Why ‘Make in India’ has failed
Suresh Babu | Teaches economics at IIT Madras
The Hindu
Babu argues that the ‘Make in India’ initiative, introduced by the Modi government in 2014, “set an ambitious goal of making India a global manufacturing hub”. To achieve this, three major objectives were identified — an increase in manufacturing sector’s growth rate to 12-14 per cent, creating 100 million additional industrial jobs and increasing the manufacturing sector’s contribution to GDP by 25 per cent, he writes.
However, according to Babu, “on all three counts, ‘Make in India’ has failed”. In the last five years, investment witnessed slow growth, output growth has been negative and industrial employment has not “grown to keep pace with the rate of new entries”. He identifies three primary reasons for the failure of ‘Make in India’. First, it set out “too ambitious growth rates” for the manufacturing sector; second, it “brought too many sectors into its fold” that led to a “loss of policy focus” and third, given the “uncertainties of global economy”, it was “spectacularly ill-timed”.
The subtle art of crowd management
K.K. Paul | Former Delhi Police commissioner & governor of Uttarakhand and Northeastern states
Hindustan Times
Paul narrates an anecdote during the 1990 students’ agitation against caste-based reservation in jobs and educational institutions. He writes that in September 1990, students staged a sit-in at AIIMS chowk and since it was peak hour, “they had virtually hit the jugular of the traffic in south Delhi”. Around midnight, Delhi Police, under “strict instructions not to use force”, surrounded the agitating students in an attempt to push them back. While everyone anticipated violence, everything remained peaceful and the situation was resolved calmly, he writes.
Paul argues that the police continue to receive “negative press” because of the “use of unbridled force on the general public”. In this context, he writes, “use of non-violent force can become an important element of policing”. He adds that “what we usually see in action is not men of a uniformed force but individuals in uniform”.
“Non-violent force is not an oxymoron. It’s a concept that has been put in practical use,” writes Paul. He argues that “force becomes violent when it is applied with a sense of revenge, hostility, hatred, malice and rancour”. A loss in the “subtleness in crowd management” leads to the use of violent force and therefore there is a need for change in police methodology, concludes Paul.
Led by the people
Javed Anand | Convener, Indian Muslims for Secular Democracy
The Indian Express
Anand argues that the protests against the Citizenship Amendment Act are different from previous protests organised by Muslims in three significant ways. One, earlier the protests were organised by the ulema but now “the Muslim masses are out in the public space in defiance of the diktats of their big-shot ulema”. Two, the protests are not “faith-based” and there is “no gender segregation”. Three, the “icons of the ongoing insurrection are mostly women” as evidenced by the female students at Jamia and the “dabang dadi ammas” of Shaheen Bagh. Finally, he writes, this time there is no ‘Islam/Shariah in danger’ call and it is all about citizenship in danger.
“Many… bemoaned the fact that the word secularism stands drained of any emotive appeal,” writes Anand and adds that they should now “rejoice in this secular awakening”. However, he also warns against the “dissonant Islamist undercurrent”, which has no faith in any “ungodly” secular-democratic dispensation. In conclusion, Anand writes that “no one can… deny the democratic right of non-jihadi Islamist organistaions to protest against the CAA-NPR-NRC process” but the liberals and leftists must be careful to not provide “credibility and strength to the Muslim right”. Especially when Muslim masses are learning that “Islam and secularism can happily co-exist”.
Budget 2020: Food, urea subsidy reforms must be priorities
Ashok Gulati | Infosys Chair Professor for Agriculture, ICRIER
Financial Express
Gulati starts his column by explaining how the budget of 1991 was historic. Because “it changed the course of the Indian economy from being a largely socialist, state-controlled one to a somewhat more liberal market-oriented economy”. He then goes on to state that any government that fails to deliver at least a 7 per cent GDP would be considered a failure on the economic front. “The economic credibility of the Modi government 2.0 is at stake on this very account,” he writes. Offering some advice to Finance Minister Nirmala Sitharaman, Gulati says that she needs to fully account for food subsidy in the budget and ensure complete transparency. He says the current dispensation should move towards direct cash transfers.
The next area that Gulati speaks about is fertiliser subsidy, advocating direct cash transfers here as well. “If Modi 2.0 can usher in this fundamental reform, i.e, moving towards direct cash transfers for intended beneficiaries, in food and fertiliser subsidy, he will go down in history for setting the agriculture sector on a sustainable growth path, with a minimum annual saving of Rs 50,000 crore,” he writes.
For a Budget that ushers in a reforms reset
Narendar Pani | Professor at the School of Social Science, National Institute of Advanced Studies
The Hindu Business Line
Pani starts his column by saying that few finance ministers have had to make their budgets in as challenging circumstances as Nirmala Sitharaman now faces. In these “uncertain times”, Pani talks about two suggestions experts have offered — boost consumption and dramatic steps in the reform process. Yet, Pani notes that both these suggestions come with a fair amount of risk. “Finding resources to fund a major boost in consumption spending is not easy,” he writes and that the continuing open market reforms also look better on paper. “At a time when demand is already depressed, inviting more foreign products would only increase the competition for the stagnant market, thereby making conditions even worse,” he writes.
Pani states it is time for Nirmala Sitharaman to explore previously unexplored territories, which is the reform process itself. “The Finance Minister thus needs to find new investors who do not yet have the option of investing abroad. This task may be difficult but is not impossible,” he writes. “Pani concludes by saying that Sitharaman “could consider setting up effective small cap stock exchanges at dispersed locations across the country. These exchanges would need to be allowed to help local firms, with appropriate credentials, to raise IPOs, even if they are relatively small in size”.
Don’t Scare Investors Away
Jay Sanklecha | Lawyer
Economic Times
Sanklecha starts by stating that the 40-page draft proposal that envisaged the appointment of mediators and the setting up of fast track courts to resolve disputes with foreign investors, which the Modi government deemed moot, was a “welcome step in rethinking the investor-state dispute regime.” He goes on to explain that currently foreign investments are protected under a series of bilateral investment treaties (BITs) between countries. And the host country guarantees certain protections to investors, however these guarantees are often vague.
“The present design of the investor protection regime offers some invaluable benefits to foreign investors,” writes Sanklecha. The first is that investors are guaranteed protection under international treaty as opposed to domestic law and it is easier for a country to change their own laws than renegotiate an international treaty. Second, “by using arbitration as the principal mode of dispute resolution, investors avoid the possibility of bias that may colour proceedings before national courts where judges may be reluctant to make rulings against the State”. However, of late there has been a backlash against investor-state arbitrations. And India is currently engaged in more than 20 investor-state disputes, with many regarding retrospective tax claims. “If India loses these disputes, it faces a potential payout of millions of dollars from taxpayer money. GoI has allowed a number of existing BITs to lapse. The proposal to introduce a new law to safeguard foreign investors is part of such a rethink,” he writes.
India has the opportunity to formulate a new law for investment protection to balance its own development needs with those of the investor, yet while doing so it should not introduce provisions that further discourage foreign investment into the country.