31 January 2021

Eco Basics: What is the Economic Survey?

In India, there is hardly any economic event that captures popular imagination as much as the Union Budget. In this Budget series, The Explainer will focus on the complex budget jargon that puts off even 'interested-in-budget' souls.

What is a Fiscal Year?
Any twelve-month period that is used for submission of accounts, taxation purposes and to state financial reporting by private and public sector companies is called a Fiscal Year.

In India, the Government has laid down the provision that the 12month starting on April 1 and ending on March 31 of next year will be treated as a Fiscal Year.

To put it in perspective, this article is being written on 31 January 2021, i.e., in Financial Year 202021 (FY21). This is also called Fiscal Year ’21.

In the same way, the financial year for 202122 will start on 1 April 2021 and will end on 31 March 2022. So on 1 April 2021, we will enter Fiscal Year ’22. 

What is the Economic Survey?
The Finance Minister's Budget Speech contains two major components: Part A and Part B.

Part A of the Speech contains the Economic Survey while Part B comprises the Union Budget Speech.

The Economic Survey is an assessment of the performance of the Indian economy in the financial year going by. For example, the Economic Survey 2020–21 presents an assessment of the performance of the Indian economy in that financial year (i.e., 2020–21). 

The Economic Survey 2020–21 was tabled on 29 January 2020. You can access it here.

What is the Budget?

The Union Budget is a statement of revenues and expenditures for the coming financial year, i.e., the one that starts on April 1 of this year.

Why is the Union Budget presented in February?
The Finance Minister of India presented the annual Union Budget for 2021–22 in the Parliament of India on February 1. It is typically presented in February (and not in March) for the following reasons: 

(a) After its presentation, the Budget is tabled in the Parliament so that MPs can, over the next few days, discuss and debate the various provisions listed in the Budget. 

(b) After the parliamentary debate, any amendment to the original provision (like increasing or decreasing the allocation for a said ministry/program and rolling back any budget proposal) will have to be tabled, discussed, passed, and brought into law by the Parliament. 

(c) Also, the administrative system, especially in case of tax administration, would need to be geared up to reflect any change in the financial, taxation or any other system.

I hope this is good! Please leave feedback in the comments section.

18 January 2021

The MbS Phenomenon


In this Explainer, I will focus on the ambitious Mohammed Bin Salman, the Crown Prince of Saudi Arabia. MbS, as he is usually referred to, has, in a very short time, come to dominate the tangled political landscape of West Asia (I prefer this term to the usual Middle East).

An aside on the name: In Saudi society (and generally in the Arabian Peninsula), a man’s name includes the name of his father (pretty much like in large parts of India). Bin means ‘son of’; so, Mohammed bin Salman means son of Salman.

Also, in this article you would find ‘Mohammed’ spelt in two different ways; I have taken the Saudi government accepted spellings of the names of the leaders.  

Who is Mohammed bin Salman?

Mohammed bin Salman is the Crown Prince of the Kingdom of Saudi Arabia. As the Crown Prince, he is next in line to succeed his father and King, Salman bin Abdulaziz Al Saud. (Understanding the name of the King: Salman, son of Abdulaziz; Al Saud is the name of the ruling house/dynasty.)

Virtually unknown in the corridors of power before his meteoric rise, MbS was appointed the Crown Prince in June 2017. Soon after his father became the King, MbS was appointed the Deputy Crown Prince; his cousin and the son of King Salman’s brother Mohammad bin Nayef, was forcibly relieved of his office by MbS.  

Today he is also the kingdom’s Deputy Prime Minister, Minister of Defence, Chairman of the Council for Economic and Development Affairs, and Chairman of the Council of Political and Security Affairs.

MbS is the most powerful person in today’s Saudi Arabia. The King, his father, trusts him blindly and has stood by him even as the calls for the Crown Prince’s removal for his involvement in the botched Yemen War and the Jamal Khashoggi murder saga grow louder.

MbS is seen as an ardent reformer by his supporters, while his detractors describe him as megalomaniacal and impetuous. His supporters point to the several reforms he has ushered in the deeply conservative country: lifting the ban on women drivers, allowing cinemas and music concerts, and introducing a spate of economic reforms.

MbS’ detractors, and there are many, cite his campaign in Yemen and the ill-planned embargo against Qatar as examples of his whimsical behaviour.

They also describe him as power-hungry who cannot tolerate dissent; the jailing of thousands of political dissidents, including women activists is a case in point. It is interesting to know here that the women activists were jailed for demanding driving rights for women. Ironically, MbS lifted the ban on women drivers and yet the women activists were jailed for calling for the same reform! Now, you may find this behaviour difficult to decipher. Well, it is easy if you understand the purport of MbS’ game plan: you cannot demand rights and get them; you will get rights ONLY if the King or the Crown Prince decide to give you rights – in other words, so it is the top-down approach that’s at work here.  

Another example is his treatment of the Prime Minister of Lebanon, Saad Hariri. When Hariri arrived in the Kingdom to meet King Salman, he was bundled to an unknown location; there was a complete blackout of the news concerning Hariri, a leader of a sovereign nation. One week later, Hariri was forced to tender his resignation from the prime minister’s post of his country from the soil of a foreign nation.

A Luxury Prison
The incident that shook the ground beneath the feet of elite Saudis took place in November 2017. Around 200 prominent Saudis, including the former Crown Prince Muhammad bin Nayef and Bakr bin Laden, the head of Saudi Binladin Group (a construction giant), were rounded up and detained for several months at the Ritz-Carlton Palace Hotel on the orders of MbS. The entire operation was described as a campaign against corruption and embezzlement; the detained were accused of enriching themselves at the cost of the Saudi State. It is believed that a few of those detained were tortured and forced into giving up their wealth. Bakr bin Laden and his two brothers were forced to transfer their 36 per cent shareholding in Saudi Binladin Group to a state-controlled company, overseen by MbS.    

The Jamal Khashoggi Saga
Jamal Khashoggi was a Saudi Arabian journalist and an insider in the Saudi royal court. He fled to the U.S after running afoul of the current royal administration in Saudi Arabia. A vociferous critic of the Saudi Arabian royal house, especially the Crown Prince Mohammad bin Salman, he was a columnist for the Washington Post newspaper and head of an Arab news channel. MbS had accused Khashoggi of working with the Kingdom’s rivals like Iran and Qatar.

On 2 October 2018, he visited the Saudi Arabian consulate in Istanbul to collect documents pertaining to the dissolution of his marriage to a Saudi Arabian woman; the documents were necessary for him to get married to his Turkish fiancée. He was murdered inside the consulate by Saudi Arabian intelligence officials. Till date, no trace of his body has been found.

The murder of Jamal Khashoggi has since thrown West Asia into turmoil. The Khashoggi saga has embroiled Saudi Arabia and Turkey in a war of words, with the U.S. squeezed between its two important allies. The following are the major players in the Khashoggi saga: Saudi Arabia, Turkey, the United States, Iran, Qatar, and the Muslim Brotherhood.

Erdogan's Wicked Glee
Turkey directly implicated Saudi Arabia of carrying out the murder on its soil, even pointing a finger at MbS for his involvement. Turkish President Recep Tayyip Erdogan claimed the possession of unimpeachable evidence of the involvement of the Saudi Crown Prince, suggesting that the order for the murder “came from the highest authorities in the Saudi administration”.

Why did the Turkish President get so worked up about the murder of a Saudi dissident? The answer to this seemingly distasteful question lies in the ‘great power’ ambitions of the two countries.

We know that Saudi Arabia is the de facto leader of the Muslim World; however, Turkey, under Erdogan, wants to become the centre of the Muslim World, just like the Ottoman empire was before its eventual collapse in 1922. Erdogan, an Islamist, has a grand vision of becoming the voice of the Muslim World, and he has made no effort to conceal his ambitions.

Erdogan is a firm supporter of the Muslim Brotherhood, an Egyptian extremist Islamist organization with a wide support base in the Muslim World. The Muslim Brotherhood is an anti-monarchy, pro-Sharia group. The Muslim Brotherhood came to power after its newly floated political party won the Egyptian elections in 2012, a development that rang loud alarm bells in the capitals of the monarchies in the Muslim World.

The anti-monarchy, pro-Sharia core ideology of the Muslim Brotherhood raised the hackles of the Saudi monarchy who felt threatened by the hardcore Islamist who was now the president of Egypt, a neighbouring country. Alarmed by the spectre of the spread of the Muslim Brotherhood’s ideology in Saudi Arabia, the Saudi Arabia royal house instigated the Egyptian army to oust the Muslim Brotherhood from power and take over the country. Thus, in July 2013, barely a few months after coming to power, the Islamist President of Egypt was ousted and jailed on charges of terrorism.

The Saudi Arabian involvement in the ousting of the democratically elected government in Egypt angered Erdogan, a die-hard supporter of the Muslim Brotherhood. The murder of Jamal Khashoggi in Istanbul, Turkey’s largest city, came as a blessing to put the Saudis on the mat. He leaked evidence of the involvement of the Saudi Crown Prince in the Khashoggi murder case in a calibrated manner; in fact, the method was so effective that it has been called “death by a thousand leaks”.

Saudi Arabia botched its response to the Khashoggi murder saga; from firmly denying its involvement to calling it a rogue intelligence operation without concurrence of the royal house, the Saudi Arabian government came across as confused and unprepared for the massive backlash from the international community.

To begin with, the United States called on the Saudi Arabian royal house to come clean on its role in the Jamal Khashoggi murder. Since then, the U.S. has spoken in multiple tongues; this is because the Donald Trump White House stood by MbS, even while the Central Intelligence Agency (CIA), the U.S. premier external spy agency, pointed to the direct involvement of the Crown Prince in the murder of the journalist. It is well known that there is no love lost between Trump and the country’s numerous spy and security agencies.

So, why did the U.S. stand by Mohammed bin Salman? The most important reason for this is Washington’s Iran policy. The U.S. policy in West Asia is centred around Iran; Washington has been categorical in stating that it will do all to stop Iran’s “wave of regional destruction and global campaign of terror”.

An enemy’s enemy is a friend. This truism defines the relationship between the U.S. and the Sunni nations in West Asia. The Sunni Muslim nations, like Saudi Arabia and the United Arab Emirates, deeply distrust Shia Iran, accusing it of fomenting terrorism in their nations. So, to counter Iran, the U.S. needs Saudi Arabia, the region’s most powerful nation and the fulcrum of the Sunni Muslim World. Saudi Arabia, under MbS, is at the forefront of the anti-Iran brigade; the Saudis see Iran as an existential threat. In fact, Saudi Arabia even backs Israel (Saudi Arabia and Israel do not have diplomatic relations, owing to the Palestinian issue) in the latter’s covert and overt operations against Iran, spread across the region, especially in Syria, Iraq, and Lebanon.

What about the U.S.’ professed love for the protection of rights of freedom of expression, right to dissent, and religious freedom? Well, in international politics, respect for democracy, human rights, morality, ideology are matters of convenience; they can be expended at the altar of national interest.


17 January 2021

GK Topics for Interviews at B-Schools, Banks, & Civil Services

This is my first post in almost a year. From today I will make it a norm to blog. 

This post is for those who are preparing for Interviews at India's leading b-schools. An interview is, usually, a free-ranging conversation. I am sharing my list of important GK areas to have a better crack at b-school interviews. 

International Issues – Politics, Economics, & Social

  • U.S.: American elections, politics and policies of Donald Trump, violence at U.S. Capitol, names of members of Joe Biden administration. 
  • China: Belt & Road Initiative (BRI), militarization of South China Sea, political & military muscle-flexing, economic problems in China, aging, repression at home (like crushing of dissent - Jack Ma), Coronavirus related issues. 
  • West Asia: Recognition of Israel by leading Arab powers; nuclear ambitions of Iran; normalization of relations between Saudi Arabia and Qatar; Yemen conflict.
  • Korean Peninsula: Political contrasts between North Korea and South Korea; North Korean nuclear & missile games; South Korea K-Pop culture.
  • Assorted Issues: Brexit and its impact on the UK, elections in Uganda, Swedish strategy in handling COVID, and Nagorno-Karabakh conflict.

National Issues – Politics, Economics, & Social

  • Indian Economy: GDP growth pangs, problems facing the Indian economy, important facts and figures.
  • Farm bills: Highlights and controversial issues.
  • Stimulus packages: Highlights and various measures, especially concerning MSMEs.
  • COVID: Spread and impact on people, healthcare, governance, and economy (with focus on Mumbai and Kerala models)
  • Assorted Issues: West Bengal politics, environmental issues, and infrastructure problems.

This is not an exhaustive list, but I am sure this will provide you with basic preparation issues for interviews at b-schools.