📰 India disputes ILO’s modern slavery report
It contains no India-specific findings
•The government has written to the International Labour Organisation (ILO) challenging a recent study on “modern slavery” conducted by the Australia-based Walk Free Foundation (WFF) on behalf of the global body. The report does not mention India.
•The Labour Ministry shot off a strong letter to the ILO regarding its report titled ‘Global Estimates of Modern Slavery: Forced Labour and Forced Marriage 2017.’ The report, released on September 19, does not contain any India-specific findings, barring a mention that 17,000 people were interviewed for the survey.
•The letter follows a missive from the Intelligence Bureau (IB) to the government about documentation by multiple international organisations on slavery in India that can hurt India’s image and exports.
•In a letter to the Prime Minister’s Office and Labour Ministry, the Intelligence Bureau (IB) mentioned the following reports — the 2016 United Nations Special Rapporteur Report on contemporary forms of slavery, including its causes and consequences, the 2015 ILO Committee of Experts on the Application of Conventions and Recommendations on Forced Labour, the 2016 Global Slavery Index 2016 and ILO-WFF joint report of 2017.
📰 Dhaka defends China’s OBOR project
Economic benefits outweigh sovereignty at times, says Bangladesh at WEF
•Countries must not become “isolated in the name of sovereignty,” said Bangladesh Foreign Secretary Shahidul Haque, striking a counter to India’s tough position against China’s One Belt, One Road (OBOR) Initiative during a discussion on Asian connectivity projects.
•“Economic issues now dictate how much sovereignty one should exert,” Mr. Haque said at the World Economic Forum in Delhi. “We cannot be isolated in the name of sovereignty…There are times when you have to put the sovereignty issue behind, in the back seat, to the economic benefits to your people.”
‘High costs involved’
•“We in South Asia are the least integrated compared to ASEAN countries,” conceded Congress leader and Chairman of the Parliamentary Committee on External Affairs Shashi Tharoor, speaking during the discussion “Asia’s New Normal” at the WEF conference, but warned that while India could not “dictate” to its neighbours, they must see the high costs of the Belt and Road Initiative.
•“Chinese are now coming to build projects in Pakistan and in Sri Lanka they are increasingly seeing the exorbitant costs of Chinese aid. Many now call Sri Lanka’s Hambantota port project, a white elephant,” Mr. Tharoor added.
•Mr. Haque’s comments came in defence of Bangladesh’s decision to join the 60-nation connectivity project promoted by China, even as concerns grow over the “debt trap” that the massive infrastructure projects are leading smaller SAARC countries like Bangladesh, Maldives, and Sri Lanka into. In May, India had refused to attend China’s Belt and Road Forum.
📰 Norms to curb fund diversion mooted
SEBI panel proposes that audit committees must monitor flows to unlisted units
•Audit committees should monitor the flow of funds to unlisted subsidiaries, including those established overseas, while listed entities should put in place proper regulatory framework while sharing unpublished price-sensitive information with promoters or any other significant shareholders, the Securities and Exchange Board of India’s panel on governance has proposed.
•Listed companies should also be required to have at least six directors on the board with a minimum of 50% representation of independent directors — including one woman director. Further, enhanced disclosure requirements related to abrupt resignation of independent directors and auditors should be put in place, according to recommendations by the Uday Kotak-headed committee on corporate governance set up by SEBI. “The audit committee should also review the utilisation of funds of the listed entity infused into unlisted subsidiaries, including foreign subsidiaries,” the panel said, adding that the requirement be applicable in instances where the “total amount of loans/advances/investment from the holding company to the subsidiary exceeds Rs. 100 crore or 10% of the asset size of the subsidiary, whichever is lower.”
•The recommendation assumes significance in the wake of SEBI’s January order barring Vijay Mallya and six other entities from the securities market after a probe found that funds were diverted from United Spirits to group companies, including Kingfisher Airlines.
•Among recommendations related to the role of independent directors, the panel sought disclosure of the expertise of the directors being appointed, and capping the maximum number of directorships to seven by April 2020.
•Neeraj Gupta, partner and leader Risk Assurance Services, PwC India, said while the recommendations would strengthen corporate governance, implementation would require fundamental changes on multiple fronts.
•“The recommendations around having at least six directors...reducing the maximum number of listed company directorships and listing out competencies of every director on the board will impact the supply side,” said Mr. Gupta. “There could soon be a war for talent as corporate India embarks on the search for good independent directors,” he said.
📰 Beyond business as usual
It is time for India and the EU to join hands in defence of the liberal order
•As India and the European Union (EU) meet at their 14th summit today in New Delhi, they must go beyond business as usual. Trade and investment, science and technology, and innovation and education will remain on the Indo-European partnership platter, but such tactical cooperation will prove meaningless unless it is given a strategic and democratic direction to navigate an increasingly hostile global environment.
•With the U.S. reducing its global footprint and China moving in to fill the vacuum, this is the right time for New Delhi and Brussels to join hands in defence of the liberal order. Taking such a lead entails not merely protecting the international principles and institutions that have underpinned the development, security and stability of both India and Europe, but also reforming the multilateral architecture to prevent the rise of isolationist, unilateral and authoritarian forces.
•For inspiration on how to steer their relationship ahead, European and Indian officials will have to look no further than the landmark resolution passed last month by the European Parliament. On September 13, 751 parliamentarians from 28 states resolved that the EU-India partnership “has not yet reached its full potential,” and called on Brussels and New Delhi to “strengthen their efforts in promoting effective, rule-based multilateralism” and address security challenges with “respect for international law and cooperation among democratic states.”
•How can India and Europe further deepen their partnership? Delhi has also accelerated outreach efforts in the Baltic and Central and Eastern Europe region, where China’s formidable Belt and Road Initiative (BRI) is changing the balance of power and threatening European unity. But if India is serious about engaging the EU and presenting itself as an alternative to China, it will have to open its market to European goods, services and investments. India will also have to invest in greater coordination security cooperation with Europe in overlapping spheres of influence. For example, it is puzzling that India continues to stay away from the EU-coordinated naval escort missions for the UN World Food Programme in the Indian Ocean, when China has already participated 11 times.
•For the EU, the challenge is to openly recognise that beyond mere economic and transactional interests, democratic India makes for a much more attractive and sustainable partner than China. Rooted in its democratic institutions and open societies, the Indian and European world views are far more similar than usually assumed. This is increasingly manifested in their converging interests to ensure Eurasian connectivity plans that are truly multilateral, and also financially and environmentally sustainable; the protection of international legal principles such as the freedom of navigation; or the development of regulatory frameworks that foster scientific and technological innovation under the rule of law.
•As the world’s two largest democracies, it is now time for Europe and India to infuse their relationship with a liberal vision for a transformed global order.
📰 Does India need a bullet train?
This is a wasteful project which only serves to deliver an illusory feel-good perception among the wealthy
•The Mumbai-Ahmedabad bullet train is a vanity project which has little or no justification on the grounds of economic viability or public service. Even the vanity angle — looking to position India among the ranks of developed countries — is a huge overreach. Only a handful of high-income countries with specific demographics have high-speed rail (HSR), while many have failed in their efforts or have abandoned it after studying it. The main problem is viability, given the huge costs involved.
Failed and struggling projects
•Japan’s pioneering Shinkansen, which connects Tokyo to Osaka, passes through the biggest industrial and commercial centres, caters to almost 50% of Japan’s population, and carries more than 150 million passengers annually. South Korea’s Seoul-Busan HSR caters to almost 70% of the population, yet struggles with viability. France’s fabled Paris-Lyon HSR service has had to periodically receive substantial subsidies. Taiwan’s $14 billion HSR service between Taipei and Tainan virtually became bankrupt after losses of over $1 billion. It realised only 50% of the projected ridership and required government bailout. Argentina gave up on HSR ambitions on cost grounds, deciding instead to upgrade its entire railway system to medium-speed infrastructure, an option India should seriously consider. Even the U.S. is tentatively initiating a San Francisco-Los Angeles corridor, and is still unsure about the densely populated industrial-commercial Philadelphia-Boston-New York-Washington DC corridor. Turkey’s Ankara-Istanbul
HSR line is the only example from a middle-income country, and the jury is still out on its viability.
•China is, of course, an exception, as it is in most things. While reliable data is hard to come by about its 20,000 km of HSR, it is known that fares have been revised downwards many times to match passenger pockets, and that the railways has run up an internal debt of over $300 billion. Is India ready for such an eventuality?
Subsidies for the rich
•The Mumbai-Ahmedabad HSR costs around Rs. 1 lakh crore. Estimates in the project report by the Indian Institute of Management, Ahmedabad show that at least 1 lakh passengers at fares of Rs. 4,000-Rs. 5,000 would be required daily for the project to break even. The tariff is too high — air fares between the two cities are around Rs. 2,500. Subsidies appear inevitable. Subsidies for agriculture, education and healthcare are taboo, but subsidies for the rich seem unproblematic.
•Should India spend over Rs. 1 lakh crore for a 508-km HSR used by well-heeled passengers when over 90% of rail passengers in India travel by sleeper class or lower class for thousands of kilometres? Project supporters argue that one should not view these as either-or propositions. Unfortunately, one is only seeing expensive projects for the upper classes so far, such as the misleadingly named ‘smart cities’. When will the Railways see investment for new tracks and upgrading services for 90% of the travelling public?
•A myth being propagated is that this project will have knock-on effects on technology absorption by India through future HSR projects. Can anyone imagine India spending 15 times the present project cost for the pipe dream of 6,000 km of a “golden quadrilateral” of even less viable HSR tracks, as promised in the BJP’s 2014 election manifesto? Another myth is that the Japanese funding at 0.1% interest with a 15-year moratorium is “almost free.” Many business analysts have pointed out that the repayment amount will amount to Rs. 1.5 lakh crore over 20 years allowing for exchange rates and comparative inflation.
•This is a wasteful project which only serves to deliver an illusory feel-good perception among the wealthy.
📰 Tri-service integration or consolidation?
Recent comments from the armed forces raise disturbing questions
•While India aspires to jointmanship among the three services, statements over the last few weeks point disturbingly to renewed inter-service rivalry to protect their turf. Last week, addressing the 14th Subroto Mukerjee seminar organised by the Centre for Air Power Studies and the Indian Air Force, Vice Chief of Air Staff, Air Marshal S.B. Deo, said jointmanship was also about optimal utilisation of resources. “Ours is a growing country, our budget is limited. We cannot afford duplicating capabilities,” he said. “We cannot have an Air Force with the Army, an Air Force with the Navy and another Air Force.”
•His comments are significant against the backdrop of the government sanctioning six AH-64 Apache helicopters for the Army, something the service has been seeking for a while. At the same time the Navy is expanding its fighter strength though the carriers to operate them would accommodate less.
Army’s supremacy?
•In turn, speaking at a seminar by the Centre for Land Warfare Studies early last month, Army Chief General Bipin Rawat gave a peek into his idea of tri-service integration when he said that the “supremacy and primacy of the Army in a joint services environment” should be maintained. “The other services, the Navy and Air Force, will play a very major role in support of the Army which will be operating on the ground because no matter what happens, we may be dominating the seas or the air, but finally war will be to ensure territorial integrity of the nation,” he said. “And therefore the supremacy and primacy of the Army in a joint services environment becomes that much more relevant and important.”
•The question is, will these developments unleash another round of inter-service turf war and further delay several important decisions on tri-service integration such as the Chief of Defence Staff (CDS), specialised commands for cyber, space and Special Forces? Also, are we moving towards tri-service integration or consolidation?
•The comments also come shortly after the Union Cabinet had cleared 65 of 99 recommendations, all related to the Army, of the Lt General D.B. Shekatkar Committee for enhancing combat capability and rebalancing defence expenditure of the armed forces to increase the teeth-to-tail ratio (that is, ratio of combatants to soldiers in support roles). The remaining 34 recommendations pertaining to the tri-services, in addition to the Navy and Air Force, are to be taken up soon. Among them is a proposal on the appointment of a single point military adviser to the Prime Minister on strategic issues. Despite the NDA government according high priority to the issue and Prime Minister Narendra Modi himself sitting through presentations, progress has been minimal. After much deliberation, the consensus has veered towards a Permanent Chairman Chiefs of Staff Committee (CoSC), a four star officer equivalent to the three service chiefs, while ideally what the country needs is a full-fledged five star officer. The four star officer would serve no real purpose except adding to the already existing protocol nightmare and complicating the situation further.
Need for Chief of Defence Staff
•The last time India fought a major battle was the Kargil conflict in 1999 in which the Navy played a silent role while the Army and Air Force collaborated to evict intruders from Indian soil. The lessons learnt then prompted the K. Subrahmanyam Committee to propose having a CDS for the first time. Those who advocate instituting a Permanent Chairman CoSC must understand that once that happens, then there would be four people opposing the CDS’s creation compared to three now. Incrementalism doesn’t always work; sometimes a giant leap is the need of the hour. But with the latest comments, it appears that the other services would oppose the proposal for a CDS tooth and nail.
•India has traditionally been a land power and, yes, the primary threats are still on land, from the northern and western borders. But the threat matrix has changed since 1947 and the Indian Ocean region is fast metamorphosing into a major arena of friction, with increasing forays by the Chinese Navy and building up of regional navies with help from China. Also, while the threat of war stills exists in the subcontinent under the nuclear overhang, the room for large conventional manoeuvres is over. In a conflict situation, what would unfold are short and swift skirmishes which call for agility and swift action by the three services in unison.
•With threat perceptions heightened in the neighbourhood and newer challenges rising in the region and beyond, it is unfortunate that the mighty ‘armed forces’, which are the drivers of the nationalistic discourse in the country, are engaged in squabbles. The recently released ‘Joint military doctrine of the Indian armed forces 2017’ made the right noise on “jointness” and “integration”, but much work is needed on the ground to achieve even a fraction of what has been enunciated.
