New on my other blogs

KERALA LETTER
Foreword to Media Tides on Kerala Coast
Teacher seeks V.S. Achuthanandan's intervention to end harassment by partymen
Change of heart? Or stooping to conquer?
Some thoughts on the historic Battle of Colachel
Supreme Court accepts idea of new Mullaperiyar tunnel


വായന
മുഖ്യ ന്യായാധിപന്റെ വിലാപം
സംഘകാലത്തെ രാഷ്ട്രീയ മാധ്യമ പരിസരം
അനന്യനായ് കെ.എം.റോയ്
കേരളത്തിലെ പ്രത്യക്ഷ-പ്രച്ഛന്ന വർഗീയതകൾ
വീണ്ടൂമൊരു മനുഷ്യനിർമിത ദുരന്തം

03 May, 2016

Another scandal playing out

BRP Bhaskar
 
The raging controversy over the Agusta Westland bribery brings to mind the Bofors scandal which reverberated in India’s political space for a quarter century before petering out with the bribe-takers getting away unpunished.

The Bofors case related to a 1986 contract for the purchase of 410 field guns for the army from Sweden for $825 million. The Swedish radio reported that the company had bribed Indian politicians to get the contract.

The Agusta Westland case relates to a 2010 contract under which the British subsidiary of the Italy’s Finmeccanica was to supply 12 helicopters for the air force’s VVIP squadron for Rs35.46 billion. Italian investigators said the company had paid commissions to three middlemen and bribed the then Indian Air Force chief SK Tyagi through his cousins to clinch the deal.

The Bofors scandal brought down Rajiv Gandhi’s government. The Central Bureau of Investigation which probed the matter registered a case in which Rajiv Gandhi, Bofors chief executive Martin Ardbo and Ottavio Quattrochhi, an Italian businessman and friend of the Gandhi family, figured among the accused. Rajiv Gandhi was assassinated and the others died of natural causes without facing trial.

In the Agusta Westland corruption case, Italian prosecutors cited Air Chief Marshal Tyagi as an accused in a Milan court along with Finmeccanica chief executive Giuseppe Orsi, former AW head Bruno Spagnolini and three middlemen.

The trial court acquitted Tyagi, who was tried in absentia, of all charges. Orsi and Spagnolini were acquitted of charges of “international corruption” but were given two years in jail for “false invoicing”.

Last month the appeals court overturned that judgment. It held Orsi and Spagnolini guilty of bribery and indicted Tyagi as a beneficiary of corruption.

When word of the Italian prosecution came AK Antony, Defence Minister in the United Progressive Alliance government, ordered an Indian investigation. By then India had received three helicopters and paid Rs16.20 billion. Further payments were frozen and the money already paid was recovered by encashing the bank guarantees the company had provided.

In March 2013 the CBI filed a first information report and began investigation. The FIR named the Italian company, its UK subsidiary, two Indian companies which were believed to have been used as conduits for payment, Tyagi, who had retired by then, and three cousins of his, among others. Simultaneously the Enforcement Directorate started a probe under the Prevention of Money Laundering Act.

In May 2014 the Bharatiya Janata Party-led government under Narendra Modi took office. The two investigations made little progress even after the change of government.

Following the Milan appeal court verdict, the investigations have come to life again.

Seventeen cops headed the CBI while it probed the Bofors scandal. One of them claimed in his autobiography that Rajiv Gandhi had told him he wanted defence deal commissions to be used to meet the Congress party’s expenses.

Like the Bofors case, the Agusta Westland deal too has an Italian angle, and that comes in handy for political rivals to embarrass the Congress, which has an Italian-born president in Sonia Gandhi. Bits of information embarrassing to the Modi government and the Indian media have also come to light.

In a letter to an international tribunal James Christian Michel, one of the middlemen, alleged that Modi, in a meeting with Italian Prime Minister Matteo Renzi during the last UN General Assembly session, offered to free the two Italian marines facing murder charges in India in exchange for evidence against Sonia Gandhi in the helicopter deal.

The External Affairs Ministry and the Information and Broadcasting Ministry rebutted the allegations in statements which are studies in prevarication. The former said there was no Modi-Renzi meeting “as part of bilateral meetings” during the UN session and the latter said Modi did not “cut any deal” with Renzi.

Michel had said the Prime Ministers had a “brush-by meeting”, not a scheduled bilateral meeting. He had said Modi had offered a deal, not that he had cut a deal.

According to a Milan court document, Agusta Westland had paid Euro 6 million to Michel to manage the Indian media. The beneficiaries of the pay-out remain unnamed.

The Congress party has alleged that Tyagi was associated with Modi’s Principal Secretary Nripendra Mishra and National Security Adviser Ajit Doval in the Vivekananda International Foundation, a pro-Hindutva think tank.

Recalling the Bofors experience 25 years later, Chitra Subramaniam, a journalist who investigated clandestine payments in that case, said, “It showed us how every political party sought to protect its space without thinking of us as a nation.” That story is being played out again. -- Gulf Today, Sharjah, May 3, 2016.

26 April, 2016

Waiting for climate justice

BRP Bhaskar
Gulf Today

A heat wave was sweeping large parts of India as Environment Minister Prakash Javadekar joined leaders from 174 other countries at the United Nations headquarters on Earth Day to sign the historic Paris Climate Agreement.

India has lived with the vagaries of nature throughout history. There are changes in the established weather pattern from time to time, resulting in drought or floods. They cause large-scale suffering, and are seen as natural calamities or acts of God.

Last year, as the country experienced a heat wave, Minister for Science, Technology and Earth Sciences Harsh Vardhan said, “This is not an unusually hot summer. This is climate change.”

That heat wave, the fifth worst in recorded history, took a toll of 2,422 lives, the highest in more than two decades. This year the heat spell started early, and this month appears set to become the cruellest April in living memory. The worst of summer is still ahead.

Last week the Centre informed the Supreme Court, which is looking into a complaint about the inadequacy of relief measures, that 256 of the country’s 675 revenue districts, have been declared drought-affected and 330 million out of the total population of 1.21 billion live there.

It is the state government that notifies a district as drought-hit and it has the responsibility to take measures to relieve the people’s distress. But it has to look up to the Centre for funds for the purpose.

Scientific management of drought, which is a major cause of failure of crops and ruin of farmers’ lives, is comparatively new. It was only in 2010 that the National Disaster Management Authority, set up under a 2005 law, formulated guidelines to facilitate coordinated response to drought.

According to NDMA, there has been no increase in the incidence of droughts over the last two centuries but their severity appears to have increased. Water is being overexploited. In the absence of effective rain harvesting, groundwater replenishment is limited.

The NDMA guidelines called for a shift in public policy from drought relief to drought preparedness and mitigation measures such as integrated soil and water management. They also envisaged drought-proofing measures before the planting of crop and drought management while it is growing.

The magnitude of the current drought suggests that the guidelines have not been implemented properly or that they have proved inadequate. The worst sufferers are the marginal farmers who number about 200 million. They own less than two acres each but have to borrow heavily to meet the cost of cultivation. Crop failure lands them in deep trouble and often leads them to suicide.

A report of 2014 put the number of farmers who had taken their lives since 1995 at 296,438. Last year 3,228 farmers were reported to have committed suicide in Maharashtra state, which was in the grip of a severe drought.

Statistical data indicate that some regions are drought-prone. The probability of drought is once in two years for western Rajasthan, once in two and a half years for Tamil Nadu and Telengana, once in three years for Gujarat, eastern Rajasthan and western Uttar Pradesh, and once in four years for south interior Karnataka, eastern UP and the Vidarbha region of Maharashtra. Assam is in a happy position with the probability of drought as low as once in 15 years.

Climate change, of course, is an issue which goes far beyond the havoc caused by drought and floods. At Paris, India made a commitment to reduce its carbon emissions by 35 per cent and augment its non-fossil fuel power generation by 40 per cent. It also agreed to undertake massive tree planting to absorb 2.5 billion tonnes of carbon dioxide from the atmosphere.

Indian businessman Anand Mahindra, who spoke on behalf of global capital at the climate agreement signing ceremony, said the Paris pact provided the corporates with the opportunity to visibly integrate their interests with those of the planet’s future. “We have contributed to the problem and it is up to us to help mitigate it,” he added.

There has been a sharp deterioration in the situation in India in the last two years but the Central and state governments are yet to take effective measures to help people in distress. An estimated 250,000 people have migrated from the Latur area of Maharashtra, which is experiencing water shortage.

Climate justice, on which the Paris agreement lays stress, will elude India unless the Centre moderates its policies which have made agriculture an uneconomical activity and industry a destroyer of the environment. -- Gulf Today, Sharjah, April 26, 2016.

19 April, 2016

New strategic equations

BRP Bhaskar
Gulf Today

What does the agreement “in principle” between India and the United States on a logistic exchange deal, announced at the end of talks between defence ministers of the two countries in New Delhi earlier this month, signify?

Ahead of his visit, Defence Secretary Ashton Carter invested his mission with special importance by declaring the US had a “whole global agenda” with India covering all issues, while its relationship with Pakistan had to do with only issues of terrorism and Afghanistan.

Speaking at the Council of Foreign Relations a few days earlier, he had claimed there was a remarkable convergence of US and Indian interests in recent years, leading to a strategic handshake. It was reflected in the 2015 Framework for the US-India Defence Relationship and in the Obama-Modi Joint Strategic Vision Statement of last January, he said.

Defence Minister Manohar Parrikar explained that under the proposed Logistic Support Agreement India and the US would provide logistic and other support to each other when needed. He cited the humanitarian exercise undertaken during the Nepal earthquake as an example of such a contingency. Actually the agreement goes further and envisages the militaries of the two countries using each other’s assets and bases.

Both Carter and Parrikar said the agreement would not entail deployment of American soldiers on Indian soil. However, in an interview to an Indian news channel, Carter had earlier indicated it could provide for deployment of US forces under certain conditions but only at the invitation of the Indian government.

The logistic support agreement was first mooted by the US 12 years ago. Discussions on the subject made little progress as AK Antony, who was Defence Minister in the Manmohan Singh government, did not favour it.

Criticising the Narendra Modi government’s decision to go ahead with it, Antony said it was “the beginning of the end of the independence of India’s foreign policy and strategic autonomy.”

Antony’s alarmist view may be a hangover of Non-alignment as practised in a bipolar world. The emerging global scenario calls for new strategic concepts. India is, in fact, seeking new strategic equations with many countries, including China.

Carter’s India visit was part of a two-week tour to boost the Obama administration’s policy of “Asia Pacific rebalance” which aims at safeguarding US political and economic interests in the context of the eastward shift in the global power balance. His final halt was the Philippines, which was once a US colony and has been aligned with it militarily since gaining Independence. The China factor in the US rebalance found direct expression in Carter’s statements there.

“Countries across the Asia Pacific are voicing concern with China’s land reclamation, which stands out in size and scope, as well as its militarisation in the South China Sea,” he said. “They are voicing those concerns publicly and privately, at the highest levels, in regional meetings and global fora.”

Philippines Defence Minister Voltaire Gazminn said US presence in the region would deter uncalled for actions by the Chinese.

Their remarks did not amuse China. It accused the US of sabotaging peace and stability in the region.

This was in sharp contrast to its muted response to India’s LSA decision. Asked about the reports from Delhi, the Chinese Foreign Ministry spokeswoman said India was an influential country with an independent foreign policy based on its own interests.

When India joined the US and Japan in military exercises last October, the Chinese Communist Party’s English newspaper Global Times had cautioned against getting roped into an anti-China camp.

Prime Minister Narendra Modi is no doubt keen to enhance India’s strategic relationship with the US. At the same time he understands there is also a need to preserve the time-tested relationships and to cultivate new ones in the light of emerging geopolitical realities.

With the best of will Modi will find it hard to go the whole hog with the US in realising its five objectives which Carter had spelt out in his speech at the Council of Foreign Relations, namely countering the prospect of Russian aggression, managing China’s rise, strengthening US deterrent against North Korea, checking Iranian influence in the Gulf and accelerating the defeat of Daesh (Islamic State).

At the weekend External Affairs Minister Sushma Swaraj was in Tehran to cement India’s traditional relations with Iran, after which she was to go to Moscow for the Russia-India-China trilateral. Defence Minister Parrikar and National Security Adviser Ajit Doval were packing their bags for visits to China, also for strategic dialogues.-- Gulf Today, Sharjah, April 19, 2016.

12 April, 2016

Recycling of hidden money

BRP Bhaskar
Gulf Today

Another black money chase has begun with the leaked Panama Papers revealing the names of more than 500 Indians linked to companies registered in tax havens.

It is widely believed that corrupt politicians and bureaucrats hold black money abroad but these documents contain no big names from these categories. The only politician named in them is Anurag Kejriwal, who was President of the Delhi unit of the small Lok Satta Party, founded by former bureaucrat Jayaprakash Narayan, until his expulsion two years ago.

This does not necessarily mean the politicians are a better lot than the public imagine. The Panama Papers came from just one of the many firms facilitating offshore accounts.

The best known names in the papers are those of Bollywood veteran Amitabh Bachchan and his daughter-in-law and former Miss World, Aishwarya Rai, a star in her own right.

Bachchan claimed someone might have misused his name. Aishwarya Rai’s media advisor told the Indian Express, which was involved in the global media investigation of the leaked papers, that the information was false.

The Indian Express said the documents showed that Rai, her father, mother and brother were appointed directors of a firm registered in the British Virgin Islands in 2005. Her status was later changed from director to shareholder. Still later the name was shortened to A. Rai “for reasons of confidentiality”.

Most of the persons are businessmen. The big ones include Samir Gehlot of India Bulls and KP Singh of DLF, both of whom are realtors, and Vinod Adani, elder brother of Gautam Adani, who reportedly looks after the Adanis’s foreign operations. Shishir Kumar Bajoria, a Kolkata industrialist who joined the Bharatiya Janata Party after being associated with the Communist Party of India (Marxist) for many years, also figures in the list.

The businessmen whom the Indian Express contacted said they were not involved in any illegal activity. They may well be telling the truth, for the laws of the land permit Indians to own companies and park money abroad in accordance with guidelines issued by the Reserve Bank of India.

Some of the offshore company owners are Non-Resident Indians who are not subject to Indian regulations. Under the RBI’s remittance scheme, drawn up to help service overseas requirements for purposes of education and medical treatment, as it now stands, even a Resident Indian can put in up to $250,000 a year in 100 per cent subsidiaries and joint ventures.

As soon as the Panama Papers came to light, former Supreme Court judge MB Shah, who heads a special investigation team on black money constituted by the government in 2014, asked it to ascertain if the Indians’ offshore activities were in accordance with the RBI guidelines.

If they acted with the RBI’s permission, it was legal, Justice Shah said. Otherwise action could be taken. The process would take time.

According to media reports, Prime Minister Narendra Modi does not want the Shah team to go into this matter as it lacks expertise to deal with the complex modus operandi of offshore operators. He asked a team comprising officials from different agencies to probe the matter and give him a preliminary report within 15 days.

In his 2014 election campaign, Modi had repeatedly lambasted the Manmohan Singh government for not taking steps to bring back the black money hoarded abroad and declared he would bring it all back within 100 days if he became the Prime Minister. The Opposition has been taunting him since the expiry of the deadline.

Not that the Modi government has done nothing. Last year it passed a law to give black money holders an opportunity to come clean, paying taxes. Some 644 persons, mostly IT professionals, doctors and small businessmen, revealed concealed income of Rs 41.64 billion and paid Rs 24.28 billion in tax and penalties. A second tax compliance scheme is planned for this year.

Some estimates put Indians’ illegal foreign holdings at $1 trillion. Few expect the big operators to respond to tax compliance schemes since they seem to be able to send black money abroad and bring it back laundered when needed.

One analyst wrote recently that black money is no longer static. It moves on the click of a mouse to chase better returns.

According to former Central Board of Direct Taxes Chairman R Prasad, scam money sent abroad was coming back through routes such as foreign direct investment, foreign institutional investment and fake exports. The fact that about two-thirds of the foreign investments of the last 15 months came from small countries like Mauritius, Singapore, Cayman Islands and Cyprus appears to bear this out.

05 April, 2016

Collapse of an institution

BRP Bhaskar
Gulf Today

The Congress, which was pushed down to the second position by Narendra Modi-led Bharatiya Janata Party in the 2014 parliamentary poll and is now facing a fresh electoral test in four states, suffered a major setback during weekend even before the first vote was cast.

In Kerala, one of the states going to the polls, the party’s central leadership collapsed in the face of the obduracy of Chief Minister Oommen Chandy, a well-established faction leader.

Factionalism has been a bane of the Congress since before Independence and remains a serious problem as the party struggles for survival. In most states, there are rival leaders who are constantly involved in group warfare but are held together by their common allegiance to the Gandhi family.

Election time usually witnesses an aggravation of party feuds. The issues are settled by the central leadership, widely referred to as the High Command. Since Indira Gandhi crushed the powerful state party chiefs who had combined and posed a threat to her, the term has come to signify the dynastic leadership.

Of the four states going to the polls, it is in Assam alone that the BJP has high hopes. There the Congress is relying upon the personal popularity of Tarun Gogoi, who has been Chief Minister for 15 years. The High Command began efforts to contain factionalism months ago.

Among the factors the BJP is banking on are the anti-incumbency factor and the issue of illegal migration from Bangladesh, which it has been playing up for long at the national level.

In West Bengal and Tamil Nadu, where regional parties are in power and the Congress has but a small presence, the High Command intervened directly to forge alliances with the more powerful opposition forces.

The main fight in Tamil Nadu is between Chief Minister J Jayalalithaa’s Anna Dravida Munnetra Kazhagam and former Chief Minister M Karunanidhi’s Dravida Munnetra Kazhagam. As the High Command’s emissary, Ghulam Nabi Azad, Leader of the Opposition in the Rajya Sabha, flew to Chennai and made a deal with Karunanidhi.

The Congress and the Communist Party of India-Marxist reached an informal understanding in West Bengal to join hands against Chief Minister Mamata Banerjee’s Trinamool Congress.

A former Congress leader, Mamata Banerjee broke away from the party and floated the Trinamool Congress in 1997. It soon replaced the parent body as the CPI-M’s main rival in the state. In the 2011 Assembly elections, she led her party to victory, bringing to an end more than three decades of unbroken rule by the CPI-M-led Left Front.

The Congress, a minor ally of the Trinamool Congress in 2011, is now the Left Front’s junior partner. The CPI-M’s central leadership gave the nod for the understanding with the Congress in the state, overruling the opposition of its Kerala unit, which was worried about its likely impact in Kerala.

The Congress-led United Democratic Front and the CPI-led Left Democratic Front have been alternating in power in Kerala for more than three decades. Even as the LDF is hoping to return to power benefiting by the scandals that has rocked the current UDF government, Oommen Chandy is making a daring bid for an unprecedented second successive term.

For decades, Congress politics in Kerala revolved around K Karunakaran and AK Antony, who pulled each other down when the UDF was in power. When Antony moved to the national arena Oommen Chandy inherited his “A” group. After Karunakaran’s death, Ramesh Chennithala, one of his former followers, revived his “I” group, named after Indira Gandhi.

Oommen Chandy as Chief Minister and Ramesh Chennithala, first as state Congress chief and then as Home Minister, established a diarchy in the party. When Ramesh Chennithala joined the Cabinet, Congress Vice-President Rahul Gandhi picked VM Sudheeran, who had withdrawn from group politics, for the party post. The two faction leaders joined hands to preserve their domains.

Rahul Gandhi backed Sudheeran’s move to deny the party ticket to a few tainted leaders, including ministers, but Oommen Chandy threatened to pull out of the elections if anyone of them was axed. Fearing a split in the party, the High Command stepped back, causing immense damage to its own stature. It continued efforts to force some minor changes but it is too late to undo the damage. -- Gulf Today, April 5, 2016.

29 March, 2016

From buffer state to bridge

BRP Bhaskar
Gulf Today

In the age of imperialism, the Himalayan kingdom of Nepal retained its independence by becoming a buffer state between the expanding British power and the declining Chinese. A landlocked country with fewer than 30 million people, it is now seeking a new role as a bridge between its giant neighbours.

When India became a democratic republic and China came under Communist rule, Nepal maintained its status as the world’s only Hindu kingdom with power in the hands of the Ranas, who were the prime ministers. In the 1950s, anti-Rana forces overthrew the Ranas, ushering in an era of constitutional monarchy with a multi-party political system. Centuries-old cultural ties helped India to develop a special relationship with it.

In 2008, even as the divided polity was grappling with the problem of drawing up a new democratic constitution, an elected assembly put an end to monarchy. The constitution, which came into force last year, declared Nepal a secular republic.

Prime Minister Narendra Modi’s Bharatiya Janata Party, which was busy expanding its Hindu base at home, was not happy with the development.

The Madhesis, an ethnic group which has ties with people across the Indian border, sought changes in the constitution to safeguard their interests. With the tacit approval of New Delhi, they blocked movement of goods from India, which lasted five months, causing serious shortage of oil, for which the country relied entirely on India.

The Madhesi agitation prompted the ruling Communist Party of India-United Marxist Leninist (CPN-UML) to turn to China for assistance. China was ready to help but transport and communication bottlenecks restricted its ability to render quick assistance.

A constitutional amendment which addressed the Madhesi concerns partially led to lifting of the blockade and easing of tension. Prime Minister KP Sharma Oli took an early opportunity to make his first visit to India. Prime Minister Narendra Modi welcomed the constitutional amendment but asked for more changes. Oli’s visit ended without the customary joint statement.

Last week Oli visited China, hailing it as an “all-weather friend” that had helped Nepal at times of distress. The two countries signed 10 agreements and issued a joint communiqué which, according to Nepalese commentators, has significant implications for the country’s economic development, democratisation and relations with India.

When the Oli visit was being planned there were reports that the two countries would also sign a deal which would provide for Nepal buying one-third of its fuel requirements from China. This was dropped later and Oli faced criticism at home for yielding to Indian pressure.

The joint communiqué indicated that the fuel trade deal is still on the cards.

One of the agreements envisages feasibility studies on Chinese assistance for exploration of oil and natural gas resources in Nepal.

The most important agreements are those relating to transit facilities through China and road and rail access to its ports. They hold out the prospects of ending Nepal’s near-total dependence on India for contacts with the rest of the world.

The long distance to the Chinese ports may inhibit their wide use. However, when the contemplated road and rail access becomes a reality, Nepal will be able to use ports in Bangladesh, which are not more distant than Kolkata on which it now depends.

One agreement provides for Chinese assistance for the construction of an international airport at Pokhara.

Nepalese journalist Kanak Mani Dixit suggested it was the long blockade by India that emboldened the country’s political class to sign the deal in Beijing. Without the public opinion created as a result of that thoughtless adventurism, no leader, including Oli, would have gone the distance in inking the 10 agreements, he said, adding: “It has suddenly become possible to talk to China as Nepal does with India after decades of running scared.”

Dixit said there was no reason for India to panic as the development of trans-Himalayan linkages would benefit it too. He also felt there was no need for Nepal to be too beholden to Beijing as China, particularly its Tibet region, will also benefit from the agreements.

During Oli’s visit, China expressed full support for Nepal’s new Constitution, over which India still has some reservations. But the possibility of India’s sympathy for Madhesi aspirations emerging as a point of conflict has somewhat lessened with the leadership of that ethnic group establishing direct communications with China too.

Nepal’s hopes of becoming a bridge can only succeed if its big neighbours are able to rise above the strategic concepts of the imperial phase. There have been suggestions from some quarters that Nepal should restore monarchy and become a Hindu kingdom again to check the growth of Chinese influence. That will be a case of the cure being worse than the disease.-- Gulf Today, Sharjah, March 29, 2016.

22 March, 2016

Ways of looking at the economy

BRP Bhaskar
Gulf Today

India’s star shines bright amid global economic challenges, International Monetary Fund Managing Director Christine Lagarde said in New Delhi earlier this month. It now has the fastest growing economy and the largest and youngest workforce and is in the process of reforming the system, she noted.

The reform process began in 1991. A quarter century later, it still faces many obstacles. The first Congress-led United Progressive Alliance government could not go ahead with some proposals due to strong opposition from the Left parties which sustained it in office. When UPA II came up with a constitutional amendment to provide for a uniform pattern of tax on goods and services across the country the Bharatiya Janata Party, which was in the opposition, did not cooperate. Now, as the ruling party, the BJP is eager to take the measure forward but the Congress stands in the way.

The BJP and the Congress agree on steps to make it easy to acquire land for industries but the people who stand to lose their farmlands and homesteads are up in arms against them. Changes of the kind the International Monetary Fund is pressing for may not, therefore, come easily. However, India is well set to retain its status as the fastest growing economy as no credible challenger is in sight.

According to World Bank data, China’s growth rate stood at 9.5 per cent in 2011 and India’s at 6.6 per cent. Since then China’s growth has fallen continuously and India’s has risen except in one year. In the process, they levelled at 7.3 per cent last year. The projection for India in the current financial year is 7.5 per cent against China’s 7.1 per cent.

On the strength of the growth rate, Finance Minister Arun Jaitley claimed that the economy had recovered from the effects of the global slowdown. But former Prime Minister Manmohan Singh, who, as Finance Minister, had initiated the economic reform process in 1991, termed the recovery very fragile. Touched to the quick, Jaitley said, “In a global slowdown situation, to have the fastest growth rate in the world certainly does not make the Indian economy fragile.”

Chief Economic Adviser Arvind Subramanian sought credit for the government for the fast growth rate. He said the manufacturing and service sectors, which were under the government’s control, had done well while the farm and export sectors, which were not under its control, had not done so well.

The steep fall in oil prices in the international market helped India, which imports 70 per cent of its crude requirements, to contain inflation and the current account deficit. But it also hurt to some extent by reducing foreign demand for its products.

Alyssa Ayres, Senior Fellow at the Council on Foreign Relations, in a testimony before a Congressional committee urged the US to “elevate support for India’s growth to the highest bilateral priority” and to “work more comprehensively to integrate India in the global economic institutions”.

She mentioned in particular the Asia Pacific Economic Cooperation (APEC) forum, which has not acted upon India’s application for membership for two decades, the Organisation for Economic Cooperation and Development (OECD), where India has the status of “key partner”, and the International Energy Agency (IEA).

China, which is watching the US moves, is of the view that unrealistic praise and forecasts for India are painting a false picture. “There is no possibility of India surpassing China,” the Communist Party’s English tabloid, Global Times, said in an article last week.

Growth rate is not a reliable measure of the robustness of the economy. A developed economy cannot be expected to chalk up a high growth rate. The US growth rate in the last four years, for instance, ranged between 2.9 per cent and 4.1 per cent. Assessment of the economy entirely on the basis of the growth rate will, therefore, be misleading.

“It is inescapably clear that India won’t easily outgrow China as predicted by the West,” the Global Times article said. “From a macro perspective, China’s GDP in 2015 was nearly $10.42 trillion, which is around five times as much as India’s $2.18 trillion.”

IMF data of GDP shows that vast gaps separate India from China, and China from the US. In per capita terms, China’s GDP is 25 per cent of the US’s and India’s 11 per cent. Until India is able to carry with it the vast excluded sections of its population, the high growth rate will be of little avail. - Gulf Today, Sharjah, March 22, 2016.