current affairs (january-2016)

8/18/2019 Current Affairs (January-2016)

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AKSH ACADEMY

A Venture of

Dr. Ravi Agrahari’s

Classes

Current Affairs

January 2016

Compilation of Hindu News Paper

TARGET - 2016



INTERNATIONAL NEWS1. Beijing’s race for the Eurasian heartland 2.

U.S.-Iran tensions on the rise again3. Jihadists deepen collaboration in North Africa

4.

China restructures military as Xi eyes ‘strong army’ 5.

Diplomatic crisis deepens in West Asia6.

U.S. caught between Iran and Saudis7. Jamaat leader’s death sentence upheld 8.

North Korea claims to have tested hydrogen bomb9.

U.S. seeks Chinese help over N. Korea10. U.S. flies straight into Korean standoff11.

China’s new force to offset U.S. edge 12.

Tsai Ing wen wins Taiwan leadership election13. U.S. lifts Iran sanctions14. 3,500 slaves held by Islamic State in Iraq: UN15.

Barzani calls for Kurdish independence16.

China moves to deepen its footprint in Iran

17.

African economies shaken by slowdown in China18.

'N.Korea poses an overt threat to world'19.

Europe clamping down on rights: HRW20. Denmark the least corrupt country, India at 76th position21.

Train to Tehran will take Silk Road into West Asia22.

IMF reforms: India, China, Brazil get more voting rights23. U.S. warship sails near disputed isle

INDIA AND THE WORLD NEWS1.

‘We are deepening engagement on Afghanistan’ 2.

Pak. to host meet on Afghan peace talks3. Afghan peace talks: Pakistan warns against preconditions

4.

India’s strategy for the near west 5.

AIIB signals structural alignment of Europe and Asia6. ‘Tax elite to reduce inequality’ 7.

Sri Lanka tops South Asia in human development8.

Madhesis reject changes to Constitution9.

India, Arab League vow to check terror, funding sources

NATIONAL NEWS1. What happens to Mudgal report?2.

India seeks to lead developing nations at WTO3.

NRIs likely to get Aadhaar number4.

NITI Aayog plans model lease law5. Maharashtra saw 3,228 farmer suicides in 2015

6.

India sets an example in subsidised TB diagnosis

ECONOMY1.

Green norms proposal may shut units: Textile Ministry2. Core sector shocker on New Year’s eve! 3.

$50-mn loan to fund education of minorities4.

China’s December factory activity shrinks 5. Government extends tax residency rule deadline6.

New form for ASBA in place



7.

Fall in exports projected to be worst since 1952-538. End of China’s super-boom spells pain, no end seen yet9. China slowdown fear spooks global, Indian equity markets10.

Centre likely to scrap 10 % export tax on low-grade iron ore11.

India to counter ‘non-issues’ at WTO talks 12. Govt. to implement BS-VI norms by 2020

13.

Markets in free fall after China devalues yuan14.

Dragon’s fire may singe Indian industry 15. New economic era for China goes off the rails16.

Currency devaluations by Asian Tigers could hinder global growth17.

Gains and pains of digital transformation18. Tax on seed funding to be scrapped19.

IIP shrinks 3.2%, worst trough since Oct. 201120.

China steps up efforts to stabilise yuan21. Centre clears new crop insurance scheme22. Digital dividends not spreading rapidly, says World Bank23.

For the farmer24.

Government all set to ease rules for startups to mushroom25. PM unveils liberal start-up ecosystem

26.

Flex fuel policy of government to curb pollution worries automakers27.

IMF cuts global growth forecast as China slows28. Cabinet nod for power tariff policy29.

Davos leaders look beyond 2016’s early market mayhem 30.

India to buy more crude oil from Nigeria31. ‘Start-up India’ Action Plan: a good start, but Govt. apathy, big corporates a hurdle 32. Flexible norms to make gold scheme glitter33.

Centre clears new financing model for highway projects34.

Centre hand-picks 20 smart cities for first phase of plan35. Fiscal deficit at 88% of annual target36.

RBI seen easing only once this year as inflation climbs

POLITY AND GOVERNANCE

1.

Pranab gives assent to 5 key legislations2. Cabinet clears Central rule in Arunachal3. Pranab gives assent to Central rule in Arunachal Pradesh4.

SC seeks proof of breakdown in Arunachal5.

More than a numbers game: moving beyond the floor test6. Open to framing law on euthanasia, says Centre

CULTURE1.

The Maharashtrian who revived Chitraveena2. Memories of a glorious past to come alive at historic Chandragiri fort3. Jallikattu in T.N., bullock cart race in Maharashtra cleared4.

No jallikattu in Tamil Nadu this year5.

Genome of Indian Jews has traces of West Asian ancestry

6.

A standing example of conservation architecture7. To draw like prehistoric man is not easy! Ask these artists8.

Lost Beatrix Potter children’s story uncovered a century on

SOCIAL ISSUES1.

Location too matters for growth2. When they turned camera inwards3.

The Lancet turns spotlight on ending preventable stillbirths4.

National Family Health Survey: PMO exerts pressure, data is out



SCIENCE AND TECHNOLOGY1.

ISRO conceives two ‘space parks’ 2.

No more ‘droughts’ in India, says IMD 3. The most energetic light ever in space4.

Fund crunch has hit research in 32 institutions: ICMR chief

5.

Nag missile hits bull’s eye with modified seeker 6. Government to hold talks with WIPO7.

First flower in space is giant leap for zero-gravity gardening8.

Ninth planet may exist, say scientists9. ISRO puts fifth GPS satellite in orbit10.

Houston, do we have a new planet?

ENERGY1.

Increase in renewable energy use to boost global GDP by $1.3 trillion

DEFENCE1. Indo-Japan joint exercise from Jan. 12

2.

‘Naval exercises will strengthen ties’ 3.

Rafale pact concluded, but no deal yet on price

INTERNAL SECURITY1.

Terror revisits Punjab after five months2. ‘Pathankot squad was more lethal than 26/11 attackers’ 3.

CERT-In signs cyber security pacts with 3 nations

ENVIRONMENT, ECOLOGY & BIODIVERSITY1.

Lalbagh flower show to go national this year2. Air in Indian cities fouler than in Beijing3. Snowflake coral, a serious threat to biodiversity4.

Why the real King Kong became extinct

5.

Tiger roar grows louder in Karnataka sanctuaries6. 81 whales washed ashore7.

New class of frogs found in the north-east8.

Sundarbans buzzes with discovery of solitary bee9. Indo-German team finds dinosaur bones in Kutch

HEALTH1.

WHO declares end to Ebola epidemic2.

U.S. pumps in $8 million to map drug-resistant infections in India3. Rural India too battles hypertension4. India drinks and smokes less now5.

Zika could infect 4 mn people: WHO

SPORTS1.

Lodha committee bats for legalising betting in cricket2. Memorable day for Federer, Sharapova3.

Hat-trick for Santina

PERSONALITIES1.

Mrinalini Sarabhai passes away at 97



AWARDS1. The Revenant, Mozart in the Jungle rule Golden Globes2.

Techie, born in T.N., wins Academy Award

BOOKS AND AUTHORS1. Some facts are to be buried along with me, says Pranab

MISCELLANEOUS1. Artificial Intelligence pioneer Marvin Minsky dead

OP-ED

1. Chennai flood This year, don’t speed dial the Army

2. Indo-Pak Relationship

The diplomacy of business China, the missing piece to the Pakistan puzzle?

Think like the neighbour3. NATGRID Revive NATGRID with safeguards

4. Kerala’s New Liquor policy All in the spirit of equality

5. Pathankot attack Stay the course after Pathankot Time for a national security doctrine Driven by neither hawks nor doves Time for questions on Pathankot In defence of intelligence After Pathankot, what?

Alert, fair, transparent Lahore to Pathankot, via Kandahar

6. WTO

The many must resist the some

7. Dress code for worshippers

Dress code by judicial diktat

8. Foreign Policy

Non-alignment to multi-alignment

9. Cricket

Bridging cricket’s credibility deficit

10. Western Asia Crisis

A dangerous escalation Saudi Arabia’s deadly gamble

11. Indo-Nepal ties

The way forward in Nepal

12. Infrastructure investment Think different on infrastructure Improve the investment climate

13. DBT



A case for expanding DBT

14. Judicial equality

For justice in equal measure

15. North Korea bomb testing

North Korea’s provocative move

16. US elections

The U.S.’s firearms menace Mixed legacy of the Obama years

17. Chinese economy

China’s contagious economic turmoil China’s long game in West Asia

18. Global finance index

Playing games with the taxman

19. LPG Subsidy

Widening the net beyond the income norm Leaving no poor person behind

20. Srilankan Constitution

Sri Lanka’s historic opportunity 21. BS norms

Welcome measure to clean the air

22. Jallikattu

A political misadventure

23. Free Basics

What Free Basics did not intend to do

24. Defence Procurement

Incremental steps not enough

25. Digitalisation for tribals

Tech tonic for the heart of India

26. Terrorism

Return of terror in Indonesia27. Economic issues

Stagflation risk ahead A tale of two economists Dealing with the slowdown

28. Sabarimala Temple issue

The case against customary exclusion Reform, only left to the judiciary?

29. Indo-Israel relation

No longer shy Driven by technology

30. Sedition Law

Freedoms only for the outraged

31. Start up stand up

Starting up to stand still?

32. Disability act

Towards a life of dignity and independence

33. Indo-Iran relation

A new beginning with Iran

34. Rohith Vemula incidence



Death of a Dalit scholar Ancient prejudice, modern inequality

35. Activists crackdown

Growing crackdown on activists

36. Maternity leave The case for going universal

37. Malda Incident Polarisation in Malda

38. OECD The hidden wealth of nations

39. Mrinalini Sarabhai The dancer with a white parasol

40. Death sentences

Compassion on death row cases

41. Terrorist attack in Pakistan

Grim reminder in Charsadda

42. NFHS

The unmet health challenge43. Davos

Sobering reflection from Davos

44. Obama Admin

Grand words, but sobering reality

45. GST

A ringside view of the proposed GST

46. Indo-France relations

Consolidating ties with France

47. President rule in Arunachal Politics, impropriety and President’s Rule

48. Paris conference

After Paris, keep the heat on49. Refugee crisis

Denmark’s absurd law on refugees

50. Corruption

The stained steel frame

51. Regulation in higher education

Mounting grievances, little regulation

52. Taliban

Negotiating with the Taliban

53. Spectrum prising

The trouble with spectrum pricing

54. Smart cities Giving cities the smart edge



INTERNATIONAL NEWS

1. Beijing’s race for the Eurasian heartland China switched to a counter-attack mode in 2015, focussing on extending the influence of Silk Road nationsIt is possible that amid the turbulence and violence radiating from West Asia and impacting large parts of the globe,especially Europe, the world’s focus may have been diverted from a game-changing development — China’sremarkable riposte to the ‘Pivot to Asia’ doctrine of the Barack Obama administration.Equally significant has been Beijing’s partnership with Moscow, which flowered in 2015. The strategic partnershipof the two established nuclear weapon powers is well on course to structure a paradigm shift that could disperseglobal power into channels of multipolarity.In the year gone by, China, the world’s second-largest economy, had answers to everything thrown at it by the U.S. — the known “global hegemon”. Pacific-centred deterrentsIf the Americans focused on their Asia pivot — a doctrinal shift, geared toward the containment of China throughthe concentration of forces in the western Pacific — the Chinese did not waste any time in building a crediblePacific-centred nuclear and conventional deterrents in 2015. This has included reinforcement of its nuclear second-strike capability by mounting JL-2 missiles, with a range of 7,350 km, on its JIN class submarines.Russia was a major partner in building the Chinese military deterrent. Beijing concluded with Moscow a decisive S-400 air defence deal. The contract nullifies threats by fighter jets or ballistic missiles by the U.S. or Japan ifbatteries of the S-400 missiles are deployed on the mainland or China’s artificial islands, built atop coral clusters,in the South China Sea. After protracted negotiations, the Russians are also supplying Su-35 fighter jets to China. The acquisition of 24 Su-35 planes would greatly extend China’s reach over the South China Sea. Su-35 planes,

capable of taking off from short runways, will cover a large f ootprint if deployed from China’s newly developedartificial islands in the South China Sea.Energy cooperation The bonding between China and Russia is being reinforced through an extensive energy relationship. With smogresulting from coal-fired power plants choking Beijing and its surrounding industrial belt, China is trying to beatthe clock by turning to clean energy in the form of natural gas, nuclear, and renewable energy. That’s whereRussia’s frozen Siberian zone, sitting across untapped mega-reserves of oil and gas, comes in. China has alreadysigned a $400 billion import deal that would funnel gas in copious quantities for the next 30 years through thePower of Siberia pipeline.A similar undertaking is expected shortly though the western Altai route, thus making Moscow Beijing’s core energysecurity partner. Both China and Russia are working together on undermining the hegemony of the U.S. dollar. Thetwo have already accelerated trading in the Chinese yuan and the Russian ruble. The currency swap tool hassignificantly eased pain inflicted upon Moscow through sanctions imposed after the crisis in Ukraine. Trading in local currencies, exemplified by the two partners, is now being reinforced in an institutional manner bytwo powerful non-western financial entities — The New Development Bank (NDB) of the Brazil-Russia-India-China-South Africa (BRICS) grouping and the China-led Asian Infrastructure Investment Bank (AIIB).

Restructuring the economyAs Western markets still remained trapped by the impact of the 2008 economic crisis, China in 2015 took majorsteps to restructure its economy through mega-investments in Eurasia under its Belt and Road initiative. Instead ofpitching its jaw-dropping financial reserves in U.S. treasury bonds, China has decided to plough large amounts ofits surplus funds in building railways, highways, industrial parks, and cyber-cities along the Silk Road EconomicBelt, one that stretches from Xian in the East to Europe in the West.A $40-billion Silk Road Fund, the AIIB, the NDB of the BRICS, and China’s own state-run “policy banks” willprovide the liquidity so that, instead of depending on the West, “new growth engines” are established along the NewSilk Road.China has been conscious that its Belt and Road initiative can more easily fly if it has the cooperation not only ofRussia, which will take care of the western flank, but also of its eastern, South Asian flank, through a simultaneousengagement of India and Pakistan as well. Over the past year, China has brought India on board the Eurasianplatform by partnering it in major initiatives to transform the international financial architecture. Far from beingintimidated by the U.S., China switched to a bold counterattack mode in 2015, focusing on extending the collectiveinfluence, with Russia as the core partner, of the Silk Road countries along the Eurasian corridor. In causing astructural breach of uniploar world, China and Russia have set the stage either for a new cold war or a more

harmonious multipolar world, provided “exceptionalist’ America agrees to a strategic realignment. Ironically, China over the past year was deepening its stakes in the geographic swathe long identified as pivotal byBritish geopolitical analyst Halford John Mackinder as the “heartland”, one that stretches from the Volga to theYangtze and from the Himalayas to the Arctic.

5.

U.S.-Iran tensions on the rise againIran’s President Hassan Rouhani has denounced possible new U.S. sanctions on his country which could jeopardisea hard-won nuclear deal due to be finally implemented within weeks.In a letter to his Defence Minister, Mr. Rouhani said reports that the U.S. Treasury Department planned to blacklistcompanies and individuals with ties to Iran’s ballistic missile programme constituted “hostile a nd illegalinterventions” that justified a response.



The comments from Mr. Rouhani, who said the military should intensify its development of missiles, seemed tocause backtracking in Washington with reports that the White House had put the intended sanctions on holdindefinitely.Breach of resolutionsIn the five months since the nuclear deal was struck, U.S. officials say Iran has conducted two missile tests, one ofwhich state media reported at the time, on October 11. Iran also recently aired television footage of an undergroundmissile base. The actions angered the United States and a United Nations panel found earlier this month that the tests breached

previous resolutions aimed at stopping the Islamic republic from developing missiles capable of carrying a nuclearwarhead.But the threat of new sanctions — the nuclear deal is due to lift past measures that froze Iran out of the globalfinancial system and crippled its oil exports — brought already worsening relations to a head. It also came after U.S.officials said an Iranian vessel had test-fired several rockets near three Western warships, including the USS HarryS. Truman aircraft carrier. The alleged incident in the strategic Strait of Hormuz on December 26 drew denials from Iran’s RevolutionaryGuards, who are responsible for protecting Iranian interests in the strategic waterway where much of the world’s oilpasses.Spokesman General Ramezan Sharif accused the U.S. of fabricating the incident as part of a “psychologicaloperation”. The Wall Street Journal had first reported on Wednesday that the U.S, was preparing fresh sanctions againstcompanies and individuals in Iran, Hong Kong and the United Arab Emirates over alleged links to Tehran’s ballisticmissile programme.But on Thursday the newspaper said the measures had been delayed — although they remain on the table — overfears the nuclear deal could be derailed. Mr. Rouhani, whose government negotiated the agreement with the United

States and five other world powers, warned of reprisals.Should individuals and companies be added to “the previously unjustified sanctions list, it is necessary that theproduction of various missiles required by the armed forces move forward with increased speed and seriousness”,said his letter to Defence Minister Hossein Dehghan. “If such wrong and interventionist actions are repeated by theU.S., the Ministry of Defence should use all its capabilities to come up with new plans to expand Iran’s missilecapabilities,” he added. Iran’s Foreign Minister Mohammad Javad Zarif, who negotiated the deal with U.S. Secretary of State John Kerryand counterparts from Britain, China, France, Russia and Germany, alluded to the missile row in a New Yearmessage posted on Twitter.“Much was achieved in 2015 through diplomacy — let’ s learn from history and repeat successes, not past mistakes.A Happy New Year to all,” he wrote. — AFP

6. Jihadists deepen collaboration in North Africa

(: A group of light armoured vehicles skated over the moonscape of the Sahara, part ofone of the largest detachments the French military has deployed here since colonial

times. Its mission is growing ever more urgent: to cut smuggling routes used by jihadists who have turned this inhospitable terrain into a sprawling security challengefor African and international forces alike.Many of the extremist groups are affiliates of al-Qaeda, which has had roots in NorthAfrica since the 1990s. With the recent introduction of Islamic State (IS) franchises, the

jihadist push has been marked by increasing, sometimes heated, competition.But, analysts and military officials say, there is also deepening collaboration amonggroups using modern communications and a sophisticated system of roving trainers toshare military tactics, media strategies and ways of transferring money. Their threat hasgrown as Libya — with its ungoverned spaces, oil, ports, and proximity to Europe andWest Asia — becomes a budding hub of operations for both al-Qaeda and the IS to reachdeeper into Africa. And as Africa’s jihadists come under the wing of distant and more

powerful patrons, officials fear that they are extending their reach and stitching togethertheir ambitions. The November 20 assault on the Radisson Blu hotel that killed at least 19 people inBamako, Mali’s capital, was just one of the more spectacular recent examples of theability of these groups to sow deadly mayhem.Cohesive network Gen. David M. Rodriguez, who heads U.S. Africa Command, warned in a congressionalstatement this year of an “increasingly cohesive network of al-Qaeda affiliates andadherents” that “continues to exploit Africa’s under-governed regions and porous



borders to train and conduct attacks,” Gen. Rodriguez warned months before the Maliattack.

The transfer of expertise can be witnessed in the spread of suicide bombings in Libya, Tunisia and Chad, and in the growing use of improvised explosive devices in Mali.Such exchanges have been enhanced as groups shift shape, sometimes merge, andcome under the wing of more powerful and distant patrons.

In one instance, two of the longest standing North African groups, al-Qaeda in theIslamic Maghreb and Al Mourabitoun, after a long publicised split, announced that theyhad reunited and that the Bamako hotel attack was their first joint venture.

The leaders of the two groups — Abdelmalek Droukdel and Mokhtar Belmokhtar, bothAlgerians — have loyalties that reach far beyond Africa, however.As does Seifallah Ben Hassine, leader of Ansar al-Sharia in Tunisia, the organisationbelieved to be behind three deadly attacks in Tunisia last year, including a massacre of38 people at a beach resort in June and an attack on the Bardo Museum in Tunis inMarch that left 22 dead.All three men are veterans of fighting in Afghanistan in the 1980s, swore allegiance toOsama bin Laden and now profess loyalty to al-Qaeda’s current leader, Ayman al-Zawahri, based in Pakistan.

7.

China restructures military as Xi eyes ‘strong army’

China has unveiled changes to the structure of its military described by President Xi Jinping as “a major policy decision to realise the Chinese dream of a strong army”, statemedia reported. Beijing in November said it planned sweeping changes in a moveintended to enhance the ruling Communist Party’s control over the People’s LiberationArmy (PLA). The changes announced late on Friday will see a new army unit set up tooversee China’s arsenal of strategic missiles. Genran’s Foreign Ministry on Monday accused Saudi Arabia of stoking regional tensionafter the kingdom broke off diplomatic relations and said Iranian embassy staff mustleave. By severing diplomatic relations, Saudi Arabia is “continuing the policy ofincreasing tension and clashes in the region”, said ministry spokesman Hossein Jaber

Ansari.Saudi Arabia announced its measures after its embassy in Tehran was firebombed andits interior destroyed by a mob who attacked the building in protest at the kingdom’sexecution of a Shia cleric. The violence was condemned on Sunday by Iran’s President.“What happened in regard to diplomatic missions, it is not the first time such a thinghappens worldwide,” said Mr. Ansari. His remarks came the morning after Saudi Arabia’s Foreign Minister Adel al -Jubeirannounced diplomatic ties had been cut, giving the Iranian diplomats 48 hours notice todepart. Mr. Jubeir did so after the two countries clashed over Saudi Arabia’s executionon Saturday of the cleric, Sheikh Nimr al-Nimr, an act that Iran’s supreme leader saidwould be met with “divine revenge”. Mr. Ansari, who said that the Iranian diplomats had not yet left Riyadh, insisted Iranhad always protected diplomatic missions and dealt with transgressions. Later onMonday, Saudi Arabia’s civil aviation authority said it was cutting all air links with Iran Iran’s President Hassan Rouhani on Sunday described the arson at the Saudi Arabianembassy as “totally unjustifiable” and judicial officials said on Monday that 50 arrestshad been made. But there were other protests in Iraq, Bahrain, Lebanon and Pakistanon Sunday over the execution of the cleric. — AFPeral command



Besides the “Rocket Force”, the PLA also unveiled an army general command to serve asthe headquarters for land forces and a support unit to assist combat troops, the officialXinhua news agency said.

The changes come as China acts more aggressively in territorial disputes in the SouthChina Sea and East China Sea and comes just after Beijing announced on Thursday itis building its second aircraft carrier. The nation’s first aircraft carrier, the Liaoning, is a

second-hand Soviet ship built more than 25 years ago that was commissioned by Chinain 2012 after extensive refits.At the same time, Mr. Xi, who also serves as head of the military, is planning to slashChina’s number of troops by 300,000 to roughly two million to craft a more efficientfighting force. China’s Central Military Commission, which Mr. Xi chairs, on Friday alsoreleased guidelines to help build the country’s vision of a modern military before 2020by cutting troops and improving the quality of combat personnel, Xinhua said. — AFP

5. Diplomatic crisis deepens in West AsiaIran’s Foreign Ministry on Monday accused Saudi Arabia of stoking regional tensionafter the kingdom broke off diplomatic relations and said Iranian embassy staff mustleave. By severing diplomatic relations, Saudi Arabia is “continuing the policy ofincreasing tension and clashes in the region”, said ministry spokesman Hossein Jaber

Ansari.Saudi Arabia announced its measures after its embassy in Tehran was firebombed andits interior destroyed by a mob who attacked the building in protest at the kingdom’sexecution of a Shia cleric. The violence was condemned on Sunday by Iran’s President.“What happened in regard to diplomatic missions, it is not the first time such a thinghappens worldwide,” said Mr. Ansari. His remarks came the morning after Saudi Arabia’s Foreign Minister Adel al-Jubeirannounced diplomatic ties had been cut, giving the Iranian diplomats 48 hours notice todepart. Mr. Jubeir did so after the two countries clashed over Saudi Arabia’s executionon Saturday of the cleric, Sheikh Nimr al-Nimr, an act that Iran’s supreme leader saidwould be met with “divine revenge”. Mr. Ansari, who said that the Iranian diplomats had not yet left Riyadh, insisted Iranhad always protected diplomatic missions and dealt with transgressions. Later onMonday, Saudi Arabia’s civil aviation authority said it was cutting all air links with Iran Iran’s President Hassan Rouhani on Sunday described the arson at the Saudi Arabianembassy as “totally unjustifiable” and judicial officials said on Monday that 50 arrestshad been made. But there were other protests in Iraq, Bahrain, Lebanon and Pakistanon Sunday over the execution of the cleric. — AFP

6. U.S. caught between Iran and Saudis



As the spiralling tensions between Saudi Arabia and Iran threaten to un-balance U.S.’stightrope walk in the strife-torn West Asian region, Washington has launched a massivediplomatic outreach to both countries, but would stop short of trying to “mediate”. “Wewant to see these kinds of tensions solved bilaterally,” said John Kirby, StateDepartment spokesperson.Secretary of State John Kerry and several other officials are in touch with Iranian andSaudi functionaries to defuse the situation, but Washington would avoid too close aninvolvement as it could complicate the matter, according to officials.Saudi Arabia’s Sunni monarchy and Iran’s Shia theocracy are bitter adversaries in the region, but are also part of a multilateral process led by the U.S and Russia to stabiliseSyria.

The White House and the State Department expressed hope that the tensions triggeredby the Saudi execution of an Iranian-trained Shia cleric, Sheikh Nimr Baqir al-Nimr,and the arson attack on the Saudi embassy in Tehran that followed over the weekendwould not derail the Syria process that is set to kick off this month.“[W]e see no reason why the Syria peace process shouldn’t move forward as planned.Obviously, the last thing we’d want to see is for there to be an impact on that or anyother significant regional issues by the tensions over the weekend,” Mr. Kirby said. White House Press Secretary Josh Earnest urged Saudi Arabia and Iran not to let thetensions affect the process of ceasefire and Syrian political transition.Legitimacy to Iran

The Saudi action that precipitated a crisis in the region happened despite the U.Srepeatedly cautioning them against the cleric’s execution. A U.S official said Washingtonhad repeatedly taken up the issue with the Saudis, but they went ahead with the

execution. The current flare-up has its origin in the Saudi monarchy’s deep resentment against theU.S-led nuclear deal with Iran that has begun to come into effect with Iran shipping itsspecified nuclear material to Russia last week. Saudis accuse the U.S. of givinglegitimacy to Iran before roping them into the Syria process. A U.S official said the Saudireservations were misplaced as Iran continues to be in the U.S. list of state sponsors ofterrorism. “We still have a lot of sanctions against Iran,” the official said, adding thateverybody would agree that Iran without nuclear weapons is better for every country inthe region.



“The deal was not about giving legitimacy, but about cutting off their pathways to thebomb. And the Saudis have been at the table on Syria, three times now. Everybody doesnot want everybody and we understand that….We are not getting any sustainablesolution in Syria if it does not account for the influence Iran has in Syria, it ispragmatism,” the official said. Recalling that it was not only the U.S. but there was a multilateral agreement on a

nuclear deal with Iran and on Syria, the official said, “Whether you like it or not, Iranhas influence in the region. They have influence over Assad. No political solution isgoing to work without engaging Iran to some degree on this,” he said. But convincing the Saudis may not be easy for the U.S. that condemned the attack onthe Saudi embassy more strongly than the cleric’s execution by Saudi Arabia. Mr. Kirbyalso said the U.S. was considering new sanctions against Iran for violations of the UNSecurity Council resolutions with respect to their ballistic missile programme. “Thereare sanctions under consideration. There are still some technical issues that need to beworked out,” Mr. Kirby said.

7. Jamaat leader’s death sentence upheld The Supreme Court of Bangladesh has upheld the death penalty for Jamaat-e-Islamichief Motiur Rahman Nizami for crimes committed during the country’s Liberation War

in 1971. A four-member appellate division bench, led by Chief Justice Surendra KumarSinha, rejected Nizami’s appeal. The International Crimes Tribunal (ICT), in its 2014 verdict, had held Nizami guilty ofeight out of the 16 charges against him and awarded him the death penalty. He was,however, acquitted on eight other charges.Murder of intellectuals Nizami (now 72), who was the chief of Islami Chhatra Sangha, a student wing of

Jamaat, headed the al-Badr militia created by the Pakistan Army to suppress theBengali rebellion. He also played a key role in the formation and running of the Razakarforce.

The al-Badr militia murdered some of the best intellectuals of the Bengali nation-in-the-making, people who formed the lifeblood of secular Bengali nationalism. Most of themwere killed days before the final victory on December 16. Nizami, a former IndustryMinister under the Khaleda Zia government, was also given death penalty in 2014 overarms trafficking related to Chittagong’s 10-truck arms haul case.Wednesday’s verdict is the sixth war crimes verdict given by the apex court after thelandmark tribunal was set up in 2010.Review option War veterans and families of victims welcomed the verdictProcessions were also takenout in various places to celebrate the verdict. Jamaat-e-Islami called a day-long hartal on Thursday to protest the judgment. The full verdict will now be sent to thewar crimes tribunal, which will issue the death warrant. The jail officials willsubsequently read out the warrant to Nizami.As per the law, the defence has a chance to file a review petition within 15 days of thepublication of the full verdict. Following that, if the death sentence is upheld, the

convict will have the opportunity to file a mercy petition to the President.Student wing of Jamaat Nizami joined Jamaat’s student wing when he was young. He swiftly rose through theranks, operating in the West and East Pakistans, and becoming Islami Chhatra Sanghapresident in 1966.He retained the post for the following five years and throughout Bangladesh’s strugglefor independence. After the war, Nizami fled to the U.K. In 1978, the then President GenZiaur Rahman repatriated him and brought the Jamaat back into politics.



8. North Korea claims to have tested hydrogen bomb

North Korea declared on Tuesday that it had detonated its first hydrogen bomb. The assertion, if true, would dramatically escalate the nuclear challenge from one of theworld’s most isolated states. In an announcement on Central Television, the state-run network, North Korea said thetest was a “complete success”. But it was difficult to tell whether the statement was

true. North Korea has made repeated claims about its nuclear capabilities that analystselsewhere have greeted with scepticism.“This is the self -defensive measure we have to take to defend our right to live in the faceof the nuclear threats and blackmail by the United States and to guarantee the securityof the Korean Peninsula,” the television announcer said, reading a statement.

The North’s announcement came about an hour after detection devices around theworld had picked up a 5.1 seismic event along the country’s northeast coast. It may be weeks or longer before detectors sent aloft by the U.S. and other powers candetermine what kind of test was conducted.A spokesman for the White House National Security Council said in a statement thatU.S. officials “cannot confirm these claims at this time”. But he said the White House expected “North Korea to abide by its international

obligations and commitments”. 9. U.S. seeks Chinese help over N. Korea The U.S. said it considered the latest nuclear explosion carried out by North Korea amatter of national security, and declared that it would stand steadfast in its alliancecommitment to South Korea. North Korea has repeatedly threatened the U.S. and hasdescribed the latest nuclear test a response to “U.S. aggression.” “We do have an alliance commitment with the Republic of Korea that we take very, veryseriously. Obviously, nobody wants to see it come to that. But we have a robust militarypresence there on the peninsula that is, as they say, they’re ready tonight if they need tobe,” State Department spokesperson John Kirby said, even as the U.S. reached out notonly to its Asian partners, including Japan, but also to China, seeking to use itsinfluence — waning as it might be — over the Communist North.

The White House said initial assessments by U.S. agencies doubted the North Koreanclaim that the device was a hydrogen bomb. Meanwhile, U.S. Deputy Secretary Antony

J. Blinken will be heading to Asia next week.Diminishing influence Mr. Kim, unlike his late father, is not particularly sensitive to Chinese concerns.However, officials said though its influence over the North Korean dictator Kim Jong-unis diminishing, China remains a crucial player which can calm the situation, and thatSecretary of State John Kerry would be talking to Chinese Foreign Minister soon.



Mr. Kirby said the U.S. was encouraged by the Chinese response that it “firmly opposed”the North’s move. “We would look to and hope for China’s leadership going forward withrespect to holding the North accountable. ….we would look and hope for China’scontinued influence in a positive way,” Mr. Kirby said.

The U.S. is also exploring new sanctions and considering strengthening the existingsanctions against.

The U.S. also said it was open to talking to North Korea in the Six Party format. Thetalks, started in 2003 but aborted in 2009, involved China, Japan, South Korea, NorthKorea, Russia, and the U.S. Washington wants the talks to restart but with apredetermined objective of dismantling the nuclear apparatus of North Korea and alsohopes China will take the initiative. North Korea has been unwilling to accept that. U.S.officials ruled out any review of the U.S. position on this.“If they want to return to the table through the Six-Party talks, the onus is on them toshow that they’re willing to do that. And they have not shown a willingness to do that

yet. But the international community is still willing to go down that road that obviouslythey aren’t,” Mr. Kirby said. North Korea under Mr. Kim has made attempts to move away from a total dependenceon China. It improved relations with Russia and even got India to receive its Foreign

Minister in 2015 — the first time in 25 years. While the U.S. is seeking Chinese lead indisciplining North Korean adventurism, it also has to signal to its allies in Asia that itwould stand up to Chinese manoeuvres in the South China Sea. Mr. Kerry spoke to hisVietnamese counterpart on Wednesday on China’s test flight landings of civilian aircrafton Fiery Cross Reef in the South China Sea. “They decided to explore how best toimprove Vietnam’s maritime domain awareness and security capabilities,” Mr. Kirbysaid.

10. U.S. flies straight into Korean standoffIn a show of force, a B-52 bomber conducts low-level flight over S.Koreafollowing the North’s nuclear test last week.

The United States deployed a B-52 bomber on a low-level flight over its ally South Koreaon Sunday, a show of force following North Korea’s nuclear test last week.

North Korean leader Kim Jong-un maintained that Wednesday’s test was of a hydrogenbomb and said it was a self-defensive step against a U.S. threat of nuclear war.North Korea’s fourth nuclear test angered both China, its main ally, and the UnitedStates, although the U.S. government and weapons experts doubt the North's claim thatthe device was a hydrogen bomb.

The massive B-52, based in Guam and capable of carrying nuclear weapons, could beseen in a low flight over Osan Air Base at around noon (0300 GMT). It was flanked bytwo fighter planes, a U.S. F-16 and a South Korean F-15, before returning to Guam, theU.S. military said in a statement.Osan is south of Seoul and 77 km from the Demilitarised Zone that separates the twoKoreas. The flight was “in response to recent provocative action by North Korea,” theU.S. military said.“The United States remains steadfast in its commitment to the defence of the Republic

of Korea [South Korea] and to maintaining stability on the Korean Peninsula, to includeextended deterrence provided by our conventional forces and our nuclear umbrella,”said U.S. Lt. Gen. Terrence O’Shaughnessy. After the North’s last test, in 2013, the United States sent a pair of nuclear-capable B-2stealth bombers over South Korea. At the time, the North responded by threatening anuclear attack on the U.S.U.S. is also considering sending a nuclear-powered aircraft carrier to waters off theKorean peninsula next month to join a naval exercise with Seoul, South Korea’s Yonhapnews agency reported without identifying a source.



However, U.S. military officials said they knew of no such plan.Keywords: Kim Jong-un, North Korea, Nuclear test, USA, South Korea

11. China’s new force to offset U.S. edge

The superiority of arch-rival United States in the air and sea may have driven China to

revamp its nuclear and conventional missile forces and bring about sweeping changes toits military command and control architecture.A write-up in China Military Online , the website of the People’s Liberation Army (PLA),quoting an in-house military expert, points out that the Second Artillery Force (SAF) — the institution that had exercised operational control over the country’s nuclear forces

— had been upgraded as the PLA Rocket Force (PRF).Without naming the U.S., Song Zhongping, a former instructor at the PLA SecondArtillery Engineering University, says that this is because the “country on the other sideof the ocean has a powerful navy and air force and boasts the world’s top air and seasupremacy and strongest conventional long-range precision strike capability”. Modernising arsenal Consequently, in order to compensate, China has decided to modernise its nucleardeterrent and conventional missiles.

The PRF has now been upgraded into a full-fledged new service on a par with the Army,Air Force and the Navy. Mr. Song explained that unlike its predecessor, the SAF, whichwas an independent arm in China’s military system, the emergence of a full -fledgedservice would imply having “several arms and special troops” apart from having“academies, research institutes and logistic support system.”

The new service, as it evolves, is expected to deploy its nuclear assets on land, sea andair. Mr. Song pointed out that after incorporating the Navy’s strategic nuclearsubmarine and the Air Force’s strategic bomber, the PRF would become the firstindependent service with land, sea and air nuclear forces in the world, more integratedthan the nuclear forces in the U.S., Russia, Britain and France.

The write-up says the PRF would have an edge because of deep cuts in Russian andU.S. missile forces that were made under previous arms control agreements.

For instance, the U.S. and the former Soviet Union had signed an agreement in 1987 tocut their ground-to-ground missiles, with ranges from 500 to 5,500 km. As a result,America’s Pershing II and land-based Tomahawk, and the former Soviet Union’s SS-4,SS-12, SS-20 and SS-23 missiles were all destroyed. The Russian army has only twotypes of short-range tactical missiles.“As China hasn’t signed any agreement of this kind, it has established the world’s mostcomplete ballistic missile strike system, including both nuclear and conventionalmissiles, with the high-precision medium-range ballistic missile standing out in theworld,” the article said.

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12. Tsai Ing wen wins Taiwan leadership election

TSAI ING-WEN BECOMES TAIWAN PRESIDENT Tsai Ing-wen of Taiwan's main opposition party becomes the island's first femalepresident in a landslide victory over the ruling Kuomintang Saturday, as voters turnedtheir backs on closer China ties.In a speech at the Kuomintang (KMT) headquarters in Taipei, Tsai’s rival KMT candidateEric Chu acknowledged his failure, saying he would take responsibility and resign fromthe post of KMT chairman, Xinhua reported.

The Taiwan Work Office of the Communist Party of China Central Committee and the Taiwan Affairs Office of the State Council released a statement late on Saturday, sayingthe mainland’s major principles and policies concerning Taiwan are “consistent andclear, and will not change with the results of Taiwan elections.”Agencies

13. U.S. lifts Iran sanctionsCommentators have estimated a windfall of USD 100-150 billion for Iran, but a U.S.

Treasury official said on condition of anonymity that the removal of sanctions wouldunlock only an estimated 50 billion USD. “Iran is likely to continue to keep it abroad tokeep its own currency stable,” the official said.

The removal of sanctions will tremendously help India’s plans in Iran, which are manyand include the Chabahar port, an Indian Oil petrochemical plant and the proposedIran – Pakistan –India (IPI) gas pipeline. India’s oil imports from Iran have been restrictedby the sanctions and the recent forward movement on the port was accommodatedwithin the exemption granted for projects exclusively serving commerce withAfghanistan.“With the lifting of the sanctions, the scope of India-Iranian cooperation, including thescope of the Chabahar port can be expanded,” an Indian diplomat said.

The Obama administration officials were upbeat on Saturday about the “diplomaticsuccess” with a country with which it had no diplomatic relations. “Iran has madeunprecedented concessions,” a senior official said. But the administration has the tough task ahead, of keeping anti-Iran allies in West

Asia such as Saudi Arabia and Israel happy and countering domestic criticism by theRepublicans that it is going soft on Iran. Jon B. Alterman, Director, Middle East Programme, at the Centre for Strategic andInternational Studies in Washington, said: “U.S. allies in the region fear that the U.S.focus on the nuclear threat distracts the United States from the array of other threatsthat Iran poses to the region. The U.S will have to reassure Saudi and UAE and othersthat that is not the case.” Mr. Alterman also believes that the possibility of U.S. and Iran entering into normaldiplomatic relations is “very far off.” “There are still many reasons each side isdistrustful of the other.” He said Iran wants to be treated like a normal country, whileother countries want Iran to behave like one. “This is a step in that direction but theonus is on Iran to prove that its behaviour fits into international norms. That is still along journey.” State Department spokesperson John Kirby said hours before the implementation of thedeal: “It was never about defining or improving our relationship with Iran. It was aboutcutting off their pathways to a nuclear bomb, and it will do that.”

14. 3,500 slaves held by Islamic State in Iraq: UN



Report says group committing abuses that may amount to war crimes, andpossibly genocide. An estimated 3,500 people, mainly women and children, are believed to be held asslaves in Iraq by Islamic State militants who impose a harsh rule marked by gruesomepublic executions, the United Nations said on Tuesday.

The militant group, which also controls large parts of neighbouring Syria, has

committed widespread abuses that may “in some instances, amount to war crimes,crimes against humanity, and possibly genocide,” the report said.

The U.N. Assistance Mission for Iraq and the U.N. human rights office estimated that3,500 people were “currently being held in slavery by ISIL”. “Those being held are predominantly women and children and come primarily from theYazidi community, but a number are also from other ethnic and religious minoritycommunities,” said the joint report issued in Geneva.

The report detailed executions by shooting, beheading, bulldozing, burning alive andthrowing people off the top of buildings.It said the U.N. had information about the murder of child soldiers and had verifiedreports suggesting between 800 and 900 children in Mosul had been abducted formilitary and religious training.

“Even the obscene casualty figures fail to accurately reflect exactly how terribly civiliansare suffering in Iraq,” U.N. human rights chief Zeid Ra’ad Al Hussein said. “The figures capture those who were killed or maimed by overt violence, but countlessothers have died from the lack of access to basic food, water or medical care.” He addedthat the report laid bare the “horror” that Iraqi refugees were attempting to escape whenthey fled to Europe and other regions.Salaries slashed Meanwhile, a report claimed that the IS has decided to cut the salaries of its fighters byhalf blaming the “exceptional circumstances”, a sign of worsening financial situation ofthe outfit.

The group’s Bayt al-Mal, the Treasury Ministry, has decided to cut the salaries of itsfighters by half, The Jerusalem Post said, citing new documents released last month.

The IS decision came amid reports of a U.S.-led coalition air strike this month thatdestroyed a cash storage facility in Mosul.‘19,000 civilians killed in 2 years in Iraq’ Nearly 19,000 civilians were killed in war-torn Iraq with a staggering total of over 55,000casualties since 2014, said a new UN report released on Tuesday.At least 18,802 civilians have been killed and another 36,245 wounded between

January 1, 2014 and October 31, 2015, stated the report jointly compiled by the UNAssistance Mission for Iraq (UNAMI) and the Office of the High Commissioner for HumanRights (OHCHR).Of the total number of casualties, at least 3,855 civilians were killed and 7,056 woundedbetween May 1 and October 31 last year — the period covered by the report.Baghdad, Anbar and Diyala governorates were the most severely affected with Baghdadaccounting for more than half of the deaths recording 6,168 civilian casualties.

“Even the obscene casualty figures fail to accurately reflect exactly how terribly civiliansare suffering in Iraq,” said the UN human rights chief Zeid Ra’ad Al Hussein.However, the OHCHR and UNAMI say that these figures may be highly underestimatedbecause of the lack of methods to verify certain incidents, the lack of access to someparticularly volatile areas and the fear of reprisals by sources.Child soldiers Between 800 and 900 child soldiers have been abducted by the Islamic State (IS) fromMosul for military training of which many were murdered when they tried to flee fromthe frontlines of the Anbar province.



“Right now, Iraq is divided. We are not responsible for it. On the contrary, we have doneour best to preserve Iraqi unity and a democratic Iraq. In 1991, we went to Iraq andnegotiated with those criminals that were responsible with the chemical bombardment,the Anfal campaign [launched by Saddam Hussein against the Kurds].“After 2003, we went to Baghdad and tried our best through the constitutional process.But the existing culture in Iraq is not one of co-existence.

“So if we can’t live together we have to live with other alternatives.” Mr. Barzani hadannounced he would push for independence on July 1, 2014, the first time a Kurdishleader had pledged to do so after decades of armed struggle, civil war and displacement.

The announcement was meant to lead to a referendum, but it failed to generatemomentum and was soon subsumed by the IS advance on Erbil, and the worseningcrisis in Iraq and Syria.

16. China moves to deepen its footprint in IranRising from the yellowish, treeless plains so typical for central Iran stands a square,three-dimensional labyrinth of pipes and conveyor belts, topped by a silver chimney thatglitters in the summer sun.Sanctions against Iran failed to halt the construction of the complex, a steel mill thatwent into operation in September and now churns out ingots and billets. The sanctions

also did not stop Sheng Kuan Li, a wealthy Chinese businessman, from pouring $200million into the project.Mr. Li is one of many Chinese investors who in recent years worked around thesanctions imposed on Iran by the U.S. and other Western powers over Tehran’s nuclearprogramme. His steel mill and other similar endeavours are the result of a strategic pactthat gives China a much-needed western gateway to West Asian markets and beyond,and that has saved Iran from international isolation and economic ruin.On Saturday, both countries agreed to increase trade to $600 billion in the comingdecade.

That agreement was made during a meeting between Iran’s leaders and China’sPresident Xi Jinping, who late last week became the first foreign leader to visit Iran aftermost international sanctions were lifted. China has relied on Iranian oil and views the

country as a vital link in Mr. Xi’s so-called Silk Road strategy, an ambitious agenda thatseeks to extend China’s economic influence westward.

The deep Chinese footprint in Iran does not only manifest itself in the tens of thousandsof inexpensive cars that have flooded the streets of Tehran in the past few years.Investors like Mr. Li, who has built two other factories here, as well as Chinese statecompanies, are active all over the country, building highways, digging mines andmelting steel.In Tehran, the Chinese have been involved in the construction of a huge elevatedexpressway and the building of the Niayesh Tunnel, one of the longest urban tunnels inthe world. The city’s metro system was built from scratch, starting in 1995, withChinese capital and Chinese engineers. The train cars that run on it are Chinese, too.“Westerners visiting the capital often wonder how we managed to pull off suchambitious projects during the heaviest sanction regime in history,” said MohammadReza Sabzalipour, Iran’s World Trade Center representative. “Well, we did it with thehelp from our Chinese friends.”

Thirst for cheap crude oil and enthusiasm for the Silk Road project, which incorporatesthe goal of unlocking China’s isolated western provinces, brought the Chinese to Iran,the only country in West Asia where the U.S. had no presence.Iran had long welcomed the relationship, but after sanctions started to squeeze theeconomy at the end of the last decade, the country gained a special status , and China’sslow but steady advance here began.



“We are Iran’s biggest trading partner for six years in a row,” Mr. Xi wrote in an openletter to the Iranian people, Xinhua, China’s state news agency, reported on Thursday, aday before his arrival on a West Asian tour that would also take him to Saudi Arabiaand Egypt. During the Iran-Iraq war, China sold weapons, including Silkworm missiles,to Iran.China looked the other way when the Iranians sought to advance their missile

technology, and assisted in developing the country’s nuclear energy programme. “After the revolution we exchanged the Western frowns with the smiles from the East,”said Asadollah Asgaroladi, one of Iran’s wealthiest businessmen and the head of theIran-China chamber of commerce. “They continue to smile at us.” So the two countries, which were connected by the old Silk Road, have embarked onestablishing a new one.

17. African economies shaken by slowdown inChinaYears of rapid economic growth across sub-Saharan Africa fuelled hopes of a prosperousnew era. To many, the world’s poorest continent was finally emerging, with economiesthat were no longer dependent on the fickle global demand for Africa’s raw resources.

But as China’s economy slows and its once seemingly insatiable hunger for Africa’scommodities wanes, many African economies are tumbling, quickly.Since the start of this year, the outlook across the continent has grown grimmer,especially in its two biggest economies, Nigeria and South Africa. Their currencies fell torecord lows this month as China, Africa’s biggest trading partner, announced thatimports from Africa plummeted nearly 40 per cent in 2015.“We can see what drove the growth in Africa when demand goes away,” said Greg Mills,the director of the Brenthurst Foundation, a Johannesburg-based economic researchgroup. “Well, demand has gone away, and it’s not pretty.”

The International Monetary Fund has in recent months sharply cut its projections forthe continent. Credit rating agencies have downgraded or lowered their outlook oncommodity exporters like Angola, Ghana, Mozambique and Zambia, which were the

darlings of international investors until just over a year ago.Many economists expect South Africa, the continent’s most advanced and diversifiedeconomy, to slide into a recession this year, a projection disputed by the government. AsAfrica’s biggest exporter of iron ore to China, South Africa is suffering from a slump inmining, as well as in other sectors like manufacturing and agriculture.Increased food costs Like the currencies of many commodity-exporting nations, South Africa’s rand hasdeclined sharply in recent months because of the worldwide fall in prices of rawmaterials and because of poor government policies.

The weak rand will make it more painful for South Africa, which is experiencing theworst drought in a generation and is usually an exporter of agricultural products, toimport corn, the nation’s staple. Higher food prices could pose a challenge to the government of President Jacob Zuma.

Nigeria, Africa’s biggest economy and oil producer, is reeling from the crash in crudeprices, at the same time President Muhammadu Buhari tries to deal with Boko Haram,the Islamic extremist group that has long terrorised the nation.With oil accounting for 80 per cent of government revenue, the government may alsolack the resources to quell potential unrest in the Niger Delta, the source of thecountry’s oil. Weakening currencies will make it harder for Nigeria — and many other Africangovernments — to repay China for loans used to build large infrastructure projects.



As the slumping economies have underscored the continent’s growing vulnerability tochanges in China, businessmen have quieted much of the heady talk of “Africa rising,” acatchphrase that symbolised the continent’s fortunes. But experts also see bright spots on the map. While previously high-flying commodityexporters, like Angola and Zambia, have been hit hardest by China’s slowdown, othercountries are showing greater resilience.

“The ‘Africa rising’ narrative wasn’t true, but neither is the diametrically opposedargument that Africa is no longer rising,” said Simon Freemantle, a senior politicaleconomist at Standard Bank, a South African bank.Mr. Freemantle said East African countries, including Kenya and Ethiopia, which havebeen forced to diversify their economies in part because of their dearth of commodities,will probably continue to enjoy robust growth.

18. 'N.Korea poses an overt threat to world'"Clearly we have several important issues that we need to find the wayforward on," John Kerry told reporters. U.S. Secretary of State John Kerry called on Wednesday for China to do more to rein inNorth Korea’s nuclear activities and decrease tensions over disputed parts of the South

China Sea.Wrapping up an eight-day, around-the-world diplomatic mission in Beijing, Mr. Kerryhailed U.S.-China cooperation on several issues, including the Iran nuclear deal andclimate change, but said consensus on North Korea and the South China Sea remaineda work in progress.“Clearly we have several important issues that we need to find the way forward on,” Mr.Kerry told reporters as he began his meeting with Chinese Foreign Minister Wang Yi. Mr.Kerry called North Korea “a major challenge to global security” and noted U.S. “concernsand activities in the South China Sea.” “We have proven ... when our two countries find common ground and work together, wecan make things happen,” he said. “And it is my hope that today will be constructiveand we will find a way forward.” In his opening remarks, Mr. Wang mentioned both issues briefly and said he was eager

to hear what Mr. Kerry had to say. But he offered no hint as to whether China wouldrespond to the entreaties beyond saying he hoped the two nations would be able “todeepen our understanding and mutual trust to deepen our strategic cooperation.”

The U.S. badly wants China to take a firmer stance in urging North Korea to end itsnuclear testing. China is North Korea’s main link to the outside world, and Americanofficials say Beijing isn’t doing enough to persuade North Korea to stop the tests andreturn to disarmament talks.

The so-called six-party talks between the North and South Korea, the United States,China, Russia and Japan have been stalled since they were last held in December 2008.Pyongyang has since conducted three nuclear tests, including the latest on Jan. 6,sparking worries the country has made progress in its bomb programme.Mr. Kerry, who after meeting with Mr. Wang was set to see State Councillor Yang Jiechi

and hoped to meet later with President Xi Jinping, also called on China to halt landreclamation and construction in disputed areas of the South China Sea, which havealarmed its smaller neighbors.Mr. Kerry arrived in China from stops in Laos and Cambodia, where he called on thetwo members of the Association of Southeast Asian Nations to present a united front indealing with increasing Chinese assertiveness over the South China Sea claims. Hisvisits to Vientiane and Phnom Penh come ahead of a summit with the leaders of all 10ASEAN nations that President Barack Obama will host next month in California.



China, which claims sovereignty of much of the territory in the South China Sea, rejectsclaims from countries like the Philippines and Vietnam and has bristled at U.S.warnings that its activities threaten the freedom of navigation in some of the world’sbusiest commercial shipping lanes. Taiwan, Malaysia and Brunei also have overlappingclaims in the strategically vital sea, through which around $5 trillion in world tradepasses each year.

The U.S. says it takes no position on the claims but says developments in the SouthChina Sea are a national security interest. It has urged that the disputes be settledpeacefully and that a binding code of conduct be established for the area.

Tensions have been especially high since Beijing transformed seven disputed reefs intoislands, where it is now constructing runways and facilities that rival claimants say canbe used militarily. China has said it built the islands primarily to foster safe civilian seatravel and fishing.In response, the U.S. sent a guided-missile destroyer close to one of the Chinese-builtislands, called Subi Reef, in October in a challenge to Beijing’s territorial claims,sparking warnings from China. U.S. officials vowed to continue manoeuvres to protectfreedom of navigation and overflight.Recent developments, including China’s movement of an oil rig into a zone disputed

with Vietnam and warnings against Philippines overflight of what it claims to be itsterritory, have raised those levels of concern. China dismisses the warnings asunwarranted, but has harshly criticized a U.S.-Philippines defence pact that allowsAmerican forces, warships and planes to be based temporarily in local military camps.China says that will “escalate tensions and undermine peace and stability in the region,”echoing language the United States uses to criticize China’s actions. Keywords: US Secretary of State John Kerry, John Kerry's China visit, U.S.-Chinacooperation, South China Sea

19. Europe clamping down on rights: HRWEuropean governments have responded to fears of terrorism and an influx of Muslimrefugees by cracking down on basic freedoms, Human Rights Watch (HRW) warned onWednesday. “Fears of terror attacks and of the potential impact of refugee influx led to a

visible scaling back of rights in Europe and other regions,” HRW Director Kenneth Rothwarned, introducing the report.“In Europe and the U.S., a polarising us-versus-them rhetoric has moved from thepolitical fringe to the mainstream,” he wrote. “Blatant Islamophobia and shamelessdemonising of refugees have become the currency of an increasingly assertive politics ofintolerance."Speaking at a news conference in Istanbul to present the report, Mr. Roth alsodenounced as “despicable” legislation agreed by Denmark to seize the valuables ofrefugees to pay for their stay.

The report also cites the example of France, where, in the aftermath of the November 13attacks on bars, a concert hall and a sports stadium in Paris, authorities have tightenedemergency laws. Suspected radicals have been confined to house arrest without trial,and police have been given stronger powers to search addresses without a judicialwarrant.In its report, HRW warned that these “potentially indiscriminate policing techniques”risk exposing blameless young Muslim men to racial profiling.

The crackdown in Europe has been mirrored in the U.S. by heightened campaignrhetoric from figures such as Donald Trump, the Republican White House hopeful whohas proposed banning Muslims from entering America.

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20. Denmark the least corrupt country, India at76th positionIndia has climbed nine points to rank 76th in this year’s global corruption indexlaunched here on Wednesday topped by Denmark, with watchdog TransparencyInternational calling graft a global “blight”. According to Transparency International’s International Corruption Perceptions Index2015, India is placed at 76th position along with Thailand, Brazil, Tunisia, Zambia andBurkina Faso out of 168 countries.India has improved its past year’s position of 85 and has a grade index score of 38 outof a possible 100 which indicates the least corrupt, said the report topped by Denmark.

The index was prepared by using data from institutions including the World Bank, theAfrican Development Bank.According to Berlin-based Transparency International, 68 per cent of countriesworldwide have a serious corruption problem and half of the G20 are among them.“Not one single country, anywhere in the world, is corruption-free,” the report said.Denmark tops of the index for the second consecutive year as the country perceived asleast corrupt. It scored 91 points, while North Korea and Somalia remained at the

bottom with unchanged scores of 8.Europe scores high

The U.S. rose one spot this year to 16th place with a score of 76, tying with Austria. TheU.K. rose three spots to place 10th, with a score of 81 that tied it with Germany andLuxembourg.

The other top spots, from second to ninth, were occupied by Finland, Sweden, NewZealand, the Netherlands, Norway, Switzerland, Singapore and Canada.Brazil and Turkey were among nations that tumbled the most. Brazil slid to 76th place,sharing its position with India, down from 69th last year. Turkey fell two spots to 66th,continuing its descent from 53rd place in 2013.“Dealing with many entrenched corruption issues, Brazil has been rocked by thePetrobras scandal, in which politicians are reported to have taken kickbacks in

exchange for awarding public contracts,” the report said. “Corruption can be beaten if we work together. To stamp out the abuse of power, briberyand shed light on secret deals, citizens must together tell their governments they havehad enough,” said Jose Ugaz, chairperson, Transparency International. Global corruption index, a composite index that draws from 12 surveys to rank nationsaround the globe, has become a benchmark gauge of perceptions of corruption and isused by analysts and investors.

21. Train to Tehran will take Silk Road intoWest AsiaChina on Thursday demonstrated the integration of West Asia in its New Silk Roadconnectivity project by flagging a train from its trading hub of Yiwu to Tehran.

The container train will cover a journey of 10,399 km in its maiden journey to West Asiain14 days. It will exit China through Alataw Pass in western China’s Xinjiang province,and then pass through Kazakhstan and Turkmenistan before heading for the Iraniancapital. Yiwu is already connected by trains that head for Duisburg in Germany andMadrid.In a recent visit to Iran Chinese President Xi Jinping gave a new geopolitical dimensionto the Beijing-Tehran relationship by signing a pact that would be valid for 25 years. Astrategic partnership agreement that was inked covers military and securitycooperation, including intelligence-sharing.



The waters of the South China Sea have been the subject of tense territorial disputes inthe region, the Pentagon spokesman noted.He added that Washington did not notify any of the countries laying claim to the islandsthat it intended to enter the territorial waters before embarking on the mission.“This operation challenged attempts by the three claimants – China, Taiwan andVietnam – to restrict navigation rights and freedoms around the features they claim by

policies that require prior permission or notification of transit within territorial seas,”Mr. Davis said.“The excessive claims regarding Triton Island are inconsistent with international law asreflected in the Law of the Sea Convention. This operation was about challengingexcessive maritime claims that restrict the rights and freedoms of the United States andothers, not about territorial claims to land features,” he said.

The Navy had conducted a similar exercise in October in which the guided-missiledestroyer Lassen sailed close to one of China’s manmade islands, drawing a rebukefrom Beijing.Mr. Davis added: “The United States takes no position on competing sovereignty claimsbetween the parties to naturally-formed land features in the South China Sea. We dotake a strong position on protecting the rights, freedoms, and lawful uses of the sea and

airspace guaranteed to all countries. All maritime claims must comply withinternational law.” ‘Violation’ of Chinese law Meanwhile, China’s Foreign Ministry said on Saturday that the U.S. warship hasviolated Chinese law by entering its territorial waters.“The American warship has violated relevant Chinese laws by enter ing Chineseterritorial waters without prior permission, and the Chinese side has taken relevantmeasures, including monitoring and admonishments,” China’s Foreign Ministry said ina statement.

The operation followed calls in Congress for the Obama administration to follow up onthe October operation.

This month, the chairman of the U.S. Senate Armed Services Committee criticisedPresident Obama for delaying further freedom of navigation patrols, which allowed

China to continue to pursue its territorial ambitions in the region. — AFP & Reuters

INDIA AND THE WORLD NEWS

1. ‘We are deepening engagement on Afghanistan’ Both India and China have a role to play in political transition, saysAmbassador Ashok K. Kantha India and China are deepening their engagement to facilitate Afghanistan’s politicaltransition, in tune with the evolution of a full-spectrum dialogue between the twocountries, which includes counter-terrorism and emergence of new regional trade blocs.In a conversation with The Hindu on the divergence between New Delhi’s and Beijing’sstances on engaging the Taliban in a dialogue, India’s Ambassador to China, Ashok K.Kantha said: “We have our different approaches on issues. But it is not essential that wemust agree on all of the key issues, before we start cooperating. On Afghanistan, wehave a good dialogue which both sides find very useful.



Afghan Foreign Ministry spokesman Ahmad Shekib Mostaghni said on Saturday therepresentatives will discuss a “roadmap for peace talks.” The talks were agreed uponduring a visit to Kabul last month by Pakistan’s army chief Gen. Raheel Sharif. Monday’s talks do not include the Taliban, who have been battling the U.S.-backedgovernment for nearly 15 years and have recently stepped up their attacks.

Talks with the Taliban have been on hold since July, when they collapsed after just one

meeting following Afghanistan’s announcement that long-time Taliban leader MullahMohammad Omar had been dead for more than two years. The Taliban called off itsparticipation and a second meeting was cancelled.A subsequent power struggle within the Taliban has raised questions about who wouldrepresent the insurgents if the talks with Kabul are revived.Pakistan is believed to have influence over the Taliban, but relations with Kabul havebeen tense in recent months. The two countries have long accused each other of backingthe Taliban and other insurgents operating along their porous border. Taliban leadersare widely believed to be based in Pakistani cities near the Afghan border, includingQuetta and Peshawar.Afghan President Ashraf Ghani took part in a regional ‘Heart of Asia’ conference lastmonth in Islamabad, which called for the resumption of the Afghan-Taliban peace

negotiations. Mr. Ghani was given a warm welcome at the meeting, which was alsoattended by U.S. and Chinese representatives.Analysts have cautioned that despite the rapprochement between Kabul and Islamabad,any substantive peace talks are still months off. Taliban demands have consistentlyfocused on the end to an international military presence in the country. The U.S. andNATO have 13,000 troops stationed in Afghanistan, mostly in a training capacity. Theyinclude 9,800 Americans.

The Taliban have intensified attacks in recent weeks and come close to taking overstrategically important districts in southern Helmand province, the world’s premierpoppy-producing region. Almost all the world’s heroin is made from opium grown insouthern Afghanistan.Inclusive dialogue Afghan civil society groups on Saturday called for an inclusive peace dialogue, saying

women’s and human rights should be central considerations. Few previous meetingsbetween the two sides have included women or civil society activists. Sonya Aslami, ofthe Afghan People’s Dialogue on Peace Initiative, said women’s participation in the peaceprocess was essential to its success. “The government should consider it as a priority.”

— APTalks with Taliban have been on hold since Mullah Omar’s death was announced

3. Afghan peace talks: Pakistan warns against preconditionsSartaj Aziz says primary goal should be to convince Taliban to come to thetable. Delegates from Afghanistan, Pakistan, China and the United States held talks onMonday to resurrect a stalled Afghan peace process and end nearly 15 years ofbloodshed, even as fighting with Taliban insurgents intensifies.

Senior officials from the four countries are meeting in the Pakistani capital, Islamabad,to launch a process they hope will lead to negotiations with Taliban insurgents, who arefighting to re-impose their strict brand of Islamist rule and are not expected at Monday’stalks.

The Pakistani Prime Minister’s foreign affairs adviser, Sartaj Aziz, opened the meeting,saying the primary goal should be to convince the Taliban to come to the table andconsider giving up violence. “It is therefore important that preconditions are notattached to the start of the negotiation process. This, we argue, will becounterproductive,” he said.



“The threat of use of military action against irreconcilables cannot precede the offer oftalks to all the groups.” Afghan Deputy Foreign Minister Hekmat Karzai and Pakistani Foreign Secretary AizazChaudhry were joined by Richard Olson, the U.S. special representative for Afghanistanand Pakistan and General Anthony Rock, the top U.S. defence representative inPakistan, as well as China's special envoy on Afghanistan affairs, Deng Xijun.

Renewed peace efforts come amid spiralling violence in Afghanistan, with last year oneof the bloodiest on record following the withdrawal of most foreign troops at the end of2014.In recent months the Taliban have won territory in the southern province of Helmand,briefly captured the northern city of Kunduz and launched a series of suicide bombs inthe capital, underlining how hard Afghan government forces are finding it fighting ontheir own.Peace efforts last year stalled after the Taliban announced that their founder, MullahMohammad Omar, had been dead for two years, throwing the militant group intodisarray as rival factions fought for supremacy.Taliban undecided

The Taliban, who were ousted in 2001, remain split on whether to take part in talks. Taliban leader Mullah Akhtar Mansour's faction has shown signs of warming to the ideaof eventually joining peace talks, and other groups are considering negotiating, seniormembers of the movement said last week.But a splinter group headed by Mullah Mohammad Rasool Akhund, which rejectsMansour’s authority, has dismissed any talks where a mediating role is played byPakistan, which observers say holds significant sway among Taliban commanders holedup near its border with Afghanistan, or the United States or China.“We have a very clear-cut stance about peace talks: all the foreign occupying forceswould need to be withdrawn,” Mullah Abdul Manan Niazi, Rasool’s deputy, told Reuterson Monday. “The issue is between the Afghans and only the Afghans can resolve it. Wewould not allow any third force to mediate between us.” Keywords: Afghan peace process, Pakistan, Afghanistan

4. India’s strategy for the near west With a series of high-profile visitors and visits planned, New Delhi is indicating its focuson West Asia in the coming year, with Prime Minister Narendra Modi expected to travelto Saudi Arabia, Israel, Palestine and possibly Iran. Leaders from those countries andmore are expected to come to Delhi as well, beginning with the Syrian Foreign Ministerwho is in Delhi now. The renewed interest from India is welcome, and indicates theimportance this region holds for it. In addition, it is important that the governmentbegins to explore options beyond bilateral relations with countries of this region, asIndia bids for a place as a permanent member of the UN Security Council. This is not aregion India can afford to take its eyes off. The explosive discord between Iran and SaudiArabia despite Iran’s landmark agreement with the P5+1 countries does not augur wellfor the future of the region as a whole, given that each country has specific areas of

influence in it. The devastation of Yemen caused by Saudi Arabian strikes and fightingon the ground hint where that conflict could lead. The spread of Islamic State may havebeen stopped due to bombing raids by the U.S. coalition in Iraq and the Russiansupport to Syrian troops in Syria, but this is by no means a solution. The Israel-Palestine conflict has the potential to spark more tensions in this region at any giventime, and the burgeoning numbers of refugees fleeing the violence from Syria, Libya,Yemen, Iraq and neighbouring areas pose another potential threat to stability in theregion and in countries where these hapless communities are forced to take shelter.

http://www.thehindu.com/news/international/afghan-peace-talks-pakistan-warns-against-preconditions/article8093918.ece












Given the powder keg that the region now stands on, can India have a hands-offapproach, and focus only on its bilateral interests in the region? To begin with, theWANA (West Asia, North Africa) region is home to more than seven million Indians whoaccount for more than half of all remittances to India, adding up to $70 billion. India’senergy dependence on the region is another reason for deeper engagement. The turmoilof the past few years in Iraq, Libya, Syria and Yemen has unleashed untold sufferings

on Indians working there. India cannot afford to ignore this peril, or simply issueadvisories for citizens not to go there. It will have to take a deeper interest in resolvingthe regional conflicts. Sending troops to these areas is not an option. Given the goodwillit enjoys, and India’s reputation of neutrality, it would be desirable for Prime MinisterModi to use his outreach in West Asia as an interlocutor for dialogue instead. Whensigning the landmark joint strategic vision document with the U.S. to monitor the SouthChina Sea region, officials had pointed to India’s mandate for a role in upholdinginternational rule of law. Much the same logic would apply for India’s role in West Asia,one that is commensurate with its own ambitions on the world stage.

5. AIIB signals structural alignment of Europe and AsiaNew structural linkages between Europe and Asia through three developmental banksthat have emerged outside the post-war Bretton Woods framework are changing the

global geopolitical architecture, with Eurasia at the core.China is the lynchpin of the evolving world financial architecture. On Saturday, it ledthe launch of the Asian Infrastructure Investment Bank (AIIB). Notwithstanding thefocus on the AIIB — a 57-nation lender, in which India and Russia are also majorpartners — China also quietly became the 67th member of the European Bank forReconstruction and Development (EBRD).With China on board, the EBRD is rapidly re-defining its role. In 1991, it was formed toreinforce the unipolar world that had emerged following the Soviet Union’s collapse. Itsfocal area of interest was Eastern Europe, which was no longer under Moscow’s shadow,and had to be rapidly integrated in the western institutional web.But last week, Suma Chakrabarti, the EBRD head, acknowledged that China, whichwas steering a Eurasian Silk Road connectivity initiative, was now a major pivot ofglobal economy. China’s growing economic and political clout had been accomplished inlittle over two decades of the Soviet Union’s collapse. “Eastern Europe is an example of how the world has changed. Ten years ago, thosecountries would have been looking for investors from Western Europe; they are nowwidening their portfolio and that includes China. It is a big win for our countries ofoperation to get China on board,” said Mr. Chakrabarti in an interview with Xinhua. He added: “In recent years because of signs of weakness in the Euro Zone and so on, those countries in Eastern Europe have been trying to diversify their sources ofinvestment. They have looked at the Gulf, they have looked at Asia, looked at NorthAmerica and China has started investing much more in Eastern Europe. On top of that,there is Central Asia, and Turkey and North Africa where China is also investing.” Thestate-run China Daily newspaper quoted Mr. Chakrabarti as saying that the EBRDwould like to work with China in other multilateral financial institutions such as the

AIIB. He also backed China’s Silk Road initiative. Analysts point out that the launch ofthe AIIB is another example of the reinforcement of economic bonds between Europeand Asia. In fact, the run-up to the formation of the bank opened cracks within theAtlantic alliance.Despite U.S. objections, European countries, including Britain, France and Germany,

joined the AIIB. Australia and South Korea — top U.S. allies in the Asia-Pacific — alsodecided to participate in the development bank as its founding members. At a Sundaypress conference, AIIB head, Jin Liqun, asserted that the bank would lend only in U.S.



dollars, defusing speculation that Beijing would use the institution to promote theinternationalisation of the yuan.Yet, the move is likely to channelise China’s foreign exchange reserves, which have sofar been mainly siphoned into low-yielding U.S. treasury bonds. The AIIB also elected a12-member board of directors, which would steer operations. Dinesh Sharma,Additional Secretary of Ministry of Finance, will represent India at the board. Far from

being a rival, the New Development Bank of Brazil-Russia-India-China-South Africa(BRICS) grouping is also set to work closely with the AIIB. Mr. Sharma told residentIndian media that “formal and informal” channels of communication for coordinationhad been established between the AIIB and the New Development Bank of the BRICS.

6. ‘Tax elite to reduce inequality’ French economist Thomas Piketty says he hopes the Indian elite will pay more taxes onwealth and income, as the country’s tax-to-GDP ratio of less than 11 per cent isinsufficient to meet its challenges of inequalities. The aim should be to evolve the ratiotowards 30-50 per cent, as in the U.S. and west European countries.“India has zero wealth tax… I hope the Indian elite will behave much more responsibly

[in paying more taxes] than the western elite did in the 20th century,” he told The

Hindu in an interview.

Drawing a comparison with China, the author of the best-seller Capital in the Twenty-First Centurysaid: “The Chinese Communist Party has been much more successful thanthe democratic and parliamentary Indian elites in mobilising significant resources tofinance a strategy of social investment and public services.” India’s public health systemhas a budget of barely 0.5 per cent of GDP, compared with almost 3 per cent in China.His observations follow new research — based on the World Bank’s poverty data — thatshow the burden of cutting global inequality now rests largely on India as China hasbeen successful in doing it. At the same time, the Modi government has announced itsintention of reducing the rate of taxation of corporate incomes to 25 per cent (withcorresponding withdrawals of exemptions), which is lower than in rich countries.

7. Sri Lanka tops South Asia in human developmentSri Lanka has maintained its high ranking in human development. But the country’s

performance in terms of average annual human development index (HDI) growth rateduring 1990-2014 was lower than many other South Asian countries.

These findings are among the highlights of the Global Human Development Report(HDR) 2015 released by the UN Development Programme (UNDP) here on Thursday.Sri Lanka has been placed at the 73rd rank with an HDI value of 0.757. In the previous

year’s report, it occupied the 74th place. Since the end of the civil war in 2009, thecountry’s rank went up by five. The report, which studied a total of 188 countries andterritories, has determined the HDI values by assessing long-term progress in threebasic dimensions of human development — a long and healthy life, access to knowledgeand a decent standard of living.According to the document, the region of South Asia includes Iran too, apart from India,Pakistan, Afghanistan, Bhutan, Nepal,Bangladesh and Maldives.While Iran is ahead of Sri Lanka, standing at 69th rank, the Maldives is ranked 104th.India and Bhutan fall under the category of medium human development countries andNepal, Pakistan and Afghanistan come under the group of low human developmentcountries. India is placed at 130th rank and Pakistan, 147th. As for the growth rateduring 1990-2014, South Asia’s figure was 1.38, the highest among all regions.

The UNDP took 1990 into account as it was from that year that the series of global HDIreports began. In the context of Sri Lanka, too, the year was significant as the EelamWar resumed in June 1990 after the withdrawal of the Indian Peacekeeping Force threemonths earlier.



Thangavel Palanivel, Chief Economist for Asia-Pacific, UNDP Regional Bureau for Asiaand the Pacific, attributes this situation to the “size effect” and points out that countriestraditionally enjoying higher economic and human development cannot grow muchbeyond a point. This was why Sri Lanka, which was better placed than many othercountries in the region even in the 1970s and 1980s, posted lower growth rate duringthe 25-year-long period.

In 1990, Sri Lanka’s HDI value was 0.620 whereas the region’s figure was 0.437. In2014, the region’s tally was 0.607.

8. Madhesis reject changes to ConstitutionNepal’s agitating Madhesis on Sunday rejected the constitutional amendments passedby the Parliament as “incomplete” for failing to address concerns over redrawing ofborders. This has dimmed hopes of an early end to the political imbroglio and blockadeof trade points with India.“Though the constitution amendment bill endorsed by the Parliament on Saturday waspositive to some extent, it does not address the demands raised by Madhesi parties intheir entirety,” said Rameshwar Raya Yadav, senior Madhesi leader and senior vice-president of Madhesi Peoples Rights Forum Democratic.Yadav listed the positive provisions in the amendment as those dealing with

proportionate representation, inclusiveness, and allocation of Parliament seats on thebasis of population. He said it would have been better if the agitating parties were takeninto confidence before endorsing the two amendment bills.

The amendmentswere endorsed by a two-third majority on Saturday. The Madhesis inNepal are largely of Indian origin.

The lawmakers of the agitating parties had boycotted the voting, saying theamendments were “incomplete”, as they fell short of addressing their concerns,including redrawing federal boundaries.Rajendra Shrestha, co-chair of the Sanghiya Samajbadi Forum Nepal — a constituent ofthe United Democratic Madhesi Front, said that the proposal by Nepali Congress leadersMinendra Rijal and Farmullah Mansoor was more progressive than the original bill filedin Parliament on December 15. As many as 24 proposals were filed by more than 100

lawmakers of different parties, seeking to amend the bill, which was endorsed in theHouse after incorporating the proposal registered by Rijal and Mansoor.

The agitating parties said the revision proposal, in line with which the Constitution

Amendment Bill was endorsed, was “incomplete” despite being progressive, The

Kathmandu Post reported.Morcha leaders said that they would comment only after “studying the text” of theamendment.Madhesis, who are inhabitants of the Terai region, are opposed to the new Constitutionthat divides their ancestral homeland.

9. India, Arab League vow to check terror,funding sources‘Those who silently sponsor terror groups may end up being used by them’

Minister for External Affairs Sushma Swaraj and her Bahrain counterpart Khalid binAhmed Al Khalifa signing an agreement in Manama on Sunday. — PHOTO: PTIIndia and the Arab League on Sunday vowed to combat terrorism and called fordeveloping a strategy to “eliminate” its sources and its funding as External AffairsMinister Sushma Swaraj made a strong pitch for delinking religion from terrorism.



While addressing the 1st Ministerial Meeting of Arab-India Cooperation Forum here inthe Bahraini capital, Ms. Swaraj also warned that those who “silently sponsor” terrorgroups could end up being used by them, in an apparent jibe at Pakistan.“Those who believe that silent sponsorship of such terrorist groups can bring rewardsmust realise that they have their own agenda; they are adept at using the benefactormore effectively than the sponsor has used them,” Ms. Swaraj told some 14 foreign

ministers of the 22-member Arab League grouping, with its Secretary General Nabil ElAraby in attendance.‘Turning point’ She said the meeting marked a “turning point” for India-Arab relations, while pointingout that “we are also at a major turning point in history when the forces of terrorismand violent extremism are seeking to destabilise societies and inflict incalculabledamage to our cities, our people and our very social fabric.” “Equally, we must delink religion from terror. The only distinction is between those whobelieve in humanity and those who do not. Terrorists use religion, but inflict harm onpeople of all faiths,” said Ms. Swaraj, who arrived here on Saturday.

The Manama Declaration The meeting, which was opened by Bahrain’s Foreign Minister Khalid bin Ahmed Al

Khalifa, culminated with the two sides issuing a joint statement called the ManamaDeclaration. The two sides discussed regional and global issues of mutual concern, including thePalestinian issue, developments in the Arab region and in South Asia, as well ascounter-terrorism, Security Council reforms and nuclear disarmament.

The two sides condemned terrorism in all its forms and manifestations and rejectedassociating it with any religion, culture or ethnic group.

They also emphasised the need for concerted regional and international efforts tocombat terrorism and to address its causes and develop a strategy to eliminate thesources of terrorism and extremism, including its funding, as well as combatingorganised cross-border crime, the Declaration stated.In this context, the two sides affirmed their respect to the independence, sovereignty,unity and territorial integrity of Iraq and non-interference in its internal affairs and

rejecting infringement of such principles, strongly condemned crimes committed by allterror organisations, especially those committed by the Islamic State. — PTI

NATIONAL NEWS

1. What happens to Mudgal report? The government’s appointment of a panel headed by veteran filmmaker Shyam Benegal

to revamp the Censor Board has raised more questions than answers.Does this mean that the new committee will just be a teacher and monitor to the currentboard? Or will it go deeper and look into the procedural rehaul of the process ofcensorship of films itself? And if it has been formed to usher in sweeping changes thenwhat happens now to the Mudgal Committee report?

The Mudgal Committee had been set up under the UPA regime and was headed byMukul Mudgal, former Chief Justice of the Punjab and Haryana High Court. Set up in2012, the panel members included, among others, FCAT chairperson Lalit Bhasin, the



then CBFC chairperson Leela Samson and film personalities Sharmila Tagore and JavedAkhtar.Censor Board member Vani Tripathi Tikoo feels the new panel is a “welcome move.” “Itis not a kneejerk reaction to any controversy but a breakthrough in terms of policy,” shesays.‘Positive step’

Filmmaker Rakeysh Omprakash Mehra says he accepted the government invite to bepart of the revamp panel for the “right reason and cause.” “It is a positive step, in theright direction.” While he admits that he has done enough groundwork in terms of thinking through hisown views on censorship, the real mandate of the new panel has not been clearlydefined yet. In fact, they have to have a first meeting to create that mandate forthemselves. “It is just the start of the journey. We will define the targets and will needtwo-three months to come out with something substantial,” he says. But what he doesassure you is that they will go to the root of the matter than pay mere lip service to thecensorship debate. “It will have to be all about policy changes, about changing theCinematograph Act of 1952 and updating it to today’s times,” he says. Which is what brings one back to the important question — if it will be about a whole

procedural rehaul then what of the Mudgal report that had suggested some far-reaching, comprehensive changes in censorship? It had spoken to many people — filmmakers, viewers, legal experts and journalists, done the spadework and covered agamut of critical issues — from certification categories to selection of the boardmembers, issues such as portrayal of women, obscenity and communal disharmony,piracy and also jurisdiction of the appellate tribunal. It was formed in the wake of thecontroversy over Tamil Nadu’s ban on Vishwaroopam and had even laid down that noState could ban a film without taking the Centre into confidence.

These recommendations had been forwarded to the Ministry but the government(s)seemed to have developed cold feet on it.

2. India seeks to lead developing nations at WTOStarting with a proposed visit by Prime Minister Narendra Modi to Africa in February,India plans to play a leadership role at the World Trade Organisation (WTO) negotiationsto boost the trade prospects of the developing and poor nations. To forge strongalliances on the “development agenda” of the WTO’s ongoing Doha Round of talks, thegovernment will, in the coming months, also hold a series of “strategy workshops” ofstakeholders, inter-ministerial and Centre-state discussions in addition to summits withAfrican countries and other developing country groups.Significantly, in this regard, in the pipeline are visits by Mr.Modi to African countriesstarting with Kenya likely next month, high-level sources in the government told TheHindu .“We will soon set up occasions like the recently held Africa Summit in India. The PrimeMinister does an outstanding job of flagging the common interests of the developingworld during such occasions,” a senior official said, adding that a “collaborativeapproach” with African countries would be central to India’s future strategy at the WTO.

The move comes in the backdrop of widespread criticism by the Opposition and civilsociety groups that the NDA government had failed to protect the interests of India andthe developing world at the Ministerial Conference (WTO’s highest decision makingbody) held in Nairobi last month for negotiations on an agreement to lower global tradebarriers.Strategy workshops “The Commerce Ministry [the nodal body at the Centre for WTO-level negotiations] will,in a few days, hold the first of the ‘strategy workshops’ to take inputs from thePermanent Mission of India to WTO, Ministries at the Central government level and



other stakeholders to take a deep dive on the outstanding issues [of the ongoing DohaDevelopment Round talks of the WTO] and come up with an initial game plan,” a seniorofficial said.Biswajit Dhar, a trade expert and professor at Jawaharlal Nehru University, said: “Overthe years, the alliance that India had with leading developing countries such as SouthAfrica and Brazil on WTO issues weakened to the point that at the Nairobi conference

one could not see any coordination between these countries. Therefore, now at thiscritical juncture, it is left to India to do the agenda setting along with these and othercountries.”

The Nairobi Ministerial Declaration reaffirmed the pre-eminence of the WTO as theglobal forum for trade rules setting and governance, but noted that there was a lack ofconsensus on the part of the WTO’s 162-member countries on the way to take forwardthe Doha Development Agenda (DDA).

The Ministerial Declaration only said: “We recognise that many members reaffirm theDDA, and the Declarations and Decisions adopted at Doha and at the MinisterialConferences held since then, and reaffirm their full commitment to conclude the DDAon that basis.” Biraj Patnaik, Principal Adviser to the Commissioners of the Supreme Court on the

Right to Food, said India should adopt a three-pronged strategy. This includes ensuring that the Trade Facilitation Agreement (TFA), aiming to easecustoms rules and expedite trade flows, does not come into effect till all the Doha Roundissues are sorted out.

The TFA, which is being pushed mostly by rich countries, will come into effect onlywhen two-thirds of the WTO’s members or 108 of the 162 member countries, ratify i t. Asof now, 63 countries have done so. India is yet to ratify the TFA.Official sources said that India will shortly hold meetings with a group of 47 nationsincluding China and Kenya that had issued a statement on the opening day of theNairobi Ministerial Conference saying that only a comprehensive conclusion of the DDA,with economically meaningful and balanced outcomes, will provide impetus to globaltrade liberalisation and facilitation and also, significantly, correct the developmentdeficit in the rules resulting from the previous rounds of multilateral trade negotiations.

In the pipeline are visits by Mr.Modi to African countries starting with Kenyalikely next month

3. NRIs likely to get Aadhaar number The government is considering giving Aadhaar cards to non-resident Indians and adecision on it will be taken soon, External Affairs Minister Sushma Swaraj said here onSaturday while inviting the diaspora community to actively participate in India’s growthstory.In her address to the first limited edition of Pravasi Bhartiya Divas, Ms. Swaraj said ithad been decided that women workers would be allowed to go to Gulf countries foremployment only through the government agencies to ensure they were not duped byrecruiting agents or firms.

The PBD, webcast by almost all Indian Missions and Posts, was organised for the first

time by the Ministry of External Affairs (MEA) after the government’s decision to mergeMinistry of Overseas Indian Affairs (MOIA) with it.Earlier the MOIA used to host the event. January 9 was chosen as the day for PBD as itwas on this day in 1915 that Mahatma Gandhi, the “greatest Pravasi,” returned homefrom South Africa to lead India’s freedom struggle. Asking the diaspora to participate in government’s various flagship programmesincluding the Skill India, the Digital India and the Clean Ganga initiatives, she saidPrime Minister Narendra Modi wanted the Aadhaar card scheme to be extended to theNRIs.



“So far, Aadhaar card has been given to those Indians who live in India. It is not for non-resident Indians. But you will be happy to know that the Prime Minister wants the cardto be given to the NRIs the way it is issued to people living in India.” “He even wants it for OCI (Overseas Citizens of India card) holders. The matter is underour consideration. No decision has been taken as discussions on it are underway. I hopesoon you will hear about it,” Ms. Swaraj said during an interaction after her address.

The government has so far issued Aadhaar cards to over 92 crore citizens. Under theprogramme, every citizen is to be provided with a 12-digit unique identification numberfor which biometric information is collected.‘Time to come back’ Calling upon the diaspora to be part of the India growth story, the Minister said: “It istime for you to come back to India.” Effusive in praise of the Prime Minister, Ms. Swaraj said India’s engagement with theoverseas Indians had increased manifold because of his constant endeavour to reachout to the community. She also referred to Mr. Modi’s Madison Square address in theU.S. and at the Wembly in London.“Your achievements in the countries of your adoption are a matter of pride... It is ourresponsibility to protect you and take care of you. Indeed, we are you and you are us,”

the Minister said. — PTI4. NITI Aayog plans model lease law

After several State governments resisted the Union government’s ordinance and Billproposing amendments to the Land Acquisition Act, 2013,NITI Aayog has taken up with the States a proposal for unlocking the value of farmlandthrough leasing.On Friday, an expert group, headed by T. Haque, former Chairman of the Commissionfor Agricultural Costs and Prices, held consultations with officials from various Stateson a model land leasing law that NITI Aayog will prepare for the States to use forreforming land lease provisions.

Representatives of farmers’ organisations and non-governmental organisations attendedthe meeting.

The organisations and individuals unanimously supported a model law, which shouldhelp the tenant and protect the landowner’s right, an official statement said.

The majority opinion was that the law should be restricted to agriculture and should notencourage corporate farming.

The measure is among the reforms NITI Aayog is taking up with the States on thesubjects under the State and Concurrent Lists of the Constitution.



Prime Minister Narendra Modi, chairman of NITI Aayog, will hold further consultationswith the States at the National Conference on Sustainable Agriculture and Farmers’Welfare in Gangtok on January 17 and 18.Land bank A land bank held by a public agency is being considered in which interested landownerscould deposit their land parcels for cultivators to lease land. Under this system, the

public agency acts as an intermediary and transfers rent from the actual cultivator toowner while charging a small fee to cover its costs. This is expected to permit theconsolidation of operational landholdings, given the steadily declining size of andfragmentation of farmland holdings in the country.“The biggest advantage of a liberalised and secure land lease market will be that it willease the exit of those farmers who find farming unattractive or non-viable andeconomically strengthen those farmers who want to stay in the farming and raise thescale of operational holdings,” NITI Aayog Vice-Chairman Arvind Panagariya recentlywrote in a blog on its website.Such a market offers solution to several problems of Indian agriculture such asconsolidation of operational holdings, fallow land, access to institutional credit, andproductive use of land belonging to farmers unwilling to engage in farming, he said.

Written documentation The consultation agreed to the need for written documentation of lease agreements,which could be recognised by the banking and credit institutions and honoured by theStates in extending relief to tenant or lessee in case of natural calamities.It was also discussed that the model Act should also explicitly provide provision for adispute redress mechanism.Productive land has been found to be left uncultivated as the existing land leasing lawsmake it risky to lease land.

5. Maharashtra saw 3,228 farmer suicides in 2015Suicides by farmers touched a grim high in 2015. The year that had recorded 2,590suicides until October -- the higher ever since 2001 -- went on to register 610 moredeaths in just the last two months. The death toll on December 31, 2015 stood at 3,228,indicating that the slew of measures the government undertook through the year failedto arrest the disturbing trend.Maharashtra has recorded 20,504 farmer suicides since 2001. Data obtained from thegovernment shows Vidarbha, the region Chief Minister Devendra Fadnavis hails from,was the worst hit last year, with around 1,541 farmers from Amaravati and Nagpurdivision committing suicides. As many as 1,130 farmers ended their lives in theAurangabad division of Marathwada. Nashik in North Maharashtra witnessed 459 casesof farmer suicides.Figures indicate that that Pune division, which covers the state’s prosperous Westernregion, too recorded 96 suicides of which 27 were registered in the last two months ofthe year.Of the 3,228 suicides, the state has found only 1,841 eligible for government aid, while903 were found ineligible. While 484 cases are pending for inquiries, ex-gratia aid has

been extended to 1,818.“Packages will no longer work for farmers and the government seems to be missing thispoint completely. There is a need of farmer oriented policy and not packages,” saidChandrakant Wankhede, an activist from Vidarbha working on issues of farmers’suicides. He said when loan waivers were announced in 2008, there was a drop insuicides. But since 2011, no such steps have been forthcoming. “The number may onlyincrease in the coming years.” Maharashtra had recorded a 75% deficit in rainfallbetween June and September last year. While the CM had announced a Rs 10,512 crorepackage of farmers in December 2015, he had refrained from announcing any loan



waivers. On Wednesday, Mr Fadnavis thanked Prime Minister Narendra Modi forlaunching the PM Crop Insurance Scheme, which assures covering over 50% of thefarmers under the insurance scheme in the coming three years. Under this scheme,90% premium money will be paid by the Centre and not just the fully grown crop buteven the stem will be insured.In the last three to four years, Maharashtra witnessed extreme weather conditions that

have either destroyed crops or left them damaged.

6. India sets an example in subsidised TBdiagnosis

There is a bright spot in an otherwise gloomy TB scenario in India. Of the 12 high-burden countries where the private sector is a major player in providing health care, theIndian private sector offers the cheapest price for the WHO-approved Xpert MTB/RIF, amolecular test for diagnosing TB. India also has the highest number of private labsoffering the test, with 113 labs offering it at a subsidised rate.While it costs only Rs. 2,000 in the 113 labs (with 5,200 collection centres) which arepart of a novel initiative — Improving Access to Affordable & Quality TB Tests (IPAQT) — that was launched in India in March 2013, the charges are anywhere between Rs. 3,500

and Rs. 5,000 in labs that are not part of the IPAQT initiative. (The ipaqt.org siteprovides the details of other labs in the country that offer the WHO-approved subsidisedtests.)

The mean price of the highly accurate TB test in Bangladesh is nearly $75, while it is$50 in the case of Afghanistan. It is as high as $155.5 in Philippines. Xpert is notcommercially available in the private sector in six other high-burden countries.

These are some of the results of a study published on Tuesday (January 26) in the journal The Lancet Global Health . The cost of the test will see a further drop if the Indian government waives off customsduty of 31 per cent levied on Xpert machine and reagents. “Nothing is preventing thegovernment from waiving off the duty. There is a provision to waive import duties for lifesaving drugs and products, and HIV kits, for example, are duty-waived. Something

similar is necessary for the WHO-endorsed TB tests,” Dr. Madhukar Pai, AssociateProfessor at McGill University, Canada, and one of the Governing Council Members ofIPAQT and a co-author of the paper, said in an email to The Hindu .As a result of the subsidised pricing agreement with the manufacturer, there has beenan increase in the number of people in India accessing the highly accurate diagnostictest since 2013. From 15,190 people who availed themselves of the test between Marchand December 2013, it has gone up to 1,31,440 tests in 2015. The total number of testsdone since March 2013 stands at 2,08,550.“With a lot of effort, we have managed to keep the price manageable via IPAQT in India,and have shown that volumes can greatly increase. In other privatised countries,patients pay a lot, and have limited access to good tests,” said Dr. Pai. Access to accurate tests at subsidised price is very important in India as nearly 80 percent of the population in India first seek the private sector. If one out of every four TB

patients in the world is an Indian, one in eight TB patients in the world is a privatelytreated Indian patient.

Though the price is internationally set at $9.98 per cartridge, and the agreement allowsfor a 10 per cent variation in the exchange rate, the cost of the test has not beenincreased since January 2014 despite the rupee depreciating against the dollar in recenttimes. But the price may be revised if the rupee continues to depreciate, warns Dr. Pai.Serological test Besides increasing the access to the highly reliable and sensitive test, all labs thatbecome a member of the Initiative abide to ban the unreliable serological test. India



banned serological test for TB in June 2012. Also, TB notification by the member labshas improved dramatically as IPAQT helps them with the process of notifying all TBcases.While the sensitivity of smear microscopy is about 50 per cent, Xpert has 90 per centsensitivity (in smear positive cases) and 98 per cent specificity. It can also indicateresistance to rifampicin — a first-line TB drug.

ECONOMY

1. Green norms proposal may shut units: Textile Ministry The Environment Ministry’s proposal, to hastily implement a ‘stringent’ norm mandating nearly all textileprocessing units to eliminate liquid discharges, can result in closure of many small and medium enterprises (SMEs)and trigger large-scale job losses, according to the Textile Ministry.In his response to the draft notification by the Ministry of Environment, Forest and Climate Change, TextilesSecretary, S. K. Panda, has said the proposed standards — mandating ‘Zero Liquid Discharge’ (ZLD) for textileprocessing units where waste water discharge is over 25 kilo litres a day — will be “too stringent” for the domestictextile processing industry that is largely unorganised and comprising of SMEs, according to reliable sources.Around 94 per cent of India’s apparel workers are employed in firms with 50 workers or less, and less than six firmshave over 2,000 workers, Niti Aayog Vice Chairman Arvind Panagariya had said.

The Environment Ministry also requires textile units in clusters (like Tirupur and Ludhiana) to establish a ZLD-common effluent treatment plants irrespective of their waster water discharge levels.Setting up ZLD-effluent treatment plants will need huge initial capital investment as well as high recurringexpenditure making it commercially non-viable, the secretary said.Citing several representations from the textile sector against such norms, he also said insisting on ZLD could inturn result in closure of several units and unemployment for workers in those units.Mr. Panda, therefore, said the environment ministry should consider implementing the ZLD only in a phasedmanner. He said the environment ministry should keep in view the larger interest of the textiles sector as well asthe country’s economic development, and implement the ZLD only in a phased manner.Meanwhile, the Textiles Ministry has set up a panel to look into the existing technologies of effluent treatment andsuggesting the best available technology — after taking into account the financial and other related factors — thatcan be introduced in these SME units. The Textiles Ministry has said, as a short-term measure, the best available technology will be adopted, but in thelong-term, research and development will be pursued for developing cleaner and more cost-effective options.One of the alternatives being tried out is marine discharge, where waste is recycled and the residue (which issubstantially salt, and therefore considered safe) is discharged into the sea. But for that, the units will have to be

located near the coastal region as setting up long pipelines from inland units to the sea will be non-viable. The Supreme Court had several years ago asked the textile units in Tirupur (Tamil Nadu) to ensure that they do notpollute the Noyyal river and that they bring down their liquid discharge to zero. The order had led to the closure ofseveral units in the area. The proposed standards will be “too stringent” for the domestic textile processing industry that is largelyunorganised and comprising of SMEs.

2. Core sector shocker on New Year’s eve!



Falls to a decade-low; signals bumps ahead for economy

Registering the steepest fall in over a decade, the core sector output in November 2015 shockingly shrank 1.3 percent compared to the same month a year ago, indicating a possible hiccup in the nascent economic recovery and adownturn in industrial production. The industrial output in October 2015 had recorded a five-year high of 9.8 per cent year-on-year growth on accountof a favourable base even as October 2014 registered a negative growth 2.7 per cent. .A fortnight ago, the government had scaled down its GDP growth forecast for the current fiscal to 7-7.5 per centfrom the earlier projection of 8.1-8.5 per cent. The GDP growth in the first half of this fiscal (April-September)slipped to 7.2 per cent from 7.5 per cent in the same period last year.

Significantly, ever since the release of the ongoing series of core sector data in April 2005, the overall core sectorhas been in negative growth territory only on four other occasions — in July 2005 (-0.3 per cent), October 2013 (-0.1 per cent), March 2015 (-0.1 per cent), April 2015 (-0.4 per cent).None of these contractions were as steep as the one in November. The output of eight core industries — that comprise nearly 38 per cent of the weight of items included in the Indexof Industrial Production (IIP) — contracted in November owing to a fall in production of crude oil (-3.3 per cent),steel (-8.4 per cent), cement (-1.8 per cent) and natural gas (-3.9 per cent). Coal production increased by 3.5 percent while refinery production went up by 2.5 per cent and fertiliser output rose by 13.5 per cent. Electricityproduction remained flat in November 2015. The core industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — hadrecorded an 8.5 per cent growth in November 2014.

3. $50-mn loan to fund education of minorities



Centre, World Bank sign credit agreement for scheme

The Union government and the World Bank signed a $50-million credit agreement for a project aimed at helping young people from minority communities complete their education and improve their employment opportunities.“The Nai Manzil Scheme is designed as an integrated education and training programme that provides youth fromminority communities skills needed for different tasks in a rapidly changing world. Interventions under this projectwill support the Nai Manzil Scheme in improving the employability and performance of minority youth in the labourmarket,” Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, said. The agreement was signed by Mr. Kumar and Michael Haney, the World Bank’s Operations Adviser in India. “India’s demographic dividend can be harnessed only if all young people from all sections of society are equippedwith the education and skills needed to make them productive members of the economy,” Mr. Haney said. Around 20 per cent of those between 17 and 35 years of age from minority groups such as Muslims, Parsees, Jains,Buddhists, Christians, and Sikhs are out of the labour force, according to the World Bank.

4. China’s December factory activity shrinks The government may have to step up policy support to avert a sharper slowdownChina looked set for a soggy start to 2016 after activity in the manufacturing sector contracted for a fifth straightmonth in December, suggesting the government may have to step up policy support to avert a sharper slowdown.While China’s services sector ended 2015 on a strong note, the economy still looked se t to grow at its slowest pacein a quarter of a century despite a raft of policy easing steps, including repeated interest rate cuts, in the past yearor so. The world’s second-largest economy faces persistent risks this year as leaders have pledged to push so-called“supply-side reform” to reduce excess factory capacity and high debt levels. The official manufacturing Purchasing Managers' Index (PMI)stood at 49.7 in December, in line with expectations ofeconomists polled by Reuters and up only fractionally from November. A reading below 50 suggests a contraction inactivity while a higher one indicates an expansion.Still, economists seemed to find some comfort that there were no signs of a sharper deterioration which has beenfeared by global investors. T he slight pick up in the manufacturing PMI “suggests that (economic) growth momentum is stabilising somewhat... however, the sector is still facing strong headwinds,” said Zhou Hao, China economist at Commerzbank inSingapore.“In order to facilitate the destocking and deleveraging process, monetary policy will remain accommodative and thefiscal policy will be more proactive.” Weak demand from at home and abroad has weighed on China’s factories, exacerbating the problem of excess

capacity and forcing them to cut prices of their goods, eating into their profits and adding to deflationary pressuresin the economy. Total new orders — a proxy for both domestic and foreign demand — rose to 50.2 in December from November’s49.8, the PMI survey showed.But export orders shrank for the 15th straight month, albeit at a less severe pace. The sub-index inched up to 47.5from November’s 46.4. The National Bureau of Statistics (NBS) said that although oil prices were very low at present, cash at the end of the year was tight for factories, putting relatively large pressure on manufacturers.A challenging 2016



China’s economic growth is expected to cool from 7.3 per cent in 2014 to 6.9 per cent in 2015, the central bank saidin a recent work paper, its slowest pace in 25 years. It said growth could ease further to 6.8 per cent in 2016.Indeed, China could run its biggest budget deficit in half a century this year as leaders turn to more governmentspending to arrest the slowdown in the economy, policy advisers say, after disappointing returns from a year ofpolicy easing. The PBOC has cut interest rates six times since November 2014 and reduced banks’ reserverequirement ratios (RRR), or the amount of cash that banks must set aside as reserves. The government has alsostepped up spending on infrastructure projects and eased restrictions on home buying to boost the sluggishproperty market.

The central bank is widely expected to cut interest rates and banks’ reserve requirement ratios further this year. A similar official survey on the services sector showed activity there quickened in December, again helping to easefears of a hard landing for the economy this year. The services sector has been the lone bright spot in the economy in the last few years, helping to offset prolongedweakness in the vast manufacturing sector, though financial markets tend to focus more closely on factoryreadings. The official non-manufacturing Purchasing Managers’ Index (PMI) rose to 54.4, from November's 53.6,according to the NBS. The services sector has accounted for the bigger part of China’s economic output for at least two years. A private gauge of Chinese manufacturing Caixin/Markit PMI, which focuses more on small-to-medium-sizedprivate firms, will be released on January four. China is set to release fourth quarter and full-year GDP data on January 19.

Keywords: factory activity, China economy

5. Government extends tax residency rule deadline A deadline for comments on the draft guidelines to determine the tax residency of a foreign company has beenextended to January 9. The government felt the need to determine a company’s place of effective management due to lack of detail in theIncome Tax Act leading to the possibility of tax avoidance.“Representations requesting for extension of the last day for submitting comments and suggestions, have beenreceived and considered,” according to a government statement announcing the extension of the deadline forcomments on the issue, earlier slated for January 2. The Place of Effective Management (POEM) of a company, as the concept was called, was introduced in the FinanceAct, 2015 to determine the tax residency of a foreign company. The draft guidelines for what defines a company’s place of effective management, released on December 23, definesthe POEM as “a place where key management and commercial decisions that are necessary for the conduct of thebusiness of an entity as a whole are, in substance made.” “Section 6(3) of the Income-tax Act, 1961, prior to its amendment by the Finance Act, 2015, provided that acompany is said to be resident in India in any previous year, if it is an Indian company or if during that year, thecontrol and management of its affairs is situated wholly in India. This allowed tax avoidance opportunities forcompanies to artificially escape the residential status under these provisions by shifting insignificant or isolatedevents related with control and management outside India,” according to draft guidelines issued by the CentralBoard of Direct Taxes.“As per the amendment brought in by the Finance Act, 2015 a foreign company will be regarded as a tax resident of

India, if its POEM in that year is in India,” according to a report by Deloitte and CII. According to the Deloitte report, there is ambiguity around some of the provisions in the guidelines, such as theduration for which a company has India as a place of effective management. “A question may still arise that for aforeign company to be resident in India, is it necessary that the POEM should be situated in India throughout thefinancial year under consideration or mainly in India.Similarly, the term “key management and commercial decisions” in the definition of POEM seems to be causingsome confusion.“Unlike, for instance, the UK, India does not define the term ‘key management and commercial decisions’ andtherefore these are undefined and subjective.In the UK, judicial precedents and tax rules lay emphasis on whether directors/officers taking major decisions areindependent, are empowered to take these or whether such directors/officers are acting under the influence ordirection of shareholders,” Mr.Alex Postma, Leader– Global and EMEIA International Tax Services, EY had said in anote.Enterprises have become increasingly mobile and technology and connectivity are as important as never before intheir global competence. This poses risks that a travelling executive may create significant unforeseen tax burdensin India,” Mr. Postma added in his note.

6. New form for ASBA in placeWith a checklist regime kicking in for initial public offerings (IPOs), capital markets regulator the Securities andExchange Board of India (SEBI), has put in place a new form for ASBA (Application Supported by Blocked Amount)facility.ASBA facility has become mandatory for all categories of investors applying for a public issue for making paymentfrom Friday. The facility allows the bid amount to remain in the applicants account till the time the shares arefinally allotted.In a circular, SEBI said that the application form for ASBA would be printed in a booklet form of A4 size paper.Besides, SEBI has prescribed white colour form for Resident Indian, NRIs applying on a non repatriation basis andblue colour form for NRIs, Foreign Venture Capital Investor, Foreign Institutional Investors, their Sub-Accounts

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(other than sub-accounts which are foreign corporates or foreign individuals bidding under the QIB Portion), on arepatriation basis.It further said that top of the application form will have a coloured identifier strap incorporating the name of theissuer, ISIN (An International Securities Identification Number) and type of form (Repatriation, Non- Repatriation).Besides, the main application should have information about eight digit application number, PAN number, biddersdepository account details, investor category, among others.A confirmation by the applicant (on behalf of joint bidders) that he/she has read, understood and agrees to suchconfirmations is also required.

The regulator said that application should also highlight about different category of investors (retail, non-institutional and QIBs), number of equity shares (reservation if applicable), percentage of issue available forallotment, basis of allocation in case of over-subscription, mode of allotment and terms of payment. The new circular will be applicable for all public issues opening on or after January 1, 2016, SEBI said. The regulator, in August, had made ASBA facility mandatory for all categories of investors applying for a publicissue.In order to enhance the points for submission of applications, SEBI had also allowed Registrar and Share TransferAgents (RTAs) and Depository Participants (DPs) to accept application forms (both physical as well as online) andmake bids on the stock exchange platform. This will be over and above the stock brokers and banks where such facilities are presently available. The numberof bank branches with ASBA facility has now increased to about 95,500, from 9,800 when this facility wasintroduced. — PTI The new circular will be applicable for all public issues opening on or after January 1, 2016

7. Fall in exports projected to be worst since 1952-53Merchandise exports this fiscal are projected to fall around (-) 16 per cent over the

previous financial year, high-level sources in the government told The Hindu . This will be the second worst export performance since independence, according toofficial data.Only in 1952-53, exports had fared worse when it shrank (-) 18.7 per cent. In the 68

years since independence, the country’s exports have been in the negative growthterritory only on 14 other occasions.Shipments during April-November this fiscal had shrunk (-) 18.46 per cent to $174.3billion from $213.8 billion during the same period in 2014-15. So officials are expectinga minor recovery in the last four months of this financial year that will in turn helpreduce the contraction to (-) 16 per cent for 2015-16.In value terms, exports – with a (-) 16 per cent contraction — will end this fiscal ataround $260 billion, the lowest since the shipments broke the $300 billion-mark for thefirst time — in 2011-12 with $305.96 billion.“We should be ending up with at least 16 per cent less than last fiscal due to factorssuch as fall in commodity prices and currency devaluation by some countries,” a seniorofficial said.Sonal Varma, India economist, Nomura, said the fall in exports is of concern as severalemployment-intensive sectors are export-oriented. “Since the demand for exports isdown, going forward there will be increasing reliance on the domestic demand,” shesaid.Since FY’12, exports have stayed above the $300 billion-mark, though it had fallen by (-)1.8 per cent in FY’13 to $300.4 billion, then recovering slightly with a 4.7% growth in2013-14 to $314.4 billion only to contract in 2014-15 by (-) 1.23 per cent to $310.53billion.

The best performance in terms of year-on-year growth has been in 2010-11 when

exports grew 40.5 per cent to $251.13 billion. The other good years for export growthwere 2004-05 (30.8 per cent), 1974-75 (30.1 per cent), 2007-08 (29 per cent) and 1973-74 (25.8 per cent), making the top five.Federation of Indian Export Organisations (FIEO) – the exporters’ apex body — alsoestimates exports in 2015-16 to end up at around $260-265 billion as companiesusually manage their inventories well during the year-end festival season and tend topush exports in the last quarter, said Ajay Sahai, Director General and CEO, FIEO.However, he said in addition to factors including the weak demand overseas, the fall incommodity prices and the currency volatility, the exports sector was hurt by the delay



on the part of the government to release the interest subvention amount as well as thehigh transaction costs.Mr. Sahai said the country should target $325 billion in the next fiscal, a growth of 23-25 per cent if global factors help.

The government, meanwhile, is working on a slew of measures to prop up export-oriented firms including Special Economic Zones in the coming Union Budget.

Separately, the Centre has called a meeting (likely on January eight) of all the Stategovernments for the first time to expedite the notification of a separate foreign tradepolicy for each state and to push through infrastructure creation measures that cansupport exports.Official sources said the government also wants the Reserve Bank of India to look intothe currency volatility-related issues and take measures to help India’s exports asseveral countries – some of them India’s competitors and others its markets — hadchosen to devalue their currency in the last one year, in turn impacting India’s exports. “The idea is to ensure that our exports are competitive and retain their market share,because once we lose markets it is tough to gain it back,” a senior official said.

The Finance Ministry had, in its mid-year review of the economy, said: “… decliningexports seem to be predominantly determined by a decline in world demand. Regardless

of the causes, the effect has been a drag on growth.” “This drag has been about one percentage point even relative to last year,” it added. However, the Commerce Ministry – the nodal ministry for exports — in a statement saidthere is no crisis in India on the export front, adding that while there is a need forcaution, there is no need for alarm or panic.Noting that the main reasons for the fall in exports were decline in prices of rawmaterials used in petroleum exports (crude oil) and gems & jewellery exports (gold), theMinistry said decline in non-oil and non-gems and jewellery exports during April-November was 9.7% in dollar terms and only 3.7% in rupee terms.“Excluding petroleum and gems & jewellery, India’s exports have not declinedsignificantly. When the export figure in rupees is compared with the average negativewholesale price index inflation rate of (-) 3.3%, the fall in exports in real terms is likelyto be negligible in volume terms,” it observed.

Keywords: Indian economy, FIEO 8. End of China’s super-boom spells pain, no end seen yetFurther interest rate hikes by the U.S. will add to the pain, by strengtheningthe dollar and making commodities more expensive for global buyers A decade-old commodity boom came crashing to an end in 2015, hurting energy andmining companies as China's industrial rise and appetite for raw materials slowed. Theoutlook for 2016 is not much better.

The Thomson Reuters Core Commodity Index fell by a quarter over the year, to hit itslowest level since 2002 in December, as commodities ranging from iron ore to oil took abattering. And there are few bright spots in sight."The chances of an optimistic 2016 are bleak," Mark To, head of research at HongKong's Wing Fung Financial Group, said. "Slowing economic growth and structural

reforms in China might contribute to decreased demand for commodities."Further interest rate hikes by the U.S. Federal Reserve will add to the pain, bystrengthening the dollar and making many commodities more expensive forinternational buyers, To said.Among industrial commodities, iron ore prices have tumbled 40 per cent 2015 this yeardue to global oversupply and shrinking Chinese steel demand, for a third year of losses,and the rout is seen stretching into 2016. In coal, thermal prices fell almost a third in2015, hurt by waning Chinese demand and the rise of renewable energy, with GoldmanSachs and the International Energy Agency saying China's coal demand has peaked.

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Both iron ore and coal have shed around 80 percent in value since their respectivehistorical peaks in 2011 and 2008.

The downturn has hammered mining majors like BHP Billiton , Rio Tinto and AngloAmerican, as well as merchants like Asia's Noble Group and Europe's Glencore, forcingthem to slash jobs and sell assets.Benchmark oil and natural gas prices have also slumped, down a third this year and

two thirds since the rout began in 2014, as ballooning supply met slowing demand."Headwinds (are) growing for 2016 oil," Morgan Stanley said this week, citing increasesin global supply and a slowdown in demand, reflecting a market consensus thatmeaningfully higher prices are not expected before late 2016.Fight for survival

The outlook is expected to trigger a fight for survival across the supply chain, includingshippers and private oil drillers, while oil-dependent countries from Venezuela andRussia to the Middle East face smaller revenues.Prices of industrial metals also plummeted this year. Copper and zinc shed a quarter oftheir value, and nickel collapsed more than 40 percent, hammered by slowing growth intop consumer China.Some investors are hoping base metals are over the worst, but some fund managers and

analysts expect further losses next year before miners make significant output cuts tooffset slowing demand growth."We've come a long way, but 2016 will probably be another lost year for commodities,though we should see a bottom," said Tiberius Asset Management Chief ExecutiveChristoph Eibl."The supply overhang needs to be corrected, which will be painful because that meansgiving up market share and restructuring," Eibl added. "I think this will happen next

year."Gold, however, is showing no sign of recovery after sliding to a near six-year low earlierin December.

The metal was poised to close the year down about 10 percent for its third straightannual loss on a stronger dollar.Keywords: China’s super-boom, Thomson Reuters Core Commodity Index, China's

industrial rise, Fed hike

9. China slowdown fear spooks global, Indian equity marketsSensex lost 537.55 points — its biggest single-day fall in four months ears of an economic slowdown in China sent equity markets crashing across the globeand India was no exception. The benchmark 30-share Sensex lost 537.55 points to closeat 25,623.35 — its biggest single-day percentage loss in four months. The broader Niftylost 171.90 points to end the day at 7,791.30.

The fall in the Indian market was across the board with more than 1,600 stocks losingground, as against 1,277 gainers. All the sectoral and broader indices ended the day inthe negative category.

Earlier in the day, the Shanghai Composite index of China lost 6.86 per cent or 243points, after data showed that the Caixin Purchasing Managers' Index (PMI) fell to 48.2in December from 48.6 in the previous month, The Caixin PMI reflects manufacturingactivity with a focus on small and medium enterprises (SMEs) and any level below 50 islooked upon as contraction.

The fall in the Chinese index led to the authorities suspending trading activities.“There was an ongoing fear of a China slowdown, which has continued in the New Year.

The PMI data was weak which also led to a slight devaluation in the yuan. There wasalready some amount of nervousness in the market. Global markets, including India,

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will now wait for some reassuring signals from China. They are certainly not getting itnow,” said Andrew Holland, Chief Executive Officer (CEO), Ambit Capital.Among the leading global indices Nikkei lost 3.06 per cent while Hang Seng and Kospideclined by 2.68 per cent and 2.31 per cent, respectively. Most of the Europeanbenchmarks were down by more than two per cent during afternoon trades.

The impact of the fall in India could be gauged by the fact that there were 13 Sensex

constituents that lost more than two per cent each. Infosys Technologies, Tata Motors,Bharti Airtel, Bhel, HDFC, State Bank of India and L&T all lost in the range of about twoto six per cent each.Rupee close to two month low

The rupee weakened against the dollar today amid weak Asian currency and equitymarkets.

The currency closed at 66.62 per dollar as compared to 66.15 of the previous close. Therupee depreciated 0.7 per cent against the dollar — the most in two months. Emerging-market stocks and currencies slumped as manufacturing in China weakened for a fifthstraight month, the longest such streak since 2009.Dealers said the State-run banks sold dollars on behalf of the central bank. Theyestimates about $ 500 million were sold by the central bank.

“The market opened today after a three-day holiday and there were no inflows that couldhave supported the rupee,” said a dealer with a state-run bank.Rupee is likely to recovery Tuesday as inflows are expected to come as auction for FIIdebt limit has seen robust demand. However, the recovery could be temporary if thedollar continues to strengthen against all other currencies, dealers said.There was an ongoing fear of a China slowdown, which has continued in the newyear. The PMI data was weak which also led to a slight devaluation in the yuan.There was already some amount of nervousness in the market. Global markets,including India, will now wait for some reassuring signals from China. They arecertainly not getting it now Andrew Holland,Chief Executive Officer, Ambit Capital The rupee weakened against the dollar on Monday amid weak Asian currencyand equity markets

10. Centre likely to scrap 10 % export tax on low-grade iron orethe government is likely to scrap the ten per cent export tax levied on low-grade iron orein view of the falling global prices and the lack of demand for such ore among domesticsteel producers, giving a fillip to the economy of Goa.“The steel ministry, which plays a critical role in formulating policies for iron ore, hasnow recommended that the low-grade iron ore could be exempted from tax as it won’timpact the interests of the domestic steel industry,” said a senior government officialfamiliar with the matter. “Iron ore prices were much higher when these taxes wereimposed but are hovering around $40 a tonne now with China’s steel productionslowing considerably,” the official said. Even China had decided to slash export taxes on high-grade pig iron ore to ten per centfrom 20 per cent from January 1, he said.

“From October 2015, we had already allowed State-owned National MineralDevelopment Corporation to export iron ore of any grade at a concessional ten per centtax to Japan and South Korea under long-term agreements,” the official said. This wasdespite the tax rate remaining 30 per cent for other higher grade iron-ore producers.Another senior official confirmed the steel ministry’s suggestion and said the minesministry also supported the proposal but the ministries of commerce and finance wouldneed to take a stand on the issue before a final decision was taken.“Scrapping the tax on low-grade iron ore won’t have to necessarily wait for the upcomingUnion Budget as a decision on it can be taken even earlier,” the official said.



Finance Minister Arun Jaitley had reduced the export tax on such low grade iron ore,with ferrous content of less than 58 per cent, in the 2014-15 Budget from 30 per cent to10 per cent in a bid to revive mining activity in Goa.Over 85 per cent of the iron ore produced in Goa is of low-grade but all mining activityhad stopped in September 2012 following the environment ministry’s decision towithdraw green clearances for iron ore mines in the wake of Justice MB Shah

Commission’s report on illegal mining. The clearances were reinstated last March andthe first iron ore shipment despatched in October 2015.

The State government has been seeking the withdrawal of the export tax on iron ore,especially since it shutdown the mines from 2012.

The closure hit its economy severely with the Goa Port also running into losses owing tothe decline in exports. Overall taxes on low-grade iron ore from Goa add up to 40 percent which includes royalty (15 per cent), district mineral fund contributions (4.5 percent), the Goa Permanent Fund (10 per cent) and the ten per cent export duty.Prior to its closure, the mining industry contributed over a quarter of the state’seconomic output, employing around 1.5 lakh people directly and indirectly.Ore exports from Goa used to rake in seven billion dollars per annum of foreignexchange, according to the Goa Mineral Ore Exporters’ Association.

Compared to Goa, over 90 per cent of the ore produced in the other four major statesproducing iron ore — Chhatisgarh, Odisha, Karnataka and Jharkhand — is of a highergrade with ferrous content of more than 60 per cent.

11. India to counter ‘non-issues’ at WTO talks The country had opposed the declaration made after the WTO’s ministerialconference in Nairobi last month he government is firming up a strategy to prevent ‘attempts’ by rich nations to introduce‘new pro-corporate issues’ such as global value chains, digital economy, labour andclimate-related trade into the World Trade Organisation (WTO) deliberations andnegotiations on mega free trade agreements, officials say.When the Doha Round negotiations (for a global agreement to lower trade barriers)resume at the WTO headquarters in Geneva, India will make it clear that discussions on

any ‘new issue’ can take place only after resolving all the outstanding matters related tothe Doha Round talks, official sources told The Hindu. The development came after India had opposed the declaration brought out after theWTO’s ministerial conference (its highest decision making body) in Nairobi last month asit did not include measures primarily meant for improving trade prospects of developingand poor nations.

The outstanding issues include an effective ‘Special Safeguard Mechanism’ (or a tool tohelp developing countries protect the interests of their poor farmers by temporarilyincreasing duties to counter farm import increase and price fall) and a permanentsolution for the issue of public stockholding for food security purposes.Two criteria India will state at the WTO that any country pitching for the introduction the ‘newissues’ will first have to ensure that they meet two criteria.

One is to establish the relevance of these issues in the context of trade and the other toensure that there is a consensus among all 162 WTO member countries in taking upsuch an agenda.Simultaneously, India will strengthen the alliance of developing and poor countries toput an end to the attempts to introduce 'new issues' into the WTO talks at this stage,sources said.

These ‘new issues’ that the developed world is keen to introduce into the WTO’s DohaRound talks include global value chains, e-commerce, labour, climate-related trade(such as environmental services and goods), competition policies, investment pacts,



In fact, the government’s first roadmap had proposed implementing BS-VI norms fromApril one, 2024.At present, BS-IV auto fuels are being supplied in over 30 cities while the rest of thecountry has BS-III fuels.Apart from Mr. Gadkari, the meeting was attended by Union Petroleum and Natural GasMinister Dharmendra Pradhan, Union Environment Minister Prakash Javadekar and

Union Minister of Heavy Industries and Public Enterprises Ananta Geete andgovernment officials.

13. Markets in free fall after China devalues yuanLess than half an hour after the market opened, Chinese stock trading wassuspended for a second time this week. Global shares tumbled for a sixth day on Thursday and oil prices slid to levels not seensince the early 2000s, after China guided the yuan lower and Shanghai shares tumbledby 7 per cent, igniting fears of competitive devaluations across Asia.Less than half an hour after the market opened, Chinese stock trading was suspendedfor a second time this week.Brent crude prices skidded over 5 per cent to an almost-12-year-low of $32.16, withworries over weaker demand from China adding to a persistent drag on prices caused by

oversupply and near-record output levels.European stock markets followed Asia lower, with the pan-European FTSEurofirst 300index down 2.3 per cent and the euro zone’s blue-chip Euro STOXX index falling 2.5 percent.MCCI’s 46-country All World index fell 1 per cent to hit a three-month low, the sixthstraight day of losses. The benchmark emerging stock index slid 2.5 per cent to a 6 1/2-

year low as investors dumped risky assets.“It’s looking pretty ugly,” said Hedge Fund Manager and Chief Investment OfficerAndreas Clenow at ACIES Asset Management in Zurich.“We’ve been scaling down equity positions. It’s time to take a step back to re-evaluatethe situation.”

The People’s Bank of China (PBOC) set the yuan midpoint rate at 6.5646 a dollar, 0.5

per cent weaker than the previous day’s fix. That was the biggest decline between dailyfixings since August and the eighth day in row the PBOC had set a lower guidance rate.Spot yuan fell to 6.5956 to the dollar, its weakest since February 2011. Offshore yuanrates hit a record low of 6.7600 to the dollar, before erasing its losses after suspectedintervention by authorities. Other regional currencies followed the yuan down asmarkets began to worry about competitive currency devaluations from trading partners.Singapore’s dollar hit a six-year low, the South Korean won touched a four-month low,and the Malaysian ringgit slumped to a three-month trough.Investors fear China's economy is even weaker than had been imagined, with Beijing, ina bid to help exporters, allowing the yuan’s depreciation to accelerate. “The lower yuan fixing probably signifies greater risks to the Chinese economy than weknow of, leading to risk-off trades,” said Jeremy Stretch, head of currency strategy atCIBC World Markets.

Flight to safety

North Korea’s announcement on Wednesday that it had successfully conducted a test ofa hydrogen nuclear device added to a growing list of geopolitical worries for investors.“Geopolitical tensions stemming from Saudi-Iran tensions and North Korea’s nucleartest had already heightened the ‘risk off' mood,” said Takashi Hiroki, Chief Strategist atMonex Securities in Tokyo. “Resurfacing China risk was the extra psychological blow tothe markets that led to the selloff in equities.”

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As investors fled to safety, the yen rose about 1 per cent to 117.615 a dollar, itsstrongest in 4 1/2 years.

Top-rated German bonds, which are also considered a safe haven, benefitted, too. Ten- year yields dropped below 0.50 per cent for the first time in over a month. Earlier,MSCI’ s broadest index of Asia-Pacific shares outside Japan dropped 2 per cent to itslowest since late September. Japan’s Nikkei shed 2.2 per cent.

New rules Chinese authorities introduced this week that restrict selling by largeshareholders did not go down well with investors and provided little tonic to jitterymarkets.“This is crazy. Chinese regulators set off on this path in July and they cannot get out ofit. They have ruined whatever hope investors still had in the market,” said AlbertoForchielli, Founder of Mandarin Capital Partners in Hong Kong.Keywords: yuan, Markets, Chinese stock trading, People’s Bank of China, ShanghaiComposite Index

14. Dragon’s fire may singe Indian industry ecline in the value of China’s currency against the dollar is a worrying development as itmay lead to a sharp increase in cheap imports hurting several Indian industries,Commerce and Industry Minister Nirmala Sitharaman said.

The depreciation of the yuan may expand the country’s trade deficit, she said. “There is the issue of excess capacity in China leading to dumping and theapprehension that products will become even cheaper due to the currency devaluationbecause of what has happened now is the third major devaluation. There is also the fearthat subsidised imports are coming in. These are worrying developments. India’s tradedeficit with China will grow even more,” Ms. Sitharaman told reporters after the firstmeeting of the Council for Trade and Development.India’s merchandise trade deficit with China had ballooned from a minuscule $1.1billion in 2003-04 to a whopping $48.5 billion in 2014-15 or over four times India’sexports to China ($11.9 billion) in FY’15. During April-September this fiscal, importsfrom China already touched $31.6 billion while India’s exports to that country were only$4.5 billion, leaving a trade deficit of $27.1 billion.However, cumulative FDI inflows from China into India during April 2000-September2015 were only $1.2 billion (or just 0.47 per cent of the total $265 billion worth overallFDI inflows into India in those 15 years), much less than the actual potential.

There are reports of excess capacity in China, especially in sectors such as steel, leadingto alleged instances of dumping of such products in several countries, including India,at rates below those in China or even lower than the production cost, Ms. Sitharamansaid.

The commerce ministry would soon hold meetings with the Chief Economic AdvisorArvind Subramanian and the NITI Aayog Vice-Chairman Arvind Panagariya on thedevelopments, she said.

The government is considering proposals to protect domestic steel manufacturers fromcheap steel imports mainly from China, the minister saidA tariff line-wise detailed assessment was being done on the steel sector to find out the

sub-segments that are affected the most and need protection in terms of anti-dumpingduty, countervailing duties (or anti-subsidy duties) and minimum import price, she said.“We will not rush into any decision. The Commerce Ministry is in consultations with theFinance and Steel Ministries. We are looking at item by item to see which all segmentsare hurt due to the surge in cheap imports,” the minister said. As a result of the plunge in value of the Chinese currency, stock markets across theworld, including in India, tumbled. Asked whether there was a need to let the rupee fallfurther to make exports more competitive, Ms. Sitharaman said though such a movemay be good for exports, there are views against it too.

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More China investments To offset the impact of trade deficit, India had sought more investments from Chinaespecially in mega industrial parks (in States such as Gujarat and Maharashtra) so thatproducts including electronic items, power equipment, footwear, industrial machinery,active pharmaceutical ingredients and apparel in addition to several value-addedproducts can be manufactured in those parks and then shipped to China and other

overseas markets. That way, India could increase its exports and simultaneously reducethe trade deficit with China. But, huge Chinese investments are yet to happen.In November, Ms. Sitharaman, during a meeting of the Parliamentary ConsultativeCommittee (attached to the Ministry of Commerce & Industry), had voiced concern overChina “making efforts to stall” India’s shipments to that country. China, is continuing to stall India’s exports using non-tariff barriers such asphytosanitary stipulations and standardisation measures. This is despite India layingemphasis on sectors such as IT/ITeS, pharma, textiles, gems and jewellery, fruits andvegetables and meat to increase the country's exports, she said.India had taken up with China, during bilateral meetings and also at the sidelines ofimportant meetings such as the G-20, the issue of the widening trade deficit but theChinese government only accepted India’s concerns but had not taken action on them,

Ms. Sitharaman said.15. New economic era for China goes off the railsAt every turn, President Xi Jinping’s efforts to manage the economy, marketand currency have been undercut by global headwinds. hen President Xi Jinping of China convened a group of top officials to discuss theeconomy last month, the highly publicised meeting was seen as a moment of triumph.A stock market plunge last summer and a messy currency devaluation that followed,had faded from global view. In the relative calm, he seemed to usher in a new era ofeconomic management, promising policy coordination at the highest levels to preventanother bout of turmoil.Less than three weeks later, his plans have been derailed as China’s stock market andcurrency once again rattle investors around the world. The latest rout sets up a

challenge for Mr. Xi, who has positioned himself as the master of the country’s economy. At every turn, the President’s efforts to manage the economy, market and currency havebeen undercut by global headwinds and haphazard policymaking, and initiatives thisweek have been particularly discordant.He also cannot move forward on the bolder actions needed to head off a more seriouseconomic slump, such as forcing hopelessly indebted State-owned enterprises to stopborrowing money and shut down.Otherwise, he risks further eroding short-term confidence and growth, which havedepended heavily on this borrow-and-spend mentality and mass layoffs could follow.Mr. Xi’s options are also more limited than in the past. He and his aides engineered the elevation of the renminbi to the ranks of the world’sleading currencies, a status bestowed by the International Monetary Fund in November.But in doing so, he gave up some control, allowing market forces to play a bigger role.

Overseas wealth In the past couple of years, China had begun allowing, even encouraging, companiesand people to invest more of their wealth overseas. Doing so helped reduce deflationarypressures at home from chronic overinvestment and overcapacity and increased China’sinfluence around the world.But a trickle of money leaving China to buy houses and other overseas investments hasbecome a flood this winter.



The central bank has responded by trying for the past three weeks to slowly guide thecurrency down as a way to help bolster exports and also make overseas investmentsseem more expensive and less appealing.

The result has been chaotic. With the renminbi worth less by the day in theinternational markets, Chinese families and companies worry that their renminbi wealthwill buy less tomorrow, spurring faster capital flight and worsening the currency

turmoil. This week, regulators also put in place a so-called circuit breaker for the stock market, amechanism that halts trading when shares fall too steeply.

The new measure, which followed last summer’s market slide, was aimed at stabilisingstocks. But in practice, it has amplified anxiety.Another measure, which banned large shareholders from selling stock, was supposed toexpire Friday. The looming deadline prompted smaller investors to dump shares.“These very high-level bodies were supposed to coordinate policy, and in this case therereally was a failure of coordination,” said Victor Shih, a specialist in Chinese financialpolicy at the University of California, San Diego.

The resulting stress has driven share prices in China down 12 per cent this week. Thefall would have been even steeper if the new rules had not shut down the market

repeatedly. The combination — a troubled stock market and currency — has proved worrisome forglobal investors. The Standard & Poor’s 500 index, the main benchmark in the U.S.,was off two per cent Thursday, and European and Asian shares were down broadly. In astark about-face, the Chinese stock market regulator said Thursday night that it wouldsuspend the new measure, “in order to preserve market stability.” It is also extendingthe selling ban for another three months. Few analysts had expected such a quickretreat. “Removing the circuit breakers now means they have to admit they made amistake,” Hao Hong, chief strategist at Bank of Communications International, theoverseas arm of a big Chinese bank, said earlier in the day. For years, the response toeconomic weakness has been the same in China: spend, spend, spend.Stimulus package When the global financial crisis hit in 2008, the Chinese authorities developed a $585

billion stimulus package. The money, funnelled into infrastructure, high-speed rail linesand intercity highways, helped protect China against the problems plaguing the UnitedStates and much of the world.In some way, China is reverting to its old tactics.Over the past few months, the government has cut interest rates and introducednumerous measures to help stimulate growth. The central bank’s response to the lateststock market fall has been to inject more money into the financial system, so that bankscan keep lending.In the face of Monday’s tumult, Prime Minister Li Keqiang visited one of the country’slargest and most troubled State-owned steel companies, Taiyuan Iron and Steel Group.

There, Li reassured workers, urging them to “revive your strength and power.” The strategy, though, risks deeper problems down the road.

By not shutting down struggling companies, China is putting off a much-neededshakeout. The country is also piling on debt to keep such businesses on life support. That makes it difficult to discern the underlying health of the economy and runscounter to Mr. Xi’s tough promise that China will clean up its corporate mess. Mr. Xi also cannot easily ask the central bank to print huge sums of money to bail outthe stock market and struggling companies. Doing so now would risk flooding theeconomy with cash, causing a further decline in China’s currency against the dollar. Ominous signs Some economists see ominous signs of a broader slowing.



A quarterly survey of 2,000 Chinese manufacturers and other industrial companiesshows that almost none are investing in new equipment and factories.“In the past four quarters, it’s only 2 to 3 per cent that are making expansionaryinvestments,” said Gan Jie, Director of the Centre on Finance and Economic Growth atthe Cheung Kong Graduate School of Business in Beijing, who oversees the quarterlysurvey.

Controlling the currency is already a problem. China has found itself in the difficultposition of setting the value of the renminbi lower and lower each day, culminating in afall of 0.51 per cent Thursday morning alone.China faces a similar steady drip of stock declines.China’s stock markets have tended to be less correlated with the local economy thanmost countries’ markets. That is because trading tends to be a speculative activity inChina, mainly undertaken by retail investors who frequently have a herd instinct.

The problem was on full display this week as the new circuit breaker mechanism kickedin. The rule imposed a cooling-off period, halting trading for 15 minutes when lossesreached 5 per cent. After trading resumed, the steep slide continued, prompting themarkets to close early twice this week when they reached a second circuit breaker of 7per cent.

To some analysts, it was unnecessary. China has a rule that each stock cannot dropmore than 10 per cent in a day.Even China tacitly admitted it had made a mistake. When the country’s regulatorabandoned the policy Thursday night, it noted in a statement that it had imposed thepolicy despite having “no experience” in using a circuit breaker. — New York TimesNews Service

16. Currency devaluations by Asian Tigers could hinder global growthChina’s decision to push the value of its currency lower has opened a new front of worryfor global investors: a potential wave of currency devaluations among the so-called Asiantigers — South Korea, Singapore and Taiwan.Such an outcome, a number of foreign exchange specialists say, would put a furtherdamper on global growth expectations, which already are being revised downward asChina’s once-booming economy retrenches.

The dollar’s strong run recently — together with the plunge in the price of oil and othercommodities — has damaged fragile emerging-market economies like Brazil, Turkey andSouth Africa; the dollar has risen 130 percent against the Brazilian real and the SouthAfrican rand since mid-2011.

The currencies of fast-growing Asian countries, including India, have largely beeninsulated, thanks to their better-performing economies and their ability to stockpilelarge foreign currency reserve positions.But having a strong currency at a time when manufacturing competitors like Japan andChina have weaker currencies leads to a sharp fall in exports, which have been theeconomic lifeblood of these countries for decades.“These countries have some of the most overvalued exchange rates on the planet,” said

Julian Brigden of Macro Intelligence 2 Partners, an independent research firm based in

Vail, Colorado, that advises large money management firms on global investmentthemes.When economies have high exchange rates, their exports tend to lose market sharecompared with countries with cheaper currencies. And when that happens, countriesthat depend on foreign trade will frequently take steps to push their currencies lower.Echoing these fears, the finance minister of Mexico, Luis Videgaray, warned that theChinese currency actions could lead to a new round of competitive devaluations.



The fear is that a currency war in Southeast Asia where the Asian financial crisiserupted in 1997 could result in lower growth and add to the already substantialconcerns about the global economy this year and next.Earlier this week, the World Bank lowered its estimate for global growth to 2.9 per centfrom 3.3 per cent, with expectations for just about all major economies being reviseddownward. Already, global money managers have begun to pull money out of some of

these Asian markets. The Korean won and the Singapore dollar are down 5 per cent, while the Taiwan dollarhas lost 7 per cent over the past six months.Even in India, perhaps the most popular emerging market among global investors, thecurrency has given ground, about 7 per cent, against the U.S. dollar.Underpinning the fears about a currency war have been the disappointing export figuresfrom the region.For example, Korean exports fell 14 per cent in December compared with the samemonth in 2014. For the year, exports shrank 8 per cent, the worst result for the countrysince the global financial crisis in 2009.In Taiwan, government officials say they expect exports for last year to have fallen 10percent; and in Singapore, the manufacturing sector at the heart of the country’s

export-based model slumped 6 percent in the most recent quarter. These export figures are disturbing because they reflect that something deeper is ailingthe global economy than simply a slowing China that is buying less oil from Nigeria, ironore from Brazil or copper from Chile.Asian Tiger nations Strong currencies in the Asian tiger countries have made their high-end electronicproducts like Samsung phones from South Korea and computer parts from Taiwan moreexpensive in Europe and the United States, their biggest markets.And with China, their main export competitor, expected to let the renminbi weakenfurther, these countries will face further pressure to let their currencies fall.

The sudden export drop-off for manufacturing powerhouses like South Korea andSingapore troubles analysts who see it as a sign that the slowdown in the globaleconomy is worse than people expect.

“I expect these currencies to fall by another 20 or 30 per cent,” said Raoul Pal, anindependent financial analyst and the founder of Real Vision TV, a media venture wheresophisticated investors discuss their views on the market. “These export figures are abig deal — it’s a huge shrinkage in the dollar-based economy, as not enough people arebuying goods.” — New York Times News Service Keywords: Asian Tigers, China

17. Gains and pains of digital transformationNew technologies are fascinating but transitioning to them can be a challengefor companies Social, cloud, analytics and mobility are rapidly changing the way companies operate.

Their synergy has resulted in easy-to-use products and services for customers on theone hand, and richer dividends for companies on the other. Seeing a positive correlation

between business performance and the emerging technologies, companies are fast-forwarding to digital transformation.Customer expectations are changing faster than what IT teams can anticipate. “Withmultiple conversation platforms, it doesn’t matter where it starts: may be with a chat,then goes on to a social platform. Digital transformation is about integrating platformsand departments to get a unified experience,” says Suman Reddy, Managing Director,Pegasystems. Some companies are even looking at new functions. Sudhir Tiwari,Managing Director, ThoughtWorks, says they now have a Chief Capability Officer. “One

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of his mandates concerns capabilities we need to build, and how we match them withwhat we believe where the market is headed.” Enterprise mobility is an emerging area. “Apps are being created for specific tasks thatwould otherwise take a long time to punch in if one has to follow traditional methods ofaccessing company’s intranet,” says Mohit Bhishikar, Chief Information Officer,Persistent Systems. Data analytics is no longer a geek’s domain. It’s become mobile,

visual and accessible to common people.Vizable is a free iPad application from Tableau Software that can be used to exploredata, personal or business, by using gestures such as pinching, swiping and dragging.Users can sculpt data into visual patterns in seconds, and the visualizations can beshared with friends and colleagues through email, instant message or social media,according to Deepak Ghodke, Country Manager, India, Tableau Software.The challenges New technologies are fascinating but transitioning to them can be challenging forcompanies. According to a global survey of 444 executives conducted by The EconomistIntelligence Unit, and sponsored by Accenture and Pegasystems, most companies saytheir digital processes are only partially integrated with their traditional businessfunctions, and very few claim to be able to present a seamless customer experience

across channels. A big challenge is the change in the IT customer who is now behavinglike a consumer, feels M. G. Raghuraman, Senior Vice-President and Chief InformationOfficer, Mphasis.“The customer now wants everything quick, flexible, scaleable, and as much as possibleon fingertips.” Though cloud is perceived as a panacea for many infrastructural issues,moving on-premise data is easier said than done. There is also the problem ofawareness, especially among established old economy enterprises.“Financial services organizations have always been intrigued by cloud and whatharnessing its power could mean to them,” says Snehal Fulzele, CEO and Co-Founder,Cloud Lending Solutions.Public cloud comes with issues of security and policies regarding backing up of data.According to Siddhesh Naik, Director, Enterprise Business Group, India and South Asiaat Lenovo, the budgets allocated to CIOs are shrinking which makes it difficult for them

to draw the line and the whole IT operation becomes a complex balancing act for them.Since technology now becomes obsolete faster than ever before, companies have to scoutfor fresh talent. Often there aren’t programmers with required knowledge base. Coupledwith this is the need to re-skill existing employees.“If you take 100 programmers, the chances are that a majority are trained in nativelanguage that is tied to a platform.

There are fewer people trained in open source. If a company has to hire a PHPprogrammer, it will have to shell out a much higher amount,” says Gerald Jaideep, COOof Simplilearn.Companies are adopting multiple means for training. Deepa Mukherjee, Vice President – HR & Head – Learning and Development, NIIT Technologies, says, “We leverage MOOCs(Massive Online Open Courses) for the foundation learning and invest in instructor-led

training for advanced levels.” EMC collaborates with colleges to make students industry-ready. “The AcademicAlliance program offers courses that focus on technology concepts applicable to anyvendor environment, enabling students to develop skills required in today’s evolving ITindustry,” says Abhijit Potnis, Director Technology Solutions, India & SAARC, EMC.Obstacles notwithstanding, companies are fast-forwarding to new technologies, oftenfearing competition, as Ray Wang, CEO of Constellation Research and author of DigitalDisruption puts it. “Things are moving so fast, companies that have been built over 100



years are disappearing. In the 1950s the average age of a company in the Standard &Poor’s index was about 60 years. It’s trending towards 15 years now, and we think it’s going to be about 12 years by2020. Digital Darwinism is unkind to those who wait.”

18. Tax on seed funding to be scrapped

The government has decided to scrap a tax on seed funding provided to start-ups byIndian angel investors in the upcoming Union Budget, to help domestic financiersbankroll new entrepreneurial ventures under its Start Up India campaign.

The tax provision in question treats infusion of funds by domestic angel investors asincome in the hands of the start-up, making India the only country in the world topenalise local angel investors in such a manner. Senior government officials working onthe Start Up India action plan to be unveiled by Prime Minister Narendra Modi onSaturday said the tax is one of the key reasons that 90 per cent of Indian start-ups arefinanced by foreign venture capital and angel funds.“We have decided to iron out many of the regulatory issues that are deterring access tofinance for start-ups and forcing them to look overseas for funding,” said one of twoofficials who spoke to The Hindu on the issue, requesting they not be identified as

Budget preparations are under way. “We are definitely keen to do away with the taxprovisions that characterise angel investments into a new venture as the investeecompany’s income, thus taking away roughly 30 per cent of the investment from thestart-up’s cash flow as it is taxed,” the official added. He added that this tax applies only to domestic investors and thus acts as a disincentiveto local funding for start-ups that the government wants to incentivise instead.Tax on seed funding goes “This is not about sops for start-ups, but ensuring equal treatment. Which country inthe world taxes its own investors higher than foreign investors?” R. Chandrasekhar,president of IT industry body Nasscom told The Hindu. Industry has told thegovernment that this is tantamount to double taxation on angel financiers who mayhave already paid taxes on their investment amount and would be taxed again on the

returns from such investments.“By its very definition, angel investing is risky and if a particular investment leads towindfall profits, it must be taxed. But the problem is that tax is levied at the time ofinvestments not at the time of booking profits, so it discourages domestic angelinvestors who are keen to bet on start-ups as the stock markets are not goinganywhere,” Mr. Chandrasekhar pointed out. The tax treatment and difficulties of doingbusiness in India as start-ups attain scale, make it attractive for such ventures torelocate out of India to countries like Singapore; 65 per cent of successful start-ups thatbegan in India have moved out of the country, industry secretary Amitabh Kant saidrecently.Nasscom and the Confederation of Indian Industry have flagged the taxing of angelinvestments as well as income of high-net worth angels as a major impediment for thegovernment’s drive to create a friendly start-up ecosystem. The CII has pointed out thatthe tax on investments by angels is particularly unnerving as it could also lead todisputes on the valuation of such investments with tax authorities and scare investorsaway.“At the stage that angels invest, start-ups have no revenue or profits and the valuationis based on the potential and promise of the idea and is usually a simple negotiationbetween founders and angel investors. The IT department would not have the domainunderstanding to value the innovation...This will subject all investments in start-ups to



re-evaluation and will open a plethora of disputes,” a note from the CII to thegovernment stressed.According to estimates by the team of officials working on the Start Up Indiaprogramme, start-ups in the country received around 9 billion dollars of funding in2015.Returns made by domestic individual investors from their start-up investments are

taxed at the highest marginal personal tax rate (around 33 per cent), while investmentsrouted through a Mauritius-based fund or by corporates who only need to pay long termcapital gains tax of around 10 per cent are taxed much lower, pointed out Mr.Chandrasekhar.Another government official dealing with start-ups said the tax on angel investments issomething that can be fixed in the Budget, but he wasn’t sure that the tax on income ofindividual angel investors could be resolved so soon.“In such cases, we would have to look at reviewing the three-year lock-in period, just forinvestments in start-ups, so that such investors can pay long-term capital gains tax.Such a long lock-in period is not compatible with the hectic pace at which investors exitand enter start-up ventures,” he explained. Industry leaders said the government’s focus on start-ups is welcome, but it must

recognise that they can now operate from anywhere in the world virtually, even if theyhave employees and business income in India.“The tax treatment is only the symptom of the larger malady. The talent for start -ups ishere, value is added here, so why should this value and the taxes it could yield go out ofour national accounts books and accrue to some other country,” Mr. Chandrasekharasked.Keywords: Nasscom, tax, start-ups, seed funding

19. IIP shrinks 3.2%, worst trough since Oct. 2011

A sustainable recovery in the Indian economy remains elusive with industrial outputshrinking by 3.2 per cent in November 2015, marking its worst performance sinceOctober 2011, while consumer price inflation inched up to 5.6 per cent in December.

The dichotomy of rising inflation accompanying a decline in industrial output poses afresh problem to the government of how to spur domestic demand, say experts. Thespike in retail inflation makes it difficult for the RBI to cut interest rates to spurinvestments, while cramping the Centre’s ability to use fiscal fillip to prop up theeconomy.“This poses a dilemma for the government on how to boost domestic demand. Withinflation going up, the Centre cannot expect an accommodation from monetaryauthorities. At the same time, they cannot look at fiscal alternatives as they have to

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keep the fiscal deficit target in mind,” D.K. Srivastava, Chief Policy Adviser, EY India,told The Hindu .

The weak index of industrial production (IIP) numbers, rising inflation and the overallGDP numbers are also leading to a situation where the government’s statistics arelosing credibility, said Rajiv Kumar, Senior Fellow at the Centre for Policy Research.“The government must reconcile the GDP and IIP data. How can you have 7.5 per cent

GDP growth while the IIP is like this and exports are consistently falling? For the firsttime, the credibility of the data is completely lost,” Mr. Kumar said, adding that it isperplexing why at a time when demand is contracting, consumer inflation is going up.

The contraction in November’s IIP comes after a 9.8 per cent growth in the index inOctober 2015. The contraction was mainly driven by a contraction in the manufacturingsector, of -4.4 per cent, the worst the sector has performed since October 2014, when itcontracted -5.6 per cent.

The capital goods sector also saw a significant contraction on a usage basis, of -24.4 percent in November 2015, compared with a growth of 16.1 per cent in October 2015.

20. China steps up efforts to stabilise yuanChina stepped up efforts to curb bets against its currency and reassure scepticalinvestors, as its central bank set another firm fix for the yuan on Tuesday backed by

what dealers said was aggressive yuan buying offshore.Ebbing confidence in China’s policymaking has fuelled investors' retreat from theslowing economy, and expectations that the currency will fall further has widened thegap between the tightly managed onshore yuan and the Hong Kong-based offshore rate.

The yuan has depreciated more than one per cent since the start of the year, having lost4.7 per cent against the dollar last year, and the accelerated slide had raiseduncertainty over China's intentions regarding the exchange rate.Analysts said offshore buying by state-owned banks, under the direction of the People’sBank of China (PBOC), dried up yuan liquidity to such an extent that overnight yuanborrowing rates in Hong Kong (HIBOR) hit a record 66.8 per cent.As a consequence the spread between onshore and offshore yuan exchange rates brieflyevaporated, having stood at more than 2 per cent last week.“The strength of its (the PBOC's) actions appears to have reached the ‘nuclear-weapon’level, and is comparable to that of the steps taken by other central banks when theypreviously fought against international speculators, such as George Soros,” said asenior dealer at a European bank in Shanghai.Perceived mis-steps by the authorities have stoked concerns in global markets thatBeijing might be losing its grip on economic policy, just as the country looks set to postits slowest growth in 25 years. China’s equity markets, which tumbled 10 per cent lastweek and a further 5 per cent on Monday, remained volatile, swinging from black to redand back again. The Shanghai Composite Index rose 0.2 per cent and the CSI300 indexclosed 0.7 per cent higher.China’s central bank manages the currency by setting a daily target for the yuan, whichis allowed to trade within a 2-percentage point band either side.

The PBOC set the mid-point for the yuan at 6.5628 per dollar, just two pips weaker than

the previous strong fix and firmer than its spot levels late on Monday. The spot yuan weakened from its overnight close to 6.5733 to the dollar, but offshore itstrengthened as much as 180 pips to 6.5660, reversing a spread that had threatenedlast week to become unmanageable.Sharpening dilemma China’s economy is likely grew by around 7 per cent in 2015 and added 13 million new

jobs, the top economic planning agency said on Tuesday, as it announced the approvalof more large infrastructure projects to avert the risk of a deeper slowdown.



Li Pumin, spokesman for the National Reform and Development Commission (NDRC)told a news conference China's economy would be in good shape in 2016, though therewere still uncertainties.“We will face a relatively complex and severe environment and there will be increasingdifficulties,” said Li, without elaborating. Fitch Ratings said the government was grappling with a “sharpening dilemma between a

perceived need to keep interest rates low to help the economy manage its debt burden,and downward pressure on the Chinese yuan and foreign reserves”. Sources suggested there were moves afoot for China's cabinet to take a bigger role inoverseeing financial markets.

The State Council has set up a working group to prepare for upgrading the cabinet'sfinancial department to bureau level, said a source close to the country’s leadership. Talk up currency Officials were doing their best to talk up the currency.

The PBOC plans to keep the yuan basically stable against a basket of currencies, andfluctuations against the U.S. dollar will increase, Ma Jun, the central bank's chiefeconomist, said on Monday. — ReutersKeywords: Chinese currency, yuan, China’s economy

21. Centre clears new crop insurance scheme The Union government on Wednesday approved the much-talked about new cropinsurance scheme in which it has kept the premium amount for farmers at a maximumof two per cent for foodgrains and oilseeds while capping it up to five per cent forhorticulture and annual commercial crops.“It is a historic day and I strongly believe the Pradhan Mantri Fasal Bima Yojana willbring about a huge change in the lives of farmers,” Mr. Modi tweeted after the schemewas jointly announced by the Ministers of Home, Agriculture and Parliamentary Affairs.

22. Digital dividends not spreading rapidly, says World BankWith 60 per cent of the world’s population still offline, institutional and regulatorybarriers to efficiency are exacerbating the problem of low and unevenly distributed“digital dividends” from growing Internet penetration across countries, a new WorldBank study has found.In its annual World Development Report (WDR) the Bank appeared to strike a balancebetween outlining the positive outcomes from a deepening digital economy in countriessuch as India, and the fact that automation of jobs was in some cases leading toinequalities in the labour market between high-skill and low-skill workers.

The 2016 WDR issue titled “Digital Dividends,” noted that almost 1.063 billion Indianswere offline even though India ranked among the top five nations in terms of the totalnumber of Internet users, along with China, the U.S., Japan and Brazil.Commenting on the report’s findings that 40 per cent of the world’s population isconnected by the Internet, Kaushik Basu, Chief Economist for the World Bank, said,“While these achievements are to be celebrated, this is also occasion to be mindful thatwe do not create a new underclass. With nearly 20 percent of the world’s populationunable to read and write, the spread of digital technologies alone is unlikely to spell the

end of the global knowledge divide.” The report also cautioned that with the advent of big data, which includes the likes ofIndia’s Aadhaar unique identity project, “secret snooping by governments can be forlegitimate law enforcement reasons, but sometimes violates laws and rights, as theEdward Snowden revelations about spying by the security agencies of the United States,the United Kingdom, and others have shown.” In fact, the Bank found that a large proportion of Indians believed that their onlineinf ormation was entirely private. The WDR noted, “57 percent of Indians believe private

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information on the Internet is very secure, but only 18 percent of French and 16 percent of German respondents do.” Yet, there were numerous examples worldwide of success stories where the power of theInternet had been leveraged to improve, for example, the delivery of public services.Among them, the Bank’s report outlined several cases of NGOs partnering with theIndian government and such “digital citizen engagement” led to success with projects

such as “I Change My City,” “I Paid A Bribe,” and the “Karnataka BVS.” These cases notwithstanding, the delivery of services through the Internet ultimatelydepends on the regulation of the service sector itself, the Bank argued, and India, alongwith Ethiopia and Zimbabwe, has “the greatest restrictions on service trade.” Overall, it was possible for digital technologies to be transformational, but for that tohappen the analogue complements are necessary, the report’s authors said.Among the conditions that may apply to the Indian case is the need to have anappropriate business environment, which shapes how firms adopt and use technology.In this context, the World Bank said, “A poor business climate and vested interests oftenhold back digital adoption. Among online firms, the economics of the Internet mayenable natural monopolies to exploit their dominant position, hurting consumers andsuppliers.”

With the advent of big data secret snooping by governments can be for legitimatelaw enforcement reasons

23. For the farmer The Narendra Modi government’s new Pradhan Mantri Fasal Bima Yojana (PMFBY) isworth commending for bringing crop insurance centrestage. Farmers, unlike most othereconomic agents, are exposed to production (weather) as well as price (market) risks.Given the extent of risk involved in growing any crop — ranging from prolonged dryspells and pest attacks to price crash at the time of harvesting — no insurer wouldnormally want to enter this segment. Even if they do, most farmers cannot afford to forkout the huge premiums based on actuarial or statistical risk assessment. There is acase, therefore, for the government to subsidise crop insurance premiums that willultimately also encourage farmers to invest in productivity improvements and newtechnologies. Such subsidy is any day preferable to those on fertiliser, electricity orwater, which only promote inefficient resource use. The fact that even farmers in acountry like the US pay just 35 per cent of the average premium on crop insurancepolicies — entailing annual federal subsidies of $10 billion — only proves the point.Under the PMFBY, farmers would pay only 2 per cent premium for all kharif crops,while it would be 1.5 per cent for rabi and 5 per cent for horticultural crops. The gapbetween the premiums they would pay and actuarial rates will be met by thegovernment without any upward limit on this subsidy. From a farmer’s perspect ive, thisrepresents significant improvement over the existing Modified National AgriculturalInsurance Scheme. Under the latter, the government subsidised a maximum of 75 percent of the actuarial premium. Moreover, the premium rate on which the sum insuredwas calculated was itself capped, so as to limit both the farmer’s claim and thegovernment’s outgo. But now, there will be no such indirect capping of the sum insured.

The question that naturally arises is, what would be the fiscal implications of the newscheme? The Modi government is planning to launch it from the coming kharif season,which, going by statistical probability, should be relatively better for agriculture,following two back-to-back monsoon failures. But in a drought year like the current one,the outgo from the PMFBY — assuming it is implemented in the manner proposed — may not be small. That price may still be worth paying for a country where only a fifth offarmers have crop insurance coverage. Subsidised premiums and prompt claimssettlement enabled by remote sensing and GPS technology — as opposed to patwarisand crop-cutting experiments — should help substantially expand coverage. An increase

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in the area insured should also bring down premium rates, through spreading of risksacross more farmers. That would also help contain the government’s subsidy burden.

24. Government all set to ease rules for startups to mushroomPriority will be given to programmes like Start-Up Mission to generate more employmentn India entrepreneurship is no longer being looked down in the guise of a frugal orflexible innovation and the government will take steps to make capital easily available

and ease rules to enable startups to flourish, Commerce and Industry Minister NirmalaSitharaman, said.

The government aims to bring a bankruptcy law to improve the ease of doing businessin the country, Sitharaman said at the inaugural session of Start- up India programme.

The Centre will give priority to programmes likes Start Up Mission to generate moreemployment and engage with entrepreneurs to remove all the burdensomeregulations.Bankruptcy Bill

The government had introduced the Bankruptcy Bill in Parliament in the recentlyconcluded winter session but could not ensure its passage.A simple and effective corporate insolvency law is important for expediting the windingup of a company, selling its assets and also for revival of sick companies.Easier entry and exit norms are important from the point of view of a startup, too, as

there is a likelihood of a good number of them failing. Investors have often criticised thedelays involved in the insolvency proceedings in India and the consequent fall in thecompany's asset value.

The number of people looking to start their own ventures have gone up while thoseseeking government employment have done down, Ms. Sitharaman said. .

The government has set up a ‘fund-of-funds’ to help startups and it will not impose anyconditions for startups but only act as a facilitator, she said. The government had inAugust last year set up an India Aspiration Fund as a fund-of-funds to increase thecapital availability for startups.EmploymentDepartment of Industrial Policy and Promotion Secretary, Amitabh Kant, saidemployment generation was the government's top-most priority. He said the Start-UpMission was an important step in this direction.Prime Minister Narendra Modi's visit to the Silicon Valley in the U.S. last year, tointeract with the entrepreneurs there, had paid off as it had created several linksbetween Indian and American entrepreneurs, he said.Pointing out that one million people enter the labour force in India every month, WorldBank Country Director for India, Onno Ruhl, said the challenge was to create jobs forthem. The World Bank was keen to work with the government in ensuring the Start-UpMission was a success.However, it was important to make sure that the country grows through innovation inthe area of frugal engineering using less energy, less water and keeping the air clean.Deep Kalra, founder of the online travel company MakeMyTrip, said with changingtimes, people now have respect for startups and entrepreneurs and the value theycreate.

25. PM unveils liberal start-up ecosystem



Announces fund of Rs. 10,000 cr. to be provided over four years

Prime Minister Narendra Modi sought to infuse more energy into India’s start-upecosystem with a bouquet of initiatives such as making tax-free the profits of thesefledgling units for three years, Rs. 10,000 crore of government funding over four years,no visits by labour inspectors for three years, and quicker and subsidised patentclearances.

The “Start-up India, Stand-up India” action plan, unveiled by Mr. Modi on Saturday,promises a new mobile app to enable start-ups to register themselves within a day andapply for clearances online, and easier exits for failed ventures with a provision forwinding them up within 90 days under a proposed bankruptcy and insolvency law.Using the opportunity to take a jibe at the Opposition parties for holding up Parliament,Mr. Modi said: “We have introduced the bankruptcy and insolvency Bill in 2015. Therest of the problem, you know … Maybe, if youth like you send a message via socialmedia for Parliament, where work is stuck … maybe, some people will understand it[better] now.” Committing to ease the red tape that makes it difficult to do business, he said: “Fornearly 70 years, government has done a lot and where did we reach? If we decide not todo some things, then these youth will reach great heights in the next decade. Thegovernment shouldn’t come in between …”

The statement drew loud applause from the crowd of over 1,500 delegates, includingSilicon Valley heavyweights such as Softbank founder Masayoshi Son and Uber founder

Travis Kalanick. Stressing that it was important for start-ups to have ideas and anability to take risks, Mr. Modi pointed to Uber’s solution for a commuting problem andsaid, “Uber has become ‘Kuber’ [the god of wealth].”

26. Flex fuel policy of government to curb pollution worries automakers The move will decrease pollution and encourage a diversion in the sugarindustry’s output away from sugar and towards ethanol India can soon expect a policy on flexible-fuel cars, cars that can run on bio-ethanol andpetrol, or a blend of both. The government is expected to make an announcement before

January 26, according to Union Transport Minister Nitin Gadkari. The move to flex-fuels will decrease pollution and encourage a diversion in the sugarindustry’s output away from sugar and towards ethanol, Mr. Gadkari said at the annualmeeting of the Indian Sugar Mills Association (ISMA) last month in New Delhi.

Biofuel production would help farmers by supporting the diversification of agricultureinto energy, power and bio-plastics, Mr. Gadkari said.Implications for auto industry A policy on flex-fuel vehicles is likely to affect the automotive industry in several ways.Flex-fuels are widely used in several countries, famously Brazil and the United States,where they are available at the pump; examples include E10, E15, E85, the numberreflecting the proportion of ethanol.

The technology for the engines that can take these fuels is certainly not new but makingthe engines available in India (Mr. Gadkari said he had asked Volkswagen to come up



with a flex-fuel engine) will take the greater part of a year at least. It requiresmodifications along the supply chain and calibrating the engine for Indian conditions.Additionally, such a policy will give manufacturers who are already in flex-fuel marketsan advantage over indigenous producers, according to industry expert V. Sumantran,Chairman of Celeris Technologies. Volkswagen, Chevrolet, Ford, Toyota, Nissan andHyundai are among those who have a presence in Brazil and manufacture flex fuel cars.

This begs the question: how viable is running existing petrol engines on blended fuels?While a regular vehicle not especially made for biofuels could run on these fuels for afew years, this is not a feasible strategy in the medium to long-term for several reasons.One of the reasons is that ethanol, unlike petrol, is prone to oxidation and this cancause gum-like sediments to accumulate in various engine parts. Ethanol also reactswith other materials in the car, such as rubber, and this causes degradation, accordingto Mr. Sumantran.Consequently, if flex fuels are to be rolled out, engines will have to be built for them — and this will mean an additional variant for manufacturers’ production plants. “For companies [car manufacturers], it is the variety that kills them. Adding anadditional line of engine variants is not cheap. All this accumulates as internal costswithin the company and they do not like doing this unless they are forced or required to

do it,” Mr. Sumantran told The Hindu . Additional manufacturing costs are likely to bepassed on in some measure to customers.Impacts on other industries At present, the most obvious and reliable source of bio-ethanol in India is sugarcane.

The world’s second largest sugar market, India produces some Rs.800 billion of sugarand supports approximately 40 million people.Ethanol is produced from cane molasses, a by-product of the sugar production process.

The government’s current Ethanol Blending Policy mandates five per cent blending ofethanol with petrol, though in reality the average ethanol blending achieved has been

just two per cent. The government wishes to achieve 10 per cent blending.A new flex-fuel policy will mean a diversion in the production process to support theproduction of ethanol rather than sugar. The government is keen to increase the ethanolcomponent in this mix partly because the sugar industry has an excess supply problem

and consequently sugar prices are depressed. Mills are mired in debt to cane farmers.An industry paper by McKinsey & Company suggests that 5 million MT (metric tonnes)of excess sugar could be exported or diverted to ethanol production.If a flex-fuel policy comes into effect, the additional ethanol demand will likely exceedwhat can be produced by diverting resources from sugar.However, according to Abinash Verma, Director General of ISMA, this demand does notnecessarily have to be met via additional acreage under sugarcane. Some of it can comefrom sources other than molasses, such as cellulosic ethanol, made from bagasse orsugarcane tops, and some can come from improved farming practices or plantinghigher-yielding varieties of cane.Such differences in productivity are already evident across the country; Tamil Nadu

yields 100 tonnes of sugar per hectare of cane, while Uttar Pradesh and Bihar yield 50-

55 tonnes per hectare, Mr. Verma toldThe Hindu. “Even if a ten per cent increase in sugarcane yield happens, this would produce 3million tonnes extra of sugar or 2 billion litres of ethanol,” Mr. Verma said, adding thatthis quantity of ethanol was equivalent to 7-8 per cent of India’s total petrolconsumption. India imports more than 80 per cent of its crude oil so this will meansignificant reductions in the oil bill.Social and environmental impacts



Flex-fuel cars, and biofuels in general, are promoted because they are cleaneralternatives to fossil fuels. However, their ability to generate more energy than is used intheir production is in question.Additionally, an increase in bio-ethanol production has also raised concerns about foodsecurity, farmers’ livelihoods and the environment, including water usage.

The National Policy on Biofuels (2009) , which directs the nation’ s overall approach to

biofuels, says these fuels will be produced using non-food feedstock (source materials)on wastelands, thereby allowing India to stay clear of the traditional food versus energysecurity debate that other countries have had to deal with.

This claim is a hard-sell for some, such as P. Sainath, founder of the People’s Archive ofRural India and an expert on famine and hunger. He does not believe these claims,saying there are no conclusive studies that can say categorically that food crop landshave not been encroached on in the past.Memories of India’s infamous and unsuccessful experiment with jatropha — a plantused to produce bio-diesel and promoted by the government across the country, are stillfresh. The purported ability of the weed to grow on wastelands and its drought-resistantproperties were not reflected in the ground realties of its commercial cultivation and theprogramme was not successful.

Water shortages too are a problem, especially when it comes to sugarcane. Maharashtrafor one just does not have enough water, with the Marathwada region already in themiddle of a drought, Mr. Sainath said.“Sugarcane is the largest water-guzzler we have,” he said, adding that sugarcane farmsconstitute 6 per cent of land use but consume 70 per cent of the irrigation water in theState.Well-considered policy needed It seems that a clear and well-considered policy, based on a considered approach thatlearns from past experience and does not lose sight of overarching objectives is needed,no matter where you stand on the flex-fuel debate.“There is no sincerity in developing alternative fuels. This is just a magic bulletapproach,” Mr. Sainath says. Sugar mill operators would benefit from a clear and well-thought-out policy too.

Considering whether oil marketing companies have enough storage capacity for ethanol,and reforming tax structures so transport of ethanol across State boundaries was notprohibitively expensive, are among the issues that needed to be considered, according toMr. Verma.Investments have to be made to install special dispensing units at petrol pumps acrossthe country and such investments should follow demand for the product, which comesafter a clear policy has been articulated, Mr. Verma said.

The policy ought to be carefully considered and aligned with the country’s overallobjectives in the sector, according to Mr. Sumantran, who supports a larger scale shifttowards biofuels as a national policy provided no food production is diverted.“I think like a lot of our policy today, a serious matter like expansion of the use of bio-fuels as a national policy requires very careful consideration and planning to be

successful,” Mr. Sumantran said. For instance, he questions the utility of using morethan 85 per cent ethanol in a blend, saying Brazil has stopped the practice for goodreasons, and a technical and economic case study has to first be made. Automobilemanufacturers also need to be given adequate lead time to comply with a new policy,Mr. Sumantran said, adding, “In our hurry to appear to do things, we need to avoidhasty steps that will hurt the progress we wish to make.”

27. IMF cuts global growth forecast as China slows



India projected to continue growing at a robust pace. The International Monetary Fund (IMF) cut its global growth forecasts for the third timein less than a year on Tuesday, as new figures from Beijing showed that the Chineseeconomy grew at its slowest rate in a quarter of a century in 2015.

To back its forecasts, the IMF cited a sharp slowdown in China trade and weakcommodity prices that are hammering Brazil and other emerging markets.

The Fund forecast that the world economy would grow at 3.4 per cent in 2016 and 3.6per cent in 2017, both years down 0.2 percentage points from the previous estimatesmade last October. “Near-term fiscal policy should be more supportive of the recovery,especially through investments that would augment future productive capital,” it said.

The updated World Economic Outlook forecasts came as global financial markets havebeen roiled by worries over China’s slowdown — confirmed by official Chinese data on

Tuesday — and plummeting oil prices. The IMF maintained its previous China growth forecasts of 6.3 per cent in 2016 and 6.0per cent in 2017, which represent sharp slowdowns from 2015. — ReutersUnchanged estimates Special Correspondent reports from New Delhi:



The IMF projected 7.3 per cent GDP growth for India in 2015-16 and 7.5 per cent in2016-17, levels unchanged from its outlook released in October. In 2014-15, itestimates, GDP grew 7.3 per cent.“India and the rest of emerging Asia are projected to grow at a robust pace, althoughwith some countries facing strong headwinds from China’s economic rebalancing andglobal manufacturing weakness,” it said.

The Union Finance Ministry last November revised downwards its projection for thecurrent financial year to 7.5 per cent after estimates from the Central Statistics Officeshowed that in the first six months, real GDP grew 7.2 per cent, slower than the 7.5 percent in the corresponding period last year.In February 2015, it projected that growth would accelerate to 8.1-8.5 per cent. TheRBI’s forecast for growth this year is 7.4 per cent.Keywords: IMF, India’s GDP forecast,

28. Cabinet nod for power tariff policyCos are allowed to pass on to consumers costs arising out of any changes in taxes, cessand levies

he Union Cabinet has approved several amendments to the national power tariff policywith a view to promote renewable energy and improve the ease of doing business fordevelopers in the sector.In a major shift, power companies are allowed to pass costs on to consumers arising outof any changes in taxes, cesses and levies levied on them.

The policy also seeks to “create a win-win between the generator, utilities andconsumers” by allowing power generators to sell their surplus power on the powerexchange and sharing the proceeds with the state government.“The amendments are based on four Es— electricity for all, efficiency that will ensureaffordable tariffs, the environment, and ease of doing business to attract greaterinvestment in the sector,” Piyush Goyal, Minister of State for Power, Coal and New &

Renewable Energy, said in a briefing on the cabinet’s decision on Tuesday. The amended tariff policy also imposes a renewable energy obligation on new coal orlignite-based thermal plants, requiring them to establish or purchase renewablecapacity alongside their own generation units.“This provision is very important as it will be a big boost for renewable energy. “But the other side is that it could add to generating companies’ stress. “There are generating companies that are already stressed as they are not being able tosell the power they generate. Now they will have to purchase renewable power, which

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will add to their stress,” Kuljit Singh, Partner and Industry Leader – Infrastructure, EY

told The Hindu.No interstate transmission

The new policy also mandates that no inter-state transmission charges will be levieduntil a time to be specified by the government.“The signal from such a move towards compulsory generation and procurement of

renewable power by coal-based plants is a clear directional shift to renewables.“So anyone involved in the energy sector has to be prepared for that,” said ArunabhaGhosh, Chief Executive Officer of the Council on Energy, Environment and Water.He added that firms will also have to take a call on how they procure their renewableobligations. “The costs and business models for different renewable alternatives such asrooftop solar or grid-connected sources are constantly evolving so the decision won’t betop-down any longer,” he said.

To encourage efficiency, the policy allows power producers to expand up to double theircapacity through the automatic route, at their existing unit locations.

This automatic approval was earlier limited to 50 per cent capacity expansions.Commission to fix tariffsFurther, the tariffs for multi-state power projects will be determined by the Central

Electricity Regulatory Commission, thereby removing a major point of uncertainty to dowith such projects.Need for action plan

The amended policy also said that the power regulator has to come up with a clearaction plan to ensure 24x7 power supply to all consumers by 2021-22 or earlier.

Towards the power for all initiative, the policy enables the creation of micro-grids inremote villages as yet unconnected to the grid, and also says that these micro-grids cansell their surplus power to the grid when it reaches those areas.

The power regulator has to come up with a clear action plan to ensure 24x7 powersupply to all.

29. Davos leaders look beyond 2016’s early market mayhem

Blood-letting in global markets is dominating corridor talk as business leaders andpolicymakers meet in Davos, although so far the view is that it doesn’t signal a financialcrisis.As the World Economic Forum’s annual meeting in Switzerland wrestled with topicsranging from the impact of robots on jobs to gender and wealth inequality, the MSCIWorld equity index fell to its lowest level since July 2013.If sustained, the 9.9 per cent fall in the index in January would be the worst monthlyloss since 2009, towards the end of the global financial crisis.“I don’t believe this is a repeat of 2008...that is not to say that there are not some verysignificant risks impacting the market - not least of which is China’s slowing growth,”

John Veihmeyer, Global Chairman of accounting group KPMG, said in the ReutersGlobal Markets Forum on Wednesday.

The International Monetary Fund (IMF) cut its global growth forecasts for the third time

in less than a year to 3.4 per cent on Tuesday, as new figures showed that the Chineseeconomy grew at its slowest rate in a quarter of a century in 2015.While China’s rapid slowdown, combined with a dramatic fall in the price of oil, hasspooked investors around the globe, European Economics Commissioner PierreMoscovici told Reuters Television he too did not believe there would be any return to aninternational financial crisis.“I don’t feel that the financial crisis is coming back... but there are downsides that weneed to address,” he said.



“There are worries...especially about China which is undergoing a transition which isdifficult and uncertain.” Harbinger of problems

However, some in Davos were less confident about the outlook for 2016 after the rockystart to the year.

“Market turmoil can be a harbinger that something is wrong and even if it is irrational,can have real consequences. What is going on now is a message that the excessiveoptimism that has been spreading around is wrong,” Nobel Prize-winning U.S.economist Joseph Stiglitz told Reuters. While Mr. Moscovici said he was confident thatthe world’s central banks have the ammunition to revive the global economy after yearsof record low interest rates and quantitative easing, Stiglitz was not convinced.“The Fed (U.S. Federal Reserve) doesn’t get it. The Fed raises interest rates, Brazil raisesinterest rates in a world in which things are not good. Central banks are often more outof tune with reality than markets,” Stiglitz said, adding he saw no chance of anyintervention at a G7 or G20 level.Veteran British businessman Roger Carr, who is chairman of British defence group BAESystems, said the future was not looking bright.

“This time last year in Davos there was a very different environment, it was quitebenign. The issue was the haves and the have nots, it wasn’t: ‘are we all going to haveless?’” “It is very pessimistic at the moment,” he told Reuters. Healthy correction

However, bankers such as former Barclays chief executive Bob Diamond said theslowdown in Chinese growth was a “healthy correction” which, while serious, wasneeded.Diamond, who now invests in Africa, told reporters that the situation now was notcomparable to the fourth quarter of 2008 and the first of 2009 which he described as“the deepest economic correction I have ever seen” as the U.S economy was growing andwestern Europe was doing well. This was echoed by Professor Ding Yuan, vice-president

and dean of the China Europe International Business School in Shanghai, who toldReuters it would be wrong to take the small devaluation of the Chinese yuan and thefalls in the Shanghai 300 index as indicators of China’s economic health. Short-term volatility

“This is only short-term volatility... People are focusing on the short term too much. Weshould be looking at the next five years, not the next two months,” he said. For CEOs at Davos trying to navigate the year ahead, the price of oil remains the greatunknown.“In many of the markets we operate in, the oil price is clearly a major factor of the healthof the economy. We’re expecting governments to adapt to this new current order of oilprices, whether they’re at $30 or lower or higher. Who knows what’s going to happen in

2016?” Vimpelcom CEO Jean-Yves Charlier told Reuters in an interview.Keywords: Davos, Davos 2016, market mayhem, global economy

30. India to buy more crude oil from NigeriaIndia is set to import more crude oil from Nigeria, already one of the biggest contributorsto the country’s oil imports, Oil Minister Dharmendra Pradhan said.“Nigeria has now agreed to increase the term contract from 1.7 million tonnes perannum to three million tonnes in 2016,” Mr. Pradhan said on the sidelines of the fourthIndia- Africa Hydrocarbon Summit in New Delhi. Nigeria is the third-largest contributor

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to India’s oil imports, accounting for 11.59 million tonnes (MT) in the first half of thisfinancial year, behind Saudi Arabia (19.56 MT) and Iraq (17.01 MT). The benefit of aterm contract is that not only does it assure a certain quantity to be supplied but alsoensures a stable price unlike oil bought from spot markets whose price can fluctuatedrastically. Apart from Nigeria, Sudan also wants to increase its engagement with India.India, on its part, is also keen to diversify its oil import basket as Saudi Arabia’s

national oil and gas company recently announced that it would be selling oil to its Asiancustomers, including India, at a premium of $0.6 a barrel above the prevailing marketprice in February.Sudan offer“They (Sudan) have offered more oil blocks for exploration and asked for Indiancompanies’ expertise to raise production from existing fields,” he said. Sudan currentlyowes India $240 million for the oil it consumed from the Greater Nile Oil Project in thecountry of which OVL owns 25 per cent. The modalities of repayment are being workedout, the Minister added. Sudanese Oil Minister Mohamed Zayed Awad said he hadoffered Blocks 8, 15 and 24 to OVL for exploration and urged the Indian company toconsider buying a stake in Block 17, which reportedly produces 7,000 barrels of oil perday.

31. ‘Start-up India’ Action Plan: a good start, but Govt. apathy, bigcorporates a hurdle

Start-ups and entrepreneurship are critical to India’s efforts to restart privateinvestment in the economyhe much anticipated, and needed, ‘Start-up India’ initiative was launched last weekendby Prime Minister Narendra Modi in a move to help start-ups and catalyseentrepreneurship. Start-ups and entrepreneurship are critical to India’s efforts to restartprivate investment into the economy, in the face of risk aversion, stalled or slowinvestments from corporate India.Start-ups in India have faced two significant obstacles. One is government apathy,corruption and a complex approvals process. The other is the power of entrenched

corporates, to oppose or kill start-ups which challenge them. So while the Action Planunveiled by Mr. Modi is a catalyst, also needed are structural reforms that permit freeand fair competition and other issues that determine the viability and existence of start-ups. Net neutrality, for instance, is a policy requirement that will determine the futurefor tech start-ups.

The Start-up India Action Plan lists out a comprehensive set of structural andregulatory reforms in order to achieve this. Income tax exemption, easing compliancethrough reduction of regulations and having fixed qualifications as to what a ‘start-up’is, were expectations at the top of the entrepreneurial bucket-list.But the Action Plan goes further. It goes on, for instance, to provide an 80 per centwaiver on patent filing fees by start-ups, provide advisory services and create aRs.10,000 crore fund-of-funds which is to be managed by professionals drawn from the

private sector. These are just a few of the ‘sweetheart’ deals for start-up entrepreneursunder the Action Plan.Money mattersBut the Action Plan also appears to have a few flaws which need to be addressed. Forinstance, it sets up an ‘Inter-Ministerial Board’ led by the Department of IndustrialPolicy and Promotion which ‘validates’ the innovative nature of an enterprise, therebyqualifying it as a start-up – an involvement of government in this ecosystem that ishardly desirable. It also requires a start-up to obtain a recommendation from anincubator in order to be eligible. The most obvious and tangible benefits to start-ups



under the Action Plan are the tax breaks and funding support. The Action Plan waivesincome tax on profits for a period of three years and also exempts taxes on capital gainswhich are invested in the ‘fund-of-funds’.

This move will help to reduce cash outflows and bring down the cost of running a start-up. In conjunction with the waiver of the ‘angel investor’ tax under the Finance Act,2013, start-ups now can have improved access to funding opportunities.

Pending reforms like the GST regime, would also make it easier for small start-ups tooperate across the country.Rs.10,000 crore ‘fund-of-funds’

The Rs.10,000 crore ‘fund-of-funds’ is a significant financial commitment by theGovernment under the Action Plan. It is set to start with Rs.2,500 crore initially with theamount set to recur for 4 years.

This mega fund will not directly invest in start-up ventures. Instead, it will do so viaSEBI registered venture funds. This fund will contribute a maximum of 50 per cent ofthe daughter fund size, providing a significant boost to the corpus of investments thatstart-ups have access to. It is important that this corpus is not managed by Politiciansor bureaucrats, but smart, savvy fund managers who have a track record on investing.On the cost saving side, an 80 per cent rebate on patent filing costs alongside an

exemption from having ‘prior-experience’ to be eligible under the public procurementprocess are steps taken to promote tech-based start-ups in particular.While tax incentives, cost saving measures and funding support will undoubtedly driveup investment into innovative start-ups it is essential that the government not lose sightof non-tech start-ups. It should make special provisions to ensure that this supportstructure extends to the agriculture, manufacturing, and handicrafts sectors.Ease of doing businessPromoting start-ups by improving ease of doing business is clearly at the forefront of theAction Plan. A significant benefit a start-up accrues under this policy is the waiver fromlabour inspections for 3 years.Now, anyone who has run a business and navigated the maze of bureaucracyunderstands the quagmire that labour laws can be, especially for a start-up. Along withthe ease in environmental checks, these changes to labour inspections are a step in the

right direction — particularly for those start-ups which are based in the manufacturingsector. But the Action Plan exempts starts-up from inspection under a fixed number oflabour laws — six to be specific. There are about 45 laws at the central level and aboutfour times this number at the state level. The Centre needs to work with the States toensure a smooth rollout of the benefits under the Action Plan and avoid discord betweenpolicies at the two levels.‘Start-up India Hub’

The Action Plan also creates a centralised system under the ‘Start-up India Hub’ whichassists start-ups by providing advisory services on financing, business structuring andimproving management skills. It also provides for a mobile app which allows start-ups toself-certify themselves and also acts as a single point of contact between entrepreneurs,regulators and the government. This is a positive move in simplifying the registration

process. This is perhaps the most pertinent question which has been answered by the ActionPlan. In order to obtain the wide ranging benefits which have been detailed in the 40-page Action Plan, it is essential for an enterprise to qualify as a ‘start-up’. Anuncontroversial requirement, but the devil is in the details.

The Action Plan requires an enterprise or partnership to be innovative by developing andcommercialising a new product or service — a step to promote truly innovative ideas.But it institutes an inter-ministerial body led by DIPP to examine whether an enterpriseis ‘innovative’.



It also requires a ‘recommendation’ from an incubator setup by the government or besupported by an incubator in a post-graduate institution recognised by the government

— this need for validation and recommendation goes against the very steps the ActionPlan takes to reduce government involvement. This additional layer of bureaucracycould slow down the starting up process and needs to go.Start-up India is consistent with the PM’s call for innovation when he launched Digital

India. The Start-up India Action plan is a good start to this – but will need continuedsupport and evolution to make this a true, deep revolution for the youth of India.

The author is a Member of Parliament & a tech entrepreneur

32. Flexible norms to make gold scheme glitter The government has made a slew of changes in its gold monetisation scheme to make itmore flexible and attractive.Since the scheme was introduced two months ago the government has collected over900 kilos of gold. The new norms issued by the Reserve Bank of India (RBI) inconsultation with the government are based on suggestions to make the scheme moreaccessible for potential gold depositors, and allow premature redemptions after three

years and five years for medium term and long term deposits, respectively. The interest

payable to depositors in such cases would be reduced, while allowing them an exitoption.Further, the quantity of gold collected under the scheme will be expressed up to threedecimals of a gram to give consumers better value for their gold deposits that can be ofany purity level.

The gold monetisation scheme was launched by Prime Minister Narendra Modi inNovember 2015 and allows people to deposit gold jewellery or bars with banks ordesignated collection agents, which could now also include 13,000 jewellers across thecountry. In return, they get up to 2.50 per cent tax-free interest per annum and anexemption from capital gains made through trading or at the time of redemption.

The gold collected under the scheme is refined for domestic purpose with an eye oncutting India’s high gold imports, which registered a surge of 179 per cent in the month

of December 2015.“A number of suggestions have been received to make the scheme easier for thecustomers to participate,” the finance ministry said in a statement on Sunday, listingout the changes to the scheme, adding that a media campaign, including print mediaand mobile SMS is being undertaken to increase awareness among depositors.Gold depositors can now give their gold directly to the refiner rather than only thoughcollection and purity testing centres (CPTCs), the ministry said, adding that this wouldencourage bulk depositors including institutions to participate in the scheme.Banks would now be paid a 2.5 per cent commission for their services on medium andlong term deposits which include testing the purity of gold deposits, refining, storageand transportation. Banks have also been given the freedom to hedge their positions inthe case of short-term deposits, and issues around interest rate calculation as well asextending loans against gold deposits have been clarified.

The number of refiners under the scheme are also likely to go up with the Bureau ofIndian Standards (BIS) modifying the licensing condition that mandated three years’experience to one year refining experience.

33. Centre clears new financing model forhighway projects



The union government on Wednesday approved the hybrid annuity model for buildingnational highways, paving the way for construction of 28 projects worth Rs. 36,000crore this fiscal year.

The move will speed up the construction of roads in the country by renewing interest ofprivate developers in highway projects as the risk will be distributed between thegovernment and the private players.

“The Cabinet Committee on Economic Affairs, chaired by the Prime Minister NarendraModi, has given its approval for the Hybrid Annuity Model as one of the modes ofdelivery for implementing the Highway Projects… The main object of the approval is torevive highway projects in the country by making one more mode of delivery of highwayprojects,” according to a statement from the Ministry of Road Transport and Highways.

The government plans to build 28 national highway projects worth Rs.36,000 crore thisfiscal year, a senior Road Ministry official told The Hindu. Under the public-private partnership (PPP) model, the government will invest 40 percent of the construction cost for building highways and the balance will come from theprivate developer. The government will invest money in five equal instalments based onthe targeted completion of the road project.

The private developer will recover his investment from the government by receiving

annuity payments over a period of 15 years. Under this model, the highway toll tax willbe collected by the government unlike the build, operate and transfer (BOT) toll modelwhere the private sector collects it. “So, there is no revenue or traffic risk on the part ofthe developer,” the official added. “It is a fairly sensible risk-sharing model because it requires the private sector to focuson areas which bring in efficiency mainly in capital cost, project completion time andquality. This model will bring in long-term infrastructure funds like pension funds intothe sector,” said Manish Agarwal, partner and leader, infrastructure at PwC India. A government official said this model will double the speed of highway construction inthe country as the government will no longer will be dependent on its limited financialresources and the expertise of private sector will be utilised to operate and maintain theroads.5,000 km highway projects

In the next two fiscal years, the government will build more than 5,000 km of nationalhighways based on the hybrid annuity model, the official said. In the present fiscal year,1,000 km national highway projects were awarded through the BOT model – where aprivate operator funds the project, operates it for a period and transfers it back to thegovernment – and 3,000 km through the engineering, procurement and construction(EPC) model in which the government pays the contractor a sum to build the project.

34. Centre hand-picks 20 smart cities for firstphase of planA new chapter in India’s urban history has started with the Smart Cities Mission finally

taking some material shape. Urban Development Minister Venkaiah Naidu on Thursdayannounced the list of 20 cities that have qualified to build smart infrastructure with Rs.200 crore each from the Central government’s first phase of funding. The Ministry hasgiven top rating to Bhubaneswar for its robust Smart City plan.Urging the country’s mayors to “work hard” for the improvement of their municipalities,Mr. Naidu said the government would soon introduce the credit rating system for citiesso as to attract foreign investors. “Every city should follow credit rating. Otherwise noone will come and invest from outside,” he said, after announcing the 20 names here.



Mr. Naidu said the government would grant every winning city a sum of Rs. 500 crore as“overall cache of start-up funds” and expects the State governments to provide anadditional Rs. 500 crore.According to mission guidelines, the total State and Central financial assistance for eachsmart city would be Rs. 1,000 crore.“This is the first time that an urban mission of such scale and ambition has relied so

little on the decision-making by the Government of India,” said Mr. Naidu, add ing thatunlike the previous urban development schemes the government had adopted the“bottom-up approach.” With an aim to achieve “inclusive growth”, the mission promotes integrated cityplanning, where the government’s policies such as Swachh Bharat Mission and AtalMission for Rejuvenation and Urban Transformation complement each other.Outside agency

The Central government has created an outside agency named Special Purpose Vehicle(SPV), which will be headed by a CEO, and will be given powers to “execute” theproposed developments and projects.“The professionally managed SPV will be empowered to execute the smart city projectsin a timely and cost-effective manner while ensuring that the quality of the outcomes is

benchmarked against global standards,” the Minister said.Since June 2015, the government hosted several workshops and training programmesfor mayors and municipal commissioners.

35. Fiscal deficit at 88% of annual target The government’s fiscal deficit for the first nine months (April-December) of thisfinancial year stood at 88 per cent of the annual target comparable with 100.2 per centof the target it managed during the same period in the previous financial year.

The April-December fiscal deficit — the difference between government revenue andexpenditure — stood at Rs.4.88 lakh crore, which is 88 per cent of the Rs.5.55 lakhcrore target for the full year set by Finance Minister Arun Jaitley in the Budget. Itamounts to 3.9 per cent of the GDP, a target that many industry leaders want to bepushed back in favour of increased public expenditure. They said it will boost domestic

demand.Several economists argue that it is important to stick to the fiscal deficit target sincegovernment accounts already fail to show the correct picture.“The government has Rs.70,000 crore of unpaid bills to the Food Corporation of Indiadue to the food subsidy, and a similar amount of unpaid bills due to the fertilisersubsidy that haven’t been shown in the Budget. This omission makes the fiscal deficitnumber look better than it is. It is important that the government sticks to the fiscaldeficit target because the real number is likely higher than what is being shown,” AshokGulati, Infosys Chair Professor at the Indian Council for Research on InternationalEconomic Relations told The Hindu.

The other argument is that the government must simultaneously increase publicspending and still keep a tight grip on the fiscal deficit target since it is availing thebenefit from falling oil and mineral prices.“The government must stick to the fiscal deficit target. Government expenditure has toalso be increased, but the government has to come up with innovative ways to financethis.“One way is to revive PPPs, and the Kelkar Committee report laid out a good roadmapfor this. Another way is to bring to resolution the large number of tax dispute cases heldup in court, which will then release the tax arrears,” said M. Govinda Rao, ProfessorEmeritus at the National Institute of Public Finance and Policy.



The third option is to make use of the huge saving the government is incurring due tofalling oil prices. Mr. Jaitley on Friday told the Press Trust of India that the savings fromoil prices will be pumped into infrastructure.The government has Rs.70,000 cr of unpaid bills to the FCI due to the foodsubsidy

36. GDP expanded 7.2 % last year, slower thanestimatedIndia’s economy expanded 7.2 per cent in the financial year ended March 2015,marginally slower than the previous estimate of 7.3 per cent. “Real GDP or GDP atconstant (2011-12) prices for the years 2014-15 and 2013-14 stands at Rs.105.52 lakhcrore and Rs. 98.39 lakh crore respectively, showing growth of 7.2 per cent during2014-15, and 6.6 per cent during 2013-14,” according to a statement released by theStatistics and Programme Implementation Ministry.In terms of real Gross Value Added, that is, GVA at constant (2011-12) prices, there hasbeen a growth of 7.1 per cent in 2014-15, as against a growth of 6.3 per cent in 2013-14, according to the statement.RBI Governor Raghuram Rajan had on Thursday warned that we should be careful

about how we measure growth. People are shifting between activities, he said, but it isimportant that when they shift to a new area, they are creating value.

The overall consensus seems to be that, despite the confusion in the national accountscaused by the revised methodology of computing GDP and GVA, there does not seem tobe any other option but to use them.“Raghuram Rajan has said that you should be careful about the GDP numbers. Butthese are the official numbers, and you need them as a benchmark,” M Govinda Rao,Professor Emeritus at the National Institute of Public Finance and Policy, told TheHindu.

The buoyancy of the indirect tax numbers have also helped, added Mr Rao.“Around 80 per cent of economists feel that the way the new GDP numbers are beingcalculated has yielded in a higher estimate than reality. The belief is that the economy is

actually growing at 5-6 per cent,” Ashok Gulati, Infosys Chair Professor at the IndianCouncil for Research on International Economic Relations said, adding that there wasno deliberate attempt to fudge the numbers. The problem lies with the methodology.

The problems with the GDP data come when they are analysed on a sectoral basis andalso when they are compared to the other indicators of economic performance.“If you look at all the other indices, growth in capital stock, exports, agriculture,industrial production, etc, then this (the GDP growth rate) will reconcile with none ofthem. There needs to be an external committee than can audit these numbers and bringcredibility back to the government’s numbers,” said Rajiv Kumar, senior fellow at theCentre for Policy Research.High-employment sectors such as agriculture are growing very slowly, adding to theconcerns. The revised numbers peg the agricultural GVA at 1.3 per cent in 2014-15, upfrom the 0.6 per cent provisionally estimated earlier. The secondary sector, comprising

manufacturing and construction, grew at 5.4 per cent in the same period, down fromthe estimated 6.5 per cent. The services sector grew at a robust 10.3 per cent.“What each sector is saying is important. More than 50 per cent of the workforce isemployed in agriculture, but the sector is growing at less than 2 per cent. Now, you cansay that there was a drought, but it is the job of government policy to deal with suchsituations,” Mr Gulati said. Gross Capital Formation, a proxy for economic activity, decreased marginally from 36.2per cent of GDP in 2013-14 to 35.9 per cent in 2014-15.



“At constant (2011-12) prices, the private final consumption expenditure [a measure ofindividual spending capacity and inclination] is estimated as Rs. 55.20 lakh crore andRs. 58.64 lakh crore, respectively for the years 2013-14 and 2014-15. Thecorresponding rates of PFCE to GDP for the years 2013-14 and 2014-15 are 56.1 percent and 55.6 per cent respectively,” according to the ministry statement.

37. RBI seen easing only once this year asinflation climbsA Reuters poll of almost 40 economists showed only one 25 basis-point ratecut this calendar year he Reserve Bank of India (RBI) is expected to leave its key interest rate steady at 6.75per cent next week and only make one cut this year as rising inflation ties its hands,according to a Reuters poll.

That marks a turn from rapidly cooling domestic consumer price inflation, whichallowed the RBI to lower the repo rate four times in 2015.Its last 50-basis-point cut in September took markets by surprise, but the RBI isn’tlikely to act as aggressively in 2016, as a renewed uptick in food-costs driven inflationputs the central bank’s medium-term price target at risk.

This week’s poll of nearly 40 economists showed only one 25 basis-point rate cut thiscalendar year, between April and June, unchanged from earlier expectations.

The RBI wants annual inflation at 5 per cent by March 2017 but December was the fifthstraight month inflation ticked up, with the rate rising to 5.61 per cent.“Inflation is likely to accelerate further,” said Shilan Shah, economist at CapitalEconomics.“Continued delays to the sowing of the rabi (winter) crop this season amid unusuallywarm temperatures are likely to push up food inflation over the coming months.” Economists polled earlier this month agreed. They forecast price rises would average 5.0per cent in 2015/2016 and 5.3 per cent in 2016/17.“The RBI faces a challenge meeting its medium-term inflation targets, suggesting thatthe window for further easing has closed,” said Mr. Shah.

But India’s economic growth has not been as robust as expected and could pressure theRBI to ease policy.

The government revised down its growth target for the current fiscal year to 7-7.5 percent and said it was unlikely to be significantly greater the following year.New Delhi is considering measures such as raising the wages of government employeesby nearly 25 per cent and revising budget deficit targets to stimulate demand, both ofwhich could drive inflation further beyond the RBI’s target.

There are also hopes parliament will deliver on long-promised and much-delayedeconomic reforms to boost growth, including amending the Land Acquisition Bill andintroducing a Goods and Services Tax. — ReutersKeywords: Indian eocnomy, inflationary pressures, Reserve Bank of India

POLITY AND GOVERNANCE

1. Pranab gives assent to 5 key legislations

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These bills were passed by the Parliament in the recently concluding session. A law enabling setting up of commercial benches in select high courts and another onarbitration for speedy settlement of high value business disputes are among fivelegislations which have got nod from President Pranab Mukherjee.Besides, a law for stringent action against those involved in crimes against personsbelonging to Scheduled Castes and Scheduled Tribes has also got the assent from

Mukherjee.Mukherjee gave nod to the Arbitration and Conciliation (Amendment) Act; the ScheduledCastes and the Scheduled Tribes (Prevention of Atrocities) Amendment Act; theCommercial Courts, Commercial Division and Commercial Appellate Division of HighCourts Act; The Atomic Energy (Amendment) Act; and the Payment of Bonus(Amendment) Act, 2015, on Thursday, official sources said.

The Atomic Energy (Amendment) Act will allow state-run Nuclear Power Corporation ofIndia Ltd (NPCIL) to have collaboration with other public sector undertakings in thenuclear field.

The law amends the 1962 Atomic Energy Act to change the definition of “governmentcompany” in the Act with a view to expand its scope. At present, only two PSUs — NPCILand Bhartiya Nabhikiya Vidyut Nigam Limited (BHAVINI), which are under the

administrative control of the Department of Atomic Energy, operate nuclear powerplants in the country. The Payment of Bonus (Amendment) Act, 2015, provides for enhancing monthly bonuscalculation ceiling to Rs. 7,000 per month from the existing Rs. 3,500. It also enhancesthe eligibility limit for payment of bonus from Rs. 10,000 per month to Rs. 21,000 permonth.As per the Arbitration and Conciliation (Amendment) Act, 2015, an arbitrator will haveto settle a case within 18 months. After the completion of 12 months, certainrestrictions will be put in place to ensure that the arbitration case does not linger.

The Commercial Courts, Commercial Division and Commercial Appellate Division ofHigh Courts Act is aimed at creating commercial benches in select high courts.Under the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities)Amendment Act, 2015, assaulting or sexually exploiting an SC or ST woman is anoffence.

The Act states that any intentional touching of an SC or ST woman in a sexual mannerwithout her consent, using words, acts or gestures of a sexual nature, dedicating her asa devadasi to a temple, or any similar practice will be considered an offence.

These bills were passed by the Parliament in the recently concluding session.Keywords: five key legislations, Pranab assent, President Pranab Mukherjee, Parliamentsession

2. Cabinet clears Central rule in Arunachal The Union Cabinet on Sunday recommended imposition of President’s rule on theCongress-ruled Arunachal Pradesh after it felt the State was heading for a“constitutional breakdown.” The Congress said it would challenge the decision in court if

it got the President’s assent. An emergency meeting of the Cabinet was convened here in the morning to discuss thesituation. Prime Minister Narendra Modi was in the chair.It was decided to recommend to the President to issue a proclamation under Article356(1) of the Constitution.

3. Pranab gives assent to Central rule inArunachal Pradesh

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The petition said Article 356 had been misused to topple the democratically electedCongress government. It wanted the Centre and the Governor to “furnish” records of theevents culminating in the Union Cabinet’s recommendation on January 24 and thesubsequent proclamation of President’s rule.

The court directed the Centre and the Governor to file their responses by January 29and posted the case for hearing on February 1.

‘Misconceived petition’ However, Attorney-General Mukul Rohatgi contested that the entire petition wasmisconceived and pre-mature. He said there was no President’s rule in ArunachalPradesh at the time of filing this petition on January 25 before the apex court. It wasonly late afternoon on Republic Day that the President gave his approval and anotification was issued declaring emergency in the State and suspended animation of itsLegislative Assembly.“Was there a proclamation of emergency in existence when this petition was filed? No.How can they challenge something that had not happened yet? They are asking for a‘super-injunction’ ... Unless they file a fresh petition challenging the President’sproclamation on January 26, I don’t even have to reply to this completely misconceivedpetition,” Mr. Rohatgi argued.

5. More than a numbers game: moving beyondthe floor test The controversial imposition of President’s rule in Arunachal Pradeshhighlights the need for standard procedures to eliminate partisan behaviourand ascertain if a Chief Minister commands a majority in the legislature Dr. B.R. Ambedkar believed that Article 356 of the Constitution, which provides forimposition of President’s rule in the States and dissolution of State Assemblies,would, in reality, be only a ‘dead letter’. However, by the time a Constitution Benchruled in the S.R. Bommai v. Union of India case (1994) that a presidential proclamationunder Article 356 is subject to judicial review, that it is not an absolute but aconditional power, and that no Assembly can be dissolved before both Houses of

Parliament ratify the proclamation, the provision originally meant to be used sparinglyhad been invoked over 90 times. After the verdict, however, one would have thought thatthe provision has been somewhat neutralised. That the casual resort to imposition ofPresident’s rule or dissolution of State Assemblies at the whim of the ruling party at theCentre has ended and the potential for further misuse removed. Arunachal Pradeshhas now demonstrated that the ‘dead letter’ is quite alive and kicking ChiefMinisters out of power.Many grounds have been cited in support of bringing the sensitive border State underCentral rule: from “breakdown of the constitutional machinery” to “collapse of law andorder” to other sinister charges such as a threat to the life and security of the Governorand alleged links between the Chief Minister and an extremist group. The context, ofcourse, is something that the Congress is familiar with, as it had used similar

circumstances to topple many a regime in the past: dissidence within the ruling partyand the Opposition colluding with the rebels to bring down the regime. In ArunachalPradesh, the party is at the receiving end. It had 47 MLAs in a 60-member House, andthe BJP 11, and yet its Chief Minister has been deposed by dissidents acting in concertwith the Opposition and helped by the Governor.Spotlight on the Governor

The manner in which Arunachal Pradesh was brought under President’s rule highlightsa significant strand of political behaviour in the country. Even constitutional

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authorities believe less in law and propriety than in their ability to work around them toachieve their desired results. And one is not merely talking about Governor J.P.Rajkhowa while saying this. It is equally applicable to the deposed Chief Minister,Nabam Tuki. It is quite obvious that the Governor was more concerned about removingthe Speaker and installing a rival faction leader as Chief Minister than giving anopportunity to Mr. Tuki to demonstrate his majority on the floor of the House. As for Mr.

Tuki, he appears to have done nothing to ascertain his support within the Congresslegislature party in the face of brewing dissidence within its ranks. Nor did he convenethe Assembly until it became a constitutional necessity as it was nearly six monthssince the House had last met.

The Gauhati High Court has categorically ruled in favour of the Governor’s decisions inthe present crisis. It has upheld his power to summon or prorogue the Assembly underArticle 174(1) and his power to send messages, even fixing a specific item on the agendaof the legislature, under Article 175(2). The court saw nothing wrong in the Governoradvancing a sitting of the House from January 14, 2016 to December 16, 2015. Nor didit find anything illegal in his specifying that a motion to remove the Speaker should betaken up immediately after the House convenes. In effect, a controversial ‘sitting’ of 33members of the Assembly in a makeshift venue has been upheld by the high court. It is

somewhat ironical that at a time when even a presidential proclamation is subject to judicial review, case law on the role of the Governor still favours gubernatorial privilegeand discretion.A crucial question before the Supreme Court is whether the Governor can, in hisdiscretion and without the aid and advice of the Council of Ministers, summon thelegislature or advance a scheduled sitting; and whether he can fix the agenda for such asession on his own. Interestingly, the Gauhati High Court extensively quotes from aMadras High Court Full Bench verdict of 1973 favouring the Governor’s action insomewhat similar circumstances in the Tamil Nadu Assembly. There, too, the rulingparty had split, the Speaker and the Deputy Speaker were in different factions, and thedissidents wanted to remove the Chief Minister through a censure motion. However, inthe Tamil Nadu precedent — where also there was a parallel ‘Assembly session’ — theGovernor was acting on the advice of the ministry of M. Karunanidhi while sending a

message to the House that it should first take up a motion to remove the Speaker,whose loyalty lay with the dissidents. On the crucial question of the Governor’sdiscretion, the high courts have gone by the principle in Article 163: that the questionwhether any advice, and if so what advice, had been given to the Governor shall not begone into by any court; and when a question arises whether the matter on which theGovernor had acted was actually one on which he can use his discretion, the decisionmade by the Governor in his discretion will be final.Options ahead of the floor test

The validity of President’s rule in Arunachal Pradesh will be decided on establishedconstitutional principles, but the time may have come to go beyond even the floor testrequirement in ascertaining whether a particular regime commands a majority. Just as

unscrupulous defections are legally discouraged, opportunistic cooperation betweenruling party dissidents and Opposition legislators just to bring down a Chief Ministermay also have to be prevented. This can be achieved if the Governor asks the ChiefMinister to submit proof of his support within his own legislature party or alliancepartners before ordering a floor test. In the event of some factions withdrawing theirsupport to the government, the Governor can always turn them away and ask them tomove a no-confidence motion instead of coming to him. If there is any attempt by theSpeaker or the Chief Minister to block such a motion, or if the Assembly is notconvened, the Governor should not hesitate to write to the party’s leadership seeking

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proof of its legislature party still having only one leader. This may force the hand ofparties that seek to avoid convening legislature party meetings and hoping that in theAssembly, a floor test can be managed by a partisan Speaker and by selectiveexpulsions to change the composition of the House. In other words, those arguing forthe primacy of the floor test will need to have their house in order before the matter isdecided in the legislature.

An incumbent government’s reluctance to follow this process may lead to the Governorrecommending that the Centre give a suitable direction to the State. For, under Article365, it shall be lawful for the President to then hold that because of any non-compliancewith the direction, the State can no more be run in accordance with the Constitution.

This sequence — proof of subsisting support within the ruling party, a floor test, and inthe event of these efforts being blocked, a formal direction from the Union, followed by adetermination on the constitutionality of the continuance of the regime — may addressconcerns of partisan behaviour.Even in times when the incumbent regime swears by “co-operative federalism”, RajBhavans are seen as sinecures for friends of the ruling party and its formerly activemembers and associates. New norms will have to guide both the appointment ofGovernors and their functioning. The recommendations of the Sarkaria Commission on

Centre-State relations are readily available with regard to choosing the occupants of RajBhavan.It had said a Governor should be someone eminent in some walk of life, and should notbe one “who has taken too great a part in politics generally, and particularly in therecent past”. Only a few eminent personalities outside the domain of politics and civil ormilitary service have been made Governors. As long as parties pursue their own politicalinterests rather than abide by the Constitution, it will be left to the courts to upholdfederal norms.

6. Open to framing law on euthanasia, saysCentre Tells Supreme Court its hands are tied due to pending litigation



After 14 years of debates and several draft Bills, the government has said it is ready toframe a law on passive euthanasia, the act of withdrawing medical treatment with thedeliberate intention of causing the death of a terminally ill patient, but says its “handsare stayed” because of pending litigation in the Supreme Court on mercy killing.

The affidavit filed by the Union Health and Family Welfare Ministry in the SupremeCourt on January 28, 2016, provides the first clear insight into whether the government

considers euthanasia (which means “good death”) as manslaughter or an act of mercy. Expert panel

The Ministry informed the Court that an expert panel had made changes and clearedthe formulation of a law on passive euthanasia after extensive debates from July 2014to June 2015.

CULTURE

1. The Maharashtrian who revived Chitraveena The renaissance of culture and music during the Maratha regime in Thanjavur gaverebirth to an instrument that had disappeared completely from the concert scene.Chitraveena or Gottuvadhyam owes its existence to Sakharama Rao, a Maharashtrianwho lived in Thiruvidaimarudur, a temple town near Kumbakonam, between 1903 and1959.“Even though the instrument has found a reference in Bharatha’s Natya Shastra, itfound no takers for almost 150 years till Sakharama Rao arrived at the scene. He re-invented and re-designed the instrument and introduced it to concert platforms,” saidChitraveena exponent N. Ravikiranan.Sakharama Rao called the slide for playing the instrument “gottu” and it becameGottuvadhyam. Earlier, slides made of the horns of bisons were used. Now teflon slides

have replaced them.Before Sakharama Rao, his father Srinivasa Rao, used the tambura to play music.“Placing the tambura like a veena, Srinivasa Rao used a small tumb ler as a sledge toproduce music. Sakharama Rao went many steps further and created an instrument,”said Mr. Ravikiran, whose grandfather Narayana Iyengar was the disciple of SakharamaRao. Narayana Iyengar gave a full-fledged Gottuvadhyam performance at the first musicfestival of the Music Academy.

Tiruvidaimarudhur, an ancient town and abode of lord Siva known as Mahalingaswamy,is known for its broad and beautiful streets. In the world of music, the place becamesynonymous with Sakharama Rao. Prominent among his disciples was the lateSemmangudi Srinivasa Iyer.With his long hair flowing down to his nape and his big moustache, Sakharama Rao fitthe image of a non-conformist in this traditional sphere. His younger brother Hari Rao

was a violinist.Mr. Ravikiran said it was his grandfather who increased the strings of the instrument to21, including synthetic ones used in the Sitar to make it sound like a human voice,while his contemporary Budalur Krishnamurthy Shastry played it like a veena.Ravikiran’s f ather, N. Narasimhan, learnt both from Budalur Krishnamurthy Shastryand his father.Prominent among Sakharama Rao’s disciples was the late SemmangudiSrinivasa Iyer

2. Memories of a glorious past to come alive at historic Chandragiri fort



The historic Chandragiri Fort near Tirupati is all set to host the 545th birth anniversaryof famous Vijayanagara emperor Sri Krishnadevaraya from February 14 to 16.Officials of the tourism department told The Hindu that the district administration

wanted to hold the event on a “grand scale”. Cultural programmes and a laser show areon the list. Hundreds of artists from Rayalaseema and Karnataka will take part in thethree-day festival, for which an initial budget of Rs. 10 lakh has been sanctioned.

The fort is under the control of the Archaeological Survey of India (ASI). The main fort, called the Raja Mahal, now hosts a museum with antique sculptures,swords and utensils belonging to the Vijayanagara empire. The Rani Mahal, a fewmetres away, is considered a favourite for the youth. The small tank (koneru) on the fortpremises, with a hill wall serving as a natural embankment, offers boat rides fortourists. The highlight of the fort is the Sound and Light show in English and Telugu.On an average, 60 tourists attend the show daily, while steps are mooted to increase thenumber to its full capacity of 250.

The district administration sought the permission of the Director-General, ASI, forsetting up new facilities on the fort premises. The proposed plan included setting up of

Darbar Hall, removable structures to serve as shelter to tourists, trek atop a hilladjoining the fort, snacks bar atop the hill. The tourism officials said permission wasalso sought for laying a direct road link to the fort from Tirupati-Bengaluru nationalhighway.

3. Jallikattu in T.N., bullock cart race in Maharashtra cleared

The Centre on Friday issued a notification to permit jallikattu, Tamil Nadu’s traditionalbull-taming sport, ahead of the Pongal festival.

The notification overturns a 2011 notification that prohibited the exhibition or trainingof bulls, and some other animals, as performing animals.



The Supreme Court had in 2014 upheld the 2011 government order. The present order permits jallikattu — and bullock cart races in Maharashtra, etc. — despite Attorney General Mukul Rohatgi reportedly advising the government againstrevoking the ban in view of the Supreme Court’s ruling. Move to reach out to TN Politically, the move is seen as an attempt on the part of the BJP government to reach

out to Tamil Nadu, where the party has no presence. There has been widespread political opinion in the State in favour of the traditionalsport.

There was also pressure from Maharashtra, where there has been a tradition of bullockcart races. Union Environment Minister Prakash Javadekar hails from the westernState.While retaining the general prohibition on using some animals — bulls, bears, monkeys,tigers, panthers and lions — as performing animals, the notification makes an exceptionfor such traditional sports involving bulls, subject to the permission of the localadministration and some conditions.It adds to the 2011 prohibition the qualification: “provided that bulls may continue to beexhibited or trained as a performing animal, at events such as Jallikattu in Tamil Nadu

and bullock cart races in Maharashtra, Karnataka, Punjab, Haryana, Kerala andGujarat…” The notification, however, includes a few guidelines to regulate the events.

8. No jallikattu in Tamil Nadu this year

In a clear message that animals cannot be bullied into pain and suffering in the name ofcustom and tradition in the 21st century, the Supreme Courton Monday stayed a January 7 notification issued by the Centre allowing jallikattu,despite the ban imposed by the court in 2014 on the sport, which it had called“inherently cruel.” A Bench of Justices Dipak Misra and N.V. Ramana refused to budge despiteimpassioned arguments from the Centre and the Tamil Nadu government that a festivalintrinsic to the culture and tradition of a State could not be prohibited, especially whenthe notification had put in place safeguards to regulate jallikattu and prevent crueltreatment of animals.“What is the necessity of such a festival... there was no festival for four years,” Justice

Misra asked, referring to an earlier notification issued by the Centre on July 11, 2011,prohibiting jallikattu and upheld by the Supreme Court in 2014. Justice Misra observedthat the “2011 notification was in consonance with the fundamental duties of the state.”

6. Genome of Indian Jews has traces of West Asian ancestryUsing high resolution genetic markers, an international team of scientists has foundthat Indian Jewish population possessed minor traces of Middle Eastern ancestry, butthe majority shared genetic affinity with their local South Asian neighbours.

The study relating to the unique blend of Indian and Middle Eastern Ancestry has beenpublished in the recent issue of the Nature’s online journal, ‘Scientific Reports’.



In the absence of archaeological evidence and with the availability of only scantyhistorical documentation of the Indian Jewish community, the team led byKumaraswamy Thangaraj from the Centre for Cellular and Molecular Biology (CCMB),Estonian Biocentre, Tratu, Estonia, Amala Institute of Medical Sciences, Thrissur,University of Kolkata and Genome Foundation, have traced the founder of Indian Jewishpopulations, using genetic data, according to a press release here on Wednesday.

The team estimated that the first migrant Jewish group entered the Indian subcontinentabout 1,500 years ago.Dilution of genome According to Dr. Thangaraj, the Jewish migrants married local people and as a resulttheir original Jewish genome got diluted. Due to admixture with local people for severalgenerations, their genetic mutations which make them susceptible for various cancerswere almost absent.

There are three main distinct Jewish groups living in India — the Jews of Kochi inKerala, South India; the Bene Israel in Mumbai, West India; and Baghdadi Jews inKolkata, East India. Each of these communities is socially linked to their neighboursthan one another. CCMB Director Ch. Mohan Rao said that to trace the mixture ofIndian Jewish populations, the researchers analysed the DNA of Indian Jewish people

using high resolution genetic markers and compared them with native Indianpopulations and people from the rest of the world. The analysis of autosomal data revealed a high level of heterogeneity among the Indian Jewish groups and their closeness with local neighbours.However, sharing of specific maternally inherited mtDNA and paternally inherited Y-chromosomal haplogroups between all the studied Indian Jewish groups and lack ofthem among other local Indian populations can be seen as a remnant of a sharedancestry with Middle Eastern populations.It is estimated that the first Jewish group entered Indian subcontinent 1,500years ago

7. A standing example of conservation architecture The Someswara temple is believed to have been originally constructed in the

7th century

Sri Lalitha Someswara Swamy Temple which was dismantled and relocated, at Somasila in Telangana.

It is really out of the way. Almost 95 km off the National Highway and most of the roadis single lane. However, the place is really worth a visit — be it for nature lovers or forthose religious/spiritual at heart.It is nature's bounty for sure, tucked away in the backwaters of the Srisailam damconstruction on which began in 1960 and 21 long years to be opened.



"Sometimes one has to spend hours reproducing just 10 square centimetres (1.5 squareinches)," he says.Chief painter Gilles Lafleur said of the original works: “We try to understand them andwhy they were painted this way.” — AFP

9. Lost Beatrix Potter children’s story

uncovered a century onA newly discovered story written more than a century ago by the cherished Britishchildren’s author Beatrix Potter will be published in September, Penguin Random Houseannounced on Tuesday.The Tale of Kitty-In-Boots , a story about a black cat that leads a double life, was foundtwo years ago by Penguin Random House publisher Jo Hanks.Ms. Potter is best known for The Tale of Peter Rabbit , which has sold 45 million copiesand been translated into 36 languages. The publication of the newly-uncovered taleforms part of this year’s celebrations marking the 150th anniversary of her birth. Ms. Hanks found a reference to the story in an out-of-print literary history of theauthor. Ms. Hanks then delved into the Potter archives held at the Victoria and AlbertMuseum in London and discovered the 1914 manuscript.

“Potter fully intended to publish it. She’d written it twice, rewritten it, polished themanuscript and then had it typeset and started to lay it out in a proof dummy,” Ms.Hanks told BBC radio.“Then World War I began, she got married and she was very intent on building herfarming business. Those interruptions took over and meant she never went back to thetale,” said Ms. Hanks. “I think it’s the best of Beatrix Potter. There’s humour, there’s rebellious characters.During the story we meet a couple of interesting villains,” she said. Older Peter Rabbit An older Peter Rabbit makes an appearance, while old favourite Mrs. Tiggywinkle thehedgehog also turns up. “Once upon a time there was a serious, well-behaved youngblack cat,” the story begins. “It belonged to a kind old lady who assured me that no

other cat could compare with Kitty.” The book will be illustrated by Quentin Blake, best known for his work on Roald Dahl’schildren’s books. Mr. Blake said: “It seemed almost incredible when, early in 2015, I was sent themanuscript of a story by Beatrix Potter, one which had lain unpublished for a hundred

years and which, with the exception of a single drawing, she had never illustrated.”

SOCIAL ISSUES

1. Location too matters for growthWhat matters more for development: location or community? New official data show that while some communitiesdo better than others in sex ratio and literacy, State-level differences can be as important.Newly released data from the Census shows that on average nationwide, Christians, followed by Muslims, continueto have the most gender-equal child sex ratios of 958 girls for every 1,000 boys and 943 respectively. Buddhistsfollow, with Hindus, Jains and Sikhs, recording the lowest child sex ratios; the numbers for Jains and Sikhs have,however, improved since 2001, while those of all other communities have worsened.However, a look at the State-wise data shows that communities are not monoliths. In the States with better sexratios, including the States with high tribal populations and the southern States, the sex ratios of all communitiestend to be higher than they are in other States.



In Kerala, for instance, Hindus, Muslims and Christians have nearly the same sex ratio among the 0-6 year childpopulation, around 965 girls for every 1,000 boys, which is higher than the national average for each of thosecommunities as well. In Haryana, the State with the worst sex ratio, on the other hand, the sex ratios of the childpopulations of Sikhs, Hindus, Christians and Muslims are all lower than the national average.Muslim sex ratios are particularly unaffected by location; while Christian child sex ratios dip below 900 girls forevery 1,000 boys in Haryana, Rajasthan and Punjab, for instance, the Muslim child sex ratio only falls below 910 inone State: the Muslim-majority Jammu & Kashmir. The State which had a far more gender-equal sex ratio of 941 in 2001 has seen one of the sharpest ever declines.

Consequently, the sex ratio of the child population of all communities in the State is now below 900, except amongBuddhists.A similar combination of location and community is at play when it comes to literacy. For the country as a whole,Muslims have the lowest literacy rates for both men and women, while Jains have the highest for both.In Kerala, however, the literacy rate among Muslim women (79 per cent) is higher than it is for men of allcommunities in Bihar. National averages hide other State-level variations.

2. When they turned camera inwardsChildren of sex workers give a masterly screen portrayal of their life “I have a doll, but I am not going to get her married,” says 10 -year-old Saleena Khatoonin the film Gaya Jamana Pitne Ka (My days of taking a beating are over). The short film,made by Saleena, has won the best film award in a unique film competition, titled “FilmFestival in a Box”.

Twenty-five short films made by children of sex workers from Delhi, Bihar and WestBengal in the competition have created a sensation among documentary film-makersand the audience.“I cannot make such films; neither can documentary film-makers like AnandPatwardhan and Sanjay Kak. This is pure documentary ... The children have created anew genre,” Ranjan Palit, award- winning documentary film-maker, told The Hindu .Mr. Palit, who has been a judge in the competition, says, “What is more to say when a10-year-old girl playing with doll says she does not want to get the doll married as shewill be beaten up after marriage.”

The films, screened at Max Muller Bhavan on Tuesday, include AnadhadhundRaid (Unending raids) and Yeh Kaisi Paramapara (What kind of tradition is this). Theyare mostly the stories about the surroundings these children grow up.

The jury includes Aruna Vasudev, editor-in-chief, Cinemaya, and Shailaja Kejriwala ofZee TV. Not only Mr. Palit but other members of the jury are also equally charmed by

the films. They have pooled their own resources to award each of the 25 children whoare behind every film.

The short films are a result of the initiative taken by Apne Aap Women Worldwide India Trust and Alliance Francaise du Bengale. The children were made to attend a workshopto learn the use of a camera and other visual tools to tell their story.“For an anti-trafficking organisation as ours, these films are an attempt to start adialogue between what we call the last girl — marginalised, living in remote parts of thecountry in abject poverty — and the first girl — who has access to everything that achild needs to grow up,” Ruchira Gupta, founder and president of Apne Aap, said. To be screened in schools Stephane Amalir of the Alliance Francaise du Bengale said the idea was to give childrentools to tell their story and the project had been successful. The films will be screened in

at least 10 schools in the city, he added.While Mr. Palit is ready to give his national award money and camera equipment for thechildren to learn the craft of film-making, Ms. Gupta said that many including VishalBharadwaj and novelist Kunal Basu were keen on meeting the children and watch thesefilms.

3. The Lancet turns spotlight on ending preventable stillbirths



TOPICS

India continues to be at the top of the table in the rank for number of

stillbirths in 2015, recording 5,92,100, followed by Nigeria, Pakistan, Chinaand Ethiopia. Concerned over the slow rate at which stillbirths have reduced across the world, missinga specific Millennium Development Goal target, the journal, The Lancet , has launched aseries of five papers about ending preventable stillbirths and kick-started a campaignalong with the London School of Hygiene and Tropical Medicine.An estimated 2.6 million third trimester stillbirths occurred in 2015 across the world, oras one of The Lancet articles in the series says, “That’s roughly the population of Rome,wiped out.” Most stillbirths (98 per cent) occur in low and middle income countries, TheLancet paper shows.While the estimates for the causes of stillbirths are often frustrated by variousclassification systems, in 18 countries with reliable data, congenital abnormalities

account only for a median of 7.4 per cent of stillbirths. Many disorders associated withstillbirths are potentially modifiable and often coexist — maternal infections, non-communicable diseases, nutrition, lifestyle factors and maternal age older than 35

years. Prolonged pregnancies, when the baby is not born after 42 weeks of gestation,contribute to 14 per cent of stillbirths. Causal pathways for stillbirth frequently involveimpaired placental function, either with growth restriction, or preterm labour or both.

The journal points out that less than 5 per cent of neonatal deaths and even fewer stillbirths are registered. A paper calls for maintaining meticulous records of all births anddeaths (maternal and foetal) in order to increase the availability of data, rationalising



that while data alone will not help save lives, it would certainly indicate a way to targetinterventions to reach more than 7,000 women every day worldwide who experience thereality of stillbirth.Notably, it was in 2011, that The Lancet began its first series on stillbirths, highlightingthe rates and causes of stillbirth globally, exploring cost-effective interventions toprevent stillbirths (as well as maternal and neonatal deaths), and setting key actions to

halve stillbirth rates by 2020. One of the papers notes that some progress has beenmade in the measurement of stillbirths since the 2011 The Lancet Stillbirths Series.Stillbirths are increasingly counted, which might be partly related to more visibleestimates. India continues to be at the top of the table in the rank for number ofstillbirths in 2015, recording 5,92,100, followed by Nigeria, Pakistan, China andEthiopia. Cultural taboos and superstitions often take the blame in the case of stillbirth

— in a recent study, 36 per cent of respondents blamed the mother for her lifestyle ordiet, 29 per cent said the baby was never supposed to live and 25 per cent blamed it onwitchcraft or evil spirits.

The stillbirth series sets out to show the need for increased awareness, opening up thedialogue at policy and community levels, giving women adequate healthcare — frombefore conception to after birth — and calling for accountability for targeted

interventions. And all this would be possible only if there is political determination toreduce the number of lives lost to zero, the paper says.Keywords: The Lancet, preventable stillbirths, London School of Hygiene and TropicalMedicine, Millennium Development Goals, India stillbirths

4. National Family Health Survey: PMO exerts pressure, data is out The secretaries had been asked to show results for the work being done. The public health community in India was taken by surprise as the Health Ministryreleased the first set of the National Family Health Survey (NFHS) data on Tuesday night

— with even the top rung of Health Ministry officials unaware of the development.According to highly placed sources in the Ministry, the decision was taken due to‘mounting pressure from the Prime Minister’s Office [PMO] to show results’. TheNational Family Health Survey (NFHS), a large-scale household sample survey is themain source for detailed health statistics in India. The survey had last been conductedin 2005-06 and the public health community, globally, was surprised as a partial dataset for 13 States, was released without a media briefing.A senior bureaucrat in the Ministry said on condition of anonymity that NFHS wasreleased under pressure from the PMO to ‘show results’. “The secretaries had a meetingat the PMO on Sunday, and were asked to show results for the work being done. We hadthis data ready. There is a lot of pressure to show results,” the official added.

The Statistics department had released the data without any consultation with seniorbureaucrats in the Ministry. “The Department of Statistics uploaded the data withoutany consultation,” said another senior official. A third official said, “We waited 11 yearsfor the data. It makes no sense that they could not wait a few more months for all Indiadata to be compiled.” C.R.K. Nair. Additional Director-General, Statistics, said “the survey is not complete. For

now we have only 13 States. The survey is just beginning in other States. We did notthink there was any point in calling the media since we did not have the entire data set,”he added. The complete data form NFHS-4 will be available by September. The datareleased on Tuesday has health indicators for Andhra Pradesh, Bihar, Goa, Haryana,Karnataka, Madhya Pradesh, Meghalaya, Sikkim, Tamil Nadu, Telangana, Tripura,Uttarakhand, West Bengal and Union Territories of Andaman and Nicobar Islands andPuducherry.

The first round of NFHS surveying took place in 1992-93, the second round in 1998-99and the third round in 2005-06. The last round of NFHS data was first released to

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academicians, in a conference at the All India Institute of Medical Sciences (AIIMS) sothat they could analyse it before disseminating it to the public.Keywords: National Family Health Survey, Prime Minister’s Office

SCIENCE AND TECHNOLOGY

1. ISRO conceives two ‘space parks’ To engage domestic firms in launch vehicles — from integrating sub-systemsto assembling and launching the PSLV

Two space industry enclaves or “parks” that have been conceived — one for launchers atSriharikota and a smaller one at an existing Bengaluru spacecraft campus — signalincreased privatisation of the nation’s space programme over the next five years. For now, the facilities will be “captive” to drive the future missions of the Indian SpaceResearch Organisation.First, ISRO wants to groom and engage domestic industry in the launch vehicles area

from integrating sub-systems up to assembling, and even launching the PSLV. This well-established rocket has put Indian and foreign satellites of up to 1,600 kg intospace.ISRO Chairman and Secretary, Department of Space, A.S. Kiran Kumar, told TheHindu: “Internal discussions have just started on the mechanism of forming a (launchvehicle) consortium. A few key industry players working in the space programme havebeen sounded.” Eventually the future consortium will be fully responsible for building and launching thelight-lift PSLV rocket.Currently industries such as Hindustan Aeronautics Ltd, Godrej & Boyce, Larsen &

Toubro, MTAR and Walchandnagar Industries produce 80 per cent of the launch vehicleparts and sub-units.

These production works are scattered across their respective locations. The launchindustry initiative must be close to ISRO’s launch complex, the Satish Dhawan SpaceCentre, at the 145-sq km Sriharikota range, on the lines of the launch complex ofEurope’s Arianespace in French Guiana, Mr. Kiran Kumar told The Hindu .Satellite support On the spacecraft front, ISRO plans to increasingly support small and mid-sizedindustries at its 10-year-old second spacecraft complex, the 100-acre ISITE, atMarathahalli in Bengaluru.ISITE, short for ISRO Satellite Integration & Test Establishment, is already open to a fewsuppliers who assemble and test their spacecraft systems for the ISRO. In the coming

years, more satellites will be needed for replacing the ageing ones in orbit and newadvanced communication, Earth observation and navigation spacecraft.Pointer to increased privatisation of the nation’s space programme over the next

five years 2. No more ‘droughts’ in India, says IMD

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The India Meteorological Department (IMD) has officially expunged the word “drought”from its vocabulary, months after it struck a contrarian note and correctly forecast oneof India’s severest monsoon deficits last year. According to a circular issued by the department last Thursday, the move is part of adecision to do away with or re-define terms that are not scientifically precise. Beginningthis season, for instance, if India’s monsoon rainfall were to dip below 10 per cent of thenormal and span between 20 and 40 per cent of the country’s area, it would be called a“deficient” year instead of an “All India Drought Year” as the IMD’s older manuals would

say. A more severe instance, where the deficit exceeds 40 per cent and would have beencalled an “All India Severe Drought Year,” will now be a “Large Deficient Year”. The IMD has never used the term “drought” in its forecasts and has maintained thatdeclaring droughts was the prerogative of States. “Some confusion has been there oversome years,” said B.P. Yadav, spokesperson for the agency, “and we wanted to be moreprecise.”

The agency had several definitions of drought: meteorological, hydrological andagricultural, and it was quite possible for a State to have a meteorological drought — 90per cent shortfall of the average monsoon rainfall — but not suffer an agriculturaldrought — if the shortfall didn’t affect more than 20 per cent of the State’s area.“Declaring a drought has never been the IMD’s mandate and, in fact, not even that ofthe Central government,” said Shailesh Nayak, former Secretary, Ministry of EarthSciences, to whom the IMD reports. “That’s because drought is not a measure of

productivity (agricultural).” Officials said the change in the nomenclature would not practically influence the wayStates viewed droughts.

The spokesperson for the agency said there would now be a standardised definition forheat waves and cold waves, and the IMD’s local arms would no longer use terms suchas “could” or “may” to suggest the possibility of showers.

3. The most energetic light ever in spaceScientists have discovered the most energetic light ever detected in the universe fromthe centre of a supernova known as ‘Crab pulsar’ which is situated 6,500 light yearsaway from Earth.

The Crab pulsar is the corpse left over when the star that created the Crab nebulaexploded as a supernova.

It has a mass of 1.5 times the mass of the Sun, concentrated in about a 10 km diameterobject, rotating 30 times per second.It is surrounded by a region of intense magnetic field 10 thousand billion times strongerthan that of the Sun.

The pulses were found by researchers working with the Major Atmospheric Gamma-rayImaging Cherenkov (Magic) observatory in the Canary Islands, Spain.“We performed deep observation of the Crab pulsar with MAGIC to understand thisphenomenon, expecting to measure the maximum energy of the pulsating photons,” saidEmma de Ona Wilhelmi from the Institute of Space Sciences (IEEC-CSIC) in Barcelona.



The new observations extend this tail to much higher, above trillion electron volt (TeV)energies, which is several times more energetic than the previous measurement,” addedRoberta Zanin from ICCUB-IEEC, Barcelona.

The Crab pulsar, created in a supernova explosion that occurred in 1054 A.D., islocated at the centre of a magnetised nebula visible in the Taurus constellation.

The Crab is the most powerful pulsar in our galaxy and it is one of only a few pulsars

detected across all wavelengths, from radio up to gamma rays.In its rotating magnetic field, electrons and positrons are accelerated up to relativisticenergies and emit radiation that arrives to our telescopes in the form of pulses every 33millisecond, each time the neutron star rotates and meets our telescopic sight.Before the MAGIC measurement, this radiation was believed to stop abruptly when thephotons reach an energy few billion times larger than visible light.

The new discovery challenges current theories about how neutron stars operate, theauthors of the study noted in a paper that appeared in the journal Astronomy &Astrophysics .

4. Fund crunch has hit research in 32 institutions: ICMR chiefOnly 50% of Rs. 10,000 crore sought for 2012-2017 has been allocated

Soumya Swaminathan, who took over as the Director General of the Indian Council ofMedical Research (ICMR) a few months ago, has said that “across the board” researchprojects run by the institute had suffered owing to lack of funds.She said biomedical research projects being conducted in all the 32 scientificorganisations of the ICMR spread across the country had been affected owing to theresource crunch.“We had asked for Rs.10,000 crore for our 12th Five Year Plan from 2012 to 2017 as wehad plans to spend that amount and our expenditure has been 100 per cent every year.But, we received only 50 per cent of the budget allocation we requested. Many of ourprojects are not on track and I am hopeful that the current budget session will addressthe issue,” she said during a media interaction.

Dr. Swaminathan said that scientific organisations needed to be empowered to becomeglobally competitive.“Resource crunch affects in many different ways. A research institute should alwayshave cutting edge technology. If we are working with outdated equipment and facility,and if things are not available on time, we cannot be globally competitive,” she said. Managerial delays were affecting scientific innovations and experiments, she alleged.“It takes six months to get a reagent while in the West, you get it in one day . By the timea scientist starts doing an experiment, it is already done and published somewhere else.We cannot compete with the world unless we change the way in which we use science.



protection.” Noting America’s concerns on India’s IPR system, the 2015 Special 301report said India will remain on the ‘Priority Watch List’. The report, however, said theU.S. was not announcing an out-of-cycle review of India in this regard, but will monitorprogress, and was prepared to take further action, if necessary.

The DIPP, on November 13, 2014, had said it constituted an IPR think tank headed by Justice Prabha Sridevan to draft a national IPR policy and sought suggestions for it from

stakeholders. The think tank submitted the first draft of the policy on December 19,2014 and sought comments from the public. The think tank then gave its final draft tothe DIPP on April 18 last year after taking comments from 290 stakeholders ordelegations and “in-person meetings with 60 delegations comprising 132 stakeholders.”

The DIPP had sought comments from other central government ministries on the finaldraft and had said the final policy will go to the Union cabinet shortly for approval.WIPO’s programme Ms. Van Greunen, who is to speak on measures to counter illicit trade at a FICCI event,said WIPO has already held a programme with the Central Bureau of Investigation andthe states on effective implementation of IPR laws and capacity building. The inputsfrom the programme would be given to the DIPP.

The Geneva-headquartered WIPO encourages and provides assistance to all its 188

member countries in formulating a national IPR policy, she said, adding, however, thatWIPO does not dictate or prescribe any mandatory measures.“All our activities are member (country)-driven. We only prepare a draft outline and tellour members what all could be useful to include in such a (national IPR) policy. It is forthe member country to accept it or not, bearing in mind their level of development anddevelopmental goals,” Van Greunen said. Referring to the importance of creating awareness of IPRs in India and other countries toensure the successful implementation of an IPR policy, she said relying only on punitivemeasures will not be as effective as a sustainable approach to create awareness amongall stakeholders.Ms. Van Greunen said WIPO has a document on enforcement dealing specifically withcomponents to be included in the awareness creation strategy, adding that thisdocument could be tailored to suit the needs of countries including India.

Low patent filing According to data compiled by IndiaSpend, of the total 67,342 patents granted in Indiaduring 2006-15, those pertaining to foreign inventors were 56,727, while only 10,615went to Indian inventors. In the WIPO's Global Innovation Index 2015 that surveyed 141economies in the world, India’s was ranked 81.

7. First flower in space is giant leap for zero-gravity gardeningWhen there is no “up”, which way does a flower grow? Astronauts on the InternationalSpace Station (ISS) have answered this and other zero-gravity gardening conundrums bygrowing the first flower in space.

The orange zinnia looks like a daisy and has a reputation for being one of the easiestflowers to grow on Earth. In space, though, it was a challenge getting it to sprout.

The flowers seemed doomed in December after four plants developed mould. But at the

weekend, U.S. astronaut Scott Kelly, who has been taking care of them, tweeted a photoof a solitary blooming zinnia with the Earth in the distance behind it, with the hashtag#SpaceFlower and the words: “Yes, there are other life forms in space!”

The flower is part of a wider attempt to grow food in orbit, using Nasa’s plant growthsystem Veggie, which was delivered to the ISS in April 2014. The Veggie team hasalready enjoyed a successful lettuce harvest and plan to have tomatoes too by 2017.Ultimately, the hope is to make possible “a sustainable food supplement” for a futuremanned mission to Mars.



But space gardening is plagued with problems, including high radiation levels andtemperature extremes. Fortunately, with the ISS in a low orbit, the Earth’s magneticfield shields plants from the worst radiation effects. Inside the station, the atmospherecan be tightly controlled.Experimentation on “It’s a relatively nice environment, with heat and humidity control,” says professor

Dhiren Kataria, who builds space instruments at University College London’s MullardSpace Science Laboratory, and is working on a new project to study the survival of seedsin space in collaboration with the seed bank at Kew Gardens.“It’s quite significant that we can do this now,” says Prof. Kataria. “If we can growflowers, it helps in terms of the pollination process. And if you want a sustainableenvironment, you need cross-pollination.” Plus, of course, nothing brightens up a spacestation like a nice bunch of flowers. — © Guardian Newspapers Limited, 2016

8. Ninth planet may exist, say scientists There might be a ninth planet in the solar system after all — and it is not Pluto.On Wednesday, two astronomers reported that they had compelling signs of somethingbigger and farther away — something that would definitely satisfy the current definitionof a planet, where Pluto falls short.

“We are pretty sure there’s one out there,” said Michael E. Brown, a professor ofplanetary astronomy at the California Institute of Technology.What Brown and a fellow Caltech professor, Konstantin Batygin, have not done isactually find that planet, so it would be premature to revise mnemonics of the planets

just yet.

In a paper in The Astronomical Journal , Professors Brown and Batygin lay out adetailed circumstantial argument for the planet’s existence in what astronomers haveobserved — a half-dozen small bodies in distant, highly elliptical orbits.What is striking, the scientists said, is that the orbits of all six loop outward in the samequadrant of the solar system and are tilted at about the same angle. The odds of thathappening by chance are about 1 in 14,000, Prof. Batygin said.A ninth planet could be gravitationally herding them into these orbits.For the calculations to work, the planet would be quite large — at least as big as Earth,and likely much bigger — a mini-Neptune with a thick atmosphere around a rocky core,with perhaps 10 times the mass of Earth. It would dwarf Pluto, at about 4,500 times itsmass.Pluto, at its most distant, is 4.6 billion miles from the sun. The potential ninth planet, atits closest, would be about 20 billion miles away; at its farthest, it could be a trillionmiles away. It would take from 10,000 to 20,000 years to complete one orbit around thesun.“We have pretty good constraints on its orbit,” Brown said. “What we don’t know iswhere it is in its orbit, which is too bad.” Alessandro Morbidelli of the Côte d’Azur Observatory in France, an expert in dynamicsof the solar system, said he was convinced. “I think the chase is now on to find this

planet,” he said. — New York Times News Service

9. ISRO puts fifth GPS satellite in orbit



The space agency chairman describes blast-off as successful, says two more satelliteswill be launched by March

In yet another textbook launch, the Indian Space Research Organisation (ISRO) onWednesday launched IRNSS-1E, the fifth of the seven-satellite Indian RegionalNavigation Satellite System (IRNSS) into space.ISRO’s workhorse PSLV C-31 rocket lifted the 1,425 kg satellite from the second

launchpad of the Satish Dhawan Space Centre here at 9.31 a.m. and placed it in theintended orbit some 19 minutes later. This is ISRO’s first launch for this year.

Though it was a textbook launch, the extremely cloudy skies in Sriharikota deprived theonlookers and journalists of a clear view, as the soaring rocket was visible only for a fewseconds, before clouds engulfed it.Announcing that the launch was a success, ISRO chairman A.S. Kiran Kumar said thenational space agency had a long way to go since two more satellites were to belaunched by March.Director of Satish Dhawan Space Centre P. Kunhikrishnan called the launch a “NewYear gift” to the nation and said the calendar was hectic for the space agency this year. With the launch of the first four satellites — IRNSS-1A, 1B, 1C and 1D were launched in

July 2013, April and October, 2014 and March last year respectively — ISRO said, “The

current achieved position accuracy is 20 metres over 18 hours of the day with foursatellites.” IRNSS-1E with a mission life of 12 years was launched into a sub geosynchronoustransfer orbit with a 284 km perigee (nearest point to Earth) and 20,657 km apogee(farthest point from Earth) with an inclination of 19.2 degree with reference to theequatorial plane.IRNSS-1E carried navigation and ranging payloads, including a rubidium atomic clock,C-band transponder and corner cube retro reflectors for laser ranging. The signal-in-space of four satellites has already been validated by various agencies within andoutside the country.

10. Houston, do we have a new planet?What’s the excitement about? Do we have a replacement for Pluto?

Earlier this week, astronomers Konstantin Batygin and Mike Brown of the CaliforniaInstitute of Technology (Caltech) in Pasadena, U.S., reported in the peer-reviewedAstronomical Journal that a body as big as Neptune — but as yet unseen — orbits theSun every 15,000 years. Mr. Brown was among those who played a pivotal role indowngrading Pluto from ‘planet’ to a mere ‘dwarf planet’ and so his championing forPlanet Nine is being taken quite seriously by the astronomer community. Then again,unless there’s visual confirmation, we don’t have a new planet. How big is it?



The object, which the researchers have nicknamed Planet Nine, has a mass about 10times that of Earth and orbits about 20 times farther from the Sun on average thandoes Neptune (which orbits the Sun at an average distance of 2.8 billion miles). In fact,it would take this new planet between 10,000 and 20,000 years to make just one fullorbit around the Sun.How long has the search for such planets been on?

The search for planets beyond Uranus has an over 150-year-old history. Based on thepeculiar movements in the orbit of that planet, astronomers felt there had to be a heavybody that was causing these skewed movements and presto, Neptune was found in themid 19th century. But that still wasn’t enough. Among the several objects found beyondNeptune — in a region that is now known as the Kuiper belt — the most prominent wasPluto, discovered by Clyde Tombaugh, in 1928. But decades of data later suggested thatPluto was too small to be a proper planet and there were bigger objects that could bebetter contenders.Why is the Batygin-Brown duo so confident about their potential discovery? According to a news report in Science, the duo inferred Planet Nine’s presence from theway six Kuiper objects orbit. They say there’s only a 0.007 per cent chance, or about onein 15,000, that the clustering could be a coincidence. Instead, they say, a planet with

the mass of 10 Earths has forced the six objects into their strange elliptical orbits, tiltedout of the plane of the solar system. The orbit of the inferred planet is similarly tilted, as well as stretched to distances thatwill explode previous conceptions of the solar system. Its closest approach to the Sun isseven times farther than Neptune, or 200 astronomical units (AUs). (An AU is thedistance between Earth and the Sun, about 150 million kilometres.)Can we ever see Planet Nine? Icy and cold definitely but over at Wired, Rhett Allain has made some back-of-the-envelope calculations to suggest that if Nine were to be at its closest to our Sun, itwould take 63 years for a spacecraft like New Horizons (that flew past Pluto last year) tofly past it. That’s the best shot and at worst, it could be around 300 years. Keywords: Planet Nine, new planet, solar system, Konstantin Batygin, MikeBrown, California Institute of Technology

ENERGY

1. Increase in renewable energy use to boost global GDP by $1.3 trillionA 36 per cent share of renewable energy in the global energy mix by 2030 wouldincrease global gross domestic product by nearly $1.3 trillion, generating millions of jobsand helping countries like India dependent on importing oil and gas, a new study says.‘Renewable Energy Benefits: Measuring the Economics’, released on Sunday at AbuDhabi during the International Renewable Energy Agency’s (IRENA) sixth assemblysession, provides the first global estimate of the macroeconomic impacts of renewableenergy deployment.Specifically, the report highlights the benefits that would be achieved under the scenarioof doubling the global share of renewable energy by 2030 from 2010 levels.“The recent Paris Agreement sent a strong signal for countries to move from negotiationto action and rapidly decarbonise the energy sector,” said Adnan Z Amin, IRENA Director-General.

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“This analysis provides compelling evidence that achieving the needed energy transitionwould not only mitigate climate change but also stimulate the economy, improve humanwelfare and boost employment worldwide,” he said. Beyond finding that global GDP in 2030 would increase by up to $1.3 trillion — morethan the combined economies of Chile, South Africa and Switzerland as of today — thereport also analyses country-specific impact.

Japan would see the largest positive GDP impact (2.3 per cent) but Australia, Brazil,Germany, Mexico, South Africa and South Korea would also see growth of more thanone per cent each.According to the report, improvements in human welfare would go well beyond gains inGDP thanks to a range of social and environmental benefits. The impact of renewableenergy deployment on welfare is estimated to be three to four times larger than itsimpact on GDP, with global welfare increasing as much as 3.7 per cent.Employment in the renewable energy sector would also increase from 9.2 million global

jobs today, to more than 24 million by 2030, the report said.A transition towards greater shares of renewables in the global energy mix would alsocause a shift in trade patterns, as it would more than halve global imports of coal andreduce oil and gas imports, benefiting large importers like Japan, India, Korea and the

European Union. Fossil fuel exporting countries would also benefit from a diversifiedeconomy. The report builds on previous IRENA analysis on the socio-economic benefitsof renewable energy and on REmap 2030, a renewable energy roadmap to doubling theglobal share of renewable energy by 2030. — PTI

DEFENCE

1. Indo-Japan joint exercise from Jan. 12 The latest edition of ‘Sahyog-Kaijin,’ the Indo-Japan Coast Guard Joint Exercise, willbegin in the Bay of Bengal off the Chennai coast on January 12.

The five-day event would witness seminars and exercises involving strategic assets ofboth the countries, besides meeting of high-level officials in Delhi and Chennai, sourcessaid.While one ship would represent the Japanese side, five to six ships are expected toparticipate from the Indian Coast Guard. The Commandant of the Japan Coast Guardwould also meet his Indian counterpart in Delhi and later arrive in Chennai.

This would be the second time in the last three months that a ship from Japanesemilitary is participating in an exercise with India in the Bay of Bengal.

The Japanese Maritime Self-Defence Force’s, FS Fuyuzuk, called on the Chennai port inOctober last year and later participated in trilateral Malabar exercise with the Indianand the U.S. navies.During the visit of Japanese Prime Minister Shinzo Abe to India last month, Foreign

Secretary S. Jaishankar had said that Japan would be a permanent partner in theMalabar naval exercise along with India and U.S. navies.

Japan is also likely to send its maritime assets to participate in the International FleetReview to be conducted by the Indian Navy at Visakhapatnam next month.Sahyog-Kaijin is held once in two years and the venue would shift between India and

Japan on alternate occasions. India’s ICGS Samudra Paheredar participated in the 2014edition held at Yokohama in Japan.

2. ‘Naval exercises will strengthen ties’



Underscoring the importance of multilateral cooperation for stability and peace in theIndian Ocean region, Australian Army Chief Lt. Gen. Angus Campbell says Malabarnaval exercises are among a spate of opportunities in that regard.Australia, which held its first bilateral naval exercise with the Indian Navy last year, hasbeen long keen on joining the Malabar exercises along with the U.S. and Japan.“Malabar is an example where there is opportunity to build but not in a directed or

specific problematic part but one that is more comfortable for the two nations … It ispart of a spate of opportunities,” Lt. Gen. Campbell said in an interview to The Hindu .

The India-U.S. Malabar naval exercises, which began in 1992, have grown in scope andcomplexity, acquiring geopolitical significance in recent times. The bilateral format gaveway to a trilateral one with inclusion of Japan as a permanent member in 2015.In 2007, Australia joined the other three in a quadrilateral format for the exercises, butbased severe criticism from China which saw it as a containment strategy.Speaking separately to The Hindu , the outgoing Australian High Commissioner in India,Patrick Suckling, expressed interest in being part of Malabar, but said: “But thatwouldn’t be the same as resurrecting that idea of four democracies doing what they hadplanned in 2007.” However, clarifying that it was not directed at anyone, Lt. Gen. Campbell reiterated that

it was Australia’s position that discussion, negotiations and in some circumstanceswhere appropriate, “arbitration of what might the interest of multiple parties should beconsidered and where that occurs that is the best pathway to reduce tensions and tobuild understanding”.

The statement is important in the backdrop of the Philippines taking China to theInternational Court of Arbitration over disputed islands in the South China Sea. Chinahas, however, rejected it, saying the international tribunal has no jurisdiction over thematter.Trading nations Emphasising that both India and Australia are “maritime trading nations”, Lt. Gen.Campbell said that what that meant was the importance of the freedom of the seas andrespect for the international law and the rule of law.“Those basic principles are important for both our countries and in that regard, we are

both keen on working across with many partners to ensure that the security setting inthis region does not deteriorate or present a challenge to the security, prosperity andstability of the people of the region.” China, which claims the part of the South China Sea up to the nine dash line as itsown, has been reclaiming reefs in the region at a rapid pace. Recently, it landed civilianplanes on a 3,000-metre airstrip on the Fiery Cross reef raising concern that fighter jetscould follow next.Lt. Gen. Campbell said that with growing prosperity, there was an increasing trend ofmilitary modernisation across Asia as was evident with India, China, Indonesia andothers.“Where countries are growing and where peoples’ prosperity is developing and thatgrowth is engaged with partnership and dialogue that is very good,” he said adding that

concerns arose where action was taken unilaterally or in a non-cooperating way.“Both our nations seek to understand our security concerns by looking at theconstructive security arrangements and the strategic settings across the India-Pacificoceans,” Lt. Gen. Campbell added. Lt. Gen. Campbell is in India on the invitation of the Chief of the Army Staff, DalbirSingh, and held discussions with the three services “to establish the right frameworkrelationship” to deepen military cooperation.



Earlier this month, on a visit to Delhi, Admiral Scott Swift, the U.S. Pacific FleetCommander, expressed concern at the lack of transparency on the Chinese motives formilitary expansion.Welcoming India’s greater role in the region, Lt. Gen. Campbell said it was for India todecide its role.

3. Rafale pact concluded, but no deal yet onpriceWe’ll never forget India’s support after the Paris attacks: Hollande

India and France on Monday signed 14 agreements, including an intergovernmentalagreement for the purchase of Rafale fighter jets, nuclear reactors, French railway

locomotives and a major commitment to counterterror cooperation.However, while the much-speculated-about Rafale agreement was inked, the financialcomponent of the deal is yet to be finalised, Prime Minister Narendra Modi and FrenchPresident Francois Hollande disclosed at the end of their three-hour talks here.Bilateral talks

The two leaders came together for their official bilateral talks a day before participatingin the Republic Day parade. “This is the fifth time a French President is going to be ourchief guest,” Mr. Modi said, explaining that as India’s first strategic partner, and one ofthe first civil nuclear partners, “France-India relations have stood every test of time.” Mr. Hollande, who is accompanied by Energy Minister Segolene Royale and ForeignMinister Laurent Fabius, said France would “never forget India’s support” after theterrorist attacks in Paris last year. In a joint statement, the two sides said they would

embark on new ways of cooperation on fighting terrorism, including intelligence-sharingand joint exercises along with the annual strategic dialogues and a joint working groupon counterterrorism meetings. They called for “decisive action to be taken againstLashkar-e-Tayibba, Jaish-e-Mohammad, Hizb-ul-Mujahideen, the Haqqani Network andother terrorist groups such as Al Qaeda,” urging Pakistan to bring to justice theperpetrators of the Pathankot and Gurdaspur attacks and the 2008 Mumbai attack, inwhich two French nationals were among those killed.



INTERNAL SECURITY

10.

Terror revisits Punjab after fivemonths

A group of four terrorists stormed the Pathankot Air Force base early on Saturdaymorning, killing six services personnel and injuring 18 after a fierce gun battle throughthe day, before being shot dead. The attack raised the spectre of cross-border terror yetagain challenging peace efforts between India and Pakistan.Sketchy information available from official sources said one Garud commando of the AirForce and two Defence Security Corps personnel were among those dead.Statements from both New Delhi and Islamabad indicated that the attack wouldn’timmediately scuttle the December 25 initiative of Prime Minister Narendra Modi to dropin at Lahore in a surprise diplomatic effort to bring momentum back to the engagement

that had suffered repeated setbacks since the NDA government came to power in May2014.Prime Minister Narendra Modi said, “Enemies of humanity who can’t see India progress,such elements attacked in Pathankot but our security forces did not let them succeed.” His Cabinet colleagues including Union Home Minister Rajnath Singh said India wantspeaceful relations with Pakistan, which was quick to condemn the attack.

The attack was the culmination of several dramatic hours that began on December 30-31 night, when the terrorists are suspected to have sneaked into India from Pakistan.Sometime around early Friday morning they intercepted a Superintendent of Police,Salwinder Singh, and two other men travelling in a blue beacon-mounted SUV nearDinanagar. The terrorists thrashed them, dumped the SP on the road a few kilometresaway and slashed another person.

For several crucial hours, Mr. Singh’s claim of being intercepted by terrorists found notakers in the establishment, and much time was lost. According to sources, theterrorists used a phone snatched from the captives to make repeated calls to Pakistan.

This was picked up by intelligence agencies, confirming the presence of terrorists in thearea. Based on those intercepts,the security establishment began to piece together thesecurity threat and stepped up combing operations.

The attack bore a close resemblance to the July 27, 2015 terror strike in Dinanagar.National Security Adviser Ajit Doval convened a high-level meeting, and extra forcesfrom the Army and State police were rushed to the area. In spite of those measures, the



terrorists struck around 3.30 a.m. at the Air Force base, where MIG-21 fighters and MI-25 and Mi-35 attack helicopters are based.“I was awake at the staff quarters next to where Division number 2 police station is. Iheard the gunshots and even before I could make any sense of them the wirelessmessage was flashed from the police control room,” Jagtar Singh, an assistant SI of thelocal police station told The Hindu outside the base.

2. ‘Pathankot squad was more lethal than 26/11 attackers’ The modus operandi adopted by the terrorists speaks volumes about theprecision training they received, says an Intelligence official. After initially refraining from blaming the country, a top government official said onMonday that the terrorists behind the Pathankot airbase attack appeared to havereceived training from a “professional armed force in Pakistan.” The fidayeen (suicide)squad was more lethal and better trained than the 26/11 Mumbai attackers. They hadenough arms and ammunition, including under barrel grenade launchers, for asustained operation of more than 60 hoursagainst a professional army.An Intelligence official told The Hindu that establishing the identity of the terroristswould be a challenge because Pakistan would certainly not own them up. Securityforces inside the air base have found bodies of five terrorists. A sixth one was blown to

pieces when the building he had taken refuge in was brought down with explosives onMonday. DNA samples would be preserved, he said.A challenge

After the 26/11 Mumbai attacks, Pakistan had refused to accept the bodies of nineLashkar-e-Taiba (LeT) terrorists killed by the security forces. The tenth terrorist, AjmalKasab, the only one to have been captured alive, was hanged in a Pune prison in 2013and his body was buried on the premises.“We are yet to ascertain the identity of the terrorists as no recoveries have been made.No terrorist group has so far claimed responsibility. The statement by the United JihadCouncil (UJC) is only an attempt to give it a Kashmir colour,” said the Intelligence official.

The UJC, an alliance of more than a dozen pro-Pakistan militant groups based inPakistan-occupied Kashmir, had claimed responsibility for the air base attack. “Theattack is a message by Mujahideen [militants] that no sensitive installation of India isout of our reach,” UJC spokesman Syed Sadaqat Hussain said in a statement. Two groups Security agencies believe there were six terrorists and they were divided into two groups

— one of 4 and the other with 2 members. The modus operandi adopted by the terrorists speaks volumes about the precisiontraining they have received, said the official. “They opened fire at a patrol team at 3.30a.m., an unusual hour to engage with the enemy. They were clearly aware that the levelof alertness would be low at that hour. They did not all come out together, but took onthe security forces from different directions.It is suspected that two terrorists might have entered the Pathankot air base before the

Superintendent of Punjab Police Salwinder Singh, his jeweller friend Rajesh Verma andcook Madan Gopal were abducted by the other four, and much before an alert wassounded about their presence in the area.Mr. Verma, who survived a slit throat, told his interrogators that he heard the fourterrorists who hijacked their vehicle talking to their handlers, presumably in Pakistan.

The handler apparently ticked them off, asking why they had not been able to enter theair base when two other terrorists had already reached the target. The four explainedthat they were on their way. They had not been able to reach the base because therewere several police pickets on the way.

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It is possible that the four terrorists entered the Pathankot air base in the morning of January 1, much before an alarm was sounded to secure all vital installations, theofficial said.NIA registers cases

There are strong indications that the terrorists were assisted by a drugs racket

operating along the border and the heavy arms and ammunition they used could havebeen dispatched from Pakistan before they themselves crossed the border. Securityagencies suspect the terrorists crossed the border in Punjab through a “controlledoperation” executed by a gang involved in the smuggling of narcotics, fake Indiancurrency and arms.Meanwhile, the National Investigation Agency (NIA) registered cases for waging waragainst India and inciting riots on Monday, under various sections of the Indian PenalCode, Unlawful Activities Prevention Act and Arms Act, against unknown persons,official sources said.

3. CERT-In signs cyber security pacts with 3nations

The Indian Computer Emergency Response Team (CERT-In) has signed cooperationpacts with its counterparts in Malaysia, Singapore and Japan for cyber security.CERT-In is the nodal agency responsible for dealing with cyber security threats. TheMemoranda of Understanding (MoUs) will promote closer cooperation for exchange ofknowledge and experience in detection, resolution and prevention of security-relatedincidents between India and the three countries, according to an official statement. TheCabinet, chaired by Prime Minister Narendra Modi, was on Wednesday apprised of thethree MoUs which were signed last November and December. An agreement betweenCERT-In and CyberSecurity, Malaysia, was signed on November 23, 2015, in KualaLumpur during Mr.Modi's visit to Malaysia, while the MoU with Singapore ComputerEmergency Response Team (SingCERT), Cyber Security Agency (CSA) of the Republic ofSingapore was signed on November 24, 2015 during the Prime Minister’s visit to

Singapore. The agreement between CERT-In and Japan Computer Emergency Response TeamCoordination Center (JPCERT/CC) was signed on December 7, 2015 through diplomaticexchange. The exchange of the signed MoU between the two parties was completed byDecember 22, 2015, according to the release.CERT-In is the nodal agency responsible for dealing with cyber security threats

ENVIRONMENT, ECOLOGY & BIODIVERSITY

1. Lalbagh flower show to go national this yearFor the first time in its 102-year-old history of hosting flower shows, Lalbagh BotanicalGardens will have a national flower show in January as a dozen States are expected toparticipate in the Republic Day flower show this time.

The 203rd edition of the flower show will have a pan-India presence, with each Stateshowcasing its native specialities to add to the heterogeneous disposition of flowerdisplay. Maharashtra, Andhra Pradesh, New Delhi and Tamil Nadu have alreadyconfirmed their participation, according to Lalbagh authorities.



Where the national flower show would bring in a distinct, focussed character is in itspresentation, as 13 acres of Lalbagh area would be bedecked with flower beds withinnovative ideas. “We did the flower seedling a few months ago and 13 lakh saplings aretimed to flower in umpteen hues exactly for the show. This project has cost us roughlyRs. 10 lakh,” said M. Jagadeesh, Joint Director, Horticulture, Parks and Gardens,Lalbagh.

Apart from the Glass House and the Band Stand that usually get the crown of flowers,this time a spread of petunias, salvias, dianthus, and tansy, which do not wilt fast,could be seen at 60 locations, including the four entrances, at the foot of the hillock onwhich there is a Kempe Gowda tower and Glass House, Director’s Building campus,DHO lawn area, tree fossil area, and Java fig area.“Given the fact that we are commemorating German horticulturist J.H. Krumbiegel’s150th birth anniversary, and 2016 happens to be our own horticulture specialist M.H.Marigowda’s birth centenary year, we decided to go national to draw in a vibrant varietyof flowers from several States, and share the achievements of our own two doyens,” saidMr. Jagadeesh.Cubbon Park’s contribution New Year for Cubbon Park authorities means making arrangements for participating in

the Republic Day flower show at Lalbagh and the Republic Day parade at Field MarshalManekshaw Parade Ground.While 10,000 flower pots from Cubbon Park would be sent to Lalbagh, the 4,000 flowerpots would adorn the parade ground, and Cubbon Park itself would get an additional3,000 potted flowers, according to Mahantesh Murgod, Deputy Director of Horticulture,Cubbon Park. “We have been working on the seedlings for the last two months andwould send 25 varieties of flower pots, including marigold, red and blue salvia, petunia,celosia, and geraniums for the two venues,” he said. A dozen States are expected to participate in the Republic Day flower show

9.

Air in Indian cities fouler than in Beijing

Southern cities better but could be hiding lethal truths

All six north Indian cities for which data was available had worse air quality thanBeijing in 2015, The Hindu ’s analysis of official data shows. However the south’s comparatively better air quality levels could hide some lethal truthsabout toxic combustion sources. Launched in April 2015, India’s National Air QualityIndex portal produces an Air Quality Index (AQI) value for around 15 cities based on themost prominent pollutant at that time for that city.Pollution monitoring stations measure the concentration of six different pollutants — PM2.5 (particulate matter of diameter less than 2.5 micrometres), PM10, sulphurdioxide, nitrogen dioxide, carbon monoxide and ozone.

The AQI is then classified along one of six categories — good, satisfactory, moderate,poor, very poor or severe.Analysing AQI data for 2015, The Hindu found that Anand Vihar in east Delhi measured

the worst air quality of any of the 25 monitoring stations for which adequate data wereavailable, with just 15 per cent of its days being good, satisfactory or moderate.

3. Snowflake coral, a serious threat to biodiversityColonies of snowflake coral ( Carijoa riisei ), an invasive species recently documented offthe coast of Thiruvananthapuram and Kanyakumari, could pose a serious threat to themarine ecology of the region, according to scientists.Scuba divers working for Friends of Marine Life (FML), a local NGO, have recorded thepresence of several colonies of the fast-growing alien species amid barnacle clusters on



These narrow preferences did not pose a problem for Gigantopithecus until Earth wasstruck by a massive ice age during the Pleistocene Epoch, which stretched from about2.6 million to 12,000 years ago.

That’s when Nature, evolution — and perhaps a refusal to try new foods — conspired todoom the giant ape, Mr. Bocherens explained.“Due to its size, Gigantopithecus presumably depended on a large amount of food,” he

said. “When during the Pleistocene, more and more forested area turned into savannahlandscapes, there was simply an insufficient food supply,” he added. Some apes survived And yet, according to the study, other apes and early humans in Africa that hadcomparable dental gear were able to survive similar transitions by eating the leaves,grass and roots offered by their new environments.But for some reason, Asia’s giant ape — which was probably too heavy to climb trees, orswing in their branches — did not make the switch.“ Gigantopithecus probably did not have the same ecological flexibility and possiblylacked the physiological ability to resist stress and food shortage,” notes the study,which is to be published in a specialist journal, Quaternary International . — AFP

5. Tiger roar grows louder in Karnataka sanctuaries

At one point of time, it was the gunshots of brigand Veerappan that rang through theforest ranges of M.M. Hills and Cauvery Wildlife Sanctuaries. Now, it is the roar of tigersthat echoes through the forest.At least 15 tigers are believed to inhabit the vast scathes of the 2,000-sq km area of thesanctuaries in Chamarajanagar, according to a study by the Nature ConservationFoundation.Claiming it to be the first time the population of the endangered species has beenenumerated in the region, Sanjay Gubbi, conservation biologist who led the cameratrapping exercise, says the time is ripe to declare the areas tiger reserves.According to the study, 10 to 12 tigers, along with nine cubs below the age of two, werespotted in M.M. Hills, while the Cauvery Wildlif e Sanctuary had two male tigers. “Whatis encouraging is that sub-adult population, cubs below the age of two, were found inthe M.M. Hills park. This means that there is breeding and a healthy population in thearea… These big cat numbers are larger than those in most declared tiger reserves,” Mr.Gubbi said.

The large presence of prey species seen in the camera trap also gives credence to theviable tiger habitats of the parks. Sambars, wild pig and gaur were found in M.M. Hills;while, chital, four-horned antelope and wild pig dotted the Cauvery Wildlife Sanctuaries,making the landscape suitable for the large cats.For the tiger, the protected area spread out as verdant, virgin forests. The territory of alarge male cat, for instance, was found to be more than 359 sq km, or nearly half thesize of Bengaluru.Apart from the tiger, the study captured 27 species of mammals, while around 15tuskers were spotted, which was a good sign after Veerappan’s gang had poached manyelephants in the area.

Small corridor M.M. Hills, which borders the BRT Tiger Reserve, can serve as a vital sink to absorb thepopulations of endangered creatures in the park, the study says. However, the migrationbetween the two protected areas was through a narrow 1-km Doddasampige-Yediyaralliforest patch. It was critical for this patch to be protected and expanded, Mr. Gubbi said.State treading cautiously

Though the National Tiger Conservation Authority (NTCA) had given an in-principleapproval for the declaration of the two sanctuaries as a tiger reserve a year ago, theState government has yet to sign it or give its assent. Senior officials in the Department



of Forest, Ecology and Environment said the proposal had been kept on hold with theCabinet believing it “could become a political issue”. Chamarajanagar district in-chargeMinister H.S. Mahadeva Prasad said the opinions of locals would be taken beforeextending complete support to the proposal.

10. 81 whales washed ashoreIn an unusual phenomenon, 45 dead, short-finned pilot whales were washed ashore

between Kallamozhi and Manapad in Thoothukudi district on Tuesday. Of these, 37were adults and eight were sub-adults.As many as 36 whales, part of the group which survived the beaching, were rescued in a

joint operation by several government agencies and pushed back to sea.Marine scientists working in the Gulf of Mannar Biosphere Reserve say that the short-finned pilot whales are deep water whales, diving up to 1,000 metres, who form stablematrilineal kinship groups. This particular group could have been stranded while insearch of food, the favourite being squids.Not much is known about the species. In fact, the IUCN Red List of Threatened Speciesclassifies it as ‘data deficient’. While there were rumours that the beaching could be due to climate change or pollutionof the waters, the scientists said the group most probably followed an isolated whale

and must have been stranded.“The stranding of these whales is rare. They don’t swim close to the coast,” says J.K.Patterson Edward, Director, Suganthi Devadason Marine Research Institute,

Thoothukudi.He recalled a similar incident on January 14, 1973 when 147 whales were stranded onthe beach between Kulasekarapattinam and Manapad, almost the same location. Theysurvived for a few days but later died.A team from Fisheries College and Research Institute (FC&RI), Thoothukudi, madeobservations on the water temperature, salinity and dissolved oxygen content of theinshore region, all of which were found to be normal.“These whales might have chased the prey in the intertidal areas during last phase ofthe high tide period [new moon day period] and later must have stranded because of theshallow depth created by receding tide, during which time they must have becomedisoriented,” says G. Sugumar, Dean, FC&RI.“The short-finned pilot whales use call dialects to communicate within the group. One ofthe animals could have been isolated after falling sick or in search of food. The otherwhales might have followed it and might have been stranded as they could not havecommunicated effectively within the group,” says M. Sakthivel, a scientist with theCentral Marine Fisheries Research Institute, who specialises in cetaceans (marinemammals).A team of CMFRI officials is on its way to study the reasons.By Tuesday night, the 36 surviving whales were pulled by boats into deep waters.“The whales were exposed for six to eight hours. The younger ones responded well. Onlyon Wednesday, we will come to know [if the whales will survive],” says Deepak Bilgi,Wildlife Warden, Gulf of Mannar Marine National Park.

13. New class of frogs found in the north-eastA class of frogs that grow in tree holes and, as tadpoles feed on eggs laid by their motherhave been discovered in the north-east region, according to an international team ofresearchers led by a Delhi University-based scientist.In the last two decades, India has reported a rapid rise in the discovery of frog speciesfrom the Western Ghats and, more recently, the north-eastern States. The new frog,

reported in the peer-reviewed journal PLoS One , has been christened Frankixalus

Jerdonii and was once considered a species lost to science.



“This genus remained unnoticed by researchers probably because of its secretive life intree holes”, said S D Biju, the lead author of the study and from the University of Delhi.He said he had first found these frogs in 2005 during explorations in Assam andArunachal Pradesh, among other places, but had taken a decade to publish about thembecause of the complexities involved in ensuring that it was indeed an entirely newgenus and not merely a known species.

Frogs of the newly described genus Frankixalus , according to Mr. Biju, were relativelylarge (between 37 – 50 mm long) with big, bulging eyes and blunt snouts and are foundon forest canopies and inside bamboos slits. Due to insufficient food resources in treeholes, the mother exhibits “remarkable parental care” by laying unfertilised eggs to feedher tadpoles. Tree frogs occur across sub-Saharan Africa, China, much of tropical Asia,

Japan, the Philippines and Sulawesi.

Independent experts told The Hindu that Mr. Biju’s find was significant but neededmore scrutiny. Sushil Dutta, a veteran herpetologist and formerly with the IndianInstitute of Science, and who read Mr. Biju’s research paper, described the study as a“rare and good find” but added that more molecular analysis was required to beconvinced that the find was indeed a new genus.

14. Sundarbans buzzes with discovery of solitary bee

A “solitary bee” species was recently discovered in the Sundarbans Biosphere Reserve. The 6.2-mm-long bee, named Braunsapis chandrai , is black in colour and haspunctured legs. What makes it distinct from other species of solitary bees is the differentpatterns of the marks on its face and frontal region.

The 96 species of bees of the genus Braunsapis do not make combs as commonhoneybees do. Solitary in nature, they nest in stems and twigs independently.“We have collected the specimen of the species, a holotype male from Dabanki in theSunderbans Biosphere Reserve. The specimen was described by Rajiv K. Gupta, anexpert in bees and Professor of Zoology at Jai Narain Vyas University, Jodhpur,” Gaurav

Sharma, scientist at the Zoological Survey of India, told The Hindu . The findings were published recently in the Journal of Environment and Bio-sciences . The new species plays a significant role in pollination.

15. Indo-German team finds dinosaur bones inKutch The pieces suggest it may have been a 10-15 metre-long, herbivorous animal

The team members at the excavation site in Kutch basin of Gujarat. — Photo: courtesy: DhirendraKumar Pandey

A team of Indo-German geologists and palaeontologists may have found fossils of a 135-million-year old herbivorous dinosaur in Kutch, Gujarat, possibly the oldest such fossilfound this century. The pieces of bone — possibly from the limb or hip and about twofeet long — suggests that it may have been a 10-15 metre-long animal and, were theresearchers’ claims to hold up, only among a handful of Jurassic-era dinosaur fossils

from India. That was the time when India and Madagascar were one landmass and theHimalayas yet to form.

The so-called Jurassic era spanned 250-145 million years during which herbivorousdinosaurs flourished and laid the ground for beasts, such as the Tyrannosaurus Rex.

These flourished during the Cretaceous period — 145 to 65 million years ago — afterwhich the double blows of a meteor strike and overflowing volcanoes are said to havedestroyed these animals.“We’ll be moving fast to find out if this a known species or a member of a new class,”said Dhiraj Kumar Pandey, palaeontologist at the University of Jaipur and part of the



excavation team. About 10 years ago, he was part of a team that discovered bones — again in Kutch — of the Camarasaurus Supremus — a herbivore and among the mostfrequently-found of dinosaur fossils in North America. “From preliminary observations,this may be related to the Camarasaurus family. We’ll be sending this to Munich andhope to be able to formally publish and describe our finds within 4 months.” Students and professors from the Department of Geology, Krantiguru Shyamji Krishna

Verma Kutch University (SKVKU); Mr. Pandey, Franz T. Fuersich from Germany and hiswife Valsamma Fuersich — born Indian and reportedly first saw the fossil — were amongthe excavation team in Kutch. The most recent dinosaur fossils from India in thismillennium is the “Rajasaurus Narmadensis, a 30-feet-long, carnivorous and stockyanimal, which was discovered from the Narmada Valley Basin in Kheda, Gujarat.

HEALTH

1. WHO declares end to Ebola epidemic

The World Health Organisation declared an end to the deadliest Ebola outbreak ever on Thursday after no new cases emerged in Liberia, though health officials warn that it willbe several more months before the world is considered free of the disease that claimedmore than 11,300 lives over two years.

Thursday’s success comes after a harrowing toll: nearly 23,000 children lost at least oneparent or caregiver. Some 17,000 survivors are trying to resume their lives though manybattle mysterious, lingering side effects. Studies continue to uncover new informationabout how long Ebola can last in bodily fluids.Liberia, which along with Sierra Leone and Guinea was an epicentre of the latestoutbreak, was first declared free of the disease last May, but new cases emerged twotimes forcing officials there to restart the clock. “While this is an important milestoneand a very important step forward, we have to say that the job is still not don e,” saidRick Brennan, WHO director of emergency risk assessment and humanitarian response,

at a news conference in Geneva.“That’s because there is still ongoing risk of re-emergence of the disease because ofpersistence of the virus in a proportion of survivors.” In Liberia, there was guardedoptimism on Thursday about reaching the 42-day benchmark with no new cases. TheMinistry of Health is still carrying out Ebola tests on dead bodies before burial, andremains on the lookout for any suspicious cases. — AP

2. U.S. pumps in $8 million to map drug-resistant infections in IndiaICMR, AIIMS and CDC to jointly execute project



The U.S. government’s Global Health Security Agenda (GHSA), launched two years agoto contain the spread of new and emergent infections following the Ebola outbreak, haspumped in a whopping $ 8 million to map the rising anti-microbial resistance in Indiaand build capacities to tackle it better. The rising anti-microbial resistance is a serioushealth concern in India, and also figured in Prime Minister Narendra Modi’s meetingwith U.S. President Barack Obama in September last year.

While Indian hospitals acknowledge a rise in drug-resistant infections, there is nocentralised documentation of the infection rates, with hospitals shying away fromreporting this data fearing loss of business. This project is aiming, rather ambitiously, atthe creation of a national network where hospitals will pool in their data on infectionrates, which would then be in the public domain for patients to make an informedchoice when they have to select a hospital to undergo treatment.Larger goal

The project’s larger goal, however, is containing the spread of infections given the hugevolume of traffic between India and the U.S., said observers.

Titled ‘Capacity Building and strengthening of hospital infection control to detect andprevent anti-microbial resistance in India’, the project will be jointly executed by theIndian Council of Medical Research (ICMR), the All India Institute of Medical Sciences

(AIIMS) and the India office of Centers for Disease Control and Prevention (CDC). The project will start with surveillance, followed by data analysis. Systems will then beput in place to first check infections and eventually bring down resistance rates.“The project will map surveillance of bloodstream infections, ventilator acquiredpneumonia and other hospital-acquired infections,” Dr. Kamini Walia, deputy director,ICMR and also the technical coordinator of the GHSA project, told The Hindu . The ICMRhas been on the resistance trail since 2014 when it set up six nodal centres in fourhospitals. Dr. Walia said the GHSA grant came to India mainly because of ICMR’sexisting surveillance network. This project will build upon this network, before it isexpanded to around 15 more hospitals in the country.Work will start with six major hospitals — PGI in Chandigarh, JIPMER in Pondicherry,AIIMS in Delhi, CMC in Vellore, Hinduja in Mumbai and Assam Medical College inDibrugarh — handpicked for their robust infection control mechanisms.

3. Rural India too battles hypertension



Obesity and diabetes cases increase in urban areas; experts blame it on stress andfaulty diet

Higher stress levels in rural India and faulty diet in cities have thrown up two mostdisturbing health concerns in the National Family Health Survey (NFHS), the data forwhich was released on Wednesday. While obesity levels have shot up in the countrysince the last NFHS survey in 2005-06, the number of people suffering from

hypertension in rural India is, in many cases, higher than in urban parts. The NFHS on Wednesday released the data for 15 States and each State, with theexception of Puducherry, showed a sharp rise in obesity levels among both men andwomen.In Andhra Pradesh, for instance, where over 10,000 households were surveyed, 45.6 percent of the total women surveyed in urban areas were found to be overweight — thehighest in the country. Obesity among rural women in AP was found to be 27.6 per cent,which may not appear alarming, but is still high compared to other rural parts.Among women, obesity levels shot up from 13.92 per cent in 2005-06 to 19.56 per centin 2015-16. For men, the rise from the last decade has been from 10.35 per cent to18.04 per cent.While rural Bihar recorded the fewest number of women suffering from obesity among

the 15 States, but more women in rural parts here were found to have hypertensioncompared to urban parts of Bihar — a trend seen in other parts of the country as well.In Andaman and Nicobar, more men and women in rural parts were found to besuffering from hypertension than in urban centres. This trend was found in Meghalayatoo.As for blood sugar levels, most States have maintained the traditional differencebetween urban and rural areas, with urban centres recording more cases of high bloodsugar. The few exceptions have been recorded in Goa where the number of women inrural areas with high blood sugar was more than in urban Goa. The same trend was



mapped in Puducherry. In Tripura and also in Haryana, more men in rural areas hadhigh blood sugar than men in urban parts.Health experts said the overall obesity in urban India and rising hypertension in ruralIndia was indicative of the faulty diet of people and also of the stress levels of women inrural India.“High stress levels in rural areas are rooted in income, agriculture and high cost of

healthcare. Also on the food front, there is lack of potassium-rich food like fruits andvegetables,” said health expert Veena Shatrugna, former deputy director of the NationalInstitute of Nutrition, Hyderabad.

4. India drinks and smokes less nowHowever, it is among the highest consumers of smokeless forms of tobacco

The preliminary findings from National Family Health Survey (NFHS-4) released lastweek have given anti-tobacco campaigners a reason to smile. The survey has found thatacross the board, people — both men and women — in India are smoking less than theywere a decade ago. Not just tobacco, even alcohol consumption among Indians hasfallen.According to the NFHS-4 data, in the 13 States surveyed, tobacco use among men hasfallen from 50 per cent in 2005-06 to 47 per cent in 2015. Similarly, alcohol

consumption among men has fallen from 38 per cent to 34 per cent. Over the lastdecade, consumption of alcohol among men has fallen in Madhya Pradesh, Bihar,Uttarakhand, Haryana, West Bengal and Meghalaya.

The data comes at a time when India is on the verge of implementing stricter tobaccocontrol laws. From April 1, 2016, the Indian government will be implementing ‘plainpackaging’ as directed by the Allahabad High Court, following a writ petition on thematter.

5. Zika could infect 4 mn people: WHO

As of now, cases have been reported in 23 countries and territories in the

Americas region. The World Health Organization (WHO) expects the Zika virus, which is spreadingthrough the Americas, to affect between three million and four million people, a diseaseexpert said on Thursday.

The WHO’s director-general said the spread of the mosquito-borne disease had gonefrom a mild threat to one of alarming proportions.Marcos Espinal, an infectious disease expert at the WHO’s Americas regional office,said: “We can expect 3 to 4 million cases of Zika virus disease”. He gave no time frame.

There is no vaccine or treatment for Zika, which is a close cousin of dengue andchikungunya and causes mild fever, rash and red eyes. An estimated 80 per cent ofpeople infected have no symptoms, making it difficult for pregnant women to knowwhether they have been infected.WHO Director-General Margaret Chan said the organisation will convene an emergencycommittee on Monday to help determine the level of the international response to theoutbreak of the virus spreading from Brazil that is believed to be linked to severe birthdefects. “The level of alarm is extremely high,” Ms. Chan told WHO executive boardmembers at a meeting in Geneva. “As of today, cases have been reported in 23 countriesand territories in the [Americas] region.” Brazil’s Health Ministry said in November 2015 that Zika was l inked to a foetaldeformation known as microcephaly, in which infants are born with abnormally smallheads. Brazil has reported 3,893 suspected cases of microcephaly, the WHO said last



week, more than 30 times more than in any year since 2010 and equivalent to 1-2 percent of all newborns in the state of Pernambuco, one of the worst-hit areas.Ms. Chan said that while a direct causal relationship between Zika virus infection andbirth malformations has not yet been established, it is “strongly suspected”. “ The possible links, only recently suspected, have rapidly changed the risk profile ofZika from a mild threat to one of alarming proportions,” she said. — Reuters

Keywords: UN, Zika virus, WHO, Geneva, global health emergency, WHO Director — General Dr. Margaret Chan

SPORTS

1. Lodha committee bats for legalising bettingin cricket

Urging lawmakers to legalise betting in cricket for all except cricket players, officials andadministrators, the Supreme Court-appointed Justice R.M. Lodha Committee reportsaid on Monday that government servants and ministers should be banned from holdingposts in the BCCI.

The committee commended the “good work” done by the BCCI, including a pensionscheme for national players. Justice Lodha, along with Justices Ashok Bhan and R.V.Raveendran, said their objective handed down by the apex court was not to limit theautonomy of the BCCI.“Our call was not restrict or limit the BCCI and its good work. But our year-long effortwas to remove the ailing parts, revitalise the body so that it could run a marathon forthe betterment of the game,” Justice Lodha said at a press conference here.

Taking a realistic stand on betting, the very cause for the court setting up the panel, Justice Lodha said betting was a $ 400 billion phenomenon practised worldwide andlawmakers in India should enact laws to legalise it.

2. Memorable day for Federer, SharapovaFormer champions notch up landmark victories; Djokovic and Serena cruiseNovak Djokovic underlined his supremacy in men’s tennis on Friday as he marchedunstoppably into the Australian Open fourth round — along with Serena Williams, whoraced through in just 44 minutes.

http://www.thehindu.com/news/international/un-to-decide-if-zika-virus-is-a-global-health-emergency/article8163370.ece
























As Roger Federer reached a landmark 300th Grand Slam win, Djokovic still looked likethe man to beat as he weathered a strong challenge from Andreas Seppi to reach thefirst weekend without dropping a set.

The top seed and defending champion saved two third-set points against Seppi beforereeling off the next four points to clinch it 6-1, 7-5, 7-6(8), his 33rd straight victory overItalian opposition.

Federer earlier went through 6-4, 3-6, 6-1, 6-4 against Grigor “Baby Fed” Dimitrov, aman whose game is so similar to his own that he admitted it was like playing a mirror.It wasn’t all plain-sailing for Federer, but with the win he became the first man to reach300 Grand Slam victories and lies six away from Martina Navratilova’s record of 306.

The Swiss became the oldest man to reach the round of 16 since Andre Agassi in 2005.Dress for successMaria Sharapova also weathered a fightback when she beat pint-sized American LaurenDavis 6-1, 6-7(5), 6-0, helped by a strategic break and change of dress, for her 600thcareer win.Sharapova left the court after she lost the second-set tiebreak but after she came backrefreshed and revitalised, she raced to victory to set up a clash with Switzerland’sBelinda Bencic.

Serena had no such problems as she crushed overawed Russian teenager DariaKasatkina 6-1, 6-1 in 44 minutes, the shortest match of the tournament so far.SportsmanshipBelgium’s David Goffin awaits Federer in round four, after he beat Dominic Thiem 6-1,3-6, 7-6(2), 7-5 in a match which included a generous act of sportsmanship from theAustrian.

Thiem, leading in the second set, told the umpire to give a point to Goffin rather thanreplay it after a Hawk-Eye challenge found a shot from the Belgian had landed in. — AFP

3. Hat-trick for Santina The top seeds overcome Hlavackova, Hradecka In a perfect climax to their stupendous run, Sania Mirza and Martina Hingis were on

Friday crowned the Australian Open women’s doubles champions after they tamed thespirited Czech duo of Andrea Hlavackova and Lucie Hradecka 7-6(1), 6-3 for their 36thwin in a row.

The top seeds fought past the seventh seeds Andrea Hlavackova and Lucie Hradecka ina final that lasted one hour and 45 minutes.It was the third consecutive Grand Slam title for Sania and Hingis, having won theWimbledon and US Open in the 2015 season.In an incredible feat, Sania and Martina have now extended their unbeaten run to 36matches, winning eight titles in a row.

They won five straight titles in 2015, starting from the US Open and before theAustralian Open on Friday they had won the Brisbane and Sydney events.It was Sania’s second title at the Australian Open, having won the mixed doubles in

2009 with Mahesh Bhupathi.It was the 12th career Grand Slam doubles title for Hingis, who has now won fiveAustralian Opens (1997, 1998, 1999, 2002, 2016), two French Opens (1998, 2000),three at Wimbledon (1996, 1998, 2015) and two on the New York hardcourts in 1998and 2015.However, later in the day, Sania fell in the mixed doubles semifinals with Croatianpartner Ivan Dodig. The top seeds lost 5-7, 6-7(4) to fifth seeds Elena Vesnina andBruno Soares.



The final, though, was not a stroll in the park for the World No. 1 team with the Czechsputting up a great fight in the opening set.

The match was littered with breaks with the two teams struggling to hold servethroughout.Hlavackova was excellent from the baseline and Hradecka was terrific at the net, playingsome breathtaking shots and winners.

The top seeds though had enough resources in their kitty to blunt the challenge of theCzech girls. — Agencies

PERSONALITIES

1. Mrinalini Sarabhai passes away at 97 The Padma Bhushan recipient was proficient in Bharatanatyam, Kathakali andMohiniyattam

The Padma Bhushan recipient was one of the most celebrated classical dancers.Veteran dancer and Padma Bhushan recipient Mrinalini Sarabhai passed away at her

residence in Ahmedabad on Thursday after a day’s hospitalisation. She was 97. Her daughter Mallika Sarabhai, dancer, actor and activist, announced the death onFacebook. “My mother Mrinalini Sarabhai has just left for her eternal dance.” “She was admitted to the hospital as she developed an infection and her systems gaveway. She was brought to her home in Usmanpura where she passed away. My motherhad a long, peaceful life,” said Kartikeya Sarabhai, her son and noted environmentalistand director of the Ahmedabad-based Centre for Environment Education (CEE).Fondly called ‘Amma,’ Mrinalini was one of the most celebrated Indian classical dancers,proficient in Bharatanatyam, Kathakali and Mohiniyattam. She studied at Santiniketanunder the guidance of Nobel laureate Rabindranath Tagore.Born into the renowned Swaminathan family, Mrinalini married Dr. Vikram Sarabhai,father of India’s space programme and institution builder who belonged to an illustrious

industrial family of Gujarat. Vikram’s father Ambalal Sarabhai was a leading textilebaron and was one of the patrons of Mahatma Gandhi during the freedom struggle.Mrinalini’s father was a freedom fighter, parliamentarian and social worker. Her motherAmmu Swaminathan was also a noted freedom fighter.After settling down in Ahmedabad after marriage, Mrinalini set up the DarpanaAcademy of Performing Arts, where more than 15,000 students trained.Besides being a celebrated classical dancer, she was a poet, writer and environmentalistand played a leading role on the social and art scene. She choreographed over 300shows.She is survived by a son and daughter, both based in Ahmedabad. Mallika is a leadingdancer and activist.

AWARDS

1. The Revenant, Mozart in the Jungle rule Golden Globes‘The Martian’ wins best motion picture comedy or musical award The Revenant and Mozart in the Jungle emerged as the top winners at the star-studded73rd edition of the Golden Globe awards.



The Revenant , a biographical Western film set in 1823 Montana and South Dakota,bagged three awards — best drama film, best actor in a drama for Leonardo DiCaprioand best director for Alejandro G. Inarritu — at the function held here on Sunday night.In the TV realm, Amazon Studio’s Mozart in the Jungle won under the category of bestcomedy series and best actor in a comedy series for Gael Garcia Bernal. The series isinspired by the Mozart in the Jungle: Sex, Drugs, and Classical Music — oboist Blair

Tindall’s 2005 memoir. The best motion picture comedy or musical award went to The Martian , leaving behindfilms like The Big Short , Joy , Spy and Trainwreck .Winning the best TV series — drama, Mr. Robot beat the likes of Empire , Game ofThrones , Narcos and Outlander . The series also won the best supporting actor in aseries, limited series or TV movie for Christian Slater. Wolf Hall received the award forbest TV movie or limited series.Son of Saul , a Hungarian movie set during World War II, was cited as the best motionpicture in a foreign language title.

The team of the animated film Inside Out was overjoyed to win the best animated filmtitle.Bagging two awards for Steve Jobs , Aaron Sorkin won for best screenplay — motion

picture and actress Kate Winslet won the best supporting actress in a motion pictureaward. Actor Sylvester Stallone was given a standing ovation as he won the bestsupporting actor in a motion picture for Creed .

The award for the best actress in a motion picture — drama was won by Brie Larsonfor Room . Actors Jennifer Lawrence and Matt Damon took home the awards for bestactress and best actor in a motion picture — comedy for Joy and The Martian .

2. Techie, born in T.N., wins Academy AwardWhen Cottalango Leon steps up to receive the Technical Achievement Award of theAcademy of Motion Picture Arts and Sciences this year, all of India will be cheering, andCoimbatore will be the loudest.Mr. Leon will take home the recognition with J Robert Ray and Sam Richards for the“design, engineering and continuous development of Sony Pictures Imageworks Itview”.

“The award was not totally unexpected for me since we were confident about ourproduct,” 45-year-old Mr. Leon toldThe Hindu over phone from Los Angeles on Monday.“It is a tool used only within Sony Imageworks. So, it feels good to be recognised by theAcademy and the wider industry”, he said. Mr. Leon was born in Thoothukudi. He grew up in Coimbatore and visits the place everyalternate year. He studied in the Government High School at Kallappalayam here tillClass VII and in Kadri Mills Higher Secondary School from Class VIII to XII. His mother,Rajam (72), lives here with his brother Cafasa.Mr. Leon went on to do his B.E. at PSG College of Technology during 1988 to 1992 andlater worked in Delhi for two years.“At that time, there was a digital revolution happening in computer graphics andentertainment technology and movie-makers were starting to make use of it to createstunning visuals in popular movies. Since I was attracted to both arts and science, thisintersection pushed me towards this field. Hence, for my Master’s degree at ArizonaState University, I chose computer graphics as my specialisation and pursued jobs inthat field after graduating in 1996,” he said in an e-mail. When Mr. Leon startedworking at Imageworks, there was a similar product that was hard to use and hence hewas asked to create something better.On Monday, some of the teachers of the schools in which he studied visited his brother’shouse and felicitated Mr. Leon’s mother. “We never expected the award. The entire family is in joy and ecstasy,” says Dr. Cafasa.



BOOKS AND AUTHORS

1. Some facts are to be buried along with me,says Pranab

The second volume of President Pranab Mukherjee’s memoirs The Turbulent Years(1980-1996) was released on Thursday even as the author himself said that “some factsare to be buried with me” at the event at Rashtrapati Bhavan. Vice-President Hamid Ansari released the first copy of the book, with a fairly eclecticaudience of Indian Council for Cultural Relations chief Karan Singh, former DeputyPrime Minister L.K. Advani, former External Affairs Minister Natwar Singh and formerComptroller and Auditor-General (C&AG) of India Vinod Rai.‘Admits fiasco’ While admitting that there were many things that he had kept confidential in this

volume of his memoirs, Mr. Mukherjee was candid enough about his political life awayfrom government files, terming the launch of his own party, the Rashtriya SamajwadiCongress, after he left the Congress over differences with the late Prime Minister, RajivGandhi, a “fiasco.” “I am not a mass leader, like say, Ajoy Mukherjee was or as Mamta [Banerjee] is, and Ihave admitted that I should not have attempted this,” he said.

MISCELLANEOUS

1. Artificial Intelligence pioneer Marvin Minsky

deadMarvin Minsky, who combined a scientist’s thirst for knowledge with a philosopher’squest for truth as a pioneering explorer of artificial intelligence, work that helped inspirethe creation of the personal computer and the Internet, died on Sunday night in Boston.He was 88.His family said the cause was a cerebral haemorrhage.Well before the advent of the microprocessor and the supercomputer, Mr. Minsky, arevered computer science educator at MIT, laid the foundation for the field of artificialintelligence by demonstrating the possibilities of imparting common-sense reasoning tocomputers.“Marvin was one of the very few people in computing whose visions and perspectivesliberated the computer from being a glorified adding machine to start to realise its

destiny as one of the most powerful amplifiers for human endeavours in history,” saidAlan Kay, a computer scientist and a friend and colleague of Mr. Minsky’s. Fascinated since his undergraduate days at Harvard by the mysteries of humanintelligence and thinking, Mr. Minsky saw no difference between the thinking processesof humans and those of machines. Beginning in the early 1950s, he worked oncomputational ideas to characterise human psychological processes and producedtheories on how to endow machines with intelligence.



Mr. Minsky, in 1959, co-founded the MIT Artificial Intelligence Project (later the ArtificialIntelligence Laboratory) with his colleague John McCarthy, who is credited with coiningthe term “artificial intelligence.” Beyond its artificial intelligence charter, however, the lab would have a profound impacton the modern computing industry, helping to impassion a culture of computer andsoftware design. It planted the seed for the idea that digital information should be

shared freely, a notion that would shape the open-source software movement, and itwas a part of the original ARPAnet, the forerunner to the Internet.Variety of disciplines Mr. Minsky’s scientific accomplishments spanned a variety of disciplines. He designedand built some of the first visual scanners and mechanical hands with tactile sensors,advances that influenced modern robotics.In 1951 he built the first randomly wired neural network learning machine, which hecalled Snarc. And in 1956, while at Harvard, he invented and built the first confocalscanning microscope, an optical instrument with superior resolution and image qualitystill in wide use in the biological sciences.His own intellect was wide-ranging and his interests were eclectic. While earning adegree in mathematics at Harvard he also studied music, and as an accomplished

pianist, he would later delight in sitting down at one and improvising complex baroquefugues.Mr. Minsky was lavished with many honours, notably, in 1970, the Turing Award,computer science’s highest prize. He went on to collaborate, in the early ’70s, with Seymour Papert, the renownededucator and computer scientist, on a theory they called “The Society of Mind,” whichcombined insights from developmental child psychology and artificial intelligenceresearch.

OP-ED

This year, don’t speed dial the Army In the 2013 Uttarakhand deluge, when the Army was single-handedly tackling relief work, someone on Facebooksaid he was irritated by the constant praise being heaped on the Army’s heroic efforts. Enough, he said, the Army is just doing a job it is supposed to do.And that is exactly what most people assume — that it’s a first-line duty of the armed forces to swim into anydisaster and rescue everybody. Whether it was Uttarakhand, the fire in Kolkata’s Burrabazar, or the Chennai floods,each time it’s been the armed forces that have stepped in. Whether an explosion in a bazaar or a child falling into awell, the armed forces are called in.What, in principle, was laid down as a “last in, first out” policy has been turned on its head. Instead, the forces arethe first to be called in and they are the last to leave, reinforcing the impression that they are only “ doing theirduty”. The reality is rather different. Not only does the Disaster Management (DM) Act, 2005 not indicate any primacy forthe role of the armed forces, it does not even formalise their role; merely stating that the management of disasterscould include the “deployment of naval, military and air forces, other armed forces of the Union or any other civilianpersonnel as may be required for the purposes of this Act”. It is not that the forces grudge it; in fact, they think it their duty to pitch in. Unfortunately, however, being called

out so frequently has a negative impact. Each time it happens, their cutting edge is reduced. They pay a heavy priceby way of training time, deployment and equipment losses.Men for the job To prevent just this, the 2005 Act established the NDMA or National Disaster Management Authority, and the NDRFor National Disaster Response Force. While the NDMA is the planning and coordinating body, the NDRF has themanpower, equipment and training to handle relief work. The NDRF, launched in 2006, today has 12 battalionsstationed across the country, with men drawn on five-year deputations from the Border Security Force, the CentralReserve Police Force, the Central Industrial Security Force (CISF), etc. The men undergo specialised training in reliefwork for quakes, landslides, biochemical mishaps, mountain rescue, and more.So, where are they when we need them? Actually, they are very much there and, in fact, 11 teams (45 men perteam) from the NDRF’s Arakkonam unit in Tamil Nadu were mobilised for the Chennai floods, followed by seven



more teams from Andhra Pradesh, Odisha and Karnataka. We also saw those orange life jackets in Nepal, whereIndia sent relief teams within five hours of the quake.Hobbled by the system If, despite this, the armed forces end up being the most visible force at hand, there are a few reasons. First is thesheer shortfall of personnel. As Indian Police Service officer O.P. Singh, Director-General, NDRF, points out, “Wehave just around 13,000 men compared to 13 lakh in the Army.” For India’s size and population, these numbers aretoo few, but the NDRF is expanding slowly; it started with eight battalions and now has 12.Second, who holds the NDMA and, in turn, the NDRF accountable when they fall short? With an annual budget of

over Rs.350 crore, why is it so difficult to produce quicker responses, better trained staff and high-end equipmenton the ground? Nobody is asking.Finally, the bigger reason why NDRF is not as effective as it could be is because of, as always in India, bureaucraticfailure. The mandarins in Delhi have not empowered NDMA, made it functionally independent or accountable. Talking to me after Uttarakhand, J.K. Sinha, who was then serving his second term at NDMA, spoke of how theorganisation is plagued by politics and apathy. For instance, in theory the NDMA must ensure that States haveresponse units across districts and blocks. In practice, it can shout itself hoarse but State governments are notobliged to respond.States need to step up To be truly effective, one national force is not enough; each State must build and maintain its own State- anddistrict-level response units. NDMA guidelines say that States must have a contingency plan that ranges frommaking vulnerability studies to preparing lists of sources that can be tapped for trucks, food or blankets; lists ofdoctors who can be called for trauma duty or post-mortems; and even firewood suppliers for mass cremations. Suchplans are not made and if made, nobody hears of them.More important, do bureaucracies have the will and intelligence to use available resources optimally? For instance,shutting down Chennai airport freed up hundreds of CISF personnel, but they were not rushed into relief work. In

fact, even much of the State’s police was kept idle. On paper, States are expected to train personnel from the fire, police, and home guards departments and keep themdisaster-ready. In reality, said Mr. Sinha, “we have to cajole them to attend training.” According to him, 90 per cen tof State governments do not even use the disaster management funds released to them.A few States like Bihar, Gujarat, Assam and Odisha now have impressive response units. But Tamil Nadu does notfigure on this list. Despite the tsunami, only around 90 personnel have received relief training so far.Rules of engagement One solution could be to lay out a clear process under which the armed forces will be deployed. First, the HomeMinistry must be asked to define just what its arms can deliver. For instance, trained personnel from the police, fireservices, civil defence, and home guards must be available on call along with equipment. If such local teams hadbeen available from Day 1, Chennai would not have had to depend on ill-equipped citizens to bail each other out.Second, threshold levels must be set for when the armed forces will be called in and pulled out. And last, we mustdefine what a national calamity is, and reserve the armed forces only for those occasions. Even the 13th FinanceCommission report says: “Although the DM Act uses terms like ‘substantial loss of life, or human suffering’,‘damage to and destruction of property’… it does not quantify these terms.” When such a process is laid out, the magnitude of a disaster will determine when the armed forces are called inrather than their being used as a default solution. And this process will also ensure that the NDRF functions theway it was designed to.

The diplomacy of business The brouhaha over a news report that Indian businessman Sajjan Jindal may have acted as an intermediarybetween the Prime Ministers of India and Pakistan, Narendra Modi and Nawaz Sharif, in the context of Mr. Modi’svisit to Pakistan on December 25, took an amusing turn with a Congress Party spokesperson, who ought to haveknown better as a former Union Minister handling commerce, industry and even external affairs, claiming that thePrime Minister seemed to value business interest above national interest. Quite apart from the question whetherdomestic business interests ought not to be regarded as national interest by the government — more on that later — the spuriousness of this protest derives from the fact that there is nothing new in business leaders acting asintermediaries between heads of government.Businessmen as intermediaries The link between the business of diplomacy and the diplomacy of business is as old as the link between trade andflag. More recent diplomatic history is replete with examples of businessmen building bridges between leaders ofadversarial nations. Be it David Rockefeller carrying messages between the U.S. government and Chinese PremierZhou Enlai, or German and Russian businessmen trying to narrow differences between Vladimir Putin and Angela

Merkel, business has helped oil the wheels of diplomacy, just as diplomacy seeks to oil those of commerce. To be sure, individual business interest is not always the only motive for business involvement in diplomacy. Suchinformal outreach has value for politicians in power because of its deniability. Businessmen know how to keepsecrets and so are often better non-official interlocutors than other professionals. Which is one reason why the mosteffective way in which business can promote diplomacy would be when it is below the radar. Indeed, Mr. Jindal mayhave erred by tweeting his participation in the Sharif family wedding celebrations weeks after an Indian journalist,Barkha Dutt, wrote about his alleged role in setting up an earlier meeting between the South Asian leaders.Discretion ought to have been the better part of valour. The Indian diplomatic and political community has, of course, always been uncomfortable dealing with the delicaterelationship between government and business for a variety of reasons, ranging from the fear of those ingovernment being accused of granting favours to business for a price, to concerns about protocol and officialsecrecy.



Quite apart from the fact that a large part of diplomacy has always been about promoting national businessinterests — “trade follows the flag” — in the modern era of globalisation, national interest has often been promotedby business — “flag follows trade”. My favourite example of the latter phenomenon is that of the role Hyundai played in getting South Korean nationalsout of Kuwait in 1990, when Saddam Hussein’s forces invaded that country. A couple of hundred Korean nationalswere holed up in the South Korean embassy in Kuwait and had to be transported to the airport to be flown out on acouple of Korean airliners waiting on the tarmac. The Kuwaiti government could not assure their security. AHyundai executive decided that everyone would be transported on buses flying the company flag, confident that

invading Iraqi soldiers would not fire at a bus sporting a Hyundai company flag. They made it. A company flag wassafer than a national one, under the circumstances.Western practice, Indian inhibition There are two very different kinds of role that business can play in the cause of diplomacy. It can be purelyaltruistic and expect no monetary reward in return, but hope to empower its corporate image and brand equity; or,it can seek pecuniary benefit. Neither is illegitimate. Heads of government do feel it is sometimes their duty to helptheir national firms.Much was made in India in 2006 during the visit of French President Jacques Chirac about whether or not PrimeMinister Manmohan Singh had taken up the issue of official French reticence to Indian businessman Ratan Tata’sattempt to buy the steel company Corus. While some of Dr. Singh’s advisers fe lt it would be wrong for thegovernment to express a view on the matter, he had no inhibition letting the media know that he did in fact raisethe matter with Mr. Chirac.Western leaders rarely feel inhibited promoting the interests of their businesses. For example, at a luncheon hostedby the Prime Minister of Finland for the visiting Indian Prime Minister in October 2006, the Finnish guest seated tothe immediate right of the host was none other than the president and CEO of the Finnish company, Nokia. Through most of the luncheon, the conversation across the table was between Nokia’s chief and the Indian Prime

Minister.Apart from individual businessmen playing their part in promoting bilateral relations, business associations havecome to play an increasingly important role in foreign affairs. Impressed by the role that the World Economic Forumhas been able to play as a facilitator of business-government contact through its annual Davos Forum inSwitzerland, the Chinese launched their Boao Forum for Asia. Closer home, business associations like theFederation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII)have hosted events at which leaders of business and government interact, both formally and informally.Successive governments have used individual businessmen and business lobbies to promote Indian nationalinterest around the world. During the debate in the United States Congress on the U.S.-India civil nuclear energyagreement, several business leaders and Non-Resident Indian businesspersons in the U.S. actively lobbiedAmerican Congressmen and women. In countries as diverse as China, Russia and Japan, business leaders havebecome an active constituency who woo and get wooed by foreign governments.India’s point men abroad Part of the reason why public opinion is often suspicious of such intimacy between business and government isbecause of the concern with cronyism and corruption. There is that risk at all times. This is at least one reason whypoliticians in office always deny any such contact, and politicians out of office are critical of such contact. However,not all such contact is suspect.Going beyond the role of diplomatic facilitators, many Indian business leaders have emerged as de facto “nationalambassadors” given their growing global footprint and the access they enjoy in foreign capitals. Some Indianbusiness leaders find it easier to meet heads of government in countries where the Indian ambassador has to oftenwait longer to secure an audience.An interesting consequence of this role of globalised business leaders is that large firms with a global footprintinvest in securing information on geopolitical trends and risks. Indeed, some have even invested in crafting whatmay be called “corporate foreign policy” based on an independent assessment of developments in countries they areinvested in.Several Western think tanks now offer geopolitical risk consultancy to corporate leaders. This is as yet a nascentdiscipline in India. Some Indian business leaders have set up their own global advisory groups manned bygeopolitical and geo-economic analysts who keep them abreast of economic, political and diplomatic developmentsin countries of interest to the firm concerned.So, while the Indian government may deny reports about Mr. Jindal’s role in Mr. Modi’s meetings with Mr. Sharif,there would be nothing new or alarming about such intermediation, if it were true. Of course, really successfulbusiness diplomacy is one where a businessman operates below the media radar, not on Twitter. The more abusinessman claims proximity to a political leader, the more of a political liability he can become.

If Indian business has a complaint, it is about the attitude of the bureaucracy. While happy to use businessinfluence and outreach in diplomacy, the Indian bureaucracy is notoriously protocol-conscious and would rarelyoffer official recognition to business leaders. At the Prime Minister’s official banquets in New Delhi’s HyderabadHouse, business leaders are seated several places away from the host and his principal guest. A long-standinggrouse of business leaders is that while they are invited to travel to foreign capitals to be in attendance when thePrime Minister or other senior ministers travel, the government will never acknowledge that the delegation ofbusiness leaders is “accompanying” them. The myth is that they just happen to be around in the right place at theright time!



China, the missing piece to the Pakistanpuzzle?Of all the casualties from the Pathankot attack,perhaps the one least spoken aboutwas the India-China dialogue. By calling off his visit to Beijing that was due at thebeginning of January, National Security Adviser Ajit Doval may have sent a signal thatdealing with the crisis at hand with Pakistan was more important than the next chapterof the protracted border talks with China. Yet nothing could be further from the truth.For a number of reasons, Prime Minister Narendra Modi’s engagement with China is not

just more connected than ever with its Pakistan outreach, it is a natural consequence ofhis desire to connect with all of South Asia.

The first reason is that the Pakistan-China bond, often termed an “all-weatherfriendship”, is deeper than ever before, reinf orced by the concrete to be used in theirbiggest infrastructural initiative, the $46-billion China-Pakistan Economic Corridor(CPEC) announced in April 2015. Second, China is involved closely in othersubcontinental developments, such as the Afghanistan-Taliban talks, that will have abearing on India-Pakistan ties. Third, the biggest source of tensions between India andChina, the border issue in Jammu and Kashmir, is geographically linked with Pakistan.

And fourth, on the subject of terrorism, it is China that has had a higher rate of successin controlling the levers in Pakistan that run terror groups than most other countries.New axis in the making? However, despite all those reasons, 2015 saw a strain in India-China ties grow.Paradoxically, this is not a strain in bilateral ties, but borne of their ties with otherplayers in the region. The year began with India heralding a decided shift towards theU.S., signing the joint vision statement for the Asia-Pacific and Indian Oceanregion with the U.S. when U.S. President Obama visited New Delhi. The agreementwas the first of its kind, committing India to ties with the U.S. outside of South Asia,specifically mentioning “ensuring freedom of navigation and over flight” in the SouthChina Sea as a goal. China did not react well to the snub, and just a few months later,and a few weeks before Prime Minister Modi’s visit to China, unveiled the CPEC, making

the road through Pakistan-occupied Kashmir and Pakistan an integral part of its OneBelt, One Road (OBOR) plan. Significantly, maps issued in 2014 had no mention ofGwadar port in Pakistan, but mentioned Kolkata as a possible stop, but since Indiaremained cold to the OBOR/Silk Route initiative in 2015, a new line through Pakistanconnecting Gwadar port to the Maritime Silk Route has become much more visible.Indian strategic ties with the U.S. and Japan, both allied against China on the SouthChina Sea issue, also got closer. The year began with President Obama’s visit andended with President Shinzo Abe’s visit. Trilateral talks and military exercises wereinstitutionalised among the three countries, which China has always read as an attemptat its “containment”. Balancing the gains

While India’s move to the U.S.-Japan corner will no doubt win it strategic power in one

respect, it must also consider what it could lose. China today is a close friend to Russia,controls much of the Asian economy, and has most of Europe in its debt. It also remainsIndia’s largest trading partner. China is also involved too deeply with each of India’sneighbours, including Afghanistan, the Maldives, Nepal, Sri Lanka, Bangladesh andespecially Pakistan, for it to be cut out of India’s equations with them. Afghanistan’sdecision to trust China as a guarantor for its talks with the Taliban, or the agreementbetween China and Nepal for fuel supplies and the opening of trade routes and portaccess after the stand off between India and Nepal, should only underline that point. It

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must be remembered that even the Turkmenistan-Afghanistan-Pakistan-India (TAPI)pipeline will draw from reserves developed by Chinese loans.

The truth is that while China is seen as a hegemonist power by its maritime neighbours,it is seen as a stabilising force that invests in long-term development by its neighbourson land in South and Central Asia. It is puzzling why India would pick a battle withChina outside of its own neighbourhood, when it benefits India to engage China in

promoting infrastructure and fighting terror in the neighbourhood. It also makes littlesense to unite Pakistan and China in their antagonism to India, when previous decadeshave shown that it is possible to appeal to China to use its influence with Pakistan forpeace in the region. In his superb discourse of the relationship in his recent book, TheChina-Pakistan Axis , Andrew Small gives a detailed account of the Chinese role inforcing General Pervez Musharraf to withdraw troops during the Kargil war (1999), itspush for peace during Operation Parakram (2001-2002), and its Vice Foreign Minister’s“shuttle diplomacy” after the Mumbai attacks. Given all of the above, Mr. Modi might find that a new push to Beijing is worthmaking in a year India hopes to push for the elusive UN Security Council seat, andalso given his desire to pursue the spirit of May 2014, when he invited leaders of allSAARC nations, including Pakistan, to his swearing-in ceremony. “A distant relative

may not be as helpful as a near neighbour,” Chinese Premier Li Keqiang had said duringa visit to Delhi in 2013. The Prime Minister may well find that eastern neighbour helpfulwhen considering its vexed relations with India’s western neighbour as well.

Think like the neighbourIt is not surprising that terrorists struck Bacha Khan University on the deathanniversary of the Gandhian it is named after. Though Khan Abdul Ghaffar Khan was adevout Muslim who had declared his allegiance to Pakistan despite initial opposition tothe Partition, much of his time after 1947 was spent in its jails. Though the FrontierGandhi died in Peshawar in 1988, he was buried by over 2,00,000 mourners not inPakistan but in Jalalabad, Afghanistan.

The trajectory of Frontier Gandhi’s life provides an interesting anecdotal peek into themodern nation-state called Pakistan, where its conformity to the concept of both nation

and state is incomplete, and complicated. Lack of nuanced understanding of thoserealities, and more importantly its significance vis-à-vis India’s own strategic interests,among Indian decision-makers has resulted in successive governments struggling toformulate a credible and continuous policy on Pakistan.Narendra Modi’s government is only the latest to swing wildly in its responses, bitterlydivided and incoherent in its assessments. The result is that in the global bazaar ofopinion-making, the India-Pakistan hyphenation is almost fully back. And at home,much of the time and capabilities of the government, especially the security anddiplomatic establishment, are being devoted to dealing with Pakistan.Understanding our neighbour A better understanding of Pakistan’s own security concerns could help policymakers inIndia frame a stable engagement strategy with its most important neighbour of the day.Pakistan’s security strategy is built around a perceived existential threat from India.According to its narrative, since the birth of the two countries in 1947 India has been anaggressor on at least three occasions, dismembered it, humbled it militarily repeatedly,built nuclear bombs that can wipe it off the map, and has been subjecting Kashmiris tohumiliation. Over the years, India has also amassed over half a million militarypersonnel in Kashmir who could any day walk across the Line of Control, they argue.Further, Pakistan also frames a significant part of its security narrative around subjectssuch as rivers that flow across the border too.

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In February 2010, the then Pakistan Army chief, General Ashfaq Parvez Kayani, speltout what the country’s army is meant for. He acknowledged it remains an “India-centric”institution and that reality will not change in any significant way until the Kashmirissue and water disputes are resolved. He recounted the bitter bilateral history, thevarious unresolved issues, and India’s military capabilities, including the so-called ColdStart doctrine, among the reasons why the Pakistan Army plans “on adversaries’

capabilities, not intentions”. How have they planned? Pakistan today spends a quarter of its tax collected on themilitary in some form or the other. It continues to juggle with budget numbers, but thefact remains that the 6,00,000-plus active military personnel, 5,00,000 reserves, andthe large military installations are a huge drain on its economy.

The Pakistan Army is not just an armed military service, but it also runs businesses andthe nation itself. While it has carried out repeated assaults on Pakistan’s democracy, itis also the only institution capable of holding Pakistan together. Over the years, steepedin its deep insecurity of India’s defence capabilities, Pakistan’s military has alsodeveloped effective and disproportionate capabilities to bleed India.Among them is the flourishing industry of churning out militants to fight and die.

Thanks to large funding from the U.S. and Saudi Arabia starting in the late 1970s, it

mastered the art of creating cannon fodder, called mujahideen, for modern politicalcauses, and misinterpreting Islam to unleash terrorism on a scale probably not seenever in history. The modern-day instruction manual for this appalling retail licence forviolence was written by the Pakistani military. The U.S., Saudi Arabia, many othercountries, but chiefly Pakistan, are all paying for the sinister interpretation given to

jihad.Since the Taliban regime was overthrown in Afghanistan, over 50,000 Pakistanisincluding military personnel have been killed by domestic terrorism that is walking intoits schools and universities with frightening frequency. According to one estimate,terrorism may have bled Pakistan of about $100 billion since 2001. About three millionAfghan refugees continue to be a burden on Pakistan, and drugs and small arms areflourishing in the Islamic Republic.The importance of terror groups

However, to expect that all those are reasons enough for Pakistan to control militancytargeted at India is simplistic. Organisations such as Lashkar-e-Taiba and Jaish-e-Mohammad were created and nurtured by the very same Pakistan Army and theintelligence agency, Inter-Services Intelligence (ISI). These groups continue to serve acritical function at the core of the army’s security doctrine, of fighting for the Kashmircause, of checkmating the much bigger Indian military, and keeping its neighbouroccupied on various fronts.Even if the Pakistan Army leadership finally is waking up to the armed non-state actorsbiting back, will all of its components fall in line without any delay? Given the highstakes the Pakistan Army and the ISI have in their country and their historic role inmilitary coups, it is but a given conclusion that they are not monolithic organisations,but pulling in various directions despite the veneer of discipline. That would explain why

terrorists of the Jaish-e-Mohammad, which was repeatedly involved in trying toassassinate General Pervez Musharraf, were able to walk across the Indian borderwithout any trouble.

The terror groups are very still effective in unsettling India. A few hijackers were able tohumiliate the Atal Bihari Vajpayee government in the last week of 1999. Just 10terrorists in November 2008 were able to create so much havoc in the Indian economic,diplomatic and security establishments that the reverberations will continue for yearsmore to come.Engagement, the way out



India has to be realistic in its approach towards Pakistan. And for that, it has to first ofall define its own permanent interests, something that the Indian establishment hasfailed to do to date. Does the Indian security doctrine centre on the responsibility toensure robust and efficient economic growth that would enable a dignified life foreveryone living within its borders, and protecting its interests around the world? Or doesit hinge on staging jingoistic performances that would win its leaders elections? Is it to

annihilate Pakistan, or to ensure that India is able to play whatever role it can inhelping Pakistan emerge as a stable democracy, which in turn would be the bestguarantee that the recalcitrant neighbour is kept in control? Does the Indian securitydoctrine hold that a stable and democratic Pakistan is in India’s best interest? Or does itadvocate the collapse of Pakistan? And if so, has it factored in the consequentdestabilisation and probable scenario of millions of refugees pouring into the mostvibrant economy in the region?If a democratically stable Pakistan is India’s best bet, then it is a long way off. UntilPakistan reaches that destination, what is India’s best option? Rhetorical flourish aboutwiping out terror and the threat of responding to Islamabad in the only language itunderstands?Over the last decade or so India was de-hyphenated from Pakistan, and was increasingly

bracketed with China in global discussions. It may have been cosmetic, but itdischarges many useful functions: from impressing global investors to enter the Indiandomestic market to reducing the amount of resources spent on plotting responses toPakistan and countering terror originating from there. In the long run, hyphenation withChina and de-hyphenation with Pakistan would perhaps broaden the perspective of oursecurity establishment and help it shed its appalling biases against minorities andothers with grievances, and basically ensuring that India truly adheres to itsConstitution.It is almost four decades since the concept of BATNA (best alternative to a negotiatedagreement) entered negotiation classrooms, but it doesn’t seem to be a key element inthe armour of Indian dealings with Pakistan. The Indian government first needs todefine what is India’s BATNA vis-à-vis Pakistan? If there is no continuous diplomaticengagement, then what? Is it continual war against mostly suicide bombers who can

spring nasty surprises even against the finest standing army in the world? What aboutIndia’s own national goal, which presumably must be the centre of its security doctrine,of pulling its impoverished millions out of their miserable existence?It’s time to ask whether India has been playing to the Pakistani security doctrine allthese decades instead of scripting its own.

Revive NATGRID with safeguards The Central government’s decision to revive NATGRID (National Intelligence Grid) is awelcome move in the fight against terrorism, but it calls for caution and nuancedplanning in the way it would be structured. According to the existing plan, NATGRIDwill become a secure centralised database to stream sensitive information from 21 setsof data sources such as banks, credit cards, visa, immigration and train and air traveldetails, as well as from various intelligence agencies. The database would be accessibleto authorised persons from 11 agencies on a case-to-case basis, and only forprofessional investigations into suspected cases of terrorism. NATGRID was among theambitious slew of intelligence reforms undertaken in the wake of the Mumbai attacks ofNovember 2008. Like NATGRID, most of these proposed reforms in the securityestablishment have not fully materialised, yet again serving as a reminder that India’smemory is embarrassingly short.In a data-driven, digitised world, it would be foolhardy to ignore the power of big dataand its potential to provide real time tip-offs and predictive intelligence to deal with the



terrorist threat. Over the last two decades or so, during which the post-Cold War chaosresulted in many violent non-state actors setting up shop, the very digital tools thatterrorists use have also become great weapons to fight the ideologies of violence. Socialmedia and other platforms have become recruitment sites and propaganda machines forterrorist groups, and formal banking channels are used as much as informal ones totransact terror funding. In those same oceans of information are trends and information

that could avert terrorist strikes. However, appreciation of the power of digital databasesto tackle terror must be accompanied by deep concern about their possible misuse. TheSnowden files are just one pointer to the widespread misuse in recent years ofsurveillance capabilities to compromise individual privacy and even violate nationalsovereignty. Increasingly, there is also academic evidence to show that states areapplying excessive force and surveillance to tackle terrorism. The NATGRID’s effortsmust be placed against these realities before the government rushes into reviving it.When so much sensitive information about individuals is available on a single source,the potential for its misuse would dramatically go up. The poor track record of theIndian security and intelligence agencies on individual privacy and liberty must be keptin mind as the National Democratic Alliance government tries to nurture NATGRID,which has failed to take off despite the aggressive push by the previous United

Progressive Alliance government. The overdue initiative to revive NATGRID musttherefore be accompanied by action on the even longer-pending need to have effectiveoversight of intelligence agencies by Parliament or an eminent group.Keywords: NATGRID, terrorism

All in the spirit of equalityAs virtually its last significant act of 2015, on December 29, the Supreme Court of Indiadelivered its judgment on the validity of Kerala’s newest liquor policy, which seeks toprohibit the sale and service of alcohol in all public places, save bars and restaurants infive-star hotels. Regardless of what our respective moral positions on policies ofprohibition might be, and regardless of the potential efficacy of such programmes, thenew law, as is only plainly evident, militates against the fundamental promise of equalconcern and treatment under the Constitution. In placing five-star hotels on a pedestal,

the law takes a classist position, and commits a patent discrimination that is really anaffront to the underlying principles of our democracy. Regrettably, though, the SupremeCourt’s judgment, in The Kerala Bar Hotels Association v. State of Kerala , eschews eventhe most basic doctrines of constitutionalism, and, in so doing, allows the state toperpetrate a politics of hypocrisy.Kicking off the excise policy Since 2007, the Kerala government has sought to tighten its Abkari (excise) policy with aview to making liquor less freely available in the State, ostensibly in the interest ofpublic health. At first, the State sought to amend the policy by permitting new barlicences to be granted only to those hotels that were accorded a rating of three stars ormore b y the Central government’s Ministry of Tourism. In 2011, these rules were furtherchanged. This time, all hotels that had a rating of anything below four stars weredisentitled from having a licence issued to serve alcoholic beverages on their premises.However, those hotels with existing licences were accorded an amnesty, which permittedthem to have their licences renewed even if they did not possess a four-star mark.

The Supreme Court held, in a convoluted judgment, in March 2014, that the deletion ofthree-star hotels from the category of hotels eligible for a liquor licence was, in fact,constitutionally valid. The court provided a rather bizarre rationale for what appeared tobe a palpable act of favouritism. Even hotels without a bar licence, it said, were entitledto three-star statuses under the Ministry of Tourism’s rules and regulations.

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the provision’s core promise. The court also crystallised a basic two-prong test todetermine what constitutes such a classification: there must be, it held, an intelligibledifferentia, which distinguishes persons or things that are grouped together from othersleft out of the group, and this differentia must have a rational relation to the objectsought to be achieved by the law in question.Hence, in determining whether Kerala’s Abkari policy violated the right to equality, the

question was rather simple: has the State made a reasonable classification inconsonance with Article 14 by permitting only five-star hotels and above to serve liquor?When we apply the test previously laid down by the Supreme Court, there is little doubtthat the distinction that the policy makes between hotels on the basis of their relativeoffering of luxuries constitutes a discernible intelligible differentia between two classesof things. But a proper defence of the law also requires the government to additionallyshow us how this classification of five-star hotels as a separate category bears a sensiblenexus with the object of the law at hand. The changes in the liquor policy wereostensibly brought through with the view of promoting prohibition, and therebyimproving the standard of public health in the State. Now, ask yourself this: how canthis special treatment of five-star hotels possibly help the Kerala government inachieving these objectives?

The Supreme Court, as it happened, made no concerted effort to answer this question. This could be because, however hard we might want to try, it’s difficult to find anycogent connection between classifying five-star hotels separately and the aim ofachieving prohibition. The court, therefore simply said, “There can be no gainsaying thatthe prices/tariff of alcohol in Five Star hotels is usually prohibitively high, which acts asa deterrent to individuals going in for binge or even casual drinking. There is also littlescope for cavil that the guests in Five Star hotels are of a mature age; they do not visitthese hotels with the sole purpose of consuming alcohol.” Given the palpableinadequacies of such a justification — and also given its validation of a manifestlyclassist position — the court also used the State government’s excuse of tourism as afurther ruse to defend the law. But when a policy exists to promote the prohibition ofthe consumption of liquor, it’s specious to use an extraneous consideration, in this case,tourism, to defend a classification made in the law, regardless of how intelligible such a

classification might be.Prohibition often has a polarising effect on the polity. But the criticisms of theineffectuality of such policies apart, Kerala’s new law ought to have been seen for whatit is: paternalism, at its best, and, at its worst, an extension of an ingrained form ofclassism that is demonstrably opposed to the guarantee of equality under ourConstitution. The judgment in The Kerala Bar Hotels Association case is therefore deeplyunsatisfactory, and requires reconsideration.

Stay the course after PathankotWithin the short space of a month, Prime Minister Narendra Modi and his governmenthave gone through the entire cycle of India-Pakistan ties, as they have played for thepast two decades ever since the two countries agreed to a composite, structureddialogue between them. There has been talks about talks, talks about terror, a briefmoment of euphoria with gestures of renewing ties from the leaders, followed by anattack. While Mr. Modi’s Lahore landing was certainly bold, it has not yet proven to bethe game-changer that perhaps he too hoped it would be. Instead, the same kind ofterrorist attack that has always accompanied India-Pakistan engagement hit Pathankotin the early hours of Saturday. As with similar attacks in the past, it should notsurprise anyone if the terrorists came from Pakistan, and belonged to an anti-Indiagroup the Pakistani army has neatly sidestepped in its otherwise fairly successfulcrackdown on terrorists in the past year. Frustrated by their inability to hurt India, the



Jaish-e-Mohammad (JeM), the Lashkar-e-Toiba (LeT) and others have tried to retaintheir relevance by instead targeting the India-Pakistan dialogue process time and again.By not calling off talks immediately after the attack, the Modi government seems to haveindicated it will not allow these groups the satisfaction of achieving those aims. Asustained dialogue is the only fitting answer to terrorist groups and to their handlersinside the Pakistan establishment who wish to destabilise the peace process. In fact,

External Affairs Minister Sushma Swaraj told Parliament last month that India wouldnot “be provoked by saboteurs who want to stop the dialogue process in one way oranother”. Going forward, the talks process must be further insulated from the ‘veto’ of theseforces. First, the foreign secretaries must move quickly to set up a timetable of meetingsof all the secretaries in the two countries involved in the comprehensive dialogue. Theprocess will receive momentum if India and Pakistan agree to a resolution on what areoften called the “low-hanging fruit” of issues such as visas, confidence buildingmeasures on the Line of Control, water issues and the Sir Creek dispute. The moreissues they are able to agree on, the greater their chances of addressing the singlelargest issue that holds back ties today, that of terrorism. On this, it is for Pakistan toshow its good intentions, by acting against the JeM and LeT, both in court and on the

ground in Punjab where they run extensive militias. India must stay the course it hasset in the past month, including during the National Security Adviser talks, where it hasdelivered its message firmly, but quietly, with no hint of the one-upmanship that canhamper engagement. These actions will pave the road that was opened by the two PrimeMinisters on Christmas day, allowing them to slice through the proverbial Gordian knoton India-Pakistan ties, rather than having to disentangle the ends that constantlythreaten to strangle peace in the subcontinent.

Time for a national security doctrineBy restarting dialogue with Pakistan and acting with diplomatic restraint following thePathankot attack, the Narendra Modi government has wisely differentiated between thePakistan government and non-state actors. The challenge thrown up by the terroristattack on the Pathankot air force base is to evolve India’s national security doctrine to

include its response to non-state actors. While carrying on diplomatic engagement withPakistan, India needs a firm strategy to deal with terrorist threats that are now theprime challenge to the state. Political consensus must be evolved, in a publiclytransparent manner, to reflect the complex challenge facing the country, detail itsthresholds, interests that would be protected at any cost and response calibration vis-à- vis armed aggression. The doctrine must be accompanied by a national security strategythat spells out the command and control structures for meeting eventualities such asterror strikes, so that last-minute goof-ups such as those that have been evident at thePathankot airbase are not repeated. In the absence of such a clearly articulatedconsensus, India’s response is qualitatively linked to the government of the day, its keyleaders and their personal ability, or inability, to understand and appreciate securitychallenges.

The proposed security doctrine must be anchored in the foundational values of theConstitution. India enjoys Westphalian sovereignty, which grants it exclusive right to itsdomestic affairs and security but also comes with a huge bundle of responsibilities.India still has no written national security doctrine, and whatever is practised as thedoctrine, and strategy, is vastly inadequate. The political class across the spectrumneeds to come together to define India’s permanent interests. It is time to move on fromthe unwritten grand strategy of working only towards the political unity andpreservation of India to a written doctrine that defines India’s role in the world and itscommitment to protecting the life, liberty and interests of its people. After every terrorist



attack, there are shallow attempts by the establishment to fit episodic responses intoacademic frameworks and proposals for security establishment reforms, but in no timethings go back to default mode, until the next terrorist attack. The recurring terroristattacks are not just a humiliation for the country but also a nightmare that is repeatedlydisrupting daily routines and taking away precious lives. The very foundations of India’ssecurity establishment need to be reformed if a robust national security doctrine is to be

implemented. The intelligence agencies are cloaked in mystery, and with no credibleexternal audit. Given the opacity of these agencies, intelligence alerts often emerge thathave no credibility. In the process, credible intelligence inputs, such as the one aboutPathankot, are not treated with enough seriousness. The agencies that are to providesecurity cover and neutralise terrorist threats do not have a cohesive command andcontrol structure. It varies according to who is in control in New Delhi. It is time tofinally show that India can be more than a functional anarchy.

Driven by neither hawks nor doves The terrorist blitz-from-the-ground on the Indian Air Force base in Pathankot hasbrought home to us the fact that there is no brave new world in cross-border relationswith Pakistan. Time after time, the same dissonances come back to haunt us. Overturesmade, initiatives taken, emotional handshakes seem to vaporise the instant the atavism

and distrust-laden DNA in these relations reasserts itself in the wake of suchpremeditated violence and terrorism.Attacks like Pathankot come with a heavy price — the price paid in lives lost of ourdefence personnel and commandos, and the jolt that is felt when it is realised that theold days when terrorism bled our people have not gone away, more so when it was just afew days ago that our Prime Minister, like Atal Bihari Vajpayee, decided to go toPakistan, even if briefly, to extend an olive branch.Negotiating many minefields In the welter of pain felt on the deaths of our personnel in Pathankot, and the doubtsthat re-awaken about the judiciousness of a policy advocating dialogue with Pakistan, itis important that we are more reflective and introspective in our reactions. First, there isa need to understand that the truth in India-Pakistan relations is not about golden

tomorrows but the ingested bitterness about bloody and betrayed yesterdays and howwe can craft a future of a well-functioning, normal relationship despite this.Second, diplomacy with Pakistan is essentially like seeking a white flag meeting (as atemporary truce for negotiation, not a surrender) while walking a field embedded withmines. That is essentially the terrain we must negotiate and we will be bloodied in theprocess. Third, hard-nosed rationality demands that we understand the nature of ouradversary, and its multi-armed-and-headed character. The deep-seated antagonism thatthe vast majority of Pakistanis in decision-making capacities evince for India is a given.Diplomacy with Pakistan is in many ways charting a course without reliable maps. Inmany ways, that map has a missing segment, much like the map in the latest Star Warsmovie, where the search for Luke Skywalker is held up because there is a criticalsegment missing. Another character in the Star Wars series, Yoda, the most powerful ofthe Jedi, was perhaps addressing Pakistan when he said: “If once you start down thedark path, forever will it dominate your destiny, consume you it will.”

There is a Jedi-like dilemma also for India here: how do we face the truth and choose,and how do we use our Force for knowledge and defence? The truth in India-Pakistanrelations is a miasma-ridden mass of mutual recrimination, of issues that raisepollution levels to the level of near hopelessness, of enmities that exist only betweenblood brothers. Understanding that we carry this heavy burden must entail that wemust seek to ease it rather than add to its weight.Unlearning what we’ve learned



And that is where India’s initiatives to seek dialogue with Pakistan show the right way. They display the strength and flexibility that is the sign of a grown-up nation. At thesame time, vigilance being the price of liberty, we cannot let down our guard becauseirrational violence and the threat of terrorism directed against Indian interests(including in Afghanistan) from across the border have not ceased being the defaultactions of powerfully entrenched interests in Pakistan.

But the problems in India-Pakistan relations must be addressed without the applicationof mantras and shibboleths. That is where, to paraphrase Yoda again, we must unlearnwhat we have learned. All the issues that covered the old Composite Dialogue need to beaddressed in a graduated manner that still enables focus on the larger picture and theorganic whole — which should be the need for a relationship that functions peacefully,is normalising and has the well-being of the people of the two countries at its heart. Thisshould be a relationship that is driven by neither hawks nor doves but by a clearcharter of goals and the steady hand of a confident leadership.Systemic responses, not hysteria In a national agenda defined by the need for development, security and goodgovernance, the factor of security stands out in our external relations and cannot bedivorced from the work of diplomacy. The Pathankot experience evokes memories of past

attacks and the degrees of national preparedness in terms of intelligence assessments,inter-agency coordination, effective response, and communication strategy. Have weabsorbed past experience and the ways to avoid the pitfalls of yesterday? When onewitnesses the levels of hysteria and cacophony in some of our media channels, thedistinct impression one gets is of a dystopian universe of confusion, blaming andshaming and hyperventilation, a news cycle replaced by an outrage cycle as oneobserver recently said.We are not as a country sensitive to the image we should proactively project, althoughwe are easily outraged by slights to our self-esteem and our perceived sense of India’splace in the world. In times of crises, a war-room approach will help — popularly definedas that bunch of strategists around that big table, with a flow chart and that big boardbut much more than that. The orchestration of operations concerning security, crisisresponse, and communication is vital: bringing key experts on deck helps clarify chaotic

situations as the experts put it. We need to identify critical gaps, timelines, risks andtheir mitigation, also the communication process and how the checkpoints regardingmedia management must be manned. The closure of leaks of information is a criticalmust. In times of emergency, as we have learnt to do with responses to naturaldisasters, we must learn to systematise our processes better.Sticking to the agenda Returning to the agenda with Pakistan, let us not forget that there is a very humandesire for peace in both countries. Prime Minister Narendra Modi’s recent handshake inPakistan with Prime Minister Nawaz Sharif rekindled memories of an event from a long-ago timeline — the Christmas Truce of 1914 between German and Allied soldiers — amomentary truce in a landscape of conflict. “Two nations singing a carol in the middle ofa war” was how one observer put it. The next day the hostilities commenced again. But

from the two World Wars of the last century, the warring nations involved moved toembrace a situation of coexistence and Europe’s battlefields, while frozen in historicalmemory, do not exist in the present. For India and Pakistan, there is a lot of learningand unlearning involved.

The emphasis in our relations with Pakistan must be on keeping the channels ofdialogue open together with vigilant intelligence and an astute assessment of Pakistan’smoves. When the two sides meet next, Pathankot will obviously dominate the agenda. Itwill not be enough for Pakistan to just play the usual signature tune that its statemachinery was not involved. India has a legitimate right to question Pakistan’s



credibility on this issue. It is a truth universally acknowledged that terror groupstargeting India continue to operate with impunity from Pakistani soil. Why is it thatPakistani intelligence and security do not silence them? It is not enough to plead thatPakistan is the worst victim of terrorism today. Much as the world and India felt grief forthe lives of innocent children lost in Peshawar, the suffering of innocent Indians at thehands of terrorists with cross-border affiliation on so many past occasions cannot be

ignored. This is a peace process, therefore, that has many miles to go.(Nirupama Rao is former Foreign Secretary and Ambassador of India to the U.S. andChina.Twitter: @NMenonRao) When the two sides meet next, Pathankot will obviously dominate the agenda. Itwill not be enough for Pakistan to just play the usual signature tune that itsstate machinery was not involved. India has a legitimate right to questionPakistan’s credibility on this issue The truth in India-Pakistan relations is not about golden tomorrows but theingested bitterness about bloody and betrayed yesterdays, and how we can crafta future of a well-functioning, normal relationship despite this

Time for questions on Pathankot There is much relief as quiet finally returns to Pathankot. However, the immediate

questions that need to be asked are about the way the security operation was carriedout from the moment a specific intelligence alert came to the Centre about the possibletargeting of the Pathankot airbase. This newspaper has already reported that byChristmas, a foreign intelligence agency had passed on a tip-off about terroristsplanning to attack the base. Was that not treated with seriousness because mostintelligence alerts do not mean anything? Is the response a reflection of the poor qualityof general intelligence alerts? On January 1, early morning, the abductedSuperintendent of Police, Salwinder Singh, reported to the local police that his vehiclehad been snatched. By afternoon, the government at the Centre had confirmation aboutthe presence of terrorists in Pathankot. What the security establishment did from thatmoment raises several questions. A meeting chaired by the National Security Adviserand attended by, among others, the chiefs of the Army and the Air Force, decided to

rush NSG commandos from Delhi. How did they take that decision, when it was clearthat an airbase had to be protected and terrorists could be anywhere in the district?Does this reflect the poor thinking of senior members of the security establishment? Ordoes it hint at autocratic decision-making in New Delhi without professionalparticipation?Over the last few days, the government has been making a desperate effort to defend thecourse of action that was followed in fighting terrorists. From informal briefings in NewDelhi to the formal briefing on Wednesday evening by Lt. Gen. K.J. Singh, GeneralOfficer Commanding-in-Chief, Western Command, the government has been putting upa spirited defence of the operations. Gen. Singh admitted that the first to react to theterrorists were the DSC (Defence Security Corps) and Garuds, but added that thesecond contact was the Army columns. As Defence Minister Manohar Parrikar did on

Tuesday, Gen. Singh claimed that there was total operational synergy, and he justifiedthe time taken by saying that forces had to be applied sequentially, and notsimultaneously, and they were also careful to avoid a hostage situation and othereventualities. However, all this does not answer the basic criticism by military veteransand security experts: despite the Pathankot airbase being at shouting distance fromthousands of Army soldiers trained to deal with terrorists, why were they not even calledin to provide perimeter security to the base? What was the need to send the NSG into amilitary installation where the Army’s para commandos and quick reaction teams wouldhave been more familiar with the terrain? Why was the operational command not



handed over to the senior-most Army commander on the ground? The answers shouldnot only inform decisions to hold those responsible accountable for the mis-step inoperations, but also lead to an upgrade of existing protocols.

In defence of intelligenceWhile many dedicated officers worked day and night for years to piece together the

growing body of evidence on al Qaeda and to understand the threats, in the end it wasnot enough to gain the advantage before the 9/11 attacks.Every terror strike anywhere in the world is invariably followed by a tirade againstintelligence agencies for their alleged failure to alert the police on the field. The history ofthe CIA/FBI (9/11 attacks on New York’s Twin Towers), the MI5 (July 7, 2005 attackson London’s public transport system) and our own Intelligence Bureau (IB) andResearch and Analysis Wing (26/11 Mumbai attacks) is replete with instances in whichthe police could not be tipped off about an impending assault on specific targets. Thecriticism of intelligence agencies after the recent Pathankot incident, in which at leastsix terrorists strongly suspected to belong to the Jaish-e-Mohammed (JeM) sneaked intoan Indian Air Force (IAF) base, followed the same pattern.Many reports have conclusively established that in this instance, both the IB and thePunjab State intelligence had sent out clear communications down the line, five days

ahead of the terrorist incursion, that there was a huge threat to installations on theborder with Pakistan, and therefore the need for extreme preparedness. An impressionhas gained ground, rightly or wrongly, that the warning had not been taken seriously,either by the local police or the defence installations in the area. As a result, theterrorist group was able to smuggle themselves into the Pathankot airbase and launch adaring attack.Intelligence and inaction In our view, here is one instance in which intelligence agencies were not to be blamed.

The lapse was most probably on the part of the defence and police personnel in the areain not plugging every possible hole to avert the incursion. The airbase, a little more than20 sq. km. in extent, is situated close to the border with a hostile neighbour. It did notrequire any extraordinary vision therefore to reach the conclusion that it was extremely

vulnerable to enemy designs at all times, and particularly after information had beenreceived of the incursion of a specific group. There was apparently a chink in thephysical security arrangements. This was certainly not an intelligence failure.

There is a near parallel here to what happened in Mumbai on November 26, 2008. TheR.D. Pradhan committee appointed by the State government pointed out how severalvaluable inputs were given to the Mumbai Police highlighting the possibility of terroristsdesigning an attack on the city. The Anti-Terrorism Squad (ATS) chief Hemant Karkareactually went to the extent of proactively advising leading hotels of the need for extremecircumspection. The Pradhan committee was highly critical of the lack of preparednessof the government and the police despite the availability of specific intelligence.(Ironically, the then Navy chief attributed the failure to foil the intrusion of the terroriststhrough the sea to the absence of specific intelligence!) It noted with regret thatwhatever intelligence was available was not shared with the lower formations of thepolice.No police force anywhere in the world concedes that it had received specific intelligenceon a possible attack. Even when it admits otherwise, it has a tendency to complain thatwhatever was given to it was not specific enough to thwart mischief. The question thatarises here is, how much intelligence can do, and also, what it cannot do. Investing thelatter with superhuman capacity and expecting it to give inputs to the last detail — suchas exact time of the attack, and the exact spots targeted — seems preposterous.The new-age terrorists



The world has become too complicated a place in the past few years for traditionalintelligence collection. The 9/11 attacks, a successful operation by an essentiallyreligious outfit with limited resources, is a landmark that will find a prominent place inany comprehensive history of the intelligence trade. It highlighted how the world’s mostreputed intelligence organisations — the CIA and FBI — were no match for the al-Qaeda. In this case, vital inputs on the latter’s activities came in bits and pieces, which

had to be woven into a whole fabric to make some sense for action.Hitherto, the belief was that aircraft were targets only for hijacking. This proved to be anaïve reading of terrorist capabilities when commercial aircraft were used as tools forbringing down massive buildings. This was almost identical with the discovery, afterRajiv Gandhi’s assassination, that a ‘human bomb’ could be employed to liquidate VIPs.In both cases, efforts were not lacking on the part of intelligence operatives. What wasdistressingly missing was the ultimate in intelligence: the exact mode, time and place ofattack.Can this lacuna be ever filled? We do not think so, unless you stumble upon some strayconversation between unidentifiable participants in a conspiracy. Conspirators of thepresent day are far more clued up than those in the business yesteryear, and take everyconceivable precaution to protect information. Only if a message cannot be delivered by

hand and through an absolutely reliable courier do terror outfits use other media. Withincreasing judicial restraints on intelligence organisations, monitoring of telephones andelectronic mail has become extremely complicated and hazardous, and is attended by anexposure that invites criminal action against public servants working in nationalinterest. The public should be made aware of this. Gone are the days when intelligenceaccountability was nearly a myth. Intelligence officers now function on a razor’s edge,with the prospect of either being bumped off by reckless terrorist groups or beingprosecuted by judicial authorities who have no clue about the perils that accompany anintelligence operation.

The alternative to eavesdropping is infiltration into terror groups. This has been foundto be an almost impossible task, because of the extreme motivation resulting fromindoctrination of members. Here I recall the decision a year ago of the New York policeto stop its men or their associates entering mosques with a view to mingling with the

gathering and observing proceedings, especially on Fridays. This reversal of anoperational tactic was a sequel to exposure of the mechanics of the police infiltratingreligious meetings.

The most recent incident (December 2, 2015) in San Bernardino (California) in which a young couple opened unprovoked fire on county employees, killing 14 of them,illustrated the enormity of the task of intelligence organisations. The couple hadPakistani connections, but had merged so well into the local community that they couldhardly have been expected to unleash a terror attack. They revealed no aberrations orany activity that even remotely suggested that they were capable of such a dastardly act.What intelligence outputs on them were possible to thwart their designs?In the ultimate analysis, we are inclined to agree with Jessica Stern of Harvard, anoutstanding scholar of terrorism, that the world cannot fight terrorism by merely

upgrading intelligence capability. It needs a lot more imagination and also dedication toremoving economic grievances in the less developed nations, where religious fanaticismhas become the opium that suppresses the pain of depravity.

After Pathankot, what? The terror attack on the airbase in Pathankot, reportedly carried out by the Jaish-e-Muhammad, has raised several questions about how to respond to such attacks. Theextended time taken by the security forces to neutralise the attack and secure the area



as well as the losses suffered by them — seven lives were lost on the Indian side — hasled to a clamour for the need to have the ability to respond more swiftly.One view has been that the local police should have reacted faster and, at any rate,must improve their capacity to meet such an attack in future. This suggestion needs tobe examined in detail since it would require atotal revamp of the police forces in the states. The police forces at the state level are

primarily required to maintain law and order, manage traffic, and prevent andinvestigate crime. It is not desirable for such a civilian force to be armed with automaticweapons to respond to a terrorist attack.Such a change in the work profile would require a paradigm change in the way policeofficials are recruited and trained. For instance, the bulk of the recruits in the policecome from the rural areas and from the economically weaker sections of society.Physical tests at the entry levels are deliberately designed in a manner that does notweed out too many hopeful candidates. For the same reason, the training curricula, aswell, cannot be too stringent.Even on the job, a daily grind with 14-hour duty schedules, irregular food timings,consumption of unhealthy street food, is not conducive to a healthy lifestyle. One canhardly expect a constable, used to wielding a lathi and investigating crime, to suddenly

take up sophisticated arms and combat well-trained terrorists.So the first thing that policymakers have to decide is the kind of police they want,depending on the kind of tasks they expect the police to perform. This should befollowed up by necessary improvements in the training facilities available for the police.Another important, yet often ignored, requirement for a force to be battleworthy isregular firing practice. Yet another handicap is the lack of ammunition. The police forcesget the ammunition from the ordinance depots, but in these depots, the requirements ofthe armed forces and the Central paramilitary forces are given priority. Between theconstraints of the depot and the objections raised by the finance department, evensanctioned grants are not utilised.

The police would also have to modernise their work culture and daily processes.Policemen, particularly in metropolitan cities, could be equipped with short batons andcommunication devices so that they

can respond quicker.In Pathankot, we were lucky that there was some intelligence input about an impendingattack. As such, security at the base could be beefed up, including the mobilisation ofthe NSG. But we may not be so lucky all the time. The July 2015 terror attack inGurdaspur is a case in point. In the November terrorist attacks in Paris, it was aprecinct cop who first reached the attack site, although he was advised to withdraw andawait the arrival of specialised units. InSan Bernardino in December 2015, specialised units had to be mobilised to deal withthe situation. Thus, specialised units are essential to deal with such attacks.Several strategic assets are spread across the country. As such, we will have to figureout how to raise such units closer to the location of our strategic or vulnerable assets.

This would have financial implications for policymakers as these units would have to be

suitably housed, trained, equipped and kept motivated. We also have to look at the wayphysical protection measures are taken at strategic installations. For instance, we oftenfind incomplete or poorly built boundary walls and inadequate lighting, with hardly anyback-up.

The Intelligence Bureau is tasked with periodic audits of vital and strategic locations buttheir reports are often ignored. Similarly, the recommendations of committees, set up toreview the security of various assets, are also ignored. Concerned ministries are loatheto spend money and no one is held accountable for the failure to follow up on



the plane the day before, holding their kirpan s (short swords or knives) to the pilots’necks. One hijacker had cut his palm with his kirpan and raised it, dripping with blood,to show that they were serious, and also threatened to detonate grenades that theyclaimed to have. The “grenades”, it turned out later, were just guavas wrapped innewspaper.In Delhi, the crisis management committee had been convened by the Cabinet Secretary

as soon as the Delhi airport Air Traffic Control (ATC) had flashed news of the hijacking.Soon after, India’s High Commissioner to Pakistan confirmed from the Lahore ATC thatthe hijacked plane had landed there, and Indian and Pakistani officials discussed whatthey should do next. At one point, India’s Deputy High Commissioner had evenattempted to enter the aircraft himself. But he was pulled back by security forces whothen brought the Dal Khalsa leader, Gajendra Singh, to the VIP lounge where the IndianHigh Commission team, including the Chief Security Officer, were monitoring thesituation. It was a moment of bravery, but could have gone terribly wrong if thehijackers had decided to take the senior diplomat hostage as well.The commando operation Singh’s demands included the release of his leaders, including Jarnail SinghBhindranwale, and $5,00,000 in cash. The High Commission officials bought time and,

along with Pakistani officials, convinced them to release many of the passengers: mostof the women and children were let off as were all the foreigners. Now, of the 117 whoboarded at Delhi, 46 passengers and six crew members remained on the plane. In themeantime, the Corps Commander in Lahore, General Lodhi, had flown in the SSGcommando team, and waited for Indian orders to go in. At about 10.30 p.m., even as theIndian Cabinet met, the High Commissioner called the Foreign Secretary, asking howlong they should wait before using force. “It should not be delayed too long,” the ForeignSecretary replied, leaving it to the High Commissioner to take a call. Shortly aftermidnight, the High Commissioner gave the all-clear to Lt Gen. Lodhi, who launched thecommando operation, captured the hijackers. and freed the hostages without muchtrouble. In Delhi the next morning, the Cabinet passed a resolution thanking Pakistanand then President General Zia-ul-Haq for his help, and put in a formal request for theextradition of the five hijackers. Through the hijack drama, President Zia had spoken

twice with then President Sanjiva Reddy, assuring India of Pakistan’s “full cooperation”. It was 1981, and the hijack described IC-423 that took off from Delhi for Srinagar viaAmritsar on September 29. On the face of it, the rescue operation was a copybookexample of how India-Pakistan cooperation should look when it comes to terror.Unfortunately, that’s where the chimera ended. Pakistani commandos didn’t hand thehijackers over to India, and despite saying they were “in custody” for years, allowedthem to live at the Nankana Sahib Gurdwara. Eventually, the government did prosecutethem for the hijack, and a court convicted them and sentenced them to lifeimprisonment in 1986. In 2000, two of the hijackers were deported to India, butGajendra Singh, who reportedly trained several batches of Sikh and then Kashmirimilitants to wage terror attacks on India, was never returned. The High Commissionermentioned was Natwar Singh, who went on to become External Affairs Minister. The

Deputy High Commissioner was Satinder Lambah, former Prime Minister ManmohanSingh’s special envoy for negotiations with Pakistan. The security officer is now India’sNational Security Adviser and was involved in hostage negotiations during the IC-814hijack. The Dal Khalsa, like other Sikh organisations, remains on India’s radar, butGajendra Singh is not mentioned in India’s list of ‘most wanted’.

The hijacking was only the first of a series. Between 1981 and 1984, there were fourmore, each more daring the last one, each receiving an increasing amount of supportfrom the government of General Zia. In one case, hijackers who stopped at Lahore andwent on to Dubai were found to have had weapons handed to them during their Lahore



halt. For Pakistan’s government, the increasing spotlight on Sikh separatism became avery convenient tool to use against India, and it used it to the hilt. Next came its fullsupport to Kashmiri militancy, and shelter to the D-Company, all of which became adomestic and an international liability. Even so, when the 1999 hijack happened, thePakistan government was more than comfortable taking in Masood Azhar, the portlycleric who had been injured during the Afghan jihad, Mushtaq Zargar, a man famous in

the Valley for tying grenades to his victims and detonating them, and Omar SaeedSheikh, the man who then killed journalist Daniel Pearl.No hostage policy yet India, too, learnt very few lessons. Despite the hijack mechanism being used time andagain, the government has instituted few new policies that would protect its citizensbetter. In 2013 and 2014, respective Home Ministers said they were working on ahostage policy, but the government has not announced one yet. While officials todayconsole themselves that the Pathankot attack “could have been much worse”, they don’tfactor in just what would have happened had some soldiers been taken hostage. Othersystems have actually deteriorated. The crisis management group, constituted in amatter of minutes in 1981, was convened, but wasn’t quick enough to stop the hijackersof IC-814 from taking off from Amritsar in 1999 and eventually reaching Kandahar, and

wasn’t even constituted during the Pathankot attack. The promise of Pakistanicooperation on terror attacks, and the Indian threat of calling off talks, too, is a runningtheme through these 35 years. No changes — except perhaps one. After the hijack in1981, carrying kirpans onbaord was banned.

The many must resist the someAs the developed countries chip away at the egalitarian moorings of the WTO,India must work with like-minded countries to translate its agenda intoactual results

The World Trade Organisation’s (WT O) press release after the Nairobi MinisterialConference in mid-December said, “WTO members secured a historic Nairobi Package

for Africa and the world”. Those seemingly optimistic words, however, belie severalfundamental challenges that the Nairobi Ministerial Declaration presents for the futureof the WTO. Buried in the last few paragraphs of the declaration is a recording ofdifferences between WTO members over how the future negotiations will be conducted.It notes that while many WTO members reaffirm the Doha Development Agenda (DDA),not all members share this view.A cardinal principle for WTO negotiations is consensus. The WTO works on the principleof one vote for each member country, irrespective of size or economic power. Thisprinciple worked well in theory in a world where a few economically strong powers couldcontinue to hold the reins of decision-making, but has been running into increasingcomplexities in a multipolar WTO with a membership of over 160 countries, and a U.S.and European Union whose economic clout have been diminishing.

The Doha precedent To add to the complexities of the increasingly complex WTO was the fairly egalitarianmandate that the DDA presented. The Doha Development Round, launched in 2001, setfor itself the challenge of a “single undertaking” comprising several elements includingagriculture, non-agricultural market access, services, intellectual property, tradefacilitation, trade and environment, and trade and development. Virtually every itemwas envisaged as a whole and indivisible package which could not be agreed uponseparately. The underlying principle for this was the need for a balanced outcome in allstreams of negotiations.



The slow progress at the WTO has been accompanied by the growth of mega-regionaltrade agreements — the recently concluded Trans-Pacific Partnership (TPP) formedamong 12 countries, and two under negotiation: the Regional Cooperation for EconomicPartnership (RCEP) formed among the 10 ASEAN countries and India, China, Japan,South Korea, Australia and New Zealand, and the Transatlantic Trade and InvestmentPartnership (TTIP) between the U.S. and the E.U. These mega-regionals need to also be

seen in the context of increasing bilateral free-trade agreements (which have increasedfrom around 124 such agreements in 1994 to over 600 agreements in 2015). Asignificant amount of India’s own negotiating capital and focus has been on the mega-regional RCEP agreement, and on bilateral free-trade agreements; but neither approachis a substitute for the WTO and its strong edifice of a multilateral system of rules,backed by an effective dispute-settlement mechanism.Agreeing to disagree It is in this context that the Nairobi Ministerial Declaration’s admission of dissonance inthe WTO membership on the ‘Doha mandate’ assumes greater significance. Thisdissonance is presented in the text of the declaration which records what “manyMembers” versus “some Members” want. While “many” reaffirm the Doha mandate, theothers do not. While “many Members want to carry out the work on the basis of the

Doha structure”, “some want to explore new architectures”. And finally, while “somewish to identify and discuss other issues for negotiation” (a reference to issues otherthan those under the Doha mandate), “others do not”. For the first time in a Ministerial Declaration adopted by consensus, there is referenceto a consensual acknowledgement of divergence of views, which underlies the slowprogress of the Doha round. While there is no identification in the declaration, thedeveloping countries, including India, clearly belong to the “many” category, while“some” includes the U.S., the E.U., and other developed countries. The use of the word“many” could perhaps be seen as an implicit recording of a majority view in favour of theDoha mandate. A glimmer of hope, however, remains — that the views of the majoritycould potentially be tapped for driving at a logical and hopeful conclusion of the Dohamandate.However disappointing the Nairobi outcome may be, it is in essence a recording of a

factual reality of the differences between countries, and the strong pressure of thedeveloped world to manoeuvre the WTO in a direction that best suits its interests. Theonly option for India is to forge ahead with a high degree of preparedness and focus onareas of its interests, coalition-building with like-minded countries, and translatingwhat “many” want into actual results. The Doha round had resulted in several decisionsand declarations which continue to remain legally valid decisions of WTO members andneed to be honoured in taking forward the negotiations. The Nairobi Declaration in factrefers to the recently concluded United Nation’s 2030 Sustainable Development Goals(SDGs). One of the SDGs is that of promoting an equitable multilateral trading systemunder the WTO “through the conclusion of negotiations under its Doha DevelopmentAgenda”. This can again be seen as an implicit referencing of the DDA and itsimportance.

Furthermore, the Nairobi Decisions on special safeguard mechanism for developingcountry members and on public stockholding for food security purposes clearly makereference to post-Doha decisions (the Hong Kong Ministerial Decision and the BaliDecision) as the basis for further negotiations. It is important to build on each of theseto reach clear, successful and speedy outcomes.On other Doha issues, it is important to clearly map what India wants, and how thatmay be achieved — for example, in services negotiations.Of equal importance is the need to prepare for the new issues, approaches andarchitecture that “some” WTO members have expressed their desire for in the Nairobi



Declaration. The recently concluded TPP agreement perhaps provides a clear glimpse ofwhat these new issues are likely to be — environment, labour, investment, competition,government procurement, and so on. How to engage on these issues, and identify thered and green lights for negotiations, is the next challenge that India needs to beprepared for.

The WTO remains an institution that is worth preserving. India needs to approach it

from a position of strength, with clearly defined agendas, and with preparedness for thenew challenges it presents.(R.V. Anuradha is a Delhi-based lawyer specialising in international trade law and policymatters.) However disappointing the Nairobi outcome may be, it is a recording of a factualreality of the differences between countries

Dress code by judicial diktatSeeking to preserve the ‘spiritual ambience’ in temples by prescribing a dress code forworshippers may appear to be a laudable objective. However, courts of law should becautious about framing their own rules in the guise of passing judicial orders. A fiatfrom the Madurai Bench of the Madras High Court prescribing the sort of clothing thatdevotees should wear while visiting temples has come into effect in Tamil Nadu from

January 1. A single judge decided on November 26, 2015 that to curb the wearing of“improper clothing” by temple-goers, a dress code was “inevitable”. Even though whatwas before him was only a petition for permitting a folk cultural performance on thepremises of a village temple, he impleaded the State Hindu Religious and CharitableEndowments Department as a respondent and proceeded to prescribe an interim dresscode straightaway. The code, that sets down dhotis or pyjamas with upper cloth, orformal trousers and shirts, for men, and saree or half-saree with blouse, or churidarswith upper cloth, for women, and any fully covered dress for children, will be in forceuntil the State government decides on implementing a code on the lines given in thecourt order. The department has now decided to appeal to a Division Bench against thesingle judge’s order. It has rightly taken the position that the order was not inconsonance with the Tamil Nadu Temple Entry Authorisation Act, 1947, which permits

individual temples to frame rules relating to attire based on their own customs andtraditions.It is true that many places of worship belonging to all religions do have and enforcesome sort of attire for worshippers and visitors. There are temples that insist that maledevotees should be bare-bodied above the waist while inside their precincts, and manythat allow only dhotis and bar trousers. However, these restrictions are framed bytemple authorities based on local tradition and customs. The acceptability of theworshippers’ clothing is decided by local circumstances and ought not to be based onexternal decree, much less through a judicial diktat. In Tamil Nadu, tens of thousandsof temples do come under the State government through the HR & CE Department, butthat does not automatically mean that a writ of mandamus can be issued by the courtto the authorities without sufficient cause or any public law principle. There is nothingto show that public authorities had failed to do their duty of protecting the ambience oftemples all over the State. The judge’s code may not be unduly restrictive, but it raisesthe question whether there is any religious rule linking dress with devotion. It is notclear why the prescription is gender-based, when some kinds of apparel — shirts andtrousers, for instance — are worn by both men and women. Judicial activismundoubtedly furthers public interest, but it is equally important that it is not used toimpose a particular world view on the public.

Non-alignment to multi-alignment



December has been a significant month for India and Indian diplomacy. This was notlimited merely to defence acquisitions, but also included new initiatives on the foreignpolicy front.If anything remained of the concept of non-alignment, India’s outreach to both Cold Warantagonists, in December, appeared to signal its final demise. Non-alignment servedIndia well during the difficult years from the mid to the late 20th century, but had

apparently outlived its utility. The time had possibly come to sound its requiem, andIndia did just that in December.Several reasons can be adduced for India’s shift from non-alignment to multi-alignment.Undeniably, policies adopted by India since the beginning of this century had helpedgenerate a climate of trust across the spectrum of warring nations and long-timeantagonists. A spirit of accommodation and constructive solutions to major regional andinternational challenges had also made India more acceptable to most nations. TheIndia-U.S. Civil Nuclear Agreement in the first decade of this century was in this respecttruly the “game changer”. India came to be seen as a positive, stabilising influence as faras the global and the regional environment was concerned. Non-alignment clearly hadno place in this milieu.Deepening India-U.S. ties

It was, hence, not difficult for Defence Minister Manohar Parrikar, within the course of afew hours of discussion with his counterpart during his visit to the United States inDecember, to enhance the quality of their defence dialogue and strengthen the defenceengagement between the two countries. Outcomes from this visit of the Defence Ministerare certain to further enlarge the scope of the already booming defence relationship.Among the more significant takeaways are: the progress made regarding the jointworking groups on both aircraft carrier technology and jet engine technology; theapprovals given for additional numbers of Boeing P-8I maritime patrol aircraft, C-17Globemaster-III strategic airlift aircraft, and M777 ultra-light howitzers; the progressachieved regarding long-deferred “foundational agreements” such as CISMOA(Communications and Information Security Memorandum of Agreement) and theLogistics Support Agreement (LSA), and a further strengthening of the partnership on“high technology” under the Defence Technology and Trade Initiative (DTTI).

Reaffirming ties with Russia and Japan During this same month of December, Prime Minister Narendra Modi took off for Russiato reaffirm the strong links that exist between the two nations. Statements made on theoccasion reveal the determination on both sides to reinforce the strategic ties that dateback to the Cold War years. Few, however, expected that the visit would also result inRussia regaining its position as India’s principal defence supplier.

The list of agreements drawn up in Moscow covers nuclear, space, energy and defence.Russia has committed [earlier] to building additional nuclear reactors at Kudankulam(Tamil Nadu) and in Andhra Pradesh. In terms of conventional energy, India has secureda bouquet of deals, including a 10 per cent stake in Russian oil company Rosneft, andcommitments regarding a possible stake in another field in East Siberia. In the area ofdefence manufacturing, both sides have pulled out all the stops. Agreement was reached

with regard to co-production of Kamov-226T utility helicopters (the bulk of which wouldbe built in India), and the possibility of securing 48 MI-17 V5 medium-lift helicopters, S-400 Triumf/Triumph missile systems and stealth frigates.

Japanese Prime Minister Shinzo Abe’s visit to India, also during the same month,meantime, proved to be more than a strategic interlude, with defence, foreign policy, andeconomic aspects all receiving attention. Japan’s willingness to cooperate on peacefulnuclear energy will have the same kind of positive impact as that which followed theiconic India-U.S. civil nuclear agreement of 2008. Japan’s willingness to acknowledgeIndia as a reliable and trustworthy nuclear power (despite not being a signatory to the



Nuclear Non-Proliferation Treaty) is again certain to have a positive impact on nuclearestablishments across the world.

Japan’s willingness to share defence equipment and technology, facilitate the exchangeof classified military information, and arrive at an understanding of emerging threats inthe Indo-Pacific — implicit in the India-Japan Agreement with regard to freedom ofnavigation in the South China Sea — has opened a new chapter in relations. This was

further buttressed by the provision of financial and technical aid for a high-speed raillink between Mumbai and Ahmedabad, in addition to overseas developmental assistancefor various projects across India. Mr. Abe’s affirmation, that no other bilateralrelationship in the world has the kind of potential which ties relations between Indiaand Japan, was clearly no hyperbole.The Pakistan puzzle On the return trip from Russia, Prime Minister Modi paid a visit to Afghanistan wherehe inaugurated the new Afghan Parliament building (built with Indian aid). Making astirring speech on the occasion, he complimented Afghanistan’s determination to standup to terror from across the border, and criticised attempts made to unsettleAfghanistan through the use of terror tactics. En route to Delhi from Kabul, the PrimeMinister made an “impromptu” stopover in Lahore to wish Pakistan Prime Minister

Nawaz Sharif on his birthday. This evoked euphoric headlines in the Indian media. Noteveryone, however, saw this as heralding a new chapter in India-Pakistan relations, withlong-time Pakistan watchers well aware that the “path to Pakistan’s perfidy” is usuallypaved with good intentions on India’s part.

The real motive underlying the Prime Minister’s visit to Pakistan remains unclear. Mr.Modi is well aware that Pakistan has given no indication whatsoever of having “changedits spots”. Only a few hours prior to the Lahore visit, he had implicitly warnedAfghanistan of the threat posed by Pakistan. Less than a fortnight ago while addressingthe Combined Commanders’ Conference on board INS Vikramaditya, the Prime Ministerhad struck a sombre note, warning that “we see terrorism and ceasefire violations;reckless nuclear build-up and threats; border transgressions; and continuing militarymodernisation” in our neighbourhood. All this leaves little room for anyone to think thatthe Prime Minister nurtures any illusion of a change of heart on Pakistan’s part. It

would, hence, be unrealistic to think that he was hoping to remove the obstacles thatstood in the way of a reconciliation between the two countries with this grand gesture.Mr. Modi is also well aware that there can be no substitute for hard negotiations, or theneed for a great deal of effort, to narrow the gap between the two countries.

The real danger is that it could lull the nation into a false sense of complacency andsecurity on account of the circumstances surrounding this sudden move. Any mistakenstep as far as Pakistan is concerned needs to be avoided. Pakistan is presently goingthrough a very “promising” phase in its turbulent history, and is being wooed by bothChina and the U.S. It does not, however, show any signs that it has reduced itsanimosity towards India.

The potential benefits from the China-Pakistan Economic Corridor are expected tosubstantially improve Pakistan’s economic fortunes. The U.S., in the meantime, appears

to have reversed some of the policies it had adopted after 2013, and is demonstrating ahigher degree of sensitivity to Pakistan’s concerns. It is at present actively courtingPakistan in view of its strategic location vis-à-vis Afghanistan and Central Asia. The saleof additional F-16 fighter aircraft, and continuation of the Coalition Support Fundbeyond 2016 reflect this. Reported U.S. support to facilitating projects in Pakistan-occupied Kashmir, U.S. support for a sustained dialogue between India and Pakistan “toresolve all outstanding territorial and other disputes, including Kashmir”, and areference to “working together to address mutual concerns of India and Pakistanregarding terrorism” in the joint statement issued following the visit of Mr. Sharif to



Washington in October, well reflect some current realities. This cannot be viewed asmere straws in the wind.It would thus be premature to offer congratulations on an end- year “breakthrough” inIndia-Pakistan relations. Instead, there is need for greater vigil and more carefulthought on what needs to be done so as to prevent a Kargil-type situation, exploiting thecurrent euphoria, from taking place.

Bridging cricket’s credibility deficit The committee headed by former Chief Justice of India R.M. Lodha has not disappointedcricket fans who favour a thorough overhaul of cricket administration in the country.Under intense judicial scrutiny ever since the betting scandal hit the Indian PremierLeague in 2013, the Board of Control for Cricket in India has been seen by many as acosy club of individuals who treat the various regional units as part of their personalfiefdom. The BCCI suffered from a serious credibility deficit as cricket-lovers wereconvinced that the businessmen and politicians who run the cash-rich body in anopaque manner were not working entirely in the game’s interest. The Supreme Courtappointed the Lodha committee last year to suggest ways to rid cricket administration ofits many obvious ills, such as lack of transparency and accountability. The panel hasmooted sweeping reforms in the board’s structure and functioning. The proposed

measures could radically alter the way the BCCI functions as well as vastly improve itspublic image and impart much-needed credibility: restricted tenures, bar on holdingmore than one office at a time, limits on terms, cooling-off periods between the holdingof one office and another, and steps to prevent the sort of conflict of interest that wasbrazenly in view for many years. One significant suggestion is that government servantsand ministers be kept out of cricket administration. Even if the political class as a wholeis not barred, it will at least prevent influential politicians in government eyeing thespoils of office in cricket administration.

The report has two major suggestions related to public policy. One is the radical idea oflegalising betting in cricket. Betting cast a dark shadow on the IPL and led to twofranchises being suspended. Many will welcome such legalisation as that will bring inan element of regulation and monitoring. Its implementation, however, will hinge on

suitable local legislation across the country. The BCCI will have to ensure strictadherence to the condition that players, managers, officials or anyone associated withcricket are not allowed to participate in betting. Another idea is that the BCCI — whichthe Supreme Court held last year to be a body discharging a public function — bebrought under the ambit of the Right to Information Act. It does sound attractive.However, it will both require legislative change and a balancing rule that unnecessaryqueries are not directed towards decisions made by captains and selectors of thenational and domestic teams. It is not difficult to guess that the BCCI would prefer thereport to be non-binding and that it would contest some of the recommendations beforethe Supreme Court. A restructured cricket board and an equitable system of voting byand in all its affiliated units will surely be in the game’s interest. What ultimatelymatters is that cricket should not suffer because of whimsical individuals holding on tokey posts in the administration and working to cover up instead of preventingunsavoury developments.

A dangerous escalation The execution of Sheikh Nimr al-Nimr, an influential Shia cleric, by Saudi Arabia hasexpectedly led to a flare-up of sectarian passions in West Asia. Sheikh Nimr was themost prominent religious leader of the Kingdom’s Shia minority, which has long beensubjected to institutionalised segregation by the Sunni monarchy of the al-Saud family.He was the driving force behind the 2011 protests in the country’s east, inspired byArab Spring protests elsewhere. Moreover, Sheikh Nimr was a respected cleric among



the Shia community in general. He had spent years in Iran’s Shia seminaries. Tehranhad repeatedly asked Riyadh to pardon him. By executing him, ignoring all those pleas,Saudi Arabia has dangerously escalated its rivalry with Iran. Within days, the stand-offhas snowballed into a full-blown diplomatic crisis with sectarian overtones. Saudimissions in Tehran and Mashhad were ransacked by protesters. In return, SaudiArabia, Bahrain and Sudan have cut diplomatic relations with Iran, while the United

Arab Emirates has downgraded ties.West Asia is already witnessing sectarian conflicts. Iraq, which is torn apart onsectarian lines, is taking baby steps under the new Prime Minister, Haider al-Abadi, torebuild national unity. The country witnessed a bloody phase of sectarian strife in theaftermath of the U.S. invasion. Parts of the country, including the second largest city,Mosul, are still under the control of Islamic State, which is carrying out a systematiccampaign against non-Sunni religious groups. In Yemen, the Shia Houthi rebels arefighting forces loyal to a Saudi-protected government led by Sunnis. In Bahrain, thewounds of a Shia rebellion which was crushed by a Sunni monarch with the help of theSaudis are still not healed. By executing Sheikh Nimr, Riyadh has poured oil into thissectarian fire, for which the region will have to pay a huge price. For decades, one of themain sources of instability in West Asia has been the cold war between Saudi Arabia

and Iran. Though the ultimate goal of both nations has been regional supremacy, theyuse sectarianism as a vehicle to maximise their interests. While Riyadh has the supportof Sunni monarchs and dictators in the Arab world, Iran is aligned with Iraq and Syria,besides its proxies such as Hezbollah in Lebanon and the Houthis in Yemen. This setsthe stage for a dangerous Shia-Sunni conflict across the region. Unless tensions aredialled down between these two heavyweights, there will not be peace in West Asia. Boththe U.S. and Russia, allies of Saudi Arabia and Iran respectively, have called for calm.Moscow has reportedly offered to mediate between Riyadh and Tehran. The U.S. andRussia should use their influence to rein in further escalation of tensions. Unchecked,the Saudi-Iran rivalry could plunge the region, already torn apart by invasions, civilwars and terrorism, into further chaos.

Saudi Arabia’s deadly gamble It would be in Tehran’s interest to stop playing into Riyadh’s plans to ratchetup tensions in the region Saudi Arabia’s execution of Sheikh Nimr al-Nimr, perhaps the most influential leaderamong the Kingdom’s Shia minority, was clearly a provocative move. Riyadh knew thatits action would deteriorate relations with Iran and inflame sectarian tensions in WestAsia at a time when the Islamic State is systematically persecuting Shias and otherminorities within Islam. Iran, a Shia-majority country and a regional rival of SaudiArabia, had repeatedly requested the Sunni monarchy to pardon Nimr, who was thedriving force behind the Arab Spring model protests in the kingdom’s east in 2011. Byexecuting him, along with 46 others on Saturday, Riyadh has plunged the region,already reeling under terrorism, insurgency and sectarianism, into more chaos.Stifling dissent

Why did Riyadh do this if they knew the consequences would be deadly? A logicalexplanation is that it’s part of a well-thought-out strategy to whip up tensions so thatthe Al-Saud ruling family could tighten its grip on power at home and embolden itsposition in the region by amassing the support of the Sunni regimes. Whether the royalsagree or not, Saudi Arabia is facing a major crisis. Oil prices are plummeting,endangering the kingdom’s economy. In 2015, it ran a deficit of $97.9 billion, and hasannounced plans to shrink its budget for the current year by $86 billion. This is likely toimpact the government’s public spending, and could trigger resentment. The rentierkingdom relies heavily on the government’s welfare policies, besides its religious appeal,



to drum up public support. The late King Abdullah’s response to Arab Spring protests isan example of this. When people elsewhere rose up against dictatorships, he announceda special economic package of $70 billion (much of this money was allocated to build5,00,000 houses to address housing shortage) to quell discontent at home. Additionally,the state injected $4 billion into healthcare. King Salman does not enjoy the luxury ofusing oil revenues to save his crown due to the economic crisis. Another option the

royals have to buttress their position is to resort to extreme majoritarianism.At least four, including Sheikh Nimr, among the 47 executed on January 2 were politicalprisoners. By putting them to death, the royal family has sent a clear message topolitical dissidents at home. At the same time, the execution of the country’s mostprominent Shia cleric would bolster the regime’s Wahhabi credentials among thehardliners. This is a tactic dictators have often used in history. They go back toextremism or sectarianism to bolster their hard-line constituency to tide over theeconomic and social difficulties. The real aim of the monarchy is to close down everywindow of dissidence; if that can’t be done through economic development andwelfarism, do it by other means.

Tensions between Iran and Saudi Arabia go back decades. Even when pre-revolutionaryIran and Saudi Arabia were the two pillars of the U.S.’s West Asia policy, Riyadh and

Tehran were regional rivals. The latest phase of this cold war begins with the U.S.-ledIraq invasion. When Saddam Hussein was toppled and a Shia-dominated governmentemerged in Baghdad, Iran was the happiest regional power. Hussein had been astaunch enemy of Tehran. Saudi Arabia was alarmed by the changing politicalequations in Iraq, and had supported Sunni militancy to prevent the Shias consolidatingpower in the post-Saddam set-up. This was one reason that Iraq broke apart later. Butthe Americans had assured full support to the Gulf monarchies and kept pressure onIran over the nuclear sanctions. When the Barack Obama administration changed itsapproach towards Iran, engaging with the Islamic Republic through seriousnegotiations, the Saudis were upset. Though Riyadh publicly accepted the nuclear deal,it was expectedly concerned about Iran’s reintegration with the global economy. Thatwould not only flood the market with cheap oil from Iran, sending oil prices downfurther, but also help Tehran rise as a legitimate regional power.

This Saudi frustration was evident in its Yemen war. Riyadh started bombing Yemen inMarch, when the nuclear talks were in the final stages. But after nine months, theSaudis are far from meeting their goals — defeating the Shia Houthi rebels Riyadh callslackeys of Tehran. On the other side, despite rhetoric from both sides, the U.S. and Iranhave expanded cooperation from the nuclear deal to Iraq and Iran. In Iraq, Americanwarplanes provided air cover when the Iraq army and Iran-trained Shia militias foughtIslamic State fighters. As regards Syria, the U.S. agreed to let Iran join the peace talks,ending years of opposition. Against this background, the Saudis wanted to escalatetensions with Iran, and further complicate Iran’s re-accommodation in West Asiangeopolitical and economic mainstream. The royals know that the best way is to whip upsectarian tensions.Iran should have exercised restraint in the wake of Sheikh Nimr’s execution. It could

have used the global anger against mass beheadings in Saudi Arabia to its benefit,particularly at a time it’s rebuilding its position in the region. But lack of a cohesivevision, and maybe the high-handedness of the hardliners, led Iran to overreact to theexecutions. The attacks on the Saudi embassy in Tehran and the consulate in Mashhadshifted the world’s attention from the executions to Iran’s hooliganism, providing Riyadhan opportunity to extend the bilateral tensions into a diplomatic crisis. This is exactlywhat the Saudis wanted. After Saudi Arabia, Bahrain, a Shia-majority nation ruled by aSunni monarchy, and Sudan, a Sunni-majority country ruled by an alleged war criminalwho’s moving increasingly closer to the Gulf monarchs, have cut diplomatic ties with



Iran. The United Arab Emirates, another Saudi ally, has withdrawn its envoy from Tehran.Iran has gained nothing but international condemnation from attacking foreign missionsin its land. It’s yet to recover completely from the siege of the U.S. e mbassy in 1979 byhard-line students. In 2011, students attacked the British embassy in Tehran, forcingLondon to withdraw its mission. Full diplomatic ties between the two nations were

restored only recently, after the nuclear agreement. The latest attack may have far-reaching consequences. It’s also possible that hard-line sections within the Iranianestablishment, who are already upset with the moderates over the nuclear deal, mighthave used the opportunity to embarrass President Hassan Rouhani. It’s also worthnoting that the President has condemned the attack, but not the Supreme Leader AliKhamenei, who warned the Saudis of “divine revenge”. Whatever led to the attack hascompromised Iran’s position in the region. What next One natural victim of these rising tensions will be the Syria peace plan. PresidentBashar al-Assad’s regime and a coalition of rebels are supposed to begin peace talks thismonth, according to a road map agreed in the UN Security Council a few weeks ago.Iranian and Saudi cooperation is a must for peace in Syria, where the ongoing civil war

has killed more than 2,50,000 people. The Saudis back anti-regime rebels andextremists in Syria, while the Iranians support the Assad government.Worse, it’s not just Syria. Unless Saudi-Iran tensions are contained, there won’t be aneffective strategy to fight the Islamic State, which is a Sunni-Wahhabi extremist group;the war in Yemen will go on, endangering many more lives; and Iraq’s efforts to stabiliseitself could be challenged. The Saudis look determined to play a long-term game ofsectarian geopolitics to maximise its interests. If the Iranians continue to respond in thesame token, West Asia would remain turbulent for many more years.

The way forward in NepalWhile media attention has been focussed on Prime Minister Narendra Modi’s surpriseChristmas rendezvous in Lahore with Nawaz Sharif and the terrorist attack at thePathankot airbase, significant developments on the Nepal front have been taking place.

Nepal Prime Minister K.P. Oli telephoned Mr. Modi on New Year’s Eve to convey hisgreetings for 2016 and informed him about his government’s plans to move forward withthe three-point package while undertaking negotiations with the agitating Madhesileaders of the Samyukta Loktantrik Madhesi Morcha (SLMM). In response, Mr. Modireiterated the need to find durable solutions to Nepal’s political problems on the basis of“consensus” and conveyed his greetings to the Nepali people for 2016. Shift or drift? However, there are subtle changes of position underway. The first sign came onDecember 21 following the decisions taken by the Nepali cabinet to address thedemands of the SLMM. The three-point package consists of constitutional amendmentson participation in the state organs on the basis of “proportionate inclusiveness” anddelineation of electoral constituencies on the basis of population. Demarcation ofprovinces was to be undertaken in a three-month period through a political mechanismon the basis of consensus, and other demands — including those pertaining to“citizenship” — are to be resolved through negotiation and appropriate notification.Nepal’s Deputy PM and Foreign Minister Kamal Thapa had already briefed ExternalAffairs Minister Sushma Swaraj about this road map during his visit to Delhi lastmonth.In an official statement, India’s Ministry of External Affairs welcomed thesedevelopments as “positive steps that help create the basis for a resolution of the currentimpasse in Nepal”. The statement further urged “all Nepali polit ical forces to now



demonstrate the necessary maturity and flexibility” so that a resolution to the currentcrisis could be found. The formal Indian statement has been followed by an informaleasing of supplies, particularly fuel and LPG, by using border-crossing points other thanthe Raxaul-Birgunj crossing which remains blocked.According to the Nepal Oil Corporation, the sole petroleum importing agency, itsmonthly imports were usually in the order of NPR 7 billion; these went down to NPR 1.5

billion during October-November but have picked up again and could reach NPR 4.5billion during December-January. This would imply that more than 50 per cent of thefuel supplies are now going through legally, in addition to the cross-border smugglingactivity which has also picked up.Growing list of demands However, the SLMM rejected the Oli government’s three-point package as “inadequate”and declared that it fell far short of their 11-point charter of demands. Originally, therewere four principal demands — demarcation of provinces which related to five districts,Sunsari, Jhapa and Morang in the east and Kanchanpur and Kailali in the west;restoring population as the primary criteria for electoral constituency delimitation;proportional representation in government jobs; and issues relating to citizenship. Withrising political polarisation over recent months and the inflexible approach adopted by

the three principal parties — Nepali Congress, Communist Party of Nepal (UnifiedMarxist-Leninist) or UML and the Maoists — the list of demands has grown. It nowincludes democratisation of the army and other security agencies; restructuring of the

judiciary; declaring Nepal a multi-national state; equal status to other languages likeHindi and Bhojpuri; a reference to the principle of “proportional representation” in thesection on Fundamental Rights and the establishment of a constitutionally empoweredInclusion Commission to monitor implementation of the proportional representationprinciple.In December, the four SLMM leaders — Mahant Thakur, Rajendra Mahato, UpendraYadav and Mahendra Rai Yadav — visited Delhi and cautioned that the agitation wastaking the shape of a movement. Unless their demands were addressed in a timelymanner, the movement could take a violent turn and the demand for separatism wouldgrow. Their feeling was that the Oli government was not serious about reaching out and

was keen to push through the amendments and postpone resolution of other issues. The import of this message was not lost on Delhi. The SLMM thought that this wouldmake Delhi tighten the screws and push the Nepali government towards acomprehensive settlement; instead, worried about greater violence in the Terai with an1,800-km-long open border, Delhi reacted differently, and as a result, differences havenow emerged within the SLMM. Mr. Mahato would like to continue with the agitationwhile others are uncertain.Division in the ranks On December 26, Mr. Mahato decided to do a dharna at the Jogbani-Biratnagarcrossing where truck movement had picked up and was badly beaten up by the Nepalpolice. He is currently convalescing at Medanta Hospital in Gurgaon. The other three didnot join the dharna and Mr. Mahato’s supporters are miffed that a condemnation of the

attack on their leader took so long coming.Sensing an opportunity, the Oli government reached out to the SLMM leadership for ameeting in Kathmandu on January 3. Mr. Thakur, accompanied by relatively juniorleaders, attended. On his side, Mr. Oli was accompanied by Nepali Congress presidentand former PM Sushil Koirala, Maoist leader and former PM Pushpa Kamal Dahal‘Prachanda’ and others. Upendra Yadav and Mahendra Rai Yadav happened to be out oftown. A week earlier, the Oli government had set the wheels in motion for theconstitutional amendment process by formally tabling it in the Assembly. At this stage,no dialogue was underway with the SLMM to get them on board and in the debates that



followed, Madhesi parties boycotted the proceedings. On January 4, the Assemblyconcluded its deliberations and after the mandated period of 72 hours for amendmentsto be tabled, will begin voting on the amendments. PM Oli has proposed the setting upof a task force to arrive at an agreed language for the amendments. Defence MinisterBhim Rawal (UML), K.B. Mahara of the Maoists and Mahesh Acharya (Nepali Congress)have been nominated by the three main parties; with the clock ticking, the SLMM may

fracture if individual leaders try to go it alone in the task force.Mending fences PM Oli has been adept at flaunting the China card. In October last year, there wasmuch fanfare about China supplying 1,000 metric tonnes of petroleum products toalleviate the shortage. Considering that the annual requirement is closer to a milliontonnes, this is a tiny amount. Also the infrastructure in terms of roads and bridges tothe Tibet border does not permit movement of heavy tankers and LPG bullets. Nepal’sattempts at negotiating long-term agreements with China have not gone very far.However, Nepali media had carried stories that Mr. Oli, in a departure from pastpractice, would undertake his first foreign trip to China instead of India. The only Nepaliprime minister to have done so was Mr. Prachanda in 2008. He, however, insisted that itwas not a bilateral visit as he was going to attend the closing ceremony of the Beijing

Olympics and his first official bilateral visit would be to India. Apparently, in thetelephone conversation on December 31, Mr. Modi reiterated his invitation to Mr. Oli tovisit India and the missions have been directed to work out mutually convenient datesat the earliest. However, Mr. Oli will find it difficult to visit Delhi unless the bordersituation has returned to normal and movement of goods and supplies has beenrestored. If the SLMM agitation is called off, he can then claim with some justificationthat his nationalistic posture, together with the anti-India rhetoric, has paid off. Giventhe strain Mr. Modi’s “neighbourhood first” policy is under on the Pakistan front, it isunderstandable that he would like Mr. Oli to stick to tradition.How did things reach such an impasse? The fact is that nobody thought that theMadhesi agitation and the consequent restrictions on cross-border movement of goodswould last this long. As a result, nobody had a Plan B and rhetoric replacedcommunication. With the key players losing control, the situation went into a tailspin.

The Oli government found it convenient to stoke Nepali nationalism and deflectattention away from its own incompetence by blaming India. The SLMM’s demandscontinued to grow with no negotiations in sight and rising anti-Indianism hardly sat wellwith Mr. Modi’s “neighbourhood first” diplomacy.

The supply situation has now eased but the Oli government needs to offer a healinghand to the Madhesis to get them on board. If he fails, he may find it difficult to dealwith the ensuing instability. The Madhesis need to reach out to the Tharus and

Janajatis, the other marginalised groups. For India, the challenge is to give greaterpolitical content to its engagement, rebuild trust with the Oli government, and revive thepositive sentiments generated by Prime Minister Modi’s visits in 2014.

Think different on infrastructureWhen the going gets tough, public investment must be stepped up to pump-prime aslow-moving economy facing uncertain headwinds of low commodity prices and falteringinternational trade. When the going is good, the private sector would also have a role toplay, Finance Minister Arun Jaitley has said, vowing to ramp up infrastructureinvestments in 2016-17. Ten months ago, in his first Budget for a full financial year, Mr.

Jaitley had scaled up such investment to Rs 1.25 lakh crore, two-thirds of which wasearmarked for road and railway projects. In the coming year, he has indicated that thepriority will be rural infrastructure as the stress in India’s villages after two badmonsoons has hit demand. This is deterring fresh private investment, with many firms



still struggling with past investment plans that are stuck or have become unviable.While economists debate whether the government should stick to its fiscal consolidationroad map or scale up public expenditure to spur the economy, nobody will mind if aslightly higher fiscal deficit leads to more jobs while creating useful public assets. Lowoil and commodity prices offer the chance to build more infrastructure at a far lowercost, but as Mr. Jaitley said, “We must have the intellectual honesty to analyse our

shortcomings and improve them.” So have higher allocations to infrastructure spending this year helped? Anecdotally, afew signs are positive. Demand for bitumen, a key ingredient for building roads, hasrisen, as have enquiries for construction and earth-moving equipment. Paying privatecontractors to build highways has boosted cash flows and enabled a few to re-enter thefray for new projects. But all is not well yet. Core sector performance hit a decade’s lowin November 2015. “Though public investments have started to gain traction, this is yetto reflect in the performance of investment-linked sectors,” rating agency Crisil said, asdemand remains weak in end-user sectors such as real estate, with overcapacity inothers. Of course, this is partly the lag effect — infrastructure projects take time to showresults. Yet, an honest introspection should reveal the need to utilise publicinfrastructure budgets more effectively without the cost- and time-overruns associated

with the government’s ‘business as usual’ approach. Take India’s largest industrialinfrastructure project, the Delhi-Mumbai Industrial Corridor, set up as a specialpurpose vehicle to shed the legacy burdens of departmental decision-making. It’scrawling, though all the States along the corridor except Delhi are run by the BJP. Orthe Project Monitoring Group under the Cabinet Secretariat tasked with resolving stalledprojects, on which not much has been heard in months. Could the fact that thesebodies were left without a head through most of 2015 have affected performance?

Tapping the Consolidated Fund of India as well as innovative vehicles such as theNational Investment and Infrastructure Fund is laudable. Perhaps, it is also time to finda few good men who can get the job done on the ground, grant them autonomy and fixaccountability for outcomes.

Improve the investment climate

The year 2015 has ended on a lacklustre note. The growth rate projected by theInternational Monetary Fund (IMF) is 3.1 per cent, with advanced economies growing ataround 2 per cent and developing economies at 4 per cent. These are not inspiringnumbers. The World Bank estimates are even lower. However, there have thankfully notbeen any economic explosions.Even Europe stumbled through despite the problem of Greece rearing its head from timeto time. The oil-exporting countries suffered most with a sharp decline in oil prices. Thisgroup included not only countries in West Asia but also Russia and Venezuela.However, what is more surprising is that even countries which had gained as aconsequence of a fall in crude oil prices have not really shown faster growth. Among thedeveloping economies, the major concerns are centred at China. With trade surplusesfalling, China has to turn to its domestic demand to spur the economy. There have alsobeen concerns about its financial system.A dismal picture Among the countries coming under the Brazil, Russia, India, China, South Africa(BRICS) bloc, only India has shown a good performance. However, the Indian storyneeds more elaboration. Before dealing with India, let us see what the picture looks likeglobally for 2016.

The IMF had projected the global growth rate for 2016 to be 3.6 per cent, with advancedeconomies growing at 2.2 per cent and developing economies growing at 4.5 per cent. At



The fiscal picture for 2016 however is going to be tough. The additional burden imposedby the Seventh Pay Commission is substantial. The expenditure on pay and pension willincrease by 20 per cent and it will amount to a burden of 0.4 per cent of GDP, aftertaking into account the additional tax revenue on the increased emoluments.Against this background, the ability of the government to raise money for capitalexpenditures will be limited. However, relaxing the fiscal consolidation path is not a

solution. There is some validity in the argument that the desired level of fiscal deficitshould depend upon the phase of the cycle. However, our experience shows that even inthe years when the economy was doing well, we were not able to abide by the mandatedlevel, let alone improve upon it. A larger fiscal deficit will not only take up a greatershare of the available pool of savings but also cause an increase in the interest rates.

This is hardly conductive to a growth in private sector investment.Private consumption may show a rise, particularly because of the additional income inthe hands of government employees. This has happened in the past every time a paycommission’s recommendations have been implemented. The hope for a substantialgrowth in 2016-17 thus revolves around the behaviour of private corporate investmentor private investment in general.

The present position of private corporate investment is that while there has been some

improvement in relation to stalled projects, there is no strong pick up in the newprojects. This situation has to change, if the pace of the recovery is to speed up this year. The corporate sector faces several internal problems, including a slow growth in nominalsales revenue and high levels of debt. For the investment climate to improve, investors’confidence in the system must be enhanced. The government has an important role toplay here.It is true that the reform agenda of the government has been stymied because of logjamin Parliament. But much can be done to restore and enhance confidence even within thepresent structure. The government can easily remove cumbersome rules and proceduresand tone up the delivery system.Globally, the prognosis for 2016 is not that good. Among the major advanced economies,the only country that can show some improvement is the United States. Among the

emerging economies, the slowdown in the performance of China and the consequentfurther devaluation of yuan may have serious spillover effects.India’s growth performance in 2015 was certainly a bright spot. It has, however, fallenshort of our expectations and needs. A strong recovery is possible in 2016 with growthrate exceeding 7.5 per cent but that is contingent on private investment, particularlyprivate corporate investment, showing substantial improvement. Creating a properinvestment climate is the need of the hour.

A case for expanding DBT The National Democratic Alliance (NDA) government, by design and thanks to somelegacy benefits from the United Progressive Alliance (UPA) government’s term, isincreasingly finding itself in a sweet spot where social security aid and subsidies canfinally be rid of the long-standing issues plaguing such systems in India. The two majorissues with subsidies in India — targeting and leakages — can both be tackled by thegovernment’s ongoing Direct Benefits Transfer (DBT) push. The time is now ripe to haveDBT for all subsidy programmes.Leakages occur when the subsidy does not reach the recipient due to corruption,pilferage or other causes. Mis-targeting benefits higher income groups that don’t reallydeserve the subsidies, thereby needlessly increasing the government’s expenditure.

The government’s DBT plan, which simply involves transferring the subsidy amountdirectly to the beneficiaries’ bank accounts instead of having to fiddle around with



differential pricing for the underprivileged, can effectively address the issue of leakagesand go a long way in solving the mis-targeting problem.Efficient targeting, using Aadhaar-linked data, ensures that the intended beneficiaryreceives the money in his account, thus helping him as well as reducing thegovernment’s subsidy burden. This has resulted in effectively solving the leakage andmis-targeting problems in some schemes, but other schemes have shown that they need

more work to be efficient. The case of MGNREGA wages is an example where DBT effectively addressed bothissues at once. In the beginning, there were reports across the country of MGNREGAwages — at the time given in cash — being misappropriated by middlemen in suchlarge-scale systems. In 2013, the government initiated the DBT scheme in MGNREGAafter several successful pilot projects and eliminated these middlemen to a large extent.So far, in this financial year, under this scheme, Rs.20,500 crore has been credited tothe accounts of almost 5 crore people. All the beneficiaries — only the beneficiaries — stood to reap benefits from MGNREGA wages.More fine-tuning However, other schemes, though successful, need more fine-tuning. While the originalDBT scheme for liquefied petroleum gas (LPG) subsidies, named PAHAL [Pratyaksh

Hanstantrit Labh], was launched in June 2013, the NDA government modified and re-launched the scheme in 54 districts in November 2014; for the rest of the country it was January 2015. The idea was that consumers link their Aadhaar number to a bankaccount and receive the subsidy amount for 12 cylinders in a year. Those without anAadhaar number could furnish any other bank account to receive the subsidy.Now, while this ensured that all LPG consumers could, in theory, avail of the subsidy, italso meant that a large proportion of the subsidies were going to people who couldafford LPG cylinders at the un-subsidised rate. Towards this, and to the credit of thegovernment, it was recently decided that people earning more than Rs.10 lakh a yearwould not be eligible for the LPG subsidy.So, DBT addresses the leakages issue while the income cap addresses the mis-targetingproblem. Back-of-the-envelope calculations (since there are no accurate figures of howmany LPG users earn more than Rs.10 lakh) peg the government’s savings from such a

move at around Rs.5,000 crore a year. There are also subsidy schemes where DBT, in its efficient implementation, couldactually result in adverse outcomes. Take the example of DBT in the kerosene schemethe Centre is incentivising States to adopt. The benefits here are immense. Expertsestimate that around half the kerosene sold in the country is being misused. Instead ofbeing used as lighting fuel — its most common use — kerosene is being used toadulterate diesel among other things. This means that the benefit of kerosene being soldat subsidised rates is also unintentionally going to those involved in such activities.Under the DBT in kerosene scheme, the consumer buys kerosene at full price and thenreceives the subsidy amount in his bank account if eligible. Here, too, mis-targeting andleakages are addressed. But, as economist Pronab Sen has pointed out, this could leadto unintended outcomes unless the scheme is managed carefully.

If the subsidy amount each household is due is calculated on the basis of the totalamount of kerosene sold divided by the number of eligible households, then this willresult in each household receiving about double the subsidy amount it should be gettingbecause total usage also takes into account pilferage. In other words, the total salesfigures overestimate actual household-level usage because they also take into accountusage by theft.Over-subsidising kerosene to such an extent will mean that it will remain the lightingfuel of choice for poor households, with no chance of a switch being made to cleanerenergy sources like solar power. So, in improving the targeting of kerosene subsidies,



the government could be cementing the use of the dirty fuel in future. The possibilitythat the government will subsequently reduce the subsidy amount, viewed as a politicalno-no, seems remote.Currently, the government has introduced DBT in food subsidies in only a few Union

Territories and is looking to introduce it in fertilizer subsidies as well — a ferventdemand made by farmers’ associations when they met the Finance Minister for a pre-

Budget meeting recently. The sweet spot created by universalising banking via the Jan-Dhan Yojana, efficienttargeting via Aadhaar, and the increasing ubiquity of smartphones is so attractive thatthe government should make full use of it to extend DBT to all subsidy schemes. It’s awin-win.

For justice in equal measureNews that Bollywood actor Sanjay Dutt will be released by the end of February afterserving a five-year prison term for being in possession of an AK-56 assault rifle over 20

years ago will surely draw contrasting reactions from the film industry on the one handand wider society on the other. His peers in filmdom and his legion of fans may seecause for great happiness in his impending release. However, there may be a largersection of society that may wonder whether justice will truly be served if Mr. Dutt, who

is already seen to have enjoyed generous spells of furlough and parole while serving hissentence, is being treated in a special way by his release being advanced by about eightmonths. Given the widespread perception — reinforced by the recent acquittal ofanother film star, Salman Khan, in a hit-and-run case — that the system will work onlyto the advantage and benefit of celebrities, questions will naturally be asked whetherMr. Dutt is being treated preferentially. Arrested in the aftermath of the 1993 Mumbaiblasts, he spent 18 months in prison before getting bail. In March 2013, the SupremeCourt confirmed a lower court conviction, but reduced his jail term from six to five

years. After being given time to wind up his film commitments, he began to serve the 42-month remainder of his term in May 2013. Even then, citing reasons as trite as that hewas married and had children, and that he had depicted on screen a form of Gandhianprotest, many had appealed for pardon on his behalf. The Maharashtra Governor,

however, did not succumb to the demand for preferential treatment to him solely on thebasis of his popularity.In the normal course, a prisoner’s release eight months ahead of the completion of histerm will not give rise to unusual scrutiny. Good behaviour is reason enough for routineremission for all convicts, and there may be no cause to suspect that Mr. Dutt has beenchosen out of turn. Yet, the State government will have to be cautious and scrupulousin computing the exact number of days he is legally entitled to, mainly to dispel thepopular impression that he is being favoured. The actor may have spent as many as 146days on parole or furlough since May 2013. In law, a furlough is an entitlement earnedby spending specified periods in jail, while parole is granted only in an emergency. Bothare considered necessary to help prisoners maintain continuity in their family life andhelp them avoid the ill-effects of protracted incarceration. Comparisons are also boundto be drawn between Mr. Dutt’s case and that of Zaibunissa Kazi, a septuagenarianfellow-prisoner who is also serving a five-year term in the same case. It will only be fairto expect that the rules of remission will apply in equal measure to all prisonersregardless of their social stature or background.

North Korea’s provocative move The underground nuclear test by North Korea that apparently used a hydrogen bombhas expectedly aggravated tensions in East Asia. South Korea, which called theexplosion an “unpardonable provocation”, has already cancelled cross-border initiatives.

Japan has termed it a “serious threat” to its national security. Most major global



powers, from the United States to Russia and even China, have condemned theexplosion. The provocation is likely to invite more economic punitive measures by theUnited Nations Security Council. The North Korean economy is going through a toughphase, and any further sanctions would jeopardise it further. Why Kim Jong-un tookthe extreme step now is anybody’s guess, though the move itself was not surprisinggiven the regime’s sinister, paranoid ways of operating. Ever since Mr. Kim became

North Korea’s leader after his father’s death in 2011, he has flexed the country’s militarymuscle and caused provocations without hinting at any tangible foreign policy goal. Heordered the country’s third nuclear test, which led directly to additional UN sanctions.

Tensions escalated between the two Koreas last year after they exchanged artillery fire.With the latest hydrogen bomb explosion claim, he has upped the ante in this game ofprovocations.Mr. Kim’s aim could be to tighten his grip of power over the state. The number ofexecutions in North Korea reportedly rose under his watch, triggering speculation overwhether the regime is facing internal strains. In 2013, Mr. Kim had ordered theexecution of his uncle and former mentor. He may also be playing a high-stakesdiplomatic game for an Iran-like deal where he could swap his country’s nuclear arsenal for international recognition and economic partnership. The third and more likely

explanation is that Mr. Kim is sending a message to South Korea and the West that hisregime is ready to go to any extreme in the wake of military hostilities. This clearlydemonstrates the failure of the nuclear diplomacy which the U.S. and other majorpowers were involved in for the past several years. Whatever Mr. Kim’s real intentions,his moves come at the cost of regional stability, and pose dangerous portents for theworld. The only country that could reason with North Korea and persuade it to join backtalks is China. Even for Beijing, despite its historical ties with Pyongyang, it is adaunting task. Mr. Kim does not seem to be particularly interested in the “China -ally”tag. In September, he refused an invitation from Chinese President Xi Jinping to attendcelebrations marking the end of the Second World War. Four years after coming topower, he is yet to visit Beijing. Despite his detachment and potential militarism, theworld doesn’t really have any option but to resume talks with Pyongyang. China has thehistorical responsibility to lead the efforts to solve the crisis on the Korean peninsula,

much like what the Russians did in securing the Iran deal.

The U.S.’s firearms menaceU.S. President Barack Obama parted with the steely tradition of his two-term presidencythis week, when he shed tears at the White House over what appears to have become atop-of the-agenda item of his final year in office, gun control reform. Although he brokedown at the mention of six-year-olds massacred at Sandy Hook Elementary School inNewtown, Connecticut, it was anger that seared through his speech announcingexecutive actions to take on the stubbornly lax regulation of guns in the U.S. Theseactions aim to expand background checks for gun ownership, boost funding for federalagencies enforcing gun laws, improve treatment of mental health conditions nationwide,and herald an era of “smart gun” technology to prevent accidental firearm dea ths. Fewwould blame Mr. Obama for feeling frustration over the quagmire that has greeted everyattempt of his to start a conversation on what many worldwide would consider areasonable restriction on the constitutionally enshrined right to bear arms. He haspitched for tighter, more meaningful gun laws no fewer than 15 times from the OvalOffice, and his most ambitious attempt to bring the discussion to the floor of the Senatethree years ago was speedily disposed of by hostile lawmakers. This week’s executiveaction had echoes of that 2013 omnibus gun control bill, yet in the face of uncertainfunding prospects in a Republican-controlled Congress, likely resistance from



conservative states and near-certainty of legal challenges, it may lack the teeth toseriously impact gun proliferation.

There are two forces behind America’s abysmal progress in halting the regularoccurrence of gun rampages in public spaces. The first is what Mr. Obama described asthe “lies” of the pro-gun lobby, whose lifeblood is the influential National RifleAssociation, funded largely by gun manufacturers. After every mass killing with guns,

NRA spokespersons proclaim in the American media that the only answer to gun deathsis more guns. Their efforts are bolstered by Republican presidential hopefuls such asDonald Trump. The second, more intractable, impediment facing any would-be reformeris the U.S.’s cultural proclivity for gun ownership. Even though a Quinnipiac poll lastmonth found 89 per cent overall support for expanded background checks, a CNN pollthe same month found that only 48 per cent of Americans favoured stricter gun controllaws. Like any other cultural revolution, unwinding this national obsession with gunswill be a slow process. Ultimately the realisation must dawn that, contrary to theSecond Amendment’s promise that the right to bear arms will protect the public fromthe tyranny of government, in the 21st century it is the tyranny of firearms that trulythreatens the American way of life.

Mixed legacy of the Obama yearsIn a speech long on past achievements and short on policy promises for his final year inoffice, U.S. President Barack Obama delivered his seventh and last State of the Unionaddress to a House of Representatives chamber on Tuesday. Equally dedicating his timeat the pulpit to defending his two-term record in office and to laying out a visionconsistent with the liberal paradigm of the Democratic Party, Mr. Obama posed fourdefinitive questions, the answers to which he said would determine how much progressthe U.S. would make in the years ahead. First, on how the U.S. middle class findssufficient opportunities in the new economy to secure its prosperity; second, on how theU.S. harnesses the power of technology to tackle climate change; third, what are themeans to secure the safety of Americans at home and abroad without getting trapped inany military “quagmires”; and fourth, how could America's leadership foster a lesshateful, less anti-minority brand of national politics? In the face of the Republican

Party’s attitude of “rancour and suspicion”, Mr. Obama has deftly navigated a pathforward on domestic priorities including healthcare reform, economic revival, andsustainable technologies in the energy sector. Yet his record on foreign policy is morepatchy and complex. The partial realisation of the dream of America leading amultilateral world sits rather uncomfortably with notable cases of stasis and deepeningconflict.An unequivocal feather in Mr. Obama’s cap is the détente with Iran, which, on hiswatch, has rolled back its nuclear programme, shipped out its uranium stockpile, andhelped the world step back from the brink of war. So too is the revival of formaldiplomatic ties with Cuba last summer which, after more than 50 years of isolation andeconomic embargo, witnessed the relaxation of travel restrictions but awaits a nod fromthe Republican-controlled Congress before trade can be fully opened up. At the macrolevel, seven years since the end of Bush-era unilateralism, the adoption of multilateral,regionally focussed and hemispheric political models have certainly come into vogueunder the able guidance of the Obama machine. Yet, even as multilateralism hasthrived, bilateral crisis-resolution has taken a back seat. With Russia, the legitimateconcerns of an important strategic player are reduced to sound bites and talking headson U.S. news channels. Consequently in Ukraine and Syria there is often a hair-triggersituation. Washington’s China engagement was more reactive than proactive, and led tomore aggressive positions in the region. The unravelling security prospects ofAfghanistan and the festering Palestine-Israel conflict were inconsistently addressed



over the two presidential terms. India, though, turned out to be the classic partner forObama’s America — there was enough bilateral economic depth to keep ties strong, andthe shared idiom of pluralistic democracy held the two nations together in a close butlight strategic embrace.

China’s contagious economic turmoil China’s transition to a ‘new normal’ rate of growth was always expected to be bumpy.But, as it shifts gears, the Asian giant is spilling pain on to the rest of the world, andvolatility is about the only certainty in the global economy at the moment. The yuan’sdepreciation on Thursday to its lowest level since 2011, again put stock markets andcurrencies worldwide under pressure. Investors fear other countries could now be forcedto consider competitive currency devaluations. The depreciation was less unexpectedthan the devaluations in August and is in line with Beijing’s move to make the yuan — all set to become a reserve currency of the International Monetary Fund — moremarket-linked. There’s a fresh worry: China’s foreign exchange reserves shrank by $108billion in December, the biggest monthly drop on record, and declined by $513 billionlast year. To put this figure in perspective, India’s foreign exchange reserves added up to$350.4 billion on January 1. The accelerating outflows from China, investors fear, couldalso be a sign of the country’s deepening troubles. China is rebalancing its economy,

shifting it away from a model of debt-fuelled infrastructure and low-cost exports towardslower but more sustainable growth, driven instead by domestic consumption andservices. Reformers in Beijing want to slow the Chinese economy, which expanded at afrenetic 10 per cent annually before 2008, and by about 7 per cent more recently. As theworld’s second largest economy goes through a recalibration, the question increasing lybeing asked is: are the authorities in Beijing in control of the transition?

The scale and span of China’s trade gives it an over-sized influence over the globaleconomy. Its waning appetite for commodities and imports is hurting economiesdependent on such exports. For India, though, the drop in international commodityprices, especially of oil, is providing a silver lining as it is a net importer. The pain forIndia will come from the big and growing trade deficit it has with China. The deficit,which was $48 billion at the end of March, had reached $36 billion in the first eight

months of this year and could worsen with the yuan’s depreciation. The Indiangovernment must recognise that the depreciating yuan is a threat above all to PrimeMinister Narendra Modi’s ‘Make In India’ plan. Indian manufacturers already suffersignificant cost disadvantages. Their competitiveness will now diminish further againstimports from China. Under the burden of China’s slowdown, global trade itself hasshrunk. Recovery continues to elude the world more than seven years after the financialmeltdown in 2008 and the subsequent monetary easing worldwide. India must recognisethat the global economic scenario is far from healthy and take steps to spur domesticgrowth.

China’s long game in West AsiaFor decades China remained on the sidelines of West Asia’s stormy waters. Even whenthe country was rising as an economic powerhouse and stepped up cooperation with the

major powers in West Asia, the cornerstone of this engagement was non-interference: beit the Israeli-Palestinian conflict or the Saudi-Iran rivalry, the Chinese would continue tosit on the fence. Beijing looked at the region through its own prism. It didn’t want to getswamped in the complex geopolitics of the region at a time when its primary focus wason economic development. So it built ties with West Asian nations based on threeprinciples — secure energy supplies, expand markets for finished goods and findinvestment opportunities — while leaving the U.S.’s primacy in the region unchallenged.

The principles of China’s economic engagement remain more or less the same eventoday. But a close look at the contemporary Chinese foreign policy would reveal that its



overall approach to West Asia has started changing. In recent years, Beijing has beenmore active in global diplomacy concerning the region (Iran nuclear deal); has startedtaking strong positions at the UN (Syria vetoes); and has even begun flexing its militarymuscles (naval exercise with Russia in the Mediterranean). This increased willingness toact as a regional power in West Asia is in line with the larger changes President Xi

Jinping is effecting in China’s foreign policy. There’s a growing consensus in Beijing that

the passive foreign policy of the rising years has to be upgraded to a pro-active approachthat suits the country’s big power ambitions. Mr. Xi’s recent visit to West Asia is theloudest statement yet that China is ready to play a more active role in the region.Pivot to Persia Beijing continues to claim its ‘equidistance principle’ remains intact in its West Asiapolicy. Mr. Xi chose to visit the three most powerful Muslim nations in the region in hisfirst trip to West Asia as president — Iran, Saudi Arabia and Egypt. These countries areimportant for China from an economic point of view. China is the world’s largest oilimporter. Its demand for imported oil is expected to grow from 6 million barrels a day in2014 to 13 million barrels a day by 2035. Much of this demand will be met by importsfrom West Asia. In 2015, Saudi Arabia was China’s largest source of oil. Beijing has alsosold intermediate range ballistic missiles and DF-21 ballistic missile system to Riyadh.

Iran is important for the same reason. China would not like to be heavily reliant onSaudi Arabia for energy supplies and an immediate alternative is Iran. Both countriesalso have strong defence cooperation. Egypt is a major market for China’s machines andelectronics industries. Bilateral trade jumped close to 14 per cent in 2014 to $11.62billion.While Mr. Xi said during the trip that China would prefer to keep its economiccooperation with these countries intact, the real focus of the visit was not lost onanyone. He was the first world leader to visit Iran after sanctions were lifted followingthe nuclear deal. In Tehran, he talked about a “new season” of Sino-Iranian ties and a25-year strategic cooperation plan, committing to increase two-way trade to $600 billionover the next decade. Both countries have agreed to enhance security cooperationthrough intelligence sharing, counter-terror measures, military exchanges andcoordination. Beijing would also support Iran’s full membership in the Shanghai

Cooperation Organisation, a China-led regional security framework.Why Iran Iran is vital for China’s continued rise. Its strategic location connecting West Asia andCentral Asia is key to President Xi’s One Belt, One Road initiative. Announced in 2013,the project proposes to build a chain of energy, infrastructure and maritime links fromChina to Europe through West and Central Asia. Iran offers immense investmentopportunities for Chinese companies in several areas, particularly in energy andinfrastructure. Needless to say, Iran’s energy resources help China diversify its importbasket. Moreover, the geopolitical value of Iran is immense for any power that seeks anambitious role in West Asia. Even the U.S., at the height of the Cold War, had a client-state relationship with Iran. Only after losing Iran following the 1979 Islamic Revolutiondid it pivot towards the Gulf kingdoms. From China’s point of view, Iran is among the

most stable countries in the region. And it’s the only major country in West Asia wherethe U.S. has practically no influence. So it’s natural for China to see Tehran as a vehicleentry into West Asia, historically a region of U.S. influence, at a time when the U.S. ispivoting to the Chinese backyard in East Asia. This calculated approach had dictatedChina’s Iran policy for a long time. During Iran’s isolation era, China adopted a dualapproach: it supported UN resolutions against Iran’s nuclear programme whileexpanding economic and security cooperation with Tehran. During this period, Chinaovertook the European Union as Iran’s largest trading partner. Chinese-Iranian tradeincreased from about $3 billion in 2001 to over $50 billion in 2014.



Security ties also flourished at a time when international negotiations on Iran’s nuclearprogramme were going on. In 2010, Chinese fighter jets refuelled in Iran, the firstforeign military units permitted on Iranian soil since the Islamic Republic wasestablished. Chinese warships paid a visit to the Iranian port of Bandar Abbas in 2014,another first. Besides, China took a favourable view of Iran’s regional policies. Itrepeatedly vetoed the resolutions prepared by Western powers demanding the ouster of

Syrian President Bashar al-Assad, an ally of Tehran.So China is actually playing a long game in West Asia. Even when complying withinternational sanctions, it expanded ties with Iran so that it would be better placed thanany other power in a post-sanctions Iran. (India did the opposite, and failed to retain thebalance between Western pressure and ties with Iran during the sanctions era.) But theChinese position also bears challenges. First, after the nuclear deal, Europeancompanies are keen to do business with Iran. President Hassan Rouhani is now on anexpansive European visit doing deals. Iran will be less reliant on China for economicbenefits in coming years. Second, China will be forced to take stronger positions in WestAsian conflicts such as the Iran-Saudi rift if it wants to play a larger role in the region.But the evolution of China’s foreign policy over the past few years shows that its riskappetite is growing, commensurate with its global position — something that’s a must

for involvement in West Asia.Playing games with the taxmanAccording to the latest report on illicit financial flows (IFFs), released last month byGlobal Financial Integrity (GFI), a Washington-based research and advocacy firm, $510billion of black money flowed out of India from 2004 to 2013. That means an averageannual outflow of $51 billion, or Rs. 3.3 lakh crore.

This is a conservative estimate. The GFI study of 2015, “Illicit Financial Flows fromDeveloping Countries: 2004-2013”, did not include or cover misinvoicing of trade inservices, cash transactions, and hawala transactions. If we took into account all those,the total outflow would be much higher.Unfortunately, the mainstream discourse on tax evasion (which is illegal) and taxavoidance (which is legal but could be equally abusive) in India has consistently

misrepresented the problem. The emotive, and largely symbolic, promise of retrievingblack money stashed abroad by the corrupt has served to distract attention away fromthe entities that actually account for the lion’s share of illicit capital flight: multinationalenterprises (MNEs). The key discursive move of separating the economic misdeed of tax-dodging from the social one of corruption has been largely bypassed, with the formerconveniently lost in the sound and fury generated by the latter.

To be sure, from time to time, the odd court battle over tax evasion featuring a Vodafoneor a Nokia does make it to the headlines. But even when it does, the discourse is mostlyframed in terms of marauding taxmen persecuting blameless corporates.Shifting of profits

The reality, if we go by the numbers, is often the opposite. According to the GFI report,trade misinvoicing (of goods) accounted for 83.4 per cent of the $510 billion of IFFs fromIndia. The Organisation for Economic Cooperation and Development (OECD) estimatesthat more than 60 per cent of global trade occurs within MNEs — that is, between thesubsidiaries of an MNE. Taken together, what these numbers indicate is a massiveshifting of profits from jurisdictions with higher tax rates to those with zero or very lowtax rates.As the accounting expert, Prem Sikka, notes in a column, an MNE today is an integratedentity that coordinates the businesses of hundreds of subsidiaries spread across

jurisdictions. But for tax purposes, these businesses are assumed to be separateeconomic activities. “So a single group of companies with 500 subsidiaries is assumed to



consist of 500 independent taxable entities in diverse locations,” notes Mr. Sikka. “Thisleaves plenty of scope for profit shifting and tax games” (“OECD’s new tax proposalswon’t stop companies shifting profits to tax havens”, Oct. 6, 2015, The Conversation ).

Thanks to this evasion-friendly tax regime, MNEs with profits in billions of dollars enjoyan effective tax rate in the low single-digits.

The most popular mechanism for shifting profits is transfer pricing. For IT giants such

as Google or Microsoft which are engaged in services, transfer pricing takes the form ofa licensing fee or a royalty payment or interest paid by a subsidiary to a parent companylocated offshore. These payments are then treated as a cost in the jurisdiction whererevenues are being generated, thereby slashing profits.

Transfer pricing channels a subsidiary’s profits through a cascade of companiesincorporated in different jurisdictions, to eventual safety in a tax haven. Google hasused Bermuda. Amazon uses Luxembourg. Microsoft uses Bermuda. Pepsi usesMauritius. Pfizer uses Cayman Islands. The list could be expanded to include nearlyevery Fortune 500 company. But here’s the thing: it’s all legal.

This lethal combination of transfer pricing and tax havens makes it impossible to curbillicit capital flows, even as more and more economies confront rising public debt. Whilethe European Union is estimated to be losing €1.1 trillion of income to tax-dodging every

year, the bigger losers are the developing countries in Africa, Asia and Latin America.According to the Tax Justice Network (TJN), a research and advocacy group, as of 2010,$21-32 trillion were held in 80 ‘secrecy’ jurisdictions. Its study of financial flows from139 low- and middle-income countries from 1970 to 2010 found that “offshore earningsswamp foreign investment”. As of 2010, the elites of these 139 countries hadaccumulated unrecorded offshore wealth of $7.3-$9.3 trillion. This dwarfed the collectiveexternal debt of these nations, which stood at $4.08 trillion. In other words, if theycould find a way to retrieve their assets stashed illegally abroad, they would be netcreditors, not debtors.A warped tax regime India is a typical case. As per the Finance Ministry’s data, India received $392.2 billionin FDI in the 15 years from 2000 to 2015. But we lost much more in illicit outflows:$512 billion in just the 10 years from 2004 to 2013. As the TJN report sums up, “The

problem is that the assets of these countries are held by a small number of wealthyindividuals while the debts are shouldered by the ordinary people of these countriesthrough their governments.” And the best way to make ordinary people shoulder the state’s debt burden is to taxconsumption more heavily than wealth. Hence, the growing importance of the Goodsand Services Tax — a hard-to-evade indirect tax that would squeeze the salaried classesand local small and medium enterprises — to make up for the billions of dollars of directtax revenue that the state is either unable or unwilling to collect from treaty-shoppingMNEs.

The warped tax regime within nation states is paralleled in the international arenawhere the dice is loaded in favour of capital-exporting nations. With global trade beingdominated by MNEs, it was found necessary to put in place a tax regime that ensured

revenue for every country while avoiding double taxation. Two model tax treaties weredeveloped, one by the United Nations, and another by the OECD. The UN model favoured taxing income at the ‘source country’ — that is, wherever theincome-generating economic activity took place, regardless of the residence of theenterprise’s owners. This was good for developing countries which, for years, hadallowed their natural resources to be extracted by foreign capital, only to see the profitsflow to offshore entities without doing much to enrich the local population.In the OECD model, residents of a country would be taxed on their worldwide income,while non-residents would be taxed only on their domestic income.



Not surprisingly, it is residence taxation that has become predominant in tax treaties,for it suits the MNEs very well. The MNEs end up paying little tax in their own residence

jurisdiction, since the bulk of their revenue is generated overseas. As for the countrieswhere they actually make their money, there too they avoid paying income tax as theyare non-residents and so are not eligible to be taxed anyway. It is this discrepancy ofdouble tax avoidance that’s been at the heart of most disputes between Indian taxmen

and foreign MNEs.India, in its Double Taxation Avoidance Agreements, has opted for a predominantlyOECD model, which means that the FDI we are manically seeking will pay very little orno tax in India on the income it generates from India. Not that this isn’t already thecase, but presumably, it is important reassure investors that nasty surprises like theones thrown at Nokia or Vodafone won’t happen again. Hence, the Finance Bill 2015’smuch talked about Place of Effective Management, which is essentially a residencetaxation concept.A saner approach would have been to simply link taxation to sales and assets in Indiarather than the (putative) residence of ‘effective’ management. But one suspects thiswould not have pleased India’s democratically unelected foreign investors. If there is one simple lesson we can draw from all this, it is that curbing illicit capital

flight ought to be a higher priority than courting foreign capital. After all, isn’t it moresensible to try and get your hands on money that’s already rightfully yours than tryingto get others to part with theirs for your development? But then, where finance capital isconcerned, rare is the state independent enough to choose the sensible option over theimprudent one.

Widening the net beyond the income normOn December 28, 2015, the Ministry of Petroleum and Natural Gas announced theexclusion of high-income households from the LPG subsidy cover. As per the officialpress release, subsidy would not be available for domestic LPG consumers, if theconsumer or his/her spouse had taxable income of more than Rs. 10 lakh for theprevious financial year. This is a significant step, which has been built upon a series ofLPG subsidy reforms that have been undertaken over the last one year.

The first day of last year marked the nationwide roll-out of the modified Direct Benefit Transfer for LPG (DBTL) scheme (also known as PAHAL). The scheme was launched withthe objective to prevent diversion of subsidised LPG, by transferring the subsidy amountdirectly in the bank accounts of the consumers. With more than 14.74 crore LPGconsumers enrolled under the scheme (90 per cent of the active number base), it hasbecome the world’s largest cash transfer scheme and has significantly reduced subsidyleakage towards non-domestic uses.Success of the Give It Up campaign Subsequent to the implementation of DBTL, which allowed domestic LPG cylinders to besold at market price, the government launched the ‘Give It Up’ scheme in March 2015.

The scheme was aimed at urging well-to-do households, who can easily afford LPG atmarket price, to give up LPG subsidy, in order to extend the subsidy benefits to poorerhouseholds, without increasing the fiscal burden. As a result of an intensive awarenesscampaign, nearly 57 lakh beneficiaries have voluntarily given up their LPG subsidy. Thistranslates to an annual subsidy saving of Rs. 940 crore for the government, at prevailingprices and consumption trends. Even though this is a significant achievement, itrepresents a mere 3.6 per cent of the active consumer base.In comparison, a study conducted by the Council on Energy, Environment and Water(CEEW) in 2014 establishes that the richest 15 per cent of Indian households can easilybe weaned of the subsidy, as the full market price (then Rs. 950 per cylinder) is wellwithin their affordability limits. At present, these households account for 25 per cent of



the active consumer base. The study also highlights that the richest 10 per centhouseholds in India corner 22 per cent of LPG subsidy, while the bottom 50 per centhouseholds together receive only 30 per cent of LPG subsidy. Thus, the government’smove to target beneficiaries by excluding well-to-do households from the subsidy net iswell-founded and timely.

The government has planned to use taxable income (greater than Rs. 10 lakh per

annum) as the basis for exclusion and self-declaration of income as the means foridentification. While this is a step in the right direction, the modalities of such anexclusion approach need further consideration. For instance, even though the LPGsubsidy is given on a household basis, the announcement suggests that the incomethreshold is applicable to individual incomes and not that of the entire household.Additionally, though self-declaration is a useful form of policy ‘nudge’, the success reliesentirely on the integrity of the respondent. To overcome this challenge, should thegovernment consider enforcing the scheme by linking LPG consumer data with the PANnumber? Moreover, less than 3 per cent of India’s population pays income tax and asignificant proportion under-reports taxable income. Thus, exclusion based on reportedincome alone would not be as expansive a criterion as is needed indirectly benefiting thetax evaders.

Using multiple criteria CEEW’s research suggests that it would be more practical and efficient to excludehouseholds based on multiple criteria, simultaneously. One such criterion could beasset-ownership of high-end consumer durables. This could be an important way tocapture the material status (wealth) of households than only relying on reported income,particularly in a country where the informal economy is as big as or larger than theformal economy.Less than 5 per cent of Indian households own passenger four-wheelers, and ownershipof this high-end asset is heavily concentrated amongst the richest households. Thismakes ‘car ownership’ an effective criterion for identifying well-to-do households.Moreover, identification based on car ownership could be achieved by using the nationalvehicle registration database maintained by Ministry of Road Transport and Highways.However, this database would need streamlining to enable a direct mapping with the

LPG consumer database.Similarly, simultaneous ownership of a refrigerator and an air conditioner, or ownershipof multiple air conditioners, could serve as another criterion to identify well-to-dohouseholds. Information about the ownership of such assets could be obtained eitherthrough self-declaration or by using the Socio Economic and Caste Census (SECC)database. Concerns about the authenticity of this database persist, as this is also self-declared.Each criterion has its limitation when applied standalone. However, a combination ofcriteria such as taxable income and ownership of high-end assets, along with a robustdatabase and stringent enforcement mechanism, would help identify and exclude well-to-do households from LPG subsidy effectively.With the dawn of the New Year, we are hopeful that the political will and leadership, as

evinced in the roll-out of the DBTL scheme and Give It Up campaign, would furtherensure that millions of households, which continue to rely on traditional fuels,transition towards a cleaner cooking fuel: LPG.

Leaving no poor person behindDhobargram is a small Santhal village in Bankura district of West Bengal, with 100households or so. Most of them are poor, or even very poor, by any plausible standard.

There are also some relatively well-off households — they are not rich, but they havethings like concrete houses and motorcycles, often thanks to a permanent job in the



public sector. Should this small minority of better-off households be excluded from thePublic Distribution System (PDS)? Including them costs public money, and they are notat risk of undernourishment.On the other hand, weeding them out is a major headache, as West Bengal andneighbouring States are discovering in the course of implementing the National FoodSecurity Act (NFSA). Also, excluding them creates a small but powerful group of

disgruntled people who may be tempted to sabotage the PDS in one way or another.When they are included, there is greater pressure on the system to work.Improved framework A house-to-house survey conducted in Dhobargram last month confirmed something wehad already noticed: West Bengal’s PDS is based on a restrictive, outdated and faultylist of “below poverty line” (BPL) households. Out of 105 households, only 29 had a BPLcard or an Antyodaya card (meant for the poorest of the poor). The rest had an APL(above poverty line) card, or no card at all — both ways, they were excluded from thePDS except possibly for kerosene rations. By contrast, 78 per cent of Dhobargram’shouseholds are on the new list of NFSA ration cards, which are to be distributed thismonth. Further, we found that most of the remaining 22 per cent were households thatmet the official exclusion criteria, such as having a government job or a pucca house

with at least three rooms. The new list, based on the Socio Economic and Caste Census2011 (SECC), is not only more inclusive than the BPL list, it is also more reliable. This is just one village (selected at random), but Dhobargram illustrates the major gainsthat are possible if the NFSA is implemented properly in the poorer States. These gainsare amplified by PDS reforms, a mandatory adjunct of the Act. The PDS in West Bengalhas been one of the worst in the country for a long time. Today, it is undergoing reformssimilar to those that have been so successful in Chhattisgarh and were also adoptedwith good effect by neighbouring States such as Odisha and Madhya Pradesh.Hopefully, they will work in West Bengal too.None of this is to say that all is well in West Bengal, or even just in Dhobargram. Somepoor households in Dhobargram are off the list of ration cards, possibly because theSECC missed them, or because they were formed after 2011, or for some other reason.

There are many cases of ration cards with missing household members (this matters

since PDS entitlements are defined in per capita terms under the NFSA). Also, the newlist of ration cards includes fewer Antyodaya households than the old list, a problemthat has also emerged in other States. It will take skilful revision of the NFSA list toresolve these problems. But at least the NFSA has created a relatively sound frameworkwithin which this can be done.Winds of change

Judging from brief enquiries in Jharkhand and Odisha, which are also in the process ofrolling out the NFSA, there are similar developments there. The biggest challenge,responsible for the delayed rollout of NFSA in many States, is to identify eligiblehouseholds. Even with near-universal coverage (86 per cent in rural Jharkhand and 82per cent in rural Odisha), this is a daunting task. Jharkhand adopted much the sameapproach as West Bengal: an initial list of ration cards was prepared from SECC data

(by removing better-off households), and later revised based on people’s complaints. Themain problem with this approach is exclusion errors: there are gaps and mistakes in theSECC data, not always corrected by the complaints process. Odisha followed a differentapproach, based on self-declaration: ration card applicants had to certify that they metthe eligibility criteria, and local functionaries were asked to verify their declarations. Themain problem here seems to be inclusion errors: well-off households often get away withclaiming that they meet the criteria. The self-declaration approach also requires areliable administrative machinery — I doubt that it would have worked in Bihar or

Jharkhand.



It is too early to tell which of these approaches is preferable. There are also alternatives,such as Madhya Pradesh’s pioneering attempt to link the PDS with a database of localresidents (the Samagra register) maintained by gram panchayat functionaries. And ofcourse, one can take the view that it is simply not worth taking all this trouble toexclude 10 or 20 per cent of rural households — universalisation is best, at least in thepoorer States. What is clear is that we can do much better today than in the old days of

“BPL surveys”. Among other remarkable improvements is the transparency of the entireprocess. Even in Jharkhand, the list of NFSA ration cards is available on the Net in areader-friendly format, with all requisite details. That makes it a lot harder to cheat — gone are the days when the village head dished out BPL cards to his or her friendswithout any risk of scrutiny.

The effects of PDS reforms have also started showing in the poorer States. Recentsurveys in Bihar and Madhya Pradesh point to remarkable improvements in the last few

years. There is no reason why the NFSA latecomers (Jharkhand, West Bengal, Assam,among others) should fail to bring about similar change. Some of them, notably Odisha,actually initiated the process of PDS reform much before rolling out the NFSA, with verypositive results. The laggards have their work cut out.Looking forward

The picture emerging from recent research is quite different from the impressionconveyed by media reports. The latter tend to focus on abuses and irregularities: forinstance, the story of a wealthy Mayor in Odisha who bagged a ration card, or ofsomeone in Jharkhand who found that 366 ration cards had “inadvertently” beenprinted in his name. It is certainly part of the media’s job to highlight these anomalies,but the larger picture tends to get lost in the process. There is an urgent need for carefulevaluations of the impact of NFSA in different States.Looking ahead, all eyes are on Uttar Pradesh, one of the last States to implement theNFSA. With a foodgrain allocation of 10 million tonnes or so, and a very restrictive PDSunder the old system, Uttar Pradesh has more to gain from the NFSA than any otherState. But it is also one of India’s worst-governed States, if not the worst. Tremendousresolve will be required to break the nexus of corrupt middlemen who have milked thePDS in Uttar Pradesh for so many years (mainly under the APL quota, which is all set to

be phased out). As election time approaches, it may just happen — that would be avictory of sorts, not only for food security but also for the battle against corruption.Finally, it is important to remember that the NFSA is not restricted to the PDS. Othercritical components include maternity entitlements, brazenly ignored by the Centralgovernment ever since the Act came into force. The PDS itself need not be confined toNFSA entitlements: in several States, some households are now eligible for subsidisedpulses and edible oil as well. Perhaps for the first time, there are real possibilities ofensuring a modicum of nutritional support and economic security to all vulnerablehouseholds.

Sri Lanka’s historic opportunity It is a moment of great hope and some fear in Sri Lanka. As it takes the first steptowards drafting a new Constitution, there is renewed hope that the island nation willbe able to reinvent itself as a modern state, one that brings economic prosperity andnational unity. At the same time, it is also difficult to ignore the fear that yet anotheropportunity presented by history may fail owing to political opposition, ethnic extremismand an entrenched, if not systemic, resistance to change. President MaithripalaSirisena’s address to Parliament on the occasion of the tabling of a motion to create aConstitutional Assembly was bold in its invocation of past failures. His candid referenceto the failure to implement past agreements as the origin of the protracted civil warshowed deep understanding of his country’s situation. Laced with justified



apprehensions about the likely impediments, Mr. Sirisena has warned his countrymenagainst attempts to raise the bogey of external pressure and an alleged threat to thespecial status of Buddhism in Sri Lanka. He is aware of the presence of extremists onboth sides of the ethnic divide. He has asserted that a constitutional solution will beindigenous. The process of constituting the entire membership of the current Parliamentas a Constitutional Assembly has begun. A steering committee will be tasked with

drafting a new Constitution while inputs from outside the parliamentary structure willbe in the form of a ‘Public Representation Commission’. For those familiar with the peace and reform processes of the last quarter century, itmay appear that all talk of national unity and a non-discriminatory system is not new. Itis a measure of how much the events of the recent years had turned the clock back onthe discourse to resolve the national question that each time an incumbent President orPrime Minister spells out a new vision, it is accompanied by new hopes and fears. Thebroad contours of an alternative constitutional framework are known. To many, it lies inabolishing the executive presidency and reforming the electoral system. In recent years,promoting good governance by strengthening democratic institutions, a comprehensiverights regime and substantive power-sharing arrangements involving all ethnicminorities have been understood to be necessary elements. The path is clear, and the

pitfalls are known. The process may be long and the effort to secure a two-thirdsmajority in the Assembly, followed by a similar special majority in Parliament andapproval in a referendum, will require political will and hard work. The emergence of anew order since 2015 under President Sirisena and Prime Minister Wickremesingheprovides a setting conducive for positive change, after the first few years in the post-conflict phase were lost in triumphalist and nationalistic rhetoric. It is a historicopportunity for all stake-holders, including Tamils, Muslims and plantation Tamils, toparticipate in the process. It is time all sides left their nationalist rhetoric of the pastbehind.

Welcome measure to clean the air The Centre’s decision to adopt Bharat Stage VI automotive fuels nationwide by April 1,2020 is a key measure that can, if implemented properly, vastly improve air quality.

Rolling out the BS VI standard nationally, skipping BS V, has significant costimplications for fuel producers and the automobile industry, but its positive impact onpublic health would more than compensate for the investment. Major pollutants such asfine particulate matter, sulphur dioxide, nitrogen oxides and carbon monoxide emittedby millions of vehicles on India’s roads are severely affecting the health of people,particularly children whose lungs are immature and hence more vulnerable. Thousandsof premature deaths and rising rates of asthma episodes highlight the urgent need tomake a radical and complete shift to modern fuels and vehicle technologies. Pastnational policy of implementation of the BS IV fuel standard failed primarily becausethis was not done all over the country and the technical standard also permitted ahigher level of sulphur in the fuel. Higher sulphur results in high volumes of finerespirable particulates measuring 2.5 micrometres (PM2.5) being generated inemissions. Since even this obsolete standard was not followed uniformly, many vehicles,especially commercial passenger and freight carriers, have been using lower standardfuel supplied outside big cities. This has rendered their catalytic converters incapable ofabsorbing pollutants.Improved air quality, especially in big urban centres, depends on several factors in anera of fast motorisation. A bloated population of vehicles using fossil fuels has affectedtravel speeds, worsening pollution levels. Poor civic governance has left roads unpavedand public spaces filled with debris and construction dust, constantly re-circulatingparticulate matter in the air. Moreover, the monitoring of diesel passenger and



commercial vehicles – the biggest contributors to total emissions – for compliance withemissions regulations remains poor. Such a record does not inspire confidence thatretrofitting of old vehicles to use higher quality fuels such as BS VI can be achievedsmoothly. Equally, the distortions in urban development policy that facilitate the use ofpersonal motorised vehicles rather than expanding good public transport, walking andcycling, are glaring. Many of these issues were underscored by the Saumitra Chaudhuri

Committee on Auto Fuel Vision and Policy 2025 in its report submitted in 2014. Thepanel also recommended appropriate levies to fund the transition to cleaner, lowsulphur fuels. A study by the Indian Institute of Technology, Delhi on fuel policy and airquality in the same year concluded that the best results would be achieved by raisingthe fuel standard and introducing policy initiatives that would influence passengerbehaviour and cut personal travel kilometres by 25 per cent. The government has donewell to advance the deadline for cleaner fuels by three years. It must show the samediligence in making other policy changes in partnership with State governments to cleanup the air.

A political misadventureC

Political opportunism in an election year often takes the form of dubious actions by the

executive, and inevitably runs into a judicial barrier. By staying the Uniongovernment’s recent notification aimed at permitting jallikattu, the popular bull-taming sport in Tamil Nadu, along with bullock cart races in some other States, theSupreme Court has stopped the Centre’s needless misadventure in its tracks. Thefestivities associated with the harvest festival of Pongal in Tamil Nadu went off without

jallikattu in 2015 after the Supreme Court’s May 2014 judgment prohibiting the sporton the ground that it perpetrates cruelty on animals and endangers the lives of theparticipants. The State government ensured peace and prevented any unrest last year,despite considerable unease and anger among the rural population. There is no reasonwhy it could not have continued to practise the same restraint and wisdom in acceptingthe court verdict. On the contrary, the issue became politicised in the run-up to theAssembly election that is due in a few months from now. Political parties stoked

popular sentiment in favour of reviving jallikattu by demanding measures to circumventthe judicial bar. The ruling Bharatiya Janata Party at the Centre, looking to find afoothold in the political fray in Tamil Nadu, made a calculated move by amending a2011 notification that prevented bulls from being exhibited or trained as performinganimals, by exempting bulls deployed in jallikattu and cart-racing from its purview. Theparty will now have to live with the criticism that it knew that the notification would bestayed, and all it was looking for was some political capital.

The Centre will have to explain why it tried to get around a court verdict through a mereexecutive notification, when it is common knowledge that it can be done only throughlegislation that removes the basis for the judgment and not merely by tweaking someregulations. Tamil Nadu Chief Minister Jayalalithaa has now urged the Centre topromulgate an ordinance to save the traditional sport, but even that may be no solution.

The law laid down by the Supreme Court is fortified by several legal formulations. In aharmonious reading of animal rights in the context of the Universal Declaration ofAnimal Welfare (UDAW), the provisions of the Prevention of Cruelty to Animals Act andthe Constitution, the court has ruled that animals have a right against human beingsinflicting unnecessary pain and suffering on them. In effect, the entire sport has beendeclared violative of the law against cruelty. Treating animals in a humane, non-exploitative way is now a constitutional requirement for any executive action related tothem. The State’s earlier regulatory Act on jallikattu was dismissed as ananthropocentric law that was repugnant to the eco-centric law against cruelty toanimals. Instead of continuing this artificial confrontation between tradition and

http://www.thehindu.com/opinion/editorial/a-political-misadventure/article8098920.ece#comments


http://www.thehindu.com/news/national/centre-allows-tn-to-conduct-jallikattu/article8081472.ece



http://www.thehindu.com/news/national/no-jallikattu-in-tamil-nadu-this-year/article8097633.ece



http://www.thehindu.com/news/national/tamil-nadu/supreme-court-bans-jallikattu-in-tamil-nadu/article5986025.ece




http://www.thehindu.com/specials/in-depth/the-runup-to-the-tn-assembly-elections/article7837594.ece




http://www.thehindu.com/news/national/tamil-nadu/jallikattu-jayalalithaa-urges-centre-to-amend-laws/article8021697.ece












modern law, Tamil Nadu would do well to stop spearheading the cause of jallikattu,which is but a relic of a feudal past.

What Free Basics did not intend to do The public now sees the Internet not just in market terms, but as a socialphenomenonthat requires public interest regulation

In its aggressive campaign for Free Basics, couched in simplistic developmentallanguage, Facebook underestimated the political sophistication of the Indian public. Itmust be regretting it now. The social networking service’s reportedly Rs. 100 -crorecampaign, through double full-page newspaper advertisements, billboards andtelevision, appears simply to have congealed public opinion against Free Basics.Everyone seems to be eager to discuss and write about what is wrong with Free Basics.When the regulator had last called for Net neutrality-related inputs, in May 2015, theopinions were relatively more divided. If they are so much more polarised today againstFree Basics and Net neutrality violations, the manner in which Facebook pushed thiscampaign does bear some responsibility for it.Facebook’s campaign may actually have ended up doing a lot of good to India, which,after all, was its professed goal. We must thank Facebook for that. These benefits have

been on two explicit fronts, and one more which will become apparent in some time.The Internet as a right First, the campaign forced everyone to respond to the question, ‘can those in poverty bedenied connectivity?’ The obvious answer being ‘no’, everyone had to come up withconcrete alternatives. As a result, something interesting happened. Even with thecurrent middle-class sentiment largely being pro-free markets and anti-governmentsubsidies, a strong opinion has emerged that those who cannot afford connectivity mustbe provided some basic free connectivity as an entitlement to be ensured by thegovernment. It can be in the form of a limited data package. Many commentators as wellas responses to the regulator’s consultation have sought such an entitlement.

This should make the regulator and the government think seriously about some suchdata entitlement for every citizen. It could also have an impact on how connectivitythrough the government’s National Optical Fibre Network will be provided to the people.

This network, connecting almost the whole of rural India, is expected to be in placewithin the next two-four years. Such emerging public opinion in favour of free basicconnectivity, if concretised into public policy, will be the first true expression of theInternet as a right, a concept which has begun to be discussed globally.

The second unintended consequence of the Free Basics campaign has been agroundswell of public consciousness that now sees the Internet not just in pure marketterms, but as a unique social phenomenon which requires special public interestregulation. The last round of Net neutrality consultation was the first heave in thisdirection, but it was still a bit tentative and immature. It is also much easier for peopleto see the logic for an Internet that treats all content equally, than develop a caseagainst a free service. (Remember, free service is already the dominant Internet servicemodel in application and content layers, a point which we will come to later.) That the

Indian public could form a considered opinion on this rather complex social and policyissue is heartening to note. It is likely to usher a new era of Internet rights activism,with people claiming digital technologies as a right and not just something that themarket provides on its own terms.At the many public interest discussions on this subject, people came up with ingeniousanalogies. One person said, “I am ready to pay the auto driver according to the distancetravelled, not based on the destination that I go to.” Another said, “Free Basics is likesomeone giving you cooking gas for free, but being able to decide what you will cookwith it.” There is an emergence of a very sophisticated orientation as to how people see



the Internet in terms of its very crucial and strong role in society today, and its hiddenmanipulative possibilities.

The cooking analogy is not a far-fetched one if one projects ahead into the emergingworld of Internet of Things. The Internet can be seen as a new neutral system of society,one that organises our lives, which can become very dangerous if its manipulativepotential is not closely watched and kept in check. There will always be corporatist

tendencies to place ‘control points’ on this neutral network, with various kinds of freeservices as the incentive, but which would lead to far greater economic and other formsof exploitation.Neutrality in all layers

This brings us to the third unintended consequence of the Facebook campaign. This isonly being informally talked about as of now, but will break into prominence soon whenother similar ‘platform abuses’ come to the fore. This is about how Facebook used itsmonopoly social networking platform for a huge political campaign in its own favour,making and sharing lakhs (11 million, according to Facebook) of template responses tothe regulator’s consultation. The same platform functionality was not available to otherusers, who could be holding other views on the subject.

The implications of such ‘platform abuse’ are not difficult to see. Imagine a close election

contest in the future when Facebook, say, has 70 per cent of adult Indians as its users. There are two main parties and, say, FDI or higher corporate taxes has become the keyelection issue. What if Facebook does a similar campaign two weeks before the elections,taking a strong position favouring one side, reaching and ‘engaging’ its users in amanner that others cannot do using the same platform?

The question then is, if a telco cannot be allowed to provide different functionalities onits platform to different content and application-providers, how can a monopoly socialnetworking platform be allowed to discriminate among its users in such a blatant wayand with such far-reaching social consequences? It is much easier to switch betweentelcos today than to even find a good alternative to the Facebook platform.Net neutrality and ‘zero-rating’ are therefore just the first key Internet regulation issuesthat we are facing. As the Internet quickly transforms our social systems and becomesan essential element, there will soon be other kinds of ‘platform neutrality’ issues.

The EU is already conducting a public consultation on ‘platform governance’. TheFrench Digital Council has brought out a comprehensive report on platform neutrality.A draft bill on Internet rights in the Italian legislature lays out public interest guidelinesfor platforms.

The keen public engagement with the issue of Net neutrality and zero-rating indicatesthat we will soon hear about other kinds of platform abuses as well, along with calls forcorresponding Internet regulation.

Incremental steps not enough The Defence Acquisition Council has approved a revised Defence ProcurementProcedure (DPP), aimed at boosting indigenous defence procurement and encouragingbetter participation from the Indian private sector. The Council is headed by DefenceMinister Manohar Parrikar and includes key stakeholders of the defence establishment.Among its key decisions is a proposal to introduce a new category of acquisition termedBuy Indian (or IDDM, indigenous design development and manufacturing), which wouldbecome the most preferred acquisition category. Under Buy Indian, domesticallydesigned equipment with 40 per cent indigenous components or foreign-designedequipment with 60 per cent local components will be considered. The new DPP hassignificantly increased the offset threshold for foreign contracts from Rs. 300 crore toRs. 2,000 crore (with 30 per cent of the contract value to be procured from within India),while it has certain provisions for encouraging Micro, Small and Medium Enterprises. At



first glance, the DPP is an incremental improvement over recent efforts to reduce India’simport dependence, which stands at 65 per cent of total defence procurement, to helpcreate a robust military industrial complex within the country.It is imperative that India succeeds at the earliest in creating a cutting-edge domesticmilitary industrial base: no major nation state has transitioned to becoming a developedeconomy without one. Such a complex would create not only latest war machines but

also hothouse innovations and technologies to improve overall scientific capabilities,and make India self-reliant at least in critical areas. If the ambition is to truly makeMake in India a reality in the defence sector, then the DPP falls significantly short ofexpectations. Many private sector participants have been flagging a host of issues, andinbuilt biases against indigenisation. There are two key impediments to India’s privatesector becoming active participants in defence R&D and production: the monopolyenjoyed by defence public sector units, and the favours that foreign suppliers enjoy.DPSUs are the workhorses of the sector as well as the biggest drag on indigenousmilitary research. A significant number of them are merely assembling foreign kits.Given India’s over-dependence on foreign military vendors, several biases have crept infavouring them in procurements. A foreign vendor gets most of his payment on self-certification of project progress, while Indian vendors have to wait for a government

inspector’s certification, which can delay payments by several months. A foreign vendorenjoys upfront customs duty exemption, while the excise duty exemption for a localsupplier is a reimbursement months after he has supplied an item. The new DPP maywork towards expanding the number of participants in military tenders, but it may nothelp dramatically improve the present environment for all participants. Going by thepresent trend, the $100 billion and more that India will spend over the next decade willmostly end up in foreign markets. Political boldness and radical reform are needed indefence procurement. Neither is visible in the new DPP.

Tech tonic for the heart of IndiaOne winter morning, in Barwani district of Madhya Pradesh, I was watching a group ofAdivasi kids peering into their mobile phones. The early morning sun was mellow, andthey were so engrossed that they did not notice me drawing near.

“We are doing Bultoo sir,” one of them told me when I asked what they were doing. It took me some time to understand that they were transferring audio and video filesusing Bluetooth technology in their mobile phones.I was in Barwani to take a class on citizen journalism with Adivasi children.Later, I discovered that more than 80 per cent of the students had Bluetooth in theirmobile phones and actively used it to share audio and video files with each other. I hadno idea that even my mobile phone is Bluetooth-enabled. I had never used it. On theother end of Central India, in Balrampur district, on the border of Chhattisgarh and

Jharkhand, I found a similar phenomenon. It is a Maoist insurgency-affected districtwith a large proportion of Oraon tribals, who speak a language called Kuduk. Anexperiment here has thrown up a model for how to solve the problem.Eighty per cent of Balrampur’s gram panchayats are connected by optical fibre cablesthanks to the Digital India push by Prime Minister Narendra Modi.

The problem is, there is broadband but there isn’t much content in Kuduk on theInternet.Experimenting with possibilities

The mobile phone is common in every household even in this remote Adivasi district.People earlier used it only to make calls. Now, they also use it to report on thehappenings around them and to listen to the “Bultoo radio”. If wages under theMahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) haven’t beenpaid, if forest right deeds have not been distributed, they report about it in Kuduk. Once



the messages get recorded on a central computer connected via the Internet, they alsoget translated into Hindi and English. Then, the messages reach officers such asCollector Alex Paul Menon, who was once abducted by the Maoists, and also reach eachgram panchayat. One person from each village comes to the gram panchayat office everyday and downloads the daily programme of “Bultoo radio” on his mobile phone andshares it with all villagers upon return.

“Bultoo radio” is a small experiment being carried out over a small area but its problem-solving potential and its use of the local idiom can bring people’s faith back in thesystem. Some thing similar can also be done with short-wave radio, which people heretune into to listen to programmes broadcast by evangelical Christian groups based inplaces such as the Philippines. Balrampur has Internet in most of its gram panchayatsbut Dantewada doesn’t in even 1 per cent of its panchayats — “Bultoo radio” will notwork there, but short wave will.

The Maoist problem is basically a problem of communication breakdown: while Maoists,missionaries, mining companies reach out to the Adivasis, mainstream India remainsblissfully cocooned. There are no officers, no journalists who understand Adivasilanguages such as Kuduk, Gondi. The Maoists did not come to the Dandakaranyaforests to effect a revolution, they came here to hide. Despite the Maoists interacting and

working with Adivasis for 40 years in the region, there are hardly any Adivasi Maoistleaders. At any rate, less than 1 per cent of the Maoists in Central India use violence asa tool to change politics; 99 per cent of them have been sold an illusion that once their“Raj” comes, all their problems will be solved, the problems of forest, land, water, healthand education.Connecting with the Adivasis India needs to have two strategies to solve the Maoist problem, one for Maoists and onefor Maoist supporters who make it “India’s biggest internal security threat”.

There are more Maoist sympathisers in our cities but not many go on to join them;Adivasis become Maoist supporters because we do not talk to them, because we do nothelp them solve their problems. Mainstream India only talks to the ‘creamy layer’ ofAdivasis, those who have learnt our languages. Many a time, this small but powerfulsection has let down fellow Adivasi brethren more than any outsider.

Reaching out to the Adivasis living in remote areas is admittedly difficult since many ofthese areas are controlled by Maoists, but we can talk to them through the airwaves. Weneed to reinvent the radio to solve the Maoist problem. We need to democratise short-wave radio. We need to be creative like “Bultoo radio”. With many Adivasis now having access to mobile phones, we need to train andencourage them to record their songs and report their problems in their language onplatforms such as CGNet Swara, a voice-based online portal that allows people in theCentral Gondwana region to report local news by making a phone call. Their messages,when recorded, need to be relayed to the authorities who can then proactively take uptheir issues. The fact that their problems have been solved should be relayed back to theAdivasis on shortwave radio in their own languages. Never mind the connectivity issues,even if they do not receive mobile phone network signals in their village, they can at

least receive signals in most of their weekly markets that they visit every week. “Radiodoes not speak in our languages and talks about [Barack] Obama, Osama [bin Laden],which we do not understand,” the locals tell me. A bottom-up approach Gondi is the lingua franca of the Maoist movement today, but All India Radio does notbroadcast even a single new bulletin in the language. A top-down All India Radio willanyway be of little use; we should strive to create a bottom-up media which is moreparticipatory. We need Adivasi broadcasting cooperatives. We need democratic and realsocial media.



along the model of the last decade. To stop Islamists making inroads into the world’slargest Muslim society, the government has to take on both the extremist organisationsand the extremists’ ideas. President Widodo should not let Islamists have their way.

Stagflation risk ahead The latest Index of Industrial Production data, showing a contraction in factory output

in November, should set alarm bells ringing in North Block, especially when read alongwith the acceleration in retail inflation. While the reasons for the slump in industrialproduction, including the festival holidays, were broadly known, the magnitude ofoverall decline as well as the drops in specific industries are cause for concern. Bothbasic goods and capital goods – proxies for manufacturing and investment demand – contracted 0.7 per cent and 24.4 per cent, respectively. The government’s IIP figuresalso come close after the Nikkei India Manufacturing Purchasing Managers’ Index,where the survey revealed a drop in output in December when companies scaled backproduction on a decline in new orders. The gathering consensus among economists isthat, save a few bright spots like automobiles and consumer durables, demand isprecariously placed. Two key drivers, the overseas export markets and the ruraleconomy, are both facing independent challenges. Global trade growth has beenbecalmed by China’s slowdown and is now being roiled by the yuan’s depreciation, while

back-to-back deficient monsoons have sapped rural consumption capacity. Theeconomy’s momentum, thus, is threatened by the prospect of a sustained slowdown thatmay need to be countered urgently by corrective fiscal interventions. With the ConsumerPrice Index (CPI)-based reading rising for a fifth straight month in December to 5.6 percent, the accelerating retail inflation could end up posing a significant risk, of combiningwith the faltering growth to produce stagflation.Some economists, including the Chief Economic Adviser Dr. Arvind Subramanian, havemooted the idea of the government temporarily straying from its fiscal consolidationpath in order to enable it to step up spending on infrastructure to pump prime theeconomy, especially given the low levels of private investment. Any additional publicexpenditure, when coupled with the increased payouts for salaries and pensions as partof the implementation of the Seventh Pay Commission’s recommendations and the One

Rank, One Pension scheme, will in turn fuel price pressures at the retail level and couldcomplicate the Reserve Bank of India’s inflation targeting agenda and monetary policycalculus. While oil prices remain in free fall, offering succour, food prices continue toclimb pushing food inflation to 6.4 per cent in December. And the outlook on that frontis hardly reassuring, with reports that unseasonal weather conditions including an ElNino-induced milder winter could lead to the rabi crop yield ending up well belowexpectations in several regions. With the RBI’s bi-monthly monetary policy and theannual Central budget set to bookend February, all eyes will be on the next set ofmonthly IIP and inflation data to see if the price gains will plateau, as the central bankhad predicted in December, or continue to trend up, and whether output growthrecovers or not.

A tale of two economists

Chief Economic Advisor Arvind Subramanian publicly differed with RBIGovernor Raghuram Rajan and took a bet on accelerating growth. He isclearly losing Chief Economic Advisor (CEA) Arvind Subramanian started 2015 on an over-optimisticnote. He is likely to have ended it in disappointment. The economy is slowing down: inthe first six months of the financial year, real GDP grew 7.2 per cent, slower than the7.5 per cent in the corresponding earlier-year period. In 2016-17 too, GDP growth willnot be significantly greater unless some specific steps are taken, the CEA has said.



Thankfully, there are few takers in the government for the main measure he issuggesting: a further pause on fiscal deficit reduction.About a year ago, barely months into his job in the Finance Ministry, Dr. Subramanianprojected a sharp recovery with growth of up to 8.1-8.5 per cent. He forecast theacceleration even though he did not expect any big-bang reforms (on this count, hisforecast was correct). In his scheme of things, the spurt in growth would come from

incremental policy pushes, such as to subsidy reforms, direct benefit transfers, andfinancial inclusion of the poor.

The brave outlook underestimated the weakness in the exports sector. It relied on theRs. 70,000 crore of public investment that was earmarked in the year’s budget — assuggested by him — for building infrastructure to stimulate private investments. Thestimulus he had designed was implemented. It proved insufficient to generate thegrowth impulses needed to kick-start the over $2 trillion economy and rekindle animalspirits gone numb in the dying years of the United Progressive Alliance’s 10 -year stintdue to policy paralysis and corruption scandals.As things stand, it seems unlikely that industrial growth will cross 5 per cent. Growth inlending by banks to industry, a proxy for investment sentiment, hasn’t budged from a20-year low. Corporate balance sheets are burdened with mountains of debt. The worst

exports performance since 1952-53 is inevitable.A government not shy of its business-friendly credentials should have picked up thesestress signals early on and administered the remedies, but its mandarins were tooexcited: international agencies had declared that 2015 was going to be the year in whichIndia would race past China (the Chinese economy is about five times as large asIndia’s) to be the fastest growing economy in the world. It was. But that this had probably more to do with China slowing down rather thanIndia picking up, and the stark difference in size made the comparison between the twoeconomies irrelevant. But the cheerleaders among bureaucrats and ministers couldn’tbe bothered with technical minutiae — all that mattered was that India is a bright spotin a gloomy global economy.Why is growth slowing? In the boom years during the UPA government’s tenure, four engines had powered the

economy. Of those, just two are still running: government investments and privateconsumption. Exports and private investments, the other two, are out of steam. TheUPA years saw an investment boom, which was bound to turn sooner or later, and has.Lower borrowing costs could restart the investments cycle but the hands of the ReserveBank of India Governor, Raghuram Rajan, are tied. An agreement that the governmentand the RBI signed a year ago has made controlling inflation the main objective ofmonetary policy. The agreement formalised a policy goal that the central bank hasalways pursued anyway, except that it set the targets in terms of consumer priceinflation. Moreover, government-owned public sector banks have been slow to pass on toborrowers the rate reductions that Dr. Rajan has announced. Banks are a cartel andkeep interest rates high because higher interest rates mean bigger profits.Dr. Rajan is well on course to bring inflation within the 6 per cent target that the

government set around the same time the CEA made his cheery growth forecast. In fact,the ‘rock star’ Governor, with whom the CEA has worked closely earlier in theInternational Monetary Fund, has had an excellent year. India was still one of the‘fragile five economies’ when the year began. Yet, it is the only one to have come out ofthe phase of heightened currency volatility and current account deficit instability thatcharacterised the group. Besides, the purse-string managers of the government’s budgetin North Block, who haven’t yet let its fiscal deficit slip, Dr. Rajan too deserves credit forrestoring India’s macroeconomic stability, which the government hasn’t quite leveraged



to push growth, just as it has been caught sitting on its hands despite the favourableglobal trends in oil and commodity prices.On growth, Dr. Rajan has been spot on. By the end of the summer, he had cut theReserve Bank’s GDP growth projection for the year not once but twice. In July, even asDr. Subramanian was sticking to 8.1-8.5 per cent, Dr. Rajan’s call was 7.4 per cent.

The overconfidence in Delhi lasted till the last day of November, when new official data

released, revealed a slowdown instead of the promised smart recovery. Within hours, thegovernment cut its growth projection to 7.5 per cent.In the following weeks, the CEA did a few mea culpas on earlier positions, raised freshconcerns about the state of the economy and declared the official data puzzling andunusually difficult to interpret. And he called for reassessing the government’scommitment to fiscal deficit reduction.Environment for lower interest rates Abandoning the committed path for fiscal rectitude now will put macroeconomicstability at risk. It might end up hurting growth rather than supporting it with thegovernment and the RBI working at cross purposes. How? To fund a wider deficit, thegovernment will have to borrow more, which could push up interest rates and crowd outprivate borrowers.

Inflation might have been tamed but the Reserve Bank’s key interest rate, despite cutsadding up to 125 basis points in 12 months, is still high for a revival in investments andgrowth. Although higher public investments are desirable, the government needs to doall it can to create the environment for lower interest rates, not higher.Public investments can be increased without deferring deficit reduction, though. Thereis a perceptible improvement in the quality of government spending with a shift towardscapital expenditure. This can be built upon. Savings from efficiency in spending remainan underrated resource. The government ought to cross the political hurdles forstrategic disinvestment. If the government’s fiscal consolidation would distract from thedemand in the economy, much of its spending will also add to it. Governmentemployees’ salaries and pensions are set to rise as the Seventh Pay Commission awardis accepted and disbursed. The hikes are bound to result in a surge in demand for goodsand services. So are other transfers from the government.

The growth and the outlook won’t seem as lacklustre if Dr. Subramanian had correctedhis forecast earlier, as Dr. Rajan had. He publicly differed with Dr. Rajan and took a beton accelerating growth, and it looks as if he is going to lose the bet.

Dealing with the slowdown The International Monetary Fund has added to the prevailing economic gloom by cuttingthe global growth forecast. It now expects the world economy to expand by 3.4 per centin 2016. This is 0.2 percentage points below its forecast of October last year. Therevision has come just as Beijing released numbers that showed China posting theslowest growth yet in 25 years. Though it reported a growth of 6.9 per cent in 2015, the

year saw turbulence in the Chinese economy, with heavy capital outflows and stockmarket volatility. The IMF has kept its growth forecast for China unchanged at 6.3 percent in 2016, and the fear is that China’s economic slowdown could have a trigger effecton others. Reading the China factor in tandem with weak commodity prices, the Fundhas chosen to pare its global growth forecast. The latest IMF growth numbers no doubtreflect the unfavourable ground conditions around the globe. Yet, they also underscore asense of urgency in putting in place an action plan that would catalyse and hasten theeconomic recovery process. Not surprisingly, the IMF has emphasised the need forsupportive measures in the near term to assist a recovery.

While ringing the slowdown alarm, the IMF, however, finds India better-placed vis-à-

vis other large economies. It has kept its growth forecast for India in 2016-17



unchanged at 7.5 per cent. Coming as it does at a time when global political andbusiness leaders make a beeline for Davos, the IMF’s prediction could be seen to be ashot in the arm for Indian leaders to hard sell the country at the World EconomicForum. At best, it could give India a psychological edge over others. But that alone maynot be sufficient to pull India to a higher growth orbit. In an inter-connectedenvironment, global headwinds cannot be wished away. Oftentimes, there have been

comparisons between India and China in the global investing community. Managing the‘China factor’ is very crucial for India to stay its course on the growth path. Containingthe spillover effects of volatility in Beijing could, however, prove a big challenge formonetary and fiscal planners in India in the coming days. Given that Indian exportshave been contracting month after month, the developments on the Chinese currencyfront are bound to pose fresh worries for the economy. Though India is relatively better-placed, the economic slowdown is as much a concern for the country as it is for others.Even as the IMF forecast provides India a comparative edge in wooing the global investorcommunity, it is essential for the government to coherently address the growing anxietyamong domestic consumers and stem, if not fully reverse, the demand slump. Thebudget will provide the NDA government an opportunity to announce a plan to mitigateeconomic distress, especially in the farm sector, and show the political will to push job-

creation as a central objective. It is a task the government must not dodge.

The case against customary exclusionOn January 18, the Supreme Court will hear final arguments on the question ofwhether women can be barred entry to the Sabarimala shrine in Kerala. During thehearing on January 11, Justice Dipak Misra indicated that he was broadly sympatheticto women’s claims to entering and worshipping at the shrine. He is reported to havesaid, “Unless you [i.e. the governing board of the shrine] have a constitutional right toprohibit women entry, you cannot prevent them from worshipping at the shrine.”

These remarks have caused quite a stir. In particular, Justice Misra’s reference to theConstitution, and his suggestion that its non-discrimination clauses might be applicableto this dispute, raise some complex questions about the relationship between freedom of

religion, equality, individual rights, and the extent to which the court can interfere inthe management of religious institutions.Room for state intervention

The history of the framing of the Constitution is a history of conflicting and clashingphilosophies. The Constitution’s fundamental rights chapter grants rights to individualsagainst the state, to individuals against other individuals, to groups and communitiesagainst the state, and, as a final layer, allows the state to restrict these rights forvarious reasons of social and public interest. Tension between these various provisionsis inevitable, and is perhaps reflected most starkly in the religious freedom clauses:Articles 25 and 26. Article 25(1) guarantees to all persons the right to freely profess,practise, and propagate their religion. Mirroring this, Article 26(b) grants to religiousdenominations the right to manage their own affairs in the matter of religion. Overridingboth these provisions, Article 25(2) allows state intervention in religious practice, if it isfor the purpose of “social welfare or reform or the throwing open of Hindu religiousinstitutions of a public character to all classes and sections of Hindus”. During the debates in the Constituent Assembly, B.R. Ambedkar — supported, amongothers, by Rajkumari Amrit Kaur, who expressed specific concerns about the plight ofwomen under religious law — endorsed giving wide, interventionist powers to the stateon the ground of the deep and pervasive role that religion played in the lives of Indians.“The religious conceptions in this country are so vast that they cover every aspect of life,from birth to death,” he observed, “I do not think it is possible to accept a position of



that sort. There is nothing extraordinary in saying that we ought to strive hereafter tolimit the definition of religion in such a manner that we shall not extend beyond beliefsand such rituals as may be connected with ceremonials which are essentially religious.”Over the years, the Supreme Court has itself restricted the scope of the religiousprotection clause to “essential practices of a religion”. While holding that the statecannot use the reform clause to “reform a religion out of existence”, it has nonetheless

held that aspects beyond essential practices have no protection from state intervention.Why does this matter? It matters because the Sabarimala governing board’s argument isthat the prohibition of women is justified by “custom”. They rely upon the Kerala HinduPlaces of Public Worship (Authorisation of Entry) Rules, 1965, which permit prohibitingwomen from accessing places of worship where “custom” or “usage” requires it. Duringthe January 11 hearing, Justice Misra doubted the existence of any such custom. Thecourt’s previous jurisprudence suggests that the burden upon the board will not merelybe to establish the existence of a custom, but also that the custom is “essential” to thepractice of the religion.What if the board fails? If it cannot show that prohibiting women from entry is anessential religious practice, then it can no longer claim absolute immunity under Article26(b). Conversely, however, the women worshippers can argue that prohibiting them

from access violates their right to worship under Article 25(1).It has long been accepted by the Supreme Court that the right to worship, as well asmodes of worship, are protected by Article 25(1). While the court, admittedly, has heldthat the right to worship does not extend to worshipping in any and every place, it hasalso noted that access to places having a “particular significance for [a particular]religion” is constitutionally protected. If, therefore, the women worshippers can demonstrate that the Sabarimala shrine hasspecial and unique religious significance, their Article 25(1) right to worship therestands established. The board’s prohibition upon their entry, consequently,impermissibly violates their constitutional right to freedom of religion.The state and the shrine

That does not, however, entirely resolve the issue. The right to freedom of religion underArticle 25(1) is enforceable against the state, and not against other individuals, or

corporate bodies. The question that the court must answer therefore is whether the Travancore Devaswom Board, which controls access to the shrine, can be equated to the“state”. In fact, in an earlier decision, the Kerala High Court already appears to have held that itcan. Previously, the Supreme Court has held that corporate bodies that are“functionally, financially and administratively” under the control of the state can beequated to the state for the purposes of fundamental rights. The Travancore DevaswomBoard is an autonomous body. While its members are appointed by the Statelegislature, it derives its main income from the administration of the temple. Therefore,it might be difficult to argue that the board is functionally or financially under thecontrol of the state. And if the board cannot be equated with the state, then theconstitutional right under Article 25(1) is not enforceable against it.

That does not yet mean that the case is lost. The Supreme Court has held that if oneprivate party obstructs another private party from exercising her constitutional right,then it is the duty of the state to effectuate her right by restraining the former fromcontinuing with its obstruction. Therefore, the women worshippers may ask the court todirect the state to take all necessary steps to guarantee that they are allowed to accessand worship at the Sabarimala shrine.Finally, there is another route the court might take. The Kerala Hindu Places of WorshipRules speak about “customs” and “usages”. The Supreme Court has held that whilepersonal law is exempt from the application of the Constitution, mere ‘custom’ is not. It



might therefore simply strike down the offending rule on the ground that itdiscriminates on grounds of gender, and therefore violates the Constitution.

The Sabarimala case is not the only case of this sort that is before the judiciary. Last year, a group of women approached the Bombay High Court asking for the recognitionof their right to enter and worship at the Haji Ali Dargah shrine. The matter is presentlyawaiting a decision.

It seems clear that the coming months will see the question of gender justice in religiousinstitutions at the forefront of the judicial landscape. It is now the task of the courts tocraft a solution that advances the constitutional guarantee of equality, non-discrimination and freedom of religion, while remaining cognisant of the fact that theConstitution also guarantees the right of religious sects and denominations to self-governance.

Reform, only left to the judiciary?Last week, the Supreme Court declared that it would hear a public interest litigation(PIL) on whether women of menstrual age can be denied the right to enter the Ayyappatemple in Sabarimala, Kerala. The bench, in its observation to the Kerala governmentand the temple authorities, remarked that “unless you have a constitutional right, youcannot prohibit entry [to women].”

In 1993, the Kerala High Court had held that the Travancore Devaswom Board, theauthority that manages the Sabarimala temple, could restrict access to women whowere in the 10-50 age group. It had conc luded that the “restriction imposed on womenaged above 10 and below 50 from trekking the holy hills of Sabarimala and offeringworship at Sabarimala Shrine is in accordance with the usage prevalent from timeimmemorial,” and that “such restriction imposed by the Devaswom Board is not violativeof Articles 15, 25 and 26 of the Constitution of India.” This is the position that theSupreme Court will revisit early next month in the context of arguments of genderequality and fundamental rights. In doing so, it will yet again wade into the paradoxicalwaters of a secular state making religious policies.No strict religion-state separation Unlike any other secular state, the Republic of India was conceived with a mandate for

social revolution. This makes our situation unprecedented and unique. We do not havea “wall of separation” between religion and state that, for instance, exists in the UnitedStates. Furthermore, the founders of the Indian republic have enjoined the state tointervene in social customs and redress grievances arising out of them so that allcitizens can equitably enjoy their constitutional rights and privileges. This is evident inthe way Article 25, which deals with freedom of religion, is constructed. Unlike otherarticles dealing with the f undamental rights, it begins with caveats (“subject to publicorder, morality and health and to the other provisions”) before stating the right (“allpersons are equally entitled to freedom of conscience and the right freely to profess,practise and propagate religion”.) It goes on to empower the state to regulate and restrictnon-religious activities associated with religion. It allows the state to make laws“providing for social welfare and reform or the throwing open of Hindu religiousinstitutions of a public character to all classes and sections of Hindus”. Interestingly,the term “Hindus” here includes “persons professing the Sikh, Jaina or Buddhistreligion”. The rights of religious minorities are protected under subsequent articles. Theasymmetries that arise from these articles are causes of grievances, disgruntlementsand contestations that vitiate our politics to this day.Why did the wise people who drafted a remarkably liberal, secular and modernConstitution decide to give the state so much power over religion? The words of Dr. B.R.Ambedkar, Chairman of the Drafting Committee, give us some insight. Arguing for aminimalist definition of what constitutes religion — and hence needs to be kept outside



the domain of the state — he held that “the religious conceptions in this country are sovast that they cover every aspect of life, from birth to death. There is nothing which isnot religion and if personal law is to be saved, I am sure about it that in social matterswe will come to a standstill.” In other words, a strict separation between religion andstate would have prevented the Constitution from carrying out social revolution.In the early decades of our republic, the Supreme Court evolved an “essential religious

practices doctrine” that spelt out the outer limits of what could be called the soledomain of religion. Unfortunately, over the years, this doctrine was interpreted in anelastic, and sometimes arbitrary manner. Judges gave themselves the power todetermine what constitutes essential religious practice not just for one religion, but forall of them.India might be the only republic where the judiciary can pronounce on matters not onlyrelating to law, but also those concerning theology. Thus, courts have ruled on topicslike the Jain practice of Santhara (voluntary fasting to death); and on who can andcannot become an archaka (priest). They have even pronounced on rather vexedquestions like what should be the shape of the markings on the temple elephant’s head.

The higher judiciary’s decisions are seen as legitimate among the public because of therelative credibility it enjoys. Judicial activism and encroachment into legislative and

executive domains add to its popularity. Thus, we should not be surprised if theSupreme Court declares that the Sabarimala temple must be thrown open to women ofall ages.Gender equality vs. judicial overreach If it does, it will be seen as another victory for the cause of gender equality, even if only aminiscule proportion of women are likely to ever exercise that right. Even women whoare in a position to visit the temple might choose not to do so out of a certain regard fornorms and practices. And some may choose to visit and society, traditions and normsmust change to accommodate them.Yet, we should be wary of a judiciary that encroaches on more domains, even for causeswe consider as desirable and good. “Caesaropapism” is a term used to describe a state ofcomplete subordination of religion to the secular state. India runs the risk of being inthrall of a variant of this, a condition that can be termed “judiciopapism”, where judges

can completely overrule religious authority. With each judgment that shrinks the scopeof what is considered an “essential religious practice”, the risk grows. Why should we care? To suggest that this is not a bad thing because it deliversprogressive results is similar to contending that dictatorships are good because they canproduce results that democracies struggle to achieve. The revolutionary makers of ourrepublic certainly did not envisage a “judiciopapist” order. Even the strongest argumentin favour of secularism cannot condone such a state of affairs.Worse, the more the state takes over the task of social reform, the less likely it is toemerge from within the society. Religious traditions often respond to externalinterventions by growing more conservative and resisting reform. A democracy isunlikely to muster the will to see through state-imposed reform, undermining itssuccess. Politics in a society like ours, with its many religions and sects, is likely to

create logjams to even the most basic social reforms. Note how the case for a UniformCivil Code has become a ground for communal politics.Further, attempts by the state at a “social revolution” only weaken efforts of socialreformers who belonged to various communities. From Buddha to Kabir, from GuruNanak to Narayana Guru, India has historically seen social reformers emerge as aresponse to orthodoxy and rigidity. Independent India has seen fewer of them, perhapsbecause the Indian republic has arrogated that responsibility to itself.Ronojoy Sen rightly notes that court rulings have “furthered the reformist agenda of theIndian state at the expense of religious freedom and neutrality.” The caveats are eating



heads to Israel, in an attempt to assure Palestinian President Mahmoud Abbas of India’scontinued support.Ever since India established full diplomatic ties with Israel in 1992, bilateral cooperationhas increased manifold. Since the early 1990s, trade between India and Israel has risenfrom the base of $200 million to over $4.5 billion in 2014-15. What began as a tight-lipped defence cooperation has now blossomed into a multifaceted partnership, ranging

from water technology and agriculture to cancer treatment and space research. Today,technology is redefining a mutual bond between these two ancient civilisations. Over75,000 Jews of Indian-origin residing today in Israel are a living testament to historicand ethnic ties.Since Independence, India has often depended on foreign suppliers for critical defenceprocurement. Modi seeks to reduce the country’s dependence on foreign suppliers. Aspart of the Make in India project, the government has eased restrictions on foreigndefence manufacturers willing to set up R&D and production units in India. Manyleading Israeli defence companies have been encouraged by easing regulations and havetied up with Indian partners to build manufacturing units. In the last year, leadingdefence manufacturers, Israel Aerospace Industries and Rafael, have signed agreementswith Indian counterparts to develop, manufacture and market cutting-edge defence

equipment in India. This bilateral defence cooperation is a partnership on an equal footing. In early 2008,the Indian Space Research Organisation (Isro) placed an Israeli reconnaissance satellite(TecSAR) into orbit. India and Israel are set to foray into the international market byoffering the jointly developed Barak 8 Air and Missile Defence System to friendlycountries. Nato-member Poland is evaluating the Barak 8 for induction into its navalarsenal.Research and technological cooperation is not limited to defence. In recent months,Israel’s two leading academic institutions, Tel Aviv University and IDC Herzliya, havesigned wide-ranging agreements with prominent Indian academic institutions, such asMumbai University, the Welingkar Institute of Management, etc.In recent years, the Indian private sector, too, has shown great interest in Israel’sacademic research and start-up ecosystem, with Indian multinationals making long-

term investments in technology firms and research institutions. The Tata Group is thelead investor in Ramot, the $20mn technology transfer arm of Tel Aviv University. Lastmonth, Mumbai’s Sun Pharma announced a tie-up with Israel’s Weizmann Institute ofScience to develop treatments for neurological diseases, including brain stroke andbrain cancer.Israeli institutions are also keen to engage with students, researchers and youngentrepreneurs from India. With support from the Israeli embassy in India, every year,select Indian start-up founders get a chance to participate in “Start Tel Aviv” andconnect with Israeli and international business leaders and venture capital firms.Israel’s Council for Higher Education offers hundreds of scholarships to Indiansinterested in pursuing higher education in Israel. Additionally, the Israel-Asia Centreoffers scholarship and leadership programmes to Indian students. The Jerusalem-based

centre also runs an MBA and leadership programme exclusively tailored to Indianwomen entrepreneurs, providing them the skills and exposure needed to excel incorporate India.Despite growing cooperation in major sunrise sectors, agriculture cooperation isarguably the most transformative component of the relationship. According to Israel’senvoy to India, Daniel Carmon, who earlier headed Israel’s Agency for International Development Cooperation (Mashav), “agriculture is one of the main pillars of Israel-Indiarelations”. Under the auspices of the Indo-Israel Agricultural Project (IIAP), severalcentres of excellence in agriculture have been set up across India since 2008. These act



as a platform for technology transfer to Indian farmers, aimed at introducing new crops,increasing yields and improving the quality of farm produce. At present, 26 such centresare running in nine states.If implemented, Israeli expertise in water resource management and cultivation of aridland could be valuable in ensuring India’s future food and water security. By connectingacademic, industrial and start-up ecosystems of both countries, Indian businesses and

entrepreneurs have the potential to create the synergies needed for a technology-drivenfuture — technology capable of addressing the emerging challenges of urbandevelopment, energy generation, water conservation and food security. The diplomaticinitiative to strengthen relations reflects the optimism shared by the Indian tech andbusiness community as a whole.

Freedoms only for the outragedAcomedian, Kiku Sharda, has been arrested under Section 295(A) of the Indian PenalCode for presumably “outraging” the religious sentiments of Dera Sacha Saudaadherents by mimicking their leader, Gurmeet Ram Rahim Singh. The case was filed bya Dera follower in Haryana, and the State police reached Mumbai to make the arrest. InMeerut, Uttar Pradesh, meanwhile, a court has accepted a plea by a local leader of the

Hindu Mahasabha for proceedings against actors Shah Rukh Khan and Salman Khan. Their misdeed: wearing shoes in a “temple” on the sets of a television show. By thestandards of intolerance to creative, literary and academic work over the past twodecades in India, these instances are unexceptional — and it is beside the point toiterate the commonsense distinction between reality and representation, between factand superstition. It is a meandering but firm line that links them up with thevandalisation of the Bhandarkar Institute in Pune over a single line in a fine study ofShivaji; the intimidatory outrage that inhibits the release of films such as BajiraoMastani andJodhaa Akbar which unsettle orthodox storytelling; the moral policing thatforced the shooting of Water , on the treatment of Hindu widows, to be shifted out ofVaranasi; and the pressure on publishers to withdraw from circulation entire books(Wendy Doniger’s The Hindus: An Alternative History ) or excise chapters from

compilations used as university texts (A.K. Ramanujan’s ‘Three Hundred Ramayanas’).It is the line that has also run through the murders of Govind Pansare, M.M. Kalburgiand Narendra Dabholkar.

There is no doubt that Section 295(A) of the IPC is in urgent need of amendment to limitits misuse. As is the section dealing with sedition, freely imposed by the state on folksingers, cartoonists, students watching cricket and defiant political upstarts. But theseare attendant issues of the crisis in India’s politics today. In democracies worldwide,questions of representation and liberty have been taken forward in the political sphere,and in India even more so. India’s politics, by parties of the freedom movement like theCongress but also regional parties, took the lead in increasing the space for rationalism,modernity, liberty and freedom of expression. That uncompromising cover for liberty isnow giving way to pervasive political competition to frame hurt identities andnationalism for partisan advantage. And those freedoms and the modernity project havebeen rendered yet more fragile in the past couple of years, with many of the so-calledfringe outfits that feast on communal intimidation drawing strength from their affiliationto the Sangh Parivar, and thereby to the ruling Bharatiya Janata Party. Months afterwriters, academics and artists foregrounded the abnormal circumstances today, it isunfortunate that India’s politics and its legislatures have not joined the debatewholesomely. This is why it takes just a couple of outraged persons to remind theworld’s largest democracy that it has lost the essential instinct for liberty.

Starting up to stand still?



Two lakh passes were sought for the Start Up India workshop at New Delhi’s VigyanBhawan with a seating capacity of 1,350, a good indicator of the interest in the actionplan for start-ups unveiled by Prime Minister Narendra Modi after a nine-hour talkathonbetween Silicon Valley honchos, financiers, Indian unicorns and top governmentofficials. Amidst the euphoria, at least one Silicon Valley CEO, B.J. Arun of JulySystems, warned that India was witnessing a bubble similar to the heady dot-com rush

of 1999-2000 in Silicon Valley with too much money chasing too few ideas. The highdemand for passes to the event is probably a sign of that growing bubble. India, Mr.Arun warned, won’t recover as easily as the U.S. did after the bubble bursts, only to betold by his Indian counterparts that there is no bubble and even if there is, the fittestwould survive. That confidence is refreshing, coming from under-40 first generationentrepreneurs. The government’s action points seem laudable for starters, if not deepenough. They include Rs. 10,000 crore of funding for the next four years, tax-free andlabour-inspection-free existence for start-ups for the first three years, speedier patentclearances with the exchequer footing most of the bill, and promises to fix taxationhurdles that deter domestic and global financiers from bankrolling new ventures in thecoming Budget. That the government must intervene less for start-ups to succeed — Mr.Modi’s core message — drew the loudest cheers, followed by the tax breaks on start-up

profits. The tax breaks fly in the face of the corporate tax reform being pursued to lowerrates and phase out exemptions; but it is a headline-grabbing measure that won’t hitrevenues as few start-ups would make profits in the first three years.A bigger issue is the attempt to define the start-ups eligible for the sops, support andfunding announced by the Prime Minister: firms set up in the past five years with anannual turnover below Rs. 25 crore, working ‘towards innovation, development,deployment or commercialisation of new products, processes or services driven bytechnology or intellectual property’. The mere act of developing products or services thatdo not have potential for commercialisation or have no or limited incremental value forcustomers would not be a start-up. Moreover, a start-up shall be eligible for tax benefitsonly after it is certified by an inter-ministerial board. Slotting something like innovationinto a template may not click and until more details emerge, it just sounds like more redtape to clear to avoid some red tape. Smarter ventures would seek funding on their own

and work without official sops, but the government must not lose sight of the need to fixIndia’s overall business climate. Failing that, even with tax sops, start-ups will continueto quit India and list or register elsewhere. Bubble or not, that’s one issue Indian unicorns are unanimous about.

Towards a life of dignity and independenceIt was the United Nations’ International Day of Persons with Disabilities on December 3,but with a difference in Delhi. The 2015 commemoration coincided with 20 years of thepassage of the relevant law, The Persons with Disabilities Act, 1995 — the first-everlegal protection in post-independent India exclusively targeting people with various,though not all, impairments. Appropriately, the National Centre for Promotion ofEmployment for Disabled People (NCPEDP), the country’s premier organisation foradvocacy, marked the occasion with a consultation among stakeholders to take stockand strategise for the future.

The highlight of the Equality+20 conference was the release of the book, 20 Stories ofChange ,by Thaawar Chand Gehlot, Union Minister of Social Justice and Empowerment(MSJE). The NCPEDP compilation catalogues the creative use of the current law bypeople with impairments and by their parents, from remote regions, to ensure that theirdisability was not held against them in the enjoyment of equal rights and opportunities.

These are tales of dogged perseverance, either to secure a seat in a mainstream school,something middle-class Indians take for granted, or to halt a routine transfer of a

http://www.thehindu.com/opinion/op-ed/a-thin-boy-in-a-wheelchair/article7941939.ece






Saturday, the International Atomic Energy Agency confirmed Iran had complied with itscommitments. Within hours, nuclear sanctions were removed, signalling Iran’sreintegration with the global economy. The implementation of the deal demonstrates thewillingness of both the U.S. and Iran to move past their history of hostilities and begin anew future of cooperation. U.S. President Barack Obama and his Iranian counterpartHassan Rouhani deserve credit for their visionary determination. It was not easy to

effect structural changes in the thinking of their respective foreign policy establishmentsand chart a new course of constructive engagement. Both faced criticism at home. Therewere regional challenges as well, such as the steadfast opposition from Israel. Still theystuck to the path of diplomacy which brought new hopes to a region that is otherwisetormented by conflicts.Over the past few months, U.S.-Iran ties have substantially improved. Though bothsides maintain that cooperation is limited to the nuclear deal, in actuality it is muchbroader. Tehran and Washington are engaged in Syria and Iraq. They share commoninterests in Afghanistan. The quick release of American sailors whose patrol boatsdrifted into Iranian waters signalled the shift in ties. The prisoner swap deal, announced

just hours before the sanctions were lifted and under which Iran released fourAmericans and the U.S. seven Iranians, is another indicator. But the question is

whether these changes are sustainable and, if so, what effects they can have on thetroubled West Asian geopolitics. In Iran there appears to be a consensus on enhancedengagement with the West. Despite the anti-American public posturing, often from thehard-line quarters of the establishment, Iran’s political elite remains largely supportiveof President Rouhani’s moves. But it’s not the case in the U.S., where the Republicanfront runners for the presidential election are highly critical of the deal. It is not clearwhat could happen to the Iran-U.S. détente if a Republican is elected to the WhiteHouse. But if both nations overcome these challenges and sustain the momentum, itcan transform the region for the better in the long run. India should take the cue fromthe deal. A peaceful, stable Iran is vital for its interests, particularly for energy securityand connectivity. New Delhi should get Tehran on board, again.

Death of a Dalit scholar The suicide of Rohith Vemula, a Dalit research scholar at the University of Hyderabad,is yet another tragic testimony to the feudal passions of caste that roil India’sinstitutions of higher education, which are known to harbour delusions of beingmeritocracies. Vemula was one of five Dalit students, all belonging to the AmbedkarStudents Association (ASA), who had been suspended by the administration. The‘suspension’ order allowed them to continue their studies in the university but deniedthem entry to the hostels, administration building and other common places in groups.It is difficult to imagine a more blatant exhibition of social boycott than such a punitivemeasure, directed at a group of students from a socially disadvantaged community. Thatthis comes from the governing elite of a central university makes it even more appalling.

The ostensible reason for the suspension of Vemula and the four others was an allegedclash between students belonging to the ASA and the Akhil Bharatiya VidyarthiParishad (ABVP), an affiliate of the right-wing Sangh Parivar. An inquiry by theuniversity culminated in the suspension order. It was against this punitive measure thatthey had been protesting. On Sunday, the young scholar decided to cut short both hisprotest and his life. His suicide note, which was posted on social media, statescategorically that no one is responsible for his act, a statement that should not be takenat face value.

The police have registered cases against Union Minister of State for Labour andEmployment Bandaru Dattatreya, the University of Hyderabad Vice-Chancellor P. AppaRao, and two ABVP activists on charges of abetment to suicide, and violation of the SC



and ST (Prevention of Atrocities) Act. Activists say the circumstances leading toVemula’s death were sparked by a letter from Mr. Dattatreya to Human ResourceDevelopment Minister Smriti Irani, charging the ASA with being “extremist” and “anti-national”. Trying to make sense of a death by suicide is an onerous, and frequentlyfutile, exercise. But Vemula’s death demands it, not least because it is a nationalshaming. It brings the Indian state face to face with its utter failure in addressing the

social evil of caste and casteist discrimination. The Thorat Committee, constituted some years ago to investigate differential treatment of SC/ST students in just one institution,the All India Institute of Medical Sciences, Delhi, had come out with a damningindictment of the way Dalit students were treated. Forced into ghettoes in the hostel,discriminated against by teachers, denied access to sporting and cultural activities,SC/ST students in India’s premier educational institutions walk into an environmentthat’s virulently hostile to them. Not surprisingly, according to one estimate, in the lastfour years 18 Dalit students chose to end their lives rather than continue to battle on inthese dens of caste prejudice and social exclusion. The first step toward treating the rotof caste is to acknowledge it — after Vemula’s tragic death, it would be a crime not to.

Ancient prejudice, modern inequalityOn Sunday, January 17, Rohith Vemula (25), a doctoral student at the University of

Hyderabad, reportedly committed suicide by hanging himself from the ceiling fan in afriend’s hostel room. His death has brought to a head a long-simmering conflict betweenprogressive student groups, and the Akhil Bharatiya Vidyarthi Parishad (ABVP), thestudents’ wing of the Rashtriya Swayamsevak Sangh (RSS), present on campuses acrossthe country and increasingly belligerent in the prevailing climate of Hindu right-wingdominance.Rohith, a Dalit, had been involved in campus activism on diverse issues: Ambedkaritepolitics, protests against beef bans, the persistence of the death penalty in the Indiancriminal justice system, and communal violence in Muzaffarnagar in August-September2013, which left many dead and thousands displaced, mostly Muslims.Along with four other Dalit students, Rohith had been evicted from his hostelaccommodation about a month ago, his monthly research stipend suspended, allegedly

for subversive activities. The university administration as well as the State and Centralgovernments all appear to have been strong-armed by the reactionary ABVP intoexpelling these five individuals on dubious charges, characterising the victimisedstudents as “casteist”, “extremist” and “anti-national”. All of them belonged to theAmbedkar Students Association, a body similar to the Ambedkar-Periyar Study Circle ofthe Indian Institute of Technology, Madras (IIT-M), a group that had also facedharassment and intimidation from campus authorities in the summer of 2015.Caste and the Hindu Right

The conflicts in both the University of Hyderabad and the IIT-M illustrate a deepfracture between the Hindu Right and Dalit-Bahujan ideologies, particularly those of theAmbedkarite strain, a fault line that cannot be papered over by electoral alliances ofconvenience and occasional instances of power-sharing between the two sides. TheSangh Parivar at every level, from the ruling Bharatiya Janata Party down to the ABVP,stands against equality, whether between castes, religious communities, or the sexes.Instead of egalitarianism, the Hindu Right believes in an archaic arithmeticof adhikaar and bahishkaar , entitlement and exclusion, based on caste, religion andgender. If the Indian Republic is built on a plinth of equal citizenship, the HinduRashtra would be founded on ritual hierarchy and patriarchy as laid out for centuries inthe caste system. Onto this unequal social order of considerable vintage would belayered a deadly neo-Fascist majoritarian politics that arises out of the Hindutvaimagination of the modern nation.



This is why, when the Ambedkar Students Association supported the screening of NakulSingh Sawhney’s film Muzaffarnagar Baaqi Hai on the University of Hyderabad campus,the ABVP attacked the Dalit activist-students, driving them out of their classrooms andhostels, eventually to the limit where Rohith took the irreversible decision to end his life.Photographs he posted on his Facebook page in 2014 of his parents’ home in the smalltown of Guntur — a prized red refrigerator in which all the neighbours kept their water

bottles, a gas burner, a fan he wryly described as “solar powered” — suggest the greatdistance from poverty and hardship travelled by this young man to become a doctoralstudent at one of the most prestigious universities in India. His journey ended violentlyand abruptly.But the ostracising of the Sudra and Dalit student from the institutions of educationand employment, knowledge and power, is a very old theme in Indian thought on socialstructure and moral order. The figure of the outcaste student appears in some of ouroldest texts that reflect on the relationship between self, society and sovereignty.In the Mahabharata, Ekalavya, a talented archer prince of the forest tribe of theNishadas, goes to Dronacharya, the master who teaches young men of the Pandava andKaurava clans how to wield their weapons. Drona will not admit Ekalavya on account ofthe tribal status that makes him an outsider to the caste system. Ekalavya goes away,

makes an image of Drona, secretly watches him give lessons to Arjuna and the otherroyals, and teaches himself archery, treating the mud-and-clay Drona as a stand-in forthe recalcitrant guru.When Ekalavya turns out to be a better bowman than the Kshatriya prince Arjuna,Drona asks for his right thumb as tuition fee. Ekalavya agrees, but not withoutunderstanding that he is being discriminated against yet again. Ekalavya’s initialdisobedience (which makes him a secret apprentice) as well as his later compliance(which costs him his thumb) shame both Drona and his favourite pupil, the supposedbeneficiary of this blatant act of prejudice, Arjuna. The story of the Nishada princeshows Drona up as a caste bigot whose classroom reeks of nepotism, even if he knowshow to teach his students well, at least the high-born ones he favours.Ekalavya’s dismembered digit, a bloody and visceral embodiment of casteconsciousness, has haunted the Hindu schoolyard from time immemorial. It can be read

as quite literall y a thumb in Drona’s eye, a jab at our conscience that is as painful for usto experience as it must have been for Ekalavya to lose the very source of his hard-earned skill. He is denied access at every stage: he cannot become Drona’s pupil, butneither is he allowed to become a great archer through his own efforts.

The story of Satyakama Jabali from the Chandogya Upanishad is more complex.Satyakama has no father, and takes his mother Jabala’s name. He goes to thehermitage of the sage Gautama, and wants to be admitted. When asked about hisparentage, he acknowledges honestly that he does not know his father’s name or caste.Gautama admits him nevertheless, and performs the initiation ritual to pronounce hima twice-born Brahmin, after which his education begins in earnest.In the ancient text of the Upanishad , Gautama is willing to entertain Satyakama as apotential pupil because of his honesty: he takes the boy’s love of truth (which is the

literal meaning of his name, satya-kama ) as proof of his essentially Brahmin nature.Once the teacher has assessed the applicant’s innate worth, he then translates hispositive assessment into an upanayana (bestowal of the sacred thread on the boy’sbody), naming Satyakama a proper Brahmin and proceeding to educate himaccordingly.Satyakama’s Brahmin identity is clearly attributed to him; it cannot be proven to beintrinsic, since his mother Jabala cannot identify his father. Gautama seems to suggestthat ‘Brahmin is as Brahmin does’, i.e., Satyakama has the lakshana (characterising



feature) of a Brahmin (because he speaks the truth), even though he does not havethe gotra (lineage) of a Brahmin (because his mother was unmarried).For a modern reader, this is a confusing account. Does Gautama make an exceptionand admit a non-Brahmin pupil into his hermitage, or does Gautama accept Satyakamabecause he thinks he recognises him, despite appearances, to be a genuine Brahmin?

The exchange between Satyakama and Gautama at the threshold of the ashram , as it

were, raising fundamental questions about identity (Who are you? Who am I?), aboutrights to entry into the portals of the academy, about rule and exception in the castesystem, and about the entailments of caste in the strongholds of knowledge and seats ofpower, is again a moment that has not left our collective conscience for two millennia.Dr. Ambedkar himself reminds us of both these characters, Ekalavya and Satyakama,who for him are damning evidence of the stubborn longevity of caste in Indian history.The more things change… Ekalavya did not die and neither did Satyakama, but Rohith did. This sad fact couldlead to various conclusions. It is a reflection on the unexpected cruelty and theadamantine ideologies undergirding the modern state and its institutions of higherlearning. Drona and Ekalavya, Gautama and Satyakama could to some extent negotiatethe terms of their relationship. Rohith ostensibly had the might of the Indian

Constitution behind him — his fundamental rights as a citizen, reservations policy forstudents of his socioeconomic background, and the empowering discourses of theAmbedkarite student group which gave him a certain political awareness and the radicalenergy to fight for the equality he fully expected and deserved, but never got. And yet,when he was rusticated and ousted from his hostel, when he and his companions feltpushed to stage a “sleep-in” outside the university gates; when his stipend was withheldand he had to borrow money, and when he finally felt like he had hit a wall and had nooptions, Rohith was far worse off than his metaphorical brothers in the ancientliterature.His heartbreaking suicide note states the piercing truth, the skewer that caste ideologydrives into every heart filled with hope: “My birth is my fatal accident.” Yes, this is thehuman condition: our birth, all birth, is an accident. We do not choose our father ormother, our group or community. But only in India, only in caste society, and only for

Dalits does this accident of coming into an unequal life become the fatality of eitherliving with relentless inequality and enduring its cruelties, or dying a terrible, unfair,premature and unredeemed death.Anil Kumar Meena, a first-year Dalit student at All India Institute of Medical Sciences(AIIMS), India’s premier medical college, had hung himself from the fan of his hostelroom in March 2012. In Rohith’s poignant Facebook photos, his family’s meagrepossessions now stand witness to a life whose promise was extinguished. He had postedthat before he got a Junior Research Fellowship, his mother’s humble sewing machinehad supported the family.Like December 16, 2012, the day marked by the horrendous rape and murder of a

young woman Nirbhaya, let January 17, 2016 too go down in this country’s history asthe dark day of the death of a student, Rohith Vemula, who was promised a chance at

dignity and prosperity by our founders, and whom we abandoned, to our eternal shame.

Growing crackdown on activists The audacious and unprovoked attack last week on a group of activists who held apeaceful rally in Rajasthan can only be explained in terms of the rising resentment onthe part of the ruling class towards civil society organisations demanding accountability.Flagged off by social activist Aruna Roy, the Jawabdehi Yatra was aimed to spreadawareness about government schemes and raise the issue of accountability in their



implementation. A mob, allegedly led by BJP legislator Kanwar Lal Meena, attacked themembers of organisations such as the Mazdoor Kisan Shakti Sanghathan (MKSS) atAklera in Jhalawar district, in a sign that sections of the ruling party in the State wereunhappy with civil society activists entering a region falling under a Lok Sabhaconstituency represented by Chief Minister Vasundhara Raje in the past and by her sonDushyant Singh now, and demanding answers from the authorities. While the police

have registered a case and arrested some of the assailants, it was only after videofootage showing the apparent presence of Mr. Meena in the crowd was released thatthere is a hint that his involvement may be probed. The 100-day yatra, under thebanner of the Soochana Evam Rozgar ka Adhikar Abhiyan, itself was as innocuous aprogramme as there could be. It merely tried to cover blocks across all the State’sdistricts to listen to people’s grievances and spread awareness through street-cornermeetings. The Rajasthan Chief Minister would do well to heed the call for a formalinquiry into the incident, come out openly in condemning such unsavoury events, andprosecute the offenders.It is difficult to see this incident in isolation. The Centre itself has been a poor rolemodel, looking at the way Greenpeace India has been hounded and its registrationsought to be cancelled. It is not difficult to surmise that a message is being sent out that

activism should be tempered by a nuanced deference to the state’s overarchinginterests. Even under the previous UPA regime, activists in Tamil Nadu opposing theKudankulam nuclear power project faced, and continue to face, hostile treatment byvarious arms of the state. If bureaucratic aversion to criticism is often an adequatesource of harassment and intimidation, political players too weigh in with disparagingremarks against non-governmental organisations and individual activists. Theirinfluence is obvious in incidents as diverse as the prevention of a Greenpeace activistfrom going abroad and the registration of a large number of cases against activists. Inrecent years, civil society has played a significant role in shaping policy. Landmarkpieces of legislation — the Right to Information Act, for instance — have come aboutonly because the government chose to involve stakeholders across the political andsocial spectrum and obtain their inputs and advice. Any attempt to prevent the freefunctioning of such organisations will amount to de-legitimising key participants and

stakeholders in the country’s social, economic and political policymaking sphere. The case for going universalMaternity entitlements are an important policy tool for encouraging better maternalhealth. This is why we need to do away with conditionality in cash transfer schemesSince the National Food Security Act (NFSA) was passed in 2013, policy circles havebeen buzzing with talk of reforms in the public distribution system (PDS). Less wellappreciated is the NFSA’s potential to call attention to, and help address, poor maternalnutrition — an aspect of food security that is extremely important for health, well-being,and productivity.Indian women are unhealthily thin when they begin pregnancy — the 2013-2014 RapidSurvey on Children finds that a little less than half of the women aged 15-18 areunderweight. Further, women gain too little weight during pregnancy to nurture healthy

babies. Maternal nutrition is so poor that Indian women actually weigh less at the endof pregnancy than sub-Saharan African women do at the beginning. As a result, India’sneonatal mortality rate is high, birth weight is low, and far too many children suffer theconsequences of being undernourished in the womb.According to the NFSA, “Every pregnant and lactating mother is entitled to a free mealat the local Anganwadi (during pregnancy and six months after child birth) as well asmaternity benefits of Rs. 6,000, in instalments.” Unfortunately, except for laudableefforts in Odisha and Tamil Nadu, and a small pilot programme called the Indira Gandhi



Matritva Sahyog Yojana (IGMSY) which is active in only 53 of India’s 676 districts,maternity entitlements have not been implemented.Government’s role Maternity entitlements would be a good idea even if they weren’t already written intolaw. The health of future Indians depends on women gaining more weight duringpregnancy. Maternity entitlements could be used to purchase vegetables, fruits, dairy

products, eggs, or meat, which are essential for healthy pregnancies but are notdistributed through existing programmes.

The government should put new emphasis on educating women and their families aboutweight gain during pregnancy. It should combat the common, though false, notion thatwomen should eat less, not more, during pregnancy. It should talk to people about thefact that pregnant women are often treated poorly by their own families; they areexpected to work hard and eat little. Despite clear difficulties of addressing entrenchedgender and age hierarchies with government action, maternity entitlements are a goodway to signal to families just how important a time pregnancy really is.Last September, the Supreme Court issued a notice to the Centre about non-implementation of maternity entitlements. A representative of the Ministry of Womenand Child Development (MWCD) responded in late October. The response suggests that

if the Finance Ministry allocates funds for maternity entitlements (the Finance Ministryhas, at present, allocated funding only for the 53 IGMSY districts), the MWCD wouldexpand IGSMY in its current form. There are several reasons why this is a bad idea.IGMSY is a conditional cash transfer, which means that mothers only receive benefits ifthey meet certain requirements. Recipients must register pregnancies with a villagehealth worker, receive ante-natal check-ups, take iron-folic acid supplements, receiveimmunisation, attend infant-feeding counselling sessions, breastfeed for six months,and begin complementary foods at six months. These are steps to raising healthychildren, but making them conditions for receiving benefits makes little sense.Conditional cash transfers have been successful in Latin America, where health systemsare well-developed. In India, though, major deficiencies in the provision of healthservices mean that conditional transfers will not work similarly. Conditional transferssolve demand problems, but India chiefly faces supply problems. Conditions that have

to do with mothers’ behaviour rather than participation in services are nearly impossibleto verify. Verifying behaviour which occurs in private, at home, constitutes an undueburden on health workers. Further, the need to document the fact that conditions havebeen met invites corruption: many health workers demand to be paid for producingpaperwork that “verifies” the unverifiable. Universalise entitlementsAlthough the NFSA clearly legislates a universal entitlement, IGSMY, which MWCDproposes to expand, restricts benefits to the first two births. This position appears to bebased on the ill-conceived notion that universal transfers increase fertility.Certainly, people respond to incentives. But a Rs. 6,000 transfer is not large enough topersuade parents to raise a child they don’t want. Children are expensive: the 2011India Human Development Survey found that parents spend an average of Rs. 4,207 per

year educating each 5-18-year-old child, not to mention what they spend on food,clothing, and medicines.Some recent research, casually cited in media reports, claims that Janani SurakshaYojana (JSY) incentives for institutional birth have slowed fertility decline. The basis ofthis claim is that between 2001 and 2008, fertility decline was slower in States withhigh JSY incentives than in those with low incentives. This argument, however,overlooks the fact that NFHS data show that this pattern was applicable even before JSYwas launched.



No social-scientific evidence supports the idea that families would be motivated to raiseanother child by JSY incentives of Rs. 1,400, or maternity entitlements of Rs. 6,000.Regrettably, social biases may be at play when government officials baulk at universalentitlements: the Centre for Equity Studies finds that restricting participation to the firsttwo births would disproportionately exclude mothers from poor and minoritybackgrounds.

Maternity entitlements are an important policy tool for encouraging better maternalhealth. But a well-designed programme would not merely scale up the IGMSY. It wouldbe, as the law already requires, a universal programme, and it would do away withconditionality in favour of educating families about the importance of investing inhealthy pregnancies.(Diane Coffey is a visiting researcher at the Indian Statistical Institute, and Payal Hathiis managing director of the Research Institute for Compassionate Economics, NewDelhi.)Indian women actually weigh less at the end of pregnancy thansub-Saharan African women do at the beginning

Polarisation in MaldaOn the face of it, the violence unleashed in Malda on January 3 would appear to point to

a dangerous escalation of a communal protest by an obscure group called the AnjumanAhle Sunnatul Jamaat. The group had organised a rally to protest against remarksagainst Islam made by a Hindu right-wing leader in Uttar Pradesh nearly a monthearlier — a mob burnt a Border Security Force (BSF) vehicle, then attacked andransacked a police station and burnt vehicles in Kaliachak. However, a deeper inquirysuggests that the violence was the result of a law and order breakdown in the largelybackward and under-developed district, which has been convulsed by agrarian distress,poverty and a political system thriving on patronage and crime. The mob had specificallytargeted the police and the BSF after a crackdown on poppy cultivation and thecirculation of fake currency notes, an illicit economic activity that is rampant in thearea. It is clear from ground reports that the protest rally was used as a ruse to unleashviolence against the police in the Kaliachak area, with crime records and poppy storage

facilities being the primary targets for the looters and arsonists among the mob. The subsequent attempt by the Bharatiya Janata Party to give a communal colour to theviolence is a sinister ploy to foment more trouble in an already troubled district. Maldahas for long been a pocket borough of the Congress party. The family of the late A.B.A.Ghani Khan Chowdhury continues to wield influence and power through a client-patronage system. The Trinamool Congress had hitherto been unable to breach theCongress stronghold despite establishing hegemony in most other districts. The Stategovernment’s business-as-usual reaction to the breakdown in law and order in Malda ispossibly on account of the Trinamool Congress’s expectations of deriving some electoraladvantage from religious polarisation. Meanwhile, the BJP, which blatantly tookrecourse to dog-whistle politics in the Lok Sabha elections of 2014, managing a decentshowing in West Bengal, has been unable to consolidate its position in the subsequentlocal body elections. With the increasing prospect of a Congress alliance with the LeftFront — both the Congress and the CPI(M) leaderships in the State have signalled apreference for an electoral understanding for the coming Assembly elections — it isamply clear that tensions are being deliberately ramped up in order to polarise voters inMalda. This process is being helped by the Trinamool government’s lack of a will to curbcriminality and increasing threats to law and order in West Bengal. Communal riots anddeterioration of civic relations are products of cynical electoral strategies of communaland narrow-minded political outfits. It is to be hoped that the progressive social forcesin Malda will work to resist the political machinations that are under way to create a



communal conflagration. That they are the last hope is a searing indictment of theadministration in West Bengal.

The hidden wealth of nations This could be a bumper year for the ever-lucrative tax avoidance industry. The 2015final reports of the Organisation for Economic Co-operation and Development (OECD)-

led project on Base Erosion and Profit Shifting (BEPS) — which refer to the erosion of anation’s tax base due to the accounting tricks of Multinational Enterprises (MNEs) andthe legal but abusive shifting out of profits to low-tax jurisdictions respectively — laysout 15 action points to curb abusive tax avoidance by MNEs. As a participant of thisproject, India is expected to implement at least some of these measures. But can it?More pertinently, does it have the political will?

The BEPS project is no doubt a positive development for tax justice. If India’s recenteconomic history tells us anything, it is that economic growth without public investmentin social infrastructure such as health care and education can do very little to better thelife conditions of the majority. Which is why curbing tax evasion to boost public financeis part of the United Nations’ Sustainable Development Goals (SDGs). However, notwithstanding the BEPS project, MNEs and their dedicated army of highlypaid accountants are not about to roll over and comply. Again, if past history is any

indication, the cat-and-mouse game between accountants and taxmen will continue,with new loopholes being unearthed in new tax rules.Empowering tax dodgers

The primary cause of concern here is the quality of India’s political leadership, whichhas consistently betrayed its own taxmen. All it takes — regardless of the party in power

— is for the stock market to sneeze, and the Indian state swoons. We’ve seen it happentime and again: the postponement of the enforcement of General Anti-Avoidance Rules(GAAR) to 2017, and more spectacularly, on the issue of participatory notes, or P-notes.Last year, the Special Investigation Team (SIT) on black money had recommendedmandatory disclosure to the regulator, as per Know Your Customer (KYC) norms, of theidentity of the final owner of P-notes. It was a sane suggestion because the bulk of P-note investments in the Indian stock market were from tax havens such as Cayman

Islands. But the markets threw a fit, with the Sensex crashing by 500 points in a day. The National Democratic Alliance (NDA) government, which had come to powerpromising to fight black money, promptly issued a statement assuring investors that itwas in no hurry to implement the SIT recommendations. Given such a patchy record,what are the realistic chances of India actually clamping down on tax dodging?Let’s take, for instance, Action No. 6 of the OECD’s BEPS report: it urges nations to curbtreaty abuse by amending their Double Taxation Avoidance Agreements (DTAA) suitably.

The obvious litmus test of India’s seriousness on BEPS is its DTAA with Mauritius. Byway of background, Mauritius accounted for 34 per cent of India’s FDI equity inflowsfrom 2000 to 2015. It’s been India’s single-largest source of FDI for nearly 15 years.Now, is it possible that there are so many rich businessmen in this tiny island nationwith a population of just 1.2 million, all with a touching faith in India as an investmentdestination? If not, how do we explain an island economy with a GDP less than one-hundredth of India’s GDP supplying more than one-third of India’s FDI? We all know the answer: Mauritius is a tax haven. While not in the same league asCayman Islands or Bermuda, Mauritius is a rising star, thanks in no small measure toIndia’s patriotic but tragically tax-allergic business elite. In Treasure Islands: TaxHavens and the Men Who Stole the World , financial journalist Nicholas Shaxson noteshow Mauritius is a popular hub for what is known as “round-tripping”. He writes, “Awealthy Indian, say, will send his money to Mauritius, where it is dressed up in a



secrecy structure, then disguised as foreign investment, before being returned to India. The sender of the money can avoid Indian tax on local earnings.” In other words, it appears that India’s biggest source of FDI is India itself. Indian moneydeparts on a short holiday to Mauritius, before returning home as FDI. Perhaps not allthe FDI streaming in from Mauritius is round-tripped capital — maybe a part of it is‘genuine’ FDI originating in Europe or the U.S. But it still denotes a massive loss of tax

revenue, part of the $1.2 trillion stolen from developing countries every year.What makes this theft of tax revenue not just possible but also legal is India’s DTAAwith Mauritius. It’s a textbook example of ‘treaty shopping’ — a government-sponsoredloophole for MNEs to avoid tax by channelling investments and profits through anoffshore jurisdiction.For instance, as per this DTAA, capital gains are taxable only in Mauritius, not in India.But here’s the thing: Mauritius does not tax capital gains. India, like any sensiblecountry, does. What would any sensible businessman do? Set up a company inMauritius, and route all Indian investments through it.India signed this DTAA with Mauritius in 1983, but apparently ‘woke up’ only in 2000. India has spent much of 2015 ‘trying’ to renegotiate this treaty. But with our Indian-made foreign investors lobbying furiously, the talks have so far yielded nothing.

Meanwhile, China, which too had the same problem with Mauritius, has alreadyrenegotiated its DTAA, and it can force investors to pay 10 per cent capital gains tax inChina.Changing profile of tax havens

Tax havens such as Mauritius thrive parasitically, feeding on substantive economies likeIndia. Back in 2000, the OECD had identified 41 jurisdictions as tax havens. Today, asit humbly seeks their cooperation to combat tax avoidance, it calls them by a differentname, so as not to offend them.

The same list is now called — and this is not a joke — ‘Jurisdictions Committed toImproving Transparency and Establishing Effective Exchange of Information in TaxMatters’. Distinguished members of this club include Cayman Islands, Bermuda,Bahamas, Cyprus, and of course, Mauritius.

Today the function of tax havens in the global economy has evolved way beyond that of

offering a low-tax jurisdiction. Mr. Shaxson describes three major elements that maketax havens tick. First, tax havens are not necessarily about geography; they are simplysomeplace else — a place where a country’s normal tax rules don’t apply. So, forinstance, country A can serve as a tax haven for residents of country B, and vice versa.

The U.S. is a classic example. It has stringent tax laws, and is energetic in prosecutingtax evasion by its citizens around the world. But it is equally keen to attract tax-evadingcapital from other countries, and does so through generous sops and helpful pieces oflegislation which have effectively turned the U.S. into a tax haven for non-residents.Second, more than the nominally low taxes, the bigger attraction of tax havens issecrecy. Secrecy is important for two reasons: to be able to avoid tax, you need to hide

your real income; and to hide your real income, you need to hide your identity, so thatthe booty stashed away in a tax haven cannot be traced back to you by the taxmen at

home. So, even a country whose taxes are not too low can function as a tax haven byoffering a combination of exemptions and iron-clad secrecy — which is the formulaadopted by the likes of Luxembourg and the Netherlands.

Third, the extreme combination of low taxes and high secrecy brought about a newmutation of tax havens in the 1960s: they turned themselves into offshore financialcentres (OFCs). The economist Ronen Palan defines OFCs as “markets in which financialoperators are permitted to raise funds from non-residents and invest or lend the moneyto other non-residents free from most regulations and taxes”. It is estimated that OFCs



are recipients of 30 per cent of the world’s FDI, and are, in turn, the source of a s imilarquantum of FDI.Such being the case, all India needs to do to attract FDI is to become an OFC, or createan OFC on its territory — bring offshore onshore, so to speak. That’s precisely what theU.S. did — it set up International Banking Facilities (IBFs), “to offer deposit and loanservices to foreign residents and institutions free of… reserve requirements”. Japan set

up the Japanese Offshore Market (JOM). Singapore has the Asian Currency Market(ACU), Thailand has the Bangkok International Banking Facility (BIBF), Malaysia has anOFC in Labuan island, and other countries have similar facilities. OFCs, as Ronen Palanputs it, are less tax havens than regulatory havens, which means that financial capitalcan do here what it cannot do ‘onshore’. So every major hedge fund operates out of anOFC. Given the volume of unregulated financial transactions that OFCs host, it is nosurprise that they were at the heart of the 2008 financial crisis.Apart from accumulating illicit capital (in the tax haven role), channelling this capitalback onshore dressed up as FDI (in investment hub role), and deploying it to engage indestructive financial speculation (in OFC role), these strongholds of finance capital alsoserve a political function: they undermine democracy by enabling financial capture ofthe political levers of democratic states.

It is well known that political parties in most democracies are amply funded by slushfunds that would not have accumulated in the first place had taxes been paid. Buttoday, not least in the Anglophone world, global finance’s capture of the state appearsmore like the norm.A lone exception seems to be Iceland, which began the new year on a rousing note — bysentencing 26 corrupt bankers to a combined 74 years in jail. Meanwhile in India, wecontinue to parrot long discredited clichés about the need for more financialderegulation and a weird logic that mandates a smaller and more limited role for publicfinance.

The dancer with a white parasolWhen dancers look back at their lives, they often remark that they were born to dance.Mrinalini Sarabhai, who passed away in Ahmedabad on Thursday at the age of 97, took

that conviction a step further. At a young age, she already knew she was a dancer, asopposed to wanting to become one. Her life was a celebration of this belief.

Though primarily identified as a dancer, Mrinalini brought to her work an acute socialand political consciousness, uncommon for the times she lived in. This awareness washome-grown — her mother, Ammu Swaminathan, was a freedom fighter and later amember of India’s first Parliament. Her sister, Lakshmi Sahgal, was part of the IndianNational Army.Sarabhai was born in Kerala, spending her early years in Switzerland. In school, shewas introduced to Dalcroze Eurhythmics, a system of introducing musical conceptsthrough movement. She spent time studying acting at the American Academy ofDramatic Arts. On returning to India, she enrolled at Santiniketan where she wasprofoundly influenced by Rabindranath Tagore and singled him out as her only real

guru.Like many other dancers of her generation, Sarabhai trained in multiple dance styles.She learned Manipuri with Amubi Singh and Kathakali with Kunju Kurup. She alsocaught the attention of dancer Ram Gopal, who went on to cast her in some of hisproductions. Further, she studied Bharatanatyam with Meenakshi Sundaram Pillai andMuthukumar Pillai.She met the celebrated scientist Vikram Sarabhai, who is known as the architect ofIndia’s space programme, in Bangalore. They got married in 1942 and moved to his



home in Ahmedabad. There, Mrinalini had to counter the notion that being a performerwas not an acceptable career choice for “respectable women”. Living in the post-Independence India, there was much to rejoice about. Yet, Mrinaliniwas also disturbed by the inequality she saw around her. Very early on, she broughtsocial issues into her choreographic practice. “I was looking for subjects that wouldshake people in dance,” she once said in a documentary.

For instance, Memory is a Ragged Fragment of Eternity (1960s) was triggered by thehigh suicide rate of women in India. It starts with an exuberant dance by three womencelebrating their womanhood and their existence. It then segues into the story of onewoman, taking us on a journey through her life. It masterfully eludes the literal in itsdepiction of the censure that drives this woman to the brink of suicide.Establishing Darpana Academy of Performing ArtsDancing in a diagonal coming downstage, two dancers use the sharp lines of a simple

Bharatanatyamadavu (step) to express their suspicion and resentment towards her.

Thrown at the protagonist, themudra s (gestures) have the potency of poisoned arrows. The costume reinforces the message, bringing the piece closer home. While thevocabulary is drawn from Bharatanatyam, the dancers are clad in colourful textiles fromGujarat, wearing chunky silver instead of the detailed temple jewellery of Tamil Nadu.

Mrinalini was more inclined to performing, and was reluctant to teach. However, sherealised in her new city that if she wanted more people to dance, she would have to trainthem. This laid the foundation for the Darpana Academy of Performing Arts, which wasset up in 1948. It went on to grow into a centre for progressive arts in Ahmedabad,training thousands of students in dance, drama, music and puppetry over 68 years.Documentaries on Mrinalini’s life show her walking into Darpana, her back erect, with apristine white parasol in her hand. She was at the centre of its rich, chaotic activity.Even in her later years, she actively taught, mentored and created new work for herstudents.Mrinalini’s dance legacy is now in its third generation. She is survived by her daughter,Mallika, a dancer and political activist. Her grandson Revanta is an emergingchoreographer, with roots in classical and contemporary dance forms, while hergranddaughter Anahita pursues various interests in dance and choreography.“Middle-class” women who, sheltered by the relative safety of marriage, created careersin classical dance, are both admired for the institutions they created and criticised forthe conventional choices they made. Mrinalini Sarabhai is one of them. What mattersmost is not the institutions she gave birth to, or the dancers she trained. It is the imagethat she passed on to her students — that of the woman with a white parasol whodanced every day, as long as she could, because she loved it.

Compassion on death row casesDeath row convict Mohammed Arif alias Ashfaq, a Pakistani national found guilty ofconspiring to organise the attack on the Red Fort complex in Delhi in 2000, in whichtwo Army soldiers and a sentry were killed, has been given one more opportunity of anoral hearing. His lawyers have been allowed by the Supreme Court to file a fresh petition

seeking a review of the death sentence confirmed by the court in August 2011 so thatthe matter can be heard once again in open court. The court has once againdemonstrated its inexhaustible capacity to deal with death penalty cases in a spirit ofcompassion. A September 2014 Constitution Bench judgment ruling that a 30-minuteoral hearing in open court for every review petition involving the penalty is aconstitutional requirement was not applicable to Ashfaq, one of the petitioners before it.

This was because the limited oral hearing in death row cases was just an exception tothe general rule that review petitions be decided by circulation of the papers among

judges. The exception was limited to those cases in which both a review petition and a



subsequent curative plea had already been rejected. In Ashfaq’s case, the court declinedto review his sentence in August 2012 and the curative petition was rejected in January2014. Chief Justice T.S. Thakur has, however, decided that he deserves a concession inorder that even the slightest possibility of error may be eliminated, for he was the soleconvict who did not get the benefit of the earlier verdict.After upholding Ashfaq’s death sentence and declining to review it, obviously because

there was no apparent error, is it not mere moral tokenism to afford him another oralhearing? Howsoever one may answer this question, it cannot be disputed that theSupreme Court has been dealing with cases culminating in the death penalty in a liberalspirit in recent years. It has delivered a series of judgments widening the scope of theclemency jurisdiction. Even when constrained by an earlier judgment by another five-member Constitution Bench allowing the disposal of review petitions without an oralhearing, the Bench, in 2014, carved out an exception for death row cases alone bymaking oral hearing an integral part of ‘reasonable procedure’. By extending the benefitto Ashaq, a Lashkar-e-Taiba terrorist found guilty of plotting and facilitating anaudacious attack , the court is enhancing the value of due process. Some critics mayquestion the wisdom of being magnanimous towards such offenders and not taking astern stand against all forms of terrorism. This apparent conflict between the thirst for

condign punishment and the twinge of conscience about sending one to the gallows willpersist as long as the death penalty remains on the statute book. Until it is well andtruly abolished, it is only the court that can humanise the law and procedure relating todeath and mercy.

Grim reminder in Charsadda The attack by terrorists on Bacha Khan University in northwestern Pakistan, which leftat least 21 people dead, raises serious questions about Islamabad’s anti-terror strategy.

The assault demonstrates that despite a year-long enhanced counterterror offensive bythe Army, Tehreek-e-Taliban Pakistan (TTP) retains the capacity to inflict lethal harm.

The attack in Charsadda in Khyber Pakhtunkhwa province (the old NWFP) comes over a year after the TTP stormed an Army school in nearby Peshawar, killing 134 children. That massacre had prompted widespread anger, forcing the Army to launch a massive

crackdown on Pakistani Taliban. Pakistan lifted a moratorium on executions, detainedthousands of suspected Islamist militants, and stepped up attacks on the TTP. This hadfractured the Taliban organisationally, and there were fewer attacks in big cities last

year. But, as the latest attack shows, the crackdown failed to neutralise the securitychallenges the TTP poses to the Pakistani state.

This is mainly owing to two reasons. First, Pakistan’s counterterrorism strategy isheavily reliant on its security establishment. To be sure, the army plays a vital role inany campaign against terrorist groups, but its focus would obviously be on the terroristinfrastructure. But Islamabad needs a broader, more comprehensive strategy to dealwith the issue at the grassroots level. It has to identify and break up local terroristnetworks, counter radical ideology, and more important, take adequate measures toaddress lawlessness and extreme poverty in the northwestern mountainous region, afertile recruiting ground for jihadists. Second, Islamabad’s dual policy towards terrorismis self-defeating. Even as it fights groups such as the TTP, the Army is deeply involvedwith the Afghan Taliban, the Haqqani Network and anti-India terrorist groups such asthe Lashkar-e-Taiba. Using jihadists for strategic gains has been a deliberate strategyfor Pakistan’s military establishment for decades. That strategy has been provencounterproductive over the years. Unfortunately, Pakistan has continued this doublegame for geopolitical gains. Even after the Peshawar attack, the Army’s focus was onlyon the TTP factions, while it kept intact its good ties with the Afghan Taliban, whocontrol huge swathes of territory in the neighbouring country. As a result, the TTP, even



if it is beaten by the Army, can retreat to Afghanistan, regroup there and move back toPakistan to carry out strikes. Pakistan is aware o f these fault lines. But it still won’tamend its strategy because it looks at the Afghan Taliban as a strategic vehicle toexpand its interests in South Asia. This dual policy has weakened the fight against the

Taliban in Afghanistan, while making Pakistan’s own campaign against extremismineffective. Thus Pakistan remains caught between its own growing internal security

challenges and a flawed geopolitical strategy. The way forward for Islamabad is to comeout of this mess and join other regional powers in a consistent fight against all forms ofterrorism.

The unmet health challenge The first set of data from the National Family Health Survey-4 for 13 States and twoUnion Territories should be seen as a report card on how effectively India has used itsnewly created wealth to alter a dismal record of nutritional deprivation, ill-health andlost potential among its citizens, particularly women and children. Given the steadygrowth in real per capita GDP since the 1980s, and the progress made sinceIndependence in overcoming severe undernourishment, enlightened policy approachescould have brought about a giant leap from 1992-93, when the first NFHS wasconducted, ensuring that no child or woman was left behind in the quest for health for

all. Evidently, the Indian state has not viewed the situation — even at the height of aprosperous phase of economic growth a decade ago — of 39 per cent of children underthe age of five remaining underweight as constituting a national crisis. It comes as nosurprise, therefore, that this failure to assume responsibility for child nutrition has left34 per cent of children in that age group underweight today. There is also a lot ofevidence to show that the deprived sections of India’s children have low weight even atbirth due to the general neglect of women’s nutrition and well-being.It is imperative that the data coming out of NFHS-4 lead to the charting of a new policycourse that makes access to nutrition and health a right for all. Asserting this rightwould require the strengthening of the Integrated Child Development Services scheme inall States, particularly those with a higher proportion of underweight and stuntedchildren. In the first set of data, Bihar and Madhya Pradesh bring up the rear on these

crucial metrics of child development. It deserves mention that even within the ICDS,there is a clear deficit in caring for the needs of children under three. Nutrition in thefirst two or three years of a child’s life has a lasting impact on her development; caregiven in later years, including freshly cooked meals at school, cannot undo the setbackcaused by neglect during this foundational phase. Other key areas requiringintervention are access to antenatal care, reduction of high levels of anaemia amongwomen, and immunisation; it is a cause for concern that a State such as Tamil Naduwith an active public health system recorded a reduced rate of full child immunisationcompared with NFHS-3 data. Overall, there is a need to assess the health of citizensmore frequently than the current NFHS cycle of seven to 10 years allows. Data gatheredevery two or three years would help make timely policy corrections. A fuller picture ofthe health of urban and rural Indians will emerge later in the year when data for allStates become available. They should send out the message that sustained economicgrowth is not possible without state support to achieve the well-being of the population,especially women and children.

Sobering reflection from DavosChina’s stock market turbulence and the impact its growth slowdown is having on theglobal economy were dominant themes last week at the annual World Economic Forumin the Swiss Alpine resort of Davos. And as the four-day gathering of internationalfinance and corporate captains, government policymakers and central bankers wounddown on Saturday, the jury was still out on whether China is headed for a hard landing



or is in control of its transition. That China and its fortunes have come to dominatediscussions is testimony to the extent to which its companies and manufacturingindustry have integrated with the rest of the world, as well as to the increasedinternational concern over the perceived opacity of the country’s banking and financialsector’s real levels of indebtedness. This was perhaps best reflected in InternationalMonetary Fund chief Christine Lagarde’s exhortation that financial markets need more

“clarity and certainty” about China’s management of the yuan’s exchange rate,especially with reference to the U.S. dollar. A modeling study done by Oxford Economicsposits that a 10 per cent decline in the value of the Chinese currency against the dollarby the third quarter of 2016 — if accompanied by resultant competitive devaluationsamong emerging market peers — could roil economies and markets worldwide, with theeurozone and Japan projected to be the hardest hit. The domino effect could retardglobal growth by 0.2 per cent and hurt countries including the U.S., Brazil, Russia andIndia. Interestingly though, the same study projects that China would have little to showby way of gains from the yuan’s weakness, lending credence to the Chinese authorities’assertions that they are not interested in engendering a scenario of competitivedevaluations. Still, that second-order effects of what happens in China will be hard tohazard a guess about has already been proven by the recent volatility seen in markets

worldwide. And the brave words of regulators notwithstanding, central bankers arerunning out of ammunition. As Reserve Bank of India Governor Raghuram Rajan said,monetary easing may have run its course and reached the limits of efficacy as a policytool.

The other key takeaway from this year’s meeting at Davos was showcased in PopeFrancis’s admonition to the global political and economic elite to reflect on their ownrole in creating inequality. An Oxfam study, released ahead of the WEF meet, said therichest 1 per cent owned as much wealth as the remaining 99 per cent combined did,with the gap in wealth widening even faster than anticipated. With politicians acrosscontinents and the entire ideological spectrum, from the far-right to the far-left, focusingtheir rhetoric and stances on the growing rich-poor divide and seeking to tap theburgeoning discontent for electoral gains, the Pope’s call to the wealthy and powerful toact to help address the inequality lends a powerful moral edge to the issue.

Grand words, but sobering realityAmerican President Barack Obama struck a note of strong optimism this week on hiscountry’s bilateral engagement with India, emphasising in an interview the steadyeconomic and strategic convergence that has occurred between Washington and NewDelhi on his watch. Indeed, Mr. Obama has held collaborative efforts with thegovernments of two Indian Prime Ministers, first Manmohan Singh and now NarendraModi, to an even keel. Notwithstanding the periodic diplomatic kerfuffle or policywrinkle, most disruptively over Devyani Khobragade’s detention, bilateral bonhomie hasheld in areas as diverse as expanding trade and investment, regional and multilateralcooperation, counterterrorism coordination, military joint exercises, and most recently,policies to fight climate change. Particularly with Mr. Modi at the helm, the twocountries have steadily added strategic depth to the bilateral relationship, whether onthe Indian Ocean Region, the Paris climate change agreement, trilateral exchanges withpartners such as Japan, or third-country development projects such as those in theAfrica region. Yet, some uncomfortable, unanswered questions remain in this space, andthey pertain to terrorist attacks in India emanating from across its western border, tothe paralysed civil nuclear agreement, and economic brawls that could, if unchecked,fuel spiralling hostility.Major terrorist attacks in India — respectively in 2001 (the Parliament complex in NewDelhi), 2008 (multiple targets in Mumbai) and in 2016 (Air Force Station in Pathankot)



— have opened up a chasm of suspicion between New Delhi and Washington,frustrating India’s foreign policy mandarins over Islamabad’s perceived double-gamewith Washington. While the U.S. President in the interview this week described thePathankot attack as “inexcusable”, it is a travesty of justice that terror mastermindsHafiz Saeed, Zaki-ur-Rehman Lakhvi and Masood Azhar are not under arrest despiteNew Delhi submitting evidence of their complicity. The U.S. administration has leverage

over Pakistan in the form of $13 billion in military aid under the Coalition SupportFunds programme, so why only use words to chastise non-action on this front?Regarding India-U.S. civil nuclear energy cooperation, Mr. Obama expressed the hopethat in the year ahead there would be deals for American companies to build newreactors; yet it is hard to see how this would materialise given the insuranceconundrum stemming from India’s Nuclear Liability Law, which provides for legitimateprotection in the event of a nuclear accident. Finally, a troubling question mark hangsover India, along with China, remaining outside the framework of the U.S.-driven Trans-Pacific Partnership. Exclusion from this trade framework may result in Indian firmslosing market share to TPP signatories. Add to this the spate of mini-squabbles thathave broken out over intellectual property rights protection and compulsory licences inIndia, over visa restrictions in the U.S. and a host of trade disputes that have reached

the World Trade Organisation, and Mr. Obama’s comment that the bilateral relationshiphad “absolutely not” reached its full potential seems perfectly accurate.

A ringside view of the proposed GSTIndia’s most transformative tax reform needs a proper design and anenabling assessment environment tosucceed

Touted as the “single most important tax reform since 1947”, the Goods and Services Tax (GST) has been in the offing for a decade and continues to figure as a top priority onthe economic agenda of the government. Although the model GST has been the subjectof wide scrutiny and debate, most of the discussions have been centred on its road topassage or on its larger form and structure. Many issues of significance, which will becrucial to the making (or the undoing) of a robust and successful GST, have largely beenunderplayed.

The reality of uniformity Much emphasis has been placed on the benefits of uniformity that the GST would usherin. Accordingly, various official documents consistently reflected the understanding thatGST would comprise an equal Central GST (CGST) and State GST (SGST), with nodeviations from the rates/exemption lists, so as to obviate potential “rate wars” betweenStates.

The first indication of the dilution of a uniform GST rate has by now already manifestedin the July 2015 Report of the Rajya Sabha Select Committee, which allows States thefreedom to impose the SGST within a “band of rates” in order to meet revenueexpediencies or as a policy tool. Recent reports also contemplate a three-tier ratestructure instead of two.Even in terms of the model law, the potential for deviation stems from the concurrent

powers of the Centre and States to enact their own GST legislation, compounded by theinheritance of the existing disjointed tax structure. It may be recalled that even theValue Added Tax regime began with a pledge of uniformity, but devolved over time aseach State formulated different tax events, rates and exemptions.Most crucially, the GST Dispute Settlement Authority, which would have reined in anydeviations affecting the harmonised structure of the GST, has been done away with.Instead, all issues concerning rates, exemptions, and so on are to be decided by the GSTCouncil (of which the Centre and States are members) by consensus, which may proveelusive given the political, social and revenue dynamics at play.



Equally questionable is the voting pattern within the GST Council, with the Centre’svote carrying a one-third weightable of the total votes cast, and the States’ votes acollective two-thirds weightage. In effect, each State, irrespective of size, representationand GDP contribution, will command an equal vote, a structure which militates againstthe basic spirit of representative democracy enshrined in the Constitution, and alsoopens up the Council to greater manoeuvring by the Centre on issues that it seeks to

pass or veto. The existing tax system has typically followed a model of rewarding States whereproduction activity is based (origin States), as opposed to States where consumption ishigh (destination States). Accordingly, most States have incentivised the setting up oflocal industries in order to drive growth and augment tax collections.However, this history of origin-based tax is anathema to the GST, which is by nature adestination-based consumption tax. While origin States may chalk out measures toredress the imbalance, consumption and production patterns will not alter overnight,and industrialised States could be left in the lurch, at least in the immediate aftermathof the GST. Interestingly, there seems to be no globally available precedent which offersa solution to such an imbalance.In the inevitable shift which the Indian GST necessitates, destination States such as

Bihar and Kerala clearly stand to gain in terms of revenue, while origin States such asGujarat and Maharashtra stand to lose, and had expectedly put up more initialopposition to GST. In order to partially level the playing field, the Centre proposed a 1per cent origin-based additional GST. However, recent reports suggest this will besacrificed for the Congress’s support in the Rajya Sabha. In such a scenario, it will be difficult to predict the reaction of industrialised States.

There is also the troubling prospect that such an aggrieved State may seek tosubstantially deviate from the uniform model.Preparedness for online compliance Unlike the existing system, which has greater scope for manual intervention, the GSTaims to achieve a tectonic shift to a singular digitised compliance set-up. While thiswould be a great leap forward if implemented well, what has perhaps beenunderestimated is the huge geographical disparity across the length and breadth of

India in terms of IT connectivity and functionality. Tacit recognition of this handicap isfound in the ‘Digital India’ campaign, which has only recently been launched andadmittedly has a long way to go to achieve reasonable Internet penetration. As a result,in some sections of the country today, manual tax compliance remains the only option.Further, the proposed GST will also be far more dependent on IT. For instance, the IGSTmechanism, which enables the crucial fungibility of taxes across States, will beunworkable outside an automated set-up, especially given the sheer volume oftransactions that the GST will subsume. The proposed IT infrastructure will have to besuitably equipped, as any snags would effectively render the levy dysfunctional.Under the GST, States will have the constitutional power to tax on a par with theCentre, bringing a host of service sectors within their scope for the first time. Pastprecedent has shown that such dual taxing power has resulted in complete chaos at the

cost of assesses (the clearest instances are the taxation of software, intangibles, and soon).Additionally, it is expected that issues of place of supply will also arise, with the Centreand States each asserting that the respective supply has occurred within their

jurisdiction, so as to be able to garner the tax revenue. Poorly drafted rules will only aidand abet the confusion — for instance, a draft provision which proportionately dividesthe tax revenue where a supply of goods/services is made across multiple States.

The other significant issue is of the culture and approach of the revenue authorities.With the implementation of the GST in India, many taxpayers will, for the first time, be



exposed to the State authorities. Possibly, clear and objective guidelines may whittledown the potential for any abuse of discretion.Along the road to GST, it is also critical that these issues are subjected to the same levelof governmental and public scrutiny so that the implementation of GST is a success inletter as well as in spirit.

Consolidating ties with FranceLike many things French, the country’s relationship with India is an understated one.Yet, as President François Hollande wrapped up his three-day visit to India, it would bea mistake to underestimate what the India-France relationship has come to mean overthe decades, devoid though it is of the grand claims attached to India’s relations withthe big world powers. Russia may be India’s oldest and biggest military supplier, theU.S. India’s newest close defence partner, and China India’s biggest trading partner, butit is France that was India’s first strategic partner. As a result, and through the strategicdialogue institutionalised since 1998, France and India have close ties oncounterterrorism. These have been given a boost by the agreement on intelligence-sharing and cooperation on investigations and judicial processes announced during thevisit. In fact, Prime Minister Modi described the common threats from “Paris toPathankot”. On other fronts too, the relationship has held strong. Despite global

recrimination over the nuclear tests in 1998, France was the first to re-start nucleartalks with India, and among the first to push nuclear trade with India in later years.While the Rafale aircraft deal has overshadowed much of the discussion on French tiesin the past few days, the fact is that France began to supply India aircraft (‘Toofani’, orDassault Ouragan fighters) as early as in 1953, and has been a consistent suppliersince. And over the years, the French space agency CNES and the Indian SpaceResearch Organisation have collaborated closely. It should therefore come as nosurprise that Mr. Hollande’s marked the fifth visit by a French leader as Chief Guest atthe Republic Day parade, something Mr. Modi referred to when he said India-Francerelations have “cleared every test over time”. However, the test that the two sides have not yet cleared is the one in bilateral trade.Despite 10 per cent growth in most years and more than a thousand French companies

operating in India, India-France trade hovers around $8 billion, which amounts to halfof India’s trade with the U.K. or Germany. A big reason for this is the impasse in India’seconomic relations with the European Union, which have been hanging fire for morethan a year now; France is more vulnerable here than its neighbours. Mr. Modi’sexpected visit to Brussels for the EU summit in the next few weeks could clear the pathfor greater bilateral ties with France as well, but India must look to other ways to buildon this relationship. Some of those will come from the joint ventures and partnershipsenvisaged during Mr. Hollande’s visit, on infrastructure such as railways, smart citiesand renewable energy projects. But much more needs to come from Indian businessesengaging with France, even as the government moves on long-promised reforms to aidexporters. To quote Mr. Hollande at the CEO forum, speaking about bilateral trade: “Wemust go faster, much faster and even then it’s too slow.” Corrections and Clarifications:

Politics, impropriety and President’s Rule It is unfortunate that Arunachal Pradesh, a sensitive border State, should find itself inthe throes of an artificial constitutional crisis. After seeking some clarifications from theUnion government, President Pranab Mukherjee has approved the imposition of Centralrule. The proclamation will have to be approved by both Houses of Parliament and thevalidity of President’s Rule may be considered by the Supreme Court, but it is difficultnot to discern a discredited political pattern behind the crisis that led to the currentsituation. The pattern involves dissidence within the ruling party, the opposition joining



hands with the rebels, confusion over the likelihood of a floor test, and the Governorintervening in a partisan manner. It is in similar circumstances that Article 356 of theConstitution has been misused in the past. And it was in such circumstances that theSupreme Court declared in 1994 that the only place for determining whether a ChiefMinister has lost or retained majority is the floor of the House. Yet, the country is stillwitnessing the sad spectacle of partisan politics overshadowing constitutional propriety.

It is a poor commentary on the Narendra Modi government that instead of finding waysto facilitate a floor test it has imposed President’s Rule in the midst of an ongoinghearing before a five-member Constitution Bench of the Supreme Court. The Congressin the State is also to blame because, having obviously failed to address the dissidencein its camp against Chief Minister Nabam Tuki, it appears to be avoiding a floor test asit has not sought interim orders to that effect from the court.Undoubtedly, there is a constitutional impasse because six months have elapsed sincethe last time the Arunachal Pradesh Assembly met. That itself is a valid ground forCentral rule. But it cannot be forgotten that events were manipulated in such a way thatthe divided legislature never got an opportunity to meet and test the government’smajority. The crisis was precipitated when Governor J.P. Rajkhowa advanced thesession scheduled for January 14, 2016 to December 16, 2015, and fixed a motion

seeking the removal of the Speaker as the first item on the agenda. In that controversialsitting at a makeshift venue, the Speaker was ‘removed’ and a ‘no -confidence motion’adopted against the Chief Minister. The Gauhati High Court has ruled that the Governorwas justified in advancing the session by acting on his own discretion if he had reasonto believe that the Chief Minister and the Speaker were stalling a particular motion. Theconstitutional question of whether the Governor can summon the legislature on his ownand whether he can send a message to the Assembly on what motion it should take upis now before the Supreme Court. An authoritative pronouncement is necessary on thisquestion, but what must not be forgotten is that political processes followed should berooted in norms of democracy, and not be at the mercy of any discretionary powers ofconstitutional functionaries.

After Paris, keep the heat onIn order to have a chance of limiting temperature rise to 1.5 degrees Celsius, weneedsuitable technologies to make low-carbon transitions in development right awayNow that the Paris Conference of the Parties (COP) meet is long over, countries need toconcentrate on global greenhouse gas (GHG) emissions, which need to peak soon and goto zero by mid-century if there is to be a chance of preventing average temperaturesfrom rising more than 1.5 degrees Celsius above the level of pre-industrial times.

This is especially a major challenge for the least developed countries and developingcountries, as they need to provide an improved quality of life to millions of poor whilereducing emissions and shifting to a new model of growth that is a low-carbon pathway.Many countries, including India, have a stated expectation that the country’s IntendedNationally Determined Contributions (INDC) targets can be met only if there istechnological and financial support. Technology transfer may include one or more of thefollowing kinds of processes: a transfer of manufacturing methods, skills, knowledge,supporting finance, and facilitation through institutional arrangements that enable suchtransfers. Technology transfer has been considered to be critical from the beginning ofthe United Nations Framework Convention on Climate Change (UNFCCC) and is part ofthe Convention under Article 4.5.Access to technologiesInnovation and transfer of technologies are essential if we want rapid shifts to renewableenergy systems worldwide. For example, commercially available crystalline silicon solarpanels are on average about 15 per cent efficient. However, higher levels of efficiency (up



to 45 per cent) have been demonstrated at laboratory scale in the U.S. and Europe. These are not yet commercially available. If India and other developing countries hadaccess to these technologies, they could potentially leapfrog to an advanced stage ofrenewables, using less land area than currently needed. This does not meandisregarding intellectual property rights (IPR). But support for licensing fees or somesuch arrangement through financing could allow developing countries to not have to

reinvent technologies that the world already has access to. Similarly, hybrid (petrol andelectric) vehicles have been available in the U.S. for over a decade now, but are still notin the Indian market, even though they could enable a doubling of efficiency and vastlylower tailpipe emissions at a reasonable cost. In many States, the transportdepartments hesitate to purchase electric buses because of the prohibitive cost, mainlybecause of the battery cost.Experience in innovation and technology has taught us that along with research and thetechnology itself, we need the right enabling environment that supports diffusion anduptake of technologies, markets, and supporting regulations and policies. For instance,the Bureau of Energy Efficiency gave meticulous attention to the dissemination ofcompact fluorescent lamps. It undertook a series of measures to enhance penetration,including large-scale procurement by the government, to ensure markets to

manufacturers and, as a result, improved system-wide efficiencies. Similarly, novelbusiness models undertaken by the government to promote Light Emitting Diode (LED)bulbs have resulted in a rapid decline of prices from Rs. 310 to Rs. 69 per bulb.Every country has technology requirements that are quite specific to its priorities,opportunities and socio-economic circumstances. In the energy sector, India’s needsinclude highly efficient renewables, better storage technologies, smart grids, clean publictransport, efficient para-transit modes such as autorickshaws, and improved efficienciesin micro, small and medium industries which employ large numbers of people. Indiaalso needs technologies for adaptation that are suitable to local impacts and conditions,since the effects of warming will be severe in the region. This combination of needs andchallenges in different places across countries and ecosystems means that new climatetechnologies need special attention so that they can be readily adapted for local needsand deployed easily with a reasonable profit; they also need to be affordable to the most

needy people. The Climate Technology Centre and Network (CTCN) and the Technology ExecutiveCommittee were set up under the Technology Mechanism in COP-16 in 2010. Thesewere meant to facilitate technology transfer by providing information and technicalassistance and fostering collaboration among experts through their network. There hasbeen concern about the level of support for the CTCN and its activities, but itsestablishment has at least placed the issue of technology transfer under the UNFCCC.Various countries jointly launched Mission Innovation before the Paris COP in order toaccelerate innovation in the energy sector. This will increase public investments, provideprivate investor support, increase transparency, and support implementation. Still, themission’s goals are meant to promote innovation only in the medium to long term, anddeliverables from investments in new technology development will, in any case, yield

results slowly, over decades probably.Given the short timeline over which the world needs to shift to zero emissions, theseprocesses are too slow. In order to peak GHG emissions and adapt to a warmer climate,the world needs suitable technologies in order to make low-carbon transitions indevelopment right now, not seven years after a global stocktake.Paris deal and the futureCOP-21 adopted the ‘Joint annual report of the Technology Executive Committee andthe Climate Technology Centre and Network’. Under the Paris deal, there will be a framework to provide guidance for the technology mechanism, provide enhanced action



on technology development and assess technologies ready for transfer. A link betweenfinancial and technology mechanisms has also been established, which should allow forcollaboration in research and development. Whether this will go as far as India wantedin providing financial support to deal with IPR barriers in the future is not entirely clear.It might be easier to grasp the linkages between energy efficiencies (therefore, mitigation)and technology needs. But a policy and regulatory regime that promotes innovation

within countries, transfers suitable technologies from outside, and supports the equity-sensitive application of new technologies is important. For example, while it is importantto promote and use solar pumps in agriculture in India, the crisis caused by over-extraction of groundwater and its contamination can only be addressed if regulationplays a critical role. Otherwise, the country would continue to overexploit groundwaterwith solar pumps. Understanding these linkages between technologies, policies andregulations and making appropriate institutional changes would be necessary forclimate adaptation and climate friendly development.

Denmark’s absurd law on refugees The passage of a law by the Danish Parliament that allows the authorities to confiscatevaluables from refugees is the latest blow to those seeking asylum in Europe. Denmark’scentre-right government says the legislation is intended to cover the cost of each

asylum-seeker’s treatment by the state, and bring refugees in line with unemployedDanes who also have to give up their savings before they receive welfare benefits. Butthe reality is starker than what the government claims. The Danish move is in line withthe hawkish stand several European governments are taking towards asylum-seekers.Earlier in the month, Switzerland started seizing valuables from refugees to help pay fortheir “upkeep”. Last week, Germany’s southern states, including Bavaria, adoptedsimilar policies. Most of those seeking asylum in Europe are fleeing war, mass crimesand rapes. Some of them make perilous boat journeys across the Mediterranean toreach the shores of Europe. Some pay huge sums to people smugglers to get themselvesout of their war-devastated nations. And they go to Europe seeing the relativelyprosperous and secure continent as their last hope to find a place to rebuild theirshattered lives. These are the people the European governments are seizing valuables

from.Yet, these moves are not surprising given the response of several European leaders tothe refugee crisis. To be sure, Europe is facing the biggest migrant crisis since theSecond World War. In 2015 alone, more than 850,000 asylum-seekers landed in Greece,from where most of them moved to other European countries through the open borders.But instead of coming up with a bold pan-European plan to address the issue, theEuropean leadership let member-states have their way. Hungary has already sealed itsboundaries to stop the entry of refugees. The Hungarian Prime Minister has, in fact,given a call to wall off Greece from the rest of Europe to prevent the movement ofrefugees. Several Balkan leaders have recently demanded the same. How canconfiscating assets from the already vulnerable refugees and blocking them at theborders help address one of the greatest humanitarian crises of our time? How canEurope, known for its human rights-driven, combative foreign policy, treat the victims ofwars as mere intruders? Besides the ethical arguments, Europe also bears someamount of direct responsibility in this crisis. Most of the refugees reaching the continentare fleeing Syria and Libya. In Syria, besides helping rebels in the civil war that hasdestabilised the country, European nations, particularly France and Britain, are waginga bombing campaign. In Libya, France was in the forefront of an invasion that hasthrown the country into chaos. And when the people fleeing these countries reach itsshores, Europe cannot just turn its back on them. Instead of building walls and seizing



assets from the refugees, what Europe actually needs is an effective resettlement plan athome, while pushing for peace and stability in the war-hit countries.

The stained steel frame The sensational arrest, by the Central Bureau of Investigation (CBI) on January 18, ofthe Regional Provident Fund (PF) Commissioner, Chennai, and some of his staff, as also

a few private individuals belonging to a group of educational institutions in the city,does not surprise me. The episode is very much part of a pattern that becameestablished a few decades ago — the escalation of corruption from the bottom of thebureaucratic hierarchy to its higher echelons. A sum of Rs.14.5 lakh was recovered fromthe PF Commissioner when he was trapped accepting a bribe in consideration of favoursshown to the administrators of a Chennai-based educational trust, which runs adeemed university offering medical, dental and engineering courses. This comes againstthe background of CBI investigations against senior Indian Administrative Service (IAS)officers, and arrests of top public sector bank, customs as well as income tax officials.Relevant to recall here is the case of an IAS couple of Madhya Pradesh, hauled up a few

years ago for being found in possession of property and bank accounts worth severalcrores of rupees. They were subsequently dismissed from the IAS. What is apparent inall these happenings is a growing fearlessness of the law in segments of the

bureaucracy, giving rise to the impression that whatever has been done by governmentsand courts till now does not deter the daring offender, who does not mind being namedand shamed. Unchecked, this trend could lead to a total erosion of public confidence inbureaucratic fairness and objectivity.The rot begins at the top It is sad that the levels of integrity of public servants are plummeting rapidly at a timewhen the Union government is in the process of implementing the recommendations ofthe Seventh Pay Commission, that would bring to every Central employee at least a 15-20 per cent rise in emoluments. The rapaciousness that is evident in critical sections ofthe civil service therefore lends strength to the popular belief that it is greed rather thanneed that impels many in the bureaucracy to resort to extortion and unabashedcorruption.

The common man should therefore be asking the question as to how any increase in thewages of government employees was justified at all in the context of the continued highlevels of corruption in the civil service. Also, what can be done to increase deterrence sothat government officials at all levels are made to be afraid of punitive action that wouldnot only embarrass them but also invite the ire of their own kith and kin?While we should worry about the lack of integrity in the whole civil service, what isdepressing is that the higher echelons are not setting an example to those below. It islamentable that corruption among the elitist All India Services (IAS, Indian PoliceService, Indian Forest Service) has shown no signs of abating, despite the many checksand balances introduced by successive governments.

The Prevention of Corruption Act (PCA), 1988 and its subsequent amendments have hadonly a marginal impact. One aspect of the problem is the well known, unethical conductof those holding ministerial positions. Their unabashed browbeating of seniorgovernment officials, particularly those at the level of secretary, is certainly a factor. Butthen, if the latter cave in to ministerial pressure, they have only themselves to blame.What is even more obnoxious is that some of them are known to join in to share the lootaccruing to a minister! The inability to stand up to ministerial pressure is one thing, butto benefit squarely from the misdeeds of those in the political firmament is an entirelydifferent proposition.Near-immunity for bureaucrats



I quite appreciate the plea for protecting the honest senior government official, whoshould be able to discharge his duties without fear or favour. I am also quite aware ofsome investigating agencies like the Central Bureau of Investigation (CBI) and StateVigilance Directorates sometimes hounding a few straightforward officers on flimsygrounds at the instance of a minister annoyed with an honest official for refusing to fallin line with a dishonest decision. It is this desire for transparency and objectivity that

saw the issue of the Single Directive by the Union government, which requiredgovernment permission to the investigating agency to initiate a preliminary inquiryagainst an official at the level of joint secretary and above. However well-meaning thisdirective was, it did result in certain licentious conduct by a few in the higherbureaucracy. The directive was struck down by the Supreme Court of India in thehawala case (1997) as unconstitutional. However, from a purely executive order, itbecame law through an appropriate provision, both in the Central Vigilance CommissionAct, 2003 and the Delhi Special Police Establishment (DSPE) Act, 1946, from which,incidentally, the CBI derives its powers to investigate. In 2014, on a challenge bySubramanian Swamy and the Centre for Public Interest Litigation, the Supreme Courtstruck down the Single Directive — as embodied in Section 6A of the DSPE Act — asdiscriminatory and violative of the constitutional principle of equality before the law.

Any fresh attempt to give life to the Single Directive through legal subterfuge underpressure from the senior bureaucracy will only send the wrong signal to those pursuinggraft at the very top in government. In a large number of States, known for high levels ofcorruption, the anti-corruption directorates still require government permission toproceed even on a preliminary inquiry against a senior officer. This mandatory provisionprotects and preserves the unholy nexus between a dishonest minister and thesecretary to the department the former presides over.

The requirement of government sanction to prosecute an official found by aninvestigating agency to have violated the PCA or the Indian Penal Code (IPC) hassimilarly blunted endeavours to bring an erring official to book. While I admit that anapplication of mind at the government level — after an agency has established guiltthrough assiduous investigation — is required to prevent miscarriage of justice, manyministries and State governments are known to have misused this in order to protect

dishonest officials who had either misbehaved on their own or in concert with aminister. A downright refusal to sanction prosecution or dilatory tactics in taking adecision on the matter encourages permissiveness. Courts have come down on thisrather heavily. After repeated expression of displeasure by the Supreme Court on thematter, the Union government has proposed an amendment to the PCA, making adecision mandatory within three months of a request for sanction. When thisamendment is approved by Parliament, one can expect expeditious disposal of requestsby investigating agencies.Punitive action as deterrent One effective step to stem bureaucratic dishonesty is to deny to the offender benefits ofliving on proceeds of corruption. While bank accounts suspected to have been parkingplaces for illegal income can be frozen by an investigating agency, enough has not been

done in respect of immovable properties acquired by an unscrupulous official. TheCriminal Law Amendment Ordinance, 1944, permits attachment of property believed tohave been purchased with the help of illegally obtained money. Such property will beforfeited under a judicial order to the state by an accused convicted under the PCA, tothe extent determined by the criminal court that has convicted him. Such acts ofattachment and forfeiture lend some deterrence to prevent corrupt civil servants fromconverting ill-gotten wealth into various forms of property. Increasing resort to this kindof punitive action could be a disincentive to buying property out of tainted money.



In the final analysis, the fight against corruption in public service is extremely problem-ridden, because the canker has spread to the higher echelons of the civil service. Thehands of investigating agencies have been tied not only by non-cooperation at levels thatmatter, but also by legal constraints. Very little can be done to substantially alter theunfortunate situation. Stronger legislation to plug the loopholes in the current law — anamendment to this effect is in the pipeline — is not the answer. Political will combined

with greater courage on the part of senior officials to stand up to unethical pressurefrom above can do a lot to stem the rot. Public vigilance coupled with media support willhelp greatly.

Mounting grievances, little regulation The suspected suicide last week of three women students, who were monetarilyexploited by the management of an ill-equipped private naturopathy and yoga college in

Tamil Nadu, is a dark reminder of the absence of an effective regulatory or grievance-redress mechanism in the higher education sector. Similar tragic episodes have playedout in other parts of the country as well. Yet, regulatory authorities have displayed littleurgency in trying to rescue students trapped in vicious environments that put theirfamilies in financial hardship and deprive them of a meaningful academic life. There isno dearth of regulatory agencies governing colleges. A private institution can be

established only after multiple clearances — ‘no objection’ and essentiality certificatesfrom the State governments, approval from apex bodies such as the AICTE and the MCI,and affiliation from the respective regional universities. What is lacking is honest andmeticulous scrutiny of an institution’s real strengths by academics, officials and expertsvested with the responsibility of inspecting and certifying colleges. In a context wherecolleges have proliferated, regulatory agencies that lack the wherewithal to physicallyinspect institutions grant approval mainly based on documents submitted by them.

They undertake only random on-site inspections. Many universities grant affiliation if acollege fulfils even 60 per cent of the stipulated requirements. Such porous systems areexploited by unscrupulous colleges to submit fabricated records and obtain approvals.

There have been numerous cases of medical and engineering colleges employing ghostfaculty members, or ‘renting’ teachers, laboratory equipment, furniture and books for

libraries during inspections. No concrete steps have been taken to plug the loopholes inthe enforcement of regulations. A simple proposal to assign unique identificationnumbers to teachers of professional colleges to prevent duplication in faculty rolls hasbeen pending for years.In another unhealthy trend in the pre-approval stage, courts often step in in favour ofcolleges after regulatory agencies reject approval or universities refuse to grant affiliationciting infrastructure and academic deficiencies. This despite the Supreme Court rulingin AICTE vs. Surinder Kumar Dhawan (2009) that “the courts are neither equipped norhave the academic or technical background to substitute themselves in place ofstatutory professional technical bodies and take decisions in academic matters involvingstandards and quality of technical education.” Post-approval, there is no enablingenvironment to encourage students to raise grievances relating to over-charging andacademic deprivation. Universities and many State governments have convenientlyadopted a hands-off approach, leaving students in irredeemable distress. Such alackadaisical approach to regulating higher education is equally responsible for collegesproducing unemployable graduates. What is needed is not only the strengthening ofregulatory systems but also the appointment of academicians with uncompromisingintegrity to head regulatory bodies and universities.

Negotiating with the Taliban



The recently concluded Doha Dialogue on ‘Peace and Security in Afghanistan’ presents anumber of opportunities for the international community, as well as India, in dealingwith the resurgent Taliban phenomenon.

The second round of the unofficial Doha Dialogue, organised by the Nobel Peace Prize-winning Pugwash Conferences on Science and World Affairs with support from the stateof Qatar, comes at a time when the official Quadrilateral Coordination Group on Afghan

Peace and Reconciliation, with participation from the governments of Afghanistan,China, Pakistan, and the U.S., has become a non-starter due to the non-participation ofthe Taliban.Key leaders from the Taliban’s Qatar office, the only one of its kind set up by thedominant Taliban faction of Mullah Akhtar Mohammad Mansour, were in fullattendance at the Doha meeting which was boycotted by the Afghan government. Led bySher Mohammad Abbas Stanekzai, head of the Taliban’s political office in Qatar, thegroup, whose leaders and assets figure on a UN blacklist, put forward a number ofconditions for initiating a peace process in Afghanistan. There are three reasons why theDoha process is significant at this juncture: the Taliban leadership’s preference, asarticulated in Doha, for a negotiated settlement in Afghanistan over continuedbloodshed; their willingness to negotiate a power-sharing agreement with the Afghan

government; and, for the first time since the Taliban’s fall in 2001 , they have startedclarifying the contours of their vision for Afghanistan, albeit through a Track II process.Why engage with the Taliban? But why should we make peace with a violent outfit holding highly objectionablereligious and political views? Shouldn’t our efforts be aimed at ensuring that the Talibanare defeated, both militarily and ideologically?

The most important reason for engaging with the Taliban is that not doing so is indeed aworse option, and could prove to be suicidal for Afghanistan and its people. With no lessthan 60,000 heavily armed men in their ranks, the Taliban are reportedly in control ofaround 30 per cent of the country’s districts, with their reach and control steadily onthe rise. There is a lot of concern today about the impending spring offensive by the

Taliban and what it would do to the Afghans.Despite the North Atlantic Treaty Organisation’s (NATO) withdrawal from Afghanistan,

the U.S. has decided to keep close to 10,000 troops in Afghanistan this year, andaround 5,000 in 2017. However, if 1,40,000 NATO troops in 2011 (and 1,20,000 in2013) could not stop the Taliban’s territorial gains, what could 10,000 troops do? Inother words, Taliban resurgence in Afghanistan is a foregone conclusion whether we likeit or not. The question is whether we can make their comeback less painful and moreacceptable for the Afghans by bringing the Taliban to the negotiating table.Second, widespread electoral fraud during the 2014 presidential election in Afghanistan,and Washington’s involvement in making an agreement between the two contenders onthe electoral outcome, has dented the legitimacy of the Afghan government. Withdecreasing American military support, very little political legitimacy, and sheer lack ofmilitary strength to run its writ over the country, the Afghan administration will finditself in more trouble in the years ahead. The more it delays direct talks with the

Taliban, the weaker its negotiating position would become prompting the Taliban to seekeven more concessions. Third, and most important, the Taliban leadership repeatedly hinted at possible power-sharing arrangements with Afghan President Ashraf Ghani during the Dohadeliberations. Given its many weaknesses, Kabul would do well by engaging the Talibanin a dialogue process. In that sense, the Afghan government’s “official” decision toboycott the Doha conference was a mistake.Have the Taliban changed?



Despite the Taliban’s military capability to take back most parts of Afghanistan, theinternational community would need to know, before conferring any semblance oflegitimacy on them, whether they are willing to change their violent ways. In order toassess this as well as to nudge them to change even more, it is important to engagethem. If the leadership’s declarations at the Doha conference are any indication of theircurrent policies, then the Taliban have indeed transformed, even though they would still

need to travel a long way to belong to the contemporary cultural and political milieu. The Taliban left no stone unturned in reassuring the dialogue participants, includingAfghan women, parliamentarians and civil society activists, that they would respectwomen’s rights (to work, choose their spouse, etc.) and ensure modern education for all,including girls. It is possible that the overzealous bunch of madrasa-trained Talibansoldiers who secured one surprise military victory after another in the mid-1990s hasafter all learned the ropes of statecraft.Second, the Taliban seemed to be receptive to the idea of an Afghan political spacewhere there is no monopoly of power by any one party. That is clearly a major changefor an uncompromisingly puritanical outfit. Given the diversity of Afghanistan, andpolitics deeply rooted in tribal loyalty, it is next to impossible for any one political outfitto exclusively govern the length and breadth of the country: the Taliban, if they are

serious about the ‘no monopoly of power’ proposal, have then recognised thatunavoidable reality. Third, the Taliban representatives also underscored the importance of economicallydeveloping the country in cooperation with neighbouring states. For instance, theypledged open support for the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI)pipeline project and guaranteed that they would ensure the security of the pipelinealong with the Afghan government.Potential roadblocks ahead And yet, the Taliban seem to be intransigent on a number of fundamental issues thatcould come up as serious difficulties on the negotiating table. The most important issueis that the Taliban, who refer to themselves as the “Islamic Emirate of Afghanistan”,continue to be unwilling to submit themselves to the Afghan Constitution and acceptthe term “Islamic Republic of Afghanistan” written in its preamble. Intent on creating an

“Islamic Emirate of Afghanistan”, they propose to establish a state based on the Sharialaw. They are non-committal on the question of democracy, partly due to theirinterpretation of Islam, and partly due to their fear whether the Afghan people wouldaccept them if they fought an open and transparent election without the might of thegun.For the Afghan government and the international community in general, it would bedifficult to accept the Taliban if they do not agree to assume power through ademocratic, electoral process. It is likely that when the Taliban talk about “power-sharing agreements” with the Afghan government, what they have in mind is being givena ‘share of power’ in Afghanistan (say, legitimate control of a few provinces) on a platter.

This could be difficult for both the Afghan government and the international communityto concede and could well be a deal-breaker.

And yet, the point is to create a political situation, through sustained negotiations withthe armed outfit, in which it is possible for the Taliban to see the virtues of competitivepolitics as an attractive route to power. Having tasted power once, they might see themerit in it. For that to happen, the Afghan government may have to accept some of the

Taliban’s preconditions for talks, such as allowing them to open a formal office onAfghan soil.India’s fears and options New Delhi has had a frosty relationship with the Taliban due to a number of reasons:the deep links between the Taliban and Pakistan’s Inter-Services Intelligence and the



latter’s use of Afghan territory to train terrorists to fight in Kashmir; the extremelyobjectionable policies followed by the Taliban regime until its fall in 2001; and the highlyunhelpful behaviour of the Taliban during the IC-814 hijack in 1999. However, NewDelhi has realised over the years that the Taliban could one day return to power inKabul in one form or another and that it would have to deal with them eventually.Clearly, not dealing with undesirable regimes, despite our political and ideological

differences, can’t be smart statecraft. An early indication of the Indian rethink vis-à-vis the Taliban came in October 2009when the then Foreign Secretary stated in a speech, “We support the Afghangovernment’s determination to integrate those willing to abjure violence and live andwork within the parameters of the Afghan Constitution, which provides the frameworkfor a pluralistic and democratic society.” Reiterating this policy two years later, the then Prime Minister Manmohan Singh stated,referring to the peace talks between the Hamid Karzai government and the Taliban, inan address to the Afghan Parliament: “Afghanistan has embarked upon a process ofnational reconciliation — we wish you well in this enterprise.” New Delhi’s cautious approach towards the Taliban is reasonable, given the latter’s pastbehaviour towards India. However, there is today a need for New Delhi to play a more

proactive role vis-à-vis the Afghan reconciliation process. It is important to take note ofthe laudable attempts made by the Taliban representatives in Doha at allaying India’sfears by stating that they would not allow their territory to be used for terror activities,and that their foreign policy would not be dictated by anyone (an indirect reference toPakistan).India’s Afghan policy, ever since the fall of the Taliban in 2001, has been impressive andimaginative. However, it does fall short in meeting the country’s future objectives inAfghanistan in the context of the emerging political realities there. India shouldtherefore make use of the reconciliation process in Afghanistan to subtly engage allstakeholders there. The Doha process and the message from the Taliban leadershipbased in the Qatari capital should be taken seriously by New Delhi.

The trouble with spectrum pricing The Telecom Regulatory Authority of India’s latest recommendation on the reserve pricefor the auction of the 700 MHz wireless spectrum could be a case where the pricing of apublic asset may end up having the exact opposite effect: making a scarce resource soexpensive that its meaningful utilisation is compromised, and thus rendered unavailableto serve the larger public good. That the telecom regulator, which has been in thevanguard of trying to spur both government and industry to become more responsive tothe larger public interest, should have opted to set such a high valuation benchmark isa touch ironic. About 14 months ago, TRAI had, in a missive to the Department of

Telecommunications, spelt out the rationale behind its recommendations on valuationand reserve price of spectrum. While the specific backdrop of that particularcommunication was the likelihood of the government opting to hold a supply-constrained auction, the broader arguments it made then remain as germane. Theregulator had pointed out that a very high per unit price realisation, while possiblyhelping meet immediate fiscal needs, would only bleed the industry of resources. Thehigh price of spectrum would also affect private investment in network expansion andinfrastructure. The financial viability of the industry, TRAI posited, was crucial both forits own health and for the government to earn recurring revenues. All these issues arestill relevant, as underscored partly by Bharti Airtel’s recent results. The company hasreported its first quarterly profit decline in two years, largely on account of higherspectrum amortisation expenses.



It is no one’s contention that the telecom regulator had not approached the task at handwith full transparency and openness in its quest to arrive at meaningful valuations forseven frequency bands. A consultation paper that sought comments from allstakeholders was followed by an open house discussion. TRAI spelt out the points madeby varied participants, including many from the industry who argued against an auctionof the 700 MHz airwaves at a time when the network and device ecosystem is not

sufficiently developed. Still, considering the performance efficiency of the particularspectrum band and its utility in improving and expanding high-speed wirelessbroadband services across rural areas, the regulator recommended that the governmentput on the block the available frequencies in this spectrum at the next auction. It is inplumping for its own April 2012 formulation of four times the reserve price of the 1800MHz spectrum that TRAI appears to have made a less-than-appropriate choice. This isparticularly so as spectrum sharing and trading have been operationalised in theintervening period, boosting overall supply. The regulator’s recommendation, for almostRs.11,500 crore per MHz, if accepted, holds risks for an industry that serves a crucialsocio-economic objective.

Giving cities the smart edge The Central government’s framework for 20 cities to become ‘smart’ over a five-year

period can cover new ground if it makes intelligent use of information technology todeliver better civic services. Rapid and poorly regulated urbanisation has overwhelmedurban governments, rendering them incapable of providing even basic services such asclean water, sewerage, pedestrian-friendly roads, public transport, uninterrupted power,street lighting, parks and recreational spaces. So weak and uncoordinated is governancethat commercial entities have wilfully violated building regulations and put upunauthorised structures — with severe impact on congestion, air quality and floodmanagement — and governments have gladly regularised the violations later. The smartcity plan now proposes to intervene and bring some order by upgrading the physicalinfrastructure in select enclaves, and incentivising the use of information andcommunication technologies. Urban Development Minister M. Venkaiah Naidu has comeup with a generalised definition of a smart Indian city as one that “enables a decent life

to the citizens, and green and sustainable environment, besides enabling adoption ofsmart solutions”, but the exercise should lead to measurable outcomes.

The first batch of smart cities would create virtually new business districts in severalcities, marking a departure from the disaggregated urban development witnessed overthe past few decades. This area-based development approach makes it imperative thatthe resulting demand for mobility to and from the ‘smart’ area be made a n integral partof the plan, with an emphasis on walkability, use of non-motorised transport and accessto public transport. Ahmedabad and Bhubaneswar have shown high ambition by optingfor a common travel card. Others such as Indore, Davangere and Belagavi planIntelligent Transport Solutions, something that has been unattainable for even a bigmetro such as Chennai. Although it enjoys high visibility, the smart city programme ismerely a framework for urban development aided by the Centre with a small initial seedfund of Rs.500 crore, while additional finances have to come from public-privatepartnerships and local revenue. State governments, including those left out of the firstlist, could unlock the potential of all cities with development policies that aim atstructural change. Improved public transport, for instance, has an immediate positiveimpact on the local economy. Technologies such as GPS to inform passengers in realtime on their mobile phones, and common ticketing, increase the efficiency of transportuse. Universal design in public buildings and streets would help all people, includingthose with disabilities. The challenge for Smart Cities 1.0 is to provide proof of conceptquickly and make outcomes sustainable. Care also needs to be taken that the effect is



not to create gated communities of best practices and civic upgrade in a wider landscapeof urban distress. It is crucial that these urban enclaves cater to the housing, health,education and recreation needs of a wide cross section of society, and that theconvergence of the Smart Cities programme with existing urban renewal projectscountrywide be smooth.

current affairs (january-2016)

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