📰 M-777 gun suffers damage during test
$737 mn deal with U.S. on the howitzer
•An M-777 ultralight howitzer from the U.S. was damaged during field testing in Pokhran on September 2, Army sources said on Tuesday.
•Last November, India signed a deal with the U.S. government under the Foreign Military Sales programme for 145 of these guns at a cost of $737 million.
•“During the firing, the projectile which was the fifth of the series exited the barrel in multiple pieces,” an Army source said.
Firing tables
•The gun, manufactured by BAE Systems of the U.S., was using Indian ammunition, and the field trial was under way for compilation of firing tables.
•“The extent of damage to the barrel is being assessed by a joint investigation team. No one has been injured,” the source said.
•Field trials will resume after an analysis is conducted by the investigation team.
•BAE Systems said in a statement that it was working closely with the Indian Army and the U.S. government to evaluate the incident.
•As part of the agreement, two guns arrived in April for calibrating range tables and three more guns will be arriving in September 2018 for training.
Long process
•Deliveries are slated to start in March 2019 and at the rate of five guns a month, will be completed by mid-2021. While 25 guns will be imported, the remaining 120 will be assembled in India by the Mahindra group.
•The Army has not inducted any new artillery gun after the Swedish Bofors in the 1980s.
•After several failed attempts, many deals are in progress.
•The M-777 agreement was the first one to be concluded.
📰 ‘Cooling off’ period in Hindu divorce can go: SC
‘Waiting 6 months will prolong agony’
•Hindu couples who have mutually agreed to separate need not wait anymore for the mandatory “cooling off” period of six months before divorce, the Supreme Court held on Tuesday.
•Once a couple moves a court of law for divorce under the Hindu Marriage Act, they have to wait for a minimum period of six months.
Mutual consent
•Divorce by mutual consent was introduced as an amendment to the Hindu Marriage Act in 1976.
•The waiting period under Section 13B was mandated to prevent couples from taking any hasty decision to end their marriage. Marriage is a sacrament in Hinduism.
•The waiting period was for them to have enough time to think through their decision to separate.
•Divorce was granted only after the ‘cooling off’ period and once the court found there was no further chance for reconciliation.
•“The waiting period will only prolong their agony,” a Bench of Justices A.K. Goel and U.U. Lalit observed in their judgment.
•The court held that the waiting period should be done away with in cases where there is no way to save the marriage and all efforts at mediation and conciliation have run their course; where parties have genuinely settled their differences including alimony, custody of child, etc, between themselves; and already a year and a half has passed since their first motion for separation.
•The application for waiver of waiting period can be filed in court within a week of their first motion for separation. The proceedings can be done through video-conferencing, the court observed.
📰 Stung India slams ‘inaccurate’ UN reports
At the Human Rights Council, India’s Permanent Representative says Commissioner’s criticism on Rohingya, cow vigilantism is selective
•Angered by criticism from the UN’s Human Rights Council on the issue of Kashmir, cow vigilante violence and Rohingya refugees, India on Tuesday accused the High Commissioner of the body, Zeid Raad Al Hussein, of passing “tendentious judgments made on the basis of selective and even inaccurate reports” in his comments on Monday.
•“India is proud of its independent judiciary, freedom of press, vibrant civil society and respect for rule of law and human rights. A more informed view would have not only recognised this but also noted, for example, that the Prime Minister himself publicly condemned violence in the name of cow protection,” said India’s Permanent Representative to the UN in Geneva Rajiv Chander, during the ongoing Human Rights Council in his reply.
‘Incidents extrapolated’
•The government said Mr. Hussein’s reference to the killing of journalist Gauri Lankesh and other references to people displaced in the Sardar Sarovar-Narmada Bachao Andolan, and “mob attacks against people under the pretext of protecting the lives of cows” and other instances of “rising intolerance” in India, were “individual incidents extrapolated to suggest a broader societal situation”.
•On Monday, while giving his update to the Council’s reports on 40 countries, Mr. Hussein had “deplored” the government’s recent decision to deport approximately 40,000 Myanmarese Rohingya refugees.
•“India cannot carry out collective expulsions, or return people to a place where they risk torture or other serious violations,” Mr. Hussein had said, referring to the principle of non-refoulement, after calling the Myanmar government’s policies against the refugees as a “a textbook example of ethnic cleansing”.
Security challenges
•“Like many other nations, India is concerned about illegal migrants, in particular, with the possibility that they could pose security challenges. Enforcing the laws should not be mistaken for lack of compassion,” Mr. Chander said, without referring directly to the Rohingya or Myanmar.
•On the issue of human rights violations in Jammu and Kashmir that the UN Human Rights Chief had referred to in the written reports as well, India said the assessments overlooked “the central role of terrorism” there.
•Reacting to Mr. Hussein’s statement, Union Minister of State for Home Kiren Rijiju had said on Monday that the government had not firmed up a plan to deport the Rohingya yet and had only asked the State governments to identify the illegal immigrants and initiate action as per the established procedure.
📰 A fragile ark that shelters 2,626 creatures
Zoological Survey of India produces first exhaustive compendium of animal diversity in the Sundarban islands and the threats it faces
•In a first, the Zoological Survey of India (ZSI) has published an compendium of animal species in the Indian Sundarbans, estimating that there are 2,626 of them in the fragile island ecosystem. The listing includes a diverse 25 phyla, as they are biologically classified.
•The Indian segment of the Sundarbans, part of a UNESCO World Heritage site, forms part of the Ganga-Brahmaputra delta across 9,630 sq. km, distributed among 104 islands.
•The region hosts 2,487 species that come under the zoological kingdom of Animalia, and 140 under the more primitive Protista.
•“The publication titled Fauna ofSundarbanBiosphere Reserve is the first consolidated and updated information of the faunal diversity of the Sundarbans. It lists over 2,600 species, including the new species described from the mangrove ecosystem as well as threats faced by them due to climate change,” ZSI Director Kailash Chandra told The Hindu.
•Biswajit Roy Chowdhury, secretary of Nature Environment and Wildlife Society, a non-governmental organisation and one of the authors of the publication, says it is encyclopedic in its scope.
•“When we talk about Sundarbans we refer to only a few major species in the reserve forest area in about 4,260 sq. km. The publication catalogues the entire faunal diversity of Sundarban Biosphere Reserve covering 9,630 sq. km spread over 19 blocks in South 24 Parganas and North 24 Parganas of West Bengal,” Mr. Roy Chowdhury said.
Gone missing
•The researchers document the famous tigers of these islands, which have adapted to aquatic conditions around, the human-tiger conflict, and behaviour of the big cat. The fortunes of 50 mammalian species including the Asian small-clawed Otter, Gangetic Dolphin, Grey and Marsh Mongoose and the wild Rhesus Monkey, the only primate here, are also documented.
•“Due to pressure on habitat from people and natural threats that have shrunk the mangrove swamp habitat, mammal numbers are declining,” the authors say. Two Rhinos, Swamp deer, Barking deer and Hog deer and Asiatic Wild Water Buffalo are not found in Sundarbans anymore, they say.
•There are 356 species of birds, the most spectacular being raptors, or birds of prey, that occupy the highest canopies of the forest. Osprey, Brahminy Kite and White-Bellied Sea Eagle are dominant, while Rose-ringed parakeets, flycatchers and warblers are also found in the middle tier, while in the lower tier, kingfishers abound — and the Sundarbans has nine of them.
•There are 11 turtles, including the famous Olive Ridley and Hawskbill sea turtles and the most threatened freshwater species, the River Terrapin.
•A crocodile, 13 lizards including three species of Monitor Lizards and five Geckos are found here. The rivers, creeks channels and the islands together harbour about 30 snake species, led by the King Cobra, considered vulnerable by IUCN.
•Others documented are the Monocellate or monocled cobra, Russell’s viper, common and banded kraits. Besides, ten species of frogs and toads are found.
Cartilaginous fish
•The mangrove ecosystem covers about 350 species of fish. Cartilaginous fish, which have skeletons of cartilage rather than bone, make up 10.3%. The IUCN conservation status shows 6.3% fish are near-threatened and 4.85% are threatened. Also, there are 173 molluscs.
•In another indication of its richness, 753 insect species are encountered in the Sundarban Biosphere Reserve. Of these, 210 are butterflies and moths. Moreover, Crustaceans — crabs, shrimp and prawns — constitute 334 species.
📰 ‘Stringent action to prevent data misuse’
Centre eyeing ‘precision governance’
•Pitching for use of big data analytics for inclusive growth, IT Minister Ravi Shankar Prasad on Tuesday said any unauthorised use of data would be dealt with an “iron-hand to ensure that nothing comes in the way of making data analytics a national movement.”
•“The government is committed to making the best use of big data in establishing rule of precision governance. While doing so, every care would be taken to strictly ensure that privacy rights of individuals are protected,” Mr. Prasad said at the inauguration of a 24-hour Hackathon, wherein participants will use government data platform to make applications and infographics on themes such as Drinking Water and Sanitation, Transport, Education and Crime and Health.
•IT Secretary Ajay Prakash Sawhney said, “There is big gap between data being available and data being utilized. I believe we have serious opportunities available.”
📰 More than 1 lakh directors at shell firms identified for disqualification
Action follows cancellation of registration of 2.1 lakh defaulting companies
•The Ministry of Corporate Affairs (MoCA) has said as on Tuesday, it has identified 1.06 lakh directors of 'shell companies' for disqualification under the relevant provisions of the Companies Act, 2013. This is part of actions to break the network of ‘shell companies’ and the fight against black money/money laundering activities, it said.
•Professionals including Chartered Accountants, Company Secretaries and Cost Accountants associated with such defaulting firms and involved in illegal activities have been identified in certain cases and the action by professional institutes such as ICAI, ICSI and ICoAI is being monitored, it said.
•Minister of State for Corporate Affairs P.P. Chaudhary said in a statement that, “The present Government has vowed to fight black money, and fighting the menace of shell companies is an imperative element of such fight. The fight against black money shall be incomplete without breaking the network of shell companies.”
Money laundering
•He said there is the possibility of using the shell companies for laundering black money. He further said, “... by the end of this month, we would be ready with the relevant details of all defaulting Directors of these shell companies. This whole exercise shall go a long way in creating an atmosphere of confidence and faith in the system paving the way for ease of doing business in India.”
•The move is pursuant to the MoCA’s action of cancellation of registration of around 2.10 lakh defaulting companies and subsequent direction of the finance ministry to banks to restrict operations of bank accounts of such companies by the directors of such companies or their authorized representatives, the MoCA said.
📰 Huge relief to Sivakasi fireworks makers as SC modifies ban order
Lifts its suspension of valid permanent licences in the NCR
•The Supreme Court on Tuesday modified its November 2016 ban on the sale of firecrackers in the National Capital Region (NCR), noting that a complete ban is “too radical a step.”
•The apex court lifted its suspension of valid permanent licences in the NCR, which encompasses the entire National Capital Territory of Delhi, including New Delhi as well as urban areas surrounding it in the neighbouring States of Haryana, Uttar Pradesh and Rajasthan. On November 11, 2016, the Supreme Court had ordered the suspension of all licences permitting the sale of fireworks, wholesale and retail within the NCR till further orders.
•It had banned the grant or renewal of firecracker licences on a slew of petitions seeking a ban on the use of fireworks. Further, the air quality had worsened manifold after Deepavali in 2016.
•In a paradigm shift from its stand last year, the court struck a balance between its primary concern to protect the “human right to breathe good quality air” and the commercial interests of the fireworks industry. It has now opted for a “graded approach” to prohibition of fireworks.
•The modification is a big relief to Sivakasi fireworks manufacturers, who had challenged the 2016 ban. They contended the ban had left 821 fireworks industries and five lakh employees in dire straits.
•“Consequently, a complete ban on the sale of fireworks would be an extreme step that might not be fully warranted by the facts available to us. There is, therefore, some justification for modifying the interim order passed on November 11, 2016 and lifting the suspension of the permanent licences...it is necessary to ensure that injustice is not caused to those who have already been granted a valid permanent licence to possess and sell fireworks in Delhi and the NCR,” a Bench of Justices Madan B. Lokur and Deepak Gupta observed in a 44-page judgment.
📰 An alliance on track
The Mumbai-Ahmedabad bullet train deal is also a geostrategic coup for Japan
•When Japanese Prime Minister Shinzō Abe meets Prime Minister Narendra Modi in Ahmedabad this week, the bilateral agenda will range from issues of maritime security to nuclear energy and trade. But at the centrepiece of their summitry will be the inauguration of India’s first high-speed rail corridor from Mumbai to Ahmedabad, to be developed using Japanese technology and financing.
•The image of the platypus-snouted blue and white Shinkansen streaking past a snow-topped Mount Fuji has become as synonymous with Japan as sushi. Since October 1964, when the first bullet trains collapsed the time it took to cover the 552 km between Tokyo and the commercial centre of Osaka to four hours (today it is down to 2 hours, 22 minutes), the Shinkansen has emerged as the symbol of Japan’s post-World War II ascent to economic superpowerdom. It encapsulates the archipelago’s engineering might and almost preternatural standards of safety and punctuality. Japan’s Shinkansen have carried over 10 billion passengers to date, without a single accident or casualty and an average delay of less than one minute.
•Yet, despite this admirable track record, Japan has struggled to export its bullet train know-how, even as Mr. Abe has made selling the technology abroad a cornerstone of his game plan to revitalise the stagnant Japanese economy. Before signing on India, Taiwan had been Japan’s only successful sale. But Taiwan is hardly a poster child for the system, given that its high-speed line has suffered heavy losses since opening in 2007.
•Profitability is a notoriously hard ask for high-speed train networks. Most lines across Europe, for example, are in the red. In Japan, some routes, notably Tokyo-Osaka, are profitable, but to achieve this requires high volumes of passengers and highly priced tickets. It costs around $130 for a one-way Shinkansen ticket from Tokyo to Osaka. And over 350 trains operate on this line daily, ferrying about 163 million passengers a year. The region served is demographically dense, home to over half of Japan’s population. These conditions are not easy to replicate and other high-speed lines in Japan have struggled.
Chinese competition
•The latest challenge to Japan’s ambitions is the emergence of China as the new emperor of the superfast train. Over the last decade China has developed a 22,000 km high-speed rail network. It boasts the ‘world’s fastest train’, the Shanghai Maglev that hits speeds of 430 km. Its technology is also cheaper, making it an attractive proposition for the cost-conscious developing and middle-income countries of Asia.
•In 2015, China pipped Japan to the post at the last minute by securing a high-speed rail project in Indonesia that had been considered by Tokyo to be in the bag. One reason Beijing unexpectedly won out was because China offered to finance the line without any recourse to Indonesia’s government coffers. In the years since, the project has stalled following land acquisition problems. Nonetheless, China has also beaten Tokyo to becoming Thailand’s partner of choice for its first high-speed rail line, permissions for which were finally granted after a two-year delay.
•The battle to export bullet trains is clearly reflective of the broader rivalry between China and Japan for influence in Asia. Consequently, the India deal is not only a business coup for Japan but also a geostrategic one. Former Ambassador of Japan to India and President of the Japan-India Association, Hiroshi Hirabayashi, acknowledged as much. “India is not Indonesia or Thailand. It is a great nation, totally autonomous. And it’s not as likely to submit to Chinese pressure,” he said of India’s decision to go with Tokyo.
Ironing out the niggles
•For Japan, the Mumbai-Ahmedabad contract has been hard-won. It entails a loan worth $12 billion, at 0.1% interest, to be paid back over 50 years, taking care of over 80% of the project’s estimated costs. Japan will also supplement the financing with a generous package of technical assistance and training.
•Yet in India, concerns related to costs, safety and misplaced priorities persist. Tomoyuki Nakano, the Director for International Engineering Affairs of Japan’s Railway Bureau, remained confident of ironing these out with some tweaks to the Japanese technology taking into account climatic differences, the possibility of electrical blackouts, as well as dust and other environmental conditions in India. He also pointed out that when Japan developed its first Shinkansen lines in the 1960s, it was a poor country as well that had required loans from the World Bank.
•But what about the enormous software or cultural differences between Japan and India? Mr. Nakano was sanguine. “When we had Indians coming here (to Tokyo) for training, I noticed some of them were quite late. But after two weeks in Japan they became very punctual,” he concluded.
📰 Time for course correction
Both public and private investment must pick up for the Indian economy to get back to high growth rates
•What do the latest numbers on national income indicate? What are the chances of the Indian economy moving out of the current phase of relatively low growth? Or are we stuck at a new ‘Hindu’ rate of growth?
Recent trends
•About a week ago, the Central Statistics Office (CSO) released the estimates of the gross domestic product (GDP) for the first quarter (April-June) of 2017-18. The numbers showed that in Q1 of 2017-18, GDP grew by 5.7%. Gross value added (GVA) at basic prices grew by 5.6%. Whichever measure you take, the growth rate has fallen below 6%. In the corresponding quarter of the previous year, GDP grew at 7.9% and GVA at 7.6%. What accounts for the decline in growth rate by almost 2 percentage points? Certainly, demonetisation must have had a negative impact. Also, the destocking of goods which might have happened prior to the introduction of goods and services tax (GST) must have also had a negative impact.
•However, it might be inappropriate to attribute the entire decline of 2 percentage points to the two factors. What has been happening is a steady decline from the first quarter of 2016-17 when the growth rate of GVA was 7.6%. By the third quarter of 2016-17, the growth rate had declined to 6.7%. Since then it has fallen by another 0.9 percentage point. Given the growth rate of 5.6% in Q1, it is unlikely that the growth rate for the year as a whole will exceed 6.5%. For this to happen, the growth rate in the next three quarters will have to be 7%. The most disappointing aspect of the first quarter numbers is the steep fall in the growth rate of manufacturing to 1.2%. Because of the good monsoon, agriculture will do better. Since agricultural growth rate last year was also good, the increase may not be that much.
•If the economy has to get back to the high growth rate seen earlier, we need to understand the factors that might have been operating to bring down the growth rate.
•One of the arguments attributed to the low growth rate is the poor performance of the external sector. Growth is fuelled broadly by two types of demand, domestic and external. High export growth has propelled the growth rate of many countries, including China’s. In India’s own experience, the high growth phase between 2005-06 and 2007-08 saw exports growing at an average annual rate exceeding 20%.
•India’s declining growth rate has also coincided with poor export performance. Export demand has been weak because of the tepid growth rate of the advanced economies. Both in 2014-15 and 2015-16, the export growth rate was negative. However, the export growth rate has become positive since the second half of 2016-17. While undoubtedly export demand is critically important to sustain high growth, the sharp decline in growth rate noted in the last few quarters cannot be attributed to poor export performance. In fact, as compared to the previous year, the export performance has improved.
Fall in investment rate
•The fundamental problem has been the sharp fall in the investment rate. Gross fixed capital formation rate stood at 34.3% in 2011-12. This started falling steadily and touched 29.3% in 2015-16. It fell further to 27.1% in 2016-17.
•According to the latest numbers, in the first quarter of 2017-18, it stood at 27.5%. Since the public investment rate has not shown any decline (it stands at 7.5% of GDP), it is the decline in private investment, both corporate and households, that has been responsible for the steady fall. While the fall in corporate investment is steep compared to what was achieved in 2007-08, it has more or less stabilised at a lower level of around 13%. Household investment, however, has continued to decline even in recent years. Household here includes not only pure households but also unincorporated enterprises.
•Deep concerns have been expressed about the fact that the growth that we have seen in recent years has not resulted in an increase in employment. The current period has therefore been described as one of ‘jobless growth’. It may be noted that data on employment are not very reliable. Firm data are available only for the organised sector. The rest are estimated through surveys. In fact, in the case of unorganised sectors, very often the position is one of ‘underemployment’ rather than unemployment. Growth can occur because of two reasons. One, it results from better utilisation of existing capacity. Two, it can come out of new investment. Whatever growth we have been seeing recently has come out of better utilisation of capacity rather than new investment. It is real growth spurred by new investment that generates more jobs.
•Another intriguing factor about the falling investment rate is that the last few years have shown a steady and substantial increase in foreign direct investment (FDI). FDI inflows in 2016-17 were at an all-time peak of $60 billion. In the first quarter of 2017, the inflows were $10.9 billion. With this type of inflow and if the investment rate has not grown, the one surmise that one can make is that much of the FDI has gone into acquiring old assets rather than going to greenfield projects. All this implies is that domestic investors continue to remain shy.
Private investment
•What can be done to stimulate private investment? First, in creating an appropriate investment climate, reforms play an important role. Some of the noteworthy changes that have happened in the last few years are the passing of the bankruptcy code and GST legislation, and modifications in FDI rules.
•We must continue with the reform agenda and there is still a lot to be done in the area of governance. Second, financing investment has taken a beating because of the poor health of banks. Banks in India today are universal banks providing both short-term and long-term credit. The sharp reduction in the flow of new credit has also put prospective investors in a difficult situation. To resolve the non-performing asset (NPA) problem, banks need to take a haircut. To bring banks back to good health, recapitalisation has become urgent. The government should go beyond the amount indicated in the Budget regarding disinvestment and fund banks through the money raised by disinvestment. Third, a close look must be taken at stalled projects to see what can be done to revive those which are viable. This is indeed a low-hanging fruit. In fact, this must be part of an overall effort to hold consultations in small groups with investors to understand and overcome the obstacles that come in the way of new investment.
•Not all investor groups are plagued with intractable problems. Industry-by-industry consultations and analyses are needed to pinpoint problems and their solutions. Fourth, even though the progress of small and medium industries is very much dependent on the fortunes of the large, a separate look at medium and small enterprises may be needed to prod them into new investment.
Two engines of growth
•To sum up, the growth rate in 2017-18 is unlikely to exceed 6.5%. Once the glitches and fears of the GST are over, the growth rate may pick up. Our goal must be to achieve and sustain a growth rate of 8% and above over an extended period. The Achilles heel is private investment, which has been steadily falling. However, there has been a slight pick-up in public investment recently. That is not enough. Only when the two engines of public and private investment function at full throttle will India fly high.
