ISSUE: FAILURE OF INDIAN DIPLOMACY
WHY IN NEWS?
The controversy over External Affairs Minister S Jaishankar’s cancelled meeting with a US Congressional Committee
Jaishankar’s decision reflects India’s emerging troubles with the US Congress and more broadly with the liberal public opinion in the US and beyond.
Even assuming that some members of the Congress are targeting India on Kashmir, avoiding an engagement is only bound to make matters worse.
The 435 members of the House of Representatives and the 100 members of the Senate tend to pronounce on all world matters. The US legislature is an integral part of the government with substantive fiscal power and diplomatic influence.
The US Congress is, of course, open to persuasion on the conduct of American foreign policy. South Block is well aware of this. After all, Delhi has turned a hostile US Congress into a formidable ally over the last quarter of a century.
The Congress also revised three and a half decades of non-proliferation law to facilitate international civil nuclear cooperation with India. It became a champion of more intensive defence and security cooperation with Delhi.
Now, the Narendra Modi government’s politics of majoritarianism appears to be alienating critical sections in the US — including those who champion human rights and religious freedoms.
Modi’s policies are identified as Islamophobic by the American Muslim groups as well as liberal media.
Murmurs of concern across the American political spectrum during the first term of the Modi government have turned into vocal objections in the second, thanks to the rapid moves by the government on Kashmir, CAA and the NRC in the last seven months.
The diplomatic kerfuffle in Washington last week is a reminder that the Modi government may be seriously underestimating the international consequences of its internal policies.
ISSUE: HOW IN FUTURE ONION FIASCO’S CAN BE AVOIDED?
The failure to control spiking onion prices (it has crossed Rs 100/kg in several retail markets) has become a nightmare for the central government.
Such a situation has arisen almost every alternate year, but we have refused to learn.
WHAT COULD BE DONE ACCORDING TO AUTHORS?
India is already the largest exporter of onions in the world with average exports of 2 mmt a year.
Instead of banning exports, it is better to keep imports open so that when domestic prices rise unduly, private trade can start importing rather than waiting for the government to take a delayed decision. This way, India can remain a reliable exporter, which will help farmers get better prices on a sustainable basis. Abrupt export bans are not only anti-farmer but actually reflect the failure of government policy. To take care of consumers’ interests, India needs to build proper value chains as envisaged under “Operation Green”
Second, storage facilities for rabi onions must be created on massive scale, both at the farmers’ end as well as with traders. When prices were hovering around Rs 4-5/kg in April-May, the government could have purchased onions at, say, Rs10/kg and stored the stock in modern, private-sector godowns. However, repeated stocking limits and raids discourage private investment in modern cold storages. For encouraging private storages, the Essential Commodities Act has to go, and if traders collude, let the Competition Commission of India (CCI), and not income tax officials, look into this.
Third, the government needs to promote the use of dehydrated onions (flakes, powder, granules) among urban households and bulk consumers (armed forces, hospitals, hotels and restaurants, etc). As onions are sensitive commodities, the government should also keep a buffer stock of dehydrated onions, which have a much longer shelf life
Fourth, small and marginal farmers should be organised in Farmer-Producer Organisations and direct buying by organised retailers should be encouraged through contract farming, bypassing the mandi system. Additionally, market reforms along with overhauling the infrastructure of existing APMC mandis are required.
ISSUE: OPERATION TWIST
WHAT IT IS?
On Thursday, the Reserve Bank of India announced its decision to conduct simultaneous purchase and sale of government securities for Rs 10,000 crore each under its Open Market Operations (OMO) after a review of the current liquidity, market situation and evolving financial conditions.
Financial markets perceive this as an Indian variant of Operation Twist, as the asset purchase programme kicked off by the Kennedy administration in the US in 1961 and later in 2011 by the US Federal Reserve to help lower long-term interest rates, was called.
The OMO as an instrument of monetary policy is aimed at either withdrawing liquidity or boosting it, including during periods of robust capital flows.
WHAT DOES IT AIMS?
The essential aim of such a programme would be not just to influence long-term interest rates but also to provide a boost to the economy by making the cost of capital or funds cheaper for business and industry and other borrowers.
WHY AT THIS POINT OF TIME?
The RBI has a far more compelling reason than just the slowdown to launch the latest programme. Even after aggressively cutting its policy rate by 135 basis points this year, monetary policy transmission has been weak with banks loath to lower rates significantly given the state of their balance sheets. That leaves the central bank with hardly any policy tools to influence rates.
WILL IT WORK?
The link between India’s bond market and the real economy has been relatively weak and making it worse is a half functional financial sector now.
Coupled with this is the large fiscal slippage — the fiscal deficit at the end of April-October this year at well over 100 per cent of the budgeted target — the spike in inflation and toned down projections of GDP growth.
A programme aimed at reducing long-term bond yields may only have limited impact as long as the government runs a large deficit, as the US experience also shows.
WHAT GOVERNMENT SHOULD DO?
Globally, there is a growing recognition that central banks are running out of ammunition. The underlying message is clear. The government should get to work on a credible fiscal deficit reduction plan, fix the broken financial system along with unveiling a roadmap for state-owned banks, get its divestment programme going and ensure that packages for sectoral issues, specially real estate, are operationalised swiftly. Else, efforts at twisting interest rates will flounder.
ISSUE: WHAT DOES NRC AND CAA MEANS?
While Assam is the only state to have an NRC, first prepared in 1951 and finally updated in 2019, the proposed nationwide exercise would be a first for the rest of India. Legally, there is no paradigm yet for a nationwide NRC.
In Assam, the NRC update was mandated by the Supreme Court in 2013. Assam has a history that is shaped by migration, and the protests there are against only CAA, not against NRC.
The Assam Accord, signed by the governments of Assam and India, and the All Assam Students’ Union (AASU) and the All Assam Gana Sangram Parishad in 1985, after a six-year mass movement, essentially declared that a resident of Assam is an Indian citizen if she could prove her presence, or an ancestor’s presence, in Assam before March 25, 1971. That is the cutoff date for NRC, which CAA extends to December 31, 2014 to non-Muslim migrants from three countries.
To prove their or their ancestors’ presence before 1971, applicants in Assam had to produce any one of 14 possible documents:
- 1951 NRC; or
- Electoral roll(s) up to March 24, 1971; or
- Anyone of 12 other kinds of papers, such as land & tenancy records; citizenship papers; passport; Board/University certificate.
Additionally, if the document submitted is in the name of an ancestor, then another document proving relationship was required to be submitted — such as a ration card, LIC/bank document or an educational certificate that contains the names of the applicant as well as the parent/ancestor.
WHAT ARE THE CONDITIONS FOR CITIZENSHIP?
According to the Citizenship Act, 1955, amended in 1986, anyone born in India up to July 1, 1987 is an Indian citizen by birth.
For those born on or after July 1, 1987, the law set out a fresh condition: one of the parents must be an Indian citizen. By a 2003 amendment, for any individual born on or after December 3, 2004 to be considered an Indian citizen, one parent must be an Indian citizen while the other must not be an illegal immigrant.
This does not apply to Assam, due to the cutoff of 1971.
For the rest of the country, those born outside the country after January 26, 1950, and residing in India without proper documents is an illegal immigrant.
CITIZENSHIP AMENDMENT ACT
The Act seeks to amend The Citizenship Act, 1955 to make Hindu, Sikh, Buddhist, Jain, Parsi, and Christian illegal migrants from Afghanistan, Bangladesh, and Pakistan, eligible for citizenship of India.
In other words, the Act intends to make it easier for non-Muslim immigrants from India’s three Muslim-majority neighbours to become citizens of India.