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After 1,460 days of Modi rule, ‘achhe din’ yet to come

I do not blame this government for not being able to deliver ‘achhe din’. Which government since Independence has?

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Narendra-Modi

New Delhi: There’s only one year more to go for the BJP-led regime before another test at the hustings. But is the country any nearer to Prime Minister Narendra Modi’s promised ‘acche din‘ (good days)? Four years ago, the country had voted the present regime to power on hopes of better days in all socio-economic-political spheres. But despite some strong structural reforms like GST, and gut-wrenching changes like demonetisation, the jury may still be out on how good it has been, according to economists and others experts.

Despite India’s GDP growth of 7.2 per cent in the third quarter (October-December) of 2017-18, some economists feel that the demonetisation drive, avowedly taken to “cleanse the system” of black money, had ended up damaging the country’s economy instead.

“Demonetisation was a terrible mistake by the government, for which the common people paid the price. It has reduced people’s trust in the banking system, as they were denied their own money during the period of cash crunch. It takes so much time and work to build institutions and policies — it is so much easier and faster to break things,” Jayati Ghosh, Economics Professor at Jawaharlal Nehru University (JNU), told IANS.

The government decided to ban 1,000 rupee and 500-rupee notes on November 8, 2016, taking away 86 per cent of the total currency in circulation. “May be this move had served the government’s purpose politically, but economically it was a bad one,” Ghosh added.

Echoing similar views, Arun Kumar, former professor of economics at the JNU, told IANS that when the NDA government came in, the Indian economy was already on an upward trajectory. The quarter, in which the government took over, the growth climbed to eight per cent. In October 2016, India was the fastest growing economy in the world when China slowed down a bit.

“But then the government administered a shock to the system with demonetisation. It had a negative impact on the unorganised sector that comprise 45 per cent of production and 93 per cent of employment in the country. According to some estimation, 50-80 per cent of that got damaged,” he said.

Kumar, who is now Chair-Professor with the Institute of Social Sciences, added: “Government did no survey at that time and hence no data is available. Even data from International Monetary Fund and World Bank, which rely on government data, do not show any estimates (on impact).”

After demonetisation, credit off-take in the country declined sharply. “Between November-December 2016, it was at historic low of 60 years. Investment into the country also took a big hit,” he said. However, Ranen Banerjee, Partner & Leader, Public Finance and Economics, at PricewaterhouseCoopers (PwC) has a different take on some of the benefits flowing from the action.

“Demonetisation had positive impact as far as digital payments were concerned. It shot up sharply during that period but came down subsequently. The level is still higher earlier. But demonetisation as a measure did not deliver all the results that it was supposed to deliver,” Banerjee said.

The government’s other major thrust, though, on Goods and Services Tax (GST) — rolled out on July 1 last year, got better billing. Economists are hopeful that it will bring in beneficial changes once the hiccups are over. Banerjee says GST would change the entire landscape of tax compliance in the country by creating a multiplier effect. “GST was a bold move which is showing positive results,” he added.

Ghosh, though, thinks GST goes against the grain of federalism. “A unified system is not so necessary in a federal structure — for example, the US does not have it and still has a very modern economy. In a federal structure you have to allow states to have some money raising power. Further, GST implementation has been really bad.”

Kumar said: “Introduction of GST has hit the unorganised sector badly. Even in Malaysia where GST was introduced in 2015-16 at 26 per cent, government decided to scrap it. The organised sector is rising at the expense of unorganised sector. Disparity is rising.”

Industry chambers have by and large welcomed government initiatives, especially the decision on GST. “The overall economy is strong with GST having settled down and reforms firmly on the right path,” Chandrajit Banerjee, Director-General of Confederation of Indian Industries (CII), told IANS.

Over the last four years, according to him, the government had systematically addressed major “pain points” for the economy such as ease of doing business, non-performing assets of banks, foreign direct investment rules, infrastructure construction and exit of failing enterprises.

“The government’s mission-mode development campaigns have delivered notable results, adding to overall growth multipliers. The firm level and sectoral level numbers look promising for the next year in terms of orders booked and capacity utilisation,” said CII’s Banerjee.

Former economics professor at Indian Statistical Institute, Dipankar Dasgupta, who holds that the economy was yet to recover from the hit it took because of demonetisation, says that on GST he was hopeful that with time it will stabilise. “In the other countries where it was introduced there were teething problems too,” he said.

The government also took up the job to cleanse bad loans of banks. It is pumping in Rs 2.11 lakh crore as capitalisation, spread over two years. But a number of banking scandals and rising non-performing assets (NPA) may have reduced the faith of people in the bank system, after the shock of demonetisation. “We have declining deposits in the banking system due to people’s rising mistrust,” says Ghosh. Dasgupta says recapitalisation should be followed with caution so that it does not widen the fiscal deficit.

The government, though, has got support in its effort to tackle the issue of NPAs. The bankruptcy law has put everyone on notice. “People are taking the issue of NPAs seriously trying to resolve it. Companies are opting for out of court settlement. Propensity to comply has increased as borrowers know that there will be consequences on not servicing a loan,” Banerjee of PriceWaterhouseCoopers said.

Yet, overall the promise of the golden pot at the end of the five-year rainbow, as promised by Modi in his of speeches — where he had painted the BJP rule in attractive hues — has not materialised in four years. BJP’s best salesman may have oversold the hope. “I do not blame this government for not being able to deliver ‘achhe din’. Which government since Independence has?” asks Dasgupta rhetorically.

Analysis

The US presidential elections and future of India-US relations

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Donald Trump Joe Biden

As the coronavirus pandemic dominates global news in the United States, progress toward the next presidential election scheduled to be held on November 3 moves slowly forward. President Donald Trump had no real opposition in the Republican party and is running for re-election. And it has now become apparent that former Vice President Joe Biden will be his opponent as the Democratic candidate for president.

What would a Trump victory bode for the future of US-India relations? What would a Biden victory bode? Let me answer each of those questions in turn.

Given the love fests of Prime Minister Narendra Modi’s ‘Howdy Modi’ event in Houston, Texas, in which Trump participated in September of 2019, and Trump’s ‘Namaste Trump’ event hosted by Modi in India in February of this year, it might be assumed that the future for US-India relations is a splendid one. This would be an incorrect assumption.

Both of these events were more symbolic than substantive. Trump’s participation in them undoubtedly helped to persuade some — perhaps many — Indian American Modi supporters who voted for Hillary Clinton in 2016 to cast their ballots for Trump in 2020. Trump’s campaign team took steps to ensure this by holding an event at his Mar-a-Lago resort in which a group of prominent Indian Americans announced their plans to work for his re-election and to mobilize Indian Americans on his behalf.

To understand the future potential of India’s relations with the US. with Trump as president, however, it is necessary to look beyond these political moves and to examine the present state of those relations and Trump’s personal style.

In a word, the best way to characterize the current relations between the US and India is “functional”. The relationship was relatively good for the first two years of Trump’s presidency. In fact, near the end of 2018, Alice Wells, the Acting Assistant Secretary of State for South and Central Asia, was quoted in the media s saying: “This has been a landmark year for US-India ties as we build out stronger relationships across the board.”

Then, in 2019, the relations went off the track in the first half of the year after the US and India got into a tit-for-tat tariff war after the US terminated India’s Generalized System of Preferences which allowed India to send certain goods to the US duty-free. There have been continuing efforts to structure a “modest” trade deal since then. It was thought there might be some type of deal done in September of 2019 while Modi was in the US by year’s end, and then during Trump’s India visit. But, as of today, there is still no deal.

This inability to get any meaningful trade agreement in place speaks volumes about India’s potential future relations with India with Trump as president. So, too does Trump’s style.

Trump’s campaign slogans this time around are “Keep America Great” and “Promises Made, Promises Kept.” Trump is not a policy wonk and most of his effort will go toward “America First”. This involves making the US more isolated by withdrawing from international agreements, restructuring trade agreements, emphasizing building walls to stop immigrants at the border, using tariffs to block trade with countries who are taking away American jobs, and confronting businesses who are allegedlly stealing American trade secrets.

This perspective suggests what India can expect for its relations with the US if it has to deal with Trump for a second term as president. The relations will stay functional at best. As I have said before, that’s because the words partnership, cooperation and collaboration are not in Trump’s vocabulary. Nationalism, isolationism and protectionism are.

Joe Biden stands in stark contrast to President Trump both professionally and personally. Biden is a strategic thinker and doer with a solid eight-year track record of leadership experience as Vice-President in forging alliances that have made a difference around the world and he has also been a long-standing friend of India.

He was chairman of the Senate Foreign Relations Committee and a leading advocate for the Congressional passage of the Indo-US civic nuclear deal in 2005. At a dinner convened 10 years later in 2015 by the Confederation of Indian Industry and the Carnegie Endowment for International Peace, Vice President Biden discussed the tremendous joint progress that had been made by the two countries in the past and declared “We are on the cusp of a sea change decade.”

Early in his campaign for the Democratic nomination for president in July of 2019, in laying out his foreign policy vision, Biden stated that the US had to reach out to India and other Asian partners to strengthen ties with them. The items on Biden’s foreign policy agenda for strengthening which are of importance for India include climate change, nuclear proliferation and cyberwarfare.

During his vice presidency, Biden worked side by side with President Barack Obama to do things that would contribute to achieving Obama’s vision stated in 2010 of India and America being “indispensable partners in meeting the challenges of our time.” In 2020, those challenges are even greater than they were a decade ago.

That is why it is so essential that India and the US develop a strategic relationship that enables them to become those indispensable partners. That can happen if Biden assumes the presidency on January 20, 2021. It cannot happen if Donald Trump remains as president for a second term.

The results of this upcoming election in the US matter greatly for the future of the United States. They matter greatly for the future of India-US relations as well. Time and the American electorate will tell what that future will be.

(Frank F. Islam is an entrepreneur, civic and thought leader based in Washington DC. The views expressed here are personal)

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Analysis

Covid-19 toll across world crosses 35,000

The COVID-19 is affecting 132 countries and territories around the world.

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Patients infected with the novel coronavirus

New Delhi, March 30 : The death toll around the world due to coronavirus crossed 35,000 on Monday evening, with Italy heading the list of 35,097 deaths with 10,779, while the number of cumulative cases rose to 737,929, with US leading with 143,055 of them, as per data from the Johns Hopkins University’s Coronavirus Resource Centre.

Spain was second with 7,340 deaths, followed by China with 3,308 (3,186 of them in Hubei where the outbreak was first recorded), Iran with 2,757 deaths, France with 2,606 deaths, the US with 2,513 (776 of them in New York) and the UK with1,228 deaths.

In number of cases, Italy was second with 97,689, followed by Spain with 85,195, China with 82,198, Germany with 62,435, Iran with 41,495 and France with 40,747.

Meanwhile, 156,652 people around the world had recovered, with nearly half of them (75,923) in China, followed by 16,780 in Spain, 13,911 in Iran and 13,030 in Italy.

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Analysis

45% of Indians do not back up their data, files: Survey

The survey was conducted among 728 Avast and AVG users between February 20-March 25.

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Data Privacy

New Delhi, March 30 : Nearly half of Indians do not back up because they think their data or files are not important enough and most of those who back up their data, do it once a month, a survey said on Monday.

Other reasons cited by the respondents for not backing up their data included not knowing how to do it, not having time and forgetting about it, according to the survey by cybersecurity company Avast.

“It could be that many aren’t aware they are backing up, as it could be happening automatically, in the background, however, others really might not be backing up at all, thinking it is not worth it,” Luis Corrons, Security Evangelist at Avast, said in a statement.

“Losing personal documents, photos and videos can be a painful experience and it’s not until this happens that they realize how valuable it actually is,” Corrons added.

Of those who do back up their data, nearly 42 per cent Indians back up to a cloud storage, 36 42 per cent back up their data to an external hard drive, 23 42 per cent back up to a USB or flash disk, 18 42 per cent back up their phone to their PC, and 10 42 per cent back up to a network storage drive, the results showed.

Corrons recommended to back up data to two different locations, like the cloud, and a physical storage, like an external hard drive.

When it comes to iPhone and Android phone owners, the percentage that backs up is nearly the same, 69 per cent and 70 per cent respectively.

The percentage of smartphone owners that don’t know how to back up their data does not vary much between iPhone and Android owners, with 13 per cent and 17 per cent claiming not knowing how to, respectively, the study revealed.

Data loss can be caused by users accidentally deleting their data themselves, hardware damage and failure, as well as malware, causing valuable data such as photos, videos, documents, and messages to be lost forever.

Ransomware and other malware, such as wipers, can either encrypt or completely destroy files, and there is no guarantee that files can be decrypted if a ransom is paid.

The survey was conducted among 728 Avast and AVG users between February 20-March 25.

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