01 October, 2020
- Announcement on Solution of Prelims 2020
- Mains Question Assignment from DNS
- Time to shift focus to the maritime sphere - (International Relation)
- On the Quad, define the idea, chart a path - (International relation)
- Centre sticks to target for borrowing - (Indian Economy)
- Question of the day (International Relation)
- UPSC Current Affairs: Time to shift focus to the maritime sphere |Page No. 06
UPSC Syllabus: Mains: GS-Paper 2- International Relations
Sub Theme: Failure of India’s continental strategy| Need to Focus on Maritime Strategy| UPSC
According to the author New Delhi’s grand strategic plans in the continental space may have reached a dead end.
- India has been traditionally obsessed with a continental approach to war and peace.
- TAPI Pipeline
- Chabahar port and onward connectivity to Afghanistan
- 'Connect Central Asia' Policy
- India–Myanmar–Thailand Trilateral Highway
- India’s continental ‘grand’ strategy is facing an existential crisis today.
- Reconciliation with its key adversaries, China and Pakistan, is unlikely at this point .
- Pursuing its ambitious territorial claims on the ground is almost impossible.
- New Delhi’s continental options seem restricted to holding operations to prevent further territorial loss.
The current state of India’s continental strategies is hardly flattering –
- China has begun to push the boundaries with India and Beijing is neither keen on ending the ongoing border stalemate nor reinstating the status quo with India as of March 2020.
- India-China Line of Actual Control in the Northeast is no more peaceful. China is pushing back New Delhi’s claims on Aksai Chin
- China has crossed the red line with India and India’s LAC with China is not going to be the same ever again.
- It is the beginning of a long, bitter winter in the Himalayan borders between the two Asian giants.
- In the Northwest, the Pakistan front has also been heating up. Ceasefire violations on the Line of Control (LoC) have spiked since last year as has the infiltration of terrorists across the LoC.
- With the change of the status of Jammu and Kashmir (J&K) by New Delhi in 2019, and Pakistan altering its political map a few months ago to include all of J&K, the India-Pakistan contestation over Kashmir has become fiercer.
- Equally important is the geopolitical collusion between Islamabad and Beijing to contain and pressure New Delhi from both sides. While this is not a new phenomenon, the intensity of the China-Pakistan containment strategy against India today is unprecedented.
- Changes in Afghanistan
- The ongoing withdrawal of the United States from Afghanistan and the return of the Taliban, with whom India has very little contact, could turn the geopolitical tide against New Delhi — similar to the situation in the early 1990s.
- But unlike in the 1990s, tables have turned in Afghanistan. The Taliban is no more an outcaste.
- With the withdrawal of forces of the North Atlantic Treaty Organization from Afghanistan, the geopolitical interests of Pakistan, China and Russia would broadly converge in the region.
- The change of the geopolitical landscape in Afghanistan and the frictions in Iran-India relations will further dampen India’s ‘Mission Central Asia’
Maritime strategy explained
It appears abundantly clear now that New Delhi’s excessive focus on the continental sphere since Independence has not yielded great returns in terms of secure borders, healthy relations with its neighbours or deterrence stability vis-à-vis adversaries. If so, it is time for India to change its grand strategic approach — by shifting its almost exclusive focus from the continental sphere to the maritime sphere.
Clearly, New Delhi has already begun to think in this direction with the Ministry of External Affairs (MEA) establishing a new division to deal with the Indo-Pacific in April 2019.
There are several reasons why a maritime grand strategy would work to India’s advantage while still struggling with a continental dilemma –
- Unlike in the continental sphere where India seems to be hemmed in by China-Pakistan collusion, the maritime sphere is wide open to India to undertake coalition building, rule setting, and other forms of strategic exploration.
- India is located right at the centre of the Indo-Pacific geopolitical imagination, in the midst of the oceanic space spanning “from the shores of Africa to that of the Americas”, as Prime Minister Narendra Modi put it at the Shangri La Dialogue two years ago.
- Unlike in the continental sphere, there is a growing great power interest in the maritime sphere, especially with the arrival of the concept of ‘Indo-Pacific’. The Euro-American interest in India’s land borders with Pakistan and China is negligible, and more so, there is little any country can do to help India in its continental contestations. The situation in the maritime sphere is the exact opposite: great powers remain ever more interested in the maritime sphere and this interest has grown substantially since the coinage of Indo-Pacific. For instance, Germany recently released its Indo-Pacific guidelines following the example of France which brought out its Indo-Pacific strategy last year.
- Beijing’s bullying behaviour in the South China Sea in particular and the region in general has generated a great deal of willingness among the Euro-American powers and the countries of the region, including Australia and Japan, to push back Chinese unilateralism. This provides New Delhi with a unique opportunity to enhance its influence and potentially checkmate the Chinese ambitions in the region.
- The maritime space is a lot more important to China than engaging in opportunistic land grab attempts in the Himalayas, thanks to the massive Chinese trade that happens via the Oceanic routes and the complex geopolitics around the maritime chokepoints which can potentially disrupt that trade.
A revitalised Indian maritime grand strategy will certainly provide New Delhi a lot more space for manoeuvre in the region and message Beijing that its Himalayan adventure could become costly for it.
Therefore, it is high time New Delhi shifted its almost exclusive focus from the continental space to the maritime space, stitching together a maritime grand strategy –
- The MEA’s Indo-Pacific Division is a good beginning
- so is the decision in 2019 to elevate the Quad meetings among India, Japan, the United States and Australia to the ministerial level.
- New Delhi would do well to ideate on the current and future maritime challenges, consolidate its military and non-military tools, engage its strategic partners, and publish a comprehensive vision document on the Indo-Pacific; the current ‘Indo-Pacific Division Briefs’ document put out by the MEA does not make the cut.
- More so, New Delhi should consider appointing a special envoy for Indo-Pacific affairs.
- UPSC Current Affairs: On the Quad, define the idea, chart a path | Page No. 06
UPSC Syllabus: Mains: GS Paper 2- International Relations
Sub Theme: Formation of QUAD | China’s reaction to QUAD | UPSC
Context - It is reported that the second Ministerial meeting of the four countries under the Quad will be held in Japan.
Formation of the Quad
- The Quadrilateral Security Group, called the Quad for short, was originally born out of the crisis that followed the Tsunami in December 2004. India’s rescue mission in the Indian Ocean was coordinated with the three other naval powers engaged in similar efforts — U.S., Australia and Japan. The idea of the Indo-Pacific as a larger maritime strategic community had been developed then.
- In 2007, Japan, Australia and Singapore joined the military exercise with India and U.S.
- The exercises and the strategic coordination in what Mr. Abe had called “the confluence of two seas”.
- Beijing and Moscow got rattled. They termed it an attempt to build “an Asian NATO”.
- S., which was trying to gain China’s support in the six-party talks on North Korea, cancelled quad exercise in 2008.
- The global financial crisis was still lurking in the shadows as America continued to enjoy its ‘unipolar moment’. The American establishment still believed that it could, somehow, persuade China to become a ‘responsible stake-holder’ and, in any case, required Chinese goodwill in dealing with America’s priorities — the nuclear issue with North Korea and Iran, and the War on Terror.
- Japan and Australia were riding the China Boom to prosperity.
- India was ambivalent at the time, because of uncertainties of others.
- Australia then pulled out of the exercises. The Quad was shelved for the next decade.
- In 2017, the Quad returned as Quad 2.0. There resulted due to the reassessment of the challenge from China by U.S, New Delhi, Tokyo and Canberra. Just months after the Doklam stand-off between the Indian Army and the PLA, officials from all four countries met in Manila for the ‘India-Australia-Japan-U.S.’ dialogue.
Chinese Hyper reaction
China’s shrill reaction to the idea of four like-minded countries establishing a plurilateral platform was, prima facie, intriguing. The idea was barely on the table; there was no clearly enunciated concept or proposed structures, much less joint understandings. The Chinese, however, labelled it as an Asian version of the North Atlantic Treaty Organization.
It became evident years later that the real reason for China’s hyperreaction was out of concern that such a grouping would “out” China’s plans for naval expansion by focusing on the Indo-Pacific maritime space. China was hoping that its naval build-up might slip under the radar because the Americans were distracted by continental challenges including Russia, Afghanistan and Iran, and would not look sea-ward.
Once the idea of Quad 1.0 had died down, China gained in confidence to reveal its hand –
- It advanced a new claim — the Nine-Dash Line — in the South China Sea;
- it undertook the rapid kind of warship building activity reminiscent of Wilhelmine Germany before 1914;
- it built its first overseas base in Djibouti; and
- it started systematically to explore the surface and sub-surface environment in the Indian Ocean beyond the Malacca Straits.
The manner of China’s dismissal of the Arbitral Award in the dispute with the Philippines on the South China Sea and its brazen militarisation of the islands after its President had publicly pronounced to the contrary, has once again brought the four countries onto the same page and given a second chance to the Quad.
A plurilateral mechanism
The Chinese are skilled at obfuscation. They will, perhaps, endeavour to conflate the Quad with the Indo-Pacific vision, and link both to the so-called China Containment Theory. The Quad nations need to better explain that the Indo-Pacific Vision is an overarching framework that is being discussed in a transparent manner, with the objective of advancing everyone’s economic and security interests. There are other such mechanisms in the region.
- In 2016, China itself established a Quadrilateral Cooperation and Coordination Mechanism with Afghanistan, Pakistan and Tajikistan and,
- more recently earlier this year, another one with Pakistan, Afghanistan and Nepal. T
The Quad is no exception.
The world today
In 2007, the Quad (the United States, Japan, India, and Australia) was an idea whose time had not yet come. That was a different world
This time around –
- the four countries are navigating through more turbulent waters.
- The global pandemic and the faltering global economy are taking a toll on the region’s growth and prosperity.
- The two major Pacific powers (China and America), are moving into a more adversarial phase of their relationship.
- Public opinion about China in all four countries is different from what it used to be in 2007.
The multilateral strategy
The forthcoming Ministerial meeting will be an opportunity to define the idea and chart a future path.
U.S. Deputy Secretary of State, Stephen Biegun, has suggested that other countries might be invited to join in the future. This too is welcome; India has many other partners in the Indo-Pacific.
A positive agenda built around collective action in humanitarian assistance and disaster relief, monitoring shipping for search and rescue or anti-piracy operations, infrastructure assistance to climatically vulnerable states, connectivity initiatives and similar activities, will re-assure the littoral States that the Quad will be a factor for regional benefit, and a far cry from Chinese allegations that it is some sort of a military alliance.
Prime Minister Abe had presciently said in the Central Hall of the Parliament of India on August 22, 2007 - “A ‘broader Asia’ that broke away geographical boundaries is now beginning to take on a distinct form.” It is the right time to realise Mr. Abe’s dreams.
- UPSC Current Affairs: Centre sticks to target for borrowing |Pg 14
UPSC Syllabus: Prelims: Indian Economy| Mains: GS Paper 3
Sub Theme: Increase in Fiscal Deficit| Should the Government be worried about Fiscal Deficit? |UPSC
India's fiscal deficit in the first five months of the financial year has touched almost Rs 8.7 lakh crores which is almost 109% of the earlier target of Rs 7.8 lakh crores fixed in Union Budget 2020-21. In spite of this, the Government has decided to go stick to its revised borrowing target of Rs 12 lakh crores fixed in May 2020. In this regard, let us analyze as to whether the Government should go for upward revision of Fiscal Deficit target or not.
The Union Budget 2020-21 had targeted the Fiscal Deficit of the Government at 3.5% of India’s GDP in the Financial year 2020-21. In terms of absolute value, it was around Rs 7.8 lakh crores. The Outbreak of COVID-19 has led to large scale decline in the revenue receipts of the Government. At the same time, there is a need to announce higher financial package to provide fiscal stimulus measures.
Taking into account, these two factors, in May 2020, the Government had decided to increase the borrowing limit for the financial year 2020-21 by almost 50% to Rs 12 lakh crores. According to some of the estimates, the Fiscal Deficit could rise to 5.6% of India’s GDP.
Now, as per Estimates, the Fiscal deficit in the first five months of Financial year has already crossed its earlier target. Hence, it was expected that the Government may go for upward revision of its revised borrowing target of Rs 12 lakh crores in order to provide fiscal stimulus. However, the Government has highlighted that it would stick to its revised borrowing target.
FRBM Act and Limits on Fiscal Deficit
In order to ensure Fiscal Discipline and to keep fiscal deficit under check, the Parliament has formulated the Fiscal responsibility and Budgetary Management Act, 2003. Under this act, the Government has been mandated to keep the fiscal deficit at 3% of GDP by the end of 31st March 2021. At the same time, the Government has been given freedom to exceed the Fiscal deficit target by 0.5% on account of certain factors. These factors are national security, war, collapse of agriculture, structural reforms and decline in the GDP growth of a quarter by 3%.
In the Budget 2020-21, the Finance Minister had decided to invoke the escape clause under the FRBM act and FD target for the financial year 2020-21 has been revised upwards to 3.5%.
As per the revised borrowing target of Rs 12 lakh crores, the Fiscal Deficit could increase to 5.6% of GDP. Hence, it’s not sure as to whether the Government would be able to meet its FD target of 3.5% in the current financial year.
Should the Government be worried about higher Fiscal Deficit now?
The increase in the Fiscal Deficit in the Current financial year has been attributed to decline in Tax revenue and not due to increase in Government expenditure. This has led to sharp contraction in the GDP growth rate to 24% in the first quarter of financial year 2020-21. This clearly highlights that the Government is withholding expenditure and desisting from announcing fiscal stimulus measures in order to contain Fiscal Deficit.
In order to counter the present economic slowdown, some of the economists have highlighted that Government should not unduly be worried about the Fiscal Deficit. The Government must focus on providing fiscal stimulus measures by undertaking higher expenditure for the creation of new assets. Such higher expenditure has the potential to create more employment opportunities and boost the declining demand in the Indian economy leading to increase in the GDP growth in future.