Contest vs. consensus
The latter should be the default approachfor selecting a presidential candidate
•Whether an enlightened public figure or an active politician, the next President should be one who enjoys the widest possible acceptability. For this to happen, there should be meaningful discussions towards building a consensus among the major political parties ahead of the presidential election. The BJP’s overtures to key leaders in the opposition appear to be merely exploratory. Approaching opposition parties for their cooperation without putting forward a name will be unfruitful. It appears that the Union Ministers who met key opposition leaders requested that the latter should not field a candidate merely for the sake of a contest. Such an approach is more likely to succeed if the Centre draws up a list of possible names and seeks the cooperation of opposition parties in getting one of them elected. It would also help the opposition parties arrive at an agreement among themselves on whether to field a candidate or back the ruling party’s choice. The BJP may want to elect a President who will share its political outlook and philosophy. After all, in the last two elections the Congress succeeded in getting its party leaders elected President. But it is worth recalling that the main opposition of the day did not oppose K.R. Narayanan and A.P.J. Abdul Kalam in 1997 and 2002, respectively. A consensus is still possible if the candidate chosen meets one of the most important qualifications for the presidency — a general acceptability.
•Too often, contestations in the political realm make it imperative for the opposition to field a candidate in the interest of demonstrating its unity in the hope that its combined strength will pose some sort of a threat to the ruling dispensation. There is little doubt that the current political mood in the country is not entirely conducive to successful cooperation among diverse political forces to get an eminent citizen elected without a contest to head the republic. There is widespread unrest among farmers and there are credible fears among several sections that there may be an attempt at homogenising the country’s cultural diversity. There will be little surprise if parties opposing the policies of the National Democratic Alliance regime would want to make use of this opportunity to join hands and make a determined attempt to challenge the electoral supremacy enjoyed by the BJP in the recent elections. On the other side, the BJP may believe it has an edge in the electoral college consisting of all members of Parliament and the State Assemblies, as it can count on the backing of some regional parties. In such circumstances, a contest is likely. However, it would be best if someone who inspires confidence that he or she would act in a non-partisan manner is elected with the support of both the ruling party and the major parties in the opposition. It would enable the next incumbent to be the honest broker and wise counsel the Constitution envisions him or her to be.
‘No Indian fighting in the Philippines’
Report had spoken of ‘foreign IS jihadis’
•Security agencies here have denied that an Indian fought alongside the Islamic State (IS) at Marawi in southern Philippines which was seized by the Islamist militant group a month ago.
•A Reuters report said on May 30 that “dozens of foreign jihadis”, which included an Indian, “fought side-by-side with Islamic State sympathisers against security forces”.
Enquiries conducted
•Following the report, security agencies conducted enquiries but could not get any information on the presence of an Indian there.
•At least two top intelligence officials told The Hindu that they could not identify any Indian who could have travelled to the island city to participate in the fight.
•“No Indian who travelled to Syria-Iraq or Afghanistan is said to be in the Philippines. We got in touch with the authorities in the East Asian country, but they have not shared any such information with us,” said one of the two intelligence officials.
•Around 25 Indians are said to have travelled to the IS-controlled territory in Iraq-Syria in the past three years, while 21 men, women and children from Kerala made their way to the Khorasan province in Afghanistan in 2016.
•Rumiyah, a propaganda magazine of the IS, in its latest issue has dedicated a chapter on the Philippines’ fight and also carries an interview with the Shaykh Abu Abdillah al-Mujahir, the amir (chief) of the IS in East Asia.
•He says in the magazine that a large number of mujahideen have reached Philippines from “various countries in the region of East Asia, and even from regions outside East Asia”, confirming the presence of foreign fighters but doesn’t mention their nationality.
•“We have identified the Indians who made their way to the IS-controlled territory, but so far no evidence has emerged that any Indian travelled to the Philippines. It could be an expatriate but we are not sure,” said another official.
•The official, however, said there were tell-tale signs of trouble brewing in the East Asian country since February-March this year when it was informed of the militant outfit’s plan to lay siege in the predominantly Catholic nation.
•The Armed Forces of Philippines (AFP) have been engaged in a prolonged battle with the Maute-IS group, which has claimed the lives of more than 300 civilians so far.
•The radical outfit formed in 2012 by two brothers, Omarkhayam and Abdullah Maute, has pledged allegiance to the IS. It has the support of Isnilon Hapilon, leader of the Abu Sayyaf and one of the most-wanted terrorists in the U.S.
New playground for non-state actors
‘Internet-enabled’ terrorism has introduced greater complexity in an already difficult scenario
•Hidden terror was, till now, believed to be confined mainly to the less developed regions of the world — the 9/11 attack in the U.S. was seen as an aberration, or exception, rather than the rule in this respect. Since 2015, however, with the attack in January of that year on the Charlie Hebdo offices in Paris, followed by a series of major terrorist incidents in Brussels, Paris, Nice, Berlin and Istanbul during the past two years, it is evident that the developed world is no longer immune from terror strikes.
•The Islamic State (IS) has claimed responsibility for the vast majority of these attacks, though this may not be true in all cases. What is not disputed any longer is that the West now has a sizeable number of radicalised Islamist elements who are willing to perpetrate acts of terror — either on their own, or under instructions from elsewhere.
Timeline of the new phase
•Terrorism can be said today to be the single most serious threat to peace across the world. Several aspects, political, security and developmental, are affected adversely by terrorism. Meanwhile, those indulging in acts of terror appear to have moved beyond the earlier non-traditional, non-state actors who were legatees of the Afghan Jihad (1979-1989). The new breed of radicalised terrorists is not overly dependent on external sponsors or state support. Their inspiration is different. While their origins may be traced to outfits such as al-Qaeda and its affiliates — and they still continue to adopt the techniques and belong to the same genre of terror — they are distinct.
•The United Kingdom, which has a reputation of possessing the best counter-terrorist organisation in Europe, and displays a steely resolve not to allow emotion to cloud its judgment unlike many other European nations, has lately been hit in rapid succession, by three significant terror attacks. This is indicative of the shifting trajectory of terror today, and the determination of ‘new era’ terrorists to attack not only ‘soft states’, but even those who pride themselves on being fully prepared to meet all contingencies.
•The first of the attacks occurred in March. This came after a gap of several years following the 2005 terror attacks in London. The March attack took place on Westminster Bridge and in the shadow of the Big Ben, in which five persons were killed and around 50 injured.
•A far more serious terrorist incident occurred subsequently in Manchester in May, in which at least 22 people were killed and more than a hundred injured. It featured a home-grown ‘jihadist’, whose victims were mostly teenagers attending a music concert, possibly the first instance of a large scale killing by the IS in the U.K. There had been prior warnings that the IS would focus on ‘soft targets’ and large crowds, rather than on protected areas with high security. The IS propaganda magazine ‘Rumiyah’ had specifically listed ‘concert halls’ as ideal target locations for attacks, while publishing a lengthy defence on the killing of women and children in ‘crusader’ countries.
•The IS has claimed responsibility for the latest June 3 attack. This resulted in the killing of eight persons, and injuries to more than 40. The attackers utilised a van driven at high speed across the London Bridge to mow down bystanders in its wake. The attackers proceeded, thereafter, to knife many more persons in the neighbouring Borough Market. Similarities between the March and June terror attacks in London are quite eerie. So, likewise, are the similarities between the May 22 Manchester attack in the U.K., and the November 13, 2015, Bataclan terror attack in Paris.
Copycat methods
•Copycat methods have often featured in IS attacks. In both the London attacks, vans were used, and even the locale was much the same. Not to be lost sight of also is the fact that in quite a few other IS-sponsored attacks vans/trucks have been employed. Instances of this kind have been reported earlier in Stockholm, Antwerp, Berlin and Nice in the past two years.
•All this needs to be viewed against the backdrop of the complicated pattern of relationships that exist between various radical Islamist terrorist organisations worldwide. These exist, notwithstanding the fact that the IS, for instance, preaches an exclusive brand of puritanical Islam alongside a vision of a new Caliphate, while some of the other terrorist organisations do not fully subscribe to this ideal. The reality is that many present-day terrorists have a common origin, and this includes the IS and al-Qaeda, though they may be rivals today. A fair amount of cooperation at the operational level is hence inevitable, and does exist among terror outfits, alongside a commonality in tactics and techniques, including in the use of high grade explosives such as TATP (Triacetone Triperoxide).
•What also cannot be ignored while comparing the banal with ground realities is that terrorism is becoming even more asymmetric by the day. This is becoming more evident by the day as new terrorist groups emerge. Collaboration agreements among terror outfits are, meantime, increasing, with signs of greater sophistication in the means and methods to perpetuate terror.
•This last aspect is especially important. Both ‘direct to home jihad’ and the ‘lone wolf’ syndrome have gained new meanings of late. Radicalisation via the Internet has attained a whole new dimension. Propaganda via the Internet today involves far more than mere recruitment imperatives, even though elaborate recruitment videos continue to be distributed via the social media, which depict the IS fighters as ‘knights’. All this still remains highly appealing to some Muslim youth. Nevertheless, a far more dangerous aspect today is the arrival of ‘Internet-enabled’ terrorism. This has introduced a far greater degree of indeterminate complexity into an already difficult scenario. The result is that the ‘lone wolf’ is no longer alone. Internet-enabled terror involves violence conceived and guided by “controllers” thousands of miles away. The attacks are masterminded from afar, guided via the Internet, and the actual perpetrators of violence act almost like robots.
•‘Enabled’ or ‘remote-controlled’ terrorism is fundamentally different from anything seen previously. Remote controllers choose the target, the actual operative, the ‘nature’ of the attack, and even the weapon to be used. Operating behind a wall of anonymity, this helps obscure the role played by individual members of terrorist groups, who utilise various individuals to carry out attacks and leave no trace.
•Specific instances already exist of the IS undertaking this kind of recruitment via the Internet. Thereafter, the individual is guided through every single step along the way for several months by anonymous “handlers” to carry out a terror attack. This marks a quantum jump as far as the terror matrix is concerned. We are possibly still at the beginning of the curve as far as the phenomena of ‘enabled’ or ‘remote-controlled’ terrorism is concerned; yet, the impact of this could be quite shattering.
Remote-plotting
•The IS appears to be in the lead in this respect as of now. Other international terrorist organisations are also beginning to resort to ‘remote-plotting’. Such situations will result in little or no dependence on the maintenance of safe havens for the plotters, since the plotters are anonymous. Visa restrictions and airport security, including perimeter security of the installations to be targeted, would again mean little to attackers, since they will strike where they live, and will no longer have to travel abroad or long distances for both training and action.
•Welcome, hence, to the world of ‘cyber-planners’, who will be responsible for planning terror attacks, identifying recruits, assess possible opportunities, act as “virtual coachers”, and provide guidance and encouragement throughout the process. These elements could be involved in every single planning stage of an operation, including where to obtain weapons that will be needed for use. All the while, the ‘cyber planners’ and ‘cyber controllers’ would be able to maintain almost total anonymity.
•The Internet has thus become a dangerous ‘plaything’ in the hands of the many of the new-era terror outfits. Some like the IS are said to be also preparing to use the ‘deep web’ and the ‘dark net’. The ‘dark net’, in particular, could become a vicious instrument in the hands of terrorist groups such as the IS.
PSBs told to explore smaller peers’ buyout
NITI Aayog report to lend clarity
•The Finance Ministry has asked four large PSU lenders to explore opportunities for acquisition of small and mid-sized banks with a goal to create global sized lenders, sources said.
•One of the possibilities is that large public sector banks (PSBs) like Punjab National Bank, Bank of Baroda, Canara Bank and Bank of India could try looking for potential candidates for acquisition, they said.
•So, informally, the Finance Ministry has sounded them that they should study the possibility for mergers and acquisitions so as to acquire scale and size of State Bank of India (SBI), the sources added.
•There are factors like regional balance, geographical reach, financial burden and smooth human resource transition that have to be looked into while taking a merger decision, they said, adding there should not be merger of a very weak bank with a strong one “as it could pull the latter down.”
NITI report
•However, the clear picture would emerge only after the NITI Aayog report sets the tone and tenure of the roadmap for the second round of consolidation in the banking sector.
•In the last consolidation drive, five associates and Bharatiya Mahila Bank (BMB) became part of SBI on April 1, 2017, catapulting the country’s largest lender to among the top 50 banks in the world.
•State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, besides BMB, were merged with SBI.
•With the merger, the total customer base of the SBI reached around 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country. The merged entity began operation with deposit base of more than Rs. 26 lakh crore and advances level of Rs. 18.50 lakh crore.
•The government in February had approved the merger of these five associate banks with SBI. Later in March, the cabinet approved merger of BMB as well. SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged with it.
•Enthused by the success of SBI merger, the finance ministry is considering clearing another such proposal in the public sector banking space by this fiscal-end. Another round of merger should kick off once the NPA situation improves.
Success, the ‘ZED’ way
•The ‘Make in India’ initiative unveiled by Prime Minister Narendra Modi in 2014, provided the much-needed boost to the languishing manufacturing sector and also an overarching framework for long pending structural reforms. Supply side interventions including FDI reforms, ease of doing business, scaling up physical infrastructure and competitive federalism are all being addressed under this initiative.
•While the ‘Make in India’ program has been incessantly analysed by economic commentators, the relatively less talked about the initiative is the effort to align with “zero defect, zero effect” (ZED). The ZED focus of the program is not only the most arduous to achieve but also most durable in its impact on overall competitiveness.
•A survey conducted by Statista-Dalia Research in 52 countries showed that ‘Made in Germany’ products were perceived as the best among 49 countries analysed followed by Switzerland and EU reflecting the inherent strength of their manufacturing engines. Interestingly, China was ranked last (49th) in terms of quality perception. India only fared marginally better at 42nd position.
Silver lining
•Nonetheless the silver lining for India is that no other Asian country is listed in the rankings, presenting an opportunity. Despite the two-decade lead taken by China in unleashing its manufacturing prowess, it continues to be at the bottom in the battle for perceived quality.
•Enhancing the quality quotient of ‘Made in India’ is a huge challenge as well as an opportunity for India’s manufacturing push. The Global Manufacturing Competitiveness Index published by Deloitte Touche and the Council on Global Competitiveness indicated the rise of the “Mighty Five”—Malaysia, India, Thailand, Indonesia and Vietnam. Indian manufacturing stakeholders should be acutely aware of the following in this regard.
•First, Chinese factory wages have trebled over the past decade and are almost at par with eastern Eurozone countries. Low-cost production jobs are now moving to countries in South/South-East Asia. India could potentially be one of the countries to benefit from this realignment.
•Second, about 131.29 million people are employed in as many as 58.5 million establishments in our country, according to the sixth economic census, 2016 reflecting the ultra fragmentation of our manufacturing base. The baby steps taken by some States in labour reforms need to be scaled up to remove the hurdles for micro units in achieving the scale of operations. Only reasonable sized enterprises shall have the economies of scale to compete globally.
•Finally, while low-cost manufacturing is important for India, a comprehensive policy on value-addition to transform the economy is needed. Existing competitive edge in sectors like textilesneeds to be supplemented with focused strategies under the ZED philosophy (certification, productivity, technological depth, energy efficiency and IPR).
•While Government’s immediate concern is job creation , it has to be kept in mind that unless India starts competing on quality and technology, healthy moats around manufacturing can’t be created. The initiatives under ZED Model, National Productivity Council and QCI need to be amplified multi-fold for achieving quality consciousness at the MSME level.
Nitty-gritty of bankruptcy code
•Last week, Reserve Bank of India said its internal advisory committee (IAC) had identified 12 accounts, which account for 25% of non-performing assets of the Indian banking system for immediate resolution under the Insolvency and Bankruptcy Code (IBC).
•The gross bad debt in the banking system as on March was Rs. 7.11 lakh crore, which means the 12 accounts contribute to about Rs. 1.78 lakh crore.
What does bankruptcy mean?
•A company is bankrupt if it is unable to repay debts to its creditors (banks, suppliers etc). The inability to repay debts by some of the Indian firms has resulted in a huge pile of non-performing assets for the banking system. A mechanism to free up the money stuck as bad loans is one of the key for the banking system. IBC is seen as one such.
Which are the most stressed sectors having a problem of non-performing assets?
•While the names of the 12 accounts which have been referred have not been made public officially, the RBI had earlier hinted that stress was coming from sectors such as power, telecom, steel, textiles and aviation. Union Finance Minister Arun Jaitley later said the number of highly stressed accounts would be about 40-50.
How the RBI came into the picture of referring accounts for resolution under IBC?
•The government had recently amended the RBI Act, which gave powers to the central bank to direct banks to take punitive action against individual accounts under IBC.
How does the process work under IBC?
•To being with any creditor including banks can start bankruptcy proceedings against defaulters by filing a petition with the National Company Law Tribunal.
•After that, an insolvency professional with significant powers is appointed to take control of the defaulting company and assist the process.
•A creditors committee is formed to represent the interest of lenders and any other party that have been affected due to the default by the company.
•The committee should come up with a resolution plan (which may include selling off defaulted loans or liquidate the company outright). The resolution would require a nod from 75% of the creditors on the committee.
•The insolvency professional gets 180 days to come up with a feasible solution on the default issue. The timeline can be extended by another 90 days. If no solution is found within 270 days, a liquidator is appointed. The company can also opt for voluntary liquidation by a special resolution in a general meeting.
Does IBC resolve the bad assets crisis of the banks?
•Only time will tell. The proceedings under IBC are at a nascent and untested stage in India.
