The self-starter farmers’ protest has snowballed into a national movement, one that has made the Govt uncomfortable
If Union Home Minister Amit Shah has stepped in to solve the farmers’ protest over the new Acts enacted by his Government, it shows that he has sensed the runaway consequences of a localised dissent turning into a national movement. And that’s because this agitation, quite unlike the demonstrations over the citizenship law or the students’ protests, cannot be attributed to liberal advocacy, ideological conflict or the Opposition’s conspiracy, but is coming from the sons of the soil. And they have decided to speak for themselves without taking the help of either politicians, rights activists or celebrities, drawing traction with their quiet dignity and right to live with it. They have demanded their equity in the new order, not as a constituency or votebank, but as conscious citizens. In that sense, they embody the deeper undercurrent of a revolt against the authoritarian dispensation of the day that expects its people to yield to the weight of majoritarianism. The farmers have shown that heft isn’t always about numbers. In fact, the subliminal resentment now has vented itself and become a voice that doesn’t need endorsement. On the contrary, politicians, sportsmen, civil society, celebrities are latching on to them than the other way round, when the cause needs to rent them. True, the farm laws attempt structural reforms to liberalise the agriculture market but they do not factor in the farmers’ well-being and comfort or hand-hold them to a new regime where they have a level-playing field. They have, therefore, become the ignored voice of the common man at the mercy of the State’s imposition. That’s why the farmers have resurrected Guru Gobind Singh’s Pagri Sambhal Jatta Lehar movement. For the Sikh guru made it a symbol of honour, the right of every honest man to live a life of dignity and declassified it as a right of the elite. Peasants, who rose against the British Raj, used the pagri to band together dissolving their identity based on religion or caste. That’s why though the Government has been trying to box the protesters in as belonging to Punjab and button-holing it as a State problem, the farmers are reminding us that this is not a problem of Sikh farmers, redefining the pagri as worthy of any one of them who fights for their rights. It is this universalising of agenda, with some farmers’ unions now drawing attention to other causes, like the incarceration of students, activists and teachers, that has made their activism credible enough to be taken seriously by the establishment. Particularly when it is spreading in State after State and farmers’ lobbies, through NRI pressure groups, have been successful in getting legislators in the US, UK and Canada involved and defend their right to protest.
Their integrity and commitment have been strong enough to draw in other trade unions, be it of transporters, traders, taxis, banks, railways, even lawyers, basically working class people who almost always turn out to vote. This coalescence is stronger than any of Shah’s intention to break up the unions. This is a political capital too difficult to ignore. One that has forced all parties, particularly those in the Opposition, to ignore their hypocrisy and stand with farmers. Which is why Prime Minister Narendra Modi himself called Shiromani Akali Dal (SAD) patron Parkash Singh Badal on his birthday, more to assuage concerns, considering that the latter had returned the Padma Vibhushan, demanding rollback of the farm Acts. In fact, with Punjab Assembly elections in 2022, the SAD couldn’t risk its image with farmers. So it walked out of its alliance with the BJP and withdrew its Minister for Food Processing, Harsimrat Kaur Badal. Punjab Chief Minister and Congress leader Amarinder Singh went a step further, amending the Central law and bringing in fresh Bills in the Assembly, guaranteeing existing rights of farmers. This seems odd considering the Congress, which has itself been reformist on the agriculture sector and favoured some of the measures in the farm Acts, has done a U-turn. It even advocated dismantling the State Agriculture Produce Marketing Committee (APMC) Acts in its 2019 manifesto. And despite promising loan waivers in States ruled by it, it has failed to provide even limited relief. The Aam Aadmi Party (AAP), which initially had a hands-off attitude to the farmers’ stir, is now supporting it primarily because it is still ambitious about making inroads into Punjab. Hence AAP leader and Delhi Chief Minister Arvind Kejriwal made it a point to visit agitators at the State’s borders. This despite the farmers refusing AAP support for community kitchens and shelters. Bengal Chief Minister Mamata Banerjee, whose State wouldn’t be much affected by the new laws, has now sided with the unions, given that Assembly elections are months away and the issue has turned out to be even bigger than those on the citizenship law or students, which were limited to their constituencies and hadn’t galloped with such frenzy. Clearly, the Opposition has once again been reactive rather than being proactive. By being disunited on the farmers’ issue, they failed to either block the Ordinance on farm reforms or muster enough numerical strength to outshout the ruling party in the Rajya Sabha, force a debate and discussion in the House or at least make sure that the legislation was scrutinised by parliamentary committees. And till the farmers landed in Delhi, none of them had planned a cohesive national campaign on their rights. Now that the issue has become a veritable tinderbox, they have no choice but to look concerned. That actually makes them look even more unconcerned. In the end, the Government has to give a price guarantee of sorts as the Minimum Support Price (MSP) has itself become unremunerative given rising input costs. Farmers are but naturally wary of any contracted price in the open market that could push them further down the trough they are in. They are not entirely unreasonable or against market economics. If only the Government had acted with reason than haste.
Despite the advent of modern technology and guiding systems, naval aviation remains among the riskiest services
Soldiering is extremely risky business, even without the escalation to a full-fledged war. The unpredictable vagaries of nature, machines, circumstances and the operating turf combine to test the warrior at each step – it is from that fount of perennial uncertainty that the military families silently invoke, “We wait. We hope. We pray. Until you’re home again.” The truism of the daily dangers that beset a warrior’s life manifested in the tragic incident of Indian Navy’s MiG-29K, which went down over the Arabian Sea. While one of the pilots was immediately rescued, the other, instructor Commander Nishant Singh, had remained untraceable. Tragically and finally, the family, squadron and the other loved ones of Commander Nishant Singh were joined in their prayers by a grateful nation, in the poignant moment of necessary “closure”, as the news of a body believed to be his was recovered from high seas after 11 days of relentless search.
In an ode to the timeless spirit of “I will never leave a comrade behind,” which underpins the sacred ethos of all warriors, the Indian Navy launched intensive search operations, deploying nine warships, 14 aircraft and fast interceptor craft.
Even among the comity of warriors, the naval aviators are cut from a brazenly different cloth, as they earn their swaggering-flyer mystique owing to the inherent dangers and glory that accompany their professional calling. These very few men and women manage the additional complexity of landing their machines on a moving aircraft carrier deck by snagging the “tailhook” to arresting high-tensile wires, after having approached the deck at exactly the right angle. Then the pilot counterintuitively pushes the engines to full power, in order to stop. All strategising and coordination has to happen in a matter of seconds. The complexities, the adrenaline rush and the dangers are simply unmatched.
Despite the advent of modern technology and guiding systems, naval aviation remains among the riskiest services. The soul of a true naval aviator is forged amid that trying loneliness of flying over the endless azure of daytime or the haunting darkness of the open ocean at night – either way tempering mind into steel so that when that split second critical decision is required, it is done to perfection. These rare warriors need to combine the multiple dimensions of sea, air and land, simultaneously.
Conversely the extreme pressures of job also lead to unique personalities that typify naval aviators. Ironically, it was Nishant who had jumped into popular imagination with a now-famous letter written to his senior, seeking permission to “bite the bullet (get married).” Nishant had asked tongue-in-cheek, “I regret to be dropping this bomb on you at such a short notice, but as you would agree, I intend to drop a nuclear one on myself and I realise that just like all the split second decisions we take up in the air in the heat of combat, I cannot afford to allow myself the luxury to re-evaluate my decision,” he wrote and had serendipitously added, “I promise to never repeat such a performance in air or teach it to my trainee pilots.” His Commanding Officer, another naval aviator, had matched Nishant’s good-humoured (albeit, private communication) with, “But all the good things have to finally come to an end” and recorded his acquiescence with jest, “welcome to hell!” Certainly, no one had imagined or ever assumed the “end” to imply death. Beyond the obvious camaraderie and the classic flamboyance and élan of naval aviators, there is also the human side of warriors who cherish nothing more than home and family, above all. Very often, owing to ignorance or sheer lack of concern, the citizenry forgets the dangers that are inherent, routine and unimaginable on land, air and sea, in the course of maintaining the sovereignty of the nation, which could lead to the payment of the “ultimate price” in the discharge of military duties.
It was to its home base at INS Hansa, Goa, that the all-weather, carrier-based, multi-role fighter aircraft, i.e. MiG-29K, was flying back from the aircraft carrier, INS Vikramaditya. Part of the Indian Navy’s famed “Black Panther” squadron, this has been the third accident involving the MiG-29K fighter in the last one year, albeit, this entailed the trainer two-seater variant. Last November, a trainer crashed in Goa after engine failure due to a bird hit. Both pilots ejected safely. In February, a MiG-29K on a routine training sortie crashed off Goa due to technical glitch. The pilot ejected safely and was recovered. Of course, the aircraft has reported glitches in the past and in other countries though the Navy has rectified the engine. Hopefully, going forward, operational deficiencies will be looked at much more keenly before acquisitions.
But while the armed forces will never forget its own in Commander Nishant Singh, it will persevere whatever the odds, as they do not know of any other way, except to fight the odds, everyday. The flyers have a unique tradition of honouring their fallen pilots with flying in a “missing man formation.” Last year, the Indian Air Force Chief himself led a group of MiG-21s to give a symbolically moving aerial salute through the “missing man formation” to honour the valour and supreme sacrifices of its pilots at Kargil.
The pain of not knowing the fate and hoping-against-hope that the family of Commander Nishant Singh had to endure for all of 11 days is of indescribable magnitude but it ends now. The author too had a family elder, Lt Bikram Singh Rathore of 6 Kumaon, who took the “last stand” in the fierce Battle of Walong in 1962. At 22, the lionheart had fought till last man, last bullet. The noble warrior had stoutly refused to surrender or retreat, and towards the same action Time magazine famously noted, “At Walong, Indian troops lacked everything. The only thing they did not lack was guts.” Lt Bikram Singh Rathore was last seen dragged away by the Chinese, never to be afforded a “closure” for the family as the official status is “missing, believed killed.” Such are the ways of the profession of arms that seldom does a warrior outlive a couple of chances, yet the soldiers will always back their instincts and take calculated chances to fight another day. “I’ve got you back” is a reassurance they convey each other but for now, the nation mourns its naval aviator, Commander Nishant Singh, who will remain symbolically the “missing man” for his family, squadron and the nation.
(The author is former Lt Governor of Andaman and Nicobar Islands & Puducherry)
Om Vir Singh, a 64-year-old long-distance runner and athlete, has come out in support of the 'Bharat Bandh' called by farmers by doing what he knows best.
Singh told IANS, "I am expressing my solidarity with the protesting farmers by running. Ever since the agitation began, I've been running for 15 km every day. Going forward, as long as the farmers are sitting here, I will continue to run 21 kilometres every day in support of their demands."
Singh, a resident of Uttar Pradesh and is also a farmer. But he is staying in Vasundhara, Ghaziabad these days. His son and daughter live abroad.
Singh has been pursuing running seriously for the past 25 years and will even participate in a 21-kilometre marathon next week.
In view of the call for Bharat Bandh, security arrangements at Ghazipur border are strict and a large number of police personnel have been deployed.
Despite negligible stubble burning, there seems to be no respite from the pollution in the national capital as the air quality index inched closer to the "severe" category on Tuesday afternoon.
The city's air quality index stood at 392 micrograms per cubic meter, which is in the "very poor" category. According to the Central Pollution Control Board (CPCB), 18 out of 36 pollution monitoring station in Delhi showed severe air quality index reading.
Jahangirpuri has the most noxious air at 439.
The Ministry of Earth Sciences has advised sensitive groups to avoid all physical activity outdoor and move activities indoors. If asthmatic, then keep relief medicine handy, it emphasized.
The System of Air Quality and Weather Forecasting and Research (SAFAR), a central government agency, said that dominating factors influencing air quality are making a swift transformation from biomass to intense winter cooled stagnation conditions, lowering of boundary layer height and fog formation.
"Surface winds are likely to be picking up slightly and the AQI is forecast to be in the very poor category for the next two days. AQI is likely to improve and stay in the middle-end of the very poor category on 11th December," the forecasting agency stated.
The contribution of stubble burning to the pollution crisis is also negligible at one per cent, according to the SAFAR. At 42 per cent, stubble burning's share in pollution had soared to season's high on November 5. It however, started plummeting from November 23 onwards.
Delhi's neighbouring regions -- Faridabad, Noida and Greater Noida are logging very poor quality of air. Ghaziabad and Greater Noida's air quality remained the worst, with very poor air quality of 439 and 414 micrograms per cubic meter, respectively.
Before climate change delivers the fatal blow, India must respond with effective counter-measures to protect lives and livelihoods
As India experiences a colder than usual winter, public opinion is firmly set on the premise that the Coronavirus-driven lockdown reduced pollution levels, thereby resulting in a season that’s more spirited than the previous ones. However, nothing could be further from the truth. The Indian Meteorological Department (IMD) has already sounded an alert to the effect that the winter of 2020-21 will be colder than usual due to the La Nina conditions prevailing in the equatorial Pacific Ocean. La Nina is the cooling phase of the El Nino southern oscillation cycle in the equatorial Pacific Ocean as opposed to the warming El Nino phase. As if confirming the IMD’s predictions, Delhi has already witnessed its coldest November in 71 years. But miseries brought on by the cold may be the least of our concerns compared to the economic impact that lies in wait for India in the wake of these erratic temperature changes.
The IMD predicts an uneven distribution of minimum and maximum temperature levels in various parts of India, which could lead to a higher variance between night and day temperatures. This, in turn, would impact farming in the Rabi season. Especially the wheat crop which is the main cereal that is grown in northern and central India.
Other crops that stand to be impacted are soy and corn. In south India, a major cash crop, coffee, which is extremely sensitive to temperature variations, is expected to suffer unduly thanks to these weather-related anomalies. These developments on the agricultural front can wreak havoc in the form of sudden spike in food prices and cause unexpected financial turbulence for the farming community that is already facing multiple difficulties.
The economy would eventually suffer the ripple effects of the agrarian crisis, the adverse impact of climate change, coupled with setbacks on account of COVID-19.
The latest Mckinsey Global Institute (MGI) report has presented unsettling facts that point towards dwindling economic prosperity due to the havoc unleashed by climate change. The report states that there is a risk of $200 billion to India’s GDP by 2030 due to a sharp reduction in outdoor working hours triggered by the increase in ambient temperatures. What are currently considered as unsafe outdoor temperatures to work in will increase by a whopping 15 per cent by 2030, directly impacting productivity and eventually the per capita income of the nation. This is because outdoor work has immense relevance for the economy. As of 2017, it contributed to nearly 50 per cent of the GDP. It drives 30 per cent of the GDP growth and ensures employment for nearly 75 per cent of the labour force or nearly 380 million people in India. Hence, climate change-driven spike in temperatures can put up to 2.5 to 4.5 per cent of the GDP at risk.
In fact, it is estimated by the MGI report that nearly 160 to 200 million people bear a clear five per cent possibility of being exposed to lethal or fatal heatwaves as early as 2030. As temperatures rise, so do the costs of air conditioning. It is estimated that by 2030, a massive $110 billion would be required as capital costs for improving the air conditioning infrastructure. Urgent remedial measures are needed to avert much of the problems before 2030. Although some situations have surpassed the stage of remedy, all is not lost yet. The authorities must have concerted plans in place that are able to mitigate the forthcoming threats. Gradually shifting of outdoor working hours coupled with movement of capital and labour out of the designated high temperature hotspots will go a long way in reducing the adverse economic impact that is being predicted.
Moreover, all the current ongoing infrastructure and developmental projects must have a critical component of climate change adaptation consideration built into them. This sensitivity will reduce the carbon footprint of these projects and will in turn help avert extreme outcomes in the form of spiraling heat output signatures.
Yet another aspect that needs urgent attention while in the pursuit of ensuring a safe climate for the future is the state of our energy supplies. The average hydel power plant dams that are currently operational in the country are decades old and the constant exposure to the elements, not to mention the ever-present interaction with water, is taking a toll on their structure. The future presents a scenario where rising temperature would mean more melting snows and glaciers, which in turn would increase the water load on these dams. An immediate assessment is required as to how these ageing concrete structures would hold up to this increased onslaught of water and still deliver. This is essential because the need for gradual decommissioning of the coal-fired power plants can no longer be a long-term strategy but is in fact a short-term urgent requirement if the erratic temperatures need to be reined in before 2030. Erratic temperatures are here to stay. But before they deliver the fatal blow, India has to respond decisively with effective counter-measures in order to protect lives and livelihoods.
(The writer is an environmental journalist)
In all probability, Rajinikanth is bound to have a secret or open understanding with the BJP as both need each other
Will the BJP be able to rope in Tamil superstar Rajinikanth, who has announced plans to launch his much-awaited political party in January 2021? The actor is a phenomenon and will be a major factor in the forthcoming Tamil Nadu Assembly polls, scheduled for April-May 2021. He has chosen this time to make his political debut because there is a huge vacuum in the State after the demise of two former Chief Ministers and political heavyweights, M Karunanidhi of the DMK in 2018 and J Jayalalithaa of the AIADMK in 2016.
“It is the need of the hour. If it is not done now, it will never be done. For this, I urge the people to stand by me. Together we will bring change,” the star-turned-politician tweeted this week. There has been speculation that he is inclined towards the BJP, though Rajinikanth has been rather coy about discussing his plans. The problem for the BJP is that if Rajnikanth’s party decides to go it alone and contest all 234 seats, it will eat into the BJP’s ally, the AIADMK’s vote share more than that of the DMK (Dravida Munnetra Kazhagam). Rajinikanth’s entry comes at a time when the incumbent AIADMK-BJP alliance, the DMK-Congress-Left Front, and another superstar Kamal Haasan have already firmed up their alliance. With the BJP’s ambitious plans to expand in the South, is it possible for Rajinikanth to join the BJP-AIADMK combine? Have the elections become a game of arithmetic?
The megastar had been putting off entering politics since 1996, when the Congress first offered to make him its chief ministerial candidate to counter the then Chief Minister J Jayalalithaa. Since then, the Congress as well as the BJP have been wooing him. “The time to rewrite Tamil Nadu’s destiny has come. There’s a great need for change... it’s now or never. Voted to power, we will change everything,” Rajinikanth promised this week. Failing repeatedly to gain a foothold in Tamil Nadu, the BJP had been trying to goad the actor into entering politics, but he had resisted the party’s overtures so far.
The BJP is handicapped, with no tall leaders at the State level, and would like to use him as its mascot. Being a megastar, he has the advantage of being a known face and has a huge fan following and clubs. He proposes to launch a spiritual party as opposed to the atheist Dravidian parties. It will be advantageous to the actor too, as the BJP is a disciplined party and has both manpower and money. The BJP would also help facilitate other things like registration of his new party and so on. So both think that they are natural allies.
Second, Rajinikanth does not have time to build a party before the polls. His fan clubs alone will not be enough. Though he had asked his followers to register their names on his website, you need teams for booth management and door-to-door campaigns and so on. The BJP has already loaned Arjun Murthy, head of the State BJP’s intellectual cell, as “chief coordinator” of the new party, indicating what is to come. While the BJP has welcomed his entry, Deputy Chief Minister and AIADMK coordinator O Panneerselvam has also hinted at a possible alliance with Rajinikanth’s party. Addressing a meeting in Theni this week, he said: “We welcome great film actor Rajnikanth’s decision to enter politics. In politics, anything can happen. If there is an opportunity, an alliance will be formed.”
Rajinikanth, too, has some challenges to face. First of all, the field in Tamil Nadu already has two strong Dravidian parties — the DMK and the AIADMK, who share a combined vote bank of 50 per cent. The other, smaller, but significant regional players such as the PMK (Paattali Makkal Katchi) and actor Vijayakanth’s DMDK (Desiya Murpokku Dravida Kazhagam) are in the line-up too. Second, the star has some health problems as he had undergone a kidney operation and might not be able to withstand a rigorous election campaign. Third, so far there is no clarity on whether his party will fight next year’s Assembly polls in Tamil Nadu independently or strike an electoral alliance. Fourth, in a caste-ridden State, forward castes, such as the Mudaliars, have divided their loyalty between the two Dravidian parties for long. As for the dominant castes, the Gounders have Chief Minister E Palanisamy of the AIADMK, the Thevars have O Panneerselvam, the Vanniyars have Dr Ramadoss and the Scheduled Castes have the VCK (Viduthalai Chiruthaigal Katchi). Vijayakanth’s DMDK, the Vaiko-led MDMK (Marumalarchi Dravida Munnetra Kazhagam), the two Left parties and actor-turned-politician Hassan’s Makkal Needhi Maiam share the caste groups. The minorities go with the DMK or the AIADMK. Parties such as the CPI (M), the CPI, the VCK and the MDMK are aligned with the DMK coalition.
In all probability, Rajinikanth is bound to have a secret or open understanding with the BJP as both need each other. The problem for the actor will be who to attack during the campaign, the Centre or the State Government? Many indications are that the star will lean towards the BJP.
(The writer is a senior journalist)
Crony capitalism has also happened in public sector banks. There is a dire need to strengthen regulatory oversight to guard against irregularities in running all banks
The recommendation of an Internal Working Group (IWG) set up by the Reserve Bank of India (RBI) to allow industrial houses to own banks — if they meet the criterion — has invited strident criticism from experts, including the former RBI Governor Raghuram Rajan. Asking how a borrower could also be a lender, they have debunked the idea, stating that this would lead to misdirected lending, mostly to entities belonging to the industrial house that owns the bank. This apprehension is valid but the misuse of public money can happen in any bank, irrespective of the ownership. For instance, in Public Sector Banks (PSBs) till now, businessmen patronised by the ruling establishment managed loans on considerations other than merit. In private banks, too, the situation is no different, as amply demonstrated by the failure of Yes Bank, which is not owned by an industrial house. There is a dire need to strengthen regulatory oversight to guard against irregularities in running banks. The IWG recommends allowing promoters to hold 26 per cent equity stake in a steady state or after 15 years (up from the existing norm of 15 per cent) from the start, when it should be a minimum of 40 per cent of the equity for the first five years. It suggests taking a sympathetic review of whether industrial houses should be allowed to own banks if they meet the criterion. And considers allowing Non-Banking Financial Companies (NBFCs) with assets of over `50,000 crore, and in operation for over 10 years, to convert to banks, whether or not they are owned by industrial houses.
These suggestions need to be read in a certain context. Already, after a prolonged tussle, the banking regulator had allowed promoters of the Kotak Mahindra Bank Limited (KMBL) to maintain their stake at 26 per cent despite the 15 per cent norm (originally named Kotak Mahindra Finance Limited, it was the first NBFC in India to convert into a bank in February 2003). This prompted promoters of other private sector banks, who had lowered their stake to 15 per cent, to demand that they, too, should be allowed to increase it to 26 per cent. For instance, the Hinduja Group of IndusInd Bank made the appeal. Therefore, by allowing promoters of all private banks to have 26 per cent stake, the IWG has taken the logical step forward.
The 15 per cent threshold was anomalous, as with a marginal stake, the promoter won’t have the desired skin in the game. Hence, the much-needed seriousness and commitment would be less. As a result, the management and governance of the bank could suffer. A study by the Boston Consulting Group (BCG), India, shows that this may well be the case. An analysis of old private sector banks done by the BCG illustrates that “boards, where equity ownership is diversified, can take control of a bank and start to direct its operations in a less than optimal manner. The Catholic Syrian Bank and the Lakshmi Vilas Bank (LVB) are good examples of this. In fact, 12 old private banks are laggards in respect to technology and risk systems and have not grown their share from four per cent of the assets of the system.”
Even so, for a promoter to initially start with 40 per cent shareholding as per the existing guidelines and then bring it down to 15 per cent (after the efforts during the initial difficult phase have borne fruit and the operations have stabilised), relegating him to a minor player, is unfair. No wonder, the KMBL promoter pleaded with the RBI to allow it to retain a higher shareholding, which the latter agreed to. The apex bank should implement the IWG’s recommendation to allow 26 per cent shareholding to the promoter in the long-run.
The second major recommendation to allow industrial houses to own banks, after addressing any outstanding issues or concerns in respect to “connected lending” and incorporating safeguards in the Banking Regulation Act (BR Act), needs to be read in conjunction with another suggestion made by the RBI to the Finance Ministry early this year. The RBI had proposed that the Centre reduce its shareholding in six top PSBs, i.e the State Bank of India, the Punjab National Bank, the Bank of Baroda, Canara Bank, the Union Bank of India and the Bank of India to 26 per cent. In the follow-through, the Centre has already initiated the process to reduce its holding to 51 per cent in the next 12-18 months.
Realising that the market may not have the appetite for it, the RBI thought that letting corporates in could help raise the prospects. There are several corporates with deep pockets who can buy the shares of PSBs, thereby enabling successful divestment and at the same time, help the Government garner resources to rein in the fiscal deficit in the current difficult year (it is aiming to garner about `43,000 crore). For this to happen, the regulator has to take a policy decision to allow corporates to own a bank. This is precisely what the IWG has done. But this has invited criticism from experts who say that instead of being based on due diligence and assessing viability of the project, the bank will give loans keeping in mind what the owner wants. Put simply, this will be tantamount to the use of public money for unjust enrichment of the corporate. This undoubtedly needs a vigilant architecture. In PSBs, for instance, businessmen with political clout managed loans and got them okayed. Neither did the banks insist on repayment, nor did the defaulters have any fear, as those who were expected to take action chose not to act. This led to an increase in non-performing assets (NPAs) to an unsustainable level, forcing the Centre to bail them out by using the taxpayers’ money.
In private banks, too (albeit those not owned by a corporate house), the situation is quite similar. Merely because an industrial house gets to occupy the driver’s seat in a bank does not automatically follow that public deposits will be misused. Abuse or otherwise is primarily a function of the quality of the management on the one hand and supervision by the banking regulator on the other. If, any of these prerequisites are lacking, then, irrespective of who owns the bank, exploitation is inevitable. To handle that, there is a dire need to strengthen regulatory oversight and the RBI should make proactive intervention on “real-time” basis to prevent mismanagement and irregularities — instead of continuing with the present practice of bolting the stable after the horses have fled.
India needs more banks with adequate capital buffer to meet the credit requirement of a $5 trillion economy by 2024-25 (funding on such a mammoth scale can’t be done with equity capital alone). In view of this, and considering that the Government wants to open up even PSBs to the private sector (look at the decision to reduce its shareholding in six top PSUs to 51 per cent), there is a dire need to expand the landscape of potential investors. The involvement of large industrial houses could be of great help in this endeavour.
Accordingly, the Government should only consider the IWG’s recommendations after incorporating safeguards to address issues of “connected lending” by amending the BR Act. All banks, which have other group entities, should be held by Non-Operating Financial Holding Companies (NOFHC).
The recommendation for a higher minimum initial capital of `1,000 crore (up from the existing `500 crore) makes eminent sense. However, there is a case for raising the bar even further to say, `5,000 crore, to ensure that only very serious entities enter the space.
The third major recommendation of the IWG to allow NBFCs with assets of over `50,000 crore, and in operation for over 10 years, to convert to banks is in sync with the RBI’s stance all along. The only change mooted now is to permit NBFCs owned by industrial houses to convert to banks, too. The RBI probably went by the fact that there are a number of well-run NBFCs owned by industrial houses who can be good candidates for converting to and running a bank.
The group has also batted for “harmonisation” of various licencing guidelines to ensure that relaxations (or for that matter, tightening of rules) given at different points of time are applicable to all entities, irrespective of when the licence was given to each. Some important recommendations provide for a “clear” and “consistent” definition of holding by a promoter (use of paid-up voting equity share capital is prescribed as the right metric); maximum share holdings of 15 per cent by non-promoters uniformly for all, banks not to carry out any activity permissible within the bank, through a separate subsidiary; pledging of bank shares and so on. The RBI should build in checks and balances.
(The writer is a New Delhi-based policy analyst)
Arab nations are warming up to India and the Army Chief’s visit will further strengthen ties
The visit of Army Chief, General MM Naravane, to Saudi Arabia and the United Arab Emirates (UAE) should be welcomed by all who are keen for India’s relations with the Arab world to improve. The Narendra Modi Government might have made ‘Look East’ a cornerstone of its foreign policy but the most dramatic improvement of ties in the past six-and-a-half years has been with the Arab world. And as many Arab nations normalise their relationship with Israel, their one-time mortal enemy, India, a long-standing friend of Israel, can only be most pleased. Combined with the fact that Pakistan, which often found a steady hand of support in the Arab world, has seen its ties with the two leading nations, Saudi Arabia and the UAE, deteriorate in the recent past, India can only look from the sidelines and be pleased at the state of affairs. Saudi Arabia is upset with Pakistan switching allegiance to Turkey as a leader of the neo-Islamic world despite feeding off Gulf largesse. The Saudis went so far as to recall a major loan from Pakistan and UAE stopped issuing visas to Pakistani citizens, However, with the Saudis and the Emirates involved in complicated politics in the area, particularly with Iran, overtly through a war in Yemen, and also internecine issues in Qatar, India will also need to thread a tightrope.
India has to maintain amicable relations with all sides because of both commercial and military reasons. Naravane as a representative of the Government must be careful. That said, India’s improved relations with West Asia are here to stay for the medium-term with major nations having political stability. OIC member states have been drawn by India’s compliance of rulebook diplomacy, respect its non-provocative gestures and scent its economic growth and wide markets. There’s a new-found respect diplomatically after we held off China. Besides, India continues to provide skilled manpower to Arab nations. Of course, there is the challenge of how the incoming US administration will treat the area but one expects more of the same.
SC reprimands Govt for aggressively pushing Central Vista project, withholds construction
Is building a citadel as testimony to one’s transformative legacy and power so important when the nation is going through its worst crisis brought on by the pandemic? Or is considered and reasoned opinion now a dispensable ritual in the rush to tick the boxes of jobs done, good or bad? May be the Narendra Modi Government thinks that it can make its priorities the nation’s own, ignoring reality. So the Supreme Court pressed the much-needed pause button yesterday, literally rebuking the Government for “moving forward aggressively” on Delhi’s Central Vista project, even before a decision could be taken on a slew of petitions challenging it. And though it allowed Modi to lay the foundation stone for the project, it categorically ruled out any construction or demolition in the demarcated area or any cutting of trees, the last so not advisable in a climate-challenged city like Delhi. The Government has justified the Rs 1,000 crore project, that provisions for a new Parliament building and a do-over of the Central Vista, on grounds of adapting to the requirements of changed times. But the top court sensed the Government’s real intent of making a power statement and curbed the adventurism, saying, “Just because there is no stay, does not mean you can start construction. We did not pass any clear stay order because we thought you are a prudent litigant, and you will show deference to the court.” When Government counsel Tushar Mehta sought time to respond to the court’s order that no construction or demolition could continue, the court insisted that he reply in five minutes on compliance. To that extent, the court played conscience keeper and made it amply clear that runaway ambitions could not be allowed to have their way when the timing and the spends are clearly inappropriate. It underlined that just because the Government considered its authoritarian and signature move as important, everybody shouldn’t agree and fall in line.
The real intent of the argument that Lutyens’ Delhi needs a makeover, particularly the Central Vista of the Rajpath, to create more spaces for a more streamlined operation of Ministry offices and freeing up more citizen-friendly spaces, is entirely political and in no way cultural or futuristic. It is quite unlike the French experiment with the Louvre though parallels have been drawn to it. When the glass Pyramid came up in the courtyard of the museum, ostensibly to free up spaces for an easier visitor movement, the then French President Francois Mitterrand was lambasted for creating “an architectural joke, an eyesore, an anachronistic intrusion of Egyptian death symbolism in the middle of Paris and a megalomaniacal folly.” The oddity of its existence was such that critics and conservationists compelled the architects to tone down on drama, keep much of the rejig of the Louvre’s internal map underground and stay away from the surrounding classical architecture. Of course, Mitterrand, an avid art lover, was thinking about keeping the Louvre relevant for generations than sealing a political legacy. Here, it is the latter taking precedence. The Government’s move is about overwriting history with its own. Yet tradition’s co-existence with modernity is encoded in our DNA and Delhi is the best testimony, where each successive ruler has sedimented through relics and monuments that have stood the test of time. And Delhiites have never denied heritage its place, be it Rajput, Islamic, European or colonial, making it a part of their living history, one where Lutyens’ Delhi is a key chapter. And no argument holds before the elegance and classicism of the design — the green pavilions, perches, cupolas and the islands are the only democratic spaces where citizens can move and roam free, catching the afternoon sun in the middle of winter and the gentle breeze of a summer evening. No kiosk and retail space is needed here for it is precisely to escape those that Delhi families assemble here. Besides, being the first stretches to be locked down for security around Republic Day and Independence Day, they are anyway sanitised and cannot ever be a porous event space like Washington’s National Mall. Redevelopment wouldn’t mean more freedom to the masses. Considering the India Gate and now the war memorial respects martyred soldiers no less, do we need to scream our triumphalism and identity any louder? Shouldn’t the Government be wiser to leave a legacy of policy and governance instead? Repurposing or modifying administrative offices within the shell of an existing facade and rejigging interiors are the done thing. But to change the skyline is quite the other. Agreed, there may be an increasing demand for land in the cities and the size of the Government means that its bureaucracy needs to be accommodated. Question is why can’t they be relocated to a space where vertical growth is possible. The Rajpath has been our ceremonial pivot, providing a monumental, dignified and symbolic setting for governmental structures, museums and national memorials. Attempting to change it for no pressing reason, therefore, is like marginalising and eroding its place-based identity. Simply because of its historicity as a power statement. One that the current regime wants to overlay with its own definition of a monolithic and a neo-cultural India, as if we never had roots through millennia. Prime Minister Narendra Modi doesn’t quite like the “Lutyens’ world” and the power structures and codes embedded in it. But in the name of breaking elitism and freeing up space for people, one cannot justify political point-scoring. There are fruits of preservation; they serve as reminders of what was and where we need to go. There are only ruins of demolition, forcibly reconstructing the past to suit our ends. Besides, no amount of overwriting can erase the imprint of the city in our hearts. In the end, Delhi’s soul gets damaged.
Before giving banking licence to corporates, the RBI must ensure a robust and fool-proof regulatory oversight architecture which it clearly lacks now
The nationalisation of banks in 1969 effectively ended the corporate dominance in the banking industry, with the Government taking control of 90 per cent of the total banking business in India. Now corporate houses may once again be allowed to enter the banking arena if the recommendations of the Reserve Bank of India’s Internal Working Group (IWG) for reviewing corporate structure of private sector banks are accepted by the Government. The suggestions are rather sweeping and it is questionable if all the risks have been weighed carefully. There are two major recommendations; the first is to allow large corporate and industrial houses to own banks by amending the Banking Regulation Act 1949, and the second is to allow large non-banking financial companies (NBFCs) with 10 years’ track record, including those owned by corporate houses and with an asset size of Rs 50,000 crore and above, to convert themselves into banks. The recommendations are open for comments till January 15, 2021.
Some of the biggest industrial houses already own large NBFCs bigger than many medium-sized banks with more than a decade’s track record. Besides HDFC with assets worth Rs 5.6 lakh crore, there are Bajaj Finservice, Sriram Transport, L&T Finance Holdings, Indiabulls Housing, Tata Capital, M&M Finance holdings, Cholamandalam Investment and Finance Company, Muthoot Finance and Aditya Birla, which fulfil the twin criteria. Their total assets would exceed Rs 14 lakh crore (FY 20). There are also Government-controlled NBFCs – for example, the one led by PFC with assets of Rs 6.6 lakh crore, followed by REC with Rs 3.2 lakh crore assets, LIC Housing Finance and HUDCO – which also fulfil the criteria; their total assets amount to around Rs 14 lakh crore. For a Covid-battered and capital-starved banking sector reeling under mounting NPAs, such huge capital from private cash-rich companies could just be rejuvenating, a consideration which probably weighed with the IWG. Private players were allowed into banking after 1993 and since 2016, NBFCs have also been allowed, but so far their responses have been tepid. One reason was the small cap of 15 per cent on the promoter’s stake; this is now proposed to be raised to 26 per cent in the long run over 15 years. But as Rajnish Kumar, the former chairman of SBI, said: “It will only work well when the system has three things in place — strong ring-fencing for business interest, high-quality corporate governance and resolution framework for banks and finance companies.” This is where the recommendations raise serious worries and have attracted widespread criticism, including from ex-Central bankers Raghuram Rajan and Viral Acharya, who called it a “bombshell” dropped by the RBI.
Historically, the RBI has always been cautious about issuing banking licences to corporates on account of the inherent conflicts of interest and poor corporate governance. The last two licences to IDFC First Bank and Bandhan Bank were given seven years ago after licences given to the Kotak Mahindra Bank and YES Bank, of which the YES Bank has now gone bust due to crony capitalism and ineffective regulatory controls and had to be bailed out like all others.
The global financial crisis had made the developed nations very cautious. In response to the 2008 global financial crisis, the US had adopted several measures, including enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which introduced a raft of measures to regulate the financial sector and protect consumers. The Act amended many existing legislations, like the Securities Exchange Act of 1934 to create an Investor Advisory Committee, an Office of the Investor Advocate and an ombudsman. It instituted regular reviews of conflicts of interest within investment firms by newly-created oversight institutions like the Financial Stability Oversight Council for identifying and improving systemic risks and especially to monitor designated Systemically Important Financial Institutions, which are deemed “too big to fail.” Even these may not be sufficient guarantee against future malfeasance.
Nothing of that sort happened in India. Satyam happened in 2009 and we were in deep slumber. An attempt to strengthen corporate governance and give it a statutory authority was made only in 2013 in the new Companies Act by incorporating some key provisions of Clause 49 of SEBI’s listing agreement. That these are hardly effective is evidenced by the unending series of frauds and scams, which have since broken upon the Indian banking scene, the regularity of which no longer surprises us. The weaknesses of the regulatory and oversight institutions and the multiple conflicts of interest along with crony capitalism have wrought havoc in the financial sector time and again. The IL&FS fraud dealt a body blow to NBFCs in India, exposing the risks a large NBFC poses to our financial system. Much of our NPAs have been the creation of super-fraudsters like Vijay Mallya, Nirav Modi, Mehul Choksi, Rana Kapoor and their ilk who could manipulate the system with active support from important levers of power. In all these cases, the RBI’s supervision has been lax and ineffective. Of course, the RBI was not alone to blame; the statutory auditors, often from the big four, and the credit rating agencies equally contributed to bypassing controls, throwing caution to the winds.
If the growth of banks and NBFCs continues unchecked without an effective framework to correct asset-liability mismatches, the financial sector will remain vulnerable to risks and accidents, dragging the economy in a downward spiral. The continued failure of banks – the latest being the Laxmi Vilas Bank (LVB) – point to the gross inadequacy of the RBI’s regulatory architecture, including its prudential norms. Even in the developed world, entry of large corporates into the banking sector is discouraged. The IWG has itself admitted that “the prevailing corporate governance culture in corporate houses is not up to the international standard and it will be difficult to ring-fence the non-financial activities of the promoters with that of the bank”; all the experts it had consulted, save one, on this issue had disagreed with its recommendations.
Before allowing large NBFCs into the banking space, the RBI must ensure a robust and fool-proof regulatory oversight architecture which it clearly lacks. The urgency being displayed by it to complete this process, therefore, legitimately surprises many and raises many unnerving worries.
The biggest concern of the RBI has always been to prevent connected lending and exposure between the banks and other related financial and non-financial group entities. It allowed large industrial houses to set up their own payments banks for the first time during 2015-16. Many like the Tatas, Birlas, Ambanis and Mahindras had applied for licence. Of the 41 applications, only 11 got in-principle approval, and seven started operations by 2018. But the banking landscape in India is undergoing significant transformation, with all public sector banks to be consolidated into only half a dozen large banks with balance sheet size of Rs 10 lakh crore each, besides a handful of large private banks. Hence there may be better avenues for raising capital rather than putting the stability of the financial system at stake.
Indeed the stakes are too high to treat the matter so casually. First is the enormous risk in connected lending. As Rajan and Acharya have correctly noted, “The history of such connected lending is invariably disastrous – how can the bank make good loans when it is owned by the borrower? Even an independent committed regulator, with all the information in the world, finds it difficult to be in every nook and corner of the financial system to stop poor lending.” Besides, the unintended consequence of concentration of economic and hence political and lobbying power in such corporate houses is likely to follow, giving a further boost to crony capitalism. Second is the excessive competition likely to result from the entry of corporates into banking, leading to erosion of profit margin of the existing banks and forcing them to lend to risky ventures and businesses, thereby further weakening the financial system. Ultimately, it is only the small investors who pay the price, as we have seen in the cases of Sahara, DHFL, PMC Bank, Yes Bank and LVB. Corporate governance is weak even in the largest private banks, as the case of ICICI Bank has demonstrated.
The Indian financial landscape is littered with a highly complex web of numerous shell companies, front companies to big corporates they can lend to, opaque onshore and offshore ownership structures of companies and incestuous financial transactions between corporate entities, who can easily form a cartel to evade regulation and oversight. The RBI still does not have the institutional capacity to enforce regulation and exercise effective control – only recently it has introduced a separate regulatory and supervisory cadre to monitor systemic risks arising from the growing sizes and complexities of an intertwined and interconnected financial sector. The question to be addressed before embarking upon any such misadventure is whether the regulator is adequately equipped to monitor millions of transactions taking place via the internet, traversing every nook and corner of the globe, and follow the monetary trails of illegitimate deals.
(The author is a former Director-General at the Office of the Comptroller & Auditor General of India and an academic)
Chennai, Dec 3 (IANS) Today's movie stars are tomorrow's political leaders and Chief Ministerial aspirants -- that is the trend in Tamil Nadu. The latest to join that club is actor Rajinikanth, who on Thursday announced his decision to float a political party in January 2021.
With this Rajinikanth puts an end to various speculations about his plunge into Tamil Nadu politics. Announcing this in a tweet he added: "In the upcoming assembly polls, with people's massive support, in Tamil Nadu, an honest, transparent corruption less, secular and spiritual politics is sure to happen." "Miracle, Wonder will happen," he added.
Speaking to reporters here Rajinikanth said: "The time has come to change the fate of Tamil Nadu. Political and government change in the state important. It will surely change. The political change is important and is compulsion of time. If not now, it is not possible ever. Everything has to be changed. We will change everything." He appealed to all to support him to bring in the change. "I am just a small instrument in the change. If I win then it is people's victory," he added.
With five chief ministers in the last five decades from the Tamil movie world, the way to the political power in Tamil Nadu is through tinsel town. Five of the state's chief ministers - C.N. Annadurai, M. Karunanidhi, M.G. Ramachandran (MGR), Janaki Ramachandran and J. Jayalalitha - had their roots in filmdom, while several other actors showed an interest in politics.
However, the trend of movie hero turning into a mass political leader was started by MGR who broke away from DMK and to float All India Anna Dravida Munnetra Kazhagam (AIADMK) and went on to become the state Chief Minister. In the upcoming 2021 Tamil Nadu assembly polls, the movie heroes who will be contesting would be: Rajinikanth, Kamal Haasan and A. Vijaykant. While Annadurai and Karunanidhi were involved in writing the story, screenplay and dialogues of movies, it was MGR who became the first actor-turned-Chief Minister.
The state has seen and is seeing several actor-turned-politicians like the late Sivaji Ganesan, T. Rajendar, M. Karthik, Vijayakanth with the DMDK, Sarathkumar with his All India Samathuva Makkal Katchi, Director and actor Seeman with his Naam Tamilar Katchi and recently Kamal Haasan floating the MNM.
There are several other actors like R. Ramarajan, Vagai Chandrasekhar, Napoleon, Khushbu, C.R. Saraswathi, Anantharaaj, Radha Ravi and others who have joined the AIADMK, the DMK and the BJP. Barring MGR and Jayalalithaa, no other actor has captured power in the state fighting elections.
In 1972 MGR broke away from DMK and floated AIADMK and in 1977 captured power in the state in 1977. He continued to be the state Chief Minister till his death in 1987. He was succeeded by his wife Janaki Ramachandran and latter by J. Jayalalithaa, a popular heroine in Tamil movies. In 2005, Vijaykant, an action hero known to perform stunts in movies without a double, floated his DMDK party as an alternative to the two dominant Dravidian parties -- the AIADMK and the DMK.
"Vijaykant had his fan club in nook and corner of the state. The set up was great and it was converted into a political party. He had developed the fan club like a political party set up," political analyst Kolahala Srenivaas told IANS. When he fought the 2006 assembly polls alone without aligning with any party, the DMDK notched up an impressive vote share, better than even the established MDMK and PMK.
In the 2006 assembly polls the party contested in all the 234 assembly elections and got about 10 per cent vote share. Barring Vijayakant who won from Virudhachalam seat, all other party candidates lost the polls. Then DMDK became a most sought after party for alliance, more so for DMK.
Alinging with AIADMK in 2011, the DMDK became the second largest party in the assembly and Vijaykant became the Leader of the Opposition. Later the party witnessed dissensions and some long time office bearers broke away. The party now has lost its steam with Vijayakant's health not up to the mark. Over the years the DMDK's vote share has come down.
In 2018, Kamal Haasan floated his Makkal Needhi Maiam (MNM) party in Madurai. The party contested independently in the 2019 Lok Sabha polls and got about four per cent vote share while all the party candidates lost. In 2021 assembly polls the party plans to contest lead by Kamal Haasan.
The other action hero Sarath Kumar floated The All India Samathuva Makkal Katchi in 2007. The party mostly contested in alliance with AIADMK and its own vote share is not known. The other notable politician import from Tamil movie world is Seeman who has floated Naam Tamilar Katchi. The party has been contesting in the polls without aligning with any other party.
In the 2019 Lok Sabha polls Naam Tamilar Katchi had polled four per cent, logging three per cent vote growth over the earlier assembly polls. "In terms of growth, it is only Kamal Haasan's MNM and Seeman's Naam Tamilar Katchi has the growth opportunity. While MNM can cut into urban votes of other parties-mainly DMK-Seeman's party can gain in the rural areas," a political analyst not wanting to be quoted told IANS.
But such a scenario is bound to change with the entry of Rajinikanth the latest movie hero to enter the state politics. "He is super caste neutral. He can attract all voter segments - urban, rural, apolitical, small, micro communities. It is going to impact all the parties," the analyst added.
The next probable actor in the political line could be Vijay. However last month he distanced himself from the political party floated by his father and movie director S.A. Chandrasekhar. Vijay urged his fans not to join or serve the party just because his father started. The actor said there is no connection between his father's party and his fan's movement. "I also hope that appropriate action will be taken against them if they engage in any activities involving my name or photo or the name of Vijay Makkal Iyakkam," Vijay had said.
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