Murder as Sacrament, Tax Raids on Economic Offender Rather than Political Opponents | Last Week in India: W40 2021

T K Arun

Another gruesome week in India followed the week of high drama, in which a bunch drunk on the impunity of power had mowed had down protesting farmers in eastern Uttar Pradesh: militants shot dead more civilians in Kashmir and some members of the Nihang sect of Sikhism chopped off the hands of a Dalit farm worker, allegedly to avenge sacrilege — pages of the Sikh holy book, the Guru Granth Sahib, had been found strewn on the ground several years ago.

Liberal opinion, in addition to Sangh-Parivar-inspired Muslim baiters, finds ready fault with calls from the fringe of Muslim society to implement the Shariat, but the brandishing of swords and other such displays of readiness to use force by Sikh or Hindu groups tend to be dismissed as a time-honored tradition. Tradition is fine, so long as it does not contradict the norms and conduct of the modern democratic order. Where tradition — whether sanctioned or even demanded by religion — conflicts with democracy, democracy must prevail and tradition, give way.

Some other endearing facets of India’s political practice that are often described as democracy were on display last week. A Gram Panchayat Technical Assistant, essentially a junior engineer helping implement government schemes that involve construction, was found to have bought 60 plots of land in Orissa, worth over Rs 1 crore. His total income over five years of employment was only Rs 10 lakh.

Assuming he had not, while trekking over rural Orissa, come upon Aladdin’s magic lamp and its resourceful genie, his extra income could only have come out of the spending on government schemes. If a lowly engineer’s share of the money siphoned out of development projects is that much, it is anyone’s guess what the scale of total fund diversion would be.

Another feature of Indian democracy is fluid party loyalty. A BJP minister and his legislator son in Uttarakhand quit the party and joined the Congress — from which they had defected some years ago. Uttarakhand goes to the polls early next year, along with Uttar Pradesh, Punjab, Goa, and Manipur. In West Bengal, many BJP leaders had recently returned to the Trinamool Congress. In Jammu, two influential National Conference leaders joined the BJP.

Lest Indians get used to the notion that income tax raids are tools to harass the ruling party’s political opponents — after all, it is to this end that these raids, assessments, and Enforcement Directorate visitations have been used in recent memory — some actual economic offenders were raided last week: they had undervalued imports of computer parts by a factor of 100. Maharashtra politician Deshmukh faced yet more tax raids last week.

On the occasion of Dussehra, Andhra Pradesh chief minister Jagan Reddy offered silken robes to Goddess Kanakadurga, in his capacity as chief minister. That a state’s temporal authority, Christian by faith, pays obeisance to a Hindu deity, causing no offense to Hindus, Christians or secularists, marks the eclectic character of India’s secularism.

The Congress Working Committee meeting, convened after the rebel Group of 23’s repeated demands for the party’s decision-making bodies to work, instead of Rahul Gandhi taking all the missteps on display and passing them off as decisions of the interim party president, saw Sonia Gandhi assert she is a full-time president and there was no need for colleagues to communicate with her through the media. Organizational elections would be held next year, a party president being elected between August 21 and Sep 20, and a new Working Committee thereafter.

Rahul Gandhi, who had quit as party president after the rout in the 2019 elections, announced he was willing to become president again. Barkis got his Peggotty, David Copperfield’s nurse, after declaring, time and again, he was willin’. So, too, might Rahul Gandhi. But the fact that the ardor to have him as party president is less than pervasive was evident from the CWC’s failure to re-elect him to the post right then and there.  Navjot Singh Sidhu continued his tantrums in Punjab, offering incessant commentary on Rahul Gandhi’s judgment while taking key decisions.

Meanwhile, the institutional integrity of Indian democracy continued to erode. The Right to Information (RTI) Act, brought in by the UPA government, has been treated by the political class as an irritant at best. The Modi regime has been trying to kill it softly, delaying personnel appointments and delaying the delivery of answers to queries. The number of RTI petitions lying unanswered across central and state governments grew to over two lakh.

Inflation continued to drop, thanks essentially to the decline in vegetable prices, hitting 4.35% for August. Core inflation, which excludes food and fuel, came in at 5.8%. India’s benchmark, 10-year bond yield rose to 6.34%, the highest level in 18 months, following a rise in crude prices and a weakening of the rupee to well past Rs 75 to the dollar. Imports rose 85% in September, while exports grew 23%. A wider trade deficit is not necessarily a cause for alarm: it signifies a pick-up in economic activity as well.

Economic recovery would appear to be well underway. Rail passenger numbers in the first week of October significantly exceeded those for the first week of October of 2019. The IMF pegged India’s growth rate at 9.5% for the current year. Reports of investment intentions and the number of tenders for construction and the bid volumes all indicate revival.

Last week saw the announcement of yet another of the government’s flagship programs: Gati Shakti, intended to give coherence to logistics, so that cargo movement turns multi-modal and frictionless. If a bunch of containers meant for, say, Indore, arrives at the port in Mumbai, ideally, they should be unloaded straight onto truck flatbeds or rail wagons, so that the cargo moves out of the dock and the port with no delay.

If ships have to turn around fast — in Singapore, they can do it in hours, it used to take weeks in India and still takes days — a fleet of trucks or a cargo train must be ready and waiting to receive the containers from the ships and then leave promptly, making room for the next lot.

The containers should move on rail, or barges on inland waterways if these are available if the distance from port to destination is long. Cranes that can lift containers off truck beds and onto wagons must be available and functional at dock and rail yards. The movement of goods trains and truck fleets must be coordinated. Roads, overpasses, and underpasses must take into account the height needed for trucks carrying containers to pass.

Gearing up the physical infrastructure for seamless multi-modal movement of cargo is a challenge that no economy aspiring for fast growth can shirk. However, it is not enough to have the physical wherewithal, there must be operational savvy as well. Following the discovery of a cargo load of opium in a shipment meant for Iran at the Mundra port, its owner Adani declared that it would not entertain cargo from or to Pakistan, Afghanistan, and Iran. This evoked strong protest from Iran, naturally.

Not that no one had thought of logistics before. But technocrats do not have the imagination to give projects names that catch the popular imagination. The UPA called its project to connect 250,000 panchayats with optical fiber the National Optical Fiber Network, or NOFN. Modi dumped that clunky bit of bureaucratese and dubbed it Bharat Net in 2014, and promised to complete it in two years. It still remains incomplete, but the credit for providing rural India with high-speed broadband has slipped quietly into one of the pockets of Modi’s many Nehru jackets.

Ideally, India should abandon laying fiber to remote areas and opt for satellite connectivity, soon a viable possibility, thanks to multiple, competing satellite networks in low-earth orbits, offering low-latency, high-speed broadband. Elon Musk’s Starlink is progressing fast, as is OneWeb, majority-owned by Bharti Airtel. Jeff Bezos’ Blue Origin space program has one up its sleeve, too. Blue Origin got a lot of publicity for itself by sending William Shatner, who played Captain Kirk in Startrek, off into space aboard a space capsule. The battle now in India is for a spectrum that terrestrial phone companies and satellite communications companies both want.

Last week saw several developments abroad that have a bearing on India. Two non-government organizations released this year’s version of the Global Hunger Index, which put India at the 101st place, below, not just Sri Lanka and Bangladesh but below Pakistan as well. The Indian government stoutly refuted the finding, wrongly alleging the data for constructing the index was compiled on the basis of surveys by Gallup. While that was wrong, there is reason to believe that the way Indian statistical outfits present data can be highly misleading.

Total consumption, as measured by consumption expenditure surveys, is a fraction of the consumption figures toted up by national income accounting. In nutrition intake estimates, the per capita availability of milk is a third of the milk output, and India does not export a great deal of its milk output.

While electoral democracies can tolerate chronic malnutrition, leading to wasting and stunting, hunger is politically sensitive. The last 15 years have seen huge increases in the distribution of subsidized food grains and expansion of the food distribution network to remote areas. That does not square with an increase in hunger.

The Nobel prize for economics was announced, honoring the process of creating theory out of messy empirical reality. The 2019 prize went to Abhijit Banerjee and Esther Duflo, for randomized controlled trials. This year’s Nobel went to Duflo’s Ph.D. supervisor Joshua Angrist (she had Banerjee as her other supervisor), as well as to David Card and Guido Imbens, for their efforts to study natural experiments and methodological refinements to separate out cause from correlation.

David Card showed, along with his collaborator Alan Krueger, who is no more, that an increase in the minimum wage did not actually lead to a rise in unemployment, as theory had assumed, taking advantage of a natural experiment arising from a homogeneous region on either side of the border between two states, in one of which the minimum wage had been raised while it had stayed the same in the other. This allowed Card to see if the higher wage led to a change in the level of employment, as compared to what could be observed in the state where the wage rate had remained the same. He found no effect.

This led to a re-examination of the theory and further refinements. There could be multiple reasons why an elevated minimum wage does not lead to lower employment. One of them is that the higher earnings of those on minimum wage could generate additional demand for consumption, the additional production to meet which could increase the demand for labor. Economists in India living in constant fear of measures such as the National Rural Employment Guarantee Scheme spoiling the labor market should take note.

These economists went on to examine the effect of staying on in education on future earnings, the effect of investing more in schools on their students’ future earnings, and so on. Such empirical research has inspired others to carry out such work, notably Raj Chetti, a potential Nobel laureate of the future.

In Kandahar, a stronghold of the Taliban, the Islamic State staged suicide attacks on a Shia mosque, killing 47. The same strain of radical Islam launched attacks on Puja pandals in Bangladesh, spreading tales of disrespect to the Quran being shown at Pujo, killing several.

Sheikh Hasina cracked down on the attackers, suspecting they are acting at the behest of Pakistan’s Inter-Services Intelligence, the nerve center of global jihad. Russian President Vladimir Putin warned against IS fighters infiltrating former Soviet Republics, passing themselves off as Afghan refugees. A British Member of Parliament was killed, during his meeting with his constituents, by a self-radicalized Islamist. A Swedish counterpart killed five people in a peaceful Swedish town, using bow and arrows.

Iran, the target of Sunni Islamist and Israeli ire, and potentially a powerful ally for India and the West against faith-based terror orchestrated out of Pakistan, has signed off on a series of agreements that its foreign minister hoped would lead to a strategic partnership with Russia, to complement the one it already has with China and form what the Iranian minister called an eastern axis. Pushing Iran into China’s arms helps no one. This development highlights the need for the US to complete talks to revive the Iran nuclear deal and lift its sanctions against Iran, the chief incentive for Iran to seek Chinese support.

China has, apart from strengthening its positions on its side of the Line of Actual Control that serves as the quasi-border between India and China in the absence of a recognized border, has struck a deal with Bhutan to settle its border dispute with the Himalayan kingdom. China’s game plan is to offer concessions to Bhutan in various sectors while wrenching control of Dokalam, that part of Bhutan that looks down upon India’s so-called Chicken’s Neck, the narrow corridor that connects mainland India with the Northeast. Small wonder Bhutan is no longer the happiest country in the world.

China objected to Vice President Venkaiah Naidu’s visit to Arunachal Pradesh, which it claims as a part of Tibet and, therefore, of China. India dismissed such objections. China has chosen to let talks with India overdrawing down troops around the LAC fail. It is feeling uppity after news broke of its hypersonic missile test in August. According to a Financial Times report, China’s test was a success, even if the missile missed its target by several miles.

Hypersonic missiles, a new breed of offensive weapons, are taken out of the earth’s atmosphere on a rocket and released. It then glides back to earth, moving at several times the speed of sound, and without making a sound. It can traverse the South Pole, unlike earlier missiles that are designed to make their way across the North Pole where Americans have installed monitoring stations and are difficult to detect.

China hosted the Convention on Biological Diversity, in the run-up to a physical meet in April next year. The goal is to achieve protected status for 30% of the land and the oceans by 2030. Such normal engagement with the world extends to trade as well. For all India’s tensions with China over the Himalayan border, bilateral trade is brisk, hitting $90 billion for the first nine months of the year, of which India’s exports are $22 billion and imports from China, $68 billion.

As India continues to hedge its bets on Myanmar, ASEAN has rapped the junta on the knuckles, refusing to invite its representative to an ASEAN meet. The military government released hundreds of political prisoners afterward.

The global toll of tuberculosis was estimated to be 1.5 million in 2020, a big rise from 2019, according to the WHO. India has a large TB burden, but its precise count is not known.

AQ Khan, the father of the Islamic nuclear bomb that Pakistan boasts of, died in Islamabad. He carried the burden of his government’s proliferation sins, accepting all nuclear know-how and material transfers to the likes of Libya and North Korea as his own handiwork, rather than that of the Pak military.

Rain havoc in Kerala led to landslips, deaths. Residents of the state, which takes legitimate pride for its general level of awareness, proved eager takers for very rare antiques sold by a fine gentleman called Monson Mavunkal, such as the staff of Moses. The conman was arrested, however. A judge in Kerala awarded a double death sentence to a man who killed his wife by making a cobra bite her. The Adani group took over the Thiruvananthapuram airport for 50 years, winning the privatization bid simply by offering to pay the government the highest fee per passenger.

On the plus side, Kerala gave its annual, best film award to a movie, the Great Indian Kitchen, which shows the routinized subordination and devaluing of women and their work in Indian households. The movie works because it refuses to wear its weakness on its sleeve. Much-loved Malayalam character actor Nedumudi Venu passed away.

Two avoidable controversies cropped up last week. The Centre enhanced the powers of the BSF to arrest, search and seize within 50 km of the border in Punjab, J&K, Ladakh, Assam, and West Bengal. A more sustainable and amicable solution is to work out protocols for cooperation between state police forces and central paramilitary bodies — after all, troublemakers infiltrate from across the border quite easily and all the arrests of alleged terrorists in India have taken place recently have been made by state police forces. The other is related to a claim by defense minister Rajnath Singh that Hindutva icon Vinayak ‘Veer’ Savarkar had written mercy petitions to the British on Gandhiji’s advice.

The Joint Entrance Examination (Advanced) for admission to the prestigious Indian Institutes of Technology saw 1.4 youngsters take part. A much larger body of aspirants had been screened out in the JEE-Main exam. Nearly 30% qualified. Only 15% were girls.

India’s need for bright engineers only goes up. All the tech majors are taking on ever more and ever more sophisticated work and need skilled talent. Wipro and Infosys announced good results, following in TCS’ footsteps.

As the country nears the milestone of having administered 100 crore vaccine doses, all 736 districts of the country have been equipped with oxygen plants as well. As many as 1,183 plants have already been commissioned, 41 more underway. An expert committee has authorized the use of Covaxin for children aged 2-18. Clearly, the essential step is to supply the World Health Organisation with the data it is looking for to authorize Covaxin for global supply, and to export the vaccine to the unvaccinated parts of the world than to vaccinate children, who are least at risk.

Sports Utility Vehicle sales outstrip those of hatchbacks and sedans these days. It is unclear if this is entirely a function of consumer taste or of car makers prioritizing SUVs for their scarce supply of chips.

As with much of the world, India is facing a fuel supply squeeze. Coal India Ltd, the state coal monopoly—de facto, after its de jure monopoly was removed years ago — cannot mine enough of the stuff, although India has the world’s fourth-largest reserves. The government’s desire to score political points over captive mine allocations has resulted in several captive mines not mining any coal at all. Reluctance to pass on the higher cost of imported coal to consumers of power has stymied coal imports. CIL decided to suspend supplies to non-power sectors, crimping the aluminum industry, which has complained.

First Published in Substack India Last Week: 11-17 Oct 2021 | Murder as sacrament, tax raids on economic offender rather than political opponents on October 21, 2021.

Read another piece on Politics and Twitter by T K Arun titled Stopping Fakes on Twitter! in IMPRI Insights

Read another piece on COVID-19 Vaccine by T K Arun titled Increasing Vaccine Production: India an Answer to Global Woes in IMPRI Insights

Read another piece on COVID-19 Vaccine by T K Arun titled Bold Vaccination Policy Needed in IMPRI Insights

Read another piece on Israel Palestine Conflict by T K Arun titled Netanyahu Culprit of History? The Politics of Israel- Palestine Conflict in IMPRI Insights

Read another piece on Retrospective Tax by T K Arun titled Mamata Banerjee Wins Over Voters in Bhabanipur and Congressmen Elsewhere, Economy Revives, Only to Face an Impending Energy Crisis | W38 2021 in IMPRI Insights

About the Author

This image has an empty alt attribute; its file name is Unknown-20.jpg

T K ArunConsulting Editor, The Economic Times, New Delhi.