~ By Sanjal Shastri

The past two years have been particularly challenging for Turkey. On one hand, the Turks are facing threat from the ISIS. Sharing a porous border with Syria, it becomes a vulnerable target. The host of attacks on tourists and the attack on Istanbul airport add to the long list of ISIS attacks. On the other hand, Turkey also is also fighting a Kurdish separatist group the PKK. The July 16 Coup attempt adds a new dimension to Turkey’s duel battle.

There are some fundamental differences between Turkey’s ISIS and PKK problems. The PKK is fighting for a separate Kurdish homeland whose proposed territory includes parts of Turkey. Unlike the ISIS, the PKK is a secular organization. It is not involved with the ISIS’ larger goal of creating a caliphate. It is a group that operates across the international border with Syria. All the PKK fighters are Kurdish in ethnicity. The ISIS on the other hand is a part of a much larger global network. Turkey’s role in the international coalition against the ISIS and the open border with Syria make it an ideal target. Another fundamental difference between the PKK and the ISIS is the profile of targets they choose. The PKK mainly target government instillations. None of the PKK’s attacks have targeted civilian areas. The ISIS on the other hand chooses targets that are more crowed and often frequented by tourists. While there are marked differences between the two groups and their activities there is an underlying link between the war against ISIS, the PKK and the recent military coup attempt.

Concerns over law, order and national security due to the ISIS and PKK were factors that contributed to the attempted military coup. This was not the first attempt at a military takeover in the country. In 1960, 1971, 1980 and 1997 four civilian governments were overthrown. Economic hardships, threats to the secular fabric of the state and spiraling security issues were common factors that led to these coups. In 2016 similarly the government of Erdogan, has been accused of heavy handedness and threatening the country’s secular fabric. Increasing attacks by the ISIS and PKK have exposed the government’s failure to deal with national security. Going by the events in Turkish history, there is a link between increased instability and military coups.

The security concerns surrounding the PKK and the ISIS have put Turkey in a precarious position in Syria. On one hand Turkey wants to see the defeat of the ISIS. Their increased presence and activities in Syria make them a serious security threat. On the other hand Turkey is also concerned about the position of Kurdish separatists in Syria. A stronger and more autonomous Kurdish region in Syria would strengthen the Kurdish separatists in Turkey. The challenge for Turkey today is that the Kurdish forces will play an important role in defeating the ISIS. They have been able to put up effective resistance against the IS in the Kurdish regions of Syria. To add to this, the Turkish government has come out openly supporting Basher al-Assad’s removal. While Turkey would be happy to see the defeat of the ISIS and the removal of president Assad, it would not be confortable with the Kurdish regions gaining greater autonomy. Given the current situation on the ground, defeating the ISIS would require some sort of a partnership with the Kurdish groups and President Assad. The USA has already softened its stand on Assad, taking note of his importance in the battle against ISIS. This leaves Turkey with a very difficult choice to make.

The attempted military coup complicates Turkey’s fight against the ISIS and the PKK. On one hand Turkey is seen as a key NATO allay in the fight against ISIS. The coup and the international response have strained ties between Turkey and the NATO allies. Within a day of the coup President Erdogan was quick to point a finger at Fethullah Gülen, a cleric who is in exile in USA. The claim has not gone down well with the American establishment. The Turkish government also closed down the airspace for American jets. This has put American operations against ISIS positions in Syria on hold. The increased tensions between Turkey and other NATO members will impact the fight against the ISIS.

Domestically, the failed coup is bound to create tensions between the military and the government. The coup comes at a time when the government is trying to up military operations against the Kurdish separatists in Turkey. On one hand there was growing concern within the military over the rising costs of Erdogan’s hardline approach. Just two days before the coup, the government signed a bill, which gave the military immunity against any judicial probe into the military’s activity domestically. Now after the coup it is difficult to see the government going ahead and implementing this bill. The success of Turkey’s fight against the Kurdish separatists depends on how effective a role the military would play. With strained ties between the government and the military, there are concerns over the status of military operations against the Kurdish groups.

The failed military coup has created a ‘Turkish Triangle’. The strained civil military relations add a new dimension to Turkey’s fight against the ISIS and PKK. A simultaneous fight against Kurdish groups, the ISIS and Basher al-Assad is not a viable option for the Turkish government. The key role being played by Kurdish groups and President Assad in the fight against ISIS makes them an important factor in the battle. Turkey today faces a difficult choice. The attempted military coup has added a new dimension to Turkey’s problems. The strained relations between Turkey and her NATO allies have impacted the fight against the ISIS. It has already led to a halt in US’ air operations against ISIS. Domestically the strained civil-military ties pose a challenge to the military operations against Kurdish separatists. Now, lacking the confidence of the military, there are question marks over President Erdogan’s battle against Kurdish separatists. Over the coming days, two factors are will determine the future course of events. Firstly, international response to the coup and its aftermath will determine how ties between Turkey and her NATO allies shape up. The questions over the extradition of FethullahGülen will decide how Turkish equations with USA change. Strained ties between Turkey and other NATO members would jeopardize the international fight against ISIS. Secondly, the battle against Kurdish separatists will hinge on President Erdogan’s ability to win back the confidence of the military. With the military’s support needed to continue the battle against Kurdish groups, one will need to keep a close eye on how the civil-military relations pan out over the coming days.

Sanjal Shastri is an Academic Associate with the Indian Institute of Management, Ahmedabad. The views expressed are his own and do not represent the views of the organization he is associated with.

~ By Siddharth Singh

The Indian Ocean Region is a very diverse region with great potential& prospect and it holds substantialstrategic importance. The region also holds significance because of the global and intra-regional trade which passes through it and for the value of its aquatic resources. The security of the Indian Ocean region is important for all those nations which faces its waters and also for all those nations which depend on the global maritime trading system by using Indian Ocean as a passage.

The Indian Ocean represents an increasingly significant avenue for global trade. Rising prosperity in Asia, growing dependence and therefore linkage between producers and consumers on natural resourcesacross the Asia and Africa andalso the existence of globalized supply chains and distribution networks are binding the region ever more closely using the mediumof the Indian Ocean. At the same time, emerging problems likepiracy, terrorism and global environmental pressures on the coastal and marine resources pose significant governance challenges for maritime policy-makers around the Indian Ocean Region (IOR).

Strategically thecrucial choke points across the Indian Oceanplay both roles:  as a facilitator by reducing travel distance and sometimes by putting constraint; if these bottlenecks come under wrong hands then it could cripple dependent economies. The seven key chokepoints in the IOR are the Lombok Strait, the Sunda Strait, the Malacca Straits, the Strait of Hormuz, the Suez Canal, Mozambique Channel, and the Bab el Mandeb.

Although sharing the same ocean, the Indian Ocean Region displaysincrediblemultiplicityas well as divergences in the littoral countries’ politics, culture values, economic models, and environmental concerns.Despite the noteworthy geographical span and large and growing population of the Indian Ocean region, it has long suffered comparativenegligence in the geopolitics of world affairs. During most of the 20th century, the region’s role and prominencewere generallyeclipsed and considered subsidiary to the super power rivalries playing out happeningsomewhere else in the globe. While the Indian Ocean Regionhas now risen to the forefront and features more prominently in world geopoliticsincluding the strategic interests and commercial controls of extra-regional powers such as the US, EU nations, Japan, and China, the littoral states of Indian Ocean are also increasingly influencing regional and global geopolitics.

The Indian Ocean Security Outlook

The security outlook for the Indian Ocean region is increasingly important for global stability and prosperity because it encompasses a vital and expanding intersection of geostrategic rivalries, economic ambitions, resource competition, environmental management, development challenges and demographic change. Its geostrategic importance is accentuated by the fact that it is the most intensively used and strategically important trade highway in the world. A broad architecture of security cooperation among Indian Ocean and non-regional states needs to be responsive to the growing complexities in the region along with the rising geostrategic importance of IOR. In doing so, it needs to accommodate legacies from the region’s past and respond creatively to its contemporary and future challenges.

The complex realities of the security outlook in the Indian Ocean have fundamentally important implications for its security architecture. The region is simply too vast in its geography, too diverse in the economic needs and priorities of its constituent states, and too disparate in its strategic outlooks to accommodate a ‘one-size-fits-all’ approach to regional security architecture. The Indian Ocean region’s security outlook demands responses that are practical, adaptive and multi-layered. It needs to reflect the realities of major power cooperation and competition, alliance frameworks, sub-regional groupings and more plurilateral arrangements. Strategic competition, particularly among major powers such as the United States, China and India is inevitable, but such competition needs to be balanced by strategic cooperation to minimise misunderstanding and misinformation, and to strengthen habits of cooperation on specific issues.

In addition to major power relations, aspects of Indian Ocean security are also critically affected by alliance and strategic partnerships involving regional and non-regional states. Some of those partnerships are longstanding and established; others are emerging and evolving. Some are bilateral; others are more broadly based. But all such partnerships constitute only a dimension of regional security architecture, and not the sum total of it.

On a range of issues – such as economic development, piracy, terrorism and illicit trafficking – more plurilateral mechanisms which involves major as well as minor powers, can offer the most productive way forward. Such coalitions of interest can embrace strategic partners as well as competitors; and they can be formal or informal.Sub-regional structures in the Indian Ocean region also play niche roles in support of regional development and security.

The key question for the future of the Indian Ocean’s security architecture is how it’s existing and emerging gaps – at major power level and at multilateral level – are going to be filled in order to accommodate the evolving challenges and opportunities in the region. The more productive way forward for the Indian Ocean’s security architecture is a genuinely multi-layered one that addresses State security and human security challenges, and that is designed to promote strategic cooperation as well as manage the realities of strategic competition.

A productive security architecture in the Indian Ocean is always going to have layers of bilateral and plurilateral interaction characterising it. The challenge is to make that mosaic as complementary, practical and intersecting as possible in order to advance the objectives of strategic stability and economic development that regional states share.

Analysing the Role of Indian Ocean Rim Association (IORA)& Indian Ocean Naval Symposium (IONS):

There are some plurilateral initiatives that focus in a more genuinely regional way on Indian Ocean economic and security issues. They include the Indian Ocean Rim Association (IORA) and the Indian Ocean Naval Symposium (IONS).

The Indian Ocean Rim – Association for Regional Cooperation (IOR-ARC) was formally launched at its first ministerial meeting in Mauritius in March 1997; and was renamed IORA at the council of ministers meeting in Perth in November 2013. IORA currently has 21 member States, seven dialogue partners and two observers. Its objectives are to promote sustainable growth and balanced development in the region and of its member states and to create common ground for regional economic cooperation. It strives towards building and expanding understanding and mutually beneficial cooperation among the countries in the Indian Ocean region.

IORA contributes to trade and investment facilitation among 21 Indian Ocean littoral countries, with important input from seven dialogue partners – China, France, Egypt, Japan, the United Kingdom, Germany and the United States. While IONS, with Indian Ocean littoral states as members and with engagement by extra-regional states as well, effectively promotes maritime cooperation and productive information flows among relevant navies particularly in relation to doctrines, procedures, capabilities, organisational and logistical systems, maritime safety and operational processes. These two Indian Ocean multilateral processes are highly desirable but are structured to achieve quite specific purposes. Neither constitutes a region-wide deliberative forum covering the broad range of Indian Ocean security and development issues.

IORA priorities are more practically focused on maritime safety, freedom of the high seas, disaster response and risk management, economic growth through regional trade facilitation and customs simplification, sustainable use of Indian Ocean resources, more effective fisheries arrangements and oceanic research as well as enhanced people-to-people links through tourism, education and business. IORA objectives still remain broad and aspirational. Over time, they would only achieve their potential if they are calibrated more specifically to benchmarks, timelines and practically focused work. The resurgence of the Indian Ocean Rim Association(IORA) is critical, given the region’s economic dynamism, huge marketsand rich natural resources.The growing geo-strategic and geo-economic salience of the IORA makes itevidently clear that there should be greater regional collaboration among thestakeholders to effectively address and confront non-traditional securitythreats such as maritime terrorism and piracy; trans-national crimes; andenvironmental & natural disasters.

IORA is the most suitable multilateral vehicle for the Indian Ocean region. If IORA has to achieve  more tangible outcomes in coming future then it would be best for it to keep its focus restricted to just the four “super priority” areasnamely maritime safety and security; trade and investment facilitation; fisheries management; and, disaster risk management.

The Indian Navy initiated IONS in 2008 to promote cooperation between navies, coastguards and marine police in the Indian Ocean region. It was inspired by and modelled on the Western Pacific Naval Symposium (WPNS) created by the Royal Australian Navy in 1988, to provide a regional mechanism for navies and maritime forces to meet periodically to discuss and interact on matters of common interest and to pursue cooperative engagement and initiatives. The key objectivesare to bring together regional navies and maritime forces to synergise their collective resources, and to maintain good order at sea in the Indian Ocean.

IONS are a voluntary initiative with membership limited to the Indian Ocean littoral states. Following the progress of IONS since its inception shows that the ‘Chairmanship’ matters. While there are a multitude of common interests, particularly in the maritime domain, not involving extra-regional countries that have important interests and stakes in the region may prove to be a major stumbling block.

In relation to IONS, its future evolution as a forum for enhancing professional naval exchanges, capacity building and interoperability will be critical for the effectiveness of the region’s security architecture. IONS should include freedom of navigation (including freedom from piracy), facilitation of maritime trade, safety of life at sea, environmental protection, information sharing, and humanitarian assistance and disaster relief arrangements.IONS are a vital facilitator of navy-to-navy understanding and professional cooperation. But neither it encompasses the political dimensions of regional security cooperation nor or the wider dimensions of national security as perceived by regional states.

The security architecture of the Indian Ocean region would be further strengthened if arrangements such as IORA and IONS were complemented by other multilateralinitiatives. This will be important if the Indian Ocean region is to develop a practical, adaptable and multi-layered security architecture.

India’s Geostrategic interests in the Indian Ocean

K.M. Panikkar, pioneer Indian geo-politician, argued more than 60 years ago that ‘Since India’s future was dependent on the Indian Ocean, then the Indian Ocean must therefore remain truly Indian’. Even earlier, in the 16th century, Portuguese Governor of Goa Alfonso Albuquerque was of the opinion that ‘Control of key choke points extending from the Horn of Africa to the Cape of Good Hope and the Malacca Strait was essential to prevent an inimical power from making an entry in the Indian Ocean’.

Yet post-independence, and until the end of the Cold War, India reduced its influence to within the sub-continent, thus limiting its influence to South Asia only. However, after 1991, India took a different approach and embraced a new open-minded policyalong with economic liberalisation, privatisation and globalisation. This policy included enlarging India’s political, diplomatic and economic spheres, and forging defence contacts in the Indian Ocean region and beyond. For the first time, India’s ‘Look East’ policy focused on Southeast Asiato shore up India’s ability to compete geopolitically with other powers like China.

The fact is that India is a maritime nation, not just by historical tradition but also because it’s geophysical configuration and geo-political circumstances makes it as dependent on the seas. India’s national security must treat the maritime space as an important dimension of its rising power status and a key component of its economic growth and energy security, although the strategic concepts of its maritime role have yet to be fully developed. For India, achieving closer diplomatic and economic relations with the Indian Ocean littoral states and other major powers has assumed added importance because a number of security analysts have asserted that energy security needs to be India’s primary strategic concern for the next 25 years, and that India must take urgent steps to address these needs in the Indian Ocean region. India also needs to pursue more aggressively the deeper economic ties with other Indian Ocean littoral states so as to develop leverages that would make them less inclined to facilitate Chinese access. More widely, if India develops cooperative security relationships with the larger littoral states of Southern Africa, Indonesia and Australia, it would achieve another of its aims of furthering its strategic reach. More targeted response of India is required which should be focused on enhancement of ‘hard power’ capabilities and interaction among strategic partners and like-minded countries.

India and China are both dependent on Sea Lines of Communications (SLOCs) through the Indian Ocean for secure energy routes and the free movement of trade to ensure their continued economic development. The potential geostrategic encirclement of India, through a combination of ports in the Indian Ocean (‘String of Pearls’) and China’s de facto alliance with Pakistan, creates a security dilemma for India. To secure itself against this possibility, India must ensure that the choke points in the Indian Ocean region remain open and free, ensuring the conditions for its continued economic growth.

India’s geostrategic interests has been very well articulated by Prime Minister Shri Narendra Modi himself. He said, “Indian Ocean, occupy a vital place in India’s national security and economic prosperity. The Indian Ocean Region is one of my foremost policy priorities. Our approach is evident in our vision of “SAGAR”, which means “Ocean” and stands for – Security and Growth for All in the Region. We would continue to actively pursue and promote our geo-political, strategic and economic interests on the seas, in particular the Indian Ocean”.

Conclusion

The emergent scenario of naval power in the Indian Ocean region is diversified and complex, with a variety of challenges and threats to the region. Evolving Maritime Multilateralism with extra-regional powers will be a very important dimension of India’s naval strategy and diplomacy in the Indian Ocean Region. India, being a dominant power in IOR, should be able toshape and influence the future discourse on the Indo-Pacific maritimeorder and for that India needs to develop a range of measures to secure its own interest in IOR which includes enhancing its military capability. In IOR, India has also engaged in capacity building in the form of gifting naval vessels and naval aircraft, enabling smaller Indian Ocean island states (like Maldives, Mauritius and Seychelles) to boost their maritime and air surveillance capabilities.Continued economic development and internal stability are also prerequisites for the successful execution of India’s strategy to counter China’s expanding influence in the Indian Ocean region. Additionally, India must further pursue its ‘Act East’ policy to achieve multilateral cohesion and leverage with Southeast Asian nations and other key stakeholders in the broader Indo-Pacific region. India must also pragmatically develop a closer relationship with the US, which has a common interest in ensuring that the SLOCs remain open and free.

The maritime security challenges must be addressed on a multifaceted basis. Some challenges that are primarily located around the Indian coast require a unilateral approach like the issue of policing and law enforcement functions. Other challenges such as military exercises which involvethe US Navy and other country’s naviesrequire a bilateral approach. A multilateral approach is desirable toward solving transnational criminality and upholding maritime order in the region.While regional cooperation between navies and coast guards must take centre stage in the evolving order, non-military maritime cooperation is equally important. Navies of littoral countries as well as navies of extra regional power must reorient themselves from the existing mind-set of ‘preparing for war in order to ensure peace’ to that of ‘if you want peace and stability,be prepared to cooperate.’

The security of India depends on the security of the Ocean and the countries that are littoral of it. India has to look to create strong relations with like-minded countries to serve India’s own national interest. India has made a new start with PM Modi’s visits to many of the Indian Ocean littoral countries.India has the potential to take the leadership role in the Indian Ocean Region and to transform it byfocusing on Security and Growth for All in the Region (SAGAR), as envisioned by Prime Minister Modi.

References:

1. http://www.iora.net/charter.aspx
2. 13th Meeting of the Council of Ministers of the Indian Ocean Rim Association, Perth Communiqué, 1 November 2013

http://www.iora.net/media/139388/perth_communiqu__2013.pdf

3. IORA Maritime Cooperation Declaration,Padang, 23 October 2015

http://www.iora.net/media/160000/iora_maritime_cooperation_declaration_2015.pdf

4. http://ions.gov.in/
5. IONS Charter Version – Mar 2014

http://ions.gov.in/sites/default/files/IONS_Charter_Version_28_March_2014_0.pdf

6. PV Rao, Indian Ocean maritime security cooperation: the employment of navies and other maritime forces, Proceedings, Indian Ocean Maritime Security Symposium,47–48
7. Ranjit B Rai, The Indian experience of strategy and the Indian perspective on maritime strategy in the 21st century in the IOR, paper delivered at the Conference on Strategic Theory, Stellenbosch, 11–12 June 2009, 6–7.
8. Rajeev Sawhney, Indian Ocean maritime security key issues and perspectives, Proceedings, Indian Ocean Maritime Security Symposium, 39–40
9. Geopolitics and Maritime Security in the Indian Ocean: What Role for the European Union? A joint policy brief of The Hague Institute for Global Justice and the Clingendael Institute.
10. Ensuring Secure Seas: Indian MARITIME Security Strategy 2015
11. Book: Growth of Naval Power in the Indian Ocean: Dynamics and Transformation, Author: W. Lawrence S. Prabhakar

• Book: Maritime Perspectives 2016, Edited by Vijay Sakhuja and Gurpreet S Khurana
• The Asia-Pacific Maritime Security Strategy: Achieving U.S. National Security Objectives in a Changing Environment

Siddharth Singh is pursuing his M.Phil. from Centre for Indo-Pacific Studies, Jawaharlal Nehru University, New Delhi. His Email ID is sidd4india@gmail.com Twitter ID: @Sid4india

~ By Sanjaya Baru

In his rare classic India and the Indian Ocean: An Essay on the Influence of Sea Power on Indian History, historian K.M. Pannikar reminded us, “Milleniums before Columbus sailed the Atlantic and Magellan crossed the Pacific, the Indian Ocean had become an active thoroughfare of commercial and cultural traffic.” ^[1] Thanks in part to its geography, given the annual and seasonal flow of winds, the sociology of the enterprising traders of Gujarat and the Coromandel coast, and the enterprise of Arab traders the Indian Ocean was one of the early theatres of maritime trade and cultural intercourse.

With the rise of Asian economies, their growing dependence on Asian energy, with the emergence of Africa as the new continent of economic growth and the eastward turn of both Africa and West Asia, as they sell more of their resources to Asia rather than the West, the centre of gravity of global commerce has shifted from the Atlantic to what is now described as the ‘Indo-Pacific’. Consequently, the Indian Ocean has again become the crossroads of global commerce.

Placed as it is on the roof of the ocean, India has lent its name to the ocean by its historical role in shaping the flow of commerce and culture. India’s civilizational footprint is all too visible even now across and around the Indian Ocean. Little wonder then that that European cartographers gave names such as ‘Atlantic’ and ‘Pacific’ to the two other oceans but chose to name the waters touching the landmass of Africa, on the east, the Indian sub-continent on the north and Indo-China and Australasia, in the west, as the ‘Indian Ocean’.

History

In his masterly study of civilisation and capitalism through the 15^th to the 18^th centuries historian Fernand Braudel draws attention to the dominant presence of India in the Indian Ocean region. ^[2] Braudel refers to the region spanning the Arabian Sea, the Bay of Bengal, the Straits of Malacca and the South China Sea – what is now referred to as the Indo-Pacific- as the “greatest of all the world economies” of the pre-industrial, pre-capitalist era. ^[3]

The Far East, says Braudel, comprised of “three gigantic world-economies”: “Islam, overlooking the Indian Ocean from the Red Sea and the Persian Gulf, and controlling the endless chain of deserts stretching across Asia from Arabia to China; India, whose influence extended throughout the Indian Ocean, both east and west of Cape Comorin; and China, at once a great territorial power – striking deep into the heart of Asia – and a maritime force, controlling the seas and countries bordering the Pacific. And so it had been for many hundreds of years.”^[4]

“The relationship between these huge areas,” says Braudel, “was the result of a series of pendulum movements of greater or lesser strength, either side of the centrally positioned Indian subcontinent. The swing might benefit first the East and then the West, redistributing functions, power and political or economic advance. Through all these vicissitudes however, India maintained her central position: her merchants in Gujarat and on the Malabar and Coromandel coasts prevailed for centuries against their many competitors – the Arab traders of the Red Sea, the Persian merchants of the Gulf, or the Chinese merchants familiar with the Indonesian seas to which their junks were now regular visitors.”^[5]

Pannikar notes, from ancient Indian texts as well as records of Asian travellers, including Chinese travellers, of centuries of Indian dominance of the Indian Ocean. From fifth century B.C. to sixth century A.D., says Pannikar, “this naval supremacy rested with the continental powers in India.” [6]  The Sri Vijaya Empire, based in Sumatra, dominated the eastern seaboard of the Indian Ocean well into the 10^th century. “The period of Hindu supremacy in the Ocean was one of complete freedom of trade and navigation.” Records Pannikar. [7]

With the decline of Hindu kingdoms in India and South-east Asia, Arab rulers and merchants gained dominance over the Indian Ocean. They were then replaced by the Europeans. Through the era of colonialism the Indian Ocean became a theatre of geo-economic and geopolitical contestation between European powers. It is thanks to their dominance over the Indian Ocean that the British built and sustained a global empire. [8]

Economics

One consequence of the harmful impact of British colonialism on India’s economic development was to turn India inward, and shun trade with the outside world. In 1950, India’s share of world merchandise trade was 2.0 per cent, compared to 1.3 per cent for China. By 1990, India’s share was down to 0.5 per cent, while China had inched up to 1.8 per cent. By 2010, the relevant numbers were 1.4 and 10.4, respectively!

The neglect of foreign trade, thanks to the export-pessimism of Jawaharlal Nehru’s economic planners and policy makers, contributed to this economic disengagement with the world as well as to a strategic neglect of maritime trade and security. After India’s reintegration with the world economy in 1991, the share of trade in India’s national income began rising. External trade in goods and services accounted for 16.2 per cent of India’s national income in 1950, and remained around this level till 1990. By 2010 the number was up at over 50.0 per cent, making India more trade-dependent than many OECD economies, including the United States.

Table 1: India’s External Trade Openness (Percentage Shares of GDP)

	1950	1980	1990	2007	2013
Exports (Goods)	6.5	4.9	5.8	14.2	17.1
Exports (Services)	1.9	1.3	1.4	7.7	8.1
Exports (Goods & Services)	8.4	6.2	7.2	21.9	25.2
Imports (Goods)	6.5	9.5	8.8	22.0	24.8
Imports (Services)	1.3	0.2	1.1	4.5	4.2
Imports (Goods & Services)	7.8	9.7	9.9	26.5	29.0
Trade in Goods & Services	16.2	15.9	17.0	48.4	54.2

          Source: Vijay Joshi, India’s Long Road: The Search for Prosperity, Penguin Allen Lane, India, 2016.

                        Table 12.1. Page 263

Table 2: India: Direction of Merchandise Exports (Percentage Share)

Region	2003-04	2013-14
Americas	24.6	17.8
Europe	25.7	19.6
Asia	42.2	50.1
Africa	5.9	9.7
Rest of the World	0.8	2.8

              Source: Ministry of Commerce, Government of India

This shift in India’s dependence on external trade was accompanied by an equally significant shift in the direction of trade. While Western Europe and North America were India’s dominant trade partners in the 1950s and through to the 1990s, there was a directional shift after 1990. Partly as a consequence of the rise of East and South-east Asian economies in the intervening period and partly as a consequence of India’s own ‘Look East’ policy, the share of East Asian and South-east Asian economies in India’s merchandise exports increased sharply. This was matched by an equally impressive rise in the share of West Asian economies – the member countries of the Gulf Cooperation Council (GCC) in particular – in India’s import and export trade. To add to this, India’s trade with Africa, especially Southern African and East African economies as also her trade with Australian and New Zealand grew at a faster pace than her trade with the trans-Atlantic economies.

All of this has meant that more than sixty per cent of India’s external trade is now with countries that are directly linked to the Indian Ocean and the Indo-Pacific region. But, of course, even the trade with Europe and the Americas traverses the Indian Ocean.

The increase in the share of trade in national income is a reflection of the growing importance of export-oriented industries and services. Most of them, both goods and services, are increasingly located in peninsular India – including the coastal states of Gujarat, Maharashtra, Karnataka, Kerala, Tamil Nadu and Andhra Pradesh. The emergence of, for example, a competitive automobile and related industries in Tamil Nadu and Maharashtra has made port development a priority in these states. The growth of a petroleum refining and petro-products industry in Gujarat has had a similar impact on the development of Gujarat’s port infrastructure.

The New Maritime Economy

The most important reason for India’s external trade dependence almost entirely on the Indian Ocean is the fact that its land links with Eurasia have been disrupted by the access denial imposed by Pakistan.  Through history, a large part of India’s trade with the Eurasian landmass – right up to Europe – was by land and passed through what are now Pakistan and Afghanistan. Historian Scott C Levi has recorded the role played by “Hindu traders”, for centuries in financing and facilitating the trade between India and Central Asia and beyond, all the way to Europe. [9]

If land-based trade to India’s west has been disrupted by Pakistan, that to India’s east has been limited by inadequate infrastructure. India is now seeking to bridge this gap by investing in road and rail connectivity with Bangladesh and Myanmar, and securing land access to the markets of South-East Asia. Indeed, even to the west, the new India-Iran port, rail and road development projects are intended to offer India land connectivity to Eurasia through Iran. Inter-regional connectivity with her wider neighbourhood has become the cornerstone of regional cooperation for India.

Indian Foreign Secretary S Jaishankar put it pithily in his address to the Raisina Dialogue in New Delhi in March 2016 when he said, “The Indian Ocean, once regarded as a maritime frontier, is today increasingly seen as a connectivity pathway……….These waters must not only get better connected but remain free from non-traditional and traditional threats that could impede the seamless movement of goods, people and ideas.” [10]

Even as the land-based connectivity infrastructure gets established, the waters around the Indian peninsula will remain her main link to the markets of the world. Pannikar was prescient to observe in 1945: “The commercial interests of India … her vast markets and her great natural resources, can be reached through the Indian Ocean and her recent industrial growth, with consequent expansion of trade, emphasises the necessity of safe sea communications.” ^[11]

Over a decade ago India launched the ‘Sagaramala’ programme of improved ports and port connectivity to ease the flow of goods and develop globally competitive infrastructure in Indian ports. New port development in almost all coastal states has increased the importance of the maritime economy for the development of these states.

To quote Foreign Secretary Jaishankar again, “Our maritime agenda envisages port development that would harness the capabilities of the private sector. It is also important that the nodes of outward connectivity are linked better to the hinterland. The integrated development of ports and the hinterland, the objective of our SAGARMALA project, would surely have profound consequences over time.” [12]

More recently, India has resumed ship building, after several decades of neglect. In the 1940s India had a globally competitive shipbuilding industry that thrived due to war demand. However, thanks to its inward-oriented industrialisation strategy India neglected its shipbuilding industry and late-comers like South Korea not only overtook India but emerged as globally competitive shipbuilding economies. Today India is teaming up with South Korea to rejuvenate its shipbuilding capabilities. [13]

Energy

Energy security is an important aspect of India’s maritime economy and strategy and a key determinant of its Indian Ocean strategy. Of all the trade links that India has with the Indian Ocean region none is more important than the trade in oil and gas. India’s economic rise has increased its dependence on imported energy. Not only is the import of crude oil increasingly important for the Indian economy, but also the export of refined petroleum and petroleum products. While India seeks to become more self-reliant in energy, by developing nuclear and renewable energy, it will continue to be a major consumer of imported hydrocarbons and exporter of petroleum products.

Here again, given Pakistan’s negative role in promoting land-based pipelines that can give India access to West and Central Asian gas and oil, India has no option but to depend on the Indian Ocean to access its energy needs. Apart from West and Central Asia, India is also sourcing and investing in oil and gas exploration in South-east Asia and East Africa.  All this imparts a strategic dimension to India’s trade dependence on the Indian Ocean.

The importance of the Indian Ocean to global energy security cannot be over-emphasised. More than two-thirds of all oil that is traded is carried over sea by oil tankers, while less than a third is carried through pipelines. Most of the oil carried by ships passes through the Indian Ocean. The Straits of Hormuz and Malacca are key chokepoints. These lie on either side of India.

People

It is not merely merchandise trade and investment flows that make the Indian Ocean region important for India. Over centuries people of Indian origin have set sail over the ocean to inhabit lands all around it. Some of these settlements, like Mauritius, have great strategic and economic value for India. Others, like the Gulf states, offer employment opportunities for millions of Indians and help India earn billions of dollars every year. Over six million persons of Indian origin living in the Gulf region repatriate home annually over US$ 50 billion.

While India has developed the capability to airlift hundreds of thousands of people from the West Asia and North Africa region during times of conflict and distress, it has also demonstrated capability to quickly bring them out by sea and offer sea-based security to these communities. Indian ships were able to rescue thousands stranded in Libya during the conflict there. During the tsunami in December 2004 Indian ships were able to provide rescue and relief to stranded people around the Indian Ocean region.

People of Indian origin living in South-east Asia and Africa also extend India’s cultural footprint. Over the past two decades India has actively pursued a policy of reaching out to the Indian diaspora. The dominant Indian communities in the Indian Ocean region are of Gujarati, Tamil, Telugu, Bihari and Bengali origin. Many continue to retain their original cultural identity even when they have fully integrated into local communities and may well be immigrants going back five generations and more.

Maritime Security

Thanks to India’s pre-occupation with land-based threats from Pakistan and China and the uncertain nature of her land borders in the immediate post-Independence period, Indian national defence strategy was focused on military and air power to the relative neglect of naval capability. This neglect of maritime security was compounded by India’s choice of an inward-oriented economic development strategy, with a consequent decline in India’s share of world trade. Pannikar warning of 1945, that “An exclusively land policy of defence for India will in future be nothing short of blindness…….. The freedom of India will hardly be worth a day’s purchase, if Indian interests in the Indian Ocean are not to be defended from India,” went unheeded for a long time. ^[14]

During the Cold War Indian strategic policy remained focused primarily on ensuring that the Indian Ocean did not become one more theatre of superpower rivalry. This was the main objective of India’s stated goal of ensuring that the Indian Ocean would be “a zone of peace.” However, with the end of the Cold War and with the rise of China, maritime security in the Indian Ocean has acquired a new relevance for India. [15] The threats of terrorism, sea piracy, failed states, religious radicalism and civil wars afflict several countries around the Indian Ocean region.

India’s security and economic stability has been directly targeted from the ocean. Apart from the high profile incident of sea-based terrorist attack on Mumbai’s financial district in November 2008, there have been incidents of piracy and illegal movement of lethal equipment with serious implications for India’s national security and the safety of the Indian Ocean sea lanes of communications.

To add to these new security concerns, the increasing global and regional integration of the Indian economy and the increase in the share of seaborne foreign trade in India’s national income also brought issues relating to maritime security into national security focus. Consequently, India has had to increase its budget for the navy and has set up a new naval command in the Andaman & Nicobar Islands.

Indian Ocean and the Global Economy

The geo-economic importance of the Indian Ocean derives from the growing importance of Asia in the world economy. More than 60 per cent of all oil and petroleum product exports are shipped through the Indian Ocean waters and over 70 per cent of global container traffic is carried through the waters of this ocean. The share of trans-Atlantic trade in world trade has been declining, that of the trans-Pacific remains static while the share of Indian Ocean trade is growing. [16]

Hence, ensuring freedom of access and movement into and out of the Indian Ocean, through its various entry and exit points – what are called ‘chokepoints’ – is essential not just for the stability and security of India and Asia, but also for the stability and sustainability of global trade and economic growth.

To be sure, the Indian Ocean is not just the crossroads of the world and the centre of gravity of the global economy but it is also a rich depository of marine resources, including minerals, oil and gas, fisheries and marine life. As the region’s biggest country, placed strategically at a vantage point over-looking the ocean, India has a special role in ensuring the security and stability of the Indian Ocean region.

India’s participation in organisations such as the Indian Ocean Rim Association (IORA) and a range of maritime exercises and initiatives, is pursued within a cooperative framework. Pannikar defined India’s long-term policy towards the Indian Ocean thus: “It cannot be less than the development of a balanced regional navy capable of (a) operating as a task force within its own area; and (b) cooperating with the high seas fleets of friendly nations in the strategy of a global naval warfare.” [17]

Pannikar drew attention to the strategic importance of the straits of Hormuz and Malacca as well as the Gulf of Aden in ensuring India’s defences, since these are the entry points into the Arabian Sea and the Bay of Bengal. India has taken a step further in ensuring its strategic presence deeper south, with a base in Mauritius, and has entered into a range of defence relationships with several Indian Ocean rim nations.

These relationships are important both from a defence perspective and a trade and economic perspective. However, the Indian Ocean is more than a thoroughfare or a depository of natural resources. It is today home to a large number of highly successful economies. Hence, India has sought to build mutually beneficial bilateral strategic economic relations with a large number of them including Singapore, Australia, Iran, Oman, United Arab Emirates, Mozambique, Mauritius and South Africa. Pannikar viewed Singapore and Socotra merely as naval bases protecting India. That was in 1945.

Today, Singapore and Dubai have become major financial centres with a rising stake in India’s economic prosperity. Mauritius too is an important economic partner for India. The government of Prime Minister Narendra Modi has taken several important steps in building a long-term strategic partnership with Mauritius, Singapore and the UAE. There are no better examples of the synergy between an economic and a defence partnership than these relationships. By linking together cooperation in the fields of defence, security, economy and finance the Joint Statement on a Strategic Partnership between India and Singapore issued in Singapore by Prime Ministers Narendra Modi and Lee Hsien Loong in November 2015 both countries have underscored the relevance of this synergy to their bilateral relationship. Both countries are bound to play an important role in the security and prosperity of the Indian Ocean region.

Map 1: Trade Routes and Major Ports in Indian Ocean Region

Source: Brahma Chellaney, World’s Geopolitical Centre of Gravity Shifts  to Indian Ocean. Accessed at: https://chellaney.net/2015/07/01/worlds-geopolitical-center-of-gravity-shifts-to-indian-ocean/

Notes

[1] K.M. Pannikar, India and the Indian Ocean: An Essay on the Influence of Sea Power on Indian History, George Allen & Unwin, London, 1945. (2^nd Edition, 1951, Page 23). I found a copy of the 1951 edition in the library of the National University of Singapore. The book bore the stamp “University of Malaya Library. September 1960”. I read this book during my stint at the Lee Kuan Yew School of Public Policy in 2008-09. The book is out of print. I have urged the National Maritime Foundation in India to reprint this classic.

Other important studies of Indian maritime activity in the Indian Ocean region include: Ashin Das Gupta, The World of the Indian Ocean Merchant, 1500-1800, New Delhi: Oxford University Press, 2001; and Holden Furber, Sinnapah Arasaratnam & Kenneth McPherson, Maritime India, Oxford University Press, New Delhi, 2004. On the idea of the ‘underlying unity’ of the Indian Ocean region see K.N. Chaudhuri, Trade and Civilisation in the Indian Ocean: An Economic History from the Rise of Islam to 1750, Cambridge University Press, UK. 1985.

[2] Fernand Braudel, Civilization and Capitalism, 15^th-18^th Century: Volume II. The Wheels of Commerce, London: Fontana Press, 1985.

[3] Fernand Braudel, Civilization and Capitalism, 15^th-18^th Century: Volume III. The Perspective of the World, Chapter 5, London: Fontana Press, 1984, pp. 484.

[4] Ibid., pp. 484-535                                                        .

[5] Ibid., pp. 484.

[6] Pannikar (1951), Page 32

[7] Pannikar (1951), Page 35

[8] For a delightful re-telling of the history of the Indian Ocean civilisations see Sanjeev Sanyal, The Ocean of Churn, How the Indian Ocean Shaped Human History, Penguin Viking, Delhi, 2016.

[9] Scott C Levi, Caravans: Indian Merchants on the Silk Road, Allen Lane by Penguin, India, 2015.

[10] S Jaishankar, Keynote Address to Raisina Dialogue, Observer Research Foundation, New Delhi, 2 March 2016. Accessed on 20 July 2016 at:

http://mea.gov.in/Speeches-Statements.htm?dtl/26433/Speech_by_Foreign_Secretary_at_Raisina_Dialogue_in_New_Delhi_March_2_2015

[11] Pannikar (1951), Page 91

[12] Jaishankar (2016)

[13] Wendy laursen, “India and Korea Boost Shipbuilding Ties”, The Maritime Executive, 19 May 2015. http://www.maritime-executive.com/article/india-and-korea-boost-shipbuilding-ties

[14] Pannikar (1951), Page 90

[15] There is now considerable literature on the strategic importance of the Indian Ocean in the context of China’s rise and India’s economic modernization. See for example: Robert D. Kaplan, Monsoon: The Indian Ocean and the Future of American Power, Random House, New York, 2011. Peter Dombrowski & Andrew C. Winner (Editors), The Indian Ocean and US Grand Strategy: Ensuring Access and Promoting Security, Georgetown University Press, Washington DC, 2014.  David Brewster, India’s Ocean: The Story of India’s Bid for Regional Leadership, Routledge, 2014. C. Raja Mohan, Samudra Manthan, Sino-Indian Rivalry in the Indo-Pacific, Carnegie Endowment for International Peace, Washington DC, 2012.  Vijay Sakhuja, Strategic Dynamics of the Indian Ocean, Emirates Lecture Series, Volume 96. 2012. Krishnappa Venkatshamy, The Indian Ocean Region in India’s Strategic Futures: Looking Out to 2030, in Jivanta Schottli (Edited), Power, Politics and Maritime Governance in the Indian Ocean, Routledge, UK, 2015.

[16] UNCTAD, Review of Maritime Transport 2015, United Nations Conference on Trade and Development, Geneva, 2015.

[17] Pannikar (1945), Page 96.

~ By Sunil Raman

In the two years since assuming office Prime Minister Narendra Modi has made a decisive difference in positioning India and in addressing its security concerns. His initiative in the Indian Ocean Region is one such prominent break from the past. The disjointed and hesitant steps of the past is giving way to a more structured approach where Modi works towards translating India’s natural geographical advantage and close cultural ties with many countries in the region to position itself as the central force in the region.

Modi has promised to bolster India’s presence in the Indian Ocean Region and enhance co-operation with countries like US, Japan and Australia.

The US-India Joint Strategic Vision for Asia Pacific and Indian Ocean Region and the signing of US-India Defense Framework have signaled the determination of the two nations to join hands in maritime security.Malabar joint naval exercises started as a bilateral arrangement between US and Indian navies in 1992 where Japan used to be an invitee has now transformed into a Trilateral Forum where the three navies would conduct joint exercises alternating between Indian Ocean and the Pacific Ocean. The latest exercise was conductedoff northern Philippines, close to South China Sea where Chinaaggressively contests territorial claims of some South East Asian countries like Philippines and Vietnam.

Modi sheds inhibitions, claims India’s natural leadership position in IOR

It was Modi’s visit to Indian Ocean nations of Mauritius and Seychelles in 2015 that brought global attention to change in strategy by New Delhi when he shared, in the words of strategic affairs expert C Raja Mohan, “India’s master plan for Indian Ocean Region”.

Charting out India’s cultural footprint across Asia and Africa Modi said India must also assume “our responsibility to shape its future” and declared Indian Ocean Region to be at the “top of our policy priorities”.

He then spelt out the five-point vision for IOR:

1. India will do everything to safeguard our mainland and islands and defend our interests. To ensure a safe, secure and stable Indian Ocean Region that delivers us all to the shores of prosperity.
2. To deepen our economic and security cooperation with our friends in the region especially our maritime neighbours and island states. We will also continue to build their maritime security capacities and their economic strength.
3. Collective action and cooperation will best advance peace and security in our maritime region. It will also prepare us better to respond to emergencies.
4. We also seek a more integrated and cooperative future in the region that enhances the prospects for sustainable development for all.
5. Those who live in this region have the primary responsibility for peace, stability and prosperity in the Indian Ocean.

Initiatives that seek to revive cultural links and help build sustainable economies among littoral states, Project Mausam and SAGAR, were launched with clear strategic vision.

The Modi government had been pushing cultural and military diplomacy as a tool for deepening strategic partnerships in the Indian Ocean region. These include joint exercises, hydrographic surveys, equipment transfer, joint training, and access to military academies in India among others.

From visiting Pacific islands to Indian Ocean littorals, and a recent trip to East African countries prime minister Modi has made a determined bid to reconnect with countries, some of which have been part of India’s cultural sphere of influence and look upon India to take the lead.

Promised projects that remained caught in bureaucratic files in New Delhi were dusted out and the Modi government has committed to help Seychelles develop infrastructure on Assumption Island, and to speed up development of Agalega Island in Mauritius.

Trips to Mozambique, South Africa, Tanzania and Kenya in June 2016 were to widen maritime security partnership.

For years India has been slow or indifferent in its response to many countries in Asia and Africa who eagerly looked up to New Delhi to use its growing economic muscle and historic links with them to assist in neutralizing China’s growing footprint in the region. That lethargy has given way to greater determination to lead from the front in securing waters while helping strengthen economies of IOR nations.

Few months ago the new version of Indian Maritime Doctrine was released to coincide with the International Fleet Review 2016. This document has enlarged India’s areas of maritime interest to south-east and westwards of Indian Ocean.  It states that with growing economic and military strength of the country, the national security imperatives and political interests stretch “beyond the Indian Ocean Region.”

Change in tack was emphasized by the then Naval Chief Admiral RK Dhowan in the strategy document when he observed that “there seems little doubt today that the 21st century will be the ‘Century of the Seas’ for India and that the seas will remain a key enabler in her global resurgence”.

Importance of Indian Ocean

 Unlike the Pacific and Atlantic Oceans, the Indian Ocean is not just open waters but is bound by land on the East, West and North. Instead enclosed within a land mass on all sides, it has kept people and civilizations that came up on the contiguous land masses, in perpetual contact. India, by its sheer geographical location and size, lent its name to these waters that saw Indian kings of the ancient world transfer considerable ideological and religious influence to countries in South East Asia.

These waters were never owned by any kingdom or country. No country, including India, in spite of its dominating presence, ever claimed ownership of these waters. The Indian Ocean has been “a great highway… a wide common”, in the words of the great naval historian, Alfred Thayer Mahan in ‘The Influence of Sea Power upon History’.

The Indian Ocean connects three continents – Asia, Africa, Australia and the Antarctica. It is home to one-third of the world’s population, also being the largest market for consumer goods, with two-thirds of proven oil reserves, one-third of world’s natural gas, 90 per cent of world’s diamonds, 60 per cent of world’s uranium and 40 per cent of world’s gold reserves.Its waters constitute the lifeline with one-half of world’s crude oil container shipment and one-third of bulk cargo passing through.

  It is also home to world oil transit chokepoints. Bound by land on three sides maritime access  for tankers and cargo vessels transporting oil and other cargo from one part of the world to the other is through narrow gateways or narrow sea lanes. Free and unhindered passage through these sea routes is essential for global energy flows. Closure of these narrow gateways or choke points can disrupt the flow of oil and gas leading to a devastating impact on global economy and security. Unlike other oceans 80 per cent of total trade in Indian Ocean is extra-regional and only 20 per cent trade between littoral states.

These waters connect four major land bodies-Africa, Asia, Australia and Antarctica. Thirty-five countries, including six island nations, are Indian Ocean Rim states or littoral states and “40 per cent of the world’s seaborne crude oil supplies and 50 per cent of the world’s merchant fleet”depend upon the security of these waters. Crude oil from the Persian Gulf destined for South Asia, South East Asia and the Far East passes through its waters. Apart from “principal oil shipping lanes” the “main navigational choke points of world commerce” – the Straits of Bab el Mandeb, Hormuz and Malacca – are located in the Indian Ocean. There are others like the Suez Canal, Cape of Good Hope, Sunda Strait,  Lombok Strait, Ombai and Wetar Straits.

Critical choke points

1. Bab el Mandab-Between the Horn of Africa and the Middle East, a strategic link between Mediterranean Sea and Indian Ocean. Located between Yemen, Djibouti and Eritrea it is 18 miles wide at its narrowest point and makes tanker traffic difficult.
2. Strait of Hormuz-World’s most important oil chokepoint in the Persian Gulf through which more than 85 per cent of crude oil exports to markets of Japan, India, China and South Korea. With Iran to its north the Strait of Hormuz is 21 miles at the narrowest part.
3. Straits of Malacca-Links the Indian Ocean to the Pacific Ocean and provides the shortest sea route between Middle East and the growing Asian markets. Located between Indonesia, Malaysia and Singapore, it links the Indian Ocean to South China Sea and Pacific Ocean. It is 1.7 miles at its narrowest point and remains a crucial chokepoint. But, its importance emerges from over 60,000 ships that transit the Straits annually carrying a quarter of world trade.

The Indian Ocean Region is also home to some of the most unstable countries like Somalia and Yemen, radical Islamic outfits, terror groups and small island nations that are threatened by climate change.

  The growing military presence of various stakeholders poses a grave threat to the region’s stability, as any untoward incident has the potential to create a major disruption in cargo traffic and movement of energy supplies

World Map sidelines Indian Ocean Region

 Geography, however, has been at the mercy of global politics with a “bias against the Indian Ocean” established from the time of the European domination of the world, through the Cold War years, and until recently. The world map made by Gerardius Mercator fourcenturies ago and in use even today reinforces the prejudice against this region with the western hemisphere located at the center of the map and the Indian Ocean split on the edges of the map. Such a map has kept attention focused on the western hemisphere.

Author is a former BBC journalis, now head Public Affairs in India for Hill & Knowlton Strategies. His post-graduate thesis at the Fletcher School of Law & Diplomacy was on “Building a Collaborative Security Architecture in the Indian Ocean Region”

(This article appeared in India Foundation Journal, July-August 2016 issue.)

~ By Jayraj Pandya

“The dream of India as a great nation, which we had seen during the Freedom Struggle, continues to inspire us even today. To some extent, this dream has been realized. Yet, a lot more remains to be accomplished.”¹

• Bharat Ratna Shri Atal Bihari Vajpayee in his last independence day address on 15^th August 2003

In the backdrop of these words and after a passage of ten years, the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) won a resounding mandate in the General Elections 2014. The BJP achieved a landslide victory by securing 282² seats out of the total 543 seats and in the process, became the first party to win a complete majority in the Lok Sabha after a span of 30 years. The new dispensation at the Centre faced colossal challenges such as an economy in doldrums, restive demographic dividend, foreign policy in tatters and much more. It required a Herculean effort on the part of Prime Minister Narendra Modi led NDA government to bring India out of its troubles, most of which being self-inflicted due to policy paralysis and lack of effective governance. This has put the country back on the trajectory of high growth and prosperity. The effort of this paper is to constructively analyse the progress achieved during the first two years of the NDA Government.

Changing Perceptions, Bursting Myths

Rather than going through the mundane SWOT (Strengths, Weaknesses, Opportunities and Threats) approach in analysing the performance of the Prime Minister Modi-led government, the approach used here is to perform an appraisal on the metrics of ability to positively change perceptions and bursting conventional and age-old myths.

The biggest positive development which has been witnessed under the new regime has been the significant rise in diplomatic capital of the country. Even there, most of this capital has been equity capital and not debt capital i.e. efforts have been made to foster long-term relations with foreign nations and in making them partners in our growth story. Right from the start of this Government’s term by extending invitations to heads of SAARC nations, to operationalising the landmark India-Bangladesh Land-Boundary agreement (LBA) and from rekindling the Indian diaspora with the nation to display of the statesmanlike approach by the Prime Minister in dealing with global leaders and multilateral institutions for best interests of the nation, the country has witnessed an unprecedented global spotlight during the past 24 months of this regime.

On the economic front, the country was battling a baffling quadrangular conundrum comprising of severe policy paralysis, high inflation, the Twin Balance Sheet (TBS) challenge and low and jobless economic growth. Blatant corrupt practices at a mammoth scale, a hallmark of the previous dispensation, led to self-induced policy paralysis stalling big-ticket investment projects in key sectors such as energy, infrastructure and transportation. Under the Pragati (Pro-Active Governance and Timely Implementation) initiative whereby the Prime Minister directly reviews stalled projects- 108 of the 350 Centre-state projects, worth over Rs 3 lakh crore across critical infrastructure sectors like railways, national highways, power and civil aviation, interminably delayed for the past four to 15 years, have been revived.³ The ardent push to electrify each and every village in the country, doubling the speed of creation of highways in the country and several other such silent revolutions marked the resurgence of infrastructure creation in the country.

Despite two consecutive years of drought, the earnest and consistent efforts made by the Government including creating Price Stabilisation Fund (PSF) for preventing volatility in agricultural commodities, restricting imports of pulses, enabling strict action against black marketers⁴ and timely imposition of stock-holding limits of essential commodities⁸ has ensured that the days of double-digit Consumer Price Inflation (CPI) are behind us.

Perhaps the biggest perception changer can be seen in the Rational Investor Ratings Index (RIRI), a tool created in Economic Survey 2014-15 to gauge the investor confidence. As can be seen, India performs well not only in terms of the change of the index but also in terms of the level, which compares favourably to its peers in the BBB investment grade and even its “betters” in the A grade. (India is in the BBB investment category according to Fitch rating agency. A is the category just above it.) ⁵

Expanding the limits for Foreign Direct Investment (FDI) in key areas including insurance and defence sectors, improving ease of doing business in the country, passing key legislations for financial reforms such as the Insolvency and Bankruptcy Law, initiation of Indradhanush program for revival of Public Sector Banks (PSBs)⁶ and a host of other such progressive measures led to India becoming the fastest growing large economy in the world during the year 2015-16⁷ and also the top destination for FDI across the world in 2016⁸.

The biggest myth prevailing in the country- the economically and socially backward classes can only be uplifted through doles and freebies has been debunked with various affirmative actions taken by this Government leading to empowerment of citizens across the board. The cause of social advancement has been championed by the NDA Government through its flagship programs including providing a bank account in each household (Jan-Dhan , more than 22 crore bank accounts opened⁹), providing life and accident insurance to citizens (Jan Suraksha, 12 crore beneficiaries reached¹⁰), crop insurance program (Pradhan Mantri Fasal Bima Yojana), providing incentives for economic upliftment through skill training (Skill India), disbursement of loans to small and micro entrepreneurs (MUDRA, over Rs. 1 lac crore disbursed to over 2.7 crore account holders¹¹) and through creating a conducive culture for start-ups in the country (Start-up India, Stand-up India).

The arduous push to the Direct Benefit Transfer (DBT) program through development of Jan-Dhan, Aadhaar, and Mobile (JAM) Trinity has been a major development in institutionalising a change in framework for provision of subsidies and services to the citizens. The first variety of JAM- PAHAL scheme of transferring LPG subsidies via DBT has been a tremendous success under this regime. As the Economic Survey stated- Based on prices and subsidy levels in 2014- 15, the potential annual fiscal savings of Pahal will be Rs. 12,700 crore in a subsequent Financial Year.¹²

Merely looking at the performance of this Government from the prism of tangible achievements would be a misnomer. The tough stance of the Prime Minister over the conduct of his Council as well as the bureaucracy has ensured that corruption, which became a hallmark of the previous dispensation, is done away with, in his tenure. This dispensation has championed several initiatives with an aim to bring about a change in the very mindsets of the citizens such as Swachh Bharat Mission, improving accessibility for Divyang citizens (Accessible India), digital storage of important documents of citizens (DigiLocker), creating an open platform for connecting with citizens (mygov.in), real-time outreach on social media for grievance redressal and more. This Government has also tried to break conventional mindsets ingrained in the bureaucratic system in the country through far-reaching measures such as real-time tracking of attendance of government officers (attendance.gov.in), direct access to citizens to seek appointments (myvisit.gov.in), allowing self-attestation of documents to prevent harassment of citizens and repealing of over 1100 archaic laws in the country¹³.

The Way Ahead

In the last two years, the NDA Government has been taking giant strides on the path of equitable social, economic and cultural progress but still a lot more remains to be achieved. Just like Bharat Ratna Shri Vajpayee, Prime Minister Modi, in his speech on the completion of 2 years of the Government reiterated his commitment towards the nation by saying-

“Work done by our Government in last 2 years is now an inspiration for us to serve the country even better.”¹⁴

The author is a Research Fellow at India Foundation. The views expressed are his own. 

(This article appeared in India Foundation Journal, May-June 2016 issue.)

References

1.        Prime Minister Shri Atal Bihari Vajpayee’s Independence Day Address, Former Prime Ministers of India- Prime Minister’s Office, 15^th August 2003, New Delhi

Can be accessed at- http://archivepmo.nic.in/abv/speech-details.php?nodeid=9239; last accessed at: 20^th June 2016

2.        Performance of National parties in General Elections 2014, Election Commission of India, New Delhi, 2014

Can be accessed at- http://eci.nic.in/eci_main/archiveofge2014/20%20-%20Performance%20of%20National%20Parties.pdf; last accessed at: 20th June 2016

3.        Off the blocks: PM Narendra Modi’s big push to get stalled Centre-state projects off the ground, India Today, June 9, 2016

Can be accessed at: http://indiatoday.intoday.in/story/narendra-modi-project-pragati/1/687740.html; last accessed at: 20^th June 2016

4. Inflation: LOK SABHA UNSTARRED QUESTION NO. 2448 TO BE ANSWERED ON MARCH 11, 2016; Lok Sabha: Parliament of India, 11^th March 2016

Can be accessed at- http://164.100.47.190/loksabhaquestions/annex/7/AU2448.pdf; last accessed at: 20^th June 2016

5. Economic Outlook, Prospects, and Policy Challenges, Economic Survey of India- Pg. 9, February 2016

Can be accessed at- http://indiabudget.nic.in/es2015-16/echapvol1-01.pdf; last accessed at: 20^th June 2016

6. Indradhanush: Plan for Revamp of Public Sector Banks; Ministry of Finance, August 14, 2015

Can be accessed at: http://financialservices.gov.in/PressnoteIndardhanush.pdf; last accessed at: 20th June 2016

7. GDP: At 7.6%, India’s growth points to fastest growing large economy, Indian Express, 1^st June 2016

Can be accessed at: http://indianexpress.com/article/business/economy/gdp-7-9-percent-its-official-india-is-now-the-fastest-growing-economy-in-the-world/; last accessed at: 20^th June 2016

8. The fDi Report 2016: Global Greenfield investment trends, Financial Times, 2016

Can be accessed at: http://forms.fdiintelligence.com/report2016/files/The_fDi_Report_2016.pdf; last accessed at: 20^th June 2016

9. Progress Report: Pradhan Mantri Jan Dhan Yojana, Ministry of Finance, As on 15^th June 2016

Can be accessed at: http://www.pmjdy.gov.in/account; last accessed at: 20^th June 2016

10. Daily Enrolment for Pradhan Mantri Jan Suraksha Yojana, Ministry of Finance, As on 18^th June 2016

Can be accessed at: http://www.jansuraksha.gov.in/claims-reported.aspx; last accessed at: 20^th June 2016

11. MUDRA Loans: LOK SABHA UNSTARRED QUESTION No. 1584 TO BE ANSWERED ON THE 4th March, 2016, Lok Sabha: Parliament of India, 4^th March 2016

Can be accessed at: http://164.100.47.190/loksabhaquestions/annex/7/AU1584.pdf; last accessed at: 20^th June 2016

12. Spreading JAM across India’s economy; Economic Survey of India- Pg. 57, February 2016

Can be accessed at: http://indiabudget.nic.in/es2015-16/echapvol1-03.pdf; last accessed at: 20^th June 2016

13. Mohan Vishwa, 1159 obsolete laws scrapped by Modi govt; 1,301 junked in previous 64 years, Times of India, 19^th May 2016

Can be accessed at: http://timesofindia.indiatimes.com/india/1159-obsolete-laws-scrapped-by-Modi-govt-1301-junked-in-previous-64-years/articleshow/52333875.cms; last accessed at: 20^th June 2016

14. Text of PM’s address at “Ek Nayi Subah” Event on the completion of 2 Years of the Government; narendramodi.in, 28^th May 2016

Can be accessed at: http://www.narendramodi.in/text-of-pm-s-address-at-ek-nayi-subah-event-on-the-completion-of-2-years-of-the-government-483802, last accessed at: 20^th June 2016

 

~ By Alok Bansal

The killing of Mullah Mansour, the leader of Taliban on 22^nd May, near AmadWal inside Pakistan’s Balochistan province has had a significant impact on the security situation of the region. It has also worsened the already tenuous relations between Pakistan and the US. This, the first drone attack inside Balochistan, saw Pakistan vociferously protesting against infringement of its sovereignty, as this has expanded the area of ‘unilateral’ US operations within Pakistan. However, as in the case of Osama Bin Laden earlier, Pakistan has yet to come out with any rational explanation for the presence of such elements within its territory. More significantly, this operation has severely strained Afghanistan-Pakistan relations.

The presence of Mullah Mansour inside Pakistan has given credence to what Afghan authorities had always believed that Mansour was in close league with Pakistani authorities. The fact that he had a valid Pakistani passport with visas from Iran indicates that somebody from within the establishment was supporting him. It has also been established that he had travelled to Iran and was coming back. The fact that the leader of one of the most dreaded militant organisation and Amir-ul-Mumineen for jihad being waged by Al Qaeda, was travelling without any protection shows that he never visualised any threat within Pakistan. He took a taxi from the Iran border and travelled over 450 Km in Balochistan where there are numerous security check points on roads to prevent movement of Baloch nationalists, thereby indicating that he feared no threat from security forces.

This affirmation of close links with the establishment in Pakistan coming immediately after heightened Taliban offensive under Mansour, which included attack on Kunduz and other towns, where numerous lives have been lost to Taliban, naturally annoyed Afghanistan. They felt that Pakistan’s government was playing a double role by supporting Taliban, while overtly being a part of the Quadrilateral Coordination Group (QCG) on Afghan peace and reconciliation process, made up of representatives from Afghanistan, Pakistan, China and the United States.

Unlike the previous occasion, when Mullah Omar had died, the Taliban did not waste time and contrary to expectations, named Haibatullah Akhundzadaas the new leader. It was widely believed that either Sirajuddin Haqqani, the leader of Haqqani Network, who has been close to the Pakistani establishment or Mullah Yakoub, the son of the Taliban founder Mullah Omar, would be appointed as the leader, as they were the deputies to Mansour.  Both have been retained as deputies to Akhundzada, as they wield considerable influence within the Taliban. Unlike the previous occasion even Al Qaeda came out quickly in support of Akhundzada. To cement his position and ostensibly to avenge Mansour’s killing, the Taliban carried out some bold attacks in Afghanistan. Merely hours after the new leader was announced, a suicide attack in Kabul on a bus carrying employees of the judiciary department claimed 11 lives and injured 10 others. As many of them were carried by Haqqani network, fingers were pointed towards Pakistan.

The new leader has vowed to continue the fight and accordingly, the Taliban have refused to participate in any talks. However, the Afghans have been pressing Pakistan to bring the Taliban to the negotiating table, as they had promised to do so earlier. The fact that Pakistan has not done so, has aggravated the rift between the two countries and Afghans have started accusing Pakistan of meddling in their affairs by pointing  towards Mansour’s presence on Pak territory. More significantly, just before Mansour’s killing, the Afghan government had warned it would take action against Taliban for not coming to the table and had urged the QCG to show their military role.

Pakistan, unfortunately, did not come out with any rationale for the presence of the Taliban chief on its territory; rather, it tried to deflect attention by talking about repatriating 2.5 million Afghan refugees, which it claims have been living in Pakistan for decades. It stated that the unbridled movement of Afghans into Pakistan had led to instability and needed to be controlled.To further aggravate the situation, it started implementing a new border mechanism from 01 June, whereby it proclaimed that no Afghan would be permitted to cross the border without a valid passport and Visa, thereby creating serious hurdles for families living across the border. It also started fencing its border and building a gate at Torkham in Khyber Agency, the busiest border crossing, which was objected to by Afghanistan stating that Pakistan could not build a gate anywhere on the border, without its consent. Pakistan however, continued to build the gate stating that it was technically 37 metres inside its border and that it was essential for its counterterrorism strategy to check infiltration of militants and terrorists.  The tensions resulted in firing between the forces of two countries, led to the killing of an Afghan soldier and two soldiers of Pakistan Army including a Major, besides causing injuries to many. The funerals of soldiers who died in combat were attended by thousands of mourners in both the countries, clearly indicating the hostile sentiments against each other.

The Afghan Foreign Ministry spokesperson claimed that the security forces had acted to safeguard its territorial integrity and “armed forces are always ready to defend their country and people and to react against any kind of threats”. Simultaneously, a senior Pakistani military official stated that the gate at Torkham would “now be built and at any cost” and the army would retaliate with full force, if anyone tried to create any hindrance. This belligerent stance led to continuation of firing between the two sides for few more days till ceasefire was eventually declared, but tension continued to prevail and troops remain deployed on both sides of the border.  All activities at Torkham were suspended and thousands of vehicles and persons were stranded on both sides. Both sides have summoned each other’s envoy and have lodged protests, but neither is willing to dilute its stance. To diffuse the issue, Sartaj Aziz, the advisor on foreign affairs to the Prime Minister of Pakistan rang up Afghan National Security Adviser (NSA) Hanif Atmar and invited him and the Afghan Foreign Minister Salahuddin Rabbani for talks to resolve the prevailing logjam. In a direct snub to Pakistan, Afghanistan refused to send either its NSA or the foreign minister, but sent a delegation led by its deputy Foreign Minister Hekmat Khalil Karzai.

The talks failed to reach any conclusion, as Pakistan informed the Afghan delegation that Pakistan planned to build four gates at different places along the border, as it considers them to be crucial to the security of both the countries. The Afghan side claimed that the talks were held in an “amicable and friendly atmosphere” but they had raised the issue of “various violations” by Pakistan, which included setting up of posts in Afghan territory and “unprovoked artillery shelling of Afghan villages.” The presidents of the two countries are expected to meet during Shanghai Cooperation Organisation (SCO) meeting.

These developments however, indicate a serious falling out between the two governments, where Afghanistan accuses Pakistan of supporting Taliban and Pakistan accusing Afghanistan of sheltering anti-Pakistan militants. It clearly indicates that having successfully inducted Haqqani network into the top echelons of Taliban, Pakistan clearly sees it as its proxy, which should be allowed to control the levers of power in Kabul. President Ghani, on the other hand after, after placating Pakistan for long, has eventually realised that Islamabad and more significantly, Rawalpindi, are unwilling to stop their support to Taliban. Consequently, Ghani has been scathing in his comments on Pakistan and is making all out diplomatic efforts to isolate Pakistan. His trip to Chabahar was probably a step in that direction. Even the US, after the killing of Mansour had warned Pakistan against terrorist activities in Afghanistan. Pakistan on the other hand, having secured Chinese support, seems to be in no mood to tow the US line.  Afghanistan-Pakistan relations therefore are headed for a prolonged period of turbulence.

The author is Director India Foundation and Adjunct Professor of NDIM.

(This article appeared in India Foundation Journal, May-June 2016 issue.)

~ By Priyang Pandey

MUDRA Bank or Micro Units Development and Refinance Agency Bank is aregulatorand a one stop solution for developing and refinancing the micro-finance institutions (MFIs) and to implement ‘credit guarantee scheme’for micro enterprises in India which according to NSSO survey of 2013 comprises over 5.77 crores business units.

Modi government announced MUDRA in the 2015-2016 Budget for refinancing micro & small-scale industries that is expected to give a big push to MSME sector, which contributes about 90% of the non-farmingjobs in India. Mudra bank was officially launched by the Prime Minister on 8^th April, 2015.

Micro and Small Scale Industry in India

A micro enterprise is an enterprise where investment in equipment or plant and machinery does not exceed Rs 25 lakh; small enterprises are those enterprises where the investment in plant and machinery is more than Rs 25 lakh but does not exceed Rs 5 crores. In India Small and Micro Industrial sector with unorganised sector together provide over 46 crores jobs.This is greater than the organised sector, which provides less than 10% of the total non-farming jobs in India.

The informal sector and employment

Over the years, various surveys conducted by the government as well as industry bodies have found that most of the credit disbursed by the commercial banks goes to organised sector industries, whereas the micro and small industries gets only 4% of its credit needs from Financing Institutions (FIs). These FIs have been setup to help in creating self-employment opportunities by providing easy loan facilities to small and informal units, which are the economic driver of a major chunk of population.

Interestingly though, the corporate sector is considered to be the growth driver of the economy for the last two decades since 1991, with access to almost every possible financing option, tax leverages and other benefits. Yet, this segment is capable of feeding just 2.9 crores households. A study titled ‘India’s better half : the informal sector economy’ by Credit Suisse clearly states that half of India’s GDP and 84% of all non-agricultural work is informal. In fact, theinformal economy in India is much larger than in most Emerging Markets (EMs).

The intuitive habit of drawing macroeconomic conclusions from the corporate feedback (and vice versa) is fraught with risks. After all, only half of India’s GDP and 10% of India’s employment are in the formal sector. Further, only a fraction of the formal sector is listed. To take investments for example, investors intuitively use feedback from large capital goods and construction companies to form a view on India’s investment cycle. This can be misleading since ‘the tail is unlikely to wag the dog’.

Micro Financing in India

Micro Finance is an economic development tool whose objective is to assist the poor to work their way out of poverty. It covers a range of services which is in addition to the provision of credit. These services are savings, insurance, and fund transfers, counselling etc. The microfinance sector has grown rapidly over the past few decades. Banks have also leveraged the channel of Self-Help Group (SHGs) to provide direct credit to group borrowers. The Indian economy largely comprises of micro-units, mostly in manufacturing, trading or service activities, which are ‘self-financed enterprises’. And it is this informal sector which keeps most of the India employed and helps in sustaining economic growth. Interestingly, in the social context, according to the government of India most of these small enterprises are owned by the people belonging to socially and economically Backward Classes.

New Initiative of Financial Inclusion

With the financial inclusion programme ‘Jan DhanYojana’ emerging as a major policy instrument in the country, microfinance has occupied centre stage as a promising channel for extending financial services to unbanked sections of population and to nurture the small and micro entrepreneurial ecosystem. At the same time, practices followed by certain lenders have subjected the sector to greater scrutiny, hence the need for strict regulation.

The government proposed the setting up of the MUDRA Bank and made it responsible for regulating and refinancing all Micro-Finance Institutions (MFIs) which are in business of lending to micro and small business entities engaged in manufacturing, trading and service activities.

As per release of Ministry of Finance, Government of India, the Bank would partner with state level and regional level co-ordinators to provide finance to Last Mile Financer (LMF) of micro and small business entities.

Functions assigned to MUDRA

The MUDRA Bank is primarily responsible for laying down policy guidelines for micro/small enterprise financing business including registration, regulation and accreditation /rating of MFI entities. MUDRA would be laying down responsible financing practices to ward off indebtedness and ensure proper client protection principles and methods of recovery besides development of standardised set of covenants governing last mile lending to micro/small enterprises. It would also promote right technology solutions for the last mile financers.The NITI Aayog also points to India’s continuing challenge to ensure that this economically vibrant group remains engaged and its potential is fully realised. Taking cognisance of this, the most important responsibility that is mandated to MUDRA is to formulate and run a Credit Guarantee Scheme (CGS) for providing guarantees to the loans which are being extended to micro-enterprises and to create a good architecture of Last Mile Credit Delivery to micro businesses under the scheme of PradhanMantri MUDRA Yojana.Under the aegis of the PradhanMantri MUDRA Yojana, MUDRA has already created its initial products/schemes. These interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage ofinitiation, growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to:

• Shishu : covering loans up to Rs 50,000/-
• Kishor : covering loans above Rs 50,000/- and up to Rs 5 lakh
• Tarun : covering loans above Rs 5 lakh and up to Rs 10 lakh

It is to be ensured that at least 60% of the credit flows to Shishu Category Units and the balance toKishor and Tarun Categories.

Establishment

MUDRA Bank was created with a corpus sum of Rs 20,000 crores that was allocated from the money available from shortfalls of Priority Sector Lending for creating a Refinance Fund to refinance all types of MFIs and Last Mile Financers. Another corpus of Rs 3,000 crore was provided to MUDRA Bank from the budget to implement Credit Guarantee scheme for ensuring loans to the micro enterprises.

The above measures are not only helping in increasing access of finance to the unbanked but also in bringing down the cost of finance from the Last Mile Financers to the micro/small enterprises, most of which are in the informal sector.

Current Scenario

For financing the small and cottage industries, previous governments from time to time provided infrastructure to support this sector. SIDBI or ‘Small Industries Development Bank of India’ was mandated to provide easy funds to cottage and micro industrial units but the smaller point of presence of the last mile financers did not deliver efficiently. In addition there are many other players in the micro finance sector like SHG (Self Help Groups) Bank Linkage model started by NABARD, Non-Banking Financial Companies and other trusts, societies. Currently, the Existing financing mechanism or the MFIs are primarily dependent on commercial banks for money. Commercial Banks are required to channel 40% of their loans to the ‘priority sector’ which includes agriculture and other small loans, and they redirect money to these MFIs to meet the targets.

The MFIs provides loan at a very high cost as the banks and other refinancing agencies charge12.5% (PLR) interest to these last mile financers and they add an additional spread of 10-11% to meet their operating cost. Consequently, loans extended by these micro units’are priced at around 23%-24%.

Most of these financers extend support to the private limited firms like proprietorship firms; partnership firms and trusts which are considered as a major share of micro industries are deprived for funds.Margin money is also an important concern for these micro units as the existing financing sector requires them to provide for a margin amount of 33%. This forces the borrowing-units to seek funds from local money lenders where the interest ranges from 36% to even 360% andleads to exploitation of these people.

MUDRA Bank is to take over some of the refinancing activities of SIDBI and channel the money in a more focussed way to pave the path of inclusive growth and development and reach out to last downtrodden person – ‘Antyodaya.’.

How it happened

In the budget of 2014, the idea of creating a new financial architecture for providing funds to the micro business units was introduced and to realise it, a committee was constituted. The committee submitted its report in February, 2015 rejecting the idea of creating a separate development and regulatory refinancing bank stating that the Reserve Bank of India had opposed it as a risk prone step.

But the NDA government was convinced that the existing financial system would not fund these micro industrial setups which in reality are the backbone of job creation in our nation. By ignoring the committee report, with the aim of improving the health of the micro and small scale sector, the government went ahead and established the MUDRA Bank. The Finance Minister emphasising in his budget speech that the ‘inclusive growth’ can only be achieved thought he growth of the non-formal sector.

Why MUDRA Bank

Conventional economic wisdom emphasises investment for growth of production or increase in its all-round spectrum by adding capital. This would certainly raise productivity but would not integrate the poor income/ real goods/ services generating activity. If we approach the problem of rural development from the view point of bringing the poor into the income generating activity by making them directly productive, we can make their life meaningful.

The current government focuses on poverty elimination rather than just alleviation which can be made a reality only if the poor are integrated into the national economic framework by involving them in their own ventures on a continuous basis. To nurture the micro and small entrepreneurial ecosystem it was the need of the hour to provide one stop solution to the problems relating to development and financing of these micro units.

Expected Outcome

As a Bank to be established by legislation under a new law, MUDRA Bank will refinance, register, regulate all small business financing institutions (MFIs), it will also partner with regional coordinators to enable them to boost up the Last Mile Financers monetarily. LMFs play a crucial role in micro financing and including them into the regulatory system will prove out to be potential game changer. On one hand LMF will utilise its local and regional knowledge, and of the borrowers potential and on the other hand the regulations will bind them with the framework set by the MUDRA Bank which will include registration, client protection to recovery options and it would helpcurb the exploitations by harsh money lenders in rural India.

Challenges in front of MUDRA Bank

To implement all these policies, a faster pace of implementation and execution is required. Paralysis in implementation of policies as well as awareness among the people running micro industrial units especially in rural areas are some of the major challenges confrontingMUDRA.Fortunately, the Modi government is working with a remarkable capacity which can be seen by the progress report of recently launched target based scheme for financial inclusion ‘Jan DhanYojana’ where the government included 665.26 lakh more people into the financial ambit of banking sector till January2015.

Point of Presence of LMFs in rural areas is a major hurdle in reaching out to the remotest part of the country and use of post offices as LMFs might turn into a landmark in financial inclusion of these micro units.

One Year old MUDRA

MUDRA turned one this April and as per the data provided on the website it has already disbursed more than one lakh crores rupees to nearly 24 lakh micro units. Not only have the existing micro units benefittedbut under the ‘Shishu’ category, many newcomers have availed of the concessional finance.

MUDRA- A Success

In his budget speech of 2016, finance minister ArunJaitley declared that the target for the last fiscal had been achieved. Till April 2016, a total of 106,52,867 loan applications worth Rs. 2437596 Crores had been sanctioned. The establishment of MUDRA would not only help in increasing access of finance to the hitherto unbanked but also bring down the cost of finance to the micro/small enterprises, most of which are in the informal sector.Further, the approach goes beyond credit only approach and offers a credit – plus solution for these myriad micro enterprises spread across the country.

On 4^th April, 2016 Prime Minister Modi launched Standup India in line with MUDRA to fund the unfunded especially for the people from SC/ST and other deprived communities. This is in line with the vision of MUDRA, which is “to be an integrated financial and support services provider par excellence benchmarked with global best practices and standards for the bottom of the pyramid universe for their comprehensive economic and social development.”

The author is Research Fellow at India Foundation. The views expressed are his own. 

(This article appeared in India Foundation Journal, May-June 2016 issue.)

~ By Zulfiqar Shah

Pakistan has kicked off a new chapter in its strategic as well as economic history, which essentially can be dubbed as Sinification of Pakistan society and state. This would be first-ever initiative over seventy years history of the country that Pakistan has decided a major and futuristic shift in its strategic policy and planning.

In 2015, Pakistan and China launched China-Pakistan Economic Corridor (CPEC) worth Chinese investment as well as interest free debt of US$ 46 billion. CPEC consists of several projects of roads, pipelinesandenergy infrastructure.Both countries have signed 51 agreements and memoranda, which also includesUS$ 33 billioninvestments in energy sectorand a US$ 44 million communication strategic project of China-Pakistan fibre optical cable.

The project connects China with Gawadarand Karachi Ports through road infrastructure. The major concern for China isoil security through this mega-engagement in Pakistan. The project would reduce the distance between China and Africa as well as with Europe. This is four-fold plan that includes Gawadar Port, transport infrastructure, energy and industrial cooperation.

The Chinese engagement with Pakistan haspromising as well as grey areas for the people of Pakistan.

Transformation of Pakistan

Some experts foresee that such a mega investmentwould transform Pakistan society in terms of political economy. Pakistan faces a decline in foreign investment. It also faces economic instability, particularly due torising unemployment. It is said that through CPEC 700,000 jobs would be created, which would change the face of Pakistan society. Pakistan already confronts inter-provincial disagreements over distribution of resources, excessive centralisation and one province’smonopoly over resources, employment and over state structures. This project would potentially create further economic cushion for Punjab province through projects and employment opportunities. This would probably further intensify the conflict among Pakistani federating provinces. Such apprehension has been expressed through statements by the Chief Minister of Sindh. CPEC is no doubt a major economic engagement and creation of job opportunities thatcould transform Pakistan society; however it seems that the transformation would limit itself to the Punjab province.There areno doubt some aspects of infrastructure development that would have long-term sociologically impacts on whole Pakistan. It is the political economy of the country that would decide whether these impacts are positive and inclusive for all.

Challenges

Pakistan is readying 4000 security personnel to protect Chinese personnel in Punjab province who would be involved in different projects under CPEC. The pool of Chinese security component in Pakistan wouldrise to 21000, up from 17000 already providing security to the Chinese. Chinese engineer and officials involved in various projects in Balochistanare already facing serious security risks.

Pakistani armed forces has undertaken various military operations against secessionists in Balochistanduring last couple of decades; the latter have suffered serious setbacks. However, the Balochsecessionists are still strong enough to resist CPEC and there are possibilities that the road construction and other projects may be delayed due to the Baloch insurgency.

China also plans to use ports of Sindh. Apart from CPEC, China intends to open about 17000 industrial units in Sindh. This would further cause non-Sindhi migration into towards Sindh from Punjab. Sindhi people are already protesting against Zulfiqarabadproject. The government has recently allocated 50 thousand acre land for Bahriya town in Karachi, a project by armed forces to construct settlement facilities for hundreds of thousands.It is expected that Sindh nationalism would protestagainst further marginalisation of Sindhi people reacting to the possibility of hegemony of one province (Punjab)in the context of CPEC.  There are possibilities that Sindhi nationalists may launch people’s movements.

Meanwhile, the possibilities of disturbance by religious extremists in Khyber Pakhtunkhwa province are almost non-existent.

Strategic Isolation

Pakistan is feared to further tilt towards China and isolate itself in the regional perspective. Pakistan would have benefited from CPEC if it would have engaged with other international actor’s economic interests.The Afghanistan scenario and the developments in the region suggestthat there are possibilities thatin the long term,delayed development in Gawadar Port may limit Chinese activities amid communication insecurities.

Recently, Iran and India have signed 12 agreements worth US$ 500 million including for the Chahbahar Port project. Besides, a three way transit accord was signed among Iran-India-Afghanistan. It seems that land-locked Afghanistan would strategically inch towards Iran in the context of Chahbahar and Bandar Abbas. This would further isolate Pakistan in the region regarding its designs to choke Afghanistan and Central Asia in the context of their dependency of Gawadar and Karachi Ports. This probably would give fillip to the Taliban insurgency in Afghanistan.

Conclusion

CPEC is the major strategic and economic shift in Pakistan’s seven decades history of statecraft and foreign policy after its alliance with USA against Soviet Union.Pakistan’s internal factors, political economy, federal conflicts, and the absence of progressive economic policy would reduce the benefits of CPEC. Regional developments may isolate Pakistan in the wake of CPECin the Central and South Asia. There are possibilities that Pakistan would go Sinicised in the coming decades.

The author is a Sindhi refugee from Pakistan currently staying in India. The views expressed are his own. 

(This article appeared in India Foundation Journal, May-June 2016 issue.)

~ By Syed Ata Hasnain

Tufail Ahmad’s book published by Infolimner carries the full title –‘Jihadist Threat to India : The Case for Islamic Reformation by an Indian Muslim’. It is a 346 page effort with a very appropriate foreword, author’s introduction and eight chapters on social and political themes relating to different aspects of Islam in India and Pakistan. The last two chapters dwell on the larger issues of Islamic Reformation and Global Jihadism.

A little on the background of the author will help appreciate the central theme of the book which appears to build a case for India’s Islamic space being the most suitable for a future reformation model. He is currently Director, South Asian Studies Project at the Middle East Research Institute, Washington. His arrival there has obviously not been through a path of roses. Coming from rural stock and having initially studied at a madrasa, Tufail went on to Aligarh Muslim University (AMU), Jawaharlal Nehru University (JNU), Indian Institute of Mass Communication (IIMC) and Kings College London. He has worked with many media and strategic institutions. He is no doubt a well-established name in the world of journalism relating to Islamic issues. In a field which is yet emerging Tufail Ahmad is a voice which projects the need for reformation in Islam. His own success story as a journalist and researcher cum academic has two important aspects which probably shape his thinking. First, are the opportunities which came his way in an India accused of being unfavorable to Muslims. This shaped his positive mind and gave him moderate ideas which continue to influence him. He had a bad experience at AMU during the time when Salman Rushdie’s Satanic Verses was released; opposing its ban brought him into confrontation with more radical minds and probably cemented his thoughts on Islam. His abhorrence towards any form of radicalism in Islam and the necessity for contextualization of the faith to modern times appears to remain an abiding belief.

It is important to remember that Tufail Ahmad belongs to a cusp generation. Many Muslims of his generation remained confused about their position in Indian society but it is also the generation which evolved itself to look for a cemented place in Indian society. He is obviously one of them who have an enduring belief in India. His writing is accordingly oriented as comes out clearly in this book.

Tufail is fortunate to have got Vikram Sood, former Director R&AW to write the foreword. It is an excellent start to the book, clearly demarcating the emphasis on radicalism in Pakistan and the Middle East, including the potential of its applicability in India. Equally appropriate is Tufail’s introduction. It is the description of his journey of evolution through the years of varied education and on the job training. The explanation about Pakistan’s campaign to exploit India’s fault lines could have been a little more elaborate about the Zia Plan conceived in 1977. The Pakistani involvement is later discussed in great detail while relating it to Kashmir.

Chapter 1 is about the idea of India and how it is shaping. A collection of essays without making any pretension of continuity and linkages carries that theme, focusing on democratic and secular credentials of India. It justifies why India is the best nation for Muslims to live in because of the freedom it offers, unlike the nations of West Asia.

The first of the essays of the second chapter takes up an interesting theme; the inability and frustration of Al Qaida to recruit Indian Muslims. This is a phenomenon which Indian Muslims proudly wear on their sleeve. Even as Al Qaida succeeded in bringing in surrogates in other parts of the Islamic world, the Indian Muslims shunned it because of the freedom and stability they enjoyed in India. The essay on Al Qaida in Pakistan is an elaborate and much needed explanation of the intricacies of terror in Pakistan and Afghanistan. It establishes various linkages between surrogate groups and describes the Lashkar e Toiba (LeT) as one of the most dangerous organization and likely to emerge with a near permanent presence in Pakistan. The kind of coordination LeT has been able to establish between ideology, business and nation-building is dangerous and has all the portents of attempting to rule the roost in Pakistan. Tufail is of the opinion that it is wrong to conclude that Al Qaida has weakened. In fact he makes a strong case for the world to believe how deeply Pakistan’s Inter Services Intelligence (ISI) is involved in propping up Al Qaida in the Indian subcontinent. The other essays in this chapter/section are short and very readable; they can also be read as stand-alone stories.

Chapter 3 focuses on Radicalization among Indian Muslims. Unfortunately it is not a cogent chapter but again back and forth thoughts are expressed in essays. It is this chapter that one hoped could have been dealt with a historical narrative. Perhaps the birth of the Jamat-e-Islami, the Tablighi Jamat and such organizations could have been discussed here with the current legitimacy of these. However, the status of various groups in India is well brought out along with the need for counter-radicalization. The attempts of the ISIS (Daesh) to recruit Indians are discussed, the conclusion is that all is not as well as we may wish to imagine. While the ratio of recruits for Daesh from India is low, the potential remains high and unpredictable. Perhaps one of the areas which could have been examined in this chapter is the increasing propensity of Muslims in the South getting more radicalized. The common belief is that the influence of the Gulf is more pronounced in Southern India because of the larger ratio of Muslims from there being in the Gulf.

Chapter 4 dwells at length on Pakistan. From Jinnah’s Islamism to Musharaf’s attempts to change the narrative and being caught in the vortex of a Pakistan undergoing turbulence through its self-created mechanisms of Jihad the various sections explain it all. There is an interesting but rather long essay on Pakistan’s Jewish problem which brings out the Israeli connection and why Israel remains opposed to Pakistan. The Baluch problem, however, is given short shrift considering it is the area where quid pro quo is always possible. However, Tufail makes a strong case for the world to examine the Pakistan Army’s war crimes in Baluchistan. The essay does not cover the China Pakistan Economic Corridor (CPEC), which Pakistan seems to believe will change the destiny of Baluchistan.

Chapter 5 is a continuing narrative on Pakistan and establishes why Pakistan is unlikely to change. An essay on Maldives and the rising stamp of Jihadism there is interesting. A lot is given to the notoriety of the ISI, describing in detail its role in guiding Pakistan’s Jihadi destiny. It concludes that nothing will change regards Pakistan’s negativity and self-belief that it can guide its destiny through the notoriety of its Army and the ISI. However, the Pakistani people are spared the ignominy of connection to the belief in these institutions. A review of India’s relations with Pakistan is the last essay and it does give a list of measures India needs to do even as it freezes relations with Pakistan, which is recommended.

The last three chapters are a review of politics of Islamic radicalism worldwide. Tufail goes on to discuss subjects such as Bangladesh, lone wolf attacks and the US system of counter terrorism. All these and more are interesting takes again in stand-alone mode.  An interesting one is the essay on trends within Turkey which are overturning the successful secular model of Kemal Ataturk. ‘Erdoganism’ is discussed but the real reasons for Turkey’s counter- revolution appeared to have evaded the writer in this essay. The treatment meted out to Turkey by rest of Western Europe, by including it in NATO and refusing entry to European Union, has had a major effect on the psyche of the Turkish citizenry. This has helped in the counter-revolution and at no time has this been more evident than at the height of the Daesh crisis when Daesh fighters used the open borders with Syria to enter the war theatres of Iraq and Syria.

What is perhaps missing is a full essay on J&K, examining its history, how Sufism was diluted as the prevailing ideology of the Valley people and how financial conduits, drug peddling and creeping Wahabi culture changed the game in favor of the Separatists. It would have been interesting to see Tufail’s informed take on Kashmir and what he would recommend for the turn around there.

Overall a good book, for the general reader but a must for those with an orientation towards following Political Islam.

(The reviewer is a retired lieutenant general and former GOC of the Srinagar-based 15 Corps, senior fellow of the Delhi Policy Group and visiting fellow at the Vivekananda International Foundation, Delhi.)

~ By Vikramjit Banerjee

After nearly 70 years of independence the question arises where do we see Hindu law proceeding towards. Hindu law, after the codification project in the 1950s, is again at a crossroads. The question now is not so much as to how to make Hindu law progressive but whether by making the law progressive, we are losing the essence of Hindu law.

Progressiveness in Hindu law has always been attached to two subjects, (a) the question of its treatment of women, and (b) the question of treatment of its castes or jatis, traditionally deemed low in the hierarchy. The question of the first has largely been solved by bringing in large-scale changes in to Hindu law through statute. This has resulted in the status of women being made at par with international standards. No doubt that this has resulted in damage to family structures but the allegation that Hindu law discriminates against women does not seem to find as much resonance as it used to find before.

The question as to how to deal with broader questions of inequality which exists as part of Hindu tradition is something which needs to be confronted. It is the view of this author that the future of Hindu law will be written in this new arena of contradiction between the continuous clamour to have equality and the continuous pull of tradition, which have for a long period of time treated groups of people differently based on their birth.

The last question which arises out of this broad discussion is what is the best method through which this equalisation can take place and how to formulate a system which would not lose the essence of Hindu tradition while making it egalitarian in its approach towards all adherents of its faith.

This paper will deal with four broad issues in relation to Hindu law, namely (a) the question of wider consultation while formulating changes to Hindu law , (b) the question of making temples centres of Hindu society while at the same time ensuring that being public places, there is no scope for discrimination in its structure , (c) the question of whether codification is a solution to the continuous problems of Hindu law or whether it is time for us to go beyond mere codification and (d) the question as to whether Hindu law may be de-legalised .

The question of wider consultation while formulating changes to Hindu law.

We have seen time and again that wide scale changes have been made to Hindu law without ever consulting Hindus. It has been an article of faith of the honourable Supreme Court that personal law are not subject to fundamental rights because personal laws are not law for the purposes of Article 13 of the Constitution of India. The catena of cases which continues to the present day through a large number of judgements  of the Supreme Court[1] would indicate that it is the view of the Court  that personal laws are not subject to fundamental rights enumerated in the Constitution since personal law is not strictly law. At the same time we have seen wide scale changes being brought in Hindu law by legislation by the State without any consultation.

Since the first modern codification of Hindu law was brought about in the early 1950s there has been huge changes which have been initiated within Hindu law. This has resulted in both the enhancement of the status of a woman within the family and has also resulted in changing the focus of a family from a composite unit to a social arrangement of independent individuals. It is a different question altogether whether the said changes have actually benefitted women outside the limited periphery of relatively independent women of a certain section of society.

In Hindu law marriage is a sacrament. The government  through legislation has changed  the very nature of marriage by allowing extensive changes in the concept of marriage in society. The process through which norms and laws of divorce have been loosened making it easy for people to break out of the norms of marriage has been unparalleled in the last 1000 years. The extensive intervention in the question of succession rights has also resulted in creating and accentuating issues which have resulted in fracturing of the family. The result of this wide ranging intervention has been that the concept of joint family has almost disappeared and has  increasingly been replaced by nuclear families in urban areas of India .

However these extensive changes have been initiated without consultation with the wider Hindu society. It seems to have been taken for granted that the logic which was behind the initiation of the first Hindu Code still holds valid today. The state it seems has gone out of its way to ensure that the bearers of tradition, whether it be religious or social are excluded from the process of formulation of such personal laws on the ground that they would be impediments to change , even though such institutions have a wide impact on society. On the other hand the state has gone out of its way to consult non-governmental organisations which are perceived by the state to be progressive. These ‘progressive’ elements are far removed from Indian reality and have very little impact on formulation of social norms. It is also surprising that this process of using external catalysts completely alien to Hindu society and tradition are only being used for making changes in Hindu law and not for making changes in family and personal law of other religions. In fact it is apparent that the government has reacted to social and religious pressures while dealing with personal law of other religions. This unilateral approach has resulted in cleavage within the Hindu society whereby the laws which have been framed for society do not reflect the societal reality. This unfortunate creation of laws disconnected from the underlying undercurrents within society has resulted in unintended but grave consequences on those very people whom the laws were supposed to protect. The increasing misuse of criminal law to target other women in the family of a husband by a disaffected wife because they seem to be the most vulnerable arises out of this complete incomprehension of the state of social realities.

No doubt that there are changes which are required in Hindu law and no doubt that such changes are long time coming but such changes cannot be brought in by government fiat alone; there has to be generation of social will for such changes. It is important to remember that whenever wide scale changes in Hindu law have been initiated, the prime movers of such changes have been from within Hindu society, for e.g. Ishwar Chandra Vidyasagar and Baba Saheb Ambedkar. The process of initiation of debate and the dissemination of ideas fundamentally changed people’s views of certain laws which were discriminatory. The government, it seems today, is not interested in the debate but is more interested in surreptitiously making changes in Hindu law to the exclusion of other personal laws.

It is important therefore that a process be initiated whereby the government is mandated to consult religious and social groups before bringing in changes into Hindu law in future. The structure so created may be a representative structure or a board or it may be a method whereby different groups may be consulted but it is imperative that such a structure through statutory backing must be created for the future.

The question of making temples centres of Hindu society while at the same time ensuring that being public places, there is no scope for discrimination in its structure.

There are essentially two parts to this question. The first part deals with the question as to how Hindu temples, which have been taken over by the government either because of disputes or because of the public interest, be returned to the people and what sort of governance structure be put in place once these temples have been returned to Hindu society. The second part is how to make worship of an increasingly egalitarian faith equal. Needless to say this is still a huge challenge and remains a key element in creating a society with less hereditary privileges. Considering how contentious the second issue is, it would be perhaps proper that a separate paper be presented on it. However for the purposes of this paper a broad outline is only indicated as to how possibly an attempt to create uniformity may be the first step towards a broader reworking of the entire process.

In relation to the first question, it is important to understand that most of today’s big Hindu temples in India are governed by the state. This has led to a situation whereby Hindu religion has been de-facto nationalised. It does not mean however that Hindu religion has been given a special status under the Constitution but that the major places of worship as well as the wealth generated out of such worship and the disbursal of the same has not remained in the hands of Hindu society but has been transferred into the hands of the government. Prima facie it is obvious that the said arrangement is contrary to strict secularism. It also creates a situation where vis-a-vis other religions Hindus feel discriminated. It is also a matter of continuing incomprehension as to why the wealth of the community which has been given for a religious purpose is used by the state for secular and nonreligious ends. No doubt that the wealth generated may rightly be used for social upliftment but the question is as to whether the Hindu community should have a say both in setting its priorities as well as it’s ends. It is also well known that temples have been the centres of Hindu community for thousands of years. The attempt of various different competing colonial regimes have been to destroy or remove from control of Hindus their temples. At the time of foreign colonialism, this thinking may have been a much hated but nonetheless an effective tool of governing the people but it is surprising that in independent India under the governing credo of secularism, such practices continue.

It is suggested that it is time that governments return temples, some of which have been ostensibly taken over temporarily but factually permanently, to the Hindu community. The method of governance of these temples once they are returned needs to be discussed threadbare. There are two broad models which may be taken up for consideration, either a territorial model based upon the state and or at the national level which would be a representative in nature which would govern all the public temples on the lines of the Shiromani Gurudwara Prabandhak Committee or a shrine specific model again which should be representative in nature like the one at Vaishno Devi , Tirupati and Amarnath. However the role of the state, which has been the hallmark of the shrine specific model, should be reduced to a minimum. It is suggested that a statutory framework of the same should be formulated either as a model bill or as a comprehensive one. Needless to say that the composition of the representation should be truly egalitarian and it is suggested that it should also include provisions of affirmative action so that the same may be truly inclusive. Such a step, as making public temples truly inclusive, would be in consonance with Article 25 (2) (b) of the Indian Constitution which mandates that the government throw open Hindu religious institutions of a public character to all classes and sections of Hindus.

The second part is the question of equalisation or the de-priviligesation of worship. While accepting that there is a private nature to faith and religion, it is also important to recognise that increasingly Hindu religion and the exercise of Hindu religion is a public act. It is also important to recognise that public Hindu temples as distinguished from private Hindu temples are by their very definition should be made accessible to every Hindu. It is important to ensure that there is no scope for discrimination of any sort on grounds of social inequality in any Hindu temple. If needed it is crucial that the said changes be brought about through statute in the exercise of Raj Dharma of the state.

The second aspect of the said right to worship is the right to equalisation of opportunity to being priests at public temples. There is no doubt that all rituals in different temples are highly specialised and that such rituals take a large number of years to perfect. There is also no detracting from the fact that such rituals need to be performed in consonance with age old tradition, custom and norms. However over a period of time, the performance of such rituals and the right to perform them have become hereditary. Just as it would be incorrect to assume that someone merely learned in Sanskrit would be able to perform the rituals exactly, it would also be a mistake to assume that those who are born into a certain family would be able to perform the rituals better than those who are not from the family. It is suggested as a first step that the qualifications of priests in Hindu temples be standardised. This could either be in the form of a degree or in the form of an examination. However to be able to take the position of a priest in any public temple there should be a large period of apprenticeship which would allow a novice to learn and internalise the specific rituals of the temple in which he would conducts worship.

The reforms in priesthood as has been mandated by the Supreme Court is not contrary to Hindu religion and is an important step to ensure egalitarianism within the religion[2].

The question of whether codification is a solution to the continuous problems of Hindu law or whether it is time for us to go beyond mere codification.

The codification of laws is a gift to India by the British. The laws as we know them today whether they be in criminal law or commercial Law or in personal law are a product of westernisation of India’s jurisprudence.

There is nothing per se incorrect with codification. Codification produces uniformity and standardisation. Codification also reduces arbitrariness. Therefore, in a modern democracy codification of laws is the cornerstone of constitutionalism. However codification of personal laws has done more harm than good in India.

The reason why codification of personal laws in India is harmful to Indian society was because the process of standardisation of norms which is the basis for codification was done without trying to find out the reality of the validity and applicability of such norms in practice. As is now well known the first formulation of a codified law was done by the British and all subsequent changes including the acts collectively known as the Hindu Code were done in pursuance of a modernist understanding of Indian society. It differed greatly from what was practised on the ground. This resulted in an anomalous situation whereby instead of incorporating flexibility which is the key to family relationships the law added rigidity. Numerous social customs which was the basis of Hindu law and which gave it flexibility to deal with various different situations arising in society were at a single stroke removed by the Hindu Code. This removed, at a single moment, the tools which would have been available to those adjudging those disputes to come to a fair and equitable conclusion.

The biggest argument towards codification of personal law has been that it has brought in equality in Hindu personal laws. However it is suggested that instead of codification if the personal laws were made subject to the fundamental rights and equality provisions of the Constitution as is clearly made out in Article 25 of the Constitution and the same were implemented strictly, the flexibility of the tradition as well as the imperative of modern equality would have been maintained. The random standardisation of Hindu law without contextualisation has resulted in complete disjunction of reality, tradition, actual practice and textual norms. It is time possibly to look outside the box for comprehensive solutions.

The question as to whether Hindu law may be de-legalised

The other big question which is related to the de-codification of Hindu law is the related idea of de-legalisation and removing the Judiciary from an area which it is ill-equipped to handle, namely family relationships.

Family by nature is a product of society and the unit on which a society is constructed. The insertion of a rights in the family structure has led to more damage than good. The exercise of these rights has been through the courts of law. This in turn has led to the situation where the entire process of living in a family has been legalised. Every aspect of one’s living in a family structure has now been made subject to some form of legal regulation. This has on one hand increased legal intervention in the family and on the other hand has also resulted in exacerbating differences between the family members. It has also resulted in providing tools to members of the family to destroy the family as a unit. The ostensible reason for doing this, as made out by progressives, is to set right the inherent imbalance of power which exists within the family. The resultant fallout of such misguided intervention has been that the family structure in the urban areas of India is increasingly collapsing. In Western countries where there is the provision of social security, the collapse of the family may be set off against the safety net provided by the state. However in India where there is no social security the collapse of the family has a disastrous impact on the weakest members of the family. The process of approaching the court which seems a remedy in the short run, being easily available, turns out to be a mirage in the long run. The Courts are also ill-equipped and completely at a loss on how to handle family relationships which is the keystone of personal laws .It is therefore suggested that it is also time that we explore as to whether the dispute resolution mechanism of Hindu personal law be brought out of the courts and given to social dispute resolution mechanisms. The details of what would be adequate and what would keep interests of all stakeholders in mind may have to be formulated after deeper and wider consultation but it is time to see whether alternative dispute resolution mechanisms may be a better method to solve family disputes in Hindu Law. It is also to be specifically noted here that even if such resolution mechanisms are taken out of the purview of the courts the same would be subject to supervision of the courts under article 226 of the Constitution of India and therefore must comply with constitutional norms and fundamental rights. The chance of such dispute resolution mechanisms taking any action which would go contrary to accepted norms of equality would therefore be completely mitigated.

CONCLUSION

In the end it is important to note that a long time has passed since the Hindu Code has come into effect. We have been able to note its disadvantages as well as its advantages. The disadvantages which we brought upon ourselves in the Hindu Code needs to be remedied by tools which are available to us. On the other hand there is an impending need to make Hindu religion and Hindu law even more inclusive and non-discriminatory. The future lies in the road whereby we would be able to wed the twin ideals of tradition and constitutional obligations in holistic manner. This article is hopefully an initiator of discussion towards that path.

The author is an advocate at Supreme Court of India and also Advocate General of Nagaland. The views expressed are his own.

(This article appeared in India Foundation Journal, May-June 2016 issue.)

[1] Riju Prasad Sarma v. State of Assam 2015 (9) SCC 461.

[2] N. Adithyan v. Travancore Devaswom Board 2002 (8) SCC 106

~ By Saema Jamil

The history of Hindu Law reforms spans a period of fifteen years (1941 to 1956). A Hindu Law Committee was set up in 1941. It recommended the enactment of one comprehensive code that would cover all matters relating to marriage and succession. The recommendations led to the formation of the second Law Committee in 1944 which submitted its report in 1947 to the Federal Parliament. There were fiery debates in the Parliament^[1] over the recommendations for almost a decade before four separate Acts could be passed in 1955-56.^[2]

The enactment of the Acts was hailed as a major leap towards the liberation of women. However, the story behind the codification of Hindu Law is not that simple. Politics and appeasement of the conservatives played a major role in the enactment of the four Acts and the goal of liberating women and attaining gender equality took a back seat. The foremost concern of the Hindu reforms was to amalgamate the diverse Hindu society and to bring uniformity in the law for the purpose of unification of the nation.^[3]

Thus, even though the Hindu personal reforms were portrayed to be radical, the provisions did not do complete justice to women. The final Acts that were passed were so different from the original provisions that were mooted that it can almost be said that the government had given up on the idea of a Hindu Code.^[4] Despite this, it cannot be denied that the Hindu personal law reforms had a definite positive impact on women’s rights. It might not have been a leap but it was definitely a step towards achieving gender equality. And we have been taking steps in the same direction ever since. It is necessary to critically analyse the provisions of the Hindu Code to ensure that we do not waiver or get lost on the road to gender equality and finish successfully the journey that we have begun.

This article would discuss the provisions of three of the Acts of the Hindu Code: The Hindu Succession Act, The Hindu Marriage Act and The Hindu Minority and Guardianship Act.

1. Hindu Succession Act

Hindu Law recognises a Hindu Joint Family as a separate entity. Before Hindu Succession Act, 1956, the joint family property was owned in the name of male coparceners^[5] and on the death of one of the coparceners the property devolved to the remaining coparceners in accordance with the doctrine of survivorship. The females had no right over the joint family property except the right to claim maintenance.

The Hindu Succession Act, 1956 brought in two major changes: it conferred full ownership of property on Hindu women who prior to the Act had only a “limited estate” and it diluted the doctrine of survivorship by introducing the concept of “notional partition”. The former change has improved the condition of women considerably. The courts have interpreted the Section liberally giving benefit to women. Recently in Jupudy Pardha Sarathy v. Pentapati Rama Krishna & Ors^[6], the Supreme Court held that a limited interest created in whatever form, in favour of a widow who was having a pre-existing right of maintenance becomes an absolute right by the operation of Section 14(1) of the Hindu Succession Act. This was a case where the husband of the widow had bequeathed a limited interest in some property to her. The court held that the interest was given to her in lieu of maintenance since the husband was aware that she had no means to maintain herself and therefore, Section 14 (1) would apply and she had become the full owner of the property after the 1956 Act was enacted. They gave a narrow meaning to Section 14 (2) to ensure that the woman gets the benefit of Section 14 (1) and upheld the spirit of the provision.

The second change introduced did not introduce gender parity though it did allow women more rights than they previously had. According to the concept of notional partition, on the death of a coparcener, his undivided share was deemed to be his separate property which devolved in accordance with inheritance laws. The rationale was to ensure that the daughters are not left with nothing. The position was still obviously inequitable as the daughter’s share was always considerably less than the male’s share.^[7]

This discrimination was sought to be ended by the 2005 Amendment Act which made daughters coparceners and abolished the doctrine of survivorship.^[8] The amendment has made the law more equitable but has led to absurd situations. For example, a daughter who was married already before the date of commencement of the 2005 Amendment Act would not be a member of her father’s joint family but by virtue of the amendment would become a member of the coparcenary which is a narrower institution than a joint family.^[9] Similarly, a daughter who gets married after the 2005 Amendment Act comes into force would be a member of two joint families (one of her father and the other of her husband) and her daughter would be a member of three joint families (her father’s, her maternal grandfather’s and her husband’s)^[10] and two coparcenaries[11]. This is a result of a fixation with the concept of Hindu Joint Family. It needs to be understood that the concept of Hindu Joint Family in its strict form cannot continue in the present times.

The entire Hindu family system has been unfair to women. It is the female who ceases to be a member of her father’s joint family and becomes a member of her husband’s joint family on marriage. Her identity (including her name) changes when she gets married. It is as if she is transferred from one family to another (usually for a consideration, i.e. dowry). But it is also necessary to acknowledge that society is dynamic and is responding to the problem of gender discrimination in the family with change. For example, many parents are not using surnames for their children and women have started retaining their own surnames or using both surnames (hers and her husband’s). This dynamism needs to continue and law and society needs to work in tandem.

Another problematic feature of the Act is the presence of separate provisions for succession in case of Hindu men and Hindu women dying intestate^[12]. The property of Hindu males devolves upon his heirs irrespective of the source of the income but the property of Hindu females devolves according to the source of the income. This provision dilutes the effect of revolutionary provisions like Section 14 and makes it seem as if the woman is a temporary occupier of the property and that the property must be reverted back from where it was inherited^[13] and that the woman has no identity of her own.[14]

It is thus clear, that the 2005 Amendment Act has not introduced true gender parity; nevertheless it cannot be denied that it was definitely a step in the direction of reducing the existing inequalities in society. The need of the hour is to recognise the biased nature of the law and to challenge it since lack of challenge and questioning puts a stop to dialogue and more importantly to change. Thus, while recognising and appreciating the positive impact of the 2005 Amendment Act, it is necessary to understand how it still does not guarantee equality between the two sexes.

1. The Hindu Minority and Guardianship Act, 1956

Section 6 of the Hindu Minority and Guardianship Act, 1956 clearly states that the father is the natural guardian of a Hindu minor when the minor is a boy or an unmarried girl and the mother would be the natural guardian after the father. It relegates the mother to a lower position than the father. The Section flagrantly denies gender equality and is ultra vires the Indian Constitution by virtue of Articles 14 and 15. And yet, the provision has been declared constitutional by the Supreme Court of India.^[15]

The Court read Section 6 along with Section 4 (c)^[16] of the Hindu Minority and Guardianship Act and came to the conclusion that both parents have been recognised as the natural guardian of the minor. They further stated that the word “after” in Section 6 (a) of the Act does not disqualify the mother from acting as the guardian of the minor during the lifetime of the father. It interpreted the word “after” to mean “in the absence of” the father. The absence could be temporary or permanent and could be a result of total apathy of the father towards the child or any ailment of the father. According to the court, this interpretation would be in consonance with the intent of the legislature which was to make provisions keeping in mind the welfare of the minor and would help the provision to stand the test of constitutionality. The interpretation was in no way ingenious because the provision had already been read down around two decades before this judgment was pronounced.^[17]

The Apex Court in Githa Hariharan case did not explicate how reading down Section 6 (a) of the Act made it constitutional. Even if the word “after” in the Section implies “in the absence of”, the Section stills violates the woman’s right to equality. The mother is recognised as the natural guardian of the minor only when the father, for whatever reasons, is not in a position to look after the welfare of the minor. The interpretation denies the woman equal rights as her partner. The law as well as the court assumes that the father is either more capable or better equipped to cater to the needs and welfare of the minor than the mother. Lamentably, the court while giving a decision against gender equality completely denied it was doing so. It violated the right to equality employing the language of equality.

The right thing to do would have been to declare the Section unconstitutional as it violated the fundamental right to equality. Instead the court after paying lip service to the constitutional mandate of ensuring gender equality held the Section constitutional giving specious reasons. This was worse than saying that the court would not interfere in personal laws because if it would have said so, it would have at least recognised that the Section was violative of the right to equality. However, by declaring that the Section is constitutional, if read down, the court did not even acknowledge the biased nature of the Section.

Also, Section 6 (a) of the Act reveals the influence of prescriptive gender behaviour and roles on the legislature. It makes the father the natural guardian of the minor in normal circumstances but stipulates that the custody of the minor till the age of five would ordinarily be with the mother. This is in line with the assumption that it is the duty of the mother to take care of the minor in his/her early years because she is better suited to the job while the father is entitled to manage the minor’s person and property and be the natural guardian.^[18]

The entire scheme of Section 6 of the Hindu Minority and Guardianship Act, 1956 is problematic because it tends to validate the hypothesis that men and women are inherently different and therefore better suited for different roles.

Another point to note is that Section 7 of the Hindu Minority and Guardianship Act says that the natural guardian of an adopted son is the adoptive father and after him the adoptive mother. There is no corresponding Section saying the same thing about an adoptive daughter (possibly because Hindu Adoption and Minority Act was enacted after Hindu Minority and Guardianship Act and therefore at the time of enactment of the former Act daughters could not be adopted). But even without an express Section, the natural guardian of an adopted daughter is the adoptive father and after him the adoptive mother by virtue of Section 6 of the Hindu Minority and Guardianship Act read with Section 12 of the Hindu Adoption and Maintenance Act. Nevertheless just to bring in parity, it would be desirable if there is an explicit provision inserted to make it express.

• The Hindu Marriage Act, 1955

The Hindu Marriage Act, 1955 was indeed a progressive Act if we keep in mind the year of its enactment. It gives almost equal rights to the wife and the husband. The wife can file an application for restitution of conjugal rights and the husband can ask for maintenance from the wife in appropriate cases. However, this Act is a perfect example of how an equal law on paper can be applied in a discriminative manner in practice. For instance, what amounts to cruelty in the case of husbands and wives respectively differs according to the expected roles they are supposed to carry out in society. This conundrum of applying the same law differently can be rectified only by bringing about a change in the way people think and not by changing the law and it has to be conceded that the change is happening gradually.

There is one provision in the Hindu Marriage Act also which is blatantly discriminatory against women. The provision being referred to is Section 25 (3) of the Act which deals with permanent alimony and maintenance. It reads, “If the court is satisfied that the party in whose favour an order has been made under this section has re-married or, if such party is the wife, that she has not remained chaste, or, if such party is the husband, that he has had sexual intercourse with any woman outside wedlock, it may at the instance of the other party vary, modify or rescind any such order in such manner as the court may deem just.” Thus, for the wife unchastity is the criterion for modifying or rescinding the order in her favour while for the husband it is sexual intercourse.

The term “chaste” is difficult to define and can be interpreted differently by different people according to their moral and ethical standards. Sexual intercourse, on the other hand, is something that positively needs to be shown and is difficult to prove. The Section admittedly prescribes different standards for men and women when it comes to a decision with respect to when an order for maintenance can be modified or rescinded. For instance, if a woman is out with a man at midnight, it might amount to being unchaste and the maintenance order might be modified but the situation is different in a man’s case.

Thus, the Hindu Marriage Act, despite being one of the most equal laws, still continues to hold on to archaic notions of chastity and purity of women and making their rights dependent on them.

Conclusion

Hindu law relating to family has evolved over the years and has become a lot more egalitarian than it was in the past and the attempt of this article was definitely not to overlook positive amendments in the law or progressive decisions given by the courts. The aim was to throw light on the things that still need change and that need to be relooked at from the perspective of gender equality, to argue that we cannot sit satisfied with what has been done and to iterate that we need to look forward and recognise what is still unfinished.

(This article appeared in India Foundation Journal, May-June 2016 issue.)

[1] The matter was debated in the Provisional Parliament between 1948 and 1951 and in the first Parliament of the newly independent India from 1952 to 1955.

[2]Flavia Agnes, Women and Law in India 78 (3d ed. 2006).

[3] See generally Archana Parashar, Women and Family Law Reform in India: Uniform Civil Code and Gender Equality 103 (1992); Flavia Agnes, Family Law, Volume 1, Family Laws and Constitutional Claims 20 (2011); Madhu Kishwar, Codified Hindu Law: Myth and Reality 2151 Vol. 29 No. 33 Economic and Political Weekly, August 13, 1994.

[4]Hukum Singh stated in a Parliamentary debate, “It is not the public opinion that has changed but…the government that has changed its attitude…This is not the original bill…The Hindu code has practically been given up by this government.” See Parliamentary Debates, House of the People, 7253-54 Vol V, 1954, Part II.

[5]In Hindu Law, within the Hindu Joint Family there is a smaller unit of persons known as the coparcenary which comprises of the senior most male member and his lineal male descendents up to three immediate generations. The concept of coparcenary is based on the son’s birth right in the joint family property.

[6] Civil Appeal Number 375 of 2007

[7] For example in a Hindu Joint Family consisting of a father and his two children (a son and a daughter), if the father dies there would be notional partition in which the son would get half the joint family property. The father’s half would then devolve to the son and the daughter equally. Thus, while the son would get three-fourth of the property, the daughter would only get one-fourth. See Poonam Pradhan Saxena, Succession Laws and Gender Justice in 286 Redefining Family Law in India: Essays in Honour of B. Sivaramayya (Archana Parashar & Amita Dhanda Eds. 2008).

[8]See Section 6 of Hindu Succession Act, 1955 after the Hindu Succession (Amendment) Act 2005.

[9]Poonam Pradhan Saxena, Supra Note 7 at 288

[10]Id. At 288

[11] This confusion could have been easily done away with by making a provision which provided that the marriage of a daughter would result in a partition with respect to her and she would receive her share in the coparcenary property.

[12]Sections 8 to 13 of the Hindu Succession Act, 1956 give the rules for devolution of property of Hindu males dying intestate while Sections 15 and 16 provide rules for devolution of property of Hindu females dying intestate.

[13]Supra Note 7, pp. 289. The doctrine of reversion has been done away with by the introduction of Section 14 in the Hindu Marriage Act but the essence of the doctrine has been retained by providing separate rules for devolution of property of Hindu females when it is inherited from her parents or husband or in-laws.

[14] This is also clear from the fact that before marriage a woman is referred to as d/o and after marriage she is referred to as w/o. She is never recognised as an autonomous individual.

[15]See Ms. Githa Hariharan and Anr. v. Reserve Bank of India and Anr. (1999) 2 SCC 228.

[16]Section 4 (c) of the Hindu Minority and Guardianship Act defines the term “natural guardian” as meaning any of the guardians mentioned in Section 6 of the same Act.

[17] In Jijabai Vithalrao Gajre v. Pathankhan & Ors 1971 SCR (2) 1, the court held that when the father was not taking any interest in the affairs of the minor daughter and only the mother was looking after the minor daughter’s interest and managing her property, it would be proper to consider the mother as the natural guardian of the minor daughter.

[18]The mother is seen as a better care taker because she is expected to be more loving and caring while the father is presumed to make more rational and reasonable decisions for the welfare of the minor. The reasoning is similar to the arguments made by cultural feminists.