Category: Editorial

Title: ​ Fate of nations: On the 2024 Economics Nobel

The 2024 economics Nobel prize is an important one as it highlights what really matters at the end of the day for the long-term economic success of any country. U.S. economists Daron Acemoğlu, Simon Johnson and James A. Robinson were rewarded for their work on how the quality of institutions in a country can lead it either down the path of economic prosperity or abject poverty. Their study was on the effects of colonialism on the quality of institutions and post-colonial growth of various countries. They found that countries with institutions that secured the rule of law and enforced property rights offered individuals a strong incentive to work, save and invest in the long run. On the other hand, countries with extractive institutions which gave rise to concentration of power and constrained political freedoms suffered deep economic pain. Some have pointed to the authors’ lack of a substantial critique of the brutality of colonialism and of painting too rosy a picture of the development of western institutions. But the salience of their analysis remains.

The “institutions” that the laureates talk about as crucial to long-term economic prosperity are nothing but the various rules, which could be either explicit laws or implicit social norms that govern human interaction in society. Such institutions may also include laws that protect citizens from expropriation by the government. The rapid economic growth of China and India since their economic liberalisation in the late 1970s and the early 1990s, respectively, are good examples of countries prospering soon after a significant change in the nature of the institutions or the “rules of the game” that governed their economies. Structural reforms that further improve the quality of institutions are thus crucial if these economies are to achieve living standards similar to those of high-income developed countries in the West. Notably, the Nobel also comes at a time when existing institutions around the world are under the significant threat of being destabilised by personality-driven populist movements. It is worth noting that in their work, the Nobel laureates have classified democracy as an important “inclusive” institution that is good for long-term economic growth. However, the rise of illiberal democracies with protectionist economic policies in recent years shows that liberal institutions that work for the upliftment of the many and development not just for a few, are now under severe threat. A democracy driven by short-term populist policies can be as “extractive” as an autocracy that serves the interests of a narrow elite that is close to people in power.

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Title: ​ Battle of wits: On the Maharashtra and Jharkhand elections 

Assembly elections in Maharashtra and Jharkhand in November will, yet again, test the mettle of the Bharatiya Janata Party (BJP) and the Congress, and the respective regional parties, just weeks after the elections in Haryana and Jammu and Kashmir. By-elections in three Lok Sabha constituencies and 48 Assembly segments across States have also been announced. The political landscape in Maharashtra has been reshaped thoroughly since the 2019 election. The Shiv Sena and the Nationalist Congress Party (NCP) have split, with one faction each in alliance with the BJP and the Congress. The ruling Mahayuti, which the BJP is a part of, ended up with 17 of 48 seats in the 2024 general election, while the Maha Vikas Aghadi, of the Congress, the Uddhav Thackeray faction of the Sena and the Sharad Pawar faction of the NCP, won 29. Since then, the ruling alliance has taken several measures to gain more ground. Following the latest decision by the outgoing Eknath Shinde-led government hours before the election schedule was announced, a complete toll waiver for light motor vehicles was announced. Chastened by the Haryana election results, the Congress has toned down its hype in Maharashtra. It has appointed senior leaders to oversee the campaign in various regions of the State. In Maharashtra and Jharkhand, the BJP has had its strategy in place well in time, overseen by veterans who command authority.

The JMM-led ruling alliance in Jharkhand, which the Congress is a part of, and the Mahayuti are betting on women voters to ensure another term. Both governments have introduced cash dole schemes for women. In Jharkhand, the BJP campaign is built on corruption allegations against State Chief Minister Hemant Soren as well as demographic shifts which the party attributes to the alleged entry of people from Bangladesh. Mr. Soren accuses the BJP of misusing central investigating agencies to implicate him. He is dependent on tribal consolidation, but that alone is not sufficient. Nearly three-fourths of the State’s population are non-tribal, and the BJP’s focus is on consolidating the Hindus among them. The tribal population is shrinking, but linking this to Bangladesh while overlooking the issue of inter-State migration is a classic BJP playbook tactic. The consolidation of the Other Backward Classes, a strategy that worked in its favour in Haryana, is what the BJP is aiming for in Jharkhand and Maharashtra. The Congress and its regional allies are at risk of being overdependent on Marathas in Maharashtra and tribespeople in Jharkhand.

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Title: ​ Abject failure: On India’s Global Hunger Index ranking

The 2024 Global Hunger Index (GHI) suggests that India’s undernourished population this year would effectively rank as the seventh most populous country in the world — with roughly the population of Brazil, a staggering 200 million people. In stark terms, this is about 14% of India’s existing population. The 2024 GHI, which is the report’s 19th edition, considers comprehensive sets of data in its findings. In India’s case, it considers the Sample Registration System statistical reports, that the Ministry of Statistics and Programme Implementation publishes annually, which provide data such as on births, deaths, infant and maternal mortality, based on reports by the Ministry of Women and Child Development and NITI Aayog.

In 2024, the scorecard for the 127 nations analysed ranges from “low” to “extremely alarming”. While India is ranked “serious” (rank 105 and score 27.3), it might as well be considered “extremely alarming” if one considers various other relevant factors. It also establishes the abject and systemic failure by the Indian state to address the most basic of human needs — of adequate food and nutrition that are essential to reap the benefits of the much touted ‘demographic dividend’. India was the world’s fastest growing economy, at 6.8% in FY24, with an estimated GDP of almost $4 trillion, ranking fifth globally. However, its per capita income, of $2,485 in FY24, was less than a fourth of the global average of $13,920 in FY22, indicating the wide income inequality that would result in vastly varied disposable incomes. This is pertinent as food inflation more than doubled between FY22 and FY24, from 3.8% to 7.5%, affecting the poor. Even as the Economic Survey for 2023-24 blames this on ‘extreme weather events, low reservoir levels and damaged crops, affecting farm output’, India recorded one of its highest levels of food production — 332 million tonnes in 2023-24. This was largely due to bumper crops in rice and wheat, though pulses and vegetables were affected by extreme weather events. But these numbers when read with India’s infant mortality — 26 per 1,000 live births in 2022, while the global average was 28 — and child stunting and wasting rates, of 35.5% and 18.7%, respectively, are revealing. They point to a failure of India’s health-care and safety net systems and the denial to address what is apparent, namely, climate change that has already begun to cast a long shadow on India’s food security.

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​Marina mayhem: On the IAF’s Chennai air show

Events that draw huge crowds require careful preparations. The loss of five lives during an air show at mid-day on Chennai’s Marina beach on October 6, organised by the Indian Air Force (IAF) as part of its 92nd anniversary, could have been avoided with better anticipation of the surge in spectators. The cause of death was attributed to heatstroke, though dehydration and suffocation may also have been factors. More than 200 people reportedly fainted. The IAF had issued advisories urging attendees to be well protected against the heat of around 34°C to 35°C. After the show, many complained of dizziness. Tamil Nadu Health Minister M. Subramanian said 102 individuals were sent to government hospitals nearby. In addition to the medical emergencies, chaos ensued on Chennai’s roads for hours. Metro Rail and Mass Rapid Transit System (MRTS) trains were overcrowded. Stations were extremely congested and services were insufficient. Tamil Nadu Chief Minister M.K. Stalin announced a solatium of ₹5 lakh each to the families of those dead. He attributed the traffic congestion to the “overwhelming response”, despite multiple departments coordinating preparations.

This is not the first time that Chennai has hosted such an event. An IAF air show on September 6, 2003, drew an estimated 13 lakh people, just 2,00,000 less than this year. Notably, there were no heatstroke fatalities then, although two children went missing. Traffic management and train services were similarly chaotic. Clearly, lessons have not been learned. The blame should be shared not only by the State government, responsible for logistical support, but also by the railway administration for its inadequate response. Defence officials should have provided more critical inputs than they did, given their experience in conducting such shows nationwide. After the crash of a fighter jet at an air show in New Delhi on October 8, 1989, the IAF seemed to have addressed its weak points to ensure smooth events related to Air Force Day. In a social media post, Mr. M. Subramanian claimed that the government had exceeded the requirements requested by the IAF. However, his assertion about sufficient toilets and drinking water did not align with complaints about inadequacies at the venue. The authorities should not have allowed several lakhs to converge at the Marina. Giant screens could have livestreamed the display and volunteers from higher education institutions could have assisted the police, transport and health officials to attend to those in distress. Defence officials and host States should critically review their plans. Only then can such mayhem be prevented.

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Title: ​ A learning curve: On the PM Internship Scheme

In October 3, without much fanfare, the Centre launched an online portal that will serve as the platform for implementing one of the major announcements in the Budget for India’s unemployed, and to a significant extent, unemployable youth. The portal, which operationalises the PM Internship Scheme — part of a five-scheme package designed to spur job creation and impart skills to 4.1 crore youth over five years — will match companies willing to offer year-long on-the-job training stints with young people striving to find a job. In principle, the mainly Centre-funded scheme makes sense for a country with a large, young workforce which is also grappling with distressing levels of youth unemployment. Apart from bridging the gap between the education provided to students and the real-world practical skills desired by employers, well-known firms could offer some form of certification at the end of the internship, providing comfort to prospective employers reviewing candidates for jobs. This could address a key question that employers often grapple with: “They can get the job, but can they get the job done?”

Under a pilot project, the first batch of 1.25 lakh interns will begin stints with voluntarily participating companies on December 2. While the government has consulted industry bodies before and after announcing the scheme, it is rightly cautious before scaling it up to meet the target of creating one crore internships by March 2029. The lessons learned from the pilot project will inform the final scheme design. Some insights will be apparent in the initial process of matching applicants to companies, but the full scope of outcomes can only be assessed after December 2025, when the interns re-enter the job market. Along the way, dropout rates and grievances will need to be monitored closely. A few features pose challenges, such as the plan to place interns within or near their district, and if that is not feasible, within their State. It is unclear how this will play out in less industrialised and less services-oriented States such as Bihar, which are likely to attract higher numbers of applicants. Just five States account for over half of India’s manufacturing output, and youth unemployment is higher in States with lower business presence. Apart from shop floor skills, the scheme also needs to incorporate digital and soft skills that are vital for the modern workplace. The pilot project’s trajectory requires a diligent and candid evaluation without a self-congratulatory approach, ensuring that intended outcomes are eventually met.

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Title: ​ The other monsoon: On the northeast monsoon

India’s southwest monsoon has ended on an optimistic note, with 8% more rain than anticipated. Reassuringly, the rainfall forecast by the India Meteorological Department (IMD), particularly since July, was accurate. Monsoon clouds continue to prevail over the country but given the centrality of rainfall to the Indian economy, focus has already shifted to the ‘other monsoon’, the northeast monsoon. It is named so because of the direction in which the winds exit from the land mass into the sea. Following the withdrawal of the southwest monsoon in mid-October, the northeast monsoon is characterised by a reversal of winds that brings rain to parts of coastal Andhra Pradesh, Tamil Nadu, Kerala, and parts of southern Karnataka. For Tamil Nadu, the northeast monsoon is the main source of rainfall. The northeast monsoon brings in only about 11% of India’s annual rainfall.

The IMD has forecast that this year’s post-monsoon rainfall is likely to be ‘above normal’ or about 12% over the historical average. Because of its limited spread and quantity, the northeast monsoon does not get as much attention as the southwest monsoon. However, it significantly affects the productivity of rice and maize in Tamil Nadu and Andhra Pradesh. Records show that in years of deficiency, there was a considerable decrease in agricultural production in the region. The northeast monsoon rainfall, averaged over the five subdivisions where it is predominant, has a variation of almost 25%, exceeding that of the southwest monsoon rainfall (10%). This translates into years of massive deluge followed by dry spells. In 2015, Chennai experienced a deluge during the northeast monsoon, resulting in significant loss of life and property. In 2019, the city faced severe water shortage. If this year’s forecast holds, it will be the second consecutive year of a normal northeast monsoon. Expectations are high that a La Nina, or cooling of the equatorial central Pacific, will support this. However, most global models have struggled to forecast the timing of La Nina this year. Thanks to improved forecast systems, the northeast monsoon is less neglected than before. Nevertheless, more focus is needed on modelling its impact regarding urban flooding. Climate change uncertainty makes such prognosis essential, and disaster management agencies in States must develop credible strategies to incorporate these buffers into budgets.

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Title: ​ ​ ​Inflection point: On the escalation in the multi-party West Asia conflict

If West Asia is in the news as a conflict zone, the desert sands of the United Arab Emirates (UAE) may offer some relief over the next fortnight. The ICC T20 Women’s World Cup that commenced at Sharjah on Thursday (October 3, 2024) will oscillate between this venue and Dubai. Featuring 10 teams split into two groups of five each, the championship will conclude on October 20, 2024. The tournament was supposed to be held in Bangladesh, but the unrest of the previous months in Dhaka meant that though India’s eastern neighbour holds the hosting rights, the matches had to be shifted to the UAE. While Australia will step in with the swagger of a defending champion, having seized the cup after vanquishing host South Africa in the 2023 edition, India will walk in with the hope of finally claiming the trophy. In the 2020 final at Melbourne, India wilted against Australia. Cut to the present, Harmanpreet Kaur’s strong unit will clash against New Zealand at Dubai on Friday and a good first outing is essential. India has moved on from the era of Mithali Raj and Jhulan Goswami and those are massive shoes to fill, but Harmanpreet, Jemimah Rodrigues, Smriti Mandhana, and others have tried their best to chart a fresh path.

The tournament is also invested with a larger cause layered with gender sensitivity. While male players get accolades and commercial heft through cricket, female players have always fought for their rights. Even in the latest event, despite being pitted against each other as rivals, there is a sisterhood at play. Through interactions with the press, all the leading female players have sought more games and also more Tests. Often the women are resigned to playing just limited-overs cricket. While Mithali turned out in 232 ODIs and 89 T20Is, it is a travesty that she played only 12 Tests in a long career. Harmanpreet and company have often sought comfort in diverse franchise leagues but there is nothing like a solid bilateral contest to toughen up the stars. Having won the title on six occasions, Australia remains the behemoth. Alyssa Healy and her merry bunch will be the team that most squads, including old rival England, would want to knock off the pedestal. And for those keen on watching neighbourhood rivalry, India and Pakistan are placed in Group A and will face off on Sunday. Diplomatic tensions have ensured that the two nations compete against each other only in global events.

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Title: ​ ​ ​Inflection point: On the escalation in the multi-party West Asia conflict

Iran’s October 1 ballistic missile attack on Israel marks a serious escalation in the multi-party conflict in West Asia. The attack is not surprising as Iran was under pressure, at home and in the region, from its allies, to respond to repeated Israeli provocations. It was Israel that took the war straight to Iran by attacking the Iranian embassy complex in Damascus, Syria, on April 1. Iran responded with its first direct attack on Israel 14 days later, giving Israel and its allies enough time to prepare for it. Israel’s response was a symbolic, unclaimed strike at a radar system in Isfahan. In end-July, Israel again escalated the conflict by killing Ismail Haniyeh, the political chief of Hamas, in Tehran. Iran vowed retaliation but showed restraint, promising to hold back fire if there was a ceasefire in Gaza. But Israel not only continued the war on Gaza but also expanded the war in the north with Hezbollah. Late last month, Israel unleashed waves of attacks on Lebanon, killing Hezbollah’s commanders and its chief, Hassan Nasrallah. Now, with Israel threatening to respond to the October 1 attack, the conflict is set to enter a more dangerous phase.

In the current conflict, no party is deterring its rivals. Israel’s greater firepower did not stop Hamas from launching the October 7, 2023 attack. Israel’s threats of retribution did not stop Hezbollah or the Houthis either from attacking the Jewish state. Nor did Iran’s proxy network and its missile might deter Israel from expanding the war by bombing the Iranian embassy complex in Syria. And Israel’s nuclear weapons did not stop Iran from launching direct attacks on the country. As deterrence collapsed, the crisis has escalated and widened. What has made the situation worse is the abdication of leadership by U.S. President Joe Biden. He has given Israel a free hand in Gaza while focusing his diplomatic resources on preventing a regional war. He has remained unmoved when Israeli Prime Minister Benjamin Netanyahu has continued to breach red line after red line. Today, the war in Gaza remains unfinished, while a regional war, which could draw in even the U.S., could break out any time. There are no clear off-ramps. A full-blown war would be catastrophic and could spiral out of control with the involvement of multiple parties. With Israel’s threat of retaliation looming large, the clock is ticking. Preventing such an outcome should be the immediate priority of the major world powers, including the U.S., which has great leverage over Israel, and China, which has a deep influence in Tehran. West Asia is at an inflection point, and the region needs emphatic diplomatic intervention to break out of its conflict loop and dial down the heat.

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Title: ​ ​ ​​​Heartland murmurs: On the Haryana Assembly elections

In Haryana, the incumbent Bharatiya Janata Party (BJP)faces a strident challenge from the Congress, where campaigning for the Assembly election ends in a day. All 90 Assembly seats will go to the polls on October 5. Though the contest appears to be bipolar, between the BJP and the Congress on the surface, a few other formations and hundreds of independents could alter the familiar patterns of voter mobilisation. The Jannayak Janta Party (JJP), a former partner of the BJP, is in an alliance with the Azad Samaj Party (Kanshi Ram), and the Indian National Lok Dal (INLD) is with the Bahujan Samaj Party (BSP). The Communist Party of India (Marxist) and the Haryana Lokhit Party are also in the fray. After seat sharing negotiations with the Congress failed, the Aam Aadmi Party has fielded candidates across the State. The BJP has tried to defend its track record of 10 years in power and consolidate the OBC voters — one third of the total — through the campaign. Chief Minister Nayab Singh Saini has been presented as a symbol of the party’s commitment to empowering the OBC. The BJP is also trying to get a share of the Dalit votes.

The Congress has been a favourite of the Dalits who make up 20% of the State’s voters. The alliances, of the JJP-ASP and the INLD-BSP, could influence the two major voting blocs in the State — the Jats and the Dalits. The Congress has managed to sustain its offensive posture though factionalism threatened to derail its campaign. The party has targeted the BJP on talking points such as a threat to the Constitution, the Agnipath scheme for military recruitment, unemployment and price rise. The BJP is also facing a problem of plenty in the State. Having inducted many leaders from other parties, it is now faced with their competing claims. The BJP’s victories in Haryana in two consecutive Assembly elections were largely due to the popularity of Prime Minister Narendra Modi and good social engineering that mobilised the non-Jat communities of the State. Haryana will be a test for the party on both counts this time. An absence from power for 10 years has cut the Congress some slack in the eyes of voters. Rahul Gandhi’s new role as the Leader of Opposition in the Lok Sabha will also face a test in the State. While the BJP’s regional leadership is relatively less formidable than the Congress’s, their respective impact on the outcome can be unpredictable. The Congress also has a history of undermining its own prospects with excessive intrigues.

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