Archive for ‘India alert’

29/07/2016

Strike hits Indian banks, but treasury functions normal | Reuters

A nation-wide bank strike in India hit the public transactions like cheque clearances and cash deposits, but the vital treasury operations including a 150 billion rupee ($2.24 billion) government bond auction are unlikely to be affected, traders said.Staffing in treasuries of banks are likely to be less than normal days but officials will ensure that functions like bidding at the auction will run smoothly, three traders at state-run banks said.

“Treasury people have been allowed to enter the head office of the bank, so there is no problem for us in trading or bidding at the auctions,” said a senior trader at a large state-run bank.

However, there could be some issues in some banks settling the previous day’s trades due to thin staffing.

“Settlement will be a problem at back office,” said a senior official with State Bank of India.The RBI was also not too worried about the impact of the strike on treasury operations and settlements of banks.

“There shouldn’t be any problem. Primary dealers are also there to underwrite if needed. But auctions should go through smoothly,” the official said.

An estimated 1 million bank staff are expected to strike work, opposing the government’s proposal to merge SBI‘s associate banks with itself. In addition, unions are against the government’s proposed move to privatise IDBI Bank.

($1 = 66.9800 Indian rupees)

Source: Strike hits Indian banks, but treasury functions normal | Reuters

29/07/2016

Why India Is Spending $1 Billion on Boeing Jets – The Short Answer – WSJ

India is beefing up its maritime patrol and anti-submarine warfare capabilities with an order for four Boeing Co.-made P-8I aircraft.

The order is the latest evidence of booming defense ties between India and the U.S. The South Asian nation’s arms imports from the U.S. in the five years through 2015 were 11 times the amount in the previous five years, according to the Stockholm International Peace Research Institute.

India imported 14% of its weapons from the U.S. in the same period, although its longstanding supplier Russia continued to dominate its defense market with a 70% share, according to the think tank.

India spent how much?

India will pay about $1 billion for the four P-8I planes. That is about half the amount the country spent in 2009 for eight of the aircraft. That order had an option for India to acquire four more jets at the 2009 price, something it is exercising now.

What can the planes do?

The P-8I—a military variant of Boeing 737-800 commercial jetliner—is fitted with state-of-the-art sensors and radars for maritime surveillance and reconnaissance, and to snoop on submarines. It can also be fitted with the Harpoon all-weather anti-ship missiles made by Boeing.

The aircraft–a variant of the U.S. navy’s P-8A Poseidon plane–can also be used for anti-piracy and other intelligence operations. It was deployed in 2014 when India joined the multinational search for the missing Malaysia Airlines Flight 370. It is currently being used in the search for an Indian air force AN-32 aircraft that went missing on Friday over the Bay of Bengal.

Why does India want the jets?

The latest acquisition of the P-8I is a milestone in India’s strategy to replace its aging equipment, much of which was bought from Russia during the Soviet era. The twin-engine jet has a range of about 2,222 kilometers, or more than 1,200 nautical miles, which allows the Indian navy to monitor the country’s vast coastline.

Has this got anything to do with China?

India’s expansion of the P-8I fleet comes as China increases its naval presence in the Indian Ocean, alarming New Delhi.

In recent years, China has been improving its submarine power with a nuclear-powered sub travelling all the way to the Persian Gulf via Sri Lanka. China and India are also locked in a long-running land-border dispute.

The new planes will bolster India’s capabilities to keep an eye on movement on Chinese warships and submarines in the region.

What else is on the shopping list?

India’s government, led by Prime Minister Narendra Modi, has promised to upgrade the country’s military capabilities. But a long-delayed deal to buy 36 Rafale fighter jets from Dassault Aviation S.A. of France is still being negotiated–more than a year after it was announced.

India also has plans to buy howitzers, warships, submarines, as well as to acquire fighter jets.

Source: Why India Is Spending $1 Billion on Boeing Jets – The Short Answer – WSJ

28/07/2016

With eye on China, India doubles down on container hub ports | Reuters

Indian conglomerate Adani Group has started building the country’s first transshipment port, conceived 25 years ago, and the government will construct another $4-billion facility nearby to create a shipping hub rivalling Chinese facilities in the region.

New Delhi will grant billionaire Gautam Adani 16 billion rupees ($240 million) in so-called “viability gap” funding to help the new port at Vizhinjam in Kerala win business from established hubs elsewhere in Asia.

Once Vizhinjam is operational the central government will start building the port of Enayam in neighbouring Tamil Nadu, said a senior shipping ministry official. Enayam alone will save more than $200 million in costs for Indian companies every year, he said.India’s 7,500-km (4,700-mile) coastline juts into one of the world’s main shipping routes and Prime Minister Narendra Modi wants to capitalise on that proximity by developing ports that can shift freight on to huge vessels capable of carrying up to 18,000 20-foot containers.

By bringing onshore cargo handling now done at entrepots in Sri Lanka, Dubai and Singapore, Modi’s government expects cargo traffic at its ports to jump by two-thirds by 2021 as India ramps up exports of goods including cars and other machinery.

The lack of an Indian domestic transshipment port forces inbound and outbound containers to take a detour to one of those regional hubs before heading to their final destination.

New Delhi expects the new ports to save Indian companies hundreds of millions of dollars in transport costs, as well as ease concerns over the growing strategic clout in South Asia of rival China, which has invested hundreds of millions of dollars in Sri Lankan ports at Colombo and Hambantota.

Adani wants the Vizhinjam port, which an arm of his Adani Group is building at a cost of around $1 billion, to be operational in 2018. The port lies hard by the Gulf-to-Malacca shipping lane that carries almost a third of world sea freight.

“The port can attract a large share of the container transshipment traffic destined for, or originating from, India which is now being diverted primarily through Colombo, Singapore and Dubai,” said an Adani Group executive who declined to be named.

But officials acknowledge that it would be difficult for the new ports to win international clients unless they offered discounts.”A major part of transshipment is happening at nearby ports. We can win some of that business,” said A.S. Suresh Babu, who heads a government agency set up by Kerala to facilitate the construction of Vizhinjam.

“There’s a viability issue in the first few years. Already the Chinese are operating there. So unless you give some discount you can’t attract these ships. So that’s why the government of India has approved the viability gap funding.”

Source: With eye on China, India doubles down on container hub ports | Reuters

27/07/2016

India’s farmers seize offer of free registration of land sold on ‘plain paper’ | Reuters

When Telangana announced a three-week window for free registration of land that had exchanged hands via handwritten notes on plain paper, the offer triggered more than a million applications.

All over the state the sale of land on notes known as “sada bainamas” has been customary because of widespread inability to pay the registration fees, illiteracy or ignorance of the law.

Around a million farmers in Telangana lack secure title to land bought this way, according to a 2014 survey carried out in the state by Landesa, a U.S. based charity .

Guram Muttaya is a beneficiary of the registration drive and one of many farmers who occupy land they have been cultivating for 30 to 40 years on the strength of informal documents.

“Registering the land will bring me government agriculture loans, compensation for crop damages and crop insurance too,” Muttaya told the Thomson Reuters Foundation, holding up a torn piece of paper bearing a signature.

The piece of paper is his only proof of ownership of a fifth of a hectare of land he bought in Kannayapally village 27 years ago for $67 and whose market value has risen to $3,000.

Studies have shown that broadly distributed secure land rights for farmers can help to pull families out of poverty and boost sustainable economic development.

Source: India’s farmers seize offer of free registration of land sold on ‘plain paper’ | Reuters

27/07/2016

Parliament passes controversial child labour bill | Reuters

Parliament on Tuesday approved a controversial law that would allow children to work for family businesses, despite widespread concern by the United Nations and other rights advocates that it will push more children into labour.

A week after the bill was passed by the Rajya Sabha, the Lok Sabha approved the measure that brings a raft of changes to a three-decade-old child labour prohibition law. The bill now goes for the President’s assent before becoming law.

The U.N. Children’s Agency (UNICEF) as well as many others have raised alarm over two particular amendments – permitting children to work for their families and reducing the number of banned professions for adolescents.

A 2015 report by the International Labour Organization (ILO) put the number of child workers in India ages 5 to 17 at 5.7 million, out of 168 million globally.

More than half of India’s child workers are employed in agriculture and more than a quarter in manufacturing – embroidering clothes, weaving carpets or making match sticks. Children also work in restaurants, shops and hotels and as domestic workers.The new legislation extends a ban on child labour under 14 to all sectors. Previously, only 18 hazardous occupations and 65 processes such as mining, gem cutting and cement manufacturing were outlawed.

It also stiffens penalties for those employing children, doubling jail terms to two years and increasing fines to 50,000 rupees ($740) from 20,000 rupees ($300).

While child rights groups have welcomed such changes, there has been concern over other amendments proposed by Prime Minister Narendra Modi‘s government.

For example, children will be allowed to work in family businesses, outside of school hours and during holidays, and in entertainment and sports if it does not affect their education.

Also, children 15 to 18 will be permitted to work, except in mines and industries where they would be exposed to inflammable substances and hazardous processes.

The government says the exemptions aim to strike a balance between education and India’s economic reality, in which parents rely on children to help with farming or artisanal work to fight poverty or pass on a family trade.

“The purpose of this very act is that we should be able to practically implement it,” Labour and Employment Minister Bandaru Dattatreya told parliament. “That’s why we are giving some exemptions.”UNICEF had urged India to exclude family work from the proposed law and include an “exhaustive list” of hazardous occupations.

“To strengthen the Bill and provide a protective legal framework for children, UNICEF India strongly recommends the removal of ‘children helping in family enterprises’,” it said in a statement on Monday.

“This will protect children from being exploited in invisible forms of work, from trafficking and from boys and girls dropping out of school due to long hours of work,” it said.

Source: Parliament passes controversial child labour bill | Reuters

27/07/2016

India orders 4 more maritime spy planes from Boeing worth $1 billion | Reuters

India has signed a pact with Boeing Co for purchasing four maritime spy planes at an estimated $1 billion, defence and industry sources said, aiming to bolster the navy as it tries to check China’s presence in the Indian Ocean.

India has already deployed eight of these long-range P-8I aircraft to track submarine movements in the Indian Ocean and on Wednesday exercised an option for more planes, a defence ministry source said.

“It has been signed,” the source familiar with the matter told Reuters. An industry source confirmed the contract, saying it was a follow-on order signed in New Delhi early on Wednesday.

Source: India orders 4 more maritime spy planes from Boeing worth $1 billion | Reuters

27/07/2016

Why India’s Lack of Toilets Is Hurting Its Children’s Development – India Real Time – WSJ

India’s lack of toilets and poor access to sanitation are holding back its children, causing stunted growth and curbing their development, a new report says.

Is India Winning the Fight Against Childhood Malnutrition?

Why Is Indian Children’s Growth So Stunted? It’s Not Why You ThinkT

he country has more than 48 million under fives with impaired growth, the largest number in the world, the report from London-based international development charity WaterAid said.

India also has 774 million people without access to adequate sanitation, and 76 million without safe water, the report said.

Children who are stunted because of malnutrition tend to be shorter and lag behind their peers cognitively. Poor access to clean water, sanitation and hygiene cause diarrhea and expose children to other intestinal infections during the crucial first two years of life.

Around 140,000 under-fives die in India every year because of diarrhea and other diseases caused by lack of access to these basic services, the report said.

Indian Prime Minister Narendra Modi has said in the past that he would rather build toilets than temples — setting a goal for every home in the country to have a place to go to the bathroom by 2019. But the program has suffered challenges: some Indians prefer to relieve themselves outdoors.

India is making some progress, however. The report said the percentage of its children who were stunted reduced from 48% in 2006 to 39% in 2014, the year Mr. Modi came to power.

Pakistan, India’s closest neighbor, ranked third with more than 9.8 million children who are stunted, according to the WaterAid study.

Source: Why India’s Lack of Toilets Is Hurting Its Children’s Development – India Real Time – WSJ

26/07/2016

Could India Become a Cashless Economy? – India Real Time – WSJ

Cash is set to lose currency in India, as an explosion in smartphone usage drives a digital payments boom, according to a new report.

By year 2020, nearly $500 billion worth of transactions in India will happen digitally, using online wallets and other digital-payment systems, 10 times the level currently, according to a report by Google India and The Boston Consulting Group.

Indians traditionally prefer to save and spend in cash, and a vast majority of the more-than 1.2 billion population doesn’t have a bank account.

Last year, 78% of all consumer payments in India were made by cash, whereas in developed countries like the U.S. and U.K., only 20% to 25% of such payments were made that way, the report said.

But the reliance on notes and coins in India is likely to diminish, as spending habits change and financial services reach more people, said the Google-BCG report. It expects cash-based consumer payments to fall to 40% to 45% by 2025.

A sharp increase in the use of mobile phones with internet connectivity will help drive the move to digital payments, said the report.

India has more than 1 billion mobile subscribers, a quarter of whom use smartphones, according to the report. By 2020, the number of smartphone users in the country will likely be 520 million, and the number of internet users 650 million, twice the number currently, according to the report.

Personal internet banking has become more popular in India over the past few years along with digital payment options that allow users to settle mobile phone, electricity and even taxi bills.

The recent spurt of growth has come from non-bank companies offering payment services. Cellphone companies like Airtel and Vodafone offer facilities to transfer money using phones, while “wallet” companies like One97 Communications’ Paytm unit, and MobiKwik, allow users to store money digitally and pay through their systems.

The next level of growth will come when local mom-and-pop grocery stores start accepting digital payments, said the report.However, there are plenty of consumers and merchants who still feel skeptical of digital payments, or find them too complicated, said the report. And others just don’t want to give up using cash, it added.

Source: Could India Become a Cashless Economy? – India Real Time – WSJ

25/07/2016

India urges security forces to exercise restraint in Kashmir | Reuters

India has asked its security forces to exercise restraint in responding to protests in disputed Kashmir and replace pellet guns with non-lethal weapons, its home affairs minister said on Sunday.

Forty six people have been killed and more than 5,000 wounded, including security forces, since protests erupted after the killing of Hizbul Mujahideen commander Burhan Wani on July 8.

Normal life remains paralysed because of the curfew imposed by the government and calls for a shutdown by separatist leaders.

“I appeal to the youth not to resort to stone pelting and I also want to appeal to the security forces not to use pellets. I have told security forces to use maximum possible restraint,” Rajnath Singh said, winding up his two-day visit to Kashmir.

Kashmir has been at the centre of a tussle between New Delhi and Islamabad for decades, as both claim the region in full but rule it in part.

“We don’t need the involvement of a third party to address the situation in Jammu and Kashmir. I want to tell my neighbour that you are yourself a victim of terrorism,” said Singh.

Since they split some 67 years ago, India and Pakistan have fought each other in three wars, two over Kashmir. There has not been a full-blown war since they both tested nuclear weapons in 1998.

Singh on Thursday told lawmakers that India would set up a panel to look for an alternative to pellet guns.More than 300 people have suffered because of pellet guns, including 171 with eye injuries, Kaisar Ahmad, principal of the Government Medical College in Srinagar, told Reuters.

Source: India urges security forces to exercise restraint in Kashmir | Reuters

25/07/2016

Ways India Has Changed Since Liberalization 25 Years Ago – WSJ

Twenty-five years ago this week, India unshackled private industry and embraced foreign investment, ending four decades of socialist self-reliance and making a major bid to reclaim its place as an economic power.

The finance minister at the time, Manmohan Singh, had a keen sense of the moment’s place in history. Presenting the budget before Parliament on July 24, 1991, he framed the new economic policies as a means of eliminating “the scourge of poverty, ignorance and disease,” and of realizing the full potential of the Indian people. In the famous closing flourish of his speech, he invoked Victor Hugo: “No power on Earth can stop an idea whose time has come.”

But even Mr. Singh, who later served a decade as the country’s prime minister, could not have foreseen all the changes that this set of ideas would bring about.

1 Economic Liftoff

By every measure, India has grown more economically prosperous. National output last year was nearly five times what it was in 1991. Indians sell more to the world, and enjoy more of the outside world’s products and services, know-how and technology. A country that was once a byword for famine is today one of the planet’s biggest exporters of rice, cotton and other agricultural products.Not all sections of Indian society have risen as much as others: The country is still home to more of the world’s poorest people than any other nation. And much of the growth has been in the informal economy, where companies don’t pay taxes or have access to large-scale finance, and where workers don’t receive benefits or protection from unfair treatment. That suggests the deterrents to doing business above-board, such as government regulations and enforcement, are still too many.ANUPAM

2 People Power

Indians are living longer, and fewer are dying at or shortly after birth. More are literate, more receive schooling and more go to college. Still, the nation badly lags its neighbors on many of these human indicators. Women fare worse than men. And despite recent government sanitation campaigns, more people in India have cellphones than have access to decent toilets, according to the United Nations.

3 Consumer Explosion

In 1991, Indians had two television channels to choose from, and both of them were produced by Doordarshan, the state broadcaster. In much else, too, from sweets to cosmetics to butter, autarky meant the choices for the average consumer were very limited. Today’s riot of options makes pre-liberalization India seem, as the writer Mukul Kesavan wrote recently, like “another country.

4 Car Crazy

It isn’t quite true that Indians had only one car available to them, the Hindustan Motors Ltd. Ambassador, before 1991. But their options have certainly multiplied since then. Almost every major international maker has tried to enter the market; not all have succeeded. The industry in India churned out nearly 24 million vehicles in the year that ended in March.

5 A Flailing State

Over the last quarter-century, as India’s economy has grown more complex, it has arguably loped ahead of the government’s capacity to manage it and provide essential services. That’s why the Harvard economist Lant Pritchett in 2009 called India a “flailing state”: The top institutions of government are sound, but they don’t deliver reliably on the ground.Public health facilities are understaffed and underfunded. Schoolteachers don’t show up for their own classes. Unlike in 1991, “India’s problem is not what the state does wrong now,” says Manish Sabharwal, chairman of TeamLease Services Ltd., a Bangalore-based staffing company. “It is what the state does not do.”

Source: Ways India Has Changed Since Liberalization 25 Years Ago – WSJ

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