Category: Economy

Across the border

The last 30 days have been taut with nervousness and violence as two major powers of South Asia, India and Pakistan were at each other’s throats. There were constant conflicts, which began with the attack on the CRPF personnel in Pulwama. Subsequently India retaliated with an air strike in Balakot. The following days also witnessed the downing of a Pakistani F-16 trying to infiltrate Indian airspace and the capture of an Indian Air Force pilot.

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Charismatic India at Davos

The morning of 23rd January 2018 was chilly, with slow yet cold winds. The temperature reached almost 5 degree Celsius and the heads of some of the most powerful states in the world in the city of Davos were wrapped in warm clothing as they moved about attending different meetings and conferences. The atmosphere was filled with buzz as the World Economic Forum was about to begin. The economy of the world for 2018 was going to be discussed and the economy of the world from 2017 was going to be analyzed. This happens every year at the event. But this time there was something special, Narendra Modi was present at the conference, the first Indian prime minister present at the conference after at least 20 years.

In a world that is filled with fault lines and rifts, we need to build a shared future.” – Narendra Modi, Prime Minister of India.

In his speech at the World Economic Forum, Narendra Modi said that “climate change, terrorism and backlash against globalization” are the three main challenges which humanity faces right now. This statement holds true. Climate change is real and countries must come together to face this challenge. Climate change does not respect political boundaries, it transgresses them. We cannot live in isolation and combat it alone. We need to take actions not as citizens of different countries but as a single society. Only then will we be able to ensure a happy and prosperous future for our succeeding generations. “We have not inherited this world from our ancestors. We have borrowed it from our children.”

The second great threat that humanity faces is terrorism. Today, countries all over the globe face the problem of terrorism. It is not a crime to voice one’s opinion; but it is a crime to pick up arms to do the same. The time has arrived for countries to come together in solidarity and combat the threat of terrorism. Just like climate change, terrorism is no longer respecting political boundaries. Nations are now commonly affected due to the violent actions carried out by terrorist organizations. It should be the utmost priority of the nations to ensure that it (terrorism) does not proliferate and should be curbed. If not by force, peaceful negotiations should be attempted so that further loss of life does not take place. But it has to come to an end. Governments spend immense amount of resources on combating terrorism, when the same resources could be diverted towards developmental activities like education, healthcare, infrastructure development etc.

Everyone is talking about an interconnected world, but we will have to accept the fact that globalization is slowing losing its lustre.” – Narendra Modi at Davos.

The third great threat is retreating from globalization. Governments across the world are becoming increasingly self-centered. Especially the developed countries, whose support is needed by the developing countries. The current trend which is taking place is the opposite of globalization. The most affected by this trend are the developing countries who have experienced a reduction in cross-border investments, trade deals breaking down and barriers being raised against globalization. It is essential to realize that the solution is not isolation, but more interaction between nations.

World Economic Forum (W.E.F.) was established 47 years ago in January 1971. Its meetings take place annually in the Swiss city of Davos at the end of January. The meeting brings together approximately 2,500 business leaders, political leaders, economists and celebrities etc. to discuss on the issues the world is facing and improve public-private co-operation. Majority of the sitting Prime Ministers did not attend this event due to its reputation of being considered ‘elite.’ That it would not play out politically well back in India. The last Prime Minister to attend the event before Narendra Modi was H.D. Deve Gowda in 1997.

India stands to gain a lot from the W.E.F. due to the stature of this platform. Especially since we addressed the plenary session of the forum. Narendra Modi’s speech was considered to be one like that of a statesman. We were represented as a nation which was a global leader. We were regarded so by other heads of states and this is what we need. There are economic advantages too. As aforementioned, even some of the leading private business leaders were present at the forum. It was an opportunity for them to witness what potential India holds for them and what we could offer to them back. They can and will be tempted to come to India. We can only hope for positive effects from this event and time will tell us how.

-Priyamvad Rai

Why does India need the Bullet Train?

The Mumbai-Ahmedabad High Speed Rail Project (MAHSR) was announced in 2017 in the bilateral talks which took place between India and Japan earlier this year. The project involves construction of Hinakasen, colloquially referred to as a ‘Bullet train’ corridor between the city of Mumbai and Ahmedabad, cutting the travel time between the two cities and 17 smaller cities on the line, by more than half.

It (MAHSR) will cost approximately Rs.1.12 lakh crore; of which, Rs.88,000 crore will be given to India by Japan in terms of a ‘soft loan’ with a grace period of 15 years (i.e. repayment won’t start for 15 years) and the repayment will be carried out over a period of 50 years at very low interest rates of 0.1% per annum. However, the announcement of this project has attracted a lot of criticism towards it from various parts of the country. The question being raised by them is, “Whether India really needs the Bullet train?” Let us try answering this question.

As aforementioned, the Bullet Train will cut the travel time between Mumbai and Ahmedabad by more than half of what it is currently. It will be able to go up-down the line almost 20 times in a day. This level of efficiency and capacity will take the load off the trains which run in this corridor and also the railway stations which suffer from lack of facilities due to overcrowding.

This will bring a significant impact on the lives of the people, for whom this project has been announced. This project will allow people to settle, not just in the major cities but enable them to live in the smaller cities and towns as well which are going to be connected via the MAHSR line. They can then buy houses or take houses on rent which will be far cheaper than the ones in the metropolitans and allow them to save a lot of money.
Subsequently, the chronic issue of overcrowding in the metropolitans will be solved as people will start moving away from these cities. The moving away of people may bring down the prices of houses which go on sale or rent (Demand goes down because people move away and therefore prices will go down) hence making the metropolitans more accessible.
Time is of the essence when it comes to emergencies regarding healthcare. People living in smaller towns and cities will have a more efficient connection to the world-class healthcare facilities situated in the large cities. They will also experience an improvement in their health as they will move away from the stressful and harmful environment of the large cities.
Courts (High Court in case of Mumbai and Ahmedabad) will become more accessible to people as they will be able to go back and forth between their respective cities and the cost of living in the hotel will be cut due to the short travel time. Justice will be delivered to people cheaper!

The bullet train is estimated to create almost 40,000 jobs, with just one corridor. Future corridors will bring in more jobs and it will help the Government in battling unemployment which is prevalent in the country as of this moment. The manufacturing of many components related to the Bullet train is being handed over to Indian manufacturers and hence create even more jobs for the people. Along with manufacturing, even the service sector (e.g. Transport) will gain a boost as these newly set up units will require various services to cater to their needs. This will also generate more revenue for the government (more employment; more income tax, more manufacturing and services; more tax) and hence it will allow the government to focus on other aspects of development.

Domestic and Foreign industries; both will prefer going to the smaller cities which are located and connected by the bullet train line as cost of operation will be cheaper, hence ensuring that developmental activities do not become centralized at just the large cities. The smaller cities will also get a chance to grow and develop and employment will be generated there too. Since people will be reaching their destination faster, they will be able to put more time into their work and hence will be more productive which is what companies expect of their employees.

Even the Government, in terms of Administration will benefit from the bullet train. In case of a security threat (a terrorist attack, riots etc.) additional forces can be put on the Bullet train and be despatched to the affected areas more quickly and ensure that the situation does not go out of hand and control the law and order of the area.
They will also be able to send out their officers and staff to different parts of the country (which are connected by bullet train) more efficiently and therefore be more productive. Cost of keeping the government officers in hotels and lodges will be cut since they will be able to go back to their homes on the same day itself.
The Indian railways will also experience a new era of modernisation as the Bullet train will completely change the ‘negative perception’ of the people towards the organization. The faith of the people will be restored and the railways will start moving in the right path, and i.e. towards modernity and development.

Since India is on the path towards becoming a major political power in Global politics. It is imperative that we do something that will create the perception that we indeed are a major power. The bullet train will allow for us to create that perception among the people as almost all of the developed countries of the world have bullet trains running in their country. India will be considered as a ‘developed’ or a ‘fast developing’ country.

Therefore, I believe that India could definitely use the Bullet train; it will considerably improve the lives of the people and it will also help the country to move towards modernity and set up a new image in the world.

Priyamvad Rai