Bengaluru, Dec 17 (IANS) Karnataka Chief Minister B. S. Yediyurappa on Thursday unveiled 'Bengaluru Mission 2022', an initiative focussing on four areas - ease of transport, cleaner city, greener city and connecting citizens to the city's culture through museums and cultural centres. The announcements are seen as part of the ruling BJP's preparations for the upcoming Bengaluru local civic body polls. The High Court had on December 5 directed the State Election Commission to hold polls to the existing 198 wards and notify the elections within 10 weeks as the term of BBMP corporators ended September 10.
Meanwhile the government has appointed a senior IAS officer Gaurav Gupta as administrator until the new council for the civic body is elected. At the launching ceremony of the Bengaluru Mission 2022 here, Yediyurappa said that the initiative's main aim is to overhaul the city's infrastructure by 2022 when the country will mark its 75th year of Independence.
He added that a blueprint for the overall development of the city had been created using recommendations from experts to beautify and develop the city, including adding more lung spaces, new storm water drains, construction of twin towers for government offices, and other announcements related to road and traffic projects.
"The experts' recommendations also include developing huge empty land parcels owned by state owned Mysuru Lamps, New Government Electrical Factory (NGEF) properties into tree parks, besides mini-forests in Turahalli, Kadugodi and J. P. Nagara, which will be similar to Lalbagh or Cubbon Park," he explained.
He also conceded that the budget will be allocated appropriately for all the works planned. "We will be conducting regular inspections once in six months and make sure that all the works planned are completed within the given timeframe," he claimed. The CM added that the financial distress caused due to the Covid-19 pandemic would not get in the way of the city's development.
Proving most of the exit polls wrong, Bihar assembly elections results have favoured the National Democratic Alliance (NDA) of BJP & JDU. The voters of Bihar have placed their trust in the NDA headed by Nitish Kumar in the state. This comes amidst a fifteen year of anti-incumbency and added hardships in the wake of Covid-19 pandemic. This was more than an ideological battle; it was a referendum on NDA headed by Nitish Kumar who was branded as below par performer on issues like employment creation, alleged corruption, his apathy towards basic health care, education and the issue of migrant labours. This result is one of its kinds where one alliance partner JDU has dipped to 43 seats from their 71 seats of 2015 and the other partner BJP has increased to 74 seats from their tally of 53 in 2015. Rarely do coalition parties meet different fates, so there has to be a plethora of reasons behind the drubbing of JDU & rise of BJP.
The disgruntled member of NDA, the Lok Janshakti Party- LJP headed by Chirag Paswan’s decision to go solo on 137 seats against the JDU & not against BJP took a toll on JDU. Though LJP never had much of an impact outside the Vaishali belt, a careful analysis of the data provided by the Election Commission forces one to observe the adverse palpable impact Chirag has managed to make on the electoral fortunes of Nitish. In constituencies like Alauli, Belhar, Khagaria,, Islampur, Korgahar, the Mahagathbandhan (MGB) has defeated JDU by 2,773, 2,468, 3,000, 3,698, 4,083 votes respectively. LJP played a spoiler for Nitish Kumar in these constituencies as it got more than 5000 votes on each seat. LJP almost dented JDU’s chances in Hilsa constituency by getting more than 17,000 votes. JDU won Hilsa by a mere 12 votes more than the RJD. Paswan also ended up reducing lead margins of JDU and other NDA allies like VIP (Vikassheel Insaan Party) & HAM (Hindustani Awam Morcha). Clearly, if not for Paswan the electoral prospects of NDA would have been better.
However, the biggest impact on Bihar elections is that of PM Narendra Modi. Despite the entire hullabaloo around economic distress, the poor handling of the Covid-19 pandemic, the issue of migrant labours, the job losses because of the lockdown etc., the charisma of PM Modi refuses to abate. His 12 rallies were exactly what the NDA needed. Modi not only gave BJP the best strike rate of 67.27 in Bihar, but also pulled out his ally out of deep trouble. Modi’s sundry economic packages of free food, cash, Covid tests, medicines, and free train tickets to migrant labourers, the short addresses to the nation during lockdown have successfully assured the masses that they have in him a PM who cares. In a country where political parties confined socialism to their poll promise and party manifesto, Modi has been able to implement socialism with efficiency. The various welfare schemes like-toilets under Swachh Bharat, bank accounts under Jan dhan, LPG subsidy etc. have won BJP loyal voters in rural India cutting across the caste barriers. It’s very hard to dent the image of saviour Modi who came from a poor family like them. Add to this, the muscular nationalistic icon that doesn’t care two hoots before looking China in the eye at Galwan or doing surgical strike and air strikes on Pakistan, Modi becomes a force to reckon with for any rival. The Modi factor has been the most important factor in Bihar election. Politics is a game of perceptions and Modi’s carefully crafted image connects with the masses.
Though CM Nitish Kumar was up against an anti-incumbency of 15 years but he has some solace on his side. Kumar took development process to the micro level. The development expenditure made by the state government has remained high in the past 15 years and consequently the Gross State Domestic Product growth rate in Bihar has also been high. Kumar’s attempts towards strengthening of Infrastructure development have been widely applauded. His government has implemented a large number of welfare programmes. The “Bihar ke Saat Nischay” scheme covers the 35% reservation for women in direct recruitment across all cadres and services of the state, piped drinking water, toilets for all households etc. Kumar’s historic decision of 2016 regarding alcohol prohibition has remained a hit with the poor women, who often were the victims of domestic violence at the hands of their intoxicated men. His prohibition has evidently drawn a large number of women towards the NDA. The overall female voter turnout was 5 % more than males. Unlike the first phase, where men voted 1% more than the women, in the 2nd & the 3rd phase, women voted 6% & 11% more than men respectively. Female votes have played important role in NDA victory. Though he is criticised for not making enough efforts towards employment generation, agricultural development, neglecting primary education and health care; the voter seems to have made his mind that Nitish at his worse is still better than the options available in Bihar.
The opposition headed by RJD could not be a match to the NDA despite best of their efforts. Rashtriya Janta Dal RJD supremo Tejasvi Yadav tried to highlight the issue of unemployment, poverty, lack of basic health infrastructure in the state as the issue. He strategically removed the posters of his father, Lalu Yadav as he probably didn’t want to remain in the shadow of a convict; this was brave coming from a political dynast. But it seems like the legacy of RJD has not faded away from the memories of Bihar. Young Tejasvi Yadav made valiant efforts to turn the fortunes for his party by focussing on issues that would matter, but unlike the JDU the alliance partner of RJD didn’t help in fact further dimmed their chances. Congress’s electoral fortunes have remained unfavourable for a while. Moreover, Congress was facing BJP directly in most of the constituencies. Congress under Rahul Gandhi vs BJP under Narendra Modi is a David vs Goliath battle and unlike the mythical saga Indian electoral politics has no provision of David carrying a secret tool to nail the mighty Goliath. Congress has become an albatross for its allies which they have to carry in the polls against a formidable BJP. Best would have been to cut down the Albatross to its size, so it was a blunder to give 70 seats to Congress. The AIMIM under Owaisi fighting on 20 constituencies also hurt MGB chances. He made a dent in Muslim votes and is gradually occupying the space in the hearts of Muslim voters that was vacant for last many years. But a counter polarisation always helps the BJP.
The revival of Left in Bihar is another remarkable outcome of Bihar elections. Communist Party of India Marxist Leninist (CPI- ML) piggybacking on RJD has won 12 constituencies with CPI & CPI (M) winning 2 constituencies respectively. CPI ML is the ultra-left faction of Communists that traces its roots to the naxal leader Charu Mazumdar. 14 constituencies for Left might have repercussions in Indian electoral politics in the long run.
Currently, the NDA has won and Nitish would be CM for the sixth time. His deputy Sushil Modi admitted on an interview just before the elections that Bihar has a very high population density so there is a lack of space in the state and therefore it cannot become a favoured destination of industries. Bihar government needs to address this by considering agriculture and allied activities as an apt option for employment generation. Bihari voters are way too smart to be allured by short term gains and this was probably the last time PM Modi has successfully sailed through the anti-incumbency in the state. The primary education, healthcare and employment remain the three big issues in Bihar and the Nitish Kumar led NDA must deliver.
Kanishk Shekhar is a political analyst and a book reviewer with a publishing house. He also teaches Political Science to students preparing for Civil services exam in leading institutes of India.
Indian beer brand Bira 91 has won the Europeon Beer Challenge 2020. It bagged five medals across categories.
The Bira 91 Indian Pale brewed with Pomelo won a double gold medal; a session IPA, this is an ode to contemporary India's love for experimentation and flavour. The crisp and refreshing Blonde Summer Lager won a gold in the lager category. Rich and malty, Bira 91 Boom Strong won a silver, and their flagship wheat beer Bira 91 White received the bronze, along with a bronze for the cologne-koelsch style Boom Classic.
Ankur Jain, Founder & CEO, Bira 91 said: "We at Bira 91 are immensely proud of this moment of having represented India at a global platform and being recognized for our flavourful beers. I would like to congratulate the Bira 91 family and our world-class brewing team for achieving heights and putting us on the world map for beers."
Deepak Sinha, VP,Marketing added: "The Triple Blind Tasting Methodused bythe EuropeanBeer Challenge means that the judges are not allowed any information about the samples they taste. They cannot see the bottle. They do not know what country it is from. They have no indication of price point. Plus, they do not discuss their thoughts together. This means that winning a European Beer Challenge 2020, with not one but across 5 of our beers is a HUGE honour. This is an exciting moment for the brand and all our consumers."
With a range of tastings organised, the most prominent Beer Buyers in Europe assembled. The London County Hall hosted the final tasting on the 24 November. Under the iconic gaze of the London Eye, the most exciting beers in the world battled to impress the demanding European Beer Challenge Judges. Thousands of samples from 39 countries fought head-to-head.
Indian interest towards Japanese culture has been growing significantly over the last few years, especially amongst Gen Z, believes Kaoru Miyamoto, Director General, Japan Foundation, New Delhi.
"Entertainment, as history and economics suggest has been the most potent source to share knowledge and therefore India is a key market for Japanese entertainment industry", he adds.
Japan Foundation is set to launch the fourth edition of the Japanese Film Festival (JFF)-India 2020 digitally amid the pandemic, starting December 4. It will screen critically acclaimed award-winning titles along with mainstream entertainment for 10 days.
IANSlife speaks to Miyamoto who shares details of the events, views on how Japanese content is liked by Indian audiences and more:
Q: How do you perceive the impact of Japanese lifestyle on the Indian population?
A: India and Japan share close resemblance in terms of the culture, food, clothing, art, and social practices. Needless to say, Japanese culture is permeating in India, advancing and strengthening the relationship between the two countries. Additionally, with an increase in exposure to global content, there is a significant surge in demand for international projects across markets. We aim to continue to empower people with quality choices and cater to a wider set of audience with the launch of the fourth edition of the Japanese Film Festival (JFF) in India.
Q: How do you see the response of Indian audience towards Japanese culture and cinema?
A: Cinema depicts all dimensions of a nation's culture. The interest towards Japanese culture has been growing significantly over the last few years, especially amongst the Gen Z. With the fourth edition of Japanese Film Festival, we seek to celebrate the vivacious Japanese culture in India, bring its different stories to the Indian audience through the medium. The 2020 Festival line-up features critically acclaimed, popular films which offers an enriching experience to our Indian viewers. We are confident the festival will not only be successful and bigger with the virtual access but also promote the appreciation of Japanese culture and cinema in Indian landscape.
Q: Which genres and formats in particular do you believe have received more traction amongst the Indian audience?
A: Usually international award-winning films like the Cannes' winner 'Shoplifters' or popular anime features like 'Weathering with You' have been quite well-received in India, in fact, becoming the first of their kind commercial releases of Japanese films in India. In addition, at the 3rd edition of JFF India, we were overwhelmed with the response of the audience to the visit of director Makoto Shinkai.
Q: Do you see the scope and popularity of Japanese content increasing in India and your thoughts on JFF's role in catering to Indian cine lovers?
A: This is the fourth season of Japanese Film Festival in India and from our earlier editions we can say that the popularity is growing rapidly. The demand is significant beyond the metros and tier 1 cities. As we understand our young audience (below 25 years) have an affinity towards foreign culture and that stems the interest in learning about and appreciating them. Entertainment, as history and economics suggest has been the most potent source to share knowledge and therefore India is a key market for Japanese entertainment industry.
The festival however focusses on strengthening the bond between the people of the two nations. The initiative is designed to promote global entertainment and offer a platform for new talent to showcase their work to diverse international audience and markets. Through the Japanese film festival in India, our endeavour is to map the interests of the Indian audience and cater to them with more precision and in pragmatic ways. The festival is free of cost, so we welcome everyone to join us in celebrating the beginning of the year end festivities with some prominent Japanese films.
Q: What are the similarities you see in terms of culture and cuisine in Japan and India?
A: Be it the love for tea or rice being a staple, there is a striking resemblance between the customs of the two countries. In terms of culture and heritage, both have similarities and are connected due to their common practices and closeness with each other. Japan has a fascinating and multifaceted culture, known for its traditions, hospitality and value system. As we know, the same values are followed in India as well. Also, in terms of cuisine, both nations offer similar types of tastes with a wide range of unique flavours and ingredients of fermented nature.
Goods and Services Tax rates can come down only when the rate of compliance improves for this grand tax reform
The Narendra Modi-led Union Government is cracking the whip on tax evaders in the country to ramp up Goods and Services Tax (GST) collections. Nationwide raids by the Directorate-General of GST Intelligence unearthed 4,586 fake entities registered under the GST regime. Countrywide 132 people were arrested in 1,430 cases related to illegally availing or passing on of bogus Input Tax Credit. Plus, more than six months’ default in filing monthly tax returns led to the cancellation of GST registrations of 1,63,042 entities.
Tax evasion in the country is rampant and strong anti-evasion measures are needed as GST collections are way below expectation and potential. This is at a time when the economy of the nation, which was already in the red, has taken a crippling blow due to the Coronavirus pandemic. The Government, which is trying to combat the pandemic, needs all the money that it can garner to keep the anti-COVID momentum going.
The Lok Sabha was informed in March that GST evasion of Rs 70,207 crore had been detected between July 2017 and January this year, of which Rs 34,591 crore had been recovered. The Directorate-General of Analytics and Risk Management has identified over 12,900 business entities suspected of availing Input Tax Credit since July 2017 through bogus invoices worth over Rs 1,00,000 crore till March this year.
Collection from taxes subsumed in the GST was about six per cent of the Gross Domestic Product (GDP) in 2016-17. In contrast, the GST collections to GDP ratio was 6.25 per cent in 2018-19 and six per cent in 2019-20. GST collections were about Rs 7,40,650 crore in 2017-18, Rs 11,77,370 crore in 2018-19 and Rs 12,22,131 crore in 2019-20.
GST collections were about Rs 32,000 crore and Rs 62,000 crore during April and May. The next four months saw an average collection of Rs 90,000 crore per month, which improved to Rs 1,05,000 crore per month in the last two months, showing a robust recovery.
If the GDP at factor cost (proxy for the total base of indirect taxes) is assumed to be Rs 160 lakh crore and 60 per cent of this GDP pays an average GST of 15 per cent, the GST revenue should be Rs 1,20,000 crore per month. Obviously, at the moment, the GST revenue is below expectations and its potential.
The Centre and State Governments across the country are taking steps to overcome resistance to formalisation and digitalisation, rationalisation of GST rates and curbing tax evasion through claims of fake or excess Input Tax Credits, misinvoicing or undocumented sales. The GST system includes certain checks on tax evasion like mandatory audits, matching of returns, E-Way Bills, reverse charge mechanism and invoice matching. These are being gradually introduced. To check the practice of setting up shell firms for fraud, the Government has mandated Aadhaar authentication for GST registration. The GST law permits deemed registration 21 days after an application is filed. Authorities will now physically inspect and verify entities obtaining deemed GST registration without Aadhaar.
Ever since the Economic Administration Reforms Commission, chaired by LK Jha in 1984, highlighted how 80 per cent of Excise manpower then guarded gates of low revenue yielding factories, tax administration in India has been moving away from physical controls to self-assessment. However, the truth is that a trust-based tax assessment system is effective only when there is the deterrence of test checks and fear of penal action on detection of breach of faith in test checks.
Otherwise, the tax system will be no different than managing the collection boxes placed in religious places. Since tax inspectors no longer guard gates of factories and godowns the E-Way Bills system was rolled out in April 2018 to track the movement of taxable goods. This also reduces Income Tax evasion by transporters as they need to get registered. Capturing the vehicle registration numbers into a trackable IT system, the E-Way Bills and the FASTag system help check other malpractices. For instance, in the Bihar fodder scam, the Comptroller and Auditor General (CAG) detected that certain vehicles supposedly used for fodder transport were actually registered two-wheelers, proving fake procurement.
Officials have found lakhs of E-Way Bills being cancelled within a few hours, indicating undocumented delivery to intra-city or nearby destinations or multiple trips being made against a single E-Way Bill to transport excess undeclared goods. To curb misuse, E-Way Bills are now being integrated with the FASTag system being used for electronic collection of tolls on National Highways and the Vahan database, too.
There have been instances where unscrupulous dealers have used fake invoices for inputs not received to claim undue Input Tax Credit. Such invoices don’t have any corresponding supply of goods/services or not to the full extent and do not involve actual payment of GST on them. This practice also leads to defrauding of banks by exaggerating turnovers and money laundering.
The July 2019 CAG report on GST, expressed concern over the continuing delay in the full invoice matching system which has made the system prone to Input Tax Credit frauds. The system was intended to be designed based on 100 per cent invoice-matching to ensure system-verified Input Tax Credit, correct settlement of the Integrated Goods and Services Tax and for minimising direct human interface with assessees. After full automation is adopted by taxpayers, even “assessment” as understood in the manual system may no longer be necessary. The tax returns can be generated by a system that matches invoices.
Tax evasion can be detected by applying analytical tools and Artificial Intelligence to the massive data that crores of invoices generate. In fact, the GST system should reach the same maturity in terms of providing visibility of Input Tax Credit as is now available for verification and tracing of TDS/TCS credits by Income Tax assesses.
One common problem, especially for small businesses, is that the GST system is not designed to distinguish a sale on full upfront payment and a sale on credit and a sale on Equated Monthly Installments. Why force a seller to pay GST even before he gets paid for the supplies? Even allowing quarterly filing of GST returns with monthly payments does not address this problem.
Small businesses selling to big buyers, including governments and Public Sector Undertakings, routinely face payment delays though some progress has been made recently. It would be desirable if in a GST2.0 upgrade, a receipt-based GST system can be implemented where the GST would be payable to the Treasury only on receipt of full or pro rata payment for the supplied goods/services. One theoretical option to implement this, at least for small businesses, could be to allow them to opt for Cash Accounting rather than Accrual Accounting. However, that will create problems when they grow and have to leave the small business tag. A better option will be to introduce payment tracking, whose benefits will go beyond the GST sphere in checking defaults and delinquencies.
It is a creditable achievement that the number of registered businesses under taxes subsumed in the GST has increased from 72 lakh to 1.28 crore, despite significant de-registrations due to increased thresholds for registration and voluntary deregistration by some Central Excise-exempt units located in the Himalayan/ North Eastern States whose business became unviable under the destination-based GST. Some 82 lakh registered sellers filed detailed returns for November and over 20 lakh GST taxpayers opting for the Composition Scheme are exempt from filing detailed returns. As a taxpayer facilitation measure, almost 94 lakh small GST taxpayers are now allowed quarterly filing of return with monthly payment.
The GST rate rationalisation is also on course. Almost 99 per cent of all commodities are now taxed with GST at the rate of 18 per cent or lower. Consumers tend to compare GST rates with erstwhile Sales Tax/Value Added Tax (VAT) rate not realising the basic fact that the GST subsumes Central Excise which has been hidden in the price of products on which VAT was applied. When the invisible Central Excise and other taxes are subsumed in the visible GST, it is bound to be seen higher than VAT.
For instance, the pre-GST taxation of goods was a typical standard VAT at the rate of 14.5 per cent, Central Excise at the rate of 12.5 per cent and CST at the rate of four per cent. With the cascading effect of tax on tax, the total levy paid by the end consumer was over 30 per cent. Inclusion of petroleum products in GST, if necessary by adjusting non-GST taxes like Customs duty, allowing Input Tax Credit across full value addition chains, further lowering of rates with continuing strict action against tax frauds can make GST more acceptable and yield more revenues.
Digitalisation and formalisation of businesses poses some short-term costs and hassles, but it is inevitable and it alone holds the promise of giving long-awaited justice to the overtaxed. GST rates can come down when compliance improves for this grand tax reform.
(The writer is former Special Secretary, Ministry of Commerce and Industry)
Having established itself in Delhi creditably, the party is now planning to test the waters in UP Assembly elections
The Aam Aadmi Party (AAP), after initial hiccups in its ambitions to spread its wings nationwide, learnt the hard way that it had to first establish its political life’s longness with proof of its governance skills. This is why it abandoned its pan-India efforts, considering its limited appeal among the civil society, and concentrated on securing Delhi. And now that it is into its third term in the city-State, riding a massive verdict and having managed to stave off the BJP creditably, it is now considering spreading its footprint across the country. Of course, in this effort, it is following a ground-up policy, proving its credentials in local Government polls. Emboldened by the party’s maiden win in the Goa zila panchayat elections, its convener and Delhi Chief Minister Arvind Kejriwal has said that the AAP will contest the Uttar Pradesh (UP) Assembly elections in 2022. The Goa win is significant for the simple reason that although the BJP dominated the results, the Opposition Congress performed poorly and the AAP seemed to be gaining at the latter’s expense. Of course, the AAP is playing it big in UP by harping on its comparatively superior performance in citizen-friendly governance. In fact, Kejriwal almost launched a campaign yesterday, asking why people from UP would have to look at Delhi for health services and education in an obvious reference to his successful run with mohalla clinics, free electricity, water, education and healthcare facilities. It would enter the contest as an outlier, hoping to encash on the vacuum created by the Congress. But the question is whether it would be open to alliances to push up its tally and relevance. Already Samajwadi Party (SP) chief Akhilesh Yadav has said that his party would form an alliance with smaller parties. His reason: his experience has not been good with the bigger parties. The AAP is now also eyeing Punjab, where it has significant presence with 19 MLAs. It has already won 62 of the 70 seats in Delhi with a vote share of nearly 54 per cent, a few of them on Punjabi-dominated seats. And now it has thrown its lot with the farmers’ agitation, dominated as it is by agriculturists from Punjab, and even thrown barbs at Congress Chief Minister Capt Amarinder Singh for toning down his attack despite the initial fury. Of course, Singh has been at the forefront of the farmers’ agitation, passing amendment Bills to the three Central farm Acts in the Assembly, insisting on meeting the President and sending his legislators to Delhi to stage a dharna. He has been one of the leading Congress voices in articulating protests against the farm Acts.
However, the AAP hopes to make gains from the anti-incumbency factor against him and benefit from the erosion of the base of the Shiromani Akali Dal (SAD). Though the latter has now walked out of the National Democratic Alliance (NDA) over the farm laws, it has been too little a move to wrest control in the State. The AAP wants to use this disappointment with the SAD to its advantage. Kejriwal’s party, however, still has to work on its base in Punjab. It has to rebuild connect with the Malwa region — the epicentre of agrarian distress — which it has lost since 2014. The AAP has to take care of factionalism in the State unit, which has not been quite at peace with the central leadership. If the party is serious about pushing itself to the forefront, it has to work on consolidating a political base that’s different from the existing players who have been seen as championing the interests of the elite. This has alienated much of Punjab’s masses from the political class and the AAP wants to spearhead that change. The farmers’ protests are just the beginning. The question is can it wrest the alternative space?
Will Air India finally find someone other than the Government of India to fund it?
Air India for years has been one of India’s most glorious examples of a white elephant, not just because the airline operated Boeing-747 ‘Jumbo Jets’ painted in white. Much like other Public Sector Enterprises, the airline became a way for politicians and bureaucrats to repay favours with inflated leases and purchases of aircraft and services. And ever since the days of the Atal Bihari Vajpayee Government, the airline has been on the shop window and up for sale. Crippled by its own debt, Air India has found it impossible to not only turn a profit but also be competitive on a number of counts against domestic rivals such as IndiGo; on international routes Air India has been hollowed out by massive route rights allotted to Arabian airlines whose growth has been predicated on the Indian passenger. While Air India has played a major role in the repatriation of Indian citizens from foreign countries since the pandemic began (and many other evacuation exercises on occasions even earlier, especially when Sushma Swaraj was the Minister of External Affairs), the airline has made a pretty penny from it. And that will not substitute as a policy once the pandemic begins to wear off and air travel begins in earnest again. But the flag-carrier airline is not competitive domestically and while it might gain on international sectors with the rise of non-stop point-to-point travel, it faces risks from other Indian carriers such as IndiGo and Vistara. However, make no mistake, Air India is a powerful brand and one worth saving especially if the Government of India takes a major hit and absorbs much of the debt associated with the airline. After all, why would any sane person buy an asset where he is crippled by prior debt when it would be cheaper to create an all-new asset. If the undisclosed bidders for Air India give the Government a fair price for the airline and absorb some of the losses and most of the employees, it could well be a win-win for everyone. Sure, writing off thousands of crores of debt might be a hard pill to swallow but it is a lot better than continuing to absorb losses or shutting down the airline completely, losing an iconic Indian brand and thousands of jobs. There already have been in the past decade massive layoffs and many lives ruined largely owing to the failures of airlines like Kingfisher and Jet Airways, and tens of thousands of crores of public money has been lost in these private airlines as public sector banks have borne the brunt of bad loans to the aviation industry.
While the Government of India has not disclosed the identity of those who have expressed interest in bidding for the airline, it has been suspected that a group of employees of the airline along with a private equity firm Interups and Tata Sons are among the suitors. As the Maharaja goes under the hammer, sources in the Government have confirmed that it has received multiple expressions of interest. We still believe that selling Air India piecemeal might be a way for the Government to realise additional value from the airline but those in power believe that such a step will only delay and needlessly complicate the sale. We cannot understate the importance of the aviation industry for India and while the Railways have been the lifeblood of the Indian passenger transport system for decades, in a country the size of India, an affordable, reliable as well as a profitable aviation industry is vital not just for connecting people and enabling the economy but most importantly, it is one of strategic importance. A large civilian air fleet — much like a large civilian merchant fleet in centuries past — is a way to move military and other strategic assets quickly. Many have argued that this is why India should retain a public airline but many large nations, particularly the United States, do not have any airline controlled by the Government. In fact, a professionally run Air India which is profitable and not a taxpayer-subsidised operation that competes with true private airlines will lead to a level playing field and the overall growth of the Indian aviation sector. However, as the saying goes, there is often a slip between the cup and the lip and it remains to be seen whether the sale goes ahead.
The ongoing India-China standoff yet again points to Intelligence lapses amid reports that the Chinese got winter warfare training from Canadian forces
Rebel News, a Canadian far right news network, has obtained 34 pages of documents called ‘China Files’ establishing that Canada has been training the Chinese People’s Liberation Army (PLA) in cold-weather warfare at its military institution in Kingston, bases in Ontario and at the Canadian Forces College, Toronto. Further, it sent to China flag-rank Canadian officers to teach PLA officers tactics and techniques in high-altitude fighting. Nearly 200 Canadian soldiers participated in the October 2019 World Military Games at Wuhan and Canadian sailors and naval ships celebrated the PLA Navy’s 70th Raising Day at Qindhao. Defence and security relations between the countries were particularly active during 2018-19 despite the Chinese taking two Canadian civilians hostage. It seems that the Canadian Government under Premier Justin Trudeau was keen to maintain warm relations and not to displease the Chinese overlooking objections raised by the Trump Administration over unintended consequences of transfer of knowledge and information to the Chinese though Canada’s Five Eyes partners were not perturbed.
The news network obtained redacted documents, some classified secret and for Canadian eyes only, 19 months after it sought them on a Freedom of Information request but as the documents were not properly redacted, they were legible. When there was resistance to implementing the exchange programmes — the Chief of Defence Staff put on hold one joint section-level exercise in winter warfare in Canada — orders were given that no training was to be suspended without consulting the Chief of Privy Council. These documents, made public last week, clearly tell India that the Chinese had been preparing for high-altitude warfare since 2018-19 — especially in the winter of 2019 — and have received training, expertise and equipment from Canadian Defence Forces during bilateral military exchanges in China and Canada. The Trudeau Government’s record of sensitivity towards India’s security concerns has at best been lax, given that its Defence Minister and Leader of the Opposition are both Khalistani sympathisers.
These revelations fit in neatly with the US-China Economic, Security Review Commission report of December 1 which describes the eight-month-long India-China standoff along the Line of Actual Control (LAC) as the most severe border
crisis in decades and accuses China of planning the Galwan clash with the blessings of Defence Minister Gen Weng Fei. Two weeks before the clash, Global Times warned that India would suffer a devastating
blow if it got involved in the
US-China rivalry. The report notes that while the “Chinese Government might deem its Ladakh venture to acquire territory a success, it failed to dissuade India from building infrastructure or aligning with the US, where results have been counterproductive”. The Indian Government, though, has denied both loss of any
territory or alignment with the US. Although no clinching evidence was presented in the report, tell-tale signs were there that China was working to a premeditated grand design of forcibly altering the LAC in Ladakh for which preparations had started in mid-2019, if
not earlier, as the ‘China Files’ indicate. These predate the Mahabalipuram/Chennai
summit and are akin to Prime Minister AB Vajpayee’s historic Lahore visit coinciding
with Gen Musharraf’s planning of Kargil.
Lies and deceit are ingrained in the Chinese Communist Party and PLA’s psyche. Foreign Minister S Jaishankar has said that the Chinese have given India five differing explanations for deploying large forces along the LAC. In its latest response to Jaishankar speaking at a virtual session with Sydney-based Lowy Institute where he blamed China for the standoff and breakdown in relations, Beijing Foreign Office repeated its standard response: “The merits of the situation are very clear. India is totally responsible for the situation.” The standoff has hit an impasse with no prospect of any thaw this winter; the Chinese and Indian tanks are just 20 metres apart near Kailash range. The Chinese cancelled the joint release of a stamp on the 70th anniversary of bilateral relations. The date for the ninth military dialogue has not been communicated by Beijing and while channels of communication remain in suspended animation, both sides are talking at each other.
Russia, which enjoys the best of relations with both India and China, has entered the fray not in helping to break the logjam but adding fuel
to the fire by accusing the
West of “anti-China games”. Foreign Minister Sergei Lavrov set the cat among the pigeons by saying that the western powers were promoting Indo-Pacific Strategy and Quadrilateral Security Dialogue to engage India in anti-China games and also trying to undermine Russia’s partnership with India. His remarks were directed at the US which has been threatening India with sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA) for the purchase of $5.4 billion S400 air defence system from Russia. This is a direct challenge to India’s strategic autonomy and one of the sticking points in the India-US Defence Partnership on which the Trump Administration remained discreetly silent.
Although India is still sitting on the fence in deference to China, it has indicated to Beijing both in words and deeds the options available to it for crossing the Rubicon. US Democratic lawmaker Mark Warner, speaking last week at the Hindustan Times Leadership Summit, said: “India should join a ‘Coalition of the Willing’ with the US and other democracies to confront China’s model of State-sponsored authoritarian capitalism.” Just as Trudeau wants to be nice to China, India does not wish to offend Beijing as it cannot independently deter Chinese coercion on the Himalayan frontiers due to conspicuous power asymmetry.
Jaishankar’s continuing reliance on diplomacy stems from ground reality and realpolitik. When asked by a journalist about India’s reaction to Chinese intrusions being diplomatic rather than a pushback, he rebutted that “there has been an enormous military response in our force deployment”, deflecting the initial omissions of any counteractions following delayed detection of intrusions. The Government is making a virtue of necessity in its counter-deployment. In the same interview, he said the standoff could go the Sumdorong Chu way (1986) which took nine years to resolve. But then while the geopolitical context and limited scale of deployment were vastly different, India was tactically in a commanding position having surrounded the PLA intrusion at Wangdung which was beyond the Indian limit of patrolling. Still Wangdung was an Intelligence lapse!
The Intelligence and operational failures on the LAC this year are compounded by the Rebel News revelations of the Chinese getting winter warfare training from the Canadian armed forces in 2018-19. In a similar situation in 1984, India got a tip-off that Pakistan was buying snow clothing in Europe and pre-emptively occupied Siachen. The last GOC Ladakh Sub-Area, Maj Gen Yash Mor who was there at the time of intrusions, lamented this week about “our repeated failures to read Intelligence”.
(The writer, a retired Major General, was Commander, IPKF South, Sri Lanka, and founder member of the Defence Planning Staff, currently the Integrated Defence Staff)
The Centre as well as farmers should resolve the issue rather than prolonging it. This would be beneficial for the entire country
The continuing protests by the farming community for the last 20 days might be one of the biggest challenges of the Narendra Modi-led Government. Though the Centre is seized of the issue, the confrontation still continues. Perhaps it is time to look back and see how India went from being one of the largest food grain importers after Independence, to achieving self-sufficiency.
Former Prime Ministers Lal Bahadur Shastri and his successor Indira Gandhi were responsible for the Green Revolution in India. The food crisis began in the last year of the Jawaharlal Nehru era, as the first two Five-Year Plans did not pay adequate attention to agriculture. In 1949 the Indian food situation was difficult and the foreign exchange position was worse. In November 1949 Nehru made his first visit to the US and during his talks with US President Harry Truman he mentioned the scarcity of food in India. Truman’s response was positive, but bureaucratic hurdles, resistance in the US Congress, red-tapism and other difficulties, including the US’ bid to barter wheat for strategic materials, ensured that there was no pact in the end.
As a result of the continued food shortages in some of the States, India witnessed riots. It was then that the country resorted to PL480 food grains as part of the US’ policy of ‘Food for Peace.’ However, soon, India faced a crisis in the supply of food grains from the US, as President Lyndon Johnson’s food politics was a puzzle even to his administration. However, it had a happy ending because, by the time Johnson left office, India experienced a Green Revolution.
Prime Minister Shastri had in his very first month in office in June 1964 indicated a policy shift from heavy to light industry and towards consumer goods and agriculture. Shastri asked his Agriculture Minister Chidambaram Subramaniam to chalk out a new strategy to increase production. By giving the slogan “Jai Jawan, Jai Kisan” Shastri inspired both, farmers as well as farm scientists, to sow the seeds of the Green Revolution.
Meanwhile, within a few months of his second term in office, Lyndon Johnson decided to take a tougher approach to food grain supply to India and Pakistan. Johnson told his puzzled officials, “I will take care of the problem.” He always waited till the last minute before personally authorising the shipments. Then American Ambassador to India, Chester Bowles, called the supply the “ship to mouth” programme as it never went through the warehouses.
After Indira Gandhi took over as the Prime Minister in January 1966 she continued the focus on agriculture. One of the first things Indira Gandhi sought from Johnson during her first visit to Washington as Prime Minister in March 1966 was food aid. Though Johnson was bowled over by her charm he made it clear that the two primary conditions for the US’ aid — self-help and more focus on agriculture — were necessary.
Things began to change for the better as India ushered in an era of expansion in the farm sector, which started with the introduction of high-yielding varieties of wheat in the late 1960s. With all the push for agriculture, coupled with the efforts of leading scientists like Dr MS Swaminathan, slowly India began to see improved yields and got closer to solving the chronic food shortages in the country.
Indira Gandhi made the Green Revolution a priority of her Government and along with new hybrid seeds, initiated State subsidies and ensured the provision of electricity, water, fertilisers and credit to farmers. Agricultural income was not taxable.
The result was that India became self-sufficient in food. This was something that Indira Gandhi wanted to achieve with all her heart, particularly given her frustration with Johnson’s erratic and conditional food aid. Once, as soon as she hung up after talking to Johnson, Indira Gandhi is reported to have said angrily, “I don’t ever want us to have to beg for food again.”
She hit back at Johnson and signed a declaration calling for an end to “imperialist aggression” against the Vietnamese people. Lyndon Johnson’s response was swift and food grain shipments to India slowed down. But later, once Johnson was satisfied that the Green Revolution in India was on track, he became liberal and tried to get the support of other countries to share the burden with the US.
The World Bank, too, started a consortium for food supply. Today, India has achieved self-sufficiency as food production has gone up from less than 50 million tonnes (MT) in 1947 to 292 MT in 2019-20.
Meanwhile, Government investment in agriculture rose sharply, too. Apart from that, institutional credit, remunerative prices and the availability of new technology at low prices were facilitated. By the 1980s not only had India become self-sufficient in food grain production, it was exporting farm produce to pay off its debts and loaning it to food-deficit countries, too.
Over the decades, successive governments have thrown sops at farmers, including large subsidies on power and fuel, but there has been little sustained or strategic effort to modernise the sector. The Modi Government, too, came up with several schemes for growers and is now talking of an ‘Evergreen Revolution’ in the farming sector.
However, the new farm laws seem to have created apprehensions among the farmers, who have been protesting on Delhi’s borders since November 26. Though the Government has held six rounds of talks with farmers’ organisations, there seems to be a trust deficit and the Opposition parties, too, have joined hands with the growers to attack the Government. The Centre as well as farmers should resolve the issue rather than prolonging it. This would be beneficial for the entire country. No one wants to see the nation’s “annadata” suffering in the fields and on the streets, too.
(The writer is a senior journalist)
In the future, telehealth benefits for employees will be an integral component of a firm’s plans for the well-being of its staff
The COVID-19 pandemic has pushed healthcare to the forefront of every organisation’s agenda. Businesses across the world have adapted to telecommuting, reconfigured work environments and logistics and updated operating protocols to cope with the effects of the global health emergency. While there has always been a correlation between the health of the population and the economy, never has it been more apparent than in the Covid era. Governments across the globe have realised that investing in the health of the population can not only improve the quality of life of citizens and mitigate the risk of a public health crisis, it can lead to greater economic returns and productivity, too.
The pandemic is set to cause a 4.5 per cent permanent loss to India’s Gross Domestic Product (GDP), say experts. Poor health and loss of productive potential among the working population will only make things more difficult. If we want to achieve a healthier nation and minimise economic losses, we need to shift the focus to preventive care. A large percentage of economic benefits can be achieved with safer work environments, increasing access to medicines, preventive care and by encouraging workers to adopt healthier lifestyles. The rest will come from timely treatment of diseases with proven medical interventions.
Change is imperative: The switch to prevention is easier said than done. Not only does it necessitate the need to shift incentives in the existing healthcare systems to health promotion, but it foregrounds the need to make better health a policy prerogative, too. The contagion has also highlighted the importance of tackling noncommunicable diseases (NCDs), which have been one of the leading causes of India’s disease burden. NCDs are responsible for 61 per cent of the deaths in the country, and we need to focus on scaling up screening programmes and awareness drives to address chronic conditions like diabetes, hypertension, obesity, heart and lung diseases, stroke and cancer. A paradigm shift to focus on preventive care can be realised at a low cost and the implementation costs will be more than offset by the gains to productivity in healthcare delivery.
Time to rethink the healthcare architecture: The outbreak has demonstrated that it is possible to reevaluate healthcare service delivery. Reimagining workforce and patient flow in COVID-19 wards and a move to teleconsultations are just two notable transitions. People are already demonstrating that it is not that difficult to induce a behavioural shift by showing their readiness to wear masks, prioritise hand hygiene and reduce person-to-person interactions in order to help curtail the spread of the virus.
The contagion has also fast-tracked innovation and collaboration by scientists across the globe. If this is sustained, it can help us address major health conditions like cardiovascular diseases, cancers and mental health disorders. As of September this year, scientists have shared more than 50,000 genome sequences and close to 200 vaccines are in different stages of development. Many of these are the result of multi-sectoral, transnational collusions. Companies are playing a key role in the ongoing transformation and pharmaceutical giants, healthcare providers and the medical technology industry are an integral part of the pandemic response. They should further come up with ways to build on innovations and help do their part in the ongoing remodeling of healthcare systems. They must ensure the alignment of incentives and efficient collaboration to improve the overall health and prosperity of the population.
The corporate world needs to adapt: Companies outside the healthcare domain are also adapting to the crisis by revamping their organisational workflow and operation models. There is a strong economic case to be made for the need to invest in the health of their employees. In today’s fast-paced and hectic corporate world, occupational risks are increasingly linked to mental health triggers, sleep hygiene and the level of physical activity. Mental health, too, is fast becoming a concern as the economic uncertainty associated with the pandemic is beginning to take its toll. Chronic conditions like migraines, back pain and mental health problems like anxiety and depression can reduce the productivity of workers and have a negative effect on the quality of life. Companies should seriously consider providing greater access to mental health services and more flexible working hours.
Encouraging workers to take advantage of telehealth and virtual programmes is the first step. Times like these bring a lot of uncertainty and anxiety, and people feel the need to talk to a counsellor. Mobility restrictions not only make that more difficult but also end up exacerbating symptoms of anxiety. That is precisely where telehealth comes into play. It will help people cope better in times of crises and induce a behavioural change in their attitudes towards seeking remote help, which is necessary as we increasingly adapt to a digitally-mediated life. By offering telehealth benefits, organisations will have an engaged and productive workforce while employees benefit from a convenient and readily accessible form of healthcare. In the future, telehealth benefits for employees will be an integral component of a firm’s plans for the well-being of its staff.
(The writer is CEO Apollo TeleHealth)
The Govt should collect money from all those who owe it instead of squeezing CPSEs for bridging fiscal gaps. This is neither healthy for the economy nor good for the enterprises
The Department of Investment and Public Asset Management (Dipam) has come out with a circular requiring Central Public Sector Enterprises (CPSEs) to pay interim dividend every quarter or half-yearly, depending on whether it is a relatively higher dividend (100 per cent or Rs 10 on a share of Rs 10) or less. Even those which can’t pay the prescribed “minimum” must give an interim dividend. Further, at least 90 per cent of the projected annual dividend should be paid as interim. Even as the bureaucrats justify this in terms of easing cash flow and improving the investment sentiment, the reality is that the Government is squeezing CPSEs to lessen its fiscal woes. However, there are better and potent ways to do this; for instance, by plugging leakages in direct and indirect tax collections. The Centre should collect money from where it is due, instead of squeezing CPSEs for bridging its fiscal gaps.
The CPSEs have also been asked to pay the final dividend of the last financial year (FY) (April-March) soon after the Annual General Meeting (AGM) is over (normally, it is held in September of the FY) in cases where the interim dividend has not been paid out fully during the last FY and there is a balance to be paid out as final dividend.
A shareholder is eligible to receive dividend on the share capital held by him/her in a company if it makes profit in a year. The profit made is the revenue generated from its operations (sale of products or services or any other income source) minus expenses (on raw materials/other inputs, wages and salaries, interest payments and so on). While this is pre-tax profit, the surplus left after payment of tax or Profit After-Tax (PAT) is normally used for building resources such as capital reserves (to offset capital losses), securities premium reserve (used for buyback of shares), general reserves (used for working capital) and so on.
After appropriation to the reserves, the leftover amount is surplus cash, which can be used for paying the dividend. Therefore, the amount available for distributing the dividend is a derived figure through a complex process that has to keep in mind the overarching interest of running the enterprise in a robust and sustainable manner. This has to come from the company management. Unfortunately, in the case of CPSEs, leveraging its majority ownership and control, the Government follows a top down approach, issuing directions from time to time.
As a general principle, the guidelines issued by the Dipam require the CPSEs to pay a minimum annual dividend of 30 per cent of PAT or five per cent of the net worth, whichever is higher. This is seriously flawed. Given its financial position, the enterprise may not be able to afford the dividend as per this diktat of the Government. Yet, being forced to give can result in derailment of its business plans and impact its viability.
This was bad enough. Now, the Dipam has come out with excruciating directions on the “interim dividend.” This is a dividend payment made before a company’s Annual General Meeting (AGM) and the release of final financial statements (audited accounts and the balance sheet). Its declaration is normally accompanied by release of the company’s interim financial statements. What is the need for interim dividend?
For any given FY (say, 2019-20 ending March 31), it takes time to prepare, process and finalise the financial statements, get these audited and approved in the AGM, which normally happens six months after the end of the FY. This means that the regular dividend can’t be declared till that time (or September). Having to wait that long can make the shareholders jittery. The idea of declaring interim dividend — normally done towards the end or February/March of the concerned FY — is to put some cash in their hands. This practice is fairly logical as at the time of declaring the interim dividend, the FY is almost over and the management has got a broad idea of the profit/loss the company is expected to make. But to stretch it to a point whereby the CPSE is asked to give “interim dividend” at the end of each of the four quarters or half-yearly (as contemplated in the Dipam circular) during the FY, is appalling.
The performance of a company can never be consistent throughout the year. If it has made “X” amount of profit during the first quarter (April-June) of the FY, it does not necessarily follow that in the remaining quarters, it will sustain this trend. The profit could be less or there could even be loss during subsequent quarters. In such a scenario, if interim dividend is paid in the first quarter, it will spell financial trouble for the enterprise even as payment once made can’t be reversed after financials are finalised for the whole year.
Furthermore, directions such as forcing companies which can’t pay dividend as per the prescribed “minimum,” to pay interim dividend and that too at the end of the first half of the FY (during October/November) or payment of at least 90 per cent of the projected annual dividend, in one or more installments as interim dividend, are completely devoid of any logic.
By nature, an interim dividend can only be a small portion of the regular dividend. Yet, if 90 per cent is given as interim, it tantamounts to demeaning the very concept itself.
Bureaucrats have sought to justify quarterly/half-yearly payments citing that bunching of interim dividend payouts in February-March may compete with their cash availability for year-end payments to suppliers, as well as towards advance tax. They also aver that this will improve investment sentiment by assuring investors of regular and certain dividend receipt during the year. The argument is untenable.
When to make payments to the suppliers and discharge other liabilities is purely a commercial matter and the company management is best equipped to ensure that these are met satisfactorily, without causing any cash flow problem. As regards investment sentiment, the investor sees the fundamentals of an enterprise and its ability to ensure a reasonable return on investment on a sustained basis — not by how frequently the dividend payment is made. The real reason behind issuing the obnoxious guidelines lies elsewhere.
The Union Government gets a good portion of its non-tax revenue as dividend receipts from CPSEs — surplus transfer from the Reserve Bank of India (RBI) and telecom spectrum receipts being the other major components. In recent years, these receipts have declined (courtesy, reduction in its shareholding in many profitable enterprises via disinvestment). For the current year, the situation has worsened. Against the Budget estimate of close to Rs 66,000 crore, it has so far received only Rs 10,000 crore.
This, together with a substantial decline in tax revenue (during April-September, this was only Rs 4,60,000 crore. This is a reduction of about 33 per cent over the corresponding period last year) and the surge in expenditure due to Covid-19 has made the Government desperate. No wonder, it is making highly unrealistic demands.
Shockingly, the directive has come at a time when the profits of CPSEs have plunged due to the pandemic. If their financials don’t justify payment of dividend (at the rate desired by the Centre), how does one expect them to pay? This looks even more anomalous when seen in juxtaposition with the Government goading these very CPSEs to undertake spending on a massive scale (to make up for the substantial decline in investment by the private sector and, during the current year, by the Government too). How can the latter spend on projects and, at the same time, fill the coffers of the Centre?
To wriggle out of a tight fiscal situation, the Government is goading these public enterprises to dip into their accumulated reserves on the one hand and take recourse to borrowings on the other. True, this way they will be able to fund capital spending. But this will make the enterprises over-leveraged. Surely, this is not a sustainable way of financing investment.
The Government can’t have the cake and eat it too. It can’t keep on denuding the CPSEs and yet expect them to remain healthy and contribute to capital formation. To meet the rising expenditure and keep fiscal deficit within the prescribed ceiling, no doubt it needs to raise resources. But there are better ways. For instance, during 2019-20 (then the impact of the Coronavirus was not there), there was a shortfall of about Rs 2,00,000 crore in tax collections vis-à-vis even revised estimates. Under the Goods and Services Tax, there are fraudulent claims of input tax credit of close to Rs 1,00,000 crore since its launch from July 1, 2017. From the ‘Vivad se Vishwas’ initiative launched in the Budget for 2020-21 on direct tax demand of about Rs 10,00,000 crore under dispute, the expected recovery is about Rs 70,000 crore — a meagre seven per cent. The list is unending.
The message is loud and clear. The Government should collect money from all those who owe it instead of squeezing CPSEs for bridging its fiscal gaps. This is in no way healthy for the economy in the long run, nor is it sustainable for the CPSEs.
(The writer is a New Delhi-based policy analyst)
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