China, India, Indian Defence, Internal Security, Strategic Studies

Celebrating Rafale, rethinking India’s national security

As five Dassault Rafale fighter jets – the first of 36 India agreed to purchase from France four years ago – landed at Ambala Air Force base, there was understandable celebration among civilians and those who don the military uniform in India. After all, this is the first high profile defence acquisition, barring the American assault helicopters, in decades.

The celebratory mood, however, must not hide the dark reality of India’s inept defence procurement process. The Indian Air Force, hobbled by fleet depletion and aircraft well past their fly-by-date, first communicated its desire to procure 126 Medium Multi-Role Combat Aircraft (MMRCA) to the Ministry of Defence in 2000. After two decades, three prime ministers, four Governments, and a dizzying number of flip-flops and somersaults, the first five Rafale fighter jets finally landed in India on 29^th July.

Opportunistic media hype apart, the arrival of these jets should be a moment of sombre national introspection. A nation that set out to procure 126 aircraft is able to obtain just five after two decades, that too by having to throw away piles of files that prevented any progress. This is a saga of a nation with an incompetent ‘system’.

The arrival of these jets should be a moment of sombre national introspection. A nation that set out to procure 126 aircraft is able to obtain just five after two decades, that too by having to throw away piles of files that prevented any progress

India is unprepared for the ensuing decade that will witness a world in upheaval and where national security will demand a significant share of resources and human capital. The Biblical ‘Four Horsemen’ have long symbolised the end of times. An honest enquiry into India’s national security preparedness will be defined by the four horsemen whose arrival portend the coming of the Apocalypse.

First, as the MMRCA saga shows, is India’s institutional inability to quickly arrive at a decision, which is invariably followed by inadequacy when it comes to swift execution of that decision.

The Rafale story serves as a demonstrator of the Indian state’s woeful (in)capacity – of its severe budgetary constraints; its inept (and self-serving) bureaucracy; its crusty defence establishment riddled with turf wars, ego battles and a vaulting sense of entitlement; and its incompetent political class that has spectacularly failed to rise to the defence of India by putting national security above party politics.

These stakeholders must be reminded of history’s abiding lesson: No nation has achieved its full potential without first establishing a strong national security industrial base. In recent times, India has set itself on the path to realising this goal with an overwhelming dependence on foreign powers. Even then, it has repeatedly stumbled due to procrastination by the ‘babu-neta’ combine.

Second, the inability to be honest with oneself. This is marked by the inability to read history correctly and to recognise India’s real enemy. Despite the obvious lessons New Delhi should have drawn from its defeat in 1962, it has largely privileged placating Beijing only to further fuel China’s untenable ambitions. As part of this perverse posture, India’s custodians of discourse have downplayed the bloody nose India has given China on at least two occasions last century and even the significant battlefield losses inflicted on China this summer.

India’s many dalliances with China, be it at BRICS or over the AIIB (Asian Infrastructure Investment Bank), were shaped by the romanticism of co-creating an ‘Asian Century’. That should have ended with Doklam in 2017. It was a promise China never meant to keep or maybe never even made at all.

We have hidden facts from 1962 onwards from all, and we continue to hide facts about Chinese behaviour and action even today. Since 2013, Chairman Xi has made abundantly clear his absence of interest in Asian multi-polarity. In Doklam, he shouted it through a megaphone for all the world to hear. China apologists do not hear and do not care.

They fail to assess China as an implacable neighbour and Xi as afflicted with an insatiable lust for power and territory. They ignore the China that views India as a civilisational foe and the Communist Party that seeks to undermine its neighbour’s political, economic and social architecture. Instead, these ‘experts’ crowd out other views from powerful pages, explaining Beijing’s malfeasance as a consequence of India’s sovereign decisions, internal politics and enhanced partnership with America.

What will it take for India to admit, unambiguously, that its neighbour is a long-term geopolitical rival and an existential threat? The tangential elements of this outlook are in place: India’s rejection of China’s Belt and Road Initiative and, more recently, its digital avatar. But the question is: Will such tactical moves serve as the cornerstone of a long-term strategy? Or, since the elephant in the room can no longer be ignored, is the template for Wuhan 2.0 being drafted by the blind men (and women) who have over the decades led India to its China conundrum?

Third, the inability to sense and seize an opportunity. Many countries have realized, or are beginning to, that they hedged their bets in Asia incorrectly. Their misplaced mission to socialise China into a rules-based international order having totally failed, they are now confronted by the reality of an imperial Beijing. Can New Delhi leverage this opportunity?

In 1972, China sensed America’s need to counterbalance the USSR and used that moment to sneak past the Iron Curtain. The Great Thaw was less a Henry Kissinger masterstroke and more a Mao success. The historic photograph in The Washington Post of a grinning President Richard Nixon with an inscrutable Paramount Leader Mao Zedong told the story best.

Beijing thought ahead and seized the moment, letting Washington foolishly believe it had stolen a march over China. Neither Nixon nor Kissinger could look beyond their immediate political imperative; China looked into the future, almost into the next century.

The lesson from that singular act of China was, and remains, that shadows of the past should not be allowed to precede India’s foray into a new world order. In 1971, Nixon ordered the US Seventh Fleet’s Task Force 74 into the Bay of Bengal as a nod to America’s ‘tilt’ towards Pakistan and to signal opposition to the Indo-Soviet Treaty.

But history moves in unpredictable cycles. The contrast between then and now is striking: The US has sent a carrier battle group into the region at a time when India and China are locked in a border confrontation. This time round, the group is exercising with Indian naval forces, bolstering a US-India partnership dedicated to resisting China’s coercive tactics and ensuring that the Indo-Pacific remains free and open. Clearly, 2020 is not 1971.

Asia has come a long way since the 1970s. In the retail market of the region’s geopolitics, India still commands a premium. As prospects of a two-front war become increasingly probable, can India shed its coy reluctance and operationalise arrangements that will welcome American naval presence in the Arabian Sea and the Bay of Bengal? A US frigate or two would send the signal to Rawalpindi to behave if India and China do engage militarily in the Himalayas. It would, in the medium term, also allow India and the US to manage the inevitable increase of Chinese presence in the Indian Ocean.

The first step towards this would be operationalising, even if for optical purposes, the Logistics Exchange Memorandum of Agreement by inviting US ships exercising in the region to use Indian facilities. This should further expand into the Indian Ocean with India facilitating an agreement on the Chagos Islands by leveraging its bilateral relations with Mauritius. A US presence at Diego Garcia is in India’s interest. It always was; now more than ever before.

Simultaneously, and before it’s too late, India must militarise its southern tip, the Andaman and Nicobar Islands: An air base and a naval docking facility are passé; India needs its very own Diego Garcia in its own national waters. If India does not do it now, very soon a rising crimson tide will leave it with no political room to have any choice. Far from matching China on the seas, if the Rafale saga is a pointer, Indian boats may need Chinese permission to leave the lagoons as our hardware would be weak and partnerships non-existent.

Although there is bi-partisan consensus in the US on Washington’s China policy, it is worth recalling that Joe Biden was part of an Administration that once harboured imaginations of a ‘G-2’ world. Drawing the US into the Indian Ocean and India’s seas will stymie such inclinations as well as get rid of the shadows of 1971 that lurk in some minds.

From the seas to the mountains, India must use the response to China’s hostility to its advantage – boldly, robustly and openly. For instance, the Quad can be taken beyond maritime security if India were to invite its partners for mountain exercises in the Himalayas next summer. China has militarised the Line of Actual Control (LAC). India militarising its Himalayan zone and creating special multilateral training and collaboration programmes would be an apt sovereign response.

The ongoing confrontation in Ladakh reminds us that claims over territory have to be backed up by connectivity, military presence and control. We may need to prepare for a highly militarised and un-tranquil LAC in the coming years.

As always, our commentariat will be pleading and pushing for ‘inaction’ as a policy option, in the mountains and in the seas. The underlying argument will be consistent with the ones deployed in the past – our actions must not provoke the dragon. The fact remains that China’s belligerence is not predicated on India’s actions, it flows from Beijing’s hostile and expansionist worldview.

Last, though not least, the inability to take its citizens into confidence. India is the only nation with great power ambition that has not adopted a formal and declared national security strategy. What passes for one is the frail doctrine of ‘strategic autonomy’, open to multiple subjective interpretations. Like ‘Panchsheel’, ‘Non-Alignment’ and ‘South-South Cooperation’, it is just another convenient phrase. It serves as a shield for indecisiveness, not as a lighthouse for agile decision-making.

Beyond the shrill prime time media wars that shape the foreign policy outlook of India’s voters, they largely have no metrics through which to judge the actions of their elected Government. India’s 1.3 billion citizens deserve far better. But since that awareness is denied to them, they applaud the landing of five fighter jets while awaiting another 31 on some unknown date, even as the country faces off Xi’s forces in the north and a ‘terror factory’ to its west.

Beyond the shrill prime time media wars that shape the foreign policy outlook of India’s voters, they largely have no metrics through which to judge the actions of their elected Government

The question is, should we ignore the four horsemen and continue marching straight into a geopolitical Apocalypse?

China, foreign policy, India, Indian Defence, Strategic Studies

Emperor Xi reinvents Chinese Checkers: Only CPC Wins

The current violent confrontation between India and China in east Ladakh along the Line of Actual Control should come as a surprise to none. This was inevitable. An inexorable chain of events was set in motion in 2017 when New Delhi rejected Beijing’s imperial invitation to the Belt and Road Initiative (BRI) event presided over by President Xi Jinping. A second rude rebuff followed later in the summer of that year when India stood up to China’s efforts to reorganise Himalayan political geography on the Doklam plateau. India must be prepared to strongly repel the backlash from Beijing on our mountains, in our waters and through our digital platforms.

The Indian commentariat is needlessly agonising over the drivers of the latest Chinese actions. Let us stop theorising and be bold enough to accept that China is just being itself. India has made decisions like independent nations do as an exercise of their sovereignty. To argue otherwise would be tantamount to ignoring the sum total of Beijing’s behaviour during the ‘Made in China’ pandemic: The acceleration of territorial revisionism in the South China Sea; the subjugation of Hong Kong through the stoutly contested national security law; repeated violations of Taiwanese airspace; heightened naval aggression around Japan’s Senkaku Islands; and its most recent encroachment in Nepal.

There is a pattern to this madness; a reason for this seemingly inexplicable restlessness.

In Jiang Zemin’s 2002 report to the 16th Party Congress, the Communist Party of China (CPC) presciently foresaw a 20-year “period of strategic opportunity” for China – linked to its entry into the WTO and America’s misguided interventions in the Middle East that enabled Beijing to play a deft game of Chinese Checkers — and build national power. Emperor Xi, anointed to office for life with a heavenly mandate, is now exercising that power as a counterpoise to the diminishing clout of American influence, and the weakening resolve of a wavering EU and unsure Europe. This is the moment for the Xi Dynasty (like the Mao Gang in another era) to take charge of the wheel and steer China to its centennial objective of world domination by 2049.

The new version of Chinese exceptionalism shaped and directed under Xi’s tutelage is linked to China’s past identity, largely a product of myth-making. It has willed itself into believing that it does not need to work within the matrix of international laws, rules and norms. It has decided that the time when China would “hide and bide” its motivations and capabilities is past.

The CPC is now externalising the authoritarian idiosyncrasies it wields at home. Medievalism is the hallmark of Chinese external assessments. This is evident from its insatiable urge to redraw boundaries as an adventure sport and from its estimation of its population (as well as others) as mere fodder. This behaviour is exemplified in China’s ‘hostage diplomacy’ with Canada. Chen Weihua, the European Union bureau chief of the China Daily, offered an unsympathetic glimpse into how China views the issue: “People often fail to note that Meng is worth 10 Kovrig and Spavor, if not more.”

Supplementing this behaviour are two critical tools: an expansionist military and modern methods of engagement. Xi has overseen what is arguably the most wide-ranging modernisation of the People’s Liberation Army: purging it of corrupt or disloyal officials, ensuring its transition to a capable and expeditionary naval force; undertaking crucial administrative and organisational reforms; and reaffirming its absolute loyalty to the CPC and its ideology. In parallel, Xi has presided over China’s long-term efforts to securitise and weaponise global supply chains, flows of technology, finance and data, and institutions of global governance. The all-pervasive Chinese state is but an instrument for the benefit of the CPC.

Time and again India has confronted these realities at 14,000 feet above sea level and soon it may have to defend its blue waters against the rising crimson tides. At one level, Beijing is merely attempting to ‘remind’ India of Asia’s geopolitical hierarchy—that failure to kow-tow to the Middle Kingdom carries consequences. More worryingly, Beijing may have concluded from India’s history that heightened aggression along the LAC will invariably bring India to the negotiating table—that India will grant China greater political concessions, market access or economic bargains as the price for “peace and tranquillity”. The Indian state will have to dispel and disprove this Chinese assumption.

China is also using this moment to send a message to its other neighbours in the East and South China Sea. While a similar escalation in those waters by China carries the risk of drawing in American military response, the attempt to reorganise boundaries on the Himalayas conveys the same intent. China is demonstrating to the world the limitations of decaying American power without having to actually confront it. In its neo-Confucian assessment an Indian capitulation may signal the final rites of Pax Americana. Beijing may be in for a surprise on both counts, provided countries are able to correctly assess the deeper import of recent Chinese actions.

India must begin with the daunting acknowledgement that the world’s second largest economy is its primary long-term geopolitical and geoeconomic rival. It must also internalise that it will not be able to negotiate its way into any favourable outcomes with China. While nations must talk and unofficial summits like Wuhan and Mamallapuram are important, India must have the singular purpose of investing in and developing robust political, economic, digital and military tools that should, for the short to medium-term, be able to protect territory and rebuff the northern marauders.

For too long, Delhi has been hesitant to impose costs for China’s military adventurism, preferring instead to settle matters diplomatically. In doing so, India has failed to realise that while Xi’s China is irrational, it is not an entirely unpredictable actor. It sees capitulation and a preference for negotiation as a sign of weakness. Delhi must be creative about how it imposes costs for this behaviour—creating unconventional and asymmetric options that help in ‘area denial’ operations in the Himalayas. Accelerating roads and infrastructure is one part, building emplacements is the second. The politics of ‘sharp’ presence (physical) is the only vocabulary understood in those terrains.

The adage ‘it is the economy stupid’ has never been more relevant. Obsession with building India’s economic heft must override all other considerations. China’s rise was underwritten by its strategic co-option of globalisation. In an era where global flows of data are outstripping trade in goods, and where technology supply chains are being jealously guarded, India’s goal should be to emerge as one of the centres of the topography of digital globalisation. India did well to reject the BRI; it must now ensure that it rejects BRI’s digital avatar as well.`

The banning of Chinese goods may be important signalling but will have little impact on the northern neighbour due to the asymmetry in trade. Zealous protection of India’s digital backbone and networks (5G) and billion people plus digital platforms from Chinese encroachment and intrusion, either openly or by stealth, must be the clear-eyed strategic objective. But India cannot do this alone. And here is where its own period of strategic opportunity begins. In a powerful dissent against the Xi regime, Tsinghua University professor Xu Zhangrun laments the consequences of Beijing’s global assertiveness: “Instead of embracing a [global] community,” he writes, “China is increasingly isolating itself from it.” The challenge for India is to capture this moment – to shed (self) righteous theories of foreign policy in favour of pragmatic, even cynical, partnerships that bolster its economy, provide it with technology, arm its military and support its global ambitions.

That India is still debating Non-Alignment as a choice is a sad reflection of its inability to grasp the reality that stares it in the face, its failure to read the writing on the wall, its myopic disregard for what the future holds. When Non-Alignment was conceived it was an attempt by the leadership of the day to carve out a space for India in a world dominated by two superpowers. Does its propagation allow similar space to India now? Or does a string of strategic partnerships (not of the variety that exists in the dozens) serve India’s interests better?

Indeed, the time for hiding behind ‘strategic ambiguity’ is over. This stands true for New Delhi’s involvement with international institutions as well. How will India take advantage of its seat in the UN Security Council, its upcoming presidency of the G-20, its chairmanship of the WHO, its position in the Global AI Alliance, or its leadership of the International Solar Alliance? India now increasingly finds a place on the high table of global governance. Question is, can it make the most of these arenas? Can Delhi marshal its diplomatic resources to convince the international community that events in the Himalayas carry global consequences, and that silence now, only emboldens China’s perverse great power ambitions in other geographies and domains? Will New Delhi develop the appetite to call out China on Taiwan, Tibet, Xinjiang and Hong Kong in international forums? And can it incubate a discursive space that will challenge ‘wolf warrior’ propaganda?

economy, Gender, Gender Issues, Health care, Indian Defence, Public Health, Sustainable Development

ORF takes on the budget

Budget 2019, budget, interim budget, healthcare, education, cyber security, defence modernisation, economic diplomacy, gender issues, India, Oommen C. Kurian, Bedavyasa Mohanty, Ameya Kelkar, Samir Saran, Antara Sengupta, Vidisha Mishra, Mission for Protection and Empowerment for Women, Gender Responsive Budgeting, Pradhan Mantri Mudra Yojana, Ujjawala Yojana, Higher Education Financing Agency, higher education, Sustainable Development Goals, National Education Mission, Samagra Siksha Abhiyan, development finance, Indian Overseas Direct Investment, Indo-Pacific, BIMSTEC, IORA, Maldives, Chabahar, development partnerships, Indian military, Chinese military, defence modernisation, defence budget, Digital India, National Strategy for Artificial Intelligence, NITI Aayog, automation technologies, PMJAY, Ayushman Bharat

The allocation for health of around INR 63,540 crore is about a 13% increase from last year. Much of it has been to PMJAY, the flagship scheme of the government, which saw allocation rise from INR 2,400 crore last year to INR 6,400 crore in the interim budget. Ayushman Bharat’s second arm, the HWCs also got considerable hike in budget allocation — from INR 1,200 crore to INR 1,600 crore. FSSAI as well as the National AIDS Programme have also seen improvements in allocation.

Budget 2019, budget, interim budget, healthcare, Oommen C. Kurian, PMJAY, Ayushman Bharat, India — Photo: Atul Loke/Getty

However, an exclusive focus on PMJAY can result in a possible de-prioritisation of core health system functions, with slow-down or reduction of allocations under various heads, including NHM. Capital outlay on medical and public health, for example, has come down from 3047.67 crore in 2017-18 (actual) to 2391.33 crore in 2018-19 (RE) to 1675.90 crore in 2019-20. This can potentially impact health system’s capacity to expand in areas that need health services the most. Neglected areas can remain neglected unless there is specific focus. The budget document stated that of the 3,508 HWCs already operational, only 582 are in the aspirational districts, or the districts lagging in health development.

An exclusive focus on PMJAY can result in a possible de-prioritisation of core health system functions, with slow-down or reduction of allocations under various heads, including National Health Mission.

Lastly, it is easy to celebrate the INR 6,400 crore allocation, meant for around 50 crore PMJAY members. Still, the money allocated remains around INR 1,000 crore short of a conservative estimate of PMJAY spending this year. To put things in perspective, healthcare coverage to just around 35 lakh CGHS beneficiaries will cost the exchequer INR 3,000 crore, of which INR 2,850 crore was allocated in the interim budget. In addition, delays in payment of sanctioned amounts undermining efficiency of PMJAY remains a real risk, as with many health schemes. As of now, reports indicate that of the INR 2,400 crore allocated last year for PMJAY by the MoF, INR 1,000 crore has yet not been released, and that there are outstanding payments from the Centre to the States amounting to INR 1,700 crore under PMJAY. This can potentially impact the sustainability and effectiveness of the scheme.

It was decided by the government that India’s government health spending will be 2.5% of its GDP by 2025. At the current pace, it will be impossible. As a percentage share of total budget, the interim budget outlay on health was just 2.2%, below the figure in 2017-18, where the proportion of health outlay peaked under the Modi regime at 2.4%. Health in India needs significant additional resources, and not reallocation of existing resources. Ayushman Bharat becoming the flagship health initiative cannot and should not lead to a case of the government missing the forest for the trees. Without expansion of real health infrastructure, Ayushman Bharat will be just band-aid.

AI and automation technologies

Bedavyasa Mohanty

Budget 2019, budget, interim budget, cyber security, Bedavyasa Mohanty, Digital India, National Strategy for Artificial Intelligence, NITI Aayog, automation technologies

The Union Budget 2019 signals early forays into artificial intelligence by the Indian government with the announcement that a National Centre on AI will soon be set up. This centre will presumably work in close coordination with Centres of Research Excellence in Artificial Intelligence (COREs) that were first proposed by the NITI Aayog in its discussion paper: National Strategy for Artificial Intelligence. While the NITI Aayog identified five areas primed for AI intervention, namely healthcare, agriculture, education, smart cities and smart mobility, the Union Budget speech hints that four more priority areas have been identified.

In a manner now idiosyncratic of the Modi government, the Minister of Finance also announced plans for the creation of an ‘national AI portal.’ Details of what this portal will achieve or what it will be meant for remain unclear. Also missing from the budget are critical details around the quantum of investment in AI and automation technologies that are being planned.

Conspicuously missing from the budget are any references to digital payments or cyber security — both strong protagonists in Modi’s Digital India.

The Finance Minister’s speech also revealed ambitious plans to digitise one lakh villages over the next five years as a part of the Digital India programme by providing WiFi access to these villages. This initiative will be spearheaded by the Common Service Centres that now serve as nodal points of delivery for public utility services.

Conspicuously missing from the budget though are any references to digital payments or cyber security — both strong protagonists in Modi’s Digital India. This absence will likely be felt by Indian tech companies who for a few years now have been demanding economic relief for domestic players to level the playing field and compete with the seemingly limitless cash inflow that US and Chinese tech startups seem to be riding on.

Indian defence

Ameya Kelkar

While the defence budget has been pegged at INR 3.05 lakh crore, an increase in absolute terms, the percentage of the GDP used for India’s defence for the year 2019-2020 remains at the measly 1.5% mark, still very low for any effective modernisation to take place. The interim finance minister, in his budget speech, has stated that the current defence personnel will see a rise in the Military Service Pay (MSP), while at the same time allocating funds for special allowances of Air Force and naval personnel who are stationed in high-risk zones. Apart from this funding of the military, the government has also earmarked a separate INR 35,000 crore as part of its OROP pension payments, in line with the BJP election manifesto. However, this defence budget still does not take into account the modernisation needs of the country, pegging only INR 1.08 lakh crore for new weapon systems, while the day-to-day expenses have been given a budget of INR 2.10 lakh crore.

This budget, while being touted as the largest increase in the defence budget of India, still reveals the fact that the Indian military is not being given enough room to upgrade its current equipment to keep pace with the rapid modernisation of the Chinese military. The budget highlights the fact that the government is only willing to keep its military functioning at the level it already is, not taking into account the asymmetry between itself and its neighbours in terms of both technology and equipment possessed. While there is no doubt that this year’s budget is a step forward in the right direction with more money being pooled in the upkeep of the military, serious attention needs to be paid to the slow speeds of modernisation of the military’s resources, which will prove to be a major factor in the coming years, in a time where the Chinese have begun downsizing and modernising and indigenising their equipment to meet the new threats of both the present and the future.

Towards economic diplomacy

Samir Saran

Compared to an allocation of INR 12,620 crore in 2014-15, the overall grant to the MEA in 2018-19 is INR 16,061 crore.

India’s allocation towards economic diplomacy has steadily crossed the USD 1 billion mark.With India already contributing nearly 15% to global growth, it must interrogate the consequences of its development partnerships more closely as allocations rise over the next decade.

Two notable heads this year are aid to the Maldives and the Chabahar port. Following the establishment of a friendlier government in Male, India has more than quintupled its aid to Maldives — from INR 109 crore in 2018-19 in the original estimate, to INR 440 crore in the revised 2018-19 estimate, and to INR 575 crore this year. And continuing a new practice from last year, India has allocated INR 150 crore for the development of the Chabahar port.

These investments reveal India’s crucial connections to both the Indo-Pacific and the Eurasian landmass. However, while South Asian states receive the bulk of India’s economic assistance, India’s aid to Eurasia stands at INR 25 crore this year.

India’s investments in regional institutions also remains unfortunately low: INR 8 crore each for the SAARC and BIMSTEC Secretariat. While the BIMSTEC budget has doubled over the past two years, it remains insufficient to create effective human or technical capacity in the institution.

Over all, the 2019-20 Budget makes clear that India must recalibrate its approach to economic diplomacy in the region, especially given its domestic constraints.

For one thing, India must begin to identify priority sectors and States — especially in the Indo-Pacific and Eurasia. Development projects that create social and economic value for local communities and where India has a comparative advantage will be key. Supporting institutions like BIMSTEC and the IORA will also be important.

Second, convincing India’s private sector to invest in the infrastructure needs of developing countries will also be crucial. Indian Overseas Direct Investment in developing countries is still limited. Budgetary support by way of concessional financing for Indian companies investing in strategic infrastructure projects abroad also remains low.

Third, India’s concessional LoC framework must be made more competitive and transparent. Many privately admit that loans are arbitrarily granted to a select few Indian actors. There is also little available data on the economic benefits that accrues to India.

Fourth, plugging India’s capital gap will require imaginative collaboration with international donors. India must explore multilateral cooperation mechanisms with the US, the EU, Japan and Australia have all announced new economic initiatives in the Indo-Pacific and Eurasia.

Given that India will emerge as one of the largest sources of development finance in the coming years, it is time for the Government to release a white paper on how development partnerships can advance India’s economic and strategic interests.

Education: Less money to State institutes and technical colleges

Antara Sengupta

The Interim Budget 2019 allocated INR 93,847.64 crore to education, which is although the largest till date with about a 10% increase from last year’s budget allocation — it is still only about 3.3% of the GDP. While the increase in allocation is a good sign, it has again failed to target the recommended 6% of the GDP required for India to inch closer to the Agenda 2030 of Sustainable Development Goals of the UN. Unlike last year, this year’s budget speech gave little importance to education as a priority sector for the economic development of the country.

Of the total budgetary allocation, school education yet again received the highest revenue of INR 56,386.63 crore, up from 50,000 crore in 2018-19. The National Education Mission (which comprises the Samagra Siksha Abhiyan for school education from pre-primary to class 12 and teacher training programmes) saw the maximum outlay of INR 36,472 crore, up from INR 31,212 crore in 2018-19. Although this is an increase, it is not enough to address the issues in school education, which has a massive near-perfect enrollment rate. Allocation to mid-day meal scheme that is known to increase attendance and improve health among children has seen paltry increase of INR 500 crore from last year. Most disheartening is to see a reduced outlay of about INR 87 crore for central schemes such as National Scheme for Incentive to Girl Child for Secondary Education, National Means cum Merit Scholarship Scheme, National Award to Teachers and Digital India e-learning.

While the increase in allocation is a good sign, it has again failed to target the recommended 6% of the GDP required for India to inch closer to the Agenda 2030 of Sustainable Development Goals of the UN. Unlike last year, this year’s budget speech gave little importance to education as a priority sector for the economic development of the country.

As for higher education, it has yet again failed to garner the attention of the policymakers. This year’s interim budget allocated INR 37,461 crore, which is a small increase of about INR 2,000 crore for 903 universities, 39,050 colleges and 10,011 standalone institutions in the country. Fund allocations to statutory bodies like UGC, AICTE, have decreased, which means lesser money to state institutes and technical colleges. Rashtriya Uchchatar Shiksha Abhiyan (RUSA), which funds all the State universities and colleges has seen an allocation of INR 2,100 crore, which is about INR 700 crore more from last year. This is highly insufficient for the upgrade of educational institutes in the States that are in a pitiable condition. To fund major infrastructural projects through loan grants, last year Higher Education Financing Agency (HEFA) was allocated INR 2,750 crore, however that too has been reduced to INR 2,100 crore this year. HEFA also funds capital expenditure of the elite institutes that have been asked to allow 10% EWS quota and increase their intake capacity by 25%. These will need major revenue boost, that seems impossible from the current budget outlay. Fund allocation to central universities too have been reduced. The only major improvement in higher education seems to be the increase in salary scale for professors and funds allocated to research and innovation activities.

Greater gender integration, but decline in women-specific schemes

Vidisha Mishra

Budget 2019, budget, interim budget, gender issues, Vidisha Mishra, Mission for Protection and Empowerment for Women, Gender Responsive Budgeting, Pradhan Mantri Mudra Yojana, Ujjawala Yojana, India

In the last budget before the national elections, Prime Minister Narendra Modi’s government pitched for transforming “women’s development to women-led development.” Adopted on the evidence-backed premise that gender-neutral policies lead to gender-unequal outcomes, India formally adopted Gender Responsive Budgeting (GRB) in 2005. Every budget since has included a statement that lists out two parts — Part A, which reflects ‘Women Specific Schemes’ which have 100% allocation for women, and Part B, which reflects ‘Pro Women Schemes’ where at least 30% of the allocation is for women.

On Friday, interim finance minister Piyush Goyal proposed to increase the budget allocation for the Mission for Protection and Empowerment for Women from INR 121,961 crore in 2018-19 to INR 131,700 crore for 2019-20, reflecting an overall increase of INR 174 crore. The mainstreaming of gender budgeting across sectors is demonstrable in the fact that more than 70% of beneficiaries of the Pradhan Mantri Mudra Yojana, which offers financial support to small and micro enterprises, were women. Similarly, the Ujjawala Yojana, which has already provided 6 crore free LPG connections, and aims to provide another 2 crore free connections by next year, has a very direct impact on homemakers, especially in rural areas. Further, an increase in budgetary allocation of schemes such as the National Rural Livelihood Mission (INR 4,512 crore), MGNREGA (INR 20,000 crore) and the PM’s employment generation programme (INR 2,327 crore) is also reflected in the gender budget.

The recognition of the cross-cutting nature of gender concerns and their firm integration in fiscal policies is good news. At the same time, it is noteworthy that the budgetary allocation on “women-specific schemes” has declined from INR 4,271.09 crore (budget estimates/BE) to INR 2,573.66 crore (revised estimates/RE) in 2018-19. Hence, an overall increase in the gender budget does necessarily translate into higher spending on women without careful implementation and gender audits.