Commentary from the South Asia Center on the most relevant news from the region, and suggested “must-read” analyses from the week.

The southern Indian state of Andhra Pradesh officially split in two this week thereby officially creating India’s 29th state, Telangana. President’s rule was lifted as the first popular government came into power as Chief Minister K. Chandrasekhara Rao was sworn in. The city of Hyderabad will remain the capital of both states for a period of ten years. A week after being sworn in as India’s Minister for Rural Development, Gopinath Munde died in a car accident while on his way to the airport to attend a victory rally in his home state of Maharashtra. Prime Minister Modi gave Munde the portfolio of Rural Development, entrusting him with the crucial task of spearheading the government’s battle against poverty in the country side which is home to half of India’s 1.2 billion population. Munde’s death leaves a void in the Cabinet with the BJP now tasked with appointing his replacement. This week also marks the 30 year anniversary of Operation Blue Star, the military operation carried out by the Indian Army on the Golden Temple, the holiest place of worship for Sikhs. The operation left hundreds dead and had deep consequences leading to the assassination of Prime Minister Indira Gandhi by her two Sikh body guards, which in turn led to the anti-Sikh riots in which thousands of Sikhs were killed.

Relevant News Stories
How Narendra Modi May Have Evolved into ‘Modi 2.0’ (The World Post)
With New Government, Analysts Expect Policy Shift for Selling Public Companies (New York Times)
Operation Blue Star: How an Indian army raid on the Golden Temple ended in disaster(The Telegraph)

The Pakistan Muslim League Nawaz (PMLN) government in Pakistan presented its second annual budget in the National Assembly this week. Despite criticism from the opposition and the media, the budget was widely recognized as balanced, business friendly, and growth oriented focusing on price stability, job creation, and infrastructure development. There was no new tax imposed, minimum wage increased from PKR 10,000 to 12,000, and the mark up on long-term financing was reduced from 11.4 percent to 9 percent. A Tax rebate was announced for the promotion of foreign direct investment in manufacturing, construction, and housing sectors while the markup rate on exports finance was reduced from 9.4 per cent to 7.5 per cent. Despite the aforementioned progressive measures, and the initiation of public health insurance for over 100 million people, coupled with a 25 percent increase in direct cash support and coverage to financially vulnerable sections, the budget deficit was decreased from 8.2 percent to 5.8 percent. The government aims at bringing it down further to 4.9 percent by the next financial year. With these measures, the government expects GDP growth rate to reach 7 percent by the end of FY 2016-17.

Relevant News Stories
Russia Lifts Arms Embargo to Pakistan (The Express Tribune)
Budget 2014-15 termed growth oriented (Dawn News)
Pakistan Condemns terrorists attack in Kabul (The News)

Afghan presidential candidate, Dr. Abdullah Abdullah, who led in the first round of elections, narrowly escaped an attempt on his life as twin blasts killed at least 6 people and injured another 22. Dr. Abdullah appeared on national television shortly after the attempted assassination to assure the nation he was unharmed. While the Taliban are suspected for carrying out the attack on Dr. Abdullah’s motorcade during a political rally, no organization has accepted responsibility as yet. Opposing candidate Dr. Ashraf Ghani condemned the attack ahead of the run-off election set to be held on June 14.

Relevant News Stories
Ghani presents his 5 year national economic development policy (Khaama Press)
1800 US Troops for Afghan Counter Terror: Dunford (Daily Afghan Outlook)
Taliban release handover video showing Bowe Bergdahl (BBC News Asia)

Supreme Leader Ayatollah Ali Khamenei commemorated the 25th death anniversary of his predecessor, Supreme Leader Ayatollah Ruhollah Khomeini with a fierce speech reeking of anti-Americanism. America, the Supreme Leader said, has failed to bring Iran “to its knees”. “Despite the sanctions imposed upon it, Iran today is launching satellites and sending live organisms into space and is producing nuclear power,” declared Supreme Leader Ayatollah Ali Khamenei as he paid tribute to the founder of the Islamic Republic. In context of the fast approaching July deadline for a permanent deal between Iran and the P5+1 nations, analysts suggest that Khamenei’s bellicose speech is a piece of political theater where the Supreme Leader adopts the role of “bad cop” contrasted by President Hassan Rouhani’s role of  “good cop”. Addressing a gathering of political and military leaders, Ayatollah Khamenei reminded his audience, and the world, that Iran’s sovereignty remains indomitable and that Tehran remains immune to American influence.

Relevant News Stories
As Iran Gains Influence, Saudi Arabia Revisits Ties Built on Distrust (New York Times)
Iran marks 25th anniversary of Ayatollah Khomeini’s death, knocks U.S. (LA Times)
Iran sandstorm kills at least four in Tehran (BBC)

Bangladesh’s Finance Minister announced that the nations GDP would expand at a rate of 7.3 percent in the fiscal year starting July 1st, the fastest rate of growth in 34 years. The Finance Minister stated that “We have successfully mitigated the pre-election damages and the economy now is back to its robust best,” while also stating that the budget deficit would remain unchanged at 5 percent of GDP. Newly appointed Indian Minister of External Affairs, Sushma Swaraj, is likely to visit Bangladesh this month in what could potentially be her first stand-alone bilateral visit to a South Asian country since assuming office.

Relevant News Stories
Bangladesh Forecasts Strongest Growth Since 1980 as Unrest Eases (Bloomberg)
Bangladesh hopes to solve debate over unsafe garment factories soon (Reuters)

Bangladesh looks to China for deep sea port investment (Port Technology)