At a time when political leaderships in the country are going to be busy with the all-important elections and later the post-poll re-arrangements, if any, and the bureaucracy too is likely to be stymied for the period, an independent assessment of what has been achieved and what awaits the nation in the short to long term is in order.
Mr M K Narayanan
Former National Security Advisor of India (NSA) & Governor of West Bengal
People don’t quite realize how much the events happening outside our country affect our national security. Shaping a national security policy is very important, particularly as we grow and become a country that people look up to. Maldives is a small country, but we see how they behave with us. It’s important that we keep our focus.
We are a nation today with a great deal of economic heft. But we were influencers of world policy even when we did not have the economic heft. In the ’50s, when the Korean War broke out, most of the diplomatic efforts to bring the war to an end were undertaken by India. So it is not merely the size of the country or its economy alone that matters. The world is even more interconnected today than it was maybe a decade or two back. I do believe that our security, to a considerable extent, depends on the nature and extent of our relations with other countries across the globe. Maintaining unambiguous relations with all countries is vital for India. It is never easy to predict how the future will turn out.
Need to Relook at Neutrality
Neutrality is not the best option. The Ukraine war started in 2022, and Hamas attacked Israel in 2023. In this backdrop, we should not lower our guard, as we can never be sure what will happen next. The year 2024 will witness an increase in global uncertainties, and they will cast a shadow on our national security. It is possibly time for India to readjust our idea of neutrality, which has been our stock in trade for many, many years. We have reached a certain status. Shortly, we will be the third most important economic power in the world. We have one of the largest armies in the world. We have the best minds. So, neutrality is not really the best option for us.
I know for all the years that I was in the government, we used to keep talking about how important neutrality was to us. Pandit Nehru talked about non-alignment. We recognized our strengths and interests and decided that we cannot afford to take sides, because everyday life of the people matters to us. India had to play between the United States, which was number one, and the Soviet Union, which was number two. Today that has changed. We cannot adopt a policy that is meant for a weaker nation.
Three Hotspots
Let me examine this from the point of each of the problems that we face. The three hotspots in the world today are Ukraine, the Middle East, and the Asia Pacific. Ukraine would have collapsed within weeks of Russia’s attack, but NATO and the West came to its aid. That is what sustains them today. Neither side is willing to give up and come to a compromise. Instead, they are trying to up the ante and may be even resort to nuclear weaponry. In such a situation, our neutrality means nothing. It is only good on paper. So, we may have to revise our policy of remaining neutral. We cannot shy away from our responsibilities.
Even if we are a reasonably big or medium power, we require friends. Traditionally, the Soviet Union or Russia has been our friend. We need to have a much better understanding of the nature of our diplomacy, essentially to protect our security. If we do not take some position, then they will say, “What kind of friend are you?”
Maldives has now extended a hand to China, which is remarkably unpopular in that nation. The Middle East has been an area of great interest and influence for India. We have had a Middle Eastern policy over the years. Much of the Middle East has been built by Indians, and Indians play a role in influencing the economy of the Middle East. But in the recent Israel-Hamas conflict, we seem to be hedging our bets, but how long can you do that? We are hunting with the hound and running with the hare. The same applies in many ways to the Indo-Pacific region, which is less incendiary than either the Middle East or Ukraine. But we are fast approaching a conflict situation there with China’s intimidation of Taiwan. What is our position there? We need our friends. Pakistan is not our immediate problem.
India and China: A Peculiar Relationship
The first answer that I have on the question of national security is that we need to understand how to deal with forces that are not necessarily on our side. The one country that we need to be careful about is China. I’m not saying that we should go to war. India and China will never be friends, but both countries cannot afford to be enemies. It’s a struggle. The Chinese believe that they are a superior race and a superior country. The United States and the West would be happy if there is a war between India and China on the Russia versus Ukraine model. They will supply equipment and manpower. But at the end of the day, India and China must go back to work. So it’s important from the national security point that we arrive at a modus vivendi with China.
I was for seven years a Special Representative for Border Talks with China. The Chinese are also human beings. They have an advantage when it comes to the border. While the West, and the US in particular, want to demonize China, we should demonstrate diplomatic capability to ensure that while we differ, we do not have an open war.
Internal Security Situation
The internal security situation is far better than the external security. Terror attacks have become rare, partly because of some historical reasons. Many of the world’s leading terror groups like ISIS and Al Qaeda are going through various stages of restructuring, leadership issues, etc. Across the globe, the number of terror attacks has come down. India has also been a beneficiary. That doesn’t mean that terror attacks will not take place or that we can believe that we will be at peace at all times.
Though people believe there is peace in Kashmir, I would like to differ and state that Kashmir is not at peace. The violence levels have certainly come down. There has not been a great deal of animosity towards the removal of Article 370. That does not mean that there has been an acceptance of it. Kashmir is still wrapped in a great deal of animosity. We need a much more acceptable political policy to deal with the situation in Kashmir.
An Uncertain Northeast
The Northeast is much quieter today than it has been for several decades. But the Northeast is always an uncertainty. There is always struggle. Violence is just below the surface. We have seen what happened in Manipur, which has always been difficult, but we have never seen a flashpoint as it happened now. The Northeastern states believe that they need to have a great deal of distance between Delhi and themselves.
Coming to the Naxalite movement, we have never had a situation of peace as we have now. The Naxalite movement has been under a great deal of check. But I’m hesitant to say that the battle over Naxalism is over and therefore, we need to be always on guard. Punjab today is at peace, and there are no major issues. But there is a great deal of economic resentment rather than political resentment. The Khalistan movement is going on across the world. There is a patronisation for this movement in the West. So, we need to keep a careful watch on Punjab.
Vigilance is the Best Defence
If I add to the list of potential threats to national security, the rapid onset of technology, cyber, and artificial intelligence will figure in that. Digital uncertainty is becoming a far bigger threat than what many have been talking about. I am not talking merely about ransomware but about the rapidity with which cyber-attacks are taking place. Artificial intelligence, I think, is going to be a far bigger threat to national security than anything else. Today, many digital devices, including even the cardiac pacemaker, have come within the high-risk category. While these may not directly come under the standard definition of national security, it demands attention. AI can weaponize hate speech, trigger violence, and threaten the fabric of our nation and national security.
Most of our problems appear harmless. But that is not exactly true. We are in a better situation than we have been before. However, vigilance is the only protection that we have for our national security.
Dr S Narayan IAS (Retd)
Former Economic Advisor to Prime Minister & Finance Secretary, Government of India
From an economic development perspective, what does 2024 hold for us? What are the positives and negatives? What are the challenges?
Recently, there has been the Davos World Economic Forum event. India was very much in focus there. On YouTube, there are numerous videos centered on India. I’m not sure whether they are only for the Indian audience. I am surprised that at that event, Telangana attracted more than about 30,000 crores worth of investment. For me, this is significant for a very particular reason, which I will share later on.
By and large, at the World Economic Forum, there was a lot of praise for India’s growth and expectations that India will soon become the third-largest economy. The current issue of ‘The Economist’ has come to the conclusion that India has done reasonably well. Of course, it highlights both our pluses and minuses.
Three Summits, Three Messages
I would like to bring attention to the three investor summits that recently happened—one in Gujarat, one in UP, and one in Tamil Nadu. Looking at the kind of investments promised in these summits, you can clearly see that the growth of industries is happening very differently in these States. Let me give an example. The investments promised in Tamil Nadu are largely in electric vehicles, solar power generation, items associated with electronics, automobiles, particularly automobile-linked manufacturing, and employment-oriented industries like non-leather shoes. Tamil Nadu has talked about six lakh crores of investment, Gujarat about 15 lakh crores, and UP much more than that.
The investments promised in Gujarat are primarily in petrochemicals, downstream of chemicals, pharmaceuticals, and solar. In solar, they are not just talking about solar generation, but also manufacturing of solar panels. The investments promised in UP are in agro-based and agro-processing-based industries, food-based industries, logistics, and basic manufacturing. The developments happening in Maharashtra, Madhya Pradesh, Bangalore, and Mysore, and to a substantial extent in Hyderabad, are also very different.
Bangalore, as everybody knows, is an IT hub and a hub of huge growth for new startups in technology, etc. But let us not forget that Bangalore has a particular advantage – it is home to many defence manufacturing units. HAL, the Indian Institute of Science, and Bharat Electronics are there. The numbers may not cross 10 lakhs or 15 lakhs crores, but much more value addition happens there.
The Amazing MP Story
Madhya Pradesh is an amazing story because it has recorded 10 to 12% CAGR in agriculture for the last 10 years. This is one of the main reasons why the government was voted back for another term. All the investments that they have been making in the last 10 or 15 years are in irrigation, in the food chain and logistics. I think MP is the largest wheat-producing state and the largest soybean-producing state. Indore is now coming up as an alternate IT hub because Indore is a very well-managed city. It’s one of the cleanest cities in the country. It’s extremely well managed, and therefore people flock to Indore.
Politically Agnostic Development
Why do I think that the investments promised for Telangana in Davos are so important? It is because Telangana had its elections only about a month ago and you have a total change of government. The earlier government, which was there for 10 years, was changed, and we have a Congress government. The new government has been on the ground only for about a month or so. But even then, if 20,000 crores worth of investment is promised, what does it show? It shows that the basic nature of investment and development is not necessarily connected to the kind of politics that is there in the State.
Even in Tamil Nadu, there’s a continuum in development, whether it is party A or party B in power. To me, this is a very good sign because business, industry, development, innovation, and entrepreneurship are slowly distancing themselves from the politics of governance, which means that at least in these States, governance will be reduced to a lot of basics like providing infrastructure, power, land, water, and to the extent possible, some clean administration. Then the industries and entrepreneurship will take off.
Leave the Stars and Focus on the Rest
And therefore, the converse of this is that if you look at states where this is not available, you will see that the growth is very much softer and slower. What comes to mind are states like Bihar, Jharkhand, and Chhattisgarh, which have enormous potential to grow. What is missing here is not entrepreneurship. The entrepreneurs are all over the place. But basic infrastructure of power, roads, and logistics are missing. The central government, in the next 5 to 10 years, must leave the states that are already galloping and instead focus on those states that are lagging, so as to bring those states to a higher level of growth.
UP, five years down the line, will be a very different state. They have a lot of problems – in population, space, etc. Development is happening in Assam in a substantial way. It has slowly started happening in Odisha as well. It is a little slow but I’m glad to see the signs.
The Financial Boom
There is huge growth in the financial sector in Maharashtra. In the last one year, a lot of money has been made in the financial market by ordinary people. In Bombay and in Delhi, within two to three kilometres of where I am staying, in the last two years, approximately 200 plus new apartments have come up by big builders, costing not less than 78 crores. We are talking about 2000 crores of investment in real estate in that locality. Where is this money coming from? This is coming because people are monetizing some of their assets, like an acre of farmland. The HNIs are looking for apartments in excess of 25 to 50 crores. Such apartments are coming up right here in Madras too, in the next two to three years.
There is a huge cycle of financial wealth, which is being created. This has nothing to do with manufacturing, employment, or any intellectual activity, but it’s purely money chasing money. The plus side of it is the huge real estate growth, which will lead to a lot of employment- not just for construction, but also for labour in the joinery, carpentry, electricity, etc.
Household consumption is growing very rapidly. So is travel. I believe in consumption figures rather than GDP which can be misleading. Within the next 10 years, there will be at least 20 crore people who would be earning an equivalent of more than 10,000 US dollars. CAGR of these people is growing at 14.1%.
Fundamentals Need to be in Place
So, what will be 2024 like? If you’re sitting in the government and looking at this scenario, you must say, “Look, all this is happening by itself. I have nothing to do with it. I just have to make sure that the basic fundamentals are provided. But all that is not happening is my responsibility. What needs my attention is the huge unemployment and huge skill gap. A high number of people are coming from UP and Bihar to work here, because they lack basic skill education there to make them suitable for particular jobs. Finding people for employment is a challenge.
If I look at the budget for the coming year, I would strongly say that it would be not an investment-oriented budget because investment orientation is no longer necessary. What is necessary is an infrastructure-oriented and a much more welfare-oriented budget. Make sure that people’s livelihood is protected, and make sure that they are skilled and able to get a job in the next five or six years. If we do that, then as a country we can go to great heights. And I’m sure we’ll get that.
