Interests of the country’s poor have been forsaken in the name of national security and to fit the country to the perception of the US-led West.
by Sanjay Kapoor
The strategic balance at the Indo-China border dramatically changed after June, 15, 2020 when the Chinese troops had a savage brawl with the Indian jawans in the Galwan river valley. The incident left 20 Indian soldiers and officers dead and many injured. Chinese casualties were never acknowledged. After the incident, the Indian government moved 2 lac troops to the frozen heights of Ladakh and Arunachal Pradesh to discourage Chinese territorial ambitions. India’s face-off with China is changing Indian economic priorities – reflected in the Union budget – and how it wants to project itself to the world. It will be interesting to watch the implications of this shift in the election year.
The enhanced threat from China deepened by the deployment of thousands of troops from both sides at the cold border has allowed the government to dilute welfarism to present itself as a growing military power that is in a position to rebuff China if it engages in adventurism. It believes that this hard posturing would go well with Prime Minister Narendra Modi’s attempts to project himself as a world leader during the G20 summit that India is hosting later this year.
Expectedly, this year’s budget shows up with an increase in defence expenditure by 13 percent to $ 72 billion compared to that of the last year and, if debt payments are discounted, then it rises to 17.5 percent. This is a healthy hike, which suggests that India would consolidate its position as the third largest spender on defence, after US and China.
While the defence sector is quibbling about the funds allocated to it as they needed more to buy hardware, the truth is that the army failed to absorb Rs.5000 crores allocated in the previous year.
Misgivings have been expressed by the opposition politicians about the manner in which this hike has come at the expense of India’s poor. The government has brutally cut the budget of the rural employment scheme (MGNREGA), which has been a legacy of the United Progressive Alliance (UPA) government and has done remarkably well by preventing large mass of people from lapsing into penury when the economy was struggling to stay alive during the period of the pandemic.
To reiterate, in a period of jobless phase of Indian economy, rural guarantee scheme that mandatorily provides 100 days of employment ensured that many people do not go jobless and hungry.
Similarly, there is a substantial rise of 33 percent in capital expenditure or CAPEX, as it is called in infrastructure projects like rail, road, seaport and power. Incidentally, all these areas were perceived to be preferred domain of the Adani group that has been earning whopping profits past few years due to manifest state patronage.
The big question is what happens to all the promised spend with government’s favorite businessman struggling to establish legitimacy as an upright operator after the hurtful expose` by Hindenburg short seller. While most Indian businesses are dodgy in the way they keep their books, the outcome of Hindenburg’s report has been very damaging for the Indian businessman who climbed to be one of the richest in the world – till infamy brought him hurtling down.
The most devastating charge against Adani has been money laundering – bringing billions from mysterious tax havens to beef up its shares by improving their valuation. Though, the government and its spin doctors have been hitting back at the critics calling the report as an international conspiracy, they have been scrupulously silent on the most damaging part of the report that wants to know from where Adani’s billions came into shell accounts in tax haven.
Much of what was to play out in the coming days – the government tom-tomming its achievements at the G20 summit as a world power – has seemingly got derailed. The endeavor of the government has been to rebuild the aura of India shining in the days preceding the global summit and to mask physical poverty as much as possible, very similar to what the Soviets did in their desperately poor villages by creating Potemkin villages.
To repeat, the interests of the country’s poor have been forsaken in the name of national security and to fit the country to the perception of US and the West.
Sanjay Kapoor is the editor of the New Delhi-based Hardnews magazine.