1. The government package to revive BSNL fortunes
What are the issues that have thwarted the telecom company’s expansion and growth?
Last week, the Union Cabinet approved a ₹1.64 lakh crore revival package for BSNL with a cash component of ₹43,964 crore.
In March 2020, BSNL had floated a tender to procure 4G equipment to help expand its mobile broadband network. The Telecom Equipment and Services Export Promotion Council (TEPC) raised objections to the tender being ‘heavily in favour of multinational companies’. They stated that domestic suppliers could not participate in the tender due to stiff conditions and BSNL had to re-work the tender. The entire burden of supporting indigenously developed equipment for 4G fell on BSNL.
The government, which said that the 2019 VRS package helped BSNL stabilise and the latest bailout would help it become viable, expects BSNL to become profitable in three to four years from now.
K. Bharat Kumar
The story so far: The Bharat Sanchar Nigam Ltd. (BSNL) was incorporated in September 2000 as a company to take over the business of providing telephone connectivity from the central government’s Department of Telecom Services. Its operations were meant to service the entire country except New Delhi and Mumbai where MTNL — or Mahanagar Telephone Nigam Ltd — would operate. Last week, the Union Cabinet approved a ₹1.64 lakh crore revival package for BSNL with a cash component of ₹43,964 crore.
What is the plan for recapitalisation?
The non-cash component of ₹1.2 lakh crore, spread over four years, will include administrative allotment of 4G spectrum worth ₹44,993 crore. Capex support of ₹22,471 crore over the next four years to “boost development and deployment of Atmanirbhar 4G stack”, viability gap funding of ₹13,789 crore for commercially unviable rural wireline operations done during 2014-15 to 2019-20, debt structuring by raising of bonds with sovereign guarantee worth ₹40,399 crore and financial support for AGR (Adjusted Gross Revenue) dues worth ₹33,404 crore complete the package.
Previously, in 2019, the Cabinet had cleared a package worth close to ₹70,000 crore for the revival of BSNL and MTNL, mainly to fund the Voluntary Retirement Scheme (VRS) package for the two firms.
How has BSNL’s performance been over the last few years?
BSNL had more than 1.5 lakh employees before the VRS was announced in 2019. About 78,000 had applied to exercise the option. Before the VRS, FY20 numbers showed the loss at ₹15,500 crore, and employee costs at a staggering ₹13,600 crore.
As of June 2021, the employee headcount was 64,000. Note that BSNL spent more than 50% of revenue on employees in FY16. That came down in FY21 to 36%, but compares poorly with, for example, Bharti Airtel whose numbers showed employee expense at about 4% for both FY21 and FY22.
The government, which said that the 2019 package helped BSNL stabilise and the latest bailout would help it become viable, expects BSNL to become profitable in three to four years from now. Recently, Chairman P.K. Purwar has been quoted as saying that FY22 revenue would be a tad lower than the previous year at ₹17,000 crore.
What went wrong with BSNL, which was profitable for much of the first decade of this century?
A report by the Standing Committee on Information Technology presented to Parliament in 2014 under the Demand for Grants quotes a BSNL representative as saying that though private operators started offering mobile services in the late 1990s, BSNL could do so only in 2002. Despite this, it was among one of the top mobile service providers in most circles by 2005-06 when its expansion was going on in full swing. The deposition talks of problems to do with ‘non-procurement of equipment’ beginning at this time.
What was the issue with procuring equipment?
In March 2020, BSNL had floated a tender to procure 4G equipment to help expand its mobile broadband network. The ₹9,000-crore contract included upgradation of 50,000 sites across the country that ‘would position the telecom company to offer high-speed Internet access to its users’. The project was seen as critical for the survival of BSNL as it was already four years behind private firms in unveiling 4G services.
In April 2020, the Telecom Equipment and Services Export Promotion Council (TEPC) raised objections to the tender being ‘heavily in favour of multinational companies’. The TEPC is an industry association representing domestic telecom equipment manufacturers such as Tejas Networks, Sterlite, HFCL, and Vihaan Networks. They stated that domestic suppliers could not participate in the tender due to stiff conditions, such as the requirement of previous experience of setting up a mobile network for at least 20 million subscribers. The national security angle also came up.
The government asked BSNL to rework the tender, but the question remained — why did private operators not face the same objection when they placed orders for equipment with foreign companies? Airtel, for instance, gave its $1-billion 4G equipment contract to Nokia of Finland that year. While encouraging domestic OE makers was a good idea, why should the entire burden of supporting indigenously developed equipment meant for 4G, and that too which had not been previously tested, fall on BSNL?
By the looks of it, the pattern of BSNL carrying the burden of proving indigenous technology viable on a mass scale may continue. The government has categorically said that one of the reasons BSNL must be supported is to help in the development of indigenous technology.
Problems surrounding BSNL’s access to quality equipment seem to be a recurring issue. In 2008, BSNL came up with an ambitious plan to raise network capacity by 94 million new lines at an investment of $10 billion. This would have made it the world’s largest telecom equipment tender at the time. Allegations of irregularity in the process surfaced and the whole plan was scrapped. Naturally, BSNL slipped in terms of customer preference.
Are skillsets a stumbling block too?
The telecom department was also quoted in the 2014 report by the Standing Committee on IT as saying that BSNL and MTNL are not only beset with a large number of employees, but that the skills of these employees were not suited for rendering services to mobile and broadband customers.
That is surprising because, one, BSNL had no trouble between 2002 and 2005-06 in getting to the top in most circles it operated in, as mentioned. Two, the private operators themselves dipped into the cream of BSNL’s manpower to set up or scale up their operations. Though the private sector did have successful global partners (Airtel-Singapore Telecom, Essar-Hutchison (now Vodafone-Idea), nobody prevented BSNL from getting the best global consultants and knowhow for its operations.
Should profitability be the goal for such an enterprise?
The government needs a telecom arm for help in disaster relief, and two, for telecom penetration in every nook and cranny of the country as a social obligation. The private sector cannot be reasonably expected to offer services in an area that is not profitable for them. BSNL’s merger with the Bharat Broadband Network (BBNL), whose BharatNet optical fibre network of 5.8 lakh km would make for a combined asset of 14 lakh km of optical fibre, is important for socially backward areas where services may not be commercially viable.
But, is it logical to expect the company to turn profitable? After having lost close to two decades in terms of time to compete, is it even feasible to expect the company to become profitable? To boot, BSNL is not a pan-India 4G service provider at a time when more than 98% of the country has 4G coverage. In fact, the latest package for BSNL was announced even as auctions for 5G spectrum were going on.
2. Has bail under PMLA become near-impossible?
How has the Supreme Court changed its view on Section 45 (1) of the Prevention of Money Laundering Act, 2002?
The Supreme Court in the case of Vijay Madanlal Chaudhary vs Union of India gave judicial approval to the twin conditions of bail under Section 45(1) of the Prevention of Money Laundering Act, 2002.
Section 45(1) of the PMLA requires that before a person is released on bail, the public prosecutor must be given an opportunity to oppose the application and secondly, when the application is opposed, the court must be satisfied that the accused is not guilty.
The SC by upholding such stringent provisions overturns the principle of presumption of innocence — that an undertrial remains innocent until he is proven guilty.
G.S. Bajpai Ankit Kaushik
The story so far: Recently, the Supreme Court in the case of Vijay Madanlal Chaudhary vs Union of India gave the judicial stamp of approval to the twin conditions of bail under Section 45(1) of the Prevention of Money Laundering Act, 2002 (PMLA). The conditions were contested as being arbitrary and draconian in as much as they reverse the presumption of innocence at the stage of bail. The judgment is of immense importance given that delay or denial in grant of bail was recently identified by the Supreme Court in the case of Satender Kumar Antil vs CBI as being a leading factor in the perpetration of injustice in our criminal justice system.
What are the conditions under Section 45(1) of the PMLA?
The PMLA was enacted with the objective to prevent money laundering. The Act provides for a higher threshold for the grant of bail as compared to the standard procedure under the Code of Criminal Procedure (CrPC). Section 45(1) of the PMLA requires that before a person is released on bail or bond, the public prosecutor must initially be given an opportunity to oppose the application and secondly, when the application is opposed, the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence and is not likely to commit any crime while out on bail.
Are there other Acts which impose such conditions?
A similar provision is provided for in Section 43D(5) of the Unlawful Activities (Prevention) Act, 1967 which requires the court to provide an opportunity to the public prosecutor to oppose the bail application and to not release the accused on bail if there are reasonable grounds for believing that the accusation is prima facie true. Section 37(1) of the Narcotic Drugs and Psychotropic Substances Act, 1985 too is in pari materia with Section 45(1) of the PMLA. Previously, Section 20(8) of the Terrorist and Disruptive Activities Act, 1987 (TADA) also carried similar conditions for grant of bail.
What was the earlier position of the court on Section 45(1)?
The validity of the twin requirements under Section 20(8) of the TADA Act had been upheld by the Supreme Court in the case of Kartar Singh vs State of Punjab (1994) on the grounds that the courts have to balance the interest of the victims and the community as well as the safety of the nation with the liberty of the accused. In the case of Nikesh Tarachand Shah vs Union of India (2018), however, the Court differentiated between the wordings of Section 20(8) of the TADA Act and Section 45(1) in two important regards — that Section 20(8) of the TADA Act applied to a ‘most heinous’ offence and that the previously un-amended Section 45(1) under challenge in the Nikesh Shah case did not pertain to an offence under the PMLA Act but only to a predicatory offence listed in Schedule A. The Supreme Court, in that case, held Section 45(1) to be unconstitutional and violative of Articles 14 and 21 of the Indian Constitution and struck it down.
Why has the Supreme Court reversed its position now?
Post the Supreme Court’s judgment in the Nikesh Shah case, Section 45(1) was amended vide Act 13 of 2018 and the revised section made the twin conditions for grant of bail applicable to all offences under the PMLA. This amended section was again challenged before the Supreme Court in the recent Vijay Madanlal case. The Supreme Court has held that as Section 45 was not obliterated from the statute book but was merely held to be unconstitutional, the Parliament was free to revive the provision by curing the defect. With respect to the first differentiation made between Section 20(8) of TADA and Section 45(1) of the PMLA, the three-judge bench of the Supreme Court in Vijay Madanlal case held that money laundering could not be considered as any lesser an offence than the offence of terrorism sought to be tackled under TADA. It stated that the offence of money laundering had a “direct impact on the financial systems and sovereignty and integrity of the countries,” and held it to be a heinous crime.
What are the implications of the Supreme Court’s judgment?
The twin conditions, when examined independently require the Court to take a judicial call on the potential guilt of the offender based on the material supplied by the accused in the bail application and the opposition made to the same by the prosecution. In doing so, the provision overturns the settled principle of presumption of innocence which dictates that an undertrial remains innocent until he is proven guilty. These safeguards have been built into the procedure under the CrPC so as to ensure that the due process values enshrined in our Constitution find practical application.
The Vijay Madanlal case decision comes from a three-judge bench of the Supreme Court and therefore conclusively overrules the judgment by the division bench of the Supreme Court in the Nikesh Shah case. In upholding Section 45(1) of the PMLA, the Court has made the twin conditions for the grant of bail constitutionally valid in the name of national security related expediency. It is trite to say that under such stringent conditions, jail becomes the rule while bail is the exception.
3. Trade deficit soared past $31 bn in July
Goods exports slid marginally even as imports surged 43.6%; silver imports zoomed
India’s merchandise trade deficit widened sharply to a record $31.02 billion in July, as per preliminary trade estimates that peg imports during the month at $66.26 billon, or 43.6% higher than a year earlier.
Goods exports declined 0.8% year-on-year to $35.24 billion and were 12.8% lower than June’s exports. Imports were flat on a month-on-month basis from June.
July’s trade deficit, which is almost thrice the $10.63 billion deficit a year earlier, takes India’s merchandise trade deficit for the first four months of 2022-23 past $100 billion. The trade deficit stood at $42.07 billion in April to July 2021.
This is the third month in a row that the monthly trade deficit had breached previous records — May had clocked a deficit of $24.3 billion, followed by $26.2 billion in June.
The Commerce and Industry Ministry attributed the decrease in exports largely to a 7.07% fall in petroleum products, followed by a 28.3% decline in cotton yarn and handloom products, a 94.3% slump in iron ore and a 2.5% dip in engineering goods. While coal and petroleum products continued to drive up imports, like they did in June, silver imports shot up exponentially in July.
Petroleum imports rose 70.4%, while inward shipments of coal jumped 164.4% to cross $5.1 billion from just a little less than $2 billion a year earlier.
Gold imports decline
Silver imports were up 9,331%, and electronics goods also escalated 27.8%, the Ministry said. Gold imports, however, dropped sharply, both on a year-on-year and sequential bases.
Only $2.37 billion worth of the yellow metal was imported in July, 43.6% lower than in July 2021 and 12.2% below June 2022 levels.
The sharp uptick in the trade deficit was unexpected and did not augur well for the current account deficit (CAD) in the second quarter, said ICRA chief economist Aditi Nayar. The CAD is likely to have crossed $30 billion in the first quarter of 2022-23, equivalent to about 80% of the full-year deficit last year.
“Lower commodity prices should temper the trade deficit going ahead, although the strength of merchandise and services exports in the face of the global slowdown fears remains crucial,” Ms. Nayar said.
She expressed concern that imports were almost double the exports in July.
EEPC India chairman Mahesh Desai said the drop in engineering goods reflected weakening demand from the U.S. and Europe amid recession concerns.
4. Editorial-1: Making sense of the ‘freebies’ issue
Most welfare schemes contribute to improving human development outcomes, also resulting in higher growth
Concern over ‘freebies’ in Indian politics has recently been expressed by those in the highest offices in the country. Speaking at the inaugural ceremony of the Bundelkhand Expressway (Uttar Pradesh) on July 16, Prime Minister Narendra Modi warned youth not to get carried away by the ‘revari culture’, where votes are sought by promising ‘freebies’. He hit out at the Opposition parties for offering freebies and said that this was dangerous and harmful to the development of the country.
Days later, a Bench headed by the Chief Justice of India, N.V. Ramana, heard a public interest litigation in which the petitioner argued against the promise of ‘irrational freebies’ by claiming that these distort the electoral process. It has been reported that during the hearing, the Chief Justice of India remarked that ‘freebies’ were a serious issue and asked the Central government to take a stand on the need to control the announcement of ‘freebies’ by political parties during election campaigns. The Court also suggested that the Finance Commission could be involved to look into the matter and propose solutions.
The discussion on the demerits of ‘freebies’ distributed to the public as a result of election promises is not new in India. However, there is often confusion on what constitutes ‘freebies’, with a number of services that the Government provides to meet its constitutional obligations towards citizens also being clubbed in this category. The basic argument is that these are a waste of resources and place a burden on already stressed fiscal resources. In such discussions, ‘freebies’ not only include the free distribution of what may be considered ‘club goods’ such as televisions and gold chains but also welfare schemes such as free or subsidised rations under the Public Distribution System (PDS), cooked meals under the mid-day meal scheme, supplementary nutrition through anganwadis, and work provided through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
But can these expenditures by the Government be considered ‘freebies’, as many commentators seem to do? For instance, is the distribution of free foodgrain during a pandemic that devastated lives and livelihoods at a time when godowns of the Food Corporation of India (FCI) had over 100 million tonnes of rice and wheat a ‘freebie’? The Prime Minister and members of the Bharatiya Janata Party have repeatedly campaigned about the Government implementing the ‘world’s largest food security programme’ by distributing free foodgrain, through the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) to around 80 crore ration cardholders.
The PMGKAY is probably what kept many away from the brink of starvation during the novel coronavirus pandemic. If anything, it can be argued that coverage under the PMGKAY must be expanded to include non-ration card holders as well, as there are many who are excluded from ration lists but are in need of subsidised or free foodgrains. Even before the COVID-19 pandemic, there have been studies which showed the poverty-reducing effect of the PDS. Subsidised foodgrains distributed under the PDS not only contribute to ensuring basic food security but also act as an implicit income transfer allowing the poor to afford commodities that they otherwise could not. Further, the PDS also plays an important role in our country where public procurement at minimum support prices (MSPs) is one of the main instruments of support to farmers. The PDS allows foodgrains to be available for cheap for consumers while assuring remunerative prices to farmers.
PDS coverage, MGNREGA
From around the mid-2000s, the PDS increasingly became a political issue, with State governments expanding coverage and reducing prices. Lower prices in the PDS became electoral issues in the southern States even earlier. Such initiatives were also included in the poll promises of almost all political parties during the mid- to late-2000s, including the general elections in 2009. This ultimately led to the National Food Security Act being passed by Parliament unanimously in 2013. Despite its shortcomings, it cannot be denied that the PMGKAY and the support that it provided during the pandemic would have been impossible had it not been for the NFSA which expanded the coverage of the PDS to about two thirds of the population. In its absence, a much smaller number of people would have had ration cards with high errors in identification of the poor (as was seen in the previous targeted system of dividing the population into those above and below the poverty line. With expansion in coverage, exclusion errors have automatically reduced, although not entirely eliminated. A universal PDS would take us even closer towards this goal.
Other welfare schemes that are repeatedly berated as adding to the ‘subsidy’ burden of the state also contribute to human development and protection of the basic rights of the people to nutrition, work, etc., essentially the right to life with dignity. MGNREGA for instance has been another scheme which has been a lifeline for many during the pandemic and earlier. At a time when there are few employment opportunities, working under MGNREGA can guarantee some assured wages; if implemented in the true spirit of the legislation this is also demand-based and, therefore, responds to as much need as there is.
Similarly, mid-day meals in schools have been proven to contribute to increased enrolment and retention in schools and addressing classroom hunger. A number of other schemes such as old age, single women and disabled pensions, community kitchens in urban areas, free uniforms and textbooks for children in government schools, and free health-care services play a critical role in providing social security and access to basic entitlements in our country. In fact, there are a number of lacunae in these programmes which call for expansion in coverage, allocation of greater resources, along with putting in place mechanisms for greater accountability and grievance redress.
Undermining the importance of these interventions of the Government by calling them ‘freebies’ exposes the elitism in our society, where the poor are seen as being unproductive and dependent on charity. Rather, the problem in fact is that these issues are not given enough attention in the political process. If anything, building public pressure towards making welfare delivery an electoral issue is the need of the hour. A discussion on whether eggs will be served in the mid-day meal programme, how many days of work will be provided under the employment guarantee scheme, schemes for access to free medicines, or at what price subsidised grain will be given under the PDS are positive signals of electoral democracy responding to the needs of the majority of people. It is important to recognise that most welfare schemes contribute to improving human development outcomes, which also results in higher economic growth in future. Sometimes, this process throws up initiatives that seem ‘wasteful’ — while these must be discussed, one cannot deny them completely.
In any case, how does one define a ‘freebie’? Around ₹1 lakh crore is the revenue forgone annually as a result of ‘major tax incentives for corporate tax payers’. Putting together all tax exemptions and concessions, including on foreign trade and personal income taxes, the revenue forgone each year is over ₹5 lakh crore. Corporate tax rates have been reducing and Budget documents show that in 2019-20, the effective tax rate (tax-to-profit ratio) declined as profits increased. However, one does not see much pressure for a justification for these concessions in mainstream discussions. The fact that small amounts given to the poor by a system that has mostly failed them are called ‘freebies’, while the freebies that the rich get all the time through low tax rates and exemptions are ‘incentives’ is nothing but a reflection of the nature of democracy in our country.
5. Editorial-2: A turning point in crypto regulation, led by Europe
If GDPR marked a decisive moment in consumer data protection, MiCA could point to responsible crypto management
There has been a lot of noise over Finance Minister Nirmala Sitaraman’s answer to a question recently in Parliament about the Indian government’s stance on cryptocurrencies. Some headlines even went as far as to suggest that there was a fresh plan to ban crypto in India.
As per my reading, the only thing the Finance Minister’s answer reveals is that while India’s central bank wants a ban on cryptocurrencies, any legislation for the “regulation or for banning crypto” can be effective only after significant international collaboration.
A seamless asset
This is true. Crypto is an Internet-native asset not limited by geographical boundaries. To transfer crypto, one does not need a pipeline or shipping container. A steady Internet connection and some elemental knowledge of crypto services are what are needed that will allow anyone in the world to transfer crypto assets.
Further, crypto assets are not issued or controlled by any enterprise. There are a little over 19 million bitcoins in circulation at present, out of the total capped supply (hence, the scarcity) of 21 million bitcoins. Any of the estimated 75 million crypto wallet holders could be owning these bitcoins, or their fractions (called satoshis or sats).
How then can such a seamless financial asset be regulated? How can regulators monitor the flow of capital in and out of their jurisdiction? Answers to these questions will lead us to a framework to regulate the crypto industry. Fortunately, global consensus is emerging on this aspect.
This June, amid all the attention over inflation and the related capital market turmoil, the European Parliament and Council, the legislative arms of the European Union, came to a provisional agreement on long-awaited regulations on crypto, namely, the Regulation of Markets in Crypto-Assets, or MiCA.
It took two years of brainstorming and negotiations for Europe to get here. But before we parse through MiCA, it is important to understand why European regulations are noteworthy.
The European market is second to the United States economically and behind Asia in terms of the number of Internet users. Yet, Europe is the global yardstick on technology regulations. The General Data Protection Regulation, or GDPR, first published in 2016 and implemented in 2018, marked a turning point on consumer data protection and privacy not just in Europe but the world over.
The GDPR introduced a framework for seeking user consent and introduced several progressive rules such as the right to forget. The Supreme Court of India has also held that the right to privacy is a fundamental right and an integral part of the right to life and liberty.
Now, Europe is showing us the path to regulate crypto assets. So, how does MiCA intend to regulate an asset not limited by geography? It proposes to regulate crypto asset services and crypto asset issuers. By regulating these entities, Europe intends to provide consumer protection, transparency, and governance standards, regardless of the decentralised nature of the technology.
For instance, under MiCA, crypto asset service providers will be liable in case they lose investors’ assets, and will be subject to European market-abuse regulations, including those on market manipulation and insider trading.
Then, MiCA goes further to put forth specific regulations for stablecoins, rightly demarcating them from other crypto assets. Under the proposed rules, issuers of stablecoins — asset-referenced tokens is the term it uses — are subject to a greater degree of compliance and declaration. Under MiCA, stablecoin issuers must maintain reserves to cover all claims of the coins, and should implement a process for immediate redemption if and when holders seek one.
The TerraUSD example
This is significant. The recent collapse of TerraUSD, an algorithmic stablecoin that had no adequate reserve and relied mainly on the demand-and-supply balance with its sister coin, Luna, had caused significant losses to retail and institutional investors. If the laws Europe proposes were in effect, TerraUSD issuers would have had to maintain 1:1 reserve, which would have prevented the bank run that roiled the crypto market.
To be clear, Europe still has some distance to cover to implement these proposed rules. But like the GDPR did for data protection, Europe has shown the way forward to regulate crypto in a manner that enables responsible businesses and protects users. It would not be too long for other nations to follow suit.
6. Editorial-3: An avoidable crisis
China and the U.S. do not want a conflict, but their actions are not serving their cause
The visit to Taiwan by the U.S. House Speaker and veteran Democrat politician, Nancy Pelosi, has risked triggering a fourth Taiwan Strait crisis and a dangerous escalation amid already worsening relations between the world’s two biggest powers. Ms. Pelosi is the highest-ranking U.S. official to visit Taiwan in 25 years — the first by a House Speaker since Newt Gingrich’s trip in 1997. That visit took place in the aftermath of the third Taiwan Strait crisis, when China conducted missile tests in response to then Taiwan President Lee Teng-hui visiting the U.S. In a phone call on July 28, U.S. President Biden sought to assure his counterpart, Xi Jinping, that “the U.S. policy has not changed”. But that does not seem to be the view in Beijing. As China’s Foreign Ministry put it on August 2, in its view, Washington, going back to the days of the Trump administration, has been gradually “hollowing out” its “One China Policy”. In the call, Mr. Xi warned Mr. Biden that “those who play with fire will perish by it” and said he “hoped that the U.S will be clear-eyed” about the consequences. Beijing has responded by announcing military drills near Taiwan. More countermeasures could follow.
This latest crisis comes at a time when China-U.S. relations are already on edge. This explains why even officials in the Biden administration and the U.S. military had called on Ms. Pelosi to reconsider. Ironically, that prospect was likely diminished by China’s stern public warnings, which all but ensured the trip would go ahead as a cancellation would have been politically costly for the Biden administration. Domestic political considerations appear to be driving both sides into their respective corners in this entirely avoidable crisis. Mr. Xi is three months away from a politically sensitive Party Congress that will mark the start of his third term. White House officials have made the point that Ms. Pelosi represents a different branch of government and members of Congress have travelled previously to Taiwan. That the visit appears to have been driven largely by Ms. Pelosi, who has been sharply critical of China’s policies in Tibet, Xinjiang and Hong Kong, rather than by the Biden administration, has not appeared to have assuaged Beijing. A sharp response, in Beijing’s view, would dissuade other countries from engaging with Taiwan at higher political levels. It may also burnish Mr. Xi’s status at home. The fact that neither side wants, nor can afford, a military confrontation may yet see the current tensions defused with each side walking away and claiming a show of strength for their domestic audiences. The latest crisis has, however, made clear the perilous state of relations between the world’s two biggest powers. It is unlikely to be the last.
7. Editorial-4: Recalling India’s Antarctica activities
Having been left out of 1959’s Antarctica Treaty, the country’s maiden voyage in 1982 stunned the world
Parliament has just passed the Indian Antarctic Bill, 2022 albeit raucously in the Rajya Sabha. It is an important step forward in our engagement with the continent which began way back in February 1956. It was then, at the instance of Jawaharlal Nehru and V.K. Krishna Menon, that India became the first country in the world to request for an item on the agenda of the eleventh United Nations General Assembly entitled “The Question of Antarctica” to ‘ensure that the vast areas and its resources were used entirely for peaceful purposes and for general welfare’.
But India did not press the point further because it got caught up later in the year with the almost simultaneous crises in the Suez and Hungary and also because of resistance from countries like Argentina and Chile. But the Nehru-Menon initiative in which India’s Permanent Representative at the UN Arthur Lall also played an important part did have one very tangible impact. Twelve countries who believed that they had a direct stake in Antarctica started discussions among themselves and on December 1, 1959 the Antarctica Treaty was signed in Washington DC.
Not surprisingly, since its moves at the UN had irked a number of countries including the USSR, India was neither involved nor invited. But in May 1958, India’s Prime Minister had told Parliament: “We are not challenging anybody’s rights there. But it has become important more specifically because of the possible experimentation of atomic weapons and the line, that the matter should be considered by the UN…the fact that Antarctica contains many very important minerals—especially atomic energy minerals—is one of the reasons why this area is attractive to various countries. We thought it would be desirable to have a discussion about this at the UN.”
Subsequently, Antarctica faded from the Indian geopolitical gaze. The Treaty members worked on the development of the continent among themselves, inviting occasional criticism from other countries, including India, who were actually helpless to make any difference.
But the morning of January 9, 1982, transformed the international discourse when news of India’s first Antarctic expedition reaching its destination not only electrified India but stunned the world. Operation Gangotri, as it was christened by the Prime Minister, had been a hush-hush exercise started as soon as Indira Gandhi had returned to power two years earlier. She had appointed noted marine biologist Syed Zahoor Qasim as secretary of the newly-created Department of Environment in April 1981 and three months later had brought into existence a separate Department of Ocean Development.
The Prime Minister was well aware of the political impact a successful Indian expedition would have since India was not a member of the Antarctic Treaty and no other Asian country, including China, had a presence there. Rather tellingly and reflective of the mindset of members of the Treaty, the well-known British science magazine New Scientist, some days later, reported India’s expedition under the headline ‘Indians quietly invade Antarctica’.
Yet, beyond global geopolitics and strategic consideration, there was another impulse compelling a naturalist Prime Minister to back the expedition. Well aware of Antarctica’s mineral wealth, Indira Gandhi was drawn equally—I would venture to suggest even more—to the ecological dimensions of Operation Gangotri: greater knowledge of the Indian Ocean and the monsoons, life in ice-bound regions and marine biodiversity. It was therefore no coincidence that the leader of the expedition was Qasim who had earlier served as the Director of the National Institute of Oceanography in Goa. C.P. Vohra, a member of the successful Indian expedition of 1965 to Mount Everest, was Qasim’s deputy.
A second expedition led by one of India’s top geologists V.K. Raina landed in Antarctica on December 10, 1982. Incidentally, it was Raina who challenged the very intellectually lazy and loose assertion of the Intergovernmental Panel on Climate Change (IPCC) that Himalayan glaciers would become extinct by 2035. It was his critique that forced the IPCC to revamp the manner in which it carried out peer reviews of climate science literature. Raina’s point was limited to questioning such a precise date of extinction: he was not doubting, nor was the government of the day, the reality of the retreat of the preponderant majority of glaciers in the Himalayas that is having serious environmental impacts.
With two expeditions successfully completed within a span of 11 months, India finally became a member of the Antarctic Treaty in August 1983 and China followed in 1985. Today the Treaty has 46 members and has a Convention on Marine Living Resources and a Protocol on Environmental Protection as well.
More achievements follow
1984 saw two more striking Indian achievements: its first Antarctic team started wintering there from March 1, 1984 and a few months afterwards an unmanned Antarctic research base — named by the Prime Minister a few months before her assassination as Dakshin Gangotri — was established. Since then, India has set up two manned (an inappropriate word since women scientists have also been part of expeditions doing the country proud) research stations in Antarctica — Maitri in 1988 and Bharati in 2012. Forty expeditions to the continent have taken place.
The Bill passed by Parliament has been under discussion in the government for over five years at least. It is largely administrative in nature but nonetheless is a milestone. It provides a detailed legal framework for India’s Antarctic activities that is consistent with its international treaty obligations.
The issue of a polar research vessel, however, still needs to be addressed immediately. So far, India has been chartering such ships from countries like Russia and Norway while China has two of its own. Of late, chartering has been presenting its own difficulties. A decision was indeed taken in October 2014 for India to have its own research ship with ice-breaking and other advanced technological capabilities but it remains unimplemented. Surely if fighter aircraft could be acquired from abroad giving a go-by to the Make-in-India policy, a research ship could also be so acquired.
The acquisition of a vessel on a permanent basis is a logical next step to the passage of the Bill as also the revamp of the quite old Maitri research station. The polar research vessel will also be required as India expands its association with and involvement in the Arctic as well. Its research station there called Himadri was inaugurated in July 2008 and five years later India got observer status at the eight-country Arctic Council.