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November 25, 2016

The India-Pakistan Imbroglio – Surgical Strike

The India-Pakistan Imbroglio – Surgical Strike

It like two brothers fighting for a piece of land born out of the same womb. Divided into countries due to the vested interests of the leaders of the bygone. If it is international than it is at home too. Are we aware? It is in our sub consciousness.

Indian army carried out, “surgical strike “on Thursday on 29th Sep. The surgical strike was meant to eliminate the terrorist camps along the de-facto border with Pakistan in Kashmir. Surgical strike is a pre-emptive attack on a specific target with an aim to neutralize the enemy with minimum collateral damage. Pakistan denied the claim and replied it as a cross border firing. Prime Minister Mr. Modi announced earlier that the attack at the Uri army base, in which 18 soldiers had died, will not go unpunished. The Uri attack came at a time of deep crisis in India-Pakistan relations. India is still smarting from an earlier attack on a military base in India, in the town of Pathankot in Punjab state in January, which it also blamed on JeM-a group with close ties to Pakistani intelligence. The two countries have fought three major wars, but they all occurred before 1998, when both nations became declared nuclear weapons states. Pakistanis already accuse India of waging covert war in Pakistan, from colluding with the Pakistani Taliban to collaborating with Baloch separatists. A wave of attacks on Pakistani troops or an assassination campaign against terrorists—regardless of whether there is clear evidence of Indian complicity—could lead to Pakistan-sponsored terror attacks in India. The territorial dispute between the two countries has been running for over six decades, and two out of the three wars fought between the nuclear-armed rivals have been over Kashmir.

The UN has urged both countries to exercise restraint. Stephane Dujarric, UN spokesman said, “The UN Military Observer Group for India and Pakistan, UNMOGIP, is aware of the ceasefire violations and right now is liaising with the concerned authorities to obtain further information. The United Nations calls on the government of India and Pakistan to exercise restraint and encourage them to continue their efforts to resolve their differences peacefully and through dialogue."

There are lot of speculations over the water disputes between the neighbouring states. The water dispute between India and Pakistan is serious not only because of water, but also due to the political rivalry between the two countries. The IWT (Indus Water Treaty) is a 56-year-old accord that governs how India and Pakistan manage the vast Indus River Basin's rivers and tributaries. On Sept 26, Indian Prime Minister Narendra Modi told top officials present at the treaty review meeting that "blood and water cannot flow together."  If India were to annul the IWT, the consequences might well be humanitarian devastation in what is already one of the world's most water-starved countries - an outcome far more harmful and far-reaching than the effects of limited war. One of the main reasons the agreement was signed because India is the source of all the rivers of the Indus basin, although Indus and Sutlej originate in China. The rivers enabled India to use them for irrigation, transport and power generation. Pakistan also needed the water and feared that India could eventually create a drought situation in Pakistan in case a war breaks out between the two countries. Under the treaty, the waters of the three eastern rivers — Beas, Ravi and Sutlej — were granted to be used by India without restriction, while 80% of the three western rivers — Indus, Chenab and Jhelum were allocated to Pakistan. The Treaty of Indus remained intact even after three wars between India and Pakistan in 1962, 1971 and 1999. Revoking the treaty will add a new colour to the Kashmir solution and sensitise the circumstances.

India and Pakistan both are suffering because of the vested interest of their respective leaders. They don’t want to resolve the issue. Kashmir is one the biggest issues in Indian Pakistan history. There are four aspect of this issue. One Indian controlled Jammu and Kashmir, Second nobody talks about China occupied Kashmir and third is Azad Kashmir who don't want to live with Pakistani's and fourth is Khyber Pakhtunkhwa. If you directly want to jump to solution you will not be able to understand the real issue of Kashmir. There were several solutions proposed by both side India and Pakistan but most of the problem is regulation and trust with each others. From India point of view we already loose trust with Pakistan because of several border infiltration and militant attack not only in Jammu and Kashmir but also in Punjab.

Since last 70 years, India and Pakistan have been unable to resolve their differences and develop a normal good neighbourly relationship, which could have benefitted people on both sides of the border. Several measures have been taken for a peaceful living.  Both are standing still. Does it mean that the two countries are cursed to live in perpetual hostility? Can they overcome their historic rivalry and emulate the example of France and Germany after the World War II? The tensions between India and Pakistan are deeply rooted in their common history. Their failure to reconcile their differences ultimately resulted in the partition of the Sub-continent.
Soon after the partition in 1947 of the sub-continent into the two nations, about 17 million people fled their homes and journeyed to either Pakistan or India. In one of the largest exchanges of populations in history, violence soon broke out with Muslims on one side and Sikhs and Hindus on the other. The resulting bloodshed in the Punjab and West Bengal regions left more than one million people dead in its wake. In the midst of this refugee movement and open violence, the governments of India and Pakistan hastily tried to divide the assets of British India between the two new countries. From weapons and money, down to paper clips and archaeological treasures all had to be divided.

Not only did the architects of Indian foreign policy fear Pakistan, but in 1962, after China's sudden invasion of northeast India, they suddenly realized the ancient protection of the Himalayan Mountains had vanished. Soon after the China war of 1962, Indian scientists began developing its nuclear capability. Under Indira Gandhi's Prime Ministership in 1974, India successfully exploded a nuclear device, announcing to the world its scientific capacity to develop nuclear bombs. China is the premier military power in Asia and considers Pakistan its oldest and most powerful Asian ally. China continues to occupy areas inside of India's borders as a result of the Indo-China war of 1962. China has nuclear-armed missiles positioned against India along the Himalayan border and in Tibet, in addition to being Pakistan’s main military weapons provider. Russia has had close relations with India since Indira Gandhi became prime minister in 1966. Russia provides most of India's military sales. After the demise of the Soviet Empire, Russia is unable to provide economic or military aid to India.

There is an erroneous thinking that has gone on for a very long time in India. Pakistan has used “non state actors” for as long as its existence to further its “doctrine”. It started in 1947 when it sent tribal force into Kashmir to seize control illegally and has used it ever since in its pursuit to get even with India. Soon after independence, Pakistan started its pursuit to project itself as the fort of Islam when it invaded Kashmir, a princely state which acceded to India based on the terms of independence of India, because it had Muslim majority population. It is often projected that Pakistan started using terrorists against India from late 1980s but the fact is that it was right after independence that Pakistan sent tribal force into Kashmir to snatch control. Pakistan will not desist from anti India activities even if it is given Kashmir on a platter by India as it is in an ideological battle with India.

Indo-Pak has the same historical-cum-cultural patterns, the “Indian cultural” pattern that has developed in a context ranging for more than a thousand years. There are great stories of peaceful coexistence and harmony during this vast historical span. The same can be revived today in this evolved context. Regardless of our differences, we are all human beings who are also entitled to a just and dignified life, a promise of the state. It is time to find effective solutions to strengthening Indo-Pak relationships. It is time to end our indifferences and forge a ‘United We Stand’ conversation about our mutual development and unity.

By – Siddhartha Shankar Mishra

( Author is a Lawyer and a Writer ) 

November 23, 2016

The Nation In Queue

India In Queue

The nation is stuck somewhere. The demonetization is a major jolt on the entire fabric of the nation. Prime Minister Narendra Modi opined, “Demonetization is a dose aimed at improving health of India’s economy.” First what is demonetization? It is an act of stripping a currency unit of its status as a legal tender. Demonetization is necessary whenever there is a change of national currency. The old unit of currency must be retired and replaced with a new currency unit.

The fact about India’s demonetization of Rs 500 and Rs 1000 that 85% of all currency in circulation has just been turned into coupons that can only be exchanged in specific places. These notes can be converted into currency again only with identity proofs (millions don’t have) and the additional hardship of standing in many queues for many hours. Over half of India’s population doesn’t have any sort of bank account at the moment and about 300 million don’t have basic ID such as Aadhaar either and hence, cannot access the banking system at all. About 110 million Indians have mobile wallets (about 30 million have credit cards) and there are maybe 510-600 million debit cards in circulation. So access to cash is very, very important for average Indians. India is a cash economy. And 90% of all transactions are done in cash. Controlling corruption is not about blocking access to a non-traceable store of value. Breaking the problem of corruption requires deeper changes to institutions.

Demonetization is not a new phenomenon. It has happened in 12 Jan 1946 and 16 Jan 1978 too. It is the third one on 8 Nov 2016. During 1946, pre-independence period The Governor agreed that about 50 per cent of the notes would be in the Indian States and so co-operation of the State Governments was very necessary. Apparently he had some doubts about this. The ideal thing was to block high denomination notes, but this course was not favoured by either the Finance Member or the Governor. This is strange if one looks at it. In 1946, the idea was to demon but it became more of a conversion. In 2016, we are calling it demon but it is actually conversion. However, lesser the conversion, it but could become demon. Talk about going in circles with words.
Second happened in 16 Jan 1978. That time the Finance Minister H.M. Patel in his budget speech on 28 Feb 1978 said:
The demonetisation of high denomination bank notes was a step primarily aimed at controlling illegal transactions. It is a part of a series of measures which Government has taken and is determined to take against anti-social elements. “As the then Finance Minister did not say anything about the success of the exercise, one can almost guess that it did not create much impact like in 1946.

India’s total tangible wealth is of the order of 280 lakh crores. World bank estimates at least a quarter of this is black. That means 70 lakh crores. It is possible that 10% of it is in cash, with the rest in real estate and gold. That is 7 lakh crores of black cash that is lying around. Maybe 80% of it will turn white and even with that Rs 1.4 lakh crores of black will be gone. That is big. Indira Gandhi tried this in early 1970s, but could not as the move leaked out and the bad guys quickly changed over the notes. The government had to back out of the move then. I’m even thinking if the move to ban NDTV was just a ploy to distract the whole media, to pull this off. And it was possibly scheduled on US election day likely to get the global media off the heat and attention, as foreign media has been ultra critical & condescending of any major move in India.

Nearly 40 percent of India's economy is driven by small- and medium-sized enterprises that largely run on cash transactions. This move could impact these businesses, and in turn have a knock-on effect on economic growth. Not known, how many are paying full income tax. The tax evaders better start paying tax rather than consider the unpaid tax is part of their profit. These people pollute the society of good Indian citizens. For the poor who don’t have debit/credit cards, there might not be much impact either - as most of their transaction happen under Rs. 500. Cashless economy in India , which is having a rural economy is immature stance of Mr Arun Jaitley. “Corruption, counterfeiting, terrorism funding, cashless economy, gold/silver, real estate, it will have an huge impact because of demonetisation.” – Arun jaitley said in a media conference.

We all know how to buy a house in India, 30% in cash and rest in white money. How do you get your work done around babus, just hand over a RS 500 note, smooth? Election money - cash, tax-free gold - cash, religious places - cash, marriage gifts - cash. That is all the money that government knows nothing about. I am sure not all the black money would be gone with a single stroke just as Raghuram Rajan mentioned, smart people will find a way. But they would certainly be more cautious from now on. For the general public, it would induce fear of stashing more cash at home that too if it is black. At least by 20-30%, because at the end of the day no matter how smart you are and what other ways you chose you would have to go to back to change the old currency to new, or deposit it in banks. Raghuram Rajan was aware of this process all along, and this was not a surprise for him. Of Course without blowing their own trumpet as “surgical strike on black money “ , which will deliver them great votes or boomerang on them , but if the present govt focused properly ,this would be an effective step to somewhat alleviate many of the problems in the economy. Further he added, “This is not an attempt to demonetise. It is an attempt to replace less effective notes with more effective notes. I understand people are making different interpretations. Unfortunately that should not be the interpretation."

BJP is the largest party in majority in India. There are several state level and district level leaders who would be holding black money. This move actually would hurt the party themselves in the states. Moreover, there would be a lot of supporters and benefactors of BJP that would be dealing in black money. It takes a great of guts and willpower to actually do this. Most of the erstwhile govts could not do this for this very reason. Indira gandhi tried but the information got leaked, probably when they tried to safeguard their own party and supporters before the move was publicly announced. This time however, Modi did not take into consideration the implication on his party and his benefactors in the interest of the country. In February 2015, Indian Express released the list of 1195 Indians account holders and their balances for the year 2006-07 in HSBC's Geneva branch. The list was obtained by French newspaper Le Monde and included the names of several prominent businessmen, diamond traders and politicians. The Swiss Ministry of External Affairs has confirmed these figures upon request for information by the Indian Ministry of External Affairs. 

Demonetization always has had an elephantine jolt on parallel economies. This is the sizable spank on the Indian parallel economy, yet. This could easily eclipse all voluntary disclosure schemes offers by current and past governments. How substantial the bang, time will tell. We can only muse.

By – Siddhartha Shankar Mishra
( Lawyer and a Writer )