📰 India bombs Jaish camp in Pakistan’s Balakot
12 IAF Mirage-2000 fighter jets unleash five one-tonne payloads; 200-325 militants had moved there from LoC sites after Pulwama attack
•Twelve days after the Pulwama attack, the Indian Air Force bombed the Jaish-e-Mohammad’s “biggest” terror-training camp in Pakistan’s Balakot early on Tuesday. The operation was carried out by 12 Mirage-2000 fighter jets, which unleashed five one-tonne bombs on the camp, based 70 km inside the Line of Control (LoC), in the Pakistani province of Khyber Pakthunkhwa.
•Senior officials citing intelligence inputs said the JeM facility was particularly crowded with 200-325 militants as many had abandoned launch pads and training camps closer to the LoC after the Pulwama attack in the expectation that India would not target Balakot.
Major shift
•The aerial attack on a target inside Pakistani territory marks a major shift in India’s counter-terror responses, which have thus far been restricted to ground operations across the LoC in Pakistan-occupied Kashmir.
•Defence officials said the Mirage fighters took off from the Gwalior airbase at approximately 3 a.m., backed by aircraft from other bases, including Sirsa, Bathinda and Agra. Announcing the strikes, the government said it was a “non-military, pre-emptive” counter-terror operation against imminent threats from the JeM.
•“Credible intelligence was received that the JeM would attempt another suicide terror attack, and jihadis were being trained for this purpose. In the face of imminent danger, a pre-emptive strike became absolutely necessary,” Foreign Secretary Vijay Gokhale said, adding that “a very large number of JeM terrorists, trainers, senior commanders and groups of jihadis, who were being trained for fidayeen action, were eliminated” in the operation.
•The first word on the attacks came not from the government, but from the Pakistani military spokesperson, who denied any “casualties or damage” from the operation. At 5.42 (IST) on Tuesday, Major General Asif Ghafoor tweeted that IAF jets had violated the LoC and “released a payload (munitions) while escaping” after being confronted by Pakistani Air Force planes scrambled to repel the incursion. “It is India’s turn now to wait for our response, it will come as a surprise,” Major-General Ghafoor warned at a press conference later. Pakistan Prime Minister Imran Khan has convened a joint session of Parliament as well as a meeting of the nuclear command structure, National Command Authority (NCA), on Wednesday to discuss his country’s response.
•A few hours after the strike, Prime Minister Narendra Modi held a meeting of the Cabinet Committee on Security to review the operations, and later met all three service chiefs. While he did not mention the air strike publicly during the day, Mr. Modi later told a rally in Rajasthan’s Churu that the nation is in “safe hands,” paying tribute to Indian security forces.
•Later in the day, External Affairs Minister Sushma Swaraj met with foreign diplomats and spoke to Foreign Ministers of U.S., China, Singapore, Bangladesh and Afghanistan, briefing them about the operation.
•Sources present at the briefing of diplomats told The Hindu that Ms. Swaraj stressed the point that India had only conducted a counter-terror strike on a training camp in Pakistan, and did not wish to “escalate” the situation further.
‘Give it a try even if there is only 1% chance of success’
•A five-judge Constitution Bench, led by Chief Justice of India Ranjan Gogoi, has proposed a court-monitored mediation process between the Hindu and Muslim parties litigating the Ayodhya dispute, asserting that both sides ought to give it a try even if there was only a “1% chance of success.”
•Adopting a two-pronged approach, the Bench on Tuesday pitched the healing touch that an out-of-court settlement could provide, even as it went ahead with the preparations to finally hear the Ayodhya title suit appeals that have been pending in the court for almost nine years. Justice S.A. Bobde explained that the mediation, if undertaken, would be confidential and court-monitored and would last eight weeks.
•Observing that the dispute was “much more” than a mere property dispute and had dragged on for decades, the Bench said mediation might result in a permanent resolution.
•The eight-week period is also the time given to the Muslim parties to examine the accuracy and relevance of the Uttar Pradesh government’s official translation of thousands of pages of oral depositions and exhibits in the appeals.
Effective use of time
•A shot at mediation under Section 89 of the Civil Procedure Code would hence be an “effective utilisation of time” during the interregnum, Chief Justice Gogoi observed. The court, however, deferred a decision on referring the dispute for ‘mediation’ to March 5. “We will pass orders then,” Justice Gogoi observed.
•The CJI also expressed the hope that mediation may help give a peaceful end to the volatile dispute between two faiths over the land where the Babri Masjid had once stood before it was demolished by kar sevaks on December 6, 1992.
📰 Nagaland Assembly rejects citizenship Bill
Passes resolution amid Oppn. walkout
•The Nagaland Assembly has passed a resolution rejecting the contentious Citizenship (Amendment) Bill, amid a walkout by 26 Opposition MLAs.
•The resolution, passed on Monday, denounced the proposed Bill stating that it cannot be implemented in Nagaland as it will impact the “unique history and status of the Nagas under the Constitution”. It was moved by Chief Minister Neiphiu Rio on Saturday.
Solidarity with States
•The resolution also expressed solidarity with the States and communities of the Northeast in opposing the Bill, as it has the potential of “changing the demographic profile, which will be against the interest of indigenous tribes and can divest them of their constitutionally guaranteed political, cultural and economic rights”.
•The opposition MLAs, however, walked out of the Assembly, saying they would not support the resolution in its present form.
•The Citizenship (Amendment) Bill, passed in Lok Sabha on January 8, seeks to provide citizenship to non-Muslims from Bangladesh, Pakistan and Afghanistan after six years of residence in India.
📰 ‘What action can you take against political parties?’
HC poser to poll panel on those flouting funding rules
•The Delhi High Court on Tuesday sought the stand of the Election Commission of India (EC) on taking action against political parties, which do not comply with its instructions to disclose funding and expenditure details.
•“You wrote to them, but they have not complied. What further? When compliance has not been done, tell us what you propose to do? What powers do you have? Your response indicates helplessness on your part,” a Bench of Chief Justice Rajendra Menon and Justice V.K. Rao said.
•The EC told the Bench that it has been consistently writing to the parties, which have not disclosed their expenditure.
•The High Court directed the EC to file an affidavit indicating what powers or options it has to ensure implementation or enforcement of its guidelines regarding disclosure of expenditure by political parties and what steps it can take when there is violation of its norms.
•The High Court was hearing a petition by NGO Association for Democratic Reforms (ADR) seeking implementation of the guidelines as well as the Law Commission’s recommendation that a provision be enacted to monitor and regulate the expenditure by political parties during elections.
•The NGO has alleged in its plea that since the present political system was being “funded through various illegal means and also by the people and corporate agencies with vested interests, it [political system] does not seem to be inclined to give effect to the recommendations of the Law Commission.”
•Senior advocate Arvind Nigam and advocate Abhimanue Shrestha, appearing for Association for Democratic Reforms, said the Supreme Court has held that the EC has the power to give effect to the law panel’s recommendations.
📰 The new order in West Asia
The landscape is now tripolar, with Saudi Arabia, Iran and Turkey competing for influence
•When protests erupted on Arab streets in late 2010 and in 2011, felling deeply entrenched dictators such as Zine El Abidine Ben Ali of Tunisia and Hosni Mubarak of Egypt, it was certain that the changes in government would alter the regional dynamics as well. Many thought the old order rooted in “stability” (read: the decades-long unperturbed rule of single families or dictators) would be swept away by emerging democracies. Eight years later, it is evident that the Arab world has changed, but not in the way many had predicted. The structures of the old Arab world have been either destroyed or shaken, but without fundamentally altering the domestic politics in Arab countries.
The backdrop of history
•There have been multiple power centres in the Arab region, at least since the second half of the 19th century when the Ottoman Sultans shifted their focus from the East to the West. The waning influence of the Ottomans in the Arab region created a vacuum which was filled by emerging regional leaders such as Muhammad Ali of Egypt, the Hashemites in central Arabia and the Mediterranean region, and the Al-Saud family in the Arabian peninsula. In post-war West Asia, Egypt remained the most influential Arab country. The Hashemite Kingdom of Jordan maintained its influence in the Mediterranean region, while Saudi Arabia was confined to the Arabian peninsula. When Egypt and Jordan were in relative decline, particularly after the 1967 war with Israel, Iraq rose under the leadership of the Baathists. Saddam Hussein, who became Iraq’s President in 1979, was eager to don the mantle of Gamal Abdel Nasser, the former Egyptian leader who called for pan Arabism. Hussein launched a war with revolutionary Iran in 1980 on behalf of most Arab countries. Though there were deep divisions between these countries, one point of convergence was “stability”. Neither the monarchs nor the dictators in the Arab world wanted any threats to their grip on power.
•This order started to age much before the Arab protests. Hussein broke a taboo of non-aggression between Arab countries when he invaded Kuwait in 1990. And the 2003 American invasion of Iraq toppled him and buried his regime. The Arab protests expedited the changes that were already under way. Egypt went through a long period of instability starting 2011. First, a revolution brought down Mr. Mubarak and took the Muslim Brotherhood to power. And then a counter-revolution by military leader Abdel Fattah el-Sisi took the country back to square one. In the process, Egypt was beaten badly: the government lost moral authority; its regional standing weakened; and with economic problems mounting, a desperate Mr. Sisi went to the Gulf monarchs for help.
The reign of the Saudis
•Saudi Arabia was generous in helping the Sisi regime. The Saudis were initially shocked by the fall of Mr. Mubarak, a trusted ally, and the rise to power of the Brothers, Islamist republicans and sworn enemies of the Kingdom. Both the Saudis and the United Arab Emirates wanted to get rid of Egypt’s elected government of President Mohamed Morsi, a Muslim Brother. They backed the 2013 counter-revolution and helped Mr. Sisi tighten his grip on power with aid. In the event, what we have now is a weaker Egypt ruled by a military dictator who’s increasingly dependent on the Saudi-UAE axis.
•In the Arab world, Saudi Arabia doesn’t face a real challenge to its leadership now. The Saudis have been eager to take this leadership position. They organised a massive Arab summit in May 2017 in Riyadh which was also attended by U.S. President Donald Trump. The U.S. and the Arab nations also announced plans to create a Middle East Strategic Alliance, also referred to as the Arab NATO, which is a transnational Arab security entity under Saudi leadership. The common enemy of this bloc is Saudi Arabia’s main geopolitical and ideological rival in the region, Iran.
•Riyadh has been aggressive in taking on Iran in recent years, be it the anti-Iran campaign it is spearheading globally (in the U.S., Saudi Crown Prince Mohammed bin Salman compared the Iranian regime to Hitler’s Nazi rule), the increasingly high military spend, or the desire to take on Iran’s proxies (interference in Lebanon’s politics or the war on Yemen). Within the Arab world, Saudi Arabia has made it clear that it will not allow alternative power centres to rise, and never from its backyard. The decision to blockade Qatar, the tiny Gulf country that has disagreements with Saudi Arabia’s foreign policy, could be seen against this backdrop. Besides Saudi Arabia and the UAE, Egypt had also joined the blockade, showing how dependent Cairo is on the Gulf axis. There are no doubts here: Saudi Arabia wants a united Arab front under its leadership that will contain Iran and maximise the Kingdom’s interests in West Asia and North Africa.
Tripolar region
•In relative terms, Riyadh has consolidated its position among the Arab countries. But its quest to become a major regional power faces serious challenges. The problem begins with its own inexperience. Saudi Arabia has never been an effective executioner of big ideas. All these years it lay low, either behind other regional powers or under the wings of the U.S. Now, as it has started taking a leadership position, its policies have gone awry. The Qatar blockade is not reaching anywhere and the war in Yemen has been catastrophic. Besides, the assassination of journalist Jamal Khashoggi inside Saudi Arabia’s Istanbul consulate has been a public relations disaster.
•Second, Iran is hardly a pushover. Ever since the Islamic Revolution of 1979, Iranians have lived under threats and with a huge sense of insecurity, which prompted them to create networks of influence across the region. Despite forging strong alliances and having a far stronger economy, Saudi Arabia has been unable to contain Iran’s influence. And it may not be able to do so in the future either, unless the Americans are ready for another major war in the region.
•Third, there is a third pole in today’s West Asia: Recep Tayyip Erdogan’s Turkey. Turkey’s ‘Arab Spring’ bet may not have paid off as the political Islamist parties, which are aligned to the ruling Justice and Development Party, failed to consolidate power in the rebellion-hit countries, except Tunisia. However, Turkey, which retreated from West Asia in the second half of the 19th century, is now shifting it focus back from Europe to the region. It is a major defence and economic partner of Qatar, and has a strong presence in Syria through its proxies. Turkey also used the Khashoggi murder to turn up heat on Saudi Arabia internationally. While Turkey is not aligned with Iran either, it has shown willingness to cooperate with the Iranians on matters of mutual interest — such as the Kurdistan issue and the Syrian conflict — while its ties with Saudi Arabia have steadily deteriorated.
•West Asia’s Muslim landscape is now tripolar: Saudi Arabia, as the leader of the Arab world, is trying to expand its influence across the region; Iran is continuing to resist what it sees as attempts to scuttle its natural rise; and Turkey is returning to a shaken region to re-establish its lost glory. This multi-directional competition, if not confrontation, will shape West Asian geopolitics in the coming years.
📰 Pushing boundaries: on Balakot air strikes
The air strikes have delivered a clear, robust message; the follow-up must be restrained
•The Indian Air Force’s strike on a Jaish-e-Mohammad terror training camp in Pakistan’s Balakot delivers a robust but calibrated message. The latter is manifest in New Delhi’s diplomatic utterances. While the strikes followed the Pulwama attack by a couple of weeks, Foreign Secretary Vijay Gokhale referred to the action as a “non-military pre-emptive strike”. The phrase indicates the action was based on an assessment of an imminent threat, and had ensured that Pakistan’s military personnel and infrastructure were not targeted, and civilian casualties were actively avoided. In effect, New Delhi’s line is that the operation was an intelligence-driven counter-terror strike rather than escalatory military aggression. The government said all other options had been exhausted in making Islamabad keep its commitments since 2004 on curbing the activities of groups like the JeM. There is no denying that the decision to send Mirage jets across the Line of Control (LoC) to fire missiles 70 km inside Pakistan represents a major shift. During the Kargil war in 1999, Prime Minister Atal Bihari Vajpayee had drawn a red line over the IAF crossing the LoC, to avoid international recrimination. This strike was carried out in Pakistani territory, not in Pakistan-occupied Kashmir, the theatre for retaliatory action in the past. It is still to be determined how far the JeM has been set back, but the strikes mark a new chapter with New Delhi’s willingness to push the war against terror into Pakistan territory. The government has judged, perhaps correctly, that global opinion has shifted and there is little tolerance today for terror groups that continue to find shelter on Pakistan soil. Significantly, with the exception of the Organisation of Islamic Cooperation, there has been no global criticism of India’s statement on the strikes, and most have just counselled restraint to both countries.
•In Pakistan, Prime Minister Imran Khan has called for a joint session of Parliament and for its diplomats to raise the matter at international fora. He has convened a meeting of the National Command Authority that oversees Pakistan’s nuclear policy. However, Pakistan’s options are limited. It could continue to deny that the Indian strike caused any damage on the ground, and obviate the need for retaliatory strikes; or it could escalate the situation with a military response. It could also make a break from its past, and begin to shut down the terror camps on its soil, which would win friends internationally and ensure peace in the region. The Modi government would do well to continue the restrained approach it has adopted after the latest operation, and avoid the triumphalism that clouded the ‘surgical strikes’ of September 2016. With a response to Pulwama duly executed, it must reach out to residents of J&K who have borne the brunt of the jingoism unleashed after Pulwama. In the long term, building strong counter-terror defences, partnering with its own citizens to gather intelligence, and creating deterrents will be key.
📰 Decolonising Chagos
Britain must honour the ICJ opinion on returning the islands to Mauritius
•The stunning opinion of the International Court of Justice in The Hague, that Britain’s continued administration of the Chagos archipelago is unlawful, is a landmark in the effort to decolonise the Indian Ocean and return the islands to Mauritius. Britain’s reaction, however, was predictable and disappointing. It said the ICJ’s is an advisory opinion it will examine, and stressed the security significance of the islands. Since the late-1960s, the U.S. has maintained a military base on one of them, Diego Garcia. In 2016, Britain extended the lease to the U.S. till 2036 even as it said it would return the islands to Mauritius when no longer needed for defence purposes. Mauritius has made it clear that it does not intend to jeopardise the future of the military base. The agreement to allow Britain to administer the Chagos islands came in 1965, three years before Mauritius gained independence. Mauritius says Britain had made it a pre-condition for independence. This was endorsed by the ICJ, which noted that given the imbalance between the two, the agreement did not amount to “freely expressed and genuine will”. It is a damning assessment of colonial legacies and the attempt by former colonial powers to justify or ignore the indefensible on the basis of ‘agreements’.
•Britain has tried to block Mauritius’s claim to the islands at every stage, first by attempting to defeat a UN General Assembly vote in 2017 calling on the ICJ to deliver its opinion. When it lost this, London questioned the court’s jurisdiction and Mauritius’s version of how the deal had been thrashed out. However, Mauritius has had many countries on its side, including India. In written and oral submissions before the court, India has insisted that historical facts were not with Britain’s interpretation and that its continued administration of the islands meant the process of decolonisation had not been completed. In an ideal world, Britain would be compelled to hand the islands to Mauritius. However, as the opinion against the construction of the separation wall in the Occupied Palestinian Territory in 2003 demonstrates, ICJ advisories are not always acted on. At the very least, Britain should show it respects the court’s view and Mauritius’s sovereignty, and make significant concessions — starting with matters ranging from fishing rights to compensation for the Chagossians, who have suffered through all of this. The ICJ ‘opinion’ draws the line on what is expected from Britain for it to be a global nation in tune with the new world order. It announces that the world has moved on from passive acceptance of the injustices of empire.
📰 Illuminating Asia’s future
Seoul embraces relations with New Delhi solely based on India’s inherent appeal and worth
•On February 22, a day after South Korean President Moon Jae-in welcomed him as his first state guest of 2019, Prime Minister Narendra Modi was conferred the Seoul Peace Prize in the South Korean capital. Mr. Modi is a conservative, nationalist leader and Mr. Moon is a liberal-minded leader and a former human rights lawyer. Yet, similar to the taegeuk (yin-yang) at the centre of South Korea’s national flag, the two leaders, like their respective nations’ national identities and foreign relations, complement each other.
•The striking historical characteristic of Korea is the homogeneity of its people and its continuous history, until recently, as a unified political entity. The same term, Han minjok, is used to denote both the Korean race and the Korean nation. Riven by subnational loyalties, India is anything but homogenous. Yet India too has exuded unity since time immemorial, which is renewed daily in the hearts and minds of its citizens. South Korea’s national identity and nationalism were forged, respectively, by the collapse of Chinese universalism at the turn of the first millennium and, again, in the early 20th century. India was never part of the Chinese world order. Yet both nations were, in the evocative words of Rabindranath Tagore, “lamp bearers” in their modern histories, joined in the struggle against colonialism and determined to re-illuminate the East.
•Korea’s foreign relations with China were steadied once its Yalu River frontier was confirmed in the late 14th century. That frontier was as porous as India’s Himalayan frontier is impassable. Yet both frontiers were breached by revolutionary communists in the aftermath of the founding of the People’s Republic, with profound geopolitical consequences that linger to this day.
•The long history of Korea’s foreign relations with China also lends an important insight into its modern-day strategic conduct: essential to its preservation as an independent state on imperial China’s periphery was an immutable policy of non-involvement in the power politics or international relations of its continental-sized neighbour.
•Seoul today, alone among its Indo-Pacific peers, embraces relations with New Delhi solely based on India’s inherent appeal and worth. India is not a hedge or a foil to be deployed against a rising China. This opens up, rather than limits, the space for bilateral cooperation, including on sensitive defence matters.
•India and South Korea view each other today as special strategic partners. As they re-illuminate the eastern sky, they must also help forge a 21st century model of Asian international relations — one that is keyed to regional tradition and historical circumstance, imbued with an ethos of equality and consensus, and which resiles from doctrines that are zero-sum in character.
📰 Smart farming in a warm world
Investment and policy reform are needed on priority to help farmers cope with climate change
•Over the last decade, many of Bundelkhand’s villages have faced significant depopulation. Famous of late for farmer protests, the region, which occupies parts of Uttar Pradesh and Madhya Pradesh, has been adversely impacted by climate change. It was once blessed with over 800-900 mm rainfall annually, but over the last seven years, it has seen this halved, with rainy days reported to be down to just 24 on average in the monsoon period. With rains patchy, crop failures become common. There is hardly any greenery in many villages, making it difficult for farmers to even maintain cattle. Adaptation is hard, with farmers varying and mixing crops across seasons, along with heavy investments in borewells, tractors and threshers. While the national media may wonder about hailstones in Noida, such weather has been destroying crop in recent years, with the arhar crop failing completely in 2015. Farmers are increasingly abandoning their lands and heading to nearby towns to find work as labourers.
•India is fortunate to have the monsoon, but it is also uniquely vulnerable to rising temperatures, with the country ranked 14th on the Global Climate Risk Index 2019. The country has over 120 million hectares suffering from some form of degradation. This has consequences, especially for marginal farmers. According to one estimate, they may face a 24-58% decline in household income and 12-33% rise in household poverty through exacerbated droughts. With rain-fed agriculture practised in over 67% of our total crop area, weather variability can lead to heavy costs, especially for coarse grains (which are mostly grown in rain-fed areas). A predicted 70% decline in summer rains by 2050 would devastate Indian agriculture. Within 80 years, our kharif season could face a significant rise in average temperatures (0.7-3.3°C) with rainfall concomitantly impacted, and potentially leading to a 22% decline in wheat yield in the rabi season, while rice yield could decline by 15%.
Some solutions
•There are simple solutions to mitigate this. Promotion of conservation farming and dryland agriculture, with each village provided with timely rainfall forecasts, along with weather-based forewarnings regarding crop pests and epidemics in various seasons, is necessary. Our agricultural research programmes need to refocus on dryland research, with adoption of drought-tolerant breeds that could reduce production risks by up to 50%. A mandate to change planting dates, particularly for wheat, should be considered, which could reduce climate change induced damage by 60-75%, by one estimate. There needs to be an increase in insurance coverage and supply of credit. Insurance coverage should be expanded to cover all crops, while interest rates need to be subsidised, through government support and an expanded Rural Insurance Development Fund. The recently announced basic income policy by the government is a welcome step as well.
•A push for actual on-ground implementation of compensatory afforestation is required. India is estimated to have lost over 26 million hectares of forest land and 20 million hectares of grasslands/shrublands between 1880 and 2013. Even now, urbanisation means that India consumes about 135 hectares of forest land a day. Meanwhile, insufficient coordination between the Central Pollution Control Board (CPCB) and the State Pollution Control Boards (SPCBs) has led to institutional apathy towards alarming air pollution levels in the metros. India hosts over 172 globally threatened species, primarily in reserve forests where they have little meaningful protection against wildlife crime and forest protection, given limited budgets for anti-poaching. Many State CAMPA (Compensatory Afforestation Fund Management and Planning Authority) hardly meet, while State-level forest departments routinely lack suitable record keeping, particularly on assessment and realisation of dues on compensatory afforestation activities and catchment area treatment.
Refreshing the IFS
•The Indian Forest Service would also benefit from restructuring, in order to make it equivalent to the police and the army, albeit in the environmental domain. State-of-the-art training to its personnel must be provided, and specialisation should be encouraged in wildlife, tourism and protection for new recruits. Deputations from other services will no longer do; this needs to remain a specialised service. Wildlife heritage towns should be given more attention — cities like Sawai Madhopur, Bharatpur, Chikmagalur and Jabalpur, which are adjacent to national parks and sanctuaries, need to be converted into green smart cities with upgraded waste recycling processes. The Van Dhan Yojana, as adopted by the State government in Rajasthan, can be scaled up towards building a green mission to save our non-protected forests (outside the existing national parks and sanctuaries). Wildlife tourism must also be encouraged, particularly through public-private partnerships, to help increase conserved areas while making a difference to backward districts.
•The impact of climate change will affect India’s food security, while reducing fodder supplies for our livestock. Prudent investments and policy reform can help make India resilient to climate change. Any adaptation to ongoing climate change will require that climate justice. This is not a blame game — this can be induced by expansion of joint research and development partnerships (like the U.S.-China Clean Energy Research Center), pairing India’s emerging smart cities with green cities in the West. India needs to decarbonise, there is no doubt about that. But the West needs to pay its bills too.
📰 RBI takes 3 banks off prompt corrective action framework
‘Allahabad, Corporation banks received capital, Dhanlaxmi not breaching norms’
•Three more banks — Allahabad Bank and Corporation Bank, from the public sector, and Dhanlaxmi Bank from the private sector — are now out of the Reserve Bank of India’s (RBI) prompt and corrective action (PCA) framework.
•Earlier, such restrictions were taken off Bank of India, Oriental Bank of Commerce and Bank of Maharashtra.
Six more under PCA
•There are another six banks that are still under PCA framework.
•While lifting the restrictions on the State-run lenders, RBI said the Board for Financial Supervision (BFS) reviewed the performance of the banks under PCA and noted that these two banks had received capital infusion from the government.
•“This has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with,” RBI said.
•Allahabad Bank and Corporation Bank had received capital of ₹6,896 crore and ₹9,086 crore respectively.
Capital adequacy ratio
•As on December 31, Allahabad Bank had a capital adequacy ratio of 10.42% and net NPA ratio of 7.7%, while Corporation Bank’s CAR was at 11.12% and net NPA 11.47%.
•“The two banks have also made the necessary disclosures to the stock exchange that post infusion of capital, the CRAR, CET1, Net NPA and leverage ratios are no longer in breach of the PCA thresholds,” RBI said.
•According to norms, PCA framework gets triggered when a bank breaches one of the three risk thresholds. Crossing 6% net NPA is one of them.
•RBI also decided to take Dhanlaxmi Bank out of PCA , as the bank was found not to be breaching any of the risk thresholds of the framework.
•“RBI will continuously monitor the performance of these banks under various parameters,” the banking regulator added.
📰 ‘Organised retail in India may double by 2021’
Expanding Internet coverage, rise of e-commerce to be growth drivers: report
•Strong macroeconomic factors coupled with robust demographics and Internet penetration will fuel the growth of the retail market in India, which is third largest in Asia and fourth-largest globally after U.S., China and Japan.
•According to a latest joint report by Deloitte and the Retailers Association of India (RAI), as Internet penetration increases in the country and more international retailers start operating in India, the share of organised retail market would increase from about 12% in 2017 to about 22-25% by 2021, which would partly also be driven by the growth of e-commerce market from $24 billion in 2017 to $84 billion in 2021. The report pegs the growth in e-commerce market to factors like growing Internet penetration and increased usage of smartphones among others.
M-commerce sales
•“The number of online shoppers would increase from the current 15% of the online population to 50% by 2026,” stated the report while adding that smartphone users are expected to increase from 260 million in 2016 to around 450 million by 2021 that is also likely to drive the m-commerce sales from $10.5 billion in 2016 to $38 billion in 2020.
•The retail market is expected to grow from $795 billion in 2017 to $1.2 trillion by 2021, as per the report.
•Meanwhile, a joint report by RAI and the Boston Consulting Group (BCG) highlighted the fact that India’s consumption has been growing at a steady pace of 13% over the last decade to ₹110 trillion in 2018, accounting for 59.3% share of GDP of India, higher than the emerging market average.
•“India’s consumption has grown at 13% in the last decade and is likely to continue to grow at 12% over the next 10 years — from ₹33 trillion in 2008 to ₹330 trillion in 2028. But the drivers of the future are going to be different than in the past,” said Abheek Singhi, senior partner and Asia-Pacific lead, consumer practice, BCG India.
