Geopolitical Trajectory and India's Perspective (2024)
Introduction
The editorial explores the potential trajectory of global geopolitics over the next 12 months, acknowledging a mix of hope and realism.
The past year witnessed a polycrisis involving the COVID-19 pandemic, economic slowdown, Russia-Ukraine war, climate challenges, debt burdens, and conflicts like Israel-Hamas.
The question arises: will the world see relief or face worsening situations?
War or Peace
Israel-Hamas Conflict
The continuation of conflicts in Ukraine and Gaza remains uncertain.
Netanyahu’s assertion of continuing the war until Israel achieves its goals contrasts with the historical reality that neither side has limitless capacity for prolonged conflict.
The two-state solution faces challenges, and the regionalization of the conflict adds complexity.
Russia-Ukraine War
The future of the Russia-Ukraine war is complex due to conflicting systems – NATO and Russia.
War fatigue sets in, with the U.S. facing challenges in sustaining financial assistance.
The possibility of the conflict ending may depend on the outcome of the 2024 U.S. presidential election.
Potential Flash Points in Indo-Pacific
Possible flashpoints in the Indo-Pacific, including Taiwan, North Korea, the South China Sea, and India-China border, are crucial.
The U.S.-China strategic rivalry and India-China contestation play pivotal roles in shaping events.
India’s Diplomacy
Achievements
India’s diplomacy has scored successes, particularly in U.S.-India relations, defense cooperation, and technology initiatives.
Relations with the EU, Japan, Australia, and the Quad are strengthening. The G-20 presidency concluded with the New Delhi Leaders’ Declaration, showcasing India’s influence.
Challenges
China remains a significant challenge for India, expanding its footprint in South Asia. Indian diplomacy faces issues ranging from climate change to free trade agreements, digital technology, and AI prioritization.
Conclusion
As India grapples with diplomatic challenges and opportunities, projecting the forthcoming parliamentary elections becomes a crucial aspect for the Ministry of External Affairs.
The evolving geopolitical landscape demands a blend of proactive diplomacy, strategic partnerships, and a focus on key global issues.
Introduction:
The aftermath of Cyclone Michuang has left Chennai residents grappling with the repercussions of decisions made on their behalf.
These decisions, both visible and subtle, demand accountability, with consequences ranging from power outages to potential dangers in homes without electricity.
Consequences of Water Release Decision (2015):
The 2015 decision to delay water release from a full reservoir during heavy rains is highlighted as a factor contributing to tragic flooding outcomes. This decision, made under pressure, emphasizes the importance of timely and informed choices in disaster management.
Dangers in Power Outages:
While cutting electricity during cyclonic conditions is a sensible preventive measure, its prolonged application poses risks.
The editorial highlights the hazards associated with power disruptions, especially for the elderly in a region with a significant aging population like Tamil Nadu.
Balancing Act of Decision-Making:
- The analysis acknowledges the dynamic nature of decision-making during crises.
- It highlights the emotional and psychological challenges faced by decision-makers, who often lean towards conservative choices to avoid potential mistakes.
- Striking a balance between proactive measures and prompt restoration becomes crucial.
Justification and Documentation:
- The note calls for decision-makers to justify and document their choices in real-time.
- This is seen as a necessary step for accountability, ensuring that power cuts are not extended without valid reasons, recognizing the potential mortality risks involved.
Specialized Review vs. Populism:
- Acknowledging the complexity of decision-making processes, the note cautions against reducing these evaluations to cheap populism.
- It advocates for reviews conducted by specialists and subject-matter experts to maintain the integrity of the process.
Shared Responsibility in Democratic Systems:
- Arguing against unfettered decision-making power, the note advocates for shared responsibility in a democratic system.
- It suggests a hierarchy-based approach with scaled levels of responsibility and periodic oversight to challenge and reverse questionable decisions.
Conclusion:
In conclusion, the note emphasizes the need for accountability, documentation, and shared responsibility in decision-making processes during natural disasters.
Striving for an ‘ideal solution’ may be elusive, but a commitment to periodic reviews and accountability ensures a continuous improvement process and guards against sub-optimal decisions with far-reaching consequences.
Introduction
The year 2024 holds significant importance for India, marked by national elections in April-May and potential continuation as the fastest-growing large economy globally for the third consecutive year.
This summary examines key factors that will shape India’s economic landscape and policy decisions in 2024.
- Interest Rate Trajectory
– A premature debate surrounds the trajectory of interest rates in India.
– Inflation projections by the RBI indicate a challenge for rate reduction until the second quarter of 2024-25.
– Historical repo rates suggest a return to the 6-6.5% range, considering the abnormal circumstances leading to the current 4% rate.
– With inflation around 5%, any rate cuts would likely be limited to 50 basis points, maintaining a real repo rate of 1%.
- Union Budget and Fiscal Policy
– The February 1 budget, a vote on account, limits significant decisions.
– Post-election, the growth projection and fiscal deficit, currently high at 5.9%, will be crucial.
– A 4.5% fiscal deficit target for 2025-26 is a compromise, raising questions about expenditure quality and sustaining capex momentum.
- Monsoon Impact on Economy
– The monsoon’s critical role, especially in bridging rural-urban demand disparities, is emphasized.
– Corporates express concern about rural demand, and a robust kharif harvest in 2024 would benefit industries like two-wheelers, FMCG, and tractors.
- Revised Economic Forecasts
– Upward revisions in 2023-24 economic forecasts reflect improved global economic conditions and post-war stability.
– Sustaining current growth is positive, while surpassing the 7% mark would provide a psychological boost.
- Private Investment Challenges
– Despite green shoots seen by the government, private investment remains stagnant.
– CEOs discuss investment plans, but the fundraising pattern and industry focus indicate limited expansion.
– The long-anticipated higher government capex driving private capex is yet to materialize.
- Corporate Sector Performance
– The corporate sector’s performance is unpredictable, with last year’s sales growth due to pent-up demand.
– Profits faced pressure from rising input costs; the current trend suggests stability in both sales and profits, impacting the stock market.
Conclusion
As India stands on the cusp of economic takeoff, 2024 promises to be a pivotal year. The interplay of interest rates, fiscal policies, monsoon impact, economic forecasts, private investments, and corporate sector performance will determine the trajectory of India’s economic journey.
Observers and stakeholders must closely monitor these factors to understand the dynamics and implications for the country’s future.
