India, Japan ink $75bn currency swap

As Prime Minister Narendra Modi wrapped up his fifth summit with counterpart Shinzo Abe, India and Japan concluded a $75-billion bilateral currency swap agreement, a move intended to bring greater stability to the rupee and capital markets in India.

Both nations have also agreed to start a “2+2” dialogue at the foreign and defence ministers’ level, and work together on infrastructure projects in Bangladesh, Myanmar and Sri Lanka. The swap agreement, a finance ministry release said, “will enable the agreed amount of foreign capital being available to India for use as and when need arises”. An official said that the agreement would have a positive impact on financing the current account deficit.


Mumbai-Elephanta in 14 minutes

In four years, Elephanta Caves in Gharapuri island will be just a 14-minute ride away. The Central government’s standing finance committee last week cleared the proposal for an 8-km Mumbai-Elephanta ropeway — the first such across the sea in the country — allowing the Mumbai Port Trust to finally take up the project three years after hitting upon this plan to boost tourism.

At present, ferries from the Gateway of India provide the only access to the UNESCO world heritage site. But a oneway ride takes close to an hour and inclement weather can bring operations to a halt.

The project will be undertaken on a public-private partnership model, and MbPT plans to get all statutory clearances by August next year. Work is expected to start the month after and wind up by October 2022.

MbPT chairperson Sanjay Bhatia said the ropeway will be a landmark tourist attraction. Initially, the plan was to start the 30-seater cable cars from Sewri, but the landing terminal will be shifted a little over a km away to Haji Bunder to avoid disturbing the migratory flamingos and the Mumbai-Trans Harbour Link. Nearly 10,000 sqm of land will be given for the terminal’s construction.

The 16-sq km island has several archaeological ruins, including the famous rock-cut temples. It has evidence of settlement from 2nd Century BC, but the temples are believed to have been built around 5th-6th Century AD. Over 10 lakh people visit the tourist attraction every year. The island was connected to the electric grid in February this year, 70 years after power lines were reportedly torn down at the end of British rule. Besides the temples, the island’s key attraction is the two-day Elephanta Cultural Festival, which has been organised by the Maharashtra Tourism Development Corporation every February for nearly 30 years.

Abe hosts Modi

Japanese Prime Minister Shinzo Abe described Narendra Modi as “one of my most dependable and valuable friends” while welcoming him into his holiday home overlooking the iconic Mount Fuji on Sunday. In a message in Japanese newspapers, Abe said he would be a “friend of India for life”.

“At the time when Japan was not so wealthy, Prime Minister (Jawaharlal) Nehru introduced PM Kishi in front of thousands of people as the Japanese prime minister whom he respects,” Abe said. Kishi was Abe’s grandfather. “Engraving the history in my heart, I have devoted myself to nurturing this friendship with India,” he added.

Modi and Abe held informal talks at a picturesque resort near Mount Fuji and visited a factory of industrial robot manufacturer Fanuc as they spent about eight hours together on the first day of a two-day summit.

Modi, who arrived in Japan on Saturday evening to attend the 13th India-Japan annual summit, has said the partnership between the two countries has been fundamentally transformed and has been strengthened as a “special strategic and global partnership”.

The two leaders took a stroll following which Abe hosted a luncheon for Modi at a scenic resort by Mount Fuji. Modi presented Abe two handcrafted stone bowls and ‘dhurries’ made from rose quartz and yellow quartz stone sourced from Rajasthan. A Jodhpuri wooden chest from Rajasthan with traditional work was also presented. The gifts were specially crafted for Modi’s visit.

Later in the evening, in a special gesture, Abe hosted Modi at his villa near Lake Kawaguchi in Yamanashi for a private dinner. It is the first time that Abe has invited a foreign political leader to his holiday home in the village of Narusawa.

“Extremely grateful to PM Shinzo Abe for the warm reception at his home. I am truly honoured by this gesture. PM Abe also taught me the Japanese way of eating food using chopsticks,” Modi tweeted. In September last year, Modi had hosted Abe in his home state Gujarat.

After the dinner, the two leaders left for Tokyo by train. They will hold a formal summit in Tokyo on Monday, during which strengthening bilateral security and economic cooperation is expected to be high on the agenda.

During the formal summit, Modi and Abe will discuss a range of issues including defence and regional security. Besides bilateral issues, the two leaders are expected to deliberate on a range of regional and global issues including the situation in the Indo-Pacific region.

India is also hoping to have some kind of synergy or integration between Ayushman Bharat scheme, which is the largest medicare programme of its kind globally, and the Japanese programme which is called Asia Health and Wellbeing Initiative.


Media & Entertainment: Moving to Digital

The media and entertainment industry in India saw a major structural shift in FY18. Companies have started realising the importance of the convergence of technology and media & telecom in engaging customers and generating revenue. A snapshot of the industry and what to expect.....

Abe, Xi vow to take ties to ‘new heights’

Traditional rivals China and Japan are describing the ongoing visit of Japanese PM Shinzo Abe to Beijing as an “historic opportunity” to mend fences and develop enduring ties in the areas of business and investment.

“We should seize this historic opportunity and make it become a new historic orientation for the development of Sino-Japanese relations,” said Chinese President Xi Jinping. Abe too spelt out his plans, saying, “Switching from competition to collaboration, I want to lift Japan-China relations to a new height”. He added that, “Japan and China will not become a threat to each other.”

Analysts, however, see the warming in Sino-Japan relations as an attempt by Xi and Abe to hedge the risks thrown up by aggressive trade actions launched by US President Trump.

Talks of cooperation have remained confined to trade, with the two leaders avoiding the issue of disputes over islands in East China Sea, observers noted. The two presided over the signing of a dozen deals including a currency swap pact worth $30 billion.

Owls massacred on Diwali

In the Lal Kurti area of Meerut city, members of the Baheliya community are busy. Working in small groups, they handle individual, sometimes pairs of owls brought in by trappers and poachers from the region and the hills of Uttarakhand. Diwali is less than a fortnight away, and the birds are in great demand.

They might be feared raptors of the night, but for the owls of India, the Diwali season holds deadly peril. The bird, because of its status as vehicle of the goddess of wealth Lakshmi, is sought for sacrifice in tantrik rituals during Diwali, which many feel bring prosperity and good fortune. A countrywide smuggling trade in owls is rampant during this season. So are the killings.

“There are 30 owl species in India and most of them are in the Red List of threatened or endangered species of the International Union for Conservation of Nature (IUCN) and Schedule I of the Wildlife Protection Act. There is a sharp spike in their capture and trade during the Diwali season. The birds are subjected to brutal deaths through black magic rituals,” said Abrar Ahmad, an ornithologist who has been following the illegal bird trade.

The exact number of the birds trapped and killed each year has not yet been estimated. But it’s “large”. Amhad said: “Tribes like the Baheliyas are involved in trapping them in areas from Pilibhit, Meerut, Moradabad and Agra to Dehradun and Ambala. There are at least 16 tribes in India involved in the trade.”

The most common way of trapping owls is the latex and bamboo method. A latex-glue smeared twig is fitted onto one end of a long bamboo stick and is slowly moved towards the roosting owl perched on trees during daytime. The bird gets stuck to the twig and is pulled down. Then there is the ‘takkva’ method in which a long needle is thrust at the bird, frequently killing it.

The captured birds face a worse fate. “Every part of an owl’s body has significance in sorcery and black magic. A live owl buried during Diwali outside the door of a house is supposed to bring prosperity. In one of the rituals, the bird is even blinded before it is slowly killed over days.The tantriks are the real culprits,” Ahmed added.

“There is a lot of demand for owls in this season at bird markets here and elsewhere. Those who want owls, including tantriks, know where to ask. We just capture the birds. It is the tantriks who kill them,” said Manohar Baheliya, who is involved in the trade in Moradabad.

The price of an owl ranges from Rs.300 to Rs.50,000 for larger species. The most prized are the rock eagle owl, dusky eagle owl and brown fish owl.

Lalit Verma, forest conservator, western zone, Uttar Pradesh, said, “We have told DFOs in the zone to be on the alert and have deployed our men at bird markets. Rangers are also on the alert in forests.”

Parag Madhukar Dha-kate, forest conservator, western circle, Kumaon region of Uttarakhand, said the police department was assisting the forest department in trying to curb the trade during Diwali.

7 elephants electrocuted in Odisha

At least seven elephants were electrocuted after coming in contact with a live wire hanging dangerously low near Kamalanga village in Odisha’s Dhenkanal forest division.

Forest officials said a herd of 13 jumbos was passing through the village in Sadar Forest Range when seven of them got electrocuted by an 11 kv line. The seven included five female elephants and a calf. Their carcasses were found lying in a ditch early on Saturday.

Principal chief conservator of forests (wildlife) Sandip Tripathy issued a release alleging that power distribution company Central Electricity Supply Utility (Cesu), an autonomous body under the state energy department, had not rectified sagging electric lines despite several pleas.

While Odisha energy secretary Hemant Sharma conceded that they had received information about the movement of elephants in the area 10 days ago, Cesu authorities denied having received any such information. Sharma said Cesu had put up temporary electric lines to supply power to a construction company building a railway over bridge near Kamalanga, adding that “an investigation will be carried out.”

Sources said the pole-mounted cable lines was at a height of eight feet above the ground. According to forest guidelines, power lines should be at least 17 ft from the ground.

Of the 42 elephants that have died of electrocution due to sagging electric wires in Odisha since April 2010, at least 18 were killed in Dhenkanal. The opposition BJP and Congress demanded resignation of energy minister Sushant Singh and forest minister Bijayshree Routray.


ED freezes Amnesty India’s a/cs

A day after Amnesty India’s Bengaluru office was raided by the Enforcement Directorate, the NGO said the ED has also frozen its bank accounts, effectively forcing it to stop work. Alleging that the Centre is treating human rights organisations like “criminal enterprises”, Amnesty India claimed that “it is, thus, the latest target of the government’s assault on civil society in the country”. The accounts of Greenpeace India were frozen earlier this month.

“Government authorities are increasingly treating human rights bodies like criminal enterprises. As an organisation committed to the rule of law, our operations here have always conformed with national regulations. The principles of transparency and accountability are at the heart of our work,” Amnesty India head Aakar Patel said.

Stating that the focus of ED’s questioning was the relationship between the two entities Amnesty International India Pvt Ltd and Amnesty International India Foundation, A statement read: “Most of the documents asked for during the search were available in public domain, or were already filed with the relevant authorities. Details of our current structure, which was the focus of much of the questioning, have been available on our website since 2014.”

“But, ahead of the raids, Indian authorities leaked a cache of their internal documents marked ‘secret’ that appear to cast Amnesty India’s operations as a dark web of intrigue,” Patel said.


Domestic Air Traffic Up 19%: September 2018

Domestic airlines registered an 18.95% growth in passengers flown in September. Indian airlines carried 11.5 million passengers in that month, up from 9.6 million in September 2017. The year’s high so far was 11.9 million passengers in May.

SpiceJet maintained its lead in terms of load factor by flying its planes 93.2% full, followed by GoAir, which used 90.6% of its seat capacity, followed by Vistara and Jet Airways with 84.9% each.

September marks the 42nd month on the trot that SpiceJet has recorded the highest occupancy in India.

GoAir operated 90.4% of its flights on time, followed by SpiceJet with 89.1% and IndiGo with 87.6%. National carrier Air India operated the least number of its flights (74.3%) on time in September. The on-time data is for Bengaluru, New Delhi, Hyderabad and Mumbai.

IndiGo strengthened its dominance in terms of market share, carrying 43.2% of the passengers who flew in September. Jet Airways followed with a 15.8% share and Spice-Jet accounted for 12%.

IndiGo reported its first quarterly loss in the three months ended September, citing pressures from high fuel costs, rupee depreciation and intense competition.

India signs a missile deal with Israel

A leading state-run Israeli defence company said that it has signed a $777 million contract with India for the supply of Barak 8 long-range surface-to-air defence missiles and missile defence systems for the Indian Navy. Israel Aerospace Industries said India’s Bharat Electronics Limited will be the main manufacturer for the project.

The IAI will supply LR-SAM and Air and Missile Defense systems, the marine version of the AMD system Barak 8, for seven ships of the Indian Navy.

India maintains close relations with Israel’s defence establishment, and has entered into several deals with Israeli defence companies.

India to become third largest aviation market by 2024

India, currently the world’s seventh largest aviation market, is set to become the third largest aviation market by 2024, said International Air Transport Association, a global airline trade body, in its 20-year air passenger forecast. By 2037, of 572 million new passengers in the world, India will account for 414 million.

Present trends in air travel suggest that the number of passengers could double to 8.2 billion in 2037, which represents 290 airlines or 82% of global air traffic, said the report. “The Asia-Pacific region will drive the biggest growth, with more than half the number of new passengers in 20 years,” the report said, adding that growth in this market is being driven by continued robust economic growth and favorable population. China will displace US as world’s largest aviation market in the mid-2020s. India will take the third place after the US around 2024, surpassing UK. Indonesia is expected to go from the world’s tenth largest aviation market in 2017 to the fourth largest by 2030. Thailand is expected to enter tenth spot in 2030, replacing Italy. In next two decades, the forecast anticipates a 3.5% compound annual growth rate, leading to a doubling in flyer numbers. The association warned growth prospects for air transport and economic benefits driven by aviation can be curtailed if governments implement protectionist measures.

“Doubling of flyers could support 100 million jobs globally. We are seeing a reshuffling of world air traffic to the East,” said Alexandre de Juniac, IATA’s director-general and CEO.

The International Air Transport Association said that growth in Asia-Pacific region is being driven by a robust economy


Mumbai - ­Goa cruise sets sail

After several delays, the Mumbai-Goa cruise service Angriya was inaugurated in Mumbai. Chief minister Devendra Fadnavis and Union minister for shipping, Nitin Gadkari, inaugurated the revamped domestic cruise terminal building at Princess Dock on Saturday. Angriya will make its first commercial voyage on October 24.

Speaking at the inauguration, Gadkari said cruise tourism has tremendous potential in India and Mumbai. His ministry, through the Mumbai Port Trust, has invested in development of international and domestic cruise terminals in the city, said Gadkari. “There is a projection that there will be 40 lakh tourists both international and Indians by 2040. Out of that, 32 lakh tourists will come to Mumbai. It will give a boost to Mumbai’s economy and also provide employment to 2.5 lakh people in 10 years,” he said.

The cruise vessel Angriya is named after the first Maratha Navy Admiral Kanhoji Angre and the sunken coral atoll Angria Bank, near Vijaydurg. Angriya can carry 399 passengers and has a 67-member crew, including hospitality staff and marine crew. There are 104 cabins across eight categories, ranging from dormitory to suites. Angriya also has an “underwater level” spa and an infinity pool.

The cruise will operate every alternate day from both Mumbai and Goa, starting October 24. It will start at 4.30 pm from Mumbai and reach Goa at around 8 am. It will not have any halts in between as planned earlier because the infrastructure to halt the cruise along the Konkan stretch is not ready.

Leena Kamat Prabhu, executive vice chairman of Angriya Sea Eagles Cruise, said ticket prices range from ₹6,000 to ₹10,000. “The dormitory ticket is ₹6,000 per person, while suites will cost ₹10,000 per person. The ticket will include snacks, dinner and breakfast,” Prabhu said.

She added the vessel has a speed of 27 knots and could complete the journey in eight hours, but the cruise has been “deliberately kept longer” so that passengers can enjoy the on-board luxury.

The new domestic cruise terminal will also be used for the water transport project on the city’s eastern waterfront, which has been stalled because the authorities have been unable to find private operators.

Fadnavis asked MbPT officials to start the service “quickly” to provide an “alternate mode of transport” for Mumbai.

Gadkari and Fadnavis also inaugurated the Bunkering Terminal where ships will refuel; carried out bhoomipujan of reclamation of Jawahar Dweep for Tank Farm; and also handed over a dry dock to the Cochin Shipyard Ltd.


Train Runs Over Dussehra Crowd on Amritsar Track

At least 58 people were killed after a crowd watching burning of a Ravana effigy spilled over railway tracks and was run over by an approaching train at Joda Phatak near Amritsar. The train from Jalandhar to Amritsar ploughed through the crowd who got little chance of escape as another train arrived on the adjacent track, officials said.

At least 300 people were at the spot watching ‘Ravana dahan’ at a ground near the tracks. As the effigy was lit and fireworks went off, a section of the crowd retreated towards the tracks where a large number of people were watching the event. Two trains from opposite directions arrived almost at the same time, giving little chance for people to escape and resulting in several being mowed down by one of the trains, officials said.

Amritsar sub-divisional magistrate Rajesh Sharma said 58 bodies were found and at least 72 injured were in a government hospital. The toll is likely to rise.

Wails of people filled the air as friends and relatives frantically looked for their near and dear ones. Severed bodies, including of many children, were on the accident site hours after the incident with angry people not allowing authorities to remove them. Dismembered body parts laid strewn on the bloodsoaked ground. Many bodies could not be identified. People shouted slogans against local MLA Navjot Kaur Sidhu, who was the chief guest at the event. She later rushed to the hospital.

There was shock and disbelief as panic-stricken people recounted the horror. “I have lost my minor child. I want him back,” an inconsolable mother could be heard. “Several times we have been requesting the authorities and local leaders telling them to take up the issue with railway authorities to slow down the trains near this Phatak during Dussehra, but no one has listened,” a local said. Another said people could not hear the sound of the approaching train due to fire crackers.

The incident sent shock waves across the country. There was an outpouring of grief, with President Ram Nath Kovind and Prime Minister Narendra Modi condoling the loss of lives. Modi asked officials to provide immediate assistance. Congress chief Rahul Gandhi too asked the state government and party workers to provide immediate relief to the affected people. Punjab chief minister Amarinder Singh announced a compensation of ₹5 lakh each to nearest kin of each of the deceased. He rushed to the spot to supervise rescue and relief operations. The CM also announced free treatment to all injured in the accident.

Union Home Minister Rajnath Singh announced all possible assistance to Punjab. “Pained beyond words at the loss of precious lives due to a train tragedy during Dussehra festivities in Punjab. My thoughts are with the families of the deceased and prayers with the injured,” Singh tweeted soon after the incident. The home minister said he has spoken to home secretary and DGP of Punjab regarding the accident. “Centre is ready to provide all possible assistance to the state at this hour of grief,” he said.

North East to get one of Asia’s longest river bridges

One of Asia’s longest river bridges will be built across the Brahmaputra, connecting Dhubri in Assam to Phulbari in Meghalaya. It will cut road travel by 203 km as also travel time. The 19.3 km, four-lane bridge will be built by 2026-27.

Considering how critical the bridge construction will be, the government’s highway construction wing, the National Highways and Industrial Development Corporation Ltd, recently reached out to global players in France.

At present, vehicles take an over 200 km-long detour using the Naranarayan bridge, which is about 60 km upstream. The Dhubri-Phulbari bridge will serve to complete the missing link of NH127B from Assam to Meghalaya. Currently, 20 to 30 small boats operate between Dhubri and Phulbari, carrying people and goods. It takes about two-and-a-half hours to cross the Brahmaputra river.

It will hardly take 15-20 minutes to cross the river after the bridge becomes operational. It will push economic activity and development on both sides of the river,” a road transport ministry official said.

“We will be floating tenders for the project and target to award the work during this financial year. It will be a public funded work. The construction of any bridge across Brahmaputra takes time since work can be carried out only for six months,” an NHIDCL official said. Japanese funding agency JICA has approved a loan for the project as part of a road infrastructure improvement package in northeast. Officials said it would also improve connectivity from West Bengal to Assam.


India has 3.4L $-millionaires

Amid rising concern over increasing inequality, the country created a whopping 7,300 more millionaires during the 12 months to mid-2018, taking the total number of dollar-millionaires to 3.43 lakh, who are collectively worth around $6 trillion, says a report.

According to Credit Suisse, the country is home to one of the highest proportions of female billionaires at 18.6% during the period, among the major countries. Of the total dollar-millionaires, 3,400 have wealth over $50 million, while 1,500 have over $100 million each, said the Credit Suisse’s 2018 global wealth report. And the number of the rich as well the inequality is set to widen by over 53% by 2023 when their number is set to cross an estimated 5,26,000 millionaires worth around $8.8 trillion.

The report said Indians’ personal wealth is dominated by property and other real assets, which make up 91% of estimated household assets. Over the past 12 months, non-financial assets grew by 4.3%, accounting for all of the wealth growth in the country, it noted. House-price movements are a proxy for the non-financial component of household assets, which reached a high of 9% for the country.

Globally, the US continues to lead the rich club for the 10th year in a row. During the reporting period too, the US contributed the most to global wealth, adding an $6.3 trillion, taking the total to $98 trillion. China is home to the second-largest number of wealthy households, having added $2.3 trillion to reach $52 trillion.


Adani ties up with French energy major Total to enter petrol retail biz

Gautam Adani-led Adani Group will enter the petroleum retail business with French energy major Total SA. The two have signed an agreement to invest in downstream. This will include a foray into retail, with the duo opening 1,500 outlets to supply compressed natural gas and develop various liquefied natural gas projects.

Both the companies have set a target of developing re-gasification terminals, including one at Dhamra LNG. “It will be a big stride towards India’s vision of achieving a healthier energy mix through promotion of LNG,” the companies said in a joint statement on Wednesday.

Total and Adani will also create a joint venture with the objective of building a retail network over 10 years. These retail outlets will be on highways and intercity connections to supply CNG for vehicles.

The French government was a majority stakeholder in Total till 1996, but has reduced its stake considerably since then.

Earlier this month, the Indian government had set up a committee led by economist Kirit Parikh to review the current marketing guidelines, so that more private players can enter the business. Currently, companies need to make an investment of Rs 20 billion on petroleum infrastructure, or submit a bank guarantee of equal value.

Sources said the panel may make suggestions to facilitate the entry of multinational companies into the fuel retail space by removing entry barriers.

The two companies said they wanted to tap the domestic fuel market, currently growing at 4 per cent per year. Development of road infrastructure and higher purchasing power with the people have been cited as reasons for growth by experts.

The Adani-Total retail outlets will offer customers the latter’s full line-up of fuels, lubricants, as well other products and services.

Adani Group, Total SA to form a joint venture to roll out a fuel retail network of 1,500 outlets, mostly on highways, in the next 10 years

Total will join Adani in developing a 5-mtpa LNG import terminal at Dhamra in Odisha

The French multinational is also eyeing a stake in city gas distribution (CGD) projects of Adani

In the recently concluded CGD bid round, Adani won rights to 13 cities on its own and another nine in JV with state-owned IOC

India's largest selling two wheeler

As #MeToo pressure mounts, Akbar quits

Minister of state for external affairs M.J. Akbar resigned from his post, a day before a Delhi court was to hear a criminal defamation case filed by him against journalist Priya Ramani, the first among a large number of female journalists to accuse the former newspaper editor of sexual harassment.

In a brief statement explaining his decision that came amid India’s growing #MeToo movement, Akbar said he wanted to pursue the court case in his personal capacity. “Since I have decided to seek justice in a court of law in my personal capacity, I deem it appropriate to step down from office and challenge the false accusations levied against me also in a personal capacity,” he said.“I have therefore tendered my resignation from the office of minister of state for external affairs.”

The resignation has been accepted by Prime Minister Narendra Modi, said a person aware of the development. “The President of India, as advised by the prime minister has accepted the resignation of Mr MJ Akbar from the Union council of ministers with immediate effect,” a statement from the President’s office said.

Akbar’s resignation came after the number of journalists accusing him of sexual misconduct kept increasing. It also came as several male journalists joined hands with their female colleagues in calling for action against Akbar, accused of sexual harassment when he was working as an editor and in other senior positions in several news publications.

The charges against Akbar first came to light in a Twitter post by journalist and Mint columnist Priya Ramani on 8 October when she named the journalist-turned-politician as the editor she had alluded to in an article in Vogue magazine on sexual harassment at the workplace in October 2017.

Akbar was on an official trip to Africa when Ramani named him. He returned to New Delhi on Sunday and issued a statement which described the allegations as “false and fabricated, spiced up by innuendo and malice”.

On Monday, Akbar filed a criminal defamation case against Ramani claiming that irreparable damage had been done to his reputation.

His decision to step down was welcomed by Ramani. “As women we feel vindicated by MJ Akbar’s resignation. I look forward to the day when I will also get justice in court #metoo,” Ramani said in a Twitter post.

According to people familiar with the developments, the government’s strategy seems to have been to allow Akbar to complete his Africa tour and return to India before taking a decision on calls for his resignation.

Akbar was given a chance to present his case, which he did via his statement issued on Sunday.

He attended office according to his routine on Monday and Tuesday. Though Akbar sat with foreign minister Sushma Swaraj for official meetings in the ministry, there was no specific meeting on the allegations against Akbar.

“With the number of accusations increasing day by day, his position was becoming untenable,” said a second person familiar with the matter.

“There was a (negative) perception of the government that was gaining ground and the considered view was that this would be harmful for the government considering all the hard work put in over the past four years on various issues, including development.” this person said.

“There were several people or levels of party and the government that were involved in Akbar tendering his resignation,” the person said.

The decision that Akbar should step down was taken at the top levels of the government and the party, said a third person familiar with the matter. Akbar could have been given a sense of this when National Security Adviser Ajit Doval met him on Tuesday.

RIL to Pick Up Majority Stakes in DEN, Hathway

In one swift move, Mukesh Ambani’s Reliance Industries has acquired majority interest in India’s two largest cable TV and broadband companies — Hathway Cable & Datacom and DEN Networks — for a total sum of ₹5,230 crore.

Reliance Industries said it will invest ₹2,940 crore in Hathway for 51.3% stake via a preferential issue of shares at a share price of ₹32.35 apiece.

In DEN, RIL will be making a primary investment of ₹2,045 crore through a preferential issue at ₹72.66 per share and a secondary purchase of ₹245 crore from existing promoters Sameer Manchanda and others. The transaction will give RIL 66% stake in the company.

The fresh fundraising will help Hathway and DEN to infuse funds for capital expenditure and increase competitive activity, industry experts said.

RIL said these investments and partnerships will create a win-win outcome for the LCOs, consumers, content providers and overall ecosystem.

The move, as ET first reported, will help in giving a boost to Ambani’s ambitious JioGigaFiber that aims to connect 50 million homes across 1,100 cities.

Reliance Jio Infotech has been facing some resistance from the LCOs across the country. However, with the acquisition of Hathway and DEN, Jio will get control of almost 27,000 LCOs of the two MSOs to work with.

RIL said it will “work together” with Hathway, DEN and the LCOs to offer a “quick and affordable upgrade” to a world-class line-up of JioGigaFiber and Jio Smart-Home Solutions to the 24 million existing cable connected homes of these companies across 750 cities.

Meanwhile, the company announced that its wholly-owned subsidiary, Reliance Industrial Investments and Holdings, has acquired 12.7% stake in US-based SkyTran.


Yogi government nod to change Allahabad to Prayagraj

Three days after UP CM Yogi Adityanath hinted that the name of Allahabad will be changed to Prayagraj, the state cabinet gave its nod to the proposal.

Allahabad will be the second city after Mughalsarai to be renamed by the BJP-led government in the state. MLA from Allahabad West and government spokesperson Sidharth Nath Singh announced that the new name would be used to promote Indian culture on an international scale and also for the promotion of Kumbh, scheduled to start in January 2019. He also indicated that Allahabad high court and Allahabad University were likely to follow suit. The government, earlier criticised for changing the name of Mughalsarai to Deen Dayal Upadhyaya Nagar on the name of the RSS ideologue, said that those opposing the move should explain whether the original name of the city should be used or a new one.

The CM, who had said last week that the government would consider a change in name for Allahabad, had participated in the Margdarshak Mandal meeting for Kumbh recently where he received this proposal from seers.

“Prayag means a confluence of two rivers. Here, we have a confluence of three rivers, Ganga, Yamuna and Saraswati. Therefore, its name should be Prayagraj,” he had said.

The city was named Ilahabad by Mughal emperor Akbar, who is said to have built a fort near the Ganga in the city, in the 16th century. It was subsequently renamed Allahabad by his grandson.

Of India's Total Fertility Rate....

The shrinking size of families in India contributed to India’s economic growth in the 1980s and 1990s, a United Nations report has found. India’s family size has steadily declined and continues to — from 5.2 children per family in 1971 to 2.3 in 2016, which means the family size itself has fallen from 7.2 to 4.3.

It isn’t just in India; shrinking family sizes contributed to Asia’s economic miracle in the 1980s and 1990s, including in China, according to the State of the World Population Report 2018 by the United Nations Population Fund. Still, India deserves special mention because it has, along with Bangladesh, El Salvador, Nepal, Myanmar and Nicaragua, fertility rates that are near replacement level, despite having lower per capita incomes than other countries with replacement-level fertility (or the total fertility rate — the average number of children born per woman— at which a population merely replaces itself from one generation to the next). “In most other parts of the world, such low fertility is achieved only at higher levels of income. These countries have made gains in human development, reflected in improved health,” said the report.

India’s population has doubled since 1971, from 566 million to 1.35 billion in 2016. The total fertility rate in urban India has already fallen below replacement levels of 2.1. But wide disparities remain between states and within districts within states. “Although average total fertility for the whole country is 2.3 births per woman, it is above 3 in Uttar Pradesh, Bihar and Madhya Pradesh, and below replacement level in Maharashtra, West Bengal and the four southern most states,” said the report.

What’s common across regions, however, is that women across all sections of society, irrespective of wealth, education and urban or rural areas, are having fewer children than ever before

Of Low Cost Air Travel....

India is the second largest market (countrywise) for low-cost air travel and the fastest growing such market in the world.

The US, where the model was born, remains the largest low-cost carrier market and is over two-and-a-half times the size of the emerging Indian market. While Indian LCCs offered about 90 million seats in the first nine months of 2018, LCCs in the US offered 250 million seats. After India are Indonesia and Spain (over 60,000 seats each). In India, 15.6 million seats were added between January and September as compared to the same period last year.

LCCs corner 69% share in Indian aviation market

Fifteen years ago, India didn’t have a single low-cost carrier. Today, LCCs have cornered 69% market share in India, a riveting feat for a country that doesn’t yet have a low cost airport or terminal.

Worldwide, LCCs have a 29.7% seat share, a percentage more than last year, said a report by the global aviation consultancy firm Centre for Asia Pacific Aviation. “Almost 115 million additional seats were offered by LCCs during the first nine months of 2018, versus the same period last year,” it said. Even as the lines between traditional full service carriers and LCCs continue to blur, the 115 million new LCC seats have led to a 10.1% rise in seats available for booking on LCCs. Currently, LCCs worldwide operate over 1.25 billion global seats (over 4.5 million seats per day).

The data, based on flight schedules from the UK-based air travel intelligence provider OAG, showed that 18 of the world’s top 20 LCC country markets saw an increase in LCC seats during the first nine months of 2018, eleven of them at double-digit rates.

India among five worst hit by climate change

Climate change is causing more havoc than geophysical events like earthquakes and tsunamis. A study by UN Office for Disaster Risk Reduction shows how climate change has affected us in the past 20 years — of all the 7,255 disasters recorded globally between 1998 and 2017, floods accounted for 43% or 3,148 incidents followed by storms at 2,049. Together, floods and storms accounted for 72% of all disasters.

The UN report, released October 13, said about 91% of all disasters during 1998-2017 were caused by droughts, heatwaves, floods, and other extreme weather events, something that should alarm policy-makers in India as it is most affected by all climate change incidents. What is more worrying for low income nations like India is the fact that economic losses from up to 87% of disasters are not reported. Globally, disaster losses are estimated at $520 billion per year, pushing over 26 million people into poverty every year. The inequality is rising and far greater than projected, it added.

Though India is yet to develop a robust mechanism to capture all disaster losses, an estimate by an agency says annual loss of lives due to just floods is an average 1,600, while loss of properties is over Rs.1,800 crore per year. India has also seen hundreds of deaths yearly due to extreme weather-related events.

The UN report has listed India among top five nations in the world with $80 billion in absolute economic loss due to disasters in the past 20 years. The global warming of 1 degree celsius compared to pre-industrial level has already altered the disaster map — disasters related to climate change have doubled in the past 20 years, an average 329 per year, compared to 165 during 1978-1997.

During 1998-2017, storms, including cyclones and hurricanes, were second only to earthquakes in terms of fatalities, killing 2,33,000 people. Floods have affected the largest number of people, followed by drought affecting a further 1.5 billion in the past 20 years.

Congress loses largest party tag in Goa

In a serious jolt to the Congress’s bid to form an alternative government in Goa, two of its MLAs resigned and joined the BJP—a development that comes as a boost to the saffron party and deprives the Congress of its single largest party status in the assembly.

With the resignation of the two Congress MLAs, Dayanand Sopte and Subhash Shirodkar, the Congress’s strength in the 40-member assembly has been reduced to 14, bringing it on a par with that of the BJP.

The MLAs said the Congress could not settle its leadership issues.

With the resignation of Sopte and Shirodkar, the House strength is reduced to 38.

While BJP has 14 MLAs, its alliance partners — Maharashtrawadi Gomantak Party and Goa Forward Party  — have three each, with three independents also supporting the government.

The inductions are a relief for BJP, dispelling speculation that the government has become unstable in the wake of CM Manohar Parrikar’s long illness and frequent hospitalisation in Mumbai, Delhi and US.

The leaders are seen to be influential, with Sopte having defeated incumbent CM Laxmikant Parsekar in the assembly polls. Shirodkar and Sopte joined BJP in the presence of Union ministers Piyush Goyal and Shripad Naik, state party president Vinay Tendulkar and health minister Vishwajit Rane in Delhi.

Rane, who played a key role in winning over the MLAs, is also a top contender to succeed Parrikar if a decision on his replacement needs to be taken. The inductions will shore up BJP ranks that had been hurt in the last state polls by differences with a section of the RSS with Sangh organiser Subhash Velingkar floating a new party. The two MLAs joined BJP in Delhi after a meeting with party president Amit Shah. They faxed their resignation letters to Speaker Pramod Sawant, who after confirming with them over telephone, accepted the letters.

Top BJP sources said the exodus from Congress may continue with two more MLAs waiting in the line to quit and join the party. It was ‘ghar wapasi’ for Sopte while Shirodkar, a former president of the Congress state unit, had left after he felt isolated and without political options.

Though Congress had staked claim to form the government as the single largest party, sources said the state unit was not interested and was waiting for the disgruntled coalition partners to quit the alliance. The Congress thinking was it would benefit the most, considering that the groundswell was against the BJP.


Exports dip 2%: September 2018

India’s exports declined over 2% in September, despite a steep depreciation of the rupee, but the government dismissed it as a blip and blamed high base for the first fall in value of shipments in five months.

A late evening statement showed a decline across sectors — from gems and jewellery (down 22%) to readymade garments ( down 33.6%). On the other hand, gainers included oil products (27%) due to higher global prices, along with plastics & linoleum (28%), and chemicals (17%).

Typically, exports become more attractive due to a weakening currency. The rupee has depreciated over 15% since January, making it the worst performing Asian currency so far this year. But, exporters said they have gained little so far since the orders were booked before rupee’s free fall began. Besides, buyers are now demanding lower prices citing a weaker rupee.

In September 2018, exports were estimated at close to $28 billion, compared to $28.6 billion a year ago. Imports, however, rose 10.4% to $42 billion, resulting in a trade deficit of nearly $14 billion. Oil imports surged 34% to $11 billion, while gold shipments were 51% higher at nearly $3 billion, mounting pressure on trade deficit.


Superstars of FDI

WPI inflation rises to 5.13% in September

After easing in the month of August, the WPI inflation surged to 5.13 percent against 4.53 percent in the previous month of FY19. The inflation in food climbed to 0.14 percent as against a negative 2.25 percent in August 2018. The wholesale inflation in the month of July was 5.09 percent. The deflation in vegetables was 3.83 percent in September as against 20.18 percent in the previous month. Inflation in ‘fuel and power’ basket in September was 16.65 percent. Individually, in petrol and diesel it was 17.21 percent and 22.18 percent, respectively, and for LPG it was 33.51 percent.

In the month of September, the core inflation stood at 4.90 percent, compared to 4.80 percent in August 2018. The inflation in the non-food articles stood at 4.17 percent in September 2018 as against 3.48 percent in the last month.

Meanwhile, the September CPI Inflation rose, albeit moderately, to 3.77 percent from 3.69 percent in the previous month.

In its fourth monetary policy review, the RBI maintained status quo on the rates but issued warning that surging oil prices, and weak global financial conditions pose substantial risks to the growth and inflation. For October to March period, the RBI had estimated CPI-based retail inflation to be between 3.9-4.5 percent.

Excluding the HRA impact, retail inflation is estimated at 3.7 per cent in Q2 FY19, 3.8 – 4.5 percent in H2 and 4.8 per cent in Q1 FY20. The central bank has retained the GDP growth projection for FY19 at 7.4 percent as 7.4 percent in Q2 FY19 and 7.1-7.3 per cent in H2FY19.


India’s biggest Zika outbreak

Fifty cases of zika virus have been confirmed in Jaipur in India’s biggest outbreak of the disease to date, and epidemiologists say it’s critical to contain mosquito breeding over the next week to ensure the infection doesn’t spread to create new epicentres. There have been no deaths.

Since the incubation period of the virus is one week, more cases are expected over the next seven days before the results of the containment measures — which now include quarantining all the students living in Rajput Hostel in neighbouring Sindhi Camp after three students tested positive — rolled out over the past week show results.

Eleven pregnant women are among those infected with zika virus, which puts their unborn children at risk of microcephaly, a birth defect in which the baby’s head is smaller than normal because of abnormal brain development.

The first person to test positive on September 21 was an 85-year-old woman with no travel history from the densely populated Shastri Nagar neighbourhood.

The health ministry has not established the epidemiology, but suspect the outbreak was started by an infected tourist.

“Apart from vector (mosquito) control measures, India needs to improve surveillance for symptoms, not just at airports but also bus terminals and other ports to ensure the outbreak remains localised and is quickly contained,” said Dileep Mavalankar, director, Indian Institute of Public Health, Gandhinagar.

“The number of cases is expected to increase for another week, but there has been no exponential increase in cases, like it happened in Brazil in 2015. Containment efforts over the next week will determine how the outbreak shapes up,” said a health ministry official, who was a member of the expert team tracking containment measures. The biggest challenge now is containing the outbreak in Rajput Hostel, which is infested with aedes aegypti mosquitoes that spread zika, dengue and chikungunya. “The average lifetime flying distance of aedes aegypti mosquitoes is 400-500 metres, so if a zero aedes zone is created using larvael control and fogging, the outbreak can be contained,” he said. “There is a busy bus terminus and several hotels near the hostel, which creates the risk of an infected person travelling out to create new epicentres,” he said.

Zika has been reported in 86 countries, with the biggest outbreak occurring in Brazil in 2015. It was first reported in India in Gujarat in February, 2017, when three people tested positive in Ahmedabad, which was followed by one case in Krishnagiri district in Tamil Nadu in July of the same year. The symptoms include high fever, rash, joint and muscle pain, headache and conjunctivitis (red, itchy eyes), but 80% of the infected persons have mild or no symptoms. It has not caused severe disease or death, with pregnant women being the most at risk.

Zika outbreaks in India

Jan-Feb 2017: 3 cases in Ahmedabad, Gujarat

July 2017: Krishnagiri, Tamil Nadu

Sept-Oct, 2018: 50 cases in Jaipur, Rajasthan

Thousands protest Sabarimala order

With three days left for the Sabarimala temple to open for monthly poojas, thousands of Ayyappa devotees took to the streets in Kochi against the Supreme Court verdict allowing women of all age groups into Sabarimala temple, even as activist Trupti Desai announced plans to visit the hill shrine soon.

The Communist Party of India (Marxist)-led Left Democratic Front (LDF) government, which decided to implement the Supreme Court ruling, held a meeting to evaluate preparations carried out for pilgrims arriving at the temple which will open for monthly poojas on Wednesday.

Although the government has not reacted to Desai’s planned trip to the temple, it has evoked sharp reactions from devotees and the Bharatiya Janata Party, which is campaigning against the entry of women into the shrine.

Holding placards bearing pictures of Lord Ayyappa and chanting hymns, protesters marched through the busy roads of Kochi, the state’s commercial hub, after launching the stir from a Shiva temple there. The faithful, a large number of them women, urged the Central and state governments to intervene in the matter to protect the sanctity of the centuries-old rituals and traditions of the shrine.

Uniform driving licences across India from 2019

From next July, new driving licences and vehicle registration certificates issued by all states and Union Territories will be uniform in look, colour, design and will have the same security features.

The ‘smart’ DLs and RCs embedded with microchips will have QR codes. They will also be enabled with near-field communication, like Metro Rail and ATM cards, so that traffic enforcers with hand -held devices can easily access details stored in the cards.

The new DL will have details of a driver’s declaration to donate organs and mention if he/she is driving a specially designed vehicle meant for the physically challenged. “The emission norm for a vehicle will be specified on the RC for objective pollution under control test. Currently, the tester asks the owner about the details,” a road transport ministry official said.

Cards to give direct access to central database

About 32,000 DLs are either issued or renewed across the country daily and nearly 43,000 vehicles are registered or re-registered. So, when anyone goes for renewal or re-registration, the transport authorities will issue the new DLs and RCs so the old ones will get replaced gradually.

An official of the road transport ministry, which has already started the process, said the enforcement personnel will have multiple options, from keying in the DL or RC numbers in their hand held device to inserting the smart card in the device or read the QR code to get access to all details of a driver. The NFC feature will help quick detection of the card details as soon as the DL or RC smart card is touched or placed close to the device.

“It will directly give access to the URL having details of the particular vehicle or driver including past records as stored in the central data base of Vahan (for vehicles) and Sarthi (drivers)," said another transport ministry official.

The cost of all the features won’t be more than Rs.15-20 per DL or RC and hence the states can easily get this done within the given timeframe.

Shivaji Memorial gets tweaked

The size of the manmade isle for the mid-sea Shivaji memorial has been reduced by 35% by the government while renegotiating the cost of the project with the lowest bidder. This means the memorial will be able to accommodate only up to 3,000 people per hour, and not 6,500 as estimated earlier, bringing down the estimated daily footfall to 10,000 from 25,000.

Similarly, the height of the seawall has also been reduced and the concrete block portion that was to form the base of the seawall has been replaced by a rock bund.

Besides the amphitheatre, entire facade lighting, baggage scanner and automatic fare collection system have deleted from the scope of the lowest bidder. Even installation of a standby transformer has been deferred. Deferring furniture and external landscape for later procurement will lead to cost escalation in future.

Massive modifications have also been planned for the Shivaji statue, pegged to be world’s tallest when it is unveiled in three years. The height of the sword has been increased and that of the actual statue reduced. With the reduction in volume of the statue, the quantity of metal needed for it will also go down. The lowest bidder, L&T, had Rs.976 crore for the civil works and and structure of the statue, which has gone down to Rs.638 crore after negotiations.

As per the original plan, there was supposed to be a 120 bedded staff accommodation on the site, which has been downsized to a facility for 30 people

Besides, the downsizing of the project also violates the government guidelines for tenders. According to central vigilance commission’s guidelines, government can renegotiate the price of a project after the bidding process, but cannot reduce the scope of work .

Many of the elements that were not important have been deferred for the ‘Phase-II’ of the project. The statue is the centre of the project and no changes have been made to that. Everything else has been tweaked to save money.


Passenger Vehicle Sales Skid 5.6% in September

Passenger vehicle sales in India fell for the third consecutive month in September, in part due to a high base and also because of the combined impact of increased fuel prices, interest rates and insurance cost that kept buyers away. Automakers dispatched 292,658 units of cars, utility vehicles and vans in the past month, a 5.61% fall from a year earlier. For the quarter through September, sales declined 3.6%.

In two-wheelers, sales continued to grow, albeit at a low single digit due to disruptions like the floods in Kerala and the West Bengal government’s decision to make driver's licence mandatory for buying two-wheelers. In September, sales rose 4.12% to 2,126,484 units. Industry executive also cited a steep increase in insurance cost — buyers now have to take multi-year third-party insurance cover — for the subdued demand.

Although rural demand for motorcycles grew, scooters posted flat sales in the July-September quarter. Commercial vehicles, however, continued to buck the trend in other vehicle segments, registering strong double-digit growth on the back of robust infrastructure investments. Dispatches of trucks and buses rose 24.14% in September to 95,867 units. Three-wheelers also maintained double-digit growth at 11.65% in September, with sales of 69,066 units.

Cumulative vehicle sales in the first half of the ongoing fiscal year rose 6.88% to 1,744,305 units, slower than the more than 9% growth reported in the April-September period last year. Automakers report dispatches from factories as sales, not the actual sales at dealerships.

The ratings firm is cautiously optimistic as the festive season usually sees pent-up demand. The impact on passenger vehicle sales was not only limited to the domestic market, as automakers in India also reported a fall in exports in the second quarter.

Industrial growth slows

Industrial output growth slowed to a three month low in August as the mining sector contracted and manufacturing remained sluggish, while retail inflation inched up marginally in September, prompting economists to say that the RBI may hold interest rates when it reviews monetary policy in December.

The index of industrial production rose an annual 4.3% in August, slower than previous month’s 6.5% and 4.8% posted in the same month last year. The capital goods sector, a barometer of industrial activity, rose 5% in August as against 7.3% in the same month last year.

Retail inflation rose an annual 3.8%, marginally higher than previous month’s 3.7% growth. This is the second successive month when retail inflation has remained below the central bank’s inflation target. RBI, which was widely expected to raise rates in its October review, did not do so but pointed to the risks for the inflation outlook in months ahead.


Odisha braces for Cyclone Titli

With cyclonic storm ‘Titli’ moving towards Odisha-Andhra Pradesh coast, the Odisha government geared up to face the situation setting a target of “zero casualty”.

The state has put the districts on high alert and asked the authorities to evacuate those living in low-lying areas and in ‘kutchha’ houses along the coast.

During previous cyclones such as Phailin in 2013 and Hudhud in 2014, the government had ensured zero casualty and earned laurels from the United Nations for successful disaster management. The IMD has forecast wind speed to be 100 to 110 kmph with gusting to 125 kmph. The MeT office has also mentioned that the cyclone Titli will further intensify into a severe cyclonic storm.

The cyclone over west-central Bay of Bengal moved west-north westwards at a speed of 10 kmph during the past six hours.


IMF Retains India FY19 Growth Outlook

The International Monetary Fund has retained its India growth forecast for the current year and marginally pared it for next fiscal, citing the drag from higher crude prices and tightening of the global financial situation. But it will remain the fastest-growing major economy, well ahead of China, it said.

In its latest World Economic Outlook, the IMF said India will grow 7.3% in FY19 and 7.4% in FY20.

It had in January forecast FY20 growth at 7.5%. China is forecast to grow 6.6% and 6.2% in 2018 and 2019, respectively. The Indian economy grew 6.7% in FY18.

The forecast for investment growth in FY19 is weaker than in April, despite higher capital spending.

India’s medium-term growth prospects remain strong at 7.75%, benefiting from ongoing structural reform and a favourable demographic dividend, the report said. The economic recovery is supported by domestic demand-led pickup.

In its monetary policy review on Friday, the RBI had retained its FY19 growth forecast at 7.4%.

The IMF expects the current account deficit to worsen to 3% of GDP in the current fiscal year before improving to 2.5% in FY20.

Inflation is projected at 4.7% in FY19 compared with 3.6% in FY18 amid accelerating demand and rising fuel prices. Core inflation, excluding all food and energy items, has risen to about 6% as a result of a narrowing output gap and pass-through effects from higher energy prices and exchange rate depreciation, the IMF said.

It has called for an increase in policy rates by 25–50 basis points given the outlook on inflation. RBI kept the repo rate unchanged at 6.5% in its monetary policy review last week. A basis point is 0.01 percentage point.

In view of the rupee’s depreciation, the IMF has said foreign exchange interventions should be limited to addressing disorderly market conditions while protecting reserve buffers. The rupee has weakened about 13% since the start of 2018.

It recognised important reforms such as GST, the inflation-targeting monetary policy framework, the Insolvency and Bankruptcy Code, and steps to liberalise foreign investment and make it easier to do business. It called for a renewed impetus for reforming labour and land markets, along with further improvements to the business climate.

At the global level, data show weakening in trade, manufacturing, and investment, the IMF said. “Overall, world economic growth is still solid compared with earlier this decade, but it appears to have plateaued,” it said. Global growth is seen 0.2 percentage points lower than the previous forecast in both the years to 3.7% each, same as that in 2017.

China’s growth is seen lower in 2019 because of the latest round of US tariffs on Chinese imports.

Other risks facing the global economy include the possible failure of Brexit negotiations and tightening financial conditions for emerging market and developing economies.


Five States To Go To Polls

The Election Commission announced the assembly election schedule for five states, three of them BJP-ruled, sounding the bugle for the medley of BJP versus Congress contests that would set the tone for the 2019 Lok Sabha polls when an array of opposition parties plan to challenge and oust the Modi-led BJP government.

Elections in Madhya Pradesh, Rajasthan, Chhattisgarh, Telangana and Mizoram will be held between November 12 and December 7. Counting in all the states will be held on December 11.

Chief election commissioner O P Rawat said Chhattisgarh would have two-phase polling on November 12, covering 18 assembly constituencies affected by left-wing extremism, and November 20 (for the remaining 72 seats). Mizoram, Telangana, Madhya Pradesh and Rajasthan will have a single-day poll. While polling in Mizoram and Madhya Pradesh will be held together on November 28, Rajasthan and Telangana will be the last to vote on December 7.

Rawat, flanked by election commissioners Sunil Arora and Ashok Lavasa, also announced bypolls on November 3 to three LS seats—Shimoga, Bellary (ST) and Mandya— as well as two assembly seats of Ramanagaram and Jamkhandi in Karnataka.

The highly anticipated announcement ended the wait among the political class and rang in the model code of conduct during which the political rivals would be pretty much be on an even keel in terms of the advantage of being in power.

But it is who comes to power on December 11 in the five states which would not only determine the fate of those provinces but in many ways the mood that would reign in the general elections.

However, for all the significance attached to them, the victories in end-year elections over 15 years have had a mixed impact on national polls that follow in six months.


RBI Springs a Surprise

The Reserve Bank of India surprised the market by keeping the policy rate unchanged as it lowered inflation forecasts, despite a surge in crude oil prices and the financial markets in panic mode. But it shut the door on any rate reductions in the months ahead by shifting its stance to ‘calibrated tightening’ from ‘neutral’.

It ruled out any special measures to arrest the slide of the rupee, which has plunged to historic lows along with other emerging markets currencies, and reiterated that any intervention would be to avoid excessive volatility rather than targeting a specific level.

While promising sufficient liquidity in the financial markets, the central bank was critical of the asset-liability mismatch at non-banking finance companies and suggested that they raise more equity and long-term funds rather than focusing on profitability with short-term funds that create instability. That follows the turmoil sparked by Infrastructure Leasing & Financial Services defaulting on payments.

Having raised the repo rate, at which the Reserve Bank lends to banks, at the two previous reviews, the central bank left the benchmark unchanged at 6.5%. All other rates were also left undisturbed. The six-member monetary policy committee voted for the status quo on rates and to change the stance by 5-1.

The monetary policy did little to calm market jitters. The benchmark Sensex tumbled 2.25% to 34376.99 points, the rupee lost 0.26% to a new closing low of 73.77 and bonds rallied, with yields falling 13 basis points. Bond prices and yields move in opposite directions. One basis point is one-hundredth of a percentage point.

While the market has been worried about a possible spike in inflation due to the sliding currency and a surge in crude oil prices, the central bank believes benign food prices will help the overall reading to be lower. It cut the inflation projection to 3.9-4.5% for the second half of FY19 and to 4.8% for first quarter of FY20. In its previous forecast, it had said inflation would be 4.8% in the second half of this fiscal and 5% in first quarter of the next fiscal year.

But it admitted to upside risks to its forecasts given the uncertainty over crude prices.

The Reserve Bank of India is mandated to keep retail inflation at 4% with a band of two percentage points on either side. The change in stance means that a rate cut is no longer on the table — RBI can either raise rates or keep them unchanged.

Retail inflation cooled to an 11-month low of 3.69% in August, mainly due to a fall in the prices of food items, including fruit and vegetables.

The rupee has slipped about 5% since the last monetary policy while oil prices have risen 10%, swelling the current account deficit from 2.4% in the June quarter to a projected 2.8% in three months ending March 2019. The financing of deficits will be a challenge with dollars exiting the country.

Foreign portfolio investors have sold securities worth a net ₹61,497 crore this year, according to data from the National Securities Depository. They had invested in excess of ₹2 lakh crore in 2017.

While many emerging markets such as Indonesia and Turkey have raised rates sharply, India has been an outlier as it is believed to be letting the currency depreciate since it has been relatively overvalued in the past two years, stifling exports.

Pami Dua, Ravindra Dholakia, Michael Patra, Viral Acharya and Patel voted in favour of keeping the policy rate unchanged. Chetan Ghate voted for an increase by 25 basis points. Dua, Ghate, Patra, Acharya and Patel voted to move to calibrated tightening, while Dholakia wanted to stick with the neutral stance.

The next MPC meeting is scheduled for December 3-5. The minutes of the October meeting will be published by October 19.

The Russian Triumf system

If fighters like Rafale are meant to take the war to the enemy, the S-400 batteries are designed to prevent the enemy from bringing it to your shores by erecting a defensive shield that can detect, track and destroy hostile strategic bombers, jets, spy planes, missiles and drones at a range of 380 km. India’s move to ink the $5.43 billion (Rs.40,000 crore) deal for five advanced S-400 Triumf surface-to-air missile squadrons from Russia, despite the looming threat of US sanctions, underlines its resolve to bolster air defence coverage along the unresolved borders with China and Pakistan.

The resolve became stronger after China began inducting six S-400 batteries in January under a $3 billion deal inked with Russia in 2014. The US last month imposed financial sanctions on China for its S-400 deal but India is hopeful of getting a waiver from the Trump administration.

India will pay 15% (Rs.6,000 crore) to Russia as the first instalment, with the rest being linked to deliveries. IAF is slated to get the first S-400 missile squadron in 24 months, with its associated battle-management system of command posts and launchers, long-range acquisition and engagement radars, and all-terrain transporter-erector-launcher vehicles. All five squadrons, with two firing units each, will come in 54 months.

The S-400s, with their huge ‘area denial capabilities’, are as much of a game-changer as the Rs.59,000-crore procurement of 36 Rafale fighters from France, which has run into a political dogfight between the BJP and Congress.

If deployed near the border with Pakistan, an S-400 battery can shoot down a hostile F-16 fighter or cruise missile much before it comes near Indian airspace during hostilities.

Russia contends the S-400, designated the ‘SA-21 Growler’ by NATO, can even “radar lock and shoot down” 5th-Gen stealth fighters like American F-35 jets. It’s no wonder the US is against proliferation of the S-400s, and has tasked its latest F-22A ‘Raptors’ and other top-notch weapons with defeating the Russian system in case of a conflict.

It was in October 2015 that India had kicked off plans to acquire the S-400 missile system, and that the Cabinet Committee on Security on September 26 had cleared the deal for inking. The S-400 contract is among the largest-ever defence deals inked with Russia. The other big deals include the ones for 272 Sukhoi-30MKI fighters (over $12 billion) and INS Vikramaditya ($2.33 billion for the aircraft carrier and another $2 billion for 45 MiG-29Ks to operate from its deck).

Konkan Alphonso, king of mangoes, gets GI tag

The Alphonso mango from Ratnagiri, Sindhudurg and adjoining areas of Konkan region in Maharashtra has finally got the Geographical Indication tag — an exclusive label used for products that have a specific geographical origin and possess qualities or reputation that are due to that origin.

Called the king of mangoes, Alphonso—it is also known as Hapus in Maharashtra—is prized in the domestic and international markets for its taste, fragrance and vibrant colour. It has long been one of the world’s most popular fruits and is exported to various countries including Japan, Korea and Europe.

The first product to get a GI tag in India was Darjeeling tea in 2004. There are 325 products from India that carry this indication. Mahabaleshwar strawberry, blue pottery of Jaipur, Banarasi sarees, rosogolla of West Bengal, Madhubani paintings of Bihar, Mysore silk of Karnataka and Tirupati laddus are some products with GI tag.

There was a long drawn fight between organisations from Sindhudurg and Ratnagiri seeking separate GI tags for mangoes from their region, but in April, they decided to bury their differences and put up a joint application after the registry of GI, Mumbai, rejected individual applications filed by four producers of Alphonso mangoes in Konkan to patent their produce as Hapus. The petitioners were Dapoli university, Kokan Hapus Udpadak Sangh, Ratnagiri Hapus Udpadak Sangh, and Devgargh Hapus Udpadak Sangh.

After hearing the applications, the controller of patent, design, and trademark, Om Prakash Gupta, suggested that instead of GI tagging separate names, all mangoes from Konkan will get the ‘Hapus’ tag after the applicants submit a fresh application.


India @ 100

The Union government will shortly unveil a development plan to make India the world’s third largest economy after the US and China by 2047, when the country celebrates its 100th year of Independence. “We are coming out with a new strategy document, ‘New India at 75’. It starts off by saying that India must aim for and can become the third-largest economy by 2047 and then we go on to break it down to steps to achieve this goal,” Rajiv Kumar, vice chairman of federal policy think tank Niti Aayog.

Although the goal is set for 2047, Kumar said the government will strive to reach the landmark much ahead of the timeline.

Efforts have been underway since the 12th five year plan ended in 2017 to have a comprehensive development plan in which states will play a dominant role.

The blueprint will suggest ways to attain less carbon-intensive and more technology-driven growth, while also narrowing income inequality. The plan will come ahead of the national polls early next year and showcase Prime Minister Narendra Modi’s idea of laying the foundation for a new India.

India overtook France to become the world’s sixth-largest economy in 2017, according to the World Bank’s updated figures published in July. India is now a $2.597 trillion economy, just above France’s $2.582 trillion. Japan, Germany and the UK occupy the third, fourth and fifth places. India’s economy is expected to overtake UK’s next year.

However, due to its large population, India lags developed economies in terms of per-capita income. The country’s per-capita GDP is a fraction of that of France, which is still roughly 20 times higher, according to the World Bank.

State governments and central ministries have given detailed suggestions for the new plan, which will set out targets and reform measures for various governments.

Kumar said the goals, as well as the measures, reforms and policies, needed to achieve the target will be spelt out in the document.

He said the average fertility rate in several states is either less than or equal to the replacement rate of 2.1 (children per woman) and, therefore, is not a big worry. “The issue of population growth is not an all-India issue, it is confined to a few large states, which require a focus on this issue.”

According to Kumar, with digital connectivity improving, gram panchayats getting optical fibre network and the implementation of Ayushman Bharat health insurance scheme for 100 million families, there will be less incentives for migration from rural areas to urban centres. “This means the people living in rural areas will be completely connected to urban centres and they can contribute from there. This may result in less migration than in the past.”

Services PMI drops to 50.9: September 2018

India’s services activity slowed to a four-month low in September due to weak demand and stagnant new work. The Nikkei/IHS Markit Services Purchasing Managers’ Index dropped to 50.9 in September from 51.5 in August.

A reading of over 50 in this survey-based index marks expansion.

Despite a slight improvement in the manufacturing sector, where output growth strengthened, the composite PMI for manufacturing and services fell to a four-month low of 51.6 in September. In September, the reading was 51.9.

Companies reported that market conditions were underwhelming amid a lack of demand at a time of generally higher prices. Average output price inflation was the strongest recorded since April and marked a twentieth successive monthly increase in prices charged.

The services activity index is based on a survey conducted among purchasing executives of more than 400 services providers divided into five categories: consumer services, transport & storage, information & communication, financial & insurance, and real estate & business services. Underlying growth in activity and new work remained strongest in information & communication. In contrast, there were falls seen in the finance & insurance and business services categories. Business services continued to record the weakest trends in new work.

Confidence among service providers about the year ahead remained inside positive territory. Around 22% of the survey panel signaled expectations for activity growth, with market demand forecast to strengthen.

Marketing and the offering of high quality services are also expected to bolster activity.

Centre cuts fuel prices

The Centre announced a reduction in petrol and diesel prices by Rs 2.50 a litre and nudged states to match the cut through a reduction in VAT to bring much-needed relief to citizens reeling under the burden of runaway fuel rates.

BJP-ruled states, including Uttar Pradesh, Gujarat and Haryana, apart from poll-bound MP and Chhattisgarh, responded, which will result in a reduction of the price of auto fuel in at least 11 states by Rs.5 a litre. Maharashtra announced a Rs.3.2 cut in petrol price, but a decision on diesel is pending. The decisions will give Mumbai’s petrol consumers a total relief of Rs.5.70 per litre mainly due to a reduction in value added tax and state surcharge. The new rates will be effective from Friday.

While Bihar, Odisha and Punjab will take a decision soon, opposition-ruled Delhi and West Bengal demanded a reduction of Rs.10 a litre. States such as Kerala and Karnataka opted to ignore the Centre’s request for lowering VAT, at least for the time being.

After holding out for nearly three months, the government decided to lower central excise on petrol and diesel by Rs.1.50 a litre and also instructed state-run oil marketing companies to pare retail prices by Re.1 a litre. Finance minister Arun Jaitley, who announced the cut, said the move was necessitated by an increase in Brent crude oil to a four-year high of $86 a barrel on Wednesday, and seven-year-high interest rates in the US.

The price cut followed consultations with PM Narendra Modi and oil minister Dharmendra Pradhan.

The duty reduction will leave a Rs.10,500-crore hole in the Centre’s kitty during the current financial year with IndianOil, Bharat Petroleum and Hindustan Petroleum too bearing the brunt. The stock market responded adversely to the price cut with shares of the retailers crashing over 10%.

Jaitley said the impact on revenue would not hit the Centre’s fiscal deficit target for the current year, which is budgeted at 3.3% of GDP. “Now all states will be on test... Will have to see states where leaders were indulging in lip sympathy and tweeting, what would these states do,” he said, adding that states had benefited more from the rise in global crude prices. So far, the government had been reluctant to reduce duties citing adverse impact on public finances which, it feared, would also add to market uncertainty and stress the rupee.


Indore, Bhopal metro rail projects approved by Modi-led Cabinet

The Cabinet, chaired by the Prime Minister Narendra Modi, has approved two big metro projects in a bid to improve the metro rail connectivity in two prominent cities of Madhya Pradesh – Bhopal and Indore. For the implementation of the metro projects in both these cities, an SPV namely Madhya Pradesh Metro Rail Co Ltd. has been constituted. A press release stated that the tenders for first civil work package have been invited already and work on the metro projects will start soon.

For Indore city, the Cabinet has approved the implementation 31.55 km long Ring line from Bengali Square – Vijay Nagar – Bhawarsala – Airport – Patasia – Bengali Square. The Ring line is likely to connect major public nodes and city cluster areas of Indore. The Ring line, which will cover 30 stations, is being developed at a cost of Rs.7500.80 crore. The Indore Metro Rail Project is also likely to be completed in four years.

After the completion of the Indore Metro Rail Project, population of 30 lakh of the city will be benefited as it will provide connectivity to all the densely populated areas of the city with the new developing areas along with railway station, airport and ABD under the Smart City project. Also, the metro project will provide eco-friendly as well as sustainable public transport to residents, regular commuters, students, office workers visitors and travelers.

To improve the metro connectivity across the state capital, the Cabinet has approved the implementation of two corridors of total length 27.87 km including the stretch from Karond Circle to AIIMS of 14.99 km and the 12.88 km long stretch from Bhadbhada Square to RatnagiriTiraha. The Karond Circle to AIIMS corridor will cover 16 stations while Bhadbhada Square to RatnagiriTiraha corridor will cover 14 stations. For the development of the Bhopal Metro Rail Project, around Rs.6941.40 crore will be spent and it is likely to be completed in four years.

The government is hopeful that once the project is complete, the entire population of Bhopal will get the benefit from what it says will be an affordable, reliable, safe, secure and seamless transport system.

One of the interesting factors about these corridors is that they will be having multimodal integration with railway stations as well as BRTS stations and also they will have feeder network of bus services, intermediate public transport and non-motorised transport. The Cabinet informed that the metro projects will have non-fare box revenue from rental and advertisement as well as Value Capture Financing through mechanism of Transit Oriented Development and Transfer of Development Rights.

India's service activity slows in September

India's services sector expanded at a slower pace in September as higher fuel costs and stronger US dollar made imported goods expensive.

The seasonally-adjusted Nikkei India Services Business Activity Index touched 50.9 in September, down from 51.5 recorded in August.

This is also the lowest reading in the current four-month sequence of rising activity.

In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

Expectations remained in positive territory, whilst firms added to their staffing levels for 13th successive month as part of efforts to keep on top of workloads.

The service sector continued to expand during September, but at a marginal rate amid reports of underwhelming market demand. "Price pressures intensified, with higher fuel costs and a stronger US dollar raising the price of imported goods," it added.

IHS Markit complies the survey on a monthly basis.

Companies reported that market conditions were underwhelming amid a lack of demand at a time of generally higher prices.

Broad sector data showed that underlying growth in activity and new work remained strongest in information and communication sector.

In contrast, there were falls seen in the finance and insurance and business services categories.

Although manufacturers recorded a slightly stronger increase in employment, the rise was insufficient to prevent a slowdown in overall jobs growth, the report said.

Latest data showed the net rise in private sector employment was the slowest in over a year.