Have China & Pakistan done a better Strategic job than India?

 

Posing the above question could surprise many, recently served glowing tributes, in op-eds’, commemorating the 30 year milestone of the 1991 economic reforms. The Congress party narrative flowing from its members or supporters in the media has always been to glorify the then Finance Minister, Manmohan Singh, at the expense the then Prime Minister Narsimha Rao - as a 2^nd best alternative to creating a perception that reforms were actually initiated by the Rajiv Gandhi regime, in the 1980’s, effectively shifting the goalpost away from 1991; this helps in cutting to size, people like Yashwant Sinha, who have claimed – not wrongly – that the blueprint for the reforms was prepared by the short lived Chandrasekhar regime (1990-91) & any govt. that followed would have implemented it.  Moving away from the rival claimants seeking credit, it is, perhaps, time to pose the following questions:

(1)Have successive Indian governments failed in creating  & implementing the right or optimum policies as Sino- Indian GDP (Gross Domestic Product) ratio is 5:1 now unlike a 1: 1 ratio in 1978? On purchasing power parity (PPP) China & India were at the same level till 1985 unlike a 2.4: 1 ratio now & on GDP per capita, parity existed in 1990-91 as per former Indian Chief Economic Advisor Arvind Virmani.

How did we remain contented at a self-congratulatory level while China raced ahead & created a huge differential in Comprehensive National Power (CNP) – a sum of its Economic & Military might?

Even during the parity age China beat India, convincingly, in the 1962 war. Since, during the Korean War (1950-53), they took on a much stronger power – the US with its attendant nuclear arsenal that had recently brought Japan to its knees in 1945 -  does it indicate that it had a greater risk appetite, unflinching in protecting its national interests?

(2)Has Pakistan – with a fraction of the Indian GDP - done a better job than India?

Indian economy is 11 times Pak's (Pak $266Billion; India $2900 billion in 2019-20) & Military Budget 7 times (Pak $10.4 billion; India & $72.9 billion as per Stockholm International Peace Research Institute SIPRI). Despite such a humongous lead, India has not been able to enforce deterrence on export of terror, resolve disputes or gain territory – post the acquisition of Siachen in 1984- while neighboring China, with acquired advantages only over the last 40 years vis a vis India, has been successful at least into creeping acquisitions? Does this mean that we have failed in our Military policy too – a blame that our armed forces should shoulder too for pushing a manpower heavy structure instead of a Tech focused one?

Analysis of Question 1

India gained independence in 1947 & the Chinese Communist Party (CCP) seized power in 1949; hence it is fair to claim a similar starting point for both nations. The Chief of the Prime Minister Economic Advisory Committee (PMEAC) Bibek Debroy, in an article wrote that Indian growth rate during the Nehru years (1947-1964) rivalled that of Asian tigers  Singapore, Malaysia, Taiwan & South Korea.

Growth dipped due to the costs incurred in fighting wars – 1962, 1965 & 1971 - & the ill-advised nationalization drive during the Indira Gandhi years apart from failed monsoons & the oil crisis. During the same period China passed through its own challenges – Korean war (1950-53), Indian war (1962) Vietnam war (1978) – economic disasters like the great leap forward (1958-62) & the Cultural Revolution (1966-1976). We were for long led to believe that Deng Xiaoping initiated economic reforms in 1978 while India did so only in 1991 & the 13 year lag reflects in our growth trajectories. However, if the Congress party’s narrative of Rajiv Gandhi initiating reforms is applied, the gap shrinks & China being 5x India, in GDP terms now, leads us to the following conclusions:

(a)India Gandhi was an economic disaster who surrendered the economic gains of the Nehruvian years apart from destroying democratic institutions; she has a better record on Indian external security though – hiving of Pakistan into Bangladesh (1971), Nuclear test (1974), Sikkim incorporation (1975) & Siachen acquisition (1984). Off course she has to share the credit for those achievements with her R&AW chief RN Kao & General Manekshaw. Her record on internal security, though, is blighted for initially propping up Bhindranwale to tame the Akalis & conducting operation Bluestar, thereafter, to tame the rebel, in 1984, that created the Punjab problem, solved later by the irreplaceable KPS Gill.

Takeaway 1: Never polarize society for political gains as it has National Security implications.

(b)While West Germany & Japan gained via US investments under the post-World War II reconstruction effort (Marshall Plan) & in 30 years emerged as economic powerhouses, did India squander the opportunity in our quest for “strategic autonomy”? Incidentally, “Non Alignment” appeared a farce after we signed the Indo-Soviet Treaty of Peace, Friendship & Co-operation in 1971.

Yes, a passive constitution was imposed on Germany & Japan to prevent their military rise & as losing powers of WWII they had no option but to comply. But they displayed amazing resilience in the economic sphere in 30 years, something we have failed to emulate. China meanwhile gained via becoming a Permanent Member of the United Nations in 1971, weaned itself closer to the US in 1972 – by offering itself as a bulwark against the USSR despite ideological affinity - & secured Western investments thereafter without compromising its Military & Foreign Policy. Today it rivals the US challenging the unipolar world order.

Takeaway 2: Seize the geopolitical opportunity to make India an attractive bet to balance China. Do to China what the it did to the USSR.

(3)Leaders off all hues – the Congress, the BJP, the Janata govt (1977-80) or the United Front (1996-98) perhaps have given us sub optimal policies reveling in the chaos of a rambunctious Indian democracy. As examples GST (Goods & Service Tax) has taken more than a decade from conceptualization to becoming a law while the inter service rivalry has delayed the implementation of "Jointness" in the armed forces commands; US created joint Theatre commands in 1986, Russia in 2008 & China in 2013 while it is still work in progress in India. The BJP opposed FDI in Retail, in 2012, during the Congress regime but implemented 100% FDI in single brand retail in 2017; The Congress opposed the BJP government’s attempts to increase FDI in Insurance, in 2014 - a proposal it unsuccessfully pushed hard while in power. Is it fair for any party to merely oppose a legislation to deny credit to the other, when protection & acceleration of national interests should be the sole objective?

Takeaway 3: Civil society & a vigilant media should question leadership on lack of policy consistency to prevent delay of India’s rise.

Analysis of Question 2

Shekhar Gupta, of The Print, writes that when he visited Pakistan in the 1980’s –as a young journalist – he was amazed at their standard of living there that was better than Indian Punjab – an outlier state in economic prosperity.  Unlike India where journalists and a hard time booking “Trunk calls” he writes that Pak had better telecom infra too. GDP per capita of Pakistan was 1.54 times India in 1970 & we crossed Pak only in 2006 & strengthened lead consistently; in 2019 Indian GDP per capita  is 1.63x Pak as per Statistics Times.

Unlike India which has weaker neighbors - in the South & East - Pak battles what it sees as an existential threat, India, in the East, claiming Jammu & Kashmir; In the North is Afghanistan (Af) – which had never accepted the Durand line effectively making Khyber Pakhtunkhwa a disputed province & a Shia dominant Iran in the West, Pakistan had managed its Foreign & Military policy remarkably well – cozying up to the US & the Arab friends during the earlier decades post-Independence riding on its patron UK’s coat tails. Later it befriended China – initially by ceding the Shaksgam valley of Jammu & Kashmir (J&K) in 1963 complicating the J&K dispute into a tripartite problem – & arranged for a Sino-US rapprochement in 1971. By placing itself as a frontline state supporting & training the Afghan Mujahideen, against the occupying Soviet forces, it secured economic & military assistance from its allies. Currently, with the US withdrawal from Af, Pak fancies a better leverage on the new govt. – at India’s expense - post the likely Taliban ascent to power.

Off course using terror as an instrument of state policy & using non state actors to cover up its CNP deficits could eventually follow the law of diminishing returns. But we must concede that Pak has done well in protecting its strategic interests; it has kept India off balance in J&K & has not conceded an inch on Sir Creek too. That analysts, including General Panag, have written about how we need to do to China what Pak has done is us, is in a way a grudging concession that Pak – despite its limited resources – has done remarkably well.

Way forward

It is time we stop hagiography of our political leaders – past & present. Obsession with a manpower centric army – when the world had moved to a technology driven one & beyond into the Cyber, Space & electromagnetic domains – indicates that the Armed forces leadership is not beyond reproach either. TV anchors berating Pak guests on prime time, to give viewers exhilaration, is merely diverting people’s attention from real issues, akin to Roman emperors keeping citizens busy with gladiatorial contests. Time for posing the right questions:

(1)What are the reasons behind the farmer agitation & the solutions thereoff? How do we improve the economic conditions in agriculture which supports 43% of our workforce? Suggestions in my blog post

https://meetrk.blogspot.com/2021/03/how-to-satisfactorily-end-indian.html

(2)What reforms does India need in the fields of Law & order – including Judiciary & police – education & healthcare? Suggestions in my blog post

https://meetrk.blogspot.com/2016/03/political-parties-in-india-havecoined.html

 (3)What are the Military reforms needed?

https://meetrk.blogspot.com/2021/08/what-military-reforms-does-india-need.html

(4)What policy initiatives beyond the PLI (Production linked Incentive), drop in taxes on manufacturing to 15% since Oct 2019 or the negation of the retrospective taxation now can spur investment & jobs to revive the country from the 2 year covid induced economic stagnation (2019-22)?

https://meetrk.blogspot.com/2020/01/india-suffered-6-consecutivequarters-of.html

 

If we don’t demand answers from our leadership we shall merely be served optics & our incompetence risks inviting ridicule from our future generations. We better make amends & shake our leadership from its stupor.

Why did Prime Minister Modi meet the Jammu & Kashmir Leaders?

The timing of the meeting between 14 Jammu & Kashmir (J&K) Leaders of 8 political parties & Prime Minister Modi, on 24^th June’21, for around 3 hours, was intriguing. That only “Mainstream” parties – who fought elections under the Indian constitution, but maintained their local relevance by demanding greater autonomy - were invited & included 4 former Chief Ministers & 4 deputy Chief Ministers, leads one to conclude that it was an attempt to restart an electoral process; keeping out the “separatist” Hurriyat Conference – formed in 1993, with its factions either supporting independence or merger with Pakistan - was not surprising, as the govt. had even cancelled talks with Pak, in 2014, on finding them engaging with this organization.  With “secession” out of question, Hurriyat becomes a pariah, but what are the objectives served by meeting the “Mainstream” parties still demanding autonomy via restitution of Article 370 & 35 A?

The BJP leadership must have been cognizant of the likelihood of criticism of such a rapprochement as a meek “walk back” especially when Home Minister, Amit Shah, in Nov’20, had panned the “Gupkar Gang” for acting “against our National interest” & in Feb’21 slammed the “3 families who have ruled in J&K for years”. Neither the BJP’s nationalistic support base nor the citizens of Kashmir – who did not protest significantly when these leaders were imprisoned, post the reading down of Article 370, on 5^th Aug 2019 – would be enthused either.

That raises the question: why did the govt. initiate such a move? Why now? Possible reasons follow:

(1)To Manage the after effects of US withdrawal from Afghanistan (Af)– The US force withdrawal, from Afghanistan, was initially planned to be completed by 11^th Sept – to coincide with the 20^th anniversary of the 9/11 attacks -  but is being accelerated -  a Vietnam redux. The proud Afghans have given a bloody nose to the British during the 3 Anglo-Afghan wars during the 18^th & 19^th centuries, the USSR during 1979-89 & the US  during 2001-20.

The Taliban, meanwhile, have captured a large swathe of Af, nudging out the state forces, rendering meaningless  their power sharing talks currently underway with the ruling govt. As per the UN Secretary General’s special envoy to Af,  Deborah Lyons “Most districts that have been taken surround provincial capitals, suggesting that the Taliban are positioning themselves to try & take these capitals, once foreign forces are completely withdraw”.  It is, therefore, likely that they would usurp power, nudging aside the Ashraf Ghani govt. – which India recognizes as the only legitimate stakeholder in the war ravaged country. The Indian institutional memory of IC 814 hijacking, in Dec 1999, to Kandahar, during the period Taliban ruled Af (1996-2001), & exchange of  terrorists that included Masood Azhar, still rankles & the possibility of battle hardened Taliban fighters being diverted to Kashmir is a challenge to Indian policy wonks. It appears, therefore, that the govt. is working on a 2 pronged approach.

(a)Open up negotiations with the Taliban: Qatar’s special envoy for counter terrorism & conflict resolution, Mustlaq bin Majed al-Qahtani alluded to the “quiet visit by Indian officials to speak to the Taliban”; was he referring to Foreign Minister S Jaishankar’s 2 transit visit to Doha, Qatar, on June 9^th & 15^th during his trips to Kuwait & Kenya?  Pakistan’s national Security Advisor Moeed Yusuf confirmed the same when he told Dawn News that India ‘having the Taliban killed daily & keep giving funds for operations against them & today they have reached there to have talks”.

It is likely that the talks did not go as planned, courtesy Pak’s pressure on the Taliban, since India denied the meeting while Yusuf derisively said “you should also ask what response they got from the Taliban”.  The most feared component of the Taliban – the Haqqani Network – is arraigned against India & it is likely that Pak could deploy its assets - Lashkar –e Tayabba (LeT) &  Jaish –e – Mohammed (JeM) against India  & that, perhaps, explains Indian diplomatic efforts to keep Pak in the Financial Action Task Force (FATF) “grey list” to check its covert ambitions.

Indian position in Af has weakened during the last few years; it has closed 2 of its 4 consulates in Af - Jalalabad & Herat in April 2020 – ostensibly due to covid & has no plans of opening them soon. The Jalalabad consulate was attacked in 2013 & 2016 & Pak has been pushing for its closure for quite some time. Having provided financial assistance of $1.5 billion – constructing their Parliament building, Salma dam, Electrical Transmission line to Kabul, Agriculture University at Kandahar, Zaranj-Delaram road, upgrading telephone exchanges, schools, Hospitals tube wells etc. – India might be keen to use the economic carrot to keep the Taliban at bay, a strategy that might work unless Pak’s iron brother China nudges India out, courtesy its economic heft.

(b)Humour the Kashmir Leaders: New Delhi appears to be moving on an alternate track as a back-up plan to the aforementioned strategy.  While the “separatist” Hurriyat leaders are still under house arrest, leaders of “mainstream” parties have been invited for the meeting to create a wedge between the two. The govt. has promised elections & statehood at an “appropriate time” post completion of the delimitation exercise.

The Delimitation commission was constituted in Mar 2020, under Justice Ranjana Desai but the Kashmiri leaders boycotted it with the argument that attendance shall render infructuous their currently subjudice demand for restoration of Article 370 & 35 A. The centre appears keen though  to use statehood as a leverage to force acceptance of Article 370 abrogation, as evident from  Modi’s 24^th June Tweet: “ Delimitation has to happen at a quick pace so that polls can happen & J&K gets an elected govt.” If some of the leaders express support for the delimitation exercise – with a view to seek  power or under coercion – it could create fissures in the “People alliance for Gupkar Declaration“ (PAGD) an umbrella organization that houses the National Conference (NC), People’s Democratic Party (PDP), People’s Conference (PC) Awami national Conference (ANC), CPI(M), J&K People’s Movement.

Post Modi’s meeting, the Delimitation commission, announced its visit to the Union Territory (UT), from July 6-9^th in what appears to be clearly a coordinated action plan. Minister of State, Home Affairs, Kishen Reddy met former MPs & civil society members from Kargil & Ladakh, later completing the cycle of engagement with other relevant stakeholders.

(2)Signal to Indian Critics abroad a resumption of a democratic process in J&K – The Acting US Assistant secretary of State for South & Central Asia, Dean Thomson, in a Congressional hearing, in June, remarked “Kashmir is one area where we have urged them (India) to return to normalcy as quickly as possible, including we have seen some steps taken: the release of prisoners, the restoration of 4G access. There are other electoral steps we would like them to take & that we have encouraged them to do & will continue to do so”

Parsing the statement leads one to conclude US pressure having forced the Indian hand. The US has helped India face a belligerent China across the northern border with diplomatic, Intelligence & surveillance information & India is thus constrained to respond favourably to nudges elsewhere.  

The drone attacks in Jammu, on June 27^th would give the govt. a reason to delay the process though.

The Politics of Delimitation:

As per the 1995 delimitation exercise, Kashmir has 111 assembly seats (Kashmir – 46, Jammu – 37 & Ladakh – 4 & Pakistan occupied Kashmir 24). Since Ladakh is now a separate Union Territory (UT),  J&K is left with 107 seats, which has been increased to 114 seats, as per the J&K reorganization Act, 2019, that has incidentally abolished the upper house – the legislative council.

There is a need to correct some historical wrongs in J&K. 7 seats in Jammu were reserved for the Scheduled castes (SCs) but Scheduled Tribes (STs) are yet to receive the benefit. The 1991 census was not conducted in J&K because of militancy & therefore the delimitation was based on the 1981 census. A decade later, census exercise was conducted in J&K, along with the rest of India; but while delimitation was conducted in the rest of India, during 2002-08, as per the 2001 census, J&K did not follow suit. Since the Central govt. passed a law in 2001 freezing the Lok-Sabha seats till 2026, the J&K state govt., in 2002, under the state constitution, froze delimitation of the state assembly constituencies till 2026. These shall be corrected under the new delimitation exercise.

The Ranjana Kumar led Delimitation commission when set up in Mar 2020, had a remit to redraw electoral constituencies of Assam, Nagaland, Arunachal Pradesh  & Manipur too apart from J&K but has been granted a 1 year extension for J&K alone indicating that elections, in J&K, are unlikely anytime soon. The recent Assam elections were conducted without delimitation & the Kashmir leaders have legitimately demanded on why the same logic cannot apply to their state.

The new state assembly shall have 114 seats with a likely higher representation to Jammu. As per the 2011 census Hindus account for 28% & Muslims 68% of the 1.25 crore population of J&K but with  Hindus a majority only in 4 of the 20 districts. Thus without demographic changes, gerrymandering, weightage to area & development indices rather than population alone, the BJP’s aim of having a Hindu Chief Minister, in the only Indian Muslim dominated state, is unlikely to happen. As a first step, the domicile rules were changed in Mar 2020 to facilitate granting rights to Hindus refugees from Pak – denied by the precious the govt.

There have been demands to grant land to retired armed force personnel to settle in the borders – to enforce demographic change & serve national security – but no central govt. has pushed the case, fearing creation of local angst & International pressure; the BJP’s support base in Jammu too has been demanding restriction of ownership on land & jobs to local residents only. Ladakh too has been demanding protection under the 6^th Schedule of the constitution that grants tribals’ autonomy. While there has been a precedence of forced demographic changes implemented in neighbouring POK & in China’s Xinjiang provinces, implementing the same in a democracy is a challenge. The govt. in negotiation with mainstream parties means that demographic changes shall be a slow burn.

The Inevitability of dialogue

The govt. facing covid & economy management challenges has a delicate job of explaining to its base the reasons for engaging with the J&K leaders, lambasted for being “anti-national” not very long ago. Apni party, largely viewed as centre backed, has not done very well in District Development Council polls, held in Dec 2020 unlike the PAGD alliance. The initial promise of the party, the J&K People’s Movement, launched by the 2009 IAS topper, Shah Faesal, has fizzled out with the founder asking, in 2020, to be relieved of organizational responsibilities. While the BJP did well in Jammu the “Gupkar alliance” held sway in Kashmir. Terror holding agency in the valley & elected representatives being killed apart from International pressure to restart electoral process in the vale might have forced the govt. hand on negotiation.

There appears to be a realization in the J&K political parties too that they have no option but to come to the dialogue table. Omar Abdullah, in an India Today interview, conceded that “It is pointless to ask this govt. to restore Article 370 ….. as they are the architects of taking it away. The fight for restoration of Article 370 & to win back, what was snatched from us, on 5^th Aug 2019, shall take place in the Supreme Court”. People Conference Chief Sajjad Lone lamented that the so called Liberal parties in India “could not convince their countrymen when the Aug 5^th changes took place. We should take whatever this govt. gives us” & “when there is a liberal govt. let us see what they do for us….. if they come to power in 2024, 2029 or 2034”. That he mentioned dates extending up to 2034 indicates that the Kashmiri leaders are not sure if the BJP shall lose elections in 2024. He also believes that “Kashmiris have shunned dialogue in the past & paid heavily”& sitting back & not engaging with the centre would put the state populace at the mercy of bureaucrats.  

P Chidambaram, in an interview, few years back, suggested a compact that grants Kashmir autonomy that harks back to the pre 1953 status, in line with the Dilip Padgaonkar committee recommendations of Oct 2011; it is unlikely that the Congress could ever support such a position fearful of losing whatever is left of its already diminished presence in the Lok Sabha.  Any party, with an agenda on reinstatement of Article 370, would be committing political hara-kiri as public sentiment across the country is against the same. Perhaps that is what Sajjad Lone meant when he said that the “two extremes of liberalism & illiberalism in Indian politics, are unfortunately coinciding”.

Conclusion:

The Modi -J&K leaders meet is in response to the Geopolitical changes of US force withdrawal from Afghanistan & the likely Taliban ascent to power & the likelihood of the Pakistan-Taliban combine to disturb the fragile peace in the Kashmir valley. The BJP govt., perhaps, took this initiative as its reach out to the Taliban did not yield the expected dividends, with Pak playing spoilsport. The less than good performance of the Apni Party, in the recently concluded District Development Council elections & IAS topper Shah Faesal relinquishing organizational responsibility, in 2020, of the newly formed J&K People Movement – meant to inject fresh blood into the vale’s politics – could have forced a rapprochement with the “Gupkar Gang”

While Joe Biden, of the Democratic Party, in power in the US,  has nudged the Indian govt. on initiating democratic process, in J&K, it is unlikely that they would do more to antagonize its Quad ally India, firm as they are in setting their sights on China, challenging a unipolar world order.

Against this background it is prudent to interpret the current move by the govt., as nothing more than mere optics to manage international pressure, couched under catchy slogans of reducing “Dilli ki doori” & “Dil ki doori”. The Delimitation commission tenure has been extended by a year which means that elections are at least a year away; meanwhile the govt. can accelerate development programs in the valley in a bid to gain more support among the populace.

COVID - 19 Second Wave In India – The Solutions

The first wave of COVID - 19 started receding around Oct 2020, in India, & Health Minister, Harshvardhan, in the 1^st week of Mar 2021, declared, “We are in the end game of the COVID – 19” – a premature victory announcement revealed in hindsight. Complacency could partially explain why the National Covid Task Force went into hibernation then but woken from its stupor, now, is warning of a likely 3^rd wave. Preparations for tackling a 2^nd wave, apparently, were non-existent & the lowering of guard was visible vide violation of social distancing norms during the just concluded “super spreader” events - state elections & preponed Kumbh Mela celebrations. No wonder the respected international Medical Journal, The Lancet, called it a “self-inflicted national catastrophe”. Regrettably, the 4^th Estate, was busy peddling the narrative of either “Vaccine Nationalism” or “Vaccine Diplomacy” & the whatsapp university played amplifier, instead of warning the powers of the impending crisis 

History often repeats itself first as a tragedy & then as a farce. Lessons ought to have been drawn from the Spanish flu, of 1918, that boasted of a more virulent 2^nd wave & a milder 3^rd wave; similarly, assuming that India shall remain untouched even as western nations were hit by a 2^nd & 3^rd wave, a few months back, is nothing short of delusion.

As expected, the blame game has begun with supporters of the Central govt. blaming the states for reneging on their responsibility on “Health”  - a “state subject” while those supporting states blaming the Centre for not accelerating “vaccine production”- & opacity on the usage of the PM Cares fund. The loser, in either case, unfortunately, is the Indian citizen.

What Should Have Been The Indian Strategy?

The Global average is about 3 hospital beds per 1000 population while India, with a population of 138 crores (Cr.) about 16 Lakh beds, against  41 Lakh beds as per Sumeet Aggarwal, in a 2017 ET Healthworld interview. About 60% of these are contributed by private hospitals. Assuming an average of Rs 1 cr. investment, per hospital bed, requires an outlay of Rs 25 Lakh cr. (~ 13 % of GDP), impossible to achieve during a pandemic year, as this is about 70% of the combined state budgets of about 35 lakh cr. per annum. Even if states did divert resources towards healthcare, clogging of hospitals, as witnessed in many western countries, with impeccable infra, during the peak of the pandemic, was inevitable as hospital bed capacity is not designed for peak load; states cannot be condoned, though, for failing to put up oxygen plants, at each public hospital, when the cost is about Rs 1 cr. per unit only. The solution thus lay in fast vaccination of the 94 cr. adult (>18 years old) population, costing about Rs 28400 cr. (94 cr. x Rs. 150 per dose x 2 doses) or about 0.15 % of GDP. Paying double the price at Rs 300 per dose too was cheap at 0.3% of GDP.

India could have wisely learned from Israel which secured Pfizer vaccines at $30 apiece, double the, prices paid by its western counterparts, for early delivery, which its Prime Minister Benjamin Netanyahu, reasoned was cheaper than the economic losses accrued due to lockdowns; of course, this was linked to sweeten his re-election bid too. Western Nations, including the US, UK etc. paid & blocked vaccine supplies, from multiple vendors - Pfizer, Moderna, J&J, Astra Zeneca etc.-  enough to vaccinate their population many times over, inviting criticism of “Vaccine Hoarding” & hence discrimination by the Global South. Obviously, India, a Middle Income country, with high population, cannot afford to block supplies, of costlier vaccines like Pfizer, costing $15-30 apiece, which requires a robust cold chain infra too, to store vaccines at -70 degrees, which India lacks; but blocking supplies of Covishied & Covaxin costing $2 apiece was always possible. Furthermore, this crisis presented an opportunity for India to buttress its claims as the “pharmacy capital of the world” by helping the global South.

India, therefore, should have decided on vaccinating 94 cr. (>18 age) population, in 6 months, needing 188 cr. doses. Funding capacity expansion could have happened either vide a subsidy, higher price of procurement or paying an advance for the entire supply, in 3-4 tranches – the last option, obviously, was the cheapest & hence recommended. It should have paid advances for procuring Serum Institute’s Covishield & Bharat Biotech’s Covaxin, to up capacity to 30 – 40 cr. per month. Post domestic inoculation, supplies should have been made to the rest of the world, to enhance its soft power. Instead, we are now at the mercy of other countries begging for supplies.

Why Is the Private Sector Loath to Invest?

Return on Investment (ROI) for private hospitals is in low single digits - since it faces a nutcracker case of rising costs, courtesy inflation & war for talent & greater govt. controls on prices of consumables - drugs, stents, implants -  which bring 2/3^rd of their profit margins apart from treatment procedures & medical devises; paradoxically, increased insurance penetration & hence greater bargaining power gained by institutional customers – insured patients, corporates & govt. funded patients – has also capped healthcare prices. While the govt. is right in creating a regulatory framework of “affordable healthcare” it must accelerate public investments into healthcare in the light of waning private investments – inferred vide many promoter sell offs in corporate hospitals.

Against this background, policy wonks would have expected a joint declaration last year, by the Centre & State governments, to spend 2 lakh cr. each, in capital investments yearly, for the next 5 years, to improve health infra. Meanwhile the Private sector could adopt digital models of faster & cheaper service delivery & tap more international business – to attract cash patients to achieve cross subsidy – & enhance margins.

Way Forward:

(1)Increase investment in healthcare: History of Nipah Virus, in Kerala, in May 2018, or the multiple waves of Corona, since Mar 2020, proposes the likelihood of similar pandemic waves, in the years to come,either due to virus transmission across species or due to bio-warfare. Increasing hospital beds to WHO norms, along with the attendant increase in manpower – doctors, nurses & paramedics - & a proportionate increase in primary & secondary healthcare centres is thus essential, all under the regulatory norm of “affordable healthcare”. While the public: private sector contribution, in tertiary healthcare can be 50:50, heavy lifting of primary healthcare has to be predominantly led by the govt.

Standardization of protocols is also essential to ensure speedy response, in the light of shortage of trained manpower.

(2)Replicate the successful template of Dr Rajendra Bharud, IAS, District Collector, Nandurbar, a tribal district of Maharashtra

·         Instead of dismantling temporary COVID - 19 facilities, post decline in cases, at the end of the first wave, Bharud, took signals from the surging case load in Brazil & America & prepared for the 2^nd wave by strengthening infra, creatively, putting to use district planning & development funds, state disaster relief funds & CSR (Corporate Social Responsibility).

·         Schools & community halls were converted into COVID - 19 centres – creating 7000 beds for isolation & 1300 ICU beds with ventilators; 27 ambulances were procured to bring patients to the hospital & 2 to move dead bodies. Today despite the 2^nd wave the district boasts of spare capacity of beds providing succour even to patients from neighbouring states.

·         Learning from the 1^st wave experience of shortage of frontline doctors & experts due to lack of medical colleges in the region, he roped in all local doctors & trained them to perform all vital procedures like intubation & monitoring of oxygen levels.

·         As a preventive measure, he initiated rapid vaccination of the 3 lakh, above 45 years old people, of the 16 lakh population, of the district. 1 lakh people have already received the 1st dose, administered vide 16 vehicles, to avoid citizens travelling in the hilly terrains, using teachers & sarpanches as "influencers", to spread word regarding the seriousness of the situation.

·         In Sept 2020, he installed the first oxygen plant in the district, with a capacity of 600 litres per min, even though the highest single day spike was 190 cases only. In Mar 2021 he installed the 2^nd Oxygen plant & in April, when cases started touching 1200, he started preparing to install a 3rd plant, with a combined capacity of 3000 litres per min. Thus while the rest of the country is gasping for oxygen, now transported, in cryogenic containers, from the steel plants, largely concentrated in India’s East, Nandurbar is self sufficient. He reasoned that directly extracting oxygen, from the air, is a cheaper alternative, to shifting oxygen from elsewhere, considering that cylinders are manufactured only in certain states.

·         Oxygen pipes were given as soon as saturation levels start dropping, instead of waiting for the critical stage, as patients use only 30% of oxygen in the first case against 90% in the latter case; it also directly affects the brain & kidney making it harder for patients to recover fast.

·         He created a website & control room to help control panic & guide the citizens to avoid citizens running from pillar to post in search of beds.

(3)Handle Manpower shortage: Dr Devi Shetty, Founder Narayana Health, has highlighted the likelihood of shortage of nurses & doctors, in ICUs, being the next headline, post shortage of Oxygen & Remdesivir is addressed & suggested the following interventions to tide over the crisis:

·         Statistically per every patient tested positive, there are 5 patients positive but untested. Thus 3 lakh per day of positives implies 15 lakh actual positive cases.

·         Assuming 5% of them to need ICU beds means an additional requirement of 75000 beds per day; each patient needs to stay in the hospital for about 10 days. Total ICU beds in India are 75000 -95000 & hence already full. Any bed in a hospital with central oxygen can be converted into an ICU with a few accessories which can be easily procured; doctors, nurses & paramedics are in short supply though.

·         Frontline workers who did a phenomenal job during the first wave are tired & exhausted.

·         Therefore

o   Exemption to the 2.2 lakh nursing students who finished GNM or BSc Training from appearing for the examinations & given preference in a future govt. jobs provided they work in a COVID - 19 ICU for 1 year.

o   NBE & NSE to exempt 25000 specialist doctors & offer a degree if they work in a COVID - 19 ICU for 1 year

o   NMC to recognize medical diplomas in intensive care cardiology or emergency medicine currently unrecognized by the Medical Council to gain access to a few thousand additional resources

o   1.3 lakh doctors are preparing for the 35000 seat NEET examination; attract the 1 lakh unsuccessful ones by offering grace marks for the exam next year provided they work in the COVID - 19 ICU for 1 year

(4)Accelerate Vaccine production:

The US has announced support for “temporary waiver” of Intellectual Property (IP) Rights, for COVID -19 vaccines – not diagnostic kits, therapeutics like Remdesivir & related technologies – unlike the resolution proposed by India & South Africa, in Oct 2020, at the World Trade Organization (WTO), that enjoys the support of over 100 countries. EU, UK, Japan & Switzerland oppose the move though. While this “limited waiver’ is a step forward, the “consensus based” approach, of all 164 members, at the WTO, shall delay the conclusion of the text based negotiations. India & other nations can break the patents anyway under the “compulsory License’ rules. But waiver of IP alone is insufficient, if technology is not transferred to accelerate production; problems of trade barriers & shortages of ingredients remain. “Voluntary licensing” by pharmaceutical majors, of the Serum Institute of India (SII) - Astra Zeneca kind – hopefully at reduced charges– is perhaps the compromise formula that shall be agreed. Since negotiations shall take time, India shall be better advised in accelerating production of SII’s Covishield & Bharat Biotech’s Covaxin.

The govt. has announced Rs 3000 cr. to The Serum Institute & Rs 1500 cr. to Bharat Biotech as a credit advance.

Covishield is expanding capacity from about 7 cr. per month to 10 cr. per month (120 cr. per annum) by July 2021. SII shall also produce 100 cr of Novovax per annum.

Covaxin has expanded capacity from 0.5 lakhs per month to 1.2 cr. per month (14.4 cr. per annum) with plans to expand it further. Since Indian Council of Medical Research (ICMR) holds patent rights along with Bharat Biotech, for Covaxin, the process should be shared with other vaccine manufacturers, in the country to ramp up production. India has a vaccine capacity of 8.2 billion per annum & ideally 50% of the capacity could be diverted to produce Covaxin.

Dr Reddy shall import 12.5 cr. vaccines starting May 2021 while Gland Pharma, Hetero Biopharma, Panacea Biotech, Stelis Biopharma & Virchow Biotech shall produce 85 cr doses per annum starting Q2 21(June-Sept 2021)

Biological E shall produce 60 cr. of Johnson & Johnson’s vaccine as part of a QUAD deal - vaccine funded by the US & Japan, produced in India & distributed by Australia. However, India's aspiration to be a lynchpin of the Quad, stands diminished, struggling as it is to produce vaccines for its own citizens. China, meanwhile, is making inroads into South Asia & beyond at India's expense.

While Pfizer & Moderna have been approved & imports are likely, they shall be constrained by the lack of a cold storage chain & high prices (~$20) & could serve only the creamy layer of the population. Sputnik is sold uniformly at $10 across the world & would have found few takers when Covaxin & Covishield were being sold for $2 apiece; that could explain the govt. allowing Covaxin & Covishied to up prices.

Prudent however for the Central govt. to book 188 cr. Covaxin & Covishield upfront, issue credit for stock to ramp up capacity & continue to offer the jabs at Rs 150 to continue gaining goodwill of the population. 

Conclusion:

Lack of commensurate investments in healthcare, over the last 70 years, is now coming home to roost; focusing on an insurance led model & expecting the private sector to carry the entire burden of upping investments, in tertiary care, is unfair & unattractive when price controls restrict ROI to single digits. Govt. should continue with price controls under the “affordable care” regulatory framework & up public investments, into tertiary care, to be at least an equal partner to the private sector from current 40%. State governments should take the entire load on setting up Primary Health Centres (PHCs) & share burden with the private sector in strengthening Secondary Health care.

While the aforementioned recommendation is a medium term goal replicating the successful template of Dr Rajendra Bharud, District Collector, of Nandurbar, Maharashtra & implementing Dr Devi Shetty’s recommendations on ramping up manpower shortages could help India emerge from the health crisis. Accelerated vaccine production & inoculation, though, remains the key to redemption

How To Satisfactorily End the Indian Government - Farmer Confrontation?

 

The govt. passed 3 farm laws in Sept 2020 & likened it to the 1965 “Green Revolution” in agriculture with a potential to improve farmer incomes while farmers - at least in some parts of the country like Punjab & Haryana – contest the claim & have risen in protest which has since crossed the 100 day mark. A solution to the confrontation is thus called for.

Since Agriculture Pricing Marketing Committee (APMC) was abolished, in Bihar, in 2006, doing away with a comparative price discovery mechanism, leading to a further drop in farm food prices accruing to farmers; the central government, rightly, has only abolished the monopoly of the APMCs by throwing it open to private competition. The model contract farming Act, perhaps, passed with an intention to encourage larger land holdings & hence to attract private investment suffers from certain flaws though; as per Agricultural Scientist Devinder Sharma, the size of an average land holding in US is over 160 hectares & in Australia more than 4000 hectares. If open agricultural markets in US & Europe – in existence for 6- 7 decades had been so benevolent the crisis would not have been so severe as to demand an annual subsidy of $100 billion in Europe & an average US farmer annual subsidy of $60,000 against $200 in India. The new legislation strangely “arranges for a bureaucratic dispute resolution mechanism to the exclusion of civil courts” as per the former Finance Minister P Chidambaram.

Facts on the ground:

(1)Agriculture supports the largest chunk of the workforce at 43%: Agriculture accounted for 69.7% of Indian workforce, of 29.8 cr. in 1951 which dropped to 54.6%, of 48.1 cr., by 2011 & at 43% now substantial to demand attention.  Their precarious position can be gauged from the fact that about 12000 farmers commit suicide every year (As per govt. data 12360 in 2014, 12602 in 2015, 11379 in 2016); loan waivers announced by all parties is a temporary band aid that does not address the root causes.

(2)Low Farm Gate to Consumer Plate Prices: As per a 2019 RBI report the farm gate prices vary between 28% -78%of the retail prices, accentuating a demand for disintermediation to improve farmer incomes. Traders & Retailers mark-up is higher for perishables indicating the urgent need for improving cold storage facilities to reduce waste. As per the Central Institute of Post-Harvest Engineering & Technology (CIPHET), 18% of fruits & vegetables in India rot due to unavailability of storage while there are other studies that peg the fig. closer to 40%. The sector is clearly crying out for investment.

(3)Predominance of small farmers impedes price negotiation: 86% of Indian farmers have less than 2 hectares of land that accounts for 47% of total cultivable area (Agricultural Census 2015-16), indicating limited negotiation capacity, for small & medium farmers,  in the absence of Farmer Producer co-operative structures (FPO) that build successes in the milk movement, under brand Amul . But political capture of the co-operative movement for sugar, milk & financial services does not inspire confidence.

	Total Holdings
Area in Hectares	Number		Area
Below 0.5	70468756	48.1%	16472957	10.4%
0.5-1.0	29782553	20.3%	21450395	13.6%
1.0-2.0	25809332	17.6%	36150710	22.9%
2.0-3.0	9827676	6.7%	23374741	14.8%
3.0-4.0	4165538	2.8%	14244565	9.0%
4.0-5.0	2366241	1.6%	10457933	6.6%
5.0-7.5	2352020	1.6%	14146575	9.0%
7.5-10.0	843219	0.6%	7205918	4.6%
10.0-20.0	693375	0.5%	9066527	5.7%
20.0 & ABOVE	145031	0.1%	5247011	3.3%
ALL CLASSES	146453741	100%	157817336	100%

 

As per the agricultural census 2015-16, the average size of operational land holdings reduced from 1.15 hectares in 2011-12 to 1.08 hectares in 2015-16; sane to presume that it has reduced further to about 1 hectare (~2.5 acres in 2020-21). Therefore, with an average profit of Rs 15,000 per acre (Rs 30,000 across 2 crops of Kharif & Rabi) an average farmer makes Rs 75,000 per annum barely sustainable for an average family of 5.

Since Income under 5 lakhs, attracts no tax farmers upto a land holding of 16.66 acres are protected. While there have been demands to tax farming, pertinent to note that only 1.2% of farmers have land holdings in excess of 7.5 hectares (~18.75 acres) & that explains why no governments has tried to tax the ~ 15 lakh “rich farmers” since it is a political hot potato; they have instead rightly tried to tax them by tracking sale of premium cars & gold purchases.

(5)India offers low MSP & no produrement support for about 20 products: India offers lower MSP than comparable contries except Vietnam & hence there is scope for enhancing same even while working at disintermediation.

GOI releases MSP for 23 products – 7 cereals (Paddy, wheat, Maize, Sorghum, Pearl Millets, Barley & Ragi)  5 pulses (Grams, Tur, Moong, Urad, Masoor) 7 oilseeds (groundnut, Rapeseed & mustard soyabeen sesamum sunflower seeds, , nigerseed, , safflower) & 4 cash crops – cotton, jute, sugarcane, copra & de-husked coconut) but procurement by FCI is done only for rice, wheat & partially for cotton & some pulses. Bereft of a procurement mechanism, MSP on the remaining products is a farce allowing private players do secure products at 15-20% lesser than the MSP announced.

Lured by procurement support farmers have overproduced water guzzling crops like rice & wheat unlike millets & sorghum depleting the water table demanding a correction to be effected in cropping patterns. As per the PRS Legislative Research data India consumes about twice the water to produce a unit of output demanding the use of drip & sprinkler system.

As per capita incomes of societies increase, the consumption of proteins – pulses, eggs, milk, meat etc. – increases & Indian food inflation during the last 2 decades was on account of such shortages indicating the need to demarket cereal production & incentivize pulses & oilseeds production

(6)Agricultural Trade Disputes on the rise: Countries like US & Canada have dragged India to the dispute resolution mechanism under the World Trade Organization (WTO) on subsidies on rice & wheat; likewise, Brazil, Australia & Guatemala on sugar subsidies. As per WTO mandate, agricultural subsidy cannot exceed 10% of the value.  Input subsidies like free water, electricity, subsidized fertilizers & MSP have been cited as the villains by the complainants who are demanding reduction of the same & opening up of agricultural markets & India might have to opt for some compromise as way forward if it wants a rules based international trade order - that has served it well - to prosper. This shall impact farmers.

As per the Food & Agricultural Organization of the United Nations, India is the 2^nd largest producer of rice in the world,  but the largest exporter with over 25%% market share (Global Market of 40MT) & growing share further might not be easy.  Increase in production worldwide led to price pressures because of which 2018 prices were nearly equivalent to those in 2009 indicating the urgent need for India to change cropping pattern away from rice.

On wheat India faces quality issues & lack of competitive advantage due to relatively higher MSP as compared to formidable competition from Australia, Ukraine, Russian Federation & US. While global wheat trade is 170 MT per annum, India exported about 5 lakh tonnes in 2019-20 largely to Nepal (~2 L tonnes)

As per US FA during the year 2019-20 India is expected to produce 112 MT of Rice & consumes 102 MT while producing 100MT of wheat consuming 91.5Mt & using 5.5MT as feed.  Thus India can afford to increase wheat production, but by rationalizing MSP, to help export competitiveness while there is a need to shift away from rice production. Incidentally, rice is produced across the country while wheat is produced predominantly in the North & Central region. Productivity of wheat in Punjab/Haryana is comparable to the global figs. while lower irrigation facilities impedes production in the drier central region; need for producing region specific seeds to enhance productivity.

Need for Rationalizing subsidy: Fertilizer subsidy of about Rs 75000 cr per annum on nitrogenous (N) fertilizers – urea - & none on phosphorous(P) & Potassium(K) has led to excessive usage of N shifting N:P:K ratio to 6.1:2.46:1 in 2017-18 against an ideal 4:2:1. The Shanta Kumar Committee therefore, recommends removal of subsidy & direct benefits transfer (DBT) at the rate of about Rs 7000/ hectare.

Understanding the interests of the 4 stakeholders - the government, Farmers, Consumers & the private sector -  in this policy document shall help chalk out an agreeable compromise.

(a)The govt. spends more than 2 Lakh cr. every year in Food Subsidy – to provide food to 66% of Indian population under the Food Safety Act 2013. Rice & Wheat are procured by the Food Corporation of India (FCI) & sold at a subsidized rate to the beneficiaries; the difference is the subsidy, which the govt. passes to the FCI albeit with a huge delay, consequent to its weak finances, pushing the organization into the Red. Furthermore, while the buffer stock required is 41.1 million tonnes on 1^st July every year to cater to any famine/drought situations & targeted Public Distribution System (PDS) needs, FCI godowns are overflowing with stocks, more than 50% of those set limits,  due to the political pressure on procurement. Short of space, FCI has been stocking up in the open, exposing stocks to rain gods & consequently selling rotten stock to breweries at a huge discount. Govt. thus is right in exploring ways to rationalize subsidies & making FCI operations efficient.

(b)Farmers accounted for 43% of the Indian workforce but contribute only about 15% of GDP (Gross Domestic Product); clearly, most of them are poor & would do well with a hike in the Minimum Support Price MSP). If the govt. genuinely wants the improvement in farmer’s incomes why are they loathe to make MSP a “legal right” i.e. even private sector cannot procure at less than MSP?

(c)Consumers want an anaemic increase in MSP so that inflation is kept in check & savings thereof can fund their other consumption splurges.

(d)The private sector, answerable rightly to their shareholders, would not want MSP as a legal right, as it is an impediment to maximize profits.

The interests of the farmers are thus is opposition to the govt., consumers & the private sector & that explains the conflict. But mere slogans of “Jai Jaiwan, Jai Kisan” do not help when budgets for both are either slashed or experience a yearly increase that barely covers inflation.

The Way forward:

The govt. needs to improve farmer incomes through concrete action rather than assuming that the entry of the private sector shall automatically usher in prosperity. The policy however should be WTO compliant that mandates that agricultural subsidy cannot exceed 10% of the value. Reduction of procurement by FCI is necessary to pull the organization out of the red. With per capita incomes under pressure, an increase in agriculture production cannot be absorbed in India & export markets, since 2012, have experienced anaemic growth. India became the largest producer of sugar in the world, last year but found it difficult to sell the excess production despite the loss of crop in Brazil. 

Therefore:

(1) Replace MSP with Input subsidy so that farmers produce what the market can absorb:

(a)Direct benefits transfer of the Rs75000 cr. fertilizer subsidy at Rs 7000/ hectare (Rs 2800 per acre)

(b)Since FSA mandates 75% of rural & 50% of urban population as beneficiaries, sane to assume that most of the land owning farmers & agricultural labourers, in rural shall fall into the beneficiary’s category. DBT of the food subsidy at about Rs 7500 per family (Rs 25/Kg X 5 Kgs/Month X 5 persons/Family X 12 months) which translated into ~Rs 3000 per acre - assuming an average holding of 1 hectare per family.

This is borne out vide the Shanta Kumar Committee recommendations; In 2013 cost of rice procured was Rs 20 & sold at Rs 3 to the beneficiaries of the Food bill incurring a subsidy of Rs 17/Kg. The logistics & storage costs were Rs 10 extra & hence the resultant subsidy was Rs 27/ Kg (Rs 30 – Rs 3). DBT of Rs 22/Kg - as part of the food bill - to the bottom 40% of the population, instead of 67% of the population (75% of rural & 50% of urban); issue wheat & rice at 50% of MSP for non-Antyodya households.

(c)Continue PM KIsan of Rs 6000/- (Rs 2400 per acre)

(d)States to replicate the Telangana Ryutu Bandhu scheme of providing an input subsidy of Rs 10,000 per acre.

These figures add up to Rs 17200 (Rs 8,200/- per acre by the central govt. & Rs 10,000 per acre by the state govt.)- about 60% of the current profit of about Rs 30,000 per acre secured by the farmer annually across 2 crops.  

(2)Launch Farmer Markets in Urban centres to reduce intermediation to enhance farmer incomes: There are some best practices of states worth a national replication. Ryathu Bazaar of undivided AP or Uzhavar Sandhai of TN – where farmers sell directly to consumers in designated spots at urban centres - have found that farmers secure 15-40 % more than wholesale prices & consumers pay 15-30% less (GOI 2011 RBI report 2019)

(3)Launch Farmer Co-operatives to help in collective bargaining: The govt. wants the creation of 10,000 farmer co-operatives & promised credit of Rs 1lakh cr. vide National Bank for Agriculture & Rural Development (NABARD) to build agricultural infrastructure; Intent is welcome but challenges in execution persist

(4)Nudge farmers to diversify Income streams: Ultimately, doubling of farmer incomes needs diversification of farmers into horticulture, poultry & animal husbandry.

(5)Need to shift workforce from agriculture to manufacturing & services:  Agriculture accounts for 15% of GDP but employs 43% of the workforce alluding to low productivity. Govt. should accelerate efforts at shifting at least 15 cr. farmers into manufacturing – especially labour intensive leather, footwear, toys, textile etc. - & service sector jobs. Landless labourers should perhaps be the first focussed group.

Conclusion

Protecting 43% of workforce, surviving on agriculture, is a must without sacrificing the inflation concerns of 100% of the consuming population & the necessity of pulling the FCI out of the red. Replacing MSP with input subsidy, disintermediation by launching farmer markets in urban areas, nudging farmers towards sustainable agricultural practices away from producing water guzzling crops like rice, wheat, sugar, etc. in favour of oilseeds, pulses, fruits & vegetables etc. - currently in short supply - & incentivizing farmers vide banking loans into diversifying income streams by starting horticulture, animal husbandry, poultry etc. is a beneficial way forward. Finally, India has no option but to arrange for shifting a majority of the farmers into manufacturing & services or else stare at a demographic nightmare. Since agriculture is a “state” subject, a consensus driven equal contribution approach by both the centre & the states can help execute the aforementioned solution. The clock is ticking.