Daily Current Affairs 13.10.2022 (China’s “wolf warrior” era, The grandeur of the Chola Empire one of the longest ruling dynasties in South India, August industrial production shrinks 0.8% inflation drags, Inflation accelerates to 7.41% highest since April, The Court and the problem with its collegium, The war against illegal goods as India’s fight, Winter is coming, We need a forest-led COP27)

Daily Current Affairs 13.10.2022 (China’s “wolf warrior” era, The grandeur of the Chola Empire one of the longest ruling dynasties in South India, August industrial production shrinks 0.8% inflation drags, Inflation accelerates to 7.41% highest since April, The Court and the problem with its collegium, The war against illegal goods as India’s fight, Winter is coming, We need a forest-led COP27)


1. China’s “wolf warrior” era

Xi Jinping’s worldview carries with it an inherent contradiction — that of a world that is simultaneously China’s to lead and one that is apparently full of external threats. This paradox, more than any other factor, has shaped China’s diplomacy in the past decade

China’s foreign policy appears to be caught between, on the one hand, presenting itself as the saviour of the UN-centred world order and globalisation — building, as Mr. Xi has christened, “a community of shared destiny” — and on the other, pursuing China’s core interests ever more aggressively, regardless of the consequences.

The launch of the Belt and Road Initiative (BRI) in 2013 was Mr. Xi’s signature foreign policy initiative and a platform to stake China’s claim to global leadership. But Beijing today is facing criticism for rising debt levels in many partner countries and for unsustainability in some of its projects.

The see-sawing India-China relationship during the Xi decade, from the highs of two “informal summits” in Wuhan in 2018 and Mamallapuram in 2019, to the still on-going border crisis triggered by the Chinese military’s multiple transgressions has plunged relations to the lowest level since the normalisation of ties in the 1980s.

Ananth Krishnan

“Defend every inch of our land!”, reads a sign in Beijing’s Military Museum, which, to mark the Chinese military’s 95th anniversary, opened a sprawling exhibit earlier this year. Divided into four sections, the exhibition went deep into the past of the People’s Liberation Army (PLA), unique among militaries in serving not a state but a single political party. The largest sections were devoted to the contributions of Mao in building a revolutionary army, and to the current leader, Xi Jinping, for building a “strong country” (“qiang guo”).

The corner of the exhibition where the sign has been displayed showcases stones from the Karakoram mountains along the India-China border as well as images from the June 2020 Galwan Valley clash, declaring that the Chinese military will do everything “to protect sovereignty”.

To the centre of the world

As Mr. Xi completes a decade in office and begins an unprecedented third term at the Communist Party’s 20th Party Congress which begins on October 16, “qiang guo” has become the short but sharp phrase of choice that sums up his view of China’s place in the world. Past maxims of China’s “peaceful rise” and “biding time, hiding brightness” have been given a quiet burial. The thrust of Mr. Xi’s argument is that China’s time has come. At the party’s previous congress in 2017, he declared China was “moving to the centre stage of the world”. His other favourite maxim is to declare that “the West was declining and the East was rising” in what he has repeatedly called a world witnessing “changes unseen in a century”. At this turning point, Mr. Xi has emphasised not only opportunities for China — taking the “centre stage” — but peril that lurks in every corner in a global order, that he has often described as being in turmoil, even chaos. Mr. Xi presents the Communist Party under his leadership as China’s defence against this “chaos” and as leading what he calls the country’s “great rejuvenation”. This inherent contradiction in Mr. Xi’s worldview — of a world that is simultaneously China’s to lead and one that is apparently full of external threats — has arguably, more than any other factor, shaped China’s diplomacy in the past decade. China’s foreign policy appears to be caught between, on the one hand, presenting itself as the saviour of the UN-centred world order and globalisation — building, as Mr. Xi has christened, “a community of shared destiny” — and on the other, pursuing China’s core interests ever more aggressively, (dubbed the ‘wolf warrior’ approach after a Chinese action hero) regardless of the consequences, from the mountains of Ladakh and the South China Sea to most recently, the waters around Taiwan.

The inevitable rise

The launch of the Belt and Road Initiative (BRI) in 2013 was Mr. Xi’s signature foreign policy initiative and a platform to stake China’s claim to global leadership. According to the estimates of the Green Finance and Development Centre at Shanghai’s Fudan University, over the past decade, the total value of projects and investments through the BRI stands at over $930 billion. But more than the infrastructure projects and investments in connectivity, the biggest success of the BRI — which ten years later remains an amorphous and hard-to-define initiative, more an idea than an actual project — has been in furthering a narrative of the inevitability of China’s rise.

The BRI, much like China’s global ambitions, stands at an inflection point. Beijing today is facing criticism for rising debt levels in many partner countries and for unsustainability in some of its projects. Criticism aside, the fact that indebted partners have only returned to Beijing for more assistance underlines the reality of China’s economic muscle, as well as an apparent push to evolve the BRI away from a hard-infrastructure focus to a wider array of financial assistance. Consider Pakistan and Sri Lanka, which have received more than $26 billion from China in the past five years, and dealing with financial crises, are turning not only to the International Monetary Fund (IMF) but again, to Beijing.

Great power rivalry

Beyond the BRI, rising China-U.S. rivalry and deepening China-Russia ties have been perhaps the clearest markers of the direction of China’s foreign policy in the Xi era. As relations with Washington torpedoed during the Donald Trump administration, Beijing has increasingly sought to present itself as the defender of a world order that in its view the U.S. was seeking to wreck. Mr. Xi, in recent speeches, has repeatedly referred to a world facing two paths — one of disorder caused by “small cliques”, as China refers to the U.S. and its allies, and the other his “community of shared destiny”.

Worsening relations with the U.S. have been accompanied by warming ties with Russia, described by the Russian Foreign Minister Sergey Lavrov recently as being “the best in history”, as well as a declaration in February this year, on the eve of Russia’s invasion of Ukraine which Beijing is yet to condemn, of a relationship with “no limits”. Fixated on its problems with Washington, Beijing has sought to shore up relations with its Southeast Asian neighbours — it has, with its deep economic ties in the region, managed to blunt criticism over its militarisation of the South China Sea, which during the Xi era has come under greater Chinese control. Yet Beijing’s renewed emphasis on protecting China’s “sovereignty” and core interests has rubbed up against its broader geopolitical ambitions, even undercutting them. India is a clear case in point, which Beijing’s mandarins have long viewed as a key “swing power”, but a country with which ties have deteriorated thanks to the PLA’s actions since April 2020.

Relationship with India

The see-sawing India-China relationship during the Xi decade, from the highs of two “informal summits” in Wuhan in 2018 and Mamallapuram in 2019, to the still on-going border crisis triggered by the Chinese military’s multiple transgressions that plunged relations to the lowest level since the normalisation of ties in the 1980s, have reflected the tensions in China’s diplomacy in the Xi period.

Under Mr. Xi, China has come to view territorial problems with neighbours not as “disputes” to be mutually resolved but as threats to China’s “sovereignty”, thus reducing the space for resolution. Relations with India have also been shaped increasingly by the all-consuming focus of Chinese diplomacy on its great rivalry with the U.S., which has become the lens through which Beijing has come to view relations with much of the world, including India. The coming five years under Mr. Xi are likely to bring an ever-sharper period of tensions with the West.

Beijing recently slammed the U.S. for its criticism over China’s military response to U.S. House Speaker Nancy Pelosi’s Taiwan visit. “They clearly believe they live in the time of 120 years ago,” the Chinese Foreign Ministry said, adding that “today’s China is not the old China of 100 years ago that was humiliated and bullied”. The ministry even compared the G7 group of developed nations to the eight-nation alliance that invaded China in 1900 and marked a “century of humiliation”, the memories of which Mr. Xi has promised to bury with his project of “rejuvenation”.

2. The grandeur of the Chola Empire, one of the longest ruling dynasties in South India

When monumental eras like the Cholas are missing from the pages of history, books and novels about the period amassed through archaeological discoveries and interpretations from classic literature, art, architecture and sculptures, change the way one sees the past

Our history books offer little to read about ancient Tamil kingdoms such as the Cholas which are much in discussion now. With Mani Ratnam’s Ponniyin Selvan I, based on Kalki’s wonderful creation of a world of the Cholas, mesmerising audiences, there is a renewed interest in knowing more about one of the oldest and longest ruling dynasties in the history of Southern India spreading over four centuries. When monumental eras like the Cholas are missing from the pages of history, the best option to know more about the ancient civilisation is to read from the available literature that talk of the valour and conquests of these kings of yore, their trade links and wealth, styles of administration, art and architecture, and cuisine and skills of the period. The monumental relics left behind; the majestic bronzes and 1,00,000 inscriptions and temples which are characteristic of the times, are for the eyes to feast on. All recent archaeological discoveries and interpretations are also a great way to explore.

Exhaustive collection

There is an interesting mix of Tamil and English books and novels by scholars and modern writers on the Dravidian kingdom. A unanimous choice of historians is The Cholas (spelt The Colas) by Prof K. A. Nilakanta Sastri. This account of the social, political and cultural history of the Chola dynasty from 850 to 1279 AD from Vijalaya Aditya I to Rajendra III, up to the end of the dynasty, is considered a pioneering work in South Indian History.

The first edition of the book was published in two volumes, in 1935 and 1937 and even after decades the book remains in demand given the fabulous narrative of the Chozhan Empire. The author relies on references made to the Chola kings in Tamil Sangam literature such as Pattinappalai and Puranaanooru, brought to print by U.V. Swaminatha Ayyar. He bases his research on inscriptions from the Archaeological Survey of India, the Mahavamsa (which tells the history of Sri Lanka), Periplus of the Erythraean Sea and other notes by Chinese and Arabian travellers to India.

Volume I contains the history of the Cholas from Karikalan to Kulothunga III in detail and Volume II describes the attributes of the Chola dynasty — how it became a military, economic and cultural power in South and South-East Asia under Rajaraja Chola I and his son Rajendra Chola I, the tax and land revenue collection techniques and ways of measuring grains and metals, the importance of education imparted to the citizens, the development of Tamil literature (such as Kalingathu Parani by Jayam kondar, Kamba Ramayanam by Kambar, Periya Puranam by Sekkizhar that were written during the reign of Kulothunga I and II) and the varied architectural achievements (construction of the Brihadeeshwara Temple in Thanjavur by Raja Raja I, Gangai konda Chozhapuram by Rajendra I, and the Airavateswara Temple at Dharasuram by Rajaraja III).

The might and power

Nagapattinam to Suvarnadwipa, compiled by Hermann Kulke in 2009 has a lot of historical research on naval power and expeditions of the Chola kings. Art historian C. Sivaramamurti has chronicled the architecture of the period in The Chola Temples: Thanjavur, Gangaikondacholapuram & Darasuram. Japanese historian Noboru Karashimahas written insightful volumes on the Cholas’ economic, social and administrative prowess.

Early Cholas: History, Art and Cuture by Dr. S. Swaminathan, gives a good account of the period from 850 AD to 970 AD that forms an important epoch in the history of Tamil Nadu. The book is about how the early Chola rulers started from scratch and went on to establish a vast empire by their conquests and are best remembered for their contribution to rules relating to the mode of local administration and imprints on art, architecture and sculpture.

S. R. Balasubrahmanyman, published a series of books — Early Chola Art (1966); Early Chola Temples (1971); Middle Chola Temples (1977); Later Chola Temples (1979), two of which were co-authored by his son B. Venkataraman, who like his father had a passion for Chola art, history and architecture and was the first historian to compile information on the Rajarajesvaram and the Brihadeeshwara temples at Thanjavur from the epigraphs available there.

In South India Under The Cholas (published in 2012), Y. Subbarayalu provides a round-up of the known history and features of the Chola dynasty. The comprehensive account of the Empire’s administration, society and economy is done in two parts — Epigraphy and History, State and Society. The first part is an in-depth analysis of Tamil epigraphy and inscriptions, how to study them and analyse socio-economic milieu, merchant guilds, and other sociological aspects. The second section traces the evolution of the medieval state, economy, and society while discussing land surveys, Chola revenue system and sale deeds, and property rights.

The book is a value-addition as it also scrutinises the evolution of organisations like Urar, Nattar, and Periyanattar, social classes like the left- and right-hand divisions, and the merchant militia and for the first time attempts to quantify the revenue of a pre-Mughal Indian state.

The search is still on

Last year, Leadstart published Raghavan Srinivasan’s Raja Raja Chola – An Interplay between an Imperial Regime and Productive forces of Society that appealed to the academia and public. The author rivetingly weaves together the lives and times of one of the most enigmatic medieval personalities, Rajaraja Chola. He elucidates the king and his stupendous legacy from the eyes of a commoner to help readers see history in ways they wouldn’t imagine.

While he writes about Rajaraja Chola as an important figure who played a crucial role in establishing peace, carrying out development and infrastructure as well as ingraining values of social and cultural significance among the people, Srinivasan also talks of the tumultuous development of the times. He presents a critique of history to acknowledge that the rise and fall of kingdoms are not the result of the strengths and weaknesses of kings and queens alone but an inevitable outcome of the greater rhythm of world events.

Juggernaut published Empire by Devi Yesodharan, who got drawn to the enormous Chola Empire stretching from the south to the Ganges, and an emperor who commanded an impressive Army and Navy that was the envy of the world. She looks at his strategic conquest of territories to protect the economy and ensure his continuing control of the naval trade in the Indian Ocean. The author says, a king who restrains himself from pursuing unnecessary wars and preserves his strength to defend his Empire, is a unique administrator. In her book, Devi projects the Chola kingdom as one of the world’s most cosmopolitan places to live in with a vibrant art scene and gorgeous writings.

3. August industrial production shrinks 0.8%, inflation drags

Manufacturing, mining sector output contract; power generation only sector to show growth; analyst warns of growth impact if festival season does not help IIP rise in September, October

India’s industrial output contracted 0.8% in August, following the 2.2% growth recorded in the preceding month, with both manufacturing and mining sectors reporting lower output than a year earlier, while overall factory production shrank 2.3% from July 2022.

While the Index of Industrial Production (IIP) had jumped 13% in August 2021, base effect only played a marginal role in the contraction with the provisional IIP estimate at 131.3, the lowest level since November 2021, when it was at 128.

Manufacturing output shrank 0.7% from August 2021 and was 1.48% lower than July, while the mining sector contracted 3.9% from a year earlier and was 0.95% below July levels.

Electricity generation was the only sector to clock an uptick, with a 1.4% year-on-year growth and a 1.3% expansion over July. However, August’s electricity output index is the second lowest since March 2022.

While there was ‘all round disappointment’ in the IIP print, Bank of Baroda chief economist Madan Sabnavis said the ‘main drag was from the consumer end with both durables and non-durables production contracting by 2.5% and 9.9%, respectively’.

“Inflation has come in the way of demand for sure and the critical part will be how demand turns out in the festival time… unless IIP growth touches 5% in September and October, there will be an adverse impact on growth prospects,” Mr. Sabnavis reckoned.

4. Inflation accelerates to 7.41%, highest since April

September food inflation quickens sharply to 8.41%, the steepest level in 22 months; economists warn that the negative surprise could spur more interest rate increases from the RBI

Retail inflation accelerated to a five-month high of 7.41% in September, from 7% in August, as food inflation surged sharply to 8.41% last month — the steepest level in 22 months.

September’s retail inflation was the highest since April, when price rise quickened to an almost eight-year high of 7.79%, and economists warned that the latest negative surprise could force the Reserve Bank of India (RBI) to opt for further interest rate increases beyond the widely expected 0.5 percentage point increase in the December monetary policy.

This is the ninth month in a row that inflation has exceeded the 6% upper tolerance threshold mandated for the RBI and would require it to send an explanation to the government on its inability to achieve the price stability target.

Rural inflation picked up further steam, from 7.15% in August, to touch 7.56% in September, while urban consumers also experienced a resurgence in price rise at 7.27%, from 6.72% a month earlier, data released by the National Statistical Office (NSO) on Wednesday show.

Vegetable prices surge

Inflation in cereals quickened to 11.5%, with rural India facing almost 12% price gains, up sharply from 9.6% in August and almost doubling from July’s 6.9% pace. Similarly, vegetables’ inflation almost virtually doubled over two months, from 10.9% in July to 18.1% in September, with urban consumers facing a sharper 20.1% rise.

The Consumer Food Price Index rose 8.6%, up from 7.6% in August, with urban consumers facing a higher surge at 8.65% from 7.55% a month earlier. For rural India, the uptick was only slightly less pronounced with food prices rising 8.53%, compared with 7.6% in August.

“The acceleration in food inflation was broad-based as prices rose across cereals, vegetables, pulses, and milk, with tomatoes and potatoes driving up vegetables’ inflation,” said CRISIL chief economist Dharmakirti Joshi.

Bank of Baroda chief economist Madan Sabnavis said inflation was not likely to come down any time soon as food prices would remain under pressure due to a lower Kharif output expected for rice, pulses and oilseeds. While high food prices and the low base of last September, when retail inflation was 4.35%, were expected to push up the headline number, Mr. Joshi noted that non-food inflation also continued to remain high.

Six major States reported inflation that exceeded 8% — West Bengal (9.44%), Telangana (8.67%), Madhya Pradesh (8.65%), Andhra Pradesh and Odisha (8.05%) and Maharashtra (8.03%) — with Gujarat and Haryana coming close at 7.95%.

5. Editorial-1: The Court and the problem with its collegium

Once again the collegium of the Supreme Court of India is in the news, and once again for the wrong reasons. This time, it is because of the difficulty that its five judges have in getting together for one meeting. The Chief Justice of India, Justice U.U. Lalit, assumed office on August 27, 2022. He has a short tenure and demits office on November 8, 2022. Nevertheless, he tries to set a scorching pace. He constitutes as many as five Constitution Benches to hear extremely important matters which his predecessors put on the back burner. The CJI also takes it upon himself to fill six vacancies in the apex court. He sets in motion the procedure contemplated for the collegium of the Supreme Court which is enshrined in the Memorandum of Procedure of 1999.

A meeting was held on September 26 at which all the five members of the collegium were present. They decided affirmatively on one candidate, Justice Dipankar Datta, now Chief Justice of the Bombay High Court. There are several other names under consideration for the remaining slots, and these include four Chief Justices of High Courts and one lawyer practising in the Supreme Court. This is deferred to September 30. However, the meeting on September 30 is not held because Justice D.Y. Chandrachud, the seniormost puisne judge and in line to be the next CJI, sits in court till 9.30 p.m. Since the meeting cannot be held as scheduled, the CJI tries to obtain approval by circulation. Two judges accord approval but Justice Chandrachud and Justice Nazeer withhold approval. Apparently they do not object to the names but object to the procedure of circulation. In the meantime there is a letter from the Law Minister asking the CJI’s view on the appointment of his successor. With that the curtain is brought down on the proposed appointments. For some reason no one can fathom, the CJI’s collegium becomes a lame duck during his last month, while his court retains every power till the last minute of his last day in office.

Relevant questions

If this was any other body conducting business for selecting the highest officers for the organisation, those in charge would face both questions and flak. Simply put, since the matter is of obvious importance, why could not five people who work in the same building meet the next day, or the day after, to conclude the business? If meeting in person was so difficult, surely we are all used to online conduct of business. The court itself has been quite proficient in conducting judicial work online for many months after COVID-19 struck us. If any of the names are not good enough, why not say so in circulation? If they were good enough, then why not just make the appointments by following any procedure feasible, whether personal meeting, circulation or online meeting? If business has to be done, then there appears to be no good reason why it did not get done.

The problem, as has been the problem with the collegium, is that there is nobody in it to ask these questions. Time and again, it has been widely commented that this is an extra-constitutional or non-constitutional body brought in force by judgments of the Supreme Court virtually wresting the power of appointment of judges. The Constitution of India gave the last word to the President of India but mandated consultation with the Court. These judgments give the last word to the Court mandating consultation with the government. Not only that, what makes the problem even worse is that there is no seat in the collegium for any non judge — neither from the executive, the Bar or anywhere else. In other words, there is no one to offer suggestions or raise questions or even to observe what is going on.

In 2014, Parliament by unanimity — mark the word unanimity — backed by State legislatures enacted the National Judicial Appointments Commission (NJAC); it comprised three judges, the Law Minister and two eminent persons to handle the task of appointing judges. By a 4:1 majority, the Supreme Court struck that down, setting at naught the entire legislative will of the country which was trying to reverse a constitutional coup. If the Court was concerned about being overruled in appointments, it could have just tinkered with and read down the Act, deleted the second eminent person and thus secured a situation where the judges were in the majority. This would have secured judicial primacy, provided for some executive involvement as well as had one person representing a larger public constituency. The point is that this will at least provide a place at the table for the question why and the question why not to be asked. There can be accountability and perceived performance only when these questions can be asked and have to be answered. Otherwise there will be insularity and opacity.

On judicial appointments

In recent times, the Government seems to have given up on pursuing the commission for judicial appointments. One wonders why. Perhaps the answer partly lies in successive collegiums not putting forth names anathema to the Government, notably that of Justice Akil Kureshi (he retired in March as the Chief Justice of the Rajasthan High Court). This is hardly a satisfactory solution. It is time to revisit this question and secure a better, broad-based and transparent method of appointing senior judges to the High Courts and the Supreme Court. While doing so, we may also ask why there have been no appointments from the category of distinguished jurists which Article 124 of the Constitution contemplates. Appointments to the top court seem to be the preserve of judges from the High Courts with a handful of appointments from the Bar. Surely some nodding acknowledgement should be given to a specific provision made by the founding fathers in the Constitution. Or is it the view that in all these years we have produced no distinguished jurist worth the name?

6. Editorial-2: The war against illegal goods as India’s fight

India’s wholesale inflation rate has been declining since July this year but has remained in double digits since April 2021. Last month, the inflation rate was recorded at 12.41%, from 13.93% in July. Consistently high inflation leads to people deferring purchases, purchasing less, going in for reuse and recycling, or just switching to cheaper alternatives. The search for cheaper alternatives kicks up a storm — markets are flooded with cheap inferior goods or spurious and fake brands, giving a dream run to the parallel economy players.

This is where the China angle comes in. The parallel economy dealers need access to seemingly similar functioning cheaper goods which are aptly served by factories humming in China. As we get closer to the festive season, we will see, yet again, bazaars full of Chinese goods — from Deepavali lights, pooja idols, electronic items and bicycles to everything that the consumer needs. Clearly, the Government’s response to this situation is centered around its self-reliance or ‘Atmanirbharta’ agenda, which should place added focus on producing goods in bulk at the lowest possible cost. The Government’s intent is certainly taking shape, as was echoed by Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs and Food and Public Distribution and Textiles, in a tweet recently. He said: “Our toy manufacturing sector is booming, with Indian toys rapidly filling up shelves in the country and abroad.” Such wins would be possible only if India can bring down the cost of manufacturing by addressing anomalies at each stage in the value chain.

A thriving market

The consumer’s search for cheaper alternatives gives birth to another menace which hurts even more — a booming, smuggled and illegal goods market. This hurts more because it is done at the cost of taxes to the government, depriving the country of the fuel required to drive social transformation. In this economic activity, the target is not the cheaper category of goods, but rather the more expensive class of goods. According to the Federation of Indian Chambers of Commerce and Industry’s Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE) — one of the best-known data sources for information on smuggling — the illicit market is thriving in five key Indian industries. This includes mobile phones, fast-moving consumer goods (FMCG) – household and personal goods, FMCG-packaged foods, tobacco products, and alcoholic beverages. The size of the illicit market in these industries was valued at ₹2,60,094 crore in 2019-20.

According to a report by the Economist Intelligence Unit, in 2018 India ranked low in the Global Illicit Trade Environment Index and needed quantifiable actions to bring down the risks of illicit trade on the economy. In relation to three of the four elements, i.e., government policy, supply and demand, and customs environment, India ranks in the third quartile of the 82 countries covered in the index. It ranks 35 in terms of transparency and trade.

The CASCADE report estimates that unlawful trade in the industries mentioned above results in a total estimated legitimate employment loss of 15.96 lakh. The combined FMCG industry (household and personal goods, and packaged foods), due to its illicit market size, accounts for about 68% of job losses. The estimated tax loss to the Government due to illicit goods in these industries has been estimated to be ₹58,521 crore. The report further reveals that two highly regulated and taxed industries, tobacco products and alcoholic beverages, account for 49% of the overall tax loss to the Government.

Rationalise taxes, promote local brands

A lesser-known fact is that the more evolved manufacturing markets subtly support smuggling by only doing lip service and not taking strong action against their exporters and international traders as it does not harm their local economy but helps their manufacturing sector. Therefore, there have been fewer supporters in the developed world and in countries such as China for the war against smuggling. This is India’s fight as it is one of the largest consuming countries with porous borders and a weak enforcement machinery to stop smuggling.

The only practical measure to stop smuggling and illicit trade is if the Government keeps taxes rationalised in the categories where smuggling is high, so as to give lesser cost arbitrage incentive to smugglers as well as aggressively promote local industry to build world-class brands and products. This would reduce the dependence on international manufacturers. There is a common thread in both cases — the need to support local industry by rationalising taxes and providing incentives to local manufacturers so they can make world-class goods that can compete with global brands in India as well as in global markets. Allowing global brands to manufacture in India also remains relevant provided they can offer India-specific pricing and are not allowed to remit royalties and profits out of the country earned from goods being consumed by Indians. China has a very successful policy wherein multinational corporations (MNC) reinvest profits earned by subsidiaries in China. India can make a concession by allowing MNCs to repatriate profits earned from the goods they sell outside India. This will propel India as a global manufacturing destination and MNCs will be able to hit their topline goals. Today, with India’s growing heft and attraction as a fast-growing economy, it is time to strike a better bargain.

Use of technology in enforcement

Fast collective action using a mix of strategies that are rooted in smart taxation, restrictions on profit repatriation and stricter law enforcement are steps that will stop the inflow of smuggled, illicit and cheap, low-quality goods into the country. According to CASCADE, enforcement can be improved by using cutting-edge technology such as artificial intelligence, blockchain, and location technology. This will help in increasing the seizure of illegal goods. The Government must also increase consumer awareness so that people boycott smuggled, counterfeit and poor quality goods. The supply of cheap, counterfeit and smuggled goods is only nurturing crime syndicates and a parallel economy, and where the Government and the consumer are the losers. There is no better time than now to give ‘Atmanirbharta’ yet another dimension to accelerate its progress.

7. Editorial-3: Winter is coming 

India’s growth impulses slowing; the IMF warns ‘worst yet to come’

The International Monetary Fund (IMF), in its latest World Economic Outlook report, has retained global growth hopes for 2022 at 3.2%, and lowered next year’s projection to 2.7% from 2.9%. The year 2023 will feel like a recession for many people in the world, the Fund has cautioned, as ‘the worst is yet to come’ amid tighter monetary policies to curb stubbornly high inflation and a spiralling energy and food crisis. While it retained India’s 2023-24 growth estimate at 6.1%, the IMF slashed this year’s forecast to 6.8%, from 7.4% in July. This is the second significant estimate after the World Bank’s 6.5% assessment that pegs India’s GDP rise below 7%, which the Reserve Bank of India and North Block mandarins are expecting this year. The downgrade is attributed to ‘weaker than expected outturn’ in the second quarter and subdued external demand. The slowing growth in tax collections, industrial output and exports, back this prognosis. The road ahead — rendered tortuous by the lingering Russia-Ukraine conflict, a slowdown in China and what the IMF has eloquently termed a ‘cost of living crisis’ — is not much travelled on. The risk of monetary, fiscal or financial policy miscalibration has risen sharply amid high uncertainty and growing fragilities, the Fund has emphasised.

After likely losing the tag to Saudi Arabia this year, the IMF expects India to become the fastest growing major economy in the world again next year. But private forecasters such as Nomura believe policy makers’ optimism about 2023-24 prospects may be misplaced as the global downturns’ ripple effects may be underestimated, and growth could well slip to 5.2%. Either way, relative prosperity compared to the world alone will not suffice. India needs to not only grow significantly faster than its faltering pre-pandemic trajectory but also deliver better quality growth that is inclusive and meets the aspirations of millions of its youth who constitute its demographic dividend. The country has only a small window now to cash in on this sweet spot. Moreover, given India’s low per capita income, the sustained surge in prices has hit most households’ spending capacity, and could even cramp their ability to invest in the next generation’s education. Ministers’ assertions that India had managed to rein in inflation and it is not a priority concern may have been premature as August and September witnessed a resurgence in price rise from July’s minor relief of 6.71% after staying above 7% in the first quarter. The Government has begun work on Budget 2023-24, but the second half of this year still needs to be navigated deftly.

8. Editorial-4: We need a forest-led COP27

In September, a study published in the journal Science said earth may have already passed through five dangerous tipping points due to the 1.1°C of global heating caused by humanity to date.

Calls for developing and transferring technologies to support action on climate change have become louder worldwide. Technology has become a survival strategy for our species, but the degree of techno-determinism that exists in the strategy to reverse climate change is alarming. Technology alone is unprepared to deal with the challenge, which requires a societal overhaul and a zero-emission strategy.

History is on the side of technological innovation. Norman Borlaug, for instance, ushered in the Green Revolution, which fed billions of people and increased yields. But we may need a few million climate Borlaugs to tackle the problems staring at us.

Technological optimism

COP26 at Glasgow also fuelled technological optimism. There was an observation that every technological solution discussed at COP26 depends on just three resources: nelectricity (non-emitting electricity generated by hydropower, renewables or nuclear fission), carbon capture and storage (CCS) or biomass. The total demand for those resources required by the plans discussed at COP26 cannot be met by 2050.

We currently have 4kWh/day of nelectricity per person. But the COP26 plans require 32 (range 16-48). We currently have 6kg of CCS per person per year, but the COP26 plans require 3,600 (range 1,400-5,700). We eat 100kg plant-based food per person each year, but producing enough bio-kerosene to fly at today’s levels requires 200kg of additional harvest. There is no possibility that our supplies of these will be near the levels required by the plans discussed at COP26.

In 2003, Ken Caldeira at the Carnegie Institution found that the world would need a nuclear plant’s worth of clean-energy capacity every day between 2000 and 2050 to avoid catastrophic climate change. In 2018, MIT Technology Review reported that at the given rate, the world will take nearly 400 years to transform the energy system.

Tech-centric mitigation conversations leave forest economies and subjects such as conservation and forests, which are the best carbon removal instruments, to the ideological fringes of climate conversation. Climate action requires the same amount of investment in conservation as we see in shiny new technology transfers.

While there was the deforestation-ending climate commitment at COP26, the nature of the pledge was vague. Countries may easily attempt to achieve their ‘net zero deforestation goals’ through monoculture farming. But this won’t be of much help: scientists, in a commentary in Nature, have stated that naturally preserved forests are 40% more effective than planted ones.

Our climate crisis is intertwined with other complex issues. This means that we must insist on multi-pronged, interconnected climate solutions. Forests shine here too. Nothing exemplifies this more than the intersection of the climate change crisis and the biodiversity crisis. Forests, which are home to 80% of terrestrial wildlife, are at this intersection.

Forests absorb a net 7.6 billion metric tonnes of CO2 a year. A new study has found that their biophysical aspects have a tendency to cool the earth by an additional 0.5%. The conservation of forests, along with other nature-based solutions, can provide up to 37% of the emissions reductions needed to tackle climate change. The Dasgupta Review-Independent Review on the Economics of Biodiversity reports that green infrastructure (salt marshes and mangroves) are 2-5 times cheaper than grey infrastructure (breakwaters).

Another study estimated that the annual gross carbon emissions from tropical tree cover loss between 2015 and 2017 was equivalent to 4.8 billion tonnes. This causes more emissions each year than 85 million cars do in their lifetime. In 2019, approximately 34% of total net anthropogenic greenhouse gas emissions came from the energy supply sector, 24% from industry, 22% from agriculture, forestry and other land use, 15% from transport and 6% from buildings.

Conserving natural sinks

The IPCC Land Report estimates that land serves as a large CO2 sink. There is a growing body of evidence that a large proportion of the required removals could be achieved by conserving natural sinks, improving biodiversity protection, and restoring ecosystems. Preserving earth’s cyclical processes by protecting terrestrial ecosystems and natural sinks and transformative agricultural practices under the leadership of indigenous people and local communities is a far more equitable and cost-effective way of tackling the climate crisis than it is being done now.

We need to realise that the climate crisis is just a symptom; our real problem is that human consumption and activity have exceeded the regenerative capacity of our planet. Technology, at best, can assist us, not lead us, on the pathway to a sustainable, regenerative and equitable world.

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