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Weekly Digest (Economics, Finance and Banking) 30 August - 5 September 2016

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In my cynicism  I worry that communism might be realized in a more perverse way than Marx ever anticipated. What if, at the point where full automation is achieved, the owners of capital decide to pool their assets together into a grand, stateless commonwealth of former-capitalists (perhaps not out of humanitarian altruism, but instead due to a self-interested recognition of certain flaws of commodity production such as business cycles, falling rates of value profit, and overall insecurity)…BUT not before first deciding to starve out and/or kill off the now-obsolete wage-workers?  Technically, that would usher in a classless, stateless society, and it would be one with an immediate increase in per-capita use-values for the (former-capitalist) comrades of the new communist utopia compared to the one where the former-capitalists had to share the automated output with the former wage-workers. Might not capitalists have every incentive and every capability to achieve something like this? Technically, once wage-workers lose their place of necessity in the production process, doesn’t that mean their only lever of social power disappears as well? How could workers be expected to prevent something like this if they indeed became obsolete? Was Marx necessarily correct that it would be the proletariat to finally effect the revolution to go beyond capitalist commodity production? Why couldn’t it be the capitalist class after all, albeit in a self-serving way very different from what the utopian socialists like Robert Owen and Saint-Simon envisioned?

Remember Nietzsche, when he said, The concept of decadence: Waste, decay, elimination need not be condemned: they are necessary consequences of life, of the growth of life. The phenomenon of decadence is as necessary as any increase and advance of life: one is in no position to abolish it. Reason demands, on the contrary, that we do justice to it. It is a disgrace for all socialist systematisers that they suppose there could be circumstances - social combinations - in which vice, disease, prostitution, distress would no longer grow. But that means condemning life. A society is not free to remain young. And even at the height of its strength it has to form refuse and waste materials. The more energetically and boldly it advances, the richer it will be in failures and deformities, the closer to decline. Age is not abolished by means of institutions. Neither is disease. Nor vice. 

The Week Gone By


The vile was vice back then (down memory lane). Fast Forward by 4+ decades, this isn't


Be ready for the PM's JIOgraphy lessons from now on. Mayank Jain on how Mukesh Ambani wants to become India's Data King by sparking a telecom bloodbath, and Subir Ghosh performs a neat surgery on getting lost in the JIO din. But, going back to the advertisement, and how it could never be a vice, The Wire questions if it was illegal or improper? And Kejriwal makes a snide remark at the PM, and justifiably so. Lalu tickles your funny bones with a mockery that has undertones of a difficult regime in the centre. 

City of Joy reverberates into a country of Joy as Mother Teresa is canonised. Whatever be the controversies, Mother is Saint Teresa now, or rather Mother as the latter is a difficult juxtaposition to get used to. And Pizza was served as lunch for the 1500 poor. Obviously, India is a birthplace of sages and saints, albeit as Nietzsche would say, some people are born posthumously. And John Edoor was right up to the mark, when he said so on FB, "It is ridiculous to accept the phenomenon of miracles and then attribute it to someone. Must challenge institutionalisation of irrationality through processes like canonisation even if it is coming from the organised mighty Church."

Singur verdict is a huge victory for farmers and big blow to industry. But, if a balance is sought. Didi ensures that her state is working overtime to effectuate Singur solarium, but the CPI (M) defends the land acquisition.  

There is an ancient saying, "Laughter is the only defense against the stupidity of men." I am referring to the cow politics, with some extremely hilarious and off the ceiling stupid statements made over the last week. Take these two: Haryana Minister says Foreign bulls ka character dheela. What about India(N) Bulls, well play it safe (oooppps Saif). And, here is brain's putrefaction: Drinking milk from non-Indian cows could turn the children towards crime. Holy rot, retire me, retire me. 

Let's turn global now, 

Syria continues to be the battleground, militarily and ideologically. For Gulf News, this has been Obama's serious mistake in Syria.  

The G20 meet in China. Tight security and what it suggests about China. The Guardian thinks G20 is a platform to help China stamp its place in the world economy, or rather power. And our dear leader Modi plays the perfect see-saw


The Apple + Ireland fiasco, which Ireland plans to challenge. Here is a fact check on if Apple is indeed the largest taxpayer in Ireland. 

Public Finance Public Accountability Collective (PFPAC) Weekly Digest (30 August - 5 September 2016)​ 

Banking in Distress

Without naming Kingfisher Airlines chief Vijay Mallya, Finance Minister Arun Jaitley told a gathering of top bankers and chief executives, that the government will do whatever it takes to ensure that bank loans are repaid by defaulters. While speaking at the FE best banks awards, Jaitley said that the government had already taken action in sectors like steel and construction, but legal action will be taken if required in the case of wilful defaulters evading Indian authorities.

+ Rejecting criticism of having spoken 'out of turn' on various occasions  Rajan said it was the 'legitimate duty' and 'moral responsibility' of public figures to tell young minds what good citizenship is about and the virtues of tolerance. Raghuram Rajan said he wanted a second term at the central bank to complete the unfinished task "but just didn't reach an agreement" with the government on that. During the exit interview, Rajan broke his silence (video). 

+ Amid rising NPAs, RBI today asked banks to put in place clear policies for sale of stressed assets to securitisation and reconstruction firms and secure two external valuation reports in case the exposure tops Rs 50 crore. In order to further strengthen banks' ability to resolve their stressed assets effectively, RBI has come out with an "improved framework" governing sale of such assets by banks to securitisation companies (SCs), reconstruction companies (RCs), other banks or non-banking financial companies or financial institutions. “We are in middle of an environment which is least forgiving. Recognition and resolution of bad loans is a tough job but the banks need to introspect what has brought us to this situation,” says Vinod Rai

+ While the RBI has cut the policy rate by 150 bps between January 2015 and April 2016, the median base rate has fallen 60 bps. The decline in median deposit rates stood at 92 bps in the same period. The RBI said that this reflects banks' preference to protect profitability in the wake of deteriorating asset quality and higher provisioning. Obviously, the transmission of rate cuts by banks remains a concern

Multilateral Development Banks

For a change, this section this weeks begins with another mushroom cropping up (It actually cropped up as an idea and then materialised in 2008-09), this time, thanks to Leftist governments of Venezuela, Ecuador and Bolivia. Christened "Bank of the South", the $7 billion fund-Development Bank is the most logical culmination (what else is there?) of these Latin Americans against the neoliberal, austerity-directed reforms of the Bretton Woods behemoths. Let them dig the grounds for fecundity, what really caught my attention here is that almost a decade back, Joseph Stiglitz endorsed Hugo Chavez's economic policies, and in 2007 even called such a development bank calling it as reflecting the perspectives of those in the South. And that was a bad call

I want to chip in why I think such endorsements portray the vacuity, and strangely that too coming from the likes of JS. But, before that, I want to acknowledge Ashwin Thomas for drawing attention to this news on his FB wall. 

South-South cooperation is actually becoming the malafide of the resistance against the neoliberal (Oh! how much do I despise this word now, and all the more so when it is gaining currency amongst the alternative political viewpoints) policies, and it is easily gauged by the receding of the Pink Tide in Latin america, the so-called cradle of Left in the late 90s of the earlier century and the first decade of the new. "With global stagnation and falling export prices, the 'pink tide' states must choose between their social programme and their economic strategy," Financial Times is tightening screws on the coffin of Left on the continent. With the recent killing of Bolivia's Deputy Interior Minister Rodolfo Illanes by striking miners, President Evo Morales has resorted to what the Left has always been classically resorting to: "conspiracy theory". As Richard Seymour has quipped with a lot of prescience, Morales' resort to conspiracy theory makes a certain sense in the context of Latin America, where a series of left-wing governments elected as part of a "pink tide" in the 2000s have gone into crisis. Argentina elected its first right-wing government in 12 years in November. Venezuela's economic crash has led to the victory of the right-wing opposition in the senate. Notwithstanding the hyperventilating coverage of the country's total collapse, the country is beset by real problems, a combination of opposition disruptioninternational pressure and government mistakes exacerbating the turmoil. In Brazil, impeachment proceedings against Dilma Rousseff have put the unelected opposition in power. Rousseff is impeached for manipulating the figures to make the government's finances look better than they were, but the real problem appears to be that amid economic troubles, Rousseff was elected on a programme of investment rather than austerity. Bolivia, did set an example of an anomaly, where growth stabilised, public investment reached a high level, and minimum wages greater than the rate of inflation were introduced. So, why this turnaround? The government has built its authority on support from the police and army, and has repeatedly deployed police against social movements where they were inconvenient, such as during the protests against fuel price increases in 2010, or against a road built on indigenous land during 2011. Dissatisfaction with the left-wing and left-center governments in Argentina, Brazil, and Venezuela did not arise because the right wing is admired by the public, but rather because the improvements begun under the left have stalled. The problems are most severe in Venezuela, where the drop in world oil prices has led to extreme inflation and scarcity of supplies in many sectors of the economy. It is important to understand that, largely, the problems have not arisen in the socialist part of the economies of these countries, but in sectors that are still under the control of private enterprise. In Venezuela, more than 70 percent of economic activity is still private. Food distribution, which is central to the problems of scarcity and inflation, is virtually monopolized by a small number of private companies that have ties to the right-wing opposition, especially the Polar company that controls 40 percent of the market. Venezuela, in short is a failed state. So, obviously the tide is turning. 

From within the simmering, rises a reinvigorated bank, and its efficiency would depend on a host of issues, viz. a replication of WB/IMF's more contributions to fund, more weightage to vote; exemption from taxes salaries and procurement of investment, which also incidentally happens to be copy of WB/IMF; undecidability on reserve funds; prioritising infrastructure over agriculture and social sectors; chalking out a plan for investment in financial intermediaries to develop national companies; procurement; and participation & transparency. Would the Bank actually be able to overcome these is in time. But, my main intention has been Joseph's remark, or rather his subscription to such alternatives to WB/IMF. More than he actually welcoming this bank, or for that matter the NDB as rivalling the hegemonic structures of WB/IMF, it's his stance on financialisation of capital that needs to be sent through a scanner. I have to admit honestly that I was bowled over by his discontent book, which did send me on a trip to track change via his honest and integrity-filled analysis of globalisation. Even reading Bhagwati in concomitance wasn't a powerful let down to following JS. But, just like the Left stands precariously, JS's conceptualisation somehow misses the beat for me these days. 

He, undoubtedly was a voice to hear during and in the aftermath of global crisis. His attack was three-pronged and all of it suited the purpose for the non-esoteric to figure out the causes of 2008-09 downturn. That there are problems associated with mainstream economics with over reliance on algorithms designed by mathematical geniuses, questionable character of rationality as a result of conflict of interests impairing ratings agencies, and lack of accountability on Wall Street's excessive risk-taking adventures isn't really in any doubt. But, thereafter fluctuations start becoming noticeable, and as a left-inclined theorist, he blames the neoliberal policies that had its beginnings in the 70s for all the ills with current economic and financial mess the world over. Assuming it to be true, then how do we explain the fact that Western Europe’s hyper-regulated economies are presently in even worse shape than America’s? Today Greece is a nation on financial life-support. Yet it has long been one of the most regulated and interventionist economies in the entire EU. This, however, doesn’t stop Stiglitz from proposing a massive expansion of regulation. This, he says, should be shaped “by financial experts in unions, nongovernmental organisations  and universities”. More generally, there’s nothing new about what Stiglitz calls “New Capitalism.” It’s a return to old-fashioned Keynesian demand-management and the pursuit of “full employment” - that old Keynesian mantra - through the government’s direction of any number of economic sectors. Then there’s Stiglitz’s proposal for a Global Reserve System to effectively undertake demand-management for the world economy. To be fair, this is not an instance of megalomania on Stiglitz’s part. Keynes argued for something similar almost 70 years ago. But here Stiglitz wraps himself again in contradiction. Having stressed the Fed’s inability to manage America’s economy, why does Stiglitz imagine a global central bank could possibly manage monetary policy for the entire world economy? What precisely, we might ask, is the optimal interest rate for the global economy? Surely only God could know that. Until then, I'd have my reservations in taking him seriously. 

+ Back to the boysCanada applies for membership at AIIB, ignoring Washington's warnings. But, Canada, remains tight-lipped on the South China Sea, signalling a shift in allegiances some believe could cool relations with the United States. Many see Canada’s decision to join the Asian Infrastructure Investment Bank as a positive sign for its economic future, even though the dozens of commercial agreements signed in Shanghai on Thursday appeared to deliver a majority of benefits to Chinese companies. Others are worried so much goodwill towards China signals a weaker commitment to traditional allies. Related here. NASDAQ news here

+ In Cambodia, its transport minister has welcomed the AIIB, calling the China-initiated Asian Infrastructure Investment Bank (AIIB) and Silk Road Fund are crucial for Asia's developing countries that need capital for connectivity and infrastructure development. But, Philippines is still reeling under uncertainty. 

+ Likelihood of NDB and AIIB jointly financing projects increases in probability most unsurprisingly. Here is a tale of two summits: BRICS and G20and how the summits would be energised by Sino-India synergy

+ Today, world over there are concerns of protectionism. What has been India’s position on this? 
Our position, first and foremost has been, multilateralism ought to take priority over other forms of trade engagement. So, we continuously push that. We therefore followed up on the Trade Facilitation Agreement and implemented it. We also push the line that we have to take a firm stand against protectionism. G20 has generally done that. Also, we push the line that regional free trade agreements should be compatible with the multilateral liberalisation and commitments made under the WTO. Arvind Panagariya, Sherpa to PM Modi interviewed on the sidelines of the G20 Summit. 

+ China spoke highly of President Kim's efforts in lifting globaleconomic growth and in poverty reduction. The World Bank sold a bond backed by the International Monetary Fund’s own currency-reserve basket in mainland China, the first such issuance in roughly three decades. The three-year bond, denominated in so-called special drawing rights - a synthetic currency based on the U.S. dollar and three other major currencies, and soon also China’s yuan - will pay an annual yield of 0.49%, according to the deal’s term sheet. WB's SDR Bond: What it is and isn't? But, isn't China the wrong place to issue these bonds? Beijing wants to rejuvenate enthusiasm for the International Monetary Fund’s quasi-currency, using domestically issued “Mulan bonds” from the World Bank and others. Unlike the Tang dynasty warrior turned Disney heroine, though, the outcome will probably not be legendary. In today’s warped environment where even terrible news in the United States sparks a flight into dollars, the case for SDR, or another alternative reserve currency, is stronger than ever. SDRs represent claims on a weighted basket of dollars, euros, yen, and pounds. From Oct. 1, the yuan will make up 10.92 percent of the basket, in a triumph of Chinese economic diplomacy. China has every reason to push SDR, and is doing so. The SDR bond market dried out in the 1980s, for want of interest from investors and market-makers. But China has funds to spare and a cartel of more-or-less compliant banks. If a local SDR market takes off, and domestic banks then expand into trading and clearing securities offshore, they could theoretically resuscitate the global market. Chinese policy banks could offer offshore issues settled in other currencies. 

+ The IMF has given the heads of the world’s leading economies a blunt post-summer welcome back to work, warning that the global economy is in need of “forceful action” to get out of a low-growth rut that is feeding popular anxieties about globalisation. “The political pendulum threatens to swing against economic openness, and without forceful policy actions, the world could suffer from disappointing growth for a long time,” said Christine Lagarde, IMF’s managing director. 


+ India’s recent move to adopt a symmetrical inflation target should provide a robust institutional foundation for maintaining price stability, the IMF has said in a report. In its Global Prospects and Policy Challenges (Caution: pdf file) report - published days before the weekend gathering of the G20 group of developed and developing nations in China, the IMF also endorsed India’s recently taken important steps towards a national goods and services tax (GST). 

+ Something for the left to cheer up to. It’s nice to see that a few IMF economists finally recognize some of the failures of neoliberalism. In recent years there has been some other research at the Fund that acknowledged major mistakes - for example, underestimating the negative impact of austerity in Europe; and challenging some prior IMF orthodoxy, such as opposition to capital controls and overly rigid central bank policies. And on July 28, the IMF’s Internal Evaluation Office released a report on some of its surveillance and intervention in the eurozone crisis. It noted that the IMF “did not foresee the magnitude of the risks” that the crisis would bring, was overly optimistic about growth forecasts in Greece and Portugal, and failed to provide a realistic view of Greece’s debt sustainability. But the report’s criticisms vastly understated the long-term damage that the IMF and its troika partners (the European Central Bank and the European Commission) inflicted on Europe during the crisis years. But, do not let the cheer get on your head, for it's loud thinking still. 

Policy and Macroeconomic Indicators

Central trade unions claimed the strike was successful, while CPI described it as the "most successful" strike. The government said the impact was minimal. "Overall, life and business remained normal in most parts of the country in wake of one-day countrywide strike called by central trade unions today. Important sectors like railways, civil aviation and major ports remained unaffected. Banking and insurance, coal, telecom and defence production were partially affected while transport and steel were marginally affected," the labour ministry said in a statement. What was the strike all about? According to DNA, economy suffered a loss of Rs. 18000 crore. On a related issue, a lot of talk about Minimum Wage has been doing the rounds of late, and especially on social media. Whats this all about? 

+ Restrictions on stockholding and export of pulses must be done away with. First, all stockholding limits and export restrictions on pulses should be lifted right away. With a bumper crop in the offing, farmers can do with more buyers for their produce. That will not happen if there is no freedom to trade, and even normal stocking can be construed as hoarding. Second, it is time to put a stop to imports, at least on government account. State agencies have so far contracted some 1.8 lakh tonnes of imported pulses, whose value would have already suffered considerable erosion with falling prices. Third, procurement operations should kick off, especially in moong and urad where arrivals will peak in a month from now. If farmers aren’t going to get even the promised MSPs, they will refrain from planting pulses.

+ "As the economy grows faster, I hope we will become a fully insured and socially secured nation over the years, and I am sure LIC can play a very big role in achieving this," Jaitley said, launching the Diamond Jubilee celebrations of the nation's largest financial powerhouse. But, Rajan does not feel so about the economy. For the outgoing RBI Governor, the growth is under pressure with industrial activity decelerating and no drivers for a turnaround at this juncture and investment opportunities remaining elusive. 

+ Equity Investment: the key to being a successful investor is the 'capacity to suffer'. To encapsulate, here are the three learnings for an investor.
* Over the long term, equity is not risky.
* Short-term volatility in equities comes with the territory. Don’t have a myopic view of it.
* You are your own enemy. When the market falls, the losses are just paper losses that will not materialise unless the investor sells. 

+ We could now be seeing Union Budget advance by a month, which would mean getting the presidential nod before the financial year begins. The PM has set March 30 as the date of parliament approval for the general budget. After the budget is presented in the first week of February, the House is likely to be adjourned for three weeks. During the time, the 24 departmental standing committees of the parliament will examine the Demand for Grants and submit their reports.

+ NITI Aayog proposes, Cabinet disposes. Seldom, does this come out true, but in this case, the Aayog's proposals for early settlement of disputes to boost construction sector gets the Cabinet nod. Even as the Centre had amended the arbitration law last year for easier dispute settlements, the industry had sought higher government intervention that would ensure early release of funds locked with various government agencies. The funds that were locked, especially those awarded in arbitration, made it difficult for construction companies to keep up with the interest payment on borrowed finances. 

+ When we look at economy-wide statistics we need to be really rather careful to think about what they are actually telling us. It’s no good reifying something like GDP growth. Sure, we want to have GDP growth, that means the country and the people are generally getting richer. But we do need to be careful that we don’t make this our sole and single goal. For there are subtleties to how we record GDP. The most obvious one is that if there’s some massive disaster then the rebuilding afterwards increases GDP. But our measure doesn’t take account (because it is “gross” not “net”) what was lost through the initial damage. So, when India records slightly lower GDP growth of 7.1% for the most recent reported quarter we want to root around in the undergrowth of the statistics in order to see what’s going on. It could, of course, be that the general growth rate is falling. That would not be a good thing. Or we might find that there’s a few little details which make it look as if that general rate is falling but which don’t quite mean that, or perhaps they are specific and known things which are going to reverse themselves.

+ “Our crops had failed for consecutive years, but neither the moneylender nor the bank’s loan recovery agent was willing to listen. He took his life in sheer desperation,” recounts Laxmibai, who has five daughters, the eldest of them 13 years old, to take care of. The only straw of hope she is latching on to is the soyabean crop on her tiny one-acre holding, which looks decent as of now, thanks to the good monsoon rains this time. But she is under no illusion that it will help repay the loans of her husband: “I was told they would be written off, but it appears now that it is not going to happen”. Agrarian distress and the collapse of credit cooperative institutions. 

Currency

Global currency trading fell to a daily average of $5.1-trillion in April, the Bank for International Settlements (BIS) said, the first contraction shown in its triennial survey of the world’s largest financial market since 2001. The 5.5% decline from a record $5.4-trillion a day average three years ago comes as the industry faces a continued regulatory squeeze on bank trading and after a global market rigging scandal that resulted in major banks being fined billions of dollars. The BIS triennial survey is the most comprehensive report into the 24 hour-a-day foreign exchange market, which transcends national borders and still dwarfs all other financial markets.The Bank for International Settlements report comes a month before the yuan is scheduled to join the dollar, euro, British pound and Japanese yen in the International Monetary Fund’s basket of global reserves. China has been trying to increase the yuan’s global usage, setting up clearing banks around the world and issuing bonds denominated in the currency in London. On Aug. 10, the People’s Bank of China said it plans to increase the yuan’s internationalization by seeking more cooperation with other countries and improving the infrastructure needed to support wider use of the yuan.


+ In the prevailing circumstances, the prospect of the emergence of a single world currency for the smooth conduct of international trade and financial affairs appears feasible only in the long run and not in the near future. This will remain so until the major international trading partners and stakeholders in global financial transactions come together to give the proposal of Keynes a nod, which is not an immediate priority on any country's scheme of things. Until the time a single world currency makes an appearance on the horizon of the international economy, SDR would have to do its best to serve the purpose of integrating global economy, involving production and exchange. In any case, the world economy deserves a single robust and dynamic global currency, no matter how far away. But how long it will take to become a reality is anyone's guess. Sunil Gupta provides a most insightful analysis on "one World One Currency'. 

The RBI, under Governor Raghuram Rajan, had been quite concerned about the subdued volumes and low participation in currency markets. The rupee is traded in the inter-bank OTC market and on the stock exchanges as exchange traded futures and options. But many foreign investors prefer to trade the rupee in offshore financial centres such as Singapore or Luxembourg. Since the RBI does not have any control on the movement of the currency in these offshore markets, it was feared that the currency would be exposed to volatility if offshore rupee trading increases. Strong linkage between offshore and onshore price of the rupee is another reason why the central bank wants the currency trading to shift onshore.

+ BTW, would BRICS still have the B? Just a will extrapolation. Brazil's currency topples.

Taxation

After a series of ratifications by statesMamata puts the GST Bill on the back burner for now. Senior state government representatives insisted that the decision is not politically motivated but party sources said it was taken to protest the recent initiatives by the Centre to inspect the state’s financial affairs, including the function of the treasury. 

+ Policymakers in some quarters of the government favour a goods and services tax rate of around 16% to make the reform more acceptable and also ensure it does not add to inflationary pressures. The new fiscal framework could provide the government wiggle room so that if revenues take a hit because of the low tax rate, this space could be utilized till the biggest tax reform since Independence starts yielding gains.  


Concerns over the financial accountability of GSTN (GST Network) discussed. One of the models discussed for creating the corpus included having funding by Centre and the states. The other model discussed by states favoured borrowing from banks and then paying interest rates, whose burden can then be shared between the Centre and states. BTW, how did I miss Swamynomics on the issue here. Dated by a month, it still provokes as always. 
The most significant player it is obvious, in this tax collection effort should be the one who generates data collection. In this case, that would be the central and state Governments. “Everything else such as adjusting the percentage of GST for various states are just a matter of programming, which could be done by the Government itself through its Department of Electronics. After all, Government has already codified Income Tax. Nothing can be more complicated than that!

+ Finance minister Arun Jaitley came down heavily on income tax evaders warning that high exemption and tax evation would lead to higher taxes. "There are a lot of questions on what would be the GST rate...the GST rate depends on various situations. You should not tax people more than needed. It should be revenue neutral," Jaitley said.  

Corporate Scan

Reliance Industries made "unjust" gains by pumping natural gas that flowed from ONGC's adjoining block but a proper inquiry is needed to ascertain if both companies knew about the connectivity of reservoirs and chose to conceal the information for years, an official panel has ruled.  The panel, set up after ONGC alleged that Reliance had illegally taken away the state firm's gas, said compensation for this "unjust enrichment" of Reliance must go to the government because the national exploration company did not own the resource and, curiously, did little to extract it for a very long time - a lapse that merits proper scrutiny.  


+ Supreme Court asked the Sahara Group to come clean by disclosing its sources from where it had raised Rs 25,000 crore and paid its investors in cash, observing that it is “difficult to digest” as such a huge amount “cannot fall from the heavens.” “You (Sahara Group) tell us what is the source of this money? Did you get the money from other companies or other schemes to the tune of Rs 24,000 crore? Withdrew it from bank accounts? Or sold property to get it? It should be any of the three alternatives. Money did not fall from the heavens. You have to show from where you have got the money. “Though we don’t doubt the capacity of your client to pay crores of money to investors, that too in cash in two months. But the entire explanation of the episode is difficult to digest. Tell us the source of the cash and there will be no need to open the pandora box,” a bench headed by Chief Justice T S Thakur said. 

+ Voices from the RightIn principle, I am not against GM crops but I am against GM food. As an example, it means that in principle, I am not against Bt cotton but I am against GM mustard. Last week, Monsanto withdrew its application for permission to launch its latest variety of Bt cotton (Bollgard II), in opposition to the Indian government’s directive to put an overall price cap Bt cotton seeds and a cap on the royalty which Monsanto earns on every packet. Almost simultaneously, there is news that domestically developed GM mustard has moved one step ahead in the approval process. Vijay Chauthaiwalea molecular biologist, is in-charge of the foreign affairs department of the BJP. 

+ With angel investors and venture capital firms lifting their foot off the funding gas pedal, start-ups in India are for financial resources to not only survive but also for growing the market they’re in.

+ Tata, Nilekani and Vijay Kelkar have come together to set up Avanti Finance which will focus on delivering affordable and timely credit to under-served and un-served segments in India.

Infrastructure

In the run-up to Habitat III, India has opposed the inclusion of the Right to the City in the draft New Urban Agenda that will define the way cities world-wide are shaped over the next two decades. The Right to the City (RTC) recognises equal access to urban life as a basic human right for all including migrants, slum dwellers and the homeless. RTC was the most contentious issue during the series of negotiations in the run-up to the once-in-twenty-year United Nations housing and sustainable urban development conference.

+ Some PPP experiments could be done with building of the city roads. Well, thats Parekh on construction of roads year after year post every monsoon. A steady ramp-up in the revival of private sector interest in the country’s highways sector is evidenced by an over two-fold increase in sections offered this fiscal for bidding under the government’s new project implementation format - the hybrid annuity model (HAM). This, alongside a pickup in the resolution of stranded projects, has infused fresh traction in the country’s roads sector. 


+ And we are still talking of smart cities. The garbage menace in urban India is not limited to what meets the eye, that is, bulging community bins, rubbish piled on street corners sometimes left for days in open spaces to rot and pollute, and garbage strewn over stormwater drains. Some cities have partially implemented door-to- door collection with the help of resident welfare associations and outsourced private agencies to take the waste to the community bins. More generally, the waste is dumped unsegregated into the community bins. It is then collected from these bins and slowly finds its way - through transportation over long distances to its final destination - the so-called landfills which are actually “land hills” of rubbish. These dumpsites were originally located outside of the cities and towns, but with cities pushing their peripheries, the land hills of garbage have moved closer, and so has the danger to our health. Choking the city

+ India’s recently released National IPR Policy demonstrates the government’s recognition of the importance of IP to fostering innovation. The policy is an important first step, and the US remains committed to working with India to ensure its implementation strengthens IP protection. The S&CD provides a critical forum for these discussions, and an opportunity to create momentum for IP reforms which go beyond the provisions of the National IPR Policy. Strong IPR infrastructure will help Indian industry, says Patrick Kilbride, Director, International Intellectual Property for GIPC at the US Chamber of Commerce. 

+ "There were certain hurdles that were to be cleared for the proposed $5-billion Railways of India Development Fund before we seek Cabinet approval. We are almost done the structuring of the fund and hope we will be able to take it to the Cabinet soon," Prabhu told a seminar organised by Indian Merchants' Chamber. While the formation of a railway regulatory authority is likely to be announced through an executive order soon, the World Bank has agreed to anchor the Railway Infrastructure Development Fund with a corpus of $5 billion over a period of seven years, a senior Railway Ministry official said. 

+ Thanks Subash Mohapatra for bringing to notice this dark reality of infrastructure tied with industrialisation and tourism under the garb of development. Odisha on the verge of suffering once more, thanks to Sagarmala!!!!

Activism

Whatever may have been their take on data, facts & figures, manipulations or manoeuvrings in the past, this sort of activism from the once-revered all over the country, and presently-viled by the naïveté of ultra-nationalists, NDTV has shored up support to save the Indian coastline by approaching the NGT and contending that numerous ports and projects along the coast would have an irreparable damage to the ecosystem if carrying capacity assessment is not done beforehand.

+ Moving to the Himalayan Kingdom of Nepal, there is this We-Are-Sorry Campaign launched in the Madhes demanding for equity and justice. Fo some, it is an opportunity to atone for their or their ancestors’ prejudices and discriminatory treatment against Dalit communities. But there are some people in the Madhes who are blasting the campaigners saying that they are trying to gain popularity or are acting at the behest of Pahadi groups who want to take advantage of caste discrimination in Madhes, a cliched argument. H/T Vinay Bandar.

+ Protests against land acquisition for industries are gaining momentum in Jharkhand and a police firing in Ramgarh has fuelled it further. Former chief minister, Babulal Marandi, on Tuesday started a two-day mass fast at Hazaribagh district against land acquisition by the National Thermal Power Corporation (NTPC).
Audit

The deficit in local bodies such as Chennai Corporation was widening owing to the increase in expenditure on Amma Canteens. While acknowledging that the objective of the scheme was laudable, the CAG pointed to lack of surveys to identify beneficiaries such as wage labourers in each area of the city. The CAG said the food was “provided to all people” at subsidised rates in Amma Canteens. Even as the State government claimed that the scheme was a social welfare measure, the CAG said the reply was not acceptable as the expenditure was incurred without providing funds for such a scheme in the budget passed by the municipal corporations such as Chennai.

+ One of the last decisions taken under Smriti Irani, when she was the HRD minister, has closed any possibility of a CAG audit of private deemed universities. Hence, 85 of the 120 deemed varsities are likely to be off the CAG radar.  The issue of auditing accounts of such universities has been a contentious one, with the regulator University Grants Commission and the HRD ministry taking opposite stands. The ministry even bolstered its case by getting CAG on its side. New deemed universities regulations, approved by Irani just before her exit, have amended the relevant clause to say that CAG can only audit government-funded universities. 

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