The Exit of Raghuram Rajan

CPR FACULTY ANALYSE
ECONOMY POLITICS

As Raghuram Rajan announces his departure not seeking a second term as RBI (Reserve Bank of India) Governor, read below the analysis to date by CPR faculty, both in the run-up to and post Rajan’s recent announcement:

In A Rajan a day in May 2016, Pratap Bhanu Mehta deconstructed the ‘institutional politics’ around the RBI governor, and what it revealed ‘about the nature of government’, writing that the premium on Rajan’s ‘public credibility’ went up considerably due to the government’s emphasis on ‘spin’.

In The Numbers RBI governor Raghuram Rajan did not get: 2014 and 282, Sanjaya Baru writes post Rajan’s announcement of returning to the University of Chicago, that it was the RBI governor’s inability to come to terms with India’s political economy that led to his exit.

Rajiv Kumar writes in The Indian Express that Rajan ‘must take his share of the blame for this unfortunate situation’, since by going public with his criticism of the government, he crossed red lines in trying to ‘combine the role of a senior policy mandarin with that of a public intellectual’.

The Fundamental Right to Property in the Indian Constitution

BOOK CHAPTER BY NAMITA WAHI
RIGHTS

Namita Wahi, fellow at CPR wrote a book chapter’The Fundamental Right to Property in the Indian Constitution’ in ‘The Oxford Handbook of the Indian Constitution’. Read below an abstract of the book chapter:

The Fundamental Right to Property enjoys the unique distinction of not only being the second most contentious provision in the drafting of the Constitution, but also the most amended provision, and the only fundamental right to be ultimately abolished in 1978. This book chapter narrates the evolution of the right to property in the Indian Constitution, and outlines the chequered trajectory of its doctrinal development, following the First (1951), Fourth (1955), Seventh (1956), Seventeenth (1964), Twenty-Fourth (1971), Twenty-Fifth (1972), Twenty-Sixth (1972), Twenty-Ninth (1972), Thirty-Fourth (1974) and Thirty-Ninth (1975) constitutional amendments.

Ultimately, the Forty Fourth Constitutional Amendment, 1978, deprived the ‘right to property’ of its ‘fundamental right’ status. The trajectory of the right to property in the Constitution, as seen from the drafting of the original constitutional property clause, and its evolution through judicial interpretation, legislation, and constitutional amendment, demonstrates the Indian State’s continual attempts to reshape property relations in society to achieve its goals of economic development and social redistribution. Each iteration of the property clause favoured property rights of certain groups and weakened those of others and was the product of intense contestation between competing groups that used both the legislature and the judiciary to further their interests. Concomitantly, lurking behind the development of the Supreme Court’s doctrinal jurisprudence is the Court’s fear of arbitrariness of State action.

To access the full chapter, click here

The Future is Federal: Why Indian Foreign Policy Needs to Leverage its Border States

AS PART OF ‘POLICY CHALLENGES – 2019-2024: THE BIG POLICY QUESTIONS FOR THE NEW GOVERNMENT AND POSSIBLE PATHWAYS’
CPR INTERNATIONAL POLITICS SOUTH ASIA

By Nimmi Kurian

India’s neighbourhood policy makes for a feel-good narrative of reimagining borders as bridges and speaks a comfortable cosmopolitan language, laying claim to a universal vision of globalism. The country’s diplomatic engagement has begun to acquire a level of diversity and complexity in recent years with a host of subregional initiatives such as the Bay of Bengal Multi-Sectoral Initiative for Technical and Economic Cooperation (BIMSTEC), the Mekong Ganga Economic Cooperation (MGC), and the Bangladesh China India Myanmar Economic Corridor (BCIM). The past five years have seen a further deepening of this idea at the substantive as well as rhetorical levels with initiatives such as the Neighbourhood First policy, the rechristened Act East policy, Prime Minister Modi’s high-profile visits to South Asian capitals, and the setting up of a States Division at the Ministry of External Affairs (MEA).1

But for all its enthusiastic rhetoric, there is a curious paradox at the heart of India’s subregional discourse. While the border states are projected as bridges between India and the neighbourhood, in actual practice India’s neighbourhood policy remains unambiguously top-down and continues to be firmly led and steered by New Delhi. This is both puzzling and problematic since the notion of subregional cooperation is fundamentally premised on making geographically proximate border regions within two or more countries important sites of cooperation. Standing this logic virtually on its head, it is New Delhi that has regularly hosted BIMSTEC’s Working Groups on regional governance issues such as disaster management, customs cooperation and regulation of passenger and cargo vehicular traffic. A comparison with the working of China’s subregional discourse is both revealing and sobering. China’s border province of Yunnan, for example, regularly hosts the Greater Mekong Sub-region Working Groups on a range of regional governance issues such as environment, tourism and agriculture. The centralising impulse is again all too evident in India’s discourse on border trade, for instance in Dharchula, Uttarakhand, an ancient border town located on the trans-Himalayan trading routes with Nepal and China. Trade permits required to conduct trade are no longer issued at the border but instead in Dehradun, the state capital, entailing protracted procedural delays and costs. Taken together, dichotomies such as these represent a classic instance of suboptimal subregionalism at work, a discourse that has clearly ended up aiming low and hitting lower.2

These dichotomies also indicate that there has been virtually no political incentive to invest in an institutionalised two-way engagement between national and subnational policy actors.3 This is a cause for serious concern and can result in institutional gridlocks between the Centre and states at a time when international engagement by border states is increasing. If recent trends are anything to go by, resource conflicts between the national and subnational governments could be a potential minefield. Bihar’s demand for an equity stake in power projects being executed by India in Bhutan as well as the Teesta river dispute between India and Bangladesh arising out of the deadlock between the Centre and West Bengal bring out the inadequacy of existing institutional arrangements in negotiating such conflicts. This is also adding an edge to domestic resource conflicts as can be seen in the recent constitutional dispute between Nagaland and the Centre wherein the Centre contested Nagaland’s claim that Article 371 (A) of the Constitution conferred upon it the right to develop its natural gas reserves. If New Delhi does not attempt to fill this policy vacuum, these growing federal-state conflicts will erode overall state capacity in damaging ways. The capacity or the mandate of existing institutional forums such as the MEA’s States Division or the Inter-State Council, in their current makeup, to mediate and resolve these conflicts is open to debate. Recalibrating these federal-state platforms to more effectively anticipate and address such challenges has to be the first order of business for the Indian government.

When Practice Meets Policy

By privileging the formal, state-led, inter-governmental processes, Indian diplomacy has ended up completely overlooking a range of practices at the border regions that are fundamentally reshaping India’s engagement with its neighbourhood. Subnational-steered policy networks need to be recognised as a field of governance in their own right, with a capacity to rescale India’s foreign policy beyond solely national frames. Local networks, both formal and informal, can work with – and not necessarily at cross-purposes – with the Centre on regional public goods. What is most striking about India’s evolving subnational diplomacy is the sheer diversity of transborder exchanges being steered by border states in terms of their nature (formal and informal); activities (social, economic, cultural, political); duration (sustained and episodic); and actors (public and private).

Bottom-up market-driven processes of economic integration are today resulting in the rise of a new set of stakeholders with stakes in subregional integration processes. There are three reasons why a serious engagement with these processes is vital. First, there is growing evidence that border regions are beginning to effectively engage the Centre to deepen subregional integration processes.4 The effects of this lobbying can be seen in India’s decision to open 70 border haats along its boundary with Bangladesh, with 35 along the border with West Bengal; 22 at the Meghalaya border; five in Tripura and four in Assam. Meghalaya and Tripura recently successfully lobbied the central government to permit the export of surplus power to Bangladesh. Second, direct transborder subnational links have on occasion bypassed the Centre to break difficult logjams and bottlenecks. A case in point is the construction of the 726 MW Palatana gas power project in southern Tripura. Given the challenges in transporting heavy equipment to Tripura due to the difficult terrain, Bangladesh allowed transhipment of heavy turbines and machinery through its territory. Bangladesh’s decision to allow transhipment became a critical factor in the successful completion of the project. Palatana will be bookmarked in India’s evolving subnational cross-border engagement as arguably one of the first instances of subregional problem solving. Third, the greatest discursive potential of subregionalism arguably lies in its capacity to position the local as a central actor in the governance agenda. It will be suboptimal to conceive them as mere agents for monitoring the implementation of service delivery systems. Consultative processes between key institutional actors have to be both continuous and inclusive, bringing together relevant local line departments and officials across all levels – from planning, through monitoring to implementation. The locational advantage of border states as primary points of contact with the neighbourhood can also help plug critical transboundary governance gaps. For instance, border regions can play an important bridging function by facilitating networked governance in subregional Asia. Several such networks – such as the Asian Environmental Compliance and Enforcement Network (AECEN), South Asian Biosphere Reserve Network (SeaBRNet), Asian Network of Sustainable Agriculture and Bioresources (ANSAB), Freshwater Action Network South Asia (FANSA), Himalayan Conservation Approaches and Technologies (HIMCAT), and South Asian Network on Environmental Law (SANEL) – are already in existence.

The Future is Federal

Nudging Indian foreign policy towards a practice-based template has the potential to incorporate a rich and hitherto untapped corpus of domain and field knowledge that national-level policymakers have no means of acquiring on their own. Policy need not always dictate practice; instead, policy and practice need to co-evolve into an institutionalised two-way flow of communication. Institutionalising consultations with a new set of border stakeholders such as legislative bodies both at the central and state levels, media and civil society organisations can go a long way in ensuring that these actors become informed interlocutors in shaping India’s evolving neighbourhood policy. A lot will, however, depend on the feedback loops that are put in place for creative ways of power sharing, institutional learning and adaptation to produce inclusive outcomes. It is only then that one can create a level playing field and a measure of parity between central and state level policy actors. India’s neighbourhood policy has the potential to produce a modest but valuable space for border states to become active partners in framing and fashioning the terms of India’s engagement with its neighbourhood. But this potential institutional innovation in Indian foreign policy is neither guaranteed nor infallible. If it is to succeed, leveraging the location of border states needs to go hand in hand with the federalisation of India’s foreign policy.

Other pieces as part of CPR’s policy document, ‘Policy Challenges – 2019-2024’ can be accessed below:

The Future of India-China Relations

Listen to the 44th episode of ThoughtSpace (above) featuring Shyam Saran, Former Foreign Secretary and Senior Fellow, CPR and Yamini Aiyar, President & Chief Executive of CPR.

In the last few weeks, a crisis has been brewing on our borders between India and China over the Line of Actual Control (LAC). Late last week, in an unprecedented move, top Generals from both countries met to seek a resolution to the crisis. The discussions have opened up the prospects of a second phase of dialogues. Against the backdrop of these dialogues, we explore the dynamics of India-China relations, the nature of this particular border dispute and the immediate and long-term implications this may have on India-China ties.

Saran, who is an expert on China, sheds light on the history of border disputes with China despite the LAC, the growing asymmetry of power between the two countries and calls for constraining Chinese aggression by cultivating strong ties with countries like the US. He also highlights that it is important to continue engaging on issues that may be mutually beneficial while at the same time confronting China where Indian interests are being threatened.

The future of the New Education Policy

AN ANALYSIS
EDUCATION

The Public Accountability and Governance in Education (PAGE) project at CPR has written a series of policy briefs and analytical articles in the run-up to the New Education Policy (NEP), 2015, to be announced next month.

The NEP will be revised after more than a decade, and will be critical in defining access to and unversalisation of quality education, going forward.For a more detailed understanding of the processes and issues, read below:

Policy brief exploring how the NEP will impact school education: School Education in New Education Policy.
Policy brief analysing the importance of the no-detention policy and continuous and comprehensive evaluation, which is part of the RTE: No-Detention Policy and Continuous and Comprehensive Evaluation.
Opinion pieces by Kiran Bhatty:
On the importance of consulting experts in the process of framing the Policy: Don’t Make Experts the Enemy in Framing a New Education Policy.
On a complete lack of a systematic assessment of the problems in the school sector to accurately inform the NEP: You Can’t Get the New Education Policy Right by Asking the Wrong Questions.

The Future We Need: Natural Resources as a Shared Inheritance

FULL AUDIO OF TALK
RIGHTS ENVIRONMENTAL JUSTICE

Watch the full video (above) of the talk by Rahul Basu, where he speaks about the work of the Goa Foundation, an environmental NGO, in raising awareness about mining being Goa’s largest environmental issue for over twenty five years

In this talk, he discusses the Goa Foundation’s ‘fair mining’ proposal, which uses the ‘public trust’ doctrine and the ‘intergenerational equity’ principle to propose an ethical, fair and just resolution to the mining issue. Basu explains how the proposal also contributes to reducing poverty, slowing the growing inequality, reducing corruption and crony capitalism, improving governance and even creating a palatable ‘Universal Basic Income’.

Rahul Basu is presently a member of a number of initiatives, including the Goa Foundation, the Goenchi Mati Movement, and The Future We Need. He is on the executive committee of Mines, Minerals and People and the interim executive committee of the India Network for Basic Income.

The BRICS Summit

21 October 2016
The BRICS Summit
CURATED ANALYSIS BY CPR FACULTY

 

Both in the run-up to, and post the BRICS summit, faculty at CPR have commented on it analysing the potential (with a special focus on India-China relations) and the outcomes. Find below a curated analysis.

  • In the run-up to the BRICS summit, Srinath Raghavan historically analyses the India-China relationship over seven decades in the Hindustan Timesstating that both countries need to show ‘mutual restraint’ to arrest ongoing deterioration in ties, spurred by wider issues that go beyond bilateral disputes.
  • Shaym Saran too historically contextualises the India-China relationship in the Business Standard, commenting on how its strategic and global dimension has weakened over the last decade, arguing that India must build her internal ‘economic and security capabilities’, and begin to close the power gap with China.
  • Commenting on the BRICS summit, Brahma Chellaney writes on how the Goa summit was a reminder that the BRICS countries were ‘yet to devise a common action plan to go forward’, in order to have any collective international influence.
  • G Parthasarathy also analyses the BRICS summit, commenting on India’s achievement of giving new momentum to relations with Russia, while questioning India’s strategy to address Chinese intentions of containing her.

The Broken Ladder: The Paradox and the Potential of India’s One Billion

FULL VIDEO OF TALK
ECONOMY

Watch the full video (above) of the talk by Anirudh Krishna, based on his book ‘The Broken Ladder’, which delves into the lives of ordinary individuals to take a ground-up view towards answering questions about the potential of civic participation in the growth of India’s economy.

Through decades-long investigations conducted on the ground, living in villages and investigating slum communities, Krishna reveals the eye-opening details of missed opportunities and the immense, but untapped, talent that can and should be honed, with immense consequences for both growth and equity. From presenting possible solutions to the problems of neediness and inequity, to mulling over ways of fixing inequalities of opportunity, his book provides a comprehensive account of India’s development strategies.

Anirudh Krishna is the Edgar T. Thompson Professor of Public Policy and professor of political science at Duke University, USA. His research investigates how poor communities and individuals in developing countries cope with the structural and personal constraints that result in poverty and powerlessness.

The centralisation vs decentralisation tug of war and the emerging narrative of fiscal federalism for social policy in India

Image Source: The Hindu
6 May 2019
The centralisation vs decentralisation tug of war and the emerging narrative of fiscal federalism for social policy in India
JOURNAL ARTICLE BY YAMINI AIYAR AND AVANI KAPUR

 

This paper examines the relationship between fiscal federalism and social policy in India through an analysis of the effects of a recent effort to increase fiscal decentralisation to state governments on the nature of social policy investment at the sub-national level. Through its analysis, this paper highlights the persistence of a strong centralisation bias in India’s fiscal architecture for social policy. We trace this centralisation bias to the political and administrative dynamics of the federal bargain. The peculiar dynamics of this bargain have created a context where the core goal of centralisation – to ensure equity – is undermined while the expectation of decentralisation – greater accountability through alignment of expenditure with local needs and preferences, fails to take root. India is thus likely to continue to witness significant regional variation in social policy outcomes, despite a centralised financing architecture.

The full journal article can be accessed here.

The centralisation vs. decentralisation tug of war and the emerging narrative of fiscal federalism for social policy in India

18 October 2018
The centralisation vs. decentralisation tug of war and the emerging narrative of fiscal federalism for social policy in India
NEW JOURNAL ARTICLE CO-AUTHORED BY YAMINI AIYAR AND AVANI KAPUR

 

This paper examines the relationship between fiscal federalism and social policy in India through an analysis of the effects of a recent effort to increase fiscal decentralisation to state governments on the nature of social policy investment at the sub-national level. Through its analysis, this paper highlights the persistence of a strong centralisation bias in India’s fiscal architecture for social policy. The paper traces this centralisation bias to the political and administrative dynamics of the federal bargain. The peculiar dynamics of this bargain have created a context where the core goal of centralisation – to ensure equity – is undermined while the expectation of decentralisation – greater accountability through alignment of expenditure with local needs and preferences, fails to take root. India is thus likely to continue to witness significant regional variation in social policy outcomes, despite a centralised financing architecture

Link to the journal article can be accessed here.