8 ISSUES AND INSIGHTS MUMBAI | THURSDAY 14 NOVEMBER 2019 >

India business was on the brink of col- waiver of penalty and tax in relation to > lapse. Chief executive Nick Read told the the AGR order by the Supreme Court. In CHINESE WHISPERS If Vodafone quits ... media in London after the company’s that case, Vodafone might have decided half-yearly results that Vodafone’s India to call a spade a spade and walk out of unit could be headed for liquidation India, which was not too long ago the Updating Twitter profile ...India’s loss might be much bigger in terms of the dent in the unless it got relief from the government most promising telecom market. overall business sentiment in terms of waiver in taxes and penalties. The second reason could be a ploy “If you don’t get the remedies being sug- or a last-ditch effort by the telco to con- Vodafone Idea, the venture in which the In a statement issued on October 31, the gested, the situation is critical,” he said vince the government to act quickly UK operator holds 45 per cent stake, had second largest telecom company in the in no unclear terms. And then to reiterate and decisively. to pay around $4 billion (more than world said, “Vodafone is aware of the the point, he said, “if you’re not a going While Vodafone, which has been ~28,000 crore) in licence fee and spec- unfounded and baseless rumours circu- concern, you’re moving into a liquida- among the biggest source of foreign trum usage dues to the government. lating in some of the Indian media that tion scenario — can’t get any clearer than direct investment, would lose out on its From there on, the sequence of we have decided to exit the market. We that.” While writing down the book value current 300 million plus subscriber base events is intriguing. would like to categorically state that this of its India operations, Vodafone has and the promise of growth if it were to A day after the court judgment, on is not true and is malicious.’’ squarely put the blame on “unsupportive exit the country, India’s loss might per- October 25, Vodafone Idea said in an The same day, the India business- regulation” and “excessive taxation”. The haps be much bigger in terms of overall Former Maharashtra chief minister exchange filing that the verdict had Vodafone Idea-made a filing to the “negative Supreme Court decision” had business sentiment. Devendra Fadnavis on Tuesday changed NOT FOR PROFIT “financial implications and represents a Bombay Stock Exchange (BSE), which of course, pushed it to the brink. The government so far has not taken his Twitter bio to “Maharashtra’s Sevak” significant event with respect to the com- had sought clarifications from the com- Although it’s rare and tough for a any pro-active step to set things in order (Maharashtra’s servant). As chief minister, NIVEDITA MOOKERJI pany”. It also said the company would pany on media reports suggesting it may global chief executive to announce that in the telecom sector, bruised by Fadnavis often used his Twitter handle engage with the Department of Telecom exit India as losses mount. “As regards a business had gone bad, it’s striking to extremely low tariff because of compe- @Dev_Fadnavis for official seeking relief, including a waiver of inter- exit of India operations by Vodafone find a multinational as big as Vodafone tition. At a time when the government communication. The BJP leader had he last week of October, with all est and penalties. group is concerned, we wish to inform change its position on exit and is calling out predatory pricing by foreign changed his Twitter bio from “Chief the festivity around, was hardly By this time, speculation around you that the company is not aware about bankruptcy within days. So, what hap- e-commerce companies to help Indian Minister of Maharashtra” to “caretaking T pleasant for the telecom sector. Vodafone’s likely exit from India were anything on the subject as it pertains to pened between October 31 and retail businesses, it’s time to take notice chief minister” last week when the BJP The Supreme Court verdict on October making headlines. Soon, TV channels Vodafone group and hence cannot com- November 12, to drive Vodafone to of the telecom sector tariffs without get- announced that it was in no position to 24 upholding the government definition and news agencies were also flashing ment on the same,” Vodafone Idea told make a public statement that its India ting into the nationalities of the compa- form the government. He quit on of adjusted gross revenue or AGR had hit that Vodafone Idea, with around $14 bil- BSE. On the issue of debt recast, days may be numbered unless the gov- nies. Also, rather than whiling away time November 8 after the Bharatiya Janata all telcos, except Reliance Jio. But, for lion net debt, was in talks with banks for Vodafone Idea dismissed it as incorrect. ernment offered substantial relief? on recommendations by a committee of Party failed to work out a power-sharing the UK communications major a debt recast and could be headed to the In less than two weeks, precisely on There could be only two reasons for secretaries, the government must take a deal with the Shiv Sena, its ally. Fadnavis, Vodafone, already in the midst of mount- bankruptcy court. The Newbury November 12, the British conglomerate this desperate war cry. One could be that call at the highest level at the earliest, 49, is the first chief minister of ing losses in its India unit, it looked like (Berkshire)-headquartered conglomer- stunned the world by negating its own the UK telco sensed the government treating Vodafone’s exit call with all the Maharashtra after Vasantrao Naik to an endgame. The top court order meant ate responded strongly to douse the fire. statement of October 31, stating that its might not offer any big relief in terms of seriousness that it deserves. complete a full term.

Jharkhand war hots up Sukhdeo Bhagat former Levelling the grain mountain Congress chief who switched to the (BJP) recently, filed his nomination from the Lohardaga Foodgrain stocks are burgeoning but the options to reduce them are limited Assembly (reserved for Scheduled Tribes) seat on Wednesday. Bhagat, who is a sitting MLA from Lohardaga, is pitted SANJEEB MUKHERJEE wheat and rice a farmer brings to the 35 kg per month, while each identified against , a former mandi within a stipulated time and individual under the PHH category officer who is few days ago, local papers in based on a pre-determined quality gets 3 kg of rice and 2 kg of wheat a currently chief of the Congress’ Haryana published reports of parameter. month. The rates for both AAY and Jharkhand unit. Oraon had succeeded A paddy farmers being turned CACP and the beleaguered FCI PHH have been unchanged at ~3 per , who quit the Congress in away from mandis because government blames this open-ended procurement kg for rice and ~2 per kg for wheat since the aftermath of the polls and agencies had stopped procurement say- for mounting foodgrain stocks, which, 2013, when the National Food Security joined the . Bhagat, ing quotas had been reached. Mandis as on October 1, 2019, stood at an esti- Act was enacted. along with three other Congress in Karnal, Panipat and Yamunagar all mated 64.23 million tonnes, more than Export wheat and rice from the legislators, joined the BJP last month. reportedly downed their shutters for six double the required buffer and strategic Central pool: This has long been con- The BJP has given the party ticket to all days, causing a long line-up of trucks reserve norms. sidered the key to liquidating the grain four from their current seats. The five- and tractor-trolleys. It was only after the “Against a requirement of around mountain. Unrestricted wheat exports phase election to the 81-member newly-formed Manohar Lal govern- 50-56 million tonnes of foodgrain to have been allowed under Open General Jharkhand Assembly will conclude on ment clarified that no decision to stop run the National Food Security Act Licence (OGL) since 2012. But India has December 20 and counting will be held procurement had been taken that the (NFSA) and other welfare schemes, the rarely managed to make any serious on December 23. Haryana mandis re- Centre ends up buying attempt to dent global wheat markets opened. almost 80 million tonnes of because constant increases in MSP The incident highlights wheat and rice. There has to Savings Funds (NSSF) by the end of that PROBLEM OF PLENTY have priced out Indian wheat. again the challenges the be a mismatch somewhere, financial year, totalling over ~319,000 Stiff competition from Australia and Being cautious Foodgrain stock (mn tonne) Centre and state govern- which is showing up,” a crore. At the start of the current fiscal, Ukraine is another key reason for the Samajwadi Party (SP) President Akhilesh ments face when it comes senior FCI official said. this figure was ~191,000 crore. In short, Oct 1, 2015 52.07 poor performance of Indian wheat Yadav has never given up an opportunity to ending the open-ended Given that India’s food- FCI is incurring crippling debt to create Oct 1, 2016 35.8 exports. Making things worse, global to attack the Yogi Adityanath government procurement of wheat and grain stocks have reached extra food stocks that the country Oct 1, 2017 42.17 prices, too, dropped from about $350 on various issues, especially cases of rice by Food Corporation of TAKE unmanageable levels — the doesn’t really need. Oct 1, 2018 54.25 metric tonne in November 2012 to alleged corruption or impropriety. India (FCI) and state agen- TWO image of rats feasting on So what can Centre do about its Oct 1, 2019 64.23 below $200 tonne in September 2019 However, “Tipu” — Yadav’s affectionate cies on its behalf. “I have stocks in FCI godowns has grain mountains? *Does not include unmilled paddy lying with mills owing to a glut in producing countries. moniker — is perceptibly cautious about ANALYSIS BEHIND and coarse grains; NOTE: The buffer and reserve stock never seen mandi authori- THE HEADLINES become famous — does the Open market sale to private players: position as on October 1 is 30.77 mn applicable from “Despite consecutive record har- the DHFL controversy, in which UP power ties denying paddy pur- government has viable The problem here, say FCI officials, is January 22, 2015 Source: Food Corporation of India (FCI) vests and high stocks, wheat exports utility mandarins had allegedly flouted chases in my lifetime,” said options to liquidate the cur- low appetite from allied industries such have not increased as Indian wheat norms to invest in the scam-hit non- a farmer from Karnal. “It seems some rent inventory without incurring a as biscuit manufacturers, a result of the ilies below the poverty line: exports are not competitive due to banking financial company between ulterior motive is at play,” he added. heavy additional financial burden? economic slowdown. The government Assuming an additional allocation of 5 higher domestic prices compared to March 2017 and December 2018. The Soon after the Haryana incident, the The short answer is no. did make a start of sorts by selling kg of rice and wheat for AAY beneficia- world prices,” CACP said. investments started when the power 2020-21 rabi report of the Commission The stock burden along with inade- wheat and rice at an MSP-linked ries, and 1 kg of rice or wheat to those In sum, given the complications and transition was underway between the for Agriculture Costs and Prices (CACP) quate Budget allocations for the food reserve price, but as the CACP noted in in the Priority Households (PHH) cate- challenges associated with all the eco- outgoing SP and now incumbent Bharatiya 2020-21 highlighted the pitfalls of open- subsidy and the Centre’s zeal to check its latest report, the offtake of wheat till gory, a back-of-the-envelope calcula- nomic options to liquidate grain stocks, Janata Party. UP Power Corporation Ltd ended procurement of wheat and rice. the fiscal deficit has worsened FCI’s September 2019 has been only 0.51 mil- tion shows that government will have the Centre has few viable choices. (UPPCL) Managing Director A P Mishra was The CACP, which is the main body that financial position. Officials say even if lion tonnes against 2.29 million tonnes bear an extra financial burden of about Reconsidering the entire MSP-based still at the helm. During the SP regime determines the Minimum Support the Centre releases all its allocated sub- offered for sale during 2019-20. The tar- ~29,000 crore over the current subsidy procurement system is the only remain- (2012-17), Mishra had the ruling Price (MSP) for a host of crops, has often sidy for 2019-20, the agency would still get is to sell around 10 million tonnes of over ~184,000 crore (Budget ing option but that is a politically sen- dispensation’s trust and was given urged the need to review the open-end- have outstanding unpaid subsidy dues in open market. Estimate, 2019-20). sitive decision involving farmer inter- multiple extensions. He is currently in the ed procurement mechanism under of ~174,000 crore, plus ~145,000 crore as Extra allocation for Antodaya Anna AAY allocations are made on a per- ests that few governments in the past custody of the UP economic offences wing. which the government buys whatever outstanding loans from National Small Yojana (AAY) beneficiaries and fam- family basis, which comes to around have dared to even consider.

INSIGHT > LETTERS

Singapore had once compared ASEAN RCEP and India to an aircraft of which India and China Focus on happiness were the two wings. That truly repre- sents the importance of India for This refers to “Development Economics after I was disappointed when India decided to opt out of the RCEP. We had all the time in ASEAN and the whole Indo-Pacific. the Nobel Prize” (November 13). Post Adam Today, we as one of the wings of the Smith, an eon was spent in identifying con- the world to negotiate and get a good deal for ourselves ASEAN aircraft have decided to vol- ditions necessary for wealth-creation. An era ILLUSTRATION BY BINAY SINHA untarily detach ourselves from that was then spent on distribution of income Vajpayee’s speech. As expected, it aircraft. between capital and labour. Nobel winner became the highlight of his address.” The 15 countries of RCEP together Professor Angus Deaton then delved into the This is an extract from my recently account for 3 billion people and 20 per cause and spread and measurement of pover- published autobiography Relentless cent of the global GDP. Manmohan ty. Now Abhijeet Banerjee et al have analysed and I am quoting it here to emphasise Singh had once described the area to combat it through the seminal concept of that both Vajpayee and I were very extending from Japan to India as an Randomised Control Trials. It may take ages keen to expand India’s trade and eco- ‘arc of prosperity’. It is tragic that the for socio-economists to move away from a nomic relations with all friendly coun- Congress party today is competing trite GDP to the concept of happiness. More tries in the world while at the same with the ruling party and others to than in economics, development needs to be time protecting and safeguarding our claim credit for India staying out of in human ethos. core national interests. When I took the RCEP. The government of course R Narayanan Navi Mumbai YASHWANT SINHA over as minister for external affairs I is claiming it to be an act of courage found to my horror that we were of a strong prime minister. The fact of Good job nowhere compared to China when it the matter is that by opting out of the came to trade, specially as far as the RCEP, India has shot itself in the foot Dilasha Seth’s report “ ‘blinks green’ as travelled for one such meeting developing countries of Asia, Africa to make an announcement to this made whatever provisions were nec- and missed a golden opportunity to the fastest air cargo hub among India’s met- (summit with ASEAN) to and Latin America were concerned. effect in my Budget speech of essary and legally feasible to safe- be an important player in the affairs, ros” (November 13) about the excellent per- I Cambodia in the PM’s special So, if China’s total annual trade with February 28 of that year. I recall with guard our interests. A special cell was not only of this region but globally. formance of the Delhi air cargo hub — and plane (the year was 2003). During the country X were three billion US dollars some amusement today the appre- set up in the ministry of commerce to The argument that India would improvements at other major airports too — flight Vajpayee asked me whether I ours would be three million dollars. hensions which existed in certain monitor the imports of sensitive com- have had to play second fiddle to is a piece of good news. The Central Board had seen the speech which had been Since trade and economic relations quarters of our business community modities and products into India. We China under this arrangement is com- of Indirect Taxes & Customs’ (CBIC’s) initia- prepared for him. The PMO used to formed an important point of the then. A senior political leader came to were ready with other measures too pletely misplaced, as is the belief that tive of launching the time-tracking colour prepare his speeches based on inputs agenda of my discussions with my see me with a delegation of the poultry to meet any surge in imports of sensi- it would have led to an upsurge in dashboard is a great idea to encourage all our received from various ministries, spe- counterparts from these countries or industry. They told me that US was tive items. But we survived; Indian imports from China. For the record, major air- and seaports to expedite customs cially the ministries of commerce and their regional groupings, I would sitting on huge mountains of frozen industry and agriculture once again our current trade deficit with China is clearance of cargo. Such healthy competition external affairs. The final version was explore all avenues to augment them. chicken legs waiting to export them stood up and faced the challenges not because of some FTA we have with is bound to improve this crucial component not shown, even to me, and was a I discussed the state of affairs with to India and how its unrestricted boldly. It helped them come of age. them. It is the result of our own defi- in “ease of doing business” and show good trade secret of the PMO. So, I frankly Vajpayee and given the confidence we imports will ruin the poultry industry I was therefore disappointed when ciencies and if there are any trade results at other airports and seaports as well told Vajpayee that I had not seen the had in our own economy, it was decid- in India. A group of businessmen from India decided to opt out of the RCEP. curbs that China has in place for as lend a big helping hand to our efforts at final draft.” ed that we should freely offer to con- the two-wheeler industry warned me It is not an act of courage but of cow- imports from India, it is the duty of “breaking into the top 50 ease of business “He immediately told his officials clude preferential and free trade agree- that China had already stocked lakhs ardice. We had all the time in the our negotiators to have them club”. Here’s wishing Delhi keeps blinking to show it to me. ‘It is a good draft, but ments with regional trading blocs and of two-wheelers in the customs free world to negotiate and get a good deal removed. There are strong rules in green — at least on this front — and others what is news worthy in the speech?’ I the larger countries. India would deal zone of Dubai and was waiting to ship for ourselves. After all, did we not do place about the country of origin and also catch up soon. Our hopes to join the top asked the PMO officials, who looked with the world with a newfound con- them to India and how that would so during the more difficult negotia- therefore the fear that China would 50 club in terms of ease of doing business at me in surprise. I told them that fidence and self-assurance. And our destroy the two-wheeler industry in tions in the Doha Round or even later have inundated us with imports should get a leg up with all this. More than ASEAN already had free trade agree- confidence was not misplaced. India. Similar fears were expressed WTO negotiations? We cannot wear through third countries is also mis- that, it will help our industry and trade ment (FTA) with China, Japan and India had stood up and squarely about apples and dairy products from our negotiating failure as a badge of placed. So is the view that an FTA with become more competitive. South Korea, which were its summit faced the challenges posed by the Australia and New Zealand and any honour, can we? the US could make up for it. The fact Krishan Kalra Gurugram partners. Should India as the fourth opening up of the Indian economy other items of imports from various RCEP embraces 15 countries, the of the matter is that some people in summit partner not offer to have an after the liberalisation of 1991. Ten other countries. Indian industry was original 10 of ASEAN and its summit India are forever afraid of coming out Letters can be mailed, faxed or e-mailed to: The Editor, Business Standard FTA with ASEAN? The suggestion was years later came a bigger challenge in the grip of an all-pervading panic. partners, namely, South Korea, Japan, of their mother’s womb. That is not Nehru House, 4 Bahadur Shah Zafar Marg accepted by Vajpayee and commerce when under the WTO agreement QRs had to go on April 1, as it was a China, Australia and New Zealand. the sign of a strong nation which is New Delhi 110 002 secretary Deepak Chatterjee, who was India had to remove all quantitative sacred international commitment. I India is the other summit partner of willing to go out and meet the world. Fax: (011) 23720201 · on the same flight, was asked to draft restrictions (QRs) with effect from took the concerns of Indian industry ASEAN and its second largest. Goh E-mail: [email protected] a few sentences to include the offer in April 1, 2001. As finance minister I had and agriculture on board and and Chok Tong, then prime minister of The author is a former Minister of Finance All letters must have a postal address and telephone number OPINION 9 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXIV Number 65 ILLUSTRATION: BINAY SINHA MUMBAI | THURSDAY, 14 NOVEMBER 2019 Policy instability reigns doctrine in the first Gulf War in 1991 caused the PLA Investors will see government action as primary risk to adopt the doctrine of “limited war under high- tech conditions”, which envisioned wars being pros- he government has sought to make India an easier place to do ecuted by relatively small, flexible, heavily armed, business, and has pushed for reform to this end at both the central tri-service troops. The White Paper of 2004 adopted and state levels. Some of its efforts have been crowned with suc- the current doctrine of “limited war under condi- tions of informationisation”, which envisioned real- cess, and India’s ranking in the World Bank’s ease of doing busi- T time advanced communications to digitally inte- ness rating has risen. The hope is that this will revive investment, both grate land, sea, air and space sensors, and the use domestic and foreign. But the question to be asked is why investors would of precision munitions to accurately strike the targets want to come in to India at the risk of catastrophic capital loss, and when thus identified. the greatest risk continues to be the Indian state itself. One major risk Given this doctrinal backdrop, what role would the PLA (AF) play, and what missions would it per- comes from the possibility that a change in administration following an form, in a future war with India? These would be election might lead to the government reneging on agreements. The situa- limited by a geographical imperative — the Tibetan tion in Andhra Pradesh is an unfortunate example of this. The new gov- Chinese air force’s Plateau, which consists of a 1,000-2,000 kilometre ernment under Jagan Mohan Reddy had previously announced it was re- buffer between the Chinese and Indian mainlands. opening power purchase agreements, which threw investment into the PLA (AF) aircraft, operating from Chengdu and Kunming, in South China — the mainland bases renewable energy sector nationwide into crisis. Now news comes that it is long march closest to India — would have a one-way journey of ending a development project in the new state capital city of Amaravati, 1,000 kilometres to enter the Assam plains. Even which was supposed to create a commercial real estate-focused area in the with mid-air refuelling, that would leave the aircraft new city on the banks of the Krishna river. This will involve pulling out of The PLA has clearly spelt out its aggressive military doctrine. India with little mission time, especially for targets deeper a contract it had signed with Singaporean investors. The Amaravati project must be ready to meet this threat inside India. Consequently, the PLA (AF) would have was supposed to be a proof of concept, a demonstration that foreign capital to operate from Tibet, for which it has created and stocked at least several air bases, including Lhasa, could co-operate with the Indian state in order to build world-class urban hen Mao Zedong declared the founding of especially the United States Air Force (USAF). Golmud, Nyingchi and Shigatse. But while these infrastructure. Instead, it now serves to demonstrate the opposite. the People’s Republic of China in Beijing Between 1950 and 1953, both sides lost hundreds of are significantly closer to Indian targets (Lhasa is Similar risks have intensified at the all-India level as well. At a media Won October 1, 1949, the country had just 17 fighters and pilots, including dozens of Russian less than 400 kilometres from Tezpur) PLA (AF) call after Vodafone released its first-half results, its chief executive officer, military aircraft. Legend has it that this little fleet pilots flying in North Korean uniforms. The experi- fighters taking off from air bases on the 10,000-feet- Nick Read, said the situation for the company in India was “critical”. This — nine fighters, two bombers, three carriers, one ence garnered enabled Russia to incrementally high Tibetan plateau would face serious limitations communication plane and two trainers — overflew develop the MiG-15 into the MiG-17, MiG-19 and the on the weapons and fuel payload they can get aloft is a consequence of the government having taken a case about revenue Tiananmen Square twice each to give the jubilant legendary MiG-21; with China eventually building with. To overcome this, they would require mid-air sharing all the way to the Supreme Court, which has now ordered debt- masses the impression they had an air force. The all four fighters under licence. The USAF, mean- refuelling after take-off, a cumbersome process car- laden telecom operators to pay $13 billion to the government, with Vodafone next month, on November 11, 1949, Mao proclaimed while, improved the supersonic F-86 Sabre fighters ried out at high altitude, during which they would Idea due to hand over $4 billion to that. The government is not responsible the People’s Liberation Army (Air Force) as a separate into an advanced version that Washington later sup- be easily detected by Indian radar, providing IAF for a court judgment, but it is certainly responsible for having fought the service. plied to Pakistan, which used them fighters, air defence guns and missile systems ample How things have changed! The against the IAF in 1965 and 1971. time to react. case up to that level, as well as refusing to see what such extortionate PLA (AF) is now a 400,000-person The Korean War gave China its To degrade the IAF’s response time and capabil- demands are doing to profitability and investment in the sector. Vodafone force that flies some 2,000 combat first fighter aces and — more impor- ity, the PLA would very likely begin the war with has rightly pointed out that it is among the largest foreign investors in aircraft — more than thrice the size tantly for Mao — a capable, experi- cruise and ballistic missile strikes on Indian air bases India. What would other large investors considering going into critical or of the Indian Air Force (IAF). On enced air force. According to in Assam, such as Tezpur, Bagdogra and Hashimara, infrastructure sectors, where partnership with the government is essential, Sunday, a PLA (AF) video, released accounts from that time, when using conventional-tipped missiles from the PLA’s to celebrate its 70th anniversary, Stalin complained about China’s so-called Second Artillery — an arsenal of strategic take away from its behaviour in the telecom sector? Now it seems the gov- boasted a range of sophisticated reluctance to engage the USAF in air missiles with either conventional or nuclear war- ernment has taken aim at the successful e-commerce sector, another loca- warplanes, most developed in combat more aggressively, Mao heads. This might be preceded, or accompanied, by tion for high investment. It changed the rules of the game after major China. These include the fifth-gen- expressed his readiness to get a mil- a carefully directed cyber attack to disable the IAF’s investments had already been made, and ministers have been routinely eration J-20 stealth fighter that has lion Chinese killed in combat in surveillance network, satellite communications and speaking about “predatory pricing” in the sector while remaining silent begun entering service, the J-16 BROADSWORD Korea, but he would not endanger command and control systems. Given China’s Shenyang fighter (an advanced ver- the existence of his new air force. It demonstrated capability to target and destroy satel- about such pricing in telecom. AJAI SHUKLA sion of the Sukhoi-30), the H-6N is important to note that China’s lites in space, Indian communications and surveil- The simple fact is that as long as governments allow political considera- strategic bomber, which reputedly shiny new air force has had very lim- lance satellites would be fair game. A high-technol- tions rather than a commitment to policy stability to dominate, investment launches the “aircraft carrier killer” Dongfeng-21D ited combat experience since the Korean War. ogy, broad-spectrum attack of this nature would not in India will continue to be muted and growth will not return to a sustained ballistic missile, the Y-20 transport aircraft that takes Analysts, including those at the USAF-linked RAND just be intended to clear the path for PLA (AF) fighter higher trajectory. It is vital that governments, both Union and state, re- aloft 66 tonnes of payload, and the KJ-2000 airborne Corporation, assess that despite the PLA (AF)’s strikes in support of a ground offensive. Given that examine their approach towards investment and prioritise policy stability. early warning system. instructional regime, which seeks to train pilots Beijing would stage-manage any attack on India as The 1962 Sino-Indian war was fought entirely under “actual combat conditions”, it is ill-prepared a global demonstration and warning of its Great between land troops, with neither side using its air to fight and win against well-drilled air forces such Power military capabilities — the philosophy of force or navy against each other. But in a military as the USAF. “killing the monkey to scare the chickens” — a full- face-off today, the PLA’s ungracefully-named mili- After the Korean war, the PLA (AF) entered a spectrum attack is a near certainty. Political circus tary doctrine of “limited war under conditions of period of steep decline caused by the Sino-Soviet In the 1950s, the Red Army’s legendary Marshal People of Maharashtra are the biggest losers Informationisation” (gobbledygook for a digitally- split and by the internal turmoil of the Great Leap Zhu De had famously said, “The kind of war we will enabled, highly transparent battlefield) will see a Forward and the Cultural Revolution. After Mao’s fight depends upon what kind of arms we have.” aharashtra has come under President’s rule after none of the major role for the PLA (AF), operating in numbers death, Deng Xiaoping began reforming the PLA; That is now history. New China’s aggressive doctrine political parties or formations was able to find the required from the 10-odd air bases that experts assess have Communist Party insiders have said he engineered now is: “Build the weapons to fight the war that we numbers in the Assembly to form a government — an out- been readied in Tibet. It is, therefore, worth retracing the abortive 1979 invasion of Vietnam only to illus- have to fight.” It is this attitude and the capabilities the PLA(AF)’s journey. trate the PLA’s deficiencies and need for reform. it has spawned that India’s military must diligently Mcome even the brightest political analysts did not anticipate The year after its humble beginnings in 1949, the The PLA (AF) also learned lessons from Britain’s prepare for. As recently as 1999, facing the prospect after last month’s elections. Although the Bharatiya Janata Party (BJP) did PLA (AF) got a major boost from the Korean War, invasion of the Falklands and Israel’s destruction of of a war in Kargil, Indian Army chief, General VP not do as well as many were expecting, it got a comfortable majority in the when Stalin and Mao reached an unholy bargain: Syrian air defence systems in Lebanon’s Bekaa Valley Malik was bravely echoing Marshal Zhu. It would 288-member Assembly with its pre-poll alliance partner, the Shiv Sena. Russia would bulk up the PLA (AF) with the mass- in 1982. Deng realised the importance of air power be worth recalling the famous comment of French But the latter had other plans and demanded an equal share in power with produced, highly-capable MiG-15, and train Chinese and space assets. He allowed the PLA (AF), hitherto marshal Pierre Bosquet after he witnessed the sui- pilots and technicians to fly and maintain combat focused on supporting the land campaign, to begin cidal Charge of the Light Brigade in 1854 in Crimea: a claim on the chair of the chief minister — something that the BJP was aircraft. In return, China would serve as a Russian developing an independent strategy. “C'est magnifique, mais ce n'est pas la guerre.” (It is unwilling to offer. It was widely speculated that the Sena would use the proxy against the United Nations coalition in Korea, The dazzling success of the US “AirLand Battle” magnificent, but it is not war.) opportunity to bargain for plum ministries and ultimately join the govern- ment. But the Sena stayed stubborn and decided to explore other options. Predictably, it could not muster the required support within the timeframe set by the governor. Clearly, the people of Maharashtra have been given short shrift. The India’s multiple asymmetries BJP did the right thing by not attempting to form a government because it did not have the required numbers after the alliance with the Sena ended. trong governments from Stalin onwards formation (and it’s always forthcoming) into a polit- healthcare in the shape of doctors, hospital beds, It was obviously not practical to expect the BJP to serve as a junior partner unfailingly aim for Olympian heights: Their ical and economic superpower. If we take at face nursing care and even genuine medicines and so Sachievements are always the biggest, tallest, value the claim that the world has suddenly started on remain depressingly low as the Economic in the alliance where it has roughly double the number of legislators the highest, fastest and so on (Stalin even claimed to respecting India as a dynamic 21st century power, Survey points out each year. Sena has. The latter will have a lot of explaining to do because it will be have the world’s biggest department store, thumb- then the world must surely have been puzzled last Here’s another. International Air Transport held responsible for the political uncertainty if it is not able to bring together ing his communist nose at his capitalist competi- week by the frenzied national attention on a Association statistics put the growth in Indian the Congress and Nationalist Congress Party (NCP) to form the government. tors). Indians of a certain outlook are prone to Supreme Court verdict concerning a dispute pred- domestic air travel at the fastest growing for the It is clear that the Sena miscalculated the alternative scenario of leading a making similar claims. Through icated on claims clouded in the fourth year in a row. Some 140 million Indian trav- the early noughties, for instance, mists of history. elled last year, according to the Directorate state government with the support of the two parties. Evidently, it will not Indian business delegations tri- The merits and demerits of the General of Civil Aviation, though this statistic may be easy for the Congress and the NCP to support or be part of a Sena-led umphantly touted the narrative judgment aside, surely, there are need to be deflated a bit since it could include government. Even if all these parties come together, it would be an inher- of the “fastest growing democra- other urgent pending issues that multiple journeys. India also boasts the world’s ently unstable coalition. There is nothing wrong or new in realignment of cy” at Davos and other global should be consuming the energies ninth busiest airport. This is certainly a sign of political forces, but the Congress supporting or becoming part of a Sena- power talking shops. At least for of the highest court in the land? upward mobility — and is largely on account of a while, that claim had the virtue The Ayodhya hearings were fast- cheap fares by fiercely competitive private airlines led government would be strange. It would also be difficult for the Sena to of being true. Now that we can no tracked even as some 60,000 cases that made air travel affordable for the middle class. support a government led by the NCP, as it will defeat the purpose of break- longer parade that line, we are left are pending in the apex court. Now But several multiples of that number still travel ing the alliance with the BJP. with such sundry claims as the that the issue has been settled by train — and the increasingly parlous state of Questions have also been raised about the role of the governor, who world’s tallest statue, the world’s largely to majoritarian satisfaction, India’s railway network and infrastructure has largest sanitation project and, of let’s take a closer look at other consumed much frenzied analysis over the has been blamed for recommending President’s rule in a hurry even as SWOT course, the world’s largest identi- asymmetries in modern, aspiring decades without much change. political parties were asking for time to discuss the modalities of government fication programme. Only one of KANIKA DATTA India that deserve focused govern- And a third. IITs and IIMs churn out engineers formation. The governor should have exhausted all avenues before recom- those are worthy of praise as a sol- mental attention. and management students that global corpora- mending President’s rule. Although technically President’s rule does not id achievement. Here’s one. The country has become a centre tions rush to snap up at eye-popping salaries. Yet stop political parties from exploring options, it is possible that the state Till the current self-created economic slowdown for upscale medical tourism. It’s not just the rou- each year, surveys suggest that Indian children ends — exactly when is the subject of fierce debate tine surgeries, Indian doctors can perform intri- are unable to read and do math for standards sev- will remain under Central rule for an extended period. As things stand among economists — we can safely wallow in cate medical feats that get feted in the media. The eral rungs below. today, no one has gained from the political shift in the state. Political parties India’s greatness in a mythical golden age when irony is that only rich foreigners and a minuscule None of these problems have been created by have been exposed and the credibility of the office of the governor has we apparently knew all about nuclear weapons proportion of very rich Indians can afford these the current regime — they’ve been around for taken a knock. But the biggest losers are the people of Maharashtra, who and plastic surgery. Having attracted no small services. The Ayushman Bharat medical insurance decades. But for a ruling dispensation that has don’t have a government and might have to fund another election. amount of derision for propagating these notions, scheme has improved the access of poor and lower focused so acutely on progress and development, Indian leaders have moved beyond those claims middle class Indians to better healthcare such as surely these are more worthy of focused political to talking instead about India’s impending trans- dialysis and surgical care. But access to basic attention than a temple and a mosque.

Good Economics for Hard Times has a economists and policy analysts would dis- economy would gain from productive tries can afford would be ultra-basic. While much broader canvas and covers globally agree with this. If large economies, such labour that is wasted in trying to get into the authors are in favour of universal ultra Nobel thoughts important public policy issues, such as as the US, shut themselves for trade, it the government. Young people prepare for basic income (UUBI), they acknowledge trade, immigration, environment and, of would affect investment and growth all years to get a government job. Mr Banerjee that there is no data on its long-term were awarded the Sveriges Riksbank Prize course, economic growth. In the context over the world and everyone is likely to and Ms Duflo suggest that the government impact. The idea of UUBI is appealing, but in Economic Sciences in Memory of Alfred of trade, the popular wisdom is that it gen- be worse off. can limit the number of times an individual the problem in a country like India is that Nobel this year “for their experimental erates large gains and benefits everyone. The authors have touched upon several can apply and make cutoff age more strin- governments are prone to implementing approach to alleviating global poverty.” Both tariff and non-tariff barriers have been policy-related issues in India. For instance, gent. These are suggestions worth consid- new programmes without cutting expen- The approach was captured by Mr brought down over the decades. However, Delhi is currently battling severe air pollu- ering, though part of the problem is that diture on the existing ones. This is exactly Banerjee and Ms Duflo in Poor Economics: there has been a backlash against trade in tion with no permanent solution in sight. India is unable to create enough gainful what has happened with the income sup- A Radical Rethinking of the Way to Fight recent years. The world’s largest economy, One of the suggestions mentioned in the employment in any sector to absorb its ris- port programme for farmers. Good BOOK REVIEW Global Poverty (2011), which was awarded the United States, has turned protectionist book is that people of Delhi can pay farmers ing workforce. Economics for Hard Times raises several the Financial Times and Goldman Sachs and is involved in an ugly trade war with in neighbouring states to not burn crops One of the things that made headlines such issues and provides plenty of evidence RAJESH KUMAR Business Book of the Year Award. Although China, which has increased risks for the and use better technology. There are a num- soon after the announcement of the Nobel to build arguments. This is not a book that their work has been criticised by several global economy. Mr Banerjee and Ms Duflo ber of other things that need to be done to Prize was Mr Banerjee’s engagement with people interested in public policy should t is rare that authors of a book one is economists, it has influenced policymak- show that reallocation of labour doesn’t contain pollution as crop burning is one of the Congress party on the Nyuntam Aay miss. Readers in India would find it par- reading, with an interview scheduled ing and improved the understanding of occur as desired from industries that are the many reasons. Mr Banerjee and Ms Yojana in the run-up to the 2019 Lok Sabha ticularly engaging as policy issues facing Iwith one of the co-authors, win the poverty in general. For instance, the pub- hit by trade to other businesses and people Duflo rightly note that despite the urgency, elections. Predictably, it acquired political the country figure prominently. Nobel Prize. In that the sense, reading Good lication of Poor Economics convinced peo- end up losing jobs. More importantly, the political demand to address the issue is not colour in no time. However, the book has a Economics for Hard Times: Better Answers ple about the distribution of bed nets to authors note: “…the aggregate gains from overwhelming. The Supreme Court recent- more nuanced take on the issue of basic GOOD ECONOMICS FOR HARD to Our Biggest Problems and the following the poor. Globally, between 2014 and 2016, trade, for a large economy like the US, are ly intervened in the matter. Part of the prob- income. Mr Banerjee and Ms Duflo argue conversation with Abhijit Banerjee — edit- over 500 million insecticide-treated nets actually, quantitatively, quite small. The lem is that solutions require a lot of people that there are good reasons for considering TIMES: Better Answers To Our ed excerpts of which were published in this were delivered. According to one estimate, truth is, if the US were to go back to com- to cooperate. Another interesting issue that basic income in developing countries, and Biggest Problems newspaper on October 22 — was a unique net distribution helped avert about 450 plete autarky, not trading with anybody, finds space in the book is the desire for gov- money to fund such a programme will ini- Abhijit Banerjee and Esther Duflo experience for this writer. Mr Banerjee and million deaths from malaria between it would be poorer. But not that much ernment jobs in India. Authors note that if tially need to come from existing subsidies. Esther Duflo, along with Michael Kremer, 2000 and 2015. poorer.” It is not hard to argue that most such jobs are made not so desirable, the The level of income support that poor coun- Juggernaut; 416 pages; ~699