The HINDU Notes – 23rd September 2019 - VISION

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Monday, September 23, 2019

The HINDU Notes – 23rd September 2019

📰 Modi, Trump set new course on terrorism, border security

PM defends action on Article 370 at massive joint rally in Houston

•In a fierce defence of the government’s actions in Jammu & Kashmir, Prime Minister Narendra Modi on Sunday said those criticising the decision to revoke Article 370 of the Constitution were “promoting terrorism”.

•Mr. Modi’s comments came during his address, along with U.S. President Donald Trump, at a rally of over 50,000 Indian-Americans at the NRG stadium in Houston. Both leaders announced a joint front on several key issues, but articulated an entirely new script on cooperation on terrorism.

Attack on Pakistan

•In a scarcely veiled attack on Pakistan, Mr. Modi said the “whole world knows where the threads from the 9/11 terror attacks to the 26/11 Mumbai lead”.

•“It is time to fight a decisive battle against terrorism and all those who promote terrorism,” he added, asking the crowd to give Mr. Trump a standing ovation for his commitment to fighting terrorism.

•In a show of support, Mr. Modi and Mr. Trump held hands and walked out of the stadium together, meeting cheering crowds, gathered to see the unprecedented joint rally by the two leaders.

•Earlier, Mr. Trump said the two countries were committed to “combatting radical Islamic terrorism”, and linked

•Indian and U.S. positions on security and terrorism to show that bilateral ties between both countries are closer “than ever before”.

•“Both India and the U.S. understand that to keep our communities safe we must protect our borders,” Mr. Trump said in comments that seemed to refer to the government’s resolve to crack down on human trafficking, and also endorsed India’s actions in fighting cross-border terrorism and actions on Article 370 in Jammu & Kashmir.

•“Border security is vital to the United States and border security is vital to India,” Mr. Trump added, vowing “unprecedented action” on the U.S.’ southern borders against illegal immigration.

•Speaking about the withdrawal of Article 370, Mr. Modi said the legislation had “kept the people of Jammu & Kashmir and Ladakh away from development and strengthened those promoting terrorism”.

•He also asked for a standing ovation for all parliamentarians in India who had passed the new legislation in both Houses with a two-thirds’s majority.

•“India’s action within its boundaries are causing discomfort to some people who are unable to manage their own country. These people put their hatred of India at the centre of their political agenda. These are people who support terrorism,” he said, in another reference to Pakistan.

•Mr Modi’s comments came even as Mr. Trump listened in the audience. On Monday, Mr. Trump is due to meet with Pakistani Prime Minister Imran Khan, and Sunday’s rally appeared to have set the tone for a fairly tough line the U.S. President is likely to take during that meet.

•“On India’s concerns over cross-border terrorism, I think Mr. Trump went beyond the script, and certainly the expectations of the government,” said senior analyst at the ORF Ashok Mallik.

•Both leaders made separate pitches to their respective domestic constituencies as well, and while PM Modi dwelt on rural sanitation, connectivity and easing business regulations, President Trump spoke of strengthening American manufacturing, rising employment figures, as well as becoming a major world energy exporter.

•While neither leader referred to the trade issues between both countries, they raised optimism that they would resolve differences during their bilateral talks on Tuesday, and Mr. Trump said he looked forward to “major defence purchases” by India in the near future. He also announced that in November this year, Indian and US forces will hold ever-joint tri-services exercises.

•In their speeches to the audience, where Mr. Trump spoke for about twenty-five minutes, and Mr. Modi for about double that time, both men made several warm references to each other and their friendship.

•While Mr. Modi referred to Mr. Trump’s warmth and wit, Mr. Trump called PM Modi a “loyal friend of the U.S.” and “full of wisdom”. Hinting at a possible visit to India in November, Mr. Trump said he might like to come and watch the first match by the U.S. basketball league NBA in Mumbai. In response, Mr. Modi welcomed Mr. Trump to India, and said that the two men had made “history together”, and also displayed “chemistry, synergy and energy” with their joint rally.

📰 India’s opportunity at the UN

The Modi govt. has a chance to regain its footing in the court of international public opinion

•When Prime Minister Narendra Modi addresses the UN General Assembly on September 27, his country will find itself in an unfamiliar position.

•For the first time in some years, India is in the cross hairs of some segments of the international community, thanks to its recent actions in Jammu and Kashmir. While governments around the world have largely remained quiet, some influential voices have lambasted New Delhi’s decision to dilute Article 370 and criticised the country over the effects of its ongoing lockdown in Kashmir.

•In the U.S., members of Congress, the State Department, and even Bernie Sanders, a front-line 2020 presidential candidate, have registered their concern. It has been a long time since there was so much negative noise about India in Washington, where for quite a few years there has been — and rightly remains — a strong bipartisan consensus in favour of a close partnership.

•Here, the annual UNGA meetings offer the government an opportunity to regain its footing in the court of international public opinion.

On Kashmir lockdown

•To achieve that outcome, the most reasonable, and realistic, expectation is for a speech that features two core components: a clear acknowledgement of the international community’s concerns about human rights in Kashmir, and a focus on India’s robust efforts to tackle the global development challenges that attract considerable concern in the UN and beyond, issues such as health, sanitation, and climate change.

•Yes, it will be asking for too much from Mr. Modi if one expects him to mention, much less acknowledge concerns about, a sensitive issue that New Delhi regards as internal and does not want to get further internationalised. Still, Mr. Modi, by stating that he recognises the world’s worries about the lockdown and its effects, can push back against global perceptions that his government is wholly dismissive of a real and serious problem. And by striking a note of humility, he could undercut the narrative of Pakistan Prime Minister Imran Khan who, at the same forum, will in all likelihood come out with guns blazing on Kashmir.

Underscoring the bona fides

•What would also resonate well is a speech that underscores India’s bona fides as a rising and responsible global power, in contrast to what are perceived by some overseas observers as irresponsible actions in Kashmir. Here, Mr. Modi can pick up where the late Sushma Swaraj, former Indian External Affairs Minister who delivered India’s UNGA speech last year, left off. She highlighted India’s progress in meeting the UN’s Sustainable Development Goals, particularly through increasing people’s access to safe sanitation, and she spoke of India’s efforts to mitigate the climate change threat. By homing in on India’s track record in tackling challenges that affect nearly every nation, Mr. Modi can project his country as a willing and able global partner. This isn’t to oversell the influence of the UNGA speeches. Outside of India, Mr. Modi’s address won’t exactly be must-see TV. Further, anti-Modi protests are planned during his time in New York, and media coverage of these protests could undercut the messages articulated in his speech.

•Indeed, one UNGA speech won’t eliminate the critical global narratives about India that have emerged since August 5. So long as the Kashmir lockdown remains in place, and likely after it’s lifted as well, and so long as New Delhi carries out a divisive social agenda, those narratives will be present. Still, for a government and a Prime Minister who place a premium on branding, the UNGA offers a useful opportunity to push back against growing threats to India’s image. It’s an opportunity that would be a pity to squander.

📰 The nationalist hindrance to climate actions

The UN Climate Action Summit is likely to hand out hard lessons about climate politics in an era of nationalism

•Can global diplomatic jaw-boning backed by an upsurge of popular youth mobilisation shift the hard economic and political calculus of nations? Today’s global Climate Action Summit, convened and energetically backed by the United Nations Secretary General, seeks to pull off just this feat. It seeks to spur national pledges and action to address climate change in the face of mounting information that the community of nations is doing too little, and too late. How likely is this effort to be successful? And what are India’s stakes in this summit?

Visible signs and science

•The summit occurs amid a steady drumroll of scientific alarm. The scientific advisory group to the summit (of which I am a member), reports that the five years since 2015 is set to be the warmest of any equivalent recorded period, sea level rise is accelerating, and oceans have become 26% more acidic since the dawn of the Industrial era. Recent weather events bring into focus the likely implications of a warming world. This summer saw Delhi-like temperatures across southern Europe; Hurricane Dorian rendered large parts of the Bahamas unliveable; and witnessed simultaneous raging fires in the Amazon, central Africa and even Siberia.

•Scientists are increasingly able to link these individual events with climate change — the heat wave in France and Germany was made eight to 10 times more likely by climate change. Yet, concentrations of carbon dioxide continue to rise, and current country pledges would not stem this increase even by 2030.

•The growing evidence of climate change — scientific and experiential — has spurred an upwelling of social action, notably among the youth. While more noticeable in the global North, young people are also mobilising in India and other countries in the global South, with The New York Times reporting that organisers estimate four million youth turned out in protest (on Friday) against inaction on climate change around the world.

A political disconnect

•If science, experience and public alarm are increasingly on the side of action, unfortunately, national politics in country after country is trending in the wrong direction. A turn toward nationalism in multiple countries has created a short-term, look-out-for-our-own mentality that is inimical to the global collective action needed to address climate change. Thus, in the United States, President Donald Trump not only refuses to enhance actions, he has actively rolled back measures in the electricity sector and actions to limit methane emissions in the name of competitiveness. In Brazil, President Jair Bolsonaro has made it clear he sees environmental protections as limiting Brazilian business. And nationalism in some countries makes it much harder to pursue aggressive action even in countries where the politics is more conducive.

•Backed by popular mobilisation and scientific evidence, can the UN Summit swing the tide toward enhanced action? The Secretary-General is pinning hopes on a two-track approach.

•First, in an exercise of diplomatic pressure, countries have been urged to enhance their pledges for action made as part of the Paris Agreement, committing to lower future emissions. The intention is to provide a platform for climate champions to step up and claim leadership of an important global agenda.

•So far, the response is underwhelming. A number of small and mid-sized countries, including the United Kingdom, have already committed to achieving the objective of making their economies net carbon neutral by 2050 (that is, the sum of emissions and uptake of carbon through ‘sinks’ such as forests is zero). By contrast, several large countries, notably the United States, Brazil, Australia, Canada, Japan and Mexico are reportedly not even going to participate in the event at a high level. China and India have issued statements hinting that they are doing quite enough, and India has highlighted the need for enhanced finance if it is to do more. While there may be last minute surprises, the UN Summit does not look like shifting any entrenched positions — those willing to act are known, and those unwilling are unmoved. International suasion, even backed by science and popular mobilisation, seems unlikely to shift entrenched national politics.

•The second track operates less in the realm of diplomacy and seeks instead to induce changes in real economies around a set of ‘action portfolios’. These include, for example, furthering and accelerating an energy transition toward low-carbon energy, making cities more climate friendly and more resilient to climate disruption, and starting the process of turning energy intensive sectors such as steel and cement more carbon friendly. Notably, domestic objectives are central to these conversations: promoting solar energy for energy security reasons; making cities more liveable; and making industries more efficient and therefore competitive. These initiatives serve as a focal point for broader conversations including coalitions of business and researchers. If the UN Summit is to result in enhanced action, this may well be the more fruitful track.

A path for India

•What does this canvas of global climate politics mean for India? First, that the prospects of effective global action required to address climate change are so weak is extremely bad news for India. We are a deeply vulnerable country to climate impacts. It would behove India not to be a status quo player in this context, but to argue for enhanced global collective action.

•Second, India has the potential to show the pathway to accelerating action on climate change even while pursuing its development interests. A notable example is its energy efficiency track record, which helps limit greenhouse gases even while saving the nation energy. However, there are inconsistencies in India’s story as a climate champion. India is justifiably recognised for promoting renewable energy, yet also muddies the waters by sending mixed signals on future coal use. The choice of Houston — the U.S. oil capital — for the Indian Prime Minister’s recent public event, risks signalling that India sees its energy independence as tied to enhanced fossil fuel use. While some increase in fossil fuel is inevitable for India, the messaging is incoherent at best. India needs domestic energy policies that are more clearly and coherently tuned to a future low carbon world.

•Third, such a domestic message would position India to be a true global climate leader, rather than a leader only among climate laggards. Could an India, firmly committed to a low-carbon future that brings development benefits, strike common cause with other powers? Could, for example, India and China, both jostling for influence in African nations but also both losers from climate impacts, jointly help ensure that Africa’s development is powered by renewable energy rather than fossil fuels and based on an energy efficient future? Such an agenda could bring together economic, environmental and political gains.

•The UN Summit is likely to teach us hard lessons about climate politics in an era of nationalism. The pathway to enhanced action is unlikely to override entrenched national politics, powered by international suasion. Instead, the aim should be to make accelerated climate action congruent with an enlightened notion of national interest by focusing on key actions in rapidly changing areas such as energy and urbanisation. Such a pathway holds enticing prospects for India. But it requires that India can build a diplomatic approach on a firm domestic foundation that takes seriously climate change as a factor in its future development pathway.

📰 Ahead of ‘Howdy, Modi!’, India struck big-ticket LNG deal

Updating an MoU signed in February, Petronet to invest $2.5 billion in Tellurian Inc., giving India access to up to 5 million tonnes of gas a year

•Petronet, an Indian liquefied natural gas (LNG) importer, has decided to invest $2.5 billion in American company Tellurian Inc., in an agreement that will give India access to up to five million tonnes of LNG a year.

•The MoU, an updated version of the one signed in February, was exchanged here by officials in the presence of Prime Minister Narendra Modi in his first engagement after landing here. Under the agreement, the finalised deal is due to be completed by March 31, 2020.

Symbolic value

•“Increasing natural gas use will enable India to fuel its impressive economic growth to achieve Mr. Modi’s goal of a $5-trillion economy while contributing to a cleaner environment,” said Tellurian Inc. president and CEO Meg Gentle in a statement after signing the new MoU.

•Officials said that while the MoU still needed to be negotiated, the announcement had symbolic value at the start of the Prime Minister’s visit to the U.S., showing India’s intent to become a major energy buyer for American companies.

•Ahead of Sunday’s rally with U.S. President Donald Trump, the Prime Minister met heads of 17 energy companies to speak about the potential of the Indian market and listened to their views on the challenges of supplying oil and also investing in India.

•According to a senior official, the companies were “appreciative” of India’s purchases of U.S. oil and gas, which have more than doubled in the last year. They also pointed to certain systemic issues with the Indian market during the two-hour meet.

•Among the issues raised by the businessmen, who included the top leadership of ExxonMobil, BP, Schlumberger, Cheniere, Total and other big energy companies, were problems with arbitration and the dispute resolution mechanism in India.

•Some asked Mr. Modi to consider a unified Ministry for all energy issues instead of separate Ministries for Petroleum and Natural Gas, coal and renewable energy to streamline processes.

Upbeat on economy

•“The CEOs lauded the government's efforts towards ease of doing business, steps taken towards deregulation in the [energy] sector ... and were upbeat on the Indian economy,” External Affairs Ministry spokesperson Raveesh Kumar said.

•Government officials said the massive investment from India in Tellurian’s $29 billion Driftwood project would “create 50,000 direct and indirect jobs” in the U.S., and would support manufacturing in 18 U.S. States.

•However, senior officials who were present at the meeting refused to comment on how soon India would be able to consume the amount of LNG the MoU insulated, in order to justify the investment.

•In 2011, GAIL (India) Ltd., a stakeholder in Petronet, had already entered into a 20-year contract to buy 5.8 million tonnes a year of U.S. LNG, split between Dominion Energy and Cheniere Energy, but India has had to resell much of its American intake due to lower demand.

•The announcement of the Tellurian MoU, which was reported by The Hindu on Friday, was anticipated as a “big-ticket” investment announcement during the Prime Minister’s U.S. visit.

•Meanwhile, Commerce Ministry officials are still negotiating with the U.S. Trade Representative’s office in Washington in the hope of announcing a limited trade deal next week, which is expected to be announced after the bilateral meeting between Mr. Modi and Mr. Trump on Tuesday. Officials are discussing lifting of tariffs, and a possible restoration of export subsidies for India under the Generalised System of Preferences, which the Trump administration withdrew in June.

📰 Seeking to secure: on linking Aadhaar-GST registration

The move to link Aadhaar with GST registration is a tentative step in the right direction

•Ever since the Centre and the States passed the landmark legislation in 2016 adopting a single countrywide Goods and Services Tax (GST), the federal council that is tasked with overseeing all the regulatory aspects of the indirect tax has had its hands full. From recommending the rates that could apply to various products and services, to deciding on what could be tax exempted, the GST Council has had the onerous task of laying out the policy framework for administering the tax in a manner that benefits all stakeholders – the governments, the consumers and the suppliers along the value chain. Given the complexity of the legacy taxes that GST subsumed and replaced and the teething troubles of operating a new tax system, ensuring optimal outcomes has proved an abiding challenge. A significant concern relates to the loopholes that unscrupulous operators have sought to exploit, whereby revenue that ought to have accrued to the Centre and the States has leaked while allowing these elements to derive illicit profits. And the scale of some has been breathtaking. Earlier this month, the Directorate General of GST Intelligence and the Directorate General of Revenue Intelligence conducted a pan-India joint operation, which saw about 1,200 officers simultaneously conducting searches at 336 different locations. In the process they unearthed a network of exporters and their suppliers who had connived to claim fraudulent refunds of Integrated GST, with more than ₹470 crore of input tax credit availed being based on non-existent entities or suppliers with fictitious addresses. A further ₹450 crore of IGST refund is also under review.

•It is against the backdrop of such cases, and the fact that frauds totalling up to a staggering ₹45,682 crore have been detected since the roll-out of the tax in July 2017, that the GST Council has decided “in principle” to recommend linking Aadhaar with registration of taxpayers. In its 37th meeting in Goa on Friday, the council also agreed to appraise the possibility of making the biometrics-based unique identifier mandatory for claiming refunds. Already the GST Network — the information technology backbone on which the whole tax system runs — has made it mandatory for new dealers registering under the composition scheme for small businesses to either authenticate their Aadhaar or submit to physical verification of their business, starting January 2020. The council too needs to follow the network’s lead and move swiftly to recommend mandatory linking for refunds, especially since that has proved to be the main source of most frauds. In a becalmed economy, neither the Centre nor States can afford to forego even a rupee of revenue that is due to the public coffers.