October 26, 2022
Good morning. In today’s either/view, we discuss whether Rishi Sunak is the right choice as UK’s Prime Minister. We also look at the data centre projects in Uttar Pradesh, among other news.
📰 FEATURE STORY
Rishi Sunak As UK PM – Is He The Right Choice?
Amid the political turmoil brewing in Britain, Rishi Sunak has emerged from the chaos as the only hope for the country. He was handed the key to 10 Downing Street on Tuesday after Liz Truss resigned from the position of leader of the UK within six weeks. The first-ever Indian-origin Prime Minister of the United Kingdom – is Sunak what the country needs?
Still reeling from the blow of exiting the European Union in 2020, Britain has been locked into a state of perma-crisis without any clear signs of resolution. It can be argued that Rishi Sunak is receiving the most challenging economic and political inheritance compared to every other British leader since the Second World War. After losing the race to Liz Truss six weeks ago following former PM Boris Johson’s resignation, Sunak has gained a second chance.
The third prime minister of the UK this year is faced with many pressing problems. Set to lead the governing Conservative Party, Sunak must attempt to rein in an economy sliding toward a recession and reverse the disastrous effect of his predecessor’s brief experiment in libertarian economics. Liz Truss pushed for an aggressive tax-cutting policy amid soaring inflation and markets on edge. Sunak had warned that her plans for unfunded tax cuts would lead to disaster, which proved to be the case.
The “mini-budget” introduced by Truss’ government led to the pound plunging by 3% against the dollar hours after it was pushed. The currency has devalued 17.5% this year. Additionally, the price of 10-year government bonds fell by 5%, completing a record one-week fall of 11%. The economic problems due to the pandemic and the war in Ukraine further the crisis in Britain. Under these circumstances, Sunak will take the centre stage with the responsibility of stabilising this rocking boat.
One of the wealthiest politicians in Westminster, the 42-year-old was born to Hindu parents of Indian descent and holds degrees from the University of Oxford and Stanford University. He worked for Goldman Sachs, an investment bank and hedge fund prior to entering the parliament for the first time in 2015.
He began his political career as an MP from Richmond (Yorks) constituency after which he quickly rose through the ranks to become a junior minister under the Theresa May government. He was first recognized by the public when he was named chancellor of the Exchequer in 2020 by Johnson. A tumultuous nation is not unfamiliar to the Hindu politician as he became the finance minister on the brink of the Covid-19 pandemic.
VIEW: Sunak is what the UK needs
Rishi Sunak gained widespread praise for his approach to battle the pandemic in Britain. He offered financial support packages to businesses and workers affected by the imposed lockdowns. He offered furloughs and loans for ailing companies as well as vouchers for restaurant visits. His infamous scheme, ‘eat out to help out,’ instigated consumer demand by subsidising food and drinks at participating restaurants, posing as a win-win that kept businesses afloat while ensuring that nobody would starve.
By virtue of accurately predicting the disastrous effect of Truss’ economic policies, many believe that Britain is in safe hands with Sunak leading it. The pound rose 0.15% against the US dollar moments after his win became apparent. Against the backdrop of global uncertainty, supporters of Sunak emphasise the need for his leadership.
Most of Sunak’s career has been defined by fiscal conservatism. He has always advocated for a small state and low taxes and constantly portrays himself as a pragmatist. Notably, analysts have stated that he will have to display pragmatism to unite his party and restore the much-needed stability the country craves. Although this cost him the post of Prime Minister in September, his accurate assessments have pushed him onto the path of Britain’s top job.
COUNTERVIEW: The UK is in the wrong hands
Like every other politician, Rishi Sunak ran into his fair share of controversies. Apart from the tax evasion charge on his wife, Akshata Murthy, his image was permanently tainted when a video of him admitting that he took money from “deprived urban areas” surfaced. He boasted about shifting money from these areas to fund projects in the Kent commuter belt and this sparked outrage since it went against the government’s rhetoric of ‘levelling up’ the country and spreading wealth beyond the south-east.
Despite having a lack of popular mandate, Rishi Sunak did not make any effort to reassure the general populace who have pressing concerns about rising costs. On the contrary, he seems keen to turn off household support energy bills the following April as he aims to reduce national debt at the expense of saving people from poverty. In the absence of fiscal expansion and the energy price guarantee, inflation is bound to be higher along with a deeper recession.
Sunak put himself in hot water with the conservatives when he decided to run for Prime Minister only hours after his mentor and senior Boris Johnson resigned in July. He lost the support of top conservative leaders including Sajid Javid who was once a close ally to him. His campaign video titled ‘Ready for Rishi’ came out only hours after Johnson resigned giving Sunak the image of a backstabber.
- Rishi Sunak said it was fairytale economics. That was one thing he got right – The Guardian
- Rishi Sunak, UK’s next PM, faces major economic problems – AP News
- UK PM polls: What led to Rishi Sunak’s defeat against Liz Truss 6 weeks ago? – Mint
- Rishi Sunak more suited than Conservative rivals to be PM—if UK can look past his skin colour – The Print
- The Guardian view on Rishi Sunak: profits in the City, austerity in the country – The Guardian
- Is Rishi Sunak the right person to lead the UK? – Aljazeera
- Rishi Sunak to become the next UK prime minister after months of turbulence – Reuters
- Rishi Sunak’s Second Chance – by Andrew Whitehead – NDTV
- Who Is Rishi Sunak? Oxford Graduate With Punjab Ancestry And Son-In-Law Of Infosys Founder – ABP News
- Rishi Sunak, Now the Front-Runner for U.K. Prime Minister, Could Say, ‘I Told You So’ – The New York Times
What is your opinion on this?
(Only subscribers can participate in polls)
a) Rishi Sunak is the right person to lead the United Kingdom now.
b) Rishi Sunak is not the right person to lead the United Kingdom now.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
Modi government’s self-reliance goals for Army forcing India to attempt an impossible task
For the Left:
Mallikarjun Kharge can succeed only if he builds a broad social coalition
🇮🇳 STATE OF THE STATES
Data centre projects (Uttar Pradesh) – The state government has signed deals worth ₹16,000 crores to set up data centres to house shared IT activities and equipment to store and process information and applications. The current policy will be amended to entice more investors. The government will set up smaller capacity centres to attract ₹30,000 crores of investment in the coming 5 years. Among the companies involved are NTT Japan, the Adani Group, and the Hiranandani Group. The first data centre park will be inaugurated on October 31 at Greater Noida.
Why it matters: The data of Indian and multinational companies are in offshore locations due to a lack of infrastructure here. This leaves it vulnerable to cyberattacks and manipulations. The Centre is pushing an aggressive data centre policy with data security and fast internet speeds. Currently, less than 20% of domestic data is preserved at onshore locations.
Tribals demand power connections (Andhra Pradesh) – Tribal villagers of the Alluri Seetharamana Raju district staged a protest with hand-made lights, demanding electricity for their village. They led the protest against the Jagan Mohan Reddy-led government. In May, Reddy laid the foundation stone for the world’s largest integrated renewable energy storage project in the Kunol district.
Why it matters: The President of the tribal association said the village hasn’t had electricity since the country’s independence. The area where the village is located has dense forests with wild animals. In June, state energy minister Balineni Srinivasa Reddy said the government would provide nine hours of continuous free power during the day to farmlands. The state’s energy sector is under ₹80,000 crores of debt, allegedly the fault of the previous TDP government.
Sun temple gets solar power (Odisha) – The famous 13th century Sun Temple at Konark will be fully illuminated by solar power from the next financial year. The Grid Corporation of Odisha (GRIDCO) said a power purchase agreement was signed between Gridco and M/S Konark Suryanagari Private Limited to buy a 10mw solar tower. The agreement states solar power will be available for 25 years at ₹2.77 per kWh.
Why it matters: The decision is part of the new and renewable energy ministry’s scheme to power the temple with 100% renewable energy. The state government has allocated ₹150 crores to develop the area under the Konark Heritage Development Project. It’ll include a permanent weather monitoring system to capture real-time data of salt-laden winds and upgrade the temple’s entrance.
Tech Mahindra’s investment (Gujarat) – Tech Mahindra will expand its operations in the state over the next five years. This includes hiring 5,000 employees. It’s part of an MoU signed with the Gujarat government under its IT/ITES policy. The company will build cutting-edge digital engineering services in the state to help businesses with digital transformation challenges. It’ll also help them build new digital products and create new revenue streams.
Why it matters: The state government has signed 15 MoUs with Indian and foreign companies under its Employment Generation Incentive (EGI) and the Atmanirbhar Gujarat Sahay Yojana to target investments in the IT sector. It’ll help create more than 26,000 skilled IT employment opportunities.
Empowering youth through sports (Nagaland) – Chief Minister Neiphiu Rio said the state government is committed to empowering youngsters through sports. Speaking at the closing ceremony of the 22nd NSF Martyr’s Memorial Trophy, he cited the state’s football heritage and the teams that have done the state proud. He said political issues and a lack of infrastructure hamper sports development. Despite this, he said the state government will have a new sports development plan.
Why it matters: The government has made a bid to host the National Games. He asked sportspersons of the state to renew their efforts to succeed in competitions. He asked sports associations to rededicate themselves to work closely with the Nagaland Olympic Association. Recently, the state successfully hosted the Nagaland Olympic & Paralympic Games with more than 3,000 participants.
🔢 KEY NUMBER
$2.5 billion – The value of shares overseas investors sold via trading links with Hong Kong as they take their money out of China. Many are concerned about a lack of supportive policies from the recent Party Congress and the zero Covid approach.