Another Iraqi Crisis


As Iraq undergoes a tough challenge against the Islamic State in Iraq and Syria (Levant) ISIS/ISIL, India must take a step back and watch very carefully. The Modi government now faces its first foreign affairs challenge wherein, it’s under pressure to evacuate Indians stranded in the country safely. India has opened channels of communication with Saudi Arabia, thought to have some sort of control over the hardened Sunni militants, who began as the Al-Qaeda’s little brother but have carved for themselves a niche in the world of terrorism.

ISIS plans to establish a joint Iraqi and Syrian Sunni Muslim state and also has eyes on world dominion. The US has denied any ground troops in Iraq after its earlier debacle and the high cost for maintaining the army in Iraq. Even soldiers of the Iraqi military have been deserting their posts amid deteriorating working conditions and fatigue. Shia clerics have been calling for the majority Shi’ite population to arm themselves and fight the Sunni militants along with the residual Iraqi forces.

India must hope for a reverse in fortunes of the Shi’ite led Iraqi forces, backed by the US for a multitude of reasons. Iraq has been one of the major crude oil suppliers of India and with the country being overrun by militants, crude oil prices are bound to skyrocket. This presents a bold challenge for the government as rising prices would fuel the already sky-high inflation figures, which can spell trouble for it amid rise in prices of train fares and a supposed rise in duty on sugar. The government must prepare itself for a huge public outcry as soaring prices will break the back of the middle-class Indian. After the fall of major Iraqi cities to ISIS, the Indian Sensex, which was soaring amid high hopes from the Modi government also crashed for consecutive days.

The bigger challenge though for the Ministry of External Affairs is the evacuation of Indians stranded in the country whose passports have been confiscated by the companies they work for. While some are hiding in war-torn areas, 40 others have been reportedly abducted by the militants. One cannot hope any kindness by them towards Indians as India has been on Al-Qaeda’s radar, which is evident due to the surfacing of a video by the militant organization calling for restart of Jihadist organizations in the Kashmir valley. Along with the 40 Indians kidnapped, trapped also are a few nurses working in militant-occupied Tikrit whose safety still remains a glaring concern. The Indian government must now sit back and hope for the best as more and more Iraqi cities fall to the militants and the death toll rises.


Inflation vs. Growth


As a new government promises to bring the economy out of doldrums and revert back a slump, the RBI governor, Raghuram Rajan has become the new hard-task master on inflation. Modi has promised to bring about a phoenix-like rise of the economy from the ashes leftover by the previous government. Rising on the back of an anti-inflationary mood in the country and the lowest growth in two decades, the nation voted for a pro-business government which has promised to bring back the “Acche Din” (good days).

As the government settles in with its new PM, all eyes are on the Finance Minister Arun Jaitley, Modi’s trusted aide. The priority would be to bring out a pro-business budget with emphasis on easing land acquisition and availability of capital. The Modi government is concerned solely about bringing back the growth rates that prevailed in the past decade, fuelling India’s mind-boggling growth story. On the other hand, India is lucky to have a stern RBI governor whose priority since taking office has been to tackle the crippling inflation. One cannot ignore the conflicts that this may give rise to among India’s top financial honchos.

The fact is that the Congress government presided upon the India’s highest financial growth in decades. However, that doesn’t mean that they are to be credited for the overwhelming growth figures. The infrastructure development started by the Vajpayee government indeed left India shining. Only to be tarnished by the populist policies of the following government. During Vajpayee’s era, inflation rates were modest enough and one should be hopeful that after inducing high growth, the following government must be capable enough to not only sustain it but also build on it. No doubt, they had funds to splurge on their MGNREGA and Pay Commissions and Farm Loan Waivers but the question was how much? It was too late before it realized that the deficits were rising and subsequent development and productive expenditure was nowhere to be seen. Instead, it fuelled this expenditure drive, which was largely non-developmental (the productive expenditure was aptly consumed by its minsters) which powered inflationary pressures without a rise in supply and growth of essential commodities.

The result, a new government inherits an ailing economy downgraded by multiple credit-rating agencies. With inflation northwards of 8 % and growth southwards of 5 %, the government will find it tough to check one while raise another. One can only hope it won’t happen the other way round. In the recently concluded policy meet of the RBI, it kept all rates unchanged except a minor change in the SLR. This move must have been prompted by a pro-growth finance minister and would have been accepted by the subdued governor whose efforts to tackle inflation so far have been successful. What needs to be seen now is whether the government will want to increase rates thus stagnating growth or to let the rates fall and risk double-digit inflation? The only solution would be to increase the supply by ensuring expenditure is planned and leakages, in the form of corruption are minimal. India desperately needs to tide over a power crisis which has threatened the existence of several small and medium enterprises in northern and eastern parts of the country. Boosting of agricultural supply would likewise be tough with clouds of weak monsoon about. Even though one might argue that the Sensex is breaking all-time records, it is purely speculative and may collapse if growth forecasts don’t project a rosy picture in the weeks after the budget.

The silver lining here, one may find it only if one looks quite carefully, is the presence of opposite mindsets among the government and the RBI. It shall lead to healthy arguments and ensure that the country’s economy doesn’t produce a lopsided figure.

What does the future hold for the Congress?


After experiencing its worst political performance in history, the Congress has been far from humble. Its spokespersons promised that it would be a constructive opposition (although it remains to be seen as to who will actually be the opposition party). Under Rahul Gandhi, it has been decimated in most states and its future is bleak. Loyalists and sitting MPs deserted the party once it was established that the Gandhi brigade was staring at a defeat at the hands of a formidable opposition. Is there a ray of hope at the end of the tunnel for the INC?

Upon realizing their decreasing significance among the Indian masses, the party has realized how it failed to capture the minds of the voters. Its populist schemes have yielded nothing but greater scope for corruption and a decreasing relevance of the middle class in the economy. It must understand how its policies and loyalties were wrongly placed before its future is in limbo. Congress has drifted far-off and has attained a left-of-centre position. Its programs were largely aimed at providing subsidies instead of generating employment. “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” The government has been falling in a debt trap generated by the Congress’ subsidy for vote scheme. So how should the party re-invent itself?

First of all, the party must sit back and watch for the next five years as the BJP government plans to reboot the economy. It must re-acquire its old credentials and lose its leftwards aligned ideology. It must shed the petty vote-bank politics and quit instilling fear of the right-wing BJP among the Muslims. They have bright minds and youth leaders who can make a much-needed difference to its future. Egos and infighting should be shunned and the party must project a united image. After its rout, it has been quick to criticize the BJP even before it settles in and has seen blame-games instead of introspection.

The time has passed when the Great Family was the glue that kept the party together. Party cadres have expressed their grievances against the leadership of Mr. Gandhi, although it has been muted. The party that ran the world’s largest democracy is itself a monarchy and its members themselves fail to understand its shortcomings. If the Congress has to make a comeback, which is imperative for the country, it must differentiate itself from the family and allow regional bigwigs to exercise their clout albeit, through democratic procedures. It blamed the BJP for its one-man worship but failed to grasp the irony. If recent occurrences are anything to go by, every party worker must have realized that Rahul Gandhi is more of a liability than an asset.

Thus, regional leaders have called upon the Family to bring to the fore Rahul’s sister, Priyanka, always going into a self-appointed political exile. Like Modi’s 2002, Priyanka carries with herself a blot, none other than her own husband Mr. Robert Vadra. His shady land-deals have fooled no one. But then, why should there be only a family member who should take charge. Don’t they have other talented leaders? There is no dearth of talent or leadership qualities among the Congress. If only the party’s big shots can agree upon a name, Congress becomes the most formidable party on paper. However, this remains a distant dream which may never be realized.

The fact is that the country needs both the rightist BJP and the so-called centrist Congress. All others are dispensable. Neither the BJP, nor the Congress must have a free run at government without the presence of each other. The concept of an intimidating opposition is not lost on anyone. For the sake of the country it so dearly exploited, the Congress must shed its dynastic nature and instead move towards a much more holistic approach of allowing internal elections like they do in the US. Its ideas of pseudo-secularism and Muslim favourtism along with a subsidy culture must be shed. In order to reappear as a horse in the next elections, it must constantly keep the BJP on its heels and let democratisation engulf it. Unless the party itself isn’t democratic in a true sense, how can it make the country democratic in any sense?