Google+ Know More , Become Better : December 2014

Dec 31, 2014

Panel for giving coal to end-useplants linked to cancelled mines

CIL shall assess the quantity of coal that could be made available for this dispensation.

An inter-ministerial panel on fuel linkages has recommended providing coal to end-use plants linked to the blocks that have been cancelled by the Supreme Court.

The Standing Linkage Committee (Long Term) recommended that “in view of the scarcity situation of coal, prioritisation of categories of coal supply be done...in case of the de-allocated/cancelled coal blocks,” according to an official document.

The first category is of those end-use plants (EUPs) which already had long-term linkages/LoAs (Letter of Assurances) but were later converted to tapering-linkage.

The second category is of those EUPs which were granted tapering linkages.

Tapering linkages are interim supply arrangement made for power projects where production from linked captive coal blocks was delayed.

“The Committee recommended that coal be supplied to the EUPs subject to availability (of coal),” it said.

“For the purpose of supply of coal...CIL (Coal India) shall assess the quantity of coal that could be made available for this dispensation and keeping that in view, may enter into MoU with EUPs,” it added. The document said that tentatively, additional 5-7 million tonnes of coal may be made available under current arrangement and till March 31, 2015. “Preference would be given to the running plants. Further, coal supply...shall be confined to EUPs under sponge iron/steel and cement sectors only....The Captive Power plants shall be excluded from the above arrangement (because of scarcity of coal),” it said.

EUPs linked with the operational blocks should not be covered under the current arrangements as they are entitled to receive coal till March 31, 2015. EUPs to be supplied coal under current proposal would be offered coal from the mines nearest to them and they should lift coal by road, it added.

EUPs linked with those coal blocks which are under the investigation of CBI and FIRs have been registered against them should not be considered for supply of coal.

Source - The Hindu

[PIB] [Eco] Quarterly Report on India’s External Debt at End-September 2014 Released;

India’s External Debt Stood at US$ 455.9 Billion, Reflecting an Increase of US$ 13.7 Billion Over the Level at End-March 2014; Government (Sovereign) External Debt Stood at US$ 88.4 Billion at End-September 2014 vis-a-vis US$ 81.5 Billion at End-March 2014.

Department of Economic Affairs, Ministry of Finance, Government of India has been compiling and releasing quarterly statistics on India’s External Debt for the quarters ending September and December every year. This press release relates to India’s external debt at end-September 2014.

At end-September 2014, India’s total external debt stock stood at US$ 455.9 billion, recording an increase of US$ 13.7 billion (3.1 per cent) over the level at end-March 2014. The rise in external debt during the period was due to long-term external debt particularly commercial borrowings and NRI deposits.

Long-term debt was US$ 369.5 billion at end-September 2014, showing an increase of 4.7 per cent over the end-March 2014 level, while short-term debt declined by 3.2 per cent to US$ 86.4 billion.

Short-term debt accounted for 18.9 per cent of India’s total external debt at end-September 2014, while the remaining (81.1 per cent) was long-term debt. Component-wise, the share of commercial borrowings stood highest at 35.4 per cent of total external debt, followed by NRI deposits (23.8 per cent) and multilateral debt (11.7 per cent).

Government (Sovereign) external debt stood at US$ 88.4 billion, (19.4 per cent of total external debt) at end-September 2014 vis-a-vis US$ 81.5 billion (18.4 per cent) at end-March 2014.

The share of US dollar denominated debt continued to be the highest in external debt stock at 60.1 per cent at end-September 2014, followed by the Indian rupee (24.2 per cent), SDR (6.5 per cent), Japanese yen (4.5 per cent), and euro (3.0 per cent).

The ratio of concessional debt to total external debt was 9.8 per cent at end-September 2014 as compared to 10.5 per cent at end-March 2014.

India’s foreign exchange reserves provided a cover of 68.9 per cent to the total external debt stock at end-September 2014 vis-à-vis 68.8 per cent at end-March 2014.

The ratio of short-term external debt to foreign exchange reserves was at 27.5 per cent at end-September 2014 as against 29.3 per cent at end-March 2014.

The complete quarterly report of India’s external debt at end-September 2014 is available on the website of Ministry of Finance – www.finmin.nic.in.

Source - PIB

Outrage over BJP MP’s remarks on farmers suicide

Farmers should be “let to die” if they are incapable of or cannot afford farming, Sanjay Dhotre said at a meeting.

Coming on the heels of a dozen reported farmer suicides within three days in Maharashtra’s Vidarbha region, BJP MP Sanjay Dhotre has kicked up a major controversy after he said that farmers should be “let to die” if they are incapable of or cannot afford farming.

“Let these farmers fend for themselves. If crops fail, they will figure out what to do. And if they dying, let them die,” said Mr. Dhotre, the parliamentarian from Akola.

Mr. Dhotre’s comments came at a farmers’ conference in his constituency on Sunday. Revenue Minister Eknath Khadse was on stage and was seen nodding at Mr. Dhotre’s remarks.

"Very few of us know about organic and Genetically Modified crop even as they have been discussed for decades. If this is our situation, imagine the plight of the poor farmers. I have many times spoken in despair…let the farmers die if they must. Those who can afford farming will do it, others will not do it,” Mr. Dhotre said.

Mr. Dhotre came under attack from various corners for “casual” and “insensitive” comments. However, he later clarified that his words were highlighted out of context.

"What I meant was that the various schemes launched for farmers are not doing anything to improve their lives but only making it worse for them. So if the farmers are on their own they might as well be better off. I did not mean it in an offensive manner when I said that if farmers are dying we should let them die. I said it in anger,” Mr. Dhotre explained.

Within a span of 72 hours, 12 farmers had committed suicide in the cotton belt of western Vidarbha, according to the Vidarbha Jan Andolan Samiti, a local farmer interest group.

Mr. Khadse had last month raked up a similar controversy in Akola when he remarked that though farmers had the money to pay their mobile bills they were often found reluctant in clearing their electricity bills. Sena chief Uddhav Thackeray had criticized Mr. Khadse saying his comments were “insensitive.”

Source - The Hindu

AirAsia tragedy: bodies, debris found in Java Sea

Signs of the jet found in shallow waters, about 16 km from its last-known coordinatesAfter three days of intense search, debris of the missing AirAsia aircraft carrying 162 people was found on Tuesday in the Java Sea off Indonesia, but only three bodies have been retrieved so far as mystery remained over the cause of the crash.








Source - The Hindu

Ordinance to amend law on arbitration

To send out a signal to foreign investors that settling commercial disputes in India will no longer be a time-consuming affair, the government has decided to promulgate an Ordinance to amend the Arbitration and Conciliation Act, 1996.

The Ordinance is aimed at making it mandatory for commercial disputes to be settled within nine months and also putting a cap on fee of arbitrator. The Centre has sent it to President Pranab Mukherjee for his assent.

The proposed amendments stipulate that the presiding officer of a commercial dispute will have to clear the case within nine months, reported agencies quoting an unnamed official. The arbitrator will be free to seek an extension from the High Court. But in case of further delays, the High Court will be free to debar the arbitrator from taking up fresh cases for a certain period.

The government had to take the Ordinance route as it wanted the reforms to be put in place at the earliest, the official said.

“Most of the recommendations of the Law Commission have been accepted. While some have been incorporated in the law itself, some of the recommendations will be used while framing rules,” the official was quoted as saying.

The Federation of Indian Chambers of Commerce and Industry (FICCI) said in a statement that the move would make India a more investor-friendly destination and help promote institutional arbitration.

FICCI Secretary-General and Indian Council of Arbitration Director-General A. Didar Singh said the proposed amendment of capping arbitrators’ fee and introducing timelines for giving final awards would make dispute-resolution less expensive and give a push to commercial activity.

It is is aimed at making it mandatory for commercial disputes to be settled within nine months and also putting a cap on fee of arbitrator

Source - The Hindu

[Ed] Impropriety of ordinance

By promulgating ordinances within days of the winter session of Parliament coming to a close, the Narendra Modi government has shown that it is not averse to repeating what his party would have considered a constitutional impropriety, had it been done by a Congress government. The power to issue ordinances is normally to be exercised to bring in urgent legislative measures when Parliament is in recess. It is not one to be resorted to merely because the government of the day lacks a majority in the Upper House or is unable to break a deadlock in Parliament. However, it is seen that inefficient floor management, fear of facing a House in which the incumbent party does not have a majority, and a reluctance to make pragmatic concessions across the floor in the interest of sticking to its legislative agenda are the main reasons for prolonged deadlocks. It is a situation rich in irony as the BJP had often questioned the United Progressive Alliance government’s promulgation of ordinances in close proximity to a parliamentary session. As in the case of the impasse in the Rajya Sabha that occasioned the ordinances recently issued to make legislative changes in the coal and insurance sectors, logjams are often the result of the government’s aversion to resolving issues raised by the Opposition. The Bharatiya Janata Party’s justification for exercising the President’s legislative power is that it had to avoid any further delay in the e-auction of coal blocks; and that raising the cap on foreign direct investment in insurance from 26 per cent to 49 brooked no further delay. And it has now approved yet another ordinance to amend the land acquisition law when there appears to be no urgent need to do so.

On the flip side, it is a fact that the combined opposition, which outnumbers the ruling party and its allies in the Rajya Sabha, was determined to stall the proceedings until the demand that the Prime Minister himself make a statement on the ongoing ‘reconversion’ drive organised by affiliates of the Sangh Parivar was met. Mr. Modi could have intervened at least once to clear the air on allegations that his government was conniving at the controversial ghar vapsi programmes across the country. For a government committed to undoing the ‘policy paralysis’ of the previous regime and revitalising economic reforms and good governance, his regime has shown notable reluctance to rein in fringe Hindutva elements that do not seem to care for the government’s growth and development objectives. Finance Minister Arun Jaitley’s claim that the promulgation of the ordinances signify the government’s commitment to reform is questionable. An easier way to demonstrate its commitment to reform would have been to create conditions conducive to getting the Bills passed in the House.

Source - The Hindu

Centre invites studies of river basins

To understand the impact of climate change on water systems

To understand the impact of climate change on water systems, the government has invited proposals from knowledge institutions like the Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc), Bangalore to undertake studies on 20 major river basins in the country. This is one of the steps under the National Water Mission which is one of the eight priority missions under the National Action Plan on Climate Change (NAPCC).

Official sources told The Hindu on Tuesday that these institutions would study impacts using downscaled global climate models. The studies are expected to be commissioned shortly and will take between six months to two years for completion. Six IITs and the IISc will be involved in the project which will provide valuable inputs to policy decisions and adaptation measures. This is the first time that such studies will be undertaken on a large-scale with downscaled models which will be relevant for local regions, he said.

According to the NAPCC, 2008, government expenditure on adaptation to climate variability exceeds 2.6 per cent of the GDP. The technical document says that many parts of India are water stressed and the country is likely to be water scarce by 2050. There is a decline in total run off for all rivers projected, except for Narmada and Tapti.

Most of India’s eight national missions are adaptation centric and the National Water Mission has five goals, official sources said. The Mission has already set up a comprehensive data base called the Water Resources Information System, in partnership with the National Remote Sensing Agency which is updated every six months.

The Mission is focusing on capacity building right down to local self-governments which is an ongoing exercise and has an MoU with the National Institute of Rural Development and other agencies for this purpose.

As part of adaptation it has focused attention on critical areas like depleting ground water and is undertaking aquifer mapping, and flood management with a focus away from structural measures like building embankments and instead working with communities for preparedness.

Two pilot projects with technical assistance from Asian Development Bank in the Burhi Gandak basin in Bihar and Brahmani in Orissa will lead to a master plan on preventive action in flood-prone areas, using best practices and providing value additions.

With the aim of increasing water use efficiency by 20 per cent across all sectors, the government is developing a National Bureau of Water Use Efficiency which is in the advanced state of being set up on the lines of the Bureau of Energy Efficiency. Among other things it will set national standards on water appliances and also focus on efficient technology and best practices.

While the Water Mission has taken several steps, there are several challenges. In 2012, a study said the mission should be led by interdisciplinary experts, which is not how the Ministry is currently set up.

Source - The Hindu

Gadkari wants foreign investment in waterways

Boosting the nation’s inland waterways network will be one of the biggest focus areas in 2015, Union Shipping and Surface Transport Minister Nitin Gadkari said on Tuesday.

“It is my dream to have an inland waterways network just like the national highways… We will try to attract foreign investment in inland waterways,” he told journalists here.

The first step, he said, would be to develop the Varanasi-Haldia project for which the World Bank sanctioned Rs. 4,200 crore. The project on the Ganga would later be extended to Allahabad.

Mr. Gadkari said that increasing road safety was a continuing priority. The road transport and safety Bill was expected to be passed by Parliament next year; thereafter, minimum safety standards for all vehicles would be announced. “Some time by the middle of next year, minimum safety standards for all car models, economy or luxury, would be notified,” Surface Transport Secretary Vijay Chhibber told The Hindu.

Adherence to the minimum standards, which would be in line with the U.N. guidelines, would be voluntary for automobile companies for the first year, after which they would be made mandatory, he said.

Beyond the minimum standards, carmakers could offer star-rated models with enhanced safety features for a higher price.

The norms would require vehicles to pass crash tests with “no fatality” at 56 km/hour.

Mr. Gadkari said the government viewed the regularisation of e-rickshaws as a humanitarian issue. “It allows a poor person to make a living using technology to ferry passengers. It is better than the inhuman manual and cycle rickshaws. E-rickshaw should be compared to manual and cycle rickshaws and not to autorickshaws,” he said.

Source - The Hindu

[Int.] Lakhvi stays imprisoned; arrested in abduction case

Mumbai attack mastermind Zakiur Rehman Lakhvi was on Tuesday arrested just before his release following a Pakistani court’s suspension of his detention.

“Lakhvi has been arrested in another case,” an interior ministry spokesman told PTI.

Lakhvi was set to be freed from the Adaila Jail Rawalpindi Tuesday morning on the order of the Islamabad High Court.

“Lakhvi was then presented before a magistrate who remanded him in custody,” the official said.

The Islamabad High Court on Monday suspended the government’s Maintenance of Public Order (MPO) under which Lakhvi was being held under detention, paving the way for his release.

Foreign Secretary Sujatha Singh summoned Pakistan High Commissioner Basit in New Delhi and the Indian mission in Islamabad took up the issue with the Pakistan Foreign Office.

While suspending Lakhvi’s detention order, the court directed the Pakistan government to file a reply in this regard on January 15.

Lakhvi, who was the operations commander of the Lashkar-e-Taiba, was charged along with six others in 2009 in the Mumbai attack case. Ajmal Kasab, executed in India, and David Coleman Headley, convicted in the U.S. for planning the attacks, had identified Zaki-ur-Rehman Lakhvi as the operations mastermind for the 26/11 terror attack on Mumbai in which 166 people were killed.
Top developments


Source - The Hindu

[Int.] Another Jamaat leader gets death sentence

A commander of Al-Badr killing squad, A.T.M. Azharul Islam, was awarded death penalty on charges of genocide, mass killing and crimes against humanity during the country’s Liberation War in 1971.

Azhar, now the assistant-secretary-general of Jamaat-e-Islami, was also sentenced to 25 and five years imprisonment on two other charges for rape and abduction.

The International Crimes Tribunal (ICT)-1 found the Jamaat-e-Islami leader guilty of five out of six charges on Tuesday. Azhar was the chief of Jamaat student front ‘Islami Chhatra Sangha’ and led the dreaded Al-Badr killing squad, formed by the Pakistan Army to suppress Bangladesh’s independence, in northern Rangpur region .

The verdict has been hailed by the people of Rangpur, who took out processions and distributed sweets. The prosecution was satisfied with the verdict and said that the punishment served the expectation of the victims’ families and the countrymen. The defence said Azhar was not awarded a fair verdict and will file an appeal.

Azhar is the eighth senior Jamaat leader to be convicted of war crimes.

The tribunal awarded capital punishment to Azhar for Mokshedpur massacre on April 16, killing of around 1,400 unarmed civilians at Jharuarbeel in Rangpur on April 17 and abduction and murder of four Hindu teachers of Carmichael College and others on April 30 in 1971.

He was sentenced to 25 years’ rigorous imprisonment for raping women at Rangour Town Hall between March 25 and December 16 and five years for torturing two persons from November to December 1.

The head of the three-member tribunal, M. Enayetur Rahim, while delivering the verdict, referred to a section of foreign media which depicted Azhar as a ‘religious figure’. “His [Azhar’s] stature as an Islamic or religious figure is not our concern. We are trying him as a suspected war criminal,” the judge remarked.

Call for shutdown

The Jamaat-e-Islami has called a two-day countryside shutdown for Wednesday and Thursday to protest against the death verdict. Jamaat had responded violently to its leaders’ convictions in the past.

Source - The Hindu

[Int.] US Congress notifies $532 million assistance package for Pakistan

ISLAMABAD: The United States Congress has notified a $532 million civilian assistance package for Pakistan under the Kerry-Lugar Act, said US Ambassador to Pakistan Richard G Olson during a meeting with Federal Minister for Finance Ishaq Dar.

An official statement issued here on Monday said that Olson discussed with the minister the breakup of assistance being given for different sectors such as energy, defence against terrorism, economic growth, community building, education and health.

The finance minister remarked that the government should spend a large amount of this assistance for the rehabilitation of the temporary displaced persons (TDPs) of North Waziristan Agency.

The act was passed in the year 2009 by the US Congress to authorise appropriations for fiscal years 2010 through 2014 to promote an enhanced strategic partnership with Pakistan and its people, and for other purposes.

Olson also discussed the agenda for the expected visit of US Secretary of State John Kerry to Pakistan in January 2015.

Dar discussed with the ambassador the speedy delivery of Boeing aircraft which PIA has sought to acquire to upgrade its fleet, which he said was on the priority list of the govt.

The minister told the ambassador that they are preparing for giving a briefing to the donors about the rehabilitation work being carried out for the TDPs of North Waziristan and the flood affected communities.

Source - DAWN.COM

[Int.] Chinese ‘tiger eater’ gets 13 years in jail

A Chinese businessman who bought and ate three tigers has been sentenced to 13 years in prison, state media reported on Tuesday.

The wealthy real estate developer, identified only by his surname Xu, has “a special hobby of grilling tiger bones, boning tiger paws, storing tiger penis, eating tiger meat and drinking tiger blood alcohol,” the official Xinhua news agency said in June when he went on trial.

Xu organised three separate trips last year for a total of 15 people, including himself, to Leizhou in the southern province of Guangdong, where they bought tigers for a “huge amount of money” that were killed and dismembered as they watched, the government-run news portal gxnews.com.cn reported on Tuesday.

One of them filmed the entire process of a tiger slaughter with his mobile phone. The footage was later obtained by police.

Police seized eight pieces of animal meat and bones from a refrigerator in Xu’s home, some of which were later identified as tiger parts, the report said, adding that 16 geckos and a cobra were also found.

Tiger bones have long been an ingredient of traditional Chinese medicine, supposedly for a capacity to strengthen the human body, and while they have been removed from its official ingredient list the belief persists among some.

Source - The Hindu

[Eco] SEBI moots new norms for issue of municipal bonds

These are good alternative investment opportunity for conservative investors, says regulator

To help in the Government’s ‘smart cities’ programme, the Securities and Exchange Board of India (SEBI), on Tuesday, proposed a new set of norms for listing and trading of municipal bonds on stock exchanges, while channelising household investments for urban infrastructure development.

Issuing draft regulations for such municipal bonds, also known as ‘muni bonds’, SEBI said that that issuing authorities would need to contribute at least 20 per cent of the total project cost for which they wish to raise funds.

Besides, these municipal authorities would need to have a strong financial track record and such bonds should have a minimum tenure of three years.

“Conservative Indian investor mainly invests in fixed deposits, small saving schemes or gold. Bonds issued by municipalities having good financial track record would be an good alternative investment opportunity for such conservative investors, as it provides reasonable return with less risk, which in turn may accelerate the capital markets,” SEBI said.

Popular in U.S.

‘Muni bonds’ are very popular among investors in many developed nations, especially in the U.S., where these have attracted investments totalling over $500 billion and are among preferred avenues for household savings.

Comments have been invited on the draft regulations till January 30.

Further, the capital market regulator said that municipal bonds would add to instruments where provident funds, pension funds and insurance companies can put in their money.

While such bonds have been issued by various municipal authorities in the country, the total funds raised through them stand at only about Rs.1,353 crore.

The Bangalore Municipal Corporation was the first municipal corporation to issue a municipal bond of Rs.125 crore with a State guarantee in 1997.

However, the access to capital market commenced in January 1998, when the Ahmedabad Municipal Corporation (AMC) issued the first municipal bonds in the country without State government guarantee for financing infrastructure projects in the city. AMC raised Rs.100 crore through its public issue.

Among others, Hyderabad, Nashik, Visakhapatnam, Chennai and Nagpur municipal authorities have issued such bonds, however, there is no provision as yet for listing and subsequent trading of muni bonds on stock exchanges in India.

As per guidelines of the Urban Development Ministry, only bonds carrying interest rate up to maximum 8 per cent per annum shall be eligible for being notified as tax-free bonds. However, SEBI’s Corporate Bonds and Securitisation Advisory Committee is of the view that having a fixed rate of 8 per cent might not attract investors.

There can be “flexibility in setting interest rate cap by linking it to a benchmark market rate,” the concept paper said. Under the proposed norms, municipal authorities having negative net worth and those which have defaulted on payments to financial institutions would be barred from issuing the bonds.

Corporate municipal entity or its directors restrained or prohibited by SEBI would also be ineligible.

Minimum subscription limit

According to draft regulations, the minimum subscription limit should not be less than 75 per cent of the issue size.

In the event of non-receipt of minimum subscription, all application money received in the public issue should be refunded to the applicants, within 12 days from the date of the closure of the issue.

When there is a delay by the issuer in making the refund, then it has to give back the subscription amount along with interest at 10 per cent rate per annum for the delayed period.

Further, SEBI said the issuer’s contribution for each project should be at least 20 per cent of the project costs, which shall be contributed from their internal resources or grants.

“An issuer, proposing to issue debt securities shall maintain 100 per cent asset cover sufficient to discharge the principal amount at all times for the debt securities issued,” it added.

There is massive capital investment need in municipal infrastructure and funds from programmes such as Jawaharlal Nehru National Urban Renewal Mission (JNNURM) can only partly meet the requirement, it said.

“Therefore, to meet their financing needs, the municipalities have to seek recourse to other means including issuance of municipal bonds,” the paper said.

Source - The Hindu 

[Ed] Fencing the farmer out

In the name of economic reforms and development, the government has taken a significant step backward in India’s march to land justice. The pushing through of the Land Act ordinance violates all democratic norms

On Monday, the Bharatiya Janata Party government cleared the proposed ordinance to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013. This amendment, insofar as has been made known to the public, creates a separate category of projects which shall be “fast tracked.” The items covered under this category include industrial corridors, defence and defence production, rural infrastructure including electrification, housing for the poor including affordable housing, and infrastructure projects including projects taken up under Public-Private Partnership (PPP) mode.

The immediate and likely impact of this amendment is that land can now be acquired for these projects without having to exhaust the pre-acquisition processes that had been put in place, namely the Social Impact Assessment (SIA) and the determination of prior informed consent from affected families. A cursory analysis of this amendment shows why the same is not just problematic but is also a serious step backward.

Reason behind pre-acquisition steps

First, there is a reason why the consent and SIA process had been hardcoded into the DNA of the law. Acquisition had become a tool for the use of brutal force by the state. Acquisition was almost always forceful, leading invariably to riots and protests (often violent in nature). By requiring the state to seek the consent of 70 to 80 per cent of the affected families, the law empowered those who were to be directly impacted against the arbitrary exercise of the power by the state. For the first time in the history of independent India was the citizenry given a say in how the state would deal with their land. Now with this one step, the BJP has returned us to the days of the British enacted law where our citizens enjoyed no say in their development.

Second, the unamended law was enacted after unprecedented nationwide consultations which took place over two years. Two all-party meetings were convened. The Bill was subject to 12 hour debates in both Houses in which over 60 members took part. Two key amendments suggested by Ms. Sushma Swaraj and Mr. Arun Jaitley were also accepted (These related to providing for lease as an option and the share of an original owner in case his land was subsequently acquired). The BJP unambiguously supported the law in Parliament and even expressed support for these very provisions it now seeks to exclude. In this context, this sharp ‘U-turn’ becomes all the more surprising.

Infrastructure projects
Third, under the unamended Act, the only exemptions to the consent and the SIA clause were the 13 laws given in the Fourth Schedule to the Act itself. Mindful of the fact that some projects were of greater national importance than others, the framers had already created this separate class of projects which included acquisition for the purposes of railways, national highways, atomic energy, electricity, etc. Acquisition for defence and national security had also been protected under the urgency clause. And even these 13 laws had to be amended within one year, i.e. by December 31, 2014 to ensure that compensation, rehabilitation and resettlement clauses were brought on a par with the new law (vide section 105 of the unamended law). With regard to this particular amendment, the government is attempting to make a virtue out of a necessity prescribed by their predecessors.

Fourth, crafting a set of categories which includes vague items such as infrastructure projects (including PPP projects) solely for the purpose of exempting them from consent requires enormous application of mind. The exemptions given in the unamended law were the result of sustained public consultation. In the case of the ordinance, exemptions have been created without any explanation as to why these activities or sectors are being placed in a class of their own. Such lawmaking practices veer dangerously close to arbitrariness in administrative decision-making.

Importance of a safeguard
Supporters of the amendment will undoubtedly argue that the law does not dilute the provisions of compensation, rehabilitation and resettlement but instead only makes the process for acquiring the land easier.

What they fail to realise is the gap between the bargaining power of the state and the lowest common denominator is a very wide chasm.

The SIA process gave these people (often farmers) the right to negotiate fairer rates of compensation while determining if the project was truly in the public interest. It had also removed the scope for the subjective use of discretion by the Collector and other representatives of the government.

Now, with the SIA process being waived, the Collector can once again determine what constitutes a public purpose and how soon can land be acquired. It was this unchecked authority that was at the heart of the multiple abuses of the law chronicled over the last 70 years. Discretion had been replaced by verifiable systems and processes to check capricious decision-making. Now, this safeguard stands eroded.

The SIA was designed to ensure that no acquisition in excess of the bare minimum requirement took place. This was an important objective as most acquisitions were characterised by excess zeal on the part of the state. More land was always acquired than was needed for the project in question. Without SIA, the possibility of arbitrary diversions once again becomes a reality.

No restrictions
Also, the new law didn’t introduce the concepts of rehabilitation and resettlement. It merely put in place a process that ensured compliance and enforcement. The Supreme Court of India had already mandated rehabilitation and resettlement even before the new law was enacted. There was even a national policy that existed on the subject but violations remained rampant. The SIA was created to provide a framework that would ensure its implementation.

Another fear is that this new ordinance will effectively undo the implicit limits that had been placed on the acquisition of agricultural or multi-crop land by the unamended Act (done to ensure continued food security for our citizens). However, the amendments seem to allow such acquisitions without restrictions. This gives rise to worrying questions as to who is the natural constituency of the party in power.

The government should have instead used this opportunity to strengthen the legal regime governing land titles in States where it is now in power (since land is primarily a state subject). Knowledge asymmetry and an active land mafia lead to the purchase of land being a risky proposition (and hence making acquisition more attractive). It is a pity that the government did not take this opportunity given that it is in power in both the Centre and in key States where acquisition is a burning issue (Maharashtra, Haryana, Rajasthan and Madhya Pradesh). The amendments will only disempower gram sabhas.

In the name of economic reforms and development, the government has taken a significant step backward in India’s march to land justice. An ordinance pushed through in this manner violates all democratic norms and is the shape of things to come in the Modi sarkar. Given this cloak-and-dagger approach becoming the norm for lawmaking in our country, we can only hope that in this era of acronym-anchored governance, ‘Modi’ does not come to stand for ‘Murder of Democratic India’.

(Jairam Ramesh is a Member of Parliament, Rajya Sabha, and Muhammad Khan is an advocate.)

Source - The Hindu

[Eco] Degrees of default

Robert Frost once said, “A bank is a place where they would lend you an umbrella in fair weather and ask for it back when it begins to rain.” In a perfect banking market, bankers lend and borrowers pay back the amount lent in due course of time. But no market is perfect. Consequently, some borrowers pay and some don’t. If both the quality and quantity of borrowers who don’t pay increases, the bank starts to panic.

Normally, a borrower does not repay a loan due to a genuine inability to pay, a temporary cash flow mismatch impacting his desire to pay or a permanent unwillingness to pay. The Reserve Bank of India (RBI) labels the last category as wilful defaulters — though it would be almost impossible to prove intentional or wilful unwillingness to pay. As a part of its framework for revitalising distressed assets in the economy, the RBI recently announced instructions to classify borrowers as “non-cooperative” borrowers.

Non-cooperative borrowers

A non-cooperative borrower is one who does not engage constructively with his lender by defaulting in timely repayment of dues while having ability to pay, thwarting lenders’ efforts for recovery of dues — basically a defaulter who deliberately stonewalls legitimate efforts to recover dues.

A non-cooperative borrower in case of a company will include, besides the company, its promoters and directors (excluding independent directors and directors nominated by the government and lending institutions). In the case of business enterprises (other than companies), non-cooperative borrowers would include persons in charge and responsible for the management of the affairs of the enterprise.

The instructions envisage a two-committee process to label a borrower as non-cooperative. While this detailed procedure could be useful, it could delay the classification. A single high-powered committee could do the job, and it would probably be a good idea to invite the statutory auditors to this committee as they are the ones that go through the asset classification norms with a fine-tooth comb.

The intention

The banks should send a show-cause notice to the borrower asking why he should not be christened non-cooperative. Banks should insist on a time limit for the borrower to respond to this failing which his loan account would be classified as non-cooperative. Half-yearly reviews of the status are to be done.

Once the label has been stuck on a borrower, additional loans as also new loans sanctioned to the borrower or any other company that has on its board any of the whole time directors/promoters of a non-cooperative borrowing company or any firm in which such a non-cooperative borrower is in charge of management of the affairs will entail higher provisioning norms and the loans would be priced higher.

It is apparent that the intention behind the instructions for classifying a borrower non-cooperative is two-fold: one is to exert pressure on the borrower to cough up the amount owed and the other is to ensure that he does not lead a comfortable life in the world of debt.

To ensure that this is implemented, banks should commence by making public the names of a few borrowers whom they have classified as non-cooperative. This would also stop the general feeling that nothing would ever happen to a well-heeled borrower who has taken care of his banker. Bankers should not agree to a small credit in the borrowers’ account to buy peace for a couple of years. This is the sub-text that the RBI has written in its instructions.

The writer is a chartered accountant

Source - The Hindu

[Ed] When the Opposition refuses to oppose

It leaves the government hogging the limelight and pushing the reformist agenda. Big business couldn’t be happier

Somnath Lahiri, the lone communist in the Constituent Assembly, said during a debate that the objective of Fundamental Rights in a “bourgeois national democracy” is that a political opposition must have full freedom to express its views, to draw its own conclusions and to say anything it likes.

If I am in the Opposition or if someone else is in the Opposition it is certainly his business to say that the existing government is despicable; otherwise he would not be in the Opposition,” he said, defining the Opposition.

After almost seven decades, we now have a situation where the government hardly has any opposition, particularly on economic and policy issues. The principal opposition party, the Congress, seems to have taken the position that it will lend whole-hearted support to the government whenever reforms are discussed.

Consider the speech of the Congress’ general secretary Madhusudan Mistry in the Rajya Sabha on the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment Bill. Mistry, a trade unionist, listed a number of problems with the Bill and said it went against the rights enjoyed by workers in the country. But, he concluded, his party had decided to support the Bill even though “I staunchly oppose the content of this Bill.” And the Bill was passed in the Upper House.Different scenario

A year ago, the situation was different. In the 2012 winter session of Parliament, both Houses discussed the proposal to increase FDI limit in the retail sector. The BJP was in the forefront of protests against it. Arun Jaitley, then leader of the Opposition in the Rajya Sabha, said young Indians would end up as sales girls and boys once this proposal was implemented. His party voted against the government’s decision in both Houses. There were not many differences in the speeches of Jaitley and the CPI(M) leader, Sitaram Yechury.

And this was not just in the case of FDI in retail. The BJP, as the Opposition for a decade, took a position similar to the Left on a number of issues ranging from the Indo-US civilian nuclear deal to the UIDAI. This has definitely helped the BJP strengthen its base as an opposition party.

The party’s campaign during the last general elections was pegged on the indecisiveness of the Manmohan Singh government even as it showcased the Gujarat model as the best reform-oriented government. So, a curious mixture of Left-leaning opposition arguments and promises of good governance helped it come back to power after its debacle in 2004.In session

When in the opposition, the BJP took an anti-government position in Parliament, in the tradition of Indian opposition parties. This ended up making it seem anti-reforms. The party ensured an informal floor co-ordination with the Left on several issues, including the Pension Bill which it had initiated when the NDA had been in power.

What about this winter session? The productivity of the Lok Sabha in these four weeks is at 102 per cent, against the Rajya Sabha’s 61 per cent. Also, the functioning of Question Hour is 84 per cent in the Lok Sabha and 27 per cent in the Rajya Sabha. While 98 questions were answered orally in the former, 43 were answered in the latter. The Lok Sabha passed 17 and the Rajya Sabha 10 Bills. While 15 Bills have been introduced in the Lok Sabha so far, one has been introduced in the Rajya Sabha.

Two years ago, both Houses witnessed several hours of disruption on issues such as FDI in retail and women’s safety. According to PRS India, a research organisation, the productivity of the Lok Sabha was 53 per cent of the scheduled hours and the Rajya Sabha, 58 per cent in the 2012 winter session. Only six Bills were passed at that time.When Left is not right

The Congress’ decision to not toe the ‘Left line’ on the issue of reforms presents a new scenario in Indian politics. As an opposition party between 1998 and 2004, the Congress upheld its ‘socialist’ credentials in Parliament to oppose several reform initiatives of the NDA such as, for instance, divestment of major public sector undertakings. It campaigned against the Centre on issues such as agrarian distress and farmer suicides. The Vidarbha region saw more than 1,050 suicides in 2014. The principal opposition party is not in a position now to take up that issue with the government.

A considerable section in the Congress believes that taking a ‘Leftist’ position when you are in the Opposition may not win you votes. Citing the plight of Left parties and the Aam Aadmi Party, Congress leaders say that “correcting” the administration rather than “criticising” it can fetch you votes. An analysis by a section of the Congress is that the AAP’s decision to turn Left from being a rightist outfit taking the moral high ground was the reason for its weak performance during the Lok Sabha elections.

By projecting the ‘socialist’ Mallikarjun Kharge as its leader in the Lok Sabha, the Congress gave some indications that it may also go the BJP way. But the party’s performance in the last two sessions proves that it works with the government on policy issues — risking unity in the Opposition. The hindutva — or rather, the anti-hindutva — campaign is the only rallying point for the opposition parties. Reforms may now be pushed without any major debates or discussions in Parliament as the non-Congress opposition in Parliament, including Leftists, socialists and the Trinamool Congress, are a micro minority. Two major regional parties — the AIADMK and the Biju Janata Dal — are taking a pro-government position.

Prime Minister Narendra Modi thus has a free hand to implement the agenda of the business class. He knows how to silence the Congress by throwing its own policies to them. Which means that reforms are also now a part of the ‘majoritarian’ agenda.


Source - The Hindu

[Eco] RBI allows banks to invest freely in FIs bonds

The RBI has exempted bank investments in equities and bonds issued by financial institutions from the ceiling of five per cent of incremental deposits over the previous year. According to a circular issued by the RBI on Wednesday, investments by banks in equities and bonds issued by the FIs will be outside the ceiling of five per cent prescribed for that in shares and debentures of corporate bodies. The move is expected to provide a boost to investments by banks in bonds issued by corporates considering several floating rate bond issues by private corporates met with a poor response due to the ceiling.

Source - The Hindu

Dec 30, 2014

[PIB] Achievements of Ministry of Health & Family Welfare in 2014




                        Read Here

[PIB] SMART Police Stations in each State shortly

The Prime Minister of India had introduced the concept of SMART Police (S-Sensitive and Strict; M-Modern with mobility; A- Alert and Accountable; R- Reliable and Responsive; T- Trained and Techno-savvy) during the 49th Directors General/ Inspectors General Annual Conference at Guwahati on Nov. 30, 2014.

Union Home Minister Shri Rajnath Singh as a first step towards SMART policing, has decided to establish one model SMART Police Station in each State and has asked the State Governments to submit their proposals with specific location and components by January 31, 2015. MHA has decided to allocate specific funds for setting up of SMART Police Stations in each state shortly.

MHA will work with State Governments for setting up more SMART Police Stations during the next financial year. Efforts will also be made to involve the private sector and their Corporate Social Responsibility (CSR) programmes to expand the roll out of SMART Police Stations.

The SMART Police Station would become the foundation towards SMART policing. A SMART Police Station should be citizen friendly and clean. It should also meet the operational and welfare needs of the police personnel posted there. Some suggested features of a SMART Police Station are:

• Basic amenities for visitors, waiting area, toilets, drinking water, Receptionist whom the visitors can meet.

• Rest room for constables, including separate room for women constables.

• Natural lighting and ventilation, solar lighting, energy saving features.

• CCTV, Safe & secure Armoury, Record Room, Communication Room for wireless, computers etc.

• Automated kiosks for filing of complaints by public (with a back-end system for tracking follow up action).

The Police Station is the key functional unit from where the police discharges its tasks of maintenance of law & order and investigation of cases etc. The Police Station is also the primary point of interaction between the citizens and the police.

Source - PIB

[PIB] [Eco] Achievements and Initiatives of Ministry of Commerce & Industry during 2014




                                 Read Here

[PIB] PM urges fast-tracking of pro-farmer initiatives,chairs high-level meeting on Pradhan Mantri Krishi Sinchai Yojana

PM: NREGA should be integrated with the overall plan of Pradhan Mantri Krishi Sinchai Yojana
In yet another initiative aimed at benefiting farmers, the Prime Minister has asked concerned Departments and Ministries of the Union Government to fast-track the Pradhan Mantri Krishi Sinchai Yojana. Today's meeting follows yesterday's decision by the Union Cabinet, in which amendments to the Land Acquisition Act, 2013, were cleared. The amendments include the pro-farmer step of bringing 13 most frequently used Acts for Land Acquisition for the Central Government Projects into the purview of the Land Acquisition Act, thus benefiting a large number of farmers whose land is acquired for such projects.

Chairing a high-level meeting involving the Ministries of Agriculture, Water Resources, Rural Development, the Prime Minister called for a multi-pronged approach to the ultimate goal of providing irrigation for every farm through the Pradhan Mantri Krishi Sinchai Yojana.

The Prime Minister noted that NREGA had been used over the past few years for creation and augmentation of irrigation assets. He said that NREGA should be integrated with the overall plan of Pradhan Mantri Krishi Sinchai Yojana. He also called for precise monitoring of outcomes in this regard.

At the macro-level, the Prime Minister asked the Ministry of Water Resources to identify river-interlinking projects that could be immediately taken up.

The Prime Minister called for comprehensive mapping and identification of water bodies across the country. He said satellite imagery and 3D photography could be used to guide villages to best possible sources of irrigation.

The Prime Minister has asked concerned departments to look into the possibility of identifying progressive farmers, who could take the lead in implementing water conservation and innovative irrigation techniques.

The Prime Minister has also called for integrating water recycling projects of key towns and cities, to irrigation in nearby rural areas. He emphasized the importance of generating consciousness among people towards water conservation.

The Union Minister for Water Resources, Ms. Uma Bharati, and the Union Minister for Agriculture, Shri Radha Mohan Singh, were present on the occasion.


Source - PIB

[PIB] Ownership of Indian Railways to Remain with the Government: Suresh Prabhu

Railways Initiates Process of Delegating Powers to Field Functioneries

General Managers Urged to Utilize Full Potential to Deliver Best Service to the People

General Managers’ Conference Held


The Minister of Railways Shri Suresh Prabhakar Prabhu said that there are several expectations from various stake holders of Indian Railways and called upon General Managers to live up to those expectations. The Minister pointed out that there is a need to benchmark our performance so that our full potential is utilized to deliver the best services to the people. The Minister stated this while addressing the conference of General Managers of all Zonal Railways and Production Units which was held here today. The Minister said that he is bringing out a white paper which will provide the vision and help formulate the road map to take Railways forward.

The Railway Minister again reiterated that Railways will not be privatized and the ownership of it will always remain with the Government. He said that we need funds to invest in various pending projects and future projects. Vigorous efforts are being made to mobilize investments in Railways Sector. Capacity augmentations is another important area which needs attention as we have to decongest highly dense traffic routes through double line, triple line or more lines, besides creating new railway connectivity. Shri Prabhu said that Railways will also have to modernize its rolling stocks, signaling system, safety operations etc. The Minister pointed out that he has already initiated the process of delegating powers to field functionaries like General Managers, Divisional Railways Managers and Station Managers but with that comes responsibilities also on the field functionaries to deliver.

Referring to the cleanliness, the Minister said that an integrated approach is required to address this important aspect of passenger amenities. He said that mechanized laundries have improved quality of linen supplied in the trains and we have to set up more such laundries to cover the entire railway network. The Minister also pointed out that sustained efforts also need to be made to improve quality of food being served at railway stations and in trains and for this, base kitchen with quality monitoring should be set up. He also called upon General Managers to complete energy audit ordered by him earlier so that we can conserve and optimize energy consumptions in Railways. Similarly, we need to do water audit for its optimum utilization. Expressing his concern for the unfortunate and tragic accidents at unmanned level crossings, Shri Prabhu said that General Managers should think of new and innovative methods to reduce such accidents and make railway operations safer. In this connection the Railway Minister informed that ISRO is helping Indian Railways using Geospatial Technologies.

Shri Prabhu also said that he has written letters to Members of Parliament requesting them to use MPLAD funds for railway works for the benefit of the passengers. He also called upon General Managers to pay due attention to the requests made by the elected representatives on behalf of public. There is a need to save precious railway land from unauthorized encroachment and at the same time take measures to recover encroached land. The Railway Minister said that he is newest member in this vast railway family and he is proud of railway personnel for their dedication, sincerity and ability to deliver. He called upon railway unions and railway administration to work together for the betterment of Indian railways and the nation.

In his address, Minister of State Shri Manoj Sinha said that it is the duty of railway administration to fulfill the expectations of railway users and we have to constantly work to improve the image of Indian Railway. Shri Sinha also emphasized on being consistent for ensuring best result. He said that we have to work as a unified railway system ensuring best coordination among all railways zones and railway divisions.

In the beginning Chairman, Railway Board, Shri Arunendra Kumar outlined the agenda of the Conference and presented action plan for the General Managers. The agenda of the meeting included; Vision for Indian Railways in the next five years with short term & long term targets, Improving productivity, Safety, Global benchmarking of Railway services for customers and Improvement in Rolling Stock.

The Conference was attended by all Railway Board Members, the General Managers of Zonal Railways and Production Units and National Representatives of the Railway Employees Unions.


Source - PIB

[Eco] Banks vulnerable to financial contagion: Reserve Bank

Growth in banking business remains subdued

The Reserve Bank of India (RBI), on Monday, warned markets against “accumulation of vulnerabilities” and “sudden and sharp overshooting in markets”, as the weak global outlook may prolong easy money stance in most advanced economies (AEs).

“Against the backdrop of low interest rates in AEs, portfolio flows to emerging market and developing economies have been robust, increasing the risk of reversals on possible adverse growth or financial market shocks, thus necessitating greater alertness,” said RBI in its Financial Stability Report (Including Trend and Progress of banking in India 2013-14).

As of now, financial risk taking had not translated into commensurate economic risk taking, RBI added.

On the domestic front, it said that macro-economic vulnerabilities had abated significantly in recent months on the back of improvement in growth outlook, fall in inflation, recovery in the external sector and political stability.

However, the central bank noted that growth in the banking business and activity in primary capital markets remained subdued due to moderate investment intentions. “Sustaining the turnaround in business sentiment remains contingent on outcomes on the ground.”Growth in banking sector

RBI said that the growth of the Indian banking sector moderated further during 2013-14. “Profitability declined on account of higher provisioning on banks’ delinquent loans and lacklustre credit growth.”

The financial health of urban and rural co-operatives indicated divergent trends in terms of key indicators. While urban co-operative banks exhibited improved performance, “the performance of primary agriculture credit societies and long term rural credit co-operatives remained a matter of concern with a further increase in their losses coupled with deterioration in asset quality.

While the asset size of the non-banking financial companies (non deposit taking-systemically important) showed an expansion, asset quality deteriorated further during the period of review, said RBI.

The banking stability indicator suggested that overall risks to the banking sector remained unchanged during the first-half of 2014-15. In individual dimensions, though the liquidity position improved in the system, “concerns remain on account of deterioration in asset quality along with weakened soundness.”

The profitability dimension of the indicator showed an improvement but it remained sluggish. The stress tests suggested that the asset quality of banks might improve in the near future under expected positive developments in the macro-economic conditions and banks might also be able to meet expected losses with their existing levels of provisions.

However, RBI said: “the asset quality of scheduled commercial banks may worsen from the current level if the macro-economic conditions deteriorate drastically, and banks are likely to fall short in terms of having sufficient provisions to meet expected losses under adverse macro-economic risk scenarios.”

Analysis of the inter-connectedness indicated that the size of the inter-bank market in relation to total banking sector assets had been on a steady decline. However, contagion analysis with top five most connected banks revealed that the banking system could potentially lose significant portion (close to 50 per cent) of its total Tier-I capital under the joint solvency-liquidity condition in the event of a particular bank triggering a contagion.

The RBI also said that the banking sector, particularly the public sector banks, would require substantial capital to meet regulatory requirements with respect to additional capital buffers.

With the increased regulatory focus on segregating the cases of wilful defaults and ensuring the equity participation of promoters in the losses leading to defaults, there is a need for greater transparency in the process of carrying out a net economic value impact assessment of large Corporate Debt Restructuring (CDR) cases,” it added. Another aspect that impinged upon the banks’ asset quality was corporate leverage and its impact on banks’ balance sheets, particularly ‘double leveraging’ through holding company structures and the pledging of shares by promoters.

Source -- The Hindu

[Ed] Choosing the jewels of India

To open the Bharat Ratna to sports or other professional endeavours is confusing public success and stature with achievement in public life

Amongst Delhi’s socially active circles, the old joke goes that government awards are easily buyable; the Padma Shri is available in local neighbourhood markets and the Padma Bhushan requires a trip to Connaught Place. Such cynicism always gets primed in conversations during conferring of the Bharat Ratna. That former Prime Minister Atal Bihari Vajpayee and freedom fighter Madan Mohan Malaviya have been nominated for the award makes no difference. The government sponsorship of an award of such rare merit is its most serious devaluation. The Prime Minister makes the recommendation to the President, who merely signs and endorses the name; the award is conferred.

Is this an appropriate and fair method to select an awardee of such national eminence, the jewel of India? Doesn’t the Prime Minister’s partisan position lend a bias to such a selection? Why should a politician be asked to make a “recognition of exceptional service and performance of the highest order, without distinction of race, occupation, position or sex?” Besides, doesn’t the award’s added scope — “to any field of human endeavour” — make the evaluation even more difficult?

Sadly, the history of the award is a history of its devaluation. In the early fifties when it was instituted, its first three recipients, C. Rajagopalachari, C.V. Raman and Dr. Radhakrishnan, were independence fighter, scientist and philosopher respectively — people whose work encompassed a wide public dimension. Since then, with the addition of music, film and sport, there has been an obvious change in profile. The most recent decoration of this, notably Sachin Tendulkar, was riddled in controversy. Critics asked how a cricketer — despite his national and international popularity and obvious greatness — could be compared to people whose life has been devoted to public service? Why then should Dhyan Chand not be similarly awarded? And since the award was open to foreigners, why not consider Tiger Woods or Roger Federer? Weren’t they even greater figures in international sport? In 1990 the award was, in fact, given to a non-Indian. Nelson Mandela, a Nobel Laureate and a South African citizen, became the first foreign recipient, a jewel of India. When the man belonged to the world, didn’t the Bharat prefix confer a provincial status to his greatness?

Idea of merit Certainly it would be impossible to find a person who neatly fits all the criteria, and public pressure and prejudice will doubtless always influence an award of such stature. However, in changed times and in a more success-oriented world, the idea of merit itself stands changed. The physical ardour of village activism, or work related to the freedom struggle which took whole lifespans, could now be condensed into ideas achieved quickly and in some uncharted virtual reality. The inventors of Flipkart or Amazon, cricket commissioners and film actors, have come to assume a larger public persona than social workers and welfare economists who work assiduously in the field — work that benefits humanity at a more basic level. But the miracle of instant rewards and awards ensures a disparity of publicity. To compare the work of Mark Zuckerberg with that of Dr. Radhakrishnan — as the Bharat Ratna’s widened perspective now does — is to make an unequal and unfair comparison. This is a comparison not of apples with oranges, but of apple seeds and ripe, full-formed apples.

As the award season begins, television resounds with a host of professional ceremonies — the Best Design Awards, Media Awards, Real Estate Awards, Entrepreneur of the Year Awards. The nature of such pats on the back are meant merely to spur insular competition among like-minded professionals and create pools of envy within predefined professional frameworks. The Bharat Ratna, unfortunately, has begun to succumb to similar forms of petty rivalries. That the award remains the last word in Indian public recognition is thus diluted by its now liberalised inclusiveness. Every modification of the award — from granting it to any and all endeavours, given posthumously, and even open to foreign nationals — has downgraded its merit. Is it an Indian Nobel, an Indian Magsaysay? By opening up the award internationally, does it then need to refresh its name? Should it be called Vishwa Ratna or Duniya/ Srushti Ratna?

Original intent The Bharat Ratna’s real value lies in the singular and indisputable recognition of an individual’s sustained labour towards achievement of national significance. To unnecessarily open it up to sports or other professional endeavours is confusing public success and stature with achievement in public life. To this effect, its criteria need to revert to its original intent of commitment to public service, and be open only to Indian nationals. While the award standards should be made more insular, the selection process should require more than just political recommendation. However deserving Mr. Vajpayee might be of the Bharat Ratna, the endorsement of the award by a Prime Minister of the Bharatiya Janata Party smacks of hypocrisy as much as the selection of Rajiv Gandhi and Indira Gandhi did during the Congress’ tenure. An open selection by a committee representing a constantly changing group of diverse people may remove the taint of politics and give greater transparency to the process. Without it, the jokes on the purchase of government awards may come to include the country’s highest honour as well.

(Gautam Bhatia is a Delhi-based architect and writer.)

Source - The Hindu

[Ed] Disquieting developments

The new Ukrainian Parliament’s overwhelming vote last week in favour of the country opting for membership of the North Atlantic Treaty Organisation (NATO) is a contentious signal from a pro-western government to further cement Kiev’s strategic ties with the West. The decision reverses the country’s policy of non-alignment with any political and military grouping, codified under former President Viktor F. Yanukovych in 2010. Instead, it paves the way for Ukraine’s strong military and strategic engagement with European powers and the United States. Eventual entry into the military alliance may still take years. But the current context of the continuing separatist insurgency in eastern Ukraine lends the legislative step a provocative edge, from a Russian standpoint. Moscow has characterised Ukraine’s move as confrontationist; one that is consistent with its decade-long and stout opposition to the eastward extension of the military alliance. The Russian stance is also in sync with influential thinking in the aftermath of the disintegration of the Soviet Union that grew sceptical of the relevance of NATO in a post-Cold War scenario. Whereas the disbanding of the Warsaw Pact followed the emergence of the new democracies in the former Eastern Europe, NATO has continued to expand in the more than two decades since.

Clearly, Kiev’s latest move cannot be viewed in isolation. Earlier in December, both Houses of the Congress adopted the Ukraine Freedom Support Act with the avowed objective of countering threats from Moscow to the territorial integrity of the Slavic nation. The Russian response has been the establishment of the Eurasian Economic Union with Belarus, Kazakhstan, Armenia and Kyrgyzstan to promote regional trade. The Kremlin came under criticism for the annexation of Crimea following a referendum earlier this year. Its alleged role in aiding Ukrainian separatist groups with military equipment has since remained in the spotlight. Meanwhile, the United Nations said last month that nearly a thousand people have been killed since September 2014 when the ceasefire between the Ukrainian forces and separatist rebels came into force. Besides, the months-long conflict has claimed a few thousand lives. Moreover, the number of people who have registered as displaced by the conflict has risen by over 50 per cent to 460,000 in the same period. In the absence of swift and concerted diplomatic initiatives to address the scale of the humanitarian tragedy, the region runs the risk of prolonged instability. That is in the interest of neither Russia nor the western powers. Kiev’s overtures at this juncture to join NATO would merely raise the rhetoric and deepen mutual suspicion.


Source - The Hindu

[Ed] Many faces of terror

Sometimes, terror is its own purpose. Militant groups with an identifiable cause often claim responsibility for their acts or choose their targets carefully. But those behind Sunday’s low-intensity explosion in Bengaluru that indiscriminately targeted ordinary people in a crowded public place have chosen to remain anonymous so far. The bomb blast, which claimed the life of a woman from Chennai who was on a visit to Bengaluru, was clearly intended to spread fear and set off panic, rather than send any specific political message. The aim seems to have been to create a feeling of insecurity among the city’s residents, and invite greater, harsh policing. This is not the first time Bengaluru has been subjected to a terror attack of this nature. Such low-intensity blasts are suspected to be the handiwork of local networks of extremists with limited material resources and logistics support. Investigators see similarities with the blast on board a Bengaluru-originating train arriving at the Chennai Central station, in which activists of the Students Islamic Movement of India, who escaped from the Khandwa jail last year, were believed to be involved. While it is too early to pinpoint responsibility, the fact remains that India-based terror modules have chosen Bengaluru for repeated attacks. While New Delhi and Mumbai have seen attacks with the involvement of organisations from across the border, most of the explosions in Bengaluru have been traced back to Indian groups such as those of Abdul Nasir Maudany or Al Umma or the Indian Mujahideen. The exception was the shooting at the Indian Institute of Science during an international conference, exactly nine years ago, which was carried out by Indians supposedly with links to the Laskhar-e-Toiba.

Whether the blast was intended to protest the arrest of the pro-Islamic State tweeter in Bengaluru, would be known only after further investigation. But, Bengaluru, a city with a large floating population, with workers drawn from different parts of the country, is surely growing too big and diverse for conventional policing. True, it is difficult to prevent terrorists picking soft targets. Intelligence inputs on the possibility of such attacks are usually vague and non-actionable. A separate intelligence information cadre, as proposed by Chief Minister Siddaramaiah, could help in data surveillance, and in tracking online activities of suspects, but whether this could in itself help prevent similar attacks on soft targets is another matter altogether. The Bengaluru police, which have had remarkable success in apprehending the perpetrators in these attacks, might need to adopt problem-oriented policing to prevent terror crimes with a greater level of success.

Source - The Hindu

India being pulled into vortex of wars

India is being pulled into the vortex of local wars, set in motion by World War I, said CPI(M) MP Sitaram Yechury here on Monday. He was delivering the first Satyendranath Majumdar memorial lecture on the completion of a hundred years of the World War I.

“The World War I is being replicated in several places across the globe… India is being pulled into the vortex of these wars. India is the largest buyer of Israeli weapons. Thus, in a way India is financing Israel’s inhuman crimes on Palestine,” Mr. Yechury said. He added that the Indian Government should have at least suspended purchasing weapons from Israel, if not completely stopped buying them.

Coming down heavily on capitalism, he said that World War I was the ‘first illogic created by capitalism.’

“Six times more money was spent on armaments [in the wars following World War I] than during the Cold War. If this much money was spent on building social welfare infrastructure for the poor, it would have led to better spending power which would have ultimately been a boon for capitalists,” said Mr. Yechury, who is also a Politbureau member of the CPI(M).

The U.S. requires to have control of economic resources to exercise its hegemony, Mr. Yechury said, adding that Afghanistan falls into the crux of this problem, stemmed by the need to control vast oil and natural gas reserves.

Source - The Hindu

[Ed] Making ‘Make in India’ happen

To become a manufacturing nation, India has to quickly move beyond rhetoric to create a clear strategy and favourable policy environment for manufacturing to take off. A close dialogue and partnership between government and the private sector is critical
At this moment, the Prime Minister’s “Make in India” campaign appears to be exactly this — an imaginative marketing campaign. But there is much thought and even more work that is required to convert this to reality.

The theory behind “Make in India” is as simple as it is compelling. India must become a manufacturing powerhouse in order to gainfully employ its demographic dividend; there is no choice here. Fortunately, we have many natural advantages including a big labour pool and a large domestic market. In addition, with China’s competitive advantage in manufacturing eroding, India has the opportunity to take some share of global manufacturing away from China. All we have to do to improve the ease of doing business in India are these —stop tax terrorism, improve infrastructure, reform labour laws, invest in skills development, make it easier to acquire land, implement Goods and Services Tax (GST) and fast track approvals. Voila, we will take our rightful place as the world’s factory alongside China.

Energy factor
This is an attractive thesis that has a lot of merit. A simple step of making it easier to do business will make a huge difference to India’s manufacturing competitiveness. It is one plank of a manufacturing strategy. India ranks 142 on the World Bank Index; China is ranked 90. If we were to improve by just 50 places, it would be a huge perceptual breakthrough. However, this is not a manufacturing strategy in itself. As Reserve Bank of India (RBI) Governor Raghuram Rajan correctly and controversially pointed out, much has changed in the world since China elbowed itself into becoming the world’s factory two decades ago. The nature of manufacturing is changing. Low-cost automation and robotics are making pure labour cost arbitrage less important. Lead times and a flexibility of supply chains are far more important, leading many companies to move manufacturing back closer to the big markets, the United States and Europe. Energy is the new labour in the sense that the cost of energy will significantly drive where things are made. Here, the U.S. with its huge new shale gas reserves has a big advantage. Developed countries are also realising how crucial local manufacturing is to jobs and to having stable, prosperous societies and so there is an attempt to reverse outsourcing and revive local manufacturing by embracing new technologies and innovations such as 3-D printing and the “Internet of things”.

For an industrial policy

To become a manufacturing powerhouse, India needs a manufacturing strategy, otherwise known as industrial policy. The idea of an industrial policy is out of vogue these days. It is seen as ineffective at best and even retrograde, running contrary to the idea of free trade. This is patent nonsense. Japan, Korea, China, Germany have all prospered by having a clear industrial policy and vigorously implementing it. The U.S., the United Kingdom, France and Italy have seen themselves deindustrialise by not having a clear industrial policy and are trying hard to course-correct this mistake.

There is a successful precedent even in India; our success in IT services was not an accident. It was the result of clear-eyed policies driven by the Department of Electronics, which included reducing import tariffs on hardware and software to zero, setting up software technology parks with tax incentives, and improving connectivity. Policy has always mattered and when it comes to manufacturing competitiveness, India must have a clear industrial policy that spells out priority sectors and how we will build competitive advantage in a way that is consistent with our obligations to the World Trade Organization (WTO).

Building on advantages

India’s industrial policy must recognise where we have important competitive advantages. India is quite uncompetitive at low skill manufacturing. On the other hand, it is good at making complex things which require skilled labour and frugal engineering. Despite all its shortcomings, India remains a very competitive manufacturing location for sophisticated things such as construction machinery, cars and automotive components and diesel engines. It is no accident that companies such as JCB, Cummins, Deere, Volvo, Hyundai and Ford are using India as a major export hub.

We must focus on building competitive advantage and global scale in sectors where we have a large domestic market and certain inherent capabilities. Strategy is all about making choices. Here, five priority industries come to mind. Defence, because we are the world’s leading arms importer. Localising what we buy as a condition for all defence deals along with a willingness to allow majority foreign ownership can turbocharge our local defence industry. The second critical industry is electronics hardware. India imports $45 billion of mobile phones, computers and communications hardware; by 2020, this is projected to grow to $300 billion and exceed our oil import bill. This is unsustainable. We have to create policy incentives to create a local electronic hardware manufacturing ecosystem. Since most component suppliers, Original Equipment Manufacturers and Original Design Manufacturers are Chinese, this will necessarily imply incentivising Chinese companies to establish factories in India. The size of our domestic market should make this possible. Concerns about security are misplaced; all our personal computers, cellphones and a lot of switches and routers are already made in China, so we are conceding nothing. The third industry is construction. India will invest a trillion dollars over the coming years in improving infrastructure. We need to create incentives that not only spur investment in manufacturing materials such as cement and steel but also construction equipment, locomotives, power generation equipment and so on. Everything we install should be made in India. The fourth is health care. India’s generic pharmaceutical industry is world class. We must not concede on intellectual property rights that neutralise our advantage. India is also exceedingly good at frugal innovation in medical devices such as low cost X-ray and ECG machines. We have a real shot at being a world leader in innovation and manufacturing in this space. Finally, agro-industries. We are one of the largest agricultural nations. A third of what we grow just rots and spoils. Investing in agro-industries such as food processing and establishing a reliable cold chain would make a huge difference in terms of rural employment and food security. If we had to pick just five industries where we want to bootstrap a strong competitive advantage it would be these. In other industries, whether it be textiles, toys, or automotive, we need to ensure that we do not disadvantage local manufacturing.

Creating ecosystems

Another critical strategic question is this: where do we want to make things? It is difficult to make a country the size of India into a uniformly attractive manufacturing location. Even China started its manufacturing odyssey by creating a few oases in the form of four special economic zones which were remarkably easy places to manufacture in. Where is India going to start its global odyssey? Manufacturing is all about hubs that are ecosystems for innovation, specialised skills and supply chains. Where will India’s hubs be for pharma, for defence, for electronics, for machinery and construction equipment? How do we catalyse these hubs by creating world-class academic institutions and skills training institutes? What incentives will attract the world’s leading companies to establish global innovation and manufacturing centres in these hubs? Pune, Chennai, Bengaluru and Delhi are already emergent hubs but what will enable them to scale up to compete with Shenzen and Tianjin?

To become a manufacturing nation, India has to quickly move beyond rhetoric to create a clear strategy and favourable policy environment for manufacturing to take off. The government has chosen to quietly dismantle the sclerotic National Manufacturing Competitiveness Council (NMCC) but it needs to foster a more vibrant think tank in its place. A close dialogue and partnership between government and the private sector, both domestic and foreign, is critical. Indian companies along with Chinese, Japanese, German, American and Swedish companies are all vital partners and we must create an environment that is open and welcoming. For this, the right leadership of this vital mission is critical. There is a clear and short-lived window of opportunity to become a manufacturing nation. We must not squander it.

(Ravi Venkatesan is the former Chairman of Microsoft India and Cummins India and an author of Conquering the Chaos: Win In India, Win Everywhere.)

Source - The Hindu