The second edition of the India, Thailand and Singapore trilateral naval exercise SITMEX-20 has concluded in the Andaman Sea.
Exercise SITMEX-20
The SITMEX series of exercises are conducted to enhance mutual inter-operability and imbibing best practices between IN, Republic of Singapore Navy (RSN) and Royal Thai Navy (RTN).
The first edition of SITMEX, hosted by Indian Navy, was conducted off Port Blair in September 2019.
The 2020 edition of the exercise is being hosted by RSN.
The maritime drill witnessed a variety of exercises including naval manoeuvres, surface warfare exercises and weapon firings.
Besides improving inter-operability, SITMEX series of exercise also aims to strengthen mutual confidence and develop common understanding and procedures towards enhancing the overall maritime security in the region.
The article highlights the factors that explain that India’s economic recovery is broad-based and sustainable in nature.
Revising India’s GDP forecast
With major banks, investor advisory groups, and credit rating agencies revising their GDP forecasts for the next financial year while lowering estimates of economic contraction for this fiscal, surely the bounce back is well on track.
Some of the earlier assessments were too pessimistic and assumed a gradual pace of economic normalisation.
Thus, a reassessment was given but nevertheless welcome.
Many continue to challenge conventional belief regarding India’s economic recovery being broad-based and sustainable in nature. It is important that we look at underlying data and relate it with steps undertaken by the government with the sole objective of reviving India’s economy.
1) Employment figures
Economic activity will see a faster revival than employment figures as labour markets tend to lag.
This is because most firms face costs associated with hiring and firing and they prefer to adjust the working hours before adjusting employment numbers.
Trends labour market does indicate prospects of a cyclical recovery which will lead to jobs being added at a faster pace than what was originally estimated.
Critically, the new scheme subsiding part of the EPFO contribution for the unskilled workers will benefit enormously which will then have spill-over effects.
2) Normalisation driven by rural economy
The bulk of the normalisation of economic activity was driven by the rural economy which eventually benefited the rest of the economy.
Rural growth has gained momentum and definitely augurs well for the Indian economy as it gets one of the engines firing.
The strong push by the government towards financing construction of assets has a significant impact.
3) Avoiding excessive and inefficient use of public funds
The design of the aid by the government is similar in terms of its size to programmes announced by other emerging markets.
However, the choice of instruments is along the lines those deployed by developed countries.
The government has refrained from excessive and inefficient use of public funds by restricting expenditures to temporary fiscal commitments.
This is important as our 2008 response had a lot of permanent fiscal expenditures which led to a systematic deterioration of our macroeconomic fundamentals.
The government has taken undertaken a sizable fiscal expansion combining automatic stabilizers, cash transfers, bank guarantees, expansion of expenditure under various programs such as MGNREGA, Food Security Act and Urban Affordable Housing Measures.
The fiscal component under each of these policies can be easily reversed making it possible for India to revert to its fiscal consolidation path a lot sooner.
4) Structural reforms as a part of its economic response package
These reforms are geared at unshackling the productivity potential in areas such as APMCs, labour markets, other reforms that allow for greater private role within the economy in critical areas such as coal, space technology etc.
These moves and their productivity gains will help India improve its potential growth rate.
This means that India should be better equipped at sustaining a high-growth rate of above 7 per cent due to the productivity gains that will be an outcome of the proposed reforms.
This will further help a faster reduction in fiscal deficit as a percentage of GDP and our public debt to GDP figures.
Conclusion
Strong macroeconomic fundamentals are necessary for sustained economic growth and the government has focused on a response package which prioritises sustainability of growth rather than having a fast yet unsustainable economic recovery from the crisis.
The article analyses India’s economic trajectory after independence and divides it into five phases. India’s progress is also compared with Pakistan’s as both countries have had much in common.
What drives economic growth
Examining the experiences of different countries to analysing the growth may seem a promising approach.
However, generalising from specific experiences can be misleading since ground conditions vary hugely across countries.
There are two ways to avoid the pitfalls of generalising from specific cases.
1) The first is to examine the same country over time to look for changes in outcomes at specific points in time.
2) A second approach is to compare countries with shared history, culture and geography.
If there are stark differences in outcomes between them, then there may be some policy lessons to be drawn.
The Indian subcontinent provides lessons from both approaches. The 73 years of post-Independence India has generated a lot of evidence across different political-economic regimes. This period has also provided us with the contrasting experiences of India and Pakistan, two countries that share history, geography and socio-cultural mores.
5 phases of India’s economic progress in 73 years: first approach
1) The first phase was the period 1950-65. This was the Nehruvian period of state-led industrialisation.
Starting in 1950 annual per person GDP growth averaged 2 per cent during this period.
This translated to aggregate annual GDP growth of around 4 per cent since the population was growing at close to 2 per cent.
2) The second phase of post-Independence India was during 1965-84.
This period was an unmitigated economic disaster with negative per capita growth.
The phase was marked with increasing state control of the economy, nationalisation of industry, closing of the economy to trade and a systematic weakening of institutions.
3) The third phase is 1984-91 when the government ushered in the first round of economic reforms by liberalising capital goods imports as well as starting industrial de-licensing.
These reforms were rewarded by a growth take-off. India’s annual per capita GDP growth averaged 3.1 per cent while aggregate GDP grew at 5.2 per cent during 1984-91.
4) The period 1991-2004 is typically classified as the liberalisation phase.
The reform effort was reflected in the 4.9 per cent annual per capita GDP growth during 1991-2004.
5) India embarked on a distinctive phase of faster growth post-2004 on the back of large investments in infrastructure.
Per person GDP growth in the period 2004-2015 averaged 7.7 per cent.
The corresponding aggregate GDP growth averaged 9 per cent.
This came at a cost, as a number of these infrastructure projects later caused problems in the banking sector on account of burgeoning NPAs, a problem that continues till today.
Comparison with Pakistan
In 1950, Pakistan’s per person GDP was almost 50 per cent greater than India that year.
Due to political uncertainty, Pakistan stagnated throughout the 1950s while a politically stable India grew.
As a result, by 1960, India had almost caught up with Pakistan in per capita GDP terms.
Unfortunately, from 1964, India went into two decades of economic stagnation while Pakistan opened up to foreign capital.
By 1984, Pakistan’s per capita income was more than double that of India’s.
Pakistan’s slowdown began in the 1980s.
This period coincided with the reforms in India.
Nevertheless, it wasn’t till as recently as 2010 that India’s per capita GDP finally overtook Pakistan.
4 takeaways
First, openness to trade and private enterprise usually has positive effects on growth.
Second, rapacious and exploitative democratic systems do not necessarily promote growth. Pakistan in the 1950s, 1990 and post-2010 is a good example.
Third, the socio-economic environment surrounding religious fundamentalism may be inimical to growth.
Fourth, degradation of institutions that regulate, arbitrate and enforce laws can be costly.
Conclusion
India’s growth when analysed from both the perspective offers valuable lessons for India and these lessons must guide India’s future economic trajectory.
The article examines the significance of the RCEP and India’s concerns over its provision.
Significance of RCEP
Last week, 15 East Asian countries signed the Regional Comprehensive Economic Partnership (RCEP), the largest free trade agreement (FTA) ever.
In 2019, RCEP members accounted for about 30% of world output.
More importantly, about 44% of their total trade was intra-RCEP, which is a major incentive for the members of this agreement.
The deal could contribute to the strengthening of the regional value chains.
Comparing RCEP with Trans-Pacific Partnership (TPP)
The TPP included several regulatory issues including labour and environmental standards and “anti-corruption”.
All of these issues could raise regulatory barriers and severely impede trade flows.
In contrast, RCEP includes traditional market access issues, following the template provided by the World Trade Organization (WTO).
RCEP also includes issues like electronic commerce, investment facilitation that are currently being discussed by WTO members to “reform the multilateral trading system”.
Would RCEP be able to realise trade and investment liberalisation?
In case of trade in goods, RCEP members have taken big strides towards lowering their tariffs.
However, commitments made by RCEP members for services trade liberalisation do look shallow in terms of the coverage of the sectors.
Movement of natural persons, an area in which India had had considerable interest, is considerably restricted.
The areas of investment and electronic commerce, in both of which India had expressed its reservations on the template adopted during RCEP negotiations, the outcomes are varied.
The text on investment rules shows that it is a work-in-progress.
The rules on dispute settlement procedures are yet to be written in.
Will India’s concerns get addressed in near future?
The answer seems to be unambiguously in the negative on two counts.
1) Two of the concerns India had raised, namely, the deep cuts in tariffs on imports from China, and provisions relating to the investment chapter, have become even more significant over the past several months.
2) India’s Atmanirbhar Bharat Abhiyan is primarily focused on strengthening domestic value chains, while RCEP, like any other FTA is solely focused on promoting regional value chains.
Consider the question “What were India’s concerns about RCEP that resulted in India not signing it? ”
Conclusion
This suggests that the prospects of India joining the RCEP in the near future appears bleak.
Over 1.3 lakh Tibetans living in exile and settled across India and other parts of the globe shall be electing their next Parliament-in-Exile, called Central Tibetan Administration, and it’s head in May 2021.
Do you think that India’s support for the Tibetan cause is the root cause of all irritants in India-China relations?
Electing the exiled Government
The Tibetan Parliament-in-Exile (TPiE) has its headquarters in Dharamsala, in the Kangra district of Himachal Pradesh.
According to the Green Book of the Tibetan government-in-exile, over 1 lakh Tibetans are settled across India.
The remaining are settled in United States, Australia, Brazil, Canada, Costa Rica, France, Mexico, Mongolia, Germany, United Kingdom, Switzerland and various other countries.
Here is how the Tibetan elections will be held:
Tibetan Parliament-in-Exile (TPiE)
The Speaker and a Deputy Speaker head the Tibetan Parliament-in-exile.
The 16th TPiE had 45 members – 10 representatives from each of the traditional provinces of Tibetan – U-Tsang, Dhotoe and Dhomey.
It includes two members from each of the four schools of Tibetan Buddhism and the pre-Buddhist Bon religion.
Other representatives are from the Tibetan Communities in North America and Europe; and from Australasia and Asia (excluding India, Nepal and Bhutan).
Till 2006, it used to be called as Assembly of Tibetan People’s Deputies (ATPDs) with the chairman as its head and a vice-chairman.
Tibetan Constitution
The Central Tibetan Administration exists and functions on the basis of the Constitution of the Tibetan government called the ‘The Charter of the Tibetans in Exile’.
In 1991, The Constitution Redrafting Committee instituted by the Dalai Lama prepared the Charter for Tibetans in exile. The Dalai Lama approved it on June 28, 1991.
In 2001, fundamental changes happened with the amendment of the Charter that facilitated the direct election of the Kalon Tripa by the Tibetans in exile.
The Kalon Tripa is called Sikyong or president of the Central Tibetan Administration.
The Kashag (Cabinet)
The Kashag (Cabinet) is the Central Tibetan Administration’s highest executive office and comprise seven members.
It is headed by the Sikyong (political leader) who is directly elected by the exiled Tibetan population.
Sikyong subsequently nominates his seven Kalons (ministers) and seeks the parliament’s approval. The Kashag’s term is for five years.
A backgrounder: Democracy for Tibet
The Dalai Lama began democratization soon after he came to India during the 1959 Tibetan National Uprising.
He reportedly asked Tibetans in exile to choose their representatives through universal adult suffrage, following which polls were held for electing Tibetan Parliamentarians in 1960.
Democracy for the Tibetans, thus, began in exile.
The Dalai Lama, however, continued to remain the supreme political leader. On March 14, 2011, he relinquished his political responsibilities, ending a 369-year-old practice.
Is TPiE officially recognised by any country?
Not exactly, it is not recognised officially by any country, including India.
But, a number of countries including the USA and European nations deal directly with the Sikyong and other Tibetan leaders through various forums.
The TPiE claims its democratically-elected character helps it manage Tibetan affairs and raise the Tibetan issue across the world.
The incumbent Sikyong, Lobsang Sangay, was among the guests who attended the oath-taking ceremony of our PM in 2014, probably a first.
The Joint Parliamentary Committee on Office of Profit has deliberated on whether a Parliamentarian can continue to teach at University and if this draws the provisions of “Office of Profit” rules.
Note: The Constitution of India does not define the Office of Profit. It has only mentioned it under Article 102 (1) and Article 191 (1).
The concept of ‘Office of Profit’
MPs and MLAs, as members of the legislature, hold the government accountable for its work.
The essence of disqualification is if legislators hold an ‘office of profit’ under the government, they might be susceptible to government influence, and may not discharge their constitutional mandate fairly.
The intent is that there should be no conflict between the duties and interests of an elected member.
Hence, the office of profit law simply seeks to enforce a basic feature of the Constitution- the principle of separation of power between the legislature and the executive.
What governs the term?
At present, the Parliament (Prevention of Disqualification) Act, 1959, bars an MP, MLA or an MLC from holding any office of profit under the central or state government unless it is exempted.
However, it does not clearly define what constitutes an office of profit.
Legislators can face disqualification for holding such positions, which bring them financial or other benefits.
Under the provisions of Article 102 (1) and Article 191 (1) of the Constitution, an MP or an MLA (or an MLC) is barred from holding any office of profit under the Central or State government.
An Un-defined term
The officials of the law ministry are of the view that defining an office of profit could lead to the filing of a number of cases with the Election Commission and the courts.
Also, once the definition is changed, one will also have to amend various provisions in the Constitution including Article 102 (1) (a) and Article 109 (1) (a) that deal with the office of profit.
It will have an overarching effect on all the other sections of the Constitution.
Factors constituting an ‘office of profit’
The 1959 law does not clearly define what constitutes an office of profit but the definition has evolved over the years with interpretations made in various court judgments.
An office of profit has been interpreted to be a position that brings to the office-holder some financial gain, or advantage, or benefit. The amount of such profit is immaterial.
In 1964, the Supreme Court ruled that the test for determining whether a person holds an office of profit is the test of appointment.
Several factors are considered in this determination including factors such as:
whether the government is the appointing authority,
whether the government has the power to terminate the appointment,
whether the government determines the remuneration,
The Indian Regional Navigation Satellite System (IRNSS) has been accepted as a component of the World Wide Radio Navigation System (WWRNS) for operation in the Indian Ocean Region by the International Maritime Organization (IMO).
Try this PYQ:
With reference to the Indian Regional Navigation Satellite System (IRNSS), consider the following statements:
IRNSS has three Satellites in geostationary and four satellites the geosynchronous orbits.
IRNSS covers entire India and about 5500 sq. km beyond its borders.
India will have its own satellite navigation system with full global coverage by the middle of 2019.
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) None
What is IRNSS?
The IRNSS, with an operational name of NavIC (acronym for Navigation with Indian Constellation) is an Indian regional satellite navigation system that provides accurate real-time positioning and timing services.
It covers India and a region extending 1,500 km around it, with plans for further extension.
The system currently consists of a constellation of seven satellites, with two additional satellites on ground as stand-by.
The constellation is in orbit as of 2018, and the system was expected to be operational from early 2018 after a system check.
It will provide two levels of service, the “standard positioning service”, which will be open for civilian use, and a “restricted service” (an encrypted one) for authorised users (including the military).
Benefits of the move
This move will enable merchant vessels to use IRNSS for obtaining position information similar to GPS and GLONASS.
This will assist in the navigation of ships in Indian ocean waters within the area covered by 50°N latitude, 55°E longitude, 5°S latitude and 110°E longitude (approximately up to 1500 km from Indian boundary).
Back2Basics: International Maritime Organisation (IMO)
IMO is the UN specialized agency with responsibility for the safety and security of shipping and the prevention of marine pollution by ships.
Its primary purpose is to develop and maintain a comprehensive regulatory framework for shipping and its remit today includes safety, environmental concerns, legal matters, technical co-operation, maritime security and the efficiency of shipping.
IMO is governed by an assembly of members and is financially administered by a council of members elected from the assembly.
The National Digital Health Mission will soon be ready for a nationwide roll-out, confirmed the Chairman of National Health Authority and CEO of Ayushman Bharat.
Our PM has launched the National Digital Health Mission on 15th August 2020.
The mission aims to create an integrated healthcare system linking practitioners with the patients digitally by giving them access to real-time health records.
It is a complete digital health ecosystem. The digital platform will be launched with four key features — health ID, personal health records, Digi Doctor and health facility registry.
At a later stage, it will also include e-pharmacy and telemedicine services, regulatory guidelines for which are being framed.
Its implementation
The NDHM is implemented by the National Health Authority (NHA) under the Ministry of Health and Family Welfare.
The National Health Authority (NHA), is also the implementing agency for Ayushman Bharat.
Early this year, our PM attended the Non-Aligned Movement (NAM) virtual summit, after previously skipping two summits.
Not attending that last few summits, had signalled India’s sudden departure away from NAM and having adopted the policy of multi-alignment.
This has raised eyebrows of those who still believe in the true spirit of Non-Alignment of which India has been the champion for a long time.
The question of strategic autonomy is in limelight since the 2+ 2 talks between India and the US.
Exploring India’s role in the launch of the Non-Aligned Movement (NAM) during the Cold War and its relations with participant countries today is pivotal to understanding ‘ India’s idea of strategic autonomy.
What is NAM?
The Non-Aligned Movement (NAM) is a forum of 120 developing world states that are not formally aligned with or against any major power bloc.
After the United Nations, it is the largest grouping of states worldwide.
Drawing on the principles agreed at the Bandung Conference in 1955, the NAM was established in 1961 in Belgrade, SR Serbia, and Yugoslavia.
It was an initiative of then PM Jawaharlal Nehru, Ghanaian President Kwame Nkrumah, Indonesian President Sukarno, Egyptian President Gamal Abdel Nasser and Yugoslav President Josip Broz Tito.
The countries of the NAM represent nearly two-thirds of the United Nations’ members and contain 55% of the world population.
Membership of NAM
Membership is particularly concentrated in countries considered to be developing or part of the Third World, though the NAM also has a number of developed nations.
At that point in time, reason behind NAM creation
Non-alignment, a policy fashioned for the Cold War, aimed to retain the autonomy of policy (not equidistance) between two politico-military blocs i.e. the US and the Soviet Union.
The NAM provided a platform for newly independent developing nations to join together to protect this autonomy.
NAM was thus similar to neutrality in a sense of not taking sides, but with the difference that if their decisions and actions coincide with one of the fighting blocs, it is their own preference, their own worldview, not supporting the bloc who has similar standings.
Relevance TODAY
Since the end of the Cold War, the NAM has been forced to redefine itself and reinvent its purpose in the current world system.
In the years since the Cold War’s end, it has focused on developing multilateral ties and connections as well as unity among the developing nations of the world, especially those within the Global South.
Fading significance of the NAM
The policy of non-alignment lost its relevance after the disintegration of the Soviet Union and the emergence of unipolar world order under the leadership of the US since 1991.
De-colonization was largely complete by then, the apartheid regime in South Africa was being dismantled and the campaign for universal nuclear disarmament was going nowhere.
Freed from the shackles of the Cold War, the NAM countries were able to diversify their network of relationships across the erstwhile east-west divide.
India and the NAM
India played an important role in the multilateral movements of colonies and newly independent countries that wanted into the NAM.
India’s policy was neither negative nor positive.
Country´s place in national diplomacy, its significant size and its economic miracle turned India into one of the leaders of the NAM and upholder of the Third World solidarity.
The principle of ‘acting and making its own choices’ also reflected India’s goal to remain independent in foreign policy choices, although posing dilemmas and challenges between national interests on international arena and poverty alleviation.
Namely, the economic situation with the aim to raise the population’s living standards challenged the country’s defence capacity and vice versa. Preserving the state’s security thus required alternative measures.
Wars with China and Pakistan had led India to an economically difficult situation and brought along food crisis in the mid-1960s, which made the country dependent on US food.
India’s position was further complicated due to agreements with the Soviet Union about military equipment.
This placed India again in a situation where on one hand the country had to remain consistent on the principles of NAM while on the other hand to act in a context with fewer choices.
The guiding principle of NAM should be repurposed as a balance between ‘Global value consensus’,‘Freedom of Alignment’ and ‘Neutrality’.
What is meant by Strategic Autonomy?
Strategic autonomy for India denotes its’ ability to pursue its national interests and adopt its preferred foreign policy without being constrained in any manner by other states.
In its pure form, strategic autonomy presupposes the state in question possessing overwhelmingly superior power.
This is what would enable that state to resist the pressures that may be exerted by other states to compel it to change its policy or moderate its interests.
Today’s ideation of ‘strategic autonomy’ is much different from the Nehruvian era thinking of ‘non-alignment’.
Strategic autonomy is today a term New Delhi’s power corridors are well-acquainted with. It is an issue & situation-based, and not ideological.
Beyond Power-Politics nexus
Strategic autonomy for India is both about power-politics and responsibilities.
India’s quest for strategic autonomy is more about justice in terms of creating the international system where all states’ voices will be heard and decisions are made on value-based consensus.
Such an idea is often misunderstood and confused with ‘opposing some states and allying the others.’
What dictates India’s alignment now?
India acknowledged the importance of economic growth as a factor in domestic poverty alleviation and for the realization of national interests in the international arena.
(1) National security
China’s rise and assertiveness as a regional and global power and the simultaneous rise of middle powers in the region mean that this balancing act is increasing in both complexity and importance, simultaneously.
China’s growth presents great opportunities for positive engagement, but territorial disputes and a forward policy in the region raise concerns for New Delhi, particularly in the Indian Ocean and with Pakistan.
(2) Global decision-making
Another distinctive feature of India’s foreign policy has been the aim to adjust international institutions consistent with changes in international system.
The support for strengthening and reforming the UN as a multilateral forum, restructuring the international economic system and preserving independence in its decision-making has become an integral part of India’s foreign policy.
(3) Prosperity and influence
India’s 21st century’s strategic partnerships with two of the biggest economies, the USA and EU rely heavily on trade and technology cooperation.
In addition, the partnership with the USA has touched the boundaries of strategic issues like cooperation on counter-terrorism, defence trade, joint military exercises, civil nuclear cooperation and energy dialogue.
(4) Multi-polarism
Another means to execute India’s foreign policy strategy of autonomy has been forming extensive partnerships with other emerging powers.
India has been an active G4 country speaking for the reform of the UN Security Council and having been elected seven times as a non-permanent member.
As a result, there is an overlap of countries in different platforms, as can be seen in cases of India’s partnership with BRICS, SAARC, etc.
The purpose of India is to increase the participation and share of developing countries in global policy-making.
Benefits out of strategic alignment
India needs investments, technology, a manufacturing ecosystem to employ millions of its young population and improve its living standards.
It requires advanced weapons and technologies for its military. India is ambitious and wants to be a great power and the US and the Western world recognise this and are willing to partner India.
US along with France, are India’s principal backers in the UN Security Council and also support its membership in it.
The Quad of India, US, Japan and Australia is also slowly institutionalizing the multilateral partnership that is committed to an open, secure, inclusive and prosperous Indo-Pacific region.
China’s “not-peaceful rise”
India is a long term rival for China, which does not want India’s rise. It wants to keep India boxed into South Asia, and tries to keep it off balance using Pakistan which it arms and supports.
It has made inroads into the region using the Belt and Road Initiative (BRI). It continues to block India’s membership in the Nuclear Suppliers Group (NSG) and continues to needle in the UNSC over Kashmir.
We all know the recent heat up after Ladakh standoff. It occupies parts of Indian Territory and also claims the entire state of Arunachal.
Hence, the Non-alignment is difficult because,
We have to safeguard ourselves from a power which has trampled upon all her neighbours most blatantly and the whole world has seen and withstood them with deafening silence.
China has kept our territory since 1962 violating all international norms and we could do nothing with this diplomatic tool called Non- Alignment.
Any policy formulation has to serve the national interest.
The US prefers its partners to pay for and manage their own security, but collaborate in all possible ways — weapons sale, sharing civil and military arsenals, diplomatic support, intelligence sharing etc.
It will be pragmatic to take advantage of the great power rivalry by suitably aligning with a power that India can derive maximum benefit from.
But Wait, NAM stillmatters!
(1) Global perception of India
India’s image abroad has suffered as a result of allegations that creep into our secular polity and a need arises to actively network and break out of isolation.
India’s partnership with America faces an uncertain future in the post-pandemic period ahead of the regime change under Joe Biden.
Indeed, India is overtly keen to upgrade a quadrilateral alliance with the US, Japan and Australia — but there too, we’re all dressed up and nowhere to go. There is no concrete commitment yet.
We can sense the growing proximity between the NAM member countries and China.
As it is, one-half of NAM comprises members of the Organisation of the Islamic Conference, which remains highly critical of the plight of Indian Muslims.
(2) For the Impulsive U.S.
For India complete dependence on the U.S. to counter China would be an error.
As the U.S. confronts the challenge to its dominance from China, the classical balance of power considerations would dictate accommodation with Russia.
A strong stake in India’s relations with the US could reinforce Russia’s affinity for China.
Russia, these days looks less pragmatic to see Indian ties with its rivals as a joint venture, not an alliance in which they could pursue shared objectives to mutual benefit.
Importance of NAM: As power booster for multilateralism
The NAM can never lose its relevance because-
Cold War has revitalized with time: Critics of NAM who term it as an outcome of the Cold War must also acknowledge that a new Cold War is beginning to unfold, this time between the US and China, which if reflected in Trade War, Protectionism, Indo-Pacific narrative, etc.
NAM provides a much bigger platform: NAM becomes relevant to mobilize international public opinion against terrorism, weapons of mass destruction (WMDs), nuclear proliferation, ecological imbalance, safeguarding interests of developing countries in WTO (World Trade Organization) etc.
NAM as a tool for autonomy: NAM’s total strength comprises 120 developing countries and most of them are members of the UN General Assembly. Thus, NAM members act as an important group in support of India’s candidature as a permanent member in UNSC.
A podium for India’s leadership: India is widely perceived as a leader of the developing world. Thus, India’s engagement with NAM will further help in the rise of India’s stature as the voice of the developing world or global south.
NAM for multilateralism: Though globalization is facing an existential crisis, it is not possible to return to isolation. In the world of complex interdependence, countries are linked to each other one way or another. With rising threats such as climate change, terrorism, and receding multilateralism, the global south and NAM countries find themselves in a precarious condition.
NAM as a source for soft power: India can use its historic ties to bring together the NAM countries. India’s strength lies in soft power rather than hard power. Therefore, NAM cannot be based on the current political structure where military and economic power is often used to coerce countries.
NAM as a tool for institutional reforms: Global institutions such as WTO and the UN are facing an existential crisis because only a few nations dictate their functions. India can use the NAM platform to push for reforms in these institutions for a more equal and democratic world order.
Elasticity is the guiding principle of diplomacy.
– Anonymous
Way Forward
In the post-COVID-19 world, India will have to make a disruptive choice — of alignment.
In the threat environment marked by a pushy China, India should aim to have both- American support and stay as an independent power centre by cooperation with middle powers in Asia and around the world.
Complete dependence would be detrimental to India’s national interest such as its ties with Iran and Russia and efforts to speed up indigenous defence modernization.
Rather than proclaiming non-alignment as an end in itself, India needs deeper engagement with its friends and partners if it is to develop leverage in its dealings with its adversaries and competitors.
A wide and diverse range of strategic partners, including the U.S. as a major partner is the only viable diplomatic way forward in the current emerging multipolar world order.
Conclusion
Though sections of the Indian establishment still want to reinvent non-alignment under ever new guises, India is showing signs of pursuing strategic autonomy separately from non-alignment.
India continues to practice a policy of non-alignment in an attempt to maintain sovereignty and oppose imperialism.
Indo-US ties are complementary, and a formal alliance will only help realize the full potential of these relations.
India, thus, emphasizes the relations with the region and emerging powers not only in terms of economic development but also as actors with similar understandings and expectations of the world system.
In some way, the relations can be described as expectations without expectations. States interact with each other in expectations to change the international system, but without expectations to ‘ally or oppose.’
India believes in making value-based decisions and maintains its coherent foreign policy. As it is familiar with the phrase ‘multi-vector’ foreign policy, it is high time to maximise its potential.
The article highlights the importance of MSMEs for the economy and issues faced by the sector.
Context
The economy may have recovered from the trough of April but is yet to show signs of a sustained recovery on an annual basis.
The number of establishments registered with the Employees’ Provident Fund Organisation declined by more than 30,800 in October, compared to September.
Incentives for MSMEs
The above-cited numbers are indicator of the vulnerability of the employment situation, but also as a performance indicator of micro, small and medium enterprises (MSMEs).
The MSME sector is vital for employment generation, as also for an economic recovery to sustain.
Under Atmanirbhar Rozgar Yojana the government will bear the entire provident fund contributions for two years of all new employees hired.
However, similar announcements earlier failed to enthuse the MSME sector.
Along with the employment incentive, the MSME sector has also been provided collateral free credit.
But the offtake from the scheme has not been impressive, pointing to deeper issues.
Why the incentives failed
Part of the reason these incentives failed lies in the very nature of the MSME sector and its heterogeneity, which is inherent in its definition as a residual sector once large enterprises are excluded.
A 2015-16 survey of the National Statistical Office shows that almost 94% of these enterprises are tiny, with less than four workers.
Only 31% are registered under various acts, but these face regulatory hurdles, some of them related to compliance with the goods and service tax (GST).
Problems faced by MSMEs
In 2015-16 survey of the National Statistical Office two most important problems mentioned were a lack of demand and unpaid dues.
On both, the situation after 2015-16 has worsened, with the economy slowing down and the government responsible for the largest unpaid dues.
With the finances of state governments also strained due to pandemic, the fiscal situation has added to the problem of unpaid dues.
The sector is also affected by the political economy of state intervention, which seems biased in favour of large corporations.
Unlike the ₹1.5 trillion tax bonanza that large companies received as part of a pre-pandemic stimulus, there was no such bounty for the MSME sector.
With most state governments relaxing labour regulations for large companies, even the low-wage advantage that this sector enjoyed has got diminished.
Policy changes have not only reduced the compliance burden of labour laws, but have also helped large enterprises reduce wage costs.
Consequently, the MSME sector has to now compete with a corporate sector that has easy access to capital, cheap and unregulated labour and a lower tax burden than before.
Way forward
Apart from the fiscal stimulus, the sector requires a political-economy approach that prioritizes MSME interests.
India needs to ease the regulatory burden of small units and aid their survival through fiscal support.
Above all, they need a level-playing field vis-à-vis big businesses.
Consider the question “Despite several incentives by the government MSME sector fails to play the role expected of it. What are the issues faced by the sector and suggest the measure to deal with the issues.”
Conclusion
Given the important role played by the sector in the economy, issues faced by it must be addressed on ani urgent basis to revive the economy battered by the pandemic.
