Closing a door
Pratap Bhanu Mehta | Contributing Editor
The Indian Express
India’s decision to opt out of the Regional Comprehensive Economic Partnership (RCEP) is an “opportune moment to take stock of India’s place in the world economy”, writes Mehta. There is a need to “acknowledge how the global context has changed” and the lesson that needs to be learned is that “the political backlash against globalisation needs to be managed”, he adds.
The relationship between “trade and strategy needs to be rethought”, argues Mehta and states that “given the political objections and the uncertain economics” – not joining the RCEP “may have been the right thing to do”. However, the “incongruity of not joining is greater for Modi” since he wants three things,simultaneously — “dependence on foreign capital, an exaggerated sense of India’s power and yet a recoiling from trade openness”. Modi, writes Mehta, has “made it clear” that India is a “modest power with much to be modest about”.
China was India’s main concern in the RCEP and Mehta writes that “some prudence might be in order” to counter it. However, he argues that prudence is “not a decisive action against joining” the RCEP and could be “balanced by two considerations” – first, Asian powers “facilitating our joining” suggests “we will forego a loss in standing in the short run” and second, the fact that there is “no [other] avenue available for trade liberalisation”.
Mehta maintains that the “real worry” is not that Modi “turned his back” on the RCEP, but that he is “sending a clear signal that India’s economy and politics is so fragile that we should not expect effective reform anytime soon”.
Lib and let lib
Dipankar Gupta | Taught at the School of Social Sciences, Jawaharlal Nehru University
The Times of India
Gupta claims that he is not surprised if one has “trouble identifying a liberal” since they “refuse to be predictably consistent”. However, he writes that it is this “quality which makes liberals so precious to democracy”. Liberals know that “citizens should not discriminate against one another in a democracy” and that “everything else depends on information flow”. Gupta argues that this makes them “inconsistent, open to change, difficult to predict” but also the “guarantor of democracy”.
The most “enduring feature” of a liberal “position is that it is time barred and never forever”. He states that while conservatives also “change their policies”, they remain “opportunistic in nature” because “they refuse to change their minds”. Gupta maintains that a liberal is not a “capitalist, socialist, secularist” but someone “who is willing to change position should new evidence warrant it”. In conclusion, he writes that liberals “shun badges and labels” which “makes them difficult to define” but they sometimes make mistakes undervaluing “consistency” and overvaluing “information”.
Unwriting history, creating myths
Karan Thapar | Television Anchor
The Hindu
When it comes to history, Thapar likes the fact that an “event is sufficiently far back in time” and “we can spin any story and present it as fact and most people will not be any wiser”. However, he notes that if one does it “publicly or loudly there’s still a danger you could get found out”.
To counter PM Modi and Home Minister Amit Shah’s claims that Sardar Vallabhbhai Patel, the country’s first Home Minister and Deputy Prime Minister wanted to repeal Article 370, Thapar refers to Srinath Raghavan, author of War and Peace in Modern India. According to Raghavan, a letter reveals that “Nehru would only tell [J&K’s first prime minister] Sheikh [Abdullah] they had an agreement on the Kashmir clauses” after “Patel wrote to him to say he was in agreement with them”. Thapar cites another source, Rajmohan Gandhi’s biography, Patel: A Life, which implied that Patel “did not strongly disagree with these concessions otherwise he would have refused to go along, or at least, done so after expressing strong dissent”.
Thapar ends his piece by invoking Napoleon, who “dismissed history as a myth” but in India “men can also unwrite history”.
How to reform India’s judicial system
Madan Lokur | Retired Judge, Supreme Court of India
Hindustan Times
Lokur argues that the “time has come” for “reforms in India’s justice delivery system”. In order to “redress the situation”, there is a need for a “bottom-up approach”, he writes and states that the “principle problem is with the district courts where lakhs of litigants come into contact with the justice delivery system”
According to Lokur, unless the problems of these courts are addressed, “ad-hoc reforms” by the Supreme Court “will have no bearing on the system and the average litigant will continue to suffer the slings and arrows of outrageous fortune”. He suggests three methods to improve the system – first, improve the district courts; second, “identify the number of pending cases and status of each case” and third, “case and court management must be encouraged and embedded in the justice delivery system”.
Even though “these are illustrative suggests”, there is “enough data and research that can be used to change the legal system”, writes Lokur. He adds that there is an “absence” of “strong will to change”.
Rural India can’t recover until NBFCs do
Pranjul Bhandari | Chief India economist, HSBC Securities and Capital Markets (India)
Business Standard
Bhandari writes that the “ailing real estate sector” has impacted construction and rural wages. Other than falling food prices, rural distress has been worsened by a shift in employment, in which rural Indians are less reliant on agriculture and more on construction.
Construction activity has suffered because it has been “dominated” by the real estate sector, which in turn relies on funding from NBFCs and shadow banking, explains Bhandari. When bank-lending to real estate developers “contracted”, it had a “knock-on effect on the construction industry and subsequently to rural employment and incomes”, she writes.
She states that the government has taken an important step by announcing the “stimulus package to revive stalled housing projects”, however, NBFCs and real estate developers may need a direct “rescue operation” by the RBI who can help them “recapitalise”.
Abandon Asia? Seriously?
Pravin Krishna | Professor of international economics and business, Johns Hopkins University, Washington DC, US
Arvind Panagariya | Professor of economics, Columbia University, New York, US
Economic Times
In their piece, Krishna and Panagariya review India’s decision not to sign the RCEP, the misconceptions on the decision and the ways India could have negotiated harder on terms.
From 2000 to 2011, India signed 14 preferential trade agreements (PTAs) and 10 were bilateral agreements with countries like Japan, South Korea, Malaysia and Singapore, however the “effects of these agreements on trade have been modest”, explain the authors.
Trade liberalisation under these pacts “was ‘phased in’” or incomplete but there is no data to show that it “strained” the economy, which is a common misconception, they write.
Krishna and Panagariya identify the positives of RCEP and write that it could have given India a chance to “integrate itself into regional and global value-chains” or attract FDI. Compared to US’ Trans-Pacific Partnership (TPP), RCEP was “an easier agreement for India to sign” as its main focus was trade liberalisation, they explain. Even if India had reservations in signing RCEP for fear of Chinese goods flooding Indian markets, it should have negotiated hard on this front. It is unlikely for RCEP to be abandoned permanently as PM Modi would not “walk away from his ‘Act East’ policy and leave India wholly disadvantaged”, they conclude.
A close look at the economic slowdown reveals its origins
Himanshu | Associate professor at Jawaharlal Nehru University
Mint
On the anniversary of demonetisation, Himanshu cites 10 big political miscalculations in the last five years that led to the economic slowdown. The first was in August 2014, when petroleum prices fell accompanied by a sharp fall in agricultural commodities, which triggered farmer distress and suicides. Second was when the “double-drought of 2014-15” was ignored. The central government’s response to “reduce real investment in agriculture drastically” was the third miscalculation.
In early 2016, when farmer distress was finally acknowledged, the Modi government announced the National Rural Employment Guarantee Scheme (NREGS) instead of “using public expenditure to revive rural wages and demand”, explains Himanshu. Ushering in of demonetisation essentially “broke the back of the informal and rural economy” — the fifth misstep. The “hurried implementation” of GST that led to job losses and the closing of enterprises was the sixth. The seventh and eighth were when loan waivers were used as an election tool under the ruse of tackling farmer distress, explains Himanshu. The ninth misstep was the central government’s unsuccessful efforts to solve “fiscal mismanagement” and the last, is the mistrust of government data and statistics on the economy.