📰 Armenians, Clive and the Battle of Plassey
The Battle of Plassey was fought on June 23, 1757, exactly 261 years ago. Not many people know that Robert Clive’s victory was eased by support from one very unlikely quarter: the Armenians, a trading community that had fled persecution in Persia and settled in India in large numbers during the Mughal era
•On June 23, 1757, the Battle of Plassey led to the unlikely conquest of Bengal by Robert Clive’s army. George Bruce Malleson, in The Decisive Battles of India(1883), described Plassey as the most unheroic English victory. It was “Plassey which necessitated,” wrote Malleson, “the conquest and colonisation of the Cape of Good Hope, of the Mauritius, the protectorship over Egypt; Plassey which gave to the sons of her middle-classes the finest field for the development of their talent and industry the world has ever known… the conviction of which underlies the thought of every true Englishman.”
•It was Plassey, however, that exposed the subcontinent’s internal conflicts, destroying the native dynasties then in power and also the economy of imperial Bengal.
•In the early 18th century, India was a gigantic cesspool of business interests torn between European powers, native rulers, and the local or migrant merchants — all of them prowling about the hunting grounds of opium, saltpetre, textiles, spices, and bullion. In 1756, anticipating French and Dutch fortifications in Bengal, the English began reinforcing troops at Fort William, their ramparts in Calcutta. Siraj ud-Daulah, the last independent Nawab of Bengal, had just succeeded to the throne, after his grandfather Ali Vardi Khan. Infuriated, he asked the English to stop their fortifications, and when they ignored him, Siraj ud-Daulah attacked the fort and its neighbouring church.
•On June 26, 1756, the British forces surrendered, Calcutta was renamed Alinagar, and a mosque was ordered to be built inside the fort. The Nawab captured the British enclave in Cossimbazar, near Murshidabad, and imprisoned many British officers, including a young Warren Hastings.
•In Fort William, about 70 officers and soldiers of an English company, which included Indian, Portuguese and Armenian soldiers, were herded into the fort’s small prison. Overnight, 43 of them died due to asphyxiation, in an incident that became infamous as the Black Hole of Calcutta.
•One year later, Clive exacted revenge at Plassey. With the help of the Nawab’s uncle, Mir Jaffar, and local moneylenders, the Jagat Seths, Siraj ud-Daulah was betrayed. The formidable Bengal army of about 60,000 soldiers, 300 cannons and 300 elephants outnumbered Clive’s forces of 3,000 by 20 times, and yet ended up deserting or surrendering. The battle was lost by soldiers who did not fight and won by generals or subedars, not exactly gallant.
•‘The Plassey Plunder,’ as the aftermath of the battle came to be known, had the English navy and army each receiving a tribute of £275,000 (about £32 million today). The Company annually received from Jaffar — who supplanted Siraj ud-Daulah in Bengal — £3 million (about £308 million), between 1757 and 1760. As a clerk in Madras, Clive’s annual salary was £5, with £40 for expenses. When he returned to England in 1767, he was ‘Clive of India,’ with a trade revenue of £4 million, more enormous than any European kingdom then, and had a personal jagir of £34,567 (£3.5 million today). Clive’s father and he purchased seats in the British Parliament, and a peerage in Ireland, where his County Clare estate was renamed ‘Plassey’ for the new Baron Clive.
The Armenians of Bengal
•All the histories of Plassey usually only recount Clive’s coalition with Jaffar, the Jagat Seths and Omichand. But another major force to reckon with in Bengal then were the Armenians. Without them, the victory at Plassey would have been a mirage for Clive and the Company, especially after the bedlam of 1756.
•Three prominent Armenians of this time were Khoja Wajid, the Bengal merchant who supported Robert Clive but was later arrested on suspicion that he had shown allegiance to the French; Joseph Emin, the adventurer who travelled to London and for a decade remained a talked-about figure among the English nobility, and Khoja Petrus Aratoon, an ally of the English Company, who may well have gone on to succeed Mir Qasim as the Nawab of Bengal but for his assassination in 1763.
•A century marked by religious intolerance and forced conversion of Armenians to Catholicism and Islam, exacerbated by the Afghan invasion of the 1720s, and the pillaging armies of Nadir Shah in the 1740s, had led to a mass-exodus of Armenians from Persia, Turkey and Afghanistan into India. Almost every native power or European company of the time strategically ushered Armenians to their side to jointly explore Asian opportunities.
•Akbar exempted Armenians from taxes on their trade with the Persian Gulf. The Armenians settled in Surat (Gujarat) in the 16th century, and in Chinsurah (West Bengal) in the late 17th century. In 1665, they were allowed to form a settlement in Saidabad, in Murshidabad district of Bengal, after a royal farmaanwas issued by Aurangzeb. Besides Murshidabad, Surat and Benares assumed robust identities as towns of silk crafts due to Armenian trade.
•Armenian Street, Armanitola, and Armenian Ghat came up in 18th century Calcutta to the rhythms of Armenian vessels lumbering between India, Persia, Turkey and China. Built in 1734 by Huzoorimal, Armenian Ghat was the site of the first ticket reservation room of the East India Railway Company between 1854 and 1857. Between 1873 and 1902, the Calcutta Tramway Company ran a metre-gauge horse-drawn tram service between Sealdah and Armenian Ghat.
•By the 20th century, there were about 25,000 Armenians in India, and about 1,000 Armenians in Calcutta alone, more than one-fourth of the population of 3,200 British settlers in the city.
For Clive and Company
•The rise of the Armenians in Bengal was due to their ability to milk the trade conflicts and monopolies between the European and regional powers. They also decided to anglicise themselves to appease the dominant colonial power.
•In 1744, Joseph Emin fled with his family — from Persia and later Afghanistan — joining about 4,000 Armenians in Calcutta. Emin wanted to train in the manners, language, arts and science of the English. In 1756, as Calcutta burned from Fort William to Fulta, Emin arrived in London, working his way as a lascar. He happened to meet Edmund Burke, who took him under his wing. Emin later copied Burke’s renowned essay, ‘On the Sublime and the Beautiful,’ among other of his works.
•The young man found influential patrons in Mrs. Montagu, Sir William Jones and the Dukes of Northumberland and Cumberland, received military training at Woolwich, and joined the English army against the French. In 1772, Clive, at the behest of Burke, recommended a military promotion for Emin, who returned to Calcutta a little later. With the aid of Montagu, Jones and 73 subscribers, he published his autobiography, The Life and Adventures of Joseph Émïn (1792), at the age of 66.
•“Who could have thought,” wrote Burke in a letter to Emin, “the day I met you in St. James’s Park that this kingdom would rule the greater part of India? But kingdoms rise and pass away — emperors are captive and blinded — pedlars become emperors.” Indeed, there were several notorious pedlars and kingmakers in Clive’s Bengal — quite a few of them Armenians. One of them was Khoja Wajid, who held business transactions with the French, English and the Dutch, while trading with Mocha and Basra. Other noted Armenian merchants were Avak di Aratoon and Khachik di Khojamal. Khoja Petrus Aratoon, another leading Armenian merchant, maintained close links with Saidabad and the Mughal durbar in Murshidabad. His two brothers, Khoja Gregory Aratoon and Khoja Barseek Aratoon, were also leading merchants and diplomats in and around Calcutta.
•Wajid was the prince of saltpetre trade and trade negotiations in Bengal. Anxious to maintain his monopoly and good relations with the other Europeans, while pretending to act as diplomatic agent, Wajid suggested involving the French in the mediations between Clive and Siraj. But when the British sacked Hooghly in 1757, Wajid’s businesses were destroyed, and his relationship with the English began to decline. Moreover, Clive suspected him of sympathising with Siraj and having a hand in French interventions in Bengal. In 1759, Wajid helped Jaffar plot a conspiracy with the Dutch traders against the English. After the fall of the Dutch at the Battle of Chinsurah, Wajid fell out of favour with all Europeans. He was taken into captivity by Clive, where he conveniently killed himself.
In high places
•Wajid’s tumble coincided with the rise of Aratoon, who had been strengthening his English ties, inchmeal, for over a decade. After the Black Hole of Calcutta, Aratoon provided provisions for the East India Company garrison. If not for the “humane Armenians”, wrote Indian-Armenian historian Mesrovb Jacob Seth, “British fugitives at Fulta might have been starved to surrender.” Aratoon was employed by Clive as a secret agent during his negotiations with Jaffar for the overthrow of Siraj ud-Daulah in the Plassey Conspiracy — a job that otherwise naturally belonged to Wajid.
•Aratoon’s position and influence with Clive rivalled that of Hastings’, who was merely 19 then, a diplomat and Governor-General-in-the-making. Aratoon became a member of the East India Company’s Council in Madras, and turned into an ambassador for the Armenians in Bengal — henceforth characterised by their philanthropy, piety and steadfast loyalty to British imperial interests.
•Before and after Plassey, Armenian aid helped dramatically consolidate British trade and military presence in Bengal. Besides shaping the metropolis of Calcutta, the commercial and diplomatic forays of Indian Armenians also went into rebuilding the colonial epicentre of London, a hundred years after the Great Fire of 1666, with the massive imperial loot of the English Company. Armenian commercial support, for instance, helped build East India House at Leadenhall Street — the headquarters for many years of the world’s first multinational company.
•In the many decades of regurgitating our colonial history, we have been guilty of ignoring the very real impact of Armenian influence, trade, diplomacy and culture on the course of events in India.
Armenians in India: A long history
•Nearly seven centuries before Vasco da Gama, a merchant-diplomat named Thomas Cana is said to have been the first Armenian to reach the Kerala coast in 780. Cana traded in spices and muslin cloth, and is referred to in local chronicles as Kanaj Tomma or The Merchant Thomas.
•The Armenians are described as ‘The Merchant Princes of India’, and according to Indian-Armenian historian Mesrovb Jacob Seth, they were not men of letters but shrewd businessmen. “Their only ambition in life was to amass wealth,” he writes.
•It was in Akbar’s reign that the Armenian’s wealth and influence grew. Akbar is not only believed to have had an Armenian queen, he also had an Armenian doctor and chief justice.
•In 1715, it was an Armenian in Farrukhsiyar’s court who helped East India Company get the Grand Firman that first granted them duty-free trading rights in Bengal.
•In 1688, it was again an Armenian who first introduced East India Company to the Mughal Court. In return, according to an agreement signed between the Company and Khoja Phanoos Kalandar, the Armenians would get similar trading rights as the English.
•The Armenians had settlements in several parts of India, including Agra, Surat, Mumbai, Kanpur, Chinsurah, Chandernagore, Calcutta, Chennai, Gwalior and Lucknow. They also had a presence in Lahore, Dhaka and Kabul.
•Gauhar Jaan, the famous singer who was one of the first artists to be recorded on a 78 rpm record, was of Armenian origin; her given name was Angelina Yeoward.
📰 Why we treasure democracy
The nasty experience of Emergency and the unsavoury condition of societies plagued with attempts at domination teach us to value democracy
•Politics anywhere, any time is messy, and democratic politics is messier, if only because its dirt is in full public view. It has the appearance of perpetual chaos, continual disorder. Why do all of us put up with it then? Why do so many prefer it to other political orders?
For peace, freedom, well-being
•The attractiveness of democracy lies in its ability to give us a peaceful transfer of power. To be sure, it is not for those in search of equanimity and inner calm, or for those easily unnerved by disagreements and conflicts. It is for the street-smart, with a flair for some adventure in public life. It draws on our agonistic energies, bringing conflict upfront. But it frees us from the bloody battles and gory coup d’états through which wealthy and powerful super elites conventionally settled their conflicts. It is a non-violent substitute for the marauding warrior ethic.
•Second, it eliminates the most basic fears and anxieties to which social and political life is prone — the fear of being killed, beaten or humiliated for doing or saying what we want or for challenging the powerful. It promotes the maximum possible openness in our lives — in how and what we think, speak, behave. None of us can survive without some limits on speech and action, but democracy allows us to test and stretch them tantalisingly close to breakdown before deftly pulling back. An extricable link exists between democracy and public freedom.
•Third, no other system — a monarchy, dictatorship or an empire — takes seriously a people’s own view of its needs, wants and goals, giving the best possible shot at satisfying them.
The difficulties of democracy
•Alas, democracy does not come easy. And Indian democracy has been built in the most difficult circumstances. Many expected it to fail even after the introduction of universal adult franchise and constitutionally mandated institutions. A culture of equality is believed to be crucial to democracy but India inherited a social structure replete with hardened gender and caste inequalities. A democracy’s success depends on fairly high levels of growth, but India’s rate of growth in 1947 was virtually zero, with 65-70% of its population trapped in extreme poverty. Successful democracies need a fair degree of cultural, linguistic and religious homogeneity but India has deep cultural, religious and linguistic diversity. Most Western democracies have high levels of literacy and education but a substantial section of the Indian population was illiterate, with virtually no formal education.
•Yet Indian democracy has survived; indeed, democratic mechanisms have been deployed to attack gender and caste inequalities, bring millions out of poverty, and to nurture its famed diversity. Besides, lack of education has not lessened popular enthusiasm in its favour. And this brings us to the most admirable feature of Indian democracy: born amidst forms of social sickness exacerbated by colonialism and new diseases fomented by it, it has had to fight these and incessantly reproduce its own conditions of survival. In the absence of social conditions crucial to its durability, it has had to continually give birth to its own nurturing conditions and heal itself after falling sick. Indian democracy is largely self-sustaining. Respect is due to it in the same way it is owed to largely self-made persons.
Helping democracy grow
•Largely, not entirely, like other claims of self-creation, this one too is a trifle exaggerated. Two external conditions help democracy to grow. First, a stateless society can’t be democratic because the conditions of democracy are not automatically reproduced but need an effective state. But just any state won’t do. Though Indian democracy was preceded by a relatively modern state, the very same state hindered it too. The colonial state apparatus inherited by us was insensitive to the needs of the people, working almost entirely for the British Empire. A number of colonial laws were repressive and excessively regulatory. Their primary objective was the creation of a ‘nuisance-free’ public order, controlling a defiant population and exploiting them for the benefit of the empire. The colonial state was built to resist democracy, not facilitate it. This repressive apparatus, a permanent threat to our democracy, always comes in handy for authoritarian officials/leaders, as it did during the Emergency. So, democracy needs a competent state, but one that is tamed to work for it.
•Second, to be democratic, the state must be relatively independent of classes and ethnic groups in society. No class or ethnic group (religious or linguistic community) must completely control state power, or use it to push its own agenda in its entirety. Therefore, each class and ethnic group must learn to live with this fact — that all its objectives cannot be met. This realisation occurs either when each class or ethnic group has enough power to prevent inter-group domination or when, for the sake of a more inclusive moral vision, every group forsakes part of its interests and achieves a principled compromise. By curbing the inclination to impose our agenda on others, and instead arriving at negotiated settlements, we produce stable democracies. This precisely is achieved in the Indian Constitution.
•Any attempt to subordinate the state to the whims of a powerful individual or to use it disproportionately in favour of one group disturbs this delicate consensus, destabilises Indian democracy and wrecks the collective future of its citizens. The nasty experience of our own Emergency and the unsavoury condition of societies plagued with attempts at domination (by the Sinhalese in Sri Lanka or Sunnis in Pakistan) teach us to treasure democracy. Forgetting this lesson is disastrous.
📰 The features of a nationalist
If George Orwell were alive today, he would consider both Islamism and Hindutva as versions of nationalism
•“A nationalist is one who thinks solely, or mainly, in terms of competitive prestige… His thoughts always turn on victories, defeats, triumphs and humiliations. He sees history, especially contemporary history, as the endless rise and decline of great power units, and every event that happens seems to him a demonstration that his own side is on the upgrade and some hated rival is on the downgrade.” Thus wrote George Orwell, one of the most intellectually independent commentators of the 20th century, in a 1945 essay.
Versions of nationalism today
•What is particularly interesting about this essay is the fact that Orwell does not apply ‘nationalism’ to just strong feelings about a real or putative nation state. He applies it to religious groups too, and to some political movements, including those on the Left. Hence, for Orwell, if he were living today, Islamism and Hindutva would both be versions of nationalism, as would be fascism, neoliberalism and, for that matter, Maoism.
•This reading of nationalism is not entirely different from late 20th century readings, such as those by Benedict Anderson, Eric Hobsbawm and Ernest Gellner: all of these place nationalism in the context of a nation state or a bid to create a nation state. As has been noted by historians, the concept of nations and various kinds of patriotism had existed before the 19th century all over the world. For instance, gypsies and Jews were considered ‘nations’ in Europe in and before the 19th century. Hence, both Savarkar and Jinnah, following a common colonial discourse, saw ‘Muslims’ and ‘Hindus’ as ‘nations’ in pre-Independent India.
•However, by the early 20th century, matters — and the meaning of ‘nation’ — had changed. From the 19th century onwards, an equation had started being made between the nation and the state. Not just Hindu and Muslim nationalists in pre-independent India, but almost all other peoples — Turks, Irish, English, Germans, Nazis, Zionists, etc. — had been swept along with this new equation of nation with state, erroneously considering it an age-old inheritance simply because both the terms ‘nation’ and ‘state’ could be traced into the far past.
•This was the decisive error of the times, because until the 19th century a nation did not need to be a state. Actually, most states, from the Habsburg Empire through the Ottoman Empire to the Mughal Empire (and the British Raj in India), saw themselves as containing various nations. In this sense again, when 18th century European colonisers referred to India as a country of many ‘nations’ (‘Hindu’ and ‘Muslim’ were not the only designations used by them), they did not mean that all these nations should be given their own states. This element was added to the colonial discourse by later colonisers and by Hindu and Muslim nationalists.
Understanding nation and state
•Hence, nationalism, as we know it today, is the late 19th and early 20th century belief that if you are a nation, you need a state, and if you are a state, you have to be (or become) a nation. When we apply the term ‘nationalism’ to any state or movement before the 19th century, we are basically (and erroneously) talking of patriotism — a very different concept from nationalism — and other forms of hegemony or identity.
•Orwell would agree with this now-established perspective, but he would not stop there. He would argue that nationalism always aspires towards a state, but it can exist even without a state. For him, the Islamic State would be very much a nationalist movement. Actually, he would consider both Islamism — even when it does not insist on a state — and Hindutva as examples of nationalism. These are the elements (in his words) he would identify in them, apart from my initial quotation: “A nationalist is one who thinks solely, or mainly, in terms of competitive prestige.”
•“Obsession: No nationalist ever thinks, talks, or writes about anything except the superiority of his own power unit. The smallest slur upon his unit, or any implied praise of a rival organisation, fills him with uneasiness which he can only relieve by making some sharp retort.”
•“Indifference to reality: Actions are held to be good or bad, not on their own merits but according to who does them, and there is almost no kind of outrage — torture, the use of hostages, forced labour, mass deportations, imprisonment without trial, forgery, assassination, the bombing of civilians — which does not change its moral colour when it is committed by ‘our’ side.”
•“The nationalist not only does not disapprove of atrocities committed by his own side, but he has a remarkable capacity for not even hearing about them.”
•“Every nationalist is haunted by the belief that the past can be altered. He spends part of his time in a fantasy world in which things happen as they should… and he will transfer fragments of this world into the history books whenever possible. Material facts are suppressed, dates altered, quotations removed from their context and doctored so as to change their meaning.”
•Interestingly, Orwell does not just distinguish between nationalism and patriotism, he implies that the two are basically opposed. After all, if ‘nationalism’ depends on blindness to justice, lack of self-criticism, obsession with others, and hallucinatory beliefs, surely it would prevent you from doing what is right and good for the people around you?
📰 Plastic ban kicks off in Mumbai, but penalties put off till June 25
Multinational eateries, schools fined; vendors hit as goods are seized.
•The country’s commercial capital on Saturday became the first major city to embrace a tough plastic-free regime, even as the rains made the transition from the ubiquitous polythene carry-bag a tricky affair.
•The municipal authorities, meanwhile, decided to defer penal action against users and small traders till Monday, and said the weekend would be used to generate awareness.
•However, not everyone got off lightly. Some big eateries in the tony suburb of Bandra, including a Starbucks and McDonald’s outlet, faced action for plastic articles found on their premises. A senior official said three such outlets were fined ₹5,000 each, while the fast-food outlet would face further proceedings as it refused to pay up. In the neighbouring districts of Thane and Navi Mumbai,the official machinery kicked off the drive in earnest — 100 people were fined ₹95,000 for violations in Thane, while ₹35,000 was collected in fines at Navi Mumbai and plastic goods seized. The Panvel City Municipal Corporation even penalised the Kharghar-based DAV School’s canteen for using plastic spoons and glasses.
•“The highest number of violations were found around the main markets and railway station. A lot of vegetable vendors and hawkers were let off with warnings as it was only the first day of the ban,” Thane Municipal Corporation spokesperson Sandeep Malvi said.
•The State government had notified the ban on the manufacture, sale and use of all plastic carry bags as well as the use of disposable plastic goods such as cutlery, containers and straws. Friday was the deadline for people to dispose of the banned items in their possession. Violations will attract a fine of ₹5000.
•Commercial establishments, big or small, began to feel the plastic-less pinch on Saturday as vegetable and fruit vendors, meat and fish markets, streetside eateries and juice centers and tea stalls across the city had to turn away customers in the absence of plastic carry bags that they usually relied on. Restaurants and food chain outlets, too, registered losses as they stopped take-away services due to the ban.
Ground Zero woes
•Vidya Shetye, a fruit-juice seller on Grant Road was one of them. “Customers often ask for parcels, I used to pack the juice in a small plastic bag but now I can find no alternative,” she said.
•Many retailers, who could afford to do so, bought cloth bags which they sold to customers who did not have any carry bags of their own. But incessant rains through the day made this alternative difficult.
•Not surprisingly, sellers of alternative material like jute and cloth bags have made a killing, as everyone from retailers to citizens flocked to their stores. “My sales have gone up by 3,000% thanks to this plastic ban since the March notification,” said Kapil Bhansal, owner of a jute and cloth bags shop in Dadar said.
•A buyback policy is still being worked out to allow the use of PET bottles for water and other drinks, “The policy is a little complex as various factors need to be considered. The cost involved in segregation, logistics and recycling will have to be factored into the buyback scheme,” said a senior official.
•Officials in the Railways, which is Mumbai’s lifeline, realised that they do not have the power to penalise passengers on railway premises. The Railways Act, which is regulates activities at train stations and on board trains, does not have a provision to punitive action for carrying banned plastic products.
•“We have sought permission from the State authorities to charge a fine. We are yet to get a directive on this,” said a senior railway official. Officials also said there is ambiguity on whether one can penalise passengers coming from other States where there is no such ban on plastic.
•Around 249 inspectors appointed by the Brihanmumbai Municipal Corporation (BMC) were divided into 23 teams, that visited various market to ensure that everyone is aware about all the aspects of the ban.
•“The inspectors will interact with shopkeepers, retailers, transporters and consumers in their respective jurisdiction and make them aware about the rules of the ban, as well as the penal action in case of violations. We will commence penal action only from Monday,” Assistant Municipal Commissioner Kiran Dighavkar, BMC said.
Polythene politics
•Meanwhile, Maharashtra’s Environment Minister said there was no pressure from the Gujarat government or the plastic lobby in the neighbouring State against the move. The Shiv Sena leader said it was true 80% of the plastic coming into Maharashtra came from but no instruction has been given to him by either the Bharatiya Janata Party (BJP) or Chief Minister Devendra Fadnavis to go slow.
•“If we find anyone bringing in plastic from Gujarat or smuggling it against our new law, action will be taken against them and they will be thrown into jail for three months,” Mr Kadam said.
📰 Why is external debt a cause for worry?
What is external debt?
•External debt is the money that borrowers in a country owe to foreign lenders. India’s external debt was $513.4 billion at the end of December 2017, an increase of 8.8% since March 2017. Most of it was owed by private businesses which borrowed at attractive rates from foreign lenders.
•To be precise, 78.8% of the total external debt ($404.5 billion) was owed by non-governmental entities like private companies. The size of external commercial borrowings and foreign currency convertible bonds, which represents Indian companies’ foreign borrowings, has risen from ₹99,490 crore at the end of December 2015 to ₹1,72,872 crore at the end of December 2017. While external debt may be denominated in either the rupee or a foreign currency like the U.S. dollar, most of India’s external debt is linked to the dollar. This means Indian borrowers will have to pay back their lenders by first converting their rupees into dollars. As of December 2017, about 48% of India’s total external debt was denominated in dollars and 37.3% in rupees.
What are the risks?
•There are two major risks involved in foreign borrowings. One is that, like in the case of domestic borrowings, there could be unexpected changes in the interest rates charged on these loans. This can, for instance, cause widespread default when rates rise as borrowers may not be able to make higher interest payments, thus raising the risks of a systemic crisis.
•The raising of interest rates by the U.S. Federal Reserve has already caused borrowing rates to rise in various countries, including in India where bond yields have shot up sharply. The yield on the 10-year government bond, for instance, has risen to about 8% from around 6.5% at the end of June last year. Another major risk is unexpected changes in the exchange rates of currencies.
•An unexpected fall in the value of the rupee, for instance, can cause severe difficulties for Indian companies that need to pay back dollar-denominated loans as they will now have to shell out more rupees than they had previously estimated to buy the necessary dollars. Lenders generally take possible fluctuations in the value of currencies into account when determining their lending rates.
•But such forecasts are not always perfect. Unexpected changes in exchange rates could still impose surprise gains or losses on them. Various emerging market currencies have seen a sharp fall in value this year against the dollar. The rupee, in particular, has fallen about 7% since the beginning of the year. The fall in the value of the emerging market currencies is due to increasing demand for dollars from investors, who wish to sell their assets in the emerging markets and invest them in the U.S. where yields have been rising quite rapidly.
What happens next?
•The U.S. central bank, which has already raised its benchmark interest rate twice this year, is expected to raise rates two more times in the rest of 2018. Further interest rate hikes could cause more outflow of capital from the emerging markets, thus causing unexpected changes in borrowing rates and the value of the rupee.
•Both government and non-government borrowers in India, who are exposed to foreign debt, could be in trouble in such a scenario. The foreign exchange reserves, held by the Reserve Bank of India (RBI), were around $425 billion as on March 2018. This is the firepower that the RBI can use to support the rupee and bail out borrowers who get into trouble. The RBI, which raised its benchmark interest rate for the first time in more than four years this month, may also decide to raise domestic interest rates further. While such a step could help to stem the capital outflow from the country and support the rupee, it could lead to further uncertainty about borrowing rates in the domestic economy.
📰 Enforcing a plastic ban in Maharashtra
•On Saturday, the Maharashtra government began enforcing a ban on plastic, a decision it announced in March. On World Environment Day, June 5, India was the host nation, with the theme for this year being ‘Beat plastic pollution.’
What is the plan?
•On March 23, the government issued a notification banning the manufacture, use, transport, distribution, wholesale and retail sale, storage and import of plastic bags with and without handle. The ban also covers disposable products, made from plastic and thermocol (polystyrene), such as single-use disposable dishes, cups, plates, glasses, fork, bowl, container, disposable dish/bowl used for packaging food in hotels, spoon, straw, non-woven polypropylene bags, cups/pouches to store liquid, packaging with plastic to wrap or store the products and packaging of food items and grain material. The ban is not applicable to PET bottles, irrespective of capacity. These bottles, however, should have predefined buyback price ranging from Rs. 1 to Rs. 2, depending on the size, printed on them.
•Plastic used for packaging of medicines, compostable plastic bags or material used for plant nurseries, handling of solid waste, plastic bags not less than 50 micron thickness used for packaging of milk (with the specific purpose printed on it), plastic manufactured for export in SEZs and plastic to wrap the material at the manufacturing stage are excluded from the ban. The ban is applicable to manufacturers and consumers as well as the chain in between, which includes shops, hawkers, vendors and offices.
What is the penalty?
•Urban and rural civic bodies, Collectors, forest officers, police authorities and Maharashtra Pollution Control Board officials have been empowered to implement the ban and take legal action. The penalty for violating the ban starts from Rs. 5,000 (first offence), Rs. 10,000 (second time) and Rs. 25,000 (third time) with three months in jail. In case one fails to pay the minimum penalty, the civic body can file a prosecution complaint before the court, which will decide the amount to be paid.
Why was this necessary?
•Environment experts have been blaming plastic for choking of nullahs in Mumbai and the flooding in parts of the city during monsoons. Yuva Sena president Aaditya Thackeray was one of the first to demand a complete ban on plastic, a demand which was accepted by Shiv Sena leader and Environment Minister Ramdas Kadam. Plastic bag manufacturers approached the Bombay High Court against the decision, but their appeal was turned down. The Federation of Retail Traders Welfare Association, too, has gone to court. A hearing was held on Friday, but the plea was rejected. The State has 2,500 units making plastic bags, employing 56,000 people. They owe nearly Rs. 11,000 crore to banks as of March 31. The Clothing Manufacturers’ Association of India has spoken out against the ban, saying the apparel trade employs 30 lakh people in the country and depends on polypropylene for packaging.
What is the alternative?
•The State is not directly providing alternatives to banned items and has relied on people for solutions. Urban local bodies, like the Brihanmumbai Municipal Corporation (BMC), have invited manufacturers of alternative products to showcase their wares at a three-day exhibition.
What lies in store?
•The BMC has trained 250 inspectors for levying penalties. Their list is available on its website, along with that of its 37 collection centres where people can dispose of plastic. While levying penalty, they will be registering the offender’s Aadhaar number, PAN number or driver licence number. It has also started a dedicated helpline for door-to-door collection. As on June 21, the BMC has collected 145 tonnes of banned plastic from Mumbai. However, most of this was plastic segregated from regular waste and only a fraction is from the 24 dedicated bins for dumping plastic. This underlines the need for more awareness.
📰 ‘Nepal can be bridge between India, China’
PM Oli says during his visit to Beijing
•Nepal can serve as a bridge between India and China, Prime Minister K.P. Oli has said, insisting that his country will maintain close ties with the two neighbours while pursuing an independent foreign policy.
•Mr. Oli, who is here on a five-day visit, held talks with President Xi Jinping and Premier Li Keqiang, following which a Memorandum of Understanding (MoU) was signed to build a railway link connecting Tibet with Kathmandu, along with 14 cooperative documents.
•In an interview to China’s state-run Global Times , Mr. Oli said since the formation of his government, Nepal has intensified engagements with both neighbours.
•“We have made it clear that we pursue an independent foreign policy and a balanced outlook in the conduct of international relations,” he said.
‘Top priority for both’
•“In foreign policy conduct, our two neighbours naturally receive top priority and with both of them, our relations are broad, comprehensive and multi-faceted,” Mr. Oli said.
•Asked whether Nepal will be the “land of the competition” or “bridge of cooperation” between China and India, Mr. Oli said Nepal has remained a sovereign and independent nation throughout history.
•“We are firmly committed to not allowing our territory to be used against the sovereign interests of our neighbours. We have the resolve to maintain this and we naturally expect similar assurances from our neighbours,” he said.
•Mr. Oli said Nepal’s developmental needs were immense and needed meaningful and mutually beneficial economic partnership with both its neighbours.
•“Fortunately for us, both our neighbours are rising in global stature and making tremendous progress in every area of development. They are in a position to support Nepal in its developmental journey,” he said.
•“We believe that Nepal can serve as a bridge between our two neighbours. In fact, we want to move from the state of a land-locked to a land-linked country through the development of adequate cross-border connectivity. Our friendship with both neighbours places us in an advantageous position to realise this goal,” he said.
•On the Tibet-Kathmandu railway link, he said, “Cross-border connectivity is our top priority. Both sides have discussed developing a multidimensional trans-Himalayan connectivity network.”
•On China’s Belt and Road Initiative (BRI), he said, “We believe that the BRI should be beneficial to all the participating countries. Nepal wants to benefit from the initiative and at the same time, works for the benefit of the international community”.
