India Last Week: Sep 26-Oct 3

Mamata Banerjee wins over voters in Bhabanipur and Congressmen elsewhere, economy revives, only to face an impending energy crisis

T K Arun

The most significant political development of the week was Mamata Banerjee’s thundering victory in the Bhabanipur by-poll, cementing not just her position as chief minister of West Bengal (she had to become an MLA within six months of being sworn in as chief minister, to retain that job) but also as BJP’s nemesis. Congressmen in Tripura decided to join her party, the Trinamool Congress (TMC), as did those in Assam. Remarkably, her appeal was not confined to eastern India—on the other side of the country, a former Congress chief minister of Goa joined TMC. This could become a trend, given the ongoing hollowing out of the Congress.

In Punjab, Navjot Singh Sidhu, having ousted Amarinder Singh as chief minister and got the Gandhi siblings to appoint him as state Congress party boss, threw a tantrum over the new chief minister, Charanjit Singh Channi, showing some autonomy in the matter of appointing key officials, rushed to New Delhi to complain to his mentors, and, on being rebuffed, resigned as party chief in the state.

In Uttar Pradesh, leading lights continued to desert the Congress: the party’s Dalit face and a prominent Brahmin face, grandson of former chief minister Kamalapati Tripathy, quit the party. At least, thanks to the Congress, we now know what loss of face means.

The Congress did gain one new member: former JNU Students Union leader and freshly minted Communist Party of India Central Executive Committee member Kanhaiya Kumar. A self-styled Dalit leader from Gujarat, Jignesh Mewani, declared ideological solidarity with the Congress, but refrained from joining the party at the moment, as this might risk his membership of the Gujarat Assembly, where his status is that of an Independent.

Sacrifice in the course of one’s political career is, of course, an old-fashioned habit from the Congress’ fuddy-duddy past, from which Rahul Gandhi wants to deliver the party, replacing its fuddy-duddy old guard with his own handpicked young men and women. Never mind that some of his youthful picks have walked over to the BJP: Jyotiraditya Scindia stuffed his carry-bag with a bunch of Congress MLAs, too, bringing down the Congress’ Madhya Pradesh government, while Sachin Pilot’s attempted exit from the Grand Old Party’s orbit did not quite reach escape velocity, making him crash to the ground. Another Rahul loyalist, Jitin Prasada, was sworn in as a minister in the Yogi Aditya Nath’s Uttar Pradesh cabinet last week.

Captain Amarinder Singh, who has not taken kindly to ‘humiliation’ at the hands of the children of his old Doon School pal, Rajiv Gandhi, has declared he would leave the Congress, and ensure the defeat of Navjot Singh Sidhu, if he were to be presented as the Congress's chief ministerial candidate in the Punjab assembly elections. Singh met home minister Amit Shah, but denied any move to join the BJP, saying the meeting was about the farmers’ agitation and the farm laws that had triggered it.

The Group of 23 senior leaders within the Congress, which has been seeking inner-party reform, sought a meeting of the Congress Working Committee, in the wake of Sidhu’s petulant theatrics in Punjab. Congress workers staged a rowdy protest in front of the house of a G23 leader, Kapil Sibal, inviting condemnation from other senior leaders. The Congress spokesperson said the Congress Working Committee would meet soon.

Meanwhile, the BJP and the Sangh Parivar have been busy combating religious conversion. After a Pew Center study brought out last week the relatively stable shares of Muslim and Hindu populations since Independence, and convergent fertility rates, the BJP’s obsession with conversion must be understood as a simple expedient of voter polarisation. In Roorkee, Uttarakhand, a church was vandalised. People have been arrested for conversion, attacked by mobs and threatened in different parts of the country. In Belagavi, Karnataka, the dead body of a man in an inter-faith relationship was discovered next to the railway track.

In solidarity with such Hindutva striving for defence of the faithful, Muslim youths recently have taken to accosting Muslim girls in the company of non-Muslims and threatening or assaulting their male companions. Such incidents have been reported from Telangana and Karnataka.

In Uttar Pradesh, where farmer protest has acquired an anti-BJP edge, the BJP-led state government has announced a Rs 25 per quintal increase in the State Advised Price that sugar mills have to pay for sugarcane, bringing it up to Rs 340 per quintal for the normal variety (Rs 350 per quintal for the early maturing variety). This is already higher than the Fair and Remunerative Price recommended by the central government of Rs 290 per quintal. The Centre, too, had dutifully announced an increase of Rs 5 per quintal in the FRP. Thanks to such politics-inspired ratcheting up of cane prices, India produces more sugar than it consumes and cannot export the surplus because it is overpriced in the global market. Last year, India spent Rs 6,000 per tonne of sugar exported as subsidy. Ever-increasing cane prices also see ever-mounting arrears of what sugar mills owe farmers. The cumulative arrears, according to an analyst’s report, stands at Rs 190,000 crore.

The largesse on sugarcane prices is at odds with the economic rationale touted by the Union government for its three farm laws that have launched farmers in a protest that has lasted more than a year. The government wants, through these laws, to move away from a system of state-inspired overproduction that accumulates three times the grain the country needs in government storage, and reach a market-determined balance between demand and supply. The laws are sensible, the problem is that these need to be complemented with a policy of transition that helps farmers switch from unwanted grain to other crops that are still in short supply.

Blissfully oblivious of any such contradiction in the policy stances on sugar and grain, Prime Minister Narendra Modi tore into the Opposition, accusing it of political deceit and dishonesty. It is attacking our government, he said, for implementing the very policies it had championed when in office, such as GST and Aadhaar. This showed low respect for public intelligence and memory: he is no less guilty of such about-turns on these matters, having stoutly opposed, as Gujarat chief minister, both Aadhaar and GST. He and the BJP had been strong critics of the Indo-US nuclear deal, too, on the basis of which India upgraded its relationship with the US, something that he has embraced as Prime Minister, hugging, too, any warm bodies encountered along the way.

The Central government has created additional demand for sugarcane through big plans for blending ethanol into petrol. Seven new ministers have been sworn in, in UP, to represent that many more castes in the council of ministers.

The Prime Minister also released 35 new crop varieties with augmented nutritional value.

In Uttar Pradesh, the police have been given a free hand to put down crime, including by killing criminals in ‘encounters’. The police have not played shrinking violets while using the carte blanche they have from the political leadership. A Kanpur businessman was beaten to death during a police raid of a hotel in Gorakhpur, to much public outcry. Chief minister Aditya Nath announced an inquiry, promised to not spare the guilty, and declared anyone talking about the event as being part of a conspiracy to defame the state.

Another locus of such defamation of the state has been assorted fevers. Viral fevers have been raging across the state. The administration pooh-poohs ‘alarmist’ estimates. Hips don’t lie, sang Shakira. Hips are not of much use when it comes to estimating the incidence of fever, but pharmaceutical statistics are. As it turns out, a year’s normal supply of paracetamol was sold in August in Agra.

The Allahabad high court ordered the state government to take prompt action against policemen who had taken into custody and tortured a former armyman in Philibhit in May.

After Britain’s unreasonable refusal to accept vaccine certificates from India, despite accepting Covishield as a legitimate vaccine (after all, it is licensed by British-Swedish firm AstraZeneca), India announced that it would impose restrictions in India on travellers from Britain symmetric with those imposed in Britain on travellers from India. Britain said it is reviewing its validation of vaccine certificates.

A number of Indian drug manufacturers have been licensed by US-based Merck, called MSD in India to distinguish it from Merck of Germany, to produce its Molnupiravir pill found to be effective against Covid if administered before the infection aggravates. The US Food and Drug Administration had ordered the ongoing Phase 3 trial of the pill to be terminated, after results indicated that those on the pill survived even as those administered the placebo were succumbing to Covid.

Chief of army staff Gen MM Naravane has said that stepped up People’s Liberation Army deployments along the Line of Actual Control is a matter of concern. The Chinese have set up 8 more troop shelters in eastern Ladakh, amassed armoured divisions, as well as upgraded an airbase. India has strengthened its own positions, deployed domestically-built 155 mm howitzers, the Vajras, in Eastern Ladakh.

Indian Space Research Organisation is to launch three Earth Observation Satellites in the last quarter of the current calendar year, one of them using a new kind of launch vehicle, the Small Satellite Launch Vehicle.

Economy on a path to recovery

The Purchasing Managers’ Index tracked by IHS Markit rose, as compared to the previous month, in September. Prices were buoyant, however, and employment, stagnant. Domestic automobile sales were hit by the continuing shortage of microprocessors. But there was good news on the external front. Exports continued to rise in September: 23% over pre-pandemic September 2019.

GST collections for September touched a five-year high, at Rs 1.17 lakh crore, 27.3% higher than the pre-pandemic level of Sep 2019.  The government has set up two committees of state finance ministers to review GST rates and systems. While collections have been improving, complaints continue about a confusing profusion of rates and complex administrative systems.

Domestic air travel has picked up, reaching 60% of 2019 August capacity, up from 50% in July, in another sign of normalisation of the economy.

Covid numbers continued to decline, and vaccination numbers, climb.

The Department of Telecommunications slapped fines of over Rs 3,000 crore on Bharti and Vofaone-Idea for denying Jio Interconnect in 2016. Thanks to this genius for getting the timing right, the new minister for communications had to step in and make some soothing noises about waiving some fines and interest on past dues.

Power consumers in Andhra Pradesh were in for a pleasant surprise. Power distribution companies of the state want to return Rs 126 crore to domestic consumers, from the savings they made in power purchases from the open market.

Invesco and another mutual fund have sought an extraordinary GBM to change directors at Zee Entertainment Enterprises Ltd, including CEO Puneet Goenka.  Zee has moved the high court to block the move.

Reliance, on a roll, given the buoyancy in oil prices, has incorporated a commodity trading firm in Abu Dhabi, Reliance International Ltd.

Boeing 737 Max aircraft, mothballed after two inexplicable and fatal crashes that killed 340 people in October 2018 and February 2019, is to fly again in India. Its software has been rejigged, and pilots retrained. SpiceJet is India’s biggest user of the craft.

In a Rajasthan-government test to recruit schoolteachers, Bluetooth devices were found to have been inserted into footwear, coupled with tiny in-ear devices. The government defeated would-be cheats by shutting down the Internet in several parts of the state.

The Telecom Equipment Manufacturers’ Association has sued the Union government and state-owned telecom company BSNL over discriminatory provisions in a Rs 1,072 crore tender for a 1,772 km undersea fiber-optic cable between Kochi and Lakshadeeep. The objection was endorsed by Niti Aayog member Dr Saraswat.

In a move that has been long in the making and stoutly opposed by employees, the Ordnance Factory Board has been converted into seven state-run public enterprises.

More than half of India’s 135 coal-fired power plants have coal for just three days, indicating desperate shortage, portending power cuts, tariff hikes, and general distress.

Silent Night, Holy Night — that is associated with Christmas. But, if the Delhi Pollution Control Board has its way, Diwali would qualify, minus the usual firecrackers. Crackers have been banned this year as well.

Dewan Housing Finance Ltd, a large Non-Banking Finance Company that collapsed after largescale siphoning off of funds was discovered, has been resolved. Banks take a steep haircut, as do individual investors who had lent the company more than Rs 2 lakh. The resolution plan sees Piramal get a housing finance company with loans of Rs 61,000 crore for Rs 14,700 crore of his own money and Rs 19,500 cr of Non-Convertible Debentures bearing a coupon of 6.75% issued by DHFL, after merger with Piramal’s company. Banks take a 56% haircut, fixed deposit holders, 77%. Piramal has a sweet deal. Tata Steel’s 10-year debenture has to offer a coupon of about 10%. This brings up the question as to why a financial company should be resolved under the Insolvency and Bankruptcy Code meant for non-financial companies.

Soon after it called Infosys an anti-national company out to wreck the Indian economy at the behest of foreign interests, Panchajanya, the Hindi mouthpiece of the Rashtriya Swayamsevak Sangh (RSS), the BJP’s ideological parent, has dubbed e-commerce major Amazon ‘East India Company 2.0’.

Panchajanya is the name of Krishna’s battle conch. In ancient India, it was not bugle calls that heralded battle, but blowing the conch-shell horn. Conch shells produce distinctive and powerful sounds when blown hard. At least one wing of the RSS has declared battle on foreign e-commerce — even if that Version 2.0 taxonomy suggests commitment to tradition a whole lot less firm than what the Sangh Parivar projects.