India's national priorities are best served domestically

We should scale down expectations and time expended on preparing for the SCO and G20 summits

Multi-country meetings at the head of government-level are enjoyable extravaganzas and the media plays up such spectacles. Presidents and prime ministers are complicit in such self-promotion as their names and videos are splashed all over newspapers and television. The Indian government should review the opportunity cost of time spent in attending international meetings in-person at the level of ministers and prime ministers (PMs), particularly for those which are pro forma.

A beneficial time saving consequence of the Covid-19 pandemic was that during 2020 and 2021 many high-level government and corporate meetings took place virtually. In June-July 2022, Nato, EU and G7 heads of government-level meetings reverted to in-person participation. More recently on September 16, the Shanghai Cooperation Organization (SCO) summit took place in the Silk Route city of Samarkand, Uzbekistan, with the physical presence of the Indian PM, the presidents of Russia and China and heads of government of other member countries.

The Indian PM called for better supply chains and full transit rights at this SCO summit. Is Pakistan likely to allow surface transit rights to India via its territory anytime soon? As for China, on the day of the SCO summit on September 16, it blocked a joint move by India and the US to blacklist the Laskhar-e-Taiba militant Sajid Mir under the 1267 Al-Qaida Sanctions Committee of the UN Security Council. The US has placed a bounty of $5 million on Mir’s head for his role in the November 26 Mumbai terror attacks. India’s bilateral relations with China are too embroiled with armed confrontation at the border in Ladakh to be effectively discussed on the sidelines of any multilateral meeting.

The next G20 Summit meeting with Indonesia in the chair is scheduled to take place in that country in November. It is unlikely to be a great success given the sharp differences between the West and Russia about the conflict in Ukraine. With the current fraught state of India’s relations with Pakistan and China, would their heads of government attend the 2023 SCO and G20 Summits in India? India should perhaps scale down expectations and time expended on preparing for these two summits.

Illustration: Binay Sinha

Over the past several decades and particularly after the elevation of G20 to head of government-level following the 2008 financial sector breakdown, Indian PMs have invariably participated in summit meetings of the G20 and other multilateral formations. However, gushing media coverage does not necessarily boost the fortunes of ruling Indian political parties any longer. This is because millennials born after 1981 are less likely to subscribe to hard copy newspapers or even view national television channels regularly and media houses know this to their cost. As for voters in rural and small-town India, they seem to get their news from social media.

The table provides the population, surface area and gross domestic product in purchasing power parity terms of a few large population economies four years into the future in 2026.

Asia has not lived up to its potential yet given its significant demographic and natural resources. However, it is a matter of time for Asia’s collective economic weight and physical size to figure more starkly in geopolitics as the numbers in the table portend. However, in per capita income terms, there will remain a considerable amount of catching up to do for several Asian countries, including India.

Turning to domestic issues in India, the southern states are growing faster than those in the north. This may lead to serious disputes between India’s southern and northern states over the sharing of centrally-raised revenues. Another potentially highly contentious issue could be the delimitation of Lok Sabha constituencies, which was last done on the basis of the 2001 census and is due for a review in 2026. Incidentally, Tamil Nadu’s finance minister has recently pointed out quite combatively that his state’s finances are in far better shape than those of the central government and its growth rate is significantly higher than the national average.

Separately, the Supreme Court is having to grapple with issues which are best resolved by ruling political parties at the Centre and the states. These disputes range from places of religious worship to quotas in government jobs for the economically weaker sections. On a separate note of distress, state electricity corporations are groaning under the weight of transmission and distribution losses caused, among other factors, by the high levels of subsidies provided in several states. According to Reserve Bank of India’s July 2022 bulletin, Punjab, Rajasthan and Jharkhand are particularly vulnerable fiscally. Another source of disquiet is the wide range of non-merit subsidies, for example, for fertilisers. All such subsidies could be withdrawn and distributed as universal basic income to those who do not have a car to their name and are above 21 years of age. The alleged excessive powers of the Enforcement Directorate are being questioned in media reports and so are repeated extensions and appointments of so-ca

lled favourites by the central government and both need course correction. 

On balance, the central government would do well to discuss contentious issues with state governments, as it did for the Goods and Services Tax legislation, to arrive at consensus-based decisions. All things considered, it would be in India’s interest for the central government to spend more time on addressing urgent domestic challenges rather than at glitzy international meetings.

j.bhagwati@gmail.com

The writer is a former Indian ambassador, head of market risk in the World Bank Treasury, and currently a distinguished fellow at the Centre for Social and  Economic Progress