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According to the Government of India’s Economic Survey for 2016-17, India’s economy is set to expand at about 6.5% in 2016-17, even though the November 2016 demonetisation poses a risk in total output. India successfully faces the foreign currency redemption, US Presidential election of November 2016, and demonetisation. 86% of the currency float of $360 million was sucked out by demonetisation, which offset demand across India, as citizens diverted attention to discretionary spending. Demonetisation is estimated to have led to a reduction of 0.25 to 2% of GDP. In the longer term, the unreturned cash would be removed from the balance sheets of the government and the Reserve Bank of India. The sudden removal of cash caused job losses in the farm sector. India imports nearly 70% of its fuel needs, and the fuel bill is the largest import item on the budget. Global prices of crude oil have nearly doubled to $53 a barrel, in the past one year. Record foreign exchange reserves and a falling current account deficit helped shore up the balance sheet. The projected universal basic income for all citizens would ensure that the excluded poor would be benefited immensely, but the cost would be 4% to 5% of GDP. The survey has recommended that biometric tracking of teachers’ attendance be introduced in government primary schools, and the data monitored by parents and local communities.
The Union budget for 2017-18, envisages the Union Government of India spending Rs 5.39 lac crore, for the financial year. The allocation under Mahatma Gandhi National Rural Employment Guarantee Act is raised by 25% to Rs 48,000 crore. Rural splending raised by 24% to Rs 1.87 lac crore. With agriculture growing at the rate of 4.1% in 2016-17, agricultural credit has been fixed at Rs 10 lac crore. 60% of India’s 1.3 billion people live in villages, some of them on less than Rs 150 a day. The estimate for fiscal deficit, the difference between spending and income, is lowered to 3.5% (2017-18), compared to 3.2% (2016-17). Cash transaction of about Rs 3 lacs are banned. Not more than Rs 2000 can be donated to political parties in cash, which has been lowered from 20,000. Income Tax payers in 2015-16 were 2.71 crore, or 2.24% of population. Income Tax rates are halved for those with taxable income between Rs 2.5 and Rs 5 lac per annum. Rs 12,500 is relief for all other slabs. Reserve Bank of India will float electoral bonds for political funding. There will be a fee levy for filing of delayed income tax returns. The Corporate Tax for small companies with annual turnover of up to Rs 50 crore is cut to 25%. The relief will cover 96% of companies.
Communal Disharmony in Dhulagarh
Dhulagarh in Howrah district (Bengal) is the heart of the district’s Micro-Small-Medium Enterprises (MSME). The area is dominated by Hindus and Muslims, to equal majority. On 13 December 2016, a religious procession on the occasion of Milad-un-Nabi was attacked near Annapurna Club at Dewanghat (Dulagarh). Allegations range from loud loudspeakers, demand by Hindus for the chanting of names of Hindu gods, youths in the procession carrying swords and bombs, the hurling of crude bombs outside Allahabad Bank branch, arson on houses and embroidery factories. Violence spread on 14 December 2016 to neighbouring Muslim dominated prosperous area of Haishar Para and Munshipara and Hindu dominated areas of Banerjee Para and Polle Para. Between 13 to 15 December 2016, around 80 huts in three villages of Dhulagarh-Dewanghat, Kole Para and Banerjee Para, about 30 km from Kolkata, were torched and belongings, including cash, looted during the clash. Villagers fled their homes and took shelter in a local temple. There was no police for four hours, between 10 am and 2 pm on 12 December 2016. More than ten factories, owned by Muslims were gutted. There are 350 small scale units in Howrah clusters, of which about 100 are in Dhulagarh. The average investment in each plant and machinery is about Rs 5 lac. Police have seized 100 kg of explosives, and registered 50 cases of arson and rioting. Demonetisation of high value currency notes had already dealt a big blow to the area. Following the violence of mid December 2016, many units have downed shutters. Workers are left unemployed.
Attacks by Wild Elephants
Bengal has the highest number of man-elephant conflicts in entire India. In 2015-16, the death toll in Bengal from elephant attacks rose to 108, and in 2016-17 the fatal casualties have been 120. While only eight people were killed by tigers in India during 2015-16, 413 people were killed only by elephants. The man-elephant conflict has been long in North Bengal. The menace in South Bengal is more recent and acute. Elephants started moving to South Bengal from 1987. The elephant heads were migrating from Jharkhand to Odisha, through Bengal, and then took the same route back every year. Forests in Jharkhand started thinning because of mining activities. Recently Odisha blocked the passage of elephants by digging canals, and building electric fences. The blocking of migratory routes led to the herds staying in Bengal for extended periods, which caused more man-animal conflicts. Elephant herds which used to spend around two to four months in Bengal, are now staying back for more than ten months in the state. Bengal is home to just 2% of India’s elephant population, but accounts for nearly 20% of the human death toll. Forests of Bankura, Purulia and West Midnapore districts provide ample shelter to the herds. Sustained irrigation in the region has improved agriculture. Elephants find enough shelter and food. Solitary males go on the rampage on agricultural land. A large number of elephants in North Bengal, are hit by trains, while crossing rail tracks.
Cash Crisis in Afghan Taliban
Several members of the Afghan Taliban movement have noted that victims of the insurgency are increasingly civilians rather than foreign troops. With donors unwilling to bankroll, the Afghan Taliban are facing a cash crisis. The movement is in a precarious financial position, despite battle field successes during the last one year. Civilian casualties are gaining bad publicity. Financiers do not want to spend money on mines that kill children. Sympathisers around the region, have long given donations to the Taliban. The donors include wealthy Afghan and Arab business people in the Gulf. Now some of the most seriously injured fighters are no longer welcome at Pakistan’s private hospitals, because they cannot settle their bills. The Taliban call the war as a struggle against foreign occupation. But the departure of most foreign combat troops since 2014, and the outbreak of bloody infighting between rival Taliban groups, has weakened the legitimacy of the war. Donations first slumped after the announcement in July 2015, that the founder of the group, Mullah Omar, had died years previously. Mullah Akhtar Mansoor, Omar’s successor, was a well connected businessman, who personally dealt with many of the donors. His death in 2016, in a US drone attack further damaged the movement’s fund raising efforts. Taxes in areas controlled by the Taliban, especially opium production, are other main source of funds, which have been disrupted by fighting. Funds are no longer forthcoming from opium rich Helmand. There is wide-spread agreement among senior Taliban figures, that the Taliban had to try to negotiate an end to the conflict, with the Afghan government. The momentum of over-running the entire country as in the 1990s is lost, despite the Taliban’s recent success of capturing Kunduz city.
China Expands UN Peacekeeping
Among the five permanent UN Security Council members, China is now the largest contributor to peace keeping forces, deploying about 2600 of the total 88,000 ‘‘blue berets’’. China has pledged to raise that number to 8000. Beijing first sent peacekeeping units to a conflict zone in 2013, despatching troops to Mali. China has upgraded its defence technology, investing in fighter jets and ships, while making efforts to recruit tech-savvy graduates, as it trims its ranks of uneducated soldiers. Its military remains relatively untested, with no international combat, since a border war with Vietnam in 1979. China could position for a greater voice in Africa and the Middle East.
Vol. 49, No.34, Feb 26 - Mar 4, 2017