Questions for the new year What will be the challenges before a re-energised India in 2015?

Another new year is around the corner and it promises to be as unpredictable and uncertain as the year gone by. This is a good occasion on which to reflect on some major developments of the past year and identify what may preoccupy us most as a country in the coming year. Undoubtedly, the historic general elections in India that, for the first time since 1984, threw up a majority government must qualify as a potentially transformational event. This has reversed the mood of despondency and frustration that pervaded the country in the last two years of the previous government; it has also revived foreign interest in India as an economic opportunity.

India's credibility as a substantial power has revived and it can deal with its external environment with renewed strategic heft. The prime minister himself has contributed significantly to this change in mood and outlook by conveying a sense ofstrong leadership and clear direction. The coming year will be critical in determining whether these altered perceptions will be translated into substantive change. Failure to deliver real change may push India off the international radar screen once again even while disappointed expectations within the country may lead to domestic turmoil.

No one expects that substantive change will come in the shape of big bang reforms. However, the changes must be significant enough to justify continued optimism about India's prospects. The display of strong leadership must be matched by systemic changes. For example, the Swachh Bharat Abhiyan is an admirable initiative, but will run out of momentum if structural changes do not follow. We need better and more efficient waste-management systems; we need municipalities that deliver public services and impose penalties for littering. A large number of toilets are being built both through public funding as also part of the corporate social responsibility projects of public sector undertakings. In the absence of quality control and proper arrangements for maintenance they are likely to become symbols of tokenism. It was recently reported that about 25 per cent of toilets built in the initial rush are already non-functional.

The energy domain has witnessed substantive change. Diesel has been de-controlled and the direct benefit scheme, through Aadhaar and inclusive banking, are important steps. They are being applied to LPG supplies and hopefully, may be extended to kerosene.

However, energy governance continues to be fragmented with multiple agencies pursuing their own narrow interests in their respective silos. This prevents the country from formulating and implementing an internally consistent and comprehensive energy strategy encompassing different fuel sources and their inter se pricing. While ensuring adequate energy supplies to drive a renewed growth push particularly in manufacturing, some thought has to be given to the longer-term challenge of sustaining accelerated growth.

Our economic structure continues to mimic the energy-intensive and wasteful patterns of production and consumption spawned by an industrialised West that experienced growth in an era of energy and resource abundance. In an increasingly energy- and resource-constrained world we cannot aspire to the lifestyles and consumption patterns of the West. Even a fraction of the car ownership density of the West would demand fuel and land for highways and parking that is way beyond reach. The citizen's right to mobility must be delivered through efficient and affordable public transport, not through enabling car or even two-wheeler ownership. The policy implications of this are obvious. We must discourage private vehicle ownership through progressively higher taxation and use the funds to invest in public transport.

Agriculture is another sector that is crying out for fundamental reforms. The Green Revolution of the late 1960s and 1970s was based on the use of hybrid cereal seeds, with the intensive use of inputs like water, chemical fertilisers and pesticides. The focus was on crop yields, not the farmer's viability. This strategy helped to generate high crop yields and enabled food security over the next few decades. Unfortunately, this strategy has now run out of steam. Prolonged use of chemical fertilisers has diminished the natural fertility of soil, while increasing requirement of water has led to the alarming drop in groundwater levels across the country. The use of toxic pesticides has not only led to contaminated food chains, but also caused adverse health effects on farmers and their families who rarely wear protective gear while spraying these pesticides. The time has come to shift towards more water-frugal agricultural practices and to rely on crop rotation and organic pesticides to ensure high yields. The focus must shift from raising crop yields to making the farmer economically viable. This may require a judicious combination of animal husbandry, horticulture and other farm-related income generating activities that give the farmer both a more predictable income as well as insurance against the failure of one or another crop. These new practices have been tried and tested in Andhra Pradesh and some other states and have yielded excellent results. They need to be upscaled.

Prime Minister Narendra Modi has already made his mark on the foreign policy front. His instincts are sound and the initiatives he has taken so far bear the stamp of a leader with an eye for perceiving and confidently grasping an opportunity that presents itself. The invitation to South Asian Association for Regional Cooperation (Saarc) heads of state and government at his swearing-in ceremony, the visits to India's hitherto neglected neighbours and the latest invitation to United States PresidentBarack Obama as chief guest for the next Republic Day are all sophisticated moves of an accomplished tactician. But these moves need to be fitted into a larger strategic vision about the future of India. How does the rapidly transforming international landscape shape India's external environment and is India able, in some way, to alter that landscape to its own advantage? How must India deal with the collateral fallout from the Ukraine crisis that has locked Russia and China into a more enduring strategic embrace than we are comfortable with? Will India be reconciled to the growing power asymmetry with China, or is it determined to shrink if not eliminate that asymmetry? If the latter, what does that mean for choices we make at home, and what we do in relationships with both friends and adversaries? What does the rise of the Islamic State of Iraq and Syria in the neighbouring Gulf region mean for a secular India, and what do we do to ensure that the virus of sectarianism does not infect our own vulnerable population? These are challenges that demand clear-headed reflection and longer-term responses. Tactical deftness must serve a compelling vision of the kind of country India wishes to become in 10, 20 or 30 years from now, and what kind of society it wishes to bequeath to succeeding generations. These are the issues that await an answer in the new year.

An advisory council?

Prime Minister Narendra Modi hosted a meeting with state chief ministers over the weekend, where the future of thePlanning Commission was discussed. The prime minister had declared as long ago as his Independence Day speech from the ramparts of the Red Fort on August 15 that the Commission would be disbanded. However, since then, there has been little clarity on what will replace it, if anything. As it happened, the meeting of chief ministers did not move the discussion forward as much as was hoped, either. One thing that did emerge from the Prime Minister's Office, somewhat typically, was a suggestion for a replacement name - "Team India". While it will naturally raise a few eyebrows, the name does underline the fact that Mr Modi will wish to position any replacement of the Planning Commission as something that is more deferential to the increasingly powerful chief ministers of states. This is, of course, not unrelated to Mr Modi's own experience as a powerful chief minister uncomfortable with the restraints of the Planning Commission. However, Finance Minister Arun Jaitley reportedly confirmed after the meeting that there was still no timeline on when the replacement body would be set up.

Essentially, the questions should be: what functions of the Planning Commission are still relevant? Which of those that are relevant can and should be farmed out to other bodies? And what additional functions should a new body take on? The old Commission had various duties. The basic perspective planning division is something that many agree is outdated, and no longer serves a major purpose. Even under the last government, as the prime minister emphasised in his meeting with chief ministers, the perspective planning process was sought to be modernised and dragged out of the 1950s. To the extent that this is the core of the old Commission's task, it should be just shut down. The projects appraisal division discharged the other main function of the Commission. This, too, should be phased out as this function can be discharged by ministries at the Centre or relevant departments in the states where such projects are to be located. Another function of the Commission, however, was to control the disbursement of central money. This has already been farmed out to the finance ministry in many ways, rendering the Commission toothless.

There are other functions, too. The Planning Commission often served as a referee between various stakeholders. First of all, between the Centre and the states - the problem being that, in the last decade in particular, it was seen as too biased towards the Centre. But also, it was a referee between states and between Union ministries. Indeed it often served as India's sole infrastructure regulator, questioning bad decisions that were being taken by powerful ministries. These are important functions, and should be hived off to other bodies. And an infrastructure regulator - a Bill for which was ironically drafted by the Commission - is overdue.

Finally, there is the question of providing relatively independent and long-term economic advice to a government chronically short of expertise. This is the direction in which the last dispensation also wished to take the Commission. The question here is whether a simple independent think tank is the best idea, or whether it should be replaced by an enhanced council of economic advisors within the Prime Minister's Office - or indeed by a reinvigoration of the economic service, and advisors placed within individual ministries. In general, the Commission's replacement should be the product of a realistic estimation of the problems of capacity in the government.

Tampering with scientific temper

Is scientific temper an attitude for both the public and the private domains or is it only for the public domain? Is it opposed to or can it coexist with superstition? These are questions India must debate

In early November, the Prime Minister announced that an important initiative to celebrate the 125th birth anniversary of Jawaharlal Nehru was the “promotion of scientific temper among children”. Endorsing this view, a few days later, the Home Minister, who is also the convener of the committee tasked to organise the celebrations, lauded Nehru’s leadership role in promoting scientific temper and in establishing the institutions of science in the country. He described Nehru as a “Rashtra Purush,” high praise which the Sangh Parivar reserves for very few. The message from the two leaders is clear: India needs to invest in “scientific temper” especially among the young if we wish, as a nation, to be a proud participating member of the world of scientific knowledge. There was no ambiguity about government intent. India was on the threshold of a new push towards scientific temper.

Issue of domains

Some weeks later, the Union Cabinet Minister for Human Resource Development, which is the Ministry in charge of schools, colleges, universities, the Indian Institutes of Science Education and Research, the Indian Institutes of Management and the Indian Institutes of Technology, and thus with the responsibility for the “promotion of scientific temper among children”, was reported, by the media, to have spent four hours with an astrologer in Rajasthan.

When queried about the nature of the consultation, since it concerned the link between palmistry and forecasting the shape of the future, and about the message this publicly reported consultation would give to children, the Minister responded by asking the media to respect her privacy. She thereby introduced a new element into the debate. Is scientific temper an attitude for both the public and the private domains or is it only for the public domain? Is it an attitude of being, for the whole person, or is it only a protocol for public activity? Is scientific temper opposed to superstition or can it cohabit easily with superstition? Is astrology a science or is it superstition? Can the evidence from the palm provide testable hypothesis about future events, such as high humidity means that it will rain, or increased particulate matter in air will produce respiratory illnesses? Is there a causal relation?

These are interesting questions and India, following the Prime Minister’s call, will need to debate them. The urgency of the debate was emphasised when the former Chief Minister of Uttarakhand stated, in no less a place than Parliament, that astrology is superior to science and that Jyotish is a science to make calculations lakhs of years in advance and that all other sciences are dwarfed in front of astrology. With these two counter statements, to the two of the Prime Minister and the Home Minister, the debate has now got very confusing. Can one make calculations lakhs of years in advance? Is scientific temper only a public and not a private matter? Is astrology the master science?

Nehru on astrology

Perhaps it is useful to go back a little and see what our Rashtra Purush’s attitude was to astrology. In a letter to Ram Swarup Sharma, the Director of the Indian Institute of Astronomical and Sanskrit Research, New Delhi, dated July 16, 1959, the Prime Minister wrote: “Dear Shri Sharma. Thank you for your letter of the 13th July which has reached me. You have referred in this letter to my lack of belief in Astrology. This is largely true. But every kind of real scientific research should be welcomed, provided it is conducted on scientific lines. My own impression is that our forefathers in India made very considerable progress in astronomical calculations. While I welcome the effort you are making to have a scientific inquiry in these matters, I do not think it will be at all suitable for this book to be dedicated to me. I am sure you will appreciate my point of view. …. Yours sincerely, Jawaharlal Nehru.”

Sharma was researching Sanskrit texts to see how far astrology in ancient India could be separated from astronomy. Nehru’s letter has four lessons for our debate on astrology and scientific temper. The first is his lack of belief in the claims of astrology to predict the future. That is why he did not wish the book to be dedicated to him. To be honoured in a book on astrology went against his scientific temper. The second is the distinction he made between astronomy and astrology in ancient India and his appreciation of the ancient advances of astronomy. The third is his welcoming of the use of the method of scientific testing. Such a method is valid for all domains of knowledge. In spite of his disbelief in astrology, he was open to the idea that its claims should be tested by the scientific method. This was the nature of his scientific temper. He would have argued that if astrology constitutes a set of testable propositions, which it claims to be, then the claim that “a marriage conducted when Mangal is entering the fourth quadrant is doomed to fail,” made by astrology, is similar to the claim that “it will rain tomorrow afternoon in Chennai south,” made by the meteorological department. A science must be made up of testable propositions. A science has researcher independent protocols for validating its truth claims. Would different astrologers agree in their reading of a single horoscope? The fourth is his taking, as Prime Minister, a public position against astrology in spite of the public’s deep belief in it. He risked a loss of political capital but still as the first educator to the nation he had to promote a scientific temper. The message from him was clear. Astrology cannot cohabit with a scientific temper.

The fact that astrology is not a science was most dramatically established by Padma Vibhushan Jayant Narlikar, India’s most eminent astrophysicist, who, along with Narendra Dabholkar, Sudhakar Kunte and Prakash Ghatpande, conducted a statistical test on astrological claims. In an article titled “An Indian Test of Indian Astrology,” published in the March/April 2013 issue of Skeptical Inquirer, which is available on the net, Narlikar describes how a set of 200 horoscopes were collected — 100 from bright students and 100 from students — in schools for the mentally challenged. Taking all the preoccupations of a double blind process, astrologers were invited to read the horoscopes. Twenty-seven responded. Here are the conclusions. “Our experiment with twenty-seven Indian astrologers judging forty horoscopes each, and a team of astrologers judging 200 horoscopes, showed that none were able to tell bright children from mentally handicapped children better than chance. Our results contradict the claims of Indian astrologers and are consistent with the many tests of western astrologers. In summary, our results are firmly against Indian astrology being considered as a science.”

We are now called upon to choose between two incompatible positions: one that sees no contradiction between astrology and scientific temper and the other which views them as fundamentally opposed. “A Statement on Scientific Temper” released by P.N. Haksar, Raja Ramanna and P.M. Bhargava on July 19, 1981, stated that it is “an attitude of mind which calls for a particular outlook and pattern of behaviour” and which advocates the method of science for “acquiring knowledge.” It advocates for the “fullest use of the method of science in everyday life and in every aspect of human endeavour from ethics to politics and economics …” Scientific temper is thus not a private matter. Article 51A(h) places on all citizens the duty to develop a scientific temper and therefore we cannot be “chalta hai” about these events since social behaviour is impacted by it and a culture of fatalism created by it. We must rally behind the Prime Minister’s call to spread scientific temper. We must revive the debate of the 1980s on the nature of scientific temper. The Prime Minister must give us his views on the relation between scientific temper and astrology. Scientists must enter the debate.

The Mangalyaan launch

It is reported that when Mangalyaan was launched — the satellite which India was able to place in Mars’ orbit in the first attempt, the only country to be able to do so — the Chairman of the Indian Space Research Organisation (ISRO), Dr. Radhakrishnan, went, the day before the launch, to pray at Tirupati for its success. When asked, he is reported to have said that he did not want to leave anything to “chance.” The Mars mission was successful. ISRO deserves a double round of applause. The team of scientists had to perform a set of complex calculations and manoeuvres to lift the satellite and position it in such a way that it could be flung towards Mars using not only its own propulsion systems but also earth’s gravity. This is science at its finest. The complex calculations gave accuracy and confidence that the commands of mission control would translate into outcomes. The technology that these calculations created, and the predictions made of place and velocity of the planet and the satellite were so accurate that they could place, after several months, the satellite in Mars orbit. This is the triumph of Nehru’s scientific temper. The previous night of prayer has, however, introduced some uncertainty into the celebrations. Was it the puja at Tirupati or the science at ISRO that worked? Was “chance” reduced by combined power? Did they cohabit to place Mangalyaan in orbit, or, asked counterfactually, if there was no puja, would Mangalyaan have entered Mars’s orbit? Which was the cause of success? This is a question of scientific temper and not pseudoscientific temper.

The only way up

To bring economic growth back to at least 6 per cent in the short run and 8 per cent in the long run, the government needs to strengthen the processes for investment by corporates. Investment in the manufacturing sector,  which accounts for only 16 per cent of the GDP (in China, it accounts for about 25 per cent), is essential for growth and job creation.

The steps needed to be taken to reignite the investment cycle fall in two categories. 

The first set of steps relates to removing the many obstacles in the investment process. The second to enabling the financing of investments.

As far as the obstacles are concerned, the land acquisition act is an important stumbling block that must be corrected. The act provides for “fair compensation” for acquiring farmland for industrial projects. However, it has made acquisition difficult and the process of acquiring land for corporate investment tedious. Modifying the act so that it facilitates land acquisition while ensuring that the interests of farmers are protected is a key step towards reigniting the investment cycle. Like several other laws in India that are unnecessarily complex, the land acquisition act also introduces several avenues for bribe-taking by officials. Take, for example, the provision mandating social impact assessments, which are supposed to be carried out in consultation with representatives of panchayati raj institutions. These representatives are likely to act as powerbrokers, demanding their pound of flesh. Rather than enacting a law that has a simple provision for determining fair compensation, such provisions only create more hurdles for land acquisition. The law must be modified to simplify the process of acquisition while ensuring that fair compensation is paid to landowners.

Second, a meaningful single-window clearance system must be created, where all approvals are packaged together and granted — from cabinet-level nods to the government clerk finally signing off on a component of the project. Even though the UPA administration and the current government have cleared several large projects at the cabinet level, the lack of the streamlining of approvals between the states and the Centre, as well as between the different levels of the bureaucracy, has prohibited these projects from getting off the ground. Bringing all the different levels of the bureaucracy, as well as the polity, under the same roof for a few days through an “investment mela”, could not only speed up approval-granting, but also reduce bribe-taking. The government clerk signing off on a power connection to a factory is unlikely to demand a bribe when he is sitting next to the cabinet secretary or the environment secretary, who provide high-level clearances.

Third, to ensure that labour costs in manufacturing, which inter alia affect the economic viability of investments, are inline with the value added by labour, the stringent laws that prevail both at the Central and the state level need to be rationalised. While the government has taken some steps in this direction, the speedy dismantling of draconian labour laws is essential. In this endeavour, the government must realise that opposition from the labour unions is unavoidable. 

In any case, the unions represent only 15 per cent of the workforce, which is employed in the organised sector. Labour unions militate to preserve the advantages they receive from stringent labour laws at the cost of 85 per cent of the workforce, employed in the unorganised sector. Even when one person in a family gets a job in the organised sector, the entire family gets economically uplifted. Political parties need to realise that this 85 per cent of the workforce represents a significantly more attractive political constituency, or “vote bank”, to cater to than the 15 per cent represented by the labour unions. 

As far as the steps needed to ease financing for investments are concerned, the government must utilise the room provided by lower oil prices to keep the fiscal deficit at the promised level despite possible shortfalls in tax revenues. A high fiscal deficit crowds out lending to the private sector because it has to be funded through government borrowing, which is provided by banks. Every additional rupee lent to the government means one rupee less for lending to the private sector. Also, compared to a large corporate firm, small and medium enterprises get disproportionately affected when government debt crowds out credit to the private sector.

 While reducing the fiscal deficit will release credit for the private sector, the efficiency with which it is allocated depends on reforming the governance of public-sector banks. The Nayak Committee, set up by the Reserve Bank of India, which submitted its report this May, has recommended the steps that need to be taken for this. Reforming public-sector banks would enable more efficient allocation of scarce credit to the private sector and thereby facilitate efficient investment in the economy. - 

No conditions apply

Cash in the hands of the poor can transform their lives. With bank accounts and an Aadhaar card for all becoming a reality, it is possible to transfer money directly to the poor and check middlemen who siphon away funds.

Cash transfers (CTs) come in many forms. They may be conditional or unconditional, selective or non-selective, targeted or universal. Some types of CT are as susceptible to misuse as the public distribution system, where, according to the Planning Commission, only 27 per cent of the expenditure actually reaches the beneficiaries.

Conditional cash transfers (CCTs) have become popular internationally. The World Bank has defined them narrowly: “[CCTs] are programmes that transfer cash, generally to poor households, on the condition that those households make pre-specified investments in the human capital of their children.” However, CCTs often have other behavioural conditions, such as the requirement for a pregnant mother to deliver a child in a hospital or to get her child vaccinated. Sometimes, conditions reach ridiculous extremes, as when a mother is supposed to “prove” exclusive breast-feeding before she can apply for a cash benefit. In Mexico, conditions have been associated with a high incidence of exclusion, as people entitled to the cash withdraw when they cannot comply with them.

Conditions are often difficult to implement and monitor. Each condition that requires a certificate becomes a road block and increases opportunities for corruption. Often, conditions beget more conditions, as they are primarily attempts at social engineering, in which a transfer is used as a carrot and stick, to be given or taken away, depending on whether the entitlement criteria are aligned with state-determined norms. This engineering is most often successful when local infrastructure, like schools and hospitals, is available; although in India, where village health clinics often have abysmal hygiene, CTs associated with hospital deliveries have resulted in multiple deaths.

Unconditional cash transfer (UCT) policies rely on people’s own initiative instead of directing them towards particular kinds of behaviour, expecting that people will use cash wisely for their own and their children’s development. A recent book, Basic Income: A Transformative Policy for India, by Sarath Davala, Saumya Kapoor Mehta, Guy Standing and myself, details the results of a survey carried out in 22 villages where UCTs were given to nearly 6,000 men, women and children, sent to their bank accounts and paid individually each month for 18 months. The rigorous study, conducted as a modified randomised control trial, seeks the answers to a number of questions on the effects of such a UCT.

 The two most commonly asked are: Would unconditional monthly cash payments be an effective tool to reduce economic insecurity and poverty? And would they be likely to lead to wasteful spending on private bads?

-reaction to the idea of CTs is, “The men will waste all the money in drinking, and will beat their wives to get their money too”. The facts disproved this. There was no increase in drinking among the families who received the transfers, nor was there any anecdotal or qualitative evidence to suggest this. In one tribal village, drinking actually went down. The sarpanch explained, “There is not much employment in these villages so men sit around playing cards and drinking. After the CT, they were able to buy seeds and fertiliser and now they work hard farming their land”. 

A heartening finding was that UCTs lead to growth and income-earning opportunities. This was especially true for the poorest tribal families, where 50 per cent said that they had used the transfers to make their lands productive, and the number of livestock in a village increased by over 30 per cent. Overall, more than 20 per cent of the respondents said they had increased their income-earning work. Multivariate analysis suggested that for women, receiving a basic income was strongly associated with diversification into a second income-earning activity combined with a primary one. Most families in India today, no matter how poor, want better education for their children. 

The CTs enabled children to go to school, often switching from a non-functional government school to a private one. There was a doubling of enrolment among adolescent girls in secondary schools. Nutrition improved, especially among the poorest tribal and Dalit families, with a substantial increase in food sufficiency. Further, as individuals were able to go to doctors when they got ill and afford regular medicine, serious health incidences in the villages declined. An emancipatory effect associated with CTs was that, with the increase in liquidity, reliance on usurious debt decreased. It empowered the most vulnerable — Dalits, women, the elderly, the disabled. UCTs are known as basic income internationally. They give people a choice and rely on individual initiatives to change social conditions. A basic income leads to holistic development and restores people’s dignity. It could be a transformative policy for India. -

India, Russia, here and now

When he met Russian President Vladimir Putin on the margins of the BRICS summit in Fortaleza, Brazil, in July, Prime Minister Narendra Modi apparently told him that every child in India knew Moscow was Delhi’s best friend forever.

As they sit down for a longer and substantive conversation in Delhi this week, Modi and Putin know they have a problem. The geopolitical circumstances that bound India and Russia close together for so long have begun to change. The structure of the partnership, too, is looking less special amid extended stagnation. Modi, who has boldly moved to rejuvenate India’s ties with America and Japan and devised a more positive approach towards China, must now go back to basics on Russia and find productive ways of boosting bilateral relations in an adverse regional and international environment.

In Moscow, it was Putin who saved the relationship from becoming irrelevant to both countries. In the 1990s, India found it hard to get post-Soviet Russia’s attention, as Moscow sought to integrate itself with the West and build a “Common European Home” stretching from the Baltic to the Pacific. Much hard work of Indian diplomats and strong faith in Delhi’s political class helped sustain the relationship with Russia through the difficult decade. It was only when Putin took charge of Russia at the turn of the new millennium that the bilateral relationship took a turn for the better.

That Putin had a working relationship with the West made India’s task relatively simple. Unlike in the Cold War, Delhi simply had to engage both Russia and the West, dealing with each on its own merit. Modi, however, will find the going somewhat difficult as Russia’s relations rapidly deteriorate.

The tension between Nato’s relentless expansion eastwards and Moscow’s determination to restore its traditional sphere of influence in the “near abroad” has been gathering for a while and finally boiled over in Ukraine this year. The idea of a Common European Home stands shattered. Russia and the West are finding it difficult to restore the rules of the road invented at the end of the Cold War in Europe, during 1989-91, or devise new ones that are acceptable to both sides. If the crisis in Europe lasts too long and Russia drifts away from the West, there will be new constraints on India’s foreign policy. There is no question of Delhi supporting Western sanctions against Russia, but the secondary effects of these measures are likely to corrode India’s ties with America and Europe.

India avoided endorsing Putin’s annexation of Crimea by force in Ukraine and then legitimising it by a “referendum”. After all, Delhi is rejecting Pakistan’s demands for a “plebiscite” in Kashmir. But you don’t want to reproach your friends in public. Delhi, therefore, kept quiet, much in the manner that it refused to publicly criticise Moscow when it sent troops into Afghanistan in 1979.

a new Cold War between Russia and the West, India might find itself in a cleft stick. On the one hand, India’s economic stakes in the partnership with the West have rapidly grown and those with Russia, steadily diminished. Beyond the important defence and strategic trade, there is little commercial content in bilateral ties. Changing that has long been a priority for Delhi and Moscow. Modi and Putin, one hopes, can do better. The changing geopolitical dynamic, meanwhile, is casting a shadow over the strategic ties between Delhi and Moscow. When Soviet Russia made enemies around the world in the 1980s, Indira Gandhi began to reduce Delhi’s excessive dependence on Moscow for arms supplies and Rajiv Gandhi accelerated the search for the diversification of India’s strategic partnerships. Russia, however, retained its special position by supplying the kind of technologies no other country was prepared to supply to India. Consider, for example, Russian assistance to India in building the nuclear-powered submarine, Arihant. Although Modi is looking for stronger defence ties with the United States, there is no possibility that it can replace Russia in the near term. But India’s relations with Russia are complicated by one important consequence of the unfolding conflict between Moscow and Washington. It is Russia’s strategic embrace of China, which is likely to have many implications for India. For one, Russia has begun to boost defence ties with China and is exporting technologies and systems that it once reserved solely for India. More broadly, by lining up behind China on global issues, Moscow is making it harder to construct a stable balance of power in Asia. Worse still, an America preoccupied with Central Europe and the Middle East might be compelled to consider compromises with Beijing in Asia. 

Put simply, Russia’s conflict with the West pushes both of them towards a rising China and improves Beijing’s leverage in all directions. Making matters worse for India is Russia’s new strategic warmth with Pakistan. This has been in the making for a while. Quite clearly, neither Delhi nor Moscow can insist, any longer, on an exclusive partnership. The India-Russia political partnership, which had expanded from the 1960s, took place amid deepening Sino-Russian hostility and Pak-China amity. Given an unreliable America, Russia was India’s principal insurance against the security challenges from China and Pakistan. If Moscow continues to fight with the West and draw closer to China and Pakistan, there is a real danger that India’s long-standing romance with Russia might turn sour. Preventing an irreversible drift in that direction should be on the top of the agenda for Modi and Putin. As hard-boiled realists, Modi and Putin must acknowledge the new dynamic around them, find ways to limit its impact on the bilateral relationship and move quickly towards expanding the scope of their commercial ties and revitalising their cooperation in energy, defence and high-technology sectors. - 

Beijing’s southern moves

It is fair to argue that South Asia had not been a priority for China’s foreign policy, although China has been an observer at the South Asian Association for Regional Cooperation (Saarc) since 2005 and a strategic ally of Pakistan. However, China’s interest in South Asia has increased considerably. Its fresh bid for full membership to Saarc reflects South Asia’s growing importance for Beijing’s foreign policy agenda.

Chinese President Xi Jinping paid state visits to Sri Lanka and the Maldives in September. Xi is the first Chinese head of state to visit the Maldives since the establishment of their diplomatic relationship in 1972. Maldives President Yameen Abdul Gayoom was quoted by Chinese media as saying: Other South Asian states were wondering how the Maldives could invite a Chinese president to visit the tiny country. Similarly, Xi’s state visit to Sri Lanka was the first by a Chinese president after 28 years. It has now clearly emerged that China is more interested in South Asia than ever.

China’s growing interest in South Asia has been driven by three main strategic considerations. First, with its rising power, China is expanding its influence beyond its immediate neighbourhood, including South Asia and the Indian Ocean. Despite India’s displeasure, a Chinese nuclear-powered submarine docked at the Colombo port. For the first time, Beijing did not keep the stopover confidential. Instead, it termed the episode as “nothing unusual”. That means China is trying to make its military presence in South Asia a “usual” affair. But, like many pundits argue, China has not been deemed a South Asian state. Therefore, its presence in this region has always raised eyebrows. The Saarc membership will serve as a solution since it will grant China a “South Asian” identity, with which Beijing can play an insider role in the region.

The second reason for Beijing to be more involved in South Asian affairs is related to China’s “One Belt, One Road” initiative, the abbreviation for the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road”. The “Silk Road Economic Belt” was first mentioned during Xi’s visit to Kazakhstan in September 2013, while the “Maritime Silk Road” was proposed when he visited Indonesia in October 2013. Since then, Beijing has tried to use the initiatives to establish a more integrated relationship with its neighbours by building transportation facilities.

The main purpose of Xi’s visit to South Asia in September, including India, Sri Lanka and the Maldives, was to promote the grand strategy, also dubbed as “China’s Marshall Plan”. So far, China has won public backing from some Saarc members, such as Pakistan, Sri Lanka and the Maldives. But China also needs a multilateral mechanism for accelerating efforts to construct the

“One Belt One Road” in South Asia. In addition to the recently launched Asian Infrastructure Investment Bank (AIIB), Saarc appeared to be an ideal platform for Beijing to rally support and concretise its ambitious diplomatic blueprint.

Third, China’s motivation to reach out to Saarc comes from its concerns about India’s eastward policy. The Narendra Modi government has renamed the “Look East” policy as “Act East”, in an attempt to build a deeper engagement with East Asia and Southeast Asia. It is not immediately clear precisely how India will act in the East. But India’s willingness to play an active role in the South China Sea, where China has overlapping claims with several countries, has alarmed Beijing. Despite China’s strong objections, India and Vietnam have cooperated in oil and gas exploration in the disputed waters of the South China Sea. China’s foreign ministry has commented, “If such cooperation harms China’s sovereignty and interests, we will resolutely oppose it.” It is also significant that the India-US joint statement, issued during Modi’s state visit to Washington, specifically mentioned the situation in the South China Sea, a move that clearly ruffled a few feathers in Beijing.

Moreover, China has expressed its discomfort about the increasingly strategic relationship between India and Japan. Disregarding Chinese concerns, India invited Japan to participate in the annual Exercise Malabar, along with the US, in the Western Pacific in July. It was followed by Modi’s veiled criticism of China’s expansionism in Tokyo. Although he did not name any country, the comment was seen as targeting China. Beijing has not been blind to these developments. It is reasonable, therefore, for Beijing to develop a southward policy as a countermeasure to put pressure on New Delhi and counter India’s eastward expansion.

With the support of some South Asian states, it’s likely only a matter of time before China secures full Saarc membership. India is left with few options but to seriously examine the implications of China’s entry. Being the dominant power in South Asia, India should probably manage China’s presence with a mindset of open regionalism. Despite blocking China’s full entry to Saarc, Delhi should mull over the possibilities of making China’s activities in South Asia complementary to India’s own neighbourhood policy. This is a more pressing challenge for India.