Budget 2022: Government extends credit to reach out to SMEs, MSMEs

Given that many businesses have bitten dust post-COVID, the finance minister in Budget 2022 introduced bold new fiscal policies, giving tax breaks to MSMEs, and increased liquidity in the market by putting money in the hands of the people to kickstart the economy.

As the nation starts picking up the pieces after two tough years, the Narendra Modi government has extended its symbolic credit arm to favourably reach out to the forgotten middle – the beleaguered SMEs/ MSMEs – a sector that has been under a wrench, but is also one of the largest job creators in the country.

Access to credit for SMEs/MSMEs

With over 95 percent of India’s businesses falling in the SME and MSME category, banks and lending agencies are finding it increasingly difficult to provide credit to this sector. It is noteworthy that this sector contributes to 30 percent of the GDP of India.

The conventional approach to funding SMEs/MSMEs has been through the traditional route of overdraft facilities, bank loans, and enhanced Line of Credit. The repayment of credit is by way of fixed equated payments at fixed rates of interest (sometimes adjusted as per RBI norms). Debt financing involves due diligence of the MSME’s financial health, creditworthiness, and future cash flow. Relationship lending in small banks is based on the loan officer’s relationship with the entrepreneur.

Traditionally, asymmetric information by SMEs such as providing audited financial statements, financial reports, fiscal governance, and often the blurring of lines between business owners, managers, and stakeholders have hampered credit-risk mitigation for banks and lending agencies.

Alternative approach to credit for MSMEs

Asset-based lending, purchase order finance, corporate bonds, or securitized debt are low-risk and low-return types of lending. The medium risk/ return includes hybrid instruments such as profit-participating rights, convertible bonds, bonds with warrants among others. Other high-risk lending includes venture capital, angel investing, crowdfunding, and more.

Budget 2022 has Nirmala Sitharaman delve deeply into these alternative financing instruments, like emergency credit line schemes to 5 lakh crore, a revamped CGTMC with direct infusion of funds that can help small and medium-sized companies kickstart their beleaguered businesses and, create a growth momentum with positive market sentiment. Hiring, purchasing of machinery, exploring new business collaborations, the market expansion will naturally follow, driving the economy upward and forward, leading to de-escalation of unemployment, and creating a new resurgent entrepreneurial wave in the country.

The adoption and implementation of these simple measures such as reduced TAT of loan disbursement, better pricing/ interest rates, EKYC enablement, relaxed norms for collateral/guarantors / and simplified and fewer documentation and faster loan sanctions would bring in the required operational efficiencies and nudge small companies and micro-entrepreneurs to approach banks, NBFCs and other financial institutions for credit.

Specific demands of micro-entrepreneurs like flexible/multiple payment mechanisms, bundled product offerings, could be offered as “Consumption loans” that would help these micro-entrepreneurs to manage liquidity over time.

Digitisation and rate cuts

Special mention of a fintech working in the financial inclusion space and enabling the art of digital payments will eventually lead to them partnering with the government and banks to capture demographic information and create risk profiles that would reduce first repayment loss ratio / high NPAs in this sector.

The highly successful Business Correspondent initiative of the government, through Banks and allied partners, could be leveraged to integrate the extensive customer information held by Bank Mitras and Bank Sakhis, harnessing technology, and enabling due diligence on loans and their speedy disbursal.

This marriage of technology, digitization, and on-ground interventions will help provide a safer, data-driven approach to credit lending, with insights on creditworthiness, repayment ability, among others, thereby reducing risk and increasing the lending landscape for SMEs and MSMEs.

Perhaps a setting up of an agency for direct funding to SMEs and MSMEs could also provide the requisite financial support required by the sector that would go a long way in mitigating the liquidity and credit-access crisis that exists in the sector today.

In addition to the above measures, if corporate taxes could be further reduced, even a 10 percent cut in surcharge, it would infuse new liquidity into the system. Slashing EPF contribution to 10 percent instead of the current 12 percent would automatically create a larger liquidity pool for employees that could lead to increased spending, creating a virtuous cycle of demand generation and consumption, giving the economy a shot in the arm that it desperately needs.

The writer is the Founder & CEO of FIA Global, a fintech company. Views are personal.

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Budget 2022: Nirmala Sitharaman did not succumb to ‘feel-good’ factor

In the round-up to the Budget, there was a general perception that there could be populist measures like rejig of tax slabs, increase in the standard deduction, etc. to provide a feel-good factor. However, it’s very heartening to note that the finance minister in the Budget placed before the Parliament on 1 February succumbed to no such temptation and on the contrary, her proposals were much forward-looking.

The major amendments with respect to individual taxation are discussed:

Filing of updated return of income

With an objective of voluntary compliance, it is proposed that an individual can file an updated return of income (even if an original or amended return of income is not filed) to offer additional income and pay the tax (and interest) due on it along with additional tax as prescribed.  Such voluntary updation of return can be done any time within twenty-four months from the end of the relevant assessment year. Conditions have been stipulated when such voluntary updation cannot be done like when any assessment/reassessment for that year is pending, etc.

Virtual digital assets

In recent times, there has been a lot of discussion on cryptocurrencies and India’s position on the same. The budget reinforces a few overarching steps on this behalf. India will have its own central bank digital currency, a digital rupee based on blockchain technologies to be issued by the Reserve Bank of India (RBI) in 2022-23. Accordingly, a definition of a virtual digital asset is sought to be introduced in the Indian Income-tax Act, 1961 (Act). The gains from the sale of such assets are going to be taxable at a rate of 30 percent.

It is also proposed that no deduction would be allowed towards the expenses (other than the cost of acquisition of such assets) and the loss, if any, would not be allowed to be set off against any other income. To ensure that such gains/ losses are appropriately reported in the return of income, it is also proposed that the payer shall deduct tax at the rate of 1 percent of the sum to be paid. Another important aspect is that in the case of gifting of such virtual digital assets, the recipient will be subject to tax.

Payment in relation to COVID

Any sum paid by the employer to the employee or by any person to any individual in respect of the expenditure incurred towards his/ her medical expenditure or towards family members for treatment of COVID  shall not be considered as a taxable income, subject to the conditions as may be laid down. Any monetary consideration received by a member of the family of a deceased person from the employer of deceased person or in case of receipt from any other person/ persons (up to an aggregate of not exceeding Rs 10 lakh in the later), within 12 months of the date of such death, shall not be considered as taxable income.

Rationalisation of surcharge

Surcharge applicable on Long Term Capital Gain (LTCG) on sale of listed equity shares and equity oriented mutual funds stands capped at a maximum of 15 percent, whereas there was no cap on other LTCGs. It is now proposed to cap the maximum surcharge at 15 percent on all types of LTCGs.

Tax relief to persons with disability

As per the existing provisions, an individual/ HUF is eligible for a deduction in respect of a) expenditure for the medical treatment, training, and rehabilitation of a dependent, being a person with a disability; or b) the amount paid to LIC or any other insurer for the maintenance of a disabled dependent. The aforesaid deduction is allowed only if the lumpsum payment/ annuity is available to the differently-abled person on the death of the parent or guardian. It is now proposed to allow the deduction even if the lump sum/ annuity payment is received during the lifetime, i.e., upon attaining the age of sixty years or more of the individual or the member of the HUF in whose name subscription to the scheme has been made.

These are some of the measures which have been introduced in the Budget which addresses very topical issues and makes this Budget forward-looking.

The writer is Tax Partner, EY. Views are personal.

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UPSC Civil Services Prelims, IFS 2022 notification out; apply at upsconline.nic.in till 22 February

The official notifications for the Indian Forest Service (IFS) examination 2022 and the Civil Services (Preliminary) Examination (CSE) 2022 have been released by the Union Public Service Commission (UPSC). Interested aspirants can view the notification and register for the exams at the official website at https://upsconline.nic.in/.

Steps to register for UPSC CSE and IFS exam 2022:
―    Visit the official website at https://ift.tt/Nz8FpkB19
―    Click on the link for online application for UPSC exams and select the link for the exam you wish to take
―    Register yourself at the UPSC portal and complete the application
―    Pay the UPSC application fee and submit the completed application
―    Take a printout of the completed UPSC application for future reference

Direct link to apply is here.

According to the official notice released by the UPSC, candidates can apply for the exam by 6 pm on 22 February. The exam will be held by the UPSC on 5 June this year.

Eligibility criteria:

The exam is open to candidates who are between the ages of 21 and 32 years, as on 1 August this year.

For CSE, applicants must hold a graduate degree from any recognised university or any equivalent qualification. Aspirants who are appearing for the final exam of their undergraduate degree are also eligible to sit for the exam, provided they submit proof of passing their graduation exam at the time of the UPSC Main examination.

For IFS exam 2022, applicants must possess a degree in Animal Husbandry and Veterinary Science, Chemistry, Geology, Botany, Physics, Statistics, Mathematics or Zoology. A degree in Forestry, Agriculture or Engineering from any recognised university in the country is also valid for appearing in the exam.

View the CSE prelims 2022 notification here.
View the IFS 2022 notification here.

Application fee: 
UPSC aspirants have to pay an application fee of Rs 100.  For women/ST/SC/PWBD applicants, no application fee will be charged.

The UPSC aims to fill 861 vacancies through the CSE exam and 161 posts through the IFS recruitment.

For more details related to the exam syllabus, eligibility criteria and so on, candidates can visit the official website of the UPSC.

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Budget 2022: Some hits and misses in retail, consumer sector

The Budget 2022-23 is highly focused on ‘growth’ and ‘capex spending’ across sectors and is a positive step in the right direction. For a ‘multiplier effect’ which the consumer retail sector looks out for, Budget 2022-2023 seems to have strategically chosen to address the ‘supply’ side, instead of giving a ‘direct booster’ to the demand-side for increasing disposable income.

In the medium to long-term, Budget 2022-23 seems to be aiming at giving a good push to infrastructure by significantly increased capital expenditure, with a renewed focus on supply chain and logistics, and domestic manufacturing. This should, in the medium to long-term, result in a strong employment generation, buoyancy, and growth in the economy, thereby benefiting the sector.

Key takeaways for the sector from the Budget 2022-23:

Capital expenditure

Large capital expenditure increase of 35.4 percent in FY 2022-23 vs FY 2021-22, taking the capex of the government to 2.9 percent of GDP. This is the highest-ever allocation for capital expenditure in the last 10 years. The money spent on infrastructure would help create jobs and boost the consumer economy.

Supply chain / logistics

As a part of the ‘PM Gati Shakti’ initiative, a Unified Logistics Interface Platform designed for ‘Application Programming Interface’ will be set up. This is expected to provide for efficient movement of goods through different modes, reducing logistics cost and time, assisting just-in-time inventory management, and eliminating tedious documentation. Most importantly, this may provide real-time information to relevant stakeholders, and improve international competitiveness.

The sector would be happy to see the Budget’s focus on improvement in supply chain/logistics by proposing setting up multimodal logistic parks, 100 cargo terminals over the next three years. This measure would not only help in reducing transportation and other supply chain-related costs but also help the sector expand its reach.

SEZ Act to be replaced

The Special Economic Zones Act will be replaced with new legislation that will enable the States to become partners in ‘Development of Enterprise and Service Hubs’. This is likely to cover all large existing and new industrial cover enclaves to utilise the available infrastructure and enhance the competitiveness of exports.

Digitisation measures

The measures around Digital Banking and Digital payment such as 75 Digital Banking units in 75 districts of the country by Scheduled Commercial Banks are likely to provide a big push to the digital banking infrastructure of India.

The continued financial support for the Digital Payment ecosystem will continue so as to promote the use of payment platforms that are economic and user friendly and likely to support e-commerce activities.

Startup status

Current provisions to qualify as an eligible start-up inter alia require the start-up to hold a certificate of eligible business from the Inter-Ministerial Board of Certification and to be incorporated on or after the first day of April 2016 but before the first day of April 2022. Due to delays in set-up owing to COVID, the period of incorporation of the eligible startup has been extended by a year from March 31, 2022, to March 31, 2023.

Beneficial tax rate of 15 percent

Straight from the wish list of the sector, the beneficial tax rate of 15 percent for new manufacturing companies has been proposed to be extended by one year viz. from 31 March 2023 to 31 March 2024.

Again, from the wish list, 100 percent exemption proposed in respect of amount received by an individual on medical treatment of COVID for self/family members. Also, a 100 percent exemption is proposed in respect of the amount received by a member of the family of a deceased person from the employer of the deceased person. Amount received from non-employees on the death of a person exempt to the extent of Rs 10 lakhs. This benefit will be applicable effective April 1, 2020.

Customs duty reduced

Customs duty reduced on inputs required for the manufacture of consumer goods such as simply sawn diamonds, camera lens used in mobile phones, specified parts of transformers used in chargers and adapters may help in enhancing domestic value addition.  Removal of customs exemption on certain items, and providing concessional duties on the raw material that go into the manufacturing of intermediate products will support the Government’s objective of ‘Make in India’ and ‘Atmanirbhar Bharat’ especially in sectors like electronics, gem, and jewellery, etc.

Overall, the Budget seems to have focused more on longer-term value creation which is expected to create the right enabling platform for employment, incomes, and consumption, rather than short-term benefits with respect to ‘putting more money in consumer wallets’ or special subsidies or support to the industry. However, some expectations around rationalization of ESOP taxation, Equalization levy, set off of unabsorbed losses for retail sector on amalgamation, etc. have not been dealt with in the Budget 2022-23.

Paresh Parekh is Partner and National Tax Leader for Consumer and Retail Sector, EY India. Nitesh Malpani, senior tax professional with EY India, has also contributed to this story. Views expressed are personal.

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Petrol, diesel prices today: Rates unchanged on 3 February, check here what you need to pay in your city

Petrol and diesel prices remained unchanged in the country on Thursday, 3 February.

In Delhi, fuel is relatively cheaper than the rest of the metros because the state government had earlier decided to reduce the Value-Added Tax (VAT) on petrol, bringing down the price of the fuel in the city by about Rs 8 per litre.

At a cabinet meeting chaired by Chief Minister Arvind Kejriwal, it was decided that the VAT on petrol will be reduced from the present 30 percent to 19.4 percent, leading to a cut of around Rs 8 per litre, officials said.

The price of petrol after the VAT cut will go down from the current Rs 103 per litre to Rs 95 per litre, sources told PTI.

Earlier, the petrol price in Delhi was higher as compared to the NCR cities in Uttar Pradesh and Haryana, where the state governments had announced a VAT cut following the Centre reducing the excise duty on fuel prices.

The Centre had on the eve of Diwali, announced excise duty cut on fuels resulting in a sharp decrease in petrol and diesel prices across the country. The government had cut the price of petrol by Rs 5 and that of diesel by Rs 10. Following this decision, several states, mostly ruled by National Democratic Alliance (NDA) and allies have also cut the Value Added Tax (VAT) on petrol and diesel prices.

Opposition-ruled Punjab and Rajasthan also followed the cue to announce the biggest reduction in petrol prices. Petrol price in Punjab was further reduced by as much as Rs 16.02 per litre and diesel by Rs 19.61 a litre as a result of the combined impact of the excise duty and VAT cut, according to price lists shared by state-owned fuel retailers. VAT on petrol price was cut by Rs 11.02 while that in diesel was cut by Rs 6.77 in the state. In Ladakh, diesel saw the most reduction as rates have come down by Rs 9.52 per litre. This is because of a cut in VAT on top of Rs 10 a litre fall in excise duty.

In Delhi, petrol costs Rs 95.41 a litre while the rate of diesel was Rs 86.67 per litre.

In Mumbai, petrol can be bought at Rs 109.98 per litre and diesel costs Rs 94.14 for one litre.

In Chennai, a litre of petrol is priced at Rs 101.40. On Thursday, the price of a litre of diesel was Rs 91.43 per litre.

Also Read: Click here for Petrol Price

Petrol in Kolkata costs Rs 104.67 per litre while diesel costs Rs 101.56 a litre.

While petrol can be bought at Rs 107.23 in Bhopal, which is a cut by Rs 6.27, diesel costs Rs 90.87 per litre.

Following are the prices of diesel and petrol in a few metros and Tier-II cities in the country:

1. Mumbai

Petrol - Rs 109.98 per litre
Diesel - Rs 94.14 per litre

2. Delhi

Petrol - Rs 95.41 per litre
Diesel - Rs 86.67 per litre

3. Chennai

Petrol - Rs 101.40 per litre
Diesel - Rs 91.43 per litre

4. Kolkata

Petrol - Rs 104.67 per litre
Diesel - Rs 89.79 per litre

5. Bhopal

Petrol - Rs 107.23 per litre
Diesel - Rs 90.87 per litre

6. Hyderabad

Petrol - Rs 108.20 per litre
Diesel - Rs 94.62 per litre

7. Bangaluru

Petrol - Rs 100.58 per litre
Diesel - Rs 85.01 per litre

8. Guwahati

Petrol - Rs 94.58 per litre
Diesel - Rs 81.29 per litre

9. Lucknow

Petrol - Rs 95.28 per litre
Diesel - Rs 86.80 per litre

10. Gandhinagar

Petrol - Rs 95.35 per litre
Diesel - Rs 89.33 per litre

11. Thiruvananthapuram

Petrol - Rs 106.36 per litre
Diesel - Rs 93.47 per litre

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Chandrashekhar Azad Ravan: Man who wears azadi with swag

For decades, Indian politicians portrayed austerity and abstemiousness in public. But as soon as ageism started vanishing from Indian politics, in stepped authenticity and hard-core puffery.

Sample Chandrashekhar Azad’s description on Wikipedia: “He has established himself as Dalit icon and he is known for his style. Azad does something more: His style is ostentatious. It rejects docility, minimalism and discretion. It is not quietly elegant, but emphatically flamboyant. It flaunts Raybans alongside homespun, replaces hipster beards with the twirled 'tache. It is azadi with swag.”

That happens to be a young Dalit leader of contemporary times, not our freedom fighter with the same name. The adjectives aren’t intended just for self-promotion but are also conscious catering to a new electorate.

So, who is Chandrashekhar Azad? Why is he being talked about as the next big thing in Dalit politics? And why is he contesting from the Gorakhpur Urban seat pitting him against current Uttar Pradesh Chief Minister Yogi Adityanath?

Azad aka Ravan is an Indian lawyer and Dalit-Bahujan rights activist. A self-professed Ambedkarite, he is the co-founder and national president of the Bhim Army. To add to his growing legend, in February 2021, Time magazine featured him in its annual list of 100 Emerging Leaders who are Shaping the Future.

Azad was born in Chhutmalpur in Saharanpur district, Uttar Pradesh. He came to prominence as a Bahujan leader after he put up a hoarding on the outskirts of his village that provocatively said: “The Great Ch****s of Ghadkhauli Welcome You”.

The story began with Azad, Satish Kumar, and Vinay Ratan Singh founding the Bhim Army in 2014, an organisation that works for the emancipation of Dalits through education in India. It runs free schools for Dalits in western Uttar Pradesh.

The Azad Samaj Party (Kanshiram) was launched on 15 March 2020 (the 86th birth anniversary of Kanshiram, the founder of the Bahujan Samaj Party), ostensibly to become part of mainstream politics.

Cut to the present, where Azad is taking pedal to metal, challenging the incumbent. To many Uttar Pradesh poll watchers, there is no way Azad can be serious competition to Yogi.

Then why contest a losing seat? When a political rookie takes on a big gun, the limelight also focuses on the challenger. That helps immensely in establishing the challenger, sends his message across and the media strobe lights do the rest.

It’s as if Azad has taken a leaf out of his predecessor’s book. In 1987, the prestigious seat of Allahabad (Prayagraj) was the scene of a major political battle. VP Singh was contesting and his challenger was none other than Kanshiram, virtually unknown then.

During campaigning, Kanshiram was holed up in a hotel. A bunch of journalists landed up to see him. One of them happened to be a Brahmin triggering a rant from Kanshiram. Brahmins dominating the bureaucracy and suppressing Dalits.

A sign of the times as that positioning benefited Kanshiram immensely during that campaign. He shot to prominence. His message got across in a high decibel campaign. Even as he clearly knew that he couldn’t defeat VP Singh.

That scenario will play out again — this time in the Gorakhpur Urban seat where the mighty Yogi Adityanath would be set for a big ticket win. Yet, Azad Ravan would acquire new sails.

Fair to say, Azad had tried for an alliance earlier with Akhilesh Yadav of Samajwadi Party(SP). That left a sour taste. He declared that he felt cheated by the SP. It had reneged on its promise to offer his party 25 seats to contest. Akhilesh said he would try to ensure that two seats were set aside for Azad's party. But Azad was no longer interested.

"I will defeat him {Adityanath}, we need organisational strength for it and we have that. Their failures are plenty... inflation, COVID handling, unemployment recruitment scams, law and order and women's security, this government has failed on all counts," he said.

“People of Gorakhpur will repeat the history of 1971 when they defeated a sitting chief minister," he said. That reference is to Congress-O leader Tribhuvan Narain Singh, who was from Varanasi and took oath as chief minister in October 1970. He was not an MLA then. He contested a bypoll from the seat of Maniram in Gorakhpur in 1971 but lost. He was forced to resign.

Interestingly, the BSP has been a consistent second runner-up on the Gorakhpur Urban seat in the last three Assembly elections. In 2017, BSP secured 11 percent votes, in 2012, it got a 14 percent vote share. Azad is eyeing the same vote bank as the BSP did.

The BJP also gets a large chunk of Dalit votes in Gorakhpur as Yogi himself keeps their issues in focus. Yuva Vahini, a right-wing affiliate organisation, invites Dalit youth regularly to Yogi’s events.

Azad Ravan’s attempts as a challenger can be interpreted as two-fold: One, push the interests of his own base and solidify his position. And Two, project himself as an alternative of Mayawati in Dalit politics. So far, he has not made any direct comments against Mayawati.

Poll pundits would keep a close eye on how the Dalit vote-bank reacts to Azad and what the BSP does.

For any political movement to garner strength and move forward there has to be a ground opportunity, space for manoeuvre and a contextual edge. In Azad’s case, the backstory is linked to Kanshiram. The increasing disconnect and failure of Mayawati in carrying forward the legacy of the BSP has given Azad that space for a manoeuvre.

The Dalit Shoshit Samaj Sangharsh Samiti, abbreviated as DS-4,  was founded on 6 December 1981 by Kanshiram to organise dalits and other oppressed groups of India.  DS4's slogan was "Brahmin, Thakur, Bania chhor, baaki sab hain DS-4". ("Leaving Brahmins, Thakurs and Banias, everyone else is DS-4."). The organisation was absorbed by the BSP in 1984.

Gauging the simmering resentment against the political ostracism towards Dalits, Kanshiram recruited disgruntled intellectuals and government employees to give wheels to the caravan of the Bahujan movement, writes Suraj Yengde, the author of “Caste Matters.”

“Educated and with a confident outlook, the young breed of Dalits are now aiming to give life to Ambedkar’s vision — of becoming a part of the ruling class of the country. Almost every student organisation, social and political outfit subscribes to the legacy of Ambedkar,” Yengde writes. This is exactly where Azad fits in.

Kanshiram understood that emotional appeal was a far more powerful way to use radical anger that would help tackle the oppressor. His deft editorial skills also found expression. The popular The Oppressed Indian and the Bahujan Sanghatak were his organisation’s mouthpieces.

Azad said his party is open to stitching an alliance with others and maintained that his fight has always been with the RSS and the BJP.

The 34-year-old Azad says, he wants to emancipate fellow Bahujans through education. His organisation helps educate minorities in western Uttar Pradesh. He wants them to pursue rights and literacy like Ambedkar envisioned in the Constitution.

Azad and the Bhim Army also “spearheaded a campaign for justice” in the case of the fatal gang-rape of a 19-year old Dalit woman in Uttar Pradesh’s Hathras. He also became one of the most popular faces in the protests against the Citizenship Amendment Act in 2020.

Cameras caught him standing outside the Jama Masjid in Delhi with a copy of the Constitution in one hand in 2020. Azad also read the preamble to the Constitution.

Ravan is pugnacious and confrontational, even as he assiduously sticks to the Dalit rhetoric and a familiar script. It is definitely azadi with swag.

The author is CEO, nnis. Views expressed are personal.

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Why there’s a sudden surge in international efforts to destabilise Modi government

In recent days, a medley of episodes has occurred abroad, the significance of which merits deeper analysis.

Just days ago, the effective mouthpiece of the British establishment, the Financial Times, abused Prime Minister Narendra Modi as a fascist, by using a well-known hack, the son of a former Lord Chamberlain to the Queen. However, his alleged expertise on India was woefully missing in a book he wrote on the country that had won accolades from the usual suspects, including the octogenarian economics Nobel Laureate of tiresome omniscience. This egregious libel had been preceded a few days earlier by another tired hack repeating the cliché about Netaji Subhas Bose as ‘pal of Hitler’, merely exposing his own inability to engage in credible posthumous libel because the evidence of Bose’s unsparing opposition to Nazism is well-documented. But the imperatives of career and lucre apparently trump honour and professional competence for someone groomed over decades by foreign masters for deployment against India.

These two ineffectual barbs of insignificant moment were preceded by a Pakistani ISI organisation getting India’s former vice president, Hamid Ansari, to lustily slander in Washington a country that has accorded him innumerable evidently undeserved privileges.

A number of other episodes are worth noting to grasp the emerging pattern which is reaching a shrill crescendo of brazen denunciations as well as significant policy actions abroad, aimed against Narendra Modi’s elected government. Most Indian commentators on British and American policy apparently lack serious knowledge and grasp of their domestic and foreign policies, which is why they failed to apprehend the political context of the passage of the infamous Islamophobia Bill in the US Congress.

The Islamophobia bill, aimed singularly against India, would require the disreputable USCIRF, dominated by evangelists, to report India’s alleged depredations against its Muslim population.

The passage of the Bill, even as Islamists renewed assaults against the US homeland, was the outcome of concerted efforts of US government agencies and the Pakistani ISI, which only required US Congresswoman Ilhan Omar to place it before the Congress.

Disappointingly, the Bill received the backing of the entire Democrat Jewish caucus and was later applauded by the White Houses and it now only remains to be passed by the US Senate, which is evenly split between the two political parties and the outcome will be decided by the casting of a US Vice President, Kamala Harris, notorious for anti-India prejudices.

Two minor episodes of greater underlying significance should also be noted. An important legal action on caste discrimination has been launched by the California Department of Fair Employment and Fair Housing against an Indian entrepreneur in the US Silicon Valley. It is shockingly being cited widely to denounce Hindu India’s allegedly innate racist caste prejudices, though there is no evidence whatsoever to support the allegations in this particular legal action. But febrile caste insinuations have entered US political consciousness, with an unpardonably unscholarly book on caste being praised by former president Barrack Obama and the University of California gratuitously including caste as a ‘protected category’ in relation to discrimination, partly due to the unproven Silicon Valley accusations, which defence representations highlight have no merit.

More concerning is intelligence from a high-level source that apart from the intensifying and public animus of US Democrats against emerging India, senior Republicans are also voicing supposed unease about Modi’s alleged anti-minority policies against Muslims, Christians and Dalits, the rainbow alliance sought by India’s political Opposition to corner the BJP. The degree of international coordination of attacks against the Modi government on similar issues was underlined by a shameful broadcast by the BBC a few weeks ago, accusing Prime Minister Modi of being the ‘fountainhead’ of what was implied is a developing pogrom against Indian Christians.

Quite clearly, the foreign campaign to destabilise the Modi government and impact India’s electoral politics has gathered momentum in recent weeks with the approach of nationwide state Assembly polls. Of course, the cynical international agents have joined hands openly with a disgruntled domestic Opposition that fears permanent political oblivion, if a second or third election is lost, with its implications for acquiring funds while in office.

The international campaign against the incumbent Modi administration is mainly sponsored by Western governments as well as the Sino-Pakistani alliance even if the visible face of the downstream protagonists may appear more innocuous.

What they all share in common is the conviction that undermining India and its government by military action at its border is a difficult proposition and the primary endeavour must be to subvert it from within by acting in concert with India’s domestic political opposition. The goal regarded as feasible is to abet the ascent of a weak and pliable government in India that can be forced to bend to the will of foreign powers. What is desired is the counterpart of the Manmohan Singh government, with a thoroughly compromised Rahul Gandhi and his acolytes heading it.

It is this context that explains the multiple apparently unrelated episodes that have occurred in recent days though preceded by much more serious actions to which the beleaguered Modi government felt obliged to respond with defensive countermeasures. It retreated from laudable policy measures legitimately enacted by parliament and desisted from justifiable police and penal action against outright criminality. These retreats by the government included the rescinding of the farm laws that had virtually universal acclaim of policy analysts and were indeed proposed by the political Opposition that subsequently repudiated them. Other self-preservatory government responses include tolerating the outrageous violation of the law by CAA protesters, followed by orchestrated lethal riots.

The Modi government subsequently allowed the capital to be held hostage for a whole year and then burn on Republic Day, with police in the national capital thrashed mercilessly. It may be sadly judged that the Modi government had rightly chosen not to precipitate bloodshed with firm action, which is exactly what the sponsors of the chaotic criminality had hoped for.

An absolutely key role has been accorded by India’s foreign adversaries to Khalistanis because of Modi’s presumed personal reluctance to act forcefully against them for fear of spilling blood that would only promote their separatist goals. The volatility of Punjab, India’s critical border state, offers a golden opportunity to cause a massive setback to India that is difficult for its foreign adversaries to ignore. Too much of this issue is in the public domain to require further elaboration, but some unpleasant hard facts need to be understood by Indians.

There is evidence on Indian government files that the bombers of Air India’s Kanishka were sent from Pakistan and trained at Fort Langley by the CIA and suggests that US agencies have outsourced support to Khalistani activism against the Indian Union to a supine Canada. In addition, Indian diplomats and editors are being taken for a ride by Indian-origin British spokespersons, with official ties, who are desperately trying to play down the level of Khalistani activism in the UK by imparting misleading impressions.

India’s unstoppable rise to power is alarming for many. Regional powers like China and Pakistan are threatened because it would alter the balance of power, ending China’s historic aspirations for regional imperium and threaten the very survival of the artificial entity that is Pakistan. At a more general international level, India’s rise would end European dominance of the world that began with Christopher Columbus’ voyages in the late fifteenth century. Such a scenario prompts intolerable psychic angst and the fear is that India and China might find it wise to cooperate rather than persist with self-destructive mutual rivalry, a potential setting pregnant with adverse implications for the new Pax Romana that came into existence with European conquest of the Americas.

Within this larger picture of global geopolitical dynamics, some specific issues are prompting the growing Western hostility towards India, of which the installation of Netaji Subhas Bose’s statue at India Gate is a major unsuspected contributor. It appears that the deeper and hugely significant implications of installing Netaji Subhas Bose’s statue at the iconic India Gate national memorial have not been grasped by Indians. His statue there will dominate the consciousness of future generations of India and constitutes the abandonment of the default of the national ethos of non-violence implanted by Gandhi though mostly honoured in the breach since India’s 1962 Himalayan debacle.

It is now being replaced by Bose’s espousal of violent action to defend the nation, the issue which divided him from Gandhi and his acolytes and prompted the thwarting of his Congress Presidency in 1938. This is huge and Modi has quietly delivered, in his usual inimitable subtle way, a massive psychological incendiary that will reverberate through India becoming Bharat for generations to come. It is going to restore the exhortation, enjoining violent resistance to adharma, of the Lord Krishna in the Bhagavad Gita.

Finally, a specific recent policy enactment of the Modi government has galvanised the immediate Anglo-American and European hostility, which accounts for the timing of the spread of canards against him. Of course, the electoral schedule from 2022 to 2024 also has a bearing on the swelling foreign hysteria though its shrillness also indicates a degree of impotence to stop Modi’s popular juggernaut.

For Pakistan, it is mostly about Jammu and Kashmir and the fear instilled by Modi’s willingness to engage in retaliatory military action not just across the LoC, which India had desisted from in the past, but across the international boundary itself. But buried in the revised FCRA of 2020 are stringent provisions that severely hinder the use of foreign funds for religious proselytism in India and interference in its domestic affairs, of the kind over Kundakulum revealed by Wikileaks.

This is a matter of the utmost importance for global evangelists and their ultimate political state patrons because the Modi government has thrown up a veritable ‘bund’ against religious conversion without legislating specifically against it. This is very ‘big deal’, to put it colloquially, since the US has long perceived religious conversion as the vehicle for taming India by creating a loyal constituency within it. Hence, the unending abuse of all things Hindu on the basis of prodigious quantities of a contrived academic research focus on caste to enhance and create further socio-political divisions within Indian society and relentless propaganda as well to promote the fabrications.

The rewards evangelists reaped during India’s acutely compromised UPA government of 2004-14 was religious conversion en masse of Andhra Pradesh and its further consolidation in Tamil Nadu, masquerading under the counterfeit guise of political atheism. India had also given the green light for turning Nepal into a loyal Christian outpost (a third already Christian converts), like India’s Northeast, whose legendary fighters can then be deployed as cannon fodder against China through Tibet. It is this terrifying surrender of Indian sovereignty to which Modi put a stop in 2014, much to the chagrin of its adversaries and frenemies.

The author taught international political economy for more than two decades at the London School of Economics and Political Science. Views expressed are personal.

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