The HINDU Notes – 19th February 2018 - VISION

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Monday, February 19, 2018

The HINDU Notes – 19th February 2018

πŸ“° For India, it should be neighbourhood first

While other geopolitical issues are important, New Delhi must give South Asia its fullest attention

•As India’s salience in global matters grows — amply demonstrated recently by the presence of 10 leaders from the Association of Southeast Asian Nations (ASEAN) at India’s Republic Day celebrations, the visit of Israeli Prime Minister Benjamin Netanyahu to India, and Prime Minister Narendra Modi’s latest forays to the United Arab Emirates (UAE), Oman and Palestine — its leaders also need to contemplate and reflect deeply on what is happening in India’s immediate neighbourhood.

In the vicinity

•Far more than East, South-east Asia, or West Asia, it is India’s immediate neighbourhood that directly impacts it geopolitically, geo-strategically and geoeconomically. Whatever be the ambit of India’s reach elsewhere, India’s principal focus, hence, will need to be on this neighbourhood.

•India can afford to live with demands such as the one made at the recently concluded ASEAN-India Commemorative Summit, where it was urged to play a pro-active role in the Asia-Pacific region, without needing to take hard decisions. It possibly also does not have to answer questions as to whether ASEAN nations fully back India’s membership of the Quadrilateral (Australia, Japan, the United States and India), even as most of them back China’s Belt and Road Initiative. India can even afford to skirt the issue as to whether ASEAN-India relations are all embracing in nature or limited only to specific aspects.

•In West Asia, India still possesses enough leeway to engage in skilful manoeuvre around contentious issues without having to take a stand. India could, thus, successfully handle an Israeli Prime Minister’s visit to India just prior to Mr. Modi’s visit to Palestine, and yet avoid a negative fallout. It could also separate the technological “blush” of Mr. Netanyahu’s visit without having to take a clear stand on the issue of Jerusalem. Likewise, Mr. Modi, during his Palestine visit could conclude as many as six agreements and express the hope that Palestine would soon emerge as a sovereign independent country in a peaceful manner without having to specifically refer to a “united” and “viable” Palestine.

•With the UAE and Oman, things have been easier. With the former, trade and economic ties as also counter-terror aspects have been on a growth curve. With the latter, an established friend, the option of closer naval co-operation and of reaching an agreement to give the Indian Navy access to Duqm port did not prove difficult.

•It is in South Asia where troubles are mounting, where India cannot succeed without looking at some hard options. For instance, how to deal with a new government in Nepal (comprising the Left Alliance of the CPN-UML led by Oli and the CPN-Maoist Centre led by Prachanda) with few pretensions as to where its sympathies lie. India also needs to now contemplate the prospect of prolonged unrest and possibly violence, both communal and terror-related, in neighbouring Bangladesh, prior to scheduled elections in 2019. This follows the conviction by a special court in Dhaka of Bangladesh Nationalist Party leader and three-time Prime Minister Khaleda Zia on corruption charges. Dealing with both Nepal and Bangladesh will need more than fine gestures; they will need far more closer monitoring.

Troubled hotspot

•Another and a more imminent challenge for India is to sort out the imbroglio in the Maldives which is threatening to spill out of control. No amount of dissimulation will help. India cannot afford not to be directly engaged in finding a proper solution.

•Relations between India and the Maldives have undergone significant changes since the days of former President Maumoon Abdul Gayoom. After the Maldivian Democratic Party, headed by former President Mohamed Nasheed, came to power, for the first time anti-Indian forces within the Maldives (including radical Islamist groups sponsored by Pakistan and Saudi Arabia) could muster some support. It was also Mr. Nasheed’s initial overtures to China that set the stage for Maldivian-China relations. Under the current President, Abdulla Yameen Abdul Gayoom, anti-Indian tendencies have steadily increased and there has been a pronounced tilt in favour of China. The free trade agreement that the Maldives signed recently with China has been the proverbial thin end of the wedge, providing China with an excellent opportunity to enhance its influence and retain de facto possession of the Southern Atolls in the Maldivian archipelago.

•Straddling a strategic part of the Western Indian Ocean, the Maldives today occupies a crucial position along the main shipping lanes in the Indian Ocean. The Southern Maldives has long remained an object of interest to the major powers. With the U.S. taking a step back, China has begun to display a great deal of interest in the area; this coincides with its current outreach into the Indian Ocean Region as also its ongoing plans to take control of Gwadar port (Pakistan) and establish a naval base in Djibouti in the Horn of Africa.

•India cannot, hence, afford to remain idle and must come up with an answer soon enough that is consistent with its strategic interests. A muscular reaction would be ill-advised, despite the entreaties of Mr. Nasheed, as the international community is likely to react adversely to any military adventure. China is, meanwhile, playing its cards carefully, calling for “home-grown solutions” and “warning against any military intervention”. The critical need is to find a solution early — one that takes into account India’s geostrategic and geopolitical interests in the region. Else, it would have far-reaching consequences as far as India’s quest for regional power status is concerned.

Across the border

•Two other issues, viz., Pakistan and Afghanistan, similarly demand our focussed attention, and that India acts with a sense of responsibility expected of a regional superpower.

•The virtual collapse of a Pakistan policy seems to affect Pakistan less and India more. The latter is facing a daily haemorrhaging of human lives due to cross border firing and terrorist violence from Pakistan. In spite of its internal political crisis, and U.S. President Donald Trump’s fusillade threatening Pakistan with dire consequences if it failed to amend its ways, Pakistan shows no sign of altering its anti-India trajectory. Democratic India can hardly afford to remain as blasΓ© and let things slide, without effectively trying to find ways and means to change a situation which is certainly not to our advantage.

•Equally vital for India is to try and find a way out of the Afghan morass. The daily massacre of innocents, men, women and children, civilian officials and military personnel, experts from several countries and diplomats, marks the start of the complete collapse of a system of governance.

•Despite periodic optimistic forecasts of the Taliban being in retreat, terrorists under check, and that the Afghan government is still in charge, Afghanistan’s position today is the worst ever since the 1970s. This January, the capital city of Kabul witnessed one of the worst ever incidents of violence anywhere, in which over 100 civilians were killed following a series of terror strikes. This happened despite the presence of foreign troops, elements of the Afghan military and also of the Afghan police. Notwithstanding the omnipresent Pakistan hand in the violence in Afghanistan, this kind of “engineered chaos” over a prolonged period of time effectively demonstrates that the Afghan state has virtually disintegrated.

•The collapse of the Afghan state does have severe consequences for India and nations in the vicinity. As a regional power, India has significant stakes in Afghanistan. Apart from the human cost and the fact that New Delhi has spent over $2 billion in providing humanitarian assistance to Afghanistan, India’s true stake lies in sustaining the future of the Afghan state. Its “shrivelling” or “demise” and any premature end to the attempt to restore peace in Afghanistan will only revive memories of the worst days of the Afghan jihad in the 1980s and 1990s, and India has every reason to feel concerned about the fallout. Of no less consequence is the fact that if Afghanistan were to cease to exist, its civilisational links with India would also evaporate. For a variety of reasons, therefore, India cannot allow Afghanistan to collapse or cease to exist as a state in the modern sense. This is something that demands India’s critical attention, and specially for a display of its leadership skills.

•For all these reasons, and apart from those currently at the helm of affairs in India, the leaderships of parties and States across the spectrum must try and achieve a unanimity of purpose in regard to our foreign policy priorities. Today, the focus needs to be on our immediate neighbourhood. The outcome of the Israel-Palestine conflict, the turmoil in the East and South China Seas, or other big-ticket issues across the world are important, but it is South Asia and the neighbourhood that demands our concentrated attention. If India is not seen to be actively involved in ensuring that the region is at peace and functions in conformity with its world view, any claims to leadership would amount to little more than treading water.

πŸ“° India still hopeful of nuclear deal with Westinghouse

‘Reactor-maker may come out of bankruptcy soon’

•India is confident of concluding the nuclear deal with reactor-maker Westinghouse Electric very soon as it expects the company to come out of bankruptcy very soon, said Satish Sharma, Chairman and Managing Director (CMD) of Nuclear Power Corporation of India Ltd (NPCIL).

•“The discussions are happening and they are of a very complex nature. Any progress will happen only after bankruptcy which is likely to happen very soon. That is why we are continuing the discussions,” Mr. Sharma said.

•Some officials said they were hopeful that Toshiba, which had acquired the U.S.-based Westinghouse in 2006, was too big to fail and would be bankrolled either by the Japanese government or the Japanese Development Bank.

•Following the Indo-U.S. nuclear deal, India has been in discussion with Westinghouse since 2005 to build six AP1000 nuclear reactors. After protracted negotiations and concerns on the nuclear liability, NPCIL and Westinghouse had agreed to “work toward finalising the contractual arrangements by June 2017.”

•However, the process was stalled after Toshiba Corp declared bankruptcy and decided to move out of reactor-building business.

Second site in A.P.

•Meanwhile, the second site for constructing additional Russian reactors in Andhra Pradesh is yet to be finalised. “The site selection committee is evaluating a second site in Andhra Pradesh other than Kovvada which was initially proposed. There are DAE guidelines laid down for finalising a site,” an official of the Department of Atomic Energy (DAE) told The Hindu .

•Stating that the process is under way, the official said that various factors such as land type, earthquake potential, availability of water should all be factored in. “Given that it is a coastal site, there are also other parameters,” he added.

πŸ“° Directing reforms

It is only logical that the sourcesof income of candidates be disclosed

•Adding to the growing body of judicially inspired electoral reforms, the Supreme Court has imposed an additional disclosure norm for candidates contesting elections. It has asked the Centre to amend the rules as well as the disclosure form filed by candidates along with their nomination papers, to include the sources of their income, and those of their spouses and dependants. The court has also asked for the establishment of a permanent mechanism to investigate any unexplained or disproportionate increase in the assets of legislators during their tenure. The verdict of the two-judge Bench on a petition from the NGO, Lok Prahari, is one more in a long line of significant verdicts aimed at preserving the purity of the electoral process. These include the direction to provide the ‘NOTA’ option in voting machines, and another striking down a clause that saved sitting legislators from immediate disqualification upon conviction. It has ruled that the act of voting is an expression of free speech, and that it is part of this fundamental right that voters are required to be informed of all relevant details about a contestant. This led to the rule that candidates should furnish details of any criminal antecedents, educational qualifications and assets. If disclosure of assets is mandatory, it is only logical that the sources of income are also revealed. And as it is often seen that there is a dramatic increase in the assets of candidates at every election over what was disclosed in previous affidavits, it stands to reason that any rise should be explained or probed.

•Few will dispute that lawmakers amassing wealth or gaining unusual access to public funds and loans are concerns that need to be addressed through new norms. To give teeth to its order, the court has made it clear that non-disclosure of assets and their sources would amount to a “corrupt practice” under Section 123 of the Representation of the People Act, 1951. Lest a question be raised whether the court’s order to amend the relevant rules amounted to legislation, the Bench has said it sees no “legal or normative impediment”, as the Centre is empowered by the Act to frame rules in consultation with the Election Commission. The idea of a permanent mechanism to collect data about the assets of legislators and periodically examine them is laudable, but it is not clear which authority will run it. The court envisions a body that would make recommendations for prosecution or disqualification based on its own findings. The Centre and the Election Commission will have to jointly address the issue. The larger message from the verdict is that a fully informed electorate and transparent candidature will be key components of future elections in India.

πŸ“° Myanmar dam on border worries Manipur village

Stokes fears of submergence and water scarcity; administration orders survey

•A dam being constructed by Myanmar across a river close to the boundary with India has stoked fears of submergence and water scarcity among border villagers in Kengjoi subdivison of Manipur’s Chandel district.

•Last week, residents of Khangtung village reported to district officials about the dam being built by Myanmar authorities barely 100 metres from the Zero Line separating the two countries.

•International rules warrant border countries to check activities in No Man’s Land – a 150-metre strip on either side of the boundary line.

•The dam, called Tuidimjang, is on the Twigem river flowing into Myanmar from Manipur. Khangtung, inhabited by the Thadou tribe, is 137 km south of Manipur capital Imphal.

•“Local people have sent photos and raised concern. The dam appears to be a new and small one, but the fear of the villagers is genuine. We are sending a team next week to survey the dam construction site and get the coordinates. A report will be made this week for sending to New Delhi via the State government,” Chandel Deputy Commissioner K. Krishna told The Hindu.

•Houkholen Haokip, secretary of the Chandel unit of the Thadou Students’ Association (TSA), did not rule out the possibility of China assisting Myanmar in building the dam.

•“The topography of the area is such that Khangtung and other Indian villages will be submerged if the dam comes up. The villagers, dependent on the river, are already facing water scarcity. Efforts to get in touch with officials and contractors in Myanmar have been in vain,” he said.

•The TSA has written to Manipur Chief Minister Nongthombam Biren requesting intervention.

•“When the dam is completed, the entire Khangtung village will be inundated and the villagers will face untold miseries and require relocation and rehabilitation. This project will have huge negative social, cultural and economic impact on the residents of Khangtung and other Indian villages,” TSA secretary general Michael Lamjathang Haokip said in the letter to Mr. Biren.

•Manipur has had issues with internal dams too. In June 2015, a tribal village named Chadong in Ukhrul district was submerged by the Mapithel dam on river Thoubal.

•Construction of the Mapithel dam, initially known as Thoubal Multipurpose Project that aimed to produce 7.5MW of power, irrigate 21,862 hectares of land and provide 10 million gallons of drinking water, began in 1989 amid protests from people downstream.

•Elders of Chadong village had inked an understanding with the State government in 1996 for an alternative settlement, but the 800-odd villagers stayed put during the submergence 19 years later as the government had failed to provide a proper relocation site.

•The Khuga dam south of Manipur’s Churachandpur town has hit turbulence too. Taken up in 1980, the project lay dormant until 2002 leading to cost escalation from the initial ₹15 crore to ₹381.29 crore in 2009.

•The project sanction by the Planning Commission was said to have inherent flaws, as a result of which the power component of 1.5MW incorporated in the initial design was scrapped despite near-completion of a powerhouse.

•Controversy has also dogged Tipaimukh, the mega hydroelectric project proposed on river Barak in Manipur 35 years ago. Dhaka is against the project, as Barak flows into Bangladesh from Manipur through southern Assam and feeds the Surma and Kushiara rivers in the country.

•At least three anti-dam organisations in Manipur and downstream Assam have been protesting the Tipaimukh project to be built by the National Hydroelectric Power Corporation Ltd. Apart from large-scale submergence, they fear ecological degradation if the dam is built.

πŸ“° Over 40 Indian languages, dialects heading to extinction

•More than 40 languages or dialects in India are considered to be endangered and are believed to be heading towards extinction as only a few thousand people speak them, officials said.

•According to a report of the Census Directorate, there are 22 scheduled languages and 100 non-scheduled languages in the country, which are spoken by a large number of people — one lakh or more.

•However, there are 42 languages which are spoken by less than 10,000 people. These are considered endangered and may be heading towards extinction, a Home Ministry official said. A list prepared by UNESCO has also mentioned about the 42 languages or dialects in India that are endangered and they may be heading towards extinction, the official said. The languages or dialects which are considered endangered, include 11 from Andaman and Nicobar Islands (Great Andamanese, Jarawa, Lamongse, Luro, Muot, Onge, Pu, Sanenyo, Sentilese, Shompen and Takahanyilang), seven from Manipur (Aimol, Aka, Koiren, Lamgang, Langrong, Purum and Tarao) and four from Himachal Pradesh (Baghati, Handuri, Pangvali and Sirmaudi).

•The other languages in the endangered category are Manda, Parji and Pengo (Odisha), Koraga and Kuruba (Karnataka), Gadaba and Naiki (AP), Kota and Toda (Tamil Nadu), Mra and Na (Arunachal Pradesh), Tai Nora and Tai Rong (Assam), Bangani (Uttarakhand), Birhor (Jharkhand), Nihali (Maharashtra), Ruga (Meghalaya) and Toto (West Bengal).

πŸ“° Farmers told not to use polluted Hindon water to grow vegetables

Found contaminated by laboratories

•Farmers in western Uttar Pradesh have been asked not to use the water of the Hindon river for growing vegetables, which are also sold in the National Capital Region markets, as it has been found to be polluted and contaminated by various official laboratories. Several NGOs along with the Meerut administration have been creating awareness among the local farmers.

•According to Raman Tyagi, director of Neer Foundation, a non-governmental organisation associated with cleaning water bodies in western Uttar Pradesh, farmers living on the banks of the Hindon use polluted and contaminated water of the river to grow vegetables.

Content of heavy metals

•“Several independent tests have shown that extremely high content of heavy metals and compounds like mercury, lead, zinc, phosphate, sulphide, cadmium, iron, nickel and manganese have been found in the river water. This makes the river water extremely dangerous to use for growing vegetables. But despite that a large number of farmers use the river water due to a variety of reasons to grow vegetables. That poses a major health risks to people,” said Mr. Tyagi, who is also a member of Nirmal Hindon Abhiyan, a cleaning drive of the Hindon river which flows in areas surrounding Meerut.

•The cleanliness initiative of the river is led by Prabhat Kumar, the Divisional Commissioner of Meerut.

Alternative sources

•“Hence, we are creating awareness among farmers not to use the river water and instead use alternative sources of water. We are also in touch with the village heads and local administration discussing ways to come up with alternative sources of water. Several meetings have been organised for the purpose,” he added. Mr. Tyagi said farmers were being made aware of organic farming and its long-term benefits both for the grower and the consumer.

‘Intensive survey’

•Due to the extent of pollution in the Hindon, the Kali and the Krishna, the rivers flowing in western UP, the National Green Tribunal (NGT) in January had ordered that Central Pollution Control Board to do an “intensive survey” of these rivers and the 136 industrial bodies which are allegedly polluting the rivers.

•The order came in response to a petition filed by an NGO Doaba Paryavaran Samiti claiming that over 50 people from villages around the rivers died of cancer as a result of consuming contaminated ground water.

Cancer deaths

•Dr. Chandraveer Singh, retired scientist from the Haryana Pollution Control Board and director of the NGO, claimed that the water of the three rivers have contaminated the groundwater through seepage. While directing the CPCB to submit the report in two months, the NGT observed that it was the fundamental duty of the State government to look after the health and environment of villagers.

πŸ“° Punjab plans to set up cooperative rural hubs

•In an attempt to strengthen the primary agriculture cooperative societies (PACS) and boost their business, the Punjab government plans to transform these societies into ‘cooperative rural hubs’.

•Pointing out that there was a need for strengthening these societies in view of their thin profits, Additional Chief Secretary (Cooperation) D.P. Reddy has asked the department to set up rural hubs in selected PACSs in a phased manner across the State.


•“Besides this, more ‘agricultural service centres’ should be established in the PACSs to provide agriculture implements on custom-hiring basis required by the farmers to cut their capital expenditures in purchase of costly tools,” he said.

•Mr. Reddy directed the officers to draft a road-map within a period of 15 days for setting up of rural hubs which could be made functional from April this year.

•“Around 30% PACSs were in loses and others running with thin profits. So it was the need of the hour to strengthen these cooperative societies vis-a-vis to turn them into profit earning ventures,” he said, adding that in addition to their existing agri-businesses these village level societies should be empowered to sell quality products of essential commodities, electronic goods and other items of daily needs in rural areas.

πŸ“° Doctors for rural India

Inducting Licentiate Medical Practitioners may be the solution to the chronic shortage of doctors in rural areas

•Nearly 600 million people in India, mostly in the rural areas, have little or no access to health care. A widespread disregard for norms, a perpetual failure to reach targets, and an air of utter helplessness are what mark the state of rural health care today. One can add to this another fact: the country is short of nearly five lakh doctors.

•Among the range of measures that have been suggested in the past decade is a rather promising proposal which has been sidelined. If properly implemented, it may provide rural India with a lasting pool of primary care physicians.

The cntours

•A few years ago, the Union Health Ministry drew flak when it put forth a proposal to train a new cadre of health professionals. Under this plan, these professionals, after undergoing a short term, 3-3.5 year course in modern medicine, were to serve the health needs of the rural population, with a focus on primary care.

•Such short-term courses aren’t new in the Indian health-care scenario. In the 1940s, primary care physicians — who were trained under short-term courses, and broadly termed Licentiate Medical Practitioners (LMPs) — would deliver quality services in the rural sector until the Bhore Committee (1946) recommended abolishing them in the idea that India would produce enough MBBS doctors.

•The committee made certain laudable recommendations in connection with the public health system. Back then, however, nobody could have anticipated the country’s miserable failure in achieving most of the targets prescribed by the committee, even years after Independence. While a profit-driven, private health-care sector continued to denude the public health system of its qualified physicians, its medical education system kept losing touch with the actual health needs of the country.

•Starting a short-term course in modern medicine can provide an opportunity to design a medical curriculum that is much more relevant to the nation’s needs. Its entry requirements could be based less on sheer merit and more on an aptitude for medical service and preference should be given to applicants from within the community. Further, a provision for learning in the vernacular languages can be made.

Not quacks

•Short-term courses in modern medicine have been consistently equated with producing “cheaply made, poor quality doctors”. However, one begs to differ with this. LMPs cannot be called quacks if they be adequately trained in their field (primary care) and have a well-defined role in health care. The present MBBS curriculum includes a good amount of superfluous detail, including subjects such as forensic medicine, that is of little relevance to primary care physicians. Here, we should also note that even though nurse practitioners and pharmacist medical practitioners may be capable of serving the same functions as LMPs, they cannot be expected to make up a lasting pool of dedicated grass-rootlevel physicians.

•Another concern is that the rural population would be made to feel like second class citizens by appointing a lower tier doctor to treat them. This can be put to rest by not letting LMPs replace MBBS doctors but instead work in a subordinate capacity.

•A few changes in the public health system can be envisioned here: LMPs be employed in sub-centres where they perform both clinical and administrative functions at the sub-centre level. This would also allow easier access to primary and emergency care and keep the post of medical officer for MBBS doctors, thereby deterring any competition between the two cadres of physicians.

•Medical officers (MBBS) could be employed in primary health centres (PHC), and new recruits imparted mandatory further training of a sufficient duration in basic clinical specialties. Also, inpatient facilities at PHCs can be scaled up. PHCs should deal with cases referred to them by sub-centre LMPs and also supervise their work.

Some spin-offs

•This has many advantages. With LMPs working at the grass-root level, a single PHC would be able to handle a bigger population, allowing for more resources to be concentrated on individual PHCs for manpower and infrastructure development and also for increasing the remuneration of medical officers.

•Ancillary responsibilities can be taken off an MBBS doctor and their skills put to better use. Quality emergency and inpatient attention can be made available at the PHC-level. Today, less than a handful of PHCs provide inpatient care of significance. Concerns about the clinical and administrative incompetence of fresh MBBS graduates appointed as bonded medical officers can be put to rest.

•LMPs could be allowed to take up a postgraduate course in primary care as an option to study further. Those with a postgraduate qualification could choose to move higher up in the public health system, establish their own practice, find positions in hospitals, or serve as faculty in medical colleges training LMPs.

•Therefore, reviving LMPs can help address the dearth of trained primary care physicians in rural India. The logistical entailments of implementing this idea would require separate deliberation.

πŸ“° We have pushed infra projects, says PM

Unveils plaque for Navi Mumbai International Airport, in limbo since it was proposed in 1997

•Blaming previous governments for not pushing infrastructure projects, Prime Minister Narendra Modi said on Sunday that projects worth Rs. 10 lakh crore were in a state of limbo when he took office in May 2014 and his government had broken the impasse on such investments during its tenure so far.

•On a day-long tour to Mumbai, Mr. Modi on Sunday afternoon unveiled the foundation plaque at the ground breaking ceremony for the Navi Mumbai International Airport, dedicated the fourth container terminal at Jawaharlal Nehru Port Trust (JNPT) to the nation and inaugurated the Magnetic Maharashtra investment summit. Late in the evening, he also launched a new centre for artificial intelligence.

•“The previous governments had only one policy, which was latkana (to stall),atkana (to keep it pending) and patkana (to ground well-laid plans). Projects worth Rs. 10 lakh crore which were pending when I took over are now progressing,” Mr. Modi said, in his address at the ground breaking ceremony of the Navi Mumbai International airport project.

•“The first promise of this airport was made in 1997, during the government of Atal Bihari Vajpayee and since then there were only promises which remained on paper. When I took over, I went over the papers. I took a detailed report of it and the work started. Now people will come to claim credit saying it was our project, but you now know what has happened,” said Mr. Modi.

•The airport is likely to cost Rs. 16,704 crore and is estimated to attract at least 10 million passengers per annum, once its first phase is operational.

Fresh orders

•Since Independence, only 450 airplanes were in the sky including both from government and private sectors, and now companies have ordered 900 planes in just one year, Mr. Modi said, highlighting the growth that has taken place under his government’s watch.

•Earlier governments only talked about the 21st century, but never visualised it and “the project only used to remain on paper,” he said.

πŸ“° Keeping the economy humming

Two former RBI Governors and a former Plan panel chief weigh in on growth, inflation and investment

•While monetary and fiscal policy makers grapple with the “growth versus inflation” debate to determine India’s economic future, they should give top priority to finding a way out of the current mess in the banking system and improve the private investment cycle.

•This was the key message that came out of a panel discussion with the former Governors of the Reserve Bank of India C. Rangarajan and D. Subbarao and the former Deputy Chairman of the Planning Commission Montek Singh Ahluwalia.

•“The most important thing what we need to do is to get investments. Monetary policy alone cannot bring growth. Investment rate is falling. So we need to do a whole lot of things to bring investments,” Dr. Subbarao said during the panel discussion moderated by R. Srinivasan, Editor, BusinessLine.

Banking mess

•Mr. Ahluwalia said that in addition to improving the investment cycle, the banking system needed to be fixed. “There should be high priority in resolving the banking mess that has been created over the past three or four years. The banks should get back to lending. This is not a monetary policy issue. Clearly, the RBI and the government have a role since 70% of the banks are still public sector banks,” Mr. Ahluwalia said.

•Asked what should be done by policy makers going forward, Dr. Rangarajan prescribed consultation with the industry to see how the investments could be brought in.

•“It is obvious that the economy is performing below potential. The economy can grow at 8-9%. Monetary policy will not be able to do much here to stimulate growth. Even if interest rate is lowered, I am not sure if the banks are in a position to pass it on. They have other problems like NPAs [non-performing assets]. The government also cannot raise the public investment by more than a few decimal points,” Dr. Rangarajan said.

•“The private investment rate has fallen from 33-34% of the GDP to something like 27%. Government should call the industry and find out what is really coming in the way of higher investments. More focussed attention to individual sectors of the industry would be a good thing to do,” he said.

•Dr. Subbarao said the ongoing inflation targeting framework had worked well so far, but had not been tested.

•“The test will come when the growth is low and inflation is high. It has worked reasonably well so far, but it has not been tested. Test will also come when there is capital inflows, when there is pressure on the exchange rate. What will the RBI do then? Will it control the inflation or will it manage the exchange rate? These are the questions for which one cannot lay down the rules and one needs to play it by the ball as per the situation,” he said.

•Mr. Ahluwalia criticised the Centre’s move to increase custom duties. “Domestic production can be better protected by having a more realistic exchange rate rather than increasing the import duties. It is a very regrettable step,” he said.

•Dr. Rangarajan said that while growth was important, it had to be consistent with some level of stability to make the growth sustainable. “You cannot have inflation at 7-8% and then say growth is important,” he said.

•Mr. Ahluwalia said that policy makers were always in a dilemma. “In reality, politicians have a tough job because they are interested not just in keeping inflation low, but they are interested in lower inflation in every commodity. The Finance Minister will be terrified of a news item that says prices of onions have shot up, even if other agricultural prices are low,” he said.

•The former Deputy Chairman of the Planning Commission said there was excessive focus on monetary policy to drive growth. “We are upset that the RBI is following the rule, but we don’t seem to mind that the fiscal deficit have been departing from the rule. If you ask the question that which part of the economy is not following the rule set a few years ago, then it is clearly the fiscal deficit. We keep postponing the deadline to meet the fiscal deficit targets. It is difficult to understand why it would depart from the rule next year if GDP is growing at 7.5% and the tax structure has stabilised. So the destabilising influences are not just on the monetary side but also on the fiscal side,” he said.

πŸ“° Banks to knock at RBI’s door on PNB impasse

‘Loan impairment may cross ₹20,000 cr. if PNB fails to pay on time, adding to huge non-performing assets of the lenders’

•Banks are planning to approach the Reserve Bank of India (RBI) to break the impasse with the fraud-hit Punjab National Bank (PNB), which is declining to pay them the dues till investigations into the ₹11,500-crore LoU scam are completed, according to an official who attended a meeting of major lenders on the issue.

•“All the banks first tried to convince PNB to honour the commitments.

•“But they are saying let the investigations be over…. so, ultimately, we decided to refer the matter to the RBI for a final decision,” said the official who attended a meeting of lenders on Saturday. The banks have decided to approach the central bank through the Indian Banks’ Association (IBA). Last week, the state-run lender informed the stock exchanges about the detection of $1.77 billion (₹11,500 crore)-worth unauthorised transactions where fraudulent letters of undertaking (LoUs) were issued from a branch in Mumbai to secure overseas credit.

‘Liable to pay’

•Bankers, at the meeting, pointed out that LoUs were issued by PNB for buyers’ credit.

•Since the other banks had extended loans to PNB (the amount was credited to PNB’s NOSTRO account) which, in turn, gave the funds to firms involved in the fraud, the state-run lender was liable to pay the other lenders.

•Allahabad Bank, for example, had an exposure of $366.87 million and State Bank of India $212 million to PNB. If PNB did not pay them, these lenders would have to classify the loans (given to PNB) as NPAs. In that case, the total loan impairment arising out of this particular case could rise to ₹20,000 crore, banking industry sources said. “Bank is fully secured by LoU documents and fully confident of receiving the payments,” Allahabad Bank had informed the exchanges.

•Public sector banks, already reeling under huge non-performing assets (NPAs), do not want to their books to be impaired further by this issue which, they said they believed, is not of their making. As a result, they now want the regulator to break the deadlock as soon as possible.

2015 guidelines

•“They (RBI) have already issued a guideline in 2015 for similar kinds of cases. They have to just reiterate the guideline which covers all these kinds of scenarios,” said another banker.

•RBI had pointed out to the failure of internal control of PNB as being the main reason for the fraud taking place. It said it was assessing the situation and would take appropriate supervisory action. It may be reaclled that the banking regulator had already undertaken a supervisory assessment of control systems in PNB.

‘Backed by assets’

•Some of the banks that had exposure to the companies of Nirav Modi and Mehul Choksi — the main accused in this fraud — said their loans were backed by the assets of companies such as Gitanjali Gems.

•The Enforcement Directorate had conducted searches at several properties belonging to Mr. Modi and reportedly seized diamond and gold jewellery worth more than ₹5,000 crore.

πŸ“° Virgin group, State govt. enter agreement to build hyperloop

High-speed transportation system will connect Mumbai, Pune

•Mumbai: The Virgin Group signed an ‘intent agreement’ with the State government on Sunday to build a hyperloop transportation system between Mumbai and Pune. The hyperloop is expected to reduce travel time between the cities to 20 minutes, from the present three hours.

•The first hyperloop route will link central Pune with Mumbai and the proposed Navi Mumbai international airport, the foundation stone for which was laid by Prime Minister Narenda Modi. Virgin Group chairman Richard Branson, who is attending the Magnetic Maharashtra investors summit, said, “We have signed an agreement with Maharashtra to build a Virgin Hyperloop between Mumbai and Pune, beginning with an operational demonstration track in the region.”

•With easier access to airport gates, the loop will be able to ferry 15 crore passengers every year. Mr. Branson said, “The proposed hyperlink system will transform the transportation system and make Maharashtra a global pioneer in the space. The socio-economic benefits of the project is $55 billion, and will create thousands of jobs.”

•While details are awaited, the hyperloop route will be a fully electric system that can travel at up to 1,000 kmph. The proposed project will begin after a six-month in-depth feasibility study to analyse and define route alignment, including environmental impact, economic and commercial viability, the regulatory framework and cost and funding model suggestions.

πŸ“° Slowly, but surely, AI use is rising across industries

But post-haste, we need data analysts in huge numbers

•Artificial Intelligence (AI) has been subject to a fair share of debates including concerns around machines overtaking, or even replacing, the human workforce.

•However, ground realities suggest the main concern should be the acute shortage of skills.

Need for talent

•One of the biggest roadblocks in the active adoption of AI is the sheer scarcity of skilled professionals. There are simply not enough data scientists to interpret massive amounts of data that are generated every day, a service that cognitive computing can offer. Further, since the skillset of a data scientist needs to constantly evolve along with technology, the demand-supply gap is only growing further.

•In countries such as India, AI adoption is driven by the evolution of the IT infrastructure. According to the IDC Cognitive User Adoption Survey (2017), an overwhelming majority of Indian organisations (nearly 70%) — have either adopted or have plans to leverage cognitive capabilities in the next 18 months. This includes a combination of pilot and enterprise-wide deployments. Currently, one in five organisations has already deployed cognitive systems, pointing to higher maturity levels as compared with Asia-Pacific counterparts (where one in 10 has achieved the same level of implementation).

•In India, the telecom, technology and banking industries are frontrunners in adoption. State Bank of India recently announced plans to leverage AI for its integrated platform, YONO (You Only Need One). This digital banking platform gives users access to banking as well as a host of lifestyle services through a single sign-on.

•Then there is the healthcare industry that relies on AI to finetune the accuracy of medical predictions, and accordingly choose a fitting line of treatment.

•Retail is another, and more obvious industry, where AI has found a strong foothold. E-commerce firms depend on AI tools to detect malpractices, improve conversion ratios and foresee consumer buying patterns. In fact, Indian e-tailers are increasingly using AI for personalised recommendations and better optimisation of their supply chain networks.

•For instance, Tata Cliq, and The Label Life are working with Mad Street Den that offers visual search technology, product recommendations and personalised homepages based on the tastes of individual shoppers. This helps improve customer experience considerably and leads to greater conversions.

•Since the CEO of a consumer company has to look after thousands of markets and stores, Manthan Analytics, based in Bengaluru, is constructing a $100-million, voice-based AI platform called Maya. With Maya, a CEO gets access to statistics on a specific market at any time and can deduce the response of sales, day-wise. The system not only records social feeds but also tallies it with market performance.

•Companies such as Starbucks and Pizza Hut are working to execute chatbots to help accelerate customer purchases. As chatbot technology becomes more advanced, virtual agents will enhance a more personal relationship with each customer. While they do so, they can also track customer purchases, behaviour and preferences. This data can then be integrated into a conversation to recommend products or services.

Rising budgets

•Successful companies regularly process high volumes of data to extract meaningful insights. Particularly in retail, businesses are deploying AI analytics to make sure the right product is in the right place at the right time.

•Using AI, retailers are expanding their boundaries to capture, manage, assess, and derive value out of the data residing in their systems. Adopting AI helps organisations present actionable insights, drive revenues, boost efficiencies, help think through complex problem areas and transform customer experiences.

•Overall, industries are expected to experience more AI use cases in the near future — from digital shopping assistants in retail to carefully curated teams in sports, and factory automation systems in manufacturing.

πŸ“° Cryptoassets: regulation in the air?

Centre would have banned cryptocurrencies by now if that was its aim, say industry players

•Despite repeated cautions by the Reserve Bank of India and the Finance Ministry about the risks associated with investing in cryptocurrencies and their illegality when used as actual currency, the crypto-industry is still pretty enthusiastic about India and maintains that even the government’s negative stance has been exaggerated.

•The RBI has issued three warnings about cryptocurrencies since 2013, and the Finance Ministry in December issued a strongly-worded notice likening crytocurrencies to Ponzi schemes and emphasised that buyers and investors were risking their money by investing in these products. This culminated in Finance Minister Arun Jaitley’s Budget speech on February 1, when he again reiterated the government’s position that cryptocurrencies were not legal tender and the government would look to curb any illegal transactions and financing using these digital currencies.

Legal or not?

•While several commentators took this to mean that the government had declared cryptocurrencies illegal, industry players in contrast took a lot of heart from Mr. Jaitley’s statement, saying that instead of suggesting a ban, the government looked like it was considering regulation of the industry.

•“When Mr. Jaitley said it was not legal tender, this is the stand the RBI has always maintained,” said Rahul Raj, co-founder and CEO, Koinex, one of India’s rapidly growing digital assets exchanges.

•“Even foreign currencies in the country are commodities and not legal tender. He also mentioned that they are looking to curb the illicit financial of illegal activities. If they are talking about illicit use, it seems to suggest a regulatory environment rather than destroying the entire industry.”

•In one of the Finance Minister’s media interviews, Mr. Raj added, “it came out very clearly that he meant regulation. “In a separate panel discussion, Economic Affairs Secretary Subhash Chandra Garg said that they were looking at a regulatory framework before the end of the financial year, and said the government was not comfortable with the words ‘coin’ or ‘currency’ because these are not legal tender, and so instead wanted to call them ‘cryptoassets’.”

•Likewise, the industry body representing most of the blockchain and crytocurrency companies in India agrees with this assessment.

•“There is a lot of negativity... arising out of repeated caution by the government and RBI that people are investing in cryptocurrencies at their own risk, which we agree with, and second, that it’s not legal tender, and third, some bank or the other says that you cannot use credit or debit cards to purchase cryptocurrencies,” Ajit Khurana, head of the Blockchain and Cryptocurrency Committee of the Internet & Mobile Association of India said. “But none of this goes to the existence or legality of cryptocurrencies.”

•Earlier this month, Citibank banned the use of its credit and debit cards for the purchase of cryptocurrencies in India “given concerns, both globally and locally, including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection, and security-related risks” associated with dealing in them.

•The central bank’s view, however, doesn’t seem as cut-and-dry as made out to be. On February 8, the RBI came out with a report on the fintech sector, in which it dedicated a section to digital currencies (DCs). It went into the modalities of such currencies and also their future potential, an indication that the RBI was not totally closed to the applications of digital currencies.

•“The implications of DCs for financial firms, markets and system will depend on the extent of their acceptability among users,” the report said. “If use of DCs were to become widespread, it would likely have material implications for the business models of financial institutions. DCs could potentially lead to a disintermediation of some existing payment services infrastructure.”

•Some cyrptocurrency players are also of the opinion that if the government wished to act decisively against cryptocurrencies, it would have already done so.

•“If the government had to completely ban these cryptocurrencies, then they would have do so already,” Ashish Agarwal, founder of Bitsachs said. “I think they want to understand whether calling it illegal would result in serious harm, or whether simply declaring it illegal will stop the system or force people into buying these digital currencies using cash.”

•The Income Tax Department this year sent one lakh notices to people who invested in cryptocurrencies and whose investments didn’t match their income profile.

•This too was widely seen as an anti-cryptocurrency move, but industry players downplayed its significance saying the number of notices sent was too small and that they didn’t have much weight given that the current financial year is yet to end.

•“The Income Tax Department came to all players and said: ‘give us the records [of investors]’,” Mr. Khurana said.

•“Now, of the number of records that were given to them, the proportion of people to whom the notices went is a small fraction. While one lakh seems like a large number, it’s not as if we gave them one lakh [worth of] details and they sent notices to all of them. We gave them a much larger number. One lakh is a small percentage of that.”

•“Suppose somebody has sold bitcoins after April 2017, not even one financial year has gone, so it couldn’t possibly have reached their income tax returns,” Mr. Khurana added. “The maximum that could have happened is that they could have reported any gains they made in their advance tax. The returns are only going to go in July 2018.”

•“Suppose I am a low income earner who files a return of say, ₹2 lakh a year,” Mr. Agarwal added. “Now, suppose I have taken a loan and invested in bitcoin and have turned ₹3 lakh into ₹30 lakh. That, of course, will not match my past returns, right? Most of the investors made their gains in 2017-18, so the deadline for their declarations is yet to come.”

‘KYC compliant’

•Another argument being made is that the reason the I-T department found it so easy to track down investors in cryptocurrencies was because the exchanges adhered to the same KYC rules as those followed by banks.

•“From our perspective, we do the complete KYC requirements that are the same for most banks, which is PAN card, Aadhaar number, bank account details; every single payment that comes to us has to come through your own bank account,” Nischint Sanghvi, head of exchange at Zebpay said. “You cannot trade in your name and have somebody else send the funds.”

•“Every single transaction can be traced,” Mr. Sanghvi added. “For certain high-end users trading above a certain value, we even ask for income tax documents, a CA certificate, and net-worth documents.

•“Today, when somebody buys a car or jewellery, even that can be declared or, need not be. All the car company can ensure is that the person is paying through the right channels, the car is in their name, and the like.”

πŸ“° Guards get modern weapons to fight poaching

Assam has five national parks and 19 wildlife sanctuaries and is home to 91% of Indian rhinos

•In a major initiative for wildlife protection, the forest guards in Assam were on Sunday given modern weapons like self-loading rifles (SLRs) and 9 MM pistols to check poaching of rhinos, tigers and other wild animals.

‘First time in country’

•Chief Minister Sarbananda Sonowal said for the first time in the country, 10 wildlife fast-track courts have been set up to exclusively deal with poaching and other related crimes against wild animals.

•“We have put protection of wildlife in high priority. Accordingly, we have today launched a new programme - modernisation of arms and equipment for protection, rescue and rehabilitation of rhinos, tigers and other wildlife,” he said.

•According to the plan, forest guards were given 954 SLRs, 272 INSAS rifles, 133 rifles of .12 bore, 20 of 9 MM pistols and 91 Ghatak rifles.

•The Chief Minister said ever since the BJP came to power in Assam nearly two years ago, 197 poachers have been arrested and eight have been killed by security guards, while as many as 59 poachers have been convicted for crimes against wildlife.

•Mr. Sonowal said wildlife fast-track courts have been set up in 10 districts and such courts have been set up for the first time in the country. “We hope that speedy trial and conviction of poachers will go a long way in protecting wildlife in the State,” he said.

•Assam has five national parks and 19 wildlife sanctuaries. It is home to more than 91% of Indian rhinos (2,431 rhinos as per 2015 census). It is also home to 167 tigers, 248 leopards, 1,169 swamp deer besides a large number of wild buffaloes, different varieties of deer and other animals.

•According to an estimate tabled in the Assembly this month, altogether 74 rhinos have been killed by poachers since 2015 and 316 poachers arrested during 2015-17.

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