New Metro rail policy

The new Metro rail policy has opened window for private investment in activities such as operation and maintenance, fare collection and other non-core functions. Under the current regime, the private sector is allowed under the public-private partnership framework for the entire project. The changes will enable private sector to manage rolling stock and signalling systems, as it would bring “managerial efficiency“.

The policy, approved by the Cabinet, also mandates states to ensure feeder transport facility for a 5 km area so that passengers don't struggle for last-mile connectivity. Ridership is largely linked to the issue of last-mile connectivity. The aim is to deepen Metro railway presence. Currently, 370 km of Metro is operational in eight cities and another 537 km is under construction in 13 cities.

The new guidelines also say Metro projects should be proposed only after assessing other mass transit solu tions such as BRT (bus rapid transport), LRT (light rail transit) and monorail to find which is most cost effective.

States can also take up Metro rail projects on their own and opt for central assistance of one-tenth of the project cost without worrying about the Centre's involvement. Considering the huge requirement of capital in such projects, the policy mandates private investments for accessing central assistance for new projects.

Sources said though Metro man E Sreedharan had suggested that Centre should stay away from PPP route, the government has given the go-ahead. The policy also focuses on the need to get revenue from alternative sources including property development and advertisements to make the projects financially viable. It makes its mandatory for states to incorporate some elements of transit oriented development, which focuses on development of office and residential complexes along Metro rail corridors.

States also need to adopt innovative mechanisms to mobilise resources by capturing a share of the increase in the value of the asset through a `betterment levy'.

States would also be required to enable low cost debt capital through issue of corporate bonds for Metro rail projects.

This means projects such as Delhi Metro phase-IV, which are still to get the go ahead, will now need to incorporate these provisions in their proposal.

However, sources said the policy hardly puts in place a framework for prioritising the sanctioning of projects. Without having an assessment system in place, it would have little impact.

US brands Hizb a foreign terror outfit

A day after US President Trump called PM Narendra Modi to greet him on Independence Day, the US designated Pakistan-based Hizbul-Mujahideen, responsible for attacks in J-K for the last three decades, as a “foreign terrorist organisation“.

The labelling of Hizb as an FTO means it will face financial sanctions. The Trump administration's previous decision to designate Hizb chief Syed Salahuddin a “global terrorist“ came just ahead of Modi's meeting with the US President in Washington in June.

The announcement is also read as a sign of US-India proximity on strategic issues at a time when Delhi is locked in a tense face-off with Beijing near the Sikkim-Bhutan-China tri-junction and is facing a daily dose of threatening statements from Beijing. The action also indicates that the US does not support China's efforts to protect terror groups sustained by Pakistan against international sanctions. The US designation of Hizbul-Mujahideen as a “foreign terrorist organisation“ seeks to deny it the resources it needs to carry out terrorist attacks, the State Department said in a media note announcing the move. Among other consequences, it said, all of HM's property and interests in property subject to US jurisdiction are blocked, and US persons are prohibited from engaging in any transactions with the group.

The move comes ahead of a widely-awaited review of South Asia strategy -involving Afghanistan, Pakistan, and India -which Trump will preside over on Friday at Camp David with vice-president Mike Pence and the National Security team.

The US decision is seen as an act of solidarity with India in its fight against terrorism and jihadi outfits operating out of Pakistan with the support of the Pakistani army and ISI. The decision, as in the case of Salahuddin, acknowledges India's arguments that the Hizb and its leaders are terrorists rather than “freedom fighters“ as claimed by Pakistan and separatists in J-K.

Hizb is now in the same list as Al Qaeda, Islamic State, Boko Haram or other Pakistan-based anti-India terror outfits such as LeT and Jaish-e Mohammad.

India now has a strong chance to push its case for designating Syed Salahuddin and Hizb-ul-Mujahideen as `global terror outfits' in the United Nations Security Council.

Milestones in Independent India’s business history

70 markers that have led to an ecosystem in which India can vie for global economic leadership. At 70, India has come a long way from the country the British exited in 1947, and which they believed (and hoped) would not survive in its then form. India has since evolved into a vibrant constitutional democracy and made rapid strides in several domains (although there is a lot of work still to be done).

1947: The Industrial Disputes Act, governing organized industrial labour, is passed.

1949: The Reserve Bank of India (RBI), previously a shareholders’ bank, is nationalized.

1950: The Planning Commission, a central planning body, is set up.

1951: First Five-Year Plan, based on the Harrod-Domar Model of economic growth and focusing on the primary sector, is presented.

1951: The first Indian Institute of Technology is set up in Kharagpur.

1953: Air India is nationalized.

1955:The Imperial Bank of India is nationalized to create the State Bank of India.

1956: Industrial Policy Resolution is passed by Parliament, marking the beginning of the Licence Raj.

1956: Second Five-Year Plan, based on the Feldman-Mahalanobis model and focusing on heavy industry, is presented.

1956:Life insurance is nationalized, and the Life Insurance Corporation (LIC) established.

1956: India’s first atomic reactor, Apsara, goes critical at the Bhabha Atomic Research Centre.

1957: The decimal system of coinage is introduced.

1958: Dhirubhai Ambani establishes the Reliance Group as a trading house called Reliance Commercial Corporation.

1958: The first Hindustan Ambassador car is produced.

1959: The Rourkela Steel Plant is commissioned.

1961: Indian Institutes of Management are set up in Calcutta (now Kolkata) and Ahmedabad.

1963: The Bhakra Nangal Dam becomes operational.

1965: Green Revolution.

1966: The Indian rupee is devalued following the Public Law 480 food aid programme as part of the Aid India Consortium at the World Bank.

1967: The first commercials are aired on Vividh Bharati.

1968: The Foreign Investment Board is established.

1969: 14 leading banks are nationalized.

1969: The Monopolies and Restrictive Trade Practices Act becomes law.

1970: The Industrial Licensing Policy comes into force, confining the role of large business to core, heavy and export-oriented sectors.

1971: The collapse of the Bretton Woods system sees the rupee pegged to the pound sterling. This causes real depreciation and exports to grow at 15% in nominal terms over the following decade.

1972: General insurance is nationalized.

1973: Coal mines and oil companies are nationalized.

1973: The Foreign Exchange Regulation Act is passed.

1973: The longest rail service in India, from Mangalore to Delhi, is inaugurated.

1974: Oil struck in the first well at Sagar Samrat, off Bombay High.

1975: Aryabhatta, the first Indian satellite, is launched from the Soviet cosmodrome.

1976: A bill abolishing bonded labour is passed.

1976: Economist Raj Krishna coins the term ‘Hindu rate of growth’, referring to India’s slower rate of economic growth compared to the rapidly growing east Asian economies.

1977: Reliance Industries launches its initial public offering (IPO).

1978: Housing Development Finance Corporation Ltd, or HDFC, the first specialized mortgage company in India, disburses its first home loan.

1978: First TV commercial is aired.

1980: India’s first credit card, Central Card, is introduced by the Central Bank of India.

1981: Infosys Ltd is incorporated by N.R. Narayana Murthy and six other co-founders.

1982: Mumbai textile mills strike led by controversial union leader Datta Samant and involving nearly 2,50,000 workers in 80 mills cripples the textile industry for over a year.

1982: Indian Oil Corporation commissions India’s first public sector petroleum refinery in Guwahati.

1983: First batch of Maruti cars rolls out, priced at about Rs.35,000 apiece.

1984: Bhopal gas tragedy, the world’s worst industrial disaster takes place following gas leak at Union Carbide’s pesticide plant. Over 10,000 people lose their lives over the next few weeks of the disaster.

1985: Significant tax reforms are kicked off by Prime Minister Rajiv Gandhi with V.P. Singh as finance minister.

1986: Demographer Ashish Bose coins the term BIMARU (Bihar-Madhya Pradesh-Rajasthan-Uttar Pradesh) referring to the poor socio-economic conditions in the four states.

1986: S&P BSE Sensex, India’s first equity index, is launched.

1987: India’s first debit card is introduced by Citi Bank, first ATM installed in Mumbai by HSBC.

1988: Securities and Exchange Board of India (Sebi) is established.

1991: Balance of payments crisis hits India.

1991: P.V. Narasimha Rao government’s budget ushers in the era of liberalization.

1992: National Stock Exchange launched as the first demutualized electronic exchange in the country.

1992: Reliance Group becomes the first Indian conglomerate to raise money in international markets.

1992: The Harshad Mehta scam roils markets but lays the path for tighter market regulation.

1993: Infosys launches IPO.

1993: HDFC becomes the first Indian company to receive in-principal approval for setting up a private sector bank.

1993: Hindustan Unilever (HUL) takes over its largest competitor, Tata Oil Mills Company.

1994: Rupee is made convertible on the current account.

1995: National Telecom Policy is formulated to open up Indian markets for foreign direct investment as well as domestic investment in the telecom sector. One of its main goals was to increase accessibility to telecom services.

1995: Cellular phone services are inaugurated as West Bengal chief minister Jyoti Basu makes the first call from Kolkata.

1999: Satyam Infoway’s Rs.499-crore buyout of Rajesh Jain’s IndiaWorld sets off dotcom boom in India.

2000: Privatization of insurance business with a 26% limit on FDI in the sector.

2002: Competition Act comes into force.

2006: India’s largest-ever rural jobs scheme, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), is launched.

2006: Tata group pays $12.98 billion to acquire UK-based Corus in the largest ever cross-border acquisition by an Indian company.

2008: Tata Motors launches Tata Nano, the world’s cheapest car.

2009: The Satyam scam erupts.

2011: 2G scam is exposed.

2013: Mars Orbiter Mission, the least expensive in the world, is successfully launched by Isro.

2016: The government announces demonetisation of Rs.500 and Rs.1000 currency notes.

2017: Passage of the Goods and Service Tax Bill ushers in a uniform tax structure throughout the country.

Smart Cities Take Shape

Two years after the Central government launched its flagship Smart City Mission, the cities have started smartening up. First off the blocks is Pune with its hi-tech command-and-control centre, which has been developed as the nerve centre for urban governance to centrally manage traffic, water and electricity supply and provide CCTV-based city surveillance.

The command-and-control centre is the first project being implemented across the smart cities. So far, all 20 cities, chosen in January 2016 after a meticulous all-India competition, have floated tenders for the centre. Pune has already rolled out six modules of this multi-crore command centre project. These include traffic management system, citizen feedback and emergency alert systems. Pune has planned the centre for not only effective city-level coordination but also as its citizen interface. At present, alerts are being sent on traffic to better manage the flow during peak office hours.

Pune and Nagpur would have fully functional command centres by the end of 2017. This would mean managing almost all municipal and city services centrally. The centre would manage CCTV based city surveillance, drone-based aerial surveillance, pan-city kiosks for municipal services including death and birth certificate registration, traffic signal violation system, automatic traffic management, parking lots, water and electricity supply. The command-and-control centres, which would cost the city between Rs.100 and Rs.500 crore, would have helplines to handhold citizens through all services.

Apart from Pune and Nagpur, three other cities which are in fairly advanced stages of command-and-control centre project rollout are Kakinada, Naya Raipur and Bhopal. All the command-and-control centres planned in the first batch of 20 cities would be functional by the end of the current financial year. The other smart cities, chosen in the subsequent rounds of challenge contests, are waiting for Bhopal to rollout its centre. “Bhopal's control centre would be the most expensive at Rs.500 crore.But the most unique aspect is that Bhopal is planning its centre in such a manner that it can be used by other cities as well. The investment is huge but the returns are expected to be immense.“

Private partnership is the key to effective implementation of Smart City Mission. As per ministry statistics, the private sector investments have been meeting the target in the first phase of implementation.

Centre clears Rs.32,000 cr plan to bolster Coast Guard

The government has approved a Rs.31,748 crore “definitive five-year action programme“ for the Coast Guard, which is the defence ministry's smallest armed force after the Army, IAF and Navy but whose role has become crucial ever since the 26/11 terror strikes in Mumbai in 2008.

The action plan to bolster the force-levels of Coast Guard in terms of offshore patrol vessels, boats, helicopters, aircraft and critical operational infrastructure was cleared at a meeting chaired by defence secretary Sanjay Mitra earlier this month.

The aim is to make the Coast Guard a 175-ship and 110-aircraft force by 2022 to plug operational gaps and strengthen its capabilities to safeguard coastal security, island territories, offshore assets and marine environment as well as undertake anti-piracy, anti-smuggling, oil-spill and pollution-control operations.

India has a 7,516 km coastline, with 1,382 islands and a sprawling Exclusive Economic Zone of 2.01 million sq km, which will go up to almost 3 million sq km after delimitation of the Continental Shelf.

But the Coast Guard cur rently has 130 “surface units'' in the shape of 60 ships (offshore patrol vessels, fast patrol vessels and pollution-control vessels), 18 hovercrafts, and 52 smaller interceptor boatscrafts.

The “air units“, in turn, are limited to 39 Dornier maritime surveillance aircraft, 19 Chetak choppers and four Dhruv advanced light helicopters.

The action plan intends to “consolidate the progress“ made by the Coast Guard, which is currently headed by Rajendra Singh as the director-general, after the 26/11 Mumbai strikes punched gaping holes in the country's coastal security architecture.

“The force already has 65 ships and interceptor crafts boats under construction. Moreover, the acquisition of 30 helicopters for over Rs.5,000 crore is also underway ,“ said a source. While 16 indigenous Dhruv choppers have already been ordered from Hindustan Aeronautics Ltd, the procurement of 14 twinengine EC-725 tactical choppers, which can carry up to 30 passengers, from Airbus is in the final stages of approval now.

With Coast Guard also looking for six more maritime multi-mission surveillance aircraft, the force will also get five more air stationsenclaves to add to the nine such establishments already present. “The existing 42 stations (20 were sanctioned after 26/11), under the five regional headquarters at Gandhinagar, Mumbai, Chennai, Kolkata and Port Blair, will also be fully-developed and made `smart' with better infrastructure,“ said the source.

“Coast Guard has taken a conscious decision to stabilize its geographic spread in order to also focus on development of critical operational infrastructure like jetties for ships and hangers for aircraft,“ he added.

With an existing man power of around 1,600 officers, 9,000 uniformed personnel and 1,200 civilians, the Coast Guard primarily has a non-military maritime security charter, except during war when it conjoins with the Navy for national defence operations.

The force, however, now also acts as the “lead intelligence agency for coastal and sea borders“. The 26/11 Mumbai carnage, after all, had exposed the lack of “critical connectivity'' between intelligence agencies and security agencies.

Since then, the Navy and Coast Guard have dramatically cranked up their maritime vigil. Several other measures, ranging from Phase-I of the coastal surveillance radar network to the naval NC3I (national command, control, communication and intelligence) network have been implemented. But much more needs to be done.

US & India announce `elevated' tie-up

With the threat of an economically and militarily assertive China looming before the US and India, American President Donald Trump chose India's Independence Day to signal that Washington has New Delhi's back by announcing that the two countries “will elevate their strategic consultations“.

The US president called PM Narendra Modi ostensibly to congratulate Indians on the country's I-Day celebration. But a White House readout on the call went far beyond the pleasantries, disclosing that “the leaders resolved to enhance peace and stability across the Indo-Pacific region by establishing a new 2-by-2 ministerial dialogue that will elevate their strategic consultations“.

The readout did not elaborate on the principals or the subject of the 2-by-2 dialogue, but the two countries have a long overdue annual strategic dialogue mechanism instituted by previous administrations.

The dialogue typically involves high cabinet officials from both sides, including the secretary of state and commerce secretary from the US and their Indian counterparts.

Although the White House statement did not refer explicitly to China, much less the Doklam issue, the reference to enhancing peace and stability across the Indo-Pacific region appears to be shot across Beijing's bow, and constitutes a continuation of the recognition by the Obama administration of India's stakes in the region.

The White House statement also came hours after Trump announced a review of China's trade prac tices, dialing down on his threat to initiate strong actions that could lead to a trade war in which both sides will suffer.

Notably, there was no Trump phone call to any Pakistani leader on the occasion of that country's IDay, confirming the impression that Washington has long de-hyphenated the two countries. Secretary Rex Tillerson recently engaged with Islamabad with prospects of some bilateral visits involving him and Pakistan's new foreign minister K M Asif.

Trump also sought to ramp up business ties with India specifically talking up the Global Entrepreneur Summit in Hyderabad, India, this coming November for which he has detailed his daughter Ivanka Trump to attend.

“As the leaders of two of the world's largest and fastest-growing major economies, President Trump and Prime Minister Modi looked forward to the Global Entrepreneurship Summit in India this November. President Trump has asked Advisor to the President Ivanka Trump to lead the United States summit delegation,“ the White House readout noted.

Indira Canteen