INDIA

INDIA

1. Economy

   • Lack of manufacturing growth due to CASH eg Gujarat( industrial heartland)> Uneven recovery&credit drought as banks tackle US$100 billion of troubled loans 2) Loans to small-sized drop 3%, mid-sized 10% (2015)
     • Necessity: fuel recovery and population growth (900 mill by 2020) Issues: plethora of different taxes, outdated factory rules
     • Budget for 16: Consideration- shock defeat in Bihar elections 1)Crop Insurance Scheme for farmers combating droughts based on crop yields> Currently covers only 10% as premiums too high 2) Other spending on Govt salaries,military pensions,state bank bad loan relief 3) Came at costFree food 4 Children,clean water in rural areas
   • Modi flagship policies: unified bankruptcy code, unified goods &services tax, more flexible labour laws, less restrictions on foreign investment, tackle corruption
     • " Oceans provide the way to its prosperity"
     • Fiscal goal under threat,credit growth 20 yr low 2)GST Tax aims to unify 12 state levies .consittuitional amendment needs to be approved by at least 15 states
   • Dreams to be bcome a world-class shipping hub: 1) Shpping Ministry's rules> imposed conditions hindering growth of new ports eg easing of overseas operators to ferry goods HOWEVER limits it to ports that transship at least 50% of container volume. IMPLICATION: crubs unchanged 4 remainin traffic eg, oil, cargo 2) Conflict betw love 4 protectionism vs hesitant wish to overhaul onerous laws stifling competion, efficiency 3) Ports applyin for rule relaxation need to grow at least 50% in cargo transshipment in 1st yr, or lose it for nxt 3 yrs. 4) WHY IMPT: 40% higher costs for indian vesels due to tax, nation crippled by infrastructure contrainsts, inadequate berths
   • Indian stock market: Rampant in mid-200s folo-ed by decade of anaemic commercia performance, conglomerates struggling with leverage, bank balance sheets filled wif bad loans, lack of banking power against delinquent,indebted tycoons 2) WHY IMPT: diversified corporate sector>not excessively reliant on commodity, btr governed more Western-style blue chips,compelling tech sector (Bangalore)
     • HOW: Muscular, more export-focused manufacturing sector, eradicating corruption, end of ruinous lending,borrowing(liqour,natural resources industry), simplified regulations 2) KIV indian companies investin in africa>Indo-African rim>heart of global trade growth wif Indian companies at fore
   • Reversal of tax pension withdrawals plan> taxing lump-sum withdrawals (40%) of individual retirement pot in Employees Provident Fund (EPF) opposed by professional class 2) Modi forced to widen revenue base,tax lower incomes 3) In light of upcoming state elections in West Bengal, Uttar Pradesh
   • 120 mill to enter labor force by 2024>unskilled youngsters, farmers movin to cities> Manufacturin>high degree of automation, therefore does not necessarily reduce unemployment 2) Many big Indian companies mired in debt, 90% of workers stucked in informal sector, unreliable infrastrcture, movement of cash hurdles
   • Aviatiion: Chronic shortage of qualified flight controllers eg New Delhi, nation busiest, only employs 360/600 required. 2) urgent due to slew of budget carriers plans to add aircraft in light of travel boom fuelled by rising incomes, lower fares. 3)Modi aviation policy aims to revive hundreds of unused airports, airline subsidies to fly to remote areas 3) Limited by lack of strategy to build skills, capabilities

2. Modi's ambition: India to be a big player>overshadowed by China's rapid rise>relegating geopolitic influence to its own backyard of South Asia 2)Massive intent to deepen power base

   • How? Soft-Power: Modi appeal, emotional links of Indian dispora>transmit indian culture
     • Foreign Policy
       • Geopolitical move : Japan> common concerns on SCS dispute>enhance cooperation on security front 2) China> support more inclusive regional econ architecture (RCEP)>leverage China's growing might>benefit India on econ front

3. Society

   • Role of Women
     • Female aspirations for independence vs family attitudes in deeply patrachal country
   • Censorship in Film Industry: Unlike news media, all films need to be approved by Central Board of Film Certification 2) Set by govt elites who felt those affluent to read newspapers could handle content while poor masses need to be protected from "wrong" kinds of entertainment 3) Other perceived threats: offensive language, gay themes, unconventional views on pol sensitive topics 4) Fil board headed by Modi appointee Pahlaj Nilhalani
   • Alcohol Laws: Set out in non-enforceable Directive Principles urging Indians to work towards prohibition, popular among electorate 2) States, Territories attempting to enforce prohibition: Bihar, Gujarat, Manipur, Nagaland, Lakshadweep> limited success eg Mihar, lifting of '91 ban in '02 in five hill districts as consumption is centuries-old tradition 3) Today, state showcasing appeal, pitfalls of moralism> Kerala> partial ban in 14, total shutdown in 10 yrs> affects tourism> 26% of revenue while excise duties of alcohol acount for 22% of revenue> needed to maintain generous welfare programmes> led to loss of bar,distillery workers, drop in tourism, IT companies reconsidering move to Kerala 4) States which have repealed prohibtion: andra Pradesh, Haryana, Mizoram, Tamil Nadu

4. Politics

   • Indian dispora sees Modi tryin to appeal to them thru focus on growth,family while reinforcing nationalist sentiments VS Opposition cryin abt growing intolerance, terrorist activites>putting self-reputation b4 country
   • Religious Confluence:
     • Recreation of Saraswati River OFFICIAL: 100 rivers showed 2 or more toxic materials,nation's total water storage currently less than half than required RELIGION: Saraswati named alot in Hindu's Rig Veda>underpin belief Hindus are direct descendants of India's original civilisation, meet the conservative Hindu agenda of a nation by & 4 Hindus (RSS) 3) able to cut-thru red-tape due to support from Haryana Chief Minister

5. Environment

   • Eastern Coast eg Chennai suffers EOY haevy monsoons 2) Due to irresponsible urbanisation taken without regard to hydrology or nature eco-systems, politicians coddling wif builders 3) Roads built without regard 4 data on water flow to city >rapid degradation of water bodies
     • Make in India iniative>plan of 100 smart cities to bring high-tech growth> to succeed, drainage systems have to be rethinked, disaster management instituitions reworked

6. Environment

   • India in Paris Deal: No carbon emission cuts pledges, only to shave off 1/3 of greenhse gas emission rate 2) Coal output to hit 1.5 bill tonnes by 2020 compared to 175 gigawatts of renewable energy
     • Possible to skip industrial development step> no power plants,ditribution grids> direct small-scale renewables for hseholds, larger-scale proj 4 industry
   • Population Policy
     • Based on Gandhi view that "real India live in villages while cities are full of corruption, foreign influence" > improve rural conditions while ignoring growing urban cities 2) Consequence: Indian cities faring poorly on liveability indices due to current urban infrastructure financing arrangements
       • Urbanisation high on Modi agenda 2) Amrut Prog gives US 7.5 billion to 500 cities over 5 yrs for investments in basic amenities, Smart Cities Mission - cities with publiv participation compete for for funds to redevelop different zones & improve public services 3) Still far short nearly US 950 billion estimated by high-level panel that India needs to to spend over 20 yrs 4) Current political system of municipal commissioners who serve only 2-yr teams inadequate 5) Many urbanised areas not recognised as cities but instead as "census towns"- governed with rural arrangements eg village councils> tirick allows these areas to gain access to more govt prog such as rural employment gurantee scheme> simultaneous excluded from urban services> expand in haphazard manner 5) Most of revenues from cities not spend to improve livelihood but go to rural areas instead
   • Digging of irrigation ponds as rain-collection holes started in Dawas, Madhya Pradesh 2) Plans to replicate model across entire country, double by '17 3) two yrs of deficient rainfall affected more than a third of India, 11 states seeking financial aid, high food prices leading to inflation exceeding 6% in July '16 4) Rainwater ponds might increase land prductivity by as much as 300% (Pradesh govt) 5) Previously, not enuf attention paid to conservation of underground water, entire resource ecosystem 6) Instead it has been treated as a system of individual rivers,lakes by state-by-state basis

7. Law

   • Supreme Court: Enabled drastic change eg doubled commercial vehicle tax,banned bullifghtin,struck down constitutional amendment givin politicians role in pickin judges vs Slow pasage of govt policies in Parliament 2) Debate: gridlock antitode,check on corrupt politicians vs democratic threat, investor risk
     • Arose out ofintro of Public interest litigation (PIL)>originally allowed poor to directly ask Court to rctify injustices eg prisoner abuse,gender inequality>scoped has widened 2) Investors demand clarity from abrupt decisions without clear rulings,reasonable implementation timeframe 3) Highl unequal social profile>judges must protect those voiceless,do not have means or info to move the courts,weakness of successive coalition govt>more space 4 judicial activism
   • Crackdown on Dalit caste women to clear excreta: Resistance thru sexism,caste bias deeply entrenched 2)905 of 1.3 mill workers are women(Jan Sahas) 3)Dalit communities still face threats of violence,eviction,wages if give up practice (more than 47k in '14)
   • Demonetising/Delegalising of 500, 1k rupee notes to rein in black money (untaxed cash transactions)>curb counterfeit currency used for terrorism, drugs, money laundering> replaced with 500, 2k note 2) Black money: gds & services escaping capture in GDP statistics, 500 billion 3) Currency circulation up 15% yr on yr since Fy 15, outpacing economic expansion 4)Demonetising depends on proportion of black money held in cash, not assets eg lands, stocks 4) Shadow to merge with formal econ> more econ activity, Cost of bank funds decline> reduction of lending rates, pumping credit into econ, rise in production capacity, prevent overheating (supply-side view), Squeeze in safehaven of real estate 5) Shift to electronic transactions

8. Farmers : Cycle of Indebtedness> increas3e irrigation spending, crop insurance is not enuf 2) Farmers owe millions to banks, moneylenders despite successve write-off by govt ( as they rarely own land they farm, high premiums of crop insurance) 3) Whats Needed: btr monsoon forecasts, bigger fertiliser subsidies, state-funded insurance scheme for all crops, promote adoption of organic farming ,methods

9. Technology

   • Role in domestic consumption, small business, services-led wing of growth 2)Mobile phone. 700 mill users by 2020, 332 Internet users in '16 3) Aadhaar> largest digital infrastructure in establishing unique identities> provides open Application Programming Interface(API)> enables online authentication by fingerprint or iris 3)I ntro of Jhan-Dhan for bank accounts> transferring of benefits, entitlements 4) Potential for doubing of GDP growth in housing, education, health services 5) Rise in Robotics, 3D, automation will hit manufacturing b4 India can catchup 6) Comparison wif China: Steel capacity of 86 mill compared to 822 mill for China, fragmented agricultural, manufacturing sectors due to excise, taxes, lagging facilities, free market for labor movement

10. Defence

    • New agreement wif US : sharing of military lands, air, naval bases for repair,resupply, defence trade, tech sharing 2) Also allows for secure comms, exchange of nautical data 3) Taken despite short-term political risk of losing autonomy