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Weapon of Peace

India allays fears over its latest ballistic missile launch

A week after successfully testing its maiden Long Range Ballistic Missile (LRBM) Agni-V, India sought to downplay the regional security implications of the launch by dubbing the missile as a “weapon of peace”.

“We were asked to develop a national deterrent as part of a government policy and we did it. That’s it. These are weapons of peace. If you are powerful enough and are committed to ‘no first strike’ there is no harm done to anybody. We always stand by ‘no first strike’,” Tessy Thomas, a senior scientist involved in the Agni-V missile development programme, told Manorama Online, a south Indian media website, on April 22.

India’s Prime Minister Manmohan Singh, while dubbing the launch “another milestone in India’s quest to add to the credibility of its security and preparedness”, called the scientists who developed the missile to “continuously explore the frontiers of science”.

But some global experts are not buying the ‘weapons of peace’ argument of India and suggest that the launch signified the intensifying of an arms race in the region.

Giving credence to their fears, Pakistan test-fired a nuclear-capable ballistic missile on April 25, less than a week after India tested Agni-V on April 19.

Mansoor Ahmed, a defence analyst based in Islamabad, said Agni-V added to India’s growing second-strike capabilities, particularly if India can construct a naval version of the Agni-V to deploy on its nuclear-powered submarines. A sub-based missile “can be deployed beyond the reach of a Pakistani first strike, thus ensuring survivability of its nuclear force,” he said.

While Pakistan’s launch was an obvious response to the Indian test, experts suggest that the Agni-V launch had an eye on China. They believe that India’s strategic planners now regard China, rather than Pakistan, as the country’s gravest military threat.

They believe the launch looked like a movement of India from balancing China to containing China.

India and China share a 3,380km border, which both countries have greatly militarised in recent years. But Agni-V would enable the Indian military, for the first time, to reach China’s most important cities, Beijing and Shanghai, with a nuclear attack.

Indian experts were quick to downplay the comparison between the weapons programmes of the two Asian giants.

“Agni-V is just a platform or a prototype.  It has to go through several tests and changes before it is inducted in the defence forces.  It will not be correct to compare it with China’s competence in missile technology. They [China] are five to six times ahead of us in defence preparedness and technology,” Bharat Verma, editor of the Indian Defence Review magazine wrote on April 24.

China already boasts a DF-31 (7,250 km), DF-31A (11,270 km) and several other long-range missiles, which are much more advanced than Agni-V.

India fired its first satellite into orbit in 1980, and began its missile development programme in 1983.

Analysts say that given India’s skills in launching heavy satellites and planetary probes, it could easily field a missile powerful enough to send warheads over intercontinental ranges.

Already, by launching the Agni-V, a ballistic missile capable of reaching deep into China, India joined a small club of nations with long-range nuclear capability, including China, Britain, France, Russia, Israel and the United States.

India initially called the latest missile ‘the 5,000km range surface-to-surface Agni-V ICBM (Inter Continental Ballistic Missile)’ but later officially changed the description to the technically correct ‘long-range ballistic missile’.

Technically, only those missiles that can reach targets beyond 5,500km fall under the ICBM category.

Stipulations aside, Agni-V matches the capability of an ICBM as it can reach the whole of Asia, almost three quarters of Europe and also parts of Eastern Africa, leaving only continental America out of its reach.

The fifth variant of Agni — which means fire in Hindi — adds to India’s burgeoning missile arsenal that already boasts Agni-I (700 km), Agni-II (2,500 km), Agni-III (3,000 km) and Agni-IV (3,500 km). The first two have already been inducted into the armed forces while the remaining two are in the final stages of testing.

A number of new technologies developed indigenously were successfully tested with the launch of Agni-V.

Avinash Chander, Chief Controller (Missiles and Strategic Systems), told The Times of India daily that the launch met all the mission objectives: “All the three stages of propulsion with locally developed Composite Rocket Motors (CRM) worked perfectly.”

The success of locally developed CRM demonstrated India’s self-reliance in building complex propulsion technology that only a handful of nations possess.

In the next 18 months, India will test fire Agni-V two more times to assess the capabilities of the warheads that would be attached to the missile.

Agni-V is expected to be delivered to the Indian military in 2015.

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Clearing Skies

China and India lead boycott of Europe’s carbon tax regime

Asia is taking the global trade war to the skies. Following the outcry over the January 1 decision by the European Union (EU) to levy carbon taxes on all airlines serving EU airports, China and India are leading a boycott of what they call a trade levy disguised as an attempt to fight climate change.

Uniting a group of 27 other countries in the Russian capital of Moscow on February 22, the two Asian giants helped shape an agreement that experts have dubbed a “strategic blueprint for global trade war”.

The Moscow Declaration prohibits the national airlines of the signatory countries from participating in the carbon scheme and established a “basket of actions” against the EU if it failed to back off on the tax.

What makes the fiery clash significant is that it is the first real clash in the debate on climate and trade.

Jayanthi Natarajan, India’s environment minister, said on April 11 that the EU move was “a deal breaker” ahead of global climate change talks. Natarajan is India’s negotiating leader at the global climate change talks and her statements are the toughest by India so far on the EU move.

The EU is sticking to its guns, arguing that the Emissions Trading System (ETS) is not a trade levy and its only objective is to reduce emissions.

Imposed on January 1, the carbon tax scheme makes it mandatory for airlines flying into European airspace to provide data allowing EU regulators to measure their carbon imprint. No airline will face a bill until 2013, when the year’s emissions are tallied.

Neither India nor China is buying any of it.

On March 24, India’s Civil Aviation Minister Ajit Singh told parliament that “the imposition of carbon tax does not arise” because Indian airlines would simply refuse to hand over their emissions data.

In February, China ordered its airlines to ignore the EU directive. The scheme could cost Chinese airlines about US$123 million on European air routes for carbon emissions in the first year, and about US$2.77 billion from 2012 to 2020, said the China Air Transport Association. The price of a flight from China to Europe might increase by US$50, going by statistics provided by the China Beijing Environment Exchange.

China and India believe that the inclusion of international civil aviation in the EU carbon tax regime leads to serious market distortions and unfair competition. Their principal argument is that any imposition of carbon tax on aviation or maritime activity must adhere to the principles of the United Nations Framework Convention on Climate Change. The convention ensures that it is the manufacturers of inefficient craft, and not consumers, that are taxed for emissions.

Support for the boycott is growing. Already, 26 of the 36 members of the International Civil Aviation Organisation, a global body for aviation regulation, have announced their opposition to the inclusion of non-EU airlines in the ETS.

To ensure that the EU does not go ahead with its ETS, the Moscow Declaration mentions prospective retaliatory air, and trade measures targeted at individual European economies. The measures review bilateral air service agreements with individual EU states and impose additional levies or charges on EU carriers.

The ‘threats’ have already started to have an effect on European players. In March, aircraft maker Airbus, plus half a dozen airlines including British Airways, Lufthansa, and Air France, wrote a letter to the British, French, German and Spanish governments warning that the ETS could cost them billions of dollars in lost orders and business, and lead to the loss of thousands of jobs.

A subsequent letter by French Prime Minister Francois Fillon to European Commission head Jose Manuel Barroso made similar points, noting that China had already suspended orders for 35 European Airbus A330 jets, worth more than US$14 billion, and was threatening to cancel ten more.

In India, Airbus has a 73% share of the commercial plane market. It has orders for more than 250 planes with IndiGo, GoAir and Kingfisher Airlines, making the South Asian country a crucial growth market.

India has no plans yet to ask airlines to cancel Airbus purchases, but an unnamed senior Indian government official told Reuters news agency on March 20 that if the dispute escalates, India would retaliate with similar moves and consider charging an “unreasonable” amount for flying over India.

“We have lots of measures to take if the EU does not go back on its demands [as mandated by the ETS],” the official said, adding that Europe’s position would harm its own economy and airlines.

In March, India delayed approval of some European summer schedules by a day, which disrupted the flight schedules of many European airlines. Experts suggest India might use that example to show how disruptive a dispute with the country could be.

China and India are not the only Asian countries at war with Europe on the issue. Japan, South Korea, Malaysia, Philippines, Singapore and Thailand were the other Asian signatories to the Moscow Declaration.

Indonesia’s state-owned airline Garuda said in March it might stop flying to Amsterdam in response to the EU move. Similarly, Thai Airways President Piyasvasti Amranand said the state-controlled airline also opposed the EU law, but declined to comment on its impact on plane purchases.

“If nothing changes, this will cost us 200-300 million baht (US$6.5-9.75 million) a year starting 2013,” Piyasvasti told Reuters last month.

Both China and India question Europe’s real motive for the scheme, and suspicions about hidden agendas have given the economic dispute a political colour. The two rising powers do not want to budge from their stands because they suspect that in the coming years, climate change will serve as a pretext for protectionist policies.

No matter who blinks first, one thing is for certain: the clash between climate concerns and commercial necessities will continue for many years. And China and India will play an increasingly crucial role in the debate.  AR

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Exploiting Hunger

India’s food bill is nothing but a political move to woo poor in blatant re-election bid

India’s corruption-tainted federal government may just have found a way to resurrect itself in the eyes of the country’s largely poor electorate.

Ahead of the 2014 federal elections, the Congress Party-led United Progressive Alliance government is preparing to introduce a Food Security Bill that seeks to provide cheaper food grain to more than half of India’s population of 1.2 billion people.

The bill promises subsidised food grants for 75% of India’s rural population and 50% of urban households. It also includes free cooked meals to children under 14 years of age and those classified as destitute.

On the face of it, the Food Security Bill seems almost obligatory. Despite India’s economic growth in recent decades, 44% of its children under the age of five are underweight and 65 children die each day of malnutrition. In all, 21% of the population in India, home to the world’s largest number of poor people, are undernourished.

The bill is likely to win the support of all political parties when introduced to parliament later this year, observers say.

“None of the opposition parties can refuse to support a seemingly pro-poor measure openly,” Chintamani Mahapatra, professor of political science at New Delhi’s Jawaharlal Nehru University, told Asia360 News.

But at what cost? India’s economy is already battling a bad year-and-a-half and the government is already operating under a fiscal deficit higher than most Asian countries. Economic growth is expected to come in at 6.5% or lower in the current fiscal year, thanks to a combination of the European debt crisis and India’s own lack of reforms.

Experts suggest that the Food Security Bill could worsen the fiscal bleeding. India’s food subsidy spending would balloon to an estimated 950 billion rupees (US$18 billion) in the first year of the scheme, up from around 673 billion rupees now. The government will also need an investment of 1.1 trillion rupees to boost farm output over the next few years.

India’s fiscal deficit is expected to overshoot the government’s official target of 5.1% of gross domestic product for 2012-13. Economists say that India cannot sustain such a high fiscal deficit for long.

Financial experts say the government can find resources to offset the additional cost burden of the Food Security Bill by cutting down or ending oil price subsidies. But it has been demonstrated umpteen times that the government is unlikely to do that, as it would not go down well with its voters.

“Measures that should have been decided on grounds of economic policies are being worked out on the basis of political calculations,” said Jawaharlal Nehru University’s Mahapatra.

In fact, many believe that it is the emotional appeal of a bill that talks of hunger alleviation that is driving the Congress Party’s move.

The feeling amid political analysts is that when nothing seems to be working in the Congress Party’s favour, even a moderate success in what will be the world’s largest experiment of providing rice and wheat to the poor, could help the party retain power at the 2014 elections.

The accusation that the government is playing politics with hunger also stems from its recent record.

Last December, the government dropped plans to open up the multi-brand retail sector to foreign direct investment (FDI) the moment some of its political allies raised objections, prompting speculation that it may be more concerned with shoring up support than the nation’s progress.

The investment liberalisation plan would have allowed global firms such as Wal-Mart and Carrefour to bring their expertise in supply chain management into the Indian market, where inefficiencies in the downstream segments of the food supply chain are rampant, threatening to undermine self-sufficiency and perpetuate malnutrition.

Inefficiency in the tomato business, for example, results in as much as 20% of tomatoes rotting in transit, while the price for consumers is marked up by as much as 60%, according to a December analysis in the Wall Street Journal Asia. It is likely that the continued government subsidies contained in the Food Security Bill will only lead to further market distortions, the report added.

Flawed economics is not the bill’s only shortcoming. Praful Bidwai, a social science researcher and human rights activist, said that the most deplorable aspect of the Food Security Bill is that it “marks a retreat from the concept of food security and the state’s duty to feed all its citizens”.

The bill particularly failed in its social duty by excluding many pertinent social groups, like truant children, he wrote in a January essay called “The Bill Must Not Pass”. School dropouts were deserving of generous food entitlements because grinding poverty at home was exactly what forced them out of school and into child labour in the first place, he argued.

“A good food security law should have provided for pensions to the aged, who have little or no earnings with which to buy food. The bill fails to do that,” he wrote.

“It also contains nothing by way of price guarantees for India’s impoverished farmers, over 250,000 of who have committed suicide since 1995, and who are among our most food-insecure people,” he added.

But what really exposes the hollow political move that hides behind the garb of social welfare, critics say, is Clause 51 of the Food Security Bill.

The clause absolves the federal — and also state governments — of any responsibility, including supplying food or paying compensation, in case of “war, flood, drought, fire, cyclone, earthquake or any act of god”.

Aren’t those the precise conditions, critics ask, in which food supply becomes crucial to the survival of many people?

All things considered, critics of the Food Security Bill say it comes across as a poor joke on the concept of food security and hunger alleviation. It neither offers good economics nor fulfills the moral requirement of a government to provide for its people’s fundamental survival needs.

The Food Security Bill, it seems, is all about making expensive promises for political gains.   AR

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Triumph of the Spirit

Myanmar emerges from the ravages of military rule to celebrate democracy

Pro-democracy icon Aung San Suu Kyi hailed a “new era” for Myanmar after her National League for Democracy (NLD) party won a landslide victory in the April 1 parliamentary by-elections.

Myanmar’s election commission confirmed on April 2 that Suu Kyi’s NLD won 40 out of the 45 seats contested, with five yet to be called.

Speaking to a crowd of delirious supporters at the NLD headquarters in Yangon, the 66-year-old Nobel laureate called the victory a “triumph of the people, who have decided that they must be involved in the political process of this country”.

The NLD claimed that Suu Kyi won over 85% of the vote in Kawhmu, a region that was ravaged by Cyclone Nargis in 2008. She received 55,902 votes, compared to 9,172 polled by her nearest rival Soe Min, the ruling Union Solidarity and Development Party (USDP) candidate.

Tin Yi of the Unity and Peace Party (UPP), the third candidate in the fray, received 397 votes, according to the NLD.

Seventeen political parties and 157 candidates, including independents, contested the polls spread across nine states.

Myanmar’s parliament has a total of 662 representatives and the military-backed USDP would control 80% of the seats even after the recent results. The country’s constitution reserves a quarter of the parliamentary seats for the military.

“What is important is not how many seats we have won, although of course we are extremely gratified that we have won so many, but the fact that the people are so enthusiastic about participating in the democratic process,” Suu Kyi told supporters at NLD headquarters on Monday.
“We hope that this will be the beginning of a new era.”

Election irregularities

In the run-up to the elections, the NLD complained of intimidation of its candidates by supporters of the ruling party. Suu Kyi said the poll could not be considered “a genuinely free and fair election”.

Concurrent with the NLD claims, sections of the Myanmar media on polling day reported instances of exclusion of eligible voters from voter lists and the inclusion of children and dead people in the official register.

Other serious allegations revolved around pouring of wax on the NLD portion of ballot papers, thereby leading to votes by NLD supporters becoming invalid.

The direction of the election commission, Win Ko, told Radio Free Asia’s Myanmar service on April 2 that anyone found guilty of fraud would face the punishment of a year in prison — provided proper evidence was uncovered. But he believed that the possibility of massive electoral fraud remained unlikely.

Many independent foreign observers agreed. Malgorzata Wasilewska, a European Union election observer, said that the election process at the roughly dozen polling stations her team visited was “convincing enough”.

Experts suggest that large-scale malpractices could not have been possible as Myanmar President Thein Sein was personally committed to the effectiveness of the by-elections.

“Allowing foreign observers to monitor the by-elections was a part of the Myanmar government’s efforts to show that it was willing to be open and also play fair,” Kyaw San Wai, research analyst at Singapore’s S Rajaratnam School of International Studies (RSIS), told Asia360 News.

One of the main reasons for the ruling USDP to stay clear of deliberate foul-play is that the quasi-civilian government that took power in 2010 needs Suu Kyi to enter the parliament to bolster the government’s legitimacy and spur an easing of western economic sanctions.

Lifting of sanctions?

As soon as the results were announced, President Thein Sein’s chief adviser told The Washington Post newspaper that the elections proved his country is capable of holding fair elections and that it is time for the US government to lift its economic sanctions on the country.

Reacting somewhat favourably to the plea, the same newspaper reported an unnamed senior US administration official as saying that “there are tangible moments that demand a tangible response to support ongoing reform”.

Observers suggest the possibilities include a lifting of travel bans to the US against Myanmar officials; the nomination, at long last, of a US ambassador to Myanmar; the lifting of some minor sanctions by presidential order; and even some military exchanges. Leaders at the ASEAN summit in Cambodia also reacted favourably to the election process and called for the lifting of international sanctions. No official announcement was made however on the issue.

“If it goes well [after the elections], it will probably lead to further engagement [of Myanmar] with outside nations, particularly the West,” Joshua Kurlantzick, Fellow for Southeast Asia at the Council on Foreign Relations (CFR), told Asia360 News.

A complete lifting of western sanctions is not expected until the authorities release all political prisoners and address the ethnic violence insurgencies that have for decades caused insurgent conflicts against the central government.

Myanmar has surprised its critics over the past year with a string of reforms such as the release of hundreds of political prisoners. But ethnic conflicts and alleged rights abuses remain concerns for the West.

The future

As a lawmaker and opposition leader in parliament, Suu Kyi would have an unprecedented voice in the legislative process. But with less than 10% of seats in parliament, her party would hardly be in a position to bring about the constitutional changes she seeks.

“We now need to see how Suu Kyi functions as a parliamentarian, as many people expect her to work miracles overnight. The transition from activist to parliamentarian has its set of challenges. If the NLD works adroitly and reaches out to the other parties, and also the military, it will be able to hit way above its weight at the parliament,” said Kyaw of Singapore’s RSIS.

To achieve that, however, Suu Kyi will need to influence not just those parliamentarians in the opposition that participated in the 2008 elections that the NLD had boycotted, but also those belonging to the ruling USDP. That would mean that she would have to work with the military in some way.

Despite fears that Suu Kyi risks legitimising a regime she has opposed for decades, NLD supporters see Suu Kyi’s presence in the parliament as the best chance in many decades for the country to take a turn for the good.

“Suu Kyi’s entry into the parliament would strengthen the democratic change within and outside parliament. It would benefit from the current climate of change in the country in its bid to bring about irreversible systemic reforms,” Soe Myrint, senior journalist and a prominent Myanmarese voice, told Asia360 News.

But experts warn that those are complicated matters that will require time to resolve.

“The real danger of the by-elections is the overblown expectations many in the west have cast on them,” David Scott Mathieson, an expert on Myanmar for Human Rights Watch, told Associated Press news agency on April 2.

“The hard work really does start afterward […] constitutional reform, legal reform, tackling systemic corruption, sustainable economic development, continued human rights challenges […] will take many years,” he said.

For the moment, most people in Myanmar are celebrating a victory that marks a major milestone in the Southeast Asian nation ravaged by decades of ruthless military rule.

The joy is even greater for the triumph of a woman who became the world’s most prominent prisoner of conscience.   AR

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Two Steps Back

Rahul Gandhi succumbs to divisive, caste-based electioneering in Uttar Pradesh, in the long, hard climb towards India’s top post

(20 January 2012) — Rahul Gandhi, the fifth-generation guardian of one of the longest running political dynasties in the modern world, and more importantly, the man whom many in India see as the nation’s future prime minister, has become the first Gandhi to publicly exploit India’s social arithmetic for electoral gains.

Putting into practice an idea that is contrary to his stated vision of a contemporary, progressive India, he is asking the 110 million voters in the northern Indian state of Uttar Pradesh (UP) to vote for his party’s candidates in the upcoming February-March 2012 elections on the basis of the castes and sub-castes that they represent.

That is not all. He is also appealing to the religious sentiments of UP’s largely poor and religiously-sensitive electorate by supporting a proposal to include a 4.5% sub-quota for minorities in the existing quota of reservation for Other Backward Classes (OBC). Reservation in India is a form of affirmative government action and the minorities are largely Muslims, who form 18% of UP’s population and can influence about 100 of the 403 electoral seats.

In the process, he has abandoned his oft-repeated promise of inducting only the youth and clean grassroot workers of his party the Congress, and given away tickets to those who can win seats in the forthcoming elections.

Disappointing as it may be from a moral perspective, political analysts are seeing this as the coming-of-age of Rahul Gandhi, the politician.

Mission 2012

It has been eight years since Rahul formally entered politics in 2004. The forthcoming UP elections are seen as not just a referendum on his organisational abilities, but also a barometer of his political ideology. More importantly, the UP election results will show whether the Gandhi scion is ready to lead his party in the 2014 federal elections, and the nation after that.

The state of 200 million not only forms 20% of India’s population, but also sends the most number of representatives, 80, to the Indian parliament. A handsome victory in UP, coupled with victories in a few more states — out of a total of 29 Indian states — can almost guarantee a party the pole position in national politics.

The Congress once ruled virtually uncontested in UP but bowed out in the December 1989 elections with a mere 94 seats, well below the majority mark. In the last election in 2007, Congress won just 22 seats. With the party losing ground in other states too, the need to re-establish a good base in UP has magnified, leading Rahul to formulate Mission 2012: The rebuilding of Congress in UP.

Not even the most ardent of Congress supporters are talking of forming a government in a state that has rebuffed the party for 22 years. But a sense of revival is running through the organisation due to Rahul’s aggressive campaigning and, more importantly, his shrewd caste-oriented tactic.

Verities of UP Politics

“Frankly, the only reality in Uttar Pradesh politics is whether your caste arithmetic is right or wrong. If the Congress wants to make a breakthrough and emerge as a party in reckoning both in 2012 and 2014, it has to talk this language, whether the national media likes it or not,” a Rahul aide in UP told weekly news magazine Tehelka on January 15.

And Congress is walking the talk, with 80 of its 325 candidates announced so far belonging to the OBC as well as the MBC, the so-called most backward of the OBC. Billboards at Rahul’s public meetings carry images of heroes and iconic figures of specific MBC groups. He also mentions these castes by name.

He is also making sure that he does not walk alone. In the western part of UP, Congress party has tied up with Rashtriya Lok Dal. The party is led by Ajit Singh, whose father Charan Singh led the first OBC opposition to Congress in UP in the late 1960s. This eventually reduced Congress to rubble in the state by the 1990s. Rahul is attempting to reverse this entire course. In the central and eastern parts of the state, Rahul has also forged similar caste-conscious alliances.

But Congress is not alone in the social engineering bid.

The ruling Bahujan Samaj Party (BSP) and the Samajwadi Party (SP), the likely winner of the election going by most opinion polls, are running campaigns focused on consolidating their core, caste-defined constituencies. Bharatiya Janata Party (BJP), India’s principal opposition party at the national level, is also trying to put together the perfect caste bouquet for the UP election. These imply that caste will continue to decide electoral fortunes in many parts of India for some time — and that Rahul has made the correct strategic choice.

The Stakes

In the event of less-than-spectacular success in the UP elections, Rahul will remain his party’s best bet for the prime ministerial post in 2014. But a good showing would almost certainly entrench his claim to the nation’s top post.

The question is, at what cost?

By playing on social divides for electoral gains, Rahul is demolishing the idea of a progressive and inspirational India that his great-grandfather Jawaharlal Nehru had hoped for, and sullying the Nehru-Gandhi identity associated with it. This is an identity that has allowed Congress to claim the higher ground over all parties through India’s modern history.

With the ageing prime minister unlikely to seek a third term, and Sonia Gandhi, the supreme leader of the ruling coalition, reportedly suffering from a debilitating illness, the nation’s leadership transition looks set to be decided by caste arithmetic in the dusty lanes of UP.

It is two steps back for Indian politics, and a crying shame for the Gandhis.

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Anshuman Rawat Interviews Nitin Gadkari

President of Indian opposition Bharatiya Janata Party (BJP) Nitin Gadkari believes that his party would bring the economy of India back on track by dislodging the present ruling coalition in 2014 elections

Established in 1980, the Bharatiya Janata Party (BJP) is India’s second largest political party in terms of representation in the parliament. Occupying the right of centre in the Indian political spectrum, it is a firm believer of free market economics and capitalism.

But defeats in successive elections in 2004 and 2009 seem to have sown seeds of doubt in its economic thinking and posture. And it hurts to be seen as a market friendly party in a nation that has the largest share of the world’s poor.

The party, which has always been a faithful ally of corporations and businesses in India, talks more about pro-poor growth and an economy based on social inclusion.

The most recent and visible example of its about-face was its vehement opposition to foreign investment in the multi billion dollar retail sector in December 2011, though BJP had itself favoured the liberalisation when it was in power in the early 2000s.

Asia360 News’ Anshuman Rawat speaks to Nitin Gadkari, President of the BJP about the Indian economy and his party’s economic plans for the country.

Asia360 News: You have said recently that BJP would dislodge the ruling government “to bring the country back on the path of economic growth.” What do you think is wrong with the economic policies of the current government?

Nitin Gadkari: I had written a comprehensive letter to the Honourable Prime Minister (Manmohan Singh) in January about the state of India’s economy. Let me share with you some of the thoughts that I shared with him.

The Indian economy is in complete mess today. There is virtual stagflation. Inflation has been hovering around 10% for the past two years, with food inflation above 12% during past two weeks. There seems to be no respite at all. The worst affected have been the poor.

On the growth front, there is a continued deceleration in output growth, while industrial production grew at a pitiful rate of 3.8% in July, the lowest in 21 months.

The figures are even more disappointing on the investment front. New investments in the country fell from 7.2 lakh crore rupees (US$145.5 billion) in April-June 2010 to 2.6 lakh crore rupees in July-September 2011, according to the Centre for Monitoring Indian Economy (CMIE).  This is a decline of 64% in one year.

Output of capital goods declined by 15.2% in July. Compared to a growth of 4.7% in August 2010, it grew only by 3.9% in the same month this year.  The repercussions of this on the economy are very evident and the long-term impact is going to be disastrous.

Asia360 News: If voted to power in 2014, what does the BJP propose to do to bring about a change in the current state of affairs?

NG: The BJP is developing an ‘India Vision Document 2025’. We have formed the team of experts, technocrats, economist and thinkers to deliberate and discuss our action plan for next 20 years.

We have formed small sub groups on more than 35 verticals such as Agriculture, Rural Development, Power, Infrastructure, Health, Primary Education, Higher Education, Irrigation, Women & Child Development, Environment, Urban Development, Non Conventional energy, Bio Fuels, God Governance, and Internal & External Security etc.

But most importantly, in a country where majority of people live in the villages, we would bring dignity to our villagers. This country has ignored agriculture and irrigation, with the result that poverty in the villages driven a good percentage of population to the cities. Cities do not have the infrastructure to deal with the influx as they are breaking at the seams. We propose to create quality infrastructure in rural areas.

Equally, we propose to have a sustainable philosophy of development. Realising that an increased demand of energy would be staring at us even as the reserves of fossil fuels deplete, the BJP would give a push to technologies that will use bio fuels and other alternatives.

Asia360 News: Which are the five key economic proposals that the BJP would to look to implement first, if it comes to power in 2014?

NG: We at the BJP believe that we can achieve 10% sustainable growth, which will not only benefit the industries but also create employment opportunities to millions of people in India.

To achieve that, I believe the biggest intervention is required in the field of agriculture.  India should aim at achieving at least 4% agriculture growth over a long period. Improvement in agriculture situation in India will not only benefit this large population but will also enable them to consume more products and avail various services. This will have a positive impact on industrial and service sector as well.

I strongly feel diversification of agriculture towards energy and power sector holds key to change scenario of agriculture sector in India.

Second, creating world-class infrastructure is a prerequisite for promoting investments and industrial development. NDA government in 1998 embarked on one of the most ambitious National Highways Development Programmes anywhere in the world. We need to think about such ambitious projects in the areas of railways, inland waterways, ports and airports etc. to overcome infrastructure deficit. It will reduce transaction costs for the businesses.

Third, the BJP would pursue the agenda of education and skill development in mission mode. Private sector can play an important role in this. Out of box ideas like the scheme of distributing free bicycles to school going girls in Madhya Pradesh and Bihar by the respective state governments has done wonders in improving the enrolments and reducing dropouts substantially.

Fourth, I firmly believe that for the sustainable development “going green” is the only option. We will have to focus on renewable energy like solar, wind etc. to generate electricity. We will have to invest in the green technologies for our industrial sector.

Finally, and most importantly, I firmly believe that (economic) reform process is irreversible and the fast economic growth it has led to has actually pulled millions of Indians out of poverty. The BJP support reforms so that hassle free procedures for the businesses to operate and flourish are created.

Asia360 News: Do you believe that BJP’s opposition to the FDI in multi-brand retail might hurt its image of a business friendly party in the eyes of foreign investors? Do you believe it would hamper India’s growth story?

NG: It would be unfair to call BJP anti reforms. The 1999-2004 BJP government was at the forefront of reforms process in India. It had in fact initiated many path-breaking reforms in the form of disinvestment, telecom policies etc.

I think the world needs to understand that every country, while contributing to global growth, has to protect the interests of its own people.
The Indian economy, at present, is dominated by the services sector, which accounts for 58% of India’s GDP. Retail chains, both small and big, make a major chunk of that sector.

At the same time, self-employment in India is the single largest source of jobs. Foreign Direct Investment (FDI) agencies with deep pockets entering this segment will have an adverse impact on our domestic retail sector. It would be a bad move at a time when the domestic retail sector is growing anyway.

Asia360 News: Asia is growing faster than any other region of the world. Does the BJP have a separate vision for the continent, especially with regards China and regional bodies like ASEAN?

NG: India’s “Look East” policy was given impetus during the BJP-led regime under Vajpayee, who during his six-year tenure practically visited all the ASEAN countries to promote bilateral cooperation in the economic and cultural fields.

The BJP continues to attach highest priority to its relations with all the Southeast Asian countries with whom India has maintained centuries’ old cultural and spiritual ties.

As the two fastest growing economies, India and China hold great potential for cooperation based on their strong complementarities.

We in the BJP strongly believe that the two Asian giants, together with other ASEAN tigers, should strengthen cooperation and coordination, jointly deal with the challenges, and guard against attempts by the developed countries to shift the burden (of issues like carbon emission) to China, India, ASEAN nations and other developing countries.

At the same time, it is imperative that India and China overcome the existing problems in their bilateral trade such as the trade imbalance, limitations in trade scope and trade mix, and a low level of mutual investment.