Saturday, July 18, 2020

A simple equation no one seems to understand.

"The government has identified at least seven Chinese companies in India with alleged direct or indirect links with People's Liberation Army (PLA) along with Chinese venture capital investments in India including 'big names' where the benefits of civilian innovation are suspected to be used for China's defense sector." Of course, they are. Why has it taken so long to recognize the Trojan Horse approach? "India must also, as China has done, build up financial reserves through creation of industrial powerhouse companies," wrote Govind Sankaranarayanan. But, India has apparently sought a balance "between being a mid-level economic power while also a disorganised democracy. However, in a world where the metric of power is largely Gross Domestic Product (GDP) per capita, such a nation will need to accept a position of lesser influence." One Indian economic powerhouse is Reliance Industries which has seen foreign investors buy stakes worth over Rs 1.15 trillion in recent weeks. Adding another Rs 531 billion from a rights issue, Reliance has become free of net debt. Using its telecom arm Jio, Reliance is moving into online retail business to take on Amazon and Walmart. Reliance Jio has entered into a deal with Microsoft "to help businesses in India adopt technologies, such as data analytics, artificial intelligence, cognitive services, blockchain, internet of things and edge computing". One company is not enough for a nation of 1.3 billion people. The good thing is that, "India had the biggest reduction in the number of multidimensionally poor people during the 2005-15 period, a new UN report has said." Sadly, "India may see millions pushed into extreme poverty on account of the Covid-19 pandemic, according to a World Bank analysis." "India's poor have got poorer, the rich have not got richer, and the middle class has seen opportunities shrink, jobs disappear, and incomes get depleted," wrote Prashant Jha. "Its children have been forced to adapt to a new education system, where going to school itself is an elusive prospect. Its young adults are graduating, but with nowhere to go." The pandemic has given more power to the government which brought the country to a halt with a notice of just 4 hours. "What happened subsequently turned out to be a double shock. India's economy is spiralling down and the pandemic is spiralling up," wrote Prof Kaushik Basu. "Democracy with Indian characteristics comes with a dash of authoritarianism," wrote Manoj Joshi. "Political corruption, extra-judicial killings, tax harassment, have been around for a long time. But under the current government the situation seems to be in free fall." Trouble is, the rewards of being elected and being a minister are so high that they will do anything to please the leader. "Ms Gandhi imposed the Emergency with a sledgehammer. But dictatorships can also creep in slowly, silently and insidiously, without any formal announcement," wrote Coomi Kapoor. "Everyone who succumbs to authority is no less guilty." Poor people are dependent on subsidies controlled by the government. Ergo, increasing poverty increases power. It's a simple equation. 

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