THE HINDU EDITORIAL- MARCH 16, 2022
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Growing price pressures Policy makers need
to tame inflation o risk it undermining the growth they seek to support Inflation in India
continues on a worrying uptrend with the consumer price index-based reading accelerating
to an eight-month high of 6.07% last month, while wholesale prices logged a
double-digit increase for the eleventh straight month. February’s headline
WPI inflation spurted to 13.11%. Retail inflation remained stuck above the
RBI’s upper tolerance threshold of 6% for the second month, as food price
inflation quickened to 5.85%. Households in the hinterland bore a bigger
brunt of the burden as price gains measured by the consumer food price index
for rural areas surged by 69 basis points from January’s level, to 5.87%.
Price gains in the key protein source of meat and fish jumped by almost 200
basis points from the preceding month to 7.45%, while nutrient-rich
vegetables also logged inflation of 6.13% in February, belying the central
bank’s prognostication last month of an “expected easing of vegetable prices
on fresh winter crop arrivals”. And even though inflation in oils and fats
eased by more than 220 basis points to 16.44%, there is little room for
cheer, given that one can expect a spike again this month in the wake of the
abrupt disruption in the supply of edible oils from war-torn Ukraine, which
is the largest source of sunflower oil imported into India. With price gains
in clothing and footwear, fuel and light and transport and communication all
running well above 8% levels, the overall trend in retail inflation is now
clearly broad-based across consumption categories and disconcertingly way
above tolerance levels. Also, with the
pump prices of fuels yet to reflect the recent upsurge in international oil
prices in the wake of Russia’s invasion of its south-western neighbor,
transport and communication inflation is certain to climb sharply once
state-run refiners reset prices to reflect crude costs. The price of India’s
crude basket had already risen by over $20 a barrel since December to $94.07
last month and with global crude prices currently in uncharted territory on
account of the war, and the rupee having weakened by about 2.5% against the
dollar since the start of the conflict, it is hard to see any near-term
relief on the fuel price front. A glance at last month’s producer prices of
the energy basket shows inflation in the fuel and power category of the
wholesale price index was at 31.5%. And in a sign that manufacturers are no
longer able to keep absorbing cost pressures, inflation in manufactured
products accelerated to 9.84% presaging more pain for consumers. RBI Deputy
Governor Michael D. patra had last week cited the headroom available for the
Government to cut taxes on the fuels as a source of comfort on the inflation
front. With the RBI’s latest consumer confidence survey showing most
households reporting further increases in overall spending on essentials and
remaining far from sanguine on the prices outlook, policymakers need to act
expeditiously to tame inflation or risk it undermining the very growth they
are currently focused on supporting. White sheen India can breathe easy on moving to
fourth place in the ICC Test Championship table India’s staggering
dominance in cricketing jousts at home was further reiterated at the
conclusion of the Test series against Sri Lanka. If the earlier T20Is were
swept 3-0, the longer format proved no different as the host won at 2-0 with
the triumphs in both Tests being registered in three days each. These
emphatic victories emphasised the vast gulf in quality between the rivals
split by the Bay of Bengal and the Indian Ocean. India last failed in a home
Test series during 2012 when Alastair Cook’s England prevailed at 2-1.
Subsequently for nearly a decade, India proved to be a tough opponent in its
backyard, maximising home advantage and thriving on an array of diverse stars
that could bat, spin and bowl reverse-swing on dry pitches under a harsh sun.
That template was evident through the last fortnight. The positive results
may hint at a smooth leadership transition from Virat Kohli to Rohit Sharma
but prior to the series, the incumbent had his share of headaches. The middle
order was recast with cheteshwar Pujara and Ajinkya Rahane making way for
Hanuma Vihari and Shreyas lyer while an injured opener K.L. Rahul was ruled
out. The batting needed reassurance while the losses in South Africa
continued to haunt. Those worries were gradually erased as despite Rohit and
Kohli’s lukewarm yield, Vihari and Shreyas revealed their mettle. Shreyas was
brilliant at Bangalore’s M. Chinnaswamy Stadium, leaving his imprint on an
abrasive surface. The pitch may not have been a minefield like the one on
which Sunil Gavaskar scored a masterly 96 in his last Test innings during the
game against Pakistan in 1987, and yet it was a strip that never allowed
batters to settle. The 92 and 67 from Shreyas were straight from the
top-drawer while Ravindra Jadeja’s star turn in the first Test at Mohali, as
reflected in his unbeaten 175 and match haul of nine wickets, kick-started
India’s campaign. The cameos by Rishabh Pant and the wickets from Jasprit
Bumrah and R. Ashwin together deflated Sri Lanka even if its skipper Demuth
Karunaratne struck a ton at Bangalore. Importantly, India gained valuable
points and moved to the fourth place in the ICC Test Championship table for
the 2021-23 cycles. Having lost in the final to New Zealand during the
previous edition, Rohit is fully aware of the challenges even if India can
breathe easy this year, especially with a major chunk of its Tests being at
home before its tour of Bangladesh. There is also a lone Test to tackle in
England, a remnant of last year’s tour. While the players will soon blend into
the imminent Indian Premier League, their Test whites seem to have gained a
fresh sheen. |
A misfiring and
its trail of poor strategic stability India’s missile incident has
underlined the sorry state of bilateral mechanisms it has with Pakistan for
crisis management HAPPYMON JACOB The accidental firing of an Indian
missile into Pakistan on March 9 calls for serious introspection by the two
nuclear-armed adversaries about the perils of living under the shadow of
nuclear weapons. The unfortunate incident also casts a shadow of nuclear
weapons. The unfortunate incident also casts a shadow on the standards of the
storage, maintenance, the handling and even the engineering of
high-technology weapon systems in India. But, more pertinently, the incident
highlights the sorry state of bilateral mechanisms for crisis management
between the two nuclear adversaries where there is a missile flight time of
barely a few minutes. Mature responses The Pakistani response to the
accidental firing of the missile was a balanced one especially when handled
by the Pakistan Army on March 11. While New Delhi maintained a silence over
the issue until it was brought up on March 11, the Indian response was also
far from denial. Pakistan did not allege that it was done intentionally by
India, and the India side owned up the mistake and ordered an inquiry.
In that sense then, the Indian and Pakistani responses to the missile
(mis) firing were the best possible out come under the circumstances given
that there is little bilateral mechanism for crisis management. The two sides
do not have high commissioners on the other side, there is no structured
bilateral dialogue, and, most importantly, the two sides have not held
‘Expert Level Talks on Nuclear Confidence Building Measures’ or ‘Expert Level
Talks on Conventional Confidence Building Measures’ for several years now.
The missile incident had all the makings of a crisis that could have
escalated quickly, but, fortunately, good sense prevailed on both sides.
Perhaps India was also very lucky. There are a number of imponderables that
could have steered the incident in a different direction. What if this had
happened during trouble between the two sides such as the Balakot crisis of
2019? What if this missile had hit a target of strategic value inside
Pakistan to retaliate which may or may not have led to an Indian response?
What if such a Pakistani response had come when the Utter Pradesh Assembly
elections were still going on? One could think of a number of scenarios
wherein the accidental firing could have spiraled into a major crisis between
India and Pakistan.
This is not to say that accidents do not take place. As a matter of
fact they do. There have been several ‘broken arrows’ (“accident that
involves nuclear weapons or nuclear weapons components, but does not create
the risk of nuclear war”), acknowledged and otherwise, that took place during
the Cold War, even though those accidents did not involve the two rivals. To
be fair, the accident on March 9 did not involve a nuclear tipped missile or
a nuclear war-head – there is speculation though that the missile in question
is the BrahMos, a nuclear capable missile. More so, the nuclear deterrence
operating in the India-Pakistan context is a relaxed one, unlike the one we
had between the superpowers during the Cold War when the two rivals often
kept their nuclear forces on hair-trigger alert.
In the subcontinent, neither side keeps its nuclear forces on high
alert. As far as India is concerned, its warheads are de-mated from the
delivery vehicles, and its nuclear forces – under the command of the Strategic
Forces Command (SFC), the tri-service functional command of the Indian armed
forces – are de-alerted. India does not have tactical nuclear weapons. Nor
has there been any consideration of pre-delegating nuclear launch authority
to local commanders, even during a crisis. Pakistan’s story is somewhat
different, though not radically so. While its nuclear forces are not on high
alert, there is no certainty that its warheads are de-mated from their launch
vehicles. Perhaps, more importantly, Pakistan’s nuclear arsenal boasts of
tactical nuclear weapons, and one often comes across reports from inside
Pakistan of the country’s tactical nuclear weapons pre-delegated to forward
commanders during crisis periods. In feeble form What is deeply worrying, however, is
the delicate state of strategic stability between India and Pakistan. There
are at least four reasons why the strategic stability regime in South Asia is
hardly prepared for dealing with accidents such as the one that just
happened, or enhancing effective crisis management and deterrence stability.
For one, although India and Pakistan signed a ‘Pre-Notification of Flight
Testing of Ballistic Missiles’ agreement in October 2005, it does not include
cruise missiles. Notably, the missile that was misfire by the India side
earlier this month, suspected to be the BrahMos, was a cruise missile (even
thought it was a misfire, and not a fight test). Given the many sophisticated
cruise missiles that are now a part of each side’s arsenal, it is important
to include them in the pre-notification regime.
Second, as pointed out above, the two sides have not held their
structured meetings on nuclear confidence building measures (CBMs) and
conventional CBMs for several years now. Given the nature of the India-Pakistan
relationship – adversarial, nuclear-armed, crisis prone, and suffering from
trust deficit – there is an urgent need, especially in the wake of the recent
incident, to revive these two dialogue mechanisms. After all, even the
ideologically-adversarial Cold War rivals had such mechanisms in operation
especially in the wake of the Cuban missile crisis of 1962. A perspective Third, what makes the regional
strategic stability regime more unstable is the fact that the third state
with nuclear weapons in the region, China, has so far refused to engage in
strategic stability discussions with India even though China today is
involved in the India-Pakistan conflict more than ever before, apart from
being in a military standoff with India. These three elements, and now with the
possibility of accidental firing of missiles, make the region particularly
weak from a strategic stability point of view.
India and Pakistan urgently require faster mechanisms for
communicating sensitive information during crisis periods and peacetime given
how quickly the two sides are capable of transitioning from peacetime to a
crisis. Therefore, India and Pakistan should consider setting up mechanisms
such as nuclear risk reduction centres (NRRCs), established between the U.S.
and the Soviet Union during the Cold War.
The primary objective of NRRCs, or similar structures that can be set
up on either side, is risk reduction by providing a structured mechanism for
timely communication of messages and proper implementation of already agreed
upon confidence building measures. In a sense, such a mechanism could act
like the ‘Permanent Indus Commission’ which has resolved several disputes
arising out of the Indus Water Treaty.
Some of the misperceptions and ambiguities in the strategic domain
could be taken up by the risk reduction centres for resolution or
clarification. Such a body could routinely exchange messages, provide timely
clarifications, and review compliance to agreements among others. In an age
of social media and 24-hour news, honest mistakes or unforeseen accidents
could spiral into a military standoff especially in the absence of timely
clarifications.
Having said that, it is deeply concerning that the Indian Director
General of Military Operations did not use the existing, and
well-functioning, hotline to inform the Pakistani side of the missile
misfiring. If indeed the hotline was not activated, it is a cause for concern
for, after all, risk reduction mechanisms are useless if there is little
political will to use them.
New Delhi should, therefore, provide assurances to Pakistan that
efforts will be made to avoid such mistakes in the future; Pakistan should
desist from the silly temptation of linking the accident to “a state
apparatus run by a fascist ideology”; and senior officials from the India and
Pakistan should device ways of improving strategic stability between the two
nuclear adversaries. ‘Bharat Natyam’
in Indian diplomacy India’s stand in the United Nations on
the Ukraine war is an apt moment to reflect on the much needed Dixit
principle RAKESH SOOD The late Jyotindra Nath Dixit (Mani
Dixit to his many friends and admirers) took over as Foreign Secretary on
December 1, 1991. He retired 26 months later, on January 31, 1994 – 58 years
was then the retirement age. Republics and
Moscow Those were times of change. On
December 25, 1991, Soviet Union’s General Secretary Mikhail Gorbachev
resigned, the flag of the Union of Soviet Socialist Republics (USSR) was
lowered for the last time at the Kremlin and the following day, the USSR was
formally dissolved. In its place, 15 republics emerged. India accepted the
challenge and set about opening new embassies to build new relationships with
these countries in Central Asia, the South Caucasus and Central Europe while
maintaining its traditional ties with Moscow. In January 1992, India and Israel
established full diplomatic relations, announcing the opening of embassies
and exchanging Ambassadors for and first time, opening the door to a
relationship that has blossomed into one of India’s most significant
strategic partnerships in the last three decades. Path to the
nuclear deal On January 31, 1992, Prime Minister
P.V. Narasimha Rao participated in the first-ever meeting of the United
Nations Security Council at the summit level (India was a member in 1991-92),
presided by the British Prime Minister, John Major. On the sidelines, Mr. Rao
had a bilateral meeting with the United States President, George H.W. Bush, where
the two leaders decided that in the changing world, Indian and the U.S.
needed to have frank exchanges on issues that had divided them during the
Cold War; the issue identified was ‘nuclear proliferation and disarmament’;
the first meeting took place during Mr. Dixit’s visit to Washington two
months later, sowing the seeds of the dialogue that continued through ups and
downs, leading to the path-breaking India-U.S. Civil Nuclear Cooperation
Agreement in 2008.
At the Association of Southeast Asian Nations (ASEAN) summit on
January 27, 1992, Prime Minister Rao’s ‘Look East’ policy began to take shape
as India and ASEAN embarked on a secotoral-dialogue partnership. By the end
of 1995, this had matured into a full-dialogue partnership and in 1996; India
joined the security dialogue platform, the ASEAN Regional Forum. Since 2002,
the relationship has strengthened further with the annual India-ASEAN summit. On China and
Taiwan Following intense negotiations, during
Mr. Rao’s visit to China in September 1993, the two sides initiated the first
of many confidence-building-measures, notably the Agreement on the
Maintenance of Peace and Tranquility Along the Line of Actual Control in the
India-China Border Areas. It laid the foundation of the relationship for two
decades. Simultaneously, India and Taiwan
negotiated to open economic and cultural centres; Taiwan opened its office
first in Mumbai in 1992 before shifting to Delhi while India established the
India-Taipei Association office in 1995.
The instances above give an idea of how India was responding to the
changes taking place around us and in the wider world. As a junior colleague
who had the privilege of working closely with Mr. Dixit during these years, I
often heard him engage patiently with foreign diplomats and respond to
questions from inquisitive journalists seeking to make sense of the about-turns
in Indian foreign policy.
Relaxing as he puffed on his pipe, in a private aside to his friends,
he would tell us, “In Indian diplomacy, sometimes, you need to do a bit of
Bharat Natyam.” The point was simple – you may appear in different forms to
others but after you have first secured your interests. UN vote dynamics In recent weeks, the debates and
discussions in the Indian media and TV talk-shows about India’s stand on the
Ukraine conflict and its votes in the UN Security Council and General
Assembly are an appropriate moment to reflect on the Dixit principle.
Evidently, the Indian government has chosen to ‘abstain’, based on an
assessment of its core interests. However, there is a cardinal principle
associated with Security Council votes on issues in such charged times. A
‘for’ or ‘against’ vote is intended to convey a blunt message of ‘support’ or
‘opposition’. It is a black or white choice, and once exercised, the
messaging is clear.
On the other hand, ‘abstention’ takes us into a grey zone because it
is the middle path. It can either be seen as fence-sitting (which is a sign
of helplessness) or create space for diplomatic manoeuvre (which is a
successful outcome). In the Ukraine instance – the West should feel satisfied
that India ‘abstained’ because it perhaps expected India to oppose the West’s
draft proposals given New Delhi’s traditional ties with Russia while Russia
should also feel satisfied at India’s ‘abstention’ because it perhaps
expected New Delhi to give in to western persuasion.
The second outcome is a positive one but to appear in different forms
at the same time, we need to revive the kind of Bharatnatyam that Mr. Dixit
used so effectively to navigate those turbulent times, even as he helped set
the course for Indian foreign policy three decades ago. |
