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Government of India VS RBI

Government of India VS RBI

As a former officer of the Reserve Bank of India, I was shocked to read the recent remarks of Viral Acharya, Deputy Governor of the Reserve Bank of India. There are probably no parallels or precedents to such public remarks that tantamount to threatening the government of India by a ranking leader of the Bank.

The RBI, India’s Central Bank is a venerable institution that effuses dignity and reverence in the world of banking and finance, not only in India, but the world over. Its rather quaintly abstruse and almost self-effacing communication style – be it in its official communiqués or while interacting with the public at large – speaks of its tradition and élan that is generally matchless. This quiet dignity actually conveys so much more than what it actually says and adds an aura of enigma to it. For example, even a passing nod from the RBI Governor at a meeting of CEOs of banks can set tongues wagging.

Like most other Central banks, its presence is felt, rather than heard. Insiders are aware that RBI’s reticence and an unwillingness to hog the spotlight is also a calculated strategy to create space for itself.  It provides enough room to maneuver, change course if needed, and fight its battle with the government quietly and behind closed doors. That has only earned it respect and reverence.

Given this grand setting, it was upsetting to read the speech of Viral Acharya. It is very amateurish indeed and only betrays a lack of experience in a managing a large banking bureaucracy. He is certainly oblivious of the ethos and dignified traditions of a great institution that he represents. That the Deputy Governor chose to attack the central government in a public lecture has not only raised eyebrows, but also raised questions of why the government has not acted on this. His continuing in office has become untenable.

The RBI and the Government of India are like inseparable Siamese twins who have to work together in the interest of the country. Like wedded partners, they have enjoyed great moments of comradery as well as intense frictions in their relationship. Over the years, both have learnt to resolve or manage the differences amongst themselves without impacting the day to day operations or the public getting wind of it.

Having said that, let’s look at the controversy itself. It has been reported that the differences arose, among other issues, over the government’s proposal to transfer approximately Rs.3.6 lakh crores of reserves to itself. This is not unseemly given that the RBI is an agent and banker to the government. Differences over the use of the reserves are legitimate and must be discussed in closed rooms and not via the media. But in all such matters, if one is guided by past experience, the government view prevails.

For all practical purposes, the RBI has been and continues to be an extension of the Ministry of Finance, government of India. All past and current Governors and members of the Board are keenly aware that in any differences or tussles with Delhi, the Ministry of Finance has the last laugh. If, despite this understanding, Viral Acharya chose to discuss differences in public, it only points to issues extraneous to the functioning of the Bank.

The reason for RBI playing second fiddle to the governments stems from the RBI Act itself. The government appoints the Governor and has the power to sack him. It also has enormous powers to instruct the RBI directly or through its board to carry out its dikats.  In fact, there have been numerous instances of this.  One interesting anecdote that has done the rounds is that during bank nationalization in 1969, some in the RBI were said to have had their reservations. Apparently, Mrs. Gandhi’s office called the concerned senior officers directly and ordered them to prepare the necessary paperwork for the legislation. It was done quietly without any further ado.

After Independence, the government of India had firmly established a tradition of appointing IAS officers or other Central Services officers, particularly from the Ministry of Finance as Governors. This way, it ensured a de facto control of the Bank. Of course there have been a few notable exceptions – like Dr C.Rangarajan who was a former Deputy Governor.  Hence all this talk of the Bank’s independence is purely academic and largely a creation of the media to exacerbate the tensions. RBI for its part understands this and is fully reconciled to this reality.

It is the Congress governments that take the cake for running roughshod over the RBI. Many are only keenly aware of the tenuous relationship between P.Chidambaram, the former Finance Minister and Governors of RBI, particularly Dr.Subba Rao.

The current Chairman of the US Federal Reserve, Jerome Powell is also under pressure from the Trump administration. President Trump is on record fighting against the Fed. But the Chairman, given the august traditions of the Fed, has refused to enter into a public fracas. That does not mean he has given in to Trump’s pressure. On the contrary, he has continued with his interest rate regime in a dignified manner, never engaging the President in public.

As expected, the media too has had a role in overhyping the controversy. That the issue has been repeatedly opined upon by known Modi baiters comes as no surprise.  Also the timing  – a few months before the general election – seems too much of a coincidence. But what is surprising is the amount of support they have generated in the international press.

Viewed in this context, the Deputy Governor’s remarks reflect very poorly on the man. Firstly, the public airing of differences with the government is unprecedented. Secondly the reference to inherent threat to financial markets and hence the overall economy seems outlandish, to say the least. It must be made clear here that the markets will continue with minimal or almost no impact if the Governor and his team are sacked. The markets are dictated by the economic fundamentals and the overall regulatory regime that define the financial and banking infrastructure in India. These are already in place and will be hardly impacted by the individuals.  Lastly, the deputy Governor has displayed a complete lack of awareness of the ethos of the magnificent institution he represents. The markets and the executive leadership of banks in India now recognize this.

It is time for the Modi government to act decisively and bring in new blood into the RBI.

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Misery Seeks Company – China Courts India to fight US Trade War

Misery Seeks Company – China Courts India to fight US Trade War

US sanctions against China seems to be having its intended effect. As pressure mounts, China’s change of stance is becoming more evident. According to recent reports President Trump and Chinese leader Xi Jinping are likely to meet at the G20 summit in Buenos Aires in November in an effort to work out a solution. But the meeting of the two leaders may not produce any dramatic resolution, given the tough stand of both the countries.

That the Chinese economy is bearing the brunt is in no doubt. Ford reported that its September sales in China fell 43% compared to same period last year. This comes in the midst of a big slump in Chinese auto sales. The IMF, for its part, has already signaled the slowdown of the Chinese economy and put its GDP growth estimates for 2019 at 6.2%. Despite all the bad news on the economic front, Chinese leadership continues to put up a brave face.

The US appears to have its strategy cut out. Vice President Pence, in a hard hitting speech at the Hudson Institute, unequivocally charged China with interfering in US elections and warned of consequences. In its 2018 National Defense Strategy paper, the US has clearly identified the two ‘revisionists powers – China and Russia’ as main threats.  The paper goes on to further recognize ‘China’s military modernization, influence operations, and predatory economics in its efforts to coerce neighboring countries to reorder the Indo-Pacific region to its advantage’ and perceives it as a long term threat to US interests.

The series of events leading up to the new set of tariffs on Chinese imports as well as the subsequent pronouncements should leave no room for doubt about US intentions. If anything, it is clear that the US will not stop with just the trade war. It is only part of an overarching strategy to contain Chinese influence globally.

China’s strategy, on the other hand, seems ambiguous and is banking on flat defiance of the US as a measure of projecting its power. It has unleashed a massive propaganda campaign, particularly in the US media, in a determined bid to win friends. Not surprisingly, many pundits have opined on how the trade war with China is unsustainable and could hurt the US too. But all this may not really alter the situation on the ground which is firmly in favor of the US

On the international scene, China has used its influence to marshal its friends and allies in an attempt to build a coalition to portray the US as the chief villain of the world. In this context, it is indeed interesting to see that China has reached out to India, pontificating on the requirements of ‘a stable environment that will facilitate the growth of the two key economies’. In its attempt to win India to its side in its trade war with the US, it has called for the two countries to join together to bring about a ‘more just and reasonable international order’.

China’s change in tone and tenor – evident in its statements and diplomatic outreach – is only symptomatic of the severe stress on its economy and political leadership. There are also indications of a lack of cohesion amongst its leadership in responding to the US.

Many in India recall the often rancid and undiplomatic statements emanating from its foreign office during the Dokhlam crisis. But the very same establishment has now unleashed the equivalent of a diplomatic charm offensive. This only highlights the fact that the country is up against the wall in its bid to untangle itself from the costly trade war.

But India is no China in every sense of the word. Its economy is a not as big, nor is it as lopsided and heavily dependent on exports to the US for its survival. Secondly and most importantly, India is a plural democracy in the truest sense of the term and is in no danger of a systemic collapse if and when sanctions are imposed.

It is worth pointing out here that following the Pokhran II nuclear explosions in 1998, many countries including China, Japan and Canada condemned India. China, for its part, was at the forefront, demanding international actions against India. But now that the tables have turned, China has suddenly discovered the virtues of ‘regional economic stability and growth’ by working together.

When the US did impose sanctions on India in May 1998 following Pokhran II, the country did not implode. The fact was that its citizens rallied together in support of the democratically elected government. But in China’s case, their leadership is acutely aware that prolonged sanctions could trigger internal unrest and rebellion that could easily threaten its structural integrity as a nation state.

Unlike China, India’s relationship with the US is on an entirely different footing. It has no overt or covert aspirations to unseat the US as the world’s superpower, nor does it have a confrontationist approach to it. But it is indeed true that, like China, India probably has a boat load of differences with the US, on issues ranging from trade to political and world view. But that is par for the course betwixt democracies.

But at the end of the day, despite the differences, the US and India, as history bears witness, have resorted to bilateral discussions to resolve these issues. Unlike China, there is no public record of India threatening or confronting the US.

Being an authoritarian set up, China lacks that fundamental connect with the US or India. At a time when it is in serious trouble with the US, it cannot pretend a have a comradery with India since the latter too is ‘impacted by Trump’s unpredictable trade policies’.

Definitely, China is expending its diplomatic resources in creating a mirage of a synergy with India out of a non-existent common cause.  The ground reality is that the leadership in India and the US are aware of the phoniness of this outreach by China.

In fact India must – and there is ample evidence to think it has – see the speciousness of this argument. It cannot join hands with China to make a common cause. India’s world view and priorities are different and dictated by New Delhi, not Beijing.

Misery loves company and China’s outreach to India is definitely a case in point.

 
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Posted by on October 15, 2018 in China, Donald Trump, Economics, Foreign Policy, Trade, US

 

Sabarimala Case – An Agonizing Verdict

Sabarimala Case – An Agonizing Verdict

In a recent judgement, the Supreme Court of India had in a 4-1 majority judgement decided to remove the ban on entry of women aged 10 – 50 into the famed Lord Ayyappa Temple at Sabarimala in South India. The case had generated a lot of interest – during the hearings as well as post judgement – all around the world. It is indeed a significant judgement since with the stroke of their pens, four judges reversed a practice that has been going on at the temple since time immemorial.

The four judges have averred that the practice “significantly denudes women of their right to worship”. Justice Chandrachud termed the custom as a form of “untouchability” which cannot be allowed under the Constitution of India.1

Justice Indu Malhotra, the lone lady member of the bench, has attracted a lot of attention and admiration. As member of this five judge bench, she wrote her dissenting judgement. She has provided some profound reasoning for her dissent that certainly deserves examination. Former Supreme Court of India judge Markandey Katju has complimented her for “the balance and restraint required of a judge of a superior court”.2

Judge Malhotra has pointed out that that “the petitioners were not directly affected and were not devotees” themselves and hence she found it “odd that the court was deciding on the entry of women into the temple at the behest of persons who do not subscribe to this faith”. This is an important observation, and has not missed the attention of millions of Hindus in the country.

She has further strongly argued for “heterogeneity in religion that allows diverse forms of worship, even if it were irrational”. Very pointedly she states that “in a secular polity, issues which are matters of deep religious faith and sentiment, must not ordinarily be interfered with by courts.”

Continuing her telling observations, Malhotra has said that permitting such public interest litigations (PILs) “in religious matters would open the floodgates to interlopers who are not followers of that faith, to question its beliefs and practices” since it would be a matter of grave concern, especially for minority communities. She has firmly concluded that the said writ petition “does not deserve to be entertained and the grievances raised are non-justiciable”.

But the majority judges thought otherwise. Their reasoning for the majority judgement seems to be a reiteration that the practice of forbidding women in the said age group was “a form of untouchability which cannot be allowed under the Constitution.” But many legal experts have already argued that this case cannot be viewed through the limited vision lens of gender equality and a broader view of Hindu religious practices was imperative in judging the case.

It is not that these points of law were not brought before the court during the hearings. In fact J Sai Deepak, who appeared before the Supreme Court in this case on behalf of the intervener organization People for Dharma, too had presented succinct arguments. For example, he had argued that “Lord Ayyappa has rights under articles 21, 25 and 26 of the Constitution of India, and his right to remain a naisthika bramhachari – or a perpetual celibate – falls under Article 25 and hence, women’s entry to the temple should continue to be restricted”. 3

Thus, restricting entry of women into the abode of a Lord who is a naisthika bramhachari – or a perpetual celibate – may not tantamount to gender inequality or discrimination against women, when viewed though a broader lens. Be as it may, the other four judges, in their wisdom have obviously not been convinced by these arguments and hence their opinions have prevailed and the judgement is there for all to see.

The impact of the judgement is expected to be felt far and wide. From breaking its own restraint in not entering into the domain of religious beliefs and practices that are not pernicious, the Supreme Court has opened the possibility of internecine litigations between religious faiths where one practitioner is now free to question and seek the quashing of practices of another religion. The outcome could be a judicial nightmare which could easily lead to bloodshed on the streets.

In multiple discussions I had with Hindu women, particularly millennials in Tamil Nadu, I got a sense of their disbelief. Many did say that they were suspicious of the motives of the petitioners since they themselves would never have approached the courts on such a matter. Many felt violated since Hindu women had traditionally revered the practice of naisthika bramhacharya vratam of Lord Ayyappa. They pointed out that the unprecedented heavy rains and consequent damage to life and property in Kerala as a sign of Lord Ayyappa’s anger.

Plural societies like India have diverse groups and interest and by definition have differing identities and belief systems which have to be celebrated. But they also have large and vulnerable underbellies that have to be carefully nurtured and protected, not exploited. But in India we seem to be witnessing the opposite.

.But if the average Hindu, particularly the women, feel outraged, they cannot be faulted for, here is a judgement that nullifies a centuries-old practice that they did not ask for. The certainly avoidable outcome, is that a growing number of reasonable Indians now think that the judiciary appears to have abandoned all shreds of caution and sensitivity when treading on matters of religious faith, however irrational they may appear.

Over the ages, Hindu social memory has been burdened with a lot of baggage – from flawed to gross miscarriages of justice – more than what many other social systems have experienced. But they have been absorbed and digested in the sands of time. So too this will be.

Despite the judgement, out of reverence for Lord Ayyappa, Hindu women have not come forward to visit the temple. And they are steadfast in their resolve. Nonetheless, many Ayyappa Sangams – groups or forums of Ayyappa devotees – do expect the usual suspects – activist women who have a track record of protesting against Hindu practices – to visit the temple. But like always, most of them will be a flash in the pan.

 
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Posted by on October 2, 2018 in Hinduism, Indology, Media, Sabarimala

 

Trade War – US Trumps China

Trade War – US Trumps China

As part of a worsening trade war, President Trump on Monday, September 17th, 2018 announced a slew of new tariffs on imports worth $200 billion from China. A 10% tariff will come into effect later this month which will then rise to 25% from January 2019. Not to be outdone, China too has responded with tariffs on $60 billion of US goods that includes meat, nuts, alcoholic drinks, chemicals, etc.

These announcements come in the midst of an already expanding trade and sanctions regime that has already engulfed the EU, Mexico, Canada, Iran and Turkey in its wake. But the response from most nations have been predictable. Fully understanding the potential threat to their vulnerable economies, Mexico and the EU quickly sued for peace.Canada too is in advanced negotiations to resolve outstanding issues. That leaves behind Iran and China in the crosswire.

This has sent shock waves in stock and currency markets all over the world. Many national currencies have tumbled, including India’s Rupee. But the collateral damage will be broader and deeper and continue to strike at the very root of “free trade” as we understand it today.

Several pundits have faulted Trump for his ‘aggression’ on China and have blamed him for what many see as the coming collapse of international trade. While one may disagree with the way Trump has executed the tariffs, he is absolutely right on taking on China. In fact the US has been very late in getting its act together on China.

A patient review of the events and facts may suggest the urgent need to hit the reset button on China. China is, by no means, a saint and has been violating every bilateral and multilateral agreement to further its trade. In fact many nations, particularly the smaller economies in the developing world have long complained of dumping of Chinese goods on their markets that led to the decimation of local businesses in these countries.

US too has long been wary of China stealing civilian as well as military intellectual property for several decades now. Further, China’s scant respect for international law – from its defiance of the International Court of Justice on the South China Sea judgement to coveting its neighbor’s land – is all well known.  If the international community has very little regard for China as a responsible world citizen, it has only itself to blame.

China may be believing it has arrived on the world stage as a super economy and a super power. That probably is the reason it decided to defy the US and impose counter tariffs. The ground reality, though, is that the US is still the largest economy with the most powerful military in the world.

Unlike China, the US has the power and means to impose sanctions and enforce it. The sanctions on Iran is a case in point where it has successfully prevented other nations from buying oil from it.

The Chinese on the other hand have a false sense of their international influence and authority. Their recalcitrance at the negotiating table earlier with the US has indeed surprised many. They seem to have played their hand wrong to their own detriment. The bottom line is that in the current trade war with the US, China will be alone as no other nation will openly defy the US to support them.

As regards the sustainability of the trade war, it is anybody’s guess as to how long this will last before a diplomatic resolution is negotiated. But given the asymmetry in trade – China exports over $200 billion compared to $80 billion of imports from the US – it is more vulnerable and will cave in sooner than later. China’s defiance is ill advised and amounts to a hara-kiri. Delay in arriving at a negotiated settlement will be a punishing setback for China and will undo decades of economic progress.

It must be mentioned here that international trade as we understand today is built on the twin pillars of economic pre-eminence and military might. These two pillars are then artfully packaged and deployed using sophisticated diplomacy to gain maximum commercial and economic advantage. Countries endowed with both emerge leaders and winners. That is the winning formula and all nations understand this very well. But for China to pretend it is on the same footing as the US is indeed churlish.

We must note here though, that history is a mute witness to the fact that when push comes to shove, the true intentions of nation states have emerged. The US and its allies have a track record of not hesitating to weaponize their trade relations and impose sanctions, which really is a proxy for their overwhelming military might, to ‘straighten’ things out.

Of course, this is not to suggest that the current crisis will transmogrify into open armed conflict. Far from it. But the consequences could be as devastating. However, in international relations, the dynamics and power equations keep changing depending upon the underlying economic fortunes of the country. The EU for example, given its weak fundamentals, may not be able to stand up to China. But the US, on the other hand, buoyed by a booming economy, has staying power.

For China, a prolonged face off with the US can have disastrous consequences at home. From unprecedented levels of unemployment to internal unrest and rebellion, anything in between may be a potential outcome.

The ongoing trade war between the US and its major trading partners has powerful lessons for India. India is caught between the US on one side and some of its own major trading partners – Russia, China and Iran – on the other. How India manages to successfully maneuver its way around these treacherous waters of international sanctions will determine – to a large extent- the survival and long term growth of India. But it certainly cannot adopt a confrontationist approach vis-a-vis the US. A collaborative approach will take it places, literally. Prime Minister Modi seems to be on the right track.

 
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Posted by on September 19, 2018 in China, Donald Trump, Economics, India, Trade

 

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US – CHINA TRADE WAR – Why Trump will Win

US – CHINA TRADE WAR  – Why Trump will Win

 The rising trade tensions between the US and its major trading partners, particularly China and European Union have been making news for some time now. It may be recalled that the US imposed tariff on imports of Chinese goods worth $200 billion and had also threatened to impose tariffs on cars imported from EU.

But the European Commission led by Jean-Claude Juncker quickly visited Washington DC and appears to have successfully negotiated and resolved the trade issues, at least for now. The EU plans to buy more US liquefied natural gas (LNG) and soybeans and has agreed to work with the US “toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods”. Trump seems to have won hands down in the trade frictions with the EU.

But the trade war with China, on the other hand, seems to be following a different course with no resolution in sight yet. China too had imposed retaliatory sanctions on goods imported from the US. The US has further accused China of manipulating its currency and is now considering additional tariffs on goods worth $500 billion.

The consequences of this internecine tension could be severe and reverberate throughout the world. The IMF has warned that the current trade war could slow down world economic growth by 0.5% or cost the world $430 billion by 2020.  In its World Economic Outlook Update published in July 2018 IMF has warned that the global expansion that was witnessed over the last two years has plateaued and has become less balanced. It projects global growth to stay at 3.9% over the next two years. Translation – any trade tensions, particularly among key economies at this juncture may be injurious to all.

While the specter of a full blown trade war is never benign, a close examination of US-China trade data that is publicly available, courtesy US Dept. of Commerce, Census Bureau is indeed revealing. Data for the last eight years (i.e. 2010 through 2018 May) shows US exports to China has been   consistent at just over a US$100 billion. On the other hand, imports from China have steadily grown from US$ 365 billion in 2010 to US$505 billion in 2017. Imports for 2018 will probably be at the same level as 2017.  Please see chart.US China Data1

US imports are almost four times its exports to China thus giving rise to a yawning trade deficit that is undesirable for any county, and most certainly for the US. But President Trump, by imposing high tariffs, may have converted this liability into a powerful weapon. Given its four to one advantage, China is four times more vulnerable, in dollar terms, than the US. The current impact of Chinese tariffs on US farm sector has been stemmed by a $12 billion federal subsidy announced by the department of agriculture.  Hence, any retaliation – both current and proposed – from China will have minimal effect on the US. Trump seems to have the upper hand with China.

One of the key reasons for the imposition of additional tariffs on China – at least the stated objective of Trump – was bringing jobs, particularly manufacturing jobs, back to the US. On this count, however, Trump may have miscalculated. America must wake up to the reality that manufacturing jobs that were squirreled away to China over the decades will never come back.

The fact is that the US is a high cost economy and the final landed cost of manufacture is very high. Secondly the strong US dollar does not help either. Bringing back manufacturing jobs will only price its products out in a fiercely competitive export market. Most manufacturers may not take the bait.

The US government fully understands this. Consequently, over the decades, it has successfully encouraged the migration of the economy to a trade and economic culture that is largely dependent and sustained by innovations and cutting edge technologies. This has helped in the creation of new markets and orient them to where the US will continue to enjoy obvious advantages and hence dominate.

China too understands the nuances of this game and has been in an extraordinary hurry to acquire new technologies at any cost. Hence it is no surprise that China has been consistently accused, over the decades, of industrial espionage and theft of intellectual property (IP) by many countries including the US. It is no surprise that under the given circumstances, President Trump was left with limited options in dealing with an aggressive trading partner like China.

China has not played a good citizen of the world. At every opportunity, it has seized its neighbor’s land in its infamous ‘salami slicing’ strategy to fulfil its expansionists ideology. It has shown no respect for international law – be it the annexation of Tibet or in the blatant militarization of the Spratly Islands in South China Sea, despite the International Court of Justice (ICJ) verdict against it.

If today China has a negative residue of international goodwill, it has only itself to blame. Its emergence as a big economy and world player has not been peaceful.

The fact that China has used the BRICS forum to speak out for “free trade” only underscores its desperation. Further, recent reports have indicated that behind its brave façade of resisting US tariffs, China is deeply worried about the potential for many of its companies to file for bankruptcies.

It is indeed impossible to guess as to what is on President Trump’s mind in dealing with China. Is he playing hard ball to get China to the negotiating table for a better trade deal? Or is the US planning to bring China on its knees without firing a shot, given China’s flagrant violation of international law in the South China Sea? Or is it Trump’s larger game plan to cut unfriendly nations to size, given his recent experience in winning over North Korea without firing a shot.

Whichever way you look at it, China seems to be the obvious loser. It is only a matter of time before China will get to the negotiating table to work out a “reasonable agreement” very much in line with the EU example. Before long, normal trade will resume, albeit under circumstances that are lot more favorable to the US.

 
 

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The curious case of Justice Chelameswar

The curious case of Justice Chelameswar

The Supreme Court of India in its recent judgement on a public interest litigation (PIL)  filed by Shanti Bhushan (TOI July 7th 2018), has reiterated, for the third time in eight months that the Chief Justice of India (CJI) will have sole authority on allocating cases in the top court. The judgement although pertains to the internal administration of the apex Court, has huge implications, particularly with regards to the powers of the CJI. The judgement also firmly puts to rest the unseemly controversy raised by Justice Chelameswar and three other judges in their well-publicized press conference in January 2018.

It may be recalled that Mr. Chelameswar and three of his fellow judges had hurriedly convened a press conference in New Delhi to “inform the nation” about ‘happenings’ within the Supreme Court of India.  A startled nation watched the drama unfold, hoping to hear some radical steps to reform the judiciary or something to that effect.  Instead, the justices raised the banner of revolt. It turned out, much to the disappointment of millions of Indians, to be another case of washing dirty linen in public.

The anguish of the four judges was over the CJI’s powers to allocate cases to his subordinate judges. An eager opposition jumped onto this ‘rebellion’ that ultimately led to the tabling of the motion for the impeachment of the CJI in Parliament. That the motion was rightfully defeated is not the issue here. It certainly opened the doors to the ‘happenings’ within the Supreme Court. This power play or the quest for control over judge’s case load unabashedly played out in front of the nation, masquerading as concern for the ‘functioning’ of the highest judicial body of the land.

The press conference of Justice Chelameswar et al. or the failed move to impeach the Chief Justice cannot be a surprise if one looks into what is happenings within this high judicial body. That Justice Chelameswar later met with a communist leader and other opposition politicians and that the likes of Shanti Bhusan had filed a follow up PIL to wrest control of the muster from the CJI speaks volumes for itself.

That the said judges seem to be so oblivious of the humungous challenges and problems faced by the courts in the country is indeed hurting. It certainly shows that a section in the judiciary has consistently put personal career aspirations over and above the sacred function of delivering justice. No one can fault them for personal ambitions, but to cloak it as a concern for the judiciary does not lend them dignity at all.

In this context it is worth looking at the problems and challenges confounding the judiciary in India today. Take a look at the data presented by National Judicial Data Grid (NJDG). According to the NJDG the backlog of cases in the judicial system in India was approximately 3.3 crores including 43 lakh cases in High Courts and 58,000 cases in the Supreme Court. (Business Today, June 28 2018). In a related news report (The Pioneer 24th November 2017), it was pointed out that almost two thirds or 67% of the prisoners in Indian jails are under-trials. This is indeed shocking.

But amidst all the pendency, ironically, the Supreme Court, did find time to convene, in the middle of the night, to pass its considered views on the election outcome and the state Governor’s decision to give two weeks’ time for the BJP to prove its majority in the recently concluded elections in Karnataka. The apex court, it appears, can definitely find time and resources to hear cases of the mighty and powerful almost immediately while the average citizen may have to wait for years, if not decades to get justice.

I have not heard any statement or action plans to solve this heart rending problem of pending cases from Justice Chelameswar or his brother judges. Maybe I missed it. But their silence on the real problems of the judiciary is indeed deafening.

The huge backlog of cases also indirectly impacts the daily life as well as the long term economic well-being of the country. For example litigations relating to land acquisition delays new road and rail infrastructure. Putting corrupt politicians in jail too is impacted by these backlogs. It can thus be argued that the inefficiencies in the delivery of justice and other judicial services in India has contributed a great deal, albeit indirectly, to its economic backwardness.

Needless to say, the impact of the backlog of cases on India is huge and often not easily quantifiable and has the potential of even destroying the country’s democratic framework. Hence the need of the hour is a collective effort from all three branches of government – legislature, executive and the judiciary to quickly clear the backlog of cases. The government’s Digital India and other initiatives to use technology to enhance delivery of services is something the judiciary can learn from.

In this context it must be reminded that the Supreme Court is not just made up of its CJI and the other justices who sit on its benches. Any number eminent judges have occupied its high offices   as judges and Chief Justices. But as an institution, it is larger than all of them – the current and past incumbents put together. In fact it stands tall as the last and final beacon of hope in a democracy and India is no exception.

To trade its stature and importance for few minutes of national spotlight on television or media is nonetheless a sacrilege that most ordinary Indians cannot easily countenance. For them, the career fortunes of individual opportunistic judges is of no consequence when crores of cases are pending and every day unknown numbers of lives are lost or wither away in prisons just because justice could not delivered on time. If this is not rank opportunism, what else could be? Any amount of tall talk and no action will not cut ice in a resurgent India we are witnessing today. The writing on the wall is clear.

 
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Posted by on July 13, 2018 in India, Media

 

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Chidambaram Peddles False Narratives on Indian Economy

Chidambaram Peddles False Narratives on Indian Economy

Two news items in the recent past caught the attention of many. They deserve closer scrutiny since it provides good insights into a thriving business in India. It is indeed representative of a deep and well entrenched industry that has prospered by profligate peddling of false narratives in India.

The first was observations made by none other than the former Union Finance Minister P.Chidambaram. He led the economic fortunes of the country during his days in the Union Cabinet and arguably presided over an economy that tanked the fastest despite strong fundamentals. That he is in the news for investigations by concerned agencies and related court cases for alleged corruption is beyond the scope of this piece.

The erudite former Minister – a Harvard alumni – has opined that the country’s current economic conditions were akin to a vehicle with three punctured tires. He went on to paint a very dismal picture where almost everything about the economy was wrong. If one were to believe him, it would appear that most Indians are rotting in poverty and even unable to sell pakodas to make a living. As a politician in the opposition camp, this was not unexpected.

As expected, this statement was lapped up by the media and reported 24/7. Many pseudo experts and self-acclaimed economists joined the fray, pontificating on why all these imaginary ills can be attributed to none other than Prime Minister Modi himself. Mercifully, the false narratives did not carry on for more than a few days of print and airtime.

The second item was a glibly written piece that subtly casts doubt on the sustainability of the high growth rate that India is currently witnessing. It again questions PM Modi’s statements where he called for a double digit growth rates in GDP. Eminent economist Dr. Subramanian Swamy has also talked about India’s inherent capacity to grow at double digits. With a touch of finesse the article cites other pundits who are not sanguine about double digit growth for India. It is certainly reminiscent of the days when socialists lectured us on why India can only grow at a “Hindu rate” of growth of 3.5% or less. The article pompously advises that it would do India better to aim for growth rates of less than 8%.

India has seen too many of these arm chair pundits and ministers of bygone eras attempting to water down the unprecedented growth we are witnessing. The fact is that this is not well intentioned advice or political strategy, but churlish rant emanating from those quarters where the sun has begun to set. It is indeed incumbent on Mr. Chidambaram, in particular, to tell the nation the initiatives that he had undertaken to stimulate the economy that provided better results, if any. That would garner better Television Rating Points (TRP) than the story of a vehicle with three flat tires.

The point is to not question anybody’s freedom of expression or the right to have an opinion that is different or even counter intuitive. On the contrary, such cross winds fertilize the idea pool and the ultimate winner is the country. But this virus strain is different. At a minimum, balanced punditry is morally duty bound to signal and call out the existence of a thriving industry that peddles false narratives.

Many politicians, together with some sections of the media, have excelled in consummating this art of creating false narratives via obfuscations, distorted and skewed opinions that is ably supported by presenting selective data.

Now let’s look at another set of data that provides a counter or shall we say a neutral narrative. In a recent article published by World Economic Forum (published well before Mr. Chidambaram’s statement), a researcher using World Bank data has shown the performance of the Indian economy over the last fifty years. Please refer to chart.

WB1The author argues that India’s growth rate has been consistent and has accelerated over the long run.  The author further projects “…..  GDP growth to be 6.7 percent in 2017-18 and accelerate to 7.3 percent and 7.5 percent respectively in 2018-19 and 2019-20”. (Emphasis added). The observation of the author – derived from data presented in the chart – seems tenable. Since the readers themselves can visually verify the data, it irons out any potential for mischievous interpretation that may ensue when data over a shorter window is observed.

This chart belies both the news items referred to above. The Indian economic vehicle does not have three flat tires, as alleged by Chidambaram. On the contrary it seems to be kicking and doing very well, despite pessimistic projections. Secondly, if we look at the performance over the last fifty years, a high trajectory i.e. double digit GDP growth may well be within India’s reach.

That leads us to the well-known truism that most Indians are aware of. In the worst days of socialism that beggared India, many exasperated but wise Indians would remark that no government rules India, for India governs itself. For them, India was on auto pilot on “Ram Bharosa”, meaning India was governing itself on the will of Lord Ram. The chart referred to earlier just seems to reinforce this dictum on India’s potential, well known only to ordinary Indians, and apparently not to some Harvard educated elites. In short, India’s growth is unstoppable, albeit it can be slowed down by the likes of Chidambaram in the short to medium term.

But that should make reasonable Indians stop on their tracks and ponder. Fashionable opinionistas in India and their allies elsewhere, as is their wont, have repeatedly lamented that India has missed the bus. But has it really? Today, when data is democratized and can be accessed by anyone in a matter of few clicks, it is indeed easy to review and draw their own conclusions.

But India has always been a paradise for peddling false narratives – be it economic growth, religious freedom, Aryan invasion theory or even the latest fad – intolerance. Some wisecrack puts out a skewed misinterpretation or blatant falsehood and this gets lapped up by the media like hungry wolves and then repeated ad nauseam. Finally, this becomes the established narrative – completely obliterating the underlying facts.

That has been the established and well tested strategy of the narrative peddlers who sell their views for a price, for a motive, in full disregard for India. And many of them happen to be politicians and opinion makers who presume they preside over the economic future of India.

The necessary and sufficient condition for the false narrative industry to thrive is a grossly ill-informed society. They had a free run for so many decades, but not anymore. Digital India has bought internet to every home and now information is free and the biased are being called out. This is the new ground reality politicians in India have to contend with. False narratives, be it from the government, the opposition political parties or for that matter from any quarter, will now be easily spotted and called out.

 
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Posted by on June 30, 2018 in Economics, India, Indian Economy, Media, Modi

 
 
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