Gist of The Hindu: April 2016

Gist of The Hindu: April 2016

A new beginning with Iran

It was a remarkable moment in international diplomacy. Until last year, it was unimaginable that there would be a peaceful solution to the Iranian nuclear crisis. Even when a deal was reached in July, critics continued to attack the efforts, questioning the operating challenges of the accord and Iran’s dubious nuclear record. But proving its critics wrong again, Iran quickly acted to rein in its nuclear programme. It decommissioned its enrichment centrifuges, removed the core of its heavy-water reactor and shipped out most of its low-enriched uranium stockpile — all in months. On Saturday, the International Atomic Energy Agency confirmed Iran had complied with its commitments. Within hours, nuclear sanctions were removed, signalling Iran’s reintegration with the global economy. The implementation of the deal demonstrates the willingness of both the U.S. and Iran to move past their history of hostilities and begin a new future of cooperation. U.S. President Barack Obama and his Iranian counterpart Hassan Rouhani deserve credit for their visionary determination. It was not easy to effect structural changes in the thinking of their respective foreign policy establishments and chart a new course of constructive engagement. Both faced criticism at home. There were regional challenges as well, such as the steadfast opposition from Israel. Still they stuck to the path of diplomacy which brought new hopes to a region that is otherwise tormented by conflicts.

Over the past few months, U.S.-Iran ties have substantially improved. Though both sides maintain that cooperation is limited to the nuclear deal, in actuality it is much broader. Tehran and Washington are engaged in Syria and Iraq. They share common interests in Afghanistan. The quick release of American sailors whose patrol boats drifted into Iranian waters signalled the shift in ties. The prisoner swap deal, announced just hours before the sanctions were lifted and under which Iran released four Americans and the U.S. seven Iranians, is another indicator. But the question is whether these changes are sustainable and, if so, what effects they can have on the troubled West Asian geopolitics. In Iran there appears to be a consensus on enhanced engagement with the West. Despite the anti-American public posturing, often from the hard-line quarters of the establishment, Iran’s political elite remains largely supportive of President Rouhani’s moves. But it’s not the case in the U.S., where the Republican front runners for the presidential election are highly critical of the deal. It is not clear what could happen to the Iran-U.S. détente if a Republican is elected to the White House. But if both nations overcome these challenges and sustain the momentum, it can transform the region for the better in the long run. India should take the cue from the deal. A peaceful, stable Iran is vital for its interests, particularly for energy security and connectivity. New Delhi should get Tehran on board, again.

A tale of two economists

Chief Economic Advisor (CEA) Arvind Subramanian started 2015 on an over-optimistic note. He is likely to have ended it in disappointment. The economy is slowing down: in the first six months of the financial year, real GDP grew 7.2 per cent, slower than the 7.5 per cent in the corresponding earlier-year period. In 2016-17 too, GDP growth will not be significantly greater unless some specific steps are taken, the CEA has said. Thankfully, there are few takers in the government for the main measure he is suggesting: a further pause on fiscal deficit reduction.

The brave outlook underestimated the weakness in the exports sector. It relied on the Rs. 70,000 crore of public investment that was earmarked in the year’s budget — as suggested by him — for building infrastructure to stimulate private investments. The stimulus he had designed was implemented. It proved insufficient to generate the growth impulses needed to kick-start the over $2 trillion economy and rekindle animal spirits gone numb in the dying years of the United Progressive Alliance’s 10-year stint due to policy paralysis and corruption scandals.

A government not shy of its business-friendly credentials should have picked up these stress signals early on and administered the remedies, but its mandarins were too excited: international agencies had declared that 2015 was going to be the year in which India would race past China (the Chinese economy is about five times as large as India’s) to be the fastest growing economy in the world.

In the boom years during the UPA government’s tenure, four engines had powered the economy. Of those, just two are still running: government investments and private consumption. Exports and private investments, the other two, are out of steam. The UPA years saw an investment boom, which was bound to turn sooner or later, and has.

Lower borrowing costs could restart the investments cycle but the hands of the Reserve Bank of India Governor, Raghuram Rajan, are tied. An agreement that the government and the RBI signed a year ago has made controlling inflation the main objective of monetary policy. The agreement formalised a policy goal that the central bank has always pursued anyway, except that it set the targets in terms of consumer price inflation. Moreover, government-owned public sector banks have been slow to pass on to borrowers the rate reductions that Dr. Rajan has announced. Banks are a cartel and keep interest rates high because higher interest rates mean bigger profits.

Dr. Rajan is well on course to bring inflation within the 6 per cent target that the government set around the same time the CEA made his cheery growth forecast. In fact, the ‘rock star’ Governor, with whom the CEA has worked closely earlier in the International Monetary Fund, has had an excellent year. India was still one of the ‘fragile five economies’ when the year began. Yet, it is the only one to have come out of the phase of heightened currency volatility and current account deficit instability that characterised the group. Besides, the purse-string managers of the government’s budget in North Block, who haven’t yet let its fiscal deficit slip, Dr. Rajan too deserves credit for restoring India’s macroeconomic stability, which the government hasn’t quite leveraged to push growth, just as it has been caught sitting on its hands despite the favourable global trends in oil and commodity prices.

On growth, Dr. Rajan has been spot on. By the end of the summer, he had cut the Reserve Bank’s GDP growth projection for the year not once but twice. In July, even as Dr. Subramanian was sticking to 8.1-8.5 per cent, Dr. Rajan’s call was 7.4 per cent. The overconfidence in Delhi lasted till the last day of November, when new official data released, revealed a slowdown instead of the promised smart recovery. Within hours, the government cut its growth projection to 7.5 per cent.

Abandoning the committed path for fiscal rectitude now will put macroeconomic stability at risk. It might end up hurting growth rather than supporting it with the government and the RBI working at cross purposes. How? To fund a wider deficit, the government will have to borrow more, which could push up interest rates and crowd out private borrowers. Inflation might have been tamed but the Reserve Bank’s key interest rate, despite cuts adding up to 125 basis points in 12 months, is still high for a revival in investments and growth. Although higher public investments are desirable, the government needs to do all it can to create the environment for lower interest rates, not higher.

Public investments can be increased without deferring deficit reduction, though. There is a perceptible improvement in the quality of government spending with a shift towards capital expenditure. This can be built upon. Savings from efficiency in spending remain an underrated resource. The government ought to cross the political hurdles for strategic disinvestment. If the government’s fiscal consolidation would distract from the demand in the economy, much of its spending will also add to it. Government employees’ salaries and pensions are set to rise as the Seventh Pay Commission award is accepted and disbursed. The hikes are bound to result in a surge in demand for goods and services. So are other transfers from the government.

Ancient prejudice, modern inequality

On Sunday, January 17, Rohith Vemula (25), a doctoral student at the University of Hyderabad, reportedly committed suicide by hanging himself from the ceiling fan in a friend’s hostel room. The conflicts in both the University of Hyderabad and the IIT-M illustrate a deep fracture between the Hindu Right and Dalit-Bahujan ideologies, particularly those of the Ambedkarite strain, a fault line that cannot be papered over by electoral alliances of convenience and occasional instances of power-sharing between the two sides.

In the Mahabharata, Ekalavya, a talented archer prince of the forest tribe of the Nishadas, goes to Dronacharya, the master who teaches young men of the Pandava and Kaurava clans how to wield their weapons. Drona will not admit Ekalavya on account of the tribal status that makes him an outsider to the caste system. Ekalavya goes away, makes an image of Drona, secretly watches him give lessons to Arjuna and the other royals, and teaches himself archery, treating the mud-and-clay Drona as a stand-in for the recalcitrant guru.

When Ekalavya turns out to be a better bowman than the Kshatriya prince Arjuna, Drona asks for his right thumb as tuition fee. Ekalavya agrees, but not without understanding that he is being discriminated against yet again. Ekalavya’s initial disobedience (which makes him a secret apprentice) as well as his later compliance (which costs him his thumb) shame both Drona and his favourite pupil, the supposed beneficiary of this blatant act of prejudice, Arjuna. The story of the Nishada prince shows Drona up as a caste bigot whose classroom reeks of nepotism, even if he knows how to teach his students well, at least the high-born ones he favours.
Ekalavya’s dismembered digit, a bloody and visceral embodiment of caste consciousness, has haunted the Hindu schoolyard from time immemorial. It can be read as quite literally a thumb in Drona’s eye, a jab at our conscience that is as painful for us to experience as it must have been for Ekalavya to lose the very source of his hard-earned skill. He is denied access at every stage: he cannot become Drona’s pupil, but neither is he allowed to become a great archer through his own efforts.

The story of Satyakama Jabali from the Chandogya Upanishad is more complex. Satyakama has no father, and takes his mother Jabala’s name. He goes to the hermitage of the sage Gautama, and wants to be admitted. When asked about his parentage, he acknowledges honestly that he does not know his father’s name or caste. Gautama admits him nevertheless, and performs the initiation ritual to pronounce him a twice-born Brahmin, after which his education begins in earnest.

In the ancient text of the Upanishad , Gautama is willing to entertain Satyakama as a potential pupil because of his honesty: he takes the boy’s love of truth (which is the literal meaning of his name, satya-kama ) as proof of his essentially Brahmin nature. Once the teacher has assessed the applicant’s innate worth, he then translates his positive assessment into an upanayana (bestowal of the sacred thread on the boy’s body), naming Satyakama a proper Brahmin and proceeding to educate him accordingly.

Satyakama’s Brahmin identity is clearly attributed to him; it cannot be proven to be intrinsic, since his mother Jabala cannot identify his father. Gautama seems to suggest that ‘Brahmin is as Brahmin does’, i.e., Satyakama has the lakshana (characterising feature) of a Brahmin (because he speaks the truth), even though he does not have the gotra (lineage) of a Brahmin (because his mother was unmarried).

For a modern reader, this is a confusing account. Does Gautama make an exception and admit a non-Brahmin pupil into his hermitage, or does Gautama accept Satyakama because he thinks he recognises him, despite appearances, to be a genuine Brahmin? The exchange between Satyakama and Gautama at the threshold of the ashram , as it were, raising fundamental questions about identity (Who are you? Who am I?), about rights to entry into the portals of the academy, about rule and exception in the caste system, and about the entailments of caste in the strongholds of knowledge and seats of power, is again a moment that has not left our collective conscience for two millennia. Dr. Ambedkar himself reminds us of both these characters, Ekalavya and Satyakama, who for him are damning evidence of the stubborn longevity of caste in Indian history.

Ekalavya did not die and neither did Satyakama, but Rohith did. This sad fact could lead to various conclusions. It is a reflection on the unexpected cruelty and the adamantine ideologies undergirding the modern state and its institutions of higher learning. Drona and Ekalavya, Gautama and Satyakama could to some extent negotiate the terms of their relationship. Rohith ostensibly had the might of the Indian Constitution behind him — his fundamental rights as a citizen, reservations policy for students of his socioeconomic background, and the empowering discourses of the Ambedkarite student group which gave him a certain political awareness and the radical energy to fight for the equality he fully expected and deserved, but never got.

His heartbreaking suicide note states the piercing truth, the skewer that caste ideology drives into every heart filled with hope: “My birth is my fatal accident.” Yes, this is the human condition: our birth, all birth, is an accident. We do not choose our father or mother, our group or community. But only in India, only in caste society, and only for Dalits does this accident of coming into an unequal life become the fatality of either living with relentless inequality and enduring its cruelties, or dying a terrible, unfair, premature and unredeemed death.

Anil Kumar Meena, a first-year Dalit student at All India Institute of Medical Sciences (AIIMS), India’s premier medical college, had hung himself from the fan of his hostel room in March 2012. In Rohith’s poignant Facebook photos, his family’s meagre possessions now stand witness to a life whose promise was extinguished. He had posted that before he got a Junior Research Fellowship, his mother’s humble sewing machine had supported the family.

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Courtesy: The Hindu