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The Reserve Bank of India (RBI) possibly does not get enough credit for the kind of challenges it faces, both internal and external. The RBI is encumbered with a rather thankless task of maintaining fiscal stability while ensuring a fertile environment for growth. Yet, it has done a stellar job, particularly over the last couple of years in the wake of the global pandemic, and is likely to again be the bearer of firewood, as we brace for economic winter.

The global economy may soon be about to see a third phase of contraction since the 2009 Great Financial Crisis (GFC), something that even US Federal Reserve Chairman Jerome Powell admitted to be a possibility given the pace of rate hikes that the Fed has embarked upon. The US markets have been in a heightened state of activity, with the Fed following through, for now, with its narrative of tightening the liquidity conditions through quantitative tightening (QT, or the process of sucking excess liquidity from the system) and with a hike to the Fed funds rate.

The interconnectedness of the global economy, underpinned by the reserve currency status of the US Dollar, has forced central banks around the world to follow suit, irrespective of the state of their economies. While curtailing inflation has been a priority across the globe, many tend to forget that this inflation has been imported from the US on account of the latter’s loose monetary policies of the last decade.

Policy Moves

The last Federal Open Market Committee (or FOMC) meeting saw Powell show resolve in increasing rates to tame inflation, with an increase in the benchmark rate to a 3-3.25 percent range, the highest since 2008.

While India has not been immune in the past to the US monetary policy movements, 2022 has been a relative period of quiet. The relative resilience of the Indian Rupee and by corollary the economy has been attributed to better access, demographic dividend, start-ups, and government policies. While all these factors have contributed, the role of the RBI policy stance goes largely underappreciated.

The RBI approach to rate hikes is a great example to buttress the above point. The RBI has raised the repo rate by 140 bps, since the beginning of 2022, on a base of 4 percent. In sharp contrast to the US Fed raising its target rate by 3 percent on a base of near zero, the RBI’s repo rate hike trajectory has been a lot less steep.

Instead of trying to follow the US Fed’s cue on rate hikes, the RBI has taken a slightly different course, and paced the hikes to focus on the challenges of the Indian economy. While the Fed’s need to rein in debt is evident, the data of the last two decades points towards the futility of this exercise.For every one percent rise in the interest rates, the interest burden will shave off nearly 4 percent from the US GDP, which emboldens Powell’s assertion about a likely recession.

Also, one cannot ignore the six-to-nine-month lag in monetary policy transmission, and the cascading effect it will have on the economy. While the US is almost certain to see a contraction as large hikes ripple through the economy at a record pace, in India’s case, the impact on growth trajectory is likely to be less onerous. Furthermore, a near normal monsoon, and the upcoming festival season without the COVID-19 restrictions of the last couple of years should further bolster the sentiment.

While the Fed is trying to make the world believe that QT has set in, the sustained level of the Fed balance sheet along will increasing rates will only add to the interest burden of the US.

As the RBI’s monetary policy committee meets from September 28, the committee will be looking at inflation, considering seasonally tighter monetary conditions in September and the impact of the lag in policy transmission while hiking rates. The current rupee depreciation may be less of a concern if the imminent US Fed rate cut cycle’s impact on the calendar year-end exchange rates is considered.

Considering where the US mortgage rates are, the smart money should be lining up to enter India, which, while benefitting the Indian markets, will also possibly contribute to the imported inflation. Once again, we will expect another measured intervention from the ever-reliable RBI.

In a bid to meet the requirements of the liberalised geospatial data regime that was released last year, the central government has released a list of economic- and national security-related strategic and sensitive locations that cannot be mapped and exported, reported BusinessLine on Tuesday.

These sensitive locations include bulk oil and gas depots, and nuclear and military installations among others.

The Central Board of Indirect Taxes and Customs in a notification released on Friday said, “The export of maps and geospatial data with sensitive attributes will be restricted.”

The central department, which comes under the Finance Ministry, said, the transgression of the threshold values the Department of Science and Technology had mentioned in its guideline issued on February 15, 2021, will not be allowed for mapping and collection of location data of the identified installations and facilities, reported BusinessLine.

“For the maintenance of the security of India, it is necessary so to do, hereby prohibits the export of Maps and Geospatial data of spatial accuracy and value finer than the threshold values as specified in Annexure-I,” the department stated.

The threshold values, as per the notification, are: “On-site spatial accuracy - one meter for horizontal or planimetry and three meters for vertical or elevation,” and “gravity anomaly - one milli-gal”. It further added the threshold value in the case of “vertical accuracy of bathymetric data ( study of underwater depth) in territorial waters - ten meters for up to five hundred meters from the shore-line and one hundred meters beyond that”, reported BusinessLine.

The government tagged 52 security installations and secured facilities as 'sensitive attributes' and added that each carries 'stipulated regulations' to prohibit them from mapping and location data sampling.

The directive has listed out 51 “security installations/ features and secured facilities” that have been tagged as “sensitive attributes” with each carrying “stipulated regulations” to prohibit them from mapping and location data sampling.

The notification, for instance, added that all missile test ranges, be it for launch and firing, will 'not to be labelled in geospatial data and map.'

Other locations that are prohibited to be labelled in geospatial data and maps are: oil bulk depots/ storage tanks; LPG/ LNG storage area/tanks; operational control rooms of oil and gas terminals; seizing up of glacier lake depth; all nuclear installations in India; the nation's intelligence agencies and its governance architecture; the space centre and space port; international boundaries with neighbouring countries, reported BusinessLine.

The central intelligence agencies and governance architecture that are barred from mapping include Aviation Research Centre (ARC), Intelligence Bureau (1B), National Security Council Secretariat (NSCS), Research & Analysis Wing (R&AW), and Cabinet Secretariat.

Should promoters be banned altogether from participating in the revival of companies which went sick under their guard? Or should they face restrictions only if the sickness was due to specific wrongs they have committed? These questions have troubled insolvency regulators and lawmakers alike.

Indeed, alarmed by attempts by errant promoters to acquire back the companies they ran, and that too at deep discounts, the lawmakers made urgent amendments in 2017 itself, the second year of life of the Insolvency & Bankruptcy Code (IBC), and barred such promoters from participating in revival of such companies. The bar was widely worded and covered promoters and even other persons on multiple counts.

There have been several cases where the question was whether such disqualified persons were trying to take back their companies through various means. The Supreme Court in 2018 elaborately ruled on such issues in the case of revival of Essar Steel. It highlighted the fact that the IBC contains widely-worded restrictions barring not just errant promoters and other persons, but also persons acting in concert with them or connected with them. Even the seemingly opaque corporate veil would not stop the court — and hence the insolvency regulators — from seeing the underlying reality. The controversies never seem to stop though.

A Nuances, Commercial View

But before we examine the issues in more detail, we come back to the more fundamental question. Should promoters of such companies in insolvency be barred from participating in their revival?

The cynical arguments in favour would seem strong. Surely the promoters have taken care of themselves and siphoned funds — in India or abroad? Or they have ‘enriched’ relatives, and connected persons through loaded transactions leaving a hollow shell of the company? Even if they did not indulge in such things, the argument goes, surely the promoter is incompetent and, if given a second chance, drown the lenders and creditors once again?

The law, however, took a nuanced and commercial view. At the outset, while promoters are not given any preference, they are not discriminated wholesale either. A specific list of disqualifications have been made. Those entering into ‘preferential’ transactions whereby related parties are enriched at the cost of the company are barred. So are wilful defaulters. Also those who have been barred by SEBI from accessing the capital markets. So on.

While generally, these disqualifications are about those who have carried out illegal/harmful activities, promoters and others are not disqualified solely because they took that, or another company, into insolvency. Yet there is one more disqualification which borders on punishing business failure. If a person is connected to a business which has become a non-performing asset, and a year has passed but such default is not cured, such person is also disqualified. Even this bar can be justified on the ground that if a person is already in financial trouble, how can they expect to enter into yet another venture?

It may also be remembered that the scheme of the IBC gives primacy to the wisdom of the Committee of Creditors. Barring such disqualifications, they have wide freedom in accepting or rejecting a particular proposal on merits, and at their choice.

Tough To Establish Links

However, the question is not whether any of the statutory disqualifications are unjustified. The question is whether they are so widely worded that they could cause several problems in practice. The disqualification, for example, applies not only to the errant persons themselves, but also to ‘persons acting in concert’ with them. This term, apparently borrowed from the SEBI Takeover Regulations, has a wide connotation, and covers several persons who may not even have formal links. Even persons ‘connected’ in the specified manner are disqualified, and this word too has been given a wide meaning.

These deeming and widely worded restrictions could end up covering even independent persons and groups who by the fortuitous circumstance of being related to or otherwise have some sort of joint arrangement in a business becoming disqualified.

The other problem is the proving of such connection or acting ‘in concert’. In the Essar Steel case before the Supreme Court, there was fairly deep investigation carried out and connections even in countries such as Bermuda was unearthed. Further, the background of entities such as discretionary trusts were also unravelled. Such inquiry and investigation, however, is a costly affair, and often faces roadblocks of non-cooperating countries that swear to secrecy.

That apart, India particularly is known for informal arrangements between parties where trust, relations, and community network often substitute formal agreements. Tax evasion/avoidance has almost been like a national sport and industry, as most recently the demonetisation exercise demonstrated. Detection of such connections and ‘acting in concert’, and then proving it before an impartial adjudicator can be very difficult indeed.

More Likely Than Not

That said, multiple laws, rulings, and legal principles laid down do help. There is a rich set of judicial precedents under the SEBI Takeover Regulations, the SEBI Insider Trading Regulations, and even under competition law. Courts have, for example, laid down useful principles one of which is the benchmark of ‘preponderance of probability’. In cases of securities fraud and similar acts, a well-accepted principle is that the level of proof applicable is whether it is more likely than not that such a wrong has taken place. This is contrasted with the principle applied for criminal proceedings of proving beyond reasonable doubt. The term ‘persons acting in concert’ also specifically covers even unwritten agreements, and understandings. This too helps the adjudicating authority, and the courts to take a view from the underlying circumstances that there indeed is a connection which disqualifies the parties.

To conclude, adjudicating authorities and courts may well adopt these principles, and apply them in insolvency cases too to disqualify those who attempt to use legal and other subterfuges. At the same time, courts may also help in those cases where parties get unintentionally disqualified due to the wide wording, albeit with the difference that the onus of proof of not being connected may be shifted to such party. All in all, the law, with all its admitted overreach, and even vagueness, is still apt to India’s circumstances. Even if its application in actual cases may continue to be a challenge, the principles are available.

Should promoters be banned altogether from participating in the revival of companies which went sick under their guard? Or should they face restrictions only if the sickness was due to specific wrongs they have committed? These questions have troubled insolvency regulators and lawmakers alike.

Indeed, alarmed by attempts by errant promoters to acquire back the companies they ran, and that too at deep discounts, the lawmakers made urgent amendments in 2017 itself, the second year of life of the Insolvency & Bankruptcy Code (IBC), and barred such promoters from participating in revival of such companies. The bar was widely worded and covered promoters and even other persons on multiple counts.

There have been several cases where the question was whether such disqualified persons were trying to take back their companies through various means. The Supreme Court in 2018 elaborately ruled on such issues in the case of revival of Essar Steel. It highlighted the fact that the IBC contains widely-worded restrictions barring not just errant promoters and other persons, but also persons acting in concert with them or connected with them. Even the seemingly opaque corporate veil would not stop the court — and hence the insolvency regulators — from seeing the underlying reality. The controversies never seem to stop though.

A Nuances, Commercial View

But before we examine the issues in more detail, we come back to the more fundamental question. Should promoters of such companies in insolvency be barred from participating in their revival?

The cynical arguments in favour would seem strong. Surely the promoters have taken care of themselves and siphoned funds — in India or abroad? Or they have ‘enriched’ relatives, and connected persons through loaded transactions leaving a hollow shell of the company? Even if they did not indulge in such things, the argument goes, surely the promoter is incompetent and, if given a second chance, drown the lenders and creditors once again?

The law, however, took a nuanced and commercial view. At the outset, while promoters are not given any preference, they are not discriminated wholesale either. A specific list of disqualifications have been made. Those entering into ‘preferential’ transactions whereby related parties are enriched at the cost of the company are barred. So are wilful defaulters. Also those who have been barred by SEBI from accessing the capital markets. So on.

While generally, these disqualifications are about those who have carried out illegal/harmful activities, promoters and others are not disqualified solely because they took that, or another company, into insolvency. Yet there is one more disqualification which borders on punishing business failure. If a person is connected to a business which has become a non-performing asset, and a year has passed but such default is not cured, such person is also disqualified. Even this bar can be justified on the ground that if a person is already in financial trouble, how can they expect to enter into yet another venture?

It may also be remembered that the scheme of the IBC gives primacy to the wisdom of the Committee of Creditors. Barring such disqualifications, they have wide freedom in accepting or rejecting a particular proposal on merits, and at their choice.

Tough To Establish Links

However, the question is not whether any of the statutory disqualifications are unjustified. The question is whether they are so widely worded that they could cause several problems in practice. The disqualification, for example, applies not only to the errant persons themselves, but also to ‘persons acting in concert’ with them. This term, apparently borrowed from the SEBI Takeover Regulations, has a wide connotation, and covers several persons who may not even have formal links. Even persons ‘connected’ in the specified manner are disqualified, and this word too has been given a wide meaning.

These deeming and widely worded restrictions could end up covering even independent persons and groups who by the fortuitous circumstance of being related to or otherwise have some sort of joint arrangement in a business becoming disqualified.

The other problem is the proving of such connection or acting ‘in concert’. In the Essar Steel case before the Supreme Court, there was fairly deep investigation carried out and connections even in countries such as Bermuda was unearthed. Further, the background of entities such as discretionary trusts were also unravelled. Such inquiry and investigation, however, is a costly affair, and often faces roadblocks of non-cooperating countries that swear to secrecy.

That apart, India particularly is known for informal arrangements between parties where trust, relations, and community network often substitute formal agreements. Tax evasion/avoidance has almost been like a national sport and industry, as most recently the demonetisation exercise demonstrated. Detection of such connections and ‘acting in concert’, and then proving it before an impartial adjudicator can be very difficult indeed.

More Likely Than Not

That said, multiple laws, rulings, and legal principles laid down do help. There is a rich set of judicial precedents under the SEBI Takeover Regulations, the SEBI Insider Trading Regulations, and even under competition law. Courts have, for example, laid down useful principles one of which is the benchmark of ‘preponderance of probability’. In cases of securities fraud and similar acts, a well-accepted principle is that the level of proof applicable is whether it is more likely than not that such a wrong has taken place. This is contrasted with the principle applied for criminal proceedings of proving beyond reasonable doubt. The term ‘persons acting in concert’ also specifically covers even unwritten agreements, and understandings. This too helps the adjudicating authority, and the courts to take a view from the underlying circumstances that there indeed is a connection which disqualifies the parties.

To conclude, adjudicating authorities and courts may well adopt these principles, and apply them in insolvency cases too to disqualify those who attempt to use legal and other subterfuges. At the same time, courts may also help in those cases where parties get unintentionally disqualified due to the wide wording, albeit with the difference that the onus of proof of not being connected may be shifted to such party. All in all, the law, with all its admitted overreach, and even vagueness, is still apt to India’s circumstances. Even if its application in actual cases may continue to be a challenge, the principles are available.

Should promoters be banned altogether from participating in the revival of companies which went sick under their guard? Or should they face restrictions only if the sickness was due to specific wrongs they have committed? These questions have troubled insolvency regulators and lawmakers alike.

Indeed, alarmed by attempts by errant promoters to acquire back the companies they ran, and that too at deep discounts, the lawmakers made urgent amendments in 2017 itself, the second year of life of the Insolvency & Bankruptcy Code (IBC), and barred such promoters from participating in revival of such companies. The bar was widely worded and covered promoters and even other persons on multiple counts.

There have been several cases where the question was whether such disqualified persons were trying to take back their companies through various means. The Supreme Court in 2018 elaborately ruled on such issues in the case of revival of Essar Steel. It highlighted the fact that the IBC contains widely-worded restrictions barring not just errant promoters and other persons, but also persons acting in concert with them or connected with them. Even the seemingly opaque corporate veil would not stop the court — and hence the insolvency regulators — from seeing the underlying reality. The controversies never seem to stop though.

A Nuances, Commercial View

But before we examine the issues in more detail, we come back to the more fundamental question. Should promoters of such companies in insolvency be barred from participating in their revival?

The cynical arguments in favour would seem strong. Surely the promoters have taken care of themselves and siphoned funds — in India or abroad? Or they have ‘enriched’ relatives, and connected persons through loaded transactions leaving a hollow shell of the company? Even if they did not indulge in such things, the argument goes, surely the promoter is incompetent and, if given a second chance, drown the lenders and creditors once again?

The law, however, took a nuanced and commercial view. At the outset, while promoters are not given any preference, they are not discriminated wholesale either. A specific list of disqualifications have been made. Those entering into ‘preferential’ transactions whereby related parties are enriched at the cost of the company are barred. So are wilful defaulters. Also those who have been barred by SEBI from accessing the capital markets. So on.

While generally, these disqualifications are about those who have carried out illegal/harmful activities, promoters and others are not disqualified solely because they took that, or another company, into insolvency. Yet there is one more disqualification which borders on punishing business failure. If a person is connected to a business which has become a non-performing asset, and a year has passed but such default is not cured, such person is also disqualified. Even this bar can be justified on the ground that if a person is already in financial trouble, how can they expect to enter into yet another venture?

It may also be remembered that the scheme of the IBC gives primacy to the wisdom of the Committee of Creditors. Barring such disqualifications, they have wide freedom in accepting or rejecting a particular proposal on merits, and at their choice.

Tough To Establish Links

However, the question is not whether any of the statutory disqualifications are unjustified. The question is whether they are so widely worded that they could cause several problems in practice. The disqualification, for example, applies not only to the errant persons themselves, but also to ‘persons acting in concert’ with them. This term, apparently borrowed from the SEBI Takeover Regulations, has a wide connotation, and covers several persons who may not even have formal links. Even persons ‘connected’ in the specified manner are disqualified, and this word too has been given a wide meaning.

These deeming and widely worded restrictions could end up covering even independent persons and groups who by the fortuitous circumstance of being related to or otherwise have some sort of joint arrangement in a business becoming disqualified.

The other problem is the proving of such connection or acting ‘in concert’. In the Essar Steel case before the Supreme Court, there was fairly deep investigation carried out and connections even in countries such as Bermuda was unearthed. Further, the background of entities such as discretionary trusts were also unravelled. Such inquiry and investigation, however, is a costly affair, and often faces roadblocks of non-cooperating countries that swear to secrecy.

That apart, India particularly is known for informal arrangements between parties where trust, relations, and community network often substitute formal agreements. Tax evasion/avoidance has almost been like a national sport and industry, as most recently the demonetisation exercise demonstrated. Detection of such connections and ‘acting in concert’, and then proving it before an impartial adjudicator can be very difficult indeed.

More Likely Than Not

That said, multiple laws, rulings, and legal principles laid down do help. There is a rich set of judicial precedents under the SEBI Takeover Regulations, the SEBI Insider Trading Regulations, and even under competition law. Courts have, for example, laid down useful principles one of which is the benchmark of ‘preponderance of probability’. In cases of securities fraud and similar acts, a well-accepted principle is that the level of proof applicable is whether it is more likely than not that such a wrong has taken place. This is contrasted with the principle applied for criminal proceedings of proving beyond reasonable doubt. The term ‘persons acting in concert’ also specifically covers even unwritten agreements, and understandings. This too helps the adjudicating authority, and the courts to take a view from the underlying circumstances that there indeed is a connection which disqualifies the parties.

To conclude, adjudicating authorities and courts may well adopt these principles, and apply them in insolvency cases too to disqualify those who attempt to use legal and other subterfuges. At the same time, courts may also help in those cases where parties get unintentionally disqualified due to the wide wording, albeit with the difference that the onus of proof of not being connected may be shifted to such party. All in all, the law, with all its admitted overreach, and even vagueness, is still apt to India’s circumstances. Even if its application in actual cases may continue to be a challenge, the principles are available.

S&P Global Ratings on Monday projected India's economic growth at 7.3 per cent in the current fiscal with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold of 6 per cent till the end of 2022.

In its Economic Outlook for Asia Pacific, S&P said India's growth next year will get support from domestic demand recovery after the coronavirus pandemic.

"We have retained our India growth outlook at 7.3 per cent for the fiscal year 2022-2023 and 6.5 per cent for the next fiscal year, although we see the risks tilted to the downside," it said.

Other agencies have cut India's GDP growth forecast amid higher inflation and rising policy interest rates. Earlier this month, Fitch Ratings slashed the growth estimate to 7 per cent for the current fiscal from 7.8 per cent pegged earlier. India Ratings & Research too had reduced its projections to 6.9 per cent from 7 per cent earlier.

Asian Development Bank has cut the projection to 7 per cent from 7.5 per cent earlier.

The Reserve Bank of India (RBI) expects the Indian economy to grow 7.2 per cent in the current fiscal (April-March). The growth last year (2021-22) was 8.7 per cent.

Indian economy expanded 13.5 per cent in the April-June quarter, sequentially higher than 4.10 per cent growth clocked in the January-March period.

On inflation, S&P Global Ratings pegged the average rate in the current fiscal at 6.8 per cent and projected it to fall to 5 per cent in the next fiscal beginning April 2023.

"India headline Consumer Price Inflation (CPI) is likely to remain outside the Reserve Bank of India's upper tolerance limit of 6 per cent until the end of 2022. That's amid substantial weather-induced wheat and rice price increases as well as sticky core inflation. And food inflation may rise again," it said.

Retail or consumer price inflation has remained above RBI's upper tolerance threshold of 6 per cent for the eighth month in a row and was at 7 per cent in August. Wholesale price inflation remained in double digits for the 17th straight month and was at 12.41 per cent in August.

According to S&P Global Ratings, elevated core inflation would drive up policy rates further in India, and projected policy interest rates to be 5.90 per cent by the end of this fiscal.

To tame stubbornly high inflation, the central bank has already hiked benchmark interest rates by 1.40 percentage points to 5.40 per cent. In its monetary policy review on September 30, RBI is expected to hike rates by another 50 basis points to a three-year high level of 5.90 per cent.

After over two decades, the party president’s office at the AICC will open its doors for ordinary workers” is how a Congress leader described the one possible change expected after the upcoming organisational elections to the President’s post.

Due to security reasons, the Congress President’s designated office at the All-India Congress Committee (AICC) headquarters at 24, Akbar Road in Delhi has virtually been closed ever since Sonia Gandhi took over the reins of the party from Sitaram Kesri in March 1998.

Rahul Gandhi followed suit in his tenure from December 2017 to May 2019, and later Sonia Gandhi continued with this practice after reassuming office in August 2019.

The Special Protection Group had suggested that the Gandhis —  Sonia Gandhi, Rahul Gandhi, and Priyanka Gandhi Vadra — should not officiate from the AICC headquarters.

As a result, Sonia Gandhi’s residence at 10 Janpath, adjoining the party headquarters, became the power centre during all these years, and later Rahul Gandhi’s official home at 12, Tughlak Lane was the go-to-place for Congress leaders.

While easy accessibility was cited as the spur behind the SPG’s proposal, the flipside of the move translated into a denial of access to common party workers, or at least that was the perception created.

With a non-Gandhi is set to become the Congress President now, the AICC could once again reclaim its glory days as a nerve centre of the grand old party, although 10 Janpath and 12 Tughlak Lane will continue to occupy the central place in the party.

While this might be the obvious change on the ground, the bigger challenge for the next Congress President would be to dispel the notion of being a rubber stamp of the Gandhi family.

Congress’ political rivals have already claimed that the incoming chief would be remote-controlled by the Gandhis.

The Gandhis have repeatedly assured of their neutrality in the contest, but reports suggesting that Rajasthan Chief Minister Ashok Gehlot has the blessings of Sonia Gandhi may cast a shadow on the results.

Many in the Congress believe that a ‘puppet’ President would not be able to establish control over the organisation, or bring about the much-needed changes in the party, and the status quo will persist.

The big question is whether the Gandhi family would continue to be the ‘high command’, or the new head would wield those powers.

Sonia Gandhi will undoubtedly continue to be the patron of the grand old party, with Rahul Gandhi as its driving force, and Priyanka Gandhi a key office bearer. Navigating these power centres to establish his writ on the party will be a tough challenge for the new party President.

It may be recalled that the buzz of the installation of KC Venugopal as the titular Congress President in August 2020 led to the emergence of the group of dissenters, known as G-23.

Some of the G-23 leaders, including Ghulam Nabi Azad and Kapil Sibal, have since quit the Congress.

Halting the growing attrition rate will be another tough task for the new chief given that a large number of leaders are feeling frustrated in the Congress following a series of electoral setbacks in states and nationally since 2014, and are easy pickings for other parties.

It would also be interesting to see if the new President reaches out to those who have left the Congress over the years, and tries to bring them back to the party fold.

Apart from dismantling all the walls that the managers or so-called strategists had erected between the leadership and workers from time to time, the other important tasks for the new President would be to accommodate some of the veterans and the side-lined leaders in the decision-making.

For the party’s revival, it is imperative for the leadership to communicate directly with the cadre, to make it fighting fit, and match the powerful machinery of the ruling Bharatiya Janata Party (BJP).

So far, the two names of Gehlot and Shashi Tharoor as candidates are doing the rounds, but a clearer picture of those who have decided to throw their hats in the ring will emerge on October 8, the last date of the withdrawal of nomination papers.

Among the two, Gehlot is a three-time Chief Minister, has a bigger stature, and a large following within the party. Although he is said to have agreed to relinquish the Chief Minister’s post if elected Congress President in accordance with the ‘one-man, one-post’ norm adopted as part of the Udaipur declaration, Gehlot is no pushover.

A wily politician, he is credited with being able to keep his flock together, and outwit his rivals within and outside the Congress.

While Gehlot’s loyalty towards the Gandhi family is unquestionable, the independent-minded politician is unlikely to acquiesce to be a rubber stamp President.

A glimpse of the master strategist's acumen was on display on September 25 night when his loyalists thwarted a meeting of the Congress Legislature Party (CLP) called to elect Sachin Pilot as his successor. As many as 90 legislators owing allegiance to Gehlot submitted their resignations to Speaker CP Joshi, plunging the party and the government in deep crisis. They want a Gehlot nominee and not Pilot to be the next Chief Minister, and that too after the election of the new Congress President on October 19.

However, first things first. While the debate on the fairness of the elections, the neutrality of the Gandhis and the effectiveness of the new President can rage on endlessly, all eyes will be on the first full-fledged contest in the Congress, nearly 22 years after Sonia Gandhi defeated Jitendra Prasada in 2000.

With its re-emergence to power in 2021, the Taliban has given out multiple statements on India, and Kashmir. It has reiterated that it wouldn’t target any country (including India); have no links with LeT or other militant organisations; wouldn’t interfere in the Kashmir issue; and would prefer India and Pakistan to resolve the Kashmir dispute peacefully. However, it also reasserted that it would raise its voice and stand in solidarity with fellow Muslims in Kashmir. While the Taliban’s contemporary rhetoric on Kashmir has remained the same, the ideological factors and interests shall determine its actual policy.

Terror Outfits, Ideology, and Interests

The Taliban share deep relations with al-Qaeda, and all its franchises, especially the Al-Qaeda Indian Subcontinent (AQIS). Some scholars even observe that it is difficult to differentiate the members of AQIS from that of the Taliban.

It is here that the Taliban’s policy will prove crucial for al-Qaeda. True, al-Qaeda’s existence in Afghanistan will not be as useful to the Taliban’s military might as it was during their fight against the West. From hosting bin Laden to sheltering al-Zawahiri in Kabul, the Taliban’s sympathy for al-Qaeda and its jihadist ideology has remained consistent. Interests-wise, al-Qaeda’s overt existence on Afghan soil may jeopardise the Taliban’s ambitions of seeking international legitimacy.

However, covert support to the organisation may enable the Taliban to stay connected with the rest of the jihadi world, and reap material and ideological benefits. This seems to be an easy alternative for the Taliban if it fails to gain international legitimacy. Given these ideological and organisational stakes, the Taliban will hesitate to completely prevent al-Qaeda from using Afghan soil for its activities (including against Kashmir).

The Taliban might also find fewer military advantages from sheltering the JeM. Ideologically, however, the Taliban’s sympathy is much deeper for fellow-Deobandi organisations. In the past, Deobandi organisations that targeted Kashmir, like Harkat-ul-Mujahideen, Harkat-ul-Jehadi Islam, and Harkat-ul-Ansar sought a safe haven and operational space in Afghanistan. The Taliban played a crucial role in the formation of Masood Azhar’s JeM too. Pakistan’s use of Deobandi organisations in Kashmir has only continued to incentivise the Taliban to shelter them on Afghan soil and leverage them to bargain with Pakistan.

LeT, however, enjoys limited operational capabilities, and presence in Afghanistan. It increased its presence in Afghanistan only in 2006 — supplementing the Taliban’s capability to fight the West. It facilitated, recruited, and sheltered members from the Taliban, al-Qaeda, and other Deobandi organisations, and has occasionally supplemented them with manpower. However, despite this limited co-operation, LeT is looked upon with scepticism by several Deobandi outfits. This is for two reasons: ideological contradictions between the LeT’s Ahl-i-Hadith ideology and Deobandism; and LeT’s closeness to the ISI and acting as its proxy on several occasions. Relatively, the Taliban, thus, has a less ideological interest in letting LeT operate from Afghan soil, but the LeT’s proximity to the ISI ensures some bargaining and leveraging power to the Taliban. That is why LeT also operates in Afghanistan, albeit in a limited fashion.

India-Pakistan Factor

On the other hand, the Taliban have tried to shun their over-reliance on Pakistan by engaging with India. The Taliban has invited India to further its military ties and investments, and guaranteed not to harbour any terrorist organisation that can target India. In this regard, India has offered food and humanitarian assistance to the Taliban, and has also re-opened its mission in Kabul — largely to avoid another 90s-like situation in Kashmir.

Overall, the Taliban is attempting to weaken ISI’s influence within the organisation, and this will likely moderate its extent of support to terror outfits targeting Kashmir. However, considering its interests and ideology, the Taliban will likely harbour both anti-Indian and anti-Pakistani outfits. This will help it seek concessions and leverages from both sides. Yet, how the Taliban will tilt in its balance on Kashmir will largely depend on how India and Pakistan can accommodate the Taliban’s interests, and vice-versa.

As the Taliban completes more than one year of governing Afghanistan, it is clear that the organisation of today is no different to that of the 90s. Restrictions on women are imposed, terrorist organisations have continued to seek safe haven, and targeted killings go on. In this context, it is crucial to revisit the Taliban’s promises and policy concerning Kashmir.

The Taliban’s contemporary rhetoric on Kashmir has stayed the same since they first came to power in the 90s. However, indifferent to the rhetoric, its actual policy has been defined by two factors: ideology, and interests. Both of these factors still favour the Taliban to shelter terror organisations that target Kashmir. But, there remains a possibility of change — based on the Taliban’s evolving relations with Pakistan, and India’s willingness to accommodate the Taliban.

Rhetoric And Beyond 

The Taliban’s Kashmir policy has largely remained the same since it initially came to power in 1996. Till 2001, the Taliban maintained the rhetoric of not interfering in India’s domestic matters and Kashmir, and promoting a good relationship with India. In reality, however, a large part of its policy was shaped by its ideology and interests.

India’s intervention to protect the rupee is running down currency reserves at a rate that’s poised to eclipse the drawdown during turmoil a decade ago.

While economists and the Reserve Bank of India aren’t ringing any alarm bells just yet, investors are watching closely given the rupee’s slump to an all-time low last month and the risk of a widening in the current account deficit.

Given a steady buildup in the reserves through to their peak last year, they remain at a much healthier level than during the previous period that covered part of the Eurozone crisis and the taper tantrum triggered by the Federal Reserve.

Also Read: RBI net-sold $19.05 billion in forex market in July to protect rupee

That crisis saw the rupee tumble almost 30% against the greenback between September 2011 and September 2013, making it one of the worst-performing emerging-markets currencies at the time. It’s dropped about 6.8% against the greenback in 2022, which is a much smaller loss than that of most of its peers.

Still, the central bank does need to be mindful that foreign exchange reserves have declined by $90 billion from their September 2021 peak of $641 billion -- a drop of 13.9%, according to RBI data. The drop in the two years a decade ago was 14.3%.

“Falling FX reserves, persistently-high commodity prices, limited exchange rate pass-through to inflation and elevated INR valuations will likely tilt the balance towards a less interventionist FX policy in coming months,” Madhavi Arora, lead economist at Emkay Global Financial Services Ltd., said in a note.

The drawdown has reduced the import cover these reserves provide to nine months, still above a standard benchmark of three months, but far below the 19 months at the beginning of 2021.

So far though, central bank governor Shaktikanta Das maintains that the level of reserves and the banking system are both healthy and well placed to handle any external shocks.

The RBI has said it expects the country’s current account deficit to stay within 3% of GDP, which it judges to be sustainable amid softening global fuel, food and fertilizer prices while portfolio flows and exports pick up.