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In Indian Homes
Phones and
Electricity on Rise
but Sanitation and
INTERNET Lagging
CHINA, JAPAN,
i d Ind a could be worl 's
SOUTH KOREA
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r w supep o er? s
INSIDE
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India co ld world's u 3rdrd
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FROM ASIAN POWER TO WORLD SUPER POWER
India really a
HOW COULD REVOLUTIONIZE
RETAIL MARKET ?
WHILE TREAD NG ON I POVERTY
E O OW H CON MIC GR T
movin ra dly is g pi
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SUPERPOWER NATI NS O
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Following are the highlights of
ECONOMIC Survey 2011-12
TEAM
If India really wants to continue this growth and
surpass her competitors like
and want to become a
Developed and first world country a lot will have to
be done.
2
4
7
9
19
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Editorial
Satya Brahma
Editor - in- Chief
INDIAN AFFAIRSTM
satya is passionate about unraveling the pandorax box.
Mail me at editor.in.chief@indianaffairs.co.in
1

INDIAN AFFAIRSTM
In Indian Homes, Phones and
Electricity on Rise but Sanitation and
INTERNET Lagging
HARI KUMAR
Delhi Bureau Chief
woman makes a call using a W.L.L. (Wireless Local Loop) mobile phone, in Madhabpur village, 62 miles south of Kolkata, West Bengal, in this Aug. 3, 2003 file photo. India's households have, overall, become more one room homes, and 179 million homes are two
comfortable in the past 10 years, but hundreds of rooms or less.
millions of people still lack basics like electricity, toilets and a convenient water source, according the
Electricity:
Nearly 70 percent of the households that was released Tuesday by use electricity, the census shows, an improvement of
Housing Census
Home Secretary R. K. Singh. The survey looks about 11 percentage points from 2001. The rural-urban gap
330 million households in India. for homes with electricity has dropped from 44
percent in 2001 to 37 percent. More than 30 percent of
households still use kerosene for light.
A few highlights:
More than 91 million households live in For cooking, 67 percent of households use firewood,
Housing:
2

INDIAN AFFAIRSTM
3
crop residue or cow dung cakes. Only 29 percent of households in urban India and just 5 percent in rural
households use cooking gas, biogas or electricity as areas. Only 3 percent of overall households have an
cooking fuel. internet connection.
Water: Sanitation:
Only 43.5 percent of houses have tap water. Kitchen facilities are present in 61
More than one-third, roughly 36 percent, have to percent of households, but 53 percent have no toilet
fetch water from source a located within 500 meters facilities, down from 63 percent in 2001. Just over
(about a third of a mile) from their home in rural half of all households, or 51 percent, are connected to
areas and 100 meters in urban areas. Nearly 20 some sort of drainage facilities. Bathing facilities are
percent have to walk farther than that to get water. present in 58 percent of homes, up from 21 percent in
2001.
A telephone, whether a land
Communication:
Transportation:
Just line or mobile, is used by 63 percent of total 5 percent of Indian
households – 82 percent in urban areas and 54 households have a four-wheeled vehicle, or car or
percent in rural areas, an increase of 54 percentage truck. More than one-fifth, or 21 percent, have
points from 2001. A mobile phone is owned by 59 motorcycles or scooters and 41 percent rely on
percent of households. bicycles.
There has been a huge jump in television ownership Banking: The number of households using banking
– up from 15.6 percent to 43 percent in since 2001. facilities has jumped substantially, from 27 percent
A computer or laptop is owned by 20 percent of the in 2001 to 59 percent in this census.

bo a
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INDIAN AFFAIRSTM
4
The Mahindra ai
n
rich groups are
& Mahindra still in the mood
stand at the for international
2
d
n
Delhi motor show expansion.
tells a story of 0
powerful domestic I
1
Some of India's
global leaders
d e m a n d a n d are, however,
undimmed global battening down
ambition. the hatches. Ratan
Thousands of young Tata , the 74-year-people
2
swarm around old chairman of the
gleaming sports SUVs, Tata Group and
electric cars and trucks, owner of the UK car
even before the show has marques Jaguar
opened to the public. and Land Rover,
From a balcony above has ruled out new
t h e f r a y , A n a n d acquisitions and
Mahindra, managing told his employees
director, is laying out his t o b r a c e f o r
plans to make his car marque a global one in the austerity.
years ahead. As with Mr Mahindra, he is turning to markets
A milestone on the way has been passed. His among Bric economies and fast-growing Asian
company has just overtaken Illinois-based John countries such as Malaysia, Indonesia and Thailand.
Deere as the world's largest tractor producer by Many industrialists and bankers have been
volume, propelled by India's buoyant rural discouraged by a dismal year at home. India's
economy. economic growth has slipped from earlier forecasts
At Mr Mahindra's side are his Korean partners. He of 9 per cent to 7 per cent for this fiscal year. Some
bought Ssangyong, the Korean carmaker, last year independent forecasts predict nearer 6 per cent.
for $400m, and so far has done a better job than its Double digit growth, says Richard Iley, economist at
previous Chinese owners, Shanghai Automotive French bank BNP Paribas, is firmly in the “rear view
Industry Corporation. mirror”.
Now, the Mumbai-based businessman is keeping his Pessimism has grown about India's prospects after
“periscope up”, he says, for other opportunities in a months of political bickering and a high profile
depressed global market. corruption scandal in the telecoms sector.
At a time of tumult in global markets, and uncertain The edge has been further taken off an earlier mood
outlook in the US and Europe, Mr Mahindra's of euphoria in the business community by near
ambitions are striking. They are a reminder that with double-digit inflation, rising borrowing costs and
a fast-growing economy at their back and delays in government approvals.
entrepreneurial flair, India's family-owned, cash- Expectations that Manmohan Singh, the prime

5
They have also sharpened
e x p e c t a t i o n s o f t h e
succession of Rahul, her
son, as premier.
The financial markets
exacted their punishment.
An exit of foreign capital
was reflected by Sensex,
the benchmark index on
t h e B omb a y S t o c k
Exchange, languishing as
one of the world's worst
performers last year.
Likewise, the rupee fell 16
per cent over the year.
Foreign direct investment
slumped from a previous
$24bn to $19bn in 2011, just
a t a t i m e w h e n
policymakers were trying
to entice foreign partners
to build infrastructure.
Export growth, which rose
sharply in the first half of
INDIAN AFFAIRSTM
minister and a respected economist, would use his the year as new markets such as Latin America,
second term in office for bold reforms have quickly Africa and Asia opened up, has slowed.
drained away. Instead, the Congress party-led
coalition has suffered repeated setbacks at the hands Many senior economists, such as Shankar Acharya,
of the opposition, its allies and civil society activists. an economist at the Indian Council for Research on
International Economic Relations, consider India's
Amid a policy paralysis, the government was problems largely homegrown, and fear 2012 will be a
assailed during the second half of last year by an tough year.
anti-corruption movement that brought middle-
class Indians out on to the streets to protest against Such were the high-tempo domestic preoccupations
poor governance and widespread cheating. that they have almost entirely eclipsed both the
global outlook of the previous year – when India
“We in India have had our share of problems. The played host to the leaders of the UN Security Council
Indian economy slowed down and inflation edged Permanent Five powers – and more traditional
up. Concern about corruption moved to the centre anxieties about neighbouring Pakistan and China.
stage,” acknowledges Mr Singh.
Economists have steadily become more downbeat.
To add to its woes, the government made an “2011 [was] an unfortunate cocktail of domestic
embarrassing U-turn on allowing greater foreign policy issues and a slowing global environment,”
investment in multi-brand retail (supermarkets). A says Rohini Malkani, economist for Citigroup in
tax overhaul, described by Adi Godrej, the chairman Mumbai.
of consumer group Godrej, as one of the biggest
catalysts to boost economic growth, has stalled. “India is not beyond repair. Measures that will help
include incentivising investments, attracting foreign
Such setbacks have fuelled speculation about exchange flows and executing proposed fiscal
differences between Mr Singh and Sonia Gandhi, the reform.”
left-leaning president of the ruling Congress party.

INDIAN AFFAIRSTM
6
Mr Singh has responded this year with an effort to more outward investments by Indian companies in
get back on the offensive. He is under pressure to resources, and in Africa.
halt the decline, and defy critics of his “The underlying reason for globalisation does not
administration's inaction. change,” Mr Dhuna says. “Indian companies are
The prime minister has opened equity markets to looking very aggressively at what's out there. There
more foreign investment. Foreign single-brand will be acquisitions in Africa. It's the next frontier.”
retailers, such as Sweden's Ikea and the UK's Marks Although some policymakers said India cannot
and Spencer, have been given the right to own their grow above 8 per cent without inflicting unbearable
Indian stores outright. However. Ikea is withholding price pressure on its rural population, Mr Singh at
entry into India as it sees a requirement that single- least has not lost touch with the dream of taking
brand retailers source 30 per cent of goods from local India to double-digit growth to rival China.
small and medium-sized companies as an obstacle to
investment that needs reviewing. “We need to do more than halt the current
slowdown,” he says. He has identified as priorities
Mr Singh's latest move is a stimulus package with agricultural output, boosting industrialisation and
$35bn of public sector investment, forcing state- managing better rapid urbanisation.
owned companies such as Coal India and the Oil and
Natural Gas Corporation to invest cash piles to A worry is the country's fiscal position, a blight of
strengthen the country's energy security. past administrations, and uncomfortable external
sector management of the current account deficit
European diplomats speak more enthusiastically and foreign borrowings.
about reaching a long-awaited bilateral trade deal
between European Union and India in coming The national budget, presented in March by finance
weeks once sticking points over cars, wines and minister Pranab Mukherjee, is expected to bring an
spirits, services and migration are overcome. admission that a fiscal deficit target of 4.6 per cent
will be missed.
“In the last three weeks there's been a definite intent
to move things along [by the government],” says Fiscal restraint will become more difficult the nearer
Samiran Chakraborty, head of research at Standard the Congress party gets to 2014 parliamentary
Chartered Bank in Mumbai. “There's an impression elections, which are often won by doling out freebies
legislation is not possible, but executive decisions and welfare programmes to the poor. Already a
can happen. There seems to be some urgency.” vote-winning food security bill is in the works.
“Amid the pervasive gloom, a few signs are pointing The second half of this year may bring a bounceback.
to better times returning sooner rather than later,” Elections in five states in February and March will be
says Anand Shanbhag, head of research at Avendus over, and the results may give the Congress party a
Capital, a Mumbai-based investment bank. reboot. As importantly, the interest rate cycle is
likely to turn and the RBI begins to cut rates that have
The view from outside a sheltered, domestically- risen steadily over the past two years.
driven economy is more optimistic. Ben Verwaayen,
chief executive of Alcatel-Lucent, the telecoms “There was a party going on and it's as if suddenly
company, says the pessimism about India's economy the lights went out,” says Mr Mahindra of business
is “overdone” when compared with the outlook in sentiment.
western markets. “There isn't a firm hand guiding you back to the
Sanjeev Dhuna, a partner at London-based law firm switch. But in India the lights go out quite
Allen & Overy, says a bad 2011 has not derailed frequently. The generator kicks in and the lights go
India's globalisation. Lower stock market valuations on again. We will get 6 per cent growth. But the
and a depreciated rupee could revive greater inward question is when will we get back to 8 per cent
M&A activity in the second half. He also expects growth?”

7
If India really wants to
continue this growth
a n d s u r p a s s h e r
c omp e t i t o r s l i k e
CHINA, JAPAN,
SOUTH KOREA
and want to become a
Developed and first
world country a lot will
have to be done.
INDIAN AFFAIRSTM
Estate bubble. O
infrastructure and overall energy investment in infrastructure between 2012 and 2017.
industry is not only inadequate but is Japanese bank Nomura has predicted
growing at snail's speed having a that home prices in China will drop by 20% by
disastrous effect on our industrial December 2011, according to Bloomberg. If we add
growth. Our economic reforms go to this property taxes and new rules for payment for
ur
one step forward and two steps backwards. Archaic the second and third home, China has serious
labour laws and policies are the biggest obstacle in problems in this area. Prices in Mumbai and Delhi in
the industrial growth. India is a democratic country India have doubled since mid-2009.
and democracy is run by political parties.
Unfortunately there is no genuine intraparty Domestic consumption.
China's export dependence
democracy in political parties of India. Most of them makes it more vulnerable than India. According to
have become dynastical or personality centered Time magazine, about 35% of China's GDP comes
clubs filled with sycophants. The biggest casualty of from exports. In contrast, India's economy is more
this structure is the democracy itself. This highly insulated from global economic crisis, since
hypocritical political structure has given rise to domestic consumption is 57% of GDP.
corruption of vulgar and monstrous proportion. If Corruption.
Central Commission for Order
India wants to become a superpower, we need to Inspection in China took a series of measures to
change this scenario urgently and with all sincerity. check how officials spend public funds. From 1.43
Economic growth is moving rapidly eastward. Place million claims filed against Chinese officials, only
bets on China and India. China's economy growing 146,517 have resulted in charges, according to
rapidly, but with its independence from foreign Bloomberg. During the Olympics Games of
investments can survive only if other economies Commonwealth the corruption has cost 2.8 billion
maintain their attractiveness. India's economy is dollars for the Indian government. To this is added
more self-sustaining, but has a high rate of the scam in telecom that has cost another 39 billion
corruption and rising inflation. dollars. Activists in India press the government for a
Infrastructure.
obtain a new anti-corruption law.
Poverty.
11% of China's GDP is spent on
infrastructure development, according to In China about 100 million people live on $
Bloomberg, while for India, only 6.5% of GDP goes to 2 a day. But most people moved to the category of
infrastructure. India expects to spend $ 1 trillion those who live by 5-10 dollars a day, according to the

INDIAN AFFAIRSTM
Wall Street Journal. In case of India, about 650 imminent threat to the growth rate of GDP of the
million people live on $ 2 per day. Unequal country. Central Bank of India increased its key rate
distribution of wealth suggest that India's seven times since March 2010. However, the country
population is more uneducated and more hungry still has a food inflation.
than that of China. In 2010, foreign direct
India's population will exceed that of investment made ? ? by China were $ 100 billion.
China until 2028. Today China's population, 1.3 This means that the country will be independent of
billion people, is higher than that in India (1,2 foreign economies. In India, foreign direct
billion). It is estimated that lack of toilets, diseases investment were low because of protectionist
and deaths will cost about $ 50 billion annually in policies. India allows FDI to 51% for a retailer that
India. has a single brand and does not allow foreign
China's monetary policies have led to an investment for those who have several brands.
inflation rate of 4.6%. India inflation of 8.4% is an
Foreign investment.
Population.
Inflation.
8

India could be world's
largest economy by 2012' 3rd
INDIAN AFFAIRSTM
India could overtake Japan to become the
world? s third largest economy behind the
United States and China by 2012 when measured
9
by purchasing power parity, according to a new
forecast by PricewaterhouseCoopers. The
accounting and professional services firm says its
projections suggest China could be the largest
economy in the world as early as 2020. This is about
five to 10 years ahead of the forecasts by investment
bank Goldman Sachs in its BRICs (Brazil, Russia,
India, China) reports over the past six years, which
suggest China will move ahead of the US to be No. 1
some time between 2025 and 2030. Goldman Sachs Germany, UK, Italy, France, Canada) by 2019. John
chief economist Jim O'Neill said last week China's Hawksworth, head of macroeconomics at
economy could eclipse Japan's some time this year to PricewaterhouseCoopers LLP, said in the report that
move in to second spot. The PwC report also says by 2030, the global top 10 could be China, the US,
India is likely to grow “significantly faster” than India, Japan, Brazil, Russia, Germany, Mexico,
China in the decade after 2020 as India reaps the France and the UK.
demographic dividend of a younger and faster- Economic output forecasts generally use US dollars
growing population, and because its lower starting as the base currency and make assumptions about
point gives it more economic “catch-up” potential. exchange rate movements. PwC said its new report
But it warns that India will only fully realise this used purchasing power parities to measure
potential if it continues with the “growth-friendly” economies, to minimize the impact of volatility and
economic policies of the last two decades. The report, future uncertainty about exchange rates. It said this
released by PwC in London last week, comes as both also corrected for price differences between the
China and India continue to rebound from the global advanced and emerging economies. The Indian
financial crisis faster than any of the other major government's own view is that after the setbacks of
economies. 2008-09, when the global financial crisis saw GDP
China's growth rate this year is likely to reach 10 per growth drop to less than 6 per cent, a return to 9 per
cent, according to an updated global outlook from cent-plus is on the cards. Indian Prime Minister
the International Monetary Fund on Tuesday Manmohan Singh said earlier this month he
(January 26), while India should reach 7.7 per cent. expected the economy to grow 7 per cent this year,
That compares with a forecast 2.7 per cent growth for and then “soon return to a sustained high growth
the US and 1.7 per cent for Japan. The IMF says that path of 9 to 10 per cent.”
overall, the global economy should grow 1.7 per cent That generally accords with the outlook of the
in 2010 and 2.2 per cent in 2011. The PwC forecast Mumbai-based independent think tank, the Centre
says the new decade will be characterized as the for Monitoring Indian Economy (CMIE), which said
point at which the largest emerging economies catch on Monday it expected India's GDP growth to be 6.9
up with and prepare to overtake the established per cent for the financial year ending March 2010,
leading economies. It said the output of the and then jump to 9.2 percent in the year ending
emerging E7 economies (China, India, Brazil, Russia, March 2011. It said consumer spending had bounced
Mexico, Indonesia and Turkey) would be “neck and back strongly in the September 2009 quarter, while
neck” with the advanced G7 economies (US, Japan, industry, agriculture and services were all expected

INDIAN AFFAIRSTM
10
to do well in the year ahead. “The Indian economy is "India has been one of the world's best-performing
fast returning to pre-crisis levels,” CMIE said, noting economies for a quarter of a century, lifting millions
that before the global financial crisis, the economy out of poverty and becoming the world's third-had
grown at better than 9 per cent in the three years largest economy in PPP (Purchasing Power Parity)
from 2005-06 to 2007-08. Last week, Goldman Sachs terms. India has tripled its defence expenditure over
India CEO Brooks Entwistle told an investment the last decade to become one of the top-ten military
conference in Mumbai that there would be many spenders. And in stark contrast to Asia's other
opportunities in India's infrastructure over the next billion-person emerging power, India has
decade, with the country needing $US1.7 trillion simultaneously cultivated an attractive global image
invested in this sector alone. Despite India's of social and cultural dynamism," it says. But then
"impressive" rise, its ambition to be a super power come the "ifs" and "buts". Plunging the knife into
may remain just that—an ambition, according to an Indian ambitions, the report says:"Still, for all India's
authoritative new study by the London School of success, its undoubted importance and despite its
Economics to which several Indian scholars have undisputed potential, there is cause for caution in
contributed. It pointedly dismisses what it calls the assessing India's claim to superpower status. India
US Secretary of State Hillary Clinton's "unequivocal still faces major developmental challenges. The still-verdict"
during her India visit in 2009 that "India is entrenched divisions of caste structure are being
not just a regional power, but a global power'. compounded by the emergence of new inequalities
The study, India: the Next Superpower? of wealth stemming from India's economic success.
acknowledges India's "formidable achievements" in India's democracy may have thrived in a manner
fostering democracy, growth and cultural that few ever expected, but its institutions face
dynamism but concludes that these are nullified by profound challenges from embedded nepotism and
its structural weaknesses, widespread corruption, corruption. India's economic success continues to
poor leadership, extreme social divisions, religious come with an environmental cost that is
extremism and internal security threats. India, it unsustainable."
argues, still faces too many "developmental These problems are compounded by India's
challenges" to qualify for "super power" status, or to "pressing security preoccupations" arising out of
be considered a serious "counterweight" to China, a "insurgent violence" affecting large parts of the
role sought to be thrust on it by some in the West. country and long-festering cross-border disputes.
Some of the report's authors wonder whether India The best that India can hope for—the study offers as
should even aspire to be a super power given its a consolation-- is "to continue to play a constructive
institutional weaknesses and social and economic international role in, among other things, the
divisions. financial diplomacy of the G20".
Historian Ramachandra Guha, currently the "Yet the hopes of those in the West who would build
Philippe Roman Chair in History and International up India as a democratic counterweight to Chinese
Affairs at LSE, suggests that rather than being superpower are unlikely to be realised anytime
seduced by the bright lights of great power soon," it concludes. The report forms part of LSE
diplomacy, India should instead focus on reforming IDEAS' series on "Power Shifts". Authors include
its institutions and repairing the social fabric that Mukulike Bannerjee and D. Rajeev Sibal (both LSE)
seems to be coming off its seams. “We need to repair, and Sandeep Sengupta, a doctoral candidate in
one by one, the institutions that have safeguarded International Relations at Oxford University.
our unity amidst diversity, and to forge the new I believe that India would make it to the top of the
institutions that can help us. It will be hard, patient, world as Indians are among the most intelligent
slow work,” he writes. The study, a summary of people of the world. India has all the human and
which was released on Wednesday, starts off by material resources that are prerequisite to become a
acknowledging that" India's rise has certainly been superpower. It is only a question of administration
impressive, and warrants the attention that it has and supervision. The country proudly holds
commanded". immense resource of experienced, high caliber

INDIAN AFFAIRSTM
11
professionals in all spheres of knowledge and greatest men of the world recognised to be
technology. India is deemed as a 'Sleeping Tiger' due extraordinary. It is just that such talents are not being
to its capabilities in different fields like nuclear properly utilized and encoraged properly. We get
technology, space technology, agricultural research great ideas when we read certain things but throw
and software development. If provided with proper away the idea saying that no one will approve it. This
support, they would be able to implement any task problem starts at home. The parents are the ones that
that a developed nation may or may not be able to make the extraordinary people become ordinary
do. ones. Parents have certain dreams and they want
My vision as a citizen of India would be to make their children to become what they want irrespective
India a superpower, both in economic and military of whether he is interested in it or not. I believe there
terms. The endeavour to be taken to herald this result are very few in India that do not have their parents
would be tremendous and not without pain. One influence behind it. Such people either suffer great
may wonder why India has not achieved this goal defeats in life or they keep fancying that they too
yet and what has prevented India from achieving could have been number1 when they see others
this goal. Many reasons point back at us the root doing better than them. So they start seeing false
cause is paved by the citizens themselves. Too much dreams which seems impossible but could have
focus is given on social and religious issues and too become possible if utilized at the right time. The ones
little on economic matters. The national elections are that were allowed to follow their goals without any
being based on religious outputs which eventually persons influence have proven themselves to the
lead to the election of leaders that are more focused world like Gandhiji, Sachin, Mital and many others.
on these aspects rather than on the economy and Some may think that you yourself have chosen your
well-being of the country. ON the other side of the goal but you couldn't become number1. It is only
coin, India faces more problems like proper because you were influenced by your parents or
infrastructure facilities, low agricultural output, others some way or the other. That is why a doctors
high illiteracy rate and poverty. India should be children mostly becomes a doctor, a politicians son a
made fully self-reliant in the fields of technology, politician, A farmers children farmers. Sweepers
energy and food. The infrastructure facilities should children begin sweeping when they are below 10
be expanded and must prove to be one of the best years are some examples. There are very few cases
that is available anywhere in the world. The scourge like a cheap labourers son becoming a IIT'n or a
of illiteracy and corruption that can be seen in all doctors son becoming a singer. We Indians have a
walks of life should be thoroughly eradicated. They inferiority complex combined with laziness. We
are sharpened knives wounding the country's dream big, aim small, work for even smaller and
powers. The most threatening disruption faced by become just a bit better than our parents. Where we
India in this era is that of utter poverty and should have dreamt impossible, aimed for some
helplessness. To become a superpower one day, the thing that we think is impossible within our ability,
government should take a large step in eradicating and work for it, improving ourself every time and
poverty and ensure that no Indian is below the becoming something that our parents could never
poverty line. A fast developing country requires dream of. That is why I think India is still developing
educated and skilled labour and decent economic even after 60 years of independence. If India has to
growth. A necessary step should be taken towards become a Super power we need to first believe in
stabilizing a value for a rupee as the continuous ourself that there is no word called impossible. We
devaluation of the rupee is seen as a major demerit. need to come out from the chain-held life system and
These necessities, hopes and aspirations should be start becoming the number1 person in the world. We
raised without harming or sacrificing on any of the will be needing major reformations in both our
rich cultural heritage and diversity that India is families as well as in our governments. We must
blessed with.. make a democratic group that is led by only the most
The reason is that this is such a country filled with the learned, intelligent people of India. A group that will
greatest hidden talents in the world. Every person in know how to rule the people, breaking all the
India I believe have the ability to be better than the bondages that are prevalent. Since we accept

INDIAN AFFAIRSTM
12
everything as it is and are not ready to come forward incredible. Aim for nothing less than the best. Dont
and prove ourself, we end up remaining a try to be influenced by others instead become the
developing nation always copying the western influence of others. Every goal is achievable if you
world. Instead we should have brought the know how to direct it. Learn from others and invest
technology from western people understand and in defense within the country instead of wasting
research on how they have done it and start making billions importing it. I could go on and on but I cant
them ourself then improve it and start exporting to due to lack of space. This is an 18 year old boy signing
the other nations like how China is doing. If at first off.
we fail try it in a different perspective and soon you With the current geopolitics being highly unpolar
will be amazed to find that it was such an easy task. and treading on thin ice, the countries which strike
The way we built our long range missile after the right will dominate the global arena in the coming
west didnt sell it. years. It goes without saying that the countries
If all the talents were put in the right direction like which are currently looked upto as potential
the americans you would be amazed at how fast successors of U.S.A and other European countries in
India would develop. According to me we would global economic and political supremacy are the
easily touch 25-35% growth in GDP and also become BRMIC (Brazil,Russia,Mexico,India and China). All
superpower by 2020. We people dismiss the ideas these countries have different reasons to feature in
that we do not believe where we should have tried to this exclusive list, The Latin American countries for
find out whether, could it be made possible? And if their rich resources of raw material and high
impossible try to find a way to make it possible. That investment conducive environment, China has
is how the martial arts of China, the aircrafts, already proven its potential by its rapid capture of
spaceships telephones, and many things that we global markets and the will to fully exploit its human
thought impossible came into existance in the West. resources through a staunch Communist stance.
We must be proud of our ancestors learn from their Now the question is how well does India justify its
mistakes and become a person that we dreamt to position here and thus, will it be able to maintain it
become. If you dream to become a singer, dancer, and rise up to the expectations of being a
cricketer, gamer, IIT'n, researcher, artist or any thing superpower within the near future. India has of
else aim for the thing you like the most and take the course come a long way since its independence,and
training from some person renouned for it and there the bandwagon stops.
become better than him and try to become Since the past two decades, India has been enjoying
unbeatable. This is possible only with research in the status of imperialism in the info-tech sector,being
whatever you do. Try to find your own excellence one of the major markets for IT industry . Then as a
and style rather than copying the ideas of other developing country it has mass potential in terms of
people as it is. an emerging market for investment, a pool of young
India has great potential but do not have a proper educated and internationally competent
leaders to take the people in the right directions. The professionals. We have all the tools, but the
average Indian age is around 22 while we have the mechanism is not in place. India's middle class is
oldest group of ministers. Instead of saying it is very ideally clinged onto this Utopic idea of
impossible and we will not become superpower in Superpowerhood, but only thinking about it will not
this century you come out and start to make the make it happen. We have some major constraints
change. If the older people do not understand us take that pull us back and have made us one fourth the
the help of some other person to convince them. size of our giant neighbours economy in terms of
Indians are multi cultural, multi religious, multi GDP over these two decades. So what are these
lingual, multi ethnic, unlike any country. But in the problems?
case of India there are around 1652 languages and The one and major is the pervasive poverty that
dialects that are spoken in India. There is no official impedes India's progress in every sector, every way.
religion or state religion and almost all the religions We have not been able to absolutely tackle the
around the world are found in India. Making us just problem in spite of it being a major highlight in every

INDIAN AFFAIRSTM
13
five year plan conceived since independence. What economic recession and how our country was
has been happening all these years is creation of a relatively less affected and also was one of the first to
widening gap between the rural and the urban and recover, shows the existence of a stable and growing
middle-class. And with poverty, needless to say, economy. The output is expected to increase by 10%
attach all these problems of malnutrition, illiteracy in the next few years. So the cynics won't be here to
and lack of basic facilities in the lives of the stay long, but in order to make our presence assertive
impoverished. We face major internal security globally, we need to employ a focussed approach in
threats with Naxals and citizens in complete achieving our goals. With global and regional
agitation with the country. Food security is another competition from China, it sure seems a Herculean
major issue at hand where on the one hand we see task,but so has every major achievement been, and
our food grains go waste due to lack of storage and at we all know this one will have more rewarding
the same time face hunger and malnutrition results than we could ever fathom,after all super
problems. Our growth today, does not overshadow powerdom is one ring that will rule them all. The
or in any way minimise the pertinence of these word superpower as the encyclopedia defines,
problems. Another major factor which affects a literally means ” state with a leading position in the
country's growth is of course its system of international system and the ability to influence
governance. India has been this fairly hyped largest events and its own interests and project power on a
democracy in the world, but its effectiveness is worldwide scale to protect those interests; it is
getting less credible as you speak. What we need are traditionally considered to be one step higher than a
radical moves and radical changes and a stronger great power”. The question that is very common
government hand in policy implementation. The amongst the thinkers worldwide is that can India be
country almost need the rule of the stick to inculcate the next superpower? Or, can India ever be a
what we direly lack in all spheres of life: discipline. superpower? The question is very complicated and
The Indian system of governance has always been can be answered positively as well as negatively. But
about the petty politics of retention of power and to a very large extent our country has to do a lot to get
patronage. to this superpower stage. It was the end of the second
We have to bring ourselves to terms with reality and world war, that divided the world into 2 power blocs
hence predict our country's fate. Without structural namely UNITED STATES and USSR and the other
changes in economy, we cannot expect it to race countries were forced to join either of the two blocs,
ahead of its time. Research, innovation, risk taking that this word came into existence but since the
policy and absolute implementation is the need of disintegration of USSR (1991) the only power house
the hour. Capacity building and decreasing our of the entire world was USA. And since then, though
dependence on other economies is another almost 2 decades have passed the story has not
requirement. We still are major importers of our changed. Though there is no defined criteria that a
Arms and ammunition which means dependency, as country needs to fulfill to be a superpower but the
opposed to China which is now among the five common sense says it is important to be
major exporters of the same. The ambitions for this economically, politically, militarily and last but not
sub-continent are not Utopic, but will be if we don't the least culturally strong to join this league. To a
find the right way to realise them. With the passing very large extent, having these strengths is enough
of the nuclear liability bill, we are at a position to but projection of these on the entire world forum is
exploit our nuclear capabilities. The recent global equally important.

INDIAN AFFAIRSTM
14
INDIA AS A SUPER POWER was ruled by the British for a period of about 200 yrs,
nobody knew that this nation would rise out to be a
As the very old saying goes “everybody solutes the world leader one day. It is being projected that in the
rising sun”, the same is the case of India and China to next 50 years, say by 2050, India will be one of the
a very great extent. Both these countries have been fastest growing economies of the world. One of the
coming up in this regard and the people have started most important outcomes of this growth on the
predicting about their future. As far as India is economic front is the rise of the new so called 'super
concerned it is a land of many naturally rich rich' class in the corporate sector.
resources and has a lot of advantage in this regard. Another common factor between India and the
Some of the aspects that favor India in this race are wealthiest country of the world, United States, is that
that India has a very large skilled manpower that is both these countries are independent societies. In
always ready to work for their as well as their spite of such a diverse cultural background the
country's success in every possible way. Not only democracy of our country is still the binding factor
human resource but the country is also rich in and it contributes a lot in this regard. But at the same
technological and nuclear resources. We are now one time our country needs to look upon some areas
of the leader countries in the world. At the time India which play a very important role in building up of a

INDIAN AFFAIRSTM
15
super powerful nation. These areas are: now it is time for all of us to work together and try
and do our bit in bringing as much success in every ?EDUCATION- the government needs to look
upon this area and try and educate as many field as possible so as to realize the dream of turning
people as possible so that we do not lack India into a superpower as soon as possible.
skilled labor ever in our country. Educated There is a thin line between the audacity of hope and
people always are beneficial for the growth grasp of reality. India's middle-class, with its fond
of our nation. dream of India as a Superpower, is like a trapeze
artist walking that very thin line. Despair too much, ?POVERTY- this is the major hurdle in the
path of development in our country. Even and your case is hopeless. Daydream too much, and
today a large part of our population is below you topple into a delusionary void. Over the past
the poverty line. But at the same time the decade or so, it's the latter which has been the bigger
government has taken out many policies to danger. India the Infotech Iron-pumper. India the
come over this issue. Nuclear Non-aggressor. India the Space Scorcher.
India the Cricket Conqueror. India the Massive
Market. India the Enormous Economy. India the
Growth Giant… you get the drift. With a flying cape
and coloured briefs, it's an India ready to make the
MODERNISATION IN OUR COUNTRY NEEDS TO
BE VIEWED IN A DIFFERENT AND A WIDER
MANNER
?3. NEIGHBOURING COUNTRIES- we world spin the other way round on its axis. At the top
should always try and maintain better or level, the dream was articulated by an optimist-in-rather
healthy relations with our residence at the Rashtrapati Bhavan itself, former
neighboring countries. So, better relations President APJ Abdul Kalam. With his technocratic
with Pakistan, China, and Afghanistan need training straight from the rah-rah realm of rocket
to be maintained. science, he went forth and set a deadline: 2020. And
then got little children all across the land waving
?4. HEALTH- this is also an important area little tricolours to pledge their support. The
because health plays a very vital role in the Millennium Goal to beat all millennium goals! The
development of human beings which leads future that was promised! The glory that was
to the development of the nation. destined! Each success has brought another bout of
These were some of the major issues though many delirium, India's lunar mission being a fine example.
small problems like religion, corruption, crime, There's ice on the moon, Jai Hind!
unethical practices etc. also come up as hurdles but So many have grown so fixated on the target, that
in my opinion a lot has been done and it would not be should we miss our date with Superpowerhood, we
a problem for India to overcome these issues, if might need group psychotherapy for decades to
worked towards religiously with complete come. But delusions of grandeur, some think, are
dedication. Growing of MNCs after the best cured by grander delusions of grandeur. So,
globalization has improved the condition of our with some digital jugglery—Infotech Imperialism
country as India has totally integrated itself into the has its privileges—the deadline has been reset to
world economy and the growth levels of around 8 to 2012. As if the poor hungry child in drought-ridden
9 percent at the GDP aspect clearly make us hopeful Bundelkhand just has to wait for the clock to tick past
that India is not very far from the USA and will soon the midnight of 31 December 2011, and he'll be
be a threat to the domination of this superpower. So reborn in the land of milk and honey.

INDIAN AFFAIRSTM
THE WILL TO POWER
amok. Or ragtag pirates thumbing their nose at
Indian flag carriers on the high seas. Or even Indians
opting for foreign citizenship at the slightest chance.
As any international traveller will tell you, all
passports are not created with equal prestige.
Perhaps it is no surprise that non-resident Indians
have played a big role in formulating the fantasy.
Oblivious to starvation deaths in Madhya Pradesh
but delighted to find Laxmi Mittal as Britain's richest
man, unaware of the scarcity of potable water in
Uttar Pradesh but at their loudest holding wine
glasses the size of watermelons, they have become
India's cheerleaders. India's moment, they exult, has
come. If only.
“Nation building is a hard grind,” says Lord Bhikhu
Parekh, political scientist, “Rhetoric, on the other
hand, is easy. The Superpower Fantasy thus is an
escape from reality. In the Nehruvian era, elections
were won on the premise that 'we cannot offer you a
That a sizzling economy can fuel hysteria has been a great today but hard work will assure that your
new learning. In a way, this is understandable. For a tomorrow is better'. This has been replaced by the
generation of Indians who remember the rhetoric of 'India Shining'.” This is not the first time
humiliation of PL-480 food aid from America, a five- that India's elite has been in a euphoric mood. In
year wait list for a scooter, a phone as a symbol of 1947, Nehru's 'Tryst with Destiny' had everyone
authority, and a working phone as a sign of cosmic agog. It was supposed to turn this ancient civilisation
rarity, the emergence into this bright new world of into a beacon of enlightenment for the world. The
choice and plentitude is cause enough for 1962 humiliation by China was a cold shower, and a
exhilaration. And with $280 billion in the treasure bitterly sobering one at that. In 1971, it resurfaced.
chest and a nuclear bomb in the basement, nobody India famously won its first war in a thousand years
dare take it away. The 'Hindu rate of growth' of 3 per and split Pakistan. Internally, Indira Gandhi's
cent has been replaced by a robust 8 percent. There is 'Garibi Hatao' was the great new adrenalin shot. It
'feel good' in the air, and it is making us heady. ended in a nightmare called the Emergency. Today's
“There is a feeling that the next generation will be delusion has its origin in the BJP's atomic muscle
better than the previous one,” says Pratap Bhanu flexing at Pokhran. From 'desert vibrating', the
Mehta, president of Centre for Policy Research, a country was taken in five years to 'India Shining'—a
think-tank, “In itself, the fantasy is not a bad thing, slogan that lost an election but gave the middle-class
but to believe that you have arrived can be an ego kick. Resplendence, it would seem, is like
dangerous. India has a very vast underclass and this transcendence. Fold your legs, chant the mantra, and
just cannot be wished away.” you're there.
One aspect of the fantasy is the belief that India has
finally secured a seat at the high table of global
power. After all, the G-8 has become the G-20,
coordinating stimulus packages to save the world.
As for wielding a veto over world affairs, don't forget So, can India realistically hope to be a superpower by
India has achieved parity with the Big Five, having 2020 or even 2050? This is not a prefix one can buy
found a cosy place in the Nuclear Club at long last, with $280 billion in hard currency or wrest with a
even if the official membership card is still in the bomb. If power is the ability to exert one's will, a
mail. With heft such as this, it is puzzling to have superpower is understood as having the ability to
Bangladesh defy India in letting terror camps run exert itself globally, or at least beyond one's
GET REAL ON THE VISION
THING
16

INDIAN AFFAIRSTM
territorial borders. In world history, expansive ill-paid of jobs. The dividend could well turn out to
empires have done this, from the Persian, Greek, be a disaster.
Roman and Mongol expanses to the latter-day The third superpower paradigm involves the State
Chinese, Russian and British empires. From the mid- and its institutions. While Indian democracy is often
20th century onwards, America has been the Big hailed highly for its 'soft power' appeal worldwide, it
Superpower. Only, the information revolution of the masks a bad case of dysfunctional politics, a reality
modern era has been making it harder and harder to that strikes the elite only in occasional spasms.
exert power without the consent of those affected, Instead of delivery of results, electoral politics is all
most pertinently that of people within one's own about retention of power and dispensing of
borders. In other words, there is no question of patronage. Unlike the revitalised US democracy,
achieving or sustaining real power—super or not—if India's capacity for self-renewal seems much too
the basic aspirations of your own citizens go weak for the country's good.Worse, the resolve to
unfulfilled. After decades of adhering to Mao's four- attain the grand goal India has set for itself is in
word 'keep a low profile' dictum, China has just sparse evidence. Internally, the Superpower Project
begun to assert itself globally. America is America, of is hollow. Take a look around. The fissures of petty
course, still in charge. So, where does that leave politics block attempts to win elections on national
India? issues. Nor can these become priorities of
For one, with an urgent need to align vision with governance. Superpowers, on the other hand, have
realism. To be sure, given the grim scenario in South always upheld issues that are vital to them in a broad
Asia, India has the makings of a regional power. sense.
Missiles and money count, but one neighbour So why does this fancy persist? Says Shiv
neutralises the warheads and the other has more Vishwanathan, a sociologist, “There is a fantastic
moolah. This limits India's influence in its immediate urge within the middle-class for upward mobility.
littoral, the big reason why the 'super' prefix eludes For status. This is fuelled equally by the expatriate
the country. Can India overcome Pakistan, at the Indian cousins when they visit or hold 'India' days. It
very least, as a critical constraint? is a dangerous fantasy because it is taken as manifest
In 2009, India was the world's second largest arms destiny. Bear in mind that a lot can still go wrong in
importer. But it's still an importer. Frontline tanks, the India story. If the middle-class insulates itself in
fighter jets and warships, they're all foreign made. the superpower ivory tower, it will invite
This means dependency. China, in contrast, is now reactions.”. There are sniggers in the dark, scowls in
among the world's five top arms exporters. India's the aisles. Read The White Tiger. Or watch Slumdog
own defence development efforts since 1947, barring Millionaire. Though aimed at Western audiences,
the odd missile, so far have been a scandalous waste. they are reminders of the mockery that comes the
This tardiness retards the country's power projection way of India's middle-class consensus on
capability in hard military terms. Then, there is the Superpowerhood. And indeed, there is much that
question of economic emergence. At last count, this should make the country squirm. There is nothing
country of 1.14 billon people had the world's largest 'super' in having to declare a quarter of the country's
number of malnourished children. India also has districts tormented by Naxal violence. There are
more people who can't write their name, more people out in the jungles who are taking up guns to
malaria deaths and more jobless youth than any overthrow the State, an entity they see as
other country. To most statisticians at human increasingly hostage to the mollycoddled middle-development
organisations, the very aspiration of class and its fancies.
superpowerdom is a crude joke. Gung-ho Indians,
meanwhile, are counting on the 'demographic
MATTER OF SELF BELIEF
dividend'. By this conventional wisdom, India will
still be youthfully energetic while the developed So, can no good come of hallucination? It could
world ages into its drone years. This view ignores the depend on how the energies are channelled. In Meiji
fact that a majority of India's young are illiterate and Japan, or Imperial Britain, the State took national
underfed, and unfit to do anything except the most ambition to new heights. “Some good does come out
17

INDIAN AFFAIRSTM
18
of the fantasy,” says Gurcharan Das, “It gives a sense Russia, Mexico, Indonesia and Turkey) would be
of self-belief. But it is critical to direct this positive “neck and neck” with the advanced G7 economies
energy, for otherwise it can lead to a dangerous (US, Japan, Germany, UK, Italy, France, Canada) by
disconnect of the elite from the concerns of a 2019. John Hawksworth, head of macroeconomics at
transforming country.” India must wake up. PricewaterhouseCoopers LLP, said in the report that
by 2030, the global top 10 could be China, the US,
India, Japan, Brazil, Russia, Germany, Mexico,
France and the UK. Economic output forecasts
India could be world's 'third largest economy by
2012'
India could overtake Japan to become the world? s generally use US dollars as the base currency and
third largest economy behind the United States and make assumptions about exchange rate movements.
China by 2012 when measured by purchasing power PwC said its new report used purchasing power
parity, according to a new forecast by parities to measure economies, to minimize the
PricewaterhouseCoopers. The accounting and impact of volatility and future uncertainty about
professional services firm says its projections exchange rates. It said this also corrected for price
suggest China could be the largest economy in the differences between the advanced and emerging
world as early as 2020. This is about five to 10 years economies. The Indian government's own view is
ahead of the forecasts by investment bank Goldman that after the setbacks of 2008-09, when the global
Sachs in its BRICs (Brazil, Russia, India, China) financial crisis saw GDP growth drop to less than 6
reports over the past six years, which suggest China per cent, a return to 9 per cent-plus is on the cards.
will move ahead of the US to be No. 1 some time Indian Prime Minister Manmohan Singh said earlier
between 2025 and 2030. Goldman Sachs chief this month he expected the economy to grow 7 per
economist Jim O'Neill said last week China's cent this year, and then “soon return to a sustained
economy could eclipse Japan's some time this year to high growth path of 9 to 10 per cent.”
move in to second spot. The PwC report also says
India is likely to grow “significantly faster” than That generally accords with the outlook of the
China in the decade after 2020 as India reaps the Mumbai-based independent think tank, the Centre
demographic dividend of a younger and faster- for Monitoring Indian Economy (CMIE), which said
growing population, and because its lower starting on Monday it expected India's GDP growth to be 6.9
point gives it more economic “catch-up” potential. per cent for the financial year ending March 2010,
and then jump to 9.2 percent in the year ending
But it warns that India will only fully realise this March 2011. It said consumer spending had bounced
potential if it continues with the “growth-friendly” back strongly in the September 2009 quarter, while
economic policies of the last two decades. The report, industry, agriculture and services were all expected
released by PwC in London last week, comes as both to do well in the year ahead. “The Indian economy is
China and India continue to rebound from the global fast returning to pre-crisis levels,” CMIE said, noting
financial crisis faster than any of the other major that before the global financial crisis, the economy
economies. China's growth rate this year is likely to had grown at better than 9 per cent in the three years
reach 10 per cent, according to an updated global from 2005-06 to 2007-08. Last week, Goldman Sachs
outlook from the International Monetary Fund on India CEO Brooks Entwistle told an investment
Tuesday (January 26), while India should reach 7.7 conference in Mumbai that there would be many
per cent. That compares with a forecast 2.7 per cent opportunities in India's infrastructure over the next
growth for the US and 1.7 per cent for Japan. The IMF decade, with the country needing $US1.7 trillion
says that overall, the global economy should grow invested in this sector alone. Geoff Hiscock writes on
1.7 per cent in 2010 and 2.2 per cent in 2011. The PwC Indian business and is the author of “India's Global
forecast says the new decade will be characterized as Wealth Club” and “India's Store Wars,” both
the point at which the largest emerging economies published by John Wiley & Sons
catch up with and prepare to overtake the
established leading economies. It said the output of
the emerging E7 economies (China, India, Brazil,

INDIAN AFFAIRSTM
19
FROM ASIAN POWER TO WORLD SUPER POWER
The last two decade of the twentieth century has become a turning point with the introduction of New
Economic Policy (N.E.P.) from 1991. The policy is labeled as LPG i.e. Liberalization, Privatization and
Globalization. Knowledge has been and will always be out heritage. The NEP has opened vast opportunities to
the Indian economy which if wisely exploited, can drive the country to become not only ASIAN TIGER but a
WORLD SUPER POWER by showing a marked improvement in Macro Economics Indicators
Indian Brands are as crazy as is innovators are, as land of billion opportunities and not a billion
Indians constantly innovate. A close scrutiny of problems . In the last 20 years, the country has added
Indian Brands post the free economy era will a trillion dollars of output. The last decade has seen
reveal that large number of players in diverse sectors India emerge stronger on the world map, especially
has made their mark in their respective fields during the global financial meltdown when the
notwithstanding the hurdles & government country weathered the crisis much to the admiration
regulation from time to time. Today Brand India is of the world. India today stands poised at the
globally accepted as the world Market is looking at threshold of change. India, today, has emerged as
india as the most preferred destination for one of the decisive nations shaping the contours of
collaboration, partnerships & investments. India is a the world economy. Consistently charting a growth

INDIAN AFFAIRSTM
20
path over the last few years, Brand India is an idea Financial Services, Food Industry, Insurance, IT &
whose time has truly arrived. Today, the triumph of ITeS, Manufacturing, Media and Entertainment,
Brand India is visible in almost all fields. With some Retail, Science and Technology, Banking,
aggressive cross-border acquisitions, India has been Biotechnology, Cement, Consumer Markets,
rewriting the global business equations; India has Healthcare, Infrastructure, Oil and Gas,
established its leadership in IT and knowledge- Pharmaceuticals, Real Estate & Infrastructure, Steel,
based industries globally and has the fastest Textiles, Telecommunications, Tourism and
growing population of workers and consumers. Hospitality by the speakers who will dwell on this
With huge investments in infrastructure subject. The Indian economy has continuously
development on the anvil, India today is a preferred recorded high growth rates and has become an
investment destination. It has one of the world's attractive destination for investments. Today India is
most rapidly growing markets, and today, Indian among the most attractive destinations globally, for
products and services are recognised for their investments and business and FDI had increased
quality all over the world. over the last few years. The Indian economy is
Against the backdrop of the above backgrounder, expected to grow at around 7.5 per cent, according to
where Brand India matters most, Indian Affairs, Dr Manmohan Singh, the Indian Prime Minister. The
India's first pink Magazine is hosting the high profile PM acknowledged Asia's emerging economies were
& india's most eagerly awaited leadership event 3rd "growing well" and were, "in fact, contributing to the
Annual India Leadership Conclave & Indian Affairs recovery of the world economy". The overall growth
Business Leadership Awards 2012 in association of gross domestic product (GDP) at factor cost at
with the Ministry of Corporate Affairs, Government constant prices, as per Revised Estimates, was 8.5 per
of India on Friday, 6thApril at Hotel Lalit, Bengaluru, cent in 2010-11 representing an increase from the
India. Keeping its tradition of bringing the finest revised growth of 8 per cent during 2009-10,
think-tanks of the society from the different diverse according to the monthly economic report released
sectors like the much acclaimed two Annual Events ( for the month of September 2011 by the Ministry of
1st Annual India Leadership Conclave( in Delhi & 2nd Finance. Overall growth in the Index of Industrial
Annual India Leadership Conclave in Mumbai), the Production (IIP) was 4.1 per cent during August
stage is set for the third one under the theme “ 2011. The eight core Infrastructure industries grew
BRAND INDIA – THE EMERGING SUPER by 3.5 per cent in August 2011 and during April-
POWER, LIMITLESS LEADERSHIP, LIMITLESS August 2011-12, these sectors increased by 5.3 per
POSSIBILITIES. The Conclave attemptsto throw cent. In addition, exports and imports in terms of US
new possibilities in diverse sectors such as dollar increased by 44.3 per cent 41.8 per cent
Agriculture, Automobiles, Auto Components, respectively.
Aviation, Education and Training, Engineering,

INDIAN AFFAIRSTM
21
Finance Minister Pranab Mukherjee tabled the in the previous two years mainly on account of
Economic Survey 2011-12 in Parliament on hursday, global slowdown and domestic factors. "There were
stating the Gross Domestic Product (GDP) is likely to also the pressures of democratic politics, which
grow 7.6 percent in FY'13. "The growth rate of real slowed reforms," the Survey said while endorsing
GDP (is expected) to pick up to 7.6 percent (plus or the Central Statistical Organisation's (CSO) estimate
minus 0.25 percent) in 2012-13 and faster beyond of 6.9 pe r c ent growth dur ing 2011-12.
that," said Pranab Mukherjee in Parliament. It
expects the economic growth to further improve to India's economic growth slowed to its weakest
8.6 percent in 2013-14. The Survey said fiscal annual pace in almost three years in the three months
consolidation is likely to get back on track from 2012- to December, as high interest rates and rising input
13, when savings and capital formation will also costs constrained investment and anufacturing,
begin to improve. government data released earlier showed. GDP rose
“Moreover, with the easing of inflationary pressure 6.1 percent in October to December compared with a
in the months to come, there could be reduction in year earlier. That marked a sharp pullback from 6.9
policy rates by the RBI, which would encourage percent growth in July to September and was the
investment that could have a positive impact on seventh successive quarterly slowdown.
growth", it added. Indian economy is likely to
slowdown to 6.9 percent in 2011-12 from 8.4 percent

INDIAN AFFAIRSTM
INDIANS
EUROPEAN
22
HOW COULD REVOLUTIONIZE
RETAIL MARKET ?
India is a unique country that has ability of statistics no wonder that Indian retail sector is seen
surprising foreigner on pretty much every step. as a great business opportunity. However, despite
Indian retail sector is noticeably different compared the efforts from local and foreign giants alike, for
to the one in Europe. While living in India, I was multiple reasons kirana store remains dominant
pleasantly surprised of how efficient kirana stores format in the market. Kirana store model is working
really are. Although usually not impressive in size, so well in India because of several fundamental
they carry surpassingly large variety of reasons. First, they provide goods on credit. It is
merchandise. What's more important, everything is extremely valuable service in a country where
available for almost instant home delivery. Ordering expenditures on food account for close to a quarter of
works especially well after some time, once the store all spending (in case of the poor – more than half)
owner gets to know your taste and preferences. Even and banking services are not commonplace. Second,
phone ordering is not as inefficient as one would female employment is still relatively low, that allows
expect in the age of the Internet. India notoriously spending more time for frequent shopping. Third
has a very low percentage of (estimated 7 % of the factor is convenience. Kirana stores are usually small
total) organized retail penetration. It is low even and located within a waking distance. And last but
compared to other developing countries and not the least, they offer truly personalized customer
incomparable to Europe's 85 % level. Given the service. Kirana stores are dominating due to a set of

INDIAN AFFAIRSTM
23
conditions that are peculiar to India. Despite the workable, kirana store offers an overall solid concept
perceived conditionality of success, this retail based a) on a low rent (due to small floor area
concept has a lot what it takes to be appealing in required), b) personalized service, c) fast home
foreign countries, as well. delivery and d) customer credit (maybe it could be
delivered in collaboration If we look at the situation in the Eastern Europe [1], with micro-credit
the seemingly unstoppable spread of supermarkets companies nowadays working so extensively in East
took place partly due to the lack of competition from Europe). The fact, that stores are unorganized and
retailers that are able of delivering such personalized family owned, is not an unsolvable obstacle either.
shopping experiences. Small stores were operating There are many examples of successful retail
basically as smaller versions of supermarkets, and cooperatives (co-owned by members) expanding
thus, after more convenient modern supermarkets internationally. It is difficult to imagine Europeans
began to emerge, customers had no reasons to keep changing their habits totally and stopping visiting
on shopping in their neighborhood stores. The supermarkets altogether. But if we look at daily
potential of India's domestic retail market is a widely grocery shopping, the demand for a more
debated subject. On the other hand, a reverse action convenient and time efficient shopping experiences
of Indian retailers expanding abroad is not spoken is already obvious. Kirana store could be one more
much. The retail model of kirana store, if developed great Indian innovation to surprise the world.
into a functional franchise, might have a disruptive [1. Eastern Europe is a $ 1,7 trillion economy,
power. I'm aware of the shortcomings of this model comparable in size to India's $1,8 trillion economy.]
and that some of its strengths are relevant only
within India. However, even if some aspects are not

INDIAN AFFAIRSTM
24
ECONOMIC GROWTH
is moving rapidly
eastward
Economic growth is moving rapidly eastward. dollars for the Indian government. To this is added
Place bets on China and India. China's the scam in telecom that has cost another 39 billion
economy growing rapidly, but with its dollars. Activists in India press the government for a
independence from foreign investments can survive obtain a new anti-corruption law.
only if other economies maintain their attractiveness. Poverty :
In China about 100 million people live
India's economy is more self-sustaining, but has a on $ 2 a day. But most people moved to the category
high rate of corruption and rising inflation. of those who live by 5-10 dollars a day, according to
11% of China's GDP is spent on the Wall Street Journal. In case of India, about 650
Infrastructure :
infrastructure development, according to million people live on $ 2 per day. Unequal
Bloomberg, while for India, only 6.5% of GDP goes to distribution of wealth suggest that India's
infrastructure. India expects to spend $ 1 trillion population is more uneducated and more hungry
investment in infrastructure between 2012 and 2017, than that of China.
according to Livemint publication. India's population will exceed that
Population :
Japanese bank Nomura has of China until 2028. Today China's population, 1.3
Estate bubble :
predicted that home prices in China will drop by 20% billion people, is higher than that in India (1,2
by December 2011, according to Bloomberg. If we billion). It is estimated that lack of toilets, diseases
add to this property taxes and new rules for payment and deaths will cost about $ 50 billion annually in
for the second and third home, China has serious India.
problems in this area. Prices in Mumbai and Delhi in Inflation :
China's monetary policies have led to
India have doubled since mid-2009. an inflation rate of 4.6%. India inflation of 8.4% is an
China's export imminent threat to the growth rate of GDP of the
Domestic consumption :
dependence makes it more vulnerable than India. country. Central Bank of India increased its key rate
According to Time magazine, about 35% of China's seven times since March 2010. However, the country
GDP comes from exports. In contrast, India's still has a food inflation.
economy is more insulated from global economic Foreign investment :
In 2010, foreign direct
crisis, since domestic consumption is 57% of GDP. investment made ? ? by China were $ 100 billion.
Central Commission for Order This means that the country will be independent of
Corruption :
Inspection in China took a series of measures to foreign economies. In India, foreign direct
check how officials spend public funds. From 1.43 investment were low because of protectionist
million claims filed against Chinese officials, only policies. India allows FDI to 51% for a retailer that
146,517 have resulted in charges, according to has a single brand and does not allow foreign
Bloomberg. During the Olympics Games of investment for those who have several brands.
Commonwealth the corruption has cost 2.8 billion

INDIAN AFFAIRSTM
Following are the highlights of
ECONOMIC Survey 2011-12
ØRate of growth estimated to be 6.9% in FY 12 ØTenuous global economic environment turned
ØOutlook for growth and stability promising sharply adverse in September, 2011
ØReal GDP growth expected at 7.6% in FY 13 ØEuro-zone crisis responsible for international
downturn ØGDP pegged at 8.6% in FY 14
ØSlowdown of Indian economy due to global, ØAgriculture grows at 2.5 % growth in FY 12 domestic factors
ØServices grow at 9.4 %, in FY 12, share in GDP ØDecline in overall investment rate cause for at 59% slow recovery
ØIndustrial growth pegged at 4-5 % in FY 13 ØGross capital formation in Q3 of FY 12 as a
ØIndustry expected to improve as economic ratio of GDP at 30%, down from 32% in FY 11
recovery resumes ØGlobal economy remains fragile; efforts needed
ØInflation on WPI was high, but shows signs of through G-20 for stability
moderation ØProgressive deregulation of interest rates on
ØInflation moderation likely to spur investment savings accounts recommended
ØWPI food inflation dropped from 20.2% in ØDeregulation of interest rates on savings
February 2010 to 1.6% in January 2012 accounts to help raise financial savings and
ØCalibrated steps initiated to contain inflation improve transmission of monetary policy
ØIndia remains among the fastest growing ØNeed deepening of domestic financial markets,
economies of the world especially corporate bond market
ØIndia's sovereign credit rating rose by 2.98 ØEfforts on to attract dedicated infrastructure
percent in 2007-12 funds
ØFiscal consolidation on track ØIndia's foreign trade performance key driver of
ØSavings & Capital Formation expected to rise growth
ØExports grew at 40.5% in H1 ØBalance of Payments widens to USD 32.8 bn in H1 of FY 12 Vs USD 29.6 bn FY 11
ØImports grew by 30.4% in H1 ØForex reserves up from USD 279 bn in March
ØForeign trade performance key driver of growth '10 to US USD 305 bn in March'11
ØForex reserves enhanced, cover nearly the entire ØIndia now more closely integrated with the
external debt stock world economy
ØCentral spending on social services up at 18.5% ØIndia's share of trade to GDP of goods and
in FY 12 Vs 13.4% FY 07 services in world tripled in 1990-2010
ØMNREGA coverage of 5.49 crore households in ØIndia's flows of capital as a share of GDP in
FY 11 word increased dramatically in last two decades
ØSustainable development and climate change
high priority
25

INDIAN AFFAIRSTM
Inflation

ØInflation to moderate further in FY 13
ØRenewed focus on supply side measures essential for price stability
ØInflation expected to moderate at 6.5-7% by March end
ØGap between WPI and CPI inflation narrows in FY 12
ØMilk, eggs/meat/fish, gram & edible oils major drivers of food inflation
ØMonetary policy measures taken to contain inflation
ØSubstantial Monetary policy challenge to rein-in inflation
ØRBI addressed liquidity concerns
ØMonetary market remained orderly in FY 12 2011-12
ØNeed to examine linkages between policy rate changes and inflation
ØThreat from asset price bubbles in real estate and stock markets
ØScope to further sharpen monetary policy and use macro prudential to deal with above said threats
ØUnexpected shocks such as oil prices remain inflationary threats
ØHigh level of food stocks to help maintain overall price stability
Measures for price stability in food items

ØNeed guidance for farmers on fertilizers, insecticide, alternate cropping
patterns
ØNeed strategy, regular imports of agriculture commodities in smaller
quantities
ØNeed to set up special markets for special crops
ØImprove Mandi governance
ØNeed to promote interstate trade
ØPerishable food items should be taken out of ambit of the APMC Act
ØFDI in multi brand retain will fill infra gap during harvest period
ØNeed to step up creation of modern stores facilities for food grains
Agriculture

ØFDI in multi-brand retail recommended
ØHigher levels of agricultural output augur well
ØConcerns over growth rate in agri sector falling short of target
ØAgriculture grows at 2.5% Vs target of 4% in five yr plan
ØAgriculture, allied activities account for 13.9 % of GDP in FY 12
ØFoodgrains stocks at 55.2 million tonnes
ØProduction of foodgrains in FY 12 estimated at 250.42 million tones
ØSpeedy improvement in yield through adequate investment in R&D needed
ØAgri infra priority area
ØAgri outlook for next fiscal bright
26

INDIAN AFFAIRSTM

Industry
ØIndustrial growth pegged at 4-5% in FY 12
ØIndustrial growth less than recent past and far below potential
ØNeed to boost business sentiments, encourage investment and identify bottlenecks
ØIndustrial sector expected to rebound during next financial year
ØIndustry expected to rebound with inflation easing, moderation in commodities
prices in international market and revival of manufacturing performance
ØLong term average annual growth of industries comprising mining, manufacturing
and electricity remain aligned with overall GDP growth rate
ØEmployment in Industry increase from 16.2% in 1999-2000 to 21.9% in 2009-10 largely due tp construction
sector
ØContraction in production in the mining sector, particularly in coal and natural gas segments
ØElectricity sector witnessed improvement
ØBasic goods and non-durables goods grew at 6.1%
ØModeration in growth in other segments of IIP
ØNegative growth observed in capital goods and intermediates segments
ØGross Capital Formation in industry as percent to the overall GCF moderated to 48.3% in FY 11
ØManufacturing GCF growth rate declined to 7% in FY 11 Vs 42% in FY 10
ØModeration in rate of growth of credit in infrastructure and manufacturing sectors
ØNeed to address land acquisition and infra issue on priority
Services Sector

ØServices sector proves saviour during global crisis
ØServices grow by 9.4% despite slowing GDP growth
ØShare of services in GDP at increased from 55.1% in FY 11 to 56.3% in FY 12
ØFinancial & non-financial services, IT, Telecomm, Real Estate constituted 41.9
% of total FDI equity inflows during April 2000-December 2011
ØFDI inflows to the Services Sector slowed down FY 10 & FY 11, dipping to
negative zone
ØFDI inflows in FY 12 recovered; increased by 36.8 % to USD 9.3 billion (April-
Dec)
ØSlight moderation in services growth no cause of worry
ØModeration due to the steep fall in growth of public administration and defence
services reflecting fiscal consolidation
ØGrowth in trade, hotels and restaurants robust at 11.2%
ØRetail-sector growth expected to be even more robust in FY 13
ØWorry areas include real estate ownership of dwellings and business services
segment
ØSoftware service exports steady; face threat from Eurozone
27

INDIAN AFFAIRSTM

Trade
ØIndia's exports grew at 23.5% to reach USD 242.8 bn in April 2011 - Jan 2012
ØExports decelerated in Oct-Nov due to global downturn; recovered in Dec-Jan
ØKey performers in export - petroleum and oil products, gems and jewellery,
engineering, cotton fabrics, electronics, readymade garments, drugs
ØImports up 29.4% during April - Jan 2011-12 at USD 391.5 bn
ØKey import areas -POL (petroleum, oil and lubricant), gold and silver
ØTrade deficit in April-Jan 2011-12 at USD148.7 bn Vs USD 105.9 billion in last fiscal
ØDiversification of export and import markets a success
ØUAE India's largest trading partner, followed by China
ØIndia's services exports bounce back after contraction in FY 10
ØIndia's services exports grew 38.4 % to USD 132.9 bn in FY 11
ØGrowth in export of services moderated in H1 FY 12 to 17.1%
ØSoftware exports may show some sluggishness
ØTrade challenges include global situation, systemic problems
ØFurther diversification of India's export basket needed
ØFacilitate trade by removing procedural delays, red tape
ØInfrastructural bottlenecks need to be removed
ØTotal investment in SEZs till 31 Dec 2011 at Rs. 2,49,630.80 crore
ØFormal approvals granted for setting up of 583 SEZs of which 380 notified
ØForex Reserves at USD 293 bn
ØExternal Debt Stock at USD 326 bn
ØOil, Gold and Silver prices contribute to modest rise in current account deficit
ØNet capital flows at USD 41.1 billion (4.5% of GDP) in the H1 of FY 12
ØExternal commercial borrowing at USD 10.6 billion in H1 of FY 12
ØPortfolio investment shows large decrease in inflow to USD 1.3 bn in H1 of FY 12
ØTrade deficit more than 8 % of GDP and current account deficit more than 3 % sign of growing imbalance in
BOP
ØHigh share of volatile FFI flows added external shock
28

INDIAN AFFAIRSTM
Infrastructure

ØPerformance of broad sectors and sub sectors in key infrastructure areas presents
mixed picture
ØAchievements in certain infrastructure sector 'remarkable'
ØNeed to attract large scale investment into infrastructure
ØPublic-Private Partnership successful model
ØPPPs expected to augment resource availability, improve efficiency
ØInvestment requirement at USD 1 trillion during Twelfth Plan
Ø50% investment to come from private sector as against the 36% anticipated
ØFinancing infrastructure a big challenge
ØImprovement in growth in power, petroleum refinery, cement, railway freight
traffic, passenger handled
ØCoal, Natural Gas, Fertilizers, handling of Export Cargo at airports and number of cell phone connections show
negative growth
ØSteel sector witnesses moderation in growth
ØCore and infrastructure sector still depends on public sector projects
ØDelays increase project risk and cost, and need to be minimized
ØCredit growth to infrastructure sector turned negative in FY 12
ØIncremental credit flow to the infra sector in April-December 2011 nearly 61% in same period year before
ØReduction in credit flow in power and telecom sectors
ØTotal FDI inflows into majors infrastructure sectors during April-December 2011 registered growth of 23.6%
ØChallenges on form plateauing of the domestic savings and macro availability of resources
ØNeed for innovative schemes to attract large-scale investment into infrastructure
ØStrengthening domestic financial institutions and development of long-term bonds market critical
Rupee

ØRupee falls by 12.4 % against USD
ØRupee falls from 44.97 per USD in March 2011 to 51.34 per USD in January
2012
ØRupee's high volatility impairs investor confidence
ØAggressive stand to check Rupee volatility recommended
Financial Markets

ØVolatility in global financial markets likely to tighten availability and cost of foreign funding
ØGovernment measures mitigate liquidity stress
ØIndian banks robust amidst Eurozone crisis
ØFinancial infrastructure continues to function without any major disruption
ØIndian financial markets, especially currency and equity, performed under pressure in FY 12
ØGlobal market turmoil caused risk aversion and moderation in capital inflows
ØCountervailing steps helped mitigate strains
ØGlobal situation, rising trade imbalance, pace of reform initiatives to boost capital flows
ØDomestic growth concerns likely to influence financial markets movements
ØConcerns over Greece's sovereign debt problem spreading to India
ØBanking business may become more complex and riskier in future with greater global integration
ØRisk and liquidity management, skill enhancement necessary
ØNeed to maintain sustainable levels of external debt
ØNeed innovative steps to bring corporate bond market at the centrestage
Infrastructure financing and financing of unorganized micro/small business sector needed
29

INDIAN AFFAIRSTM
Banking and Micro Finance

ØPublic sector banks show 19 % growth in priority sector lending
ØCredit Disbursement to agri sector exceeded target by 19 %
ØCredit Disbursement helped over 12.7 mn new farmers
Ø98 % public sector bank branches fully computerised
ØSelf Help Group- bank linkage programme major success
ØCapital in banks essential for balance sheet expansion
ØRs 12,000 provided in FY 12 for capital infusion in public sector banks
ØGrowth in bank credit extended by Scheduled Commercial Banks grew at 17.1%
ØFlow of agricultural credit impressive
ØInfrastructure Debt Funds to facilitate flow of funds into infrastructure projects
ØResource mobilization through primary market shows sharp decline in FY 11
Environment and Climate Change

ØLower carbon sustainable growth to be central element of 12th plan
ØIndia's per capita CO2 emissions much lower than those of developed
countries even if historical emissions are excluded
ØNeed for more sensitivity from developed countries to carbon emissions
ØEconomic pricing of energy, new technologies to be the key
ØIndia has taken voluntary actions to pursue sustainable development strategy
ØWarming planet may cause adverse effects, extreme weather events
ØIndia has stepped up protection of its natural environment, forests
ØFive main challenges include climate change, food security, water security,
energy security and managing urbanization
ØBroad-based economic and social development answer for greater
sustainability
Education and Employment
ØReform process in education continued IN FY 12
ØAakash, low cost computing device launched
ØSarva Shiksha Abhiyan norms revised to correspond with the provisions of the RTE
Act
ØNational Council for Teacher Education notified as the academic authority for teacher
qualifications
ØNumber of out-of-school children down from 134.6 lakh in 2005 to 81.5 lakh in 2009
ØNeed to scale up the successful centres of innovations, create higher technical
institutions
ØLabour Bureau Survey indicates upward trend in employment since July 2009
maintained
ØEmployment in organized sector increased by 1.9 % in 2010
ØShare of women in organized-sector employment at 20.4% in 2010 March end
ØMGNREGA: Coverage increases to 5.49 crore households in 2010-11
ØGovernment sets up committee for developing index for fixing MGNREGA wage rates
30

INDIAN AFFAIRSTM
Mani Shankar Iyer
The TV crews were racing us to the
Attari-Wagha crossing, goggle-eyed at
the prospect of covering yet another
military coup in Pakistan. Our motley
delegation of 15 more-or-less self-selected
Members of Parliament,
ranging the spectrum of ten political
parties and drawn from across the
country, Lakshadweep to Haryana and
Maharashtra to Odisha, comprising
both eager first-termers and more
hardened veterans, led by the former
Foreign Minister, Yashwant Sinha,
proceeded to the same crossing at the
same t ime wi th the oppos i t e
apprehension: that the overthrow of the
government and the closing down of
the Pakistan National Assembly might leave us with As our panting reporters and hysterical anchors
no interlocutors for the third round of the India- back home flitted like bees from one 'expert' to
Pakistan Parliamentarians dialogue being another predicting an imminent political
organized by the Pakistan Institute of Legislative earthquake in our immediate neighbourhood,
Development and Transparency (PILDAT). anxious messages had flown between our
delegation and our hosts over whether it would not
Our journey to Islamabad began even as the be wiser to postpone the event to a less eventful time.
Pakistan National Assembly reconvened to debate a The contrast between the tone of our queries and the
motion of confidence moved by the prime minister even replies we received could not have been
in the face of a standoff between the government and starker. Repeatedly we were reassured that all was
the Supreme Court over initiating criminal on even keel; that our parliamentary counterparts
proceedings against the president, and against the were ready, able and willing to receive us; that we
background of a straight confrontation between the could indeed even bring our spouses along if we
government and its army brass over 'memogate', the wished; and that the theme of the conference would
defence secretary (a retired lieutenant general and continue to the somewhat banal one of trade and
confidant of the army chief) having been summarily economic relations even as our general public was
dismissed the previous week and a decision hanging being informed by our always perceptive 24x7
over the continuation beyond the next few weeks of media that Pakistan was hurtling once more
the head of the ISI, Gen Shuja Pasha. It was a towards the abyss, and that to talk trade at a moment
situation ripe, in the light of the past six decades, for like this was a bit like discussing the trickle in the tap
a coup to send the civilian government packing, when the issue was the imminence of the flood.
more ripe perhaps than ever in the past given that
there is no charismatic Bhutto at the head of the Our discussions over two days — the 17th and 18th -
political establishment but a fragile coalition held overlapped with the debate in the Pakistan's
together by leaders who can feel under their feet the National Assembly and Senate, essentially over who
heaving discontent of their own supporters. was to run the country, the army or the civilian
authority; concern over whether Prime Minister
31

INDIAN AFFAIRSTM
32
Gilani would, in fact, respond to the Supreme even the presiding officers of our parliament, let lone
Court's summons for his personal appearance our respective political leaderships, the reception at
before the Bench, and what would happen if he were the prime minister's residence, in the context of what
to go - or not to go; the stripping of Gilani's principal is his most daunting domestic challenge to date,
counsel of his right to appear on behalf of his was, to say the least, quite remarkable. We had
eminent client and his replacement by none other certainly neither asked for it, nor expected it. Next
than the seasoned barrister, Aitzaz Ahsan, who had morning, as we re-crossed the Wagha-Attari border,
led the lawyers' movement against Pervez we learned that Gilani had presented himself in
Musharraf; the dismissed defence secretary's person before the Supreme Court, that he was
decision to appeal to the courts against what he exempted from further personal appearances and
insists is his arbitrary dismissal; and widespread that the case would go forward with due democratic
speculation over the future of the ISI chief and thus decorum but no let or hindrances.
of the relationship between the civil government
and the armed forces' principal enforcement agency, The main lesson to be learned is that democracy has
not only operating abroad but even more against at long last taken root in the hitherto arid soil of
dissidents and discontents within Pakistan. Pakistan. In sharp contrast to the past, not a single
political formation has offered itself as the civilian
In the event, and notwithstanding their other faÁade for military rule. There is no “King's Party”,
pressing political life-and-death pre-occupations, no no Jamaat or other 'Islam-pasand' to prop up a Zia-less
than 52 members of the Pakistan Parliament, ul-Haq, no PML-Q to lend a patina of democratic
stretching past all the principal political formations, respectability to a Pervez Musharraf. Astonishingly,
took time off to meet us, as many as 35 of them this is no achievement of a popular, charismatic
participating, without rancour and with immense political personality. Indeed, never before has the
good humour, in the most constructive round of Pakistani political leadership had a lower popular
discussions of the three we have held so far. More, profile. In fact, the traditional leadership of the PPP
we were taken to the Senate and welcomed formally nationally and in Sindh, of Nawaz Sharif and his
not only by the chair but by every one of the heads of PML-N in Punjab, of the Awami National Party in
the political parties represented in the Senate. There Khyber Pakhtunkhwa (the erstwhile NWFP), and
was some apprehension when Prof Khurshid assorted revolutionaries in Balochistan been more
Ahmed of the Jamaat-e-Islami rose to speak that the challenged by a rank outsider, Imran Khan, as it now
cordiality might be blown away; his remarks were, is. The principal domestic debate is over whether to
however, entirely in keeping with the warmth of the split their four provinces into smaller, more
sentiments expressed from every corner of the governable units, the Hazaras under Ayub Khan's
House. The next evening, the delegation was son, Gohar, demanding a Telengana-like separation
received by the prime minister (to some whispering from Khyber Pakhtunkhwa (ironic, given that it was
among us as to whether this was a 'farewell tea' from his father who had constituted West Pakistan as One
an outgoing head of government). But rising above Unit!) and the Muttahida Qaumi Movement hoping
the steaming samosas and delectable sandwiches, that the Mohajirs of Karachi, like the Gorkhlanders
the engagement turned into a full-blown protocol of the Darjeeling Hills, might secure the separation
event with the leaders of all the political parties of their tiny territory from the parent province.
represented in the ruling coalition in respectful
attendance, along with Foreign Minister Hina Yet, this bitterly fractured polity has united on the
Rabbani Khar (at her winsome best) and other senior need to keep out the military. And the military itself
ministers, the prime minister himself going well appears to have willingly acquiesced in letting the
beyond his written speech to convey an elected representatives continue to rule the country
unmistakable message of goodwill and good as best they can. The worst-case scenario projected in
neighbourliness. Given that ours was an utterly all sections of informed Pakistani political opinion is
informal, non-official delegation, with no particular not a return of the 'faujis' but an early election!
sanction or mandate from either the government or

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