste polyethylene is a potential carbon source that could be made into value added polymers. Noticeable progress has been made in laboratories to turn waste plastics into a pliable wax like substance to which then is added other elements resulting into bioplastics. We don’t have at this point any estimate of how much of waste plastics in India could be recycled. But developed countries are targeting 70 per cent recycling by 2030. McKinsey has recommended decoupling of plastics from fossil feedstocks by way of exploring and establishing renewably sourced feedstocks. But this will be a journey which will meet with serious opposition from the powerful oil industry.

Participating in the debate on the abrogation of Article 370 in Jammu and Kashmir and the bifurcation of the state in Parliament last month, former finance minister P Chidambaram was perhaps the only speaker who focused extensively on the Modi government’s decision to unilaterally alter the status of a state and its far-reaching implications for the country’s federal structure.

Describing the move as “a misadventure, a catastrophic step”, Chidambaram maintained that the dismemberment of a state would lay down a dangerous precedent as the government would henceforth be able to carve out every other state in the country in a similar manner.

The former minister went on to underline: “All that they have to do is dismiss the elected government, impose President’s rule, dissolve the elected assembly, and ensure Parliament takes the power of the state assembly. The government then moves a resolution, Parliament approves it and the state is dismembered.”

That the Modi government’s decision on the division of Jammu and Kashmir has far-reaching implications for other states can hardly be denied. And yet most regional parties, which are otherwise extremely vocal on issues which have an adverse impact on federalism, have been nonchalant on this aspect. In fact, several regional parties including the Bahujan Samaj Party, the Telugu Desam Party, Aam Admi Party, YSR Congress, and Biju Janata Dal, which are not official members of the ruling alliance welcomed the government’s decision on Article 370 but were silent on the move to bifurcate the state.

And even parties like the DMK, the Rashtriya Janata Dal, the Samajwadi Party, the Trinamool Congress and the Janata Dal (U), which opposed the move referred to the bifurcation only cursorily. Instead, the arguments put forth by the representatives of these parties focused on the stealth with which the Modi government brought the Bills to Parliament without circulating them in advance which would allow MPs to scrutinise the provisions in detail.

For instance, Trinamool Congress spokesperson Derek O’Brien described the government handling as “procedural harakiri” while Tiruchi Siva of the DMK only went as far as to say that the Centre should have taken the consent of the Jammu and Kashmir assembly before going ahead with this move.

The DMK subsequently took the lead in organizing a protest rally of opposition parties in Delhi last month but here again, the leaders who participated did not attack the Modi government either on the abrogation of Article 370 or the bifurcation of the state of Jammu and Kashmir. They drew attention to the arrest of political leaders in the state and demanded their immediate release and also that normalcy be restored at the earliest and the clampdown on communication is removed. The day-long event was, at best, a token protest. Opposition leaders followed this up by attempting to visit the Kashmir Valley but were turned back from the Srinagar airport by the security agencies who said they were instructed not to allow them out.

Delhi chief minister and AAP convener Arvind Kejriwal, who has been campaigning for full statehood for Delhi which is presently a Union Territory with an assembly, surprised everyone when he came out in support of the Modi government’s decision to abrogate Article 370. But Kejriwal was unfazed when confronted with the contradiction in his stand, pointing out that a peaceful state cannot be compared with a disturbed border state.

Opposition leaders privately agreed that that the decision to divide Jammu and Kashmir could impact other states but said they were hemmed in from launching a severe attack against the Modi government on its J&K policy because it enjoyed widespread public support.

That’s the reason, they said, they had confined  their criticism to the faulty process adopted by the government in this case, the arrest of political leaders and the overall lockdown in the state. “We are constrained because we cannot go against public sentiment,” a DMK leader pointed out. Consequently, DMK chief M K Stalin did not go beyond describing the decision as a “murder of democracy” while charging the BJP of not respecting the sentiments of the people of Jammu and Kashmir.

Ironically, even the Trinamool Congress has been muted in its criticism. Though Derek O’Brien described August 5 as “Black Monday” and a dark day for the country’s constitution, his party chose to walk out during the debate in Parliament instead of voting against the Bills.

Like other opposition parties, Trinamool Congress is also hemmed in by its dipping graph in West Bengal and the BJP’s growing popularity in the state. “Did you notice the number of times Amit Shah mentioned Shyama Prasad Mukherjee in his speech,” a Trinamool Congress MP pointed out, adding, “Ultimately we have to fight elections in our state.”

Shyama Prasad Mukherjee, founder of the Jan Sangh which later became the BJP was a staunch opponent of Article 370 and had waged a consistent battle against this provision. The BJP has been projecting Mukherjee as an icon of West Bengal in its campaign against the Trinamool Congress.

Assembly elections are due in West Bengal next year and given the religious polarization fanned by the BJP in the state, a beleaguered Mamata Banerjee has little option but to do a fine balancing act.

Bharatiya Janata Party leaders pointed out that if the opposition genuinely had strong views on the latest developments in Kashmir, it should have organized mass protests on the streets. “But they cannot do so because the people are not with them,” remarked a BJP leader.

When the Congress Working Committee, the party’s highest decision-making body, met here earlier this month to pick Rahul Gandhi’s successor, it eventually settled on Sonia Gandhi after day-long deliberations. The difference between the two national parties and their fortunes could not be more symbolic than this step. Congress has become a pensioners’ party while BJP is the dynamic youth orientated national force.

The decision by Congress to reinstate Sonia Gandhi as leader was a major victory for the party’s old guard which had been working behind the scenes for nearly two months to see that Rahul Gandhi loyalists were denied the party’s presidency. By proposing Sonia Gandhi’s name, the party seniors silenced those who were pushing for a younger leader and also ensured that their hold on the party organization remained intact as they are essentially her camp followers.

The entire exercise ended up exposing the divide between the party’s old guard and the Gen Next leaders with the former having the upper hand. Consequently, the much-needed generational shift in the grand old party was effectively thwarted.

In fact, this battle between the two groups is not new. Afraid of losing their preeminent position in the party organization, the old guard has been blocking Rahul Gandhi’s plans since he was the party vice-president. Even after he took over as party chief, the Nehru-Gandhi scion had to tread carefully to ensure that he did not alienate the old-timers, known for their proximity to Sonia Gandhi.

That Rahul Gandhi was unable to shake them off was evident when it came to the appointment of chief ministers in Madhya Pradesh and Rajasthan after the Congress won the assembly polls in the two states last year. He had to willy-nilly endorse senior leaders Kamal Nath and Ashok Gehlot as chief ministers, overlooking the claims of younger leaders Jyotiraditya Scindia and Sachin Pilot.  

This ongoing turf war between Sonia Gandhi’s loyalists and Rahul Gandhi’s supporters in the Congress stands out in sharp contrast to the Bharatiya Janata Party, which has, over the past few years, placed young leaders in key positions of power without creating any major ripples in the party.

The first move in this direction was made after veteran BJP leader L.K.Advani fell foul of the party’s ideological mentor, the Rashtriya Swayamsevak Sangh, with his complimentary remarks on Mohammad Jinnah. Advani’s protégés Sushma Swaraj and Arun Jaitley were given the responsibility of leading the charge against the Manmohan Singh government in the Lok Sabha and Rajya Sabha, respectively. Both leaders were in their fifties then. Shortly thereafter, 52-year-old Nitin Gadkari was promoted as BJP president. Though dethroned, Advani retained a say in party matters through Swaraj and Jaitley, both mentored by him.

However, the BJP and the RSS woke up to the need for a further generational change after the party lost two consecutive elections in 2004 and 2009. It was clear that seniors like Advani and Murli Manohar Joshi were not inspiring younger and new voters and that it was time to take drastic decisions.

By then, three-time Gujarat chief minister Narendra Modi had positioned himself for a larger national role. Undoubtedly, his projection as the BJP’s Prime Ministerial face came up for opposition from Advani and his supporters in the run-up to the 2014 Lok Sabha elections. But, after a few hiccups, their resistance was eventually worn down. And once Modi proved his credentials in the electoral arena by leading the party to an emphatic victory in the 2014 Lok Sabha polls, there was no looking back.

Modi and his confidant Amit Shah have since moved fast to bring in younger leaders. Party seniors were been gradually sidelined and even second-generation leaders made way for a younger set. But unlike the Congress, the change-over has been a smooth affair.

Senior leaders were first denied ministerial berths in 2014 by laying down an upper age limit of 75 years. In the recent general election, these leaders, including Advani, Joshi, Shanta Kumar, Sumitra Mahajan, B.C.Khanduri and Kalraj Mishra were not even given tickets.

At the same time, Modi, assisted by BJP president Amit Shah, has picked new chief ministerial candidates which went against all conventional logic. For instance, Devendra Fadnavis, a Brahmin, was appointed a chief minister in Maharashtra where power has always been with the all-powerful Maratha community. Similarly, Manohar Lal Khattar, a non-Jat, was chosen as chief minister of Haryana where it is the Jat community which dominates. It’s the same story in Jharkhand and Assam.

Though there were initial murmurs in the party, there were no protests or counter moves to all these decisions, thus ensuring the emergence of a new-look BJP.  

The Congress can certainly take a few lessons from the BJP which successfully managed to reverse the trend of electoral losses by taking some tough measures. It was a gamble but it paid off. The result is that the BJP is the central pole of Indian polity today while the Congress is struggling for survival.

The Congress too needs to disturb the status quo and go in for major changes without being afraid of rocking the boat. But to do so, it needs a powerful and charismatic leader who also has capabilities of winning elections for the party. The BJP has that advantage.

Congress increasingly gives the impression of a party seeking ‘retirement’ as Sonia Gandhi with Manmohan Singh in tow, both shuffling when walking, are the face of Congress. But where is the new dynamic youthful strides going to come from?

Unfortunately, Rahul Gandhi has not measured up to the task, which has allowed the old guard to retain its vice-like grip on the party while Gen-Next leaders continue to wait in the wings.

As final Assam National Register of Citizens is released, leaving 1.9 million people stateless and homeless, a massive humanitarian tragedy is likely to confront the state

A time bomb is ticking in Assam as the state braces to cope with the fall-out from the final publication of the National Registrar of Citizens released on August 31. A massive humanitarian tragedy may confront the state as roughly 1.9 million people are likely to become stateless and homeless. The figure is from the final NRC which was released on August 31.

Is India now going the Myanmar way? The Muslim Rohingyas are stateless with no rights. Time and again they are attacked and have no access to either government health care or any other facilities provided for ordinary citizens. The plight of the Rohingya refugees have caught the imagination of the world. India risks the same outrage from the international community, unless it has thought through what it aims to do. Kashmir is already in focus. Add the plight of four million stateless people and Delhi will have a major human rights problem in hand. Will the rest of the world be as accommodating as they have been so far with Kashmir?

Neither the Centre nor the Assam government have given a clue of what they intend to do with this mass of people whose lives are being torn apart. It has been a haphazard exercise ridden with mistakes. That could be overlooked considering the huge numbers. Yet as people are at the centre of the NRC, mistakes take a deadly toll on individuals and families. There are several instances reported of the grandparents considered as Indian citizens while the sons and daughters are blacklisted as foreigners. Much depends on the official behind the desk who has enormous powers over these hapless individuals. Time and again the BJP government, both at the Centre and the state have assured people that they have the  right to appeal and that not a single genuine citizen need worry. But assurances on paper and what happens on the ground are two different things.

 Where will these people be kept? At the moment Assam has six detention camps that operate out of make-shift facilities in local prisons in Goal Para, Dibrugarh, Silcher, Tezpur, Jorhat and Kokrajhar. According to reports 10 more are going to be built. But when? And what happens to them after Saturday? According to reports in the local newspapers, Assam’s first stand-alone detention centre is being constructed in the border district of Goalpara, which will be able to keep 3,000 people. But that is a drop in the ocean considering the numbers.

 As most of the stateless are allegedly from neighbouring Bangladesh, has Dhaka been consulted? Has Sheikh Hasina’s government agreed to take back at least some of these detainees? Nobody knows. Delhi is keeping its cards close to its chest. When foreign minister S Jaishankar was in Dhaka earlier this month and asked at a news conference about the NRC, he said it was India’s internal problem and he would not answer any questions on the process.

In the past Bangladesh had said that they would take back those people who had relevant papers to show they were from that country. A majority of the stateless are poor, illiterate peasants who have no papers to prove their identity. India has excellent relations with Sheikh Hasina’s Awami League government. Delhi is unlikely to do anything to upset that equation.

But what will the government do with the four million alleged foreigners. For one it is impossible to keep them under detention indefinitely. People of Assam are happy that finally foreign nationals have been identified. They have long struggled for this. The student’s agitation in the late 70s was all about protecting the identity of the local Assamese. The 1985 Assam Accord had promised to identify foreigners and deport them. Not much had happened however. The fear of being reduced to a minority in their own homes is something that has haunted the Assamese for decades. The fear was that Assam would be the second Muslim majority state after Kashmir. Ironically with the abrogation of article 370 and 35 A of the constitution, which forbids “outsiders’’ from other Indian states from buying land in the state is now no longer applicable. Kashmiris worry that in a couple of decades, the state will no longer have a Muslim majority.  Ironically in Assam the government is proposing to ensure that the Assamese majority keep their status intact.   

The only way out to deal with the alleged foreigners is to allow people to remain but ensure that they have no voting rights. This will assuage the Assamese that illegal voters will not have a say in the elections. There is concern in the local BJP unit in Assam that as much as 40 percent of the foreigners identified are Hindu Bengalis from former East Pakistan and current Bangladesh. The Amendment to the Citizenship Act was brought in with these people in mind. The amendment allows for all Hindu refugees to seek Indian citizenship. There have been demonstrations by local units of the BJP in Assam that Hindus should not be humiliated in this fashion. The government will find a way out for the Hindu Bengalis, considering that the BJP has already got the Citizenship Amendment ready to take care of that contingency. 

Can the rest of the people, identified as foreigners continue to live and operate out of Assam? A stateless population will be exposed to all kinds of atrocities, as Myanmar has proved. The BJP seems to be playing with fire, considering there is talk of having NRC across India. That would be disastrous and light the fires of social tension across the country. Will any government in its right mind push this self-destruct button?

]]>

For a 5,000-year old civilisation to be celebrating ‘Independence’ Day is not only ‘naff’ but an admission that a superior culture has mastered and nurtured it into some sort of maturity. It gives too much respect for a 200-period of rule by the British, neglecting a thousand years of colonisation by other invading forces, including the Mughals, and a 5000 year of indigenous civilisation that was more advanced than the invading British.

Wouldn’t it be more dignified to drop ‘independence’ day and rename it with a new name signifying reaffirmation and continuity of an ancient civilisation that has seen much, experienced much and absorbed much.

The Mughals lasted nearly seven hundred years. Prior to them there were others who had been lords at Delhi, including Sikandar Lodhi. Why so much obsession with a mere 200 years of the British?

There is no doubt that the British were the first invaders who had brought the whole region under one ruler, the British Crown. It is also true that they introduced much of the infrastructure, institutions, constitutional and legal instruments and administrative systems that sustain both India and Pakistan in the modern era.

But much has changed in United Kingdom. It is no longer the Britain, the colonising power that had once thought of itself as a superior culture and power. Britain has learnt a lot from its experience during the colonial period and from the immigrant populations that have settled in its territory. It has metamorphosed. It now seeks partners rather than subordinates around the world.

But India hangs on to the memory of British colonisation more than seventy years after they left. It seems there are still wounds of history, of being brow beaten into modernity, of being oppressed for resources and of being nurtured to become ‘civilised’ as the British called it. It is release from this long period of misery, of being a student, of being shaped and finally matured that 15^th august commemorates. Why else celebrate independence.

Every year India gives an update on its stage in development on this day as the Prime Minister stands at Lal Qila to read from the progress card. The PM also expresses aspirations for further improvements. The British delegation is also sat in the enclosure of diplomats, perhaps feeling bored, perhaps feeling a sense of satisfaction that they have started the country on a right path, or perhaps wondering what has all this got to do with them after decades.

With a history of 5000 years, a civilisation with tremendous depth and wisdom, why give the impression as if it only came of age on 15^th August 1947? Isn’t it humiliating?

In fact the civilisations of India have always been free. That is why India did not end up with mass conversions either into Islam or Christianity. The civilisations have resisted enslavement through the ages. It is the State that was colonised, first by Islamic invaders, then by European (British, French and Portuguese) invaders. It is the State which seems to be celebrating its independence. But then why just from British. Why not from the Mughals?

Delhi feels like a spook town on this day of State celebration. There does not seem to be great enthusiasm on the part of masses to celebrate Independence Day with any popular cultural functions. There isn’t the razzmatazz, the family reunions, the fireworks, the town parades etc that the American Independence day is known for. It is not difficult to understand this difference. The USA is a new-born country, a recent community and one without a lineage. It was full of migrants who sought to forge their own country and way of life free from the British Crown.

India is different. The region had distinctive cultures and civilisations before the British and they have continued after the British left. The people have merely succeeded in throwing out the invaders who didn’t integrate with the indigenous. Nothing much changed in the everyday culture and the long history of the region in terms of its practices, or its people, or its belief systems. In fact there were some distortions introduced during the Raj, which are being corrected now.  The cultures of the region were there before 1947 and have continued since. Those who ruled the State have changed.

Perhaps rather than continue with a historical timewarp, why not call this day a regeneration day and name it ‘Bharat Divas’ giving its different regions a day to celebrate their distinctive cultures, customs, dances, etc. It will be a day of diversity and unity, a day of common celebration but with distinctive flavours and a day when people across the country can put their passions into being part of a whole yet with their own languages and ways.

It could be a very participatory day, as colourful as Diwali, but with a difference. Whereas Diwali is a religious festival of one religion, albeit the majority, the Hindus, a common Bharat divas will be secular, encouraging everyone irrespective of their background to celebrate a day of unity.

Imagine a day like this where parades take place with floats from different sections of society, with different cultural dances and different national dresses all celebrating their common nationality. It will be a tremendous reflection of the diversity of the region, its long surviving plurality and its colourful cultures.

The British period was but a blip in the long history of the region. It is best to fold it away in the archelogy of power and reclaim the present as a continuum of many millennia without giving importance to any one period. A Bharat Divas has more pride and more indigenous flavour to it. This day can be a celebration that Bharat finally started to revive itself.

The mood in India is celebratory. The general consensus after Prime Minister Narendra Modi’s meeting with US President Donald Trump in France (the first since scrapping of Kashmir’s special status) is that this round has gone to India. Modi has drawn the line on third party mediation and told Trump where to get off.  Neither the US President nor any other nation needs to intervene in what is a purely bilateral matter between India and Pakistan. This has been the traditional Indian stand on Kashmir but in the context of Trumps recent statements, it had to be reiterated.

Considering that Trump had since his July 22 meeting with Prime Minister Imran Khan spoken several times of his wish to play peace maker, there was concern in South Block at what to expect from the mercurial Trump. There was a collective sigh of relief in India at the way the conversation panned out, on the sidelines of the G7 summit in Biarritz.

Prime Minister Modi may have stalled the US President for the moment but the world’s eyes are focused on Kashmir as India and Pakistan are on the edge. With the peace talks between US and the Taliban about to be clinched in Doha, and Pakistan’s importance in the process, Imran Khan’s hands have been strengthened.

In recent years, Kashmir had been pushed out of the global narrative. Modi’s decision to abrogate article 370 and the consequent lockdown of the Valley has given Islamabad just the opportunity it wanted.

Pakistan is mobilizing all resources to bring Kashmir back to centre stage. Initially the response from the global community was muted, but gradually that graph is changing. The reason for this shift is not due to scrapping of the special status but the complete communication embargo. Bringing back a semblance of normal life to the Valley thus is the need of the hour. That is a big ask, considering the mood of the majority of Kashmiris.

Pakistan claims that it has “succeeded in internationalising the issue of Kashmir”. Prime Minister Imran Khan claimed in an address to his people, hours after the Modi-Trump meeting, “We talked to world leaders and embassies. UN for the first time since 1965, convened a meeting on Kashmir issue. Even international media has picked it up.”

Playing on the US and the rest of the world’s fears about a nuclear fallout between the two South Asian foes, Imran Khan emphasised: “If the [Kashmir] conflict moves towards war then remember both nations have nuclear weapons and no one is a winner in a nuclear war. It will have global ramifications. The superpowers of the world have a huge responsibility…whether they support us or not, Pakistan will do everything possible.”

Modi on its end has made it clear that third party mediation was not welcome. At a news conference, with Trump sitting beside him, he made it clear: “All issues between India and Pakistan are bilateral in nature and that is why we don’t bother any other country regarding them.” Modi also added that India and Pakistan were one country before Independence and that he was “confident that we can discuss our problems and solve them, together”.

How did the conversation on Kashmir go behind closed doors, is not known. The Americans team had briefed reporters ahead of the meeting that the situation in Kashmir and concerns about the communication blockade would be raised during the President’s meeting with Modi. But the Indian Prime Minister seems to have convinced Trump that the situation would not go out of hand or lead to regional instability.

Trump made this known at the joint news conference when he said: “We spoke last night about Kashmir, Prime Minister really feels that he has it under control, and now when they speak with Pakistan I’m sure that they will be able to do something that will be very good.” He also added that he was available if anyone needed his help. Does this mean that Modi had given the green signal for talks with Pakistan?

For Pakistan, Kashmir is the core issue. By scrapping Article 370, the government’s contention is that Kashmir is just another state in India. Thus, Pakistan’s claim that it is a party to the Kashmir dispute becomes redundant. New Delhi will possibly be ready to talk about Siachen, Sir Creek and other issues, but not Kashmir. From that position any kind of dialogue with Pakistan appears impossible, whatever Modi has said to Trump about talks.

Imran Khan has said in a recent interview to the New York Times, that he is no longer willing to talk to India. He had tried in earlier but New Delhi possibly regarded his attempt to mend ties as a sign of weakness. India’s response has been that terror and talks cannot go together.

Talks may be out, but the Modi government has to work at lifting restrictions in the valley. Restoring communication lines is a must as a blanket ban cannot continue indefinitely in a nation which proudly flaunts its democratic credentials.    

After all, Kashmiris are Indian citizens. They were not consulted when government decided to scrap Kashmir’s special status and are angry. The BJP has singularly failed at reaching out to the ordinary Kashmiri. Considering that opposition leaders were sent back from the airport on Saturday just proves how difficult the situation is.

It is also true that the moment restrictions are lifted, the Valley will erupt in protests which could lead to violence. Handling protests and stone-pelters would be a major challenge considering that Indian police and para military forces are ill equipped to deal with such a situation.  

A new intifada is likely to take shape in Kashmir. Separatists and jihadi groups will naturally try to exploit the situation. Besides, well known anti-India groups like Jaish-e-Mohammed, Lashkar-e-Taiba, Hizbul Mujahideen will again become active. These are the usual suspects but the ISIS and Al Qaeda sub-groups will also fish in troubled waters. The Ansar Ghazwat-ul-Hind, linked with Al Qaeda, is working at forming a loose jihadi alliance against India, according to reports from Pakistan.

New Delhi has a tough task ahead and the next few months will show whether Modi’s gamble in Kashmir has paid off.

“What is good for General Motors is good for the United States,” US Secretary of Defence Charles Wilson, incidentally a former CEO of the automobile giant, once said. Can such hype work for India’s automobile industry?  

From boost in the mid-1980s thanks to the “Maruti revolution” to a boom as the century closed amidst economic reforms that brought in many domestic and foreign players and lasted over 25 years, to an unprecedented bust now, is its latest story.

Its formidable lobby with any government is desperately looking for a bailout. Amidst a general economic slowdown, the Narendra Modi Government would have to think hard before obliging.

Forget the ‘B’ alliterations – the passenger cars sales alone have plummeted by 36 percent and 350,000 jobs are lost. The fall could rise to 40 percent with a million jobs at stake in the coming months.

As recently as March this year, India was ranked the world’s fourth largest automobile market after China, the USA and Japan, surpassing Germany in terms of sales. New car models were being announced every month.

Any warning or words of caution were lost in the cacophony of the elections whose outcome was decided on ‘nationalism’ platform, despite the economic slowdown and rising unemployment.

Last month, however, the sale of vehicles across categories in the country slumped 18.71 percent to about 1.82 million units, down from about 2.24 million units in July 2018. This has been the steepest fall in nearly 19 years.

The combined vehicle dispatches across all categories, from factories to dealers, fell by about a fifth. Dispatches of passenger vehicles fell by almost a third with passenger cars declining by a steep 36 percent or by over a third compared to the same month 2018. Dispatches of motorcycles fell by almost a fifth and scooters by more than 12 percent, while dispatches of trucks, buses and light commercial vehicles were down by over 37 percent.

Auto industry contributes over seven percent of India’s GDP. Its honchos say this is the worst-ever crisis. The Society of Indian Automobile Manufacturers (SIAM) data shows that the sector also accounts for 14 percent of India’s total GST collections. Now, the government’s revenue is also hit.

The industry found some solace in the fact that historically, vehicle sales decline in the months preceding elections, and expressed the hope that demand following the elections would pick up. But like the overall economy, this did not happen.

Polls’ uncertainties drove people to postpone vehicle purchases. Ownership costs, an overall weak economy affecting demand and floods thanks to climate change in many parts of the country last year, as also this monsoon, combined to squeeze auto demand.

Government policies contributed to the confusion. It imposed deadline of mandatory transition to the Bharat Stage VI (BS VI) emission norms. It pushed another simultaneously to convert some vehicle categories to electric from the present internal combustion engine (ICE) technology that drives three of the four vehicles on the road. It proposes to ban all ICE-driven vehicles under 150cc in six years and all three-wheelers within four.

The automobile industry has mounted a quiet resistance to the technology-switch and now, it is the first major producer/employer to loudly protest the government’s economic policies. After a gap of over five years, one hears again the accusation of “policy paralysis.”

The entire auto industry is hit. To cope with slow demand, 15 auto makers including Honda, Maruti Suzuki, Nissan, Datsun, Mercedez and Indian ones like Tata and Mahindra and Mahindra (M&M) have reduced seven percent workforce as they stagger production. Some have declared two weekly holidays.

This extends to ancillary units like Japanese motorcycle maker Yamaha Motor and auto components makers including France’s Valeo and Subros. They add up to 100,000 jobs lost, according to a Reuters report.

India’s jobless rate rose to 7.51 percent in July 2019 from 5.66 percent in July 2018, according to private data group CMIE whose data is more up-to-date than government figures and regarded in financial markets as more credible.

Seven percent of those in temporary jobs are sacked. Swank car sales outlets have closed down enforcing more job-cuts. There is also fall in insurance that is mandatory before a vehicle touches the road.

Auto-makers are concentrated in and around Mumbai, Pune, besides Gujarat, Modi’s home state. Chennai accounts for 35 to 40 percent of all car manufacture.  At Gurugram and Manesar, the Maruti Suzuki hub in Haryana, 40,000 to 50,000 workers have already been laid off.

If that is any consolation to India, layoffs in global auto industry have hit Mexico, China and the US as well. While all are hit by a general slowdown, Edelweiss Research says India’s auto slump is different from others, differs from the ones it suffered in the past and is driven by domestic factors. Much of rural India’s auto aspiration was driven by non-banking financial institutions. But they were hit by November 2016 demonetization of 83 percent of currency in circulation.

Changing social mores are contributing to the slump. While owning a car and one’s own house remain symbols of social status, the urban youth, at least, want to utilize their disposable incomes differently. They increasingly prefer a rented house and travel by app-based vehicles to escape repaying heavy loans on both and to avoid maintenance hassles. This partly explains the glut in unsold city houses and cars, two major producers/employers.

Sadly, the car/housing bust is unlikely to change the attitude of the politicians who failed to widen the roads enough and promote public transport. Among the car owners, the rich want to park vehicles free on public roads. On the other hand, the harried car owner rues traffic jams and delays at work, occasionally causing accidents or getting into road rage.      

Analysts say there are better ways of boosting and measuring the economy than car production. It is sad that many jobs are being lost in the automobile sector. But the way out is not to bail out the automobile sector but to create jobs in more socially useful sectors.

The crisis is expected to last two to three years. Perhaps, longer due to expected rise in costs  estimated at 13 to 30 percent due to safety, insurance and emission-related compliance. As for the fuel costs, with rising tensions in West Asia, it is anybody’s guess.

The writer can be reached at mahendraved07@gmail.com