General Affairs
Home Minister Rajnath Singh Breaks Protocol, Hugs BSF Jawan With Disability
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In a rare gesture, Home Minister Rajnath Singh on Thursday broke protocol and hugged BSF constable Godhraj Meena who sustained 85 per cent disability after terrorists' bullets hit him during an attack in Jammu and Kashmir's Udhampur in 2014. Mr Meena's bus, part of a Border Security Force convoy, was ambushed by terrorists on August 5, 2014 near the 'narsu nalah' area in Udhampur with a heavy gunfire. The citation of the 44-year-old trooper said he was on guard duty in the bus and his bravery, acute presence of mind and accurate fire kept the two terrorists at bay and thwarted their attempts to enter and target the about 30 personnel onboard.
Mr Meena, who is not able to speak properly as one bullet had pierced through his jaw, received a thunderous applause from the officials and jawans when the home minister pinned the gallantry medal on his chest.
Even before Mr Meena could accord the mandatory salute, the home minister hugged and patted him and saw him off from the dais with a firm and long hand shake.
BSF officials said as per protocol, the home minister, after pinning the medal and handing over the citation, has to shake hand with the awardee and the person moves ahead after according a salute to him.
"What we saw today is rare, very rare. This is only in very special cases like that of Meena who has suffered 85 per cent disability after the attack. He is not able to talk and walk properly but despite this he dons his uniform with pride," a senior officer said.
The officer said Mr Meena has now been deputed for conducting administrative duties.
This retaliation had led a total of four BSF personnel, including Mr Meena, being decorated with gallantry medals.
The others included constable Subhendu Roy, driver Daljit Singh and constable Rocky who was awarded the 'Shaurya Chakra'.
Later, during his speech, the Home Minister said he was proud of Mr Meena's bravery and grit.
He also awarded the police medal for gallantry (posthumous) to the wife of the constable and cook of the BSF unit Sanjay Dhar.
Mr Dhar was posted at the 'Pittal' border post along the Indo-Pak International Border in Jammu and laid down his life while saving his friend who had got injured in an unprovoked firing incident by Pakistan on July 16, 2014.
Singh, during the annual investiture ceremony of the BSF, also awarded gallantry medals to a total of seven troops of the border guarding force for their daredevil actions during ceasefire violations along the India-Pakistan border and while handling attacks by militants in Jammu and Kashmir.
He also decorated five personnel of the 41st battalion of the force for undertaking an anti-Naxal operation in Chhattisgarh's Kanker in 2014, where the team killed two Maoists.
Mr Meena, who is not able to speak properly as one bullet had pierced through his jaw, received a thunderous applause from the officials and jawans when the home minister pinned the gallantry medal on his chest.
BSF officials said as per protocol, the home minister, after pinning the medal and handing over the citation, has to shake hand with the awardee and the person moves ahead after according a salute to him.
"What we saw today is rare, very rare. This is only in very special cases like that of Meena who has suffered 85 per cent disability after the attack. He is not able to talk and walk properly but despite this he dons his uniform with pride," a senior officer said.
The officer said Mr Meena has now been deputed for conducting administrative duties.
This retaliation had led a total of four BSF personnel, including Mr Meena, being decorated with gallantry medals.
The others included constable Subhendu Roy, driver Daljit Singh and constable Rocky who was awarded the 'Shaurya Chakra'.
Later, during his speech, the Home Minister said he was proud of Mr Meena's bravery and grit.
He also awarded the police medal for gallantry (posthumous) to the wife of the constable and cook of the BSF unit Sanjay Dhar.
Mr Dhar was posted at the 'Pittal' border post along the Indo-Pak International Border in Jammu and laid down his life while saving his friend who had got injured in an unprovoked firing incident by Pakistan on July 16, 2014.
Singh, during the annual investiture ceremony of the BSF, also awarded gallantry medals to a total of seven troops of the border guarding force for their daredevil actions during ceasefire violations along the India-Pakistan border and while handling attacks by militants in Jammu and Kashmir.
He also decorated five personnel of the 41st battalion of the force for undertaking an anti-Naxal operation in Chhattisgarh's Kanker in 2014, where the team killed two Maoists.
India, Russia Ask Countries To Stop Cross-Border Movement Of Terrorists
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India and Russia today asked all countries to stop cross-border movement of terrorists and asserted that a decisive collective response from the international community without "double standards and selectivity" was required to combat terrorism.
The assertion to fight terrorism came in a vision document released by India and Russia after Prime Minister Narendra Modi and President Vladimir Putin held wide-ranging talks here. Prime Minister Modi, addressing a joint press event with Putin, said India welcomes Russia's unconditional support in the fight against cross-border terrorism.
PM Modi said the views of the two countries are similar on the problem in whichever form it exists, whether in Afghanistan, the Middle East or Asia-Pacific.
"India and Russia stand together on terrorism and the new challenges to security," he said.
"We strongly condemn terrorism in all its forms and manifestations and stress that there can be no justification whatsoever for any acts of terrorism, whether based upon ideological, religious, political, racial, ethnic or any other reasons," the two countries said in the St Petersburg declaration titled 'A vision for the 21st century'. India and Russia asserted that they will continue efforts to combat international terrorism, which poses a great threat to the maintenance of peace and security.
"We are convinced that the unprecedented spread of this threat requires decisive collective response on part of the entire global community, without double standards and selectivity, in accordance with international law and the UN Charter," the declaration said.
India and Russia urged all countries and entities to work sincerely to disrupt terrorist networks and their financing, and "stop cross-border movement of terrorists".
"We call for an early conclusion of negotiations on the Comprehensive Convention on International Terrorism to strengthen the global counter-terrorism normative and legal framework to combat this scourge," the statement said.
The strong pitch against terrorism comes after Prime Minister Modi also raised the issue of combating he menace with the top leadership in Germany and Spain.
The assertion to fight terrorism came in a vision document released by India and Russia after Prime Minister Narendra Modi and President Vladimir Putin held wide-ranging talks here. Prime Minister Modi, addressing a joint press event with Putin, said India welcomes Russia's unconditional support in the fight against cross-border terrorism.
"India and Russia stand together on terrorism and the new challenges to security," he said.
"We strongly condemn terrorism in all its forms and manifestations and stress that there can be no justification whatsoever for any acts of terrorism, whether based upon ideological, religious, political, racial, ethnic or any other reasons," the two countries said in the St Petersburg declaration titled 'A vision for the 21st century'. India and Russia asserted that they will continue efforts to combat international terrorism, which poses a great threat to the maintenance of peace and security.
"We are convinced that the unprecedented spread of this threat requires decisive collective response on part of the entire global community, without double standards and selectivity, in accordance with international law and the UN Charter," the declaration said.
India and Russia urged all countries and entities to work sincerely to disrupt terrorist networks and their financing, and "stop cross-border movement of terrorists".
"We call for an early conclusion of negotiations on the Comprehensive Convention on International Terrorism to strengthen the global counter-terrorism normative and legal framework to combat this scourge," the statement said.
The strong pitch against terrorism comes after Prime Minister Modi also raised the issue of combating he menace with the top leadership in Germany and Spain.
As US Backs Away From Climate Pledges, India And China Step Up
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As the United States pulls back from its commitment to fight climate change, the world's two other biggest polluters - India and China - are sounding the alarm. But neither country is in a position to fill the void left by American leadership, or to foot the bill.
Their vast populations stand to lose dramatically from global warming, and the two countries' leaders are already taking a stronger public stance against the threat posed by carbon emissions in the form of rising sea levels and catastrophic weather patterns.
Both say they will honor their own commitments to the Paris accord, and are encouraging other countries to do the same. That sort of rhetorical leadership is very welcome, experts say, but neither country is in any position to replace the financial incentives the United States had offered poorer nations.
Earlier this week, Indian Prime Minister Narendra Modi, on a visit to Berlin, stood alongside German Chancellor Angela Merkel and said that failing to act on climate change was a "morally criminal act."
And earlier this year, Chinese President Xi Jinping called the 2015 climate accord in Paris "a hard-won achievement" and urged other signers to stick to their pledges instead of walking away - "as this is a responsibility we must assume for future generations."
Experts said that the Trump administration's withdrawal from the pact jeopardizes financing for mitigation and control efforts by smaller nations and stokes fears that other countries may abandon their pledges to reduce emissions along with the United States.
It also dramatically undermines the chances of further progress in years ahead: the commitments contained in the Paris accord are not enough to prevent catastrophic rises in global temperatures, and much deeper emissions cuts would be needed. The U.S. withdrawal is bound to badly damage the accord's credibility and the chances of keeping the rest of the world focused on the tough choices ahead.
"It's a body blow," said Chandra Bhushan, deputy director of the Center for Science and Environment in New Delhi. "People are putting on a brave face and saying it doesn't matter if the U.S. withdraws from the Paris agreement. But it is built not only on cutting emissions, but finance and technology, and the U.S. contribution is about 20 percent of that."
The United States is the world's second-largest emitter of greenhouse gases and had pledged in Paris to reduce its emissions 26 percent to 28 percent below their 2005 levels by 2025.The country's withdrawal will have a major impact on the agreement's goal of keeping the warming of the planet to below two degrees Celsius (3.6 degrees Fahrenheit) of what it was in pre-industrial times, experts say.
Trump, who has said climate change is a "hoax" and that restrictions are bad for the U.S. economy, has already moved to roll back many Obama-era policies such as clean power, vehicle emission standards and curbs on power plants.
China and India had been slow to address the issue of global warming -- fearing it would hold back the pace of development. In India for example, 240 million people remain without electricity. But experts now predict that China's carbon emissions will peak, and then begin to decline, significantly earlier than the country's 2030 target, and the country is investing more in renewable energy than any other nation in the world, pledging a further $360 billion by 2020.
"China will continue to carry out innovation, green, open and shared development regardless of how the other countries' positions are changing, based on the inherent needs of its own sustainable development," Hua Chunying, a spokesman for the Ministry of Foreign Affairs, said in a press conference this week in Beijing.
And now new energy policies in both nations are beginning to have a discernible effect, scholars say.
Slowing consumption in China and delay of construction of new coal plants in India will likely reduce projected global emissions by 2 billion to 3 billion tons by 2030, compared with forecasts from last year, according to a study released in May by Climate Action Tracker, an independent monitoring group.
Meanwhile, India - which set a target of increasing its renewable power capacity to 175 gigawatts by 2022 - has exceeded its targets for wind power this fiscal year and has made some strides in increasing its solar capacity, according to a study from the World Resources Institute. Recent low solar prices may make renewable power increasingly competitive, the study said.
In addition, the country is holding off on the construction of some new coal-fired power generating plants because the extra capacity may not be needed for now, according to a new draft electricity plan.
Piyush Goyal, India's energy minister, said that India remains committed to its Paris pledge - no matter what happens in the rest of the world.
"We are not addressing climate change because somebody told us to do it, it is an article of faith for this government," Goyal said. "Sadly the developed world does not show the same commitment to fulfill their promises,which could help speed up the clean energy revolution."
Yet neither country is willing to foot the bill for other countries' efforts to reduce emissions, experts say. The United States had pledged $3 billion into a Green Climate Fund to assist smaller counties on their climate change initiatives - $2 billion of which has been canceled by the Trump administration.
Zhang Zhongxiang, the director of the China Academy of Energy, Environmental and Industrial Economics and professor at Tianjin University, said China is more likely to take a role of a "cooperator" and a "pusher" rather than assuming the out-front leadership role the Obama administration adopted, and may contribute financially in smaller ways - such as contributing $20 million to its South-South Cooperation Fund to help smaller countries.
The two countries will likely foster knowledge sharing with other nations, rather than creating super funds, such as India's founding of International Solar Alliance - a knowledge platform for sun-rich countries - with France in 2015, said Varad Pande, a former adviser to India's Environment Ministry and a member of India's climate negotiations team.
Their vast populations stand to lose dramatically from global warming, and the two countries' leaders are already taking a stronger public stance against the threat posed by carbon emissions in the form of rising sea levels and catastrophic weather patterns.
Both say they will honor their own commitments to the Paris accord, and are encouraging other countries to do the same. That sort of rhetorical leadership is very welcome, experts say, but neither country is in any position to replace the financial incentives the United States had offered poorer nations.
And earlier this year, Chinese President Xi Jinping called the 2015 climate accord in Paris "a hard-won achievement" and urged other signers to stick to their pledges instead of walking away - "as this is a responsibility we must assume for future generations."
Experts said that the Trump administration's withdrawal from the pact jeopardizes financing for mitigation and control efforts by smaller nations and stokes fears that other countries may abandon their pledges to reduce emissions along with the United States.
It also dramatically undermines the chances of further progress in years ahead: the commitments contained in the Paris accord are not enough to prevent catastrophic rises in global temperatures, and much deeper emissions cuts would be needed. The U.S. withdrawal is bound to badly damage the accord's credibility and the chances of keeping the rest of the world focused on the tough choices ahead.
"It's a body blow," said Chandra Bhushan, deputy director of the Center for Science and Environment in New Delhi. "People are putting on a brave face and saying it doesn't matter if the U.S. withdraws from the Paris agreement. But it is built not only on cutting emissions, but finance and technology, and the U.S. contribution is about 20 percent of that."
The United States is the world's second-largest emitter of greenhouse gases and had pledged in Paris to reduce its emissions 26 percent to 28 percent below their 2005 levels by 2025.The country's withdrawal will have a major impact on the agreement's goal of keeping the warming of the planet to below two degrees Celsius (3.6 degrees Fahrenheit) of what it was in pre-industrial times, experts say.
Trump, who has said climate change is a "hoax" and that restrictions are bad for the U.S. economy, has already moved to roll back many Obama-era policies such as clean power, vehicle emission standards and curbs on power plants.
China and India had been slow to address the issue of global warming -- fearing it would hold back the pace of development. In India for example, 240 million people remain without electricity. But experts now predict that China's carbon emissions will peak, and then begin to decline, significantly earlier than the country's 2030 target, and the country is investing more in renewable energy than any other nation in the world, pledging a further $360 billion by 2020.
"China will continue to carry out innovation, green, open and shared development regardless of how the other countries' positions are changing, based on the inherent needs of its own sustainable development," Hua Chunying, a spokesman for the Ministry of Foreign Affairs, said in a press conference this week in Beijing.
And now new energy policies in both nations are beginning to have a discernible effect, scholars say.
Slowing consumption in China and delay of construction of new coal plants in India will likely reduce projected global emissions by 2 billion to 3 billion tons by 2030, compared with forecasts from last year, according to a study released in May by Climate Action Tracker, an independent monitoring group.
Meanwhile, India - which set a target of increasing its renewable power capacity to 175 gigawatts by 2022 - has exceeded its targets for wind power this fiscal year and has made some strides in increasing its solar capacity, according to a study from the World Resources Institute. Recent low solar prices may make renewable power increasingly competitive, the study said.
In addition, the country is holding off on the construction of some new coal-fired power generating plants because the extra capacity may not be needed for now, according to a new draft electricity plan.
Piyush Goyal, India's energy minister, said that India remains committed to its Paris pledge - no matter what happens in the rest of the world.
"We are not addressing climate change because somebody told us to do it, it is an article of faith for this government," Goyal said. "Sadly the developed world does not show the same commitment to fulfill their promises,which could help speed up the clean energy revolution."
Yet neither country is willing to foot the bill for other countries' efforts to reduce emissions, experts say. The United States had pledged $3 billion into a Green Climate Fund to assist smaller counties on their climate change initiatives - $2 billion of which has been canceled by the Trump administration.
Zhang Zhongxiang, the director of the China Academy of Energy, Environmental and Industrial Economics and professor at Tianjin University, said China is more likely to take a role of a "cooperator" and a "pusher" rather than assuming the out-front leadership role the Obama administration adopted, and may contribute financially in smaller ways - such as contributing $20 million to its South-South Cooperation Fund to help smaller countries.
The two countries will likely foster knowledge sharing with other nations, rather than creating super funds, such as India's founding of International Solar Alliance - a knowledge platform for sun-rich countries - with France in 2015, said Varad Pande, a former adviser to India's Environment Ministry and a member of India's climate negotiations team.
Russia Readying To Supply S-400 Anti-Aircraft Missile Systems To India
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Russia today said it was preparing to supply S-400 Triumf anti-aircraft missile systems to India and both governments were "simply discussing" the terms. Pre-contract preparations underway on the supplies of the S-400 anti-aircraft missile complexes to India, Russian Deputy Prime Minister Dmitry Rogozin told reporters in St Petersbrug.
"Pre-contract preparations are underway on the supplies of S-400 anti-aircraft missile complexes to India," he said. "It is difficult to say yet how much time they will take.
There is an agreement between governments and now we are simply discussing the terms," Russia's official Tass News Agency quoted Rogozin as saying on the sidelines of Prime Minister Narendra Modi's ongoing visit to this Russian city.
India had announced on October 15 last year a deal on the Triumf air defence systems from Russia, worth over USD five billion, and collaborate in making four state of art frigates besides setting up a joint production facility for making Kamov helicopters.
The deals were announced following talks held between Prime Minister Modi and Russian President Putin on the sidelines of the BRICS Summit held in Goa.
The S-400 Triumf long-range air defence missile system has the capability to destroy incoming hostile aircraft, missiles and even drones at ranges of up to 400 km.
India and Russia have been in talks for over a year for the purchase of at least five systems of S-400 that will be a game changer in the region.
It is capable of firing three types of missiles, creating a layered defence, and simultaneously engaging 36 targets.
"Pre-contract preparations are underway on the supplies of S-400 anti-aircraft missile complexes to India," he said. "It is difficult to say yet how much time they will take.
India had announced on October 15 last year a deal on the Triumf air defence systems from Russia, worth over USD five billion, and collaborate in making four state of art frigates besides setting up a joint production facility for making Kamov helicopters.
The S-400 Triumf long-range air defence missile system has the capability to destroy incoming hostile aircraft, missiles and even drones at ranges of up to 400 km.
India and Russia have been in talks for over a year for the purchase of at least five systems of S-400 that will be a game changer in the region.
It is capable of firing three types of missiles, creating a layered defence, and simultaneously engaging 36 targets.
India, Pak To Become Full Members Of Shanghai Cooperation Organisation Next Week: China
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India and Pakistan's admission to the Beijing-backed Shanghai Cooperation Organisation (SCO) will be formalised at the grouping's summit in Kazakhstan next week, China said today.
"The members states of the SCO are accelerating the MoU procedures with the two countries and everything is going very well," Chinese foreign ministry spokesperson Hua Chunying said.
"We hope India and Pakistan as the full members at the Astana summit (on June 8-9). We also expect the Astana summit will complete the admission procedures for the two countries," Hua told reporters.
The political and security grouping - headquartered in Beijing - was founded in 2001 and comprises Russia, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan, besides China as full members. It is mainly aimed at military cooperation between the members and involves intelligence-sharing, counter-terrorism operations in Central Asia.
Afghanistan, Belarus, India, Iran, Mongolia and Pakistan have observer status.
"We hope India and Pakistan as the full members at the Astana summit (on June 8-9). We also expect the Astana summit will complete the admission procedures for the two countries," Hua told reporters.
The political and security grouping - headquartered in Beijing - was founded in 2001 and comprises Russia, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan, besides China as full members. It is mainly aimed at military cooperation between the members and involves intelligence-sharing, counter-terrorism operations in Central Asia.
Afghanistan, Belarus, India, Iran, Mongolia and Pakistan have observer status.
Business Affairs
GDP down to 6.1 per cent: Why everyone needs to worry about the economy
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The latest GDP numbers have come out and the picture is not very pretty. The GDP growth slowed to 6.1 per cent for the fourth quarter of 2016-17, from the 7.0 per cent the previous quarter. And the previous quarter itself had seen a slowdown, coming much lower than the 7.9 per cent and the 7.5 per cent seen in the first two quarters. The slowdown in growth had started even before demonetisation was announced.
Look at the GVA figures, which is the measure of the goods and services produced by a country (GDP = GVA plus taxes, minus subsidies), and the picture gets worse. GVA growth has fallen quarter after quarter, two years in a row. Take away the effect of the increased government spending in the last quarter and also that of agricultural growth which rebounded because of good monsoons, and the picture gets even more ugly. You have the GVA for the latest quarter growing at a measly 3.8 per cent.
Some other economic measures are also worrying. Growth in gross fixed capital formation is at an all time low. The NPA problem just refuses to go away. There is little news of big, new, Greenfield projects that will create lots of jobs. Construction activity has hit a low. In general, even while the overall GDP figure paints a reasonably rosy picture, it hides a lot of bad news.
How worried should we be about the country's economy? Quite a bit. As I had written earlier, the GDP data does not really capture the full effects of demonetisation on the informal sector. The formal sector data is used to estimate the informal sector, but demonetisation probably hurt the latter far more than the former. If anything, the organised sector stood to gain from demonetisation move.
But what is often being overlooked is that the slowdown had started even before demonetisation. The fact that GVA figures has been falling quarter after quarter for two years straight is the first worrying factor. The GDP growth in the second quarter itself was lower than the GDP growth in the first quarter. More importantly, in the past three quarters, the GVA from agriculture and government spending has been higher than those for manufacturing and services.
Agriculture, unfortunately, depends too heavily on good monsoons in India. Last year, we had good rains after two consecutive years of drought. This year too, normal rains are expected but the government cannot just depend on the monsoon being normal to save its blushes.
And eventually, government spending to prop up the GDP cannot be the solution. Private investment needs to come back and for that two things are necessary. The first is healthy consumption demand going up steadily which reduces the overcapacity that has been built up in most sectors, and allows goods and services companies to spend in building new capacity for the future. The second is healthy balance sheets that allow companies to start borrowing afresh to set up new projects. By all indications, both will take some time.
Meanwhile, there is the worry about the short term disruptions and impact of GST. The concept of GST is very good, and in the long run it will have all sorts of benefits including reduced costs and inefficiencies and better tax compliance. In the short run though, it will possibly be a bigger disruptor for the Indian economy than demonetisation was.
Already, there are indications that most sectors will have to deal with a working capital disruption for a quarter or two before things settle down. There is also the cost of compliance which could increase expenses for smaller companies and eat into their margins. There are other worries as well - including the anti-profiteering clause which could lead to lots of litigations.
Before things settle down, GST will create some uncertainty. It will also cause companies to postpone some decisions, including new project decisions, until the effects of GST is clear and the new tax system reaches some sort of stability.
Beyond that, Indian policy makers need to worry about long term trends like the rapid march of technology and its effect on jobs. As our recent cover story shows, the rapid increases in automation and robotics - and also artificial intelligence - will initially try reduce the number of people required for future factories and service companies.
They may or may not actually result in layoffs, but they will certainly put pressure on new job creation. For example, a car company will create far fewer jobs to produce the same number of cars in a new factory compared to an older one. An IT services firm will need far fewer people to do tasks that created thousands of jobs in the old days.
Eventually, things will settle, and new jobs will also be created. But till then, there will be enough uncertainties. And that is why the government needs to worry about.
The latest GDP numbers have come out and the picture is not very pretty. The GDP growth slowed to 6.1 per cent for the fourth quarter of 2016-17, from the 7.0 per cent the previous quarter. And the previous quarter itself had seen a slowdown, coming much lower than the 7.9 per cent and the 7.5 per cent seen in the first two quarters. The slowdown in growth had started even before demonetisation was announced.
Look at the GVA figures, which is the measure of the goods and services produced by a country (GDP = GVA plus taxes, minus subsidies), and the picture gets worse. GVA growth has fallen quarter after quarter, two years in a row. Take away the effect of the increased government spending in the last quarter and also that of agricultural growth which rebounded because of good monsoons, and the picture gets even more ugly. You have the GVA for the latest quarter growing at a measly 3.8 per cent.
Some other economic measures are also worrying. Growth in gross fixed capital formation is at an all time low. The NPA problem just refuses to go away. There is little news of big, new, Greenfield projects that will create lots of jobs. Construction activity has hit a low. In general, even while the overall GDP figure paints a reasonably rosy picture, it hides a lot of bad news.
How worried should we be about the country's economy? Quite a bit. As I had written earlier, the GDP data does not really capture the full effects of demonetisation on the informal sector. The formal sector data is used to estimate the informal sector, but demonetisation probably hurt the latter far more than the former. If anything, the organised sector stood to gain from demonetisation move.
But what is often being overlooked is that the slowdown had started even before demonetisation. The fact that GVA figures has been falling quarter after quarter for two years straight is the first worrying factor. The GDP growth in the second quarter itself was lower than the GDP growth in the first quarter. More importantly, in the past three quarters, the GVA from agriculture and government spending has been higher than those for manufacturing and services.
Agriculture, unfortunately, depends too heavily on good monsoons in India. Last year, we had good rains after two consecutive years of drought. This year too, normal rains are expected but the government cannot just depend on the monsoon being normal to save its blushes.
And eventually, government spending to prop up the GDP cannot be the solution. Private investment needs to come back and for that two things are necessary. The first is healthy consumption demand going up steadily which reduces the overcapacity that has been built up in most sectors, and allows goods and services companies to spend in building new capacity for the future. The second is healthy balance sheets that allow companies to start borrowing afresh to set up new projects. By all indications, both will take some time.
Meanwhile, there is the worry about the short term disruptions and impact of GST. The concept of GST is very good, and in the long run it will have all sorts of benefits including reduced costs and inefficiencies and better tax compliance. In the short run though, it will possibly be a bigger disruptor for the Indian economy than demonetisation was.
Already, there are indications that most sectors will have to deal with a working capital disruption for a quarter or two before things settle down. There is also the cost of compliance which could increase expenses for smaller companies and eat into their margins. There are other worries as well - including the anti-profiteering clause which could lead to lots of litigations.
Before things settle down, GST will create some uncertainty. It will also cause companies to postpone some decisions, including new project decisions, until the effects of GST is clear and the new tax system reaches some sort of stability.
Beyond that, Indian policy makers need to worry about long term trends like the rapid march of technology and its effect on jobs. As our recent cover story shows, the rapid increases in automation and robotics - and also artificial intelligence - will initially try reduce the number of people required for future factories and service companies.
They may or may not actually result in layoffs, but they will certainly put pressure on new job creation. For example, a car company will create far fewer jobs to produce the same number of cars in a new factory compared to an older one. An IT services firm will need far fewer people to do tasks that created thousands of jobs in the old days.
Eventually, things will settle, and new jobs will also be created. But till then, there will be enough uncertainties. And that is why the government needs to worry about.
India, Russia to develop 'independent' credit rating industry
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India and Russia today vowed to develop a credit rating industry that is "independent from political conjecture" -- a move that follows apprehensions about global agencies being biased towards large economies like the US and China.
In a joint declaration, Prime Minister Narendra Modi and Russian President Vladimir Putin also said they would also explore harmonisation of the respective laws in the two countries regarding credit ratings.
The move assumes significance in the wake of several commentators and policy makers in India raising concerns that the global rating agencies have not been upgrading India's sovereign credit rating despite its improving economic and political fundamentals, even as China was viewed favourably by the same agencies.
Globally, there are a handful of rating agencies and most of them are headquartered in the US. Most of the agencies including Fitch, S&P and Moody's have given India the lowest investment grade rating -- just a notch above the junk grade.
"We will coordinate our positions in order to develop a credit rating industry that is transparent for the market participants and independent from political conjecture.
"In this sense we support work aimed at exploring the opportunities of harmonisation of our legislation in the area of credit ratings, as well as recognition of ratings of our local credit rating agencies," the declaration said.
India continues to be rated 'BBB-' -- just a notch above the junk grade and lowest among investment grade ratings -- by most of the global credit rating agencies despite the government pitching hard for an upgrade on the basis of several reforms initiated over the last few years.
Some commentators have also raised questions about the methodologies adopted by the rating agencies, even as they have been defending their views and have ruled out any upgrade in the immediate future.
Taking a dig at rating agencies, Chief Economic Advisor Arvind Subramanian went on to write a piece in this year's Economic Survey with a headline 'Poor Standards? The Rating Agencies, China and India' -- an apparent reference to the leading agency Standard and Poor's.
He also wrote that the role of ratings agencies has increasingly come into question in recent years.
"In the US financial crisis, questions were raised about their role in certifying as AAA bundles of mortgage-backed securities that had toxic underlying assets. Similarly, their value has been questioned in light of their failure to provide warnings in advance of financial crises - often downgrades have occurred post facto, a case of closing the stable doors after the horses have bolted," he wrote.
Subramanian said S&P in November 2016 had ruled out the scope for an upgrade for India for some considerable period, mainly on the grounds of its low per capita GDP and relatively high fiscal deficit.
Former RBI Governor Bimal Jalan also last month pitched for a rating upgrade for India due to a number of steps taken by the government.
Asked why India was being denied a rating upgrade even as growth and fundamentals have improved, Jalan said the country's rating must be upgraded by global rating agencies because of a number of measures taken by the Modi government.
Recently, Fitch cited weak fiscal position to keep India's sovereign rating unchanged at 'BBB-', the lowest investment grade with stable outlook assigned to the country more than a decade ago.
Critical of rating agencies for giving India the lowest investment grade rating, eminent banker Deepak Parekh also wondered how a country with such "strong fundamentals" on both economic and political fronts can be rated so low.
"Why is India, the fastest growing emerging economy for over one year now with all macroeconomic fundamentals being positive, rated just BBB-?
"On the other hand, Italy and Spain, which are far weaker and smaller, are having much higher ratings than us," Parekh said recently.
"Italian banks are in far worse shape than our banks.
Italian government is more shaky and we have a solid political stability now," he said, while adding that a credit rating is supposed to be based on both economic and political factors.
India and Russia today vowed to develop a credit rating industry that is "independent from political conjecture" -- a move that follows apprehensions about global agencies being biased towards large economies like the US and China.
In a joint declaration, Prime Minister Narendra Modi and Russian President Vladimir Putin also said they would also explore harmonisation of the respective laws in the two countries regarding credit ratings.
The move assumes significance in the wake of several commentators and policy makers in India raising concerns that the global rating agencies have not been upgrading India's sovereign credit rating despite its improving economic and political fundamentals, even as China was viewed favourably by the same agencies.
Globally, there are a handful of rating agencies and most of them are headquartered in the US. Most of the agencies including Fitch, S&P and Moody's have given India the lowest investment grade rating -- just a notch above the junk grade.
"We will coordinate our positions in order to develop a credit rating industry that is transparent for the market participants and independent from political conjecture.
"In this sense we support work aimed at exploring the opportunities of harmonisation of our legislation in the area of credit ratings, as well as recognition of ratings of our local credit rating agencies," the declaration said.
India continues to be rated 'BBB-' -- just a notch above the junk grade and lowest among investment grade ratings -- by most of the global credit rating agencies despite the government pitching hard for an upgrade on the basis of several reforms initiated over the last few years.
Some commentators have also raised questions about the methodologies adopted by the rating agencies, even as they have been defending their views and have ruled out any upgrade in the immediate future.
Taking a dig at rating agencies, Chief Economic Advisor Arvind Subramanian went on to write a piece in this year's Economic Survey with a headline 'Poor Standards? The Rating Agencies, China and India' -- an apparent reference to the leading agency Standard and Poor's.
He also wrote that the role of ratings agencies has increasingly come into question in recent years.
"In the US financial crisis, questions were raised about their role in certifying as AAA bundles of mortgage-backed securities that had toxic underlying assets. Similarly, their value has been questioned in light of their failure to provide warnings in advance of financial crises - often downgrades have occurred post facto, a case of closing the stable doors after the horses have bolted," he wrote.
Subramanian said S&P in November 2016 had ruled out the scope for an upgrade for India for some considerable period, mainly on the grounds of its low per capita GDP and relatively high fiscal deficit.
Former RBI Governor Bimal Jalan also last month pitched for a rating upgrade for India due to a number of steps taken by the government.
Asked why India was being denied a rating upgrade even as growth and fundamentals have improved, Jalan said the country's rating must be upgraded by global rating agencies because of a number of measures taken by the Modi government.
Recently, Fitch cited weak fiscal position to keep India's sovereign rating unchanged at 'BBB-', the lowest investment grade with stable outlook assigned to the country more than a decade ago.
Critical of rating agencies for giving India the lowest investment grade rating, eminent banker Deepak Parekh also wondered how a country with such "strong fundamentals" on both economic and political fronts can be rated so low.
"Why is India, the fastest growing emerging economy for over one year now with all macroeconomic fundamentals being positive, rated just BBB-?
"On the other hand, Italy and Spain, which are far weaker and smaller, are having much higher ratings than us," Parekh said recently.
"Italian banks are in far worse shape than our banks.
Italian government is more shaky and we have a solid political stability now," he said, while adding that a credit rating is supposed to be based on both economic and political factors.
Initial construction complete on largest ever aircraft, images surface
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The largest aircraft of the world was brought out in the open in the midst of Mojave desert in California for fueling tests. Named the Stratolaunch, 'it will be an air-launch platform to make access to space more convenient, reliable, and routine' according to the it's own Twitter handle. The plane is being developed by a firm of the same name, founded by Microsoft co-founder Paul Allen back in 2011. The massive plane boasts of a wingspan measuring 385 feet, and a height of 50 feet. The dry weight of the airplane stands at a staggering 500,000 pounds, and it can carry 250,000 pounds of fuel. While carrying its payload, the aircraft can weigh up to 1.3 million pounds. To lift this much weight, the plane is equipped with six 747 engines, which were disassembled and integrated in the aircraft.
The aircraft will not be carrying human or petty cargo, though. The Stratolaunch is intended to carry space rockets. With airport-style operations and quick turn capabilities, it will be a much cheaper option to project satellites and spacecrafts of certain weight.The rocket will be strapped to the bridge between the two fuselage of the aircraft and will be air-launched from 35,000 feet.
Stratolaunch has even partnered with OrbitalATK, and will launch their PegasusXL, a rocket that can deliver small satellites weighing up to 1000 pounds into orbit. This is expected to slash space travel costs by a great deal.
The largest aircraft of the world was brought out in the open in the midst of Mojave desert in California for fueling tests. Named the Stratolaunch, 'it will be an air-launch platform to make access to space more convenient, reliable, and routine' according to the it's own Twitter handle. The plane is being developed by a firm of the same name, founded by Microsoft co-founder Paul Allen back in 2011. The massive plane boasts of a wingspan measuring 385 feet, and a height of 50 feet. The dry weight of the airplane stands at a staggering 500,000 pounds, and it can carry 250,000 pounds of fuel. While carrying its payload, the aircraft can weigh up to 1.3 million pounds. To lift this much weight, the plane is equipped with six 747 engines, which were disassembled and integrated in the aircraft.
The aircraft will not be carrying human or petty cargo, though. The Stratolaunch is intended to carry space rockets. With airport-style operations and quick turn capabilities, it will be a much cheaper option to project satellites and spacecrafts of certain weight.The rocket will be strapped to the bridge between the two fuselage of the aircraft and will be air-launched from 35,000 feet.
Stratolaunch has even partnered with OrbitalATK, and will launch their PegasusXL, a rocket that can deliver small satellites weighing up to 1000 pounds into orbit. This is expected to slash space travel costs by a great deal.
RCom default a 'real possibility', says Fitch after Moody's downgrade
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Joining other rating agencies, Fitch today also downgraded Reliance Communications' debt, saying some kind of default is a "real possibility".
Earlier Moody's Investors Services, ICRA and CARE had downgraded the company's debt rating amid heightened concern over the telecom operator's loan repayment capability.
"RCom's rating downgrade reflects Fitch's belief that some kind of default is a real possibility," a Fitch statement said.
The US-based agency has flagged poor liquidity, excessive refinancing risk, "compromised" business model and delays in deal execution as key reasons for the downgrade.
"The rating action reflects Fitch's assessment that short-term liquidity has deteriorated to a position where credit risk is very high," Fitch said.
Fitch considers that Rcom's business model is "compromised in the highly price-competitive market" due to the high level of debt and loss of market share to competitors with greater resources.
"Its capital structure is unsustainable and it has excessive refinancing risk given that we expect cash generation may decline. During FY17, Rcom's revenue and EBITDA declined by 10 per cent and 30 per cent respectively," it said.
The earnings before interest, tax, depreciation and amortisation or EBITDA is a measure of any company's operating performance.
Fitch does not expect that RCom's FY18 EBITDA will be sufficient to cover its annual interest cost and maintenance capex requirements.
"Fitch Ratings has downgraded India-based Reliance Communications Limited's (Rcom) Long-Term Foreign- and Local- Currency Issuer Default Ratings (IDRs) to 'CCC' from 'B+'," Fitch said.
The debt-laden company owned by Anil Ambani has been reeling under a slew of rating downgrades over the last few days, and its shares have tanked amid reports that the firm failed on its debt serving obligations towards 10 or more local banks.
The company, last week, had reported its first annual loss since its inception of Rs 1,283 crore for fiscal ended March 2017, against a net profit of Rs 660 crore in 2015-16.
Its loss during March quarter stood at Rs 948 crore compared to a net profit of Rs 79 crore in year-ago period, hurt by the intense price war unleashed by newcomer Reliance Jio, owned by elder brother and India's richest man Mukesh Ambani. Its net debt stood at over Rs 44,000 crore at the end of March.
In the days that followed, Moody's Investors Service downgraded RCom's corporate family rating and senior secured bond rating citing weak performance and "fragile" liquidity position of the company.
As per rating agency ICRA, the debt protection metrics of RCom have further deteriorated with increase in debt and weakening in profitability.
RCom, however, has been trying to assure investors and lenders that it would repay Rs 25,000 crore before September 30 this year post completion of its two deals - sale of its tower business and merger of its wireless business with Aircel.
RCom Chairman Anil Ambani is all set to address the media tomorrow on some of these critical issues, as he seeks to calm investors' frayed nerves over its debt repayment plans.
"At end-March 2017, cash and equivalents were Rs 14 billion (Rs 1400 crore) - insufficient to pay for short-term debt of INR 109 billion (Rs 10900 crore)," Fitch said.
Joining other rating agencies, Fitch today also downgraded Reliance Communications' debt, saying some kind of default is a "real possibility".
Earlier Moody's Investors Services, ICRA and CARE had downgraded the company's debt rating amid heightened concern over the telecom operator's loan repayment capability.
"RCom's rating downgrade reflects Fitch's belief that some kind of default is a real possibility," a Fitch statement said.
The US-based agency has flagged poor liquidity, excessive refinancing risk, "compromised" business model and delays in deal execution as key reasons for the downgrade.
"The rating action reflects Fitch's assessment that short-term liquidity has deteriorated to a position where credit risk is very high," Fitch said.
Fitch considers that Rcom's business model is "compromised in the highly price-competitive market" due to the high level of debt and loss of market share to competitors with greater resources.
"Its capital structure is unsustainable and it has excessive refinancing risk given that we expect cash generation may decline. During FY17, Rcom's revenue and EBITDA declined by 10 per cent and 30 per cent respectively," it said.
The earnings before interest, tax, depreciation and amortisation or EBITDA is a measure of any company's operating performance.
Fitch does not expect that RCom's FY18 EBITDA will be sufficient to cover its annual interest cost and maintenance capex requirements.
"Fitch Ratings has downgraded India-based Reliance Communications Limited's (Rcom) Long-Term Foreign- and Local- Currency Issuer Default Ratings (IDRs) to 'CCC' from 'B+'," Fitch said.
The debt-laden company owned by Anil Ambani has been reeling under a slew of rating downgrades over the last few days, and its shares have tanked amid reports that the firm failed on its debt serving obligations towards 10 or more local banks.
The company, last week, had reported its first annual loss since its inception of Rs 1,283 crore for fiscal ended March 2017, against a net profit of Rs 660 crore in 2015-16.
Its loss during March quarter stood at Rs 948 crore compared to a net profit of Rs 79 crore in year-ago period, hurt by the intense price war unleashed by newcomer Reliance Jio, owned by elder brother and India's richest man Mukesh Ambani. Its net debt stood at over Rs 44,000 crore at the end of March.
In the days that followed, Moody's Investors Service downgraded RCom's corporate family rating and senior secured bond rating citing weak performance and "fragile" liquidity position of the company.
As per rating agency ICRA, the debt protection metrics of RCom have further deteriorated with increase in debt and weakening in profitability.
RCom, however, has been trying to assure investors and lenders that it would repay Rs 25,000 crore before September 30 this year post completion of its two deals - sale of its tower business and merger of its wireless business with Aircel.
RCom Chairman Anil Ambani is all set to address the media tomorrow on some of these critical issues, as he seeks to calm investors' frayed nerves over its debt repayment plans.
"At end-March 2017, cash and equivalents were Rs 14 billion (Rs 1400 crore) - insufficient to pay for short-term debt of INR 109 billion (Rs 10900 crore)," Fitch said.
IKEA to soon set up its third store in Bengaluru, to create 500-700 jobs
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After setting up two stores in Hyderabad and Mumbai, Swedish home furnishings company IKEA has now acquired a 14-acre site in Bengaluru to open its third store in the country.
The 14-acre land, which IKEA acquired from Bangalore Metro Rail Corp Ltd, is located at Nagasandra on Tumkur road. The furnishings company's first store in India will open early next year in Hyderabad.
According to a report in Business Line, IKEA store in Bengaluru is planned to be around 4.5 lakh square feet and is expected to have more than 5 million visitors per year.
The report also quoted IKEA India Chief Executive Officer Juvencio Maeztu who said, ''Karnataka is a highly strategic and important market for IKEA. Along with retail stores, IKEA's purchasing team will also grow local sourcing and engage with local artisan and communities in many projects. Our first Indian sofa supplier is from Karnataka supplying to our global stores."
"Each IKEA store will employ 500-700 co-workers directly and another 1,500 people indirectly in different services. We are committed to inclusion and diversity and having 50 per cent women in our organisation at all levels is non-negotiable," Maeztu told Business Line.
Reacting to IKEA's latest plan, Karnataka Chief Minister Siddaramaiah in a statement said, "IKEA will bring best business practices, many employment opportunities, infrastructure development and contribute to the growth of the retail sector in the State. IKEA will work as a catalyst in our development plans."
After setting up two stores in Hyderabad and Mumbai, Swedish home furnishings company IKEA has now acquired a 14-acre site in Bengaluru to open its third store in the country.
The 14-acre land, which IKEA acquired from Bangalore Metro Rail Corp Ltd, is located at Nagasandra on Tumkur road. The furnishings company's first store in India will open early next year in Hyderabad.
According to a report in Business Line, IKEA store in Bengaluru is planned to be around 4.5 lakh square feet and is expected to have more than 5 million visitors per year.
The report also quoted IKEA India Chief Executive Officer Juvencio Maeztu who said, ''Karnataka is a highly strategic and important market for IKEA. Along with retail stores, IKEA's purchasing team will also grow local sourcing and engage with local artisan and communities in many projects. Our first Indian sofa supplier is from Karnataka supplying to our global stores."
"Each IKEA store will employ 500-700 co-workers directly and another 1,500 people indirectly in different services. We are committed to inclusion and diversity and having 50 per cent women in our organisation at all levels is non-negotiable," Maeztu told Business Line.
Reacting to IKEA's latest plan, Karnataka Chief Minister Siddaramaiah in a statement said, "IKEA will bring best business practices, many employment opportunities, infrastructure development and contribute to the growth of the retail sector in the State. IKEA will work as a catalyst in our development plans."
General Awareness
Kohli and Dhoni amongst four Indian cricketers on ESPN World Fame 100
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Indian cricketers Virat Kohli, Mahendra Singh Dhoni Yuvraj Singh and Suresh Raina, have featured in this year’s ESPN World Fame 100 list.
More Information about this year’s ESPN World Fame 100 Rankings:
Virat Kohli ranked 13th, which marks a drop from his previous year rank at 8thVirat has signed endorsements deal worth USD 17.4 million which includes the record Puma deal signed in February 2017. He has 13.4 million followers on Instagram, 33.9 million on Facebook and 13.9 million on Twitter.
- M S Dhoni’s too slipped by one spot to 15th from last year’s 14th
- Yuvraj Singh and Suresh Raina ranked 90th and 95th
- Indian tennis star Sania Mirza who ranked 41st in 2016 could not make it to the 2017 rankings.
- Footballer Cristiano Ronaldo topped this year’s ESPN World Fame 100 Rankings with USD 32 million endorsement deals, 93 million Instagram followers, 118.1 million Facebook followers and 50.4 million Twitter followers. Cristiano Ronaldo retained his top rank of last year’s inaugural rankings.
- Ronda Rousey, the mixed martial artist, at 16th position, is the highest ranked female athlete.
- American athletes dominated the ranking by occupying 35 spots.
Top 10 of ESPN World Fame 100:
Rank Athletes Sport 1 Cristiano Ronaldo Football 2 LeBron James Basketball 3 Lionel Messi Football 4 Roger Federer Tennis 5 Phil Mickelson Golf 6 Neymar Football 7 Usain Bolt Sprint 8 Kevin Durant Basketball 9 Rafael Nadal Tennis 10 Tiger Woods Golf
About ESPN World Fame 100 Rankings:
ESPN World Fame 100, annual rankings were first released in year 2016.
- The rankings are compiled on basis of a formula that combines value of endorsement deals signed by athletes, social media following (Facebook, Instagram and Twitter) and internet search popularity (particularly Google trends) of sports personalities across the world.
- Indian cricketers Virat Kohli, Mahendra Singh Dhoni Yuvraj Singh and Suresh Raina, have featured in this year’s ESPN World Fame 100 list.More Information about this year’s ESPN World Fame 100 Rankings:Virat Kohli ranked 13th, which marks a drop from his previous year rank at 8thVirat has signed endorsements deal worth USD 17.4 million which includes the record Puma deal signed in February 2017. He has 13.4 million followers on Instagram, 33.9 million on Facebook and 13.9 million on Twitter.
- M S Dhoni’s too slipped by one spot to 15th from last year’s 14th
- Yuvraj Singh and Suresh Raina ranked 90th and 95th
- Indian tennis star Sania Mirza who ranked 41st in 2016 could not make it to the 2017 rankings.
- Footballer Cristiano Ronaldo topped this year’s ESPN World Fame 100 Rankings with USD 32 million endorsement deals, 93 million Instagram followers, 118.1 million Facebook followers and 50.4 million Twitter followers. Cristiano Ronaldo retained his top rank of last year’s inaugural rankings.
- Ronda Rousey, the mixed martial artist, at 16th position, is the highest ranked female athlete.
- American athletes dominated the ranking by occupying 35 spots.
Top 10 of ESPN World Fame 100:Rank Athletes Sport 1 Cristiano Ronaldo Football 2 LeBron James Basketball 3 Lionel Messi Football 4 Roger Federer Tennis 5 Phil Mickelson Golf 6 Neymar Football 7 Usain Bolt Sprint 8 Kevin Durant Basketball 9 Rafael Nadal Tennis 10 Tiger Woods Golf About ESPN World Fame 100 Rankings:ESPN World Fame 100, annual rankings were first released in year 2016.- The rankings are compiled on basis of a formula that combines value of endorsement deals signed by athletes, social media following (Facebook, Instagram and Twitter) and internet search popularity (particularly Google trends) of sports personalities across the world.
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