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Current Affairs - 23 July 2017


General Affairs 

Indian Army let down by Ordnance Factories, it failed to deliver ammunition on time, says CAG report
  • Stocks of the as many as 61 types of critical ammunition needed to fight a war by the Indian Army will last only 10 days , a report of the Comptroller and Auditor General of India (CAG) has said which was tabled in the Parliament yesterday.
    But how did the stocks of the Indian Army drop so low and who exactly is responsible?
    About 90 per cent of the ammunition for Indian Army is sourced from the various manufacturing units of the Ordinance Factories Boards (OFB). The OFB failed to deliver ammunition on time leading to a mounting shortfall, the CAG has found.
    The OFBs are Defence Public Sector Units. They are controlled by the Department of Defence Production under the Ministry of Defence.
    Inquires of the CAG reveal performance of OFB have dipped in the last four years - since 2013. Earlier, from 2009-2013 the shortfall in production of different types of ammunition varied from "54 to 73 per cent."  Subsequently, from 2013 to December 2016, the CAG observes, "the Army's demand was not met in respect of 64 to 95 per cent types of ammunition."
    Closer scrutiny of the CAG revealed even shocking facts. For as many as 11 to 30 types of ammunition considered critical by the Indian Army, the shortfall varied between 50 to 100 per cent. In other words, certain key ammunition weren't produced by the OFBs at all between 2013 and December 2016. In comparison, the CAG says the shortfall in production of the same type of ammunition during 2008 and 2013 stood at 4 to 11 per cent.
    "Despite the continued slippages in supply of ammunition to the Army by ordnances factories no mechanism has been introduced by the Board or factories to fix responsibilities," the CAG has observed.
    AMMUNITION PRODUCED IS BELOW PAR
    Not only did the OFBs fail to produce critical ammunition for the Indian Army, but produced poor quality ammunition, the CAG has observed. As many as 14 types of ammunition and 7 types of spares were returned between 2013-14 and 2016.
    Of the ammunition found to be faulty, the majority were 81 mm and 155 mm ammunition, the CAG observes. The 81 mm ammunition that the CAG mentions are mortars which are used respond to ceasefire violations by Pakistan. The 155 mm ammunitions are artillery shells - those used by the Bofor's Field Guns. These two alone accounted for about 59 per cent of ammunition retuned. 
    POOR QUALITY CONTROL AND QUALITY ASSURANCE
    Shockingly, the CAG has found ammunition worth nearly Rs 17000 crore had to rejected by the army because of poor quality. These are "lying rejected at different depots due manufacturing defects," the CAG has said.
    Last June, 16 soldiers, including two officers, died when Central Ammunition Depot (CAD) at Pulgaon, Maharashtra went up in flames when defective anti-tank mines stored in the depot went up in flames.
    The CAG says even during the audit, a fresh case of faulty 7.62 mm bullets - used by the infantry - came to light. The total value of the bullets is nearly Rs 130 crore, the CAG has observed.
    Replacing faulty ammunition not only adds to the delays but also adds to the cost, "the need of the hour is improvement of the existing controls of Quality Control and Quality Assurance," the CAG has observed.

21 years after industrial ban, Agra still among India's worst polluted cities
  • Although the Taj Trapezium Zone Authority (TTZA) has placed over two dozen restrictions on industries in Agra to protect the Taj Mahal from pollution, but most of these restrictions remain more on paper than being practically implemented. As a result, the Taj Mahal remains engulfed in pollution year round.
    If pollution data of Agra is viewed, the entire city is surrounded by polluted air and the condition is deteriorating every year, making it difficult for the ad-hoc moratorium on new industries in Agra placed by the Environment Ministry to be lifted anytime soon. This has created difficulty in the expansion of existing industries in Agra, along with the setting up of new units.
    The officials who are responsible for the protection of the Taj Mahal from pollution are not even able to prevent garbage from burning in the city and neither are they trying to control the levels of airborne dust. Agra ranks among the five worst cities in India in terms of average Air Quality Index (AQI).
    An Archaeological Survey of India (ASI) official told India Today that from February to May, PM-10 particulate matter increased in the air around the Taj Mahal, which caused the AQI to reach dangerous levels. Taking a glimpse of the air quality statistics of Agra, in May 2017, PM-10 in Agra was at 203 while AQI was 169. In April, PM-10 was 170 and AQI was 147. In March, PM-10 was 141 and AQI was 127, while in February, the PM-10 particulate was at 148 and AQI was 132. All these levels are dangerously high and could give rise to various respiratory illnesses and even lung cancer, but the administration is yet to take any action on this matter.
    Agra Tourist Welfare Chamber Secretary Vishal Sharma said that Agra remains one of the worst polluted cities of India despite the closure of hundreds of polluting industries. He said that there is a ban on setting up new industrial units in Agra but, the air pollution is not coming down. Instead, the air quality is becoming poorer with every passing year, making it difficult to avoid respiratory illnesses after breathing in this air for the tourists. A lot of them have taken to wearing masks when coming to Agra. The Hota Committee report on pollution was not implemented in Agra.
    Sharma revealed that even Noida has a better air quality than Agra. He said that Agra has a major problem of PM 2.5 particulate in the air, apart from the dust in the air which originates from non-paved roadsides as well as the occasional dust storms that hit the city from the west including Rajasthan.
    The project of creating a three-layer green barrier between Rajasthan and Agra was never fully implemented and consequently, the air quality drops significantly in the city during the summer months due to dust. While in the winters, the PM 2.5 particulate and NO2 wreak havoc.
    To protect the Taj Mahal from pollution, the Taj Trapezium Authority and local administration have placed several restrictions, but no efforts are being made to control the real factors that are causing such high pollution levels. Henceforth, India's industrial cities have better air quality than Agra, despite the fact that Agra let go of its polluting industries in the interest of the Taj Mahal about 21 years back.

    The thermal power house that powered a large part of Agra was shut down and the use of coal in industries was banned. The petha (a soft candy popular in Agra) industry was shifted out of the city and petrol/diesel operated vehicles were banned from entering the restricted zone of 500 meters around the Taj Mahal. Despite all these measures, pollution hasn't gone down in Agra, which clearly indicates that it wasn't the industries alone that caused the most pollution in Agra.

Indian Air Force continues to provide support in flood-hit Gujarat
  • Responding to an early morning request by civil administration to rescue people fighting for life amidst flood waters, an MI-17V5 helicopter of the Indian Air Force took to the skies braving the extremely challenging weather conditions prevailing in the area.
    The helicopter was assigned the task of airlifting stranded people from 03 different villages in Limbdi, Sayla and Chotila Talukas of Surendranagar district of Gujarat whilst the NDRF personnel continued the rescue effort on ground.
    Fortunately, the rescue teams were able to extricate most people out of danger before the helicopter arrived. One person, however, stuck alone in a Dargaah in Untadi village in Limbdi Taluka was inaccessible for rescue teams on ground.
    In a well coordinated operation, the IAF helicopter was guided to the spot and the person winched to safety in the nick of time in a meticulously executed operation.
    The helicopter later returned to Ahmedabad airfield after an aerial recce of the area looking for people in need of aerial rescue. The IAF is maintaining suitably modified aircraft in a state of readiness to respond to any requisition for rescue by the state administration.

Doklam standoff: Engage in direct dialogue to reduce tension, US tells China, India
  • India and China should engage in direct dialogue free of any "coercive aspects" to reduce the tension over a military standoff in Dokalam, the Pentagon has said.
    Chinese and Indian soldiers have been locked in a face-off in Dokalam area in the southernmost part of Tibet in an area also claimed by Indian ally Bhutan for over a month after Indian troops stopped the Chinese army from building a road in the disputed area.
    "We encourage India and China to engage in direct dialogue aimed at reducing tensions and free of any coercive aspects," Gary Ross, a Defence Department spokesman told PTI.
    Ross, however, refused to take sides on the issue.
    "We refer you to the governments of India and China for further information... We are not going to speculate on such matters," Ross said when asked if the Pentagon fears the tension may escalate between India and China.
    The US State Department too has made similar statements over the past week.
    In recent years, almost all neighbours of China have accused Beijing of coercive tactics to settle border disputes.
    The standoff in Dokalam is seen as part of the same tactic to change the status quo in the area. India has taken a strong stand against the Chinese "unilateral action".
    National Security Adviser Ajit Doval is to head to Beijing for a meeting of BRICS NSAs next week. He is expected to discuss the issue with his Chinese counterpart Yang Jiechi.
    Earlier this week, a top Pentagon Commander told US lawmakers that China was exploiting its economic leverage as a way to further its regional political objectives.
    "As Chinas military modernisation continues, the United States and its allies and partners will continue to be challenged to balance Chinas influence," General Paul Selva, USAF, said in written response to questions to the Senate Armed Services Committee for his reconfirmation as Vice Chairman of the Joint Chiefs of Staff.
    Selva said deterring war is an exercise in influencing Chinas decision calculus, making diplomacy preferable to conflict and managing crises in such a manner that they do not unintentionally escalate.
    "To do this, the Joint Force will engage with the Chinese military within Congressionally mandated limits, build alliance capacity through close cooperation, and uphold international law through appropriate operations," he said.

Gorkhaland agitation takes a toll on students' fate, teachers turn saviours
  • Gorkhaland Movement has not only brought the life in Queen of Hills to a standstill but also raised a big question on the fate of students appearing in board examination this year.
    Darjeeling district has around 50 schools which are of national and international standards but all are closed since June 15. The schools in entire hill area of Darjeeling are more than a century old. Housed in heritage buildings these schools have been the education centres of many governors and other respected dignitaries over the years.
    The strike has left more than 43,000 students in a dilemma on how or rather whether they will be able to appear in the board examinations this year.
    Many schools have still not held the half yearly examinations till now for this academic year.
    The schools have been closed for more than a month and many parents are worried about the fate of their wards.
    TEACHERS TO RESCUE OF STUDENTS
    Subsequent to a request from the parents, several teachers have now gone out of their way to teach the students privately at home.
    The tuitions are being giving to these students free of cost every day in the first half of the day mostly from 11 am to afternoon.
    Nadim Akhtar is one of the several teachers who have made this effort. Akhtar, who teaches in a private school, said, "I am teaching these students in my home to help them in their studies. I am teaching them on the request of their parents. At first I was not ready but the way they requested me and when I saw these kids, I changed my mind and decided to teach them for about one-and-a-half hours."
    He expressed the confidence that his efforts would benefit these kids because they want to play whole day but do not want to study. At least under his guidance they are learning something new. They cannot attend to school but in his home they are taking test of every subject every day. At least they are not sitting blank. Whatever they study under his guidance, they revise everything at their home, he added.
    The teacher said he supported the issue of Gorkhaland. Still he was teaching these students so that they could revise their syllabus properly. "I am not teaching them any new chapter. I am just teaching them according to their mid-term syllabus. Students easily forget the subjects like maths and science. This is the only reason I am helping these students," he said.
    However, the students in the rural areas are not as fortunate as their counterparts in the urban areas. The distance they can afford to travel is never more than two kilometres for safety and security reasons but there are other constraints too.
    They can only revise since the boarders are unable to attend the extra classes as it may result in a mismatch of the syllabus.
    TEACHERS' PROTEST
    Meanwhile, several teachers have returned the awards from the state government but are still doing their duty of teaching at home, sans any cost.
    Pramila Pradhan, senior teacher of St Joseph School in Darjeeling said, "I got this academic award in 2012 from the teaching department of West Bengal government in Kolkata. The way the Bengal Government is ill-treating everyone, I thought I should return this award and support others."
    SCHOOLS AGAINST TAKEOVER BY FORCES
    The Central Paramilitary Forces are seeking school buildings for operation and accommodation bringing the school authorities at loggerheads.
    Father Kiju, assistant principal of North Point School in Darjeeling, made it clear that the forces will in no way get the school premises for any such purpose.
    He said, "They want to camp here but we are not giving them any space. They entered by breaking the locks. They were asking for the permission but we denied. They want to stay here with their securities which can be a risk. This is the only reason we didn't give them the permission."
    GORKHALAND JANMUKTI MORCHA AGITATION CONTINUES
    The Morcha leaders are continuing their demand, strike and have gone on hunger strike also now.
    Sonum Lama, president of Student Morcha said, "The adverse impact on education due to the mass movement has been massive. It has affected the life of the students," blaming the government for the situation.

Business Affairs 

    Bajaj Auto reports 19.51 per cent fall in Q1 net profit
    • Bajaj Auto reported a 19.51 per cent decline in consolidated net profit to Rs 836.79 crore for the June quarter of current fiscal, on account of lower sales.
      It had posted net profit of Rs 1,039.70 crore in the April-June quarter of last fiscal. Bajaj Auto said in a BSE filing its total income from operations during the quarter under review stood at Rs 6,177.66 crore as against Rs 6,355.84 crore in the April-June quarter of 2016-17.
      The domestic industry, it said, was impacted during the June quarter of 2017-18 due to changeover from BS-III to BS-IV vehicles and transition to the new Goods and Services Tax. Total vehicles sales during the quarter declined 10.68 per cent to 8,88,434 units as against 9,94,733 units in the corresponding period of last fiscal.
      The company said its total exports, however, went up by 10.48 per cent to 4,09,525 units as against 3,70,649 units in the same quarter last fiscal.
      With regard to GST, Bajaj Auto said: "For dealers holding stocks as on June 30, estimated loss per motorcycle was around Rs 1,400 as CST, auto cess, entry tax in certain states and LBT would not be eligible for set-off under rules for transition to GST."
      The company said it provided for Rs 32 crore towards compensation to the dealers for transition to GST. Competition continued to build stocks at the dealerships and hence in June, performance measured on wholesale numbers was negative for the company and reflected a lower market share, it added.

    RBI may push for resolution of bad loans worth Rs 8 trillion by March 2019: study
    • Emboldened by the Banking Regulation (Amendment) Ordinance, the Reserve Bank of India (RBI) is expected to push for resolution of bad loans worth around Rs 8 trillion by March 2019, a move that could bring down the non performing assets (NPAs) and improve the financial health of banks, a study by Assocham said.
      "So, it should be safe to assume that the NPAs mess would largely be resolved by the first quarter of financial year 2019-20," Assocham study titled 'NPAs Resolution: Light at the end of tunnel by March 2019' said. This would be helped by a combination of several factors-turnaround in the economic cycle and some resolute steps by the government and the Reserve Bank of India to fix the issue, it said.
      Although entire NPAs could be put on the altar of Insolvency and Bankruptcy Code (IBC) resolution mechanism, it has to be seen how much and how fast they actually goes out from the balance sheets of banks which at this point of time seem very stressed, it said.
      It is no secret that NPAs are a big drain on the financial health of banks especially public sector banks (PSBs). For example, 27 PSBs collectively made an operating profit of Rs 1.5 trillion in 2016-17, but after allowing for the provisioning for bad loans, among others, net operating profit slipped to a paltry Rs 574 crore.
      If balance sheet numbers are anything to go by, it simply brings home the fact that banks have no capacity to do fresh corporate lending that is necessary for pushing subdued private sector investment, the study said.
      Releasing the report, Assocham secretary general DS Rawat said it is to be noted that 16-month Asset Quality Review (AQR) exercise that ended in March 2017 pulled out NPAs from the closet and after this deep surgery strong medicine was required to quickly heal the system.
      "So, somewhat bitter medicine came in the form of the Ordinance promulgated by the President in May. The government gave wide-ranging legislative powers to the RBI to issue directions to lenders to initiate insolvency proceedings for the recovery of bad loans that have reached unacceptably high levels," he said.
      Banks were reluctant to resolve NPAs through settlement schemes or sell bad loans with hair cut to asset reconstruction companies for fear of 3Cs-CBI, CAG and CVC. With the institution of OC, the top bankers should get some cushion against the 3Cs, since the key decisions which involve taking losses by the banks, would be taken by an institutional mechanism and not one or few individuals.
      Within hours of the notification of the ordinance amending the Banking Resolution Act 1949, the RBI, eased the decision making process in the Joint Lenders' Forum (JLF) and Corrective Action Plan (CAP) under the 'Framework for Revitalising Distressed Assets in the Economy'.
      To begin with, the RBI empowered by the ordinance initiated the process of resolution and identified 12 accounts each having more than Rs 5,000 crore of outstanding loans and which accounting for 25 per cent or nearly Rs 2 trillion of total NPAs of banks for immediate referral for reaching a conclusion under the IBC.

    Reliance Jio launches JioPhone: Priced at Rs 0 'India ka Smartphone' offers unlimited 4G data in just Rs 153
    • Reliance Industries Limited chairman Mukesh Ambani on Friday announced the 4G VoLTE feature JioPhone at an effective price of Rs Zero. However, customers first have to pay a security of Rs 1500, which would be fully refundable after three years.
      Unveiling the 'India ka Smartphone', Ambani said that the launch of JioPhone is a critical element in bridging the divide between digital India.
      The 4G enabled phone includes, a distress call system, Jio Music, Jio Cinema and Jio TV. The phone also supports 22 major Indian languages.
      Here are the data plans the newly launched smartphone will offer:

      • "Voice will always be free" on a JioPhone, said Ambani. He went on to announce "digital freedom" on JioPhones since August 15 with unlimited data.
      • The phone will come with unlimited 4G data. Jio customers can avail Reliance Jio's Dhan Dhana Dhan offer on their JioPhone in just Rs 153 for a month.
      • Jio Customers can also avail the same offer weekly in just Rs 53 and for two days in just Rs 23.
      • Jio has also introduced a new Rs 309 per month plan for those who want to mirror content from JioPhone screen to the TV.
      Jio will cover over 99 per cent of the country's population in the next one year, said Mukesh Ambani.


      Data consumption in India has grown from 20 crore GB per month to 120 crore GB after Jio's entry, and has been multiplying ever since, he said.
      He further added, the country has now taken over China and US when it comes to data consumption.

    Apple helping Indian Railways to increase train speeds over 600 km per hour
    • Eyeing trains speeds of 600 km per hour, the government is working with global technology firms like Apple to help take Indian railways to the next level, Union minister Suresh Prabhu said on Friday.
      The railway minister also said the government's premier think tank NITI Aayog had approved the ministry's Rs18,000 crore proposal to increase speeds of the Gatiman Express on the two busiest corridors, Delhi-Mumbai and Delhi-Kolkata.
      With this approval, the speed of the Gatiman Express would increase to 200 km per hour, the minister said at an event organised by industry chamber ASSOCHAM.
      "You can yourself imagine how much travelling time this will save." Sharing plans for the future, Prabhu said the government had six-eight months ago called major technology developers working on increasing train speeds to more than 600 km per hour.
      "We are already working with companies like Apple... technology will not only be imported in India but will be co- developed in India," Prabhu said.
      Safety was also an important concern and Indian railways was planning to use self-propelled coaches that can detect rail fractures through ultrasonic technology, the minister added.

    The debt threat lurking behind India's power plants
    • In the central Indian village of Raikheda, the construction of a thermal coal power plant once promised jobs and economic progress.
      Years after its completion though, the debt-saddled project that promised power supply to hundreds of thousands of homes, sits mostly idle. It is unable to buy coal to power the plant or sell electricity to utilities. Dozens of nearby stores that were reliant on the project's success have shut down.
      Raikheda is not alone.
      A Reuters analysis of India's power output data shows over 50 coal-and-gas-fired power plants in India are largely mothballed, or operating at a bare minimum.
      They are symbolic of a broader power sector struggling to service and pay off billions of dollars in loans, a major debt risk for the banking sector that could come to a head in coming months and ultimately leave tax payers picking up the bill.
      After steel, power firms make up the second-biggest portion of India's $150 billion mountain of bad debts. Steel made up roughly a fifth of the bad debts and power more than 12 percent.
      Last month, the central bank ordered commercial banks - the main financiers of infrastructure projects in India, including the semi-complete, or largely mothballed power plants - to resolve non-performing debt problems in six months, or push defaulters into bankruptcy.
      That could leave the state-dominated banking sector with the bad debts and hasten a government recapitalization of the sector.
      "These loans aren't going anywhere," said Supratim Sarkar, group head of structured finance at SBI Capital Markets in Mumbai. "The government will have to take care of the banking sector."
      GMR Infrastructure, which also operates the New Delhi airport, built the Raikheda plant in the central state of Chhattisgarh with around 80 billion rupees in loans. GMR did not respond to multiple requests for comment, although earlier this year it announced a debt restructuring for the Raikheda plant.
      GMR commissioned the first phase of the 1.4 gigawatt Raikheda station in 2014 and its second in 2016, but they are fired up only occasionally to keep the power systems operable.
      During construction thousands were employed at the site and the local economy was bustling. Many farmers sold land in exchange for jobs at the plant. Next Domino to Fall
      India's stalled or stranded power projects account for nearly 50 gigawatts of electricity production capacity, or roughly 15 percent of India's total of more than 300 gigawatts.
      That is potentially critical output in a fast-growing economy where total power-supply capacity is, on paper, sufficient to meet demand. But blackouts are not unusual during peak hours.
      Several stranded projects are owned by the likes of Essar Power, GVK Power and Reliance Power, who rushed to set up power projects in the past decade when tariffs were rising.
      But the plans came unstuck as the financial health of government-owned, state-level power distributors weakened, leaving them unwilling to meet the prices demanded by power plants, while coal and gas supplies failed to keep up with the needs of the newly opened power plants.
      After heavy investment to construct the plants but no sales to generate income, many of these plants are now weighed down with debt.
      Brokerage CLSA estimates the power generation sector accounts for 43 percent of the debt on domestic bank watchlists, which represent credit deemed at risk of going sour but not yet classified as a non-performing loans.
      In 2015, India budgeted about $11 billion for a four-year bank bailout program, although analysts say this amount falls woefully short of requirements given Basel III norms and the provisioning needed for bad loans.
      Indeed, S&P Global Ratings analyst Deepali Seth-Chhabria estimates Indian banks will need 2.5 trillion rupees ($39 billion) for recapitalization. Policy Missteps
      Compounding the risks for the coal and gas-fired power sector, India's most-populous state of Uttar Pradesh recently rescinded eight power purchase deals the prior government had inked, deeming them too costly.
      And a shift in government policy in favor of clean energy further undermines the prospects of power plants reliant on coal.
      Earlier this year, GMR said it had agreed with banks to a strategic debt restructuring (SDR) for its Raikheda plant, giving lenders an equity stake in the asset and the ability to force a sale. At a conference in June, GMR said banks are still looking for potential buyers.
      So far, the use of SDRs have seen little success, analysts said.
      "Valuations of projects are the main reasons why SDRs have not yielded the desired results," said R. Venkataraman, senior director at business consultancy Alvarez & Marsal in Mumbai.
      With promoters of these projects also not keen to give away control, many of these cases will go to the bankruptcy court, he said.

    General Awareness

    India, China, Pakistan among 10 nations accounting for 95% of HIV infections – UN report

    • As per a report titled ‘Ending AIDS: Progress towards the 90-90-90 targets’ by the Joint UN Programme on HIV/AIDSUNAIDSIndia, China and Pakistan are among the 10 countries that accounted for more than 95% of all new HIV infections in the Asia and the Pacific region in 2016.
      Highlights of ‘Ending AIDS: Progress towards the 90-90-90 targets’:
      The report gives a comprehensive analysis of the 2014 targets to accelerate progress so that by 2020, 90% of all HIV-infected people know their status, 90% of all HIV-diagnosed people are accessing antiretroviral therapy (ART) and 90% of those taking ART are virally suppressed.
      • As per the report, positive developments have been observed for the first time in the fight against AIDS as more than half of all people living with the HIV virus now have access to treatmentwhile AIDS-related deaths have nearly halved since 2005.
      • The report added that last year, 19.5 million of the 36.7 million people living with HIV globally had access to treatment.
      • The annual number of new HIV infections in Asia and the Pacific has declinedfrom 310,000 in 2010 to 270,000 in 2016, marking a 13% drop.
      • However, the report has identified India, China, Indonesia, Pakistan, Vietnam, Myanmar, Papua New Guinea, the Philippines, Thailand and Malaysia as top 10 countrieswhich together accounted for more than 95% of all new HIV infections in the region in 2016.
      • In India, a respondent-driven sampling survey across 26 cities found that knowledge of HIV status was 41% among people living with HIV who inject drugs. Of those who knew their HIV status, only 52 per cent were accessing antiretroviral therapy and 83 per cent of those accessing treatment were virally suppressed.
      • The report also shows that globally, 30% of people living with HIV still do not know their status, 17.1 million are unable to access ART and more than half are not virally suppressed.
      Quick Facts about UNAIDS:
      The Joint United Nations Programme on HIV and AIDS (UNAIDS) is the main advocate for accelerated, comprehensive and coordinated global action on the HIV/AIDS
      • Headquarters of UNAIDS is located in Geneva, Switzerland.
      • Michel Sidibe is the current Executive Director of UNAIDS.

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