The Texas event is timely, gives a big push to trade
Kanwal Sibal | Former foreign secretary.
Live Mint
Sibal writes that Prime Minister Narendra Modi’s ‘Howdy, Modi!’ event was not significant only because of its scale, but also because of various other elements at play. After his huge election win in India, Modi can now be seen as a global leader with “unmatched democratic legitimacy”. The fact that Trump and many US Congressmen attended the rally indicates a recognition of the “political and economic clout” of the Indian-American community.
The event comes after the scrapping of Article 370 in Jammu and Kashmir, which has drawn harsh criticism from “liberal political and media circles” in the US and the international community over human rights violations of Kashmiris. Trump’s participation signals that the India-US relationship goes far beyond the Kashmir issue, writes Sibal.
The event is timely in terms of India expanding economic ties with the US. The US is India’s biggest trade partner in goods and services, apart from being the biggest source of advanced technology. Modi plans to participate in a round table with Houston-based energy companies, and additional LNG supply contracts from the US have been signed. This should strengthen India-US trade ties, “defuse Trump’s angst on the trade deficit with India, and incentivise the shift of investment from China to India by US companies”, he concludes.
Cheering for toilets but with caution
Sunita Narain | The writer is at the Centre for Science and Environment
Business Standard
Narain writes that while India’s achievement of constructing “100 million toilets in 600,000 villages” as well as making the country Open Defecation Free (ODF) must be celebrated, it is imperative that these developments are sustainable. She argues that “even if toilets are built and even if people have started using them, this trend can reverse in no time”. For instance, while in Uttar Pradesh people have started using toilets there has been a backward trend in Haryana with residents going back to open defecation.
She also flags the issue of excreta disposal. “It is estimated that the bulk of the 100 million toilets built in rural India are either single or twin-pit latrines,” writes Narain. Thus, there can be a serious health issue if more sophisticated methods of excreta disposal are not introduced in rural households.
Finally, she highlights the credibility of the information and data available on toilets. She writes that while there is no doubt about the data provided by the ministry, to ensure greater accuracy and credibility “there is reason to ask for differently done assessments by many more institutions and with many more colours”.
A step for the high growth strategy
Ajay Shah | Professor at National Institute of Public Finance and Policy, New Delhi
Business Standard
Shah writes that the most important problem plaguing Indian macroeconomics is a decline in private investment. “More needs to be done, to change the risk/reward analysis of private persons, to get back to high-growth arrangement, “ he writes. The announcement Friday will increase profit for the owner of an enterprise which would encourage more investment by private individuals.
Shah highlights that there are three major risks that an investor faces – normal business risks, policy risk as well as risk from agencies. Thus, to ensure greater investment there is a need to reduce policy and agency risks. Shah argues that “health of the financial system is required, in the high-growth strategy”.
He also writes about the “fiscal risks associated with reduced tax rates”. According to Shah, “simple proportionality is never found when tax rates change”. When it is raised, the revenues obtained always disappoint and when they are lowered, the reduction is much less than “what meets the eye”.
Sanjaya Baru | Distinguished fellow, Institute for Defence Studies & Analysis (IDSA), New Delhi
The Economic Times
Baru argues that Modi has proven to be particularly weak while dealing with the economic aspect of the country and the weekly piecemeal announcements by Finance Minister Nirmala Sitharaman only makes it seem like “the good news appears as if it is a response to some bad news”.
While all of the moves announced are seen as a step in the right direction, the question that arises is “why none of these major measures formed a part of the July 2019 budget?”
“By choosing to ignore the bad news about the economy at that time, and pretending that India was well on its way to becoming a $5 trillion economy, the government was fooling no one but itself,” writes Baru. As PM, Modi should have known about the deplorable state of the economy and should have used the July budget to counter it.
Baru also writes that deficit financing is the only factor influencing policy that has changed in the past three months. The growing slowdown even convinced fiscal conservatives like C Rangarajan to recommend an increase in public spending through capital expenditure.
According to Baru, “economic policy making is not just about the content of policy as it is also about timing and articulation,” and “knee-jerk piecemeal” intervention is not the best strategic approach.
The nationalist hindrance to climate actions
Navroz K. Dubash | Professor at the Centre for Policy Research
The Hindu
Dubash writes about how the Climate Action Summit seeks to combine diplomatic persuasion and “popular youth mobilisation” to spur action on climate change. Alarming scientific reports show that the five years since 2015 have been the warmest the world has ever seen, with sea levels rising, oceans becoming 26 per cent more acidic, catastrophic events like Hurricane Dorian and the fires in the Amazon, central Africa and Siberia occurring. Scientists have proven that all this is linked to climate change, but most countries remain behind as nationalist short-sighted politics have taken precedence the world over.
The UN Secretary-General hopes that the Summit will effect change in two ways. First, countries have been urged to commit to lower emissions, enhancing the pledges they made as part of the Paris Agreement. Second, countries are provided sets of ‘action portfolios’ – domestic economic objectives to make cities more “livable” and more “resilient to climate disruption”, to move towards low-carbon energy, and make industries more efficient. The first track has had a mixed response, but this second track might be more effective.
“Global climate politics” could mean three things for India. First, as a country that is extremely vulnerable to climate impact, it needs to be part of global collective action. Second, with a track record of being energy-efficient India has the potential to take action on climate change. But this has been inconsistent, and we need clear and coherent domestic policies to ensure low carbon energy. Third, we should be a “global climate leader”, not one of the countries lagging behind.