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Jai, Jai, Jaitley!

The new cabinet of the Modi II government will miss the brilliant Arun Jaitley. Despite serious health problems, Jaitley valiantly soldiered on and lent a good deal of strength and respectability to the finance portfolio. The most invaluable of his contributions relate to the GST. This brilliant lawyer succeeded in building consensus on the very many complicated issues about GST. It was not easy to build consensus on GST, which had serious implications for the finances of states as much as for the Centre. Jaitley also had to deal with states bitterly opposed to the Centre like West Bengal. He worked hard to convince the states to fall in line, promising them generous compensation for any loss suffered.

The UPA regime, with a fractured mandate and a loose coalition of several parties with strong regional pulls, could not achieve this. Of course, Jaitley had the advantage of his party enjoying a comfortable majority in the Lok Sabha. Still the support of the Rajya Sabha, as also a majority of the states, was needed. All these could be achieved in good time. With frequent meetings, the GST Council brought about several amendments providing the corrections required, and the system gained acceptance and stability in a remarkably short time of little over a year. Even before the end of the second year, monthly GST collections started exceeding Rs 100,000 crore. The proof for the change brought about by the finance minister is evident from Tamil Nadu, one of the sharpest critics which resisted the introduction of GST on fears of steep fall in its revenues fell in line offering invaluable inputs for the smooth course of GST. The number of tax return filers expanded from 3 crores to nearly 6 crores for the first time in decades during his tenure.

The eloquence, reasoning, and stature of Jaitley were of immense value in both the houses of Parliament. The BJP will now miss this strength in the Lok Sabha as Jaitley cannot now attend the lower House (he is not a minister and he is a member of the Rajya Sabha). Jaitley lent a lot of stature and strength to the Modi-I term. I do hope his counsel will continue to be utilized in the Modi-II reign.

Will miss Suresh Prabhu too…

Suresh Prabhu is another notable drop out of the cabinet. He showed his mettle as Minister of Power in Vajpayee’s NDA I government. He moved closer to the BJP, which was not much to the liking of the Shiv Sena, his parent party. Still, the government used his services as the chairman of the Inter-linking of Rivers. The committee did produce a comprehensive report, but the UPA government put it aside. Prabhu joined the BJP and infused new dynamism in administering the railways in the Modi government. Earlier in the long era of coalition rule, the railway portfolio was given to a member of a regional party of the coalition. Remember the havoc caused by the likes of Lalu Prasad, Mamata Banerjee and Mukul Roy in neglecting reforms and revenue generation and indulging in populism?
Prabhu injected a lot of professionalism and brought about dramatic changes in railway administration. Sadly, a spate of train accidents led to his resignation as Minister of Railways. As Minister of Industry & Commerce, he continued with reforms. Stagnant exports recorded growth during 2018-19. Like Jaitley, Prabhu has also been suffering from indifferent health. The frequent and continuous travel on trade conferences should have taken its toll.

Large parts of the country, including Tamil Nadu, are going through a severe water crisis. This is further accentuated by the harsh summer which appears to be hotter than normal years. Chennai metro has been suffering a long summer. The north-east monsoon, spread between October and December, used to bring needed rains to Tamil Nadu and coastal Andhra. This failed last year, landing the state in the current water crisis.
Chennai Metro is heavily dependent on the storage of rainwater during the monsoon. The four major reservoirs in the metro are bone dry for a few months now. The water table has gone much deeper. Large parts of the city are suffering from severe water stress. There is a huge rise in vegetable prices.
With the long coastline, desalination can be a solution. Two large desal plants mooted four years ago, if constructed, could have brought a lot of relief. But with high energy demanded by desalination plants and costs are deterrents. We do not, as such, have technologies that would reduce costs. The administration plans to build two more large reservoirs, one in the north and the other in the south of the metro. Hopefully, these would be ready for collecting and storing water from the coming monsoon. The present dry beds of the existing reservoirs could also be desilted and deepened.
The south-west monsoon that has commenced in coastal Kerala and moving slowly towards north and east, hopefully, would bring succor to large parts of the country. For Tamil Nadu, the relief seems distant.

Japan and India can jointly build infra in Africa, M-East…

IE has been suggesting joint efforts with developed countries like Japan to expand trade and investment opportunities in less developed countries, notably in Africa and the Middle-East.

China has been expanding its influence, reach, and markets in developing countries of the world, including those in distant South America.

The strengths of China in terms of its financial clout and technology have been of big help to that country rapidly expanding its influence and markets in several developing countries. China extends excellent financial assistance for infrastructure development, eg., the large Hambantota Port in Sri Lanka, the economic corridor leading to Gwadar Port in Pakistan and the massive One Belt One Road initiative (OBOR). These are sustained by the spectacular economic growth recorded by China over the last two decades and her humongous surpluses in foreign trade.

For India, the opportunity lies in attempting such reach in partnership with a prosperous economy like Japan. In recent years Japan and India have come much closer. Japan has been extending substantial assistance for construction of infrastructure projects, notably railways, on flexible terms. The added advantage is the recent agreement to conclude this on rupee terms.

Such cooperation has a much broader scope for the two countries building large infrastructure projects in developing countries in Africa, Middle-East and elsewhere. The finance and technology strength of Japan, and the execution and management capabilities of India will be a win-win combination. There will also be the advantage of India helping with labor-intensive, appropriate systems.

An exciting possibility of extending such an approach to private corporates is seen in the recent collaboration between the trading giant Mitsubishi Corporation and the transport behemoth, TVS.

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