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The Hindu Analysis Free PDF Download

Date: 29 January 2020

Maharaja on sale

  • First attempt which failed to enthuse buyers.
  • Troubled airline that is devouring tax-payer money.
  • Terms this time are exceptionally favourable and clearly appear to be tailored based on feedback from prospective buyers.
  •  Expression of Interest (EOI): sell 100% equity in the national carrier and Air India Express Ltd. and its 50% holding in AISATS.

Prime hurdle: 17,984 employees of Air India + 9,617employees of Air India Express.

Huge employee base

  • Pension liability for the airline’s retired employees and their perks such as free/rebated tickets.
  • Whoever buys the airline will have to shed surplus labour.
  •  Lack of upfront clarity on this may put off prospective bidders.
  • A whopping ₹30,500 crore has been sunk into AirIndia since 2012 despite which it has been posting losses.

Alarming spread

  •  India is still novel coronavirus free.
  • Thermal screening of passengers from China will now be extended from seven to 20 airports.
  • Around 33,000 passengers have been screened so far.
  • In 2017, the Ministry kept under wraps the detection of three cases of the Zika virus in Gujarat.
  • Coronavirus appears to be spreading with renewed vigour.
  • The first case of human-to-human transmission was reported in Vietnam, and now Germany.

The continuing theme of uncertainty, volatility

  •  Democracy and democratic freedoms are coming under increasing attack accompanied by a retreat from liberalism and globalisation.
  • This is not limited to any one country or a group of countries but is evident across much of the world.
  • The spectre of an all-out war between Iran and USA
  • The Gulf region and the world is in grave jeopardy. From a national perspective, 2019 posited at best, a mixed bag.
  •  General Elections held in April-May
  • Victories of Opposition parties in the Assembly Elections in Madhya Pradesh, Rajasthan and Chhattisgarh

  • Qassem Soleimani
  • Abu Mahdi al-Muhandis
  •  14 February 2019: Pulwama attack killing 44 CRPFpersonnel
  •  India carried out an aerial strike on a JeM training camp in Balakot. The second half of 2019: Parliament diluted Article370 of the Constitution.
  •  In the final weeks of 2019, the Government initiated another controversial move to push through the Citizenship (Amendment) Act.
  •  As 2020 commences, India’s foreign policy challenges remain very considerable.
  • India’s attempts at creating a supportive environment in its immediate neighbourhood in 2020 remains equally challenging.
  • The advent of a new Government in Sri Lanka.
  • Relations with Bangladesh appear satisfactory on the surface, but underlying strains are emerging.
  • Relations with the United Arab Emirates are better than at any time previously, but the India Saudi Arabia relationship can at best be termed uncertain.
  • Relations with Iran are likely to become highly problematic, in view of India’s “tilt” towards the U.S.
  • CAA + NRC issue: it is aggravating the fault-lines in society
  •  Current economic malaise: the economic portents for 2020 also do not look too good.
  •  Given the total impact of the various aspects, those in charge would do well to be aware of and prepare for the major problems that lie ahead.

The many problems of delayed data

  • “I often wonder why the whole world is so prone to generalise. Generalisations are seldom if ever true and are usually utterly inaccurate.” - Agatha Christie
  • Crime statistics offer people a huge opportunity to indulge in generalisations.
  • Crime in India’ (CII) by the National Crime RecordsBureau (NCRB).
  • Some of the States are not good in providing data.
  • The NCRB merely assembles the figures it receives from the State police forces and does not tinker with them to reach a predetermined conclusion.

 The utility of the data.

  • There was a two-year delay in releasing the crime statistics for 2017. Just two months after it was published, the ‘Crime in India’ 2018 report was released.
  •  It is strange that we see such delays in an age of computerisation when we boast of efficient and swift online services.
  • The police are notorious the world over for not registering complaints.
  •  Legend has it that some four or five decades ago, an inspector General of Police in Uttar Pradesh lost his job for ordering his force to register every single complaint made to them at the police station!
  • The public are also not very enthusiastic about reporting crimes to the police.
  • The problem has declined slightly over the years due to public awareness and intense media scrutiny.

Crimes difficult to bury

  • India reports an average of 30,000 murders every year.
  •  Crime against women should agitate every responsible citizen in the world.
  •  In 2018, there were 33,356 rapes, a higher number than the previous year.

 Dissent won’t hurt a nation’s foreign policy agenda

  • The ongoing protests against issues linked to citizenship are serious and the government has to find a way to reassure the protesters.
  • But it is too much of a stretch to say that the demonstrations will hurt India’s foreign policy interests.
  • The international order envisaged in the UN Charteris based on sovereignty, and interfering in the internal affairs of other nations is specifically prohibited.
  • Non-Aligned Movement was composed of severalcountries ruled by dictators who oppressed their people.
  •  The only time New Delhi opposed a country from rejoining the Non-Aligned Movement on grounds of repression of its people was in 1991 when the Burmese military regime imprisoned Aung San Suu Kyi after she had won the elections.
  • The U.S. agitated once, in 2003, about Libyabecoming the chair of the Human Rights Commission and suggested that countries guilty of human rights violations should be expelled from such bodies.
  • Recent protests in democracies like France have not resulted in Paris losing friends abroad.
  •  Similarly, no country has abandoned China on account of the unrest in Hong Kong.
  •  Independent nations take action on bilateral and multilateral ties on merits, even if decisions by other governments lead to internal protests.
  • A country’s own Constitution is the only guide and the Supreme Court the prime arbiter on whether or not a particular action is constitutional. Such display of dissent cannot affect a country foreign policy as friends in the international sphere are chosen for the contribution they make for the common good or for bilateral benefits.

Examining the slowdown

  • After the 1991 economic reforms, the Indian economy reached a higher growth plateau of 7% compared to a prior rate of 3.85%.
  •  An in-depth analysis of trends in five key macroeconomic variables — consumption, investment, savings, exports, and net foreign direct investment (NFDI) inflows — was done for two different periods: 2003-04 to 2010-11 and 2011-12 to 2018-19.
  • The results reveal that compared to 2003-2011,investment and savings rates and exports-GDP ratio declined in the 2011-2019 period.
  • The investment rate declined from 34.31% of GDP in 2011-12 to 29.30% in 2018-19, caused mainly by the household sector and to some extent by the public sector, but not the corporate sector.
  • The slump in the domestic investment rate in the 2011-2019 period was compensated by increased NFDI inflows.
  • On average, NFDI inflow was 1.31% of GDP during2011-2019 compared to 0.89% during 2003-2011.
  • The decline in household sector investment justifies the package of measures introduced by the Central government to revive the housing sector.
  • The questionable policy, however, is the steep cut in the corporate income tax rate from 30% to 22%, aimed at boosting private investment.
  •  Given that the corporate investment rate has not eroded severely during 2011-2019, one wonders if the tax cut would help economic revival.
  •  A part of the largesse offered to Corporate India could have been used to spur rural consumption.

 Savings and consumption

  • The savings rate declined almost consistently from34.27% of GDP to 30.51% between 2011 and 2018.
  • This was also caused by a significant fall in the savings of the household sector in financial assets.
  • The fall in household financial savings is alarming and needs to be arrested.
  •  Lower household savings imply lesser funds available in the domestic market for investment spending.
  • The decline in household savings has pushed up private final consumption expenditure consistently from 56.21% of GDP in 2011-12 to 59.39% in 2018-19.
  •  This suggests that economic growth during 2011-2019 was powered by consumption, not investment. In contrast, during 2003-2011, growth was powered by investments.
  • Thus, the popular view that economic slowdown was caused due to a slowdown in consumption demand needs to be re-examined.
  • There is no concrete evidence to suggest that the economy is facing a structural consumption slowdown. India’s exports-GDP ratio declined from 24.54% to19.74% during 2011-2019. The decline started from 2014-15, coinciding with a similar trend in the world export-GDP ratio.


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