China’s Semiconductor Gold Rush: A Reality Check

The semiconductor industry has become a major front in the US-China tech war. Given that this is a weak link in China’s otherwise impressive technology stack, the US has imposed export controls restricting Chinese semiconductor companies from accessing key equipment, software, and intellectual property.This article was first published in the South China Morning Post. Views are personal. Read more here.

The need for a more direct stimulus

The finance minister announced a stimulus package called Atmanirbhar 3.0, so-called because it was the third in a series. The total rupee value of this stimulus for the economy is 2.65 trillion. A stimulus is supposed to put money in the pocket of the citizen so that he or she can start spending. That is, start buying things like essential goods, clothes, medicines or pay rent.

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Managing India’s Defence Expenditure Requires a Whole-of-Government Approach

"We must do something.This is something.Therefore, we must do this."This logical fallacy, derisively labelled as the politician's syllogism, accurately explains recent developments to contain defence expenditure in the wake of COVID-19. Balancing between development and defence priorities is a tough act even in the best of times. But the unprecedented economic aftermath of COVID-19 has meant that a range of solutions — symbolic, radical, and ill-advised — are all now on the table.Read the full article in ThePrint.

Flawed regulation can undermine the digital payment ecosystem

Anupam Manur writes in Hindustan Times on why the limits placed on Unified Payments Interface (UPI) transactions for third-party apps by NPCI is flawed.Systemic risks are automatically lower when consumers, merchants, and third-party app developers are all multi-homing, meaning they simultaneously use more than one app for the same purpose. The UPI ecosystem is radically substitutable. In the case of failure, consumers and merchants can switch from one app to another without the slightest friction. Though two apps, PhonePe and GPay, dominate the UPI market (with roughly 80% of UPI transactions), consumers are not without choice — there are at least 52 UPI service providers, 189 issuers and around 21 third-party apps. Third-party app developers also can and do have tie-ups with multiple banks simultaneously, such that the YES bank-PhonePe fiasco will not be repeated.Beyond being unnecessary, the rule is also improper, incomplete, and inconsistent. If the aim is to mitigate the systemic risk of failure of one big market player, the rule change should apply to all apps providing UPI services, and not just third-party apps. Is the systemic risk different when the app of a scheduled commercial bank fails as against a third-party app?The entire article can be accessed here

Economy to Decide Ties

Kamala Harris will become the first-ever Vice President of America to have Indian ancestry. Senator Harris' mother Shyamala Gopalan arrived in the United States at the age of 19 to do her PhD in nutrition and endocrinology at the University of California in Berkeley. Harris has maintained her links with her maternal grandparents and other Indian relatives.Read More

EC should allow Biharis in Bengaluru to vote for state polls. US showed every vote matters

Many of those who followed the drama of the US presidential election last week were struck by the seemingly patchy and disorganised manner in which the votes were counted. This also led to the impression that Joe Biden “caught up” with Donald Trump in the four battleground states that ultimately swung the election in favour of the Democrats. A number of Indian commentators took the opportunity to pat themselves on the back by comparing India’s own voting system favourably with that of the United States. As much as these conclusions are right at a superficial level, a deeper look suggests both direct comparisons are misleading and that democracies can learn things from each other.

The US president is not directly elected by the majority of people by design. Indeed, in many recent elections — including in 2016 — the winner of the electoral college has received fewer popular votes than the challenger. It might startle a lot of people — even in the United States — to know that it is a part of their constitutional system. Now it is fairly well known that the founders of the United States paid a lot of attention to prevent accumulation of power in the hands of one person. We have them to thank for the doctrine of separation of powers between the executive, legislature and judiciary. What is less well known is that they also engineered the system in such a way that raw democracy — in terms of majority votes — does not override individual liberties, and does not wreck the federal structure of the United States.

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India should create bubbles of trust with its geopolitical allies

A few months ago, this column had argued that the tech war between the United States and China is being fought across a flexible, porous bamboo curtain, and India’s interests lie in staying out of the Sinosphere while creating circles or bubbles of trust “with the US, Japan, Taiwan, Australia, Singapore and South Korea that will help Indian companies, professionals and consumers find themselves in circles of opportunity." Even if political changes around the world rekindle interest in multilateral approaches to world trade, technology and climate change, New Delhi must prioritise deepening relationships with its geopolitical allies (there, I said the word). Like air bubbles for international travel during the pandemic, first create bubbles of trust bilaterally with strategic partners and then explore whether these can coalesce into larger bubbles that include more countries.Read More

The consent of the loser

One of the best speeches of a candidate conceding electoral victory to his rival was that of Senator John McCain in 2008. America had just elected its first ever black President. It was close to midnight on voting day November 4, after a gruelling campaign season that lasted several months. Of course, not all votes were counted by midnight. Actually it always takes days or weeks to get a tally of all the votes, since they come by mail, from overseas, from military personnel posted in remote locations. But a concession speech is given much before the counting is done. A mature, experienced leader can see the writing on the wall, no matter how bitter the contest, and how close the result. McCain was such a man. As a naval officer he had fought in the Vietnam War, and suffered torture as a prisoner for six years. Yet his later life showed no bitterness, and in fact he was part of the effort to restore diplomatic relations with Vietnam. His life was dedicated to public service, as a core member of the Republican Party, and as people’s representative for more than three decades. It is worth recalling the words he said on that night. “The American people have spoken, and they have spoken clearly. A little while ago, I had the honour of calling Senator Barack Obama to congratulate him on being elected the next president of the country that we both love. In a contest as long and difficult as this campaign has been, his success alone commands my respect for his ability and perseverance. But that he managed to do so by inspiring the hopes of so many millions of Americans, who had once wrongly believed that they had little at stake or little influence in the election of an American president, is something I deeply admire and commend him for achieving.” Obama and McCain were opponents, not enemies.Read More 

Why India must vaccinate 80% of population by December 2021 — no matter what the cost

Planning for a national Covid-19 vaccination programme has begun to move forward in right earnest in India. Last week Union Health Secretary Rajesh Bhushan wrote to state governments outlining the administrative structures to be put in place to oversee the implementation in their respective jurisdictions. As of now, the Narendra Modi government expects the vaccination programme to take over a year, with healthcare and essential services workers getting the shots before the rest of the population. The Modi government has done well to reject the narrative of low expectations by setting a one-year timeline. As I have argued earlier, this is both necessary and eminently doable if we do not limit ourselves to departmental thinking and processes.Read More

A coalition to counter China will take some time to operationalise

This story was first published in The Mint. Views are personal.This week, another important cog in the machinery of strategic cooperation between India and the United States fell into place when the two countries signed the Basic Exchange and Cooperation Agreement (Beca) for Geospatial Intelligence. The agreement opens the doors for India to get access to military-grade global positioning system signals, digital imagery and mapping that can upgrade the capabilities of our defence forces and intelligence agencies. For the United States, the agreement not only helps lock India in as a defence equipment buyer, but more importantly, is one more step towards drawing New Delhi onto its side, geopolitically.Read More  

Future-Reliance saga has a scary message: If Amazon can't enforce a contract, who can?

This story was first published in The Economic Times. Views are personal.

In case you have not been paying attention, the pandemic has had a transformative impact on the future of Indian retail and e-commerce. Earlier in October, Kishore Biyani admitted that the pandemic had led to his company, ‘Future Group’, losing ₹7000 crores in 3-4 months. Rent and interest on properties like Big Bazaar had not stopped, while sales had taken a direct hit.

While Future Group was struggling with the impact of the pandemic, Reliance was looking to grow. This year, Jio Platforms attracted high-profile investments from amongst others, Facebook and Google. Similarly, Reliance Retail was looking to expand. Between September to October, Reliance Retail raised ₹37,000 crores from over eight investments. Also, there were reports that Amazon had been planning to acquire a significant stake in Reliance Retail for about $20 billion. In late August, Reliance announced the acquisition of Future Group for ₹24,713 crores.

The unbearable rage of the road minister

The National Highway Authority of India (NHAI) was last week inaugurating their brand new building in Dwarka, in Delhi. The chief guest was, appropriately, their boss, Nitin Gadkari, the Union minister for highways. Gadkari is popularly known as Mr. Highways for his impeccable record. Firstly, as PWD minister in Maharashtra from 1996 to 1999, he fast-tracked the construction of the Mumbai-Pune expressway, which had been languishing, and also built 55 flyovers in Mumbai. During his tenure, the state’s rural road connectivity increased to 98 per cent. Due to this, he was appointed as chairman of the National Rural Road Development Committee, which ultimately led to the launch of Prime Minister’s Gram Sadak Yojana.Secondly, and more importantly, as Union minister for highways since 2014 in the Modi government, under Gadkari’s watch, the pace of highway building has gone up from barely two kilometres per day to nearly 35 kilometres per day today. He is clearly a man of action, and in a hurry, and he is known to rally the troops and get contractors, builders, and even private investors to work successfully with the government.Read More

Centre raises hopes of free COVID-19 vaccine, but benevolence can't be at the cost of the economy

This article first appeared in the Firstpost. COVID-19 has assaulted the health of people and economies. The impact on the economy has led to further stress on people’s livelihoods. This unprecedented threat to public health has not been constrained by measures taken by national and state governments. All humankind is waiting with bated breath for a COVID-19 vaccine that can set us on a course to normalcy. The human and economic cost of COVID-19 has been immense and governments are stepping up to expedite vaccine availability.Given the vaccine’s huge impact on public health, it is reasonable to expect that the government makes it available free for all. The cost of undertaking this exercise would depend on a variety of factors – the cost of manufacturing, the cost of supply chain, and the cost of administration of the vaccine. For example, nucleic acid-based vaccines have to be stored at sub-zero temperatures and are costly to make and transport. (Read more) 

Politicisation of Covid vaccine is a good thing — it means India will get it free

It is surprising that political parties were surprised that one of them — the Bharatiya Janata Party, as it happens — announced in its manifesto for the Bihar assembly election that it would provide free Covid-19 vaccines to everyone in the state if elected to power. By now they must know that the BJP under Narendra Modi and Amit Shah is an exponent of totalpolitik that stops at nothing to win the next election, big or small. Indeed, the promise of a free vaccine is perhaps among the milder instruments in its political armoury. Moreover, in a country where political parties have promised colour televisions, cable TV connections, bicycles, electric scooters, durable slippers, lunch boxes, sarees, kitchen utensils, cooking oil, rice, electricity, fertilisers, wedding cash gifts, laptops, WiFi, and smartphones with six months of free internet to voters, a free vaccine for everyone against a raging pandemic seems even reasonable.Read MoreYou can read the story in Hindi, here.

Criminal taint grows on ballot choices

In September 2018 a five-judge constitution bench that included the Chief Justice of India, pronounced an important verdict on criminals in politics. The Supreme Court was hearing a batch of petitions seeking disqualification of candidates who have pending criminal cases. One of these petitions was a PIL filed by the Public Interest Foundation of India (PIF) back in 2011. The Director of PIF had written these words, even before the results of the 2014 elections were announced. “The next government will face the challenge of curbing corruption… It must be remembered that the government will be on probation as its performance would be critically tracked by a very vibrant civil society and media.” That Director was later handpicked to become the Principal Secretary to the new Prime Minister Narendra Modi in 2014. The PIF petition had asked for the removal of criminals from the ballot. This was the petition that was disposed of by the Supreme Court in 2018. But its verdict, unfortunately, stopped short of disqualifying criminally tainted candidates. The Central government which was a defendant in the suit, firmly opposed the petition, saying that legislating a new disqualification was not in the domain of the court. It was for parliament to pass such a law. Besides, the Centre used the old argument, that a person is innocent until proven guilty, and cannot be deprived of the right to vote, or the right to contest elections merely based on criminal charges. The court expressed helplessness, and not for the first time.Read More 

A front-footed approach to the world calls for a strong economy

The India Way: Strategies for an Uncertain World is an interesting book because it is written by four authors: a scholar of international relations, a career diplomat, a serving foreign minister, and a member of Narendra Modi’s Bharatiya Janata Party. It so happens that they are all named S. Jaishankar. Almost every paragraph in the book is an exercise in balance between four perspectives: of the scholar reading the past and the present in realist terms, the long-serving diplomat totalling up the successes and failings of India’s foreign policy over the past four decades, the cabinet minister outlining the incumbent government’s policy positions, and the BJP member connecting the book’s narrative with his party’s. The tension between the four Jaishankars is not always apparent, and I suspect is visible only to keener students of international relations who in any case tend to connect dots into shapes they wish to see.Read more

Cracked screen, broken dreams

Introducing Rohit Varak, who at 16 is so mature for his age. He wants to be an electrical contractor, after getting ITI training. His family lives in a remote village in northwest Goa. Rohit is acutely aware of his father’s struggle to secure a government job. Bhago has been trying for several years, even knocking on the door of their MLA. Bhago has had an elbow injury and suffers from severe back pain. He has tried in vain to get a job as a driver with the government. That MLA only gives jobs to his cronies and their relatives.“So many houses have four or five government servants, but we can’t even get one job.” Rohit has told his baba, not to beg anyone for a job. He would be an ITI technician, and he would take care of the family with great dignity. He is inspired by his cousin, who is a driver in the army. His older sister Riya too has a dream of becoming a nurse. She is enrolled at a nursing college in Hubli. Riya’s birthday was just last week.Read More 

India’s Australia Signal| Delhi’s horizontal escalation

For India, the announcement of Australia’s participation in the annual Malabar naval exercises of 2020 is a deliberate horizontal escalation of the continental border crisis whose present centre of gravity is Ladakh. The Malabar exercises began as an Indo-US bilateral exercise in 1992. In 2015, Japan joined in and India has now overcome its reticence about annoying China and opened the door for Australia. The connection with China’s rise and its strategic misbehaviour is obvious and is part of a larger global countervailing move for stability and balance. For India, the burning question is, what difference can this make to China’s threats on its continental borders.Read more

Serosurveys point to inadequacies in India’s COVID-19 testing strategy

Over the past few months, a series of serosurveys for detecting the spread of COVID-19 have been carried out in India. The surveys are meant to identify the percentage of the Indian population with antibodies against SARS-CoV-2, as an indicator of how widespread COVID-19 is in the population. The Indian Council of Medical Research led a national survey starting May 2020, the findings of which suggest that the seroprevalence in a selection of districts across India was 0.73 percent. A follow-up survey done in August showed that seroprevalence in the same districts increased to 7.1 percent. Between May and August, city/state-level surveys have shown varying seroprevalence, ranging from 0.25 to 51 percent.Read more

Bring back the family doctor. India has too many specialists

If you live in a medium-sized or larger town in India, chances are that you have a private medical clinic or hospital not too far from your home. Chances are that it will describe itself as a “multi-specialty clinic” and the reception area will have a long list of specialists who you could consult. Even the smallest clinics in my neighbourhood in Bengaluru have around a dozen specialists on their roster. Every conceivable specialisation — from neurosurgery to psychiatry, interventional cardiology to maxillofacial surgery — is available within a 5-kilometre radius from my home.Read More You can also read this article in Hindi