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LORD MOUNTBATTEN'S ROLE IN INTEGRATION OF PRINCELY STATES

Answer the following question in NOT MORE than 200 words in the Comments section.

Content of the answer is more important than its length.  

 

Discuss the contribution of Lord Mountbatten in the integration of princely states into India.

 

Lapse of Paramountcy:

  • At the time of Indian independence in 1947, India was divided into two sets of territories, one under the control of the British Empire, and the other over which the Crown had suzerainty, but which were under the control of their hereditary rulers.
  • The termination of paramountcy would have in principle meant that all rights that flowed from the states' relationship with the British crown would return to them, leaving them free to negotiate relationships with the new states of India and Pakistan "on a basis of complete freedom".
  • This was unacceptable to the Indian National Congress, which regarded the independence of princely states as a denial of the course of Indian history, and consequently regarded this scheme as a "Balkanisation" of India.

 

                                                          

Lord Mountbatten's Role:

  • Lord Mountbatten believed that securing the princely states' accession to India was crucial to reaching a negotiated settlement with the Congress for the transfer of power.
  • Mountbatten was also persuaded by the argument of Indian officials such as V. P. Menon that the integration of the princely states into independent India would, to some extent, assuage the wounds of partition.
  • The result was that Mountbatten personally favoured and worked towards the accession of princely states to India following the transfer of power, as proposed by the Congress.
  • Lord Mountbatten addressed the Chamber of Princes on 25th July 1947 giving a powerful speech in favour of integration of princely states within the Indian geographical region with India.
  • As a relative of the British King, he was trusted by most of the princes and was a personal friend of many, especially the Nawab of Bhopal, Hamidullah Khan.
  • The princes also believed that Lord Mountbatten, as the first Governor General of the Dominion of India post-Independence, would be in a position to ensure the independent India adhered to any terms that might be agreed upon.
  • Mountbatten used his influence with the princes to push them towards accession. He declared that the British Government would not grant dominion status to any of the princely states, nor would it accept them into the British Commonwealth, which meant that the states would sever all connections with the British crown unless they joined either India or Pakistan.
  • He pointed out that the Indian subcontinent was one economic entity, and that the states would suffer most if the link were broken.
  • The Instrument of Accession the princely states were asked to sign would cede away defence, external affairs and communications. The Congress offer, said the Viceroy, left the rulers ‘with great internal authority'while divesting them of matters they could not deal with on their own.
  • He also pointed to the difficulties that princes would face maintaining order in the face of threats such as the rise of communal violence and communist movements.
  • Mountbatten stressed that he would act as the trustee of the princes' commitment, as he would be serving as India's head of state well into 1948.
  • He engaged in a personal dialogue with reluctant princes, such as the Nawab of Bhopal, who he asked through a confidential letter to sign the Instrument of Accession making Bhopal part of India, which Mountbatten would keep locked up in his safe. It would be handed to the States Department on 15 August only if the Nawab did not change his mind before then, which he was free to do. The Nawab agreed, and did not renege over the deal.


 

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INTELLECTUAL PROPERTY RIGHTS - COPYRIGHTS

1.      “Copyright, especially in literary works, is thus not an inevitable, divine, or natural right that confers on authors the absolute ownership of their creations. It is designed rather to stimulate activity and progress in the arts for the intellectual enrichment of the public. Copyright is intended to increase and not to impede the harvest of knowledge. It is intended to motivate the creative activity of authors and inventors in order to benefit the public.” Elaborate in context of recent judicial ruling.

http://www.thehindu.com/opinion/editorial/delhi-hc-verdict-on-university-photocopying-case-copyright-and-copymaking/article9128736.ece

http://www.thehindu.com/opinion/lead/judgment-in-the-delhi-university-photocopying-case-a-blow-for-the-right-to-knowledge/article9121260.ece

 In News:

 

  • In its much awaited judgment in the Delhi University photocopying case (The Chancellor Masters and Scholars of the University of Oxford v. Rameshwari Photocopy Services), the Delhi High Court has dismissed the copyright infringement petition initiated in August 2012 by three publishers (Oxford, Cambridge and Taylor & Francis) against a photocopy shop located in the premises of Delhi University.
  • This case, which was being closely tracked by students, teachers and the publishing industry alike, was seen as one with immense significance for questions of access to knowledge.
  • While initially involving only the publishers, the photocopier and the university, the case also saw intervention petitions being filed by a student group (Association of Students for Equitable Access to Knowledge) as well as by teachers and academics (Society for Promoting Educational Access and Knowledge).
  • While the publishers made the argument that the creation of course packs and the photocopying of academic material for the same amounted to an infringement of the exclusive copyright of the authors and publishers, the defendants argued that the reproduction of materials for educational purposes fell within the exceptions to copyright under Section 52(1)(i) of the Copyright Act.

 

 

Interpreting Section 52 of the Copyright Act:

 

  • In his considered and sharply reasoned judgment, Justice Rajiv Sahai Endlaw examines the gamut of arguments made by both sides and arrives at the conclusion that copyright is a statutory right and not a natural right, and hence any right that is granted to owners is also limited by exceptions carved out by law.
  • The nature of Section 52 of the Copyright Act is such that any act falling within its scope will not constitute infringement.
  • Section 52(1)(i) allows for the reproduction of any work

 

i)        by a teacher or a pupil in the course of instruction; or

ii)      as part of the questions to be answered in an examination; or

iii)    in answers to such questions.

 

  • The crux of the dispute was about whether course packs fall within this exception. The petitioners tried to provide a narrow reading of the section, claiming that at best what the section allows for is the provision of materials in the course of a lecture and spatially restricted to a classroom.
  • The court, while rejecting this claim, argues that “instruction” cannot be narrowly understood and, through a historically informed reading of the phrase “in the course of”, concludes that instruction includes the entire ambit of pedagogy from the creation of syllabus to teaching and provision of reading materials.
  • It then locates the question of education within a changing technological environment, and argues that “when an action, if onerously done, is not an offence, it cannot become an offence when, owing to advancement in technology doing thereof has been simplified” (paragraph 75).
  • To make this point, Justice Endlaw contrasts his own experiences as a law student where photocopying was very limited and studying entailed students copying by hand, scribe like, pages after pages of books.
  • Photocopiers have just made the task simpler and faster, but if the act of copying for a particular purpose is itself not illegal, and “the effect of the action is the same, the difference in the mode of action cannot make a difference so as to make one an offence”.
  • In a clear statement of the philosophical basis of copyright law, Justice Endlaw rejects the populist and unidimensional assumption that copyright is about the protection of the property rights of owners. He notes instead: “Copyright, specially in literary works, is thus not an inevitable, divine, or natural right that confers on authors the absolute ownership of their creations. It is designed rather to stimulate activity and progress in the arts for the intellectual enrichment of the public. Copyright is intended to increase and not to impede the harvest of knowledge. It is intended to motivate the creative activity of authors and inventors in order to benefit the public.”
  • If copyright was always about maintaining a balance between competing ideas of private and public interest, the Delhi High Court has restored to copyright jurisprudence a clear mandate for the future, one which is cognisant that the end goal of technology is the improvement of our lives (material and intellectual) and “no law can be interpreted so as to result in any regression of the evolvement of the human being for the better”.
  • In a radical move, the Delhi High Court has concluded that if Indian law makers have allowed through statute for the reproduction of a copyrighted work in the course of instruction, it has done so on the basis of purpose (teaching) and with the conviction that this does not unreasonably prejudice the legitimate interest of the author.
  • Further, it said that it is not the place of courts to impose artificial restrictions by way of quantitative limits. Justice Endlaw, while arriving at this conclusion, is acutely aware of the specific needs of countries like India where libraries and universities have to cope with the needs of thousands of students simultaneously, and it would be naïve to expect every student to buy copies of every book.

 

 

Internationally:

 

  • The judgment has immense consequences beyond India and is a bold articulation of the principles of equitable access to knowledge — and one that deserves to be emulated globally.
  • For a while now, the globalisation of copyright norms through international law (Berne Convention, TRIPS Agreement) has been accompanied by the globalisation of copyright standards that have primarily emerged from the global north.
  • Aggressively pushed by the copyright lobby, such as Hollywood, the music industry and the publishing cartels, copyright law had effectively been hijacked by narrow commercial interests (albeit always speaking in the name of authors and creators).
  • Thus even when it came to discussing fair use and exceptions and limitations, countries have found themselves constrained by judicial precedents from the U.S. and elsewhere that have defined quantitative restrictions on photocopying.

 

 

  • Interestingly, the judge sees the ‘no infringement’ clauses as being consistent with articles in the Berne Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights, which provide for domestic legislation to permit reproductions for specific purposes, as long as they do not conflict with normal exploitation of the works or unreasonably prejudice the rights-holder.

 

 

 

How will publishers respond?

 

  • While this judgment delivers a terrible blow to the publishers, the crucial question is, how will they respond?
  • The publishers have argued, in vain, that universities should not allow unrestricted photocopying, but instead apply for licences through the Indian Reprographic Rights Organisation, a registered copyright society.
  • The publishers may pursue this aspect in their appeal, if there is one.
  • The verdict may justly raise the concern whether conferring unrestricted reprographic rights on academic institutions will drive reputed publishers out of the field of education.
  • It is true that academic publications, especially international ones, are expensive, putting them beyond the reach of many students.
  • But the question is whether the balance between the competing interests has been fully preserved in the law. If reputed publishers feel that there is insufficient copyright protection and back out of educational publishing in the country, it will be equally injurious to the public interest.

 

 

 

 

 

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THE ‘RIVAL BANKS’

With the taking over as the first President (CEO) of the New Development Bank, which formerly was called ‘BRICS BANK’, it is expected that the NDB will be operational by the end of the current year or so. Subsequent presidents are to be nominated by other countries in rotation.  NDB is to start with US$ 100 billion to realize the vision shared at Fortaleza. While it is joint venture of the five BRICS nations, no one is in doubt that NDB has come to fruition mainly due to Chinese financial muscle power. The NDB’s mandate is to be infrastructure financing. The NDB with have its HQ at Shanghai and all five members are to contribute USD 50 billion each eventually. Many rising economies including China and India were ‘not happy’ with the perceived domination of ‘Washington Consensus’ in the World Bank – IMF top management and desired an alternative international financing bank. Now, it is to be seen whether the NDB gets autonomy of project financing or it will be dominated by big brother China. China has many projects in Africa in which it wants to get control over resources and also extend its soft power.

With a huge pile of FE reserves, China obviously will get a way out to invest the surplus funds through NDB as NDB will obviously raise loans as well. China has foreign exchange reserve of 4 trillion USD now.  Amazingly, India, Russia, and Brazil - all have similar level of FE reserves at  355-360 billion USD each as of March 2015. South Africa holds FE reserve of just under 50 billion USD.

Another parallel rival of the ‘Washington Consensus’ is in the offing by the way of the Asian Infrastructure Investment Bank, established in Beijing, on the initiative of the XI Jingping, the President of China in October last year. The participants here are much larger in number and they are still queuing up!. India, of course, is one of the ‘Prospective Founder Member’. It’s official objective is industrialization in Asia Pacific region.  Up to last month there were 57 members already.  USA is obviously not happy with a rival financial power centre coming up and is an absentee so is Japan as it said it ‘does not need to join’. This bank is also likely to commence operation by the end of 2015. Significantly, South Korea is like to join as it expects to get financing for its major global infrastructural companies. 

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‘LOOK EAST’ POLICY IN JEOPARDY

‘Look East’ is an apt description of the foreign policy focus and terming it now as ‘Act East’ does not really make any difference in the policy emphasis.  The Look East agenda is in jeopardy because the Myanmar’s Thein Sein regime of has not hesitated in taking the risk of offending India by signing a five clause agreement with the NSCN-K’s chief Khaplang, alias ‘Baba’. This agreement is, inter alia, allows for movement of NSCN armed cadres within Myanmar and therefore is sure to be helpful in the insurgents ambushing Indian security forces and moving across border to find sanctuary. Obviously other Northeast based insurgent groups might also collaborate with the NSCN-K. The NSCN-K is emboldened and has been attacking Assam Rifles units as the ceasefire agreement that was operational is now defunct.

 The Naga separatist movement is reviving and this will make the Moreh corridor to Myanmar and beyond an undependable route. The grand design of multimodal access to ASEAN is in jeopardy. That Thein Sein regime is not India-friendly is sufficiently evident.


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PROWLING DRAGON MAY BECOME UNFRIENDLY – SOON!

Despite the present show of bonhomie, it should not be forgotten that China has not slowed its aggressive strategies. The military budget in China is huge, even considering only the known size. The liberal support to Pakistan and the high priority China Pakistan Economic Corridor is part of a grand design to have access around India. The friendly overtones to Nepal and offers to build first class transport link with Kathmandu are indicators of the grand design.

 Within the next 5 to 10 years the Chinese economic and military might will be unparallel, barring only the USA. It would be palpable for China to encourage Pakistan to provoke a war to keep India busy and at the same time invade and overrun Arunachal Pradesh.  Obviously, it is very unlikely in such a scenario that India will be able to retain all its limbs.   China is also now giving high priority to diverting Brahmaputra river water by building a dam at the ‘bend’ just before the ‘tsangpo’ or Brahmaputra enters India. North east India will be in crisis in the near future arising from river water diversion and potentially from planned flooding as part of a military action.  India is in a weaker bargaining position in almost every way. It is running huge current account deficit with China and this trend will continue as there is no way India can compensate by exporting more to China at the coming years.  

Chinese agenda of dominating not only South or South East Asia but entire Asia will not change. India is the only potential obstacle in this Chinese vision. Chinese investment everywhere in the world is a component of its political strategy and is therefore state supported.  No wonder, in spite of so much hype since last one year on Chinese investment promises, nothing much has materialized on the ground.  

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IMAGE PROMOTION BAN BY SUPREME COURT

It was never a secret that the tax payers’ money was rampantly used by those in power to promote and glorify their images. Those placed in power by the people are expected to run the states and the country efficiently.  The Supreme Court has very rightly clamped down on the practice of government departments, PSUs and ministries resorting to boss pleasing campaign through release of massive advertisements – finding the occasion being never a difficulty for the creative loyal. Personality cult is at the root of the malaise.

Hopefully, this ban will dampen somewhat the VVIP promotion culture in the country. Many worthy persons have been recorded by TV channel reporters expressing their anguish at this ban.

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TROUBLED TIMES LIKELY AHEAD FOR THE INDIAN GDP

The financial market is in a bad mood. Investor confidence is declining and foreign investments are moving towards China in spite of its slowed growth rates. The industrial revival is not as projected as the recent IIP survey indicates. The pace of reforms seems not enough and is short of the expectations.  Agriculture will be showing poor performance because of the projected below average monsoon activity. Global depressed crop prices will be discouraging for agro based product exports (sugar for example).

 Land, instead of a factor of production, is now a hot item on the political dinner plate.

The private sector participation in infrastructure enticed with the various versions of PPP is still hesitant.

Many forecasts are there placing Indian growth rate exceeding 7% in the current year but all these are based on the ‘potential’.  Yes! But mere ‘potential’ is not enough by itself.

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QUAKE RESPONSE MORE SENSIBLE - THIS TIME!

The massive Indian response to the first earthquake in Nepal not only failed to strengthen Indo-Nepal strategic relations but India even got a snub as in the midst of the rescue operations the NDRF was abruptly asked to quit Nepal – ostensibly at the instance of Nepalese media. However, there are reports of Chinese pressure on Nepal – specifically after two triggering incidents.  The first is the flak that the PLA got from its political bosses due to comparison of Chinese initiative in Nepali distress with more comprehensive Indian initiatives which was much highlighted in Media.  The impression went around that Nepal was letting India uncontrolled activities in its soil. The second and more significant is the Chinese complaints to Nepal that Indian rescue helicopters were flying much too close to Chinese border, while attempting to help the distressed Nepalese in remote areas.

This time round, the Indian response is more mature. Govt. of India has justifiably taken the stand that let Nepal make a formal request if it needs India’s help. Perhaps, Indian establishment now realizes the ground realities of Indo-Nepal-China relationship.

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CAPITAL ACCOUNT CONVERTIBILITY FOR INDIA

From time to time the issue of CAC had been surfacing in India. As early as 1997 the RBI published the Report on Capital Account Convertibility.  In essence the CAC simply means the freedom of citizens (and others) to convert the financial assets of home country into financial assets of another country.  While the ultimate destination for liberalization ought to include CAC – as a step towards integration with global economy, but various apprehensions force the regulatory authority to carefully proceed in the matter. Capital flight has been a major concern for Central Banks everywhere. Also the Current Account Deficits generated in India (due to excess of imports over merchandise exports) almost always in the past does not inspire confidence in the economy’s ability to generate foreign exchange earnings.  The CAC fall out could lead to a crisis of foreign exchange reserves. 


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DIGITAL ACTIVISM - A NEW WEAPON

India is watching the power of digital activism in the form of a million digital protest messages (email, sms etc.) that has flooded the Telecom Regulatory Authority of India (TRAI). This unprecedented scale of digital protest is against the proposed levy of fees for certain internet based applications – ostensibly at the behest of the Internet Service Providers in India. Those who access internet services through smart phones (mobile – android platform) are likely to be targeted for levying extra charges by service providers. There are estimated 200 million such users in India. The protesters are for safeguarding the ‘Net-neutrality’ – a philosophy that internet is free and is nobody’s property and therefore nobody is entitled to make extra charges for increasingly popular applications like ‘What’s app’. Mobile phone net connectivity forfree basic services is expected by customers on the lines of ‘Internet.org’.

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SMART CITIES – DIGITAL DREAM

Urbanization in India is racing fast –albeit by the unorganized process of peripheral expansions of cities and towns often. The Cabinet clearance of two groups of projects – one of 100 smart cities and 500 modern cities – is a step towards realization of a vision of modern living in India. It appears JNNURM has metamorphosed into AMRUT (Atal Mission for Rejuvenation and Urban Transportation).

Presumably, the smart cities would be Greenfield projects given the near impossibility of imposing or integrating the high-tech infrastructure on existing cities.  These would be long term projects and offer immense scope for investments – both public and private. There are several alternative, and often inconsistent, ideas of ‘smart cities’ but central to the vision is urban infrastructure managed by digital capabilities – most likely using cloud computing technologies.  Obviously, such city management scenario requires integration of computing and communication technology with most physical infrastructure. ‘Sensors’ from the physical world will trigger actions by computerized automated management system. Within the ambit of the system will come water supply, electricity distribution, waste collection, transportation system, cooking gas supply, health services delivery, government services, business transactions, and movement of agricultural and other supplies and so on.  For example, the physical infrastructure for solid waste collection from homes would consist of a high powered suction pipe network activated according to pre-determined aggregate load. The collected garbage will be filtered and separated electromechanically or pneumatically and then processed – all by computerized control system that is without manual involvement.  These futuristic cities are expected to conserve energy, keep ambience clean healthy and promote collective efficiency and also encourage knowledge based economy. 

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TILAIYA UMPP – LOSS FOR JHARKHAND

The economic momentum of Jharkhand will take a jolt with the with the shelving of proposed thermal plant Ultra Mega Power Project at Tilaiya (Hazaribagh). Reliance (Anil Ambani Group) has just abandoned the mega power plant designed to generate 3960 MW due to inordinate delays in land acquisition – they have waited for years and in the meanwhile project cost has risen and the expenses incurred so far is now a dead loss.  Many of India’s major industrial and infrastructure projects are hanging due to land availability uncertainties.  So far billions of rupees have been spent by various investors and they are stuck.

This abandonment will also have a fall out on the investment climate of India. India’s failure to reform the input side (land, labour, raw materials availability) makes the reform process only partially effective).

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NEPAL DISASTER – ASSESSMENT OF INDIAN INITIATIVES

The massive Indian response to Nepal’s calamity arising from the earthquake should earn goodwill for India in Nepal.  Part of the justifications of Indian initiative is the large Indian Diaspora in Nepal and also the risk of migration of Nepalese into Indian states neighbouring Nepal.  As humanitarian move, Indian initiative is commendable.  However, over the next few weeks Indian initiatives is likely to become comparatively less important as other major initiatives will arise from the West – like the USA, Britain, Germany and others.  Huge number of Westerners have visited Nepal or trekked in the Himalayas during the last half a century and therefore maintain soft corner for Nepal.  They are likely to respond on a large scale over time and their collective resources and the sympathies of their governments are likely to turn into extraordinary rescue and reconstruction efforts.India is not likely to get any diplomatic benefit of its initiative in the long run in spite of the fact that its regional rival China has not so far launched any major rescue endeavours in Nepal so far.  This is somewhat surprising considering the fact that China is so much experience in construction work and rescue operations. Keeping Nepal in good humour should also have been in its political priority.  After the emergency is over Nepal is once again likely to look to China as its elder brother.

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VISIT OF AFGHAN PRESIDENT – INDIAN STAKES

The forthcoming visit of the Afghan President Dr. Ashraf Ghani to India aaccompanied with hiswife is likely to be an important occasion in India’s foreign policy establishment.There has been an uneasy phase in Indo-Afghan relations since the presidential elections in Afghanistan at the end of last year.  President Ghani is somewhat indebted to Pakistan because of its support of Dr. Ghani during the elections. Also, the rivalry between the pro-Pashtun and pro-Tajik+Hazara forces continues in Afghanistan manifested by the makeshift power sharing between Pashtun backed Dr. Ghani and Abdullah Abdullah with back of rival parties. Taliban has not been neutralized and unlikely to be anytime soon. IS also has supports from fundamentalists. Hints are that the US is likely to retain a division strength force in Afghanistan permanently. All this makes Afghanistan a volatile territory.The visit will allow Indian side to assess the future configuration of Indo-Afghan relations.  India will not be able to stop the growing Afghan-Pak proximity at the political leadership level. Indian National Security Advisor is in Afghanistan to prepare the agenda, at least covering the security issues, for the ensuing deliberations between President Ghani and Indian establishment. President Ghani is likely to play a balancing game using India and Pakistan – as some other neighbours of India do with India-China or India-Pakistan. 

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UPSC CHIEF PROPOSES STRUCTURAL CHANGES IN CIVIL SERVICES PAPER

UPSC Chairman Deepak Gupta has mooted a proposal for structural changes in the number of papers to be made part of the selection process, even as he favoured revolving a “foolproof online system of examinations. He was addressing a three-day conference of chairpersons of Public Service Commissions (PSC) in India that began in Shimla on Saturday.

 “There is a huge increase in applications, which is becoming a logistical challenge. Last year, the civil services preliminary applicants numbered 9.5 lakh, which is expected to rise to 12 lakh this year. Perhaps,it may need structural change in the manner and number of papers that are to be part of examinations,” said Gupta.

Gupta termed the system of online examinations and web-based examinations as efficient, credible and  helpful in handling increased workload. The computer-based examination system is more secure and transparent as a mode of conducting examinations/recruitment tests as it compresses the time between conduct of examinations and declaration of results, he said, while adding that some challenges such as security of data and related infrastructure constraints need to be addressed.

Gupta shared his experience of successfully conducting 22 online computer-based tests in nine cities.

 The UPSC chairman said that in the last three years the commission had introduced innovativeInformation Communication Technological initiatives such as online receipt of examination applications, generation of e-admit cards and interactive websites to cut down delays and reduce manual workload.

Gupta admitted that the tasks being handled by state commissions had become challenging when it came to maintaining transparency and accountability, besides the integrity of the selection process and the objectivity that will remain to be the test to measure the commission’s performance.

Quoting Dr B R Ambedkar, Gupta suggested the need for improvement in universityand technical education. “Our country requires upgradation of skills, knowledge and competency. Only then will we be able to reap the demographic dividends, else it may become a nightmare and time is of the essence.”

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END OF INDUSTRIAL LICENSING

The government has taken out several items on 13.04.2015 from the list of items reserved for small scale sector under the Industries (Development and Regulation) Act 1951 and subsequent amendments.  Earlier proviso was that any item on the reserved list which was desired to be manufactured by a large scale industry, then it had to obtain a licence and the licence was granted on the condition of 50% output to be exported.  The government has also decided to take out from the reserved list the remaining 20 items which means there will be not item left for exclusively manufacture by SSI units which are now re-christened MSE or Medium and Small Sector (sometimes also referred to as MSME or Micro, Small and Medium Enterprises).

 

The objective of this total deregulation obviously is to allow for efficiency in manufacturing by way of economies of scale and introduction of new technology.

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‘HYBRID ANNUITY MODEL’ – a new version of PPP

The lukewarm response of private sector towards the standard PPP model has forced the Government to devise alternative models to rope in private sector for infrastructure projects.

Of the 8500 kms of road development projects planned to be awarded by the Ministry of Roads, Transport and Highways (MoRTH) during the financial year 2015-16, projects covering approximately 4000 kms are intended to be awarded on the basis of this new model HAM.  As per HAM, the Concessionaire or private partner will be provided with 40% of the project cost the by the government (of course against bank guarantees by the developer or partner) to enable start of project work. The developer would be required to invest the remaining share of project costs.  Now, instead of the developer collecting the revenue by way of toll, the NHAI will collect this and reimburse the developer his investments over a mutually agreed tenure – say 10 or 15 or 20 years – including a margin of profit for the developer.  As the marketing risk now shifts to NHAI, a government agency, the banks will be more comfortable in lending for the project.

The remaining projects covering 4500 kms of road development will continue on the earlier models of BOT variants or EPC.  The EPC or the Engineering, Procurement and Construction model was tried in the last two years with mixed success. 

 

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MUDRA AS REGULATOR AND REFINANCING BANK

The MUDRA or the Micro Units Development and Refinance Agency has been launched a week ago. This is under the ‘Pradhan Mantri Mudra Yojana’ which intends to lend to small and very small enterprises, particularly those owned by vulnerable sections of society who are usually not preferred as borrower by conventional lenders like banks. Banks usually have preference for established enterprises and have much elaborate appraisal system for loan sanctions.  Most small or micro enterprises usually are unable to meet the required as a borrower of banks.

The role of Mudra is two-fold.  The first is as a refinancing agency for financial institutions which lend to eligible borrowers – here the function of MUDRA is similar to NABARD or SIDBI.  The second function is that of a regulator of MFI or Micro-Finance Institutions which are registered as NBFC-MF.  This function was so far with RBI. Now Mudra is the dedicated agency for regulating thousands of MFIs operating in India.

Capital base of MUDRA is to be Rs. 20,0 billion.  Maximum loan amount to one enterprise will be Rs. 1 million.  

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UN HARDENS STANCE ON WIDLIFE CRIME

The 13h UN Congress  (12-19th April 2015) wants countries to consider environmental crimes as serious crimes and collaborate with INTERPOL . The CITES or the Convention on International Trade in Endangered Species, under UN auspices, is the global framework to regulate the international trading of endangered species.  CITES is a multinational co-operation agreement among nations who have taken initiatives to curb illegal trade in wildlife.

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IMPLICATIONS OF CHINA PAKISTAN ECONOMIC CORRIDOR

New item Chinese President Xi Jinping is in Islamabad to flag off a major bilateral plan. The plan is so far known as the China Pakistan Economic Corridor. The plan consists of several projects:

1.     1.      The upgrading of highway from Kashgar in Xinjiang province of China to Gwadar port in Pakistan.

2.    2.       Build railway lines alongside the highway

3.    3.       Build oil pipeline between the two cities

4.    4.       Lay fibre optics cable for high speed communication network in the entire region

This 3000 km long corridor is very significant for entire South Asia and even West Asia.  The highway will integrate the Karakoram Highway with Indus Highway of Pakistan.  For China this means a strategic passage to the Middle East right next to the Persian Gulf as Gwadar is less than 100 kilometres from Iranian borders. Pakistan has already handed over Gwadar to China and China is spending huge amounts to convert this on the model of Hambantota and Colombo.  For India the implication is alarming – the highway will pass through Lahore – a stone’s throw from Amritsar.  So far the threat in the West was from Pakistan and post CPEC, the Chinese movement in the West will be additional dimension to the threat.  China is already proceeding with the highway and train link from Lhasa to Kathmandu by tunneling under Mount Everest.  For Pakistan’s ailing economy this is a boon or enormous proportions as the project involves outlay of US$ 50 billion approximately and most of these Chinese money is to be spent in Pakistani territory.  Afghanistan will have additional incentive to be friendly with Pakistan to get access to Western China. 

 

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COAL BLOCK AUCTIONS TO SWELL STATE TREASURIES

Govt. of India raised 2 trillion rupees with two rounds of coal block auctions. The first round was with Schedule II mines or mines which were operational at the time of allocation cancellation by the Supreme Court.  The second round was with Schedule III mines or mines which were about to become operational. These funds, raised by auctioning of coal blocks, will go to the East Indian States of West Bengal, Jharkhand, Odisha and also to Chhatisgarh and Madhya Pradesh. These States already are already receiving much larger amounts this year through Finance Commission mandates (as compared with previous years) and will therefore be flush with funds.  If these funds are used properly, these States will see radical change in the infrastructure scenario.  The only caveat is that there may not be enough users of the infrastructure facilities unless there is corresponding growth in industries in these States as customers.

Coal production had been stable at around 550-560 million tonnes during the last three years but this year, with the coal mines re-allocation, the output is expected to go up to 620-630 million tonnes but coal imports will still be required. 

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