Modi Unveils First Budget; Pakistani Terror Group Allies with ISIS; Amb. Dobbins Urges Afghan Power-Sharing

India

Modi government’s unveils its first budget

Prime Minister Narendra Modi’s new government unveiled its first budget on Thursday (Hindustan Times, NDTV, BBC, Livemint). Finance Minister Arun Jaitley, who delivered his speech in the Lok Sabha (India’s lower house of parliament) spoke of reforms that seek to revive growth and limit higher borrowing in the country’s economy.

Jaitley stressed fiscal prudence and made it clear that "we cannot spend beyond our means." Jaitley told the parliament further that the new government had inherited a "challenging" situation from the previous Congress-led government, one of low growth and high inflation.

Jaitley raised limits on foreign investment in the defense and insurance sectors from 26 percent to 49 percent. Jaitley also set a fiscal deficit target of 4.1 percent of gross domestic product (GDP) for the year ending March 31, though he said meeting that target would be "daunting." Jaitley said the deficit would shrink to 3.6 percent in 2015-16 and 3 percent in 2016-17. The minister established an ambitious target for infrastructure in India by committing to building 23 kilometer (14 miles) of highways a day.

Jaitley also committed to provide clarity on the goods and services tax (GST) this year. The GST aims to improve tax compliance, widen the tax base, and reduce transaction costs of businesses. On the controversial "retrospective taxes" — which give the government the right to raise tax demands on concluded deals, including overseas Indian assets — the government clarified it would not "ordinarily" create new liabilities. The previous government’s policy of imposing retrospective taxes had created an uneasy business environment for foreign companies.

In his speech, Jaitley also said the government would spend more than $1.13 billion to modernize 100 Indian cities into "smart cities." Giving education a strong push, Jaitley proposed setting up five more Indian Institutes of Technology (IITs), five more Indian Institutes of Management (IIMs), and four more All India Institutes of Medical Sciences (AIIMS). Jaitley emphasized his government’s commitment to providing electricity and sanitation in all homes by 2019.

Jaitley also set aside approximately $33 million for a giant statue of Sardar Vallabhbhai Patel, one of the founding fathers of India, in Modi’s home state of Gujarat (NDTV). Critics were quick to compare this allocated amount to the $25 million allocated to women’s safety and almost $16 million allocated to women’s welfare in the budget.

The Indian economy has slowed in recent years, growing by 4.7 percent in 2013-14. Growth in India was 8.4 percent in 2010-11. To read the full text of Jaitley’s budgetary speech, click here.

Indian Supreme Court asks for NGO details

The Indian Supreme Court (SC) granted the Central Bureau of Investigation (CBI) three more months on Tuesday to provide details about all registered non-governmental organizations (NGOs) in India (Livemint, Times of India, IBNLive). NGOs came under judicial scrutiny when the SC asked CBI to provide details about such registered organizations and their financial statements in September 2013. The request was based on a public interest litigation (PIL) filed by M. L. Sharma, an advocate who alleged irregularities in an NGO linked to Anna Hazare. A social activist, Hazare had started an indefinite hunger strike on April 5, 2011 to exert pressure on the Indian government to enact a stringent anti-corruption law.

CBI informed the bench that most NGOs are not filing income tax returns. CBI said further that while states like Andhra Pradesh, Bihar, Haryana, Madhya Pradesh, West Bengal, Odisha, and Maharashtra only provided partial information to CBI requests, the states of Gujarat and Tamil Nadu did not share any information about the NGOs in their respective states.

When CBI initially expressed difficulty in collecting information on NGOs, and requested the task be handed over to states, the bench had said "If CBI can probe murder cases then why not probe against NGOs? You can do so many things, you do it also." According to information gathered by the Asian Centre for Human Rights through the Right to Information Act (RTI), the federal and state governments released more than $1 billion to various NGOs between 2002 and 2009, averaging over $155 million per year.

BJP MP caught in burglary humiliation

Giriraj Singh, member of the Parliament and the Bharatiya Janata Party (BJP) leader, was embroiled in yet another controversy when $190,833 was recovered by the police after a burglary at his home in the central state of Bihar on Tuesday (Times of India, Business Standard, DNA, BBC). Singh had reported that only $837 was stolen during the robbery.  On Wednesday, Singh called the burglary a "political conspiracy" and said: "The money which was burgled from my house is not mine but my cousin’s. He is going to clarify it to everyone."

The police recovered cash, expensive watches, and jewellery from the four alleged robbers, which included Singh’s bodyguard, domestic servant, and apartment security guard. Opposition parties demanded the arrest and termination of Singh’s parliament membership (Economic Times). Bihar Chief Minister Jitan Ram Manjhi said: "Patna police and Income Tax have already been probing the source of the wealth recovered. If need arises other forms of inquiry could be ordered."

Singh had made headlines during the recent elections in India when he had stated that anyone who opposed his party leader, now Prime Minister Narendra Modi, should be sent to Pakistan.

— Neeli Shah and Jameel Khan

Pakistan

Pakistani terror group allies with ISIS

According to The Telegraph, Tehreek-e-Khilafat, a Pakistani terror group, which has claimed responsibility for a series of past attacks in Karachi, announced its allegiance to Abu Bakr al-Baghdadi’s Islamic State (formerly the Islamic State of Iraq and al-Sham or ISIS) this week (The Telegraph).  Tehreek-e-Khilafat would be the first group outside of the Middle East to ally itself officially with Baghdadi’s group, which has engaged in active hostilities with Al Qaeda-aligned forces in Syria. The declaration represents a step towards global, rather than regional influence, for Baghdadi’s group.  The statement declared: "We are praying from the almighty Allah to give us chance in our lives to see the expansion of Islamic State boundaries toward the Sub­Continent and Khurasan region in order to hoist the flag of Islamic State here."

Drone strike in North Waziristan kills six

A U.S. drone strike in the Datta Khel area of North Waziristan reportedly killed at least six people Thursday (ET, Dawn).  Pakistan’s Foreign Office would not confirm the strike.  More than 2,000 people have been killed by U.S. drones since the beginning of such operations in Pakistan according to data collected by the New America Foundation.  The most recent drone strike occurred on June 18; earlier in the year there was a six month lull in strikes. Bonus Read: The Return of the Drones, Bailey Cahall and Emily Schneider, Foreign Policy.

Prime Minister visits Karachi

Pakistani Prime Minister Nawaz Sharif visited Karachi on Thursday and received a briefing on law enforcement and security in the city (ET).  Sharif emphasized the need for security and expressed fears of backlash in Pakistan’s cities to the Zarb-e-Azb operation being conducted in North Waziristan.  Karachi has seen a recent wave of violence that the government has responded to with targeted operations.  According to a report presented by Hyder Jamali, the acting Inspector General for the Sindh Police, 31,336 people have been arrested in targeted operations in Karachi since the operations began (Dawn).  Bonus Read: Will Karachi Become the Next Waziristan, Michael Kugelman, South Asia Channel.

Pakistan expresses support for peaceful Afghan transition

Pakistan’s Foreign Office expressed its support for a peaceful democratic transition in Afghanistan on Wednesday, as tensions continued to mount over allegations of electoral fraud (ET).  The statement emphasized that the preliminary results were not final and expressed the need for resolution of the crisis under Afghanistan’s constitution stating: "We are aware of the announcement made by the Independent Election Commission regarding preliminary results of the second round and noted the statement that these are not final. It is our earnest hope that all related issues would be resolved peacefully, through dialogue, in a timely manner and within the framework of Afghanistan’s Constitution and laws."  Pakistan joined a number of other countries that have recently urged a peaceful resolution of the Afghan crisis, including the United States, the United Kingdom, and Russia.

Afghanistan

Special Representative for Afghanistan and Pakistan urges power-sharing

Amb. James Dobbins, the United States’ Special Representative for Afghanistan and Pakistan, stated that power-sharing and patronage would be necessary for resolving the ongoing electoral crisis in Afghanistan at an Asia Society event in Washington, D.C. on Wednesday (Pajhwok, Bloomberg, TOLO News).  During the event, Dobbins said: "I think that some degree of patronage allocation and power-sharing is going to be essential for a new government to be formed that retains the support of all elements of society" and warned that "a winner-take-all system in Afghanistan is not a workable [option]."

Six deminers killed in Herat

An attack on a de-mining convoy — operated by de-mining company Halo Trust – travelling to the Kohsan district of Herat province killed six de-miners on Thursday (Pajhwok).  According to Col. Abdul Rauf Ahmadi, a police spokesman, three other de-miners were kidnapped from the convoy.  The Taliban have not commented on the attack.  Thursday’s attack is not the first time de-miners have been targeted.  A de-miner was killed in June in an attack in Qarabagh district of Ghazni province.

Police seize drugs reportedly on way to Iran

Afghan police seized 140 kilograms of drugs in western Nimroz province a police official announced on Thursday (Pajhwok).  Brig. Gen. Mohammad Qasim Jangal Bagh, the provincial police chief, told Pajhwok Afghan News that the drugs were on their way to Iran and that the smugglers had escaped.  Nimroz province has long served as a gateway for the smuggling of drugs into Iran.

­–David Sterman

Edited by Peter Bergen