Separating economic and border issues

As we exit the lockdown and resume economic activity, we will have to observe certain protocols. Like social distancing. Or using hand sanitisers in office, public places, or even at home. These sanitisers are alcohol-based and usually come in dispenser pumps. The pump minimises human contact, unlike a tube or bottle. It is made of plastic, has 16 components, and costs less than Rs 20 if produced at scale. Here’s the rub: As reported by an online news outlet, we have not been able to find domestic manufacturers who can produce dispensers at a large scale, at this cost. We are facing a health crisis, and urgently need large quantities of dispenser pumps. There’s no alternative but to import from China.Take pharmaceuticals. We are the world’s leaders in bulk drug formulations, used by leading medicine makers of the world. But these formulations need crucial active pharmaceutical ingredients (APIs) as inputs. Without APIs, our pharma industry, both domestic and export, will be crippled. And 65 per cent of APIs are imported from China, worth $3.5 billion (i.e. about Rs 25,000 crore). When imports were halted in April and May due to the lockdown and stoppage of the sea and air cargo, there was near panic in the Indian pharma industry. This could threaten even our internal supply situation for medicines. And there is no realistic option of switching to any other supplier, at this cost or scale. Unless we risk rising medical costs.Read More

Indian unpredictability could make China rethink its game

The South China Sea is thousands of miles away from the Indian heartland. Very few people in our country pay attention to developments in that part of the world, and although it has a bearing on India’s national interest, it barely figures in our self-centred public discourse. There, over the past decade, China has incrementally occupied islands disputed by several South East Asian countries, built military infrastructure on several of them, imposed its political administration, and is on the verge of declaring an Air Defence Identification Zone (ADIZ) over the entire region, threatening military force against any aircraft that overflies without its permission. Read more

Time for Modi to take political stand on China. Military talks won’t deter the bully

n an earlier article on how China has crossed the Lakshman Rekha, I had noted that ‘diplomatic virtuosity is insufficient to resolve the issue unless it is accompanied by political sagacity and boldness’. Two weeks later, we saw talks through military and diplomatic channels between India and China, but there is not much sign of the role that political sagacity is playing. It is well possible and understandable that political moves beneath the surface are going on and the matter will be resolved through an agreement. The incident at Galwan, which has resulted in the tragic death of a Commanding Officer and 19 jawans on 15 June, is symptomatic of China’s continued violations of agreements and protocols.You can find the article here

Price controls are a terrible idea to tackle private-public healthcare gap in India

Even before the advent of the Covid-19 pandemic, sticker shock with respect to private hospital charges was commonplace in India. The perception and fear of being overcharged by private hospitals, especially through ‘unnecessary’ diagnostic tests and treatments, is widespread. Adverse health outcomes are frequently attributed to negligence or malpractice, and violent attacks on medical personnel by distraught relatives were common enough to warrant special legislation. In India, there is an environment of mutual distrust among the government, hospitals, and patients.

The novel coronavirus has entered the scene in this backdrop. No wonder that it has sharpened the sense of distrust to a breaking point. Last week, the Supreme Court heard a PIL filed by advocate Sachin Jain who argued that private hospitals, which have been given land free of cost, should not charge for Covid-19 treatment. In response to the petition demanding price regulations on private hospitals, the Court asked if private hospitals “were ready to charge Covid patients the rates fixed under the Narendra Modi government’s Ayushman Bharat scheme for their treatment.” Lawyers then submitted that private hospitals are in a poor financial position as a result of the Covid-crisis and that there was “no business left” as there was a drop in people visiting hospitals for treatments and this could lead to the closure of hospitals. The Court’s retort to this was surreal. “That is good,” the Bench said “You are doing it for a good cause.” It is yet to rule on the matter, but this exchange exemplifies the problem we have with the governance of our healthcare sector

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Now is the time for misinformation reform

This article was first published in Deccan Chronicle. Views are personal.One of the most evident changes brought about by the pandemic has been accelerated shifting our interactions online. This involves turning to the web not just our engagements with friends or colleagues, but also for questions and comments about the virus and the developments around it. For instance, running Google searches on whether the virus can spread through water, or engaging on Twitter about the latest numbers and how they can be controlled.Like many such transitions, there are multiple anticipated second-order effects of increased user interaction on platforms. Firstly, an increased number of searches around COVID-19 provides advertisers with an incentive to leverage that to their advantage. This includes advertising false cures for the virus, or masks, or immunity boosters. In addition, it also includes using controversial targeting options (such as anti-vaccine groups) to sell products.

Let us not dilute law on cheque bouncing

The Indian court system is notoriously clogged. There are more than three crore cases pending at various levels and stages. Justice delayed is justice denied. What do we do? Experts and bodies such as law commissions and industry chambers have recommended several judicial reforms. A big part of the solution is filling out all the vacancies in the judiciary so that there is a speedy resolution of cases. We also have to encourage parties to settle out of court as far as possible, a process called arbitration or mediation. If a case goes to trial in a court, what are the chances of the plaintiff winning? In India, it is not even 50-50. The process itself takes so long that the plaintiff loses at the beginning itself. Often the accused, or the defendant, can tell the plaintiff: go to court if you want. As if admitting a trial into court, means getting into a permanent traffic jam – the ‘taareekh pe taareekh’ syndrome. Imagine the following: what if the chance of the defendant being found guilty, or losing the case is 90 per cent?Then the defendant will try hard to settle out of court. This can happen if the pre-trial preparation is watertight and of excellent quality. So shoddy investigation and badly done prosecution can also cause the trial to fail. Indeed the pendency ratio of courts in India would vastly come down if the trials were speedy, and almost surely end up with the defendant losing, because of excellent pre-court preparation.Read More 

COVID-19 and Inter Service Cooperation

The COVID-19’s relentless journey has already covered 213 countries and territories. In Indian official circles, there is growing acceptance of the reality, that we will have to learn to live with it. The Indian economy has taken a massive blow and is reflected in the decision of a 20% cut across the board including the defence budget, for the first quarter. India’s national development process has suffered a severe setback and so will our capacity for military modernisation.You can find the article here

India is being forced to unlock during pandemic. But it’s no green zone yet

Unlike many other countries, India is gradually lifting the lockdown before the coronavirus curve has flattened. Covid-19 positive cases are now doubling every 17 days, a little slower than a week ago. With several state governments relaxing the lockdown, we should expect that the picture will worsen and that — at least initially — we will see faster growth in the number of cases.

Is the lockdown being relaxed too early? From a purely epidemiological perspective, yes. Yet, from an overall perspective, we have little choice but to reopen the economy and allow people to earn their livelihoods. With the Narendra Modi government unable or unwilling to provide income support and direct cash transfers to compensate people for the loss of income, the only option is to shift the balance towards greater economic activity at the cost of higher epidemiological risk.

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Removing Chinese apps from your phone is the opposite of self-reliance

This article was first published in Deccan Chronicle.The most important takeaway from Nobel Laureate Daniel Kahneman’s insights from ‘Thinking Fast and Slow’ is that the human brain has two systems, System one and System two. The former is good at ‘fast thinking’, which relies on our instincts and emotions to come to conclusions quickly. Kahneman refers to the latter as slow thinking, which is more deliberate and logical in its approach.If I ask you to compute two plus two for me, System one will immediately throw up the answer. But if I ask you to manually multiply five thousand nine hundred four by twenty-eight thousand four hundred and ninety, you will automatically engage System two.  There are some tasks to which System one is better suited, while there are others for which you need to rely on System two. When you end up using the wrong system for the wrong task, you will likely end up with the wrong answer.Read more.

Some out-of-the-box ideas for a fiscal stimulus

The pandemic and lockdown have deeply hurt the economy. This year the world’s economy will shrink by 3 percent, something that we have not witnessed in our lifetimes. India too may shrink as much if not more, since our lockdown has been more stringent than other nations. During April more than 120 million people lost jobs, and some of them permanently. More than ten million urban workers and their families reverse migrated to their villages or home towns, partly because they had lost their livelihoods. These workers will return to cities and factories after the re-opening of the economy, but also when there is an assurance of jobs. Else the rural areas are a better bet during the recession. There has been a bumper rabi crop (spring harvest). The procurement of wheat in Punjab, Haryana, and U.P. has been very successful, meaning farmers have received the minimum support price. Even Madhya Pradesh procurement is at record levels. Besides this income, the PM-KISAN scheme launched last year has been putting some money in farm households. Additionally, the small payment to rural women has helped, and so has the PDS foodgrain allocation through the ration shops, again benefiting the rural areas. Finally, there is the rural employment guarantee scheme (MNREGS) whose allocation has gone up to 1 lakh crore rupees, and which will certainly act as an additional income buffer for many families in rural areasRead more 

The role that compassion could play in India’s economic revival

To rebuild the economy, we must focus on rebuilding social capital. To rebuild social capital, we need greater compassion across society. So many of the humanitarian tragedies that unfolded over the past few months could have been avoided or mitigated had we shown more compassion: in making migrants feel safe, making food available, saving small businesses, and giving money directly to those who are in most need. This is not merely an indictment of our Union and state governments. It is an indictment of our society as a whole. Read more

What are China’s weak points?

What is common to PayTM, Ola, BigBasket, Swiggy, and OYO? Yes, they are all made in India startup success stories. Some of them have achieved global success too. Did you know the Ola taxi service was launched in London in February? And OYO rooms are available in almost a dozen countries other than India? However, the other common factor to all of them is that they are substantially funded by Chinese investors. As reported by the digital publication, The Ken, all the top ten startups of India, ranked by venture funding raised, have Chinese investment. Apart from the five mentioned above, these include the app-based self-learning platform Byju’s and a very successful logistics company called Delhivery. A startup needs angel funding in the very beginning, and venture funding soon thereafter. Indian banks cannot help. Once the startup becomes successful, its value increases. If its value exceeds billion dollars (which is roughly Rs 7,500 crore today), then it is called a unicorn. The Gateway House, a think tank, reports that 18 out of 30 unicorns in India have Chinese investors. These investors are crucial to the startup community, because in their earlier years these companies have been incurring losses, and these have to be funded by some rich uncle, at least to pay salaries. Since there are not enough Indians willing to patiently fund losses for the first few years of startups, the Chinese have happily stepped in. In the process, Indian companies have achieved scale, and some can become world-beaters. The Chinese investors will make handsome money, but that is because they took risks and were patient for all these years. Besides, eight out of 10 startups fail. So the investor makes up by hitting a jackpot on the ninth or the tenth that does not fail.Read More 

Xi’s Strategic Folly: Why a New National Security Law Highlights China’s Insecurities

This article was first published in The Diplomat.Xi Jinping’s move reflects Beijing’s insecurities over Hong KongLast week was among the most critical in Hong Kong’s history since the 1997 handover of the territory to the People’s Republic of China. On Thursday, the National People’s Congress (NPC), China’s top legislature, approved a draft decision to pursue enacting new national security legislation by a vote of 2,878-1, at its annual session in Beijing, with six abstentions. Over the past few days, there’s been a spate of demonstrations and crackdowns in the city amid concerns that the new legislation would be the end of Hong Kong’s autonomy.

Human Capital for the Department of Military Affairs

The creation of the Department of Military Affairs (DMA) in the Ministry of Defence portends better civil-military cooperation. That India’s civil-military cooperation was in need of structural reform was never doubted. Yet, the implementation of such reform lacked political will, faced bureaucratic resistance, and was stymied by elements within the armed services.You can find the article here

Joint/Theatre Commands

The dawn of 2020 heralded, three simultaneous, path-breaking and long-awaited steps in India’s defence reforms – the institution of the posts of the Chief of Defence Staff (CDS) and Permanent Chairman, Chiefs of Staff Committee (PC-COSC) and the concurrent creation of the Department of Military Affairs (DMA) in the MoD with the CDS as the Head of Department (HoD). The Group of Ministers’ (GOM) Report of 2002 had recommended the CDS and in 2012, the Naresh Chandra Committee had recommended the PC-COSC.

Role of Political Guidance for Self-Reliance in Defence

During his address to the nation on May 12, the Prime Minister called for a ‘Self-Reliant India’ as the pathway to be adopted as India confronts the COVID-19 pandemic. For the defence sector, ‘self-reliance’ has remained elusive for seven decades and India remains the second largest arms importer on the global stage.

How Covid-19 Changes the Geopolitics of Semiconductor Supply Chains

On May 15, Taiwan Semiconductor Manufacturing Company (TSMC) — a semiconductor manufacturing behemoth that makes Apple’s A-series chips — announced its plans to build a $12 billion plant in the state of Arizona. On the same day, it was reported that TSMC has stopped taking new orders from Huawei to fully comply with the latest export control regulation imposed by the US. These are significant shifts in the semiconductor industry. We have an analysis of why these changes are happening and more importantly, why are they happening now.We argue that the economics of semiconductors — turbocharged by efficient and lean global supply chains — has made it a viable geopolitical tool. The US-China confrontation over Huawei is just one manifestation of this confrontation over semiconductors. COVID-19 only exacerbates this contestation. We evaluate four specific risks and write that COVID-19 will change the resilience-efficiency trade-off in the semiconductor industry. National governments and the geopolitical environment will be the key drivers of this transformation.The full article can be read on South China Morning Post here.

When should Indian schools physically reopen? The best answer is: not yet

The winding down of the national lockdown in India and the devolution of coronavirus pandemic management to the states will change daily life as we have known it for the past few months. While the reopening of the economy is rightly the subject of public interest, the reopening of schools and educational institutions will require greater attention in the coming weeks. The lockdown was less disruptive than it might otherwise have been because it came at the tail end of the academic year in many states and students spent the better part of the period at home. But now the questions of if, when, and how to reopen schools and colleges can no longer be put on the back burner. How should state governments proceed?

From the public health perspective, there are two principal considerations: protecting children and their families from the disease and preventing transmission through school children.

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Reimagining the Mountain Corps

The Ladakh crisis has triggered calls for a resurrection of the Mountain Strike Corps (MSC), whose raising had been put on hold in 2018, due to lack of finances. Freezing the raising, was no surprise as it was always gasping for financial support, starting from 2011, when the case was first forwarded for consideration of the Cabinet Committee on Security (CCS). The proposal was rightly justified as a major measure for countering the increased threat from China. It involved adding 90000 personnel and projected to cost approximately Rs 65000 crores. This figure did not consider the cost of infrastructure at that time and therefore underestimated the total costs. However, there was a need for reviewing the very idea of raising the MSC. The main issue that was contested was whether the final product, the MSC will serve its purpose of deterring China. You can find the article here

Will India experience the fallout of Trump vs Twitter?

This is an extract from the full article which appeared in Deccan Herald.....But before resorting to isomorphic mimicry, it is important to understand what the executive order proposes. The reading suggests that it seeks to narrow the definition of 'good faith' under which a platform can carry out 'Good Samaritan' blocking. Kate Klonick was quoted in Recode as saying that the order was not enforceable and even referred to it is as 'political theatre'. And Daphne Keller published an annotated version of the order in which she classified various sections as 'atmospherics', 'legally dubious', and points on which 'reasonable minds can differ.The current trajectory in India appears to be headed in the opposite direction. A recent PIL in the Supreme Court, filed by a BJP member sought to make it mandatory to link social media accounts with identification. While the petition itself was disposed of, the petitioner was directed to be impleaded in the ongoing Whatsapp Traceability case. The draft Personal Data Protections proposes 'voluntary' verification for social media intermediaries.