An illusion of parity
C. Raja Mohan | Director, Institute of South Asian Studies, National University of Singapore
The Indian Express
As the People’s Republic of China celebrates its 70th founding anniversary, India can draw four lessons from its evolution, writes Mohan. First, China’s economic progress has made it the world’s second-largest economy after Deng Xiaoping ushered in the country’s “era of reform”. Despite critiquing its political system, India should admire how rapidly it moved from underdeveloped to developed.
Second, the Communist Party of China brought together a wide set of people and territories, but ethnic and minority issues persist, such as in Tibet and Hong Kong. India can learn from ancient Chinese wisdom — ‘Governing a large nation is like cooking a small fish. They are easily overdone’.
Third, China’s commitment to science and technology, replacing religious and social customs with modernisation goals, is noteworthy. Finally, the world may admire its economic rise, but China’s assertion of power has caused a pushback from the West — specifically the US. India has been under the “the illusion of parity” with China. Coming to terms with its growing power will be our “greatest national challenge in the coming decades”, says Mohan.
On Gandhi’s 150th, it’s time to review the sedition law
Gautam Bhatia | New-Delhi based advocate
Hindustan Times
Supreme Court judge Justice Deepak Gupta recently spoke about how the sedition law is often “abused and misused”, and that “freedom of expression” as a constitutional right is more important. Sedition has colonial roots used by the Britishers to “suppress political and cultural dissent”, writes Bhatia.
Even figures like Mahatma Gandhi were jailed on charges of sedition which is why there was an intense debate about sedition in the Constituent assembly, and Jawaharlal Nehru promised that the government would remove it. But he didn’t, and in 1962 the SC upheld its constitutional validity, defining it as a “reasonable restriction upon the freedom of speech” if the speech “incited violence or public disorder”.
The gap between the “broad” words in the law — “disaffection”, “contempt” and “hatred” — and their interpretation is the problem. Sedition is a “cognisable offence” — the police can arrest someone for it without a judicial warrant.
The law sidelines personal liberty and is often misused. The SC should strike down the law as unconstitutional, argues Bhatia.
Welcome but inadequate increase in jobs
Mahesh Vyas | CEO, MD & Director, Centre For Monitoring Indian Economy
Business Standard
Vyas writes that a recent survey conducted by CMIE shows that “the count of the unemployed continues to grow, but employment has also started rising”. An estimated 405 million people were found to be employed by the survey during May-August 2019. Of the 405 million, “129 million were residents of urban India. The remaining 276 million were rural folks.” Approximately, 10 million jobs were lost in 2018 but the latest survey shows an increase of almost 4 million employed individuals since then. This increase is not sufficient because “while the labour force expanded by 11.3 million, jobs grew by only 2.5 million,” writes Vyas.
According to Vyas, the rise in unemployment is a reason to celebrate since it indicates an “an increase in the hopes for finding jobs. Post demonetisation this hope had dried up”. He writes that the latest rise in employment was “fragile and tentative” and the rising labour force needs to find adequate jobs.
Interest rates: There’s room for a 25 bps cut
Aditi Nayar | Principal economist, ICRA
Financial Express
Nayar writes that the monetary policy committee’s decision to reduce the repo rate by 35 basis points (bps) to 5.4 per cent in August was an unexpected move and a fifth consecutive cut is expected in October to tackle the growth slowdown. The year-on-year Consumer Price Index (CPI) inflation increased to 3.21 per cent in August and Nayar predicts a further increase in inflation due to a spike in food prices and volatile crude oil prices.
The government has introduced various measures to tackle the slowdown such as the cut in corporate tax, which is “long-term structural positive, although it would increase fiscal stress in the short-term,” writes Nayar. According to her, “land and labour reforms, and regulatory clarity and consistency” are areas that require further improvement.
Nayar estimates a further cut of 25 bps based on inflation and growth trajectory in October, but writes that “the efficacy of incremental rate cuts in rapidly instigating a turnaround in economic growth remains uncertain”.
Cosmetic approach
Renu Kohli | Macroeconomist
The Telegraph
In her piece, Kohli is optimistic about the recent corporate rate tax cut, which, despite “uncertainty and heightened world competition”, has revived animal spirits and reduced skepticism over medium-term economic growth. The cut should have come a few years earlier, writes Kohli, around 2015-16, “so as to exploit the oil-revenues’ windfall and enable firms to pick up the Chinese manufacturing slack”. However, the complementary changes that went with the change, like banks scaling up lending and the RBI lowering risk weights of loans, are risky.
The government’s aim to restore demand by boosting credit supply is “resting heavily upon public sector banks”, she explains. Banks have also been told to gear up for loan ‘melas’ or loan outreach programmes scheduled to begin Thursday, which could not only attract the wrong kind of borrower and increase the risks of fresh NPA creation and aggravating past “NPA overhang”. What is needed is a structural reform of revenue expenditure, starting with “staggered food subsidy cuts”, to make room for fiscal space, she writes.