In an recent article “The End of An Era For White Men” by David Rothkopf in FOREIGN POLICY Journal (Dated 01 Feb 2016) there is the historic admission of steady global dominance of western world.

It states:-

“While men had a great run from the rise of the Greeks to the birth of western based global empires – they have controlled much of the world sought to. So much of history is a consequence of decisions made by and at the behest of the white guys in-charge’.

 The learned author adds:-

“Several factors are contributing to make this historic moment a watershed in global history. ….. …. ….. ….. While the planet earth has always been home to great non-white civilisations, such societies have ebbed and flowed in relative importance. Today it is clear that these emerging societies, namely China and India are on the rise.”

 In context of above, what our Hon’ble Home Minister Shri Rajnath Singh had stated sometime back that Maharana Pratap of Udaipur deserves to be titled “The Great”; it quintessentially sounds logical and convincing.

Interestingly, historians world over have not yet found as to which august body (or a group of individuals) had constructed the qualifying requirements for the title “The Great”. And, also who (and when) the title(s) were conferred on the selected few. Just to mention some of them:-

• Alexander The Great (of Macedonia)
• Constantine The Great (of Byzantium Empire)
• Peter The Great (of Russia)
• Fredrick The Great (of Germany)
• Ashoka The Great (of India)
• Akbar The Great (of India)

Interestingly, commentary on the traditional belief in the decline of greatness; THOMAS CARLYLE laments in his classics “Heroes, Heroworship And The HEROICS IN HISTORY (1841)” that “Napoleon was our last Great man”. He also singles out the lone social fact that “Greatness has been equated with fame and the fame could not be made overnight”.

Delving deep into the dynamics of above stated “Greatness” conferred on heroes of yester-years; shouldn’t we presume that it was the western media which was on the beck and call of European world conquerors that played the trick. History is testimony to the fact that whenever civilisations preferred convenience, they spelt their downfall. Dr. Radha Krishnan had once said “India was never conquered from “without”; it was always from “within” that it was subdued”. Third world countries have not only lost on battle-fields but also on brand/image projections. Maharana Pratap’s case is to be viewed through the above prism.

Battle of Haldighati (fought on 21^st June 1576) with Raja Man Singh as Commander-in-Chief of Mughal army and Maharana Pratap of Udaipur leading conglomerate of Rajput warriors – the episode is well documented. The outcome of the clash is known to students of history. Mewar army was routed in the final run. General Sagat Singh of Indian army (hero of Bangladesh’s liberation: 1971 India-Pak war) has attributed Mughal army’s success to their superior artillery.

A moot point is that Pratap could not be captured and his flight from battle-field was orchestrated by his faithful(s) – for yet another day to settle scores with the Mughals. It is also on record that Emperor Akbar had refused to meet Raja Man Singh and Asaf Khan while expressing his dissatisfaction over the results. On this subject, we have the last word from eminent history scholar Prof. G.N. Sharma. He states:-

“The Kachhawaha General (Raja Man Singh) had failed either to kill or capture the Rana. Hence Haldighati was a barren victory for the Mughals”.

 The Battle of Haldighati has immortalised Maharana Pratap as a warrior of freedom and pride. Amongst the Mughal Kings, Akbar rose to dizzy heights of greatness and the title “AKBAR THE GREAT” is well deserved. But Maharana Pratap’s rugged defiance against Mughal rule qualifies him as fountain-head of liberty and self-rule. It wasn’t easy – those were the times when consequences of not towing the diktat of an Emperor could bring-in untold miseries; Maharana Pratap who epitomised exemplary courage and indomitable spirit had outrightly rejected the olive branch. He toiled hard for decades – post-Haldighati clash, practicing guerilla tactics against the adversary and refused to compromise with freedom.

There are some unsung heroes of Battle of Haldighati.

1. Jhala (Bida) Man – who had assisted Maharana Pratap in moving to a place of safety (in this manouvre he got killed).
2. Hakim Khan Sur – The Afghan General and a loyalist. He was a strategist and warrior of repute. (Not much literature is available on him).
3. Bhama Shah – He was the financier who greatly helped Maharana Pratap during his “exile” after the Battle of Haldighati.
4. Rana Punja – The Bhil Chieftain – his band of followers had inflicted severe blows on enemy flanks. His generosity towards Rana Pratap in providing “men and material”, assistance during “war and peace” periods with Mughals is well known.

It is said that “History has been unfair to its heroes, leaving ordinary men to decide the difference between posterity and oblivion”.

For the six eminent luminaries viz. Rani Gaidinliu, Lala Lajpat Rai, Tatya Tope, Maharana Pratap, Shri Bhisham Sahni and Sage Chaitanya Mahaprabhu; the recent initiative in constituting an Implementation Committee on Commemoration under the Ministry of Culture is worth mention.

Govt. of India’s effort to “resurrect” heroic images from our hoary past are well-meaning. Maharana Pratap of Mewar richly deserves the title “The Great”. One is reminded of Martin Luther King Jr.’s words “The Arc of moral Universe is long, but it bends towards Justice”. Yes, we are talking about Justice for recognition to a great Indian warrior Maharana Pratap.

Gp Capt DC Bakshi, VSM, IAF (retd.)

Introduction: Power to Tax and Sovereignty

 

Power to levy taxes has been universally acknowledged as an essential attribute of sovereignty. Cooley in his Book on Taxation – Volume-1 (4th Edn.) in Chapter-2, recognises the power of taxation to be inherent in a sovereign State. The power, says Cooley, is inherent in the people and is meant to recover a contribution of money or other property in accordance with some reasonable rule or apportionment for the purpose of defraying public expenses.

In Commissioner of Income Tax, Udiapur, Rajasthan v. MCdowell and Co. Ltd. (2009) 10 SCC 755, the Supreme Court observed as follows:

“(iv)  As an incident of sovereignty and in the nature of compulsory exaction, a liability founded on principle of contract cannot be a “tax” in its technical sense as an impost, general, local or special.”

Further, a tax is a compulsory exaction of money for general public good and is defined as under by Thomas M. Cooley in his book The Law of Taxation at page 61(Clark A. Nichols ed., 4th ed. 1924) as follows:

 “Taxes are the enforced proportional contributions from persons and property, levied by the state by virtue of its sovereignty for the support of government and for all public needs. This definition of taxes, often referred to as “Cooley’s definition,” has been quoted and endorsed, or approved, expressly or otherwise, by many different courts. While this definition of taxes characterizes them as ‘contributions’, other definitions refer to them as ‘imposts’, ‘duty or impost’, ‘charges’, ‘burdens’, or ‘exactions’, ; but these variations in phraseology are of no practical importance.”

GST and the World

 

Prior to the implementation of the Goods and Service Tax (GST), there were several indirect taxes which were being levied at different levels of the supply chain. The implementation of the GST has resulted in the merger of indirect taxes (central as well as state) thereby making the GST an umbrella tax, which would facilitate Indian Businesses compete globally. GST is inter-alia structured for efficient tax collection, seamless inter-state movement of goods and reduction of the number of indirect taxation departments such as VAT, Excise, Service Tax, etc which resulted in glitches and undue delays.

 

France was the first country to implement GST to reduce tax-evasion in 1954. Since then, more than 160 countries have implemented GST with some countries having Dual-GST (e.g. Brazil, Canada etc.) model i.e. Federal GST and State GST. India has chosen the Canadian model of dual GST i.e. CGST and SGST or IGST in case of inter-state transport of goods or provision of services.

In Canada, the GST is known as Federal Goods and Service Tax and Harmonized Sales Tax which is being implemented since 1991. A table made below provides a comparison of scheme of GST in India and the prevailing schemes in Canada, Singapore and Malaysia.

Particulars	India	Singapore	Canada	Malaysia
Name of the Law relating to Taxation of Goods and Services	Goods and Services Tax	Goods and Service Tax	Federal Goods and Service Tax & Harmonized Sales Tax	Goods and Service Tax
Threshold exemption limit	20 Lakhs (10 Lakhs for NE States)	Singapore $ 1 million (Approx Rs. 4.8 crore)	Canadian $ 30,000 (Approx Rs. 15.6 lakhs in INR)	MYR 500,000 (Approx Rs. 75 lakhs)
Standard Rate	0% (for food staples), 5%, 12%, 18% and 28%(+cess for luxury items)	7% Reduced rates- Zero rated, exempt.	GST 5% and HST varies from 0% to 15%	6%
Liability arises on	Accrual basis: Issue of invoice OR Receipt of payment -earlier	Accrual Basis: Issue of invoice OR Receipt of payment OR Supply – earliest Cash  basis:(T/O upto SGD$1mn): Payment	Accrual basis: The date of issue of invoice OR the date of receipt of payment- earlier.	Accrual Basis: Delivery of goods OR Issue of invoice OR Receipt of payment
Exempt services	Manufacture of exempted goods or Provision of exempted services (which have been notified such as rent from residential accommodation)	Real estate, Financial services, Residential rental	Real estate, Financial Services, Rent (Residence), Charities, Health, Education	Basic food, Health Transportation, Residential property, Agricultural land

 

Therefore, GST model across the commonwealth countries are similar with some variations with respect to the rates and threshold limits, which may be economy specific.

 

GST in India: Biggest Economic Reform since Independence

 

GST is a single tax that simplifies the giant tax structure by supporting and enhancing the economic growth of a country, and is levied on the supply of goods and services, right from the manufacturer to the consumer. GST is a destination i.e. final consumption based tax regime, however, credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer would thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages. To the credit of the Finance Minister and the GST Council, the efficient input tax credit system ensures that there is no cascading of taxes i.e. taxes on tax paid on inputs that go into manufacture of goods.

 

In order to avoid the payment of multiple taxes such as excise duty and service tax at Central level and VAT at the State level, GST has unified indirect taxes and created a uniform market throughout the country. Integration of various taxes into a GST system has brought about an effective cross-utilization of credits. The current system taxes production, whereas the GST will aim to tax final consumption. The following taxes have been subsumed in the GST:

At the Central level, Central Excise Duty, Additional Excise Duty, Service Tax, Additional Customs Duty commonly known as Countervailing Duty, and Special Additional Duty of Customs.

At the State level, State Value Added Tax/Sales Tax, Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), Octroi and Entry tax, Purchase Tax, Luxury tax, Taxes on lottery, betting and gambling.

There are following benefits of the GST:

• Two-tiered One-Country-One-Tax regime.
• Subsuming indirect taxes at the centre and the state level.
• Widen the tax regime by covering goods and services and make it transparent.
• Benefit to the manufacturing sector from cascading effect of taxes, thus by improve the cost-competitiveness of goods and services.
• Bring down the prices of goods and services and thus by, increase consumption.
• It would create business-friendly environment, thus by increase tax-GDP ratio thereby enhancing the ease of doing business in India.
• Direct benefit to Manufacturing: Logistics and More Employment – The manufacturing sector has great importance for many developing countries. India’s manufacturing sector has complex tax structure with only 16% share in GDP, India’s manufacturing sector has been close to stagnant for the last two decades. India has shifted itself from an agricultural economy to a manufacturing and service economy. The direct benefit in the hand of manufacturers and logistic companies, warehousing facilitators rather than industries. GST will bring slight change in prices & tax burden on consumers. It will reduce the transit time by which more efficiency will be and benefiting manufactures. Further, logistics sectors would benefit after implementation of GST, reducing compliance cost, dropping number of warehouse and allowing tax credit across the supply chain. Almost all the sector would have indirect benefit from it and expand their operation that will create a more employment.
• Under GST, without costs on Inter-state movement of goods (CST or Entry taxes) and change in the point of taxation to be the consumer, businesses shall have greater flexibility to muster and re-design their supply chains thereby optimizing their logistic cost. Since sellers are also likely to get benefit from changes, Companies ought to negotiate and get benefit on Input Prices.

Conclusion: Challenges ahead

 

The most critical challenge in the implementation of the GST would be the IT transformation that is required to be made by the businesses and their respective organisations. Technical systems would have to be in synchronisation with the scheme of GST as monthly returns would have to be filed electronically. Secondly, since the threshold exemption limit has been kept low, SME’s and small traders may be would have to compete aggressively. However, with time it would be the SMEs and small traders who would benefit the most from the implementation of the GST, and lastly, the intended revenue collection would depend on the strict implementation in letter and spirit of the GST Act and allied Rules.  

 

(Sagar Suri is an advocate practicing at the High Court of Delhi and Supreme Court of India.)

We have been hearing about India’s developing debt crisis for a while now. News reports also listed top defaulters.

Insolvency or Bankruptcy are terms which are usually used interchangeably for a situation of a person or a corporate when they are unable to repay their debts. Bankruptcy is the legal adjudication of Insolvency which is a factual scenario. Insolvency can occur due to a set of factors which include, slowdown of the cash flow, poorly managed cash system, increase in cash expenditures, etc. The reasons for insolvency are important, as the specific rights are allowed for the creditor to be exercised against the entity which is insolvent in any legal system.

The Indian insolvency law recently went through an overhaul with the government notifying most of the provisions of the new Insolvency and Bankruptcy Code (IBC) earlier this year. The Indian Law is one of the better drafted legislations if we compare it globally and has borrowed best practices from both UK and the USA. The new Law was passed, enacted and notified at a break neck speed.

Last month Reserve Bank of India was armed with a set of powers by the Government to identify and initiate proceedings, through the respective banks, against defaulters under the Code. These powers flow through an amendment to the Banking Regulation Act, which adds Sections 35AA and 35AB to the Act.

Though any set of Insolvency laws in any jurisdiction are not a debt recovery tool per se but they certainly play an important role in promoting credit discipline at large. India’s debt problem is concentrated to a few entities as has been pointed out by the RBI. As per the RBI only 12 NPA accounts account for 25% of the total NPAs by volume. The gross bad debt of the Indian banking system as of March, was at Rs 7.11 lakh crore, which means the 12 accounts would be responsible for about Rs 1.78 lakh crore.Recently the Finance Minister, Arun Jaitely remarked that the whole NPA problem is only limited 20-30 accounts and is not spread to large number of accounts.

The RBI will in all probability recommend the respective commercial banks to initiate proceedings under the IBC against these 12 accounts. This move has drawn an international applause, including a praise from the international credit rating agency Moody’s too.

This is a valid point considering the proceedings under the code can’t go beyond 180 days which are stretchable upto 270 days at the most. Time is of essence for the resolution of this problem because the debt is growing day by day. There is a counter argument to this, that the time limit may actually force the corporate into liquidation. This is a very flawed argument. Insolvency is not necessarily the worst outcome in the current situation and in fact it is probably the best solution. The corporates which we are dealing with here, most probably have already been subject to multiple restructuring through various schemes of RBI like Strategic debt restructuring, S4A, 5/25 etc. Hence, insolvency under the IBC is not that bad afterall, since the banks and the creditors will atleast be able to recover a part of their credit. This will certainly help them improve their asset quality which is under tremendous amount of stress right now.

Had there been no IBC, the resolution of each case would atleast take 4 years, which has been India’s average of resolving Insolvency in the recent past.

Given the knowledge of the cancer of debt, surgery shouldn’t be a problem if we are prepared to take bold decisions. All top 20-30 accounts in fact can be subjected to IBC proceedings. Even if they result in a 40% of haircut by the banks on an average, 60% of the money gets back to the banks which can be used for their recapitalisation.

If we start now with the resolution of the first 12 accounts, as recommended by the RBI, the judicial proceedings can be done within a year and the rest 10-15 accounts or so in the next year. The amendment in the Banking Regulation Act is very critical here. The creditors, which being the banks, anyways don’t need a sanction or a permission from the RBI to initiate proceedings under IBC, as per its provisions. What happens in practical situations is that the defaulter is a person who is politically connected and pressurizes the bank administration to not proceed and usually succeeds in doing it. Now after the amendment it is the RBI can be authorized by the Central Government to direct the banks to initiate proceedings under the IBC. This way the bank administration can escape any political pressure which is usually the problem.

Due to a small number of NPA accounts accounting for the major NPA by volume, our debt problem is still a problem only and not a crisis. For the sake of comparison, the sub-prime crises in the USA, involved a large number of accounts and hence became unmanageable and ultimately resulted in global recession. India’s debt problem therefore can be effectively resolved or at least contained by effective implementation of the IBC. The priority here should be saving the banks and an impending debt crises and not saving a few corporates.

(Raghav Pandey is a Research Scholar at School of Humanities, IIT, Mumbai.)

A rather peculiar phenomenon which is now appearing on the political landscape and in the mainstream and social media, is that anyone who is anyone, feels compelled to comment on the country’s Armed Forces, more so on the actions of the Army. The trend gained traction after the  terror attack on the Air Force Station at Pathankot in January 2016, which caused casualties to own forces before the terrorists were eliminated. This was followed a month later by a terror attack on  a government building in the outskirts of Srinagar which resulted in the loss of three para commandos including two Captains, before the lone terrorist was eliminated. Then in September, 17 soldiers lost their lives in a sneak attack on a brigade HQ in Uri sector, which rightly caused rage and indignation across the country and led to the Indian Army responding by a surgical strike across the border, successfully targeting a number of terrorist bases. Finally, in November, the terrorists struck once again, this time at an artillery unit in Nagrota, killing three soldiers, including one Captain.

2017 has not yet seen the type of high profile attacks of 2016 on military targets, which perhaps points to the success of the Army in keeping the area under effective domination, but civil disobedience in the form of pelting stones at the security forces has taken on a more ominous dimension. It was to save the lives of election officials and their protection party from a thousand or so stone pelters intent on creating mayhem that Maj Gogoi, who was detailed to rescue the beleaguered officials, tied up a stone pelter in front of his jeep and carried out the rescue without mishap in April this year. But then all hell broke loose, with exaggerated concern being expressed for the human rights of the tied up stone pelter, but muted or no criticism being showered on the murderous stone pelters and their attempts to thwart the election process. The Army supported the action of Gogoi, with the Chief giving him his commendation card while stating at the same time that though not the norm for the Army, different situations required different responses. A former Army Commander of Northern Command however openly expressed his displeasure to the act of tying up a stone pelter, taking the high moral ground that such an act had no place in the Army’s ethos. The Government supported the Army Chief, but predictably, the opposition came out all guns blazing, indicting the Centre and the alliance government at the State  for its perceived failure in bringing peace and normalcy to the Valley and infringement of the human rights of the civilian stone pelter.

Soon public opinion was divided on the issue. Editorial pieces in the Indian Express slammed the Army, the Telegraph termed the sequence of incidents as shocking and unbecoming and the Hindustan Times bluntly stated “The General has it wrong”. Karan Thapar, the son of  a former Chief also jumped into the fray, stating that it was ‘not the Indian Army I know’. But other mainstream papers supported the Army, support pouring in overwhelmingly also from the social media. In all the brouhaha, the basic issue however got ignored.

Commanders need to take decisions in real time in situations which are akin to war. Their actions cannot be judged in terms of right or wrong — but on whether their action was done in good faith. How an action will eventually pan out can never be pre-determined and young commanders must always have the backing of their superiors in the chain of command for taking on the spot decisions. Otherwise, our junior leadership will lose confidence in the higher leadership with disastrous consequences for the Army and the nation. More importantly, as said so eloquently by Sadguru, decisions on the battlefield must be left to the commanders who are facing the bullets and cannot be the subject of debate in the media. Every action cannot be put open to public gaze. The Army is the instrument of final resolve and its edge must never be allowed to be eroded. Which is why the Chief supported his officers fighting on the battlefield. On a different note, Karan Thapar may be right when he stated that this is not the Army he grew up in. It most certainly is not. The present Chief upheld the interests of the Army. Sadly, that did not happen when his father was the Chief and we suffered humiliation at the hands of the Chinese in 1962.

(The writer is Director of India Foundation)

The article was published in Salute magazine, April-May 2017 issue. 

China organized it’s first Belt and Road Forum (BRF) Summit in Beijing on 14^th-15^th May 2017 which was attended by 29 Heads of States and as many as 129 countries including delegation from other South Asian countries, except India and Bhutan. It also included leaders and officials from Russia, US, Japan, UK, Germany and France. The initiative which was proposed in 2013, is the clearest expression of President Xi Jinping’s determination to break away with Deng Xiaoping’s dictum to “hide our capabilities and bide our time”. More recently, China made a robust call in ‘defense of globalization’ at Davos, World Economic Forum (WEF) meet 2017, in same line and vigour.

The ambitious project is backed by top Chinese leadership and draws on the strength of China’s USD 10 trillion economy, with spending of nearly 150 billion USD a year, in the 68 countries that have signed up to the initiative. .Considering the unfolding nature of OBOR project, its opportunities and challenges cannot be set out in clearer terms at present. The project aims to link Asia, Africa and Europe, with an eye to establish free-trade area in the Asia-Pacific region and linking it further to Europe through Land and Maritime Silk Road so as to make it global project whose influence exceeds China’s immediate borders. The ‘grand strategy’ of OBOR looks both to the East and West. Although driving on ‘economic exceptionalism’, it has strategic underpinnings to counter ‘Pivot to Asia’ of United States in the Asia Pacific region and causing shifts in global governance model with new identity and vision. To mention, the initial impression for having multi-model link from Asia to Europe was found in India’s desire for an International North-South Transit Corridor (INSTC), in September 2000, bringing together India, Iran and Russia.

Despite China’s covert objectives to redefine ‘global norms and institutions’ through OBOR project, the idea faces some key challenges at both domestic and global fronts.

Firstly, Beijing expects around USD 100 billion of infrastructure investments in Asia from newly created institutions like AIIB and NDB (BRICS Bank), which seems less likely to realize before 2020. Although AIIB aimed to lend more than USD $1.7  billion in 2016, the amount remains less to the intended projections for OBOR. Secondly, the OBOR project also faces push from different stakeholders in China, considering the involvement of three ministries at the official launch of vision document on OBOR which was released in March 2015. With likely ambition of the project related with provincial interest of Western China, it has chances of being ‘over stretched’ to China’s domestic politics. Thirdly, there is growing tendency for ‘risk aversion’ in China’s financial institutions that forms a key challenge against taking lead in investments abroad.

On the global front, concerns remain on questions of ‘debt repayment’ to China being faced by countries like Ukraine, Zimbabwe, Cambodia and Sri-Lanka. According to IMF report 2016, out of Cambodia’s USD 3.9 billion bilateral public debts with China, 80 percent is owned by China. Further there is also concern on the flow of Chinese goods and services in countries along the Land and maritime route of OBOR. Considering the over capacity of Chinese economy, there are doubts if OBOR aims to link production centers in China to the markets in Eurasia.  The project also attaches need to deal with political risk and operational insecurity in Central Asia, South Asia and the Middle East for Chinese investment.

The project also has not found approval from India due to the fact that$46 billion China Pakistan Economic Corridor (CPEC) passes through Pakistan-occupied Kashmir (PoK), with officials declaring that the venture violated Indian sovereignty. The China was unwilling to agree with New Delhi’s requests for consultations on the objectives, nature and financing of the BRI. India has made its position clear that China cannot ignore its concerns on territorial integrity and Chinese will have to adhere to One India policy. As per some reports in media, the likely deployment of 30,000 Chinese ‘security personnel’ to protect the projects along the CPEC, in addition to 15000 troops from Pakistan army make the situation alarming for India. To remember, the standoff on Demchok and Chumar (2014) due to Chinese incursion has drawn concern from India’s highest leadership. India’s future strategy thrust on CPEC must be based on a careful assessment of geopolitics and economics.

Moreover, in the maritime domain China is set to increase number of its marine corps from 20,000 to one lakh at strategic Gwadar port in Pakistan and in military base of Djibouti.. In recent years, China has moved aggressively to increase its power projection capabilities through the rapid modernization of its navy and has increasedits military spending. Given the case of Indian opposition, a ‘meaningful dialogue’ between both is necessary giving due consideration to India’s sovereignty concerns and upholding of ‘One India’ policy. China needs to address the context of rising tension with India in the larger framework of realizing the dream of ‘An Asian Century’.

As the BRF summit concluded major European nations like France, Germany, Estonia, Greece, Portugal and Britain refused to sign the trade document citing concerns on public procurement and environmental standards. The challenge before China is to communicate that its objective and vision for BRI does not represent a threat for regional stability, territorial sovereignty and equitable world order.

(Abhishek Pratap Singh is a Fellow, South Asia Democratic Forum (SADF), Brussels and Doctoral Candidate, Centre for East Asian Studies (Chinese), Jawaharlal Nehru University, New Delhi.)

But India’s staying away from the OBOR mega show will not affect bilateral relations adversely

Belt and Road is China’s most ambitious initiative in history. Popularly known as One Belt One Road (OBOR), this infrastructure project of gigantic proportions attempts to bring under its sway more than 60 countries, from the Scandinavian world to the South Pacific Islands, in its land and maritime versions. The ancient Silk Route is said to be the inspiration for this initiative launched in 2013.

For President Xi Jinping, Belt and Road is a project of personal ambition and honour. His government has not left any stone unturned to make it a reality in a span of less than four years. In the first three years, various projects have seen the signing of contracts worth more than a trillion US dollars.

In a world of competing economic and trade alliances, OBOR has overtaken many others active in the region and beyond. The European Union has some 27 member countries; the Organisation of Petroleum Exporting Countries (OPEC) has 13 countries; the East Asia Summit has 18 countries; even a religious grouping like the Organisation of Islamic Cooperation (OIC) has only 57 countries as members. APEC, TTP, SCO — none comes anywhere near the Belt and Road initiative which boasts of the involvement of more than 60 countries.

By all means, this is singularly the biggest constellation of nations in the 21st century. One prominent nation missing in this mega show is India. Like other countries, India too was invited to the Beijing conclave, with invitations reaching six different ministries for participation in various forums during the summit. The Chinese were hopeful till the last moment about Indian participation. But the government of India decided not to send its representatives to the summit.

Belt and Road is essentially a Chinese project. Two major Chinese financial institutions are supposedly taking responsibility for arranging the necessary finances for participant nations. When completed, the rail, road and maritime routes of this project are expected to boost bilateral and multilateral trade in a big way.

Where the project is a matter of pride for the Chinese leadership, it is also mired in controversy over sovereignty questions and fears about debt servicing obligations. Projects like this one, involving multiple countries, are launched only after proper deliberations among the beneficiary countries and after addressing their concerns.

In the case of Belt and Road, however, the Chinese have opted for a different course. They first announced the project and then initiated the dialogue process with various stakeholder nations. It suited some; for some, like Nepal, it is too big a proposal to be rejected. India is probably the only country that didn’t find it virtuous or beneficial to join this mega alliance.

India’s reservations need to be looked at from the sovereignty perspective. China routinely threatens countries when it finds issues even remotely connected to its own sovereignty question being “violated”. Not just China, no country compromises with its sovereignty for the sake of some trade and commerce interests.

India’s Achilles’ heel is the China Pakistan Economic Corridor, popularly known as CPEC. The CPEC is seen as a part of the Belt and Road initiative although it started much earlier. In fact, when the Chinese entered into an agreement with Pakistan in 1963 to build the Karakoram Highway in the Pakistan occupied Kashmir (PoK) region, India had vociferously objected to it on the very question of sovereignty. The region through which the highway was to pass belonged to India and has been under the illegal occupation of Pakistan. The Chinese side, thus, has full knowledge of India’s concerns about the region.

The CPEC today passes through the same region of PoK called Gilgit Baltistan (GB). India has time and again raised its concerns over Chinese activity in the region, the latest being in 2011 when information came out about the presence of thousands of Chinese troops in the region. Adding insult to injury for India is the very name of the project, CPEC, although the region through which it passes doesn’t belong either to Pakistan or to China. In such a scenario, for India to participate in the summit would have meant acceptance of the CPEC proposition.

There is no reason to assume that India’s decision will affect bilateral relations with China adversely. Both India and China have a mature leadership under Modi and Xi. Both work together on many other multilateral forums like the Shanghai Cooperation Organisation (SCO), Asian Infrastructure and Investment Bank (AIIB), BRICS Forum, etc. In bilateral relations, there are certain irritants that have either been inherited over time or are a result of realpolitik. That includes China’s position on Pakistan and terrorism sponsored by it on Indian soil. India hopes that China appreciates its concerns and takes mutually satisfactory and reassuring measures.

However, being not just a nation but a civilisation in itself, China has time and again betrayed its own style in diplomacy. In his book The Hundred Year Marathon, Michael Pillsbury suggested that Chinese strategists have a definite road map for their country to overtake all other world powers, including America, by the time their Maoist Revolution completes a hundred years in 2049, becoming the sole super power. But President Jinping seems to be a man in a hurry. He wants to achieve it much earlier.

As pointed out by The Economist magazine, China today talks not in terms of the China Model or the Beijing Consensus as it used to. The terminology used these days is “China solution” and “guiding globalisation”. Its initiatives, including OBOR, need to be viewed from the perspective of these newly coined phrases.

(Ram Madhav is National General Secretary, BJP and Director, India Foundation.)

(The article is originally carried in the Indian Express, 17^th May, 2017 at http://indianexpress.com/article/opinion/columns/turning-down-china-one-belt-one-road-4659155/ )