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The world looks quite different when we turn the lens around, good things appear bad and bad appear good, the challenge remains of understanding others' perspectives and still deciding and acting to make things better

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A quick preview of the good news

Addressing India’s Literacy Challenge

The Frontline

Addressing India’s Literacy Challenge
A brief discussion with Sourav Banerjee, India Country Director for Room to Read, a global non-profit organisation whose mission is to tackle the problem of childhood literacy across the developing world

Investing in the New India Story

The Investor

Investing in the “New India Story” – a brief guide to the key considerations
Also: Analysis of GST and its implications for investing in India

The Big Picture TEST, Metrics

The Big Picture TEST, Metrics

India’s economic recovery continued in November with an expansion in manufacturing activity, and robust trade growth. Factory output in China in November exceeded expectations

This Month Through India’s Eyes

This Month Through India’s Eyes

Trump’s recognition of Jerusalem as Israel’s capital, Gujarat and Himachal Pradesh state elections, Rahul Gandhi’s appointment as President of the Indian National Congress

Last Month Through India’s Eyes

Last Month Through India’s Eyes

Retrospections on India’s demonetisation, recent GDP growth rebound, and Reserve Bank of India’s potential interest rate cut

Pointing to the Future

Pointing to the Future

India’s partnership with US and Japan, Indian government’s push for a cashless society, India’s agriculture sector, India’s dilemma on clean energy policy, China’s Belt and Road and international influence, China’s role in internet governance, China’s “New Era” under Xi, China and regional tensions, BitCoin and global warming

Big News

Big News

India announces infrastructure investment plan, Sonia Gandhi retires, Nissan sues India over outstanding dues, South Korean President Moon visits China, China summons Australian ambassador amid “influence” debate, China building refugee camps along border with North Korea

December 2017

 

Perspectives: The Month Through India’s Eyes

Media coverage in India over the last month was heavily focused on political matters, both domestic and international.  Within India, outcome of the state elections in Gujarat and Himachal Pradesh, and Rahul Gandhi’s appointment as the new President of the Indian National Congress (“Congress”) were scrutinised by the press.  Overseas, foreign policy columnists opined on President Trump’s decision to formally recognise Jerusalem as the capital of Israel, and its implications on the Middle East.

 

President Trump’s Recognition of Jerusalem as Israel’s Capital

President Trump’s announcement earlier this month that the United States would formally recognise Jerusalem as the capital of Israel, and move its embassy to the city in 2018 was heavily scrutinised across the world.  This was also the case in India, with various publications opining on the consequences of this significant foreign policy decision.

An editorial in the Indian Express was highly critical of Mr. Trump’s decision.  “I’ve always heard that perhaps the toughest deal to make is the deal between the Israelis and the Palestinians”, United States President Donald Trump told his Palestinian counterpart, Mahmoud Abbas, in May. “We’ll get it done.”  In an act of diplomatic vandalism with few parallels, Trump has dynamited prospects of that deal by recognising Jerusalem as Israel’s capital.  The decision to move the Embassy of the United States there from Tel Aviv is not only notable for its negative outcomes — feeding rage across West Asia, and sabotaging prospects of a negotiated Israel-Palestine peace.  It is also remarkable because of the utter absence of redeeming features.  The decision is not conditioned on Israel stopping its programme of building settlements in occupied land.  It does not call on Tel Aviv to take steps towards recognising the Palestinian state.  Israel has not even been obligated to protect the rights of the approximately 1,00,000 Palestinian residents of East Jerusalem who live beyond the city’s so-called “separation barrier”, cut off from city services.”

The Hindu agreed with this point of view, claiming that the United States’ “decision to recognise Jerusalem as the capital of Israel, despite warnings at home and abroad, will worsen the Israel-Palestine conflict.  Jerusalem, which houses holy places of all three Abrahamic religions and is claimed by both Israelis and Palestinians, is at the very heart of the dispute.  Israel built its seat of power in West Jerusalem decades ago and occupied the East during the 1967 war, and later annexed it.  Palestinians insist that East Jerusalem should be the capital of their future state.  Even though there is a Congressional resolution in the U.S. urging Washington to relocate its embassy from Tel Aviv to Jerusalem, previous American Presidents avoided doing so given the legal, ethical and political implications of the issue, besides their commitment to a negotiated two-state settlement.  By breaking with this consensus, Mr. Trump has in effect endorsed the Israeli claims to East Jerusalem.  The decision will likely help him bolster his image among the Jewish lobby in Washington as well as American evangelical groups, his social base. Israel is obviously happy.  Though Arab countries have voiced protest, they are unlikely to challenge an American decision.  Mr. Trump’s move raises vital questions about U.S. diplomacy in the region besides putting new roadblocks in the peace process.  It could be viewed as illegal as the Israeli claim that Jerusalem “complete and united” is its capital has been declared “null and void” by UN Security Council Resolution 478, which also asks member-countries to “withdraw diplomatic missions from the Holy City”.  The U.S. is now acting against the spirit of this resolution.”

A column in Live Mint, however, put forth a counter-narrative, arguing that President Trump’s decision simply acknowledges the on-the-ground situation in the region today, and is a move in the right direction.  “The first thing to note here is that the land allocated for the future US embassy building in Jerusalem is in West Jerusalem.  And Israeli control over West Jerusalem was sanctified first by the 1949 armistice agreement and then formalized in 1967, thereby forming the baseline for the Oslo accords and the UN resolutions.  This line demarcates the “State of Israel”, recognition of which was the precondition to the Israeli-Palestinian accords.  Israeli control over West Jerusalem, therefore, is not disputed—at least not by the Palestinian Authority or by the countries that recognize and maintain diplomatic relations with Israel… Second, we have to understand that the so-called peace process to which everyone seems so attached has been effectively dead ever since the late Yasser Arafat, the then president of the Palestinian Authority, rejected the proposed final settlement at the Camp David Summit in July 2000.  That deal offered him 95% of the West Bank, all of Gaza, compensation in lieu of the right of return of the Palestinian diaspora, and, most importantly East Jerusalem… What Trump’s announcement has done is fire a warning shot.  The move of the embassy to Jerusalem carries with it the implicit threat that the US will either sanctify or reject Israeli control of East Jerusalem.  On the one hand, this conveys to the Palestinian Authority that it must reach a settlement during Trump’s presidency.  On the other, it is equally a warning to Israeli Prime Minister Benjamin Netanyahu, whose core constituency would consider it unthinkable to give up the occupied territories.  While some commentators, without any proof or causal linkages, will attribute future acts of violence and terror to this move, the inescapable conclusion remains that this is a pragmatic step in the right direction.”

 

Gujarat and Himachal Pradesh State Elections

The recently concluded state legislative elections for the states of Gujarat and Himachal Pradesh ended with the BJP, returning to power in both states.  Despite these victories, however, the fact that the BJP was run closer than expected by the Congress Party in both states came as a surprise to many, particularly in light of the opinion polls that forecast a sweeping victory for Prime Minister Modi’s party.  A number of publications weighed in on these election results, and their implications on India’s political landscape.

Veteran political columnist, Shekhar Gupta, in an editorial in the Print, explained that the election results in both states should result in the 2019 General Elections being more competitive than first planned.  Now, this is a first since the heady summer of 2014. Since then, any contest with the Congress (notably Haryana, Maharashtra and Uttarakhand) has been a walkover for the BJP. And where the Congress did a little bit better but fell short of a majority, as in Goa and Manipur, the BJP simply walked across, gravy train in tow, and conjured up a government of its own. So far, the only post-poll comments on the Congress had been jeers, mocking pity and ridicule for its “crown prince”.  The Congress has been thrashed in Himachal and lost a sixth consecutive election in Gujarat. Yet it has given the almighty national ruling party a cause to complain… even two clear BJP victories make it such a watershed election.  It has opened up the political space which, until today, had seemed locked and sealed until the summer of 2019.  Or see it like this. After the 2014 sweep, the BJP had vowed to create a Congress-mukt (Congress-less) Bharat.  It was well on its way there, knocking over state after state.  With today’s result, it begins a fresh term in what can be aptly called a Congress-yukt (including Congress) Gujarat.  This is as radical a change in script as you could have in your fourth year in power, without actually losing a state election.”

A column in Firstpost echoed these views, claiming that the second-placed party was the winner of these state elections, particularly in Gujarat.  “As the final results of the Gujarat Assembly elections are being tallied, it is clear that the Congress will win close to 80 of the 182 seats in the state Assembly. To put things into perspective, the last time the Congress won more seats in the Gujarat Assembly was in 1985, and that was a whopping 149 seats.  That year, Madhavsinh Solanki became the chief minister. The misrule was such that even today many remember that era – marked by Hindu-Muslim violence and poor law and order… Winning close to 80 seats in Gujarat makes the Congress look not weak but rather a strong contender for power.  It can be said that finally, the Congress in Gujarat has turned a leaf, and has moved beyond the Madhavsinh Solanki era… The Congress party has been so down and out since 2013 that the spectre of a ‘Congress-mukt’ Bharat has looked real.  By staging a recovery in Gujarat, the Congress can finally have the confidence that it can recover, that it can put up a fight against the BJP and exploit anti-incumbency.  The BJP is going to form the government in Gujarat once again, but the Congress has won its highest ever seats in the state since 1985.  It would be fair to say that the winner came second.”

Finally, Live Mint adopted a contrarian view, arguing that the BJP’s victories in Gujarat and Himachal Pradesh leave the BJP well-positioned to win 2019 General Elections.  “The final round of elections in 2017 ended like the year began for the Bharatiya Janata Party (BJP): in victory.  For the record, it predictably routed the Congress in Himachal Pradesh, but just about hung in there in Gujarat, scraping together a record fifth consecutive term.  Adding the audacious win in Uttar Pradesh, this would by far be the best ever electoral year for the BJP.  Consequently, its national electoral footprint has witnessed an unprecedented expansion, reinforcing its status as the principal pole of Indian politics.  From controlling political power in eight states in 2014, over and above its hold of the Union government, the BJP has, after the recent round of polls, expanded its presence to 19 states in the country, leaving it perfectly poised ahead of the 17th general election due in 2019.”

 

Rahul Gandhi’s Appointment as President of the Indian National Congress

Rahul Gandhi was recently unanimously elected to succeed his mother, Sonia Gandhi, as the new President of the Congress party, thereby becoming the sixth member of the Nehru-Gandhi family to occupy this position.  Mr. Gandhi’s elevation, while expected by many, was analysed by the Indian media.

Mihir Sharma, writing for Bloomberg India stated that while Mr. Gandhi’s ascension to President is a positive, India’s largest opposition party needs more if it is able to stand up to the BJP.  “It’s worth noting exactly how under siege Gandhi’s party is. It runs just two of India’s big states and has less than a tenth of the seats in the lower house of India’s Parliament.  Worse, it has no story to tell. Once it was the party of nationalism, of the future, of development and reform, of the poor.  All these mantles have instead been taken up by Modi.  To what extent can Rahul develop a convincing counter-narrative to the one Modi’s created over his time in office?  Can he capitalize on the government’s failures of administration, such as the error-ridden introduction of the new goods-and-services tax?  Can he transform Congress into an umbrella for all those dissatisfied with the government’s inability to create jobs?  Unfortunately for the party, all these questions are subordinate to one other: Is Rahul’s own image now so toxic that Modi will win by default, however poorly he performs?… to hold the party together means having to deal with the reality that Rahul Gandhi is in charge.  And while Gandhi is certainly not the idiot he’s been portrayed as being, he’s far from being a natural politician.  Nor is he the sort of policy wonk who can dazzle audiences with his preparedness for government.  Why would anyone vote for him?  That’s the central dilemma facing Congress going forward.  I believe there’s only one way out of it — the same solution that his mother found.  One person — a Gandhi — runs the party and another, the government. The Congress has found a successor to Sonia Gandhi.  Rahul should be looking around for a successor to Manmohan Singh.”

The Hindu, on the other hand, praised Mr. Gandhi and the recent “transformation” in his image.  “In 2007, he bragged that his family had broken Pakistan in two, which thankfully did not set off a diplomatic crisis.  In 2013, to the bewilderment of all, including the Congress, he spoke of Dalits needing the escape velocity of Jupiter to succeed.  Mr. Gandhi’s January 2014 interview to Times Now’s Arnab Goswami had Twitterati wisecracking that Mr. Goswami ought to have been sued for harassing a minor.  In recent months, Mr. Gandhi’s public appearances have made people sit up and take notice — and for the entirely different reason that nearly everything about him has changed for the better.  The transformation was first noticed on his tour of the United States, where on his campus interactions, he came across as sober, self-assured and able to convey ideas, if not with scintillating intellectual depth, then certainly in a commonsensical way.  However, he has been a revelation on the Gujarat campaign trail; indeed if anyone has made a splash in this election, aside from the young caste leaders who have shored up the Congress, it is Rahul Gandhi himself.  Gujaratis are talking to him and talking about him.  Although nowhere in the league of the phenomenal Narendra Modi, Mr. Gandhi has developed a distinct style of his own.  On the stump, he looks relaxed and confident, slow-delivering his lines to make them uncomplicated and effective.  His speeches are direct hits at the Prime Minister and his Gujarat model, and there are frequent digs at the now dying Tata Nano, which he says was part of Mr. Modi’s agenda of “transferring wealth from the poor to the rich.”

Finally, a column in the Times of India argued that while the task to defeat Mr. Modi and the BJP in 2019 may be daunting, it is not insurmountable.  “Many elections are lost by incumbents rather than won by challengers. With the passage of time, memories of Congress scams will fade, anti-incumbency will rise, and the other side may make mistakes.  None of this means that Rahul will win in 2019.  Remember, Sonia lost twice before winning in 2004.  Rahul too may have to wait, maybe for years.  But he cannot be written off, as some are doing.  State election results for Gujarat and Himachal Pradesh will be announced tomorrow.  Exit polls show the BJP retaining Gujarat and wresting Himachal Pradesh.  Rahul’s tactic of allying with a new bunch of BJP opponents (Hardik Patel, Alpesh Thakor and Jignesh Mewani) does not seem to have worked.  Now, exit polls are often wrong, sometimes grossly so. Exit polls had predicted victory for Vajpayee in 2004, a real bloomer.  Congressmen will hope for something similar in Gujarat.  They will probably be disappointed.  Yet Modi is not invulnerable.  He was thrashed in the state elections in Delhi and Bihar, states he had swept in the 2004 general election.  He may win in Gujarat, but could lose next year’s state elections in Rajasthan and Chhattisgarh.  The greatest risk for the BJP is not that it will lose some states, but that it will win so many that it slips into the arrogant over-confidence of Vajpayee’s “Shining India” campaign in 2004. That error enabled Sonia to win despite Vajpayee’s high popularity. Rahul can hope that, one day, BJP arrogance will provide him another opening.”

 

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