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Saturday, 7 November 2015

1st week of nov 2015

prepared by ashok sharma




the Union power ministry appears to have cast its net wide to select the best global talent to head NTPC Limited — India's largest power producer, in which the government owns a stake of around 75 per cent. The ministry has published an advertisement in The Economist seeking applications for the post of chairman and managing director of NTPC Limited. Such a notice from the government in an international publication is extremely rare. The obvious desire is to tap the global talent pool to steer a company which, with over 24,000 employees and an installed capacity of about 45,500 MW, was ranked 431st in the Forbes Global 2000 listing of the world's biggest companies. 




Over the last decade or so, India has become a major destination for what has been referred to as "reproductive tourism" for foreign couples, owing to the relatively lower costs of in-vitro fertilisation and other treatments as well as the lax regulatory framework to protect the rights of surrogate mothers and the babies. In the absence of comprehensive laws to prevent exploitation, there have been instances where surrogates have died as a result of complications during pregnancy and the unavailability of good post-natal care. Contracts between surrogate mothers, who are often poor, and the intended parents are sometimes structured in a manner that the former assumes all medical, financial and psychological risks, absolving the latter of liability. There are horror stories of multiple embryos being implanted in the surrogate's womb to ensure a higher chance of success. There are cases of babies born with disabilities or an unplanned twin being abandoned by the intended parents.


Clearly, India needs a law to regulate what is estimated to be a $2.5 billion industry. The government's latest draft of the Assisted Reproductive Techniques (Regulation) Bill seeks to impose heavy penalties on couples who refuse to take custody of a surrogate child born with disabilities, and prioritises the rights of the surrogate mother. 


HRD interferes in IIT

In December last year IIT Delhi director R K Shevgaonkar resigned his post following differences with the HRD ministry . Earlier this year nuclear scientist Anil Kakodkar too resigned as the chair man of the board of governors of IIT Bombay , citing interference from the HRD ministry . The latter has not stop ped short of intervening even in petty matters. For instance, HRD minister Smriti Irani issued a directive to IITs and IIMs last year, asking them to seg regate vegetarian and non-vegetarian students in their dining halls.

In short, the government has been making regular stabs at thrusting its own agenda ­ and people ­ on these institutes. In the same vein, it foisted B-grade actor Gajendra Chauhan as director of Film and Television Institute of India, Pune, triggering student unrest that went on for months. The point is that the excellence of these institutes, which makes them a bulwark against the largely shoddy quality of the Indian education system, has been built on their autonomy . The government runs the risk of destroying them and stifling scientific thought and research ­ and much else besides ­ if it persists in interfering with them. Along with writers and artistes, the mood of India's scientific community is sullen today . Scientist P M Bhargava plans to return his Padma Bhushan in protest against the "government's attack on rationalism, reason, and science".



India Africa relations


 India's presence in Africa has been muted -the trade is pegged at about $75 billion, far lower than that of China and the European Union, investments have been higher than with either the EU or China. Going beyond the traditional ties, the shared history of colonialism and struggle against imperial powers, the third edition of the IndiaAfrica Forum Summit is an effort to chart the course of future engagement between India and the African continent to build on the potential for growth. For India and the 54 nations of the African continent such an engagement is a win-win proposition. The government has done the right thing by expanding the scale and scope of India's ongoing cooperation with African nations.


China and Africa far outstrips that with India, New Delhi is not starting off with a blank slate. India has considerable invest ment in Africa's economies. The focus on sectors like clean energy , sustaina ble habitats, public transport and cli mate resilient agriculture points to building a partnership for the future in a world that will be constrained by climate change. It will build on India's presence in the services sector such as telecom and pharmaceuticals. Technology has been slated as a key partnership area, particularly in agriculture. With 60% of the world's arable land, Africa presents a key for food security , especially for countries like India, which have a burgeoning population. For Africa, agriculture provides a path to prosperity .

That 41 heads of state and government from 54 countries in Africa were present at the India-Africa Forum Summit in New Delhi, itself demonstrates the importance both sides attach to mutual ties. The summit, which concluded on Thursday, was the largest gathering of foreign dignitaries in New Delhi since the 1983 Non-Aligned Summit. 

New Delhi exports consumer and capital goods and medicines to the continent. India-Africa trade was worth almost $70 billion in 2014-15, and Indian companies invested some $30-35 billion in the continent over the past decade. While trade has improved in these ten years, it is still much less than Africa's trade with China, which was $200 billion in 2014-15. Besides, China has invested more than $180 billion in Sub-Saharan Africa alone in areas ranging from energy to infrastructure during the period 2005-2015.





I truly worry that Israel is slowly committing suicide, with all the best arguments.



Call drop:


The telecom companies will have to deploy sizeable managerial bandwidth to handle these issues. The ceiling of Rs 3 a day on the penalty may look small but an unscrupulous subscriber can make up to Rs 93 every month by abusing the system. This is two-thirds of the industry's average revenue per user of about Rs 130 a month. The telecom companies have said that the annual compensation due to dropped calls might range from Rs 10,000 crore (in case 10 per cent of their subscribers claim compensation) to Rs 54,000 crore (if 50 per cent claim compensation).


Regional connectivity scheme (RCS)


The government has unveiled a draft aviation policy that features a regional connectivity scheme (RCS) aimed at improving access to remote areas, fiscal and other concessions aimed at helping airlines and operators to lower their operational costs, a 2 per cent levy to ensure an all inclusive airfare not exceeding Rs 2,500 per passenger for one hour of flying on some regional routes and plans to revive at least 300-odd airports in various parts of the country that are not in use by upgrading their infrastructure to equip them as no-frills airports at an investment of Rs 50 crore each. It also talks of allowing higher foreign direct investment, of up to 50 per cent, and a review of the rules on allowing Indian carriers to fly abroad. Some of these proposals, such as those designed to encourage the building of airport infrastructure and concessions or incentives, both fiscal and regulatory, are sensible, considering the investment in the sector over the last decade, which has seen a rise in passenger traffic in India. This would also mean building airport infrastructure beyond Mumbai, Delhi, Kolkata, Chennai and Hyderabad to keep pace with growth in a market projected to emerge as one of the top five over the next few years, in line with the broader growth of the Indian economy.   





China changed one kid policy


After 35 years, China is set to change its one-child policy, allowing all couples to have at most two children. Since its introduction in 1980 with the aim of slowing population growth in the world's most populous country, an estimated 400 million births have been prevented in China. From 5.5 births per woman in 1970, the country's fertility rate is now well below the replacement level of 2.1. 

Facing a stacked deck, China has reverted to the two-child norm that was encouraged through the 1970s. It needs new blood to deal with a greying population, 30 per cent of which is over 50. 

the decision has been taken in response to the decline in China's working population relative to its elderly population. China's dependancy ratio — the ratio of children and elderly to its working age population — has declined from 63.4 in 1950 to 34.5 in 2010, as against 56.3 for India, meaning far fewer working people support a far larger number of dependants. All countries will move through cycles of demographic dividends followed by rapid ageing, and must plan for their own unique challenges without intervening in family lives to engineer change.


India too has had its experiments with state coercion in limiting family size. Undoubtedly the worst of these were the horrific violations during the Emergency, when Sanjay Gandhi spearheaded a sterilisation campaign that included carting off thousands of men against their wishes to camps, where many died. In the late-1990s and early-2000s, 11 States enacted laws restricting eligibility in local body elections to persons with two or fewer children; research shows that this move did have the impact of lowering family sizes in the general population, but it also worsened the sex ratio. 


The one-child policy was introduced in 1978. But the fertility rate had already been falling rapidly for a decade before that — from an average of 5.87 births per woman in 1968 to 2.98 in 1978. After that huge drop, the fertility rate continued to fall with the new draconian policy in force, but there was no plunge — only a smooth continuation of the falling trend that preceded the restriction. From 2.98 in 1978, the rate has declined to 1.67 now.


Statistics that compare different countries, as well as empirical analysis of data from hundreds of districts within India, indicate sharply that the two most potent factors that induce fertility reduction globally are women's schooling and women's paid employment.

fertility rate declines in China have been close to what we would expect on the basis of these social influences alone. China often gets too much credit from commentators on the alleged effectiveness of its harsher interventions, and far too little for the positive role of its supportive policies (including its heavy focus on education and health care, from which many other countries can learn).

This takes us back to a classic disagreement between Thomas Robert Malthus and the Marquis de Condorcet in the 18th century, at the height of the Enlightenment. Condorcet had noted the possibility of terrible overpopulation; Malthus acknowledged that he was following Condorcet in this, but he hugely exaggerated the danger when he rejected Condorcet's reassuring argument that human reasoning would produce a corrective. Condorcet had anticipated the emergence of new norms of smaller family size based on "the progress of reason." Buttressed by the expansion of education, especially for women (of which Condorcet was one of the earliest and most vocal advocates), he argued that people would choose voluntarily to cut the birthrate.

Despite China's extraordinary social and economic success (not just in economic growth), it has one of the worst records in the world in the selective abortion of female fetuses; the number of girls born per 100 male births has been as low as 85, compared with a normal rate around 95 in countries where there is little or no selective intervention against female birth. Chinese women have made huge progress in most spheres of life, but traditional "boy preference" is still rampant. 

What is needed is more reasoning, aided by further use of women's empowerment, against such an arbitrary and dehumanizing bias. Such a change has, in fact, been very successfully achieved in South Korea, which once also had a very low ratio of girls to boys at birth. The cultivation of active public reasoning and wider understanding of the demands of gender equity have produced a huge change there.




Merchandise Exports from India Scheme or MEIS felled


India's merchandise exports fell by a little more than a quarter in September this year, marking the 10th consecutive monthly decline and raising serious questions about the government's plans to revive economic growth through a boost to manufacturing. Imports too fell by a similar margin over those in the same month last year - confirming that industrial demand at home continues to remain weak. Although the trade deficit decreased - down to $85 billion in the first half of 2015-16 compared to $97 billion in the same period last year, the government's policy makers are obviously not happy about these numbers.


The instrument used by the government to offer these incentives is the Merchandise Exports from India Scheme or MEIS that was announced early this year as part of the new five-year trade policy. The scheme already enables exporters of around 4,900 items to claim duty credit scrips determined at a rate of two to five per cent of their export earnings which they can use for paying a wide range of duties like customs and excise including service tax.

The latest decision extends the coverage of MEIS to include 110 more items with export potential. 

The new export sectors to be covered under MEIS include sports goods, medical equipment, processed products of natural rubber, chemicals and plastics. In some items, the rate at which the duty credit scrips are valued has been raised. As a result, over 2,200 export products would get either higher MEIS rates or these incentives would now be available for exports to more countries. According to one estimate, the revised MEIS would now cover over 55 per cent of India's total exports.

The government will incur an additional cost of Rs 3,000 crore by way of foregone revenues, raising the total annual financial burden of MEIS on the exchequer to Rs 21,000 crore. The effectiveness of MEIS and its extension to new sectors, therefore, need to be properly evaluated.

 The Indian currency continues to be overvalued against the dollar even as India's competitors in the exports market do not enjoy a similar disadvantage. Adding to these constraints are recent developments, where international trade agreements by countries like the one concluded recently by 12 countries under the Trans-Pacific Partnership, accounting for 40 per cent of global income, will deny Indian exporters easy access to these markets.




NEW bill for airlines


It has been reported that the government is likely to waive excise duty on aviation turbine fuel and service tax on tickets, and also exempt travellers from paying passenger services fee of Rs 149, to enable short-haul air travel of a flying time of less than an hour at a fixed price of Rs 2,500. The Union civil aviation ministry, in a draft policy it released late last month, had talked of viability gap funding in order to improve regional connectivity through such airfares. The Centre will foot 80 per cent of the bill, while the states will provide the other 20 per cent, the draft said. The proposed tax exemptions could be over and above this subsidy.


Last week, the government published a draft of the new civil aviation policy. The overall thrust of the draft has been well received, both by industry experts and investors, who bid up the prices of the two listed domestic airlines. The main thrust of the policy is to significantly expand the space for new capacity to enter. Outside a radius of 5,000 km, an open skies approach is proposed, which will remove all restrictions on the number of flights to and from destinations pretty much all over the world. Within that radius, which covers West and South Asia as well as the countries to the east, flying rights will be auctioned. This will allow, particularly, the West Asian carriers, which have been aggressively expanding into India, to continue to do so - but with the payment of the licence fee, which will accrue to the government. Further, the current cap on 49 per cent on foreign direct investment is proposed to be eventually raised to above 50 per cent, paving the way for strategic investment by foreign carriers.

The main policy move proffered is a 2% cess on `all domestic and international tickets' to subsidise `airfare not exceeding ` . 2,500 per passenger, indexed to inflation, for a one-hour flight'. Instead, it would be far more sensible, efficient and cost-effective to promote faster rail services that would provide point-to-point travel without time-consuming to and fro airport commute and checkin. Also proposed is the concept of Scheduled Commuter Airlines for the short-haul trips, which would mandatorily have aircraft capacity of 100 seats or less. But such constraints would be further distorting. We surely need improved regional connectivity for the scheduled carri ers; multiple aircraft types would in any case rev up overall costs. The poli cy proposes new no-frills airports to boost regional connectivity , `mostly through AAI'. But the Airports Au thority of India (AAI) itself needs to be speedily overhauled.


On bilateral traffic rights, the open-sky policy suggested on a reciprocal basis is sound, as is liberalisation of code-share agreements. The flexibility proposed in the five-year and 20-aircraft rule for flying abroad is also welcome. 

It has been reported that the government is likely to waive excise duty on aviation turbine fuel and service tax on tickets, and also exempt travellers from paying passenger services fee of Rs 149, to enable short-haul air travel of a flying time of less than an hour at a fixed price of Rs 2,500. The Union civil aviation ministry, in a draft policy it released late last month, had talked of viability gap funding in order to improve regional connectivity through such airfares. The Centre will foot 80 per cent of the bill, while the states will provide the other 20 per cent, the draft said. The proposed tax exemptions could be over and above this subsidy.


MOODy to Modi


Last week, Moody's Analytics, the economic research and analysis division of Moody's Corporation, warned Prime Minister Narendra Modi about growing "ethnic tensions" in the country. "Modi must keep his members in check or risk losing domestic and global credibility," said the report titled "India Outlook: Searching for Potential".

The cautionary note comes at a time when the government is celebrating the improvement in India's ranking, from 134 to 130, in the World Bank's ease of doing business index. It is instructive to note that in April, soon after the Union budget, Moody's Investors Service, also part of Moody's Corporation, had upgraded India's sovereign rating outlook from "stable" to "positive", citing the reform measures by the NDA government. At that time, the growth outlook for the current financial year ranged between 8.1-8.5 per cent. Six months later, that estimate stands at 7.6 per cent. Over the course of the year, other agencies and institutions, including the RBI, have revised the growth estimates downwards. The worry is that a government ill at ease with itself will not focus on the issues that plague the economy.

according to India's meteorological department, almost half the districts in the country received deficit rainfall this year. Five states have already declared a drought, but these cover just one-third of the affected districts. With adverse climatic conditions likely to continue well into 2016, rural incomes and, consequently, demand will remain depressed. It is not just farmers who are stressed. The recent report by the Swiss financial services firm, Credit Suisse, has shown that the financial strain experienced by 10 large Indian corporate groups has intensified over the last three years. Add to that the poor financial health of public-sector banks, and it appears that business activity may not pick up in a hurry, despite the interest rate cuts by the RBI


Bihar election


Votes are now in for 186 of Bihar's 243 assembly seats. Voters in the last remaining phase of the election will cast their ballots on November 5. The Bihar poll matters because it is much more than just about Bihar. Nationally , the results will shape the political direction of BJP as well as its internal power dynamics. Within Bihar, it is a matter of sheer political survival for chief minister Nitish Kumar as well as Lalu Prasad. Both sides are desperate to win. Women will paly a critical role.

when women voters outnumber the men, it's a good bet that the neta who did a better job of listening to them will be first past the post. Because in Bihar women voters have outnumbered the men by a whopping 6%




Turkey election


there is an old Turkish proverb which says that a defeated wrestler always wants another match. It could have been coined to describe the increasingly dire situation of Turkey in recent years under Recep Tayyip Erdoğan. 

Votes are votes, and politics is not a pure business in any country, but the problem is nevertheless how he achieved this victory.

In a stunning reversal of the June election results, President Recep Tayyip Erdogan's Justice and Development Party (AKP) has returned with an absolute majority in Turkey. With 49.4 per cent of the popular vote, the AKP has secured 316 seats in the 550-member Parliament, well past the 276 needed to form a government. More important, Mr. Erdogan is now closer to realising his ambition of rewriting the country's Constitution so that his ceremonial presidency could be turned into an executive authority. 



Brijmohan munjal


Brijmohan Munjal belonged to a generation of business leaders who built their empires from scratch in an environment with a licence-permit raj and artificially limited markets - a world removed from today's India. But only a handful of industry leaders from that era were able to make a seamless transition into the demands of a post-

His vision allowed Hero Group to rapidly overtake well-established rivals and become the world's largest cycle maker, and Hero Motocorp the world's largest two-wheeler manufacturer by volume. He positioned his motorcycles as more fuel efficient than scooters, which struck a chord with cost-conscious Indian buyers. The "Fill it, shut it, forget it" campaign remains one of the most effective ones in the country's corporate history. In the 1980s, organised dealership networks didn't exist; companies produced and sold through traders. When Munjal changed that system, it was thought to be ahead of its time - but, eventually, that distribution mode became an entry barrier for many of Hero's competitors. His relationship with dealers was so strong that till his last days as chairman, he would remember most of the 1,000-odd dealers of Hero MotoCorp by their first name. Forging partnerships and nurturing them into strong relationships were clearly his hallmarks.

        That's not all - when the time came to end a 26-year-old alliance with Honda in 2010, when the latter wanted to launch its own branded motorcycles in India, Munjal took charge of rebuilding the group all over again and decided to replace the Hero Honda brand much earlier than the June 2014 deadline set out in the joint venture agreement. That showed extraordinary self-belief, at a time when the company was trying to come out of the shadow of Honda's technological excellence. Munjal, 92, who passed the baton to his son in June this year, will always occupy a prominent place in India's corporate history for his ability to do all this - and still live a life on the principle that if you work hard and be good to people around you, success in business will follow. 





UN marks the International Day to End Impunity for Crimes against Journalists on Nov 2, it is worth asking why this particular turn of phrase is being used.

According to UN figures, over the past decade, 700 journalists have been killed the world over during the course of discharging their duties. This averages out to one death a week. In 2013, the UN General Assembly adopted a resolution proclaiming Nov 2 as IDEI — the date commemorates the murder of two French journalists in Mali that year.

Since 1994, the CPJ counts 56 journalists killed in Pakistan where the motive was confirmed as related to the work they were doing.





Sedition law

Once again the law of sedition has been misused, this time in Tamil Nadu. A folk singer associated with a radical leftist group has been charged with sedition and committing an act with an intent to cause a riot. His offence: disseminating two songs pillorying Chief Minister Jayalalithaa and her government for its policy of retailing liquor. There is nothing in the compositions that even remotely threatens the state or established government; neither is there anything that encourages violence, beyond calling for the closure of state-run liquor outlets as part of a campaign against government policy. 

 Kovan's arrest marks yet another instance of a pliant police force invoking Section 124A of the Indian Penal Code, which deals with sedition, with utter disregard for several judicial pronouncements limiting its scope. Courts have deprecated the tendency to invoke this grave charge for mere expressions of critical views. The Supreme Court has said that even words that indicate disaffection towards the government cannot be termed seditious, unless there is actual incitement to violence and intention to cause disorder. In this case, it is particularly disgraceful that the Chennai police have equated strident criticism of the Chief Minister with an alleged threat to the government established by law. It was only recently that the Maharashtra government withdrew a controversial circular to the effect that strong criticism of public servants could attract the charge of sedition. In 2012, cartoonist Aseem Trivedi was booked for sedition for a cartoon that highlighted corruption. In Meerut last year, the police initially invoked Section 124A, but later dropped it, against a group of Kashmiri students for, of all things, cheering the Pakistan team during a cricket telecast. 

Last Friday, the Tamil Nadu police arrested the folk singer S Kovan on charges of sedition. The 52-year old Mr Kovan had recorded hard-hitting songs pointing a finger at the chief minister of Tamil Nadu, J Jayalalithaa - and her government, of the All India Anna Dravida Munnetra Kazagham or AIADMK - of profiting from the sale of liquor in the state's chain of alcohol shops under the Tamil Nadu State Marketing Corporation, or TASMAC. There are about 6,800 state-run alcohol shops in Tamil Nadu, and TASMAC earned just under Rs 24,000 crore a year in 2013-14. Mr Kovan, an outspoken Dalit rights activist, has sympathised with other hot-button issues before the prohibition movement, but his songs on alcohol attacking Ms Jayalalithaa have touched a particular nerve, with his supporters saying they have been seen over 400,000 times on YouTube. It is, however, entirely questionable as to whether they constitute sedition.

Mr Kovan's arrest under Section 124(A) of the Indian Penal Code, which lays out the penalties for sedition, is a reminder that this colonial-era law is prone to misuse. Police who wish to take a dissenter into custody frequently use the latitude the law grants them. This is in spite of judgments of the Supreme Court that have strictly circumscribed the limits of sedition, given the Constitution's guarantee of free speech. 


Taiwan, Chinese presidents to meet for first time since 1949

China confirmed on Wednesday that President Xi Jinping will meet this weekend with Taiwanese President Ma Ying-jeou in a historic first culminating nearly eight years of quickly improved relations between the two sides.

Presidents of the two sides have not met since Chiang Kai-shek's Nationalists lost the Chinese civil war to Mao Zedong's Communists and the Nationalists rebased in Taiwan 160 kilometers (100 miles) away in 1949. The two sides have been separately ruled since then with Taiwan evolving into a freewheeling democracy.

The two sides never talked formally until Ma, the Nationalist president since 2008, lay aside old hostilities to set up lower-level official meetings. China and Taiwan have signed 23 deals covering mainly trade, transit and investment, binding Taiwan closer to its top trading partner and the world's second-largest economy.



BJP's new move


The government's real challenge is to build bridges with the opposition to push through crucial legislation like the GST Bill or labour law reform. It must reach out to other parties and build political consensus for this. The second big challenge is to follow up these measures with fundamental changes in the Union Budget early next year. The last two budgets did not really set the business imagination on fire and India needs big bang reforms. These are vital as the slowdown in global growth is already impacting negatively on Indian exports. Lower oil prices have buttressed the trade balance so far but a rebound in oil prices could shift the scales.

It is time to delink reforms from the political cycle of state elections. Bihar will be followed by Assam, Kerala, Tamil Nadu and Bengal in 2016 and UP in 2017. This means political parties will remain in constant campaign mode. What the NDA must keep in mind is the national election cycle ­ it is expected to deliver economic results when the next Lok Sabha polls come round in 2019.Since reforms take some time to bear fruit, linking difficult policy changes to fluctuating poll fortunes in states will prove counterproductive. It's literally now or never on reforms.



Delhi Air pollution issues


Air pollution is a mix of ozone, sulphur dioxide, nitrogen dioxide, carbon monoxide and fine particulates. A 2013 WHO study revealed that Delhi had the world's worst air, in terms of its PM2.5 count ­ the tiniest granules that settle deep in the lungs and bloodstream. This causes chronic obstructive pulmonary disease, lower respiratory infections, heart disease, cerebrovascular disease and cancers of the trachea and lung. While Delhi is the most monitored spot, 13 out of the 20 cities with the worst PM2.5 counts are in India, including Gwalior, Raipur and Patna.

At one level, this is now being acknowledged as a health emergency . India has seen greater monitoring and analysis in recent years, and is trying out small steps like "green taxes" for trucks, phasing out old vehicles, etc. The problem, though, is that the Central Pollution Control Board cannot take integrated action for cleaner air

The US Environmental Protection Agency provides federal coordination on all of these, and also waste disposal, safe detergents and so on. The other problem is a law that is too strict to be effective ­ the Air (Prevention and Control of Pollution) Act of 1981 criminalises polluters rather than extracting civil penalties, though an amendment is now pending.

India doesn't have time to waste.



India Nepal issues

New Delhi and Kathmandu must work hard to restore last year's level of bilateral trust

Prime Minister Narendra Modi provided huge impetus to India Nepal ties during his first year in office. His two visits to Nepal last year, as well as New Delhi's generous aid to Kathmandu for relief and reconstruction work in the aftermath of the devastating Nepal earthquake this year, were seen as extremely positive. But following the shooting of an Indian youth by Nepali police, which Modi took up strongly with his Nepali counterpart KP Oli, much of that goodwill appears to have been squandered. Both New Delhi and Kathmandu must work hard to turn this around.

Protests by Madhesi minorities over the promulgation of Nepal's new constitution have complicated bilateral ties between New Delhi and Kathmandu. They have also created an atmosphere of distrust that needs to be dispelled soon. Despite India's repeated assertions to the contrary , an impression has formed in Nepal that New Delhi imposed unofficial restrictions on Indian supply trucks to put pressure on Kathmandu to heed Madhesi demands.


Which is why Kathmandu must do more to allay the apprehensions of Madhesis who feel that the new Nepali constitution marginalises them politically by reducing their numbers in parliament. Similarly , the constitutional provision that makes it difficult for women to pass on Nepali citizenship to their children if their fathers are foreigners again discriminates against Madhesi women who have marriage relations in India. It's therefore in Kathmandu's interest to sincerely address these issues and give confidence to Madhesis. But that's a matter for Nepalis to decide. India can offer advice, but otherwise it should be content to play a supportive role.





FDI in Defense sector


The government expects to attract ` . 60,000-80,000 crore worth of foreign direct investments (FDI) in the defence sector. This is welcome, but a tangle of complex rules threatens this target. The ceiling for FDI in defence has been raised from 26% to 49%, but investors are not enthused. Most military equipment is highly sophisticated and overseas manufacturers want majority control of any joint ventures. This is not allowed under current policy , which mandates that an Indian entity has to be in charge. The only exception is when FDI comes with `state of the art' technology . In that case, foreign ownership can go up to 100%. Given the ambiguity about what is state of the art, few investors have stepped up.

Meanwhile, India -whose defence bud get is now `. 2.5 lakh crore -enjoys the dubious distinction of being the world's largest importer of arms, buying up 15% of all weapons sold globally . To shake off our addiction to arms imports, New Delhi should allow 100% FDI into the defence sector. This will boost inflows and, coupled with India's defence offset policy which mandates that a certain proportion of each project must be given to local players, boost manufacturing at home. The country's import dependence has sapped it of skills and technology . Allowing 100% FDI could fill up the blank.

There must be absolute confidence that the supplier of the technology would not share the technology to any of India's adversary in battle, as is widely believed to have happened in the case of the Exocet missile that Argentina could not use a second time against Britain after the French passed on information to their ally on how to neutralise the missile. The best source of such confidence is developing such technology indigenously .




Carbon emission tax



A carbon tax has been implemented in many countries — Canada, Chile, Ireland and South Africa to name a few. In almost all cases, the tax aims to incentivise consumers of hydrocarbon fuels to be more efficient in its utilisation.


For power producers, the tax can incentivise them to invest in the maintenance of their furnaces, as well as apply due care to manage the quality of combustion with the aim of reducing the carbon dioxide emissions.

The more they curtail their emissions, the more they stand to save on the tax. Beyond this the tax can also generate revenue earmarked for a special purpose: funding mitigation measures for climate change such as paying for superior forecasting technology for anomalous rain systems, and early warning systems for floods.




China facts:

China's 13th Five-Year Plan will not be available till March but there are clear signals that the government is focusing on reducing inequality, green growth and lifting 70 million people out of poverty with an improved minimum wage and free secondary school education. People's Daily flagged the preeminence of environmental concerns in a social media leak ahead of the meeting, saying that the Plan would "maintain ecological civilisation." Indeed, China is committing to raising the share of non-fossil energy from 11.4 per cent in 2015 to 15 per cent in 2020.

 China's aging population has been viewed as a weakness by many Indian observers who mistakenly believe this will allow India to take its place in the global manufacturing supply chain. However, China has also raised the productivity of its workers through training and better schooling - and is now focusing on innovation, services, industries like aerospace and the internet of things.



Affidavit scrapped

In a welcome move, the Delhi cabinet has given the go-ahead to scrap 200 affidavits that were required in order to access various government services, including ration cards, income and caste certificates, electricity connections, even the booking of baraat ghars. The government rightly noted that these could be replaced with self-declarations and has tasked the department of administrative reforms to look into provisions for stringent punishment for wrong declarations. The Delhi cabinet's decision takes forward a project started in Punjab in 2010, aimed at reposing trust in citizens and moving away from affidavits sworn before a magistrate or public notary, and certified true copies attested by gazetted officers and the like, in favour of self-attestation. The Centre under Prime Minister Narendra Modi gave impetus to this campaign, and other state governments — Gujarat, Kerala, Madhya Pradesh, Rajasthan, Goa — have followed Punjab's example.


In Punjab, it was found that, on average, 50 per cent of the state's households file an affidavit in a year.

The document concluded that, if this figure is extrapolated for the whole of India, the total expenses incurred by citizens would be about Rs 8,000 crore per year. 


India is top source of OECD migrants


Both the countries of origin (where people emigrate from) and the profile of migrants has changed significantly in recent years.

India now tops the list of countries of origin for recent as well as highly skilled migrants to member countries of the Organization for Economic Co-operation and Development (Oecd).

The 34 Oecd member countries include the European countries, USA, Canada and Australia.




National Judicial Appointments Commission (NJAC)


The government is right to keep its options open on revising the process of judicial appointments, in the wake of the Supreme Court ruling the National Judicial Appointments Commission (NJAC) to be ultra vires of the Constitution. However, it would be wrong to limit the options to either a revamped NJAC or an overhaul of the present collegium system, in which the five senior-most judges decide whom to call to the bench. The collegium method essentially makes judicial appointments entirely endogenous, without any scope for the other organs of state to play any role in the selection process. The NJAC could, if worked in good faith, strike a balance between the judiciary and the executive in the process of judicial renewal.If good faith is missing, and there is no reason to take it for granted, it could skew the process in favour of the ex ecutive. We need a better alternative.



Egypt real situation


As dictators go, Abdel Fatah al-Sisi certainly meets the criteria that have long defined the Arab strongman, harnessing his power through the violent crushing of dissent and individual freedom, while claiming that he is doing no more than benignly protecting his nation's security. Mr Sisi took power in the aftermath of the coup in July 2013, hundreds of political opponents have been sentenced to death or life imprisonment; no one has been held to account for the deaths of more than 1,000 people demonstrating in Cairo two years ago; military court jurisdiction has been expanded; journalists have been locked up and put on trial; and NGO work has been severely restricted. None of this is likely to come up in public this week as the UK government instead fixes its gaze on security cooperation and lucrative arms contracts. So it is welcome and natural that Mr Sisi's visit is accompanied by protests from human rights organisations and other critics.



Pakistan earth quack


In some areas, tents and blankets have not arrived, while the supplies that have reached the affected families are inadequate considering the harsh weather.

This makes the situation critical for the thousands whose dwellings have been destroyed, especially with snowfall and rain, and temperatures falling below zero.

Chitral, Shangla and Lower Dir have been the hardest hit districts. True, the terrain is quite difficult to access, and inclement weather has affected the relief operation. 

One solution put forth by the authorities is to house the quake survivors in schools. We must ask though how many buildings in the affected area are safe post-quake.

One figure says over 500 schools have been damaged in the affected areas. The federal and provincial authorities, therefore, need to step up their efforts to provide relief and safe shelters to the victims, especially those in remote regions.



Paris climate talks


IN less than a month, delegates from more than 190 countries will convene in Paris to finalize a sweeping agreement intended to constrain human influence on the climate.

The first reality is that emissions of carbon dioxide, the greenhouse gas of greatest concern, accumulate in the atmosphere and remain there for centuries as they are slowly absorbed by plants and the oceans. This means modest reductions in emissions will only delay the rise in atmospheric concentration but will not prevent it. Thus, even if global emissions could be reduced by a heroic average 20 percent from their "business as usual" course over the next 50 years, we would be delaying the projected doubling of the concentration by only 10 years, from 2065 to 2075.

Unconditional national commitments made by countries for the Paris meeting are projected to reduce total greenhouse gas emissions through 2030 by an average of only 3 percent below the business-as-usual average rise of 8 percent.

current annual per capita emissions from the United States, Europe and China are, respectively, about 17, 7 and 6 tons. The second scientific reality, arising from peculiarities of the carbon dioxide molecule, is that the warming influence of the gas in the atmosphere changes less than proportionately as the concentration changes. As a result, small reductions will have progressively less influence on the climate as the atmospheric concentration increases. The practical implication of this slow logarithmic dependence is that eliminating a ton of emissions in the middle of the 21st century will exert only half of the cooling influence that it would have had in the middle of the 20th century.

Energy demand, which is strongly correlated with rising incomes and living standards, is expected to grow by some 50 percent by midcentury, driven by economic progress in developing countries and by population growth to about 9.7 billion people from the current 7.3 billion.

Fossil fuels, which are not running out anytime soon, supply over 80 percent of the world's energy today and are usually the least expensive and most convenient means of meeting growing energy demand.





Bankruptcy bill

The Bankruptcy Law Reforms Committee has submitted its final report to the Centre, including a draft Insolvency and Bankruptcy Bill. The bill aims to bring in a modern framework to deal with bankruptcy and insolvency of a variety of economic players, including individuals, but excluding financial firms. It seeks to replace the myriad legislation currently in force, including century-old laws governing personal insolvency. This is a much overdue reform and Finance Minister Arun Jaitley must make good on his budget promise to bring it in this winter session of Parliament. India ranks an abysmal 136 out of 189 countries in "resolving insolvency" in the Doing Business 2016 report — on average, secured creditors in India recover 25.7 cents for every dollar of credit from an insolvent firm at the end of insolvency proceedings, which take 4.3 years to conclude. This is in contrast to the OECD countries of 72.3 cents and 1.7 years.








 it is unconscionable that the government owes Rs.3,200 crore to beneficiaries of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Yet that is exactly where matters have reached with the ten-year-old scheme, a fact the Supreme Court took notice of earlier this week. The scheme was launched by the United Progressive Alliance (UPA) government in its first term and delays in wage payments preceded the change in government, but matters have come to a head over the last year, resulting in a decline in the number of people participating. The number of households that got the legally guaranteed 100 days of work fell from 51.73 lakh in 2012-13 to 46.73 lakh in 2013-14 (under the UPA), and then dipped sharply to 23.24 lakh in 2014-15 (under the NDA). Funds sanctioned for the scheme show a similar steep decline under the NDA government, from Rs.27,484 crore in 2013-14 to Rs.17,074 crore in 2014-15. Research and news reports suggest thatdelays in wage payments are turning workers away from the scheme and towards more exploitative forms of work that might require them to leave their States, but where payment is guaranteed each week. Institutional mechanisms written into the scheme, including a social audit system, have been neglected, and wages have not kept pace with inflation.


There is now a wealth of evidence of the anti-poverty capacities of the MGNREGS. Perhaps the most rigorous came from the India Human Development Survey, which found that 14 million people escaped falling into poverty on account of it. 

As the country faced down its second successive drought this year, that disdain was momentarily put aside as the government offered 50 extra days of work under the MGNREGS in drought-hit areas,




Kerela election 2016


The Bihar election will be over and done with in the next few days, analysed to death, and all parties will get on the elections treadmill once again to fight the next round of state polls in 2016. Elections are due to the Tamil Nadu and Puducherry Assembly, West Bengal and Assam, all in the summer. The earliest will be Kerala where the election is due to be completed before the end of May. Arguably this is going to be the most interesting election of all because the outcome could be historic: a return of the Congress-led United Democratic Front (UDF) in a state where no government has ever ruled for a second term and the balance between alliance partners is so fine that a tiny percentage swing of votes can lead to a major electoral upset.

First, the basic facts about Kerala: The Assembly has only 140 seats (Kerala sends 20 seats to the Lok Sabha and just nine to the Rajya Sabha).


As Chief Minister, Chandy has taken steps that have been controversial. The liquor policy – which involved shutting down more than 700 bars with permission to sell liquor accorded only to five star hotels - has led to loss of revenue, court cases, a crisis for Kerala's lifeline industries such as tourism, and serious allegations of graft. Finance minister KM Mani from alliance partner Kerala Congress is still fighting off charges of corruption after a dilution of the policy, allegedly in return for financial contributions. But Chandy has stood firm, going on to say that Kerala will become a 'dry' state in the next 10 years while conceding that the revenue loss will amount to Rs 8,000 crore or more. Obviously, he has won tremendous support from the victims of alcohol, women. Muslims account for 27 per cent of Kerala population while various Christian sects account for about 18 per cent. While large numbers from both religions back the LDF, the majority has always been with the UDF. What the BJP was doing was breaking the so-called Hindu monolith, much of which was with the LDF.


Just by way of numbers, in the 2011 elections, the UDF got 45.83 percent of popular vote while the LDF had 44.9 per cent vote. The UDF won 72 seats while the LDF's tally was 68. The BJP had 6.03 per cent vote share. In about 35 seats the margins were less than 5,000 votes. These are potential swing seats. In 2006 a six per cent margin in vote share helped the LDF grab 100 seats in the 140 strong state assembly.

What does this tell us? That in the internecine quarrel between Achuthanandan and Pinarayi Vijayan, the two tallest Left leaders, the BJP is gaining ground. But the ultimate gainer is the UDF. That is why the Kerala election in 2016 could make history.





Pulses policy



By hiking the official procurement price of chana and masur by Rs 325 per quintal, as against Rs 75 for wheat, the Centre has seemingly sought to encourage farmers to grow more pulses that the country desperately needs, as opposed to surplus cereals. But the move is too little, too late. Minimum support price (MSP) announcements, to be effective, need to be made well before farmers take cropping decisions. In this case, the declaration of a higher
MSP increase for pulses grown in the current rabi season should have been made by mid-October at the latest. Instead, it has happened only now, when rabi sowings have already crossed 8.5 million hectares.

Besides, the increase isn't as big as it is being made out to be. The new procurement prices of Rs 3,500 per quintal for chana and Rs 3,400 for masur are way below the ruling wholesale market rates of Rs 5,000-6,000 per quintal. And given the government's past record of actual procurement of pulses — just over a year back, chana was trading Rs 500-600 per quintal lower than the MSP — the announced official rates aren't incentive enough for farmers to significantly expand acreages. If the Centre really wanted to create a buzz around pulses, it should have fixed an MSP of around Rs 4,000 per quintal and declared this by late-September or early-October.

The Centre has, in fact, made things worse by simultaneously raising the MSP of wheat by 5.2 per cent to Rs 1,525 per quintal. This is a sure-shot formula to ensure farmers plant more of this cereal when the Food Corporation of India is, as it is, holding almost 12 million tonnes of extra wheat in its godowns. Last year, farmers delivered over 28 million tonnes of wheat to government agencies, even with a Rs 50/ quintal MSP increase. They can be trusted to produce and deliver even more with the MSP this time going up by Rs 75 per quintal. Soaring dal prices presented a rare opportunity for the Centre to induce farmers even in Punjab and Haryana to grow pulses, which has unfortunately got relegated to being a dryland crop. The right way to do this would have been to freeze the MSP of wheat at last year's Rs 1,450 per quintal level and simultaneously increase that of chana and masur to Rs 4,000 per quintal.



LPG subsidy


Pakistan cricket ranking


PAKISTAN'S rise to number two on the Test table after a gap of almost a decade is cause for celebration.

This has come after a display of flair and determination during the just-concluded series against England that Pakistan won 2-0.

The national side's batting effort was led by senior pros Younis Khan, Muhammad Hafeez and skipper Misbah ul Haq.


Let the spirit prevail until the beckoning of Pakistan's next challenge that includes a series against wounded England on their own soil in the summer of 2016.




The Push for Legal Marijuana Spreads


Support for making marijuana legal is increasing around the world, and that is a good thing. Earlier this week, the Mexican Supreme Court opened the door to legalizing the drug by giving four plaintiffs the right to grow cannabis for personal use.

In Canada, the newly sworn in prime minister, Justin Trudeau, has said he intends to change the law so people can use the drug recreationally;medicinal use is already legal in that country. And in the United States, Senator Bernie Sanders of Vermont, who is seeking the Democratic nomination for president, recently introduced a bill that would let states decide if they want to make the drug legal without worrying about violating federal law.


Laws banning the growing, distribution and possession of marijuana have caused tremendous damage to society, with billions spent on imprisoning people for violating pointlessly harsh laws. Yet research shows that marijuana is far less harmful than alcohol and tobacco, and can be used to treat medical conditions like chronic pain.

California was the first state to allow medicinal use of the drugin 1996, and it is a big market for illegal Mexican cannabis.  Oregon and Washington have already legalized the drug, as have Colorado, Alaska and the District of Columbia.