On the other hand, Finance is a very broad term that describes the idea of management of large amounts of money through activities associated with banking, debit, credit, money and investments.

With the continuous advancements in the field of science and technology, there has been the involvement of technology in almost every branch of knowledge that exists in this world be it security, food, currency, architecture, medicine, art, astronomy and so on. Simultaneously, technology has also proved to be fortuitous in the field of finance and that too on a very high scale. Thus, the branch which deals with the symbiosis between finance and technology and consists of software, applications and other digital services that are used by the consumers for activities like mobile banking, investments and loans, is referred to as ‘FinTech,’ a portmanteau of Financial Technology. 

‘Tech’ in ‘Fin’- Applications

Customer Service is one of the major sectors that has exploited Financial Technology in the last few years. A decade ago, an efficient customer service team was essential in order to carry out the financial tasks involved within a company. But, with the advancements in FinTech, AI chatbots have made consumers’ life way too easier and act as an avenue for customers to interact with. The chance of error is significantly reduced and the workload on humans is also minimised. Earlier we needed a separate team to carry out the bank work but now with the evolution of FinTech, we don’t even need to go to the bank personally to open a bank account, transfer cash or update the details. Everything can be done conveniently by using banking apps and other such software on smartphones.

In finance, computer programming has been proved to be extremely useful in a wide range of situations which include setting up and managing electronic trading systems, pricing derivatives, risk management, trade management platforms and so on. Python, in particular, is important for the latter three. Python can also help in creating analytical tools and models and can even modify Excel Spreadsheets to provide greater efficiency. Another advantage of using this language is that it provides a large array of libraries that can be effectively used in finance to build financial models and perform other mathematical operations. 

Some useful Python libraries and packages include –

• numpy: This package is used for performing scientific and computational tasks on python. Besides that, it is also used in numerical programming, finance, industry, academia and so on. With its roots in all these fields, this library specializes in basic array operations.
• pyfin: If the user wants to perform basic options pricing in python, they can simply use the pyfin library.
• ffn: This is a financial function library for python. It is basically used to quickly carry out analysis of trading strategies and financial asset price series and contains many useful functions for those who work in quantitative finance.
• QuantPy: This is a framework created primarily for quantitative finance in python. It has a Portfolio Class that can import daily returns from search engines like Yahoo.
• zipline: This is a Python based algorithmic trading library. Besides being an event-driven system, it also reinforces backtesting and live trading.
• TA-Lib: This is a software that is widely used by software developers involved in trading and required to perform the analysis of financial market data technically. Another advantage is that it has an open-source Application Program Interface (API) for Python.
• trade: This Python framework is used for the development of financial applications. Once the user informs the items he has in stock and a series of subsequent occurrences with those or other items, trade calculates the effects of those purchases, sales and so on and by and by gives back the new amounts and cost of items in stock.
• QuantSoftware Toolkit: This is an open-source software framework on Python, designed to support portfolio construction and management. This QS Toolkit is primarily for finance students, computing students as well as quantitative analysts with programming experience.
• finmarketpy- This is a python-based library that enables us to analyse market data and simultaneously backtest trading strategies using a convenient Application Program Interface, which already has the templates to define backtest.
• pyfolio:  This is a Python library used primarily for risk analysis and performance of financial portfolios. It works efficiently with the Zipline open-source backtesting library.
• finance: This is also mainly used for Financial Risk Calculations. It has been so optimized such that it is easy to use because of features like Class Construction and Operator Overload.
• qfrm: It is abbreviated form of Quantitative Financial Risk Management. It constitutes amazing Object Oriented Programming tools for measuring, managing and visualizing risk of financial instruments and portfolios.
• visualize-wealth: If the user wants to backtest, construct, analyse or evaluate portfolios and their benchmarks then he can easily use this library in Python to perform all the tasks mentioned above.
• empirical: This is used by both zipline and pyfolio and is used for common financial risk analysis and also in performance metrics.
• statsmodels: If the users want to explore data, estimate statistical models or perform other statistical tests then they can use this Python module.
• ARCH: This is used to perform financial econometrics in Python.

Java is another popular language that is used in the banking industry. This is primarily due to its secure and stable design. Java is a platform-independent and portable language and thus it can easily run on the newer versions as well even when a change was made. It is necessary to install a security system since banks handle a lot of sensitive and confidential information. Java acts as a stimulus and helps banks perform all the tasks while maintaining an appropriate level of confidentiality.

Data Visualization in FinTech

Most of the people in this world are visual learners i.e., they prefer to visualize a certain concept to understand it more thoroughly. Charts and graphs allow the users to understand the growth or depreciation of a certain thing by comparing it with the previously stored data. Histograms are the best means to represent such data statistically. A manager can take large quantities of data, can see the bigger picture more clearly and can provide a concise report.

Data visualization is the creation of visual representations of data that clearly communicate insights through charts and graphs. These charts and graphs help leaders and decision-makers make better, data-based decisions more quickly than the traditional data table. And it keeps them from getting lost in a Where’s Waldo-style puzzle maze of stats and data points. (Sisence, 2020)

Data visualization allows us for quick interpretation of results. We can easily create a chart of the data and see the trends of that particular data over a period of time or over any other variable. For example-

This visual data representation is split into a percentage gauge in addition to a detailed bar chart and will help you to accurately calculate your Earnings Before Interest and Tax (EBIT).

Data Visualization can be easily done using the Financial Toolbox in MATLAB. It provides numerous easy-to-digest functions for mathematical modelling and statistical analysis of financial data. We can analyse, backtest and optimise investment portfolios taking into account the turnover, transaction costs, semi-continuous constraints and minimum or maximum number of assets. This toolbox also enables us to estimate risk, analyse yield curves, price fixed-income instruments and European options, and measure investment performance. (MathWorks, 2021)

Stochastic Differential Equation(SDE) tools let us model and stimulate a variety of stochastic processes. Time series analysis functions can also help us perform various productive tasks. They let us perform transformations and regressions with missing data and convert between different trading calendars and day-count conventions. (MathWorks, 2021)

There are various other libraries in our hand which are used for data visualization in finance-

Matplotlib- This has established itself as the benchmark for data visualization and is a robust, reliable and efficient tool modelled after MATLAB’s plotting capabilities. It can be used to create static image files of almost any plot type. (Foy,2021)

Seaborn- This is another common data visualization library that is based on Matplotlib and provides a high-level interface for drawing attractive and informative statistical graphs. (Foy,2021)

Plotly & Dash- Since all the previous graphs were static and could not be altered and interacted with in any way. Plotly library solves this problem using which python creates interactive plots as .html files. Users can zoom in, select, hover and perform several such tasks with these plots but in order to regenerate a plot to see updates you need to re-run the .py script. Dash helps to resolve this problem. Instead of creating a .html file, Dash produces a dashboard web application at your localhost which you can then conveniently visit and interact with. (Foy,2021)

Some other prominent libraries include Pandas and Time Series Visualization which are extremely useful as well.

Business Intelligence (BI)

Business Intelligence has been defined as “a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making.” (Forrester, 2021) Thus, Forrester refers to data preparation and data usage as two separate but closely linked segments of the business-intelligence architectural stack.

Business intelligence can help companies make better and appropriate decisions by showing them the present data as well as the historical data within their desired context. BI can be used by analysts to provide performance and competitor benchmarks to make the organization run smoother and more efficiently. Market trends can also be easily spotted to increase sales or revenue.

The best way to present BI is through Data Visualization.

Listed below are few ways in which business intelligence(BI) can help companies make smarter, data-driven decisions:

• Identify ways to increase profit
• Analyse customer behaviour
• Compare data with competitors
• Track performance
• Optimize operations
• Predict success
• Spot market trends
• Discover issues or problems

Conclusion

BI is rapidly evolving according to the needs of the business foundations and technologies. Companies are striving to be more data-driven and efforts to share and collaborate data are continuously increasing. In the future, we can definitely say that data visualization will be even more essential to work together across teams and departments.

And with the continuous advancements in technology and science, we can definitely hope to see a new phase, a new era of modernization where FinTech would rule the world of finance.

References

Evelson, B., & Nicolson, N.(2008). Topic overview: Business intelligence.  https://www.forrester.com/report/Topic+Overview+Business+Intelligence/-/E-RES39218#

Foy, P. (2021). Python for Finance: Data Visualization. https://www.mlq.ai/python-for-finance-data-visualization/#:~:text=%20Python%20for%20Finance%3A%20Data%20Visualization%20%201,Python%20data%20visualization%20library%20based%20on…%20More%20

MathWorks. (2021). Financial Toolbox. https://in.mathworks.com/products/finance.html

Finance Train. (2019). Best Python Libraries/Packages for Finance and Financial Data Scientists. https://financetrain.com/best-python-librariespackages-finance-financial-data-scientists/

8020 Consulting. (2020). The Growing Power of Data Visualization in Finance. https://8020consulting.com/data-visualization-in-finance/

CFI. (n.d.). Programming. https://corporatefinanceinstitute.com/resources/knowledge/other/programming/

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India’s five-year plans (FYPs) highlighted the import substitution policy under India’s inward-looking strategy. This meant that the goods that can be produced domestically should be produced domestically rather than importing from the foreign market. The domestic producers could thus sell their products in the Indian markets without any foreign competition. The main aim here was to boost the economic growth of the nation and achieve self-sufficiency. Such an economy is also known as a closed economy. Up until the 1990s, India chose to remain as a closed economy.

The system of import substitution and import restrictions was implemented with the help of a number of different methodsー through the imposition of a) Tariffs, b) Quotas.

Extremely high tariffs were levied on imported goods making them very expensive for the Indian consumers. This eventually forced them to buy goods that have been made domestically rather than the imported items.

The quota system led to the fixing the maximum limit on the imports made by a domestic consumer. Only a certain amount of very essential items such as raw materials and capital equipment were allowed to be imported and used. That means, if the producers wanted extra materials, they had to fend for themselves.

No doubt that the inward looking strategy brought a rise in the foreign trade sector with the domestic producers gaining exponentially but towards the early 1990s, the Indian law makers realised that there are many loopholes in the current foreign trade policy that they adopted. The main problem was that the domestic producers made no sincere efforts to step up the quality of their products, forcing the Indian consumers to purchase whatever was supplied by them.

In 1962, a review committee was formed to discuss the changes required in the government’s existing foreign trade rules and hence, in 1985, then Finance Minister V.P. Singh announced the EXIM Policy (short for Export-Import Policy) which formulated the export and import policies of the country. Initially, the policy was meant to be followed for a period of three years. Later from 1991, the policies were revised every 5 years in view of the changing international economic context. The EXIM policy came into being to get a better view of the trade situation of the country and to correct trade deficits, if any.

In the year 1991, India received a major setback. The Indian government availed a loan of $7 billion from the IMF (International Monetary Fund) and the World Bank due to its inability to manage the economic condition of the country. In order to avail the loan, these international agencies expected India to liberalise, privatise and globalise its economy. The Indian government thus announced the New Economic Policy (NEP), popularly known as the LPG (Liberalisation, Privatisation, Globalisation) policies. Under the New Economic Policy, quantitative restrictions that were imposed after independence were substantially removed. For example, by the year 2001, import restrictions on manufactured consumer goods and agricultural products were completely eliminated. Similarly, tariffs were removed to a great extent in order to increase the competitiveness of the domestic goods in the foreign markets and to improve the quality of the products.

The first EXIM policy came into effect in 1992 and was effective until 1997. This policy aimed at removing the various protectionist measures that were taken by the Indian government previously. After that, the second EXIM policy started in the same year (1997) and stayed up until 2002. This time the focus was on making India a globally oriented economy through the adoption of a set of schemes such as the Export Promotion Capital Goods Schemes and Advanced License Schemes aimed at increasing investments from abroad. The next EXIM policy emerged after 2 years i.e. in 2004 up to 2009 (major trade decisions were taken under this EXIM policy which is why it is also called the ‘Trade Constitution’), under which newer policies such as Target Plus which focussed on providing incentives to producers and exporters with duty-free credit and Free Trade Zones. Soon after, the fourth EXIM policy came into effect from 2009 till 2014 which brought in new initiatives known as Focus Market scheme and product market scheme to help exporters compete in foreign markets and incentivise the export of those products which have high employment intensity. The fifth EXIM policy came after one gap year and came into effect in 2015 and stayed till 2020. This policy focussed on the export as well as the manufacturing services to improve the ease of doing business to increase India’s exports and thus increase its participation in the global market.

Fig 1. Imports of goods and services (% of GDP) – India | Source: World Bank

Fig 2. Exports of goods and services (% of GDP) – India | Source: World Bank

On March 31, 2020, the Government of India decided to extend the Foreign Trade Policy 2015-2020 for one year in light of the Covid-19 situation. It was to expire on March 31, 2021, but the Directorate General of Foreign Trade (DGFT) again extended FTP 2015-20 up to September 30, 2021, and it has been operational since.

References:

1. Arora, S. (2019). What are the objectives of Foreign Trade Policy in India? Legodesk. https://legodesk.com/legopedia/foreign-trade-policy-india/

2. India’s International Trade Policy – EXIM Policy. Economics Discussion. https://www.economicsdiscussion.net/international-economics/indias-international-trade-policy-exim-policy/4241

3. Soares, N. (2014). Foreign Trade Policy of India since 1980. Slideshare. https://www.slideshare.net/NikhilSoares/foreign-trade-policy-of-india-since-1980

4. Saluja, N. (2021). Govt extends current foreign trade policy till September. The Economic Times. https://m.economictimes.com/news/economy/foreign-trade/govt-extends-current-foreign-trade-policy-till-september/amp_articleshow/81777971.cms

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The Formula and What It Means

The formula for calculating the expected return of an asset given its risk is as follows:​

ER_i =R_f + β*(ER_m − R_f)

where:

ER_i = expected return of investment

R_f = risk-free rate

β = systematic risk (of the potential investment)

ER_m = expected return of the market

(ER_m − R_f) = market risk premium

In the stock market, investors are compensated for the risk they take and the time value of money. In the CAPM formula, risk-free rate R_f accounts for the time value of money. In other words, it’s the rate of return one would earn on an investment that has 0 risk.

In practice, a representation of the risk-free rate is given by the yield on 10-year government bonds. They are considered risk-free because the probability that the Indian government defaults and is not able to pay the return is very small.

R_m is the expected return of the stock market. It is what you can expect to earn on an average if you invest in a broad market index. The market risk premium is the difference between the expected return of the market and the risk-free rate. So, it’s like an expected reward for taking the extra risk. Using an estimate of the expected market return (R_m) gives an estimate of the return of the stock (R_i).

The β of a potential investment measures how much the stock moves when the market index moves up or down. The market, by definition, has a β of 1. A β of 1 means that the stock moves exactly like the market in both directions. A β greater than 1 means that the stock moves more aggressively with respect to the market so it gives you more upside potential when the markets are in bullish territory but it also carries a higher risk of money loss in a market downturn. Finally, a β smaller than 1 indicates that the stock is more defensive than the market, so there’s a lower risk but it also results in a lower return when things go well.

The market risk premium multiplied by the factor β [β*(ER_m − R_f)] is termed as ‘securities risk premium’.

So, for example, if the risk-free rate R_f is 5%, the expected return of the market ER_m is 13% and the systematic risk β of the security is 1.2. Then the expected return will be:

ER_i =R_f + β*(ER_m − R_f) = 5% + 1.2*(13%−5%) = 14.6%

Now, what does this mean to a potential investor? If the expected return they are looking for is equal to or more than 14.6%, then this asset is a decent option to invest in.

What the CAPM Implies

The CAPM depicts that the expected rate of return of an investment is fully determined by two factors: the risk free rate Rf and the securities risk premium i.e. the market risk premium multiplied by the factor of β [ β*(ER_m − R_f) ].

Greater Expected Returns require Greater Risk

The graph shows how greater expected returns from an investment(y-axis) require a greater expected risk(x-axis). Starting with the risk-free rate, the expected return increases as the risk increases.

Assumptions that don’t match reality

The CAPM is based on several critical assumptions. Some assumptions which potentially have some issues include:

1. Markets are efficient and all investors have equal access to information captured in the market. Now this generally won’t hold because institutional investors (a professional investor or organization that trades in large quantities) may have much better access to information, i.e., they have analysis, reports and other tools which make them more adept at evaluating securities than a retail investor (an individual or a non-professional investor). Also, different institutional investors are going to have different access to information.

2. Moving on to investor behaviour, markets are assumed to be dominated by risk-averse and rational investors which doesn’t generally hold because all investors do not act rationally all the time. They might invest emotionally or they might invest in things that particularly interest them.

3. Markets are frictionless i.e., there are no transaction costs, taxes or any kind of restraints in the market and one can buy and sell assets without incurring any kind of additional costs. Now, obviously this assumption doesn’t hold up in real life. While trading, there are a number of consequences that can’t be avoided. If you just think about when you trade shares, you incur a fee while buying or selling. You will also incur a bid-ask spread (the difference between the highest price that a buyer is willing to pay for an asset and the lowest price that a seller is willing to accept). Institutional investors, when they trade significant blocks of shares, also incur market impact costs i.e., the impact their trade has on share prices. Which means if they sell a lot of shares, they might depress the price. And, of course, taxes are a real concern. For example, Securities Transaction Tax (STT) is one such tax payable in India.

4. Under CAPM, it is also assumed that all investors invest in the same time horizon. Investment horizon is the term used to describe the total length of time that an investor expects to hold a security before selling it off. This assumption also normally doesn’t hold in markets because all investors usually have different time horizons which varies according to their investment goals.

The CAPM is a very useful tool to calculate a discount rate or expected return rate but it’s not the only one. There are other modern approaches such as Arbitrage Pricing Theory and Merton’s Portfolio Problem. There are also a few Multi-Factor Models at work as well. But the CAPM still remains popular due to its simplicity and utility in numerous situations.

References:

1. Bleve, M. (2020). Capital Asset Pricing Model (CAPM) Explained. The Finbox Blog. https://finbox.com/blog/capital-asset-pricing-model-capm-explained/
2. Capital Asset Pricing Model. University of South Wales. http://research.economics.unsw.edu.au/jmorley/econ487/CAPM_lecture.pdf
3. Kenton, W. (2021). Capital Asset Pricing Model (CAPM). Investopedia. https://www.investopedia.com/terms/c/capm.asp

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The major perspective of Financial Modeling is to predict the future of a business on the basis of past and present data. The predictions are based on the company’s past financial information, the information that is currently available about the company and the industry, and assumptions about how the future will unfold. Conclusions from a Financial Model are then used for analysis and decision making in the company.

Another aspect of Financial Modeling is to perform the valuation of a company/business. It helps investors determine whether the share price of potential investment options is undervalued, overvalued or valued accurately. This valuation is done on the basis of financial statements. For example, the results of a Financial Modeling done on the basis of financial statements gives a particular insight into the valuation of the company, which is then compared to its share price. Imagine that the share price of the company turns out to be less than what the model predicts, then it indicates that the company is undervalued and should be invested in.

Types of Financial Models

There are numerous types of financial models used by professionals but the most relevant ones in today’s corporate finance world include:

Three-Statement Model

As the name suggests, this model includes three financial statements- the Income Statement (also called the Profit & Loss Statement), the Balance Sheet and the Cash Flow Statement.

1. The Income Statement gives the details about the revenue and expenses generated by the company over the required time period.
2. The Balance Sheet tells about what assets (such as cash in the bank, inventory or real estate) and liabilities (like bank loans, debt to suppliers) a company has at a given point of time. Subtracting the liabilities from the assets gives the net worth of the company at that given point in time.
3. The Cash Flow Statement shows how much cash or anything equivalent to cash entered and left the company over the required time period.

These three statements are dynamically linked with formulas in Excel and financial analysis is then performed on the model.

Discounted Cash Flow (DCF) Model

Free cash flow is that part of cash flow that is not required for day to day business operations of the company. Anything done with the free cash flow doesn’t affect the existing business and it is available for distribution among the investors (both debt or equity) of the organization. Free cash flow is used because it shows actual economic value, while metrics like net income or profits may be misleading.

There are two steps in the DCF model- estimation of the company’s free cash flow in the future and then discounting (the opposite of ‘compounding’) it back to today using the appropriate rate to find the present value of the business (called Net Present Value or NPV) and ultimately, the value per share of the business.

The DCF model takes into consideration the initial free cash flow (the average free cash flow generated by the company in the last 3 years), the annual growth rate of the free cash flow of a company (predicted with the help of historic data), terminal growth rate (it is assumed that the cash flow generated at the end of forecast period grows at a constant rate forever, this is because estimates made far off in the future should not be aggressive) and finally the discount rate or the expected return from the business.

To arrive at the discount rate, a measure called Weighted Average Cost of Capital (WACC) is used. The weighted average cost of capital (WACC) is a calculation of a firm’s cost of capital in which each category of capital is proportionately weighted. All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.

So, for example, if the calculated WACC is 9%, it is used to discount expected cash flow to see what it is worth today. So, if cash flow is expected to be ₹100,00,000(1 crore) in 2 years for a company being valued today, that ₹1 crore in 2 years is worth ₹91,74,312 today.

Formula to calculate present value

= future value/(1+WACC)^time

= 10000000/(1+9%)²

= 9174311.9

If the company we’re considering has 1 lakh outstanding shares, dividing ₹91,74,312 by 1,00,000 gives a present value of ₹91.74 per share. If our predictions about future cash flows are accurate, this is what the stock is worth today.

Imagine that this stock is trading at just ₹70/share in the market. This indicates that it is undervalued and should be invested in. But, if this stock is trading at ₹100/share, then it means that it is overvalued.

Mergers & Acquisitions (M&A) Model

As the name implies, the M&A Model is an analysis of the combination of two companies that come together through an M&A process. A merger is the “combination” of two companies, under a mutual agreement, to form a single entity. An acquisition occurs when one company completely takes over the other company. In both cases, a single company emerges. This is usually done to reduce competition, increase operational efficiency and for growth.

This model builds on both the Three Statement Model as well as the DCF Model and hence has all the standard components of a Three-Statement and DCF Model. The steps followed in a Merger Model include:

1. Forecasting the valuation of the first company (acquirer)
2. Forecasting the valuation of the second company (target)
3. Combining the two frameworks and making adjustments for various types of synergies

Sum of the Parts Valuation (SOTP Model)

The sum-of-the-parts valuation is typically used for companies that have diversified businesses, i.e., when a company is a conglomerate and derives its revenue through business units in different industries that cannot be valued using a single relative valuation technique. In such cases, the different parts of the business are valued differently and then they are all summed up so as to obtain the final number or the Total Enterprise Value (TEV). For example, Reliance Industries owns businesses engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications.

The steps followed in an SOTP Valuation include:

1. Determining the different business segments
2. Valuing each segment
3. Combining up the total to get the final result

In the following example, the multinational company Amazon has been divided into different separately valued segments and then added together at the end.

Leveraged Buyout (LBO) Model

Whenever a private equity firm purchases a business using a significant amount of borrowed money and then uses the profits generated by this business to eventually pay down the debt, ultimately reducing the debt and increasing the level of equity, it is called a leveraged buyout.

The private equity firm may borrow as much as up to 70 or 80 percent of the purchase price from a variety of lenders(Banks, NBFCs, Financial Institutions) and fund the balance with its own equity.

Over time, as the debt is paid off, the equity portion increases significantly and over a long time period, the equity investors can achieve an Internal Rate of Return (IRR) of up to 20-30% or even higher.

Comparable Company Analysis (CCA) Model

In this method, a company is valued using the metrics of other businesses of similar size in the same industry. For example, the valuation of an e-commerce startup like Flipkart must be done by comparing it with an e-commerce company like Amazon India.

Using valuation measures like P/E Ratio, P/B Ratio, P/S Ratio, EV/Sales, EV/EBITDA etc, it is determined if a company is overvalued or undervalued.

The basic steps followed while performing CCA are:

1. Finding comparable companies
2. Determining relevant valuation measure
3. Validating key fundamental metrics (this refers to excluding non-recurring expenses and/or income which might reflect in the numbers)

References:

1. Ahern, D. (2020). Explaining the DCF Valuation Model with a Simple Example. https://einvestingforbeginners.com/dcf-valuation/
2. Chen, J. (2020). Comparable Company Analysis (CCA). https://www.investopedia.com/terms/c/comparable-company-analysis-cca.asp
3. Hargrave, M. (2021). Weighted Average Cost of Capital (WACC). https://www.investopedia.com/terms/w/wacc.asp

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News channels these days, instead of conveying accurate information, focus on adopting means to get more viewers and raise their TRPs. In order to do so, they publish or telecast an overwhelmingly larger proportion of negative news items. As studies in the USA and Australia have shown, about 90% of the news is negative, a huge proportion of them being sensationalist reports. Around 74% of the news stories about Australian indigenous health were negative, while a mere 15% of the stories were classified as positive and 11% as neutral. (Stoneham et al, 2014).

Ever wondered why this is so? Studies have proven that humans show what is known as the negativity bias or negativity effect in information processing. This means that negative events or information are more likely to draw our attention. In a study by Kätsyri J. (2016), gaze tracking, recognition memory, cardiac responses, and self-reports were used to track the attention of 38 participants in a controlled environment. It was found that negative tweets gained more attention and were viewed for longer durations. One of the best instances of this bias was seen when the ‘City Reporter’, a Russian website, lost two-thirds of its readership when it decided to publish only positive news stories for a day!

Framing Effect

News channels and publishers tend to, in fact, not just “report” the news, but make sure they spice it up appropriately to garner and sustain people’s attention. How a particular situation is narrated, that is positive or negative framing, also has an effect on a person’s response (Tversky and Kahneman, 1981). Negative words such as “never”, “die”, “worst”, which have proved to be more eye-catching, is used more by the media, particularly in headlines. There is also an association between gender and valence of the information: women have shown better memory and higher stress reactivity in response to negative news as compared to men (Marin et al, 2012).

Picture Superiority Effect

The media tries its best to evoke emotional reactions through its reports, and to maximize the effect, often uses disturbing and strong images. Everything – from images of dead bodies lying in a pool of blood to detailed descriptions of murder or terrorist attack – is reported sensationally, in an exaggerated manner. Be it Sushant Singh Rajput’s pre-autopsy dead body or gallows in Tihar jail, one can see all such images floating on news channels and social media within minutes of the occurrence of an incident. The reason behind excessive usage of such images is the phenomenon termed as the ‘picture superiority effect’, which means humans tend to remember and recall pictures much better than words. Such images, therefore, are bound to elicit strong negative emotions and hence be remembered by people.

The negativity bias and the framing and picture superiority effects, all combine to cause a range of physiological and psychological effects on people’s minds.

Physiological Effects of Negative News Reporting

Excessive exposure to negative information or news can cause the brain to perceive it as a threat, and as a result, might activate the fight-or-flight response of the sympathetic nervous system. Stress hormones – adrenaline and cortisol – are released in response, which might result in physiological effects of stress such as fatigue and sleeplessness.

Psychological Effects of Negative News Reporting

As compared to positively-valenced or neutral news items, negatively-valenced news also causes heightened anxiety and a bad mood (Johnston & Davey, 1997). As a result, people tend to worry excessively about themselves and their near and dear ones. This, in fact, leads to more problems: people are tempted to check the news repeatedly, which heightens the anxiety and stress, thus forming a never-ending cycle.

Stress is the root cause of a variety of psychological disorders. A positive correlation was found between the number of hours an individual watched negative news and the amount of distress and the possibility of developing post-traumatic stress disorder (PTSD) (Riehm et al, 2020). Moreover, for people who have personally experienced or been victims of any of the events being reported, the negative images and words used tend to elicit flashbacks of their own past experiences, thus making their healing process all the more difficult. This is because of the self-reference effect, or the tendency of humans to remember and recall those events better which are personally relevant or related to themselves in some way. When exposed to arousing bulletins, people hence tend to relate the negative information to their personal contexts (Johnston & Davey, 1997).

Negative Reporting and COVID-19 Pandemic

In the current times, when the world is battling a pandemic and everyone is confined within their homes, with nothing more than a tv screen or a laptop to entertain themselves with, many people are facing one or the other form of social isolation. The effect of the same can be seen in the huge rise in the number of people who reported mental health issues or sought professional help. A 20% increase in mental illnesses has been observed since the beginning of the COVID-19 outbreak in India (Indian Psychiatric Society, 2020). Many people experience heightened levels of stress and anxiety as a result of watching or reading covid-related news. The figure below shows the sentiments evoked by various news headlines related to the pandemic, a vast majority (51.66%) of which evoked negative sentiments, while only 30.46% generated positive sentiments, and 17.87% were neutral (Aslam et al, 2020). The histogram depicting the sentiments, too, is weighted on the negative side.

With covid cases and related deaths reaching a new spike every day, news reporters, in a bid to reveal the mismanagement and failure of the government in handling the crisis, try to portray the situation as negatively as possible. Images and videos of hospitals running out of oxygen, people running around looking for hospital beds and plasma donations, crematoriums overflowing due to the rising number of covid-related deaths, and relatives weeping inconsolably, are traumatizing not just for those currently suffering from the disease, but also the ones who have won the battle against the virus. They fear being re-infected and do not feel safe even inside their homes. In fact, even those who have fortunately not contracted the infection are constantly worried and feel tempted to keep checking the news repeatedly. This may even lead to illness anxiety disorder and hypochondriasis amongst such people. Scarcity and unavailability of vaccines, masks, sanitizers, and protective equipment for frontline covid warriors is a huge cause of concern, leading to fear and anxiety amongst all people alike.

These images and reports haunt people round the clock, leading to nightmares, insomnia, and hypersomnia. Quite often, people wake up screaming, breathing heavily, or sweating excessively, and may even develop long-term sleep problems. About 15% of adult Indians reported some form of insomnia due to apprehensions and concerns related to the pandemic (Lahiri et al, 2021). As shown in the figure below, various factors such as higher age, isolation, generalized anxiety, and known co-morbid conditions were found to be correlated with increased levels of insomnia (Lahiri et al, 2021).

Studies have shown that this could also have long-term effects, leading to a decrease in the overall social interaction, with people being apprehensive about physical meetings even after the pandemic is over. Moreover, people could, in general, become more pessimistic about situations in life and their ability to handle them successfully. They might begin to view events more as a ‘threat’ than a ‘challenge’ since they would begin to feel that they are solely victims of the situation and have no control over it. Their sense of satisfaction with life might also decrease, along with a range of other effects.

Other Common Examples

This is just one of the countless examples we see every other day. Excessive coverage of celebrity suicides and deaths is another common example, the most recent one being the Sushant Singh Rajputs case, which was sensationalized and reported twenty-four-seven for several months following the claimed suicide. What the media did not realize was the effect this could have on young and vulnerable minds who considered this man as their role model. Consequently, a number of suicides of young adults were reported in several parts of the country within a few days following the SSR case. The excessive coverage of the incident hence triggered a series of suicides of ordinary people and celebrities alike, who were later found to be suffering from depression or other mental health issues and began to feel that suicide was a viable solution to their struggles.

Another common media practice is the focus on negative and corrupt political activities and rare reporting of any positive events and practices in the political arena. This has a negative effect on people’s overall belief in the democratic system, and even affects their sense of control over the chosen leaders. The effect is visible in the voter turnout which has recorded a reduction over the years in countries like the USA.

The list of such examples seems endless. The media needs to realize the effects and consequences of the evident bias in their choice and manner of reporting. There is a need to maintain a balance between positive and negative news items. News channels and publications should provide unbiased and unexaggerated information to the people with an aim to make them more aware and informed, rather than trying to increase their own readership and viewership. Only then can we hope to reduce and not aggravate the mental health issues that every fourth person may be suffering from (WHO, 2001).

References

Johnston, W. M., & Davey, G. C. (1997). The psychological impact of negative TV news bulletins: The catastrophizing of personal worries. British Journal of Psychology, 88(1), 85-91.  https://doi.org/10.1111/j.2044-8295.1997.tb02622.x

Garz, M. (2014). Good news and bad news: evidence of media bias in unemployment reports. Public Choice, 161(3-4), 499-515. https://doi.org/10.1007/s11127-014-0182-2

Grabe, M. E., & Kamhawi, R. (2006). Hard Wired for Negative News? Gender Differences in Processing Broadcast News. Communication Research, 33(5), 346–369. https://doi.org/10.1177/0093650206291479

Tversky A., Kahneman D. (1989) Rational Choice and the Framing of Decisions. In: Karpak B., Zionts S. (eds) Multiple Criteria Decision Making and Risk Analysis Using Microcomputers. NATO ASI Series (Series F: Computer and Systems Sciences), vol 56. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-74919-3_4

 Kätsyri J, Kinnunen T, Kusumoto K, Oittinen P, Ravaja N (2016) Negativity Bias in Media Multitasking: The Effects of Negative Social Media Messages on Attention to Television News Broadcasts. PLoS ONE 11(5): e0153712. https://doi.org/10.1371/journal.pone.0153712

Schlenger WE, Caddell JM, Ebert L, Jordan BK, Rourke KM, et al. (2002) Psychological reactions to terrorist attacks: findings from the National Study of Americans’ Reactions to September 11. JAMA 288: 581–588.  doi: 10.1001/jama.288.5.581

Lahiri, A., Jha, S. S., Acharya, R., Dey, A., & Chakraborty, A. (2021). Correlates of insomnia among the adults during COVID19 pandemic: evidence from an online survey in India. Sleep medicine, 77, 66-73. https://doi.org/10.1016/j.sleep.2020.11.020

Marin M-F, Morin-Major J-K, Schramek TE, Beaupré A, Perna A, Juster R-P, et al. (2012) There Is No News Like Bad News: Women Are More Remembering and Stress Reactive after Reading Real Negative News than Men. PLoS ONE 7(10): e47189. https://doi.org/10.1371/journal.pone.0047189

Anant Kumar & K. Rajasekharan Nayar (2020): COVID 19 and its mental health consequences, Journal of Mental Health. https://doi.org/10.1080/09638237.2020.1757052

Stoneham, M., Goodman, J., & Daube, M. (2014). The portrayal of Indigenous health in selected Australian media. The International Indigenous Policy Journal, 5(1), 1-13. http://hdl.handle.net/20.500.11937/33658

Aslam, F., Awan, T.M., Syed, J.H. et al. (2020). Sentiments and emotions evoked by news headlines of coronavirus disease (COVID-19) outbreak. Humanit Soc Sci Commun 7, 23. https://doi.org/10.1057/s41599-020-0523-3

Lindberg, S. (2020, May 18). Is watching the news bad for mental health? Verywell Mind. https://www.verywellmind.com/is-watching-the-news-bad-for-mental-health-4802320

The World Health Report 2001: Mental Disorders affect one in four people. (2001). WHO | World Health Organization. https://www.who.int/news/item/28-09-2001-the-world-health-report-2001-mental-disorders-affect-one-in-four-people

Riehm, K. E., Holingue, C., Kalb, L. G., Bennett, D., Kapteyn, A., Jiang, Q., … & Thrul, J. (2020). Associations between media exposure and mental distress among US adults at the beginning of the COVID-19 pandemic. American journal of preventive medicine, 59(5), 630-638. https://doi.org/10.1016/j.amepre.2020.06.008

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Target-Oriented Population Control during the Emergency Period (1975-1977)

A major breakthrough in the population control process took place when then Prime Minister Indira Gandhi announced a nationwide emergency in 1975 and rigorously enforced mass sterilization programmes to bring down the population growth rate. About 6.2 million Indian men were sterilised in just a year which, according to a 2014 BBC news report, was 15 times the number of people sterilized by the Nazis. Vasectomy was a safer procedure than tubectomy, especially at that time, as it required less recovery time and follow-up hence poor men became the main targets of this gruesome campaign. The campaign to sterilise men involved many levels of harassment. There were even reports of police dragging the men to mass vasectomy camps. Men were considered easier targets for threats like job loss or fines, since they were more likely to be employed outside the home, to take public transportation and to go out or pick up government food rations.

Incentives and disincentives were given on a large scale for acts such as getting oneself sterilized or convincing other citizens to get sterilized. From offering plots of land in return for sterilization to threatening the loss of a government job for those who refused the procedure. While both men and women could be sterilized, the medical system was equipped to do many more vasectomies than tubectomies. Records have shown that the sterilization process mostly targeted the poor citizens and that wealthier Indians were able to buy their way out of the system. The coercive measures and the sterilizations caused a great deal of anger among the people. This unrest caused in the country is also considered as one of the reasons why Indira Gandhi’s government was voted out in the 1977 elections.

Voluntary Period since 1997

The next major breakthrough happened after the emergency period where the Indian government took a 180° turn and began to turn its family planning policy towards women. Female sterilizations became by far the most popular method of contraception. Family planning programmes further extended to rural areas through the network of primary health centres. The most fundamental change of the Indian population policy since 1977 was that family planning became mostly voluntary. The Indian government now put more emphasis on incentives to attract people to accept family planning voluntarily instead of forceful measures. During the Seventh Five Year Plan period between 1986 and 1991, the Indian government’s population control policy extended to including both long term and short term as well as specific goals. The long-term goal was to fix the net reproduction rate to be achieved by 2001 and the short-term goal focused on the female minimum age of marriage and the practice of contraception. The specific goal was to promote a two-child norm by increasing awareness among the people about family planning and responsible parenthood. The government efforts in population control now also extended to increase the literacy rate of the population and especially women.

Formation of the ICPD (1994)

The year 1994 is considered to be a noteworthy one in the history of family planning programmes in the world since the International Conference on Population and Development (ICPD) convened under the United Nations at Cairo in 1994 made some recommendations that were accepted by many developing countries including India that changed the direction of family planning programmes. The conference recommended that family planning programmes should not be driven by demographic goals but instead, they should be based on women’s reproductive rights and reproductive health, keeping in mind the well-being of everyone (International Institute for Population Sciences, 2016).

Adoption of NPP in the year 2000

India adopted the National Population Policy (NPP) in the year 2000 which decentralized the decision making to local government and improved the coordination between the government and the local and non-government organizations. Stress was given to improve the status of mothers and children. The programme focuses on the improvement of health care infrastructure and services and the empowerment of women. It also gives more emphasis to use of contraceptive methods like IUCDs, promotes delayed marriage for girls, provides a policy framework for imparting free and compulsory education up to 14 years of age, seeks to achieve universal immunization of children against all vaccine preventable diseases and to reduce infant mortality rate to below 30 per 1000 live births. Insurance is provided for the deaths, complications and failures caused by sterilization; compensating those who accept sterilizations and increasing male participation in family planning. Family welfare is now promoted as a people-centered program.

Endnote

Overpopulation is the root cause of numerous problems like low per capita income, unemployment and overburdened natural resources among many others. Therefore, the need of the hour today is a more effective measure to reduce the population growth in Indian society. Importance has to be given to population education, achievement of equal status for women and lower caste people, development of economy, urbanization, and modernization of the whole society. When socioeconomic conditions improve, the birth rate will be lower and the overpopulation problem will be reduced (Population Control Policies and Implementations in India, 2019).

References

• Biswas, S. (2014). India’s dark history of sterilisation. BBC. https://www.bbc.com/news/world-asia-india-30040790
• Srinivasan, K. (2016). “India’s Population Issues and Policies: Professionals’ Perceptions”, Working Paper No. 11, International Institute for Population Sciences, Mumbai. https://www.iipsindia.ac.in/sites/default/files/IIPS_Working_Paper11.pdf
• Wang, G. T. Population Control Policies and Implementations in India. https://doi.org/10.15640/jssw.v7n2a14

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Objectives and Goals

The NPP 2000 emphasised a series of important measures including an increase in the monetary compensation for sterilization, introduction of ‘population education in the Indian education system, increase in the usage of mass media in rural areas to increase awareness about family planning and contraceptives etc and thus sought to promote responsible and planned parenthood on a voluntary basis, aiming to freeze the population figures at the 1971 level until 2001 till the farthest extent possible. Broadly, the NPP 2000 can be summed up into three main objectives: short, middle and long term objectives.

Short term objectives:

1. To address the unmet needs for contraception, healthcare infrastructure and health personnel.
2. To provide integrated service delivery in consonance with the guidelines of WHO.

Middle term objectives:

1. To control the population through intersectoral operational strategies which include intersectoral collaboration between health and education to prevent problems like adolescent pregnancy and thus bring down the total fertility rate.

Long term objectives:

1. To achieve a stable population by the year 2045 by attempting to satisfy the economic needs of the present generation but in a manner that sustains natural resources and the environment for future generations.

The following goals were formulated to be achieved in the first decade after the introduction of the National Population Policy in 2000:

1. To address the unmet needs for basic reproduction (contraception), child health services, supplies and infrastructure (health personnel).
2. To make school education up to age 14 free and compulsory and reduce dropouts at primary and secondary school levels to below 20 per cent for both boys and girls.
3. To reduce the infant mortality rate to below 30 per 1,000 live births.
4. To reduce the maternal mortality rate to below 100 per 100,000 live births.
5. To achieve universal immunization of children against all vaccine-preventable diseases.
6. To promote delayed marriages for girls, not earlier than age 18 and preferably after 20 years of age.
7. To achieve universal access to information/counselling, and services for fertility regulation and contraception with a wide basket of choices.
8. To achieve 80 per cent institutional deliveries and 100 per cent deliveries by trained persons.
9. To achieve 100 per cent registration of births, deaths, marriages and pregnancies
10. To prevent and control communicable diseases, especially AIDS and sexually transmitted infections (STIs).
11. To promote vigorously the small family norm.
12. To integrate Indian Systems of Medicine (ISM) in the provision of repro­ductive and child health services, and in reaching out to households.

In order to achieve these goals, certain promotional and motivational measures were also undertaken.

Current Outlook

Despite all the efforts and steps taken towards population control and family planning, the programme has failed to deliver any kind of desired results. According to a UNICEF report, in India, 67,385 births happen in a day. The reasons for the programme’s failure can be attributed to several reasons including large size of the population in the reproductive age group, higher fertility due to unmet needs of contraception, higher desire for fertility due to high infant mortality rate, ignorance of the rural masses about birth control techniques and the preference of a male child etc.

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“If humanity is to progress, Gandhi is inescapable. He lived, thought, and acted, inspired by the vision of humanity evolving toward a world of peace and harmony. We may ignore him at our own risk.”

Gandhi was always more than what we know where his political contributions, way of life, words of wisdom, ideals of lifestyle; enlighten India, and the world even today after so many years. How Gandhi’s techniques have sometimes been invoked even in the land of his birth, especially in recent incidents, would appear to be a travesty of his principles. As the countries across the globe has been in the grip of a series of crises ranging from Korea to the Middle East with a never-ending trail of blood and bitterness; Gandhi’s ideals echo somewhere far behind.

Gandhi since the start deviated from the claim of calling himself a prophet or even a philosopher. “There is no such thing as Gandhism,” he explained, “and I do not want to leave any sect after me.” There was only one Gandhian; the one who believes to see a changed India that lives in his eyes, he said, an imperfect one at that: himself. According to him, the real significance of the Indian freedom movement lied in its promise to be waged nonviolently, on the ideals of truth and goodwill and to not succumb to the brutal measures the other side initiated with.

He objected to violence not only because unarmed people had little chance of success in an armed rebellion, but because he considered violence a vicious weapon that spurted more problems than it resolved, and left a trail of hatred and bitterness in which genuine reconciliation was almost a distant dream (Parida, 2019).

This emphasis on nonviolence jarred alike on Gandhi’s British and Indian critics, as this novel idea even back then was met with a wide array of responses. To the former, nonviolence was a camouflage; to the latter, it was sheer sentimentalism – as the whites tended to see the Indian struggle through the prism of European history undermined the remarkably peaceful nature of Gandhi’s campaigns. While on the flip side the radical Indian politicians, who had drawn inspiration from the history of the French and Russian revolutions were vehemently opposed to the “Gandhian way of ushering peace” and strongly held that it was foolish to miss opportunities and sacrifice tactical gains for reasons more relevant to ethics than to politics.

This total allegiance to nonviolence did end up creating a gulf between him and the educated elite in India which saw force as the uptight tool to yield their lost power and prestige and temporarily bridged only during periods of intense political excitement.

His ideological proposition of doctrine of nonviolence was followed in accordance to its logical conclusion even by his closest allies: ‘the adoption of unilateral disarmament in a world armed to the core, the scrapping of the loaded armed forces, and the decentralisation of administration to the point where the state would “wither away” were certain aspects that raised doubts about the principle’s vitality even long back.

Even with its fair share of lacunas, India did not question the superiority of the principle of nonviolence as enunciated by their leader, but they did believe it to not be fitting conjunction to every aspect of practical politics. The Indian Constituent Assembly include a majority of members owing allegiance to Gandhi, but the constitution which emerged in 1949 was based more on the Western parliamentary than on the Gandhian model alone.

After understanding how even before his ideas were not adopted unilaterally since the start it’s important to put today’s world into context. As the changing times that we exist in, we need to realise the validity of these ideals that once accorded us freedom and led one of the greatest independence movements across the globe. The question one often ends up asking is if after Gandhi’s assassination on January 30, 1948, does his ideals of truth and non-violence remain relevant in 21st century India?

On ethical and behavioural paradigm Gandhianism has much meaning today because society is witnessing the degradation of values where virtues of self-control and righteousness are much needed in a materialistic world driven by the desire to achieve and acquire more. As the headlines are coloured with harassment incidents, the subjugation of women’s need and other gruesome acts with this ascending level of vicious violence Gandhian dream of a safe country for all still looks like an unachievable objective (Srivastav, 2019).

The shadow of a thermo-nuclear war with its incalculable hazards continues to hang over mankind with evolving technological sector and ever-increasing military capability of countries -from this predicament, Gandhi’s ideas and techniques may suggest a way out.

Unfortunately, his motives and methods are often misunderstood, and this perspective of a judged vision completely resonates with what he battled with the British Raj. He advocated nonviolence not because it offered an easy way out, but because he considered “violence a crude ineffective weapon; thus it is to be stressed that rejection of violence stemmed from choice, not from necessity” as many mistakenly portray.

Horace Alexander, who held Gandhi in his highest regard and witnessed his speeches, graphically describes the attitude of the nonviolent resister to his armed opponent: “On your side, you have all the mighty forces of the modern State. On my side, I have nothing but my conviction of right and truth, the unquenchable spirit of man, who is prepared to die for his convictions than submit to your brute force. Here we stand; and here if need be, we fall.” Thus he highlights here how detached from being a craven retreat from danger, nonviolent resistance demands courage of a high order, the courage to resist; the courage to call out injustice without rancour, to unite all with the idea of peace, to invite suffering but not to inflict it, to die but not to kill.

Looking at India’s present state of affairs, one would probably surmise that Gandhism cannot have any relevance in this twenty-first century; wherein the age of social media and instant gratification, we accord a secondary place for ethics and honesty. Gandhi is rightly called the Father of the Nation because he single-handedly stood up against the mighty British Empire, filled the zeal of independence in millions and brought us freedom as we stand today as the world’s largest surviving democracy. However, today, Gandhi is mostly forgotten and his relevance questioned even by his ardent devotees.

Since independence, the country has witnessed many violent communal riots which run parallel to his most-followed ideology of ‘secularism’ while also neglecting the ideal of ‘Sarvodaya, a broad Gandhian term meaning ‘universal upliftment’ or ‘progress of all’. On the contrary, the irony in today’s India is a unique distinction of being the country where industrial giants and nominees of richest people in the world come from while at the same time more than 30 per cent of its population lives in dire poverty and 45 % is unaware of their rights (Baura, 2017).

What is required is a global non-violent awakening of principles Gandhi gave birth to, where his name should transcend the bounds of race, religion and nation-states, and emerges as the prophetic voice of the twenty-first century. Where his passionate adherence is resonated in every corner of the world and thus more than ever now is the time to make Gandhi relevant.

As all of us move towards an all-pervading materialistic, agnostic and consumerist culture, as we fight these big wars and grapple with crises; the common ordinary people in this modern age need Gandhism to hold on to.

SOURCES

-Baura, R { 2017 , June }. Relevance of Gandhi in Modern Times. mkgandhi.org. https://www.mkgandhi.org/articles/relevance-of-gandhi-in-modern-times.html

-Srivastav, R { 2019, August 13}. Bapu’s way : the relevance of Gandhi in Modern India and the World. One travel. https://www.onetravel.com/going-places/the-relevance-of-gandhi-in-modern-india-and-the-world/

-Parida, O {2019, October 1 } . Relevance of Gandhianism in today’s world. The Times of India. https://timesofindia.com/blogs/the-rock-bottom/relevance-of-gandhianism-in-todays-world/

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Democrat President Joe Biden’s decision to end support of the six-year-long Yemen war, and reassess American arms sales that began under his tenure as Vice President is surprisingly not what is making the headlines around the world this week. Jamal Khashoggi is a name that is familiar not just in journalistic circles but elsewhere too. Khashoggi was a Washington Post Saudi journalist who was killed in 2018 in Turkey. Following Khashoggi’s gruesome murder at the Saudi Embassy, fingers were instantly pointed at Saudi Arabia, and rather spectacularly on Mohammed Bin Salman, a.k.a, MBS. The Trump administration refused to publish a report linking MBS to the murder, despite the American legislature passing an act calling on intelligence services to provide evidence tying MBS to Khashoggi’s killing. However, matters are a bit different under the Democrat White House. Biden, who made it abundantly clear that his administration is not going to base their Middle East Policy on Saudi Arabia, unlike his predecessors, has finally called for the publication of the long blocked report in the public domain. What remains to be seen is how this is going to alter the relationship between the Americans and their strategically important partner in the Middle East.

Jamal Khashoggi had enjoyed a long and distinguished career in the Saudi Kingdom. He was known to have enjoyed close relations with the Royal family and often acted as an official spokesperson for them. . Khashoggi’s relationship with the ruling family and Saudi Arabia was redefined when King Salman’s son Mohammad Bin Salman started accumulating power and was soon made the Crown-Prince, set to inherit his father’s position. It is during this time Khashoggi distanced himself from the helm of power and became a critic of MBS and his policies often calling out the government and central political figures for imposing severe and autocratic policies. Despite his staunch stance, which fell well within the journalistic standards, no one foresaw what would befall Jamal Khashoggi. Khashoggi, having had come to terms with the threat looming over him, had relocated to the United States, in the form of a self-exile and had been a regular contributor to the Washington Post. Khashoggi in the summer of 2018 had travelled to Turkey in search of marital bliss. Tragically, before he could tie the knot, Jamal Khashoggi was reported missing from the Saudi embassy in Turkey and later pronounced dead.

Relations between the United States and Saudi Arabia were extremely warm under the Trump administration. However, the defining feature in this relationship wasn’t the two heads of state, rather the shots were called by Mohammad Bin Salman, and Trump’s son-in-law, Jared Kushner. The two young and like-minded individuals forged a close relationship in the second part of the decade, mainly due to their shared business mindset. In fact, Trump on Kushner’s urgings decided to make his first official overseas visit to Saudi Arabia. From the very onset of his Presidency, Trump cultivated a very close relationship with the Saudi Kingdom making it the fulcrum of his Middle-East policy, and viewing the country as an important ally against America’s long Middle East rival, the Islamic Republic of Iran. The relationship was further strengthened through the Trump Administration’s decision to increase arms sales to Saudi Arabia, whilst backing its campaign in the Yemen war.

Despite Trump and Kushner obviously viewing their Saudi counterparts as their bosom companions, it was still an utter shock to see Trump adopt an ambiguous stance towards the killing of Washington Post Journalist Jamal Khashoggi. Trumps’ decision to blatantly believe what the Crown-Prince had to say, shook the Congress and American Intelligence Services, as the CIA itself concluded with medium-high certainty that Mohammad Bin Salman was aware of and directly involved in the killing of Jamal Khashoggi.

In 2018, the United States Senate, unanimously passed Resolution 69, which recognised that the Government of the Kingdom of Saudi Arabia has, in recent years engaged in concerning behaviour, which includes its conduct in the civil war in Yemen, the apparent detention of the Prime Minister of Lebanon, suppression of dissent in the Kingdom and of course the killing of Jamal Khashoggi. The resolution explicitly recognises the misleading statements issued by the Saudi government, and that the fact the recent actions have undermined trust and confidence in the long-standing friendship between the United States and the Kingdom of Saudi Arabia. The following resolution having been passed unanimously proved that the United States Senate was ready to take up its role in shaping foreign policy which it had long abdicated in favour of the executive. Despite the directness and consensual adoption of the resolution, it fell short of having any effect on American foreign policy. Owing simply to the fact that the Trump Administration actively suppressed its publication and wrote a blank cheque to the Saudi Government.

The United States turned a new page under the Biden Administration, as it seeks to calibrate American ties with the Gulf country. From the inception of Biden’s bid for the Presidency, he has portrayed a hard stance against the Kingdom of Saudi Arabia. During his campaign trails, he has gone to the extent of calling the country a ‘pariah’ state. In the short time that he has been in office, he has already reduced arms sales to the country, and the report presented to the Congress a few days ago by the Biden-Harris Administration was the proverbial last nail in the coffin. However, it is still early to determine the exact ramifications the report will have on the American-Saudi relationship and more importantly on the Kingdom’s de facto ruler MBS himself. The Biden administration may seem to be on a war footing undeterred by policies followed by their predecessors, but they have been extremely strategic. Apart from the incessant repetition by the White House Press Office, that decision would be taken keeping in mind that current relationship the two states share, Joe Biden prior to releasing the report also spoke to King Salman, the current head of state. Another anomaly that we see, is a dearth of White House officials rushing to the press to give insights into what the publication of the report means for the Saudis.

In the past few years, it has been evident to lawmakers on Capitol Hill and the intelligence services that Mohammed Bin Salman, wasn’t the top choice to be the leader of America’s closest ally in the Middle East. However, America’s top choice, Muhammad bin Nayef Al Saud, who served as the interior minister and was responsible for successfully countering the Al-Qaeda in the Kingdom, now lives in Canada in exile. The release of the report has just provided ammunition to the gun lying uncocked with the US Congress. Since the report by the Biden-Harris administration, we have already seen the imposition of the ‘Khashoggi Ban’, which is a new VISA policy, that sets new restrictions pursuant to section 21(a)(3)(C) of the Immigration and Nationality Act. The largely unanswered question that remains is how the American officials aim to publicly cooperate with a man who they have held responsible for an act of such nature. A possible divorce driven by public sentiment, or even a temporary souring of relations between the two countries could be a blessing in disguise for the IS and Al-Qaeda. However, another international actor set to benefit is the Islamic Republic of Iran. Ramifications of Joe Biden’s decision to halt arms sales to the Saudis were evident when Iran-backed Houthis rebels were quick to capitalise on this and decided to advance on several fronts. However, in the near future, we need to consider the possibility that America’s decision to distance itself from Riyadh, could very well open doors for China, Russia and may even push the Saudi officials to develop closer ties with the Israelis.

The release of the report, along with growing opposition to the Yemen war and President Biden’s insistence on speaking with King Salman, instead of his son MBS, has heralded a new era in US-Saudi relations. An era that is marked with a host of strategic calculations on the part of the United States, that are aimed at keeping Saudi Arabia at an arm’s length, while being able to exploit its strong position in the Middle East. Like many other acts of geopolitical significance that are often ignored in the hope of a natural solution, I fear this is not applicable in this case. Khashoggi’s death has stirred up feelings against the Saudi Kingdom and the leadership which could very well be directed towards America if they fail to act decisively in the near future.

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Making India $5 Trillion Economy- What Should India Primarily Focus on?

Before the pandemic struck the entire world, India was expected to become a $5 trillion economy by 2025. The Covid-19 Pandemic had distorted all projections and left the world in an unpredictable state for almost a year. The economies all over the world crashed down due to the lockdowns and global unrest. Data from the National Statistical Office projects a 7.7 percent contraction for FY2021. 

But even if we look prior to the pandemic, India’s $5 trillion economy had many obstacles that needed focus to achieve the dream. One of the most important is India’s manufacturing sector. India’s manufacturing sector is not strong enough to allow expansion and integration in the global value chain. The Economic Survey pointed out that the global value chain exports could contribute a quarter of the increase in value-added for the $5 trillion goal and generate four million jobs by 2025 and eight million by 2030 via the Make in India initiative. (Reddy & S, 2021)

In order to integrate our manufacturing sector with the GVCs, it is very important to develop the infrastructure with top most priority. One example of this is China. China has done huge investments on infrastructure in the first half of the 20th century and the results of that can be seen now by the entire world. China has rapidly risen in the GVC due to its investment on infrastructure. This has led China to becoming the centre for world production. At this point in time, China is one of the strongest economies and has almost reached the stage of being self-reliant. 

India has announced Atmanirbhar Bharat (self-reliant India) with the view of transforming India into an important global player and making India self-reliant. The campaign has also created confusion in the minds of the MNCs as in the initial stages of the campaign India put a ban on the import of various non-essential commodities. Although these import restrictions were put to encourage domestic production to make India self reliant, these may also be seen as an obstruction in integrating India with the GVC. The import restriction can discourage global investors and in turn harms the long term goal for becoming a manufacturing hub. 

For India to achieve a $5 trillion economy, it has to encourage more and more foreign investments in the country and be as closely integrated with the GVC as possible. The policies made therefore have to be more welcoming for the global investors and MNCs and less restrictive in terms of import tariffs. 

The government should first and foremost focus on infrastructural development in the country in order to improve the manufacturing sector and be able to competitively produce. It should perhaps create a more open trade environment so that there is free trade of goods and services. The infrastructural development can also be useful for the performance linked incentive sectors. In this regard, the government’s Rs 111 lakh crore or $1.4 trillion investments in the National Infrastructure Pipeline can be seen as an important step towards building the required infrastructure. NIP consists of investment from the centre (39 per cent), state governments (20 percent) and private sector (21 per cent). It is very important at this point that the centre and the state governments work in a collaborative manner in order to devise smooth systems and proper and timely implementations of the policies. The central government should be hands on with any shortcomings of the state government so that there is minimum or no harmful repercussions felt over and beyond. It is important to make India so strong that even though India is a labour intensive country, it can have the ability to also be a major exporter of the capital intensive commodities along with labour intensive commodities. (Reddy & S, 2021)

It is as important to develop the traditional labour intensive commodities market so that India holds its foot strong in the global market when it comes to labour intensive commodities as it is one of the major aspects of the Make In India project.

Efforts of States to Achieve $5 Trillion Goal

UP Budget 2021-22 

The UP government on February 22nd brought the state budget to the table of the state Assembly. Chief Minister Yogi Adityanath presented the first paperless budget including ₹ 5,50,270.78 crore for 2021-22. It is about ₹37,410 crore more than the previous year’s budget. The focus of the budget was to make Uttar Pradesh Atmanirbhar and ensure overall development of the state. (Rudrappa, 2021)

Some of the important Budget Highlights:

1. UP government announced ₹2000 crore for Noida International Airport and also, building electronic city near airport.
2. UP budget proposed at least ₹640 crore for the overall development of Ayodhya.
3. The UP government made provision of ₹1,175 crore for metro rail projects. There is a provision of ₹597 crore for the Kanpur metro rail project in the budget presented by Finance Minister Suresh Khanna.
4. The UP government made ₹7,000 crore provision for Pradhan Mantri Gramin Awas Yojna.
5. A budget provision of Rs 976 crores for the development of canals, ₹610 crores for Saryu Canal Project, and ₹271 crores for the Eastern Ganga Canal Project were proposed. ₹104 crores was also proposed for Ken Betwa Interlink Canal Project. (D’Souza, 2021)
6. ₹1326 crore has been given for Delhi-Meerut RRTS and ₹100 crores each for Gorakhpur-Varanasi metro.

The investments on infrastructure by the UP government is one of the key aspects that could help transform India into a global manufacturing hub. The provisions made in the budget also promises to generate employment for the state leading to a higher SGDP. The infrastructural boost will lead the state to become more efficient in its development. With projects like Sabka Saath Sabka Vikas, the UP government has promised to bring taps, electricity, roads, water in every household along with making the state digitally equipped. The Chief Minister in his speech mentioned that the budget focuses on the poor, women, youth and the farmers. 

Bihar Budget 2021-22

The Bihar government announced a ₹2.18 lakh crore budget for 2021-22 with focus on social sector and infrastructural development. The Chief Minister of Bihar also announced a separate department for skill development and entrepreneurship in the state. The Chief Minister announced that the government has made the highest allocation in the education sector worth ₹38,035.93 crore followed by ₹16,835.67 crore for rural development, ₹15,227.74 crore for roads, ₹13,264.87 crore for health and ₹8,560.00 crore for energy. (Bihar’s Rs 2.18 trillion budget for FY22 prioritises social, infra sectors, 2021)

Some of the important highlights of the Bihar Budget:

1. All villages in Bihar will have the facility of solar street lights.
2. A budget provision of ₹250 crore for building link roads in rural areas of Bihar.
3. The state allocated ₹110 crores towards building of new engineering colleges.
4. Three new medical colleges are already under construction. 
5. 38 districts of the state have been declared as open defecation free.

The Bihar government has also focused on developing the infrastructure of the state along with improving the rural regions of the state. This inclusive development efforts of the state government will generate more skilled employment and improve the lifestyle of the rural people. The state government has made extra effort in building a separate skill development department in order to increase the skilled employment in the state integrating with the idea of Atmanirbhar Bharat. 

West Bengal Budget 2021-22

The West Bengal government announced its budget in the absence of the Finance Minister of the state. The government has announced a ₹29,96,88 crore budget for 2021-2022. (West Bengal Budget 2021-2022, 2021)

Some of the important budget highlights:

1. ₹1500 cr allocated for the construction of 20 lakh houses for SC/STs.
2. ₹50 cr allocated for building the infrastructure of 100 new English medium schools.
3. Building of 100 new schools for Nepali, Urdu, Kamtapuri and Kurmali language.
4. 45 lakh construction and transport workers will be given ₹1000 each under the social security scheme.
5. 100 IAS and IPS aspirants will be trained by the state government along with fooding, lodging and providing stipend.
6. All kinds of road taxes lifted from January 2021 to June 2021.

The budget of West Bengal has seen a rise in the expenditure on infrastructure 3.9 times. The state’s planned expenditure increased by 7.2 times. The expenditure on social sectors has risen by 5.6 times.These highlights show that the state government is perhaps in link with the national goal but has to do more in terms of investing in the infrastructure. To build a self reliant nation, the state governments have to work in synchronisation with the central government. 

CONCLUSION 

In view of the Modi government’s aim to make India a $5 trillion economy, the state governments’ budgets do perhaps look in sync. The state governments have focused primarily on the infrastructural developments and enhancing the skilled employment in the respective states. It is very important for these states to pull up their sock in order to provide a competitive development strategy. In order for India to become a global leader in terms of exports, it is very important that the two most important factors are strongly built-infrastructure and skilled labour. 

Being a country with the largest youth population in the world, it is our responsibility to stand out and become self reliant along with being a provider for the world. The pandemic has brought in many changes and should be seen as an opportunity to develop new skills and explore the untapped potentials of the country. 

References

Bihar’s Rs 2.18 trillion budget for FY22 prioritises social, infra sectors. (2021, February 22). Business Standard.

D’Souza, C. E. (2021, February 22). UP Budget 2021-22: Yogi Adityanath govt proposes Rs 140 crore for development of Ayodhya. ZEE News.

Reddy, K., & S, S. (2021, January 13). Building a $5-trillion economy. The Indian Express.

Rudrappa, P. (2021, FEBRUARY 22). UP Budget 2021 Live Updates: UP Presents ₹ 5.5 Lakh Crore Budget To Make State “Aatmanirbhar”. NDTV.

West Bengal Budget 2021-2022. (2021, February 22). The Times of India.

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