India’s 2014–15 budget doubled the rate of tax on coal from 50 rupees (US$0.82) to 100 rupees (US$1.64) per metric tonne. Though the additional revenue could accelerate the deployment of renewable energy technologies in India, the increase in coal tax is not an unambiguous step in the ‘right’ direction of lowering the carbon intensity of the Indian economy.
With more than half of the global population now living in urban areas, some in abject poverty, the path to sustainable development must pass through cities. In a meeting in July, the Working Group for the UN’s Sustainable Development Goals set a target to build ‘inclusive, safe resilient and sustainable’ cities and human settlements.
Before his election to India’s prime ministership, Narendra Modi was persona non grata in the United States because of his alleged complicity in the ethnic violence in Gujarat of 2002 in which 790 Muslims and 254 Hindus died, 2500 people were injured, and 223 more were reported missing. Though a subsequent Indian Supreme Court investigation in 2012 cleared him of complicity in the violence, Modi was still banned from entering the United States, a decision taken by the previous US administration but not lifted by Obama until after Modi’s election.
Increasing the GDP growth rate will be a major task for India’s new government. GDP growth will be critical for eradicating poverty and improving the living standards of India’s population. The economy also faces the daunting challenge of providing employment opportunities to about a million people being added to the job market every month. Rapid expansion of the industrial base of the country through labour intensive manufacturing appears to be the perfect solution to the country’s problems.
On Independence Day 2014, India’s Prime Minister Narendra Modi launched his financial inclusion plan to provide a bank account to every Indian household. His ‘Jan-Dhan Yojana’ (Scheme for People’s Wealth) — which, in typical Modi vernacular, plays on rhyming words — seeks to provide financial independence to unbanked Indians through a two-phase plan.
Indian economic data in July on industrial growth and inflation was disappointing. Industrial sector growth slowed to 3.4 per cent in June 2014 with the manufacturing sector, the largest component, growing at an anemic 1.8 per cent. But the more worrying set of statistics was the rise in retail inflation to 7.96 per cent in July 2014, which also reversed the declining trend observed since December 2013.
In 2011, the well-known historian, Patrick French, wrote and released a book which offered revealing data regarding the hold that lineage and family has had on Indian politics. The text, ‘India: A Portrait’, suggested that if the trend continued, India could be seen to slide backwards in progression to days when the country was ruled by a single hereditary monarch and various princes.
India has played the spoiler by refusing to sign the global agreement on trade facilitation agreed at the Bali Ministerial of the World Trade Organisation in December 2013. The signing of the agreement would have resulted in the first global trade reform agreement in the history of the WTO. The Trade Facilitation Agreement aimed to boost trade by providing for faster and more efficient customs procedures through effective cooperation between customs and other appropriate authorities.
Although not the world’s top military spender, India has been the world’s largest arms importer since 2010. The need to modernise has indeed been one major reason for India’s status as top spender on arms imports. But there are other factors at work too.
India has been the world’s largest arms importer every year since 2010, as its defence industry struggles to keep up with its international ambitions.
India will need a whole host of domestic and international reforms to re-boost the economy. However in a democracy that is going into an election year, only politically friendly reforms are likely to be undertaken. Can politicians persuade their constituents to accept reform?
The Indian economy is suffering from the effects of the government’s high-risk development policy, which relied on volatile capital inflows from US quantitative easing to finance consumption and inclusion.
