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Analysis

How the future was compromised

NPA crisis was accentuated by court judgments cancelling telecom licences and coal block allocations. An overzealous CAG, bloodthirsty media, myopic Opposition hurt India’s progress Presumptive loss is actionable.

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Kapil Sibal
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NPA crisis was accentuated by court judgments cancelling telecom licences and coal block allocations. An overzealous CAG, bloodthirsty media, myopic Opposition hurt India’s progress Presumptive loss is actionable. Actual loss is not. Ironic but true. It seems Rs 2,50,000 crore lost on account of demonetisation is not actionable because the Comptroller and Auditor General of India (CAG) says he cannot go after policy decisions. Also, no-one can be held responsible not just for over 100 lives lost of people forced to stand in queues, but also for the yet untold stories of those who lost loved ones for want of cash in medical emergencies. But his predecessor not only questioned the policy decision of not auctioning spectrum and coal blocks but also conjured up astronomical figures of alleged presumptive loss. I suppose institutional positions change with the change of CAG. Institutions don’t matter, people do. That is why we often witness the ugly spectacle of the National Investigation Agency and the CBI doing a U-turn, depending on the political masters they wish to please.

We lament the state of our economy, especially the increasing non-performing assets of banks. The credit for this, in no small measure, goes to the judiciary for its path-breaking judgements cancelling, with a flourish of the pen, all telecom licences and coal block allocations, oblivious of their disastrous economic consequences. Many investors, foreign and domestic, found their investments set to naught without establishing culpability. The government consequently had to put to auction spectrum and coal blocks, for any other method of dealing with such natural resources would have earned it the ire of the court. The CAG, donning the mantle of virtue personified, convinced himself that natural resources, if allocated without competitive bidding, will amount to shortchanging government coffers. Under the garb of a “performance audit”, he over-performed by evolving the concept of presumptive loss which cost the UPA its credibility. The result: Five mega hertz of 2G spectrum allocated at Rs 1,651 crore was auctioned at a base price of Rs 14,000 crore in 2012. Telecom operators starved of spectrum had to bid to survive. Capital required for investments in infrastructure went into discharging debt. Banks were not willing to lend to operators already heavily indebted and return on investment was inadequate to service mounting debt.

Eight years down the road, the sector is under a debt of around Rs 5 lakh crore (the banking sector pegs it at Rs 7.29 lakh crore). Telenor, Etisalat and Sistema bled and have exited. Vodafone and Idea intend to merge and Tata Telecom has been, in a sense, gifted to Airtel. Reliance is in deep trouble, the Aircel-Reliance deal having fallen through. Reliance has no choice except to exit. So we will be left with three players: Jio, Airtel and Vodafone/Idea. Vodafone might not wish to increase its exposure any more, given the nature of our regulatory juggernaut. Allocation of spectrum encouraged competition leaving surpluses for investments in infrastructure. Auctions soured that story.

Power, steel, cement and ferroalloys need coal. Coal India does not produce enough to meet domestic demand. States seek investments in these sectors but without firm and adequate supply of coal, stakeholders are hesitant to invest. All the allocations were cancelled by the Supreme Court which found fault with both extant procedures for allocations made on the recommendations of the screening committee set up by the Union, and in law, in the absence of amendments to the Coal Nationalisation Act. At the auction which followed, the results were disastrous. Many failed and some of those who succeeded were targeted; their bids were cancelled for obviously political reasons. Over a hundred coal blocks have yet to be put up for auction. The investment climate being, to say the least, tepid, there are hardly any takers. Qua some auctions, the bid parameters were sought to be changed midstream. Most of the auctions were mired in litigation for different reasons. Output suffered. Import, the only alternative source of coal, was at the time an expensive option, impacting competition. In an emerging economy, if there is no demand for power, the economy suffers from a development paralysis. Auction of coal blocks and its consequences contributed to the NPAs.

The media loves sensation. The CAG’s outlandish conclusions were a godsend. They wanted answers without listening. They bayed for blood and loved the sight of it being splashed on celluloid. They, in turn, were courted by the Opposition by paralysing Parliament. The contention that spectrum allocations were made on the basis of policy had no takers. To them, loss of revenue, even though presumptive, was unpardonable. Little did they realise that the objective of any policy prescription is affordable and quality service to the consumer which will elude him if resources are perceived as milch cows to enrich the government. That way both government and industry will suffer and the consumers will lose out in the long term. Only if industry prospers will the consumer benefit. The Opposition did not wish to see beyond its nose, for politics was above all else. No-one grasped the fundamental premise that low-cost allocation of resources will allow entrepreneurs to provide efficient affordable service and if industry prospers government too will benefit. In the telecom sector, it would have shared the profits of the operator. Government stood to profit in other ways: Increased private sector investment, greater FDI, if permissible, employment generation, increased revenues through our taxing regime etc.

Presumptive loss made good headlines but the proposed economic model was disastrous for the economy. The only economic model that will work is for the state to share in the prosperity of the private sector. An overzealous CAG, bloodthirsty media, myopic Opposition and Supreme Court judgements, which lacked vision and were short on the law, impacted India’s progress adversely. This was the beginning of the decline. The CAG, media, the Opposition and the Court need to realise that such mistakes can cost us our future.

The writer, a senior Congress leader, is a former Union minister.

Courtesy: Article is published on The Indian Express dated 28th October 2017

Analysis

Rafale, a political bomb for Modi

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Rafale deal scam

Within 48 hours after former French President Francois Hollande’s remarks re-ignited the allegations of crony capitalism over the Rafale deal, Modi government has remained on the back-foot, relying on weak denials and resorting to evasive narratives which places blame on the previous UPA government.

Over the past few days, there have been various statements from India’s defence ministry, the French government, from Dassault Aviation, a couple of political party press conferences and most recently a statement put out by the Finance minister Arun Jaitley.

At the end though, this is where these stakeholders stand:

1. Modi government claims it had no role in selecting an offset partner.

2. French government also claims that neither it had any role in selecting an offset partner.

3. Dassault Aviation says that the selection of Reliance was their choice.

4. Former French President Hollande, the one who negotiated deal said that Reliance was forced upon them by the Indian govt.

Now, if we look at the timeline and connect all the missing dots, we reach to the following conclusion. In March 2015, Anil Ambani’s Reliance acquires Pipavav Defence, an acquisition that it has used as a justification for being chosen as an offset partner in the Rafale deal, claiming to be a leader in different areas of defence manufacturing.

A month later, in April 2015, the Prime minister suddenly appears in Paris and announces a huge change in the earlier Rafale deal, that by all accounts, takes everybody by surprise. Anil Ambani, who attended Modi’s meeting with defence chief executives in Paris, reportedly held a long discussion with Dassault chief Eric Trappier.

While formal incorporation of Dassault Reliance Aerospace Ltd took place last year in February, the joint venture between Reliance and Dassault began functioning as early as May 2015, a few weeks after the announcement. All this lends credibility to Hollande’s full remarks to AFP, which state that Reliance’s name came in the context of a ‘new formula’ of negotiations in the Rafale deal, decided by the Modi government after it replaced UPA at the centre.

Hollande made this disclosure to refute the allegation that he may have favoured the Anil Ambani led Reliance group as a quid pro quo for a business deal struck by his partner, Julie Gayet. Last month, the leading Indian daily. The Indian Express reported that on January 24, 2016, Anil Ambani’s Reliance Entertainment entered into a deal with Julie Gayet’s firm Rouge International to jointly produce a French film and within next two days Hollande, who came as a chief guest for the Republic Day parade inked a memorandum of understanding with Narendra Modi for the purchase of 36 Rafale jets in New Delhi.

Subsequently, Anil Ambani’s Reliance Defence officially became part of the offset programme of Rs 59,000 crore Rafale deal through the Dassault Reliance Aerospace Limited — a company in which Ambani holds a 51% share and Dassault the remaining 49%. However, the ex President did not reveal the name of person who proposed Ambani’s firm but the way he asserted himself, points the finger of suspicion towards people in high places that had direct access to the Prime Minister.

In spite of government’s stonewalling the information on the Rafale deal, questions on the controversial contract have kept rising in recent months. Most of the opposition parties have accused the Prime minister of bypassing the well structured process to strike a deal with France which involved a three times higher price per aircraft than the price negotiated by the earlier UPA Govt. The no of aircraft also by magic dropped from 126 to just 36, HAL, the Public sector undertaking being replaced by Anil Ambani’s firm with zero experience in defence equipment manufacture.

The government could have easily avoided the controversy and stopped it from becoming a major scandal by taking opposition leaders into confidence about the details of the agreement or it may have appointed a joint parliamentary committee (JPC) to go into the details of the deal. On contrary, it has used a combination of silence — a dogged refusal to reveal the price of the aircraft and blaming the earlier UPA govt for its failure to finalise the deal. It kept on harping that it got a more competitive price than agreed upon by the UPA Govt without even revealing the actual price.

This tactic of obfuscation has begun to unravel. On one hand, the ex-President of France has forcefully contradicted the government’s claim that it had nothing to do with the choice of Reliance as an offset partner, the ex-chairman of HAL has also refuted Defence Minister Sitharaman’s charge that it was poor health of Hindustan Aeronautics Ltd (HAL) which was partly responsible for the failure to clinch the Rafale deal during UPA’s regime.

The former HAL chief, T. Suvarna Raju, who retired on September 1, in an interview to Hindustan Times last week said, “If HAL can build a 25-tonne Sukhoi-30, a 4th generation fighter jet that forms the mainstay of the air force, from raw material stage, then what are we talking about? We could have definitely done it”. Raju further added that why only Sukhoi, HAL had maintained the Mirage 2000 aircraft, which was also manufactured by Dassault Aviation, for last 20 years and was involved in the Mirage upgradation programme as well.

The ex Chief while countering Sitharaman’s claim that HAL was dropped from the deal when the UPA was in power since it couldn’t agree on the terms of production with Dassault, said, “Dassault and HAL had signed the mutual work-share contract and given it to the government. Why don’t you ask the Govt of India to put the files out in public? The files will tell you everything.

Sitharaman gave another flimsy argument to justify Modi government’s decision to buy just 36 Rafale fighters in “flyaway” condition on grounds that the air force would not have the “paraphernalia” to induct more than two squadrons of 18 aircraft each at a time.

This argument falls flat in the face of the fact that four former IAF chiefs had asked for a minimum of 126 fighter planes, giving a valid reason that the air force is currently way too short of its authorized strength of 42 fighter squadrons and that it has ample experience of creating the infrastructure to accommodate the future induction.

You don’t have to be an expert to see through her claim that no due process was followed in securing the deal. The actual signing may have taken place in September 2016 after the cabinet committee on security formally approved it, but Narendra Modi jumped the gun in April 2015. On his first visit to France, Modi unilaterally announced that India would buy 36 Rafale fighters. Three months later, the earlier agreement with Dassault for 126 jets was cancelled, and HAL was cut out of the picture.

Back in April 2015, less than a year after his sweeping victory, Narendra Modi was on cloud nine who had the swagger of a conquering hero who could get away with anything — no questions asked. Now with the latest revelations tumbling out on Rafale every day, that promise of running a clean and transparent government is just evaporating in thin air.

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Analysis

Over 4.5 lakh entries in ‘sexual offenders’ database, NCRB to maintain record

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National Database Sexual Offenders

New Delhi, Sep 20 : In a first, the government on Thursday came out with a National Database on Sexual Offenders (NDSO), containing a list of 4.5 lakh convicts with photos of about 3.5 lakh of them available.

The offenders face charges of rape, gangrape and eve-teasing.

The database, which was rolled out by the Ministry of Home Affairs (MHA) along with Women and Child Development Ministry (WCD) here, will be maintained by the National Crime Records Bureau (NCRB).

The NDSO which is accessible only to law enforcement agencies will assist in effectively tracking and investigating cases of sexual offences and employee verification.

The registry which was approved by the Cabinet in April 2018 makes India the ninth country in the world to set up and maintain a national database of sexual offenders.

According to MHA, the state police have been requested to regularly update the database from 2005 onwards. The database includes name, address, photograph and fingerprint details for each entry. However, the database will not compromise any individual’s privacy.

MHA has already released a grant of Rs. 94.5 crore to states/UTs for establishing cyber forensic-cum-training laboratories to strengthen cybercrime investigation and conduct training programmes to enhance capabilities of police officers, public prosecutors and judicial officers.

According to the WCD ministry, the sex offenders listed in the database will be classified on the basis of criminal history to ascertain if they pose a serious danger to the community.

“It is a matter of great pride and joy as two initiatives that my Ministry (WCD) and I had been pursuing for three years have been executed. The launch of National Registry of Sexual Offenders and Cybercrime Reporting Portal is one more step taken by our government for the safety of our women and children,” Union WCD Minister Maneka Gandhi said.

Another web portal, “Cyber Crime Prevention Against Women and Children (CCPWC)”, an initiative under the Nirbhaya Fund was also launched which will enable complainants in reporting cases without disclosing their identity.

“Government has taken several measures to check crime against Women and Children, including provision of stringent punishment and creation of modern forensics facilities to improve investigation, creation of the Women’s Safety Division in the MHA and launching of Safe City projects for Women’s Safety,” Union MHA minister Rajnath Singh said.

The complaints registered through this portal will be handled by police authorities of respective State/UTs and complainants can also upload the objectionable content and URL to assist in the investigation by the state police.

The NCRB will proactively identify such objectionable content and take up with intermediaries for its removal. For this NCRB has already been notified as the Government of India agency to issue notices under the IT Act.

“A positive aspect of this portal is the provision for anonymous reporting, which will encourage more people to come forward with such complaints. This portal comes as a relief by providing time-bound solutions to a huge number of women and children who are being exploited in cyber space,” Gandhi added.

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Analysis

Saab is interested in Indian fighter jet deal: Swedish official

The Saab Gripen will be contesting with the likes of the Russian MiG 35, Dassault Rafale, Eurofighter Typhoon, Boeing F/A 18 and Lockheed Martin F-16 for the upcoming deal.

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Rafale deal scam

Amid the raging controversy over the Defence Ministry’s procurement of the Rafale fighter aircraft from French firm Dassault Aviation, a senior Swedish official has said that his country’s firm Saab, in its Gripen aircraft, has the requisite experience to contest for the upcoming Indian deal for manufacturing 110 new fighter jets under the Make in India programme.

“I know that Saab is interested, they want to be a part of this procurement,” Teppo Tauriainen, Director General for Trade in the Swedish Foreign Ministry, told IANS in an interview here.

“They think they have something good to offer that will be of interest to India,” Tauriainen said.

“They, of course, know what the expectations of the government is in terms of local production and cooperation with a local partner.”

India is expected to select by the end of this year one fighter aircraft that will be manufactured by the private sector under the Make in India programme for supply to the Indian Air Force.

The Saab Gripen will be contesting with the likes of the Russian MiG 35, Dassault Rafale, Eurofighter Typhoon, Boeing F/A 18 and Lockheed Martin F-16 for the upcoming deal.

While MiG has already said that it will have state-owned Hindustan Aeronautic Limited (HAL) as its local partner, Indian companies like Tata, Reliance Defence, Mahindra and Adani are in the fray for local partners in the project that is expected to be worth over $20 billion (Rs 1.44 lakh crore).

Tauriainen said that for Saab, contesting for the deal will be nothing new as it has signed a similar deal for Gripen with the Brazilian government with Embraer as its local partner.

“I have myself visited the Brazilian partner, Embraer, and seen there are a lot of spin-offs locally in the Brazilian economy from this fighter jet deal,” he said.

“So, I think for Saab, as a company, it won’t be unusual to do it the way the Indian government wants it to happen.”

During his visit to Sweden in April this year, Prime Minister Narendra Modi had said that defence and security have emerged as an important pillar of the India-Sweden bilateral partnership.

“Sweden has been a partner of India in the defence sector for a long time. I am confident new opportunities for cooperation in this sector will arise in the future, especially in defence production,” Modi said.

During that visit, an India-Sweden Partnership was also announced with a fund of 50 million Swedish kronor (around $5.6 million) for innovation cooperation in the fields of smart cities and sustainability.

Asked what steps have been taken in this connection, Tauriainen said that the dialogue for these projects has started though none of these projects have started operating.

“But we have come quite far to identify areas where we think there is a potential to do cooperation,” he said.

He said that sustainable technology is a broad area and is very much related to how cities are built in terms of transport, energy, waste and waste water.

“There we have some interesting experiences and I hope that is of relevance to India,” Tauriainen said.

“Some technologies we have already tested in Sweden. Other technologies will have to be adapted to Indian conditions,” he added.

In Sweden, waste is actually used to generate power and only one per cent of the waste goes to the landfill.

Asked about the presence of around 180 Swedish companies in India and their role in the Indian economy, Tauriainen said these are doing good business despite “some limitations”.

“They wouldn’t mind if those limitations are taken away. But they are interested in the Indian market and most of them are interested in expanding,” he said.

(Aroonim Bhuyan can be contacted at [email protected])

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