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Analysis

Yeddy does ‘Atal’, deals blow to BJP’s south strategy

With Karnataka gone now, Yeddyurappa made an emotional last bid to win people’s heart ahead of the 2019 Lok Sabha polls.

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BS Yeddyurappa

New Delhi, May 19 : The BJP’s efforts to expand in southern states suffered a blow on Saturday with its two-day old government collapsing as Chief Minister B.S. Yeddyurappa resigned before a trust vote in an assembly where no party has majority.

The party now hopes that the move, akin to what then Prime Minister Atal Bihari Vajpayee did in 1996 after failing to garner enough support for his 13-day old government, will help it gain sympathy in the 2019 Lok Sabha polls.

Despite knowing the fact that it was short of the required numbers, the BJP leadership went ahead to stake claim and took risk of allowing Yeddyurappa to take oath as Chief Minister.

This is what Vajpayee — the first Bharatiya Janata Party (BJP) Prime Minister — did almost 22 years ago.

The BJP, which considers Karnataka as its gateway to south, tried its best to win the trust vote after forming the government on Thursday but failed to sustain it.

Despite this, BJP leaders are hopeful Yeddyurappa’s emotional speech in the Assembly before resigning and clearing his vision for the cause of farmers and downtrodden, will help the party in 2019 elections.

“Yeddyurappa did the same way Atal Bihari Vajpayee made his speech in the Lok Sabha in 1996 before resigning as the Prime Minister,” a senior BJP functionary told IANS, recalling how the BJP-led NDA returned with a thumping majority in the elections that followed.

“The BJP surged all over the country and formed governments (in many states) with coalition as well as of its own in 2014. We are hopeful of emerging in south too through Yeddyurappa,” he said.

With the possibility of relatively fewer seats in the Hindi belt states like Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Gujarat, Rajasthan, Jharkhand and other north Indian states during the Lok Sabha elections in 2019, BJP President Amit Shah has been working on a strategy to compensate a bit from the probable loss of seats in southern part of the country.

But after Yeddyurappa’s resignation, Shah’s startegy has suffered a jolt as it provided an opportunity to the opposition camp to remain united.

The Assembly poll results clearly indicate that if the Congress and JD-S join hands in 2019, it will be a tough task for the BJP.

In 2014, the BJP had won 17 out of total 28 Lok Sabha seats of Karnataka. Out of total 129 seats of southeren states of Andhra Pradesh, Tamil Nadu, Telangana, Karnataka and Kerela, the BJP could win only 21 in 2014.

With the Telugu Desam Party (TDP) quitting the NDA, the BJP has already suffered a jolt in south as its position has weakened considerably in Andhra Pradesh where Chief Minister N Chandrababu Naidu is campaigning against the Modi government for not meeting the demand of special status to the state.

To compensate TDP’s departure from the NDA, the BJP has been eying YSR Congress. But that looks like not an easy task as YSR Congress itself has been vehemently opposing the Modi government for not meeting the demand of special status.

In 2014, the BJP could won only two out of 25 seats in Lok Sabha in Andhra Pradesh.

In Tamil Nadu, the BJP is also facing the ire of the people as the Union government has failed yet to constitute a Cauvery Management Board.

With AIADMK in power and DMK as the main opposition, the BJP has very little space for its emergence in the state. In the 2016 state Assembly elections, the BJP even found it hard to identify candidates for the 234 constituencies in the Dravidian state.

The BJP is now trying to make inroads in Kerala but it will again not be an easy cup of tea for the party.

Although the BJP improved its vote share by around nine per cent in 2016 state Assembly elections, but it failed to stop Left Democratic Front from retaining power. In that year, the BJP opened an account in the state assembly — a first in the history of Kerala.

The BJP is hopeful of gaining ground in Telangana but faces a tough contest from the Telangana Rashtra Samithi and the Congress. In 2014, it could win only one seat out of total 17 in the state.

Now, with the country all set to face general elections next year, the only state through which the BJP could have made inroads in south was Karnataka.

With Karnataka gone now, Yeddyurappa made an emotional last bid to win people’s heart ahead of the 2019 Lok Sabha polls.

“I will travel across the state non stop. We have received tremendous love and support across the state. For 2019, I promise, we will win 28 out of all 28 Lok Sabha seats. I won’t relent. I will continue to fight till my last breath,” he said in the Assembly, before meeting Governor Vajubhai Vala to resign.

(Brajendra Nath Singh can be contacted at [email protected])

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Analysis

A view through an infrastructure investor’s prism

Active policies to address the three issues revolving around the value, scarcity and contract enforcement that investors utilise to determine both investments and the required rate of return can help make policies useful.

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investment returns

Perspectives on infrastructure assets vary widely: While investors focus on investment returns, policymakers analyse both financial and socio-economic benefits. It would be worthwhile for policymakers to view things through an investor’s investment prism because an understanding of the critical factors that shape investment decisions will help frame better policies to expedite Indian infrastructure creation.

The “raw value” of an infrastructure project is what a potential investor evaluates first. For example, in a renewable energy wind project, the wind potential of a site is what an investor evaluates. For a transportation project, the investor evaluates the potential passenger traffic. This so-called “raw value” is a huge determinant of the financial viability of a project.

Segregating infrastructure sectors and projects by such “raw value” can help government and industry alike to work towards directing infrastructure capital more optimally. Additionally, such analysis helps in framing policies for those sectors that deliver very substantial social and economic value but are not financially viable on their own.

A robust framework that helps determine “raw value” can aid all the stakeholders, especially the government, to work with investors and multilateral trade agencies to find financing solutions for such socially and economically relevant projects. Eventually, India needs to create an information repository of sorts that provides the global investor base information and access by asset type and investment potential.

Once the “raw value” of a project is determined, an investor tries to gauge what is called its “scarcity value”. Take, for instance, transportation projects. If the transportation potential of connecting City “A” with City “B” is attractive, then is building an airport to connect the two cities the most optimal infrastructure asset? That is, in spite of the traffic potential, is an airport a “scarce” enough asset to deliver attractive returns?

The investor will gauge whether the airport is likely to face competition from a competing train network or a highway. Being cognizant of the long-dated nature of infrastructure assets is important. Hence investors will have to gauge the “scarcity value” of the asset to determine the attractiveness of the asset over the long investment horizon and, therefore, eventually decide on their willingness to invest in the asset.

It is essential for the government to find a balance between allowing investors to make returns commensurate with the risk taken and allowing the public to have access to a well-priced and high-quality infrastructure asset. The twin objectives of consistency and transparency in policy are crucial in this regard.

The government’s ability to formulate and communicate the strategy effectively regarding not just sectors but individual assets is vital. To indeed expedite infrastructure creation, granular policy across industries will be needed, more so for much-needed greenfield infrastructure projects.

Apart from “raw value” and “scarcity value”, an investor considers a third factor: The quality of the underlying contracts signed for the asset. Investors look for high-quality counter-parties with whom to sign contracts. More importantly, the government’s ability to deliver a robust legal system for contract-enforcement, as also a more efficient system for conflict-resolution, will attract more significant investments.

Lowering the risk perception for Indian infrastructure assets is essential not merely to attract more investments but also to attract investments at lower financing costs. Reducing the cost of capital is going to be a significant driver of infrastructure projects through their improved financial viability.

Another area that merits attention is the possibility of the government working even more closely with Export Credit Agencies of various countries to offer foreign exchange hedges, while “importing infrastructure investments”. Solutions that not only reduce the legal risk in investments but also partially eliminate the foreign exchange risk can help boost investments significantly.

Active policies to address the three issues revolving around the value, scarcity and contract enforcement that investors utilise to determine both investments and the required rate of return can help make policies useful.

Policy frameworks can potentially be refined using these three key factors that shape investment decisions. Most importantly, one does not need to improve concurrently on all three fronts for all infrastructure sectors; incremental improvement on one element can provide a significant fillip to infrastructure investments.

(Taponeel Mukherjee heads Development Tracks, an infrastructure advisory firm. Views expressed are personal. He can contacted at [email protected] or @Taponeel on Twitter)

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Analysis

Ministry says yoga is not sport, but DU colleges still reserve seats

Colleges have autonomy to choose the sports under which they wish to give admissions. University cannot tell a college to pick a specific sport. It is their discretion. These sports do not come under Sports Ministry, nor are they regulated by it.

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Delhi University

New Delhi, June 12 (IANS) Is yoga a sport? The Ministry of Youth Affairs and Sports (MYAS) says it is not. Yet, 11 Delhi University (DU) colleges have this year reserved seats for the discipline under their sports quota.

The university and the colleges, meanwhile, have been shifting responsibility back and forth.

After recognising it as a sport in 2015, the MYAS reversed its decision the next year. “After elaborate discussion, it was concluded that yoga has various dimensions/arms in which competitions are not possible. Hence, it was agreed that Yoga cannot be termed a sport. Consequently, it may not be appropriate to recognise any organisation as NSF (national sports federation) for yoga,” the Sports Ministry had said in a letter dated December 21, 2016, to all national sports federations and the Indian Olympic Assocation.

“It was also agreed that the entire matter relating to yoga will continue to be handled by the Ministry of AYUSH,” the letter said.

When IANS contacted the DU Sports Council for a clarification, it said that the colleges had requested the university to conduct yoga trials.

“Yes, Yoga has been under sports quota and it has been there in previous years also. Last year, 19 colleges had applied for trial for Yoga under sports quota. The decision, in which sports admissions are to be made, are taken by the colleges,” Anil Kalkal, Director of the varsity sports council which conducts the centralised trials for sports quota on behalf of colleges, told IANS.

“Colleges have autonomy to choose the sports under which they wish to give admissions. University cannot tell a college to pick a specific sport. It is their discretion. These sports do not come under Sports Ministry, nor are they regulated by it,” he said.

Although colleges are entitled to choose a sport for trials and reserve seats under it, the list of sports from which they are to choose is compiled by the varsity.

Kalkal cited another factor in the form of inter-university competition, held by the Association of Indian Universities (AIU) — a non-governmental body listed under the Societies Act — as one of the reasons for considering Yoga as sport.

“If such was the thing (de-recognition) why would AIU conduct the yoga competition? The day AIU will tell us that Yoga is not a sport and stop conducting the competition, we will stop taking admission under it,” he said.

“If colleges are requesting to admit students under yoga, what can the university do? We have to conduct the trials. You should ask the colleges why they requested us to conduct yoga trials,” he said.

An official from one of the colleges which has reserved seats for Yoga this year, when contacted, passed the buck to the university.

“We consider Delhi University and AIU the governing bodies. If an activity is listed as sport by the university, we follow that. If DU tells us that it will not conduct trials in yoga then we will also give it up. Government doesn’t have a role in it,” M.P. Sharma, sports Convener at Hansraj College, told IANS.

Ambiguity on the legal sanction of quota for yoga got further worsened when an AIU official conceded that the association itself didn’t consider yoga as a sport.

“The competition is there because it helps in maintaining your body, mind and spirit. We do not consider it sport. This is not a sport. But we conduct the competition to improve the standard of performance,” said AIU Joint Secretary (Sports) Gurdeep Singh.

Singh also conceded that association’s decisions are not binding on the university.

“We have nothing to do with the DU sports quota. DU follows its own constitution. You talk to DU for this. A collective decision is made by our sports board. Whatever is in the larger interest of students, we do that. It’s not a sport but an activity, which helps strike a balance. The entire world has recognised the value of yoga, I don’t know why only here people have an issue with it,” he said.

However, in spite of what Singh said, the AIU website lists yoga as a sport in its “Calendar of Events” for 2017.

Although it is a thing which has been going on for years, some DU teachers, when apprised of the matter, called the decision (listing of yoga as sport by the university) as “arbitrary”, stating that it was never presented before the Academic or the Executive Council of the university.

“As far as reservation of seats under sports quota is concerned, we have an understanding of reserving them for only those sports which are recognised in Olympics. On what basis can they include yoga in it? asks Rajesh Jha, a DU professor and Executive Council member.

“This will end up undermining the chances of admission of those who are trained in genuine sports. This seems like a completely arbitrary decision,” he added.

Trials for yoga are scheduled to be conducted later this month.

Apart from Hansraj, Gargi College, Deshbandhu College, College of Vocational studies, and Kalindi College are few of those which have given their names for yoga trials and have reserved seats under the activity.

(Vishal Narayan can be contacted at [email protected])

— IANS

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Analysis

Global cues, inflation to dictate equity indices trend

The Central Statistics Office (CSO) is slated to release the macro-economic data points of IIP and CPI (Consumer Price Index) on June 12.

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Sensex Nifty Equity

Mumbai, June 10 : Monetary policy announcements by global central banks coupled with the upcoming release of major macro-economic data points on industrial production and inflation are expected to set the trend for the domestic equity indices.

According to market observers, other key factors such as rupee’s movements against the US dollar and fluctuations in crude oil prices as well as developments on monsoon’s progress will impact investors’ risk-taking appetite.

“Next week will have a flurry of economic data for India,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.

“A negative surprise in inflation data would reinforce the hawkish stance of RBI. A weaker external sector data would have an impact on INR, especially during a negative EM (emerging markets) sentiment. IIP (Index of Industrial Production) would be watched closely for an ongoing economic expansion.”

The Central Statistics Office (CSO) is slated to release the macro-economic data points of IIP and CPI (Consumer Price Index) on June 12.

Subsequently, other major macro-economic data points such as WPI (Wholesale Price Index), Current Account Deficit and Balance of Trade figures will be released.

On the global front, monetary policy announcements by the US Federal Reserve, ECB (European Central Bank) and the Bank of Japan (BoJ) will form major themes for the upcoming week.

“The US Fed rate move and language will set the tone for sentiment in EM as well Indian markets. The key is whether the US Fed pays attention to the vulnerable EM situation,” Nevgi said.

Besides, the movement of Indian rupee against the US dollar and fluctuations in global crude oil prices will also set the course for the key indices.

On a weekly basis, the Indian rupee weakened by 45 paise to close at 67.51 against the US dollar from its previous close of 67.06 per greenback.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors bought scrips worth Rs 1,367.22 crore during the week ended June 8, 2018.

Figures from the National Securities Depository Ltd (NSDL) revealed that foreign portfolio investors (FPIs) invested equities worth Rs 3,757.94 crore, or $560.40 million, in the last week.

Additionally, technical charts show that the National Stock Exchange (NSE)’s Nifty50 remains in an intermediate uptrend.

“Technically, with Nifty recovering from the lows of 10,552 points, the intermediate trend remains up,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

“Further upsides are likely in the coming week once the immediate resistances of 10,814 points are taken out. Crucial supports to watch for any weakness are at 10,618 points.”

Last week, the key Indian equity indices — the S&P BSE Sensex and the NSE Nifty50 — rose on the back of Reserve Bank of India’s “neutral” stance on a future rate hike trajectory, along with its reform measures for the realty, bond and banking sectors and value buying.

Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the BSE rose by 216.41 points or 0.61 per cent to 35,443.67 points on a weekly basis.

Similarly, the wider Nifty50 of the NSE closed last week’s trade at 10,767.65 points — up 71.45 points or 0.67 per cent — from its previous close.

(Rohit Vaid can be contacted at [email protected])

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