Tuesday, 29 November, 2022
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Yashwant Sinha says corporate tax cut not enough, Sanjaya Baru for investment in Saudi

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

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Drone arms drop: A new security threat emerges on India’s western border

Manmohan Bahadur | Air Vice Marshal (retd) and additional director general, Centre for Air Power Studies

Hindustan Times

Bahadur writes about the worrying drone usage by Pakistan-based entities to airdrop arms and ammunition in Punjab.

Pakistan-based Khalistanis earlier lacked the capability to arm sympathisers in Punjab or to transfer weapons to terrorists in Jammu and Kashmir. But the drone drop is evidence of “enhanced capability” and “inimical intent”. It should be seen as “offensive intent”, similar to the message the Indian Air Force strikes “on Balakot terrorist camps sent”, he writes.

India always reacted to Pakistan’s security but now its approach has changed from “strategic restraint” to “offensive defence”.

This new strategy could warrant pre-emptive action against more drone launches, which could “raise political temperatures in Pakistan” and lead to a quick escalation. The huge proliferation of drones in the open market — along with possibilities of misuse — is a huge security concern.

India will “take it easy on the drone drops in Punjab” at its own risk, but New Delhi should have no doubt in its approach to this new threat, concludes Bahadur.

Imbalances in the fiscal deficit debate

Yashwant Sinha | Former finance minister

Business Standard

Sinha writes on the recent debate on fiscal deficit and the relevance of the Fiscal Responsibility and Budget Management Act which set the deficit target at 3 per cent.

The target was meant to be achieved over a period of years. But those who opposed the bill at the time failed to realise it also stipulated the revenue deficit be brought down to zero over the same period, he writes.

Sinha argues that while the fiscal deficit target is not inflexible, if the revenue deficit can be brought down to zero, he has no issues even if “the fiscal deficit is raised to even 5 per cent of GDP and the money thus raised is well spent”.

According to him, the recent cut in corporate tax is “not the remedy for the current ills facing the Indian economy”. The problem lies in demand and the government is attempting to fix supply. He recommends that the government instead spends on infrastructure and housing to revive the economy.

Energise Energy Diplomacy

Sanjaya Baru | Distinguished fellow, Institute for Defence Studies & Analyses

The Economic Times

Baru writes that India’s import dependency is at an all-time high at 90 per cent and so “assured supply of oil at reasonable and stable prices is a fundamental economic, political and security priority”.

Taking cognisance of the fact that there could be a spike in oil prices due to disruptions, such as the recent drone attack on the oil facilities in Saudi Arabia, the Narendra Modi government has been “energetic in his energy diplomacy”, he writes.

In recent times, India has signed long-term LNG supply deals with Russia and the US. During his upcoming Riyadh visit, Modi is expected to cement a deal over lifetime oil supply assurances.

While India is attempting to build a strong relationship with Saudi Arabia, Baru recommends going beyond energy diplomacy and playing “an active role in reducing the risk of heightened conflict in the region”.

“India’s interests in West Asia go beyond oil and gas and its influence remains underutilised,” he adds.

Beware of the ‘whatever it takes’ response to a crisis

Ajit Ranade | Economist and senior fellow, Takshashila Institution


Ranade comments on the “limited potency” of a “whatever it takes” attitude seen in the Reserve Bank of India (RBI)’s monetary policy statement last week.

He harks back to the European Union’s debt crisis around 2010 and 2012, in which the president of the European Central Bank (ECB) offered an “open-ended, no-holds-barred promise” to investors that the ECB would not let the euro zone economy decline further, writes Ranade.

The threat to the euro subsided with just this promise, explains Ranade, yet the EU’s exports and economic growth are weak even today and Germany, the grouping’s largest economy, is in recession, he explains.

Ranade finds a parallel in the RBI governor’s “unlimited promise” last week that policy would “remain accommodative till growth returned” at a time when the central bank is already pressured to “bail out NBFCs” and faces a “looming shadow” of growing fiscal deficit.

Not only are there limits to what the central bank can achieve in the current situation, it must also realise its “credibility is a precious and potent weapon, to be used very sparingly in assuring markets and investors”.

While rescuing growth does require an accommodative monetary policy, “the heavy lifting has to come from other quarters, not just RBI”, he adds.

Kangaroo tribunals

Faizan Mustafa | Vice-chancellor, NALSAR

The Indian Express

Mustafa writes about the partisan manner in which the Foreigners’ Tribunals (FT) in Assam have been working. These bodies are quasi-judicial in nature but in recent cases have almost become “another arm of the BJP government in Assam”.

The Supreme Court-approved tribunals were set up under the Foreigners’ Act, 1946, which was a colonial legislation to deal with foreigners, not citizens. The tribunals, which are multiplying in number, have the power to devise their own procedures and, argues Mustafa, work in “inconsistent” ways.

The origin of “denial of due process” by FTs, writes Mustafa, lies in the SC’s contentious decision in the Sonowal case (2005) where it struck down the “The Illegal Migrants (Determination by Tribunals) Act (IMDT), 1983, as unconstitutional, and invoked Article 355 that ‘imposes a duty on the Centre to protect the states from external aggression’”.

Due to this erroneous SC judgment, the burden of proving citizenship now falls on citizens, instead of the prosecution as per criminal law, he writes.

In the case of a nationwide NRC, FTs must be brought under strict supervision of concerned high courts and should be freed from governmental control, concludes Mustafa.

A buffer called Saudi Arabia

Vikram Singh Mehta | Chairman & senior fellow, Brookings India

The Financial Express

Mehta asks India to deepen its economic ties with Saudi Arabia as a security buffer in the event of conflict escalation with Pakistan.

This can be done by “interlocking cross-country investments” like the $40 billion joint venture refinery project in Ratnagiri, and purchasing a small stake in Saudi Aramco as it plans to offer up 5 per cent of its shares to the public.

By giving Saudi Arabia “a material stake in its petroleum sector”, it would strengthen the security perimeter around India’s oil and gas facilities on and offshore the western coastline, writes Mehta.

Since Pakistan “depends hugely on the Kingdom’s largess to avoid economic collapse”, Saudi Arabia has leverage over Pakistan and the latter therefore “cannot afford to ignore Saudi economic interests when war-gaming an offensive strategy against India”. In this way, India can adopt a “non-military option for mitigating” tensions with Pakistan, writes Mehta.

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