2017: A year of many firsts in foreign policy

By Indrani Bagchi

In 2017, India’s foreign policy tried to defy precedents and confound expectations. The result — India ventured into areas it had not dared to before.

The Doklam crisis was a defining moment in ways more than one. Quite apart from military lessons, India chose this time to object to a creeping action by China that has gone unmarked by Indian governments for years. Doklam has placed India and China squarely on opposite sides, no matter how the two countries try to dress it up. The standoff and its resolution showed maturing of the two rising Asian powers, but also showed once again the precarious nature of Indian defence preparation. India was lucky the crisis happened in an area where its forces are at a situational and military advantage.

There are two takeaways — first, how would India have showed up against China in a different theatre? On the other hand, India showed it was willing to go far, very far, in its stand against China. That was an inflexion point for both India and China.

New Delhi’s opposition to ‘One Belt, One Road’ put it in a minority until other countries gradually discovered OBOR was another mode of Chinese colonialism. Here, India was again willing to defy its tested precedent of not seeming to be isolated in world affairs. In the coming years, India will need to put teeth to this opposition, either by presenting a credible alternative, or by getting China to change its ways.

The decision to take the Kulbhushan Jadhav case to the International Court of Justice (ICJ) surprised even Indians because it is an article of faith in India’s foreign policy template to not take bilateral issues to the international level. Successive Indian governments have made “internationalisation” a bad word. The early success of getting the ICJ to stay Jadhav’s execution will draw attention to the final arguments and verdict in the coming weeks. But the ghost has been slain.

India’s multilateral appetite has only grown in the past year. The campaign to put Dalveer Bhandari back as ICJ judge was brutal to say the least, but once again defied conventional practice that India did not go up against a P-5 member (the UK). The MEA and the PMO burned phone lines and pumped flesh in the kind of outreach that is normally seen in Indian domestic elections. It was tough work — even India’s closest ally, Japan, voted against Bhandari in these elections!

Ironically, India’s victory might make it difficult for it to get into the Nuclear Suppliers’ Group (NSG) — a consequence of the Indian determination to plod along its trajectory to becoming a “leading power” appears to have convinced the Chinese system to double down on its opposition to India. According to sources, their calculation appears to be this — If India gets into the NSG, it would have overcome the “non-proliferation treaty hurdle” and its path to a permanent seat in the UNSC would become easier. China will, therefore, contest India’s determination with its own. So, the jury remains out on whether it’s a good thing for India to have an open global appetite. Some say India should “bide its time”, but proponents of this policy in the government say New Delhi should take what is available and wait for the next level to open up.

In 2018, the Indian system will go all out once again to get back into the Human Rights Council and one can expect another high-energy campaign. This is also one of the reasons why India voted the way it did in the recent UN General Aassembly resolution on Jerusalem. On one level, India believes, like most others, that Jerusalem’s fate is tied to a final resolution. On another level, India could have defied precedent and changed its vote for two best friends — Israel and the US. It did not.

Similarly, India took a decidedly left turn when it refused to take up the opportunity of walking out of the Paris accord after Donald Trump opened the way for a cop-out. Instead, India is now a champion of climate change policies, and the forthcoming International Solar Alliance summit will demonstrate it, sources said.

Modi became the first Indian leader to visit Israel this year, a sign of the growing relationship between the two countries. But the important piece of signalling was the de-hyphenation — something no previous government had the political courage to do.


Forex Kitty at Record $405 Billion

India’s foreign exchange reserves surged by $3.53 billion to touch a new lifetime high of $404.921 billion in the week to December 22, aided by an increase in foreign currency assets, Reserve Bank data showed.

In the previous week, foreign exchange reserves had risen by $488.2 million to $401.385 billion.

The reserves had crossed the $400-billion mark for the first time in the first week of September this year but have been fluctuating since then. Prior to this, it had touched a lifetime high of $402.509 billion on the back of a $1.782 billion surge in the week ending September 15, 2017.

In the current reporting week, the foreign currency reserves, a major component of the overall reserves, rose by $3.773 billion to $380.680 billion.

Expressed in the US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US currencies such as the euro, the pound and the yen held in the reserves.

After remaining unchanged from past many weeks, gold reserves rose by $12.6 million to $20.716 billion.

Fiscal Deficit Crosses Annual Target

India’s fiscal deficit crossed the target set for 2017-18 by the end of November itself, triggering fresh concerns that it will stay so for the year.

The fiscal deficit for April-November was ₹6.12 lakh crore, or 12% more than the ₹5.47 lakh crore target for the year.

The deficit at the same point last year was about 14% less than the budget estimate.

India’s economy expanded 6.3% in the July-September period, up from a three-year low of 5.7% in the previous quarter.

On Wednesday, the government announced additional borrowing of ₹ 50,000 crore through dated government securities in the last quarter of the financial year.

Independent experts expect a fiscal deficit slippage of up to 3.5% of GDP.

The government said the numbers were not strictly comparable with last year because of the early presentation of the budget (on February 1 instead of the usual end-February), which allowed spending to start quickly.

Spending in April-November has been higher at 68.9% of the budget estimate this year against 65% last year, but revenue slippage has also contributed to the wide gap. Government’s total receipts at the end of November added up to ₹8.67 lakh crore, 54.2% of the budget estimate of ₹16 lakh crore.

Non-tax revenue was only 36.5% of the budget estimates with the Reserve Bank of India declaring a lower than expected dividend.

Net tax revenue was pegged at ₹7 lakh crore, 57% of the budgeted amount and below the 58.9% recorded a year earlier. This is largely on account of muted GST collections, which declined to ₹80,808 crore for November from more than ₹95,000 crore in September.

Spectrum auction that was budgeted to yield ₹50,000 crore is not expected to fetch much this fiscal year. The government has spent ₹1.84 lakh crore of its total ₹3.09 lakh crore capital budget for the year.

India protests as Palestine envoy and Hafiz meet

India slammed Palestine for its ambassador in Pakistan sharing stage with JuD chief and LeT founder Hafiz Saeed at a rally in Rawalpindi.

India served a strongly worded demarche to the Palestine authority, expressing displeasure.

In a late evening statement, the MEA spokesperson said tersely: “We are taking up the matter strongly with the Palestinian ambassador in New Delhi and the Palestinian authorities.”

The presence of the Palestinian envoy at a JuD rally is a slap on the face for India, which last week voted for a United Nations General Assembly resolution against the US decision to recognise Jerusalem as the capital of Israel.

Pictures of the Palestinian ambassador to Pakistan, Waleed Abu Ali, circulated on social media after he reportedly attended a rally organised by Difah-e-Pakistan Council in Liaquat Bagh in Rawalpindi. Difah-e-Pakistan Council is an umbrella group of 40 religious and extremist groups in Pakistan, headed by Saeed, who is banned as a global terrorist by the UN and is the mastermind of the 26/11 attacks in Mumbai. Saeed used the rally to call for an “Islamic summit” to defend Jerusalem from Israel.

India, like 127 other countries, voted on the principle that the status of Jerusalem would be decided after a deal between Israel and Palestine. India’s vote was seen to be against Israel, a close friend, as well as the US, a strategic partner.

The Narendra Modi government came under some criticism from its own supporters, who thought India had let its friends down. The Israeli government, too, registered its protest against the Indian vote.

Not only has Palestine President Mahmoud Abbas visited India earlier this year on a state visit, Modi is expected to visit Palestine in the coming months.

Palestine, however, has consistently voted against India on the Kashmir issue both in the UN and in the OIC for years while criticising New Delhi’s growing relationship with Israel. India, therefore, has no choice but to take a grim view of the Palestine envoy’s actions.

E-goods made in India pull ahead of imports

The Centre’s efforts to promote local manufacturing through the ‘Make in India’ programme seem to be reaping dividends with the domestic production of electronics — one of the key reasons behind foreign currency spends after oil — moving ahead of imports for the first time in 2016-17.

Domestic electronics production in 2016-17 stood at $49.5 billion, higher than the near $43 billion spent on imports.

The government has taken a number of steps to boost manufacturing of electronics, particularly of smartphones, appliances, set-top boxes and televisions. A majority of imports in many of these areas are coming from neighbouring China, something India is now trying to counter through fiscal incentives and other measures.

The local benefits were reinforced recently when the customs duty on import of a variety of products was raised earlier this month. This was for products such as mobile phones, set-top boxes, microwave ovens, and LED lamps.

The growth in local manufacturing has been strong over the past three financial years as imports are moderating. In 2015-16, the local production was $37.4 billion against imports of $41 billion, while in 2014-15, electronics goods worth around $30 billion were made in India against $37.5 billion sourced from overseas. The government plans to give a massive push to digital activities and achieve a turnover of $1 trillion by 2022. Manufacturing of electronics is seen as a major contributor towards meeting this target.

The overall demand for electronics (sourced locally and through imports) in 2016-17 has been to the tune of $86.4 billion ($60.5 billion in 2014-15), and the government expects this to more than double by 2020 and stay between $171 billion and $228 billion. “The overall projection by 2023-24 is $400 billion,” an official source said.

What is heartening for the government in this growth is the impetus it has provided to local production and jobs. While 6 crore handsets were manufactured in the country in 2014-15, this has grown nearly threefold in just two years to 17.5 crore in 2016-17. The value of phones made in India has moved up from Rs.19,000 crore in 2014-15 to as much as Rs.90,000 crore in 2016-17.

A similar spurt has been seen in the production of televisions. “The production of LCD/LED TVs grew from nearly 90 lakh units in 2014-15 to 1.5 crore units in 2016-17. In terms of turnover, LED production grew from Rs.2,172 crore in 2014-15 to over Rs.7,100 crore in 2016-17,” the source said.


Lok Sabha Passes Triple Talaq Bill

Lok Sabha passed the Muslim Women (Protection of Rights on Marriage) Bill, which seeks to ban instant triple talaq and will lead to imprisonment of up to three years and fine, after a charged debate in the House, with several opposition members warning that the proposed law will make a civil offence a criminal wrongdoing.

Law minister Ravi Shankar Prasad moved the Bill banning Talaq-e-biddat in the wake of the August 22 SC order declaring the practice “null and void”, unconstitutional and arbitrary. He said the SC had asked the government to pass a law on the matter.

The minister cited a case of triple talaq in Rampur district reported in the media and pressed on the urgency of passing the Bill without sending it to the standing panel. Leader of Congress in Lok Sabha Mallikarjun Kharge and others suggested the Bill should not be hurried through and sent to the parliamentary panel as views of the Muslim community had not been taken.

The government maintained that 10 Islamic countries, including Bangladesh, Pakistan, Afghanistan, Morocco, Tunisia, Indonesia and Malaysia, have banned instant talaq. Countries like Bangladesh and Pakistan even have penal provisions like jail for one year. Prasad insisted talaq needs to be “regulated” as has been done by these Islamic countries where one has to give a notice to his wife and inform the arbitration council.

MoS for external affairs MJ Akbar recalled Jawaharlal Nehru had said at the time the Hindu Code Bill was passed that the “time was not right” for a similar law for Muslims. He said that moment has come.

Jio to Buy Out RCom’s Wireless Assets

Mukesh Ambani-led Reliance Jio Infocomm is poised to bail out younger brother Anil Ambani’s debt-ridden telecom business by buying the wireless assets of Reliance Communications, having signed an accord that was announced on father Dhirubhai Ambani’s 85th birth anniversary.

Jio inked a definitive agreement to acquire specified assets of RCom and its affiliates in an all-cash deal on Thursday. Market and banking circles pegged the deal size at about ₹24,000 crore, but this was not confirmed by either of the companies.

RCom said it would use the proceeds of the cash deal solely for prepayment of debt. The company, weighed down by₹45,000 crore of loans and the failed merger with Aircel, had been in the midst of a strategic debt restructuring programme with the lenders.

State Bank of India is its largest local lender while China Development Bank, which had filed an insolvency petition in the bankruptcy court to recover $1.78 billion, or about ₹11,460 crore, its largest overall lender. While CDB is expected to withdraw its insolvency petition by January 5 — the next date of hearing — sources at Ericsson, which adopted a similar strategy to recover some ₹1,100 crore dues from RCom, said its case was still on though the company officially did not comment.

The deal, the contours of which were announced by Anil Ambani on December 26 as part of a new debt repayment plan, beat a deadline of December 28 by when the joint lenders forum had to take a decision on whether to convert its debt to equity and would mean RCom can now exit the SDR process and retain ownership of the company whose focus will now be on enterprise business, with the wireless operations shut down.

This agreement also came about a decade after the brothers divided the Ambani empire between with them, with the telecom interests going to the younger sibling. Thursday’s agreement marks the integration of the wireless assets of the two brothers under one roof as it had been before the split. Reliance Communications had shut its wireless business at the end of November.

The RCom assets that will change hands include 122.4 units of 4G airwaves across the 850, 900, 1800 and 2100 MHz bands, over 43,000 towers, 1,78,000 RKm (route km) of fibre with a pan-India footprint, and 248 media convergence nodes, covering 5 million sq ft used for hosting telecom infrastructure.

Delhi Metro will become world’s 4th largest network

Starting March 2018, many new lines of the Delhi Metro network will begin operating. With the completion of Delhi Metro Rail Corporation’s Phase III expansion, the Indian capital’s metro rail system would become the fourth largest in the world with over 350 km of corridors. Its current network spans 231 km following the recent opening of the Botanical Garden-Kalkaji Mandir section of the Magenta Line.

Anuj Dayal, executive director (corporate communications), DMRC, said Delhi Metro has 173 operational stations at the moment, making it the ninth largest metro system in the world. “After the completion of Phase III, we shall have a network of over 375 km, including the Noida-Greater Noida corridor and would be the largest after Shanghai, Beijing and London,” Dayal said. The Noida-Greater Noida corridor would be a part of the Delhi Metro network with an interchange at the upcoming Noida Sector 52 station. Though constructed by DMRC, this corridor would be operated by the Noida Metro Rail Corporation.

It is expected that the next Delhi Metro corridor to be opened will be the Kalkaji Mandir-Janakpuri West corridor of the Magenta Line, the first section of which was inaugurated by Prime Minister Narendra Modi on December 25. The corridor has already brought Noida closer to south Delhi, but when the line is extended to Janakpuri West, the distance between Noida and Gurgaon would also shrink with the availability of interchange at Hauz Khas station with the Yellow Line (HUDA City Centre-Samaypur Badli). DMRC promises to complete the section by March 2018, though its opening for commercial operations would depend on the safety go ahead from the Commissioner of Metro Rail Safety.

The Kalkaji Mandir-Janakpuri West corridor would also bring the domestic Terminal 1 of the Indira Gandhi International Airport on the metro map. At present, IGIA is connected with the city centre through the high-speed Airport Express Line, but the corridor doesn’t have direct connectivity with Terminal 1 handling domestic flights.

March 2018 will also see the completion of the massive Pink Line (Majlis Park-Shiv Vihar) with a length of 58.59 km. The Pink Line will act as a ‘Ring Corridor’ connecting most parts of Delhi. A small stretch of the corridor, between Mayur Vihar Pocket 1 and Trilokpuri, however, will not be a part of the line due to land-related issues and will, therefore, remain a missing link. The Pink Line will turn the Delhi Metro network into an intricate web by bringing the existing corridors at 10 different interchange points, including with the Airport Express Line at Dhaula Kuan station.

In 2018, DMRC will also make its third foray into Haryana after Gurgaon and Faridabad by extending the Green Line to Bahadurgarh. DMRC will also extend the Violet Line from Escorts Mujesar in Faridabad to Ballabhgarh next year. The extension of Blue Line from Noida City Centre to Noida Electronic City will not only bring Delhi Metro closer to many sectors of Noida, but also to areas in Ghaziabad such as Indirapuram.

Chennai BRTS likely to roll out by 2019

If everything goes according to plan, Chennai will have a BRTS in place by 2019 to ease traffic congestion, said an official from the Pallavan Transport Consultancy Services. He was speaking at a public hearing called to seek the views of resident welfare associations on the proposal.

Under the BRTS, exclusive corridors will be created along the central portion of the road to operate state-of-the-art buses. The corridors will have subways or underpasses through which commuters can reach either side of the road.

Seven such corridors have been identified in the city: Koyambedu-Poonamallee, Koyambedu-Ambattur, Koyambedu-Madhavaram, Saidapet-Siruseri, Saidapet-Mahindra WorldCity, Thoraipakkam-Chromepet and Koyambedu-Saidapet.

The founder of Urban Voices, Kumar Manish, who is also an urban transport consultant, said Ahmedabad pioneered the BRTS which was introduced in 2009. The system has received national and international awards for its innovation. BRTS offers commuters an alternative to taking crowded municipal transport bus services and driving private vehicles on roads choked with traffic. The system in Ahmedabad, which includes air-conditioned buses, has expanded to 89 km from the initial 12-km pilot project and carries an average of 1.5 lakh passengers per day.

Reduced travel time, reduced waiting time due to more services and feeder services to the rail network are some of the advantages of the BRTS. It also helps fight air pollution by offering private vehicle users a viable alternative, resulting in fewer vehicles on the road.

Also known as the ‘metro on roads’, BRTS costs a fraction of what the metro charges and is all about prioritising public transport users and giving them dignity.

Domestic missile defence shield a step closer

India took another step towards developing a two-tiered ballistic missile defence shield-—which has long been in the making—by testing a supersonic interceptor missile to destroy an incoming ballistic missile, over the Bay of Bengal.

The experimental two-tier BMD system is supposed to track and destroy nuclear tipped ballistic missiles both inside (endo) and outside (exo) the earth’s atmosphere.

Phase-I of this BMD system, with interceptors flying at 4.5 Mach high-supersonic speeds to intercept enemy missiles, is meant to tackle hostile missiles with a 2,000-km strike range. Its Phase-II will be geared to take on 5,000-km range missiles, virtually in the class of intercontinental ballistic missiles, with interceptors at hypersonic speeds of 6-7 Mach. The indigenous missile shield, once fully operational, is supposed to protect cities like New Delhi and Mumbai.

In the test on Thursday, the low-altitude or endo-atmospheric Advanced Area Defence interceptor missile hit the “enemy” (a modified Prithvi missile) at an altitude of 15 km, in the third such successful test this year. While the interceptor was fired from the Abdul Kalam Island off Odisha coast, the “enemy” was launched from the Launch Complex-III of the Integrated Test Range also based on the island. “It was a direct hit,” claimed a DRDO official.

DRDO is working on adding a third layer to the BMD system, which will tackle low flying cruise missiles, artillery projectiles and rockets.

Commodities, stocks to be on same exchange

Markets regulator Sebi has allowed trading on stocks and commodity derivatives on the same exchange from next October. Simply put, investors can now trade gold, crude oil and wheat along with Reliance and Infosys shares on BSE, NSE, MCX and NCDEX. They can use a single demat account and also a single bank account for both kind of trades.

The regulator’s decision meets a long-standing demand by market players to align Indian markets with global practices.

Brokers are already allowed to offer trading of both stocks and commodity derivatives to their clients under the same roof. Earlier, clearing houses too were allowed to offer services for both types of assets. Currently, investors can trade gold and crude oil on MCX, wheat on NCDEX, and company stocks on BSE and NSE.

The Sebi decision could also lead to cost savings for investors, as under the new system, money set aside for stock trading but which is unused, could be deployed in commodities like gold, silver, crude and wheat within minutes. The decision could also push for a merger of stock exchanges and commodity derivatives bourses, mainly to leverage the economies of scale.

Sebi chairman Ajay Tyagi said that the integration process of the bourses would involve removal of certain existing legal restrictions by amending the relevant laws which would allow all exchanges in the country, currently offering trading platforms either for stocks or commodity derivatives, to provide a universal trading platform. In the run-up to this decision, Sebi had allowed one single broker to offer stock and commodity derivatives trading and also clearing houses to offer services for both types of products.

The government was also keen that both the markets are integrated after it merged Forward Markets Commission, the commodity derivatives market regulator, with Sebi in late 2015. In the Budget speech for 2017-18, finance minister Arun Jaitley had pushed for universal exchanges in the country.


Jai Ram Takes Oath As 13th Himachal CM

With Seraj MLA Jai Ram Thakur taking oath as the 13th chief minister of Himachal Pradesh at the historic Ridge Maidan in Shimla, a new era has begun in the hill state’s politics. Thakur will be leading a pack of BJP’s second rung leadership with many of the senior leaders having lost their seat in the recently concluded election.

To witness the new government taking shape, Prime Minister Narendra Modi, BJP national president Amit Shah and party patriarch L K Advani were present at the swearing-in along with Union ministers and chief ministers of BJP-controlled states. The ceremony saw a massive gathering of people as BJP supporters from different parts of Himachal Pradesh arrived in Shimla to witness their party coming back to power after five years.

Governor Acharya Devvrat administered the oath to Thakur in Hindi amid a loud cheer from crowd. Eleven ministers were also administered oath. Sarveen Chaudhary from Shahpur assembly constituency was the only woman minister in the council. Suresh Bhardwaj and Govind Singh Thakur chose to break from tradition and took oath in Sanskrit. So far, oaths have been administered in either Hindi or English.

More than half the cabinet is made up of first-time ministers, including Suresh Bhardwaj, Vipin Singh Parmar, Birender Kanwar, Bikram Singh Jaswan, Govind Singh Thakur and Dr Rajiv Saizal.


Of Tiger deaths in Maharashtra....

TN signs ₹20K cr pact with WB to develop irrigation systems

The Union government and Tamil Nadu have signed an agreement with the World Bank for a $318 million (₹20,378 crore) loan towards an irrigated agriculture modernisation project to promote climate-resilient agriculture technologies, improve water management practices, and increase market opportunities for small and marginal farmers.

The loan has a five-year grace period and a maturity of 19 years. About five lakh farmers, mostly small and marginal, are expected to benefit from improved tank irrigation systems.

The project is likely to rehabilitate and modernise about 4,800 irrigation tanks and 477 check dams, spread across 66 sub-basins, in delivering bulk water to irrigation systems.

The project will support smallholder producers adopt new conservation technologies such as the system of rice intensification  and sustainable sugar initiative. They reduce average water usage by 35% and increase yields by 22% per hectare. The project is expected to increase the yield of rice, maize, and pulses by 18–20%.

Sensex tops 34k

A late surge in the last half an hour of Tuesday’s session took the sensex to a record closing high — above the 34,000 mark, helped by a sudden spurt in Reliance and Bharti Airtel stocks. After opening at 34,005, the sensex mostly remained in a narrow zone before racing past the psychologically important mark to close 70 points higher at 34,011. Nifty on the NSE, too, closed at a record high at 10,532, showing a gain of 39 points .

India to be 5th largest economy in 2018

India is set to emerge as the world’s fifth largest economy by overtaking Britain and France. And, India will emerge as the world’s third largest economy by 2027, the report by the Centre for Economics and Business Research said.

“The World Economic League Table shows that despite temporary setbacks from demonetisation and the introduction of the new GST, India’s economy has caught up with that of France and the UK and in 2018 will overtake them both to become the world’s fifth largest economy in dollar terms,” Cebr deputy chairman Douglas McWilliams said.

“On some cost of living adjusted measures India is already the world’s third largest economy, but 2018 is the first time the Indian economy has caught up and will overtake both those of the UK and France in real money dollar terms,” said the 9th edition of the World Economic League table, which tracks the size of different economies across the globe and projects changes over the next 15 years.

The Indian economy is emerging from the impact of demonetisation and rollout issues linked to GST. Latest data shows the economy grew 6.3% in the July-September quarter, rising from the three year-low of 5.7% growth registered in the June quarter.

Several multilateral agencies expect the Indian economy to post robust growth in the years ahead and the International Monetary Fund forecasts the economy to expand by 7.2% this year and 7.7% in 2018-19.

The report said China will overtake the US as the world’s largest economy by 2030. “This remains a remarkable achievement from an economy that was only 12% of the size of the US economy as recently as 2000,” it said.

The main theme of the report is that emerging economies catch up and overtake advanced economies, using GDP measured in dollar terms. “The interesting trend emerging is that by 2032 five of the ten largest economies will be in Asia while European economies are falling down the ranking and the US losing its top spot,” said Oliver Kolodseike, senior economist at Cebr. “Technology and urbanisation will be important factors transforming the world economy over the next 15 years,” Kolodseike said.


Investors rush to mutual funds

In a big surge, mutual funds have added over Rs.6 trillion to their asset base in 2017 and the uptrend is likely to continue in the new year, helped by a spirited promotion campaign by the industry and post-demonetisation resurgence of financial investment products.

The industry is looking at an increase of nearly 40% to the total AUM as the year 2017 draws to a close, after attaining a record level of Rs.23 trillion at November-end itself—up from Rs.16.46 trillion at the end of December 2016.

The investor count is also estimated to have risen by over 1.7 crore during the year. Moreover, the fund houses are expecting similar ‘healthy’ growth in AUM to continue in the new year as the penetration levels of mutual funds are still very low in the country and various reform measures initiated by the regulator Sebi should help too.

In 2017, the total asset base of all 42 active fund houses put together has surged by an impressive about 40%. The growth was 24% over the last five years. The industry’s AUM had crossed the milestone of Rs.10 trillion for the first time in May 2014 and in a short span of about three-and-a-half years, the asset base shot up more than two-fold to Rs.23 trillion in November-end.

This would be the fifth consecutive yearly rise in the industry AUM, after a drop seen for the two preceding years. The spike in bank deposits and consequent decline in interest rates following demonetisation on 8 November 2016 has also helped mutual funds.

The industry has been running a very ambitious investor awareness campaign, ‘mutual fund sahi hai’ or mutual funds are right for the investor and the experts feel it may have added considerably to the growth. Further, consistent delivery of returns by the industry and prudent risk management assisted in increasing the penetration of mutual fund products.

Moreover, a sharp rise in SIPs has promoted more sustainable growth for the industry as more people moved away from the concept of large lump sum investments. Fund houses have garnered over Rs.53,000 crore through SIPs—a preferred route for retail investors to invest in mutual funds as it helps them reduce market timing risk.

The industry added over 9 lakh SIP accounts each month on an average in 2017 with SIP size increasing from Rs.3,973 crore last year to Rs.5,893 crore in 2017.

The increased participation of investors from the country’s smaller towns (B-15) compared to top 15 cities was another major development for the industry. Another highlight of 2017 was an impressive surge in the number of investor accounts and equity folios contributed tremendously to this growth.

Overall, investor folios climbed by 1.7 crore to 6.5 crore while retail investor accounts—defined by folios in equity, ELSS and balanced categories—alone grew by 1.4 crore to 5.3 crore. Equity and equity-linked saving schemes attracted an impressive inflow of around Rs.1.4 trillion.

SIPs have been a key driver for these flows, while EPFO has been another major contributor to such flows through passive funds. The year passing-by continued to see a trend wherein net investments by domestic institutions have been more than that of foreign investors.

Mutual funds have made a net investment of Rs.1.15 trillion into stock markets, much higher than Rs.53,000 crore pumped in by FPIs. Over the last few years, MFs have proved to be a low- cost, compliant and transparent entity to channelise savings towards financial investments.

Indian airlines to induct over 900 planes by 2025

Indian airlines are likely to induct more than 900 aircraft in the coming years, with IndiGo alone expected to add 448 planes.

India is one of the fastest growing aviation markets in the world and most airlines have ambitious expansion plans, especially to tap the potential on regional routes. As per data available with the civil aviation ministry, budget airlines IndiGo, SpiceJet, GoAir and AirAsia are set to significantly expand their respective fleet sizes.

Along with other carriers, the total number of aircraft to be inducted by the domestic players would be more than 900. With an existing fleet of 150 planes, IndiGo is readying to add another 448 aircraft—399 A320s and 49 ATRs—in the next seven to eight years. Competitor SpiceJet too is in the process of expanding its current fleet of 57 aircraft. The no-frills airline would be adding 107 B737-800s and 50 Bombardier Q400s during the 2018-2023 period.

Another budget carrier GoAir, which is yet to take off on overseas routes, would induct 119 A320 planes during the period from 2018-2022. At present, its fleet size is 34.

AirAsia India would induct 60 planes in the next five years. Currently, the budget carrier has 14 aircraft. Legacy carrier Jet Airways—which has 107 aircraft—would take 81 B737-8 MAX planes during 2018-2024 period. It would also add five B737-800s this fiscal ending March 2018.

Disinvestment-bound Air India would induct three B777- 300ER and 16 A320 planes between December this year and March 2019. The national carrier has 155 aircraft at present. Among others, full service carrier Vistara would induct five aircraft next year that would expand its current fleet of 17 planes.

TruJet, which now has four planes, would add six aircraft each year from 2018-2022. These would be ATR72-500/600, the ministry data showed. After starting services this year, Zoom Air has placed orders for five CRJ-200 and 14 CRJ-900 planes. At present, it has two planes.

1.7% Indians Paid Income Tax in 2015-16

Just over 2 crore Indians, or 1.7% of the total population, paid income tax in the assessment year 2015-16.

The number of income-tax return filers increased to 4.07 crore in assessment year 2015-16 (FY 2014-2015) from 3.65 crore in the previous year but only 2.06 crore actually paid tax as the others claimed income below taxable limits.

In the previous AY 2014-15, 1.91 crore, out of 3.65 crore who filed returns, had paid income tax.

But the total income tax paid by individuals declined to ₹1.88 lakh crore in AY 2015-16 from ₹1.91 lakh crore in AY 2014-15.

The data indicates just over 3% of the 120 crore population filed returns.

Of these, 2.01 crore paid nil income tax, 9,690 paid tax of over ₹1crore.

Only one individual paid over ₹100 crore in taxes (₹238 crore to be precise).

Maximum among of 19,931 crore was collected from 2.80 crore tax filers who paid between ₹5.5 lakh to ₹9.5 lakh in taxes.

As many as 1.84 crore returns were filed for payment of income tax of less than ₹1.5 lakh or an average of ₹24,000.

Of the 4.07 crore tax returns field in AY 2015-16, close to 82 lakh showed zero or income less than ₹2.5 lakh.

Currently, no income tax is for income up to ₹2.5 lakh.

In AY 2014-15, 3.65 crore filed tax returns with 1.37 crore showing zero or less than ₹2.5 lakh income.

The combined income of all individual tax filers rose to ₹21.27 lakh crore in AY 2015-16 from ₹18.41 lakh crore in the previous year.

Maximum number of 1.33 crore individuals were in ₹2.5 lakh to ₹3.5 lakh income group in AY 2015-16.

In all, 4.35 crore income tax returns, including those by individuals, were filed in AY 2015-16. Total income declared was ₹33.62 lakh crore.

In the previous year, 3.91crore returns were filed with ₹26.93 crore declared income.

Companies filed 7.19 lakh returns with gross income of ₹10.71lakh crore.

Kulbhushan Jadhav meets Mother and Wife

Kulbhushan Jadhav’s mother and wife met him, nearly two years after the Pakistani army arrested the Indian national and sentenced him to death over allegations of spying.

The meeting that lasted for a mere 40 minutes can be viewed as an attempt by Islamabad to reach out to the Modi government, which has shown little interest in widening its engagement with the neighbour after the Pathankot and Uri terror strikes.

Jadhav and his family were separated by a glass panel and they spoke through a speaker phone in what was a family gathering of sorts after a gap of about 22 months. Pakistan’s foreign office director of India desk, Dr Fariha, was also present.

Jadhav’s mother Avanti and wife Chetana were accompanied to the meeting by India’s deputy high commissioner JP Singh to provide them moral support.

India rejected Pak claim that since the Indian deputy high commissioner accompanied the family, it constituted “consular access”. The Pakistan foreign ministry also clarified that the meeting was granted as “a humanitarian gesture on the birthday of the Father of the nation, Quaid-e-Azam Muhammad Ali Jinnah” and should not be seen as “consular access”.

However, Pak foreign minister Khawaja Muhammad Asif earlier said allowing an Indian diplomat with the family meant consular access. Jadhav’s family landed in Islamabad via Dubai around noon and as they drove to meet him, traffic was blocked on the road. Pakistan Rangers, anti-terrorism squads and sharp shooters were posted on rooftops to prevent any untoward incident. India had sought a “sovereign guarantee” from Pakistan to ensure the safety of Jadhav’s family.

A former officer of the Indian Navy, Jadhav was sentenced to death by a military court in Pakistan in April. India has opposed the arrest and the sentencing, saying he was kidnapped from Iran where he runs a business. Since his arrest, Pak has repeatedly refused to give India consular access.

PM inaugurates Delhi’s new Metro line

On Christmas day, Delhi Metro threw open the Magenta line, one of the most important pieces of its third phase that brings the Noida-south Delhi journey down to just 19 minutes.

The 12.64 km section that was opened has Botanical Garden and Kalkaji Mandir as the two terminal stations and it reduces travel time between South Delhi and Noida to nearly a third of what it previously took (52 minutes, via Mandi House).

Before Monday, commuters had to traverse 22 stations, including an interchange at Mandi House, to reach Kalkaji station from Botanical Garden. The shortened journey also means that commuters will be saving money — instead of Rs.50 via Mandi House, the Magenta line ride will cost Rs.30.

The line was inaugurated by the PM, who boarded the Metro from Botanical Garden station and travelled till the next station, Okhla Bird Sanctuary station, the only two stations that are in Noida. The seven other stations till Kalkaji Mandir are in Delhi.

The section was opened for commercial operations at 5 pm. Monday being a holiday, the new corridor mostly saw people flocking to the nearest station to get a first-hand experience of the ‘driverless’ trains.

Trains on the Magenta line are being operated using a new signalling technology — Communication Based Train Control, which allows unattended train operations —but drivers will be present in the trains for the next couple of years.


‘Bengaluru – BE U’ (be you)

A logo that signifies Bengaluru’s 480-year history and its future-first outlook, Brand Bengaluru, was unveiled. The logo, which was selected from 1,350 entries, highlights the tagline, ‘Bengaluru – BE U’ (be you). The logo is expected to build the city’s image on the global stage.

IT-BT and tourism minister Priyank Kharge said the logo would be used to enhance tourism in Karnataka, while giving citizens an identity to connect with.

Kharge said they zeroed in on ‘Be U’ because the city is known for its cosmopolitan nature that allows every citizen individuality while providing a sense of belonging. “The logo has a touch of Kannada and English,” he said.

The logo was unveiled amid festivities at Vidhana Soudha, which was opened up for Open Street, in the presence of Bengaluru development minister K J George, Gandhinagar MLA Dinesh Gundu Rao, Shantinagar MLA NA Haris, and Bengaluru mayor R Sampath Raj.

The department had called residents to present their ideas for a logo. Nammur, a city-based design firm started by two former bankers, presented the winning design and won a cash prize of Rs.5 lakh to promote the design across commercial establishments.

Kharge said the logo would enhance the city’s status on a global platform. “We have a rich history and it deserves to be showcased to the world. Bengaluru is fast growing but is deeply rooted in its 480-year-old heritage. Weaving stories of how the city became one of the leading metropolises of the world will be key to promoting Brand Bengaluru,” he said.

Jai Ram Thakur to be Himachal CM

Suspense over Himachal Pradesh’s new chief minister ended with BJP giving the reins of the state to five-time MLA and former minister Jai Ram Thakur.

The 52-year-old will be the 13th chief minister of the hill state. He will take oath on December 27 in the presence of PM Narendra Modi.

Amid uncertainty following the defeat of Prem Kumar Dhumal, BJP’s central observers Nirmala Sitharaman and Narender Tomar, and the party’s HP in-charge, Mangal Pandey, arrived in Shimla to meet newly elected MLAs, leaders and MPs from the state.

In the meeting, Prem Kumar Dhumal proposed Jai Ram Thakur’s name as the leader of the BJP legislature party and senior leaders Shanta Kumar, J P Nadda and Satinder Satti seconded it.

Later, a BJP delegation led by Thakur met Governor Acharya Devvrat at Raj Bhavan and staked claim to form government.

This is the first time in the state that a leader from Mandi has become CM. If Kangra district with 15 of the 68 assembly seats forms the political heart of Himachal, then Mandi comes in second with 10 seats.

BJP had faced an internal rift while selecting a CM after Dhumal lost in Sujanpur along with other senior leaders. While Thakur was seen as the front-runner ever since the results were declared on December 18, many other names, including Union minister J P Nadda and Dhumal, did the rounds over the next few days.

Thakur and Dhumal had a closed-door meeting before the central observers arrived in Shimla on Thursday. They met at Dhumal’s residence at Samirpur village for about an hour. But soon after, supporters of Dhumal raised slogans demanding the CM’s post for him. Thakur’s supporters, too, did some sloganeering, exposing the party’s fault line. On Saturday, however, Dhumal said he was not in the race and it was largely certain that Thakur would take over.

Coming from a humble background, he represents a class of leaders who have worked their way up from the grassroots. Sources said his clean image, strong connect with RSS and ability to take warring factions of the party along played a major role in his selection.

Thakur, from Tandi village in Mandi district’s Seraj assembly constituency, was elected as an MLA for the first time in 1998 from Chachiot in Mandi and was re-elected in 2003 and 2007 from the same seat.Thakur, who has an MA in English literature, is married to Sadhna Singh, a doctor, and they have two daughters.

Somewhere in Mumbai....

Liquidity dips, interest rates set to rise

For businesses, 2017 is a year of easy money, thanks to a demonetisation powered surge in cash with banks that kept interest rates low. However, this is going to change. Now, there are clear signs that liquidity is reducing in the banking system and interest rates are set to rise.

RBI was forced to lend money to banks last week for the first time since demonetization. The drop in liquidity in the system is a fall out of advance tax outflows from banks, resulting into a cash squeeze. This was not a problem in the first three quarters of 2017 as demonetization had pushed up cash level in banks.

The systemic liquidity deficit — triggered by advance tax payments for Q3 FY2018 and recent increase in credit offtake — to widen with GST payments. As a result of the squeeze in liquidity, yields on the 10-year government bonds rose to 7.25%. Long term home loans are available at 8.35%. This is the narrowest spread between the 10-year G-secs and home loans in recent times. The 10-year yield had dropped to 6.2% a year earlier.

Another reason for the cash shortage is currency in circulation continues to rise, defying RBI’s claims that it has stabilized. CIC rose to Rs.16.9 lakh crore for the fortnight ended December 15, 2017, up from Rs.16.8 lakh crore in the previous one. This has been rising fortnight upon fortnight and is now at the same level as March 2016. Economists are now saying that CIC level is keeping with long-term trend lines and demonetization is turning to be a blip.

The rise in bank loans is another indicator that interest rates will come under pressure. According to RBI data, outstanding bank credit as on December 8, 2017 stood at Rs.80.3 lakh crore — a year-on-year increase of  9.8%. This is a sharp jump from the 5% level at the beginning of the year and highest since October 2016.

Besides rising demand from corporates, the government is also expected to increase its borrowing. There are expectations that the government may raise farm spending during the current financial year after weaker than expected performance in Gujarat state elections. In its forecast for 2018, Standard Chartered Bank has said that it expects the government to deviate from the fiscal consolidation path and borrow more than planned.

PM Modi to attend Davos economic summit

Prime Minister Narendra Modi will make his maiden appearance at Davos, the Alpine ski resort where the world’s top CEOs and a large number of heads of government gather for the annual meeting of the World Economic Forum in January.

Modi will be the first Indian PM to attend the meet in over two decades but officials said, it will be the first time that an Indian Prime Minister will be the treated like the chief guest, with the country expected to dominate the show, where nearly a hundred Indian corporate chiefs and policymakers will be present. The India theme will be in focus at the conference with several sessions around India. There is a lot of interest to invest in the country.

Last January, Chinese President Xi Jinping delivered the main address in Davos where he made a strong pitch to shun protectionism, in what was an apparent dig at the US ahead of Donald Trump’s inauguration later in the month.

Typically, Indian PMs have avoided the event as it clashes with the Republic Day celebrations but Modi has decided to pack his already hectic January calendar with a trip to Switzerland with the event scheduled for January 23-26. He will return to India to welcome Asean leaders for the Republic Day, which will be followed by the start of the budget session of Parliament. In the past only two PMs — PV Narasimha Rao and HD Deve Gowda — have gone to Davos with the last one being in 1997.

Like the past, 30-40 heads of government are expected to be Davos, which will give India an opportunity to showcase its policies as well as soft power through food and culture. In a statement last month, WEF said over 3,000 leaders, representing 100 countries, will gather in an effort to shape the global and industry agendas, with a commitment to improve state of the world.

TISS to open world-class school of economics

Come 2019, Mumbai will get a world-class school of economics at the Deonar campus of The Tata Institute of Social Sciences.

This will mark the foray of the premier institute—well known for its courses in social sciences, human development and public policy—into mainstream economics studies. At present, TISS offers some courses in economic sciences on its Mumbai, Tuljapur, Guwahati and Hyderabad campuses.

The new autonomous campus of TISS, to be set up at a cost of Rs.100 crore, will bring in faculty members and programmes from top global institutes such as London School of Economics and Political Sciences and Paris Institute of Political Studies.

“The building work has started and it will be ready by May 2019. Admissions will be completed by March 2019,” said Dr S Parsuraman, director of TISS.

Initially, the institute will offer only fellowship courses—MPhil and Phd. “It will expand later,” he added. It will offer masters and doctoral programs in econometrics; business and development analytics; development economics; public policy and good governance; ecology, livelihoods, social entrepreneurship; urban habitat and climate change; and regulatory governance.

It is likely to be called School of Economics Sciences. However, there is also a possibility that the name of one of sponsors may be attached, like in the case of Kellogg School of Management.

This will be Mumbai’s second “school of economics”. Recently, Mumbai University renamed its economics department as Mumbai School of Economics. Dr Parsuraman said, “There are schools of economics at Mumbai University and other universities. They are limited in their scope. We are setting up School of Economics Sciences and it will offer many more programmes. Development economics and compassionate capitalism will be our main focus.”

Sasikala’s nephew wins Jaya’s seat

In a by-election whose campaign was yet again marred by allegations of bribery, independent candidate and rebel AIADMK leader T T V Dhinakaran emerged victorious beating his AIADMK rival by a massive margin of 40,707 votes.

The victory of Jayalalithaa aide Sasikala’s nephew against all odds and coming on the death anniversary of AIADMK founder MGR marks his birth as a political star.

Dhinakaran got 89,013 votes while his AIADMK rival veteran E Madhusudhanan secured 48,306 votes. He later said, “This government will be ousted in three months. The people of Tamil Nadu have taught this traitor-AIADMK government a fitting lesson. I am Amma’s successor.”

AIADMK rebel Dhinakaran’s victory is expected to set off minor tremors within the newly unified AIADMK that could lead to further desertions by MLAs and MPs. Dhinakaran now has the backing of 18 MLAs, all of whom were disqualified by the Tamil Nadu assembly speaker. There is also speculation that the DMK camp is secretly rejoicing Dhinakaran’s victory which, they feel, may hasten the AIADMK government’s fall and ensure a mid-term poll.

Railways: A ₹20-lakh crore Boost in the Works

The railways ministry is drawing up a ₹20-lakh crore investment plan under which it will convert 10,000 km of its trunk routes into high-speed corridors and take up several other projects related to modernisation .

The investment plan will be spread out over a period of 10 years, with an average annual capacity upgradation and expansion outlay of ₹2 lakh crore.

Half of the total allocation — about ₹10 lakh crore — will go towards speeding up train travel. Under the plan, railways would upgrade the existing Delhi-Mumbai, Delhi-Howrah, Bengaluru-Hyderabad among several other routes into high speed corridors, and upgrade the stations along the route into world class terminals.

Railways will also complete the 3300-km long dedicated corridor project for the movement of freight that will free up existing routes to run more premium passenger trains and increase the average speed of the trains.

The national transporter would also induct more than 40,000 German technology-based LHB coaches that are safer and will reduce the number of causalities in case of train derailment or an accident.

The railways has also planned a complete overhaul of the signalling and electrification network at an estimated cost of ₹60,000 crore that will allow it to run trains every 6-7 minutes.

Ever since the National Democratic Alliance government has come to power, investment in railways has gone up substantially. In the past three financial years, the government has spent more than ₹3 lakh crore towards the development of this critical infrastructure sector. The railways is expecting to generate substantial revenue by monetising its own assets such as overhead electric lines, land bank among other things to fund the plan.

The national transporter will also receive funding through institutional investors such as Life Insurance Corporation of India and Indian Railway Finance Corporation bonds.

For the high-speed corridor projects, it could get financing from the Japanese funding agencies, World Bank, Asian Development Bank and several other investors.

Rupani Remains Gujarat CM

As many as 99 BJP MLAs in Gujarat elected Vijay Rupani as the chief minister of the state with Nitin Patel as his deputy.

The decision was taken at a meeting held in the BJP headquarters on the outskirts of Gandhinagar in the presence of central observers, including Union finance minister Arun Jaitley, Saroj Pandey and BJP Gujarat in-charge Bhupendra Yadav.

Speaking to the media later, Jaitley said the names were proposed by senior BJP MLA Bhupendrasinh Chudasma and was unanimously accepted by the MLAs.

Meanwhile, BJP’s strength in the assembly that had gone down to double digit grew back to triple digits with independent MLA from Lunawada, Ratansinh Rathod supporting the party unconditionally.

Though the BJP retained power in the key western state for a record sixth straight term, there was speculation about Rupani’s continuance due to the party’s narrow victory over challenger Congress.

The BJP won 99 seats in the 182-member Assembly, the first time its tally slipped below hundred since 1995, while the Congress clocked its best in many years clinching 77. Together with its allies, the Congress has the backing of 80 MLAs.

BJP national president Amit Shah for the records at the onset of the election campaign had stated that the party will continue with Rupani and Nitin Patel at the helm in government post-election. However, the erosion of seats had set speculations abuzz with a possible change.

A Jain Bania by caste, Rupani is neutral to the caste arithmetic that had significant role in election results in the state recently and party insiders maintained that changing Rupani at this point would have given out a wrong signal, as the party is trying to portray the victory as a major success in the face of 22 years of incumbency.

Rupani will now make a claim for forming the next government to Governor OP Kohli, who had dissolved the government on Wednesday and had asked Rupani to continue as the caretaker chief minister till the next government swears in.

While the party is yet to announce the date for swearing -in of the next government, it is expected that the swearing -in will be held on December 25, the birthday of former prime minister Atal Bihari Vajpayee.


India Ready to Play Host to 10 Asean Leaders

The central government is preparing for the mega Indo-ASEAN show which will be attended by all the 10 leaders from SE Asia in January amid growing demand for Delhi to play a bigger role in the region to counter the hegemony of China.

The Indo-ASEAN commemorative Summit in Delhi on January 25 to celebrate 25 years of partnership will be followed by the presence of all 10 leaders as chief guests at India's Republic Day on January 26. This will be the first time that more than two leaders will be chief guests on India’s Republic Day. It was only thrice since 1950s that India had invited more than one leader as the chief guest during Republic Day.

In 1956, the UK Chancellor of Exchequer and Chief Justice of Japan were Chief Guests on January 26; later in 1968, Soviet leader Alexei Kosygin and Yugoslav leader Tito were chief guests; and in 1974, Tito once again was the Chief Guest along with the then Sri Lankan PM Bandernaike.

The highlight of the Commemorative Summit on January 25 will be the Delhi declaration that will outline vision for India's ASEAN engagement for the next 25 years across sectors from security to economic partnership to India-led connectivity projects to centuries-old cultural links. Some of the visiting SE Asian leaders will also hold their standalone bilateral meets with PM Modi on the sidelines of the Summit that promises to be as grand as the third edition of the Indo-Africa Summit here in 2015 and BRICS Summit in Goa in 2016. Around 20 events are planned in the run-up to the Summit and Republic Day not just in Delhi but also in other states. 

2G scam: No one guilty

A special court acquitted former telecom minister A Raja, DMK lawmaker Kanimozhi, Essar group vice-chairman Ravi Kant Ruia, Swan Telecom promoter Shahid Balwa, Unitech managing director Sanjay Chandra, ex-telecom secretary Siddharth Behura and 12 others in the 2G scam, which had rocked the telecom industry in 2011and was key to the previous government’s defeat three years later, saying that the charges had not been proven.

“I have absolutely no hesitation in holding that the prosecution has miserably failed to prove any charge against any of the accused made in its well-choreographed charge sheet,” said judge OP Saini, who has been dealing exclusively with 2G spectrum scam cases. “There is no evidence on the record produced before the court indicating any criminality.”

The charges related to application deadlines, manipulation of the first come, first served policy, allocation of spectrum to dual-technology applicants, ignoring the ineligibility of Swan Telecom and Unitech group companies, non-revision of entry fees and the transfer of ₹200 crore to Kalaignar TV as bribes. Saini decided three cases on Thursday, two filed by the Central Bureau of Investigation and one by the Enforcement Directorate, in judgements that were about 2,200 pages long all told.

Referring specifically to Raja, Saini said there was no material on record to show that he was the “mother lode of conspiracy in the instant case. There is also no evidence of his no-holds-barred immersion in any wrongdoing, conspiracy or corruption.”

CBI and ED said they will appeal the Thursday verdict in a higher court.

The 2G scam came to haunt the Congress-led United Progressive Alliance government, which couldn’t shake off the taint of corruption as it got embroiled in various other scandals.

Street protests evolved into an anti-corruption movement that gave rise to the Aam Aadmi Party. Narendra Modi and the Bharatiya Janata Party were able to harness the widespread public disgust and turn it into a powerful campaign plank to defeat the UPA and ride to power in 2014.

CBI had alleged that the government lost Rs.30,984 crore after the telecom department under Raja allotted 122 licences bundled with startup spectrum in 2008 at prices determined in 2001, or Rs.1,658 crore. Before that, the Comptroller and Auditor General had estimated the loss to the exchequer at Rs.1.76 lakh crore.

Saini suggested that the figures involved were highly inflated.

“On account of the various actions and inactions of the officials… nobody believed the version of DoT and a huge scam was seen by everyone where there was none. These factors compelled people to conjecture about a big scam,” Saini said. “Thus, some people created a scam by artfully arranging a few selected facts and exaggerating things beyond recognition to astronomical levels.”

The Supreme Court had scrapped those 122 licences in 2012, saying that the first-come, first-served basis of spectrum allotment in 2008 had been faulty. That led to the exit of foreign telecom giants Etisalat and eventually Sistema and Telenor.

The former telecom minister said the accusations against him were bogus. “I brought a revolution in the telecom sector. It is not unknown in history that a person who did revolution is tainted as a criminal,” said Raja, adding that the presumptive loss to the exchequer “which formed the basis of the conspiracy theorists to run amok, was cooked up.”

Those acquitted included Essar Group promoters Ravi Ruia and Anshuman Ruia and Essar Group director Vikash Saraf, along with Loop Telecom promoters IP Khaitan and Kiran Khaitan. The court also acquitted Loop Telecom Ltd, Loop Mobile (India) Ltd and Essar Teleholdings Ltd.

Others exonerated were former telecom secretary Siddharth Behura, Raja’s erstwhile private secretary RK Chandolia, Swan Telecom promoters Balwa and Vinod Goenka, Unitech’s Chandra and three top executives of Reliance Anil Dhirubhai Ambani Group — Gautam Doshi, Surendra Pipara and Hari Nair. Reliance Group, as R-ADAG has since been renamed, welcomed the order.

Directors of Kusegaon Fruits and Vegetables Pvt Ltd Asif Balwa and Rajiv Agarwal, Kalaignar TV director Sharad Kumar and Bollywood producer Karim Morani were also acquitted. These companies were accused of being the conduits for the alleged bribes paid to Raja.

The probe agency had also alleged that Raja had taken bribes, routed through Kalaignar TV run by Kanimozhi, and colluded with bureaucrats and officials of companies to subvert the first-come, first-served process of allocating spectrum to favour companies such as Reliance Telecom, Swan Telecom and Unitech Wireless. CBI had alleged that Reliance Telecom had used Swan as a front company to garner airwaves in 2008. All the companies have been acquitted.

Saini faulted the first-come, first served policy of allotting airwaves. “The policy of first-come, first-served was not clear, definite and explicit and left room for misinterpretation. It is clear that the policy was not a result of well thought-out process and was meant only for limited and staggered applicants,” Saini said.

The Congress and DMK hailed the verdict. “We respect the court’s judgement. I am glad that the court has pronounced unambiguously that all these massive propaganda that has been (on) against the UPA was without any foundation,” former prime minister Manmohan Singh said. “The judgement speaks for itself.”

Congress leader and former telecom minister Kapil Sibal, who succeeded Raja after the DMK leader was forced to resign due to the 2G scam, sought an apology from the BJP.

“They (the BJP) must apologise as they attacked the (then) prime minister and the Congress in the Lok Sabha as well as in the Rajya Sabha. Today’s verdict clears the then government position as vindicated,” Sibal said. He had said at the time that the spectrum allocation had caused “zero loss” to the government.

Finance minister Arun Jaitley hit back at the Congress.

“Its history is of corruption — facts have proven it. Congress leaders are treating the judgement like a badge of honour and certification that the 2G spectrum allocation policy was an honest policy,” he said. “(There is) huge arbitration element in spectrum allocation. First-come, first-served policy was only for a few. Each spectrum allocation was quashed by Supreme Court.”

Raja and Kanimozhi, who had spent 15 and six months in jail, respectively, were expectedly relieved after the verdict. “The last seven years have not been easy for me. You have been accused for something that you have not done. This means a lot to my party, DMK,” said Kanimozhi. A combative Raja said he will come down “heavily” on those who have been instrumental in all the “wrong that has been done”.

Saini pulled up the CBI for what he characterised as a shoddy job and criticised the DoT and some of its officials for the “mess” that had been created.

“Neither any investigator nor any prosecutor was willing to take any responsibility for what was being filed or said in the court,” said Saini.

He said the fate of the case had depended upon witnesses belonging to DoT and the companies of the accused.

“The witnesses from DoT were either highly guarded, and if I may say so, hesitant, in their deposition, and also went against official record rendering themselves unreliable,” Saini said. “Witnesses from the companies of the accused also did not support the prosecution version.”

He did however name two officials who weren’t among the accused in the verdict. He said it wasn’t Raja, but “Pulok Chatterjee, in consultation with Sh TKA Nair”, who had “suppressed the most relevant and controversial part of the letter of Sh A Raja from the then Hon’ble prime minister.”


Maharashtra: Shops, hotels, malls can remain open 24X7

Shops, hotels and malls can now remain open round-theclock through the week in Maharashtra, according to a new law, which will not apply to bars, pubs, liquor shops and discotheques, the state’s Labour Minister Sambhaji Nilangekar-Patil said.

The government notified the amended Maharashtra Shops and Establishments (Regulation of Employment and Service Condition) Act, 2017, on Tuesday which covers hotels, malls and restaurants.

The bill was passed by the Maharashtra legislature during its last session.

The new law excludes bars, pubs, wine shops and discos which have to open and close at a particular time.

“The amendment now allows all shops to remain open in three shifts. It can remain open for 24 hours on all seven days. It is, however, mandatory to give one-day leave to their employees every week,” Nilangekar-Patil said.

The amended law says smaller establishments would not require licences to run their operations but will have to register online with the authority concerned.

It exempts small and mediumsized establishments, which have less than 10 workers, or employees working from home, or which are run as online businesses, from registering for a licence.

This relaxation is expected to benefit about 22 lakh establishments, the minister said.

“Maharashtra is the first state to implement the Shops and Establishments Act to free shopkeepers from licence inspectors,” said Nilangekar-Patil. 

Haldiram Topples PepsiCo

Haldiram has regained the top spot as the country’s largest snack company after more than two decades, surpassing PepsiCo in sales thanks to increasing consumer preference for packaged namkeen over western snacks such as potato chips.

Haldiram posted sales of ₹4,224.8 crore in the year ended September, compared with PepsiCo’s ₹3,990.7 crore from brands such as Lay’s, Kurkure and Uncle Chipps, according to the latest Nielsen data sourced from executives. A year earlier, PepsiCo’s sales stood at ₹3,617 crore compared with Haldiram’s ₹3,262 crore.

Delhi appoints London firm for revival of Mula-Mutha

The Union government has appointed a London-based consultant agency for the Rs.950-crore Mula-Mutha rejuvenation project that aims at restricting release of untreated sewage into the river, Pune city MP Anil Shirole said.

He said the environment ministry has issued a letter on the appointment of the consultant — a crucial push to the project announced in 2015 but which is yet to take off.

In October, Shirole said, a meeting was held in New Delhi in the presence of Union environment minister Harsh Vardhan to take forward the project implemented with financial assistance from Japan International Cooperation Agency as part of the National River Conservation Plan.

The meeting resolved to appoint a consultant by the end of November. “It was also decided to start the project in phases,” he said, adding that NRDP and JICA are likely to approve laying of sewage lines in the Baner area in the next few days.

The actual field work will, however, start after the civic body’s standing committee approves it. The project aims at measures to stop pollution by restricting release of sewage into the river by constructing sewage treatment plants along its banks, laying sewer lines and constructing community toilets.

Shirole said he will try faster implementation of the project and ensure that it receives necessary assistance from the Centre. The leader pledged to hold talks with chief minister Devendra Fadnavis to resolve issues related to the implementation of the river rejuvenation project.

The civic administration had last month said no sewage would be released untreated into the Mula- Mutha under the river restoration project. The administration has mapped 127 points along the river where sewage is released.

Opposition parties in the Pune Municipal Corporation have been blaming the Union and the state governments for the delay in the implementation of the project. They claimed that the project was yet to take off because of the lack of coordination between the two governments.

The project is expected to improve the sanitation of the city. The biogas (methane) from STPs will be used to generate electricity. Though this will not only be a non-conventional energy source, but it will have its benefits in terms of reducing greenhouse gas emissions. Methane is a greenhouse gas.

The Mula-Mutha in Pune is one of the 302 polluted river stretches across the country identified by Central Pollution Control Board. The major factors behind the pollution of Mula-Mutha are discharge of untreated domestic waste water into the river because of inadequate sewerage system and treatment capacity and open defecation along the river banks.

The civic administration has, however, identified locations along the river wherein sewage is being released into the water.

CBDT panel set up to look at e-assessment

The Central Board of Direct Taxes has constituted a nine-member committee to work out details of how to implement paperless assessment of income tax returns where interface of taxpayers with I-T officers will be negligible.

Income tax paperless assessment or e-assessment was launched by the CBDT as a pilot project in 2015. E-assessment recorded phenomenal growth, up from 1,000 in 2015-16 to 14,000 last fiscal and is likely to touch 78,000 in the current fiscal year.

E-assessment will be rolled out across India from 2018 to reduce interface of taxpayers with tax officials. This is part of the endeavour to take all I-T proceedings online with minimal or no interface between tax officials and taxpayers. The I-T department had earlier made it mandatory for all tax queries to be sent through emails and responses were also to be received from taxpayers through mails.

The pilot project was initiated in Mumbai, Delhi, Chennai, Bengaluru, Ahmedabad, Kolkata and Hyderabad. From the next fiscal, the CBDT is likely to introduce e-proceedings for assessment of all cases across India. A scrutiny process entails submission of multiple documents by the taxpayer to the assessing officer before the case is processed. A new link called ‘e-proceeding’ has been added on the personal login of the taxpayer on the e-filing website of the I-T department.

The new regime of e-communication, however, will be voluntary and a taxpayer can decide whether to conduct her dealings with the taxman over the e-system or through the existing procedure of manual submissions of documents by visiting the tax office.

Once a taxpayer registers on the web portal, she will get a confirmation text message and email on her registered mobile number and email ID, indicating success. The functionality to conduct e-proceeding will be available for all types of notices, questionnaires, letter issued under various sections of the I-T Act

Of Income Tax Payers....

Tax concessions and moderate increments have slowed down the expansion of direct taxpayer base in the first two years of the Narendra Modi government, a trend that it expects to reverse post-demonetisation.

The number of individual taxpayers filing returns has grown, but at a slower pace for four years in a row starting 2012-13, when there was an increase of 54 lakh. But ever since then, the numbers will not bring cheer as far as widening the base is concerned. In fact, in the first two years of the current regime, the number of individual taxpayers rose from 5.4 crore in 2013-14, the year before Modi swept to power, to 5.93 crore in 2015-16 — an increase of 53 lakh.

But with at least 91lakh taxpayers added-post demonetisation, the government is hoping to significantly widen the base.

Tax experts say part of the reason for the moderation in growth in the direct taxpayer base are the concessions offered by the Modi government.

For instance, in his first Budget after the elections, finance minister Arun Jaitley had increased personal income tax exemption limit by Rs.50,000, which was seen as a reward for the middle class. This move is seen to have pushed several individuals out of the net. In 2015, he followed it up with more deductions for health insurance and pension.

In 2015-16, the falling trend of direct taxes as a percentage of the Centre’s overall tax collection also continued as the share of service tax in overall kitty went up. In fact, for the first time since 2006-07, direct taxes accounted for less than half the tax collections.

But on the positive side, it was a year in which the trend of falling ratio of direct taxes to GDP was reversed.

BJP rules in 19 States: PM

Emphasising the continued ascendancy of the BJP, an emotional Prime Minister Narendra Modi said the saffron party was now in power in 19 states, one more than the Congress at its peak under former PM Indira Gandhi.

The PM while addressing MPs at the parliamentary party meeting also recalled the sacrifices of leaders who built the party over the years and exuded confidence that the BJP would win more state polls in the days to come.

Congress under Indira Gandhi ruled in 18 states but the BJP and its allies have gained power in 19 states in the past three-and-a-half years. Soon, we shall win other state polls too,” Modi said.

A senior leader, who was present in the meeting, said Narendra Modi’s reference to Congress under Indira was noteworthy as the BJP was not only pitted against Congress but a host of regional parties which were strong forces in states. Modi turned emotional as he recounted his long association with party president Amit Shah, 14 years his junior. He said he groomed a young Shah into a national leader as he laid stress on giving opportunities to younger leaders in the party organisation.

Shah, who addressed party MPs before Modi, mentioned the hard work put in by the PM for the Gujarat and Himachal assembly polls. “Modiji used to call at 2 am followed by calls at 6 am too. I could not understand when he managed to sleep,” Shah said.

The PM called for strengthening the BJP “at its roots” for a win in the 2019 Lok Sabha polls and also pitched for promoting young faces inside and outside the party. Modi’s emphasis on young leaders is seen as a reference to the perception that there has been a leadership vacuum in Gujarat since his departure.

Sharing his anguish at the opposition’s “personalised” campaign against him, the PM asked party MPs not be affected by the “disinformation” campaign and stay focused on serving the people.

This was the first parliamentary party meeting after the Gujarat and Himachal Pradesh results and Modi shared how the BJP won Gujarat for a sixth time in a row after being a fringe party for decades. The PM said it was not easy for the BJP in Gujarat as several prominent leaders had left but expansion continued.

Improve India ties: Pakistani Army Chief Bajwa

In an extraordinary gesture, Pakistan Army chief Gen Qamar Javed Bajwa has urged the country’s lawmakers to try and improve relations with India, assuring them the Army’s support. His address comes in the backdrop of sustained US pressure on Pakistan’s leadership to mend ties with India.

“The military is ready to back the political leadership’s initiative for normalisation of relations with India,” Gen Bajwa told lawmakers at the senate committee of the House during his first appearance before a parliamentary forum.

Gen Bajwa was invited by senate chairman Raza Rabbani for the meeting and was accompanied by Inter Services Intelligence chief Naveed Mukhtar and top military officers, Major Gen Sahir Shamshad Mirza and Major Gen Asim Munir. The session lasted nearly four-and-a-half hours.

Quoting senators, leading Pakistan daily Dawn said Gen Bajwa told legislators that he wanted relations with all neighbours to be normalised and urged politicians to try to improve ties with India. The army chief ’s offer is particularly significant given the general perception that the army was against peace efforts with India. But Gen Bajwa said a large part of Indian military deployment was mostly against Pakistan. He also accused India of fomenting instability and terrorism in Pakistan, stating that New Delhi had developed a strong nexus with Afghan intelligence agency National Directorate of Security.


India can grow at 8% for next 20 years: UN

India can achieve an eight per cent growth rate for the next two decades by promoting investment and improving the living conditions of its people, a senior UN economic official has said.

Describing India's economic condition as largely positive and "favourable to growth", Sebastian Vergara, an Economic Affairs Officer at the United Nations, said the country needs to unleash the next set of reforms to achieve its potential. "It needs to think as to how to maintain and consolidate its growth for a very long period of time. India in our assessment has the potential to grow at eight per cent, not for a few years, but 20 years," Vergara said.  "For that, India needs to come out with the next series of reforms, for example, promote investment and improve the living condition of its population," he said.

Despite the positive economic condition, Vergara said, India's economic growth could be a little lower in comparison to some of the earlier forecasts.

The UN, in its latest report, projected India's growth rate to be 7.2 per cent in 2018 and 7.4 per cent in 2019.

The annual 'World Economic Situation Prospects' report, released last week, said the GDP growth for India in 2017 is projected to be 6.7 per cent.

Several factors have led to India's "positive" economic conditions, Vergara said.

"One of this is the growth of private consumption and sound macroeconomic policies. The monetary policy, which has been able to control inflation, also has a role to play," he said. "Also fiscal policy in India, in our assessment has been prudent. At the same time, it has provided another quite support for the economic activity," Vergara said.

The UN officer praised the Indian government's emphasis on public investment and infrastructure projects. "This has been very important to promote growth in the short term and to encourage economic activity in the medium term," he said.

The series of regulatory reforms that has happened in the previous year and the current one has also helped India's cause, said the UN official who keeps a tab on India's economic health and development. "Demonetisation clearly had an impact in early 2017. This resulted in a significant liquidity crunch, but was temporary," he said. "As the year went on, measures were implemented, financial relief were introduced, steps like credit support for small enterprise to help contain the shock that this demonetisation policy created," he said, adding that demonetisation has benefited the banking sector and increased the tax base -- which will help the fiscal accounts. "So, in the medium term, we think that this policy will help the Indian economy," Vergara said.

According to the top UN economic official, 2017 has been a year of major economic reforms in India, particularly in the banking sector. "There has been deregulation and further liberalisation of the policies regarding foreign direct investment," he said.

Vergara said these reforms are helping the Indian economy to improve its efficiency and increase the medium-term prospects of its economy. "In that sense these policy reforms are positive. Of course, we will see how these policies are implemented," he said.