Basit Ali, Pakistan’s High Commissioner to India, came perilous to being declared persona non grta thrown out of the country, following his brazen public announcement on August 14, Pakistan’s Independence Day, that the anniversary would be dedicated to Kashmir’s jihadi separatist groups’ bid for power. There were calls for his expulsion from certain sections of Indian opinion, but cooler heads in Delhi decided to put the Pakistan government of Prime Minister Nawaz Sharif on the rack and keep it there for some time. Prime Minister has decided to turn the screw with sympathetic references to the struggle of the Baloch people against Pakistani oppression, and similar movements in Pakistan-occupied Kashmir including Baltistan in the far north. (see comment page 3)
The fine art of diplomacy is pivoted on economic strength and military power. As a failing state torn asunder by myriad insurgencies, Pakistan lacks the desired proportion of supply-side economic and military durability. Hence the country’s reach exceeds its grasp. The screws must be tightened and the quantum of pain substantially increased on Islamabad and its political class until they are unable to bear the costs of their criminal behaviour. The time for marathon talks operating in a moral void is long past. The time to bite the bullet has arrived (Telegraph, Hindu, Times of India August 15)
Bihar passes GST Bill
Bihar became the first non-BJP State to ratify the Goods and Services Bill. Its legislative assembly approved the landmark measure together with BJP-ruled Assam to do so. The central government in Delhi needs 16 States to do likewise. At present 14 States are BJP-ruled. The hurdles hereon should prove less daunting (Mint August 17)
Karnataka leads in IT investments
Karnataka attracted Rs 53,396 crore investments in the software sector for the last fiscal ending March 31, around 25 per cent of the total private and public sectors across India. Clocking a compounded annual growth of over 14 per cent in IT investments from 2005-06).
Gujarat second, Kerala third
Gujarat is ranked second today in the IT category, having registered an explosive 48 per cent growth in IT investments since 2005-06. Kerala is third with 13 per cent in IT investments, followed by Andhra Pradesh (12 per cent), Tamil Nadu (7 per cent), Haryana (5 per cent), Maharashtra (5 per cent) West Bengal (4.8 per cent), Telangana (4 per cent, and Odisha (3 per cent) (Business Line August 17). (see comment p 3)
IIT Hyderabad eyes $15 million funding
The Indian Institute of Technology (IIT) aims to attract $15 million in research funding in the next two years. Since its establishment in 2008, it has bagged $20 million of sponsored research projects. ‘We are already working on a series of projects and our target may even reach, $35 million in the next two years, IIT Hyderabad Director. U.B. Desai. (Business Line August 17)
IKEA starts first Indian store
Swedish furniture giant IKEA has commenced work in Hyderabad for its first Indian outlet. The store is scheduled for service by mid-2017, with a built-up space of 400,000 square ft and will feature 7, 500 home furnishing products, apart from a 1000-seater restaurant. IKEA plans to set up a chain of 25 stores in the country by 2021. Addressing the media at a ground breaking ceremony, IKEA
CEO India Juvencio Maeztu, said: ‘This is a big milestone and the first store in India… We hope to bring out unique home furnishing products… We are committed to hire 50 per cent women in our workplace.’ (Business Line August 12)
Russia to source Indian dairy products
Russia has agreed to Indian dairy exports for its domestic markets. The Russian agency for food security, having made on-the-spot cheks of local production facilities and hygiene standards has given the go-ahed for exports to begin. With Russia continuing its ban on European dairy imports in retaliation for European economic sanctions, the potential for Indian exports in the large Russian market is huge. ‘We are ready to meet all conditions laid down by the Russians. We want them to give us the opportunity…Once they realize items such as hard cheese are of premium quality they would hopefully be open to more companies,’ said Devendra Shah, Chairman and Managing Director, Parag Milk Foods (Business Line August 15)
Premji, Nadar in Forbes tech list
Wipro Chairman Azim Premji and HCL co-founder Shiv Nadar are on the Forbes list of the world’s 100 wealthiest technology industrialists. They are the only two Indian billionaires in the top 20 of this category, ahead of Google boss Eric Schmidt . Bill Gates, founder of Microsoft, tops the list with an estimated fortune of $78 billion. Premji is 13 th with a net worth of $16 billion, and Nadar ranked 17, with $11.6. ((Business Line August 12)
Modi’s improved rate card
During his Red Fort address to the nation on Independence Day, Prime Minister Narendra Modi said his mantra was to ‘reform, perform and transform.’ He provided an impressive list to support his claim. These include easier access to government services, faster approvals of new business enterprises, reducing the stranglehold of middlemen over appointments of new entrants to lower level government jobs, less harassment of taxpayers by officials and much else.
The Prime Minister’s administrative skills are widely recognized. His popularity far exceeds those of the Opposition leaders, most notably, the Congress party Vice President Rahul Gandhi, who lacks any credibility as a future prime minister. ‘Since the beginning of this year, the Modi government has pushed through several landmark changes that can be game-changers.’
Among them are legally binding monetary policy to a formal inflation target. Second, the Aadhar Bill which ensures that welfare schemes reach those most in need. Finally, the passage of the Goods and Services Bill through Parliament, which will radically alter India’s cumbersome tax system and create a unified national market, underwriting India’s openness to business. There are problems aplenty that need sorting, but an encouraging start has been made to break the mould and create a more economically efficient and socially just order (Mint August 17)
Military build-up continues apace
India’s military build-up along the Himalayan border and the Andaman/Nicobar archipelago continues apace with new air and army bases and naval hubs in the Bay of Bengal as it touches the Indian Ocean. Bald statistics of size and defence budgets of India and China can be misleading; more telling are their disparate geographies. China has 14 neigbours across a continuous land frontier around 4,000 miles and a maritime coastline almost as large. It faces the United States and Japan in the Pacific Ocean.
New landing strips
That said, India’s naval capabilities have been significantly enhanced by warships, submarines, aircraft, drones and missile systems. New forward airstrips have been established at Ziro, Along, Pasighat, Walong, Mechuka in Arunachal Pradesh, with Tutling scheduled to be operational by December and Tawang by April next year.
In Ladakh, the Daulat Beg Oldi and Nyoma landing strips. Sukhoi-30MKI aircr4aft heavy lift transport Hercules -130, and T 72 tanks are in place, while Poseidon 81 maritime anti-submarine and surveillance aircraft and helicopters are being deployed in Andaman/Nicobar bases. Sukhoi-30MKI fighter aircraft are being deployed in forward positions. Two new infantry divisions (36,0 00 men in all) were raised in Likabali and Missamari in Assam, while the Mountain Strike Corps of over 90,000 troops are to be fully raised by by 2021 (Times of India August 18)
Indians online 730 million by 2020
The number of Indian internet users is expected to double to 730 million by 2020, according to a new report issued by trade body Nasscom, entitled ‘The Future of Internet in India.’ India, which has an internet user base second only to China, will remain the fastest growing market, says the report. Of the new users, 75 per cent are expected to come from rural hinterland.
In 2015, Indian e-commerce shoppers numbered 17 million, in 2020 the figure is expected to grow to 34 million. By 2020, India will have 702 smartphones in use and mobile phones will emerge as the as the preferred device for e-commerce. (Hindu August 18)
More cold chains, food parks
Government plans to set up 100 new cold chain projects has made an encouraging beginning, hence is inviting investors to set up six new mega food parks , in a bid to boost rural incomes by establishing farm to fork linkages. More than $1billion foreign direct investment (FDI) has entered the sector in the past two years, including some of the biggest names such as Kellogg’s, McCain Foods and Mars International. (Hindu August 18)
Indian steel firms increase profits
According to Moodys, Indian steel companies such as Tata Steel and JSW Steel are likely to outpace their regional peers in profitability following increasing domestic demand cresting on 7.5 per cent GDP growth. India’s economic reforms plus policy support for infrastructure, and rapid urbanization have placed the country’s steel producers in pole position (Hindu August 18).