Monsoon covers entire country

The monsoon has covered the entire country, 17 days ahead of its normal onset date, the India Meteorological Department said.

The monsoon reached Sriganganagar, its last outpost in the country located in west Rajasthan. Its normal date to reach Sriganganagar was July 15. The monsoon covers the entire country by July 1, but West Rajasthan gets rains later.

The four-month monsoon season normally begins from June 1 and ends on September 30.

This year, monsoon touched Kerala on May 29, three days ahead of its normal onset date of June 1. It battered the western coast in the first half of June. However, after a brief lull, it made a steady advance.

On Thursday, it reached Delhi, a day ahead of its schedule.

The monsoon deficiency, which until early this week was 10 per cent, went down to six per cent on Friday.

The Southwest Monsoon gives 70 per rains to the country, where agriculture still remains a major contributor to the GDP.


Rupee breaches 69

The rupee fell to an all-time low against the dollar, making it the worst-performing currency in Asia this year.

There is a reason for that. India sticks out like a sore thumb among most of the major economies in the Asia-Pacific region because of its large current account deficit.

China, to which India is frequently compared, ran a huge current account surplus of about $164.8 billion for 2017. As a percentage of gross domestic product, it is down to 1.4% from 9.9% a decade ago. While many countries in the region run current account surpluses, others have narrower deficits than India.

This is not to say that these economies are not vulnerable to external shocks. But their currencies are still withstanding the onslaught of the dollar’s surge far better than the rupee. The Thai baht has lost only 1.6% against the dollar. The Malaysian ringgit has performed even better. Others like South Korean won and the Philippine peso have depreciated more sharply but the rupee has been the worst performer for 2018 so far with a loss of 8% in its value. That is steep even considering previous episodes of depreciation. Even the Bangladesh taka has done better.

Of course, the current account deficit wouldn’t have mattered if these were normal times. But with the threat of trade wars hanging over the global economy and with a strong dollar, capital flows have turned risk-averse. Add to that the vulnerability of India’s external position to high crude oil prices. Given that India’s external position is weak to start with, it is more vulnerable than the others to sudden bouts of dollar outflows.

Foreign money will find value in an economy that gives good returns in the long run. The fact that the rupee sticks out like a sore thumb every time foreign investors turn jittery about emerging markets speaks volumes about the economy’s ability to attract consistent flows. Unless India fixes its thirst for imports by making the domestic industry more competitive, its currency will continue to face a fate worse than other Asian peers.

Haley warns of Iran import curbs

The US is acting tough on India regarding energy imports from Iran and New Delhi, despite its efforts to preserve energy independence, may be forced to comply to avoid sanctions from kicking in.

The Iran message was delivered most clearly by US ambassador to the UN, Nikki Haley, during her visit to the Capital. In a special address, Haley said: “The world is united against Iran having nuclear weapons because we all have good reason to worry about what Iran would do with those weapons.”

During the Obama years, India had to show a “significant reduction” and demonstrate it was bringing down oil imports at an average rate of 20% every six months. But Trump has insisted that this goes down to “zero”. That is also why the state department’s briefing to journalists this week on Iran was tougher than the one in early May.

Haley’s message on Iran comes even as it emerged that the US pulled out of the 2+2 dialogue with India because secretary of state Mike Pompeo chose to travel to North Korea to “follow up” on the Trump-Kim Singapore summit. The decision, seen as an open snub to India, also comes at a time when the bilateral relationship is under strain amid growing trade and economic disputes besides the threat of sanctions over Iran.

Sources said the dialogue would be rescheduled “soon” but bringing four top ministers together on a single day is proving to be a challenge.

Haley was unambiguous on Iran. Describing Iran as a “theocratic dictatorship that abuses its people, funds terrorism and spreads conflict throughout the Middle East”, she said: “The Tehran regime is the hidden, and sometimes not-so-hidden, force behind most of the conflict in the region. And its aggressive ambitions reach much further abroad. Iran’s pursuit of a nuclear weapon threatens all of us.”

During her meeting with Prime Minister Narendra Modi, Haley re-emphasised the importance of India cutting oil imports from Iran. In an interview to a TV channel, Haley reiterated that message: “I think for the future of India, future of resources, we would encourage them to rethink their relationship with Iran.”

5 killed in Mumbai plane crash

A 12-seater aircraft crashed in a crowded Mumbai suburb Ghatkopar, killing both the pilots and two aircraft maintenance engineers on board, besides a pedestrian.

This was the second air mishap in Maharashtra in two days. The pilot and flight test engineer of a Sukhoi Su-30M aircraft of Hindustan Aeronautics Limited had ejected safely after it crashed near Nashik.

The King Air C90 plane, which crashed at the Old Malik Estate near Ghatkopar telephone exchange, once belonged to the Uttar Pradesh government and was sold to UY Aviation. The aircraft had taken off from the Juhu airstrip on a test flight. It lost control when it was four nautical miles from Juhu, Air Traffic Control.

The police identified the crash victims as pilots Maria Zuberi, 48, and Pradeep Rajput, engineer Surabhi Brijeshkumar Gupta, 34, technician Manish Tejpal Pande, 21 and pedestrian Govind Pandit.

A team of DGCA officials rushed to the crash site for a preliminary investigation. A two-member team of the Aircraft Accident Investigation Bureau, which comes under the Civil Aviation Ministry, too reached the city to probe the crash.

DGCA officials traced the Aircraft Voice Data Recorder, which will help them piece together the events that led to the crash.

Investigators are likely to collect the wreckage of the plane in the next two days, he said.

Maharashtra Chief Minister Devendra Fadnavis too visited the crash site and said the air mishap would be probed.


Nod for 5 metro plans

Metro construction will pick up pace in the country with the Union finance ministry recently giving “in-principle” approval to five proposed metro projects in Indore, Bhopal, Kanpur, Agra, and Delhi, with an estimated cost of ₹1.07 lakh crore.

Besides the five metro projects, the ₹32,000 crore Delhi-Meerut corridor of the proposed Rapid Rail Transit System also got the in-principle nod from the finance ministry.

The “in-principle” approval is just the first step in a series of approvals that will follow before the projects finally take off the ground.

In Delhi, three corridors of phase four of the metro, running into 61.66 km with an estimated cost of ₹29,000 crore, have been approved.

The total length of the two corridors of the Kanpur metro rail project is 32.38 km and the completion cost, excluding the land cost and state taxes, is ₹16,192 crore. The length of the Agra stretch of the metro, which will also have two corridors, is 30 km and the completion cost is ₹12,253 crore.

Two of the other metro projects that got the “in-principle” nod are in poll-bound Madhya Pradesh. The proposed length of the Indore project is 104.25 km and the estimated cost is ₹26,762 crore while the length of the Bhopal metro is 95.03 km and the estimated cost is ₹22,504.25.

The projects approved by the finance ministry are the first to be approved after the government came out with the new metro policy last August. The policy made PPP (public private partnership) component mandatory for availing central assistance for all new metro projects.

G Raghuram, transport economist at IIM Bangalore, said that with the aspiration for vehicle ownership growing, mass rapid transport systems are a desirable option in our cities that have reasonable population density.

PM's chai pe charcha with Business Honchos

Industrialists expressed concern over rising perception that the entire business community is being targeted over scams and wanted the slow-moving state bureaucracy shaken up to boost housing in prime minister Narendra Modi’s first-ever interaction with India Inc’s top CEOs in the financial capital of Mumbai.

The no-holds-barred discussion, initially slated for one-and-a-half hours at the Raj Bhavan in south Mumbai, extended into a near-three-hour discussion with the prime minister holding unprecedented one-on-one-tea sessions with some leading CEOs after telling them he wanted to hear their criticism of his policies.

An hour-long presentation by the prime minister on his government’s achievements was followed by an honest and frank exchange of views.

One industrialist said that there is a perception that the business community is being targeted by the government thanks to intense reportage in the media about arrests and corruption scandals and wanted the government to clarify that only suspected criminals and offenders would be targeted. Another said that the bureaucracy at the state level is delaying much-needed work on affordable housing while a third wanted the government to step up defence orders to the private sector.

The PM listened to all this and also some praise over the work being done on Digital India and called for a one-on-one tea session with them.

Other industrialists present at the meeting included Reliance Industries chairman Mukesh Ambani, Aditya Birla Group chairman Kumar Mangalam Birla, RPG Group chairman Harsh Goenka, HDFC chairman Deepak Parekh and Piramal group chairman Ajay Piramal. Top bankers including State Bank of India chairman Rajnish Kumar and Kotak Mahindra Bank chairman Uday Kotak also attended the meeting.

The exchange of views was preceded by a presentation made by interim finance minister Piyush Goyal.

Modi also discussed many policy reforms and initiatives taken in the past four years. He emphasised the need to promote local manufacturing in areas such as medical devices, electronics and defence equipment. “If the 21st century is considered to be Asia’s century, then it becomes our duty to make it India’s century,” Modi said.

India’s capital formation to GDP — a measure of investment activity — was at 27.12% in 2016 down from the all-time high of 35.57% in 2007, according to the World Bank data.

Modi tried to promote India as the world’s next manufacturing hub aimed at creating millions of jobs and boost growth.

Modi said there is massive scope for private sector investment in the agriculture sector as it remains at meagre 1.75% at present.

Of China creating Debt Traps....

Sri Lanka’s handover of Hambantota Port to Beijing illustrates how China turned an ally’s financial woes to its advantage: NYT

China’s acquisition of the strategic Hambantota port from Sri Lanka has given it “control of a territory” just a few hundred miles off the shores of India, highlighting its “debt trap” and ambitious use of loans to gain influence around the world. An article in The New York Times about Sri Lanka’s handover of the Hambantota Port to China in December 2017 illustrates how China turned an ally’s struggles to its strategic advantage.

The report said that feasibility studies had found that the Hambantota port would not work and “frequent lenders” like India had refused to provide loans or assistance. “However, every time (then president Mahinda) Rajapaksa turned to his Chinese allies for loans and assistance with the ambitious port project, the answer was yes,” it said.

The investigative report said that over years of construction and renegotiation with a Chinese firm, the Hambantota Port development project distinguished itself mostly by failing, as predicted. 2012, the Colombo Port, which had room for expansion, handled 3,667 ships while only 34 vessels docked at Hambantota.

With Rajapaksa being voted out of office in 2015, Sri Lanka’s new government struggled to make payments on the debt. “Under heavy pressure, the government handed over the port and 15,000 acres of land around it for 99 years in December last year. The transfer gave China control of territory just a few hundred miles off the shores of rival India,” the NYT article said.

“The case is one of the most vivid examples of China’s ambitious use of loans and aid to gain influence around the world – and of its willingness to play hardball to collect,” it said.

“The only way to justify the investment in Hambantota is from a national security standpoint – that they will bring the People’s Liberation Army in,” India’s former foreign secretary and NSA Shivshankar Menon was quoted as saying in the report.

“They approached us for the port at the beginning, and Indian companies said no,” said Menon, who served as India’s foreign secretary and then its national security adviser as the Hambantota port was being built. “It was an economic dud then, and it’s an economic dud now.”


Environmental Performance Index

Delhi Metro will make its third foray into Haryana

With the opening of the 11.2 km Mundka-Bahadurgarh stretch of Green Line, Delhi Metro will make its third foray into Haryana — connecting Bahadurgarh to the heart of Delhi.

Operations on the corridor will start from 4 pm, with the inauguration likely to be carried out by Prime Minister Narendra Modi via teleconferencing in the morning. In addition, Union urban affairs minister Hardeep Singh Puri and Haryana chief minister Manohar Lal Khattar is expected to attend the inauguration ceremony in Haryana.

Every alternate train from Mundka will travel to City Park in Bahadurgarh and a frequency of around eight minutes will be maintained between Mundka and City Park. The total running time between Inderlok/Kirti Nagar and City Park (Bahadurgarh) will be around 50 minutes.

The Mundka-Bahadurgarh stretch is an extension of Delhi Metro’s Green Line from Inderlok to Mundka and will add an additional seven stations to the Green Line — all on the elevated corridor. While four of the new stations lie in Delhi (Mundka Industrial Area, Ghevra, Tikri Kalan and Tikri Border), three stations fall under Haryana’s jurisdiction (Modern Industrial Estate, Bus Stand and City Park).

With the opening of this section, the entire Inderlok-Bahadurgarh section would become 29.64 km-long.

Haryana already has over 21km of metro line under the DMRC network, with both Faridabad and Gurgaon covered under it. With the opening of this section, Delhi Metro’s growth in Haryana will expand to 25.8 km.

Swachh Survekshan 2018

Navi Mumbai slipped by one rank to take the 9th spot and Pune emerged as number 10, three positions up from last year, in Swachh Survekshan 2018, the cleanliness rankings of municipalities by the Central government released by PM Narendra Modi. Mumbai too showed an improvement, moving up to 18 from 29 in 2017, and Thane made a forward leap from 116 to 40. The top two positions were retained by Indore and Bhopal, and the report revealed that West Bengal is home to 7 of the 10 dirtiest municipal areas in the country.

The overall rankings of cities from Maharashtra also went up. Apart from the two cities in the top ten, 9 figured in the top 50, up from just 3 the previous year.

State officials said the government is now focusing on segregating waste in most cities in the state, for which a blueprint is being prepared.

The BMC had roped in NGOs, schools and government organizations, informing them about an app through which one could place any garbage-related complaint which would be solved in 12 hours. Around 4 lakh people registered to download the app. More than 5,500 public toilets were also opened.

West Bengal for the first time participated in the Swachh Survekshan which covered 4,203 municipal areas across the country this year.

While three new cities – Chandigarh, Pune, Vijayawada - made it to the best 10, Surat, Tiruchirappalli and Vadodara were pushed back. Chandigarh climbed to 3rd rank (it was 11 earlier), while New Delhi Municipal Council improved to occupy the No. 4 slot compared with the 7th it had. Tirupati jumped to number 6 from 9 last year. Uttar Pradesh has 3 of the dirtiest cities, Bihar 2 and Odisha 1.

Dairy Crisis brews in Maharashtra

A year ago, dairy farmers in Maharashtra got up to Rs.27 per litre of cow’s milk, but prices plunged by Rs.4-10 eight months ago as a result of a surplus and a crash in international skimmed milk powder prices.

Babasaheb Mane from Sangli’s Mahuli village was once a proud dairy farmer. He made Rs 30,000 a month from his four cows last year. Today, he and his wife work as farm labourers to keep their home running.

Mane sells 40 litres of milk daily for Rs.17 per litre. “I make Rs.720 a day but spend Rs.1,000 on the cows. I used to make a profit of Rs.15,000 per month but now I make a loss of Rs.9,000,” he says. Farmers here are trapped between the fall in procurement rates and sharp increase in the costs of inputs, including fodder, oil-cakes and lactation pellets for cattle over the last year.

Maharashtra’s formal sector collects 115 lakh litres of milk daily. In June 2017, after the historic farmer strike, the state hiked the procurement price from Rs.24 to Rs.27 per litre. However, prices plummeted in just a few months. Since November, the state has had a surplus of 22 lakh litres per day. At the same time, international skimmed milk powder prices fell 30-40%. Unable to sell their milk powder stock, dairies faced losses and cut the price offered to farmers. Maharashtra currently has stocks of 29,000 tonnes of skimmed milk powder.

The bulk of the state’s dairy sector is private. Only 1% of the state’s milk is bought by the government and 39% by cooperative dairies mainly controlled by the Congress and NCP. As much as 60% is bought by private dairies.

The state admits it cannot control prices in a decontrolled sector dominated by private players. “When the Milk Control Order was in force till mid-2000, the state controlled licences to dairies. But now milk is an open commodity,” said state dairy development commissioner Rajeev Jadhav.

The government has tried to enforce the procurement price of Rs.27 by issuing directives to cooperative dairies. “But the cooperative dairies went to court and in most cases, the high court issued a stay,” said Jadhav. Cooperative dairies accuse the BJP government of trying to crush a sector controlled by the opposition.

Dairies are demanding an export incentive for skimmed milk powder and subsidies to milk farmers, like that offered by Karnataka.CM Devendra Fadnavis has asked the Centre to declare a minimum support price for milk and 10% export incentive on skimmed milk powder.

Those leading the milk agitation say dairies are also exploiting farmers to make a difficult situation worse. “If the entire dairy industry is impacted by skimmed milk powder stocks, how are other states offering higher procurement rates? And why are dairies in Kolhapur able to offer higher rates than other parts of the state?” asks Ajit Navale of the Kisan Sabha.

By now, even the bigger dairy farmers are feeling the heat with many exiting the trade.

Indrajit Patil had a farm with 90 cows in Shirdon village in 2007. Now he has only five. With cattle markets depressed, he can’t even sell them. “The beef ban and fall in milk prices has shattered the cattle markets. I bought each cow for Rs.50,000, now the price is Rs.30,000. I am just waiting for the right time to sell,” he says.


Shivaji memorial update

A letter from the Ministry of Environment, Forests and Climate change, dated June 15, to the chief engineer, public works department, released on the MoEFCC website on Friday, cleared the revised construction plans (made in October 2017) presented by the state’s PWD on April 22.

In the revised clearances, the Union government has directed the state to follow a new clause of corporate environment responsibility plan. Considering the proposal for amendment to the environmental and Coastal Regulation Zone rules on construction near the shore clearance, the letter signed by Kaushal Vashisht, director, MoEFCC, read, “Based on the information furnished by the project proponent and the expert appraisal committee recommendations, the Ministry hereby accords amendment to environmental and CRZ clearance with additional conditions.”

While all previous conditions for environmental and CRZ clearances for the statue remain unchanged, EAC directed the state to bring in additional clauses including a focus on marine conservation, a plan for management of fishing operations, during the construction, among other conditions.

The CER plan stipulates creation of infrastructure for drinking water, sanitation, health, education, skill development, roads, and help to farmers in areas around the project.

Vinayak Mete, chairman of the committee that oversees implementation of the memorial project, said the revised clearances will be adhered to, but the Centre’s recommendations will be implemented only after a fresh letter, seeking permission to further increase the statue’s height by another two metres (212m), is sanctioned.

The project is to construct a memorial – an oval-shaped basalt rocky outcrop - in the form of an equestrian statue of Chhatrapati Shivaji Maharaj on a reclaimed island in the Arabian Sea in the Back Bay area.“There is no ecosensitive area or national park or sanctuaries located within 10 km of project area. There is no forest land involved in the project. The proposed site falls in CRZ IV ‘A’ area,” read the environment ministry letter.

The revised plans also includes setting up of two breakwaters towards north and south end of the site.

Environmentalists said the new design would be disastrous for Mumbai’s coastline. 

Didi Cancels China Trip

Bengal chief minister Mamata Banerjee’s proposed week long trip to China was called off at the last moment on Friday barely six to seven hours before her flight to Beijing. According to a note issued by the West Bengal government, the trip was cancelled as there was no confirmation on the proposed political meetings between the Mamata and the Chinese leadership.

In a press statement, Banerjee explained that she was “compelled” to cancel the visit at the last minute since China could not confirm her proposed meetings with the political leaders. “Till Thursday, everything was going well, but unfortunately, the Chinese side could not confirm the political meetings at appropriate level as informed by our ambassador in China,” Banerjee said. “It has now been intimated by our ambassador in China that the political meetings at the appropriate level under the Exchange Programme could not be confirmed. Therefore, the purpose of my visit with a delegation to China under the Exchange Programme is of no use.” The state government officials clarified that the “appropriate level” was defined by the MEA and not by the Bengal government.

“I wish the continuation of friendship between India and China in days to come and it should strengthen further in the interest of both the countries,” she said.

Ma Zhanwu, the consul general of the People’s Republic of China in Kolkata said, “I have no clue that the chief minister has cancelled the visit. I have to check what suddenly went wrong.”

The Chinese consulate issued a statement on Friday. “We have taken note of the fact that Madam Mamata Banerjee, Chief Minister of West Bengal, announced the cancellation of her trip to China on the afternoon of 22 June 2018. The Chinese side attaches great importance to its relationship with India and to the exchanges between the Chinese provinces and the Indian states. It was working hard to prepare for the Chief Minister’s trip to China, including on the relevant arrangements during the visit...The Chinese Consulate General in Kolkata has all along been committed to promoting ties between the Chinese provinces and West Bengal, and will continue its efforts.” it said.


Shiv Sena slams BJP's exit from Kashmir Government

Attacking the BJP over its exit from the Jammu and Kashmir government, the Shiv Sena said the party had spread anarchy in the state before opting out. In an editorial in its mouthpiece, Saamana, it said the BJP formed the government with the People’s Democratic Party only for “greed” of power, and compared its exit to the British decamping from India in 1947.

Earlier this week, the BJP pulled out of its alliance with the PDP, claiming that it had become “untenable”.

“Terrorism, violence, and radicalisation have risen and fundamental rights of citizens are in danger in the Valley,” Ram Madhav, BJP general secretary and architect of the alliance, said while announcing the decision on June 19.

The Sena slammed the BJP for pinning the blame of rising violence solely on the PDP.

“The BJP opted out of power after spreading anarchy in the Valley. The situation has never before deteriorated to this extent, rivers of blood have never flown so extensively, and never have so many soldiers lost their lives before,” the Sena alleged.

In the run-up to the 2014 general elections, PM Narendra Modi had talked about dealing with terrorism in Kashmir and Pakistan with a “56-inch chest”, but those assurances have fallen flat, the Sena said. People in J&K are so distressed with the increasing incidents of violence that they “feel the [previous] Congress-National Conference government was better,” the editorial claimed.


Mumbai - Pune Hyperloop snippets

After accommodating two Metro corridors and a bullet train terminal, Mumbai’s commercial hub Bandra Kurla Complex will also house a station for hyperloop connectivity that is being planned between Mumbai and Pune.

The hyperloop is proposed to start from Pune, and will come all the way till BKC via proposed Navi Mumbai Airport near Panvel where government plans it to connect with Colaba-Seepz Metro-3 underground corridor and the DN Nagar- Mankhurd Metro-2B corridor, and also the bullet train terminal, if possible.

Hyperloop is said to be a futuristic mode of mass transit system wherein a tube like pod is expected to allow one travel between Mumbai and Pune in 25 minutes. The project is being handled by the Pune Metropolitan Region Development Authority that has also prepared a pre-feasibility report on the same.

Kiran Gitte, Metropolitan Commissioner, PMRDA said, “The pre-feasibility conducted for Mumbai-Pune hyperloop has already been concluded and currently Virgin Hyperloop One is conducting a feasibility report for futuristic transit system. We basically plan to connect BKC in Mumbai because there are two Metro corridors proposed in BKC from where a person can go to any part of the city. We also plan it to connect with proposed Navi Mumbai airport”

Last week, Chief Minister Devendra Fadnavis also visited Virgin Hyperloop One that will make the system during his official visit to US. This visit is considered to be a significant visit after after signing of Memorandum of Understanding between Maharashtra government and Virgin Hyperloop in Novemeber 2017.

In the current context, a trial on stretch of at least 15-km stretch will be conducted by building the necessary infrastructure for hyperloop near the Pune end on Expressway.

Gitte added, “Virgin Hyperloop One is taking data from several agencies like MMRDA, MSRDC considering for Mumbai-Pune Expressway MSRDC planning authorities, and conducting feasibility study at its own cost. It will be challenging considering we plan to connect Metro junctions in Pune and Mumbai from where one can move to another place.”

Bank of Maharashtra: DSK Fraud

The Economic Offences Wing of Maharashtra Police arrested six bank officers and employees of DS Kulkarni Developers Limited in connection with the Rs.2,000-crore DSK fraud case. Those arrested include Bank of Maharashtra’s acting chairman and managing director Ravindra Marathe, and the bank’s ex-CMD Sushil Muhnot.

Marathe was arrested from Pune, while Muhnot was picked up from Jaipur. Both of them have been accused of advancing loans to the fraud accused realtor in an alleged major violation of banking norms. Also nabbed from Pune were BoM executive director Rajendrakumar Gupta, DSK’s chartered accountant Sunil M Ghatpande and DSKDL engineering department vice-president Rajeev Newaskar. The BoM zonal manager Nityanand Deshpande was arrested from from Ahmedabad.

The four arrested from Pune were later produced in the sessions court.

As their names were called out for the hearing, Marathe and Gupta looked visibly nervous; they sat in the witness box, while Newaskar and Ghatpande stood next to them.

Special public prosecutor Pravin Chavan told the court that the accused misused their power and position. A consortium of six banks was to sanction loans for DSK’s Dream City project in Phursungi, with plans to dole out Rs.600 crore. However, bank officers Gupta, Deshpande and Muhnot illegally sanctioned a loan of Rs.100 crore to DSK and passed a separate resolution without the permission of the other banks, also immediately transferring Rs.50 crore towards the Dream City. They have been accused of hatching a conspiracy in this regard.

Chavan further said the purpose for which the loan was passed was not fulfilled. The investigation revealed that this money was used to pay for bills and charges at a spa massage centre, for making photocopies, and to purchase shoes, rice, oil, floor decorations, vegetables, tailoring, along with other expenses.

In January 2016, DSK Group employees had faced severe salary problems, and thousands had quit their jobs. As many as 1,220 cheques had bounced, but the arrested bank officers did not consider all of this while sanctioning the Rs.100-crore loan to DSK, the prosecutor said, adding that to clarify role of each of them in the mess, custodial interrogation is necessary.

The defence advocates Harshad Nimbalkar, Shailesh Mhaske, Rishi Ghorpade and Rohan Nahar opposed this demand vehemently, with Nimbalkar arguing that Marathe and Gupta are officers of the rank of additional secretary and joint secretary, respectively, with the Government of India. He added that Pune police had obtained no sanction from the government or Reserve Bank of India for these arrests, and neither gave no intimation of this move, nor called for enquiries before the arrest.

Chief Economic Adviser quits

Chief economic adviser Arvind Subramanian will return to the United States owing to family commitments, Union minister Arun Jaitley has announced in a Facebook post.

Subramanian’s three-year term expired last October. He was keen to return to the US last year itself but was persuaded to stay on till May 2019. But “compelling” personal reasons have now made him opt for an early departure. “My departure from this job is for entirely personal reasons. It is no secret that we are expecting our first grandchild in early September. That’s a very compelling reason that takes us back to the old life... of researching, writing, teaching and reflecting, above all,” Subramanian said at a press conference on Wednesday.

He follows former Niti Aayog vice chairman Arvind Panagariya and former RBI governor Raghuram Rajan, who returned to academia in the US.


Air Passenger Traffic Growth Slows in May

The number of domestic air passengers in India registered a slower growth of 16.53% during May on account of rising fuel prices leading to increase in fares. Indian carriers carried 11.9 million passengers during the month, up from 10.17 million in May 2017.

Industry insiders say that lower growth is due to higher fares but expect the growth trend to continue.
However, all key scheduled carriers flew their planes with over 80% of their seats full. Gurgaon-based SpiceJet continued to maintain its pole position in terms of load factor by flying its planes 94.8% full, followed by IndiGo, which flew its planes with 91% seats followed by AirAsia India at 89.7%.

In terms of operating flights on time, Air India became the worst performer for May. While Air India operated 69.8% of its flights on time, IndiGo topped the list by operating 80.9% of its flights on time. SpiceJet was second, having operated 80% of its flights on time.

IndiGo remained the market leader in terms of passenger carriage, by flying 40.9% of the total passengers during May. Jet Airways was second by flying 15.2% of the passengers, while Air India was the third-largest carrier in terms of market share, accounting for 12.8% of the passengers flown during the month.

Kejriwal Ends Dharna at LG Office

Delhi chief minister Arvind Kejriwal ended his nine day sit-in at LG Anil Baijal’s office. Baijal wrote to the chief minister asking him to meet the IAS officers ‘urgently’ to address concerns of both sides through dialogue.

Baijal’s letter is mainly in response to deputy chief minister Manish Sisodia’s request for a meeting between the Delhi government and bureaucrats to end the impasse.

Kejriwal and Sisodia along with health minister Satyendar Jain and labour minister Gopal Rai began a sit-in at the LG office on June 11 demanding a direction to the IAS officers to end their ‘strike’.

Kejriwal left Baijal’s office on Tuesday evening, accompanied by cabinet colleague Gopal Rai and AAP leaders Sanjay Singh and Raghav Chaddha. Announcing the end of Kejriwal’s fast, Sisodia, who was discharged from the hospital along with health minister Satyendra Jain on Tuesday morning, said meetings called by cabinet ministers Imran Hussain, Kailash Gahlot and Rajendra Gautam were duly attended by the IAS officers who had not been attending meetings earlier.

BJP dumps PDP

The rocky three-year alliance between PDP and BJP that propped up the Mehbooba Mufti government in Jammu and Kashmir came to an abrupt end with the saffron party announcing withdrawal of support, a move that came two days after the Centre declared that it is revoking the suspension of operations in the border state.

There was simmering discontent on both sides over the alliance as PDP and BJP found themselves on a different page on virtually every major issue. The two parties even spoke in different voices in the Jammu and Kashmir Assembly. While it was speculated for a long time that the alliance will not last long, the announcement on Tuesday afternoon took many by surprise. The call was made after a meeting convened by Shah at the BJP headquarters on Tuesday morning with party ministers from J&K, office-bearers from the state and central in-charges handling the affairs of the state.

The immediate provocation was not clear but the decision has been taken with an eye on the 2019 elections. BJP was losing ground in the Jammu region due to the alliance and its cadre as well as the RSS were of the view that ties should be snapped. The differences over suspension of operations –– PDP wanted it to continue while the Centre decided to revoke it a day after Eid –– is said to be the tipping point.

The month-long suspension of operations tested the patience of the Centre as terror attacks continued unabated. Government informers and security forces were eliminated by terrorists while the forces stayed in the barracks. Sources said the increase in terror activities in the Valley and growing radicalisation of youth was the one of the primary reasons. Mufti was in favour of talks with Pakistan while BJP felt the only way out was to take strong action against terrorists and stone-pelters.

The decision to withdraw support and go for Governor’s rule in the state was taken after the National Security Advisor, the Intelligence agencies and the ministry of home affairs came to the conclusion that the situation was getting out of hand.

The RSS-BJP meeting at Surajkund last week had also discussed the situation in Kashmir. Prime Minister Narendra Modi and BJP Chief Amit Shah were apprised of the issue. The RSS and BJP cadre in both Jammu and the rest of the country were of the opinion that relations with PDP had reached breaking point. The Kashmir discourse has resonance for BJP in the rest of the country and is not just confined to the border state.

In FY17, India saw 20% rise in $ millionaires

Despite an adverse impact on GST implementation, India saw a 20% increase in both the number of dollar millionaires and their wealth in 2017 to emerge as the fastest growing market for high net population.

French tech firm Capgemini’s report, which comes amid growing concerns over social ramifications of asymmetry in wealth distribution, said the number of HNIs grew over 20% to 2.6 lakh people, while their collective wealth grew 21% to over $1 trillion. “India was the fastest growing market globally,” the report said.

The country’s growth on both the number of HNIs and wealth is faster than the global average of 11.2% and 12%, respectively. The US, Japan, Germany and China are the biggest HNI markets in the world, it said, adding that the show in 2017 has increased India’s ranking to 11th. According to the report, an HNI is defined as one who has investable assets of over $1million.

One of the major reasons for the growth was an over 50% surge in market capitalisation during the year, along with an average 4.8% increase in realty prices and the 6.7% GDP expansion, which is faster than the world. There was an adverse effect on wealth due to the implementation of GST in July, but the report called it “transitory”.

Other factors, like the monetary policy being steady, impact of demonetisation wearing off and higher savings rate helped in wealth creation, it said. It can be noted that in January, a study had stated that the top 1% of the over 1.2 billion population had cornered 73% of the overall wealth generated during the year.

Besides, 67 crore Indians comprising the population’s poorest half saw their wealth rise by just 1%, according to the survey released by the international rights group Oxfam ahead of the annual World Economic Forum had said. 

India’s health spend 1% of GDP

India currently spends a little over 1% of GDP on health, far below Singapore which has the lowest public spend on health at 2.2% of GDP among countries with significant universal health coverage  service, according to latest National Health Profile data.

India’s per capita public expenditure on health increased from Rs.621 in 2009-10 to Rs.1,112 (around $16 at current exchange rate) in 2015-16. However, it is still “nominal”, compared to other countries. Switzerland spends $6,944 on health per capita, whereas the United States spends $4,802 and UK spends $3,500. Even Singapore’s per capita expenditure at $1,183 is much higher than India. But this could change as the Centre plans to launch its ambitious National Health Protection Scheme-Ayushman Bharat- to cover over 10 crore poor families with an annual health cover of Rs.5 lakh per family. Modicare, as it is called, is billed to be the world’s largest such government-run insurance scheme.

According to National Health Profile (2018), around 43 crore individuals or 34% of the population were covered under any health insurance in 2016-17. Launching the NHP, health minister JP Nadda said NHPS will significantly bring down the out of pocket expenditure on health.

Though the latest NHP data do not give figures for ‘out of pocket’ expenditure, WHO’s health financing profile for 2017 shows 67.78% of total expenditure on health in India was paid out of pocket. The world average is 18.2%.

Total public expenditure on health in 2015-16 was Rs.140,054 crore.


Maharashtra is revving up: Morgan Stanley

Maharashtra Chief Minister Devendra Fadnavis is aggressively pursuing a development agenda. His focus is to make Maharashtra a $1 trillion economy by 2025, which is about 20 per cent of country’s estimated GDP.

Fadnavis is actively pushing implementation of a slew of urban infrastructure projects including metro corridors in Mumbai, Pune and Nagpur worth Rs.92,000 crore and Mumbai Trans Harbour Link worth Rs.17,843 crore, enhanced connectivity between urban and rural parts of the state, revival of agriculture, skilled work force and construction of 18 lakh homes.

American multinational investment bank and financial services company Morgan Stanley in its report has taken a note of CM’s plan and target, especially in the wake of his recent visit to the US where he had held meetings with the World Bank and representatives of MNCs and visited the prototype of hyperloop at Nevada. Interestingly, Fadnavis presented status report in this regard to the fourth governing council meeting of the NITI Ayog.

Morgan Stanley in its report said that currently the state is contributing about 15 per cent of India’s GDP and Maharashtra is the likely to be the growth engine of the country for the next five years. CM’s target of Maharashtra’s economy to achieve $1 trillion represents an annual growth of 15 per cent and it will be led by services growth. The state’s real output growth has accelerated from 5.4 per cent in F2015 to 9.4 per cent in F2017.

As far as Foreign Direct Investment inflow is concerned, the state in F2017 has received $29 billion, which is about 51 per cent of the total FDI to India. It was the outcome of the changes in the state’s infrastructure, land and labor laws and ease of doing business.

Agriculture though contributes only 11 per cent of the state’s output, it employs 50 per cent of the work force. According to Morgan Stanley, concerted water program by creating almost 52,000 ponds has improved water security of the drought-prone state. The state saw 13 per cent growth in agricultural sector in F2017.

‘NavIC’ all set to navigate you

Soon, your smartphones and car navigation systems may take directions from NavIC, the government’s desi global positioning system that has been developed to challenge the current GPS operations taken from the West.

NavIC, an ambitious project pursued by the government, is in the final stages of launch, and could soon be offered as an Indian counter to foreign systems, currently being used by companies and other users.

NavIC, or the Indian Regional Navigation Satellite System, will work through a constellation of seven satellites, the last of which was launched around the middle of 2016.

NavIC (‘Navigation with Indian Constellation’ whose English meaning is ‘sailor’ or ‘navigator’), is designed to provide accurate position information to users within the country. It will help India enter the club of select countries having their own positioning systems. Besides America’s GPS (with 24 satellites in a constellation), Russia has its GLONASS and European Union, its Galileo. Interestingly, China is also in the process of building Beidou Navigation Satellite System.

With seven satellites, the NavIC covers only India and its surroundings and is considered to be more accurate than the American system. NavIC will provide standard positioning service to all users with a position accuracy of 5 metre. The GPS, on the other hand, has a position accuracy of 20-30 metre.

The indigenous navigation system is believed to have cost ISRO around Rs.1,400 crore, and will aid terrestrial, aerial and marine navigation, vehicle tracking and fleet management, disaster management, mapping and geodetic data capture, visual and voice navigation for drivers.


Mumbai to Pune Hyperloop project

It was in February 2018 when Maharastra government had first expressed its intent to build a Hyperloop between Mumbai-Pune with Virgin Hyperloop One aims to connect central Pune, Navi Mumbai International Airport and Mumbai in just 25 minutes. Chief Minister Devendra Fadnavis who was in America visited the Virgin Hyperloop One test site in Nevada and met the company's CEO and board member, Rob Lloyd, a statement from the CMO said.

The Government of Maharashtra is exploring this transportation technology (hyperloop) for the Mumbai-Pune route with an aim to reduce the travel time between them to just 25 minutes, confirmed a statement released by the CM's office. Virgin Hyperloop One will soon be sending its engineers to Pune to conduct a study, it said. The Pune Metropolitan Regional Development Authority has identified a 15-km long demonstration track for hyperloop. If things go as per plan then the Hyperloop between Mumbai-Pune will be ready by 2024. This will not just reduce the commute time, but will further reduce the pollution and traffic on the Mumbai-Pune Expressway.

Government ends ceasefire in Kashmir

Days after journalist Shujaat Bukhari was gunned down and Indian Army soldier Aurangzeb was abducted and killed by militants in Kashmir, the Union home ministry called off the suspension of operations by security forces.

In a statement, the ministry said: “The government of India has decided not to extend the suspension of operations in Jammu and Kashmir announced in the beginning of Ramzan. Operations against terrorists will resume.”

The ministry also said the government commended the “security forces for having shown exemplary restraint during Ramazan despite grave provocations”. “It is important for all those who have interests of people of Jammu and Kashmir, especially the youth in mind, to isolate the terrorists and work towards bringing back misguided youth to the right path. On the other hand, terrorists have indulged in wanton killing of innocent civilians and attacks on security forces.”

The decision was taken at a meeting chaired by Prime Minister Narendra Modi with Union home minister Rajnath Singh, national security adviser Ajit Doval and Indian Army chief Bipin Rawat on Friday.

According to senior officials familiar with the developments, the recent events of violence in Kashmir had prompted the government to suspend the “ceasefire”, which was part of a peace initiative in the valley.

Senior security force officials welcomed the move. The Indian Army is expected to resume search and destroy operations, and cordon and search operations.

Floods in Assam affect 4.5 Lakh

Five people drowned in the current spate of floods in Assam, taking the toll to 11 in the state since the first wave hit the state five days ago. Three persons drowned in Cachar district and one each in Hailakandi and Karimganj districts in Barak valley.

Nearly 4.5 lakh people in the state remain affected by the deluge. Districts still reeling under flood are Hojai, Karbi Anglong West, Golaghat, Karimganj, Cachar and Hailakandi. A total of 1,73,245 displaced people are currently sheltered in 481 relief camps in affected districts. According to the Assam State Disaster Management Authority, Karimganj is the worst-hit, with 2,14,808 people affected.

Brahmaputra at Neamatighat in Jorhat, Dhansiri at Numaligarh in Golaghat, Jia Bharali in Sonitpur, continued to flow above danger mark.

Country Poised To Become A $5Tn Economy

PM Modi asked states to set ambitious growth targets for their economies, saying the world expected India to become a $5 trillion economy even as he emphasised on the need to reach welfare schemes to the last beneficiary.

The PM’s exhortation at the meeting of the Niti Aayog governing council came even as he yet again touched on the need for simultaneous elections to states and Lok Sabha, as this would save costs and provide a break from a cycle of elections that takes away from governance due to long periods of the code of conduct, which restricts decision making, being in force. The PM advised states to pay special attention to attracting export-oriented investments while organising investment summits.

Aayog vice-chairman Rajiv Kumar said there was a consensus that the 2011 census would remain the key benchmark for devolution of funds. This was significant in the light of concerns expressed by southern states that their better population control would disadvantage them. It was pointed out that meeting such goals would be given due weightage.

The PM urged CMs that on the lines of the 115 aspirational districts identified by Niti Aayog, states could define their own parameters to identify 20% of the states’ blocks as aspirational (backward) blocks.


Exports Growth Hits a 6-month High: May 2018

India’s exports grew a robust 20.18% in May, a six-month high, benefiting from a broad-based recovery in sectors led by petroleum. Costlier crude also caused imports to grow 15% in the month, leaving a four month high trade deficit of $14.62 billion, or about ₹98,732.03 crore. Trade deficit was $13.84 billion in May 2017.

Growth in 23 out of 30 sectors, including petroleum products, organic and inorganic chemicals, and drugs and pharmaceuticals helped exports grow by one fifth to $28.86 billion in May, while a near 50% increase in oil imports drove the country’s total imports to $43.48 billion. The country’s exports growth in May was faster than China’s 12.6% growth.

Major commodity groups of export showing positive growth over the corresponding month of last year included petroleum products (104.47%), organic and inorganic chemicals (34.21%), drugs and pharmaceuticals (25.67%), cotton yarn (24.7%), and engineering goods (14.77%).

The rise in imports in the month was driven by 49.46% jump in oil imports at $11.5 billion on the back of surging international crude prices. Global Brent prices ($/bbl) increased 50.68% year on year in May 2018 as per World Bank commodity price data.

Gold imports fell 29.85% last month to $3.48 billion compared to $4.96 billion in May 2017.

Imports of inputs such as iron and steel, nonferrous metals, fertilisers, chemicals, coal, machinery and transport equipment increased on account of firmer oil prices.

Notice served via WhatsApp is valid: HC

In a significant order, the Bombay high court has said that serving a legal notice through WhatsApp is valid. The HC said a SBI credit card defaulter who was evading the bank had not only received the notice, but had also opened it and read its contents. The bank claimed it was unable to serve the notice on the defaulter for two years as he had changed his place of residence. His phone number was, however, available with it. As per rules, notice is served in person or through registered post. In some cases, courts have also allowed use of email.

Rules state that a notice is served in person or through registered post. Following the enactment of the Information Technology Act, which recognises electronic communication as evidence, courts have allowed parties in a litigation to serve notice through email in addition to traditional methods. Earlier this year, a Delhi metropolitan magistrate had allowed a woman to serve summons in a domestic violence case on her estranged husband in Australia via WhatsApp.

The court had said that the “double tick” on WhatsApp showed that the summons had been delivered.

Last year, in a copyright infringement case, the high court bench of Justice Patel had taken on record a notice sent to a Kannada film producer through WhatsApp and email.


AIADMK feud splits HC too

Political uncertainty in Tamil Nadu is bound to continue for some more time as the first bench of the Madras high court delivered a split verdict in the ‘18 MLAs disqualification case’.

While Chief Justice Indira Banerjee upheld the speaker’s September 18, 2017 order stripping 18 rebel AIADMK legislators of their posts, saying scope of judicial review was limited, her companion judge Justice M Sundar quashed the speaker’s decision, saying the MLAs’ act of alleged defection was not ‘clear, categoric and unambiguous.” They were disqualified on September 18, 2017 under anti-defection law for having submitted a memorandum to the governor withdrawing their support to CM Edappadi K Palaniswami. On September 20, the court asked the election commission not to treat them as vacancies and hold by-elections. The first bench reserved its order on January 23.

In a development that would prolong the uncertainty on the status of the MLAs, and consequently the stability of the government, the judges failed to reach a consensus over the issue. They referred the matter to the next senior-most judge of the court so as to be posted before a third judge for hearing. The bench also made it clear that the bar on holding bypoll in 18 seats would continue. In her order, Chief Justice Banerjee said that though orders of the speaker under the Tenth Schedule were amenable to judicial review, the scope of such review is limited to violation of constitutional mandate, mala fides, non-compliance with rules of natural justice and perversity.

Vistara Eligible to Fly Abroad with 21st Aircraft

Domestic airline Vistara announced that it has received its 21st aircraft, an Airbus A320neo powered by CFM engines, which makes the Tata Sons-Singapore Airlines joint venture eligible to fly international.

Vistara, however, said the new aircraft will be deployed to strengthen its domestic network.

The airline currently serves 22 destinations with over 800 flights.

Journalist Bukhari Shot Dead in Kashmir

Veteran journalist and Rising Kashmir editor-in-chief Shujaat Bukhari and two of his personal security officers were shot dead by unidentified gunmen in Srinagar.

Police officers claim that at least three armed men attacked Bukhari around 7 pm when he was leaving his office in Press Enclave for an Iftar party. The assailants also fled with the PSOs’ weapons.

Bukhari hailed from Keeri village of Pattan area of northern Kashmir and was currently living on the outskirts of Srinagar. He is survived by his parents, a doctor wife and two children.

Hours before his death, Bukhari had had posted the UN report on alleged human rights violations in the Valley.

Bukhari used to run four publications-Rising Kashmir (English daily), Buland Kashmir (Urdu daily) , Parcham, (Urdu weekly) and Sangarmal (Kashmiri newspaper). He also used to head the consortium of literary and cultural forums Adabi Markaz Kamaraz. He was the recipient of World Press Institute USA fellowship and Asian Centre for Journalism Singapore fellowship.

In 2006, Bukhari was reportedly abducted by two unidentified men in Srinagar, who drove him several kilometers away from the city. However, when one of them tried to shoot him, the gun got jammed and Bukhari managed to escape. In 1996, Bukhari, was among the 19 local journalists abducted by the militant group Ikhwan in Anantnag district.

J&K chief minister Mehbooba Mufti condemned the brutal killing and expressed condolence with the family of Bukhari. “The scourge of terror has reared its ugly head on the eve of Eid. I strongly condemn this act of mindless violence & pray for his soul to rest in peace…” she tweeted.

Home Minister Rajnath Singh tweeted, “The killing of Rising Kashmir editor, Shujaat Bukhari is an act of cowardice. It is an attempt to silence the saner voices of Kashmir. He was a courageous and fearless journalist.”

Wholesale Inflation Rises to 4.43%

Wholesale inflation accelerated to a 14-month high in May, driven by a broad-based increase in prices that had spilled over to the retail level as well.

Inflation as measured by the Wholesale Price Index came in at 4.43% in May compared with 3.18% in April and 2.26% a year earlier.

The increase last month was the fastest since March 2017, when WPI inflation was 5.11%.

Data released earlier this week showed the rate of consumer inflation rose to a four-month high of 4.87% in May. The Reserve Bank of India increased the key interest rate by 25 basis points on June 6, forecasting a rise in inflation.

Prices of food articles rose 1.6% in May as against 0.87% in April as rates of fruits, onions, potatoes and vegetables rose.

The increase in fuel and power prices, at 11.2%, was the highest, in line with rising global crude oil rates. Comparatively, prices in this segment rose 7.85% in April and 11.81% in May last year.

Inflation in vegetables climbed to 2.51% compared with a 0.89% decline in April. Prices of potatoes surged 81.93%, while in the case of fruits it was 15.4%.

Prices of manufactured products, which make up almost twothirds of the index, jumped 3.73% compared with 3.11% in April.

The government revised WPI for March upwards to 2.74% from the provisional estimate of 2.47%.

Key factors that could influence the inflation trajectory include the level at which global crude prices stabilise and the extent to which they are transmitted to domestic fuel prices, the trend in monsoon dispersion and the extent of changes in the minimum support prices offered by the government for crops.

Goa CM returns

Over three months after he left India for medical treatment in the United States, Goa chief minister Manohar Parrikar returned home on Thursday. Parrikar, accompanied by his elder son Utpal, landed in Mumbai in the afternoon and took a flight to Goa in the evening.

He was received at the Goa airport by state health minister Vishwajit Rane, his top bureaucrats and officials from the CMO, and walked out of Dabolim airport at 6.20 pm.

Sources said Parrikar told officials in the CMO to line up review meetings on power and infrastructure works. The state has been going through an abysmal power situation with frequent outages, while a lot of infrastructure works are in the final stages of completion.

Dabolim airport had a tight security cordon for Parrikar’s arrival and the CM only smiled and waved at the waiting mediapersons before heading to his home at Taleigao, on the outskirts of capital Panaji.

Parrikar, who was diagnosed with pancreatitis, went to the US for advanced treatment on March 7.


CAD Widens to 1.9% of GDP in Q4

India’s external position turned weaker with the current account deficit, the excess of spending overseas than earnings, more than quadrupled in the fourth quarter of FY18 due to soaring commodity prices. For the full fiscal year too, it rose sharply.

CAD rose to $ 13 billion, or 1.9% of the gross domestic product, from $ 2.6 billion or 0.4% of the GDP in the year-ago period. For the full year, it climbed to 1.9% of GDP, from 0.6% a year earlier.

External trade which has caused worries to the Indian financial stability in the past due to heavy reliance on oil imports, has returned with crude oil prices soaring. Every $10 a barrel increase in oil price would worsen the current account deficit by 0.4% of the the GDP and push inflation by 30 to 40 basis points, and hurt growth by 15 basis points, estimates Nomura.

If Brent oil averages $75 a barrel sustainably in 2018, India’s current account deficit would widen to 2.5% of the GDP from 1.5% in 2017. Crude oil accounts for a fourth of India’s merchandise imports and crude prices increased 5% during the quarter to touch $68.4 per barrel by the end of March.

Services receipts increased 8.8% on the back of a rise in software services and other business services. Remittances amounted to $ 18.1 billion, up 15.1% from their level a year ago. In the capital account, foreign portfolio investment recorded net inflow of $ 2.3 billion in the quarter compared with an inflow of $10.8 billion in Q4 last year – on account of moderation in net purchases in both the debt and equity markets, RBI said.

While inflows through NRI deposits amounted to $4.6 billion in Q4 of 2017-18 as compared with $ 2.7 billion a year ago. Capital account surplus amounted to $25 billion during the quarter compared to $10.4 billion in the same period last year.


Services activities shrink in May

The widely-tracked Nikkei purchasing managers’ index for services fell below the 50-point mark, indicating a fall in activities for the second time in four months in May.

This also had repercussions in the job markets as hiring grew the slowest this year in May.

PMI for services fell to 49.6 in May from 51.4 in April as new business orders stagnated and cost pressures intensified.

However, a “bright spot” was that business sentiment was the strongest since January 2015, rooted in expectations of improvements in demand conditions in the year ahead. The index had last slipped below the 50-point mark in February.

As per the survey, competitive demand conditions and a broad stagnation in new orders were the key factors behind a decline in output across the services sector in May.

The index reflected the overall weakness in the services sector, shown in even the GDP data. Within the services sector, only government-backed public administration, defence and other services showed improvement in growth during the fourth quarter of 2017-18 as compared to the third quarter of the year. For instance, the beleaguered financial, real estate and professional services grew by five per cent in Q4 against 6.9 per cent in Q3. Trade, hotels, transport and communication as well as services expanded 6.8 per cent against 8.5 per cent.

On the employment front, the slowdown in services activity fed into the labour market, as jobs growth moderated from April’s seven-year high.

The headline seasonally adjusted Nikkei India Composite PMI Output Index – that maps both the manufacturing and the services sector – fell from 51.9 in April to 50.4 in May.

Retail inflation hits 4-mth high, IIP steady

Retail inflation inched up to a 4-month high in May on the back of strengthening fuel, housing and food prices, while industrial output growth remained steady in April, prompting economists to say that possibility of another rate hike persists for now.

Inflation as measured by the Consumer Price Index rose an annual 4.9% in May compared to the previous month’s 4.6%. Rural inflation stood at 4.9%, while urban inflation was at 4.7%.

Fuel and light inflation rose 5.8% in May, while housing prices shot up 8.4% during the month. Fruit prices rose an annual 12.3%. Pulses and product prices contracted 11.6% in May.

Industrial output rose an annual 4.9% in April compared to 3.2% in the year-ago period. Manufacturing, which accounts for over 75% of the index, rose a healthy 5.2% in April compared to a 3% expansion in the year earlier period. Capital goods, a key gauge of industrial activity, rose 13% in April compared with a decline of 4.8% during the same month last year.

Of Water Conservation and Profitable Farmers

In the last 25 years, farmers in Hiware Bazar, a tiny village in the arid zone of Maharashtra, have increased their income by an estimated 38 times. But it’s not a miracle, insists village sarpanch Popatrao Pawar, who says the village faced a severe water crisis earlier. The village gets 200-300mm rainfall annually and farmers would migrate in search of work during the summer.

Inspired by Ralegan Siddhi’s water conservation work, Pawar and other villagers started water conservation, rainwater harvesting and watershed management initiatives in the 1990s. Villagers vowed not to let a single drop of rainwater flow out of the village. But this wasn’t enough considering the scanty rainfall. So, they changed cropping patterns and resolved to stop growing the water-guzzling sugarcane, opting for vegetables, pulses, flowers and fruit cultivation.

The villagers meet every December 31 to review water availability and decide the crops to grow. Hiware Bazar, perhaps, is the country’s only village with a water budget. If there is a deficit, farmers take a collective break from farming. But this does not affect their earnings, says Pawar, adding the farmers have a strong dairy business, producing 4,000 litres of milk daily.

Villagers made farming a profitable venture and no family lives below the poverty line. In the last 25 years, Hiware Bazar has not called for a water tanker and over 42 families that had left the village returned. Groundwater is now available at just 20-40 ft in Hiware Bazar while surrounding villages must dig 300-400 ft.

Villagers of Kadwanchi located in the drought-prone Marathwada region in Maharashtra have multiplied their income through watershed management since 1995. They undertake strict water and soil conservation and dig farm ponds to save rainwater and turned to grape cultivation using drip irrigation. A survey, by the central research institute of dryland agriculture, noted average annual incomes of farmers in the village increased from Rs.40,000 in 1996 to Rs.3.2 lakh in 2012, a 700% rise.

It took farmers in Julwaniya Chota in Madhya Pradesh three years to double their income while some villages in Andhra Pradesh increased their income 2-3 times in the last few years according to research by Delhi-based Centre for Science and Environment. These villages used simple traditional wisdom, the CSE report said, adding that every village can meet its water needs by capturing enough rainwater to meet drinking and cooking needs.

Lapodia, a village of 200 households in Rajasthan, has opted for a model of square dykes to trap rain water. Families here earn sufficiently just by selling milk. Eklava village in Gujarat has collected rainwater over the past 12 years — every house has an underground water tank built near the house to store rainwater that is used for drinking and cooking purposes throughout the year.

These villages represent a new polarization India is going through, states the CSE — those who harvest water and those who don’t.


Of Full Statehood for Delhi....

Before the Delhi Assembly endorsed a resolution demanding full statehood for the city-state, chief minister Arvind Kejriwal criticised both BJP and Congress for using the statehood issue only to win elections. “I want to tell BJP that if Delhi is granted statehood before the 2019 general elections, we will make sure that each and every vote from the capital goes in their favour; we will campaign for them,” Kejriwal said in the Assembly. “If you don't grant statehood, then every Delhi resident will put up signboards saying, ‘BJP leave Delhi’.”

Saying that the Aam Aadmi Party would run a 'LG, Delhi chhodo' campaign, Kejriwal claimed that if Delhi was accorded full statehood, every family would be assured of a house and employment. The CM noted, “Chhattisgarh generates Rs.5,400 crore in taxes and get Rs.26,000 crore in return from the Centre. Gujarat generates Rs.47,000 crore and gets Rs.28,000 crore. But Delhi, which generates Rs.1.3 lakh crore in tax revenue receives only Rs.325 crore. If we start getting a sum comparable to other states, we will build houses for every family living in Delhi within five years.”

Leader of the Opposition Vijender Gupta and MLA M S Sirsa were ordered to be marshalled out of the House by the speaker before the discussions began. The BJP MLAs sat in protest outside the CM’s office at Vidhan Sabha after being evicted. “The AAP government is trying to divert public attention from issues plaguing the city,” accused Gupta. “Why have none of AAP’s MPs raised the statehood issue in Parliament?”

Auto Sales Grow 12%: May 2018

Vehicle sales continued to grow at a quick pace, with overall volume expanding 12.13% in May with new launches, higher infrastructure expenditure and a favourable base effect helping boost the performance.

While the passenger vehicle segment comprising cars, SUVs and vans grew 19.65% in the past month to 301,238 units, riding on new launches from Honda and Toyota, commercial vehicle sales increased at a faster pace of 43.06% to 76,478 units. These are wholesale numbers as manufactures usually declare only shipments to dealerships and not retail sales.

Last year, sales were hit by the implementation of new emission rules and uncertainty over the GST.

Manufacturers had offered heavy discounts on BS-III models in March 2017, before the adoption of the next emission standard of BS VI from April 1. This boosted March numbers, especially in commercial vehicles and two-wheelers, but killed the numbers the following months. Also, expecting that the rollout of GST from July 1, 2017 would lower car prices, consumers had postponed purchases, which hurt sales in May and June last year.

Sales of the newly-launched Toyota Yaris and Honda Amaze, besides strong numbers from market leader Maruti Suzuki, added to the spike in passenger car numbers. Exports of passenger cars, however, declined 1.69% to 44,904 units.

Sales of utility vehicles rose 17.53% to 82,086 units. Exports outpaced sales — with shipments of 14,492 units, exports grew 21.23%.

In the two-wheeler space, the industry saw a reverse in trend, with scooter sales declining after nearly 15 months by 1.40% to 555,467 units in May.

Overall, two-wheeler sales, however, rose 9.19% to 1,850,093, in an indication of a shift in consumer preference back to motorcycles.

In the commercial vehicle space, medium and heavy commercial vehicles posted a massive 80% jump in sales at 30,128 units. The light commercial vehicles segment grew 26.15% to 46,350 units in the past month.

In the three-wheeler segment, exports remained the main driver, growing 70.32% to 46,243 units. Domestic sales also gained momentum with sales expanding 51.97% to 54,809 units.

Overall, vehicle exports grew 23.84% to 398,798 units in May 2018, with a majority of that coming from two-wheelers. Total two-wheeler exports during the month were 284,573 units.

Telecom tattle

Reliance Jio Infocomm has overtaken Kumar Birla-led Idea Cellular in revenue market share and nearly closed in on Vodafone India on this key performance metric in the March quarter as incumbent carriers continued to struggle amid continuing pricing aggression from the Mukesh Ambani-controlled 4G newcomer.

Jio’s revenue market share has widened almost to 20% in the fiscal’s fourth quarter — reflecting a whopping 443 basis points sequential spurt — stealing a march over No. 3 carrier by users, Idea, which saw its RMS share slump nine bps on quarter to 16.5%. No. 2 ranked Vodafone India’s 21% revenue share – up 76 bps on-quarter – was just a touch above Jio’s.

Sunil Mittal-led Bharti Airtel though defended its revenue share leadership by notching up a 92-bps sequential gain to take its revenue market share to nearly 32% in the March quarter, it was helped in part by contribution from Tata Teleservices’ revenue numbers.

Airtel has an intra-circle roaming pact with Tata Tele, whose consumer mobility business the market leader is buying.

Jio’s robust RMS numbers come ahead of Idea and Vodafone India’s much awaited merger likely to close this month, which will create a Rs.63,000-crore revenue entity with some 430 million subscribers. Together, Vodafone and Idea will emerge as the market leader with 37.5% RMS and, by user base, followed by Airtel and Jio.

Circle-wise AGR shows Jio is already ‘No. 1’ or `No. 2’ in 18 circles and has over 25% AGR market share in 15 circles. Jio also “benefitted from a rise in on-net calls” during the quarter, referring to Jio-to-Jio calls.


India's Poor

Cash with public at a record high

Currency with the public has reached a record high of over Rs.18.5 lakh crore, more than double the low of Rs.7.8 lakh crore it had hit after demonetisation in late 2016.

The total currency put in circulation by the Reserve Bank has also more than doubled to over Rs.19.3 lakh crore — from a low of about Rs.8.9 lakh crore post-demonetisation. As a percentage of GDP, however, the proportion remains much lower than the pre-demonetisation level. Currency with the public is arrived at after deducting cash with banks from total currency in circulation.

This high level of currency available with the public is in contrast to the reported cash crunch in various parts of the country a few months ago. Hoarding of cash was then cited as a reason that could have triggered an artificial currency crunch.

The figures for both ‘currency with the public’ and ‘currency in circulation’ have also exceeded the levels seen before the government’s demonetisation decision on November 8, 2016, that saw nearly 86% of the currency in circulation at that time being invalidated overnight by scrapping the then Rs.500/ 1,000 banknotes.

The public was given time to deposit the invalidated notes in banks, which saw nearly 99% of banned notes coming back into the system.

As per the RBI’s latest disclosure in this regard, people had returned Rs.15.28 lakh crore as on June 30, 2017, of the Rs.15.44 lakh crore banned currency, or 98.96%, of the scrapped notes to the banking system.

Since then, the RBI has introduced new denominations of Rs.2,000 and Rs.200, among others, besides a new Rs.500 note.

22 SCO Pacts Include Terror & Deradicalisation

The eight-member Shanghai Cooperation Organisation signed 22 documents including separate pacts on countering terror and deradicalisation, even as India kept itself out of reference on the China-led Belt and Road Initiative in the summit joint communique.

Besides the joint communique, a dozen other documents were signed between the member countries including one on trade facilitation in an era of protectionism at the summit in the Chinese city of Qingdao. Four other documents were signed among various ministries of member countries, including one on micro, small and medium enterprises and another on tourism. One of the key documents has been on an appeal to youth against radicalisation. India played a key role in shaping documents on counter-terror and deradicalisation of youth.

The summit ratified a five-year action plan for implementing the Treaty on Long-Term Good-Neighborliness, Friendship and Cooperation of the SCO Member States.

PM Modi in his intervention in the restricted format of the SCO summit urged for a regional front against terrorism and slammed attempts to “threaten” peace in Afghanistan. Modi rued the worsening situation in Afghanistan was “an unfortunate example” of terrorism and suggested that it was “our common responsibility to ensure that reasons that threaten Afghanistan’s sovereignty and security are not repeated”.

The Qingdao declaration called for implementing a three-year plan to combat terrorism, separatism and extremism. The member countries also signed a decision to approve the 2018-2023 Anti-Drug Strategy and Action Plan and implement it. The leaders also signed an information pact.

However, India refused to back China’s BRI project at the SCO Summit that ended on Sunday. The name of all member countries except India figured in the paragraph of the joint declaration endorsing the multi-billion-dollar project. Delhi was part of the joint declaration except the paragraph on BRI.

“The Republic of Kazakhstan, the Kyrgyz Republic, the Islamic Republic of Pakistan, the Russian Federation, the Republic of Tajikistan, and the Republic of Uzbekistan reaffirm their support for the ‘Belt and Road Initiative’ proposed by China and affirm that all parties should implement the ‘Belt and Road Initiative’ to promote the ‘Belt and Road’ initiative,” according to the BRI reference in the declaration.