Arduous road ahead
For Mains: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.
Context of News:
- Taking stock of the situation Finance Minister on 26 March announced a slew of measures to address and alleviate the economic hardship caused by the corona virus.
- This measure was on the table since the beginning of the 21 days Lockdown, following which severe plight of migrant workers and unskilled workers were evident quite clearly.
Economic Measures Taken:
Decision taken by Finance Minister can be seen through two-pronged approach:
- First Decision aimed at ensuring a steady supply of food and cooking gas.
- To ensure food security, FM announced that 800 million people will get 5 kg of wheat or rice per month free of cost, over and above their existing 5 kg allocation, along with 1 kg of pulses (per household) for the next three months.
- Given that food grain stocks with the FCI are well above the required norms, ensuring these supplies should not be a problem though the extent to which migrant labourers are able to take advantage of this is uncertain.
- Second, easing cash woes of the vulnerable sections.
- To ease cash flow woes, the government is banking on front-loading the first instalment of PM-Kisan. While using the existing infrastructure will certainly help speed up the process, this is not an additional allocation, but the implementation of an existing scheme.
- These are welcome first steps. But, given the massive disruption in economic activity, even seen alongside steps announced by various state governments, the Centre’s cash transfers appear modest.
Missing Link in this Short Term Measures:
- No Package for unorganised/informal small and medium enterprises:
- The package does not address the challenges being faced by unorganised/informal small and medium enterprises and other hard-hit sectors. This will be the third shock that the informal economy faces, after demonetisation and GST.
- As revenue dries up, these businesses will not be in a position to pay wages. And as workers in the unorganised sector have no safety nets or savings to fall back on, the economic costs of an extended lockdown will be grave.
- Rather than disbursing Rs 500 per month to 20 crore women Jan Dhan account-holders for three months, perhaps a better mechanism might have been to club this with the MGNREGA given the element of self-selection, better targeting could have been achieved.
- Missing link of Health Care system:
- Except for the announcement of a small financial package to improve health services, there is nothing to assure the poor or have access to a health system that works for them when the virus hits them. There is nothing, where will they test, will they have to pay, and where will there be hospital beds and ventilators for them?
How to Fight Financial Challenges amid Covid-19?
- Our early success in containing the spread of the virus has been due to the early start by state governments. India’s states, however, are at a massive disadvantage. They are at the frontline but have limited resources to fight. Post GST, their ability to raise resources through taxes has been curtailed. To fight the global pandemic, what we need is?
- Release all the pending dues:
- Release all the pending dues owed to the state governments on account of GST compensation. Make an advance payment of the dues that will arise over the financial year. Earmark a fund dedicated to supporting state government activities to contain COVID-19, which may go beyond what the Centre has decreed.
- If states are still short of money, actively assist them in raising finances from markets, even giving an explicit sovereign guarantee to lenders. The Centre should also share some of the bonanzas it will gain from the fall in crude oil prices and hike in excise duty.
- Reorient investments:
- Reorient investments to activities that will contain the pandemic, especially since the fight against COVID-19 will not end in 21 days. Medium-term and long-term planning must start now. Utilise funds earmarked for investments in infrastructure to supplement efforts of state governments.
- Setting up isolation centres, production of medical and safety equipment, and ramping up of testing capabilities cannot wait. Projects under the Swachh Bharat Mission and MGNREGA should be reoriented to align with the larger health mission.
- Coordination for seamless execution of activities:
- Regularly consult all chief ministers and lieutenant governors and devise a protocol to ensure seamless execution of activities. Supply chains have been greatly affected by the varied lockdowns across India. Different states’ guidelines hinder the movement of citizens from other states and essential goods and services. Their concerns and other bottlenecks must be removed through a holistic approach.
- Given the long and arduous road ahead, the announcements on Thursday should be considered as only the beginning of emergency measures they should be re-examined and re-evaluated as the crisis plays out. The government must consider the option of a larger economic package.
- The authorities, including the RBI, should be prepared to intervene at multiple levels providing regulatory forbearance, a moratorium on interest payments, changing classification norms, and ensuring easy access to credit.
- Questions must also be asked of the corporate sector. Where is the compassionate capitalism that is often spoken of here? Sure, some industrialists have spoken up to offer relief to their workers. But it is not even close to what is required. This crisis requires a societal response. It needs everyone to step up to it and to reach out to those who cannot.
- India need to learn from Spain and New Zealand and nationalise the private health services at least for the duration of the pandemic. Otherwise the poor seem doomed to die not just of hunger but also of the virus when it catches up with them.
Horror in Kabul
For Mains: Security Challenges and their Management in Border Areas – Linkages of Organized Crime with Terrorism.
Context of News:
- Gunmen and suicide bombers have killed at least 25 worshippers and injured many others in an early morning attack on a Sikh Gurdwara in the heart of Kabul on March 26th .
- The attack , Which lasted hours as the gunmen held hostages while Afghan special forces and international troops tried to end the siege in a complex that is home to many families, as well as a place of worship.
Possible Reasons for Kabul Attack:
- The March 25 attack at the Kabul Gurdwara is suspected to be an attempt at rupturing the strong Indo-Afghan ties by Pakistan-aided terrorists. With the United States getting into exit-mode to leave the country and paving the way for an eventual Taliban-take over, India seems to be the last viable backer for the Afghan government of Ashraf Ghani.
- This attack is also an indication of the involvement of Pakistan in low proxy wars and keeping India engage in wars outside of territory to inject non state actors in India for terrorist activities.
India amid US-Taliban Peace Accord:
- A significant withdrawal of American troops from Afghanistan may be imminent, reflecting the strategic incoherence of the Trump administration, which is earning notoriety for pursuing an isolationist and anti-interventionist foreign policy to appease its core political base’s is taking out its troop and they need a reliable partner in Afghanistan, so India comes in to the picture.
- India’s Afghanistan policy has two major objectives:
- First, to curtail Islamabad’s influence in Kabul and deny Pakistan’s state and non-state agents leverage to plot against Indian interests.
- Second, to gain access to vast energy markets in Central Asia.
- In order to achieve these objectives, India has been one of the staunchest supporters of a strong and “independent” government in Kabul since an Afghanistan that is indirectly controlled by Rawalpindi is detrimental to Indian strategic interests. To achieve this objective India also wants to create a channel of Discussion.
- Despite India’s extensive developmental role, India remains a peripheral player in Afghan political affairs. India’s recent critical stance at the United Nations for its failure to sanction new Taliban leaders and their helpers in the neighbourhood may be ethically appropriate, but seems out of sync with emerging ground realities in Afghanistan. There are already growing voices in India who are now asking the government to engage with the Taliban more substantively. It remains to be seen how New Delhi will respond to Trump’s latest policy shifts.
Challenges for India post USA troops Withdrwal:
- While it is true that a Taliban victory will work like a shot in the arm for all sorts of jihadists and Islamists and there is likely to be an upsurge of jihadist violence in Jammu and Kashmir the fact of the matter is that India’s problems in Kashmir originate and emanate from Pakistan. With or without the Taliban, Pakistan will continue to be a thorn in India’s flesh.
- With India reluctant to play hardball the Afghans were not given the sort of weapon systems and platforms they required to fight the enemy, all it could do was to flaunt its ‘soft power’, which was never going to be enough in a setting where hard power was always going to be the deciding factor.
- India in last 17 years in Pakistan has just relied upon the soft power and engaging in constructive works in Afghanistan, now with sudden withdrawal of forces of USA India has to change its strategy altogether and take one to one path with Taliban, which India has not much experience.
- The first thing India will need to do is to stop whining about what some other countries, including its ‘strategic partners’ like the US, do in the pursuit of their own interests. It doesn’t make any sense for Indian strategists to bristle at what they would describe as ‘American fickleness’, or even ‘betrayal’, in Afghanistan.
- The other thing India can do is to use the goodwill it has earned and the links it has established to cement the anti-Taliban forces. Without interfering in Afghanistan’s internal affairs, India can still build partnerships between various stakeholders and raise the capacity and capability of its friends to resist the Taliban onslaught.
- The decision to withdraw troops by USA from Afghanistan is likely to have far-reaching consequences for India ,an increase in Taliban’s influence in Afghanistan could negatively impact the security situation in the restive Kashmir valley.
- With the Islamic State currently on the back foot, the Taliban may well emerge as the ideological inspiration of resurgent insurgency in Kashmir. There is additional concern regarding the security of India’s consulates in Afghanistan. Can India afford to remain aloof in this unfolding scenario? Is the question that India should not miss and start a channel of discussion that may be fruitful in controlling Taliban to some extent in the future?