Coal India divestment

Life Insurance Corporation and other domestic institutions bailed out the government's biggest disinvestment offering by picking up a substantial chunk of Coal India's shares in the offer for sale (OFS) that concluded on Friday .
The insurer is believed to have invested more than Rs.10,000 crore, helping the new government's first major disinvestment offering sail past the finish line. Coal India's offer for sale was oversubscribed 1.06 times with major support from domestic insurers and mutual funds. The government received bids worth Rs.24,174 crore against an offer size of Rs.22,613 crore.
The success of the issue should help the government meet its disinvestment target and reduce market borrowings which otherwise would have been needed to plug a sharp shortfall in revenue.
The indicative price or weighted average price, according to the BSE website was Rs 358.49. Shares of Coal India declined 3.8% to end the day at Rs 360.85.The floor price of Rs 358 was a 5% discount to Thursday's closing price.The sale reduces the government's stake in Coal India to 79.65% from 89.65%.
Other domestic institutions led by GIC, chipped in by buying shares more than Rs.1,000 crore, bankers said. About Rs.11,360.13 crore worth of shares were purchased by insurers; retail investors bought Rs.1,852.55 crore; mutual funds purchased Rs 603.11 crore; foreign institutional investors and banks purchased Rs.8,485.65 crore of which FIIs alone, led by Capital International, bought Rs.6,000 crore worth of shares.
Domestic institutions have been sellers for the last 10 days, selling shares worth Rs 8800 crore mainly to invest in Coal India.
The government raised Rs.22,500 crore from Friday's issue, the biggest such receipt since the Atal Behari Vajpayee-led NDA started the disinvestment process in 1999-2003. LIC bought more than 40% of the shares that were on offer, bankers and fund managers said. Asset sales to plug revenue shortfall and meet development expenditure and spending on infrastructure have fallen short of target in the past few years due to lacklustre market, poor performance of companies.
The government could raise only Rs.15,820 crore in 2013-14 versus a target of Rs.40,000 crore. In 2012-3, disinvestment yielded Rs.23,957 crore against a target of Rs.30,000 crore.
This government has now raised about Rs.24,300 so far against the target of Rs.58,425 crore. In December, the government raised Rs.1,715 crore by selling shares of Sail, the government owned steel company .
A majority of domestic brokers recommended subscription to the offer citing inexpensive valuations and strong growth perspective following the change of government policies.
Coal India shares rallied last year on hopes of reforms and touched an alltime high of Rs.423.85 on June 11. However, the stock which rose just 5% since its listing in November 2010 grossly underperformed the broader market due to the overhang of Govt's share sale, disappointment on volume growth, Govt's directive to reduce E auction sales and inability to pass on the increase in costs. BSE Sensex gained 40% during this period.

A new base!

Fresh FY13 and FY14 data show recovery had started in the last year of UPA govt itself
India's economy expanded at a much quicker pace in 2013-14 than previously estimated, updated and revamped data with a new base showed, indicating that a recovery had started in the last year of UPA government and the country's growth could outpace China's this year itself. Gross domestic product grew 6.9% in 2013-14 and 5.1% in the year before that. The numbers aren't strictly comparable with the earlier data that showed the economy expanded 4.7% in fiscal 2014 and 4.5% in fiscal 2013.
The UPA had received much flak for the slow growth after years of nearly double-digit expansion.There will be greater pressure on the new government, which took over in May last year, to better the performance in the current fiscal year through March.
Apart from updating the base of national accounts to 2011-12 from 2004-05, the country has also shifted to compiling numbers at internationally accepted market prices as opposed to the previous factor-cost method, which considered cost of factors consumed for producing goods and services. In addition, coverage has become wider to include a bigger set of numbers from the corporate affairs ministry's database and more of the unorganised sectors.
In terms of the size, the economy remains the same at nearly Rs.113.5 lakh crore in fiscal 2014, which suggests some growth redistribution is behind the spurt in growth from earlier estimate. Based on the new formula, 2011-12 growth could be lower than the previously estimated 6.7%.
Former finance minister P Chidambaram said this should put to an end the “misconceived“ charge that the UPA government mismanaged the economy. “I sincerely hope that the government's leaders will stop repeating the jibe of sub-5% growth in the last two years,“ he said, offering to work with the government to take the country forward. “There is much work to be done.We are willing to help. It is up to the government to reach out to everyone, build consensus, and work toward achieving higher growth in the years to come,“ he added. There is something in the revision for the new government as well, as the new formula could push up growth for the current fiscal year to more than 7%. According to International Monetary Fund estimates, China's growth is expected to slow to 6.8% in 2015 from the estimated 7.4% in 2014. The IMF has recently predicted India's GDP growth to surpass that of China in 2016.
Based on earlier factor cost method, the revised numbers showed the economy grew 6.6% in FY14 and 4.9% in FY13, the last two years of the UPA government.
The revised numbers showed that investments picked up slightly in the last year of Manmohan Singh government with gross fixed capital formation rising 3% in fiscal 2014 from a 0.3% decline in the previous year. Consumer demand, as measured by the private final consumption expenditure, recovered to 6.2% from 5.5% over this period.
The shift in the conceptual framework for national accounts means that a number of indicators where GDP is used as reference point will change. Public expenditure, fiscal deficit and savings will be adjusted for a change in the GDP numbers, but the government said the revision is not material.
“It may be noted that the level of revision in the present base revision is not large enough to affect any of these ratios significantly,“ the statistics office said in a statement.
Gross savings have declined steadily from 33% of gross national disposable income in fiscal 2012 to 30% in fiscal 2014. The manufacturing sector performed much better than earlier estimated in 2013-14, showing growth of 5.3% against a 0.7% contraction estimated in the earlier series. The share of manufacturing in the overall economy went up to 17.3% in 2013-14 as per the new series as against 12.9% in the earlier.
This is essentially on account of the new corporate database that will supplement the information available in the annual survey of industries. The government is targeting to take up the manufacturing share to 25% by 2022, with the ‘Make in India’ campaign.
The services sector, excluding construction, which has enjoyed a share of close to 57% in the earlier series, is down to 51.3% in the 2011-12 series. The share of trade and repair services has fallen to 12% from 16.5%. Financial services have been widened to include accounts of stock brokers, stock exchanges, asset management companies, mutual funds, pension funds and regulatory bodies like the Securities and Exchange Board of India, Pension Fund Regulatory and Development Authority and Insurance Regulatory and Development Authority.
Mining and quarrying recorded growth of 5.4% in 2013-14 on the new series as against a 1.4% contraction recorded previously.
The statistics office has included a new asset classification – Intellectual property products, comprising research and development, mineral exploration, database and software, etc.

Mumbai Next

The Maharashtra state government will hold a transformation summit for the Mumbai Metropolitan Region (MMR) on February 6 to give weight to Mumbai's demands before the Union budget and get funds allocated. Industrialists and Bollywood biggies will be invited to it. The previous government's plans to turn Navi Mumbai, Wadala, Jogeshwari and Kalyan into financial hubs will be given a push. The government also plans to make a time-bound programme to clear project hurdles and make execution faster.
According to chief minister Devendra Fadnavis, investments and projects the government has planned for Mumbai has the potential to generate $50 billion in revenue for the state.
Fadnavis said that at the summit, titled `Mumbai Next', the government would come up with an execution plan instead of just discussing projects, so that matters can be placed before business heads for implementation.“Industrialists like Cyrus Mistry and Mukesh Ambani, and Bollywood biggies like Amitabh Bachchan and Aamir Khan will participate in the meet. Union finance minister Arun Jaitley and Union minister of state for finance Jayant Sinha will also be there,“ he said. “Representatives of the World Bank and the European Council and foreign business heads will also participate.“
Interestingly, most of the projects had been put in execution mode by the previous Congress-NCP government.They include Nhava-Sewri transharbour sea link, coastal road from Cuffe Parade to Marve, and Metro routes Dahisar-Charkop-Bandra Mankhurd, Colaba-Bandra-Airport-Seepz and Wadala-Ghatkopar-Kasarvadavali-Teen Hath Naka. Also part of the agenda will be the Navi Mumbai Airport-Influenced Notified Area (NAINA), which was framed in 2013, and growth centres on the lines of the BKC in Kalyan, Ulhasnagar, Bhiwandi, Ambernath, Vasai, Wadala, Kalwa and Oshiwara.

A Biz hub planned in Thane

Maharashtra Chief minister Devendra Fadnavis approved an ambitious plan to develop a sprawling plot of government land in suburban Thane on the lines of the Bandra Kurla Complex (BKC). “We had a prolonged discussion on development of 72 acres of land in Kalwa on the lines of BKC. In principle, we have accepted the proposal. I have asked the MMRDA, which will be the nodal agency for the project, to draft an action plan soon,“ Fadnavis said.
Earlier, Fadnavis held a meeting attended by public works (MSRDC) minister Eknath Shinde, BJP legislator Sanjay Kelkar and NCP's Jitendra Awhad who had approached the CM for development of the Kalwa land. Immediately after being sworn in as CM in October, Fadnavis had lamented the fact that Mumbai had only one BKC and said that he wished to see many such commercial complexes spring up across the Mumbai Metropolitan Region.
On Friday he said, “I am sure that once the plot is commercially developed, it will change the economic situation of the entire Thane region, that too in a time-bound period. I also propose to link it to the Metro line.“
The CM said he has asked MMRDA bureaucrats to ensure that it turns out to be one of the best commercial hubs, with open spaces and state-of-the-art facilities for industrial houses and entrepreneurs.
Awhad said since it will be a commercial venture, financial support from the state government will not be required.


Spectrum auction update

The Cabinet has fixed the starting price for 3G spectrum auctions at Rs.3,705 crore per MHz, which could net the government a minimum of Rs.17,555 crore. But operators warned that the high starting level could drive up voice and data tariffs.
Winners of the auction, which is slated to start on March 4, will have to make an upfront payment of 33% of the final bid amount to the government within 10 days of the close of the bandwidth sale. Rest can be paid after a moratorium of two years in 10 equal installments.
A 5 MHz block of 2100 MHz airwaves typically used for 3G services will be offered in all service areas except Jammu & Kashmir, Bihar, Himachal Pradesh, West Bengal and Punjab. Thus, a total of 85 MHz in 17 service areas is being put to auction, the government said. The Centre expects to generate .
Rs.5,793 crore from the 3G sale alone in this fiscal, as winners are expected to pay in installments, which can be used to bridge a part of the budget deficit.
However, the overall proceeds from auctions this fiscal will rise substantially, as including the 2G (800 MHz, 900 MHz and 1800 MHz) and 3G bands being put for sale, the Centre expects to generate a minimum of Rs.80,000 crore, a portion of which will come in by March-end.
The final price, which was 36% higher than the Rs.2,720 crore a unit recommended by the Telecom Regulatory Authority of India (Trai), left the industry disappointed.
Despite the prices, there is likely to be demand for the airwaves, which operators such as Bharti Airtel, Vodafone India and Idea Cellular need to support surging demand for their data services. No operator holds pan-India 3G spectrum, with Airtel, Reliance Communications and Aircel hold the most in 13 circles each. During the briefing, Prasad lashed out at the industry over claims that the government was creating artificial scarcity. The issue stemmed from the government’s decision to auction 5 MHz of the 3G spectrum, which the defence forces had agreed to vacate across 17 circles.
The telecom industry, backed by the telecom regulator, though was hoping that the government will auction 15 MHz more of 3G spectrum per circle across India, currently in possession of the defence forces but are being negotiated for by the telecom department.
The telecom regulator had recommended that the government should go ahead and auction these additional 15 MHz of airwaves, which the telecom department is yet to receive. Since there was an in-principle agreement between the defence and the telecom department to swap the latter’s 15 MHz of 3G airwaves in the 2100 MHz band with the former’s 15 MHz of airwaves in the 1900 MHz band, the regulator had said the actual allotments to the winners could have been made even a year later, as and when the actual swap occurred.
The cabinet ratified the price of 3G spectrum a day after the telecom department pushed the 2G and 3G spectrum auctions to March 4 from February 25.The government had previously fixed a reserve price of  Rs.3,646 crore pan-India per MHz of 800 MHz spectrum,Rs.3,980 crore per MHz of 900 MHz band (excluding Delhi, Mumbai, Kolkata, and J&K) and Rs.2,191 crore pan-India (excluding Maharashtra and West Bengal) per MHz of 1800 MHz frequency.

Smart cities

The Centre plans to take up 20-30 cities during the next financial year under its flagship scheme to develop them into smart cities. Sources said there would be some minimum pre-qualification for the cities to make it to the elite club.
To start with, the government is looking at creating a colony or commercial area as small as 50 acres within a city limit with smart features in five years that can be replicated in other parts. “Once people see a success story in their vicinity and there is a model, more such areas can be developed with people's participation,“ said an urban development ministry official.
As per the concept note, there will be three approaches -retrofitting, redevelopment and green-field development. Under the retrofitting scheme, a city can undertake an area of minimum 500 acres and can implement the scheme in three years. Under a redevelopment scheme, a 50 acre area can be taken as a model. Similarly , in the case of green-field development, the project area can be a vacant land spread over at least 250 acres and can be completed in 10 years.
Sources said while selecting cities, their performance in `Swachh Bharat' scheme and the initiatives taken for good governance -at least 50% tax collection and 60% assessment of properties to name a few -would be considered. Some of the other features that can prove as an advantage for any city are identifying business investment districts (BIDs) that can generate more employment, model bye-laws and the existence of a municipal cadre.
An urban development ministry official said a meeting of state government officials, including five municipal commissioners from each of them and other stakeholders, have been convened on Friday to sensitize them about innovative policy and financing tools required to make the initiative successful.
The government has set a target to develop 100 smart cities. Sources said the priorities of such cities would be to have clean air, move towards zero discharge of solid and liquid waste, make streets litter free, involve citizens in policy making and execution, generate jobs, expand the identified core economic activities, reduce and eliminate poverty and make basic services available to all especially the poor and disadvantaged.

Digital cash transfers

Digitization of low value cash transactions has begun with a bang in 2015. Latest initiatives announced include a deal between Kotak Bank and Airtel Mcommerce for a payments bank, Yes Bank partnering Citrus Pay for a payment gateway and HDFC Bank introducing Chillr — an application that will allow customers to send to their contacts’ smartphones amounts as low as Rs.1 instantly. The person-to-person transfer is a precursor to the next phase when the bank will market this app to merchants.
Kotak Bank has agreed to pick up a 19.9% stake in Airtel Mcommerce Services, which is seeking a payments bank licence. Airtel will be part of a 50-plus list seeking such a licence. Others on the list include large players in the payments space such as Paytm, Citrus Pay, ItzCash, Oxigen and Mobikwik, besides a host of microfinance, gold loan and other technology companies. The last date for submission of applications is February 2.
HDFC Bank’s Chillr seeks to overcome hurdles people face in mobile transfers, which include multiple security levels and the need to have the recipient’s bank details. In Chillr, once an account holder sends money to his contact, the recipient is prompted to download the app and enter his bank details (any bank). From then on, he can automatically receive funds from the HDFC Bank accountholder in one step.
Chillr comes after other digital transfer offerings by ICICI Bank and Kotak Mahindra Bank. All these solutions simplify transfers of funds by putting the onus of entering recipient bank details on the beneficiary . Chillr seeks to entrench this digital payment behaviour by ensuring that everyone has an app.

On Transfer Pricing cases

The tax department has asked its officers not to press ahead with transfer pricing cases similar to Vodafone, a signal which is expected to bring comfort to several multinational firms grappling with such tax demands.
The move comes a day after the government on Wednesday decided it will not appeal against a Bombay high court order in a Rs.3,200-crore tax case involving global telecom giant Vodafone to avoid “fruitless litigation”. Officers dealing with similar transfer pricing cases have been asked to adhere to the court ruling.
In a circular to field officers, the Central Board of Direct Taxes (CBDT) said: “…the Board has accepted the decision of the high court. It is directed that the ratio decidendi of the judgment must be adhered to by field officers in all cases where this issue is involved.” “Ratio decidendi” refers to the logic or rationale behind the judgment.
The case involving Vodafone India is a transfer pricing dispute, dating back to August 2008, and is different from the Rs.13,000 crore capital gains tax levy, which was to be paid by Hutch when it sold its stake to the British major. Several multinational firms such as Shell and Nokia have complained of getting unfair deal with the Dutch oil major winning the case in similar transfer pricing case in the Bombay HC.
Nokia has decided to shut shop after it had to keep the Indian plant, and its vendors such as Flextronics too is downing shutters due to what many term as “adversarial” tax regime.
The Modi administration has vowed to provide a non-adversarial tax regime and has asked the tax authorities to ensure that there is no harassment of taxpayers. The string of high-profile tax cases include the issue of retrospective taxation that scared investors and prompted them to go slow on their plans in the country. The Modi government is now seeking to attract foreign investment to boost growth and is keen to provide a “predictable and transparent tax regime.”

Pakistan opposes India's UNSC membership

Pakistan reiterated its opposition to India's permanent UN Security Council (UNSC) membership saying New Delhi remains “in violation of its resolutions on J&K and Kashmiri right to self-determination''. “How does a country with such record qualify to become a permanent member of the UNSC?“ asked foreign office spokeswoman Tasneem Aslam. She said a reformed UNSC should reflect interests of the wider UN members. “Pakistan, as a part of the Uniting for Consensus group, has always advocated an effective and feasible reform of the Security Council based on consensus among the UN members,“ she said.
Aslam's comments came days after US President Barack Obama supported India's permanent UNSC membership during his visit to New Delhi on Republic Day . The spokeswoman reiterated Islamabad's concerns over US-India nuclear deal, saying it will destabilize strategic balance between the two nuclear-armed neighbours. “The Indo-US defence deal would create strategic imbalance in South Asia,“ Aslam added.

Subhash Ghising dies

Subhash Ghising, the principal architect of violent hill politics in West Bengal that challenged the Left Front government’s might in the 1980s, died at 79 in a Delhi hospital. A former Gorkha Rifles soldier who later became a teacher, Ghising founded the Gorkha National Liberation Front (GNLF) in 1980.
He led the GNLF into a violent movement for carving a separate Gorkhaland state out of Bengal, resulting in frequent bloodbaths in the Hills between 1986 and 1988. The Gorkhaland movement posed the biggest challenge to the unquestioned authority of then Bengal CM Jyoti Basu. The statehood movement was tackled by the Left Front government using force. Although Basu succeeded in preventing Bengal’s division, the Left Front had to strike a hard bargain with Ghising to buy peace. The movement led to the ouster of Left Front from the Hills politics.
Ghising’s one-time aide Bimal Gurung set up the Gorkha Janmukti Morcha (GJM) in 2007. The very next year, Ghising was ousted from the Hills. GJM even prevented Ghising from bringing his wife’s body for cremation to the Hills.
After Ghising’s death, Gurung posted on Facebook, “The sad demise of Mr Subhash Ghising is a political loss to the Hill people. His contribution towards the development of the Hills will always be appreciated. I extend my heartfelt condolences to the bereaved family and pray that God give them the strength to bear the loss.”

Goregaon-Mulund link road snippets

A four-lane elevated road will pass through Aarey colony as part of the Goregaon-Mulund Link Road. The BMC, which took over the existing two-lane road from the state dairy development department, had earlier proposed to widen the road to four lanes. “We had planned an elevated road from outside Aarey . Since the department had given the road on the condition that trees should not be cut for widening, we have now decided to make it a completely elevated road even through Aarey ,'' said S V R Srinivas, additional municipal commissioner, in-charge of road projects.
The proposed elevated road will be 14.5 km long, connecting the Western Express Highway and the Eastern Express Highway . It is the last of the east-west links left to be developed. The Santa Cruz-Chembur Link Road, Jogeshwari-Vikhroli Link road, the Versova-Andheri-Ghatkopar metro are other links between the eastern and western parts of the city . The elevated section through Aarey will increase the cost of the road by another Rs.200 crore, taking the total cost to approximately Rs.1,300 crore.
The road will begin from the Western Express Highway and go over Saki-Vihar Road. Here, an elevated junction will be provided to avoid signals and motorists from JVLR and beyond can get on the elevated road at this point. The elevated road will then go to LBS Marg where it will split northwards to Mulund East and to the south towards the island city . From Mulund East, motorists will be able to access the Eastern Express Highway . At the Sonapur junction on LBS Marg, the BMC has planned a landing both on the left and right sides. The road will have six entry and exit points each. After every one km it will be widened for an evacuation area for vehicles that break down, or in case of accidents, to ensure speedy clearance of the road.
While Srinivas said the elevated road would ensure minimum number of trees will be cut, activists from the Save Aarey Movement pointed out that to accommodate the wide span of the elevated road, trees would inevitably be chopped.
“Around 1,500 trees are expected to be affected but these will be transplanted within Aarey colony. We have identified a few bald patches within Aarey where these can be transplanted. We shall plant even more trees if the Tree Authority wants us to do so on these bald patches,’’ Srinivas said.
Srinivas said the elevated road would reduce vehicular pollution as vehicles will be able to move fast without signals. Since it is an elevated road, there are only around 180 rehab components, both residential and commercial. Also very few underground utilities, mainly on LBS Marg, will need to be shifted, said Srinivas. The road will take a little over three years to complete. 

Sukhoi-BrahMos integration

The Indian Air Force (IAF) is moving towards an indigenous missile era that will allow India to order surgical strikes destroying targets about 300 km away . In a new feat, HAL has completed integration of BrahMos thermonuclear cruise missile with Sukhoi-30 MKI after over two years of work, modifying the Russian-made aircraft.
HAL director S Subrahmanyan, who led the project, said the first test flight of the modified Su-30 MKI with the BrahMos missile will be conducted in March. HAL chairman R K Tyagi confirmed crucial ground vibration test was completed late 2014.“The initial requirement is for two Su-30 MKIs with BrahMos. The first one will fly in March and we will take up the second one in line,“ Subrahmanyan said.
The project, first conceived in July-August 2012, seeks to integrate 216 air-version missiles with 42 Sukhoi fighters. A retired Air Marshal said: “All our fighters have origins in other countries (Mirage in France) and they come with certain configurations.While minor modifications have been carried out in the past, to be able to mount an indigenized cruise missile is definitely an achievement.“
He added that this will pave the way for the IAF to look at mini missiles and other crucial weapon systems being integrated. While the onus of integrating the missile with the aircraft was on BrahMos Aerospace, HAL was asked to complete certain crucial modifications that would allow the missile team to fulfill its responsibility . Asked for a conservative deadline for the integration of second Su-30 MKI, HAL sources said it would take about 13 months.
In the last 6-7 months several key assessment changes, including the stress analysis, modifying load bearing members (components) of the aircraft, dummy missile mounting etc. have been completed.Sources said Russia provided the team with technical consultancy , adding the modifications to the fuselage in order to accommodate the 9-metre-long missile, were among the most challenging tasks.

Shocker in Chennai

As a murder (group) of crows descended on a meat shop in Guduvanchery on Monday evening for a feast of leftovers, there was something else amid the heap -a dog's leg. From the meat shop, a long trail of blood led to a shanty nearby , where a mongrel sat motionless, whimpering in shock and pain.
“It took the butcher only one blow,“ a passerby said, “to sever the mongrel's left hind leg for no reason.“ The act appeared to have been carried out on a whim, with a butcher's clinical perfection and indifference.
The dog was standing near the meat shop at Guduvanchery junction when all of a sudden, the butcher came out, dragged it in and hacked its leg, said Raj Ganesh, an IT professional who witnessed the brutal act. “The mongrel whimpered in pain and somehow dragged itself away . The butcher calmly went inside and resumed his work,“ he said. Raj then informed volunteers of People for Cattle in India (PFCI). “Around 5 pm on Monday , I received a call saying a black mongrel was attacked. Our volunteers took the dog to the R A Puram veterinary hospital. It had lost a lot of blood. The doctors performed an immediate surgery to amputate its hind leg,“ said G Arun Prasanna of PFCI. He added that the butcher, Riyaz, threatened the volunteers with dire consequences when questioned.
On Tuesday , the Guduvanchery police registered an FIR under Sections 429 (mischief by killing or maiming an animal) and 506 (i) (criminal intimidation) along with sections of the Prevention of Cruelty Towards Animals Act, 1960. “There was no motive for the crime,“ said sub-inspector Dilli Babu, adding, “the accused is absconding and would be arrested shortly.“ “The mongrel is on intravenous fluids. Though it will survive, it has to fend for itself on its three legs from now on,“ said veterinarian Dr V Sujatha.
Violent acts towards animals have long been recognised as indicators of a dangerous psychopathology . “Communities must recognise that abuse of any living being is unacceptable,“ said Chaitanya Koduri of PFCI.

Smart Surat in the making

It won't be surprising if Surat emerges as India's first `Smart City', an integral element of one of the pet schemes of Prime Minister Narendra Modi. The reason -the implementation methodology for building 100 smart cities proposed by the Union urban development ministry last week has already been put in practice in Surat. The ministry has identified three key areas -retrofitting development of 500 acres (makeover of old city), redevelopment of existing urban sprawl and greenfield townships -as prerequisites for a Smart City.
Surat Municipal Corporation (SMC) is already working on two of the three parameters. “As far retrofitting is concerned, we have started work on giving the railway station a complete facelift. The Surat Diamond Bourse (SDB) fits in the redevelopment and greenfield township requirement,“ said municipal commissioner Milind Torwane.
SMC has also started water metering in specific areas of Varacha and Gopipu ra of old city, changing the water distribution network in Chowk Bazaar area and replacing the tube lights on Rajmarg with energy-efficient LED lights. “A major challenge is retrofitting the old city area of 500 acres. We are starting that with metering of all water connections in Varacha and will take up other old city areas one by one,“ said Jatin Shah, city engineer in SMC. “Moreover, the latest guidelines state that the model adopted for development is not a subsidy model but a public-private-partnership (PPP model. We are working on it from the beginning and not relying on government subsidy,“ he added.
This development will be completed in a span of three to five years with the help of initial funding of Rs.1,000 crore provided by the government. Major portion of the funds will be recoverable after five years' time.
The Surat Smart City project has already got a major fillip with software giant Microsoft giving help to create smart IT solutions for all public services, intelligent traffic management system and others.


NaMu airport snippets

Four companies have bid for constructing Navi Mumbai international airport. A developer (who bags the contract) is likely to start work by October. The development is seen a shot in the arm for the key infrastructure project, which has been in limbo for the last seven years.
The four companies and consortia, which are going to compete in the qualification round, include GMR Delhi, GVK-led Mumbai International Airport Ltd, Zurich Airport with Hiranandani Developers and MIA Infrastructure of France along with Tata Realty .
“In this round, the companies that are hoping to win the contract will be shortlisted for the final bid competition. The company , which will offer the highest revenue share to government in the project, will bag the deal,“ a source said. “Companies with a minimum net worth of Rs.2,375 crore and having the experience of developing projects amounting to Rs.9,500 crore will be eligible to bid for the international airport project, which is expected to be operational in phases from 2018-19,“ the source added.

Lean season discounts in the air

Airlines have dropped fares by up to 50% in a bid to fill up seats in the lean travel season that will last up to mid-April.
SpiceJet was the first off the block, offering five lakh seats at fares starting at Rs.1,499. The offer will be for bookings until Friday for travel between February 15 and June 30. Jet Airways was quick to join the bandwagon, offering all-inclusive return tickets from Rs.4,459. Under the scheme, valid till March 31, Jet is offering Goa-Mumbai-Goa tickets for Rs.4,459. Carriers, including SpiceJet, IndiGo and Jet Airways, have slashed their fares in a bid to lure flyers. The return fares on Jet Airways for Pune-Hyderabad, Kochi-Chennai, Nagpur-Mumbai and Delhi-Leh are Rs.5,019, Rs.5,901, Rs.6,143 and Rs.6,826, respectively.
IndiGo, India's largest airline in terms of domestic passenger carriage, has brought down its 90-day advance fares. All-inclusive fares from Delhi to Mumbai now cost Rs.3,002, while a Delhi-Goa flight ticket will come for Rs.4,694. Trips to Kolkata, Chennai and Goa now come at Rs.3,002, Rs.3,861, Rs.4,693 and Rs.4,694, respectively . Other airlines may follow suit.
While airlines are slashing fares now, flying costs may remain prohibitive for passengers in the peak travel months of April-June and October to mid-January . The aviation ministry has junked its recent proposal to cap maximum domestic economy fares at Rs.20,000. An internal aviation ministry note circulated last month had proposed the cap after airlines had hiked fares substantially , following SpiceJet's move to cut capacity from mid-November.
Airline industry sources say for once these low fares may not be suicidal. Airlines had cut fares to fill planes in last month too. Air India had cut fares by 50% for a limited time last month and may do it again.


ICC World Cup 2015 hype begins

UP pitches NOIDA as the next Shenzen

Pitching Noida as the next Shenzhen, Chief Minister Akhilesh Yadav said it was not impossible for the western districts to follow in the footsteps of China's first, and most successful, special economic zone. Speaking at the city , Akhilesh said he was willing to go the extra mile to facilitate the setting up of industry in Uttar Pradesh.
The UP government signed MoUs worth nearly Rs.5,000 crore with seven IT and telecom companies. Out of this, the Cellular Operators Association of India will invest Rs.3,000 crore for setting up mobile manufacturing units.

Another MiG-27 crashes

A MiG-27 fighter plane of the Indian Air Force (IAF) crashed on the outskirts of Barmer. The plane fell barely 1 km from the district headquarters near Saint Paul's School and a colony having more than 500 families.
While the pilot ejected safely, no casualty was reported except bruises to a motorcyclist, Loon Singh, on whom burning parts of the plane fell while he was distributing his wedding cards.The incident took place at Mahabar Road at around 3.30 pm.
Defence spokesperson Lt Colonel Manish Ojha said that a MiG 27 took off from Jodhpur air base to Uttarlai at around 3.10 pm.“The plane caught fire due to some technical snag and crashed,“ he said. A court of inquiry has been or dered, he said.
“An IAF chopper lifted the injured pilot to Jodhpur army hospital, where he was declared out of danger,“ he added. District police chief Anil Deshmukh and collector Madhusudan Sharma reached the spot along with air force and civil administration staff.
This was the second accident involving IAF this month in the district. An unmanned aerial vehicle of the IAF fell at Akoda village in Chohatan sub division in Barmer district on January 9 last.

Indians help make Dubai- the busiest international airport

With more than a little help from Indian travellers, Dubai has emerged the busiest international airport in the world. Dubai overtook London Heathrow last year, thanks to a growth of 9.3 lakh flyers to and from the India subcontinent — which was second only to the increase of 11.9 lakh flyers the Emirate saw in passengers to and from Europe.
Dubai International (DXB) handled over 7 crore international flyers last year, while Heathrow — which has been pipped for the first time ever — saw 6.8 crore international travellers. India played an important role in Dubai emerging as the busiest international airport. Dubai’s Emirates operates the maximum flights among all foreign airlines that operate to India. It has 185 weekly flights to 10 Indian cities, with the number of weekly flights set to rise to 186 from March 29.
A Dubai Airports release issued Tuesday said: “For the full year 2014, the top market for growth in passenger volumes was western Europe (+1,192,831 passengers), closely followed by the Indian Subcontinent (+936,449 passengers)...”

Somewhere in Punjab....

Kolkata to be India’s 1st Wi-Fi city

Kolkata is set to become India’s first fully Wi-Fi enabled metro city with a private operator launching the service from Park Street on February 5 and then rolling it out in a phased manner across 144 municipal wards over the next couple of months. The whole of Kolkata is expected to come under Wi-Fi coverage by Bengali New Year in mid-April.
Chief minister Mamata Banerjee made the surprise announcement at the inauguration of the International Kolkata Book Fair on Tuesday evening. “Delighted to announce that #Kolkata will become India's first fully Wi-Fi enabled metro city in the next 2-3 months. Park St from Feb 5,“ the CM tweeted moments after making the announcement. “Let others talk about Digital India. We just delivered Digital Kolkata,” party spokesperson Derek O’Brien tweeted immediately.
To begin with, users of smartphones, tablets, laptops and other Wi-Fi-enabled devices travelling through Park Street, Loudon Street, Royd Street, Sudder Street and adjoining localities will be able to access the service. Mayor Sovan Chatterjee, who was entrusted to ensure that the service delivery deadline is met said the Kolkata Municipal Corporation would monitor the progress of Wi-Fi rollout and give it due priority.
Sources in TMC said Mamata was keen to do something that would be viewed as a game-changer to not only alter the perception about Kolkata but also change the image of her government as one that is passive to progressive.

Consumer Confidence Index

India’s consumer confidence continues to remain highest globally and showed improvement in the fourth quarter of calendar year 2014 (Q4), riding on positive economic environment and lower inflation. Nielsen’s findings reveal that the consumer confidence of urban India increased by three points in Q4 from the preceding quarter. With a score of 129 in Q4, urban India’s consumer confidence is up by 14 points from the corresponding period of the previous year (Q4 of 2013) when it stood at 115.
The current score helps India stay on top of the global consumer confidence index for the quarter and is followed by Indonesia and Philippines, each of which have a score of 120. The improvement in consumer confidence index in Q4 is significant given that it had dipped marginally in Q3 of 2014.
The study is an indicator of what consumers look for and buy. In the latest online survey, conducted between November 10 and 28, 2014, over four in five (82%) urban Indian respondents indicated the highest level of optimism globally on job prospects in the next 12 months, followed by Indonesia (73%) and Philippines (73%). In the same quarter last year, 70% were optimistic about their job prospects in India.

Aaple Sarkar

Grievances posted by citizens on the state website, Aaple Sarkar, will be addressed within 21 days, promised chief minister Devendra Fadnavis. Aaple Sarkar, which was launched by Fadnavis on Republic Day, is a technology-based forum for direct interaction and closed communication between the citizens and the state government. “It is powered by MAGIC platform, an acronym for Maharashtra State Application for Grievances, Information and Collaboration. The initiative is in line with the CM’s vision to use technology to digitize services provided by the state,” said a source.
The CM had assured online services to citizens under his proposed Right to Services initiative for which the process for enactment of a bill has been initiated. At the launch, Fadnavis also vowed to make e-files compulsory to bring in transparency and end corruption.
“Citizens can share their grievances, suggestions and file RTIs through mobile phones and computers and they will get a response within a specified time. State departments can view the grievances on a single screen and respond to the same online,” said an official from the CMO. At present, the facility is limited to grievances.
“After a citizen loads his complaint, it will go to the department concerned in Mantralaya. The nodal officer designated in each department for online queries will attach the required documents and send them to the citizen, who can then give a feedback. The CMO will monitor the interface to ensure effective redressal,” said a source.
Ajoy Mehta, prinicipal secretary of the IT department, said the portal will help citizens save time and energy as they will not have to visit Mantralaya to air their grievances.


US President Barack Obama waded into the raging conversion dispute as he reminded the Indian government and people that they ought to ensure freedom of religion as enshrined in Article 25 of the Indian Constitution.
While Obama's assertion was more of a nudge than an admonition, he spoke at length about the freedom to be able to practise one's religion, reading out from Indian Constitution which guarantees freedom to practise and propagate religion. “Your Article 25 says that all people are `equally entitled to freedom of conscience and the right freely to profess, practice and propagate religion',“ Obama said in his address to a largely young audience, hours ahead of his departure from India.
“In both our countries, in all countries, upholding this fundamental freedom is the responsibility of government, but it's also the responsibility of every person,“ he added. Obama went on to say that India was going to succeed so long as it was not splintered on sectarian lines. He recalled the attack on a Sikh temple in Wisconsin, saying the act of violence had both India and US reaffirming that every person had the right to practise the faith of their choice.
To further drive home his point about religious tolerance in India, Obama mentioned the recognition achieved by people like Shah Rukh Khan, Milkha Singh and Mary Kom, all from minority communities, in India.
Obama's remarks came during the course of his almost hour-long speech titled `India and America: The Future We Can Build Together“. According to a report in New York Times, Obama was under pressure from advocacy groups to take up the issue of human rights while in India. Among his audience was Kailash Satyarthi, a fellow Nobel Peace Laureate. The focus on religion, though, was just one aspect of his speech in which he made a compelling case for stronger Indo-US cooperation.“India and US are natural partners but I believe they can also be best partners,“ he said. Obama also backed the just concluded negotiations for operationalizing the civil nuclear agreement which, he said, could help fight climate change through clean energy .He touched upon a number of global issues as he exhorted India to play a bigger role, saying with greater power came more responsibility .
“The United States welcomes a greater role for India in the Asia Pacific, where freedom of navigation must be upheld and disputes must be resolved peacefully ,“ said Obama. While reiterating support for India's candidature for permanent membership of UNSC, he said the two countries could work together for peace and stability in the region, including in Burma and Sri Lanka where, he said, there was new hope for democracy . He also sought closer partnership between the two countries in security and defence.
The speech was peppered by references to Gandhi and Martin Luther King Jr and also Vivekananda who, he said, brought to the US yoga and Hinduism.Twice Obama addressed the audience as sisters and brothers of India after he referred to Vivekananda's speech in Chicago where he addressed the US audience as sisters and brothers of America.
The manner in which Obama invoked his own background and also America's racial segregation in the past in pressing India on issues like women rights and religious freedom helped temper his message which could still ruffle some feathers here. Obama mentioned how his grandfather was the son of a cook in the British army .
“Even as we live in a world of wrenching inequities, we're also proud to live in countries where even the grandson of a cook can become president, even a Dalit can help write a constitution, and even a tea-seller can become prime minister,“ Obama said, as he recalled how King Jr was introduced in a school as a “fellow untouchable'' when he visited India.

US President Barack Obama's India visit was initially seen as more about symbolism than substance, but as it turned out, this was one of the most substantive engagements between the two countries with outgoing foreign secretary Sujatha Singh describing it as historic. Obama backed India to play a bigger role on global issues as he reiterated support to India's candidature for a permanent membership of UN security council. The following are some of the important takeaways:

Nuclear Deal
The end of the nuclear logjam was a big takeaway because it was alone acting as an impediment in deepening strategic ties. India didn't give in to any intrusive monitoring of its nuclear facilities and supplies and removed the liability hurdle through an insurance pool without diluting its liability law. It remains to be seen though if a nuclear accident victim retains the right to sue suppliers as envisaged in the law. But with the governments out of the way , it is over to businesses to do the cost-benefit analysis.

Asia-Pacific vision
The two governments issued a joint strategic vision for Asia Pacific and Indian Ocean in what may be one of the most significant foreign policy statements by the Modi government. Coupled with last year's Modi-Obama joint statement, it shows that Modi is not averse to an eventual amalgamation of India's Act East and US' Asia pivot. PM Modi is himself said to have been very keen on signing the China-centric strategic vision after he shared his fear of an “expansive“ China with Obama. This is a considerable shift from the stand of the UPA which was more inhibited about endorsing the US pivot to Asia.

India and the US renewed their broad 10-year defence framework, with the Defence Trade and Technology Initiative (DTTI) being the key new element. Under it, the two have chosen four relatively modest military products ­ Raven miniUAVs, aircraft reconnaissance modules, mobile electric power sources & soldier protective gear ­ for co-development and production. Plus, the two nations also agreed to set up two working groups to explore development of aircraft carrier technologies and jet engines, which are more high-end.

India-US: Best Partners
The decision to elevate the strategic partnership with a Declaration of Friendship strengthens and expands the relationship between India and the US.Among other things, it also envisages regular summit meets. Signaling the natural affinity enjoyed by our two nations, as the White House said in a press release, this declaration proclaims a higher level of trust and coordination that will continue to draw the two governments and people together across the spectrum of human endeavor for a better world.

A warning from Obama
Obama may have handed another takeaway in the form of a thinly veiled warning that religious tolerance is imperative for India's success. Coming from a country the Modi government sees as indispensable for its own economic success and overall global standing, it may not be easy to just wish Obama's assertion away .If this leads Modi to, at some stage, publicly shun fringe elements associated with BJP and their controversial religious conversion programme, it will only help raise India's and his own stature.


Chindia comparison

Motown forecast

NaMo raises a toast

Somewhere in Mumbai....

The Queen's Necklace gets LED streetlights

Republic Day 2015

RK Laxman is no more

India-US trade

The US and India pledged to step up their economic engagement with President Barack Obama promising finance facilities worth $4 billion and a new Indian Diaspora Initiative meant to help Indian-Americans fund local businesses. While the Indian authorities, led by Prime Minister Narendra Modi promised to address concerns related to tax and ease of doing business that US companies voiced, Obama focused on offering support to upgrade infrastructure, renewable energy and small enterprises and realize the untapped business potential between the two largest democracies.
Between all this, there was a `Made in America' bias. The $1 billion financing window from US Exim Bank is meant to support Made in America exports to India, he told a conference attended by top CEOs from both the countries.
Another $1 billion is to come from the Overseas Private Investment Corporation or OPIC to support lending to SMEs in under served markets. The US Trade and Development Agency will aim to leverage nearly $2 billion in investments in renewable energy in India. In the past, the US has complained bitterly about India's solar energy programme that has a preference for Made in India goods. “So, we are moving forward, there is new momentum, there is new energy , new hope that we can finally begin to realise the full potential of our economic relationship,“ the US president said.
He also elaborated on major challenges, low trade volumes being one of them. “We all know that the US-India economic relationship is also defined by so much untapped potential. Of all America's import from the world about 2% come from India. Of all America's exports to the world, just over 1% go to India, to over a billion people. We do about $100 billion in trade with India, which is a great improvement since we took office, but we do about $560 billion a year with China.Everybody would agree, we have to do better.“
Obama then listed out the other areas of concern, some of which have been flagged by industry captains -from ease of doing business to protecting IPRs. “Here in India there are still too many barriers, hoops to jump through, bureaucratic restrictions that make it hard to start a business, to import or export, to close a deal, deliver on a deal... We need to be incentivising trade and investment, not stifling it. We need to be fostering a business environment that's more transparent and more consistent and more predictable,“ he said even as he referred to steps taken by the Modi administration. Obama said US companies are ready to help Indian counterparts to develop India specific products, upgrade infrastructure and build smart cities.

Mann Ki Baat

BJP's campaign for Delhi 2015

A new Education Policy

Padma awards

BJP veteran and former deputy prime minister L K Advani, Punjab CM Parkash Singh Badal, Bollywood icons Dilip Kumar and Amitabh Bachchan and leader of Ismaili sect of Muslims Karim Al Hussaini Aga Khan have been awarded the Padma Vibhushan, the second highest civilian honour after the Bharat Ratna. The Padma Bhushan awardees include Microsoft founder and philanthropist Bill Gates and his wife Melinda Gates, who have donated billions towards healthcare in India.
The honours list includes Jagadguru Ramanandacharya Srinivasan of Tulsi Peeth, Shivakumara Swami of Siddaganga Mutt in Tumkur, Swami Satyamitranand Giri who founded Bharat Mata Mandir in Haridwar and Portugal-based yoga guru Jagat Guru Arta Suyananda Maha Raja. The list of “spiritual gurus“ would have been longer but for the refusal of Sri Sri Ravi Shankar and Ramdev. Of the 104 Padma award winners announced on Republic Day eve, nine were conferred the Padma Vibhushan, 20 were named for Padma Bhushan and 75 for Padma Shri.
The list includes 17 women, with the highlight being the presence of four women among the total six awardees in the sports category. Also, in a record of sorts, there are 17 awardees in the category of foreigners, NRIs and PIOs.
In the latter bracket, for Padma Bhushan, are Netaji Subhas Chandra Bose’s Japanese associate Saichiro Misumi, whom PM Modi had met in Tokyo last year, and US-based Sanskrit scholar David Frawley, who is also known as Vamadeva.
The Padma Vibhushan awardees include Dr Veerjendra Heggade of Karnataka (for social work), Prof Malur Ramasamy Srinivasan of Tamil Nadu (science & engineering) and legal luminary K K Venugopal (public affairs).
The Padma Bhushan list features former Solicitor General Harish Salve, constitutional expert Subhash C Kashyap and former chief election commissioner N Gopalaswami. Assamese film maker Jahnu Barua, journalists Rajat Sharma and Swapan Dasgupta, Hindustani classical vocalist Pandit Gokulotsavji Maharaj, Carnatic vocalist Sudha Ragunathan, wrestling coach Satpal and geologist Kharag Singh Valdiya have also been conferred the country’s third highest civilian award. Indian-origin mathematician Manjul Bhargava, too, is on the list.
The sports category features four women including badminton player P V Sindhu, cricketer Mithali Raj, hockey player Saba Anjum and the first female amputee to climb Mt Everest Arunima Singh. Wresting coach Satpal and hockey team captain Sardara Singh are the only two male Padma awardees in the sports category.
The Padma winners for science medicine are computer scientist Vijay Bhatkar, cardiologist Ashok Seth, pulmonary medicine specialist Randeep Guleria, Dr Ambrish Mithal of Medanta (all Padma Bhushan); and DRDO’s Dr N Prabhakar and Dr Prahlada.
Among the 75 Padma Shri winners are late spiritual head of the Bohra Muslims Syedna Mohammad Burhanuddin, economist and Niti Aayog member Bibek Debroy, cartoonist Pran (posthumous), filmmaker Sanjay Leela Bhansali, music composer Ravindra Jain, ad man Prasoon Joshi, former NCERT chairman J S Rajput, T V Mohandas Pai, chairman of Manipal Global Education, and Gujarati columnist Tarak Mehta.
Among the foreigners awarded the Padma Shri are Chinese Indologist Huang Baosheng, French scientist Jacques Blamont, French novelist Jean-Claude Carriere, professor of Tamil language at University of California, Berkeley, George L Hart, and German Indologist Annette Schmiedchen.
The NRIs PIOs in the Padma Shri category are Indian-American economist Nandrajan “Raj” Chetty, vocalist Tripti Mukherjee; and Dr Dattatreyudu Nori, Dr Raghu Rama Pillarisetti and Dr Saumitra Rawat in the field of medicine.

Somewhere in Uttar Pradesh....

India-US defence tie ups announced

Renewing their expansive defence framework for another 10 years, India and the US have decided to kick off joint manufacturing of four relatively modest military products and explore the development of two more high-end technologies.
The two nations agreed to step up joint combat exercises, maritime security endeavours, intelligence-sharing mechanisms, military exchanges and the like through the framework, which has the key new element of Defence Defence Trade and Technology Initiative (DTTI) to bolster India's fledgling defence industrial base.
The DTTI will be launched with four aptly called “pathfinder projects“ since India wants to first ascertain how these “not-so-complex technologies“ actually materialize on the ground. The Indian defence establishment, after all, is yet to fully shed its long-standing inhibitions about the US being a reliable long-term supplier of top-notch technologies. The four products to be co-produced are the next-generation Raven unmanned aerial vehicles (UAVs), “roll-on, roll-off“ intelligence-gathering and reconnaissance modules for C-130J Super Hercules aircraft, mobile electric hybrid power sources and “uniform integrated protection ensemble increment-2 (chemical, biological warfare protection gear for soldiers)“.
The Raven, for instance, is not an advanced spy or combat drone. A hand launched mini drone, it is used by soldiers in the battlefield to keep tabs on enemy formations within a range of 10 km. The two sides, however, plan to extend its range to 18 km and flying endurance to six hours from the existing four hours. Similarly , the 12 C-130Js acquired by India from the US for over $2 billion since 2007 did not have the requisite surveillance modules that they will now get.
Both Obama and Modi promised the DTTI would take the bilateral defence cooperation to a new level altogether with “additional joint projects in the near future“. Towards this end, the decision to set up working groups to explore development of aircraft carrier technologies and jet engines is crucial.
India has miserably flopped to develop the Kaveri engine for its indigenous Tejas light combat aircraft, which is going to be powered by American GE engines for the foreseeable future. As for aircraft carriers, India is currently constructing the 40,000-tonne INS Vikrant at Cochin Shipyard, as also planning a second, much larger one thereafter.


Modi, Obama make a N-breakthrough

PM Narendra Modi and US President Barack Obama seemed set to elevate Indo-US ties to a new level with a remarkable breakthrough in India's moribund 2008 civil nuclear cooperation agreement with the US. The two clinched the agreement while taking a 30 minute stroll in the lawns of Hyderabad House after talks had failed to resolve the issue.
With Obama using his executive powers to roll back the condition that US authorities be allowed to monitor use of nuclear material purchased by India even from third countries, the two leaders successfully finalised the terms and conditions for operationalizing the civil nuclear deal.In his press statement, Modi said US and India shared a natural global partnership. Indian officials attributed the successful conclusion of nuclear talks to Obama's intervention as intrusive inspections by US authorities was the lone issue that was threatening to derail the contact group meeting last week in London. Officials said the two countries would follow the Canada template, which India had been seeking (as reported by this paper earlier), under which US authorities wouldn't insist on inspections over and above those by IAEA.
“I am pleased that six years after we signed our bilateral agreement, we are moving towards commercial cooperation, consistent with our law, our international legal obligations, and technical and commercial viability ,“ said Modi in a joint press interaction with Obama. A Democratic President and a BJP Prime Minister thus completed a process that had been begun by a Republican President (George W Bush) and a Congress Prime Minister (Manmohan Singh).
Obama also backed India's phased entry into the Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Arrangement and the Australia Group to strengthen non-proliferation and export control regimes.
This development will not just stamp Modi's authority on foreign relations but also earn him political mileage at home.While the administrative arrangements were taken care of by the gesture from Obama, India's 2010 nuclear liability law too remained unscathed.
Describing Obama's visit as historic, foreign secretary Sujatha Singh reaffirmed that both the contentious sections -section 17 (b) which guarantees right of recourse against suppliers in the event of an accident and section 46 which exposed suppliers to tort claims and potentially unlimited liability--conformed to IA EA's Convention on Supplementary Compensation for Nuclear Damage (CSC).
MEA joint secretary for disarmament Amandeep Gill said India remained committed to ratifying CSC. Today we achieved a breakthrough under standing on two issues that were holding up our ability to advance our civil nuclear cooperation and we are committed to moving towards full implementation,“ said Obama at the press interaction. “This is an important step that shows how we can work together to elevate our relationship.“
The administrative arrangements which the US sought in the London meeting of the contact group had turned into a real hurdle even though the meeting saw considerable progress over the liability issue. The US has agreed to India's proposal to build a risk-management insurance pool of Rs.1,500 crore to provide cover to suppliers who shunned the civil nuclear agreement because it made them liable to pay compensation in the event of a nuclear accident While General Insurance Corporation of India (GIC) and other national insurers are expected to contribute Rs.750 crore for the pool, the remaining half will be provided by the government.
The two countries were also seeking to address concerns over section 46 which leaves suppliers exposed to tort claims.
This section empowers ordinary citizens to file tort claims against suppliers, something which was seen by the US industry as opening US companies to potentially unlimited liability.
The development is likely to be touted as a major achievement by the Modi government as the two countries can now move to effect civil nuclear “within the framework of law“ and without having to dilute the liability law.
The civil nuclear cooperation with the US could never really take off in the past seven years because of differences over liability and administrative issues despite India having allotted sites to US companies in Andhra Pradesh and Gujarat.