indian affairs magazine

JOURNALISM OF TRUTH, TRANSPARENCY & CREDIBILITY INDIA’S PREMIERE PINK MAGAZINE ON CURRENT AFFAIRS

INDIAN AFFAIRSTM

N : E GI U R P RBRAND I DIA TH EMER NG S PE - OWEI S M P I T LIM TLES LEADERSHIP, LI ITLESS OSS BILI IES

6 r l 01 G l R m, l Be lur IFriday, th Ap i 2 2, rand Ba l oo The La it, nga u, ndia

Dynasty Politics Back in Action

WILL 2014 BE AN END OF

Dr. Manmohan Singh’s ERA ?

WILL 2014 BE AN END OF

Dr. Manmohan Singh’s ERA ?

A NETWORK 7 MEDIA GROUP VENTURE

3rd Annual India Leadership Conclave & Indian Affairs Business Leadership Awards 20123rd Annual India Leadership Conclave & Indian Affairs Business Leadership Awards 2012

MARCH - APRIL 2012 Price : 100www.indianaffairs.in


INDIAN AFFAIRSTM

www.indianaffairs.in

Publisher & Editor-In-ChiefSatya Brahma*

Deputy EditorAbhinav SharmaEditor - Special ReportsAlok VermaEditor, NewsAkshay Gupta

Editor-InvestigationsAbdulla KhanSenior EditorRamesh Saigal

Associate EditorRajiv Batra

Assistant EditorsSnehal LambaDamodar ParekhSpecial CorrespondentsPrakash JhaRehena Rafique

Principal Correspondentsparveen tajSuresh JadavSenior CorrespondentsHrishikeshCorrespondentAnoop yadav

Asst Copy EditorHarshvardhanEditor-In-Chief's OfficeSanjeev Kaur

Design HeadKaushik pradhan

Art EditorAbdul BariDesign TeamChalapathy (Mark Peter)Grace Design

Deputy Photo EditorSubrat Roy

PhotographersNalini, Sharada, Rizwan

Senior Photo CoordinatorSupriya Kamatkar

Web EditorMahadev PradasSoftware DeveloperSuhasini khatriManger-ProductionSynthia Vaz

FOUNDER GROUPPharma Leaders AcademyNetwork 7 Media Group

Chief Operating Officer Gaurav VermaVP MarketingDeepak Kapoor

VP-CirculationSonam SinhaFinance ManagerSteve Rozer

Published,Printed & Editedby Satya Brahma on behalf of Pharma Leaders Academy

INSIDE

In Indian Homes Phones and

Electricity on Rise but Sanitation and

LaggingINTERNET

abol liG s ad tn ioa na i 2d 0

n 1I 2

India co ld be world's u

33rdrds o m large t ec no y by 2012'

e t o om 1larg s ec n y by 20 2'

id

Ind a could be worl 's

FROM ASIAN POWER TO WORLD SUPER POWER

HOW COULD REVOLUTIONIZE

RETAIL MARKET ?

EO

OW

H

CONMIC

GRT

movin ra

dly

is

gpi

asa d

etw

rECNO

IC OW

H

OM

GRT

movin ra

p dly

is

gi

asard

etw

Following are the highlights of

ECONOMIC Survey 2011-12

Mani Sh n ar Iyer

a k

Mani Sh nkar Iy r

a

e

B

THE STORY O ECOMING

F

SUPERPOWER NATI NS O

WHILE TREAD NG ON

I

POVERTY

India really a

rw

supepo

er?

ss

TEAM

If India really wants to continue this growth and

surpass her competitors like

and want to become a Developed and first world country a lot will have to be done.

CHINA, JAPAN,

SOUTH KOREA

2

4

7

9

19

22

24

25

31

34

36

Editorial

Satya BrahmaEditor - in- Chief

satya is passionate about unraveling the pandorax box. Mail me at [email protected]


INDIAN AFFAIRSTM

1


In Indian Homes, Phones and Electricity on Rise but Sanitation and

LaggingINTERNETHARI KUMARDelhi Bureau Chief

woman makes a call using a W.L.L. (Wireless Local Loop) mobile phone, in Madhabpur village, 62 miles south of Kolkata, West Bengal, in this Aug. 3, 2003 file photo.

India's households have, overall, become more one room homes, and 179 million homes are two comfortable in the past 10 years, but hundreds of rooms or less.millions of people still lack basics like electricity,

Nearly 70 percent of the households toilets and a convenient water source, according the

use electricity, the census shows, an improvement of that was released Tuesday by

11 percentage points from 2001. The rural-urban gap Home Secretary R. K. Singh. The survey looks about

for homes with electricity has dropped from 44 330 million households in India.

percent in 2001 to 37 percent. More than 30 percent of households still use kerosene for light.

For cooking, 67 percent of households use firewood, More than 91 million households live in

Electricity:

Housing Census

Housing:

A few highlights:


INDIAN AFFAIRSTM

2


crop residue or cow dung cakes. Only 29 percent of households in urban India and just 5 percent in rural households use cooking gas, biogas or electricity as areas. Only 3 percent of overall households have an cooking fuel. internet connection.

Only 43.5 percent of houses have tap water. Kitchen facilities are present in 61

More than one-third, roughly 36 percent, have to percent of households, but 53 percent have no toilet fetch water from source a located within 500 meters facilities, down from 63 percent in 2001. Just over (about a third of a mile) from their home in rural half of all households, or 51 percent, are connected to areas and 100 meters in urban areas. Nearly 20 some sort of drainage facilities. Bathing facilities are percent have to walk farther than that to get water. present in 58 percent of homes, up from 21 percent in

2001. A telephone, whether a land

Just 5 percent of Indian line or mobile, is used by 63 percent of total households – 82 percent in urban areas and 54 households have a four-wheeled vehicle, or car or percent in rural areas, an increase of 54 percentage truck. More than one-fifth, or 21 percent, have points from 2001. A mobile phone is owned by 59 motorcycles or scooters and 41 percent rely on percent of households. bicycles.

There has been a huge jump in television ownership Banking: The number of households using banking – up from 15.6 percent to 43 percent in since 2001. facilities has jumped substantially, from 27 percent

in 2001 to 59 percent in this census.A computer or laptop is owned by 20 percent of the

Water: Sanitation:

Communication:Transportation:


INDIAN AFFAIRSTM

3


The Mahindra rich groups are & Mahindra still in the mood stand at the for international

Delhi motor show expansion.tells a story of Some of India's powerful domestic global leaders d e m a n d a n d are, however, undimmed global battening down ambition. the hatches. Ratan Thousands of young Tata , the 74-year-people swarm around old chairman of the gleaming sports SUVs, Tata Group and electric cars and trucks, owner of the UK car even before the show has marques Jaguar opened to the public. and Land Rover,

has ruled out new From a balcony above acquisitions and t h e f r a y , A n a n d told his employees Mahindra, managing t o b r a c e f o r director, is laying out his

austerity.plans to make his car marque a global one in the years ahead. As with Mr Mahindra, he is turning to markets

among Bric economies and fast-growing Asian A milestone on the way has been passed. His countries such as Malaysia, Indonesia and Thailand.company has just overtaken Illinois-based John

Deere as the world's largest tractor producer by Many industrialists and bankers have been volume, propelled by India's buoyant rural discouraged by a dismal year at home. India's economy. economic growth has slipped from earlier forecasts

of 9 per cent to 7 per cent for this fiscal year. Some At Mr Mahindra's side are his Korean partners. He independent forecasts predict nearer 6 per cent.bought Ssangyong, the Korean carmaker, last year

for $400m, and so far has done a better job than its Double digit growth, says Richard Iley, economist at previous Chinese owners, Shanghai Automotive French bank BNP Paribas, is firmly in the “rear view Industry Corporation. mirror”.

Now, the Mumbai-based businessman is keeping his Pessimism has grown about India's prospects after “periscope up”, he says, for other opportunities in a months of political bickering and a high profile depressed global market. corruption scandal in the telecoms sector.

At a time of tumult in global markets, and uncertain The edge has been further taken off an earlier mood outlook in the US and Europe, Mr Mahindra's of euphoria in the business community by near ambitions are striking. They are a reminder that with double-digit inflation, rising borrowing costs and a fast-growing economy at their back and delays in government approvals.entrepreneurial flair, India's family-owned, cash- Expectations that Manmohan Singh, the prime

bo al liG sad tn ioa na i 2d 0n 1I 2


INDIAN AFFAIRSTM

4


They have also sharpened e x p e c t a t i o n s o f t h e succession of Rahul, her son, as premier.

The financial markets exacted their punishment. An exit of foreign capital was reflected by Sensex, the benchmark index on t h e B o m b a y S t o c k Exchange, languishing as one of the world's worst performers last year. Likewise, the rupee fell 16 per cent over the year.

Foreign direct investment slumped from a previous $24bn to $19bn in 2011, just a t a t i m e w h e n policymakers were trying to entice foreign partners to build infrastructure.

Export growth, which rose sharply in the first half of

minister and a respected economist, would use his the year as new markets such as Latin America, second term in office for bold reforms have quickly Africa and Asia opened up, has slowed.drained away. Instead, the Congress party-led

Many senior economists, such as Shankar Acharya, coalition has suffered repeated setbacks at the hands an economist at the Indian Council for Research on of the opposition, its allies and civil society activists.International Economic Relations, consider India's

Amid a policy paralysis, the government was problems largely homegrown, and fear 2012 will be a assailed during the second half of last year by an tough year.anti-corruption movement that brought middle-

Such were the high-tempo domestic preoccupations class Indians out on to the streets to protest against that they have almost entirely eclipsed both the poor governance and widespread cheating.global outlook of the previous year – when India

“We in India have had our share of problems. The played host to the leaders of the UN Security Council Indian economy slowed down and inflation edged Permanent Five powers – and more traditional up. Concern about corruption moved to the centre anxieties about neighbouring Pakistan and China.stage,” acknowledges Mr Singh.

Economists have steadily become more downbeat. To add to its woes, the government made an “2011 [was] an unfortunate cocktail of domestic embarrassing U-turn on allowing greater foreign policy issues and a slowing global environment,” investment in multi-brand retail (supermarkets). A says Rohini Malkani, economist for Citigroup in tax overhaul, described by Adi Godrej, the chairman Mumbai.of consumer group Godrej, as one of the biggest

“India is not beyond repair. Measures that will help catalysts to boost economic growth, has stalled.include incentivising investments, attracting foreign

Such setbacks have fuelled speculation about exchange flows and executing proposed fiscal differences between Mr Singh and Sonia Gandhi, the reform.”left-leaning president of the ruling Congress party.


INDIAN AFFAIRSTM

5


Mr Singh has responded this year with an effort to more outward investments by Indian companies in get back on the offensive. He is under pressure to resources, and in Africa.halt the decline, and defy critics of his “The underlying reason for globalisation does not administration's inaction. change,” Mr Dhuna says. “Indian companies are The prime minister has opened equity markets to looking very aggressively at what's out there. There more foreign investment. Foreign single-brand will be acquisitions in Africa. It's the next frontier.”retailers, such as Sweden's Ikea and the UK's Marks Although some policymakers said India cannot and Spencer, have been given the right to own their grow above 8 per cent without inflicting unbearable Indian stores outright. However. Ikea is withholding price pressure on its rural population, Mr Singh at entry into India as it sees a requirement that single- least has not lost touch with the dream of taking brand retailers source 30 per cent of goods from local India to double-digit growth to rival China.small and medium-sized companies as an obstacle to

“We need to do more than halt the current investment that needs reviewing.slowdown,” he says. He has identified as priorities

Mr Singh's latest move is a stimulus package with agricultural output, boosting industrialisation and $35bn of public sector investment, forcing state- managing better rapid urbanisation.owned companies such as Coal India and the Oil and

A worry is the country's fiscal position, a blight of Natural Gas Corporation to invest cash piles to past administrations, and uncomfortable external strengthen the country's energy security.sector management of the current account deficit

European diplomats speak more enthusiastically and foreign borrowings.about reaching a long-awaited bilateral trade deal

The national budget, presented in March by finance between European Union and India in coming minister Pranab Mukherjee, is expected to bring an weeks once sticking points over cars, wines and admission that a fiscal deficit target of 4.6 per cent spirits, services and migration are overcome.will be missed.

“In the last three weeks there's been a definite intent Fiscal restraint will become more difficult the nearer to move things along [by the government],” says the Congress party gets to 2014 parliamentary Samiran Chakraborty, head of research at Standard elections, which are often won by doling out freebies Chartered Bank in Mumbai. “There's an impression and welfare programmes to the poor. Already a legislation is not possible, but executive decisions vote-winning food security bill is in the works.can happen. There seems to be some urgency.”

The second half of this year may bring a bounceback. “Amid the pervasive gloom, a few signs are pointing Elections in five states in February and March will be to better times returning sooner rather than later,” over, and the results may give the Congress party a says Anand Shanbhag, head of research at Avendus reboot. As importantly, the interest rate cycle is Capital, a Mumbai-based investment bank.likely to turn and the RBI begins to cut rates that have

The view from outside a sheltered, domestically- risen steadily over the past two years.driven economy is more optimistic. Ben Verwaayen,

“There was a party going on and it's as if suddenly chief executive of Alcatel-Lucent, the telecoms the lights went out,” says Mr Mahindra of business company, says the pessimism about India's economy sentiment.is “overdone” when compared with the outlook in

western markets. “There isn't a firm hand guiding you back to the switch. But in India the lights go out quite Sanjeev Dhuna, a partner at London-based law firm frequently. The generator kicks in and the lights go Allen & Overy, says a bad 2011 has not derailed on again. We will get 6 per cent growth. But the India's globalisation. Lower stock market valuations question is when will we get back to 8 per cent and a depreciated rupee could revive greater inward growth?”M&A activity in the second half. He also expects


INDIAN AFFAIRSTM

6


If India really wants to continue this growth a n d s u r p a s s h e r c o m p e t i t o r s l i k e

and want to become a Developed and first world country a lot will have to be done.

CHINA, JAPAN,

SOUTH KOREA

Estate bubble.ODomestic consumption.

Corruption.

Infrastructure.Poverty.

infrastructure and overall energy investment in infrastructure between 2012 and 2017. industry is not only inadequate but is Japanese bank Nomura has predicted growing at snail's speed having a that home prices in China will drop by 20% by disastrous effect on our industrial December 2011, according to Bloomberg. If we add growth. Our economic reforms go to this property taxes and new rules for payment for

one step forward and two steps backwards. Archaic the second and third home, China has serious labour laws and policies are the biggest obstacle in problems in this area. Prices in Mumbai and Delhi in the industrial growth. India is a democratic country India have doubled since mid-2009.and democracy is run by political parties.

China's export dependence Unfortunately there is no genuine intraparty makes it more vulnerable than India. According to democracy in political parties of India. Most of them Time magazine, about 35% of China's GDP comes have become dynastical or personality centered from exports. In contrast, India's economy is more clubs filled with sycophants. The biggest casualty of insulated from global economic crisis, since this structure is the democracy itself. This highly domestic consumption is 57% of GDP.hypocritical political structure has given rise to

corruption of vulgar and monstrous proportion. If Central Commission for Order India wants to become a superpower, we need to Inspection in China took a series of measures to change this scenario urgently and with all sincerity. check how officials spend public funds. From 1.43

million claims filed against Chinese officials, only Economic growth is moving rapidly eastward. Place 146,517 have resulted in charges, according to bets on China and India. China's economy growing Bloomberg. During the Olympics Games of rapidly, but with its independence from foreign Commonwealth the corruption has cost 2.8 billion investments can survive only if other economies dollars for the Indian government. To this is added maintain their attractiveness. India's economy is the scam in telecom that has cost another 39 billion more self-sustaining, but has a high rate of dollars. Activists in India press the government for a corruption and rising inflation. obtain a new anti-corruption law.

11% of China's GDP is spent on In China about 100 million people live on $ infrastructure development, according to

2 a day. But most people moved to the category of Bloomberg, while for India, only 6.5% of GDP goes to those who live by 5-10 dollars a day, according to the infrastructure. India expects to spend $ 1 trillion

ur


INDIAN AFFAIRSTM

7


Wall Street Journal. In case of India, about 650 imminent threat to the growth rate of GDP of the million people live on $ 2 per day. Unequal country. Central Bank of India increased its key rate distribution of wealth suggest that India's seven times since March 2010. However, the country population is more uneducated and more hungry still has a food inflation.than that of China. In 2010, foreign direct

India's population will exceed that of investment made ? ? by China were $ 100 billion. China until 2028. Today China's population, 1.3 This means that the country will be independent of billion people, is higher than that in India (1,2 foreign economies. In India, foreign direct billion). It is estimated that lack of toilets, diseases investment were low because of protectionist and deaths will cost about $ 50 billion annually in policies. India allows FDI to 51% for a retailer that India. has a single brand and does not allow foreign

investment for those who have several brands. China's monetary policies have led to an

inflation rate of 4.6%. India inflation of 8.4% is an

Foreign investment.Population.

Inflation.


INDIAN AFFAIRSTM

8


India could overtake Japan to become the world? s third largest economy behind the United States and China by 2012 when measured

by purchasing power parity, according to a new forecast by PricewaterhouseCoopers. The accounting and professional services firm says its projections suggest China could be the largest economy in the world as early as 2020. This is about five to 10 years ahead of the forecasts by investment bank Goldman Sachs in its BRICs (Brazil, Russia, India, China) reports over the past six years, which suggest China will move ahead of the US to be No. 1 some time between 2025 and 2030. Goldman Sachs Germany, UK, Italy, France, Canada) by 2019. John chief economist Jim O'Neill said last week China's Hawksworth, head of macroeconomics at economy could eclipse Japan's some time this year to PricewaterhouseCoopers LLP, said in the report that move in to second spot. The PwC report also says by 2030, the global top 10 could be China, the US, India is likely to grow “significantly faster” than India, Japan, Brazil, Russia, Germany, Mexico, China in the decade after 2020 as India reaps the France and the UK.demographic dividend of a younger and faster- Economic output forecasts generally use US dollars growing population, and because its lower starting as the base currency and make assumptions about point gives it more economic “catch-up” potential. exchange rate movements. PwC said its new report But it warns that India will only fully realise this used purchasing power parities to measure potential if it continues with the “growth-friendly” economies, to minimize the impact of volatility and economic policies of the last two decades. The report, future uncertainty about exchange rates. It said this released by PwC in London last week, comes as both also corrected for price differences between the China and India continue to rebound from the global advanced and emerging economies. The Indian financial crisis faster than any of the other major government's own view is that after the setbacks of economies. 2008-09, when the global financial crisis saw GDP

growth drop to less than 6 per cent, a return to 9 per China's growth rate this year is likely to reach 10 per cent-plus is on the cards. Indian Prime Minister cent, according to an updated global outlook from Manmohan Singh said earlier this month he the International Monetary Fund on Tuesday expected the economy to grow 7 per cent this year, (January 26), while India should reach 7.7 per cent. and then “soon return to a sustained high growth That compares with a forecast 2.7 per cent growth for path of 9 to 10 per cent.”the US and 1.7 per cent for Japan. The IMF says that

overall, the global economy should grow 1.7 per cent That generally accords with the outlook of the in 2010 and 2.2 per cent in 2011. The PwC forecast Mumbai-based independent think tank, the Centre says the new decade will be characterized as the for Monitoring Indian Economy (CMIE), which said point at which the largest emerging economies catch on Monday it expected India's GDP growth to be 6.9 up with and prepare to overtake the established per cent for the financial year ending March 2010, leading economies. It said the output of the and then jump to 9.2 percent in the year ending emerging E7 economies (China, India, Brazil, Russia, March 2011. It said consumer spending had bounced Mexico, Indonesia and Turkey) would be “neck and back strongly in the September 2009 quarter, while neck” with the advanced G7 economies (US, Japan, industry, agriculture and services were all expected

India could be world's largest economy by 2012'

33rdrd


INDIAN AFFAIRSTM

9


to do well in the year ahead. “The Indian economy is "India has been one of the world's best-performing fast returning to pre-crisis levels,” CMIE said, noting economies for a quarter of a century, lifting millions that before the global financial crisis, the economy out of poverty and becoming the world's third-had grown at better than 9 per cent in the three years largest economy in PPP (Purchasing Power Parity) from 2005-06 to 2007-08. Last week, Goldman Sachs terms. India has tripled its defence expenditure over India CEO Brooks Entwistle told an investment the last decade to become one of the top-ten military conference in Mumbai that there would be many spenders. And in stark contrast to Asia's other opportunities in India's infrastructure over the next billion-person emerging power, India has decade, with the country needing $US1.7 trillion simultaneously cultivated an attractive global image invested in this sector alone. Despite India's of social and cultural dynamism," it says. But then "impressive" rise, its ambition to be a super power come the "ifs" and "buts". Plunging the knife into may remain just that—an ambition, according to an Indian ambitions, the report says:"Still, for all India's authoritative new study by the London School of success, its undoubted importance and despite its Economics to which several Indian scholars have undisputed potential, there is cause for caution in contributed. It pointedly dismisses what it calls the assessing India's claim to superpower status. India US Secretary of State Hillary Clinton's "unequivocal still faces major developmental challenges. The still-verdict" during her India visit in 2009 that "India is entrenched divisions of caste structure are being not just a regional power, but a global power'. compounded by the emergence of new inequalities

of wealth stemming from India's economic success. The study, India: the Next Superpower? India's democracy may have thrived in a manner acknowledges India's "formidable achievements" in that few ever expected, but its institutions face fostering democracy, growth and cultural profound challenges from embedded nepotism and dynamism but concludes that these are nullified by corruption. India's economic success continues to its structural weaknesses, widespread corruption, come with an environmental cost that is poor leadership, extreme social divisions, religious unsustainable."extremism and internal security threats. India, it

argues, still faces too many "developmental These problems are compounded by India's challenges" to qualify for "super power" status, or to "pressing security preoccupations" arising out of be considered a serious "counterweight" to China, a "insurgent violence" affecting large parts of the role sought to be thrust on it by some in the West. country and long-festering cross-border disputes. Some of the report's authors wonder whether India The best that India can hope for—the study offers as should even aspire to be a super power given its a consolation-- is "to continue to play a constructive institutional weaknesses and social and economic international role in, among other things, the divisions. financial diplomacy of the G20".

Historian Ramachandra Guha, currently the "Yet the hopes of those in the West who would build Philippe Roman Chair in History and International up India as a democratic counterweight to Chinese Affairs at LSE, suggests that rather than being superpower are unlikely to be realised anytime seduced by the bright lights of great power soon," it concludes. The report forms part of LSE diplomacy, India should instead focus on reforming IDEAS' series on "Power Shifts". Authors include its institutions and repairing the social fabric that Mukulike Bannerjee and D. Rajeev Sibal (both LSE) seems to be coming off its seams. “We need to repair, and Sandeep Sengupta, a doctoral candidate in one by one, the institutions that have safeguarded International Relations at Oxford University. our unity amidst diversity, and to forge the new I believe that India would make it to the top of the institutions that can help us. It will be hard, patient, world as Indians are among the most intelligent slow work,” he writes. The study, a summary of people of the world. India has all the human and which was released on Wednesday, starts off by material resources that are prerequisite to become a acknowledging that" India's rise has certainly been superpower. It is only a question of administration impressive, and warrants the attention that it has and supervision. The country proudly holds commanded". immense resource of experienced, high caliber


INDIAN AFFAIRSTM

10


professionals in all spheres of knowledge and greatest men of the world recognised to be technology. India is deemed as a 'Sleeping Tiger' due extraordinary. It is just that such talents are not being to its capabilities in different fields like nuclear properly utilized and encoraged properly. We get technology, space technology, agricultural research great ideas when we read certain things but throw and software development. If provided with proper away the idea saying that no one will approve it. This support, they would be able to implement any task problem starts at home. The parents are the ones that that a developed nation may or may not be able to make the extraordinary people become ordinary do. ones. Parents have certain dreams and they want

their children to become what they want irrespective My vision as a citizen of India would be to make of whether he is interested in it or not. I believe there India a superpower, both in economic and military are very few in India that do not have their parents terms. The endeavour to be taken to herald this result influence behind it. Such people either suffer great would be tremendous and not without pain. One defeats in life or they keep fancying that they too may wonder why India has not achieved this goal could have been number1 when they see others yet and what has prevented India from achieving doing better than them. So they start seeing false this goal. Many reasons point back at us the root dreams which seems impossible but could have cause is paved by the citizens themselves. Too much become possible if utilized at the right time. The ones focus is given on social and religious issues and too that were allowed to follow their goals without any little on economic matters. The national elections are persons influence have proven themselves to the being based on religious outputs which eventually world like Gandhiji, Sachin, Mital and many others.lead to the election of leaders that are more focused

on these aspects rather than on the economy and Some may think that you yourself have chosen your well-being of the country. ON the other side of the goal but you couldn't become number1. It is only coin, India faces more problems like proper because you were influenced by your parents or infrastructure facilities, low agricultural output, others some way or the other. That is why a doctors high illiteracy rate and poverty. India should be children mostly becomes a doctor, a politicians son a made fully self-reliant in the fields of technology, politician, A farmers children farmers. Sweepers energy and food. The infrastructure facilities should children begin sweeping when they are below 10 be expanded and must prove to be one of the best years are some examples. There are very few cases that is available anywhere in the world. The scourge like a cheap labourers son becoming a IIT'n or a of illiteracy and corruption that can be seen in all doctors son becoming a singer. We Indians have a walks of life should be thoroughly eradicated. They inferiority complex combined with laziness. We are sharpened knives wounding the country's dream big, aim small, work for even smaller and powers. The most threatening disruption faced by become just a bit better than our parents. Where we India in this era is that of utter poverty and should have dreamt impossible, aimed for some helplessness. To become a superpower one day, the thing that we think is impossible within our ability, government should take a large step in eradicating and work for it, improving ourself every time and poverty and ensure that no Indian is below the becoming something that our parents could never poverty line. A fast developing country requires dream of. That is why I think India is still developing educated and skilled labour and decent economic even after 60 years of independence. If India has to growth. A necessary step should be taken towards become a Super power we need to first believe in stabilizing a value for a rupee as the continuous ourself that there is no word called impossible. We devaluation of the rupee is seen as a major demerit. need to come out from the chain-held life system and These necessities, hopes and aspirations should be start becoming the number1 person in the world. We raised without harming or sacrificing on any of the will be needing major reformations in both our rich cultural heritage and diversity that India is families as well as in our governments. We must blessed with.. make a democratic group that is led by only the most

learned, intelligent people of India. A group that will The reason is that this is such a country filled with the know how to rule the people, breaking all the greatest hidden talents in the world. Every person in bondages that are prevalent. Since we accept India I believe have the ability to be better than the


INDIAN AFFAIRSTM

11


everything as it is and are not ready to come forward incredible. Aim for nothing less than the best. Dont and prove ourself, we end up remaining a try to be influenced by others instead become the developing nation always copying the western influence of others. Every goal is achievable if you world. Instead we should have brought the know how to direct it. Learn from others and invest technology from western people understand and in defense within the country instead of wasting research on how they have done it and start making billions importing it. I could go on and on but I cant them ourself then improve it and start exporting to due to lack of space. This is an 18 year old boy signing the other nations like how China is doing. If at first off.we fail try it in a different perspective and soon you With the current geopolitics being highly unpolar will be amazed to find that it was such an easy task. and treading on thin ice, the countries which strike The way we built our long range missile after the right will dominate the global arena in the coming west didnt sell it. years. It goes without saying that the countries If all the talents were put in the right direction like which are currently looked upto as potential the americans you would be amazed at how fast successors of U.S.A and other European countries in India would develop. According to me we would global economic and political supremacy are the easily touch 25-35% growth in GDP and also become BRMIC (Brazil,Russia,Mexico,India and China). All superpower by 2020. We people dismiss the ideas these countries have different reasons to feature in that we do not believe where we should have tried to this exclusive list, The Latin American countries for find out whether, could it be made possible? And if their rich resources of raw material and high impossible try to find a way to make it possible. That investment conducive environment, China has is how the martial arts of China, the aircrafts, already proven its potential by its rapid capture of spaceships telephones, and many things that we global markets and the will to fully exploit its human thought impossible came into existance in the West. resources through a staunch Communist stance. We must be proud of our ancestors learn from their Now the question is how well does India justify its mistakes and become a person that we dreamt to position here and thus, will it be able to maintain it become. If you dream to become a singer, dancer, and rise up to the expectations of being a cricketer, gamer, IIT'n, researcher, artist or any thing superpower within the near future. India has of else aim for the thing you like the most and take the course come a long way since its independence,and training from some person renouned for it and there the bandwagon stops.become better than him and try to become Since the past two decades, India has been enjoying unbeatable. This is possible only with research in the status of imperialism in the info-tech sector,being whatever you do. Try to find your own excellence one of the major markets for IT industry . Then as a and style rather than copying the ideas of other developing country it has mass potential in terms of people as it is. an emerging market for investment, a pool of young India has great potential but do not have a proper educated and international ly competent leaders to take the people in the right directions. The professionals. We have all the tools, but the average Indian age is around 22 while we have the mechanism is not in place. India's middle class is oldest group of ministers. Instead of saying it is very ideally clinged onto this Utopic idea of impossible and we will not become superpower in Superpowerhood, but only thinking about it will not this century you come out and start to make the make it happen. We have some major constraints change. If the older people do not understand us take that pull us back and have made us one fourth the the help of some other person to convince them. size of our giant neighbours economy in terms of Indians are multi cultural, multi religious, multi GDP over these two decades. So what are these lingual, multi ethnic, unlike any country. But in the problems?case of India there are around 1652 languages and The one and major is the pervasive poverty that dialects that are spoken in India. There is no official impedes India's progress in every sector, every way. religion or state religion and almost all the religions We have not been able to absolutely tackle the around the world are found in India. Making us just problem in spite of it being a major highlight in every


INDIAN AFFAIRSTM

12


five year plan conceived since independence. What economic recession and how our country was has been happening all these years is creation of a relatively less affected and also was one of the first to widening gap between the rural and the urban and recover, shows the existence of a stable and growing middle-class. And with poverty, needless to say, economy. The output is expected to increase by 10% attach all these problems of malnutrition, illiteracy in the next few years. So the cynics won't be here to and lack of basic facilities in the lives of the stay long, but in order to make our presence assertive impoverished. We face major internal security globally, we need to employ a focussed approach in threats with Naxals and citizens in complete achieving our goals. With global and regional agitation with the country. Food security is another competition from China, it sure seems a Herculean major issue at hand where on the one hand we see task,but so has every major achievement been, and our food grains go waste due to lack of storage and at we all know this one will have more rewarding the same time face hunger and malnutrition results than we could ever fathom,after all super problems. Our growth today, does not overshadow powerdom is one ring that will rule them all. The or in any way minimise the pertinence of these word superpower as the encyclopedia defines, problems. Another major factor which affects a literally means ” state with a leading position in the country's growth is of course its system of international system and the ability to influence governance. India has been this fairly hyped largest events and its own interests and project power on a democracy in the world, but its effectiveness is worldwide scale to protect those interests; it is getting less credible as you speak. What we need are traditionally considered to be one step higher than a radical moves and radical changes and a stronger great power”. The question that is very common government hand in policy implementation. The amongst the thinkers worldwide is that can India be country almost need the rule of the stick to inculcate the next superpower? Or, can India ever be a what we direly lack in all spheres of life: discipline. superpower? The question is very complicated and The Indian system of governance has always been can be answered positively as well as negatively. But about the petty politics of retention of power and to a very large extent our country has to do a lot to get patronage. to this superpower stage. It was the end of the second

world war, that divided the world into 2 power blocs We have to bring ourselves to terms with reality and namely UNITED STATES and USSR and the other hence predict our country's fate. Without structural countries were forced to join either of the two blocs, changes in economy, we cannot expect it to race that this word came into existence but since the ahead of its time. Research, innovation, risk taking disintegration of USSR (1991) the only power house policy and absolute implementation is the need of of the entire world was USA. And since then, though the hour. Capacity building and decreasing our almost 2 decades have passed the story has not dependence on other economies is another changed. Though there is no defined criteria that a requirement. We still are major importers of our country needs to fulfill to be a superpower but the Arms and ammunition which means dependency, as common sense says it is important to be opposed to China which is now among the five economically, politically, militarily and last but not major exporters of the same. The ambitions for this the least culturally strong to join this league. To a sub-continent are not Utopic, but will be if we don't very large extent, having these strengths is enough find the right way to realise them. With the passing but projection of these on the entire world forum is of the nuclear liability bill, we are at a position to equally important.exploit our nuclear capabilities. The recent global


INDIAN AFFAIRSTM

13


INDIA AS A SUPER POWER was ruled by the British for a period of about 200 yrs, nobody knew that this nation would rise out to be a

As the very old saying goes “everybody solutes the world leader one day. It is being projected that in the

rising sun”, the same is the case of India and China to next 50 years, say by 2050, India will be one of the

a very great extent. Both these countries have been fastest growing economies of the world. One of the

coming up in this regard and the people have started most important outcomes of this growth on the

predicting about their future. As far as India is economic front is the rise of the new so called 'super

concerned it is a land of many naturally rich rich' class in the corporate sector.

resources and has a lot of advantage in this regard. Another common factor between India and the Some of the aspects that favor India in this race are wealthiest country of the world, United States, is that that India has a very large skilled manpower that is both these countries are independent societies. In always ready to work for their as well as their spite of such a diverse cultural background the country's success in every possible way. Not only democracy of our country is still the binding factor human resource but the country is also rich in and it contributes a lot in this regard. But at the same technological and nuclear resources. We are now one time our country needs to look upon some areas of the leader countries in the world. At the time India which play a very important role in building up of a


INDIAN AFFAIRSTM

14


super powerful nation. These areas are: now it is time for all of us to work together and try and do our bit in bringing as much success in every

?EDUCATION- the government needs to look field as possible so as to realize the dream of turning upon this area and try and educate as many India into a superpower as soon as possible.people as possible so that we do not lack

skilled labor ever in our country. Educated There is a thin line between the audacity of hope and people always are beneficial for the growth grasp of reality. India's middle-class, with its fond of our nation. dream of India as a Superpower, is like a trapeze

artist walking that very thin line. Despair too much, ?POVERTY- this is the major hurdle in the

and your case is hopeless. Daydream too much, and path of development in our country. Even you topple into a delusionary void. Over the past today a large part of our population is below decade or so, it's the latter which has been the bigger the poverty line. But at the same time the danger. India the Infotech Iron-pumper. India the government has taken out many policies to Nuclear Non-aggressor. India the Space Scorcher. come over this issue.India the Cricket Conqueror. India the Massive Market. India the Enormous Economy. India the Growth Giant… you get the drift. With a flying cape and coloured briefs, it's an India ready to make the world spin the other way round on its axis. At the top ?3. NEIGHBOURING COUNTRIES- we level, the dream was articulated by an optimist-in-should always try and maintain better or residence at the Rashtrapati Bhavan itself, former rather heal thy re lat ions with our President APJ Abdul Kalam. With his technocratic neighboring countries. So, better relations training straight from the rah-rah realm of rocket with Pakistan, China, and Afghanistan need science, he went forth and set a deadline: 2020. And to be maintained.then got little children all across the land waving

?4. HEALTH- this is also an important area little tricolours to pledge their support. The because health plays a very vital role in the Millennium Goal to beat all millennium goals! The development of human beings which leads future that was promised! The glory that was to the development of the nation. destined! Each success has brought another bout of

delirium, India's lunar mission being a fine example. These were some of the major issues though many There's ice on the moon, Jai Hind!small problems like religion, corruption, crime,

unethical practices etc. also come up as hurdles but So many have grown so fixated on the target, that in my opinion a lot has been done and it would not be should we miss our date with Superpowerhood, we a problem for India to overcome these issues, if might need group psychotherapy for decades to worked towards religiously with complete come. But delusions of grandeur, some think, are dedication. Growing of MNCs after the best cured by grander delusions of grandeur. So, globalization has improved the condition of our with some digital jugglery—Infotech Imperialism country as India has totally integrated itself into the has its privileges—the deadline has been reset to world economy and the growth levels of around 8 to 2012. As if the poor hungry child in drought-ridden 9 percent at the GDP aspect clearly make us hopeful Bundelkhand just has to wait for the clock to tick past that India is not very far from the USA and will soon the midnight of 31 December 2011, and he'll be be a threat to the domination of this superpower. So reborn in the land of milk and honey.

MODERNISATION IN OUR COUNTRY NEEDS TO BE VIEWED IN A DIFFERENT AND A WIDER MANNER


INDIAN AFFAIRSTM

15


THE WILL TO POWER

GET REAL ON THE VISION THING

amok. Or ragtag pirates thumbing their nose at Indian flag carriers on the high seas. Or even Indians opting for foreign citizenship at the slightest chance. As any international traveller will tell you, all passports are not created with equal prestige. Perhaps it is no surprise that non-resident Indians have played a big role in formulating the fantasy. Oblivious to starvation deaths in Madhya Pradesh but delighted to find Laxmi Mittal as Britain's richest man, unaware of the scarcity of potable water in Uttar Pradesh but at their loudest holding wine glasses the size of watermelons, they have become India's cheerleaders. India's moment, they exult, has come. If only.

“Nation building is a hard grind,” says Lord Bhikhu Parekh, political scientist, “Rhetoric, on the other hand, is easy. The Superpower Fantasy thus is an escape from reality. In the Nehruvian era, elections were won on the premise that 'we cannot offer you a

That a sizzling economy can fuel hysteria has been a great today but hard work will assure that your new learning. In a way, this is understandable. For a tomorrow is better'. This has been replaced by the generation of Indians who remember the rhetoric of 'India Shining'.” This is not the first time humiliation of PL-480 food aid from America, a five- that India's elite has been in a euphoric mood. In year wait list for a scooter, a phone as a symbol of 1947, Nehru's 'Tryst with Destiny' had everyone authority, and a working phone as a sign of cosmic agog. It was supposed to turn this ancient civilisation rarity, the emergence into this bright new world of into a beacon of enlightenment for the world. The choice and plentitude is cause enough for 1962 humiliation by China was a cold shower, and a exhilaration. And with $280 billion in the treasure bitterly sobering one at that. In 1971, it resurfaced. chest and a nuclear bomb in the basement, nobody India famously won its first war in a thousand years dare take it away. The 'Hindu rate of growth' of 3 per and split Pakistan. Internally, Indira Gandhi's cent has been replaced by a robust 8 percent. There is 'Garibi Hatao' was the great new adrenalin shot. It 'feel good' in the air, and it is making us heady. ended in a nightmare called the Emergency. Today's “There is a feeling that the next generation will be delusion has its origin in the BJP's atomic muscle better than the previous one,” says Pratap Bhanu flexing at Pokhran. From 'desert vibrating', the Mehta, president of Centre for Policy Research, a country was taken in five years to 'India Shining'—a think-tank, “In itself, the fantasy is not a bad thing, slogan that lost an election but gave the middle-class but to believe that you have arrived can be an ego kick. Resplendence, it would seem, is like dangerous. India has a very vast underclass and this transcendence. Fold your legs, chant the mantra, and just cannot be wished away.” you're there.

One aspect of the fantasy is the belief that India has finally secured a seat at the high table of global power. After all, the G-8 has become the G-20, coordinating stimulus packages to save the world.

So, can India realistically hope to be a superpower by As for wielding a veto over world affairs, don't forget 2020 or even 2050? This is not a prefix one can buy India has achieved parity with the Big Five, having with $280 billion in hard currency or wrest with a found a cosy place in the Nuclear Club at long last, bomb. If power is the ability to exert one's will, a even if the official membership card is still in the superpower is understood as having the ability to mail. With heft such as this, it is puzzling to have exert itself globally, or at least beyond one's Bangladesh defy India in letting terror camps run


INDIAN AFFAIRSTM

16


territorial borders. In world history, expansive ill-paid of jobs. The dividend could well turn out to empires have done this, from the Persian, Greek, be a disaster.Roman and Mongol expanses to the latter-day The third superpower paradigm involves the State Chinese, Russian and British empires. From the mid- and its institutions. While Indian democracy is often 20th century onwards, America has been the Big hailed highly for its 'soft power' appeal worldwide, it Superpower. Only, the information revolution of the masks a bad case of dysfunctional politics, a reality modern era has been making it harder and harder to that strikes the elite only in occasional spasms. exert power without the consent of those affected, Instead of delivery of results, electoral politics is all most pertinently that of people within one's own about retention of power and dispensing of borders. In other words, there is no question of patronage. Unlike the revitalised US democracy, achieving or sustaining real power—super or not—if India's capacity for self-renewal seems much too the basic aspirations of your own citizens go weak for the country's good.Worse, the resolve to unfulfilled. After decades of adhering to Mao's four- attain the grand goal India has set for itself is in word 'keep a low profile' dictum, China has just sparse evidence. Internally, the Superpower Project begun to assert itself globally. America is America, of is hollow. Take a look around. The fissures of petty course, still in charge. So, where does that leave politics block attempts to win elections on national India? issues. Nor can these become priorities of For one, with an urgent need to align vision with governance. Superpowers, on the other hand, have realism. To be sure, given the grim scenario in South always upheld issues that are vital to them in a broad Asia, India has the makings of a regional power. sense.Missiles and money count, but one neighbour So why does this fancy persist? Says Shiv neutralises the warheads and the other has more Vishwanathan, a sociologist, “There is a fantastic moolah. This limits India's influence in its immediate urge within the middle-class for upward mobility. littoral, the big reason why the 'super' prefix eludes For status. This is fuelled equally by the expatriate the country. Can India overcome Pakistan, at the Indian cousins when they visit or hold 'India' days. It very least, as a critical constraint? is a dangerous fantasy because it is taken as manifest In 2009, India was the world's second largest arms destiny. Bear in mind that a lot can still go wrong in importer. But it's still an importer. Frontline tanks, the India story. If the middle-class insulates itself in fighter jets and warships, they're all foreign made. the superpower ivory tower, it will invite This means dependency. China, in contrast, is now reactions.”. There are sniggers in the dark, scowls in among the world's five top arms exporters. India's the aisles. Read The White Tiger. Or watch Slumdog own defence development efforts since 1947, barring Millionaire. Though aimed at Western audiences, the odd missile, so far have been a scandalous waste. they are reminders of the mockery that comes the This tardiness retards the country's power projection way of India's middle-class consensus on capability in hard military terms. Then, there is the Superpowerhood. And indeed, there is much that question of economic emergence. At last count, this should make the country squirm. There is nothing country of 1.14 billon people had the world's largest 'super' in having to declare a quarter of the country's number of malnourished children. India also has districts tormented by Naxal violence. There are more people who can't write their name, more people out in the jungles who are taking up guns to malaria deaths and more jobless youth than any overthrow the State, an entity they see as other country. To most statisticians at human increasingly hostage to the mollycoddled middle-development organisations, the very aspiration of class and its fancies.superpowerdom is a crude joke. Gung-ho Indians, meanwhile, are counting on the 'demographic dividend'. By this conventional wisdom, India will

So, can no good come of hallucination? It could still be youthfully energetic while the developed

depend on how the energies are channelled. In Meiji world ages into its drone years. This view ignores the

Japan, or Imperial Britain, the State took national fact that a majority of India's young are illiterate and

ambition to new heights. “Some good does come out underfed, and unfit to do anything except the most

MATTER OF SELF BELIEF


INDIAN AFFAIRSTM

17


of the fantasy,” says Gurcharan Das, “It gives a sense Russia, Mexico, Indonesia and Turkey) would be of self-belief. But it is critical to direct this positive “neck and neck” with the advanced G7 economies energy, for otherwise it can lead to a dangerous (US, Japan, Germany, UK, Italy, France, Canada) by disconnect of the elite from the concerns of a 2019. John Hawksworth, head of macroeconomics at transforming country.” India must wake up. PricewaterhouseCoopers LLP, said in the report that

by 2030, the global top 10 could be China, the US, India, Japan, Brazil, Russia, Germany, Mexico, France and the UK. Economic output forecasts

India could overtake Japan to become the world? s generally use US dollars as the base currency and third largest economy behind the United States and make assumptions about exchange rate movements. China by 2012 when measured by purchasing power PwC said its new report used purchasing power parity, according to a new forecast by parities to measure economies, to minimize the PricewaterhouseCoopers. The accounting and impact of volatility and future uncertainty about professional services firm says its projections exchange rates. It said this also corrected for price suggest China could be the largest economy in the differences between the advanced and emerging world as early as 2020. This is about five to 10 years economies. The Indian government's own view is ahead of the forecasts by investment bank Goldman that after the setbacks of 2008-09, when the global Sachs in its BRICs (Brazil, Russia, India, China) financial crisis saw GDP growth drop to less than 6 reports over the past six years, which suggest China per cent, a return to 9 per cent-plus is on the cards. will move ahead of the US to be No. 1 some time Indian Prime Minister Manmohan Singh said earlier between 2025 and 2030. Goldman Sachs chief this month he expected the economy to grow 7 per economist Jim O'Neill said last week China's cent this year, and then “soon return to a sustained economy could eclipse Japan's some time this year to high growth path of 9 to 10 per cent.”move in to second spot. The PwC report also says

That generally accords with the outlook of the India is likely to grow “significantly faster” than Mumbai-based independent think tank, the Centre China in the decade after 2020 as India reaps the for Monitoring Indian Economy (CMIE), which said demographic dividend of a younger and faster-on Monday it expected India's GDP growth to be 6.9 growing population, and because its lower starting per cent for the financial year ending March 2010, point gives it more economic “catch-up” potential.and then jump to 9.2 percent in the year ending

But it warns that India will only fully realise this March 2011. It said consumer spending had bounced potential if it continues with the “growth-friendly” back strongly in the September 2009 quarter, while economic policies of the last two decades. The report, industry, agriculture and services were all expected released by PwC in London last week, comes as both to do well in the year ahead. “The Indian economy is China and India continue to rebound from the global fast returning to pre-crisis levels,” CMIE said, noting financial crisis faster than any of the other major that before the global financial crisis, the economy economies. China's growth rate this year is likely to had grown at better than 9 per cent in the three years reach 10 per cent, according to an updated global from 2005-06 to 2007-08. Last week, Goldman Sachs outlook from the International Monetary Fund on India CEO Brooks Entwistle told an investment Tuesday (January 26), while India should reach 7.7 conference in Mumbai that there would be many per cent. That compares with a forecast 2.7 per cent opportunities in India's infrastructure over the next growth for the US and 1.7 per cent for Japan. The IMF decade, with the country needing $US1.7 trillion says that overall, the global economy should grow invested in this sector alone. Geoff Hiscock writes on 1.7 per cent in 2010 and 2.2 per cent in 2011. The PwC Indian business and is the author of “India's Global forecast says the new decade will be characterized as Wealth Club” and “India's Store Wars,” both the point at which the largest emerging economies published by John Wiley & Sonscatch up with and prepare to overtake the established leading economies. It said the output of the emerging E7 economies (China, India, Brazil,

India could be world's 'third largest economy by 2012'


INDIAN AFFAIRSTM

18


The last two decade of the twentieth century has become a turning point with the introduction of New Economic Policy (N.E.P.) from 1991. The policy is labeled as LPG i.e. Liberalization, Privatization and Globalization. Knowledge has been and will always be out heritage. The NEP has opened vast opportunities to the Indian economy which if wisely exploited, can drive the country to become not only ASIAN TIGER but a WORLD SUPER POWER by showing a marked improvement in Macro Economics Indicators

FROM ASIAN POWER TO WORLD SUPER POWER

Indian Brands are as crazy as is innovators are, as land of billion opportunities and not a billion Indians constantly innovate. A close scrutiny of problems . In the last 20 years, the country has added Indian Brands post the free economy era will a trillion dollars of output. The last decade has seen

reveal that large number of players in diverse sectors India emerge stronger on the world map, especially has made their mark in their respective fields during the global financial meltdown when the notwithstanding the hurdles & government country weathered the crisis much to the admiration regulation from time to time. Today Brand India is of the world. India today stands poised at the globally accepted as the world Market is looking at threshold of change. India, today, has emerged as india as the most preferred destination for one of the decisive nations shaping the contours of collaboration, partnerships & investments. India is a the world economy. Consistently charting a growth


INDIAN AFFAIRSTM

19


path over the last few years, Brand India is an idea Financial Services, Food Industry, Insurance, IT & whose time has truly arrived. Today, the triumph of ITeS, Manufacturing, Media and Entertainment, Brand India is visible in almost all fields. With some Retail, Science and Technology, Banking, aggressive cross-border acquisitions, India has been Biotechnology, Cement, Consumer Markets, rewriting the global business equations; India has Healthcare, Infrastructure, Oil and Gas, established its leadership in IT and knowledge- Pharmaceuticals, Real Estate & Infrastructure, Steel, based industries globally and has the fastest Textiles, Telecommunications, Tourism and growing population of workers and consumers. Hospitality by the speakers who will dwell on this With huge investments in infrastructure subject. The Indian economy has continuously development on the anvil, India today is a preferred recorded high growth rates and has become an investment destination. It has one of the world's attractive destination for investments. Today India is most rapidly growing markets, and today, Indian among the most attractive destinations globally, for products and services are recognised for their investments and business and FDI had increased quality all over the world. over the last few years. The Indian economy is

expected to grow at around 7.5 per cent, according to Against the backdrop of the above backgrounder, Dr Manmohan Singh, the Indian Prime Minister. The where Brand India matters most, Indian Affairs, PM acknowledged Asia's emerging economies were India's first pink Magazine is hosting the high profile

rd "growing well" and were, "in fact, contributing to the & india's most eagerly awaited leadership event 3

recovery of the world economy". The overall growth Annual India Leadership Conclave & Indian Affairs

of gross domestic product (GDP) at factor cost at Business Leadership Awards 2012 in association

constant prices, as per Revised Estimates, was 8.5 per with the Ministry of Corporate Affairs, Government

cent in 2010-11 representing an increase from the thof India on Friday, 6 April at Hotel Lalit, Bengaluru,

revised growth of 8 per cent during 2009-10, India. Keeping its tradition of bringing the finest

according to the monthly economic report released think-tanks of the society from the different diverse

for the month of September 2011 by the Ministry of sectors like the much acclaimed two Annual Events (

Finance. Overall growth in the Index of Industrial st nd1 Annual India Leadership Conclave( in Delhi & 2 Production (IIP) was 4.1 per cent during August

Annual India Leadership Conclave in Mumbai), the 2011. The eight core Infrastructure industries grew

stage is set for the third one under the theme “ by 3.5 per cent in August 2011 and during April-

BRAND INDIA – THE EMERGING SUPER August 2011-12, these sectors increased by 5.3 per

POWER, LIMITLESS LEADERSHIP, LIMITLESS cent. In addition, exports and imports in terms of US

POSSIBILITIES. The Conclave attemptsto throw dollar increased by 44.3 per cent 41.8 per cent

new possibilities in diverse sectors such as respectively.

Agriculture, Automobiles, Auto Components, Aviation, Education and Training, Engineering,


INDIAN AFFAIRSTM

20


Finance Minister Pranab Mukherjee tabled the in the previous two years mainly on account of Economic Survey 2011-12 in Parliament on hursday, global slowdown and domestic factors. "There were stating the Gross Domestic Product (GDP) is likely to also the pressures of democratic politics, which grow 7.6 percent in FY'13. "The growth rate of real slowed reforms," the Survey said while endorsing GDP (is expected) to pick up to 7.6 percent (plus or the Central Statistical Organisation's (CSO) estimate minus 0.25 percent) in 2012-13 and faster beyond o f 6 .9 percent growth dur ing 2011-12 .that," said Pranab Mukherjee in Parliament. It expects the economic growth to further improve to India's economic growth slowed to its weakest 8.6 percent in 2013-14. The Survey said fiscal annual pace in almost three years in the three months consolidation is likely to get back on track from 2012- to December, as high interest rates and rising input 13, when savings and capital formation will also costs constrained investment and anufacturing, begin to improve. government data released earlier showed. GDP rose

6.1 percent in October to December compared with a “Moreover, with the easing of inflationary pressure year earlier. That marked a sharp pullback from 6.9 in the months to come, there could be reduction in percent growth in July to September and was the policy rates by the RBI, which would encourage seventh successive quarterly slowdown.investment that could have a positive impact on

growth", it added. Indian economy is likely to slowdown to 6.9 percent in 2011-12 from 8.4 percent


INDIAN AFFAIRSTM

21


INDIANSEUROPEAN

HOW COULD REVOLUTIONIZE

RETAIL MARKET ?

INDIANS

EUROPEAN

India is a unique country that has ability of statistics no wonder that Indian retail sector is seen surprising foreigner on pretty much every step. as a great business opportunity. However, despite Indian retail sector is noticeably different compared the efforts from local and foreign giants alike, for to the one in Europe. While living in India, I was multiple reasons kirana store remains dominant pleasantly surprised of how efficient kirana stores format in the market. Kirana store model is working really are. Although usually not impressive in size, so well in India because of several fundamental they carry surpassingly large variety of reasons. First, they provide goods on credit. It is merchandise. What's more important, everything is extremely valuable service in a country where available for almost instant home delivery. Ordering expenditures on food account for close to a quarter of works especially well after some time, once the store all spending (in case of the poor – more than half) owner gets to know your taste and preferences. Even and banking services are not commonplace. Second, phone ordering is not as inefficient as one would female employment is still relatively low, that allows expect in the age of the Internet. India notoriously spending more time for frequent shopping. Third has a very low percentage of (estimated 7 % of the factor is convenience. Kirana stores are usually small total) organized retail penetration. It is low even and located within a waking distance. And last but compared to other developing countries and not the least, they offer truly personalized customer incomparable to Europe's 85 % level. Given the service. Kirana stores are dominating due to a set of


INDIAN AFFAIRSTM

22


conditions that are peculiar to India. Despite the workable, kirana store offers an overall solid concept perceived conditionality of success, this retail based a) on a low rent (due to small floor area concept has a lot what it takes to be appealing in required), b) personalized service, c) fast home foreign countries, as well. delivery and d) customer credit (maybe it could be

delivered in collaboration with micro-credit If we look at the situation in the Eastern Europe [1], companies nowadays working so extensively in East the seemingly unstoppable spread of supermarkets Europe). The fact, that stores are unorganized and took place partly due to the lack of competition from family owned, is not an unsolvable obstacle either. retailers that are able of delivering such personalized There are many examples of successful retail shopping experiences. Small stores were operating cooperatives (co-owned by members) expanding basically as smaller versions of supermarkets, and internationally. It is difficult to imagine Europeans thus, after more convenient modern supermarkets changing their habits totally and stopping visiting began to emerge, customers had no reasons to keep supermarkets altogether. But if we look at daily on shopping in their neighborhood stores. The grocery shopping, the demand for a more potential of India's domestic retail market is a widely convenient and time efficient shopping experiences debated subject. On the other hand, a reverse action is already obvious. Kirana store could be one more of Indian retailers expanding abroad is not spoken great Indian innovation to surprise the world. much. The retail model of kirana store, if developed

into a functional franchise, might have a disruptive [1. Eastern Europe is a $ 1,7 trillion economy, power. I'm aware of the shortcomings of this model comparable in size to India's $1,8 trillion economy.]and that some of its strengths are relevant only within India. However, even if some aspects are not


INDIAN AFFAIRSTM

23


Economic growth is moving rapidly eastward. dollars for the Indian government. To this is added Place bets on China and India. China's the scam in telecom that has cost another 39 billion economy growing rapidly, but with its dollars. Activists in India press the government for a

independence from foreign investments can survive obtain a new anti-corruption law.only if other economies maintain their attractiveness.

In China about 100 million people live India's economy is more self-sustaining, but has a

on $ 2 a day. But most people moved to the category high rate of corruption and rising inflation.

of those who live by 5-10 dollars a day, according to 11% of China's GDP is spent on the Wall Street Journal. In case of India, about 650

infrastructure development, according to million people live on $ 2 per day. Unequal Bloomberg, while for India, only 6.5% of GDP goes to distribution of wealth suggest that India's infrastructure. India expects to spend $ 1 trillion population is more uneducated and more hungry investment in infrastructure between 2012 and 2017, than that of China.according to Livemint publication.

India's population will exceed that Japanese bank Nomura has of China until 2028. Today China's population, 1.3

predicted that home prices in China will drop by 20% billion people, is higher than that in India (1,2 by December 2011, according to Bloomberg. If we billion). It is estimated that lack of toilets, diseases add to this property taxes and new rules for payment and deaths will cost about $ 50 billion annually in for the second and third home, China has serious India.problems in this area. Prices in Mumbai and Delhi in

China's monetary policies have led to India have doubled since mid-2009.

an inflation rate of 4.6%. India inflation of 8.4% is an China's export imminent threat to the growth rate of GDP of the

dependence makes it more vulnerable than India. country. Central Bank of India increased its key rate According to Time magazine, about 35% of China's seven times since March 2010. However, the country GDP comes from exports. In contrast, India's still has a food inflation.economy is more insulated from global economic

In 2010, foreign direct crisis, since domestic consumption is 57% of GDP.

investment made ? ? by China were $ 100 billion. Central Commission for Order This means that the country will be independent of

Inspection in China took a series of measures to foreign economies. In India, foreign direct check how officials spend public funds. From 1.43 investment were low because of protectionist million claims filed against Chinese officials, only policies. India allows FDI to 51% for a retailer that 146,517 have resulted in charges, according to has a single brand and does not allow foreign Bloomberg. During the Olympics Games of investment for those who have several brands.Commonwealth the corruption has cost 2.8 billion

Poverty :

Infrastructure :

Population :Estate bubble :

Inflation :

Domestic consumption :

Foreign investment :

Corruption :

ECONOMIC GROWTH

is moving rapidly eastward

ECONOMIC GROWTH

is moving rapidly eastward


INDIAN AFFAIRSTM

24


Following are the highlights of

ECONOMIC Survey 2011-12

ØRate of growth estimated to be 6.9% in FY 12 ØTenuous global economic environment turned sharply adverse in September, 2011ØOutlook for growth and stability promising

ØEuro-zone crisis responsible for international ØReal GDP growth expected at 7.6% in FY 13downturn

ØGDP pegged at 8.6% in FY 14ØSlowdown of Indian economy due to global,

ØAgriculture grows at 2.5 % growth in FY 12 domestic factorsØServices grow at 9.4 %, in FY 12, share in GDP ØDecline in overall investment rate cause for

at 59% slow recoveryØIndustrial growth pegged at 4-5 % in FY 13 ØGross capital formation in Q3 of FY 12 as a ØIndustry expected to improve as economic ratio of GDP at 30%, down from 32% in FY 11

recovery resumes ØGlobal economy remains fragile; efforts needed ØInflation on WPI was high, but shows signs of through G-20 for stability

moderation ØProgressive deregulation of interest rates on ØInflation moderation likely to spur investment savings accounts recommended

ØWPI food inflation dropped from 20.2% in ØDeregulation of interest rates on savings February 2010 to 1.6% in January 2012 accounts to help raise financial savings and

improve transmission of monetary policyØCalibrated steps initiated to contain inflationØNeed deepening of domestic financial markets, ØIndia remains among the fastest growing

especially corporate bond marketeconomies of the worldØEfforts on to attract dedicated infrastructure ØIndia's sovereign credit rating rose by 2.98

fundspercent in 2007-12ØIndia's foreign trade performance key driver of ØFiscal consolidation on track

growthØSavings & Capital Formation expected to rise

ØBalance of Payments widens to USD 32.8 bn in ØExports grew at 40.5% in H1

H1 of FY 12 Vs USD 29.6 bn FY 11ØImports grew by 30.4% in H1

ØForex reserves up from USD 279 bn in March ØForeign trade performance key driver of growth '10 to US USD 305 bn in March'11ØForex reserves enhanced, cover nearly the entire ØIndia now more closely integrated with the

external debt stock world economyØCentral spending on social services up at 18.5% ØIndia's share of trade to GDP of goods and

in FY 12 Vs 13.4% FY 07 services in world tripled in 1990-2010ØMNREGA coverage of 5.49 crore households in ØIndia's flows of capital as a share of GDP in

FY 11 word increased dramatically in last two decadesØSustainable development and climate change

high priority


INDIAN AFFAIRSTM

25


ØInflation to moderate further in FY 13

ØRenewed focus on supply side measures essential for price stability

ØInflation expected to moderate at 6.5-7% by March end

ØGap between WPI and CPI inflation narrows in FY 12

ØMilk, eggs/meat/fish, gram & edible oils major drivers of food inflation

ØMonetary policy measures taken to contain inflation

ØSubstantial Monetary policy challenge to rein-in inflation

ØRBI addressed liquidity concerns

ØMonetary market remained orderly in FY 12 2011-12

ØNeed to examine linkages between policy rate changes and inflation

ØThreat from asset price bubbles in real estate and stock markets

ØScope to further sharpen monetary policy and use macro prudential to deal with above said threats

ØUnexpected shocks such as oil prices remain inflationary threats

ØHigh level of food stocks to help maintain overall price stability

Inflation

ØNeed guidance for farmers on fertilizers, insecticide, alternate cropping patterns

ØNeed strategy, regular imports of agriculture commodities in smaller quantities

ØNeed to set up special markets for special crops

ØImprove Mandi governance

ØNeed to promote interstate trade

ØPerishable food items should be taken out of ambit of the APMC Act

ØFDI in multi brand retain will fill infra gap during harvest period

ØNeed to step up creation of modern stores facilities for food grains

Measures for price stability in food items

ØFDI in multi-brand retail recommended

ØHigher levels of agricultural output augur well

ØConcerns over growth rate in agri sector falling short of target

ØAgriculture grows at 2.5% Vs target of 4% in five yr plan

ØAgriculture, allied activities account for 13.9 % of GDP in FY 12

ØFoodgrains stocks at 55.2 million tonnes

ØProduction of foodgrains in FY 12 estimated at 250.42 million tones

ØSpeedy improvement in yield through adequate investment in R&D needed

ØAgri infra priority area

ØAgri outlook for next fiscal bright

Agriculture


INDIAN AFFAIRSTM

26


ØIndustrial growth pegged at 4-5% in FY 12

ØIndustrial growth less than recent past and far below potential

ØNeed to boost business sentiments, encourage investment and identify bottlenecks

ØIndustrial sector expected to rebound during next financial year

ØIndustry expected to rebound with inflation easing, moderation in commodities prices in international market and revival of manufacturing performance

ØLong term average annual growth of industries comprising mining, manufacturing and electricity remain aligned with overall GDP growth rate

ØEmployment in Industry increase from 16.2% in 1999-2000 to 21.9% in 2009-10 largely due tp construction sector

ØContraction in production in the mining sector, particularly in coal and natural gas segments

ØElectricity sector witnessed improvement

ØBasic goods and non-durables goods grew at 6.1%

ØModeration in growth in other segments of IIP

ØNegative growth observed in capital goods and intermediates segments

ØGross Capital Formation in industry as percent to the overall GCF moderated to 48.3% in FY 11

ØManufacturing GCF growth rate declined to 7% in FY 11 Vs 42% in FY 10

ØModeration in rate of growth of credit in infrastructure and manufacturing sectors

ØNeed to address land acquisition and infra issue on priority

Industry

ØServices sector proves saviour during global crisis

ØServices grow by 9.4% despite slowing GDP growth

ØShare of services in GDP at increased from 55.1% in FY 11 to 56.3% in FY 12

ØFinancial & non-financial services, IT, Telecomm, Real Estate constituted 41.9 % of total FDI equity inflows during April 2000-December 2011

ØFDI inflows to the Services Sector slowed down FY 10 & FY 11, dipping to negative zone

ØFDI inflows in FY 12 recovered; increased by 36.8 % to USD 9.3 billion (April-Dec)

ØSlight moderation in services growth no cause of worry

ØModeration due to the steep fall in growth of public administration and defence services reflecting fiscal consolidation

ØGrowth in trade, hotels and restaurants robust at 11.2%

ØRetail-sector growth expected to be even more robust in FY 13

ØWorry areas include real estate ownership of dwellings and business services segment

ØSoftware service exports steady; face threat from Eurozone

Services Sector


INDIAN AFFAIRSTM

27


ØIndia's exports grew at 23.5% to reach USD 242.8 bn in April 2011 - Jan 2012

ØExports decelerated in Oct-Nov due to global downturn; recovered in Dec-Jan

ØKey performers in export - petroleum and oil products, gems and jewellery, engineering, cotton fabrics, electronics, readymade garments, drugs

ØImports up 29.4% during April - Jan 2011-12 at USD 391.5 bn

ØKey import areas -POL (petroleum, oil and lubricant), gold and silver

ØTrade deficit in April-Jan 2011-12 at USD148.7 bn Vs USD 105.9 billion in last fiscal

ØDiversification of export and import markets a success

ØUAE India's largest trading partner, followed by China

ØIndia's services exports bounce back after contraction in FY 10

ØIndia's services exports grew 38.4 % to USD 132.9 bn in FY 11

ØGrowth in export of services moderated in H1 FY 12 to 17.1%

ØSoftware exports may show some sluggishness

ØTrade challenges include global situation, systemic problems

ØFurther diversification of India's export basket needed

ØFacilitate trade by removing procedural delays, red tape

ØInfrastructural bottlenecks need to be removed

ØTotal investment in SEZs till 31 Dec 2011 at Rs. 2,49,630.80 crore

ØFormal approvals granted for setting up of 583 SEZs of which 380 notified

ØForex Reserves at USD 293 bn

ØExternal Debt Stock at USD 326 bn

ØOil, Gold and Silver prices contribute to modest rise in current account deficit

ØNet capital flows at USD 41.1 billion (4.5% of GDP) in the H1 of FY 12

ØExternal commercial borrowing at USD 10.6 billion in H1 of FY 12

ØPortfolio investment shows large decrease in inflow to USD 1.3 bn in H1 of FY 12

ØTrade deficit more than 8 % of GDP and current account deficit more than 3 % sign of growing imbalance in BOP

ØHigh share of volatile FFI flows added external shock

Trade


INDIAN AFFAIRSTM

28


ØPerformance of broad sectors and sub sectors in key infrastructure areas presents

mixed pictureØAchievements in certain infrastructure sector 'remarkable'ØNeed to attract large scale investment into infrastructureØPublic-Private Partnership successful modelØPPPs expected to augment resource availability, improve efficiencyØInvestment requirement at USD 1 trillion during Twelfth PlanØ50% investment to come from private sector as against the 36% anticipatedØFinancing infrastructure a big challengeØImprovement in growth in power, petroleum refinery, cement, railway freight

traffic, passenger handledØCoal, Natural Gas, Fertilizers, handling of Export Cargo at airports and number of cell phone connections show

negative growthØSteel sector witnesses moderation in growthØCore and infrastructure sector still depends on public sector projectsØDelays increase project risk and cost, and need to be minimizedØCredit growth to infrastructure sector turned negative in FY 12ØIncremental credit flow to the infra sector in April-December 2011 nearly 61% in same period year beforeØReduction in credit flow in power and telecom sectorsØTotal FDI inflows into majors infrastructure sectors during April-December 2011 registered growth of 23.6%ØChallenges on form plateauing of the domestic savings and macro availability of resourcesØNeed for innovative schemes to attract large-scale investment into infrastructureØStrengthening domestic financial institutions and development of long-term bonds market critical

Infrastructure

ØRupee falls by 12.4 % against USD

ØRupee falls from 44.97 per USD in March 2011 to 51.34 per USD in January 2012

ØRupee's high volatility impairs investor confidence

ØAggressive stand to check Rupee volatility recommended

Rupee

ØVolatility in global financial markets likely to tighten availability and cost of foreign fundingØGovernment measures mitigate liquidity stressØIndian banks robust amidst Eurozone crisisØFinancial infrastructure continues to function without any major disruptionØIndian financial markets, especially currency and equity, performed under pressure in FY 12ØGlobal market turmoil caused risk aversion and moderation in capital inflowsØCountervailing steps helped mitigate strainsØGlobal situation, rising trade imbalance, pace of reform initiatives to boost capital flowsØDomestic growth concerns likely to influence financial markets movementsØConcerns over Greece's sovereign debt problem spreading to IndiaØBanking business may become more complex and riskier in future with greater global integrationØRisk and liquidity management, skill enhancement necessaryØNeed to maintain sustainable levels of external debtØNeed innovative steps to bring corporate bond market at the centrestage

Infrastructure financing and financing of unorganized micro/small business sector needed

Financial Markets


INDIAN AFFAIRSTM

29


ØPublic sector banks show 19 % growth in priority sector lending

ØCredit Disbursement to agri sector exceeded target by 19 %

ØCredit Disbursement helped over 12.7 mn new farmers

Ø98 % public sector bank branches fully computerised

ØSelf Help Group- bank linkage programme major success

ØCapital in banks essential for balance sheet expansion

ØRs 12,000 provided in FY 12 for capital infusion in public sector banks

ØGrowth in bank credit extended by Scheduled Commercial Banks grew at 17.1%

ØFlow of agricultural credit impressive

ØInfrastructure Debt Funds to facilitate flow of funds into infrastructure projects

ØResource mobilization through primary market shows sharp decline in FY 11

Banking and Micro Finance

ØLower carbon sustainable growth to be central element of 12th plan

ØIndia's per capita CO2 emissions much lower than those of developed countries even if historical emissions are excluded

ØNeed for more sensitivity from developed countries to carbon emissions

ØEconomic pricing of energy, new technologies to be the key

ØIndia has taken voluntary actions to pursue sustainable development strategy

ØWarming planet may cause adverse effects, extreme weather events

ØIndia has stepped up protection of its natural environment, forests

ØFive main challenges include climate change, food security, water security, energy security and managing urbanization

ØBroad-based economic and social development answer for greater sustainability

Environment and Climate Change

ØReform process in education continued IN FY 12

ØAakash, low cost computing device launched

ØSarva Shiksha Abhiyan norms revised to correspond with the provisions of the RTE Act

ØNational Council for Teacher Education notified as the academic authority for teacher qualifications

ØNumber of out-of-school children down from 134.6 lakh in 2005 to 81.5 lakh in 2009

ØNeed to scale up the successful centres of innovations, create higher technical institutions

ØLabour Bureau Survey indicates upward trend in employment since July 2009 maintained

ØEmployment in organized sector increased by 1.9 % in 2010

ØShare of women in organized-sector employment at 20.4% in 2010 March end

ØMGNREGA: Coverage increases to 5.49 crore households in 2010-11

ØGovernment sets up committee for developing index for fixing MGNREGA wage rates

Education and Employment


INDIAN AFFAIRSTM

30


The TV crews were racing us to the

Attari-Wagha crossing, goggle-eyed at

the prospect of covering yet another

military coup in Pakistan. Our motley

delegation of 15 more-or-less self-

selected Members of Parliament,

ranging the spectrum of ten political

parties and drawn from across the

country, Lakshadweep to Haryana and

Maharashtra to Odisha, comprising

both eager first-termers and more

hardened veterans, led by the former

Foreign Minister, Yashwant Sinha,

proceeded to the same crossing at the

same t ime wi th the oppos i te

apprehension: that the overthrow of the

government and the closing down of As our panting reporters and hysterical anchors the Pakistan National Assembly might leave us with back home flitted like bees from one 'expert' to no interlocutors for the third round of the India-another predicting an imminent political Pakistan Parliamentarians dialogue being earthquake in our immediate neighbourhood, organized by the Pakistan Institute of Legislative anxious messages had flown between our Development and Transparency (PILDAT).delegation and our hosts over whether it would not be wiser to postpone the event to a less eventful time. Our journey to Islamabad began even as the The contrast between the tone of our queries and the Pakistan National Assembly reconvened to debate a even replies we received could not have been motion of confidence moved by the prime minister starker. Repeatedly we were reassured that all was in the face of a standoff between the government and on even keel; that our parliamentary counterparts the Supreme Court over initiating criminal were ready, able and willing to receive us; that we proceedings against the president, and against the could indeed even bring our spouses along if we background of a straight confrontation between the wished; and that the theme of the conference would government and its army brass over 'memogate', the continue to the somewhat banal one of trade and defence secretary (a retired lieutenant general and economic relations even as our general public was confidant of the army chief) having been summarily being informed by our always perceptive 24x7 dismissed the previous week and a decision hanging media that Pakistan was hurtling once more over the continuation beyond the next few weeks of towards the abyss, and that to talk trade at a moment the head of the ISI, Gen Shuja Pasha. It was a like this was a bit like discussing the trickle in the tap situation ripe, in the light of the past six decades, for when the issue was the imminence of the flood.a coup to send the civilian government packing, more ripe perhaps than ever in the past given that Our discussions over two days — the 17th and 18th - there is no charismatic Bhutto at the head of the overlapped with the debate in the Pakistan's political establishment but a fragile coalition held National Assembly and Senate, essentially over who together by leaders who can feel under their feet the was to run the country, the army or the civilian heaving discontent of their own supporters.authority; concern over whether Prime Minister

Mani Shankar IyerMani Shankar Iyer


INDIAN AFFAIRSTM

31


Gilani would, in fact, respond to the Supreme even the presiding officers of our parliament, let lone

Court's summons for his personal appearance our respective political leaderships, the reception at

before the Bench, and what would happen if he were the prime minister's residence, in the context of what

to go - or not to go; the stripping of Gilani's principal is his most daunting domestic challenge to date,

counsel of his right to appear on behalf of his was, to say the least, quite remarkable. We had

eminent client and his replacement by none other certainly neither asked for it, nor expected it. Next

than the seasoned barrister, Aitzaz Ahsan, who had morning, as we re-crossed the Wagha-Attari border,

led the lawyers' movement against Pervez we learned that Gilani had presented himself in

Musharraf; the dismissed defence secretary's person before the Supreme Court, that he was

decision to appeal to the courts against what he exempted from further personal appearances and

insists is his arbitrary dismissal; and widespread that the case would go forward with due democratic

speculation over the future of the ISI chief and thus decorum but no let or hindrances.

of the relationship between the civil government

and the armed forces' principal enforcement agency, The main lesson to be learned is that democracy has

not only operating abroad but even more against at long last taken root in the hitherto arid soil of

dissidents and discontents within Pakistan. Pakistan. In sharp contrast to the past, not a single

political formation has offered itself as the civilian

In the event, and notwithstanding their other faÁade for military rule. There is no “King's Party”,

pressing political life-and-death pre-occupations, no no Jamaat or other 'Islam-pasand' to prop up a Zia-

less than 52 members of the Pakistan Parliament, ul-Haq, no PML-Q to lend a patina of democratic

stretching past all the principal political formations, respectability to a Pervez Musharraf. Astonishingly,

took time off to meet us, as many as 35 of them this is no achievement of a popular, charismatic

participating, without rancour and with immense political personality. Indeed, never before has the

good humour, in the most constructive round of Pakistani political leadership had a lower popular

discussions of the three we have held so far. More, profile. In fact, the traditional leadership of the PPP

we were taken to the Senate and welcomed formally nationally and in Sindh, of Nawaz Sharif and his

not only by the chair but by every one of the heads of PML-N in Punjab, of the Awami National Party in

the political parties represented in the Senate. There Khyber Pakhtunkhwa (the erstwhile NWFP), and

was some apprehension when Prof Khurshid assorted revolutionaries in Balochistan been more

Ahmed of the Jamaat-e-Islami rose to speak that the challenged by a rank outsider, Imran Khan, as it now

cordiality might be blown away; his remarks were, is. The principal domestic debate is over whether to

however, entirely in keeping with the warmth of the split their four provinces into smaller, more

sentiments expressed from every corner of the governable units, the Hazaras under Ayub Khan's

House. The next evening, the delegation was son, Gohar, demanding a Telengana-like separation

received by the prime minister (to some whispering from Khyber Pakhtunkhwa (ironic, given that it was

among us as to whether this was a 'farewell tea' from his father who had constituted West Pakistan as One

an outgoing head of government). But rising above Unit!) and the Muttahida Qaumi Movement hoping

the steaming samosas and delectable sandwiches, that the Mohajirs of Karachi, like the Gorkhlanders

the engagement turned into a full-blown protocol of the Darjeeling Hills, might secure the separation

event with the leaders of all the political parties of their tiny territory from the parent province.

represented in the ruling coalition in respectful

attendance, along with Foreign Minister Hina Yet, this bitterly fractured polity has united on the

Rabbani Khar (at her winsome best) and other senior need to keep out the military. And the military itself

ministers, the prime minister himself going well appears to have willingly acquiesced in letting the

beyond his written speech to convey an elected representatives continue to rule the country

unmistakable message of goodwill and good as best they can. The worst-case scenario projected in

neighbourliness. Given that ours was an utterly all sections of informed Pakistani political opinion is

informal, non-official delegation, with no particular not a return of the 'faujis' but an early election!

sanction or mandate from either the government or


INDIAN AFFAIRSTM

32


Bonapartism is not perhaps dead but it has certainly For me the most startling, enlivening and

taken a back-seat. The army fights its corner, but not enlightening moment of the dialogue came when a

as the usurper, rather as the authority in charge of Pakistani participant said that the “most basic,

national defence and security. That Gen. Nadeem, fundamental issue between India and Pakistan” (oh

the dismissed defence secretary, has taken his case to ho, here comes Kashmir, I thought!) is, said he, “the

the Supreme Court, even as the Indian army chief is need for a change in mindsets.” Are we in India

contemplating doing, rather than turning for justice ready to change our mindset? Are we ready to

to Army HQ or the 111 Brigade in Rawalpindi is recognize the transformation taking place in

symbolic of both the emerging relationship between Pakistan, of the opportunities for reconciliation this

civilian rule and Pakistan's armed forces, as also presents us, of the need for so structuring our inter-

between the army and the courts, for no longer can governmental d ia logue as to render i t

the armed forces do an Ayub by coercing the courts “uninterrupted and un-interruptible” until we have

to declare a 'doctrine of necessity' as the legal fig-leaf put the devils of the past to sleep and embarked on a

for military dictatorship. Of course, Pakistan's new era of bringing South Asia into its own? I hope

military Inc. continues to be the country's principal so. I fear not.

entrepreneur, but perhaps the armed forces have

decided that minting money through the Fauji The writer is a member of Indian Parliament MP

Foundation makes more sense than trying to run an (Rajya Sabha) and former Consul-General of India in

economy on the verge of bankruptcy. Karachi.


INDIAN AFFAIRSTM

33


Today's world is living in the age of global billion people around the world who still live in

competition; where most of the developing extreme poverty, and the 800 million who don't get a

countries are trying to climb the ladders of single meal in the whole day and go hungry.

economic, industrial and technological progress and These numbers are not mere digits, but the dark, be the next self-sufficient super power, while the grim reality of our everyday life. The millions of already developed countries are busy trying to poor people are not consolidate their only not getting position at the peak. food, but their basic A certain country is Human rights to preoccupied with health, education, being the next USA, work and welfare a n d a d o p t i n g a r e a l s o b e i n g stringent and harsh denied. The need of measures to achieve the hour is not t h a t d r e a m , spending millions inconsiderate of the o f m o n e y o n welfare of its own flyovers and malls civilians. There is for the privileged India, which is public, but for all doing all it can to the countries to get that one seat in cooperate and show t h e S e c u r i t y concern for the poor Council, competing with South Africa and Brazil by using all that money to work towards their and allowing all sorts of foreign investments and upliftment. Global poverty seems like an incurable opening India to the world, so that its industries can ailment, but if all the nations cooperate towards this grow, and India can proudly present the picture of humanist goal of eradicating poverty from the roots, 'India Shining'. The Commonwealth games were there is still hope for the rural and urban poor. These more of a platform for India to present itself in a countries wherein reside people whose backs are platter to the world, by simply brushing away the broken by the burden of living in poverty ridden slums and street vendors, and project world-class conditions, and have to see their own family infrastructure of huge flyovers, clean roads, A/C members die of starvation, need to ensure that these buses and metros; in short a beggar-free , hi-tech people get an access to education and work. They India. But in the fight to finish, not just India, but the need to make sure that the farmer who grows food whole world is neglecting the real issues they need for the whole nation mustn't die of lack of food grain to address. in his stomach. The poor need to be made into useful

human resources for the country, so that they can

work and justly get their dues from society.The helpless, poverty-stricken man who lives on less

than $1 ( ) is the one who is getting There are innumerable programmes and plans the

neglected in these countries, which are not government make to provide the poor with proper

concentrating on the real issues they are facing, employment, restoring the rights of the women and

making the rich richer and the poor poorer. All the children to proper education, healthcare and

superficial development does not account for the 1 sanitation, eradicating diseases and making the

Rs.32 in India

THE STORY OF BECOMING SUPERPOWER NATIONS WHILE TREADING ON POVERTYPOVERTY


INDIAN AFFAIRSTM

34


benefits of new technologies of information and international debt. A good government that works

communication available to them. But these plans for development and poverty-reduction at national

should not just remain in paper, but need to be and global level is required, and not one that focuses

practically implemented. The whole International just on urban growth. No country can call itself to be

community should cooperate together in this progressing, until the poor in their country are

problem. The Millennium Development Goals denied of their basic necessities.

(MDGs), created by the international community in The needs of the less developed nations should be 2000, represent an unprecedented opportunity for given special attention and care by the countries that the world to usher in a new era of collaboration in are financially secure. Most importantly, the youth fighting poverty, by setting concrete targets to of these countries must be strengthened so that they reduce extreme poverty by 2015. Yet very little time can be capable of taking forward their country in the is left to bring these goals into reality. It's high time future. The poor need to be made self-sustainable so for the government to work together with civil that they don't die out of lack of money, food and society, multilateral institutions and private sector medical facilities. These are little baby steps that can entities. There should be debt-relief programmes take such countries forward, for its only ideal that and tariff- and quota-free access for their export for the whole world progresses in a wholesome manner, under-developed countries that are under high and no country has to remain crippled behind.


INDIAN AFFAIRSTM

35


Sukanto Debnath/Flickr

For all the hype around the unstoppable ascent of the domestic challenges. These include a disruptive

world's most populous democracy, “India is not a Maoist guerrilla faction; the terrible waste of human

superpower (and may never be),” according to a resources that is the Hindu caste system; and a

group of researchers at the London School of corrupt and divided political leadership that can't

Economics, who just penned an interesting ever come up with a coherent, grand strategy for

on the topic. anything from developing the economy to rebooting

the military.

The paper, of course, isn't denying India's rise. After

all, the country's economy expanded fourfold in the In the chapter on the economy, Rajeev Sibal, an

last 10 years, lifting millions out of poverty along the economics Ph.D. candidate at the LSE, writes that,

way. And if its domestic market weren't so tied up “without an enhancement of regulatory capacity,

with rules meant to keep foreigners at bay, Western increased liberalisation will simply perpetuate

companies would probably be stepping over each corruption and further inequality.” In other words, if

other to win Indian contracts, as they're doing right India were to swing open the door to global markets

now in China. right now it would probably wind up like post-

Gorbachev Russia. The country, in fact, can't even lift

But an economic miracle isn't enough to qualify for capital controls, continues Sibal, because even a

superpower status, the authors of the report argue. small uptick in food prices would leave many of the

India is still grappling with a number of serious country's poor without their naan and butter.

new

study

by Erica Alini on Friday, March 9, 2012 6:22pm - 6 Comments

India really a superpower?ssJOURNALISM OF TRUTH, TRANSPARENCY & CREDIBILITY INDIA’S PREMIERE PINK MAGAZINE ON CURRENT AFFAIRS

INDIAN AFFAIRSTM

36


In the section on military power, Iskander Rehman, younger workers struggle to take care of their elders.

another soon-to-be-Dr. at Science Po, in Paris,

reports that India has become the world's largest India doesn't have this problem. Despite its

weapons importer. But he goes on to argue that the g o v e r n m e n t ' s z e a l o u s e f f o r t s t o c u r b

civilian government's deep-seated distrust of all births–remember the forced vasectomies of the 1970s

things military–something it inherited from in ?–the fertility rate never took a dive

Nehru–is impeding a true Indian military rise. there as it did in China. In 2010 India's working-age

population stood at 65 per cent, and continues to

The paper's list of why-nots goes on, but there's no expand.

mention of an important factor, one that is

unquestionably skewed in India's favour and will, Of course, there are some factors that China's

by contrast, bog down China: demography. It's an population disadvantage compared to India, the

old prediction that the People's Republic's strict RAND paper notes.Twice as many working-age

population controls–which started the women have joined the labour market in the People's

one-child policy of 1979–will soon get in the way of Republic, and both men and women there tend to be

its economic growth. better educated there. Still, demography is a Sword

of Damocles hanging over the Communist Party of

“A high ratio of working-age people to dependents China.

contributed significantly to China's economic

growth in the past two decades, but China's But even if one disregards the population issue, the

proportion of working-age people is at its peak and argument that India's domestic headaches will keep

will soon begin to decline,” reads a recent on it from soon reaching its superpower potential

the topic by the RAND Corporation. Also, the remains unconvincing. “Those are obstacles that

country's pension system covers only other nations have experienced during their

of the population and there aren't nearly concomitant rise on the world stage,” Nilanthi

enough , so China's elders will Samaranayake, an analyst at

have to dip into their savings and rely on their , told me in an quick email exchange about

children for support to a much greater extent than the LSE paper. She added: “I see little reason for

seniors in the West do. That, in turn, will reduce the India to be held back strategically while it addresses

flow of private capital that currently goes into the internal challenges that all nations have.”

investments and put a strain on the labour force, as

A Fine Balance

tame

well before

paper

a small

fraction

retirement homes Center for Naval

Analyses


INDIAN AFFAIRSTM

37


indian affairs magazine

Business

ipoverty india

ssteamif india

worl s

journalism of truth

p i t lim tles leadership

indias households

larg s ec n y

e t o om