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Sajjid Chinoy on the ‘Budget’s dilemma’, R Jagannathan on choosing between Air India & Jet

The best of the day’s opinion, chosen and curated by ThePrint’s top editors.

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Bridge over troubled waters

David M Sloan | South Asia specialist for The Scowcroft Group, a Washington-based global advisory consultancy
The Times of India

The writer says even though India-US ties appear on a “decidedly positive trajectory” after Osaka, reaching agreements on many issues might prove difficult. He argues that India and the US need to adopt a holistic approach instead of negotiating on individual agreements.

For India, the purchase of the S-400 missile defence system from Russia remains a non-negotiable issue, for the US it is to ensure that India halts its oil supplies from Iran. He says if India and the US “can agree to a trade-off on these red line issues, progress on other core bilateral irritants” will be easier. If that happens, India is likely to remove tariffs on Harley Davidson motorbikes and ease price controls on medical devices. On its part, the US can again make India a beneficiary of its Generalised System of Preferences (GSP) programme.

Terms of estrangement

Christophe Jaffrelot | Senior research fellow at CERI-Sciences Po/CNRS, Paris, professor of Indian politics and Sociology at King’s India Institute, London
The Indian Express

On the other hand, Jaffrelot argues that the deterioration of India-US ties is a result of “national-populism in both countries” and “New Delhi’s quest for multi-alignment”.

Jaffrelot says steps like India’s new e-commerce rules and USA’s termination of GSP status to India were expected as they come from national-populist leaders.

He also says India’s policy of multi-alignment as evident from its purchase of S-400 from Russia is another deterrent as the world is getting “so polarised that memories of the Cold War come to mind”. India’s good relation with Iran is also a problem, he says.

The writer concludes that the kind of words the two leaders expressed for each other’s country in Osaka does not reflect the present dynamics of India-US relations.

Keep the Centre-state channel open

Yamini Aiyar | President and chief executive, Centre for Policy Research
Hindustan Times

Aiyar says a critical faultline in the centralisation versus decentralisation debate has been exposed in India as an “unintended” consequence of the dismantling of the Planning Commission. She says while that was a welcome move given that the Commission had entrenched centralisation, its abolition “created an institutional vacuum for addressing national development goals and ensuring that all citizens, regardless of where they live, receive a minimum standard of public services”.

Thus, we need a new federal institution. However, two facts need to be considered. First, she says the Planning Commission provided a platform where the states can have a dialogue with the Centre. Second, she argues fiscal centralisation is important for low-income states because they lack planning capabilities.

Another problem is that the richer states use central funds better, making them beneficiaries of centralisation even though it’s the poorer states that require it. Thus, it will be important to overcome these problems in any new institutional arrangement.

Reclaiming the space of non-violence

Neera Chandhoke | Former professor of Political Science at Delhi University
The Hindu

In this piece, the author criticises the incidents of lynchings and says that we need to “reclaim the space of non-violence”. She says we need to ask ourselves questions like what violence does to us as a society.

She says to fight the present injustices, which are being carried out, we need to “recreate Gandhi’s notion of satyagraha”. She says that philosophy of ‘satyagraha’ gives us a theory of action. It makes us aware of what is right and what is wrong, sensitises us to injustice and tells us the “need to fight for justice against the abuse of power”.

The budget’s dilemma

Sajjid Z. Chinoy | Chief India economist at JP Morgan
The Indian Express

In this piece, the author argues India is facing an NBFC and an agrarian crisis. And, while monetary policy has been relaxed in recent times, its transmission has remained limited. In such a scenario, he says, economic theory would argue that the government declares a fiscal stimulus in the forthcoming budget. But, this might not help, he argues, given that there is already a “fiscal overhang”.

He recommends that in such a scenario the government should target asset sales by “a combination of strategic disinvestment and re-cycling existing infrastructure assets”. This, he says, will ensure that fiscal policy effectively becomes expansionary.

Sharpen Educational Tools

Arvind Panagariya | Professor at Columbia University, US,
B Venkatesh Kumar |  Professor at Tata Institute of Social Sciences, Mumbai
The Economic Times

The key recommendations of the draft National Education Policy (NEP) include separating the functions of regulation, funding, accreditation and standard. However, its recommendation that a National Higher Education Regulatory Authority of India be all-encompassing, which should subsume the functions of many professional regulatory bodies such as the Bar Council of India and the erstwhile Medical Council of India (MCI), is risky.

Panagariya and Kumar also note that research and quality of education remain the biggest challenge in the higher education sector.

“At the top end, we lack internationally renowned institutions. At the bottom end, we have allowed numerous colleges unworthy of the title on account of nearly missing faculty and infrastructure and students numbering fewer than a hundred,” they write. It is important to frame policies that prevent the entry of “frivolous colleges.”

The government has a choice to make between Air India and Jet

R. Jagannathan | Editorial director, ‘Swarajya’ magazine

Air India (AI) and Jet Airways are on the block at the same time and this can be directly linked to the general elections. “The Narendra Modi government did not want two political time bombs going off together before the polls,” says Jagannathan. Air India privatisation and rescue efforts of Jet — both were put on hold till elections were over. But, now as both airlines’ rescue efforts take centre-stage, the government will actually have to choose between two options — whether to push AI’s sale hard or to get Jet flying again within the three-month resolution time set by the National Company Law Tribunal (NCLT). It is unlikely that both airlines will get sold simultaneously when bidders have the option of driving down the cost of either acquisition. Both are unlikely to happen together.

New fiscal mindset key to reviving growth

Pranjul Bhandari | Chief India economist, HSBC Securities and Capital Markets (India) Pvt Ltd
Business Standard

Battling structural, cyclical, domestic and global headwinds, India’s growth story has hit a soft patch. Bhandari writes there are three main drivers of growth —capital, labour and total factor productivity. The focus has been on total factor productivity with reforms such as digitisation and GST implementation. But, capital and labour cannot be ignored if growth has to be boosted. As election uncertainties settle down and the RBI eases interest rates, growth can go up to about 7 per cent. Anything above that would require reforms to augment capital and labour.

Cost of capital is still high despite RBI lowering rates. Labour reforms are complex. India’s best bet is to revive investments cycle and this can happen only by adopting asset recycling such as disinvestment and selling or auctioning government owned assets such as roads and ports.

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