There is one highly successful scheme of the BJP government under PM Narendra Modi that has not received any media attention — ‘Pradhan Mantri Billionaire Badhao – Billionaire Bachao – Billionaire Banao Yojana’.

The Bharatiya Janata Party (BJP) government’s numerous schemes meant for ordinary Indians – farmers, youth, women and others – have received a great deal of publicity from the government and a fair amount of criticism from the public for their failure.Yet, there is one highly successful scheme of the BJP government under PM Narendra Modi, that has not received any media attention. This is the ‘Pradhan Mantri Billionaire Badhao – Billionaire Bachao – Billionaire Banao Yojana’.

It is true that the Pradhan Mantri’s employment programme has not created any new jobs. If anything, there is a net loss of employment under the BJP government. The Fasal Bhima Yojana benefitted the corporates more than the kisans (farmers) and Skill India brought no jobs to those who have got skills.

But, the success of ‘Billionaire Badhao – Billionaire Bachao – Billionaire Banao Yojana’ eclipses the failure of the rest of the schemes.
The success of this scheme is even more remarkable for the fact that it has never been publicly announced by the government. We have come to perceive the existence of the scheme only through the results it has achieved. As such, there is a need to understand and appreciate this scheme.

Under this scheme, already thriving billionaires added more billions to their net worth. Those who were not doing so well were given a helping hand to retain their wealth. Those who were not billionaires to begin with, were lifted to be included in the billionaire wealth bracket by the Modi government.

So, let us take a look at some of the important beneficiaries of this scheme.

Mukesh Ambani ´ 2
India’s richest man Mukesh Ambani has become doubly richer within the first four years under the Modi government. Between 2014 and 2019, his wealth more than doubled –from about $23 billion to $55 billion. This means that Mukesh Ambani accumulated more wealth in the five years of BJP rule than all the wealth he made and inherited in the entire 58 years of his life before Modi became Prime Minister.

No doubt, Ambani worked really hard to earn Rs. 122 crore per day in the last five years. Yet, credit should be given where it is really due.

He has to concede that without the BJP government’s policies, his billions would have been fewer.

This all began with Ambani’s launch of Reliance JIO in September 2016. All of us remember when JIO was launched with full-page newspaper advertisements. The person endorsing the JIO brand was none other than Prime Minister Modi, who appeared on the advertisements wearing a dress that was colour coordinated to match with the JIO logo. There were the usual denials that the pictures were used without the Prime Minister’s permission. But most of us know that Reliance would not have dared to use Modi’s image without some tacit prior understanding.

From its commercial launch in September 2016, JIO’s subscriber base skyrocketed within two years – like never before in India’s telecom history—thanks to Telecom Regulator Authority of India (TRAI) tweaking its policy for the undue benefit of Reliance JIO. One month after JIO was launched, TRAI announced a steep cut in interconnection charge, resulting in a fall of these charges by less than 50%. This meant that JIO had to pay very little to connect the calls of its subscribers to a much larger subscriber base of its competitors. This was a blow to existing telecom operator,s like Airtel and Vodafone, and a boon to Reliance JIO.

In 2016, when Reliance JIO was in the testing phase, TRAI arbitrarily imposed a penalty of more than Rs 3,000 crore on the other operators for not providing enough interconnecting points to JIO. Even though, according to their license agreements, the incumbent operators had 90 days to provide the points of interconnect (PoI) to JIO, TRAI imposed a penalty before the 90-day period was over. This resulted in an undue advantage to JIO.

When JIO’s competitors started complaining of its predatory pricing behaviour, TRAI tweaked the rules once again in 2018 for the benefit JIO. Because the rules on predatory pricing behaviour apply to only a company with significant market power, TRAI changed the rules of determining market power, in favour of JIO again. Till then, market power was calculated on the basis of four metrics – revenue market share, subscriber market share, volume of traffic and capacity. But, to benefit JIO and to show its market power lower than it actually is, TRAI simply removed the volume of traffic and capacity as metrics of market power. As a result, JIO, with its deep pockets, could continue its predatory behaviour by undercutting its competitors.

Thanks to his efforts with regard to JIO, Modi government reappointed R S Sharma as TRAI chairman for two more years. This is the first time in the history of TRAI that somebody has been reappointed as the chairman.

There is no doubt, Mukesh Ambani’s doubled billions are the result of the government’s and TRAI’s ‘fatherly’ interest in Reliance JIO. A look at the chronology of Mukesh Ambani’s net worth makes this clear. From 2014 to 2016, there was hardly any change in his net worth – it remained at about $23 billion. After Reliance JIO’s commercial launch, his net worth skyrocketed and reached $55 billion in 2019. One can imagine the miracles Ambani may have in store if Modi is given another five years in office.

Adani Kalyan Yojana
The scores of schemes announced by the BJP government seem to have brought little actual benefit to Indian people, as actual beneficiaries are just a handful of billionaires. Let us take a look at another such beneficiary. For all the BJP government has done for him, he actually deserves a scheme named after him.

When talking of Modi’s beneficiaries, one must certainly not forget Gautam Adani, his BFF or best friend forever. The rise of Adani in the business world seemed to have gone hand in hand with Modi’s ascent to power in Gujarat in 2001. As a ‘true friend’, Modi has been relentless in improving the lot of his ‘good’ friends. During his tenure in Gujarat, Adani Enterprises’ assets grew by 5,000%. We are not sure if an ordinary Gujarati has seen such growth in his income under Modi.

By the time Modi ended his tenure in Gujarat, Adani was a billionaire with a net worth of $2.6 billion. And, the fruits of this friendship continued to bear after Modi’s shift to Delhi. Adani’s net worth more than quadrupled to $11.9 billion – in just the first four years of Modi rule.

How did this happen?
Do you remember all the foreign countries the PM visited over the last five years in a bid to shore up India’s standing in the international arena? While he was at it, our PM also managed to drum up some business for his friend. Thanks to this, Adani was able to ink 15 deals related to defence, logistics and power with many of the countries that Modi visited.

The infamous Carmichael mine project, which has been witnessing protests in Australia since its inception for financial irregularities and tax evasion, was pocketed by Adani during Modi’s visit to that country, just a few months after he became PM. In the same visit, it was announced that State Bank of India, India’s largest public sector bank, would provide a loan of $1 billion to Adani for this Australian Ppoject.

A $15.5 billion project as well as an easy to loan to execute it! What more can a friend ask for. Yet, there were more goodies waiting for Adani.

The rapid expansion of the Adani group over the last decade was built on large loans Gautam Adani took from the banking system. In 2015, the Adani group had Rs. 92,000 crore debt on its books, earning a place in a list called ‘House of Debt’ – compiled by Credit Suisse. According to the report, Adani is in the august company of Anil Ambani as one among the top four Indian corporate groups with the highest levels of unsustainable debt. Credit Suisse categorised 1/3rd of Adani group’s debt as ‘highly stressed’, which means that the group was not in a position to make repayments.

In 2017, Adani power alone had total borrowings of Rs 53,000 crore, with an interest cover as low as 0.7%. For every Rs 70 that Adani Power was making, it had to make interest payments of Rs 100 – implying that it was defaulting on loan payments.

Despite this desperate situation, the Adani group did not seem to have any NPAs (non-performing assets or bad loans) with the banking system. What is the secret behind such an extraordinary feat?

Here is the secret. Within two months of Modi coming power, public sector banks under the Reserve Bank of India’s 5/25 refinance scheme, have restructured and refinanced loans of many corporates – extending the loan repayment periods from 10 years to 25 years. The Adani group has been one of the main beneficiaries of this scheme. From the financial press, we know that at least Rs.15,000 crore of Adani power’s loans have been restructured, extending the loan repayment period from 10 years to 25 years with a 15-month moratorium on interest payments. No doubt, more such loans of the group have been restructured on similarly benevolent terms. This is also the reason why, despite its mountain of highly stressed debt, the Adani group’s market valuation has been growing.

The list of favours given to Adani under the BJP government may seems endless. Yet, there is one that stands above others, for it involves subversion of government institutions.

In 2014 and 2015, the Directorate of Revenue Intelligence (DRI) issued notices to three of Adani’s power sector firms regarding diversion of Rs 5,000 crore to tax havens through over-invoicing of power equipment.

DRI’s evidence showed that Adani power companies purchased power equipment from abroad, which was shipped by their Chinese and South Korean sellers directly from their ports to Indian ports, with no diversion in the middle. But, on paper, it was shown that the equipment was first purchased by a Dubai-based firm called Electrogen Infra, a company owned by Adani’s brother, Vinod Adani. Again on paper, Electrogen Infra sold the same equipment to Adani power companies, at price as high as 800% of the original price. DRI said that through this scam, Adani illegally diverted more than Rs 5000 crore to overseas tax havens.

To those following the scam, it seemed like an open and shut case. Yet, explicably, DRI’s adjudicating authority summarily dropped all the proceedings against Adani on August 21, 2017. Four days later, Gautam Adani reportedly met Modi’s revenue secretary Hasmukh Adhia. Was it to thank him?

Rafale on Anil Ambani’s Platter
This billionaire, sadly, has not done so well under PM Narendra Modi’s regime. It is a universal knowledge that the younger Ambani brother has been seeing rough times these last few years. His net worth dropped from $6.3 billion to $1.8 billion in the last five years.

Yet, one can completely absolve the BJP government of any blame in the younger Ambani’s loss of billions and slide into billionaire poverty. In fact, PM Modi put in a commendable effort to restore the Junior Ambani’s lost billions.

It is no secret that Anil Ambani’s group owed a great deal of money to the Indian banking system, and that his group is one of the main contributors to the NPAs woes of the banking sector. One of his group companies, Reliance Communications, has at least Rs. 14,000 crore of NPAs with banks. The figures may actually be higher, but are not made public yet. Another group company, Reliance Naval and Engineering, defaulted on Rs 9,000 crore to the banks, most of which is to public sector banks.

This is only the information in the public domain. Much of the information regarding the bad loans is shrouded in secrecy. Only the government knows the actual amount of  NPAs of the entire Anil Ambani group.

A less compassionate government would have initiated action against Anil Ambani, the promoter of these companies. It may have taken steps to confiscate his assets. After all, government is the owner of public sector banks, as well as the representative of Indian citizens, whose deposits have been lent by these banks to Ambani.

But, not Modi, who has instead chosen to help junior Ambani recover his lost fortunes. The result being the Rafale deal or shall we say, scheme. Though, most readers are familiar with this scheme, there is no harm in recounting its salient features.

In 2012, the United Progressive Alliance (UPA) government negotiated with the French company Dassault for 126 Rafale fighter jets, to add to the fleet of Indian Air Force (IAF). According to this agreement, which was almost finalised, out of the 126 aircraft, India would buy 18 in finished form directly from Dassault. While, the rest 108 Rafale jets will be manufactured by Hindustan Aeronautics Limited (HAL), with technology transfer from Dassault.

HAL is one of India’s Navratna public sector companies. It has more than half a decade experience of manufacturing and supplying fighter aircraft to IAF.

In 2015, Modi decided to scrap this deal and make a new one. Why? So that the experienced HAL can be replaced by an Ambani company, which has ‘zero’ experience in any kind of defence manufacturing. Moreover, the Ambani company was set up just 12 days before Modi’s visit to France to discuss the deal.

The special consideration given to Anil Ambani’s company at the expense of HAL is obviously part of Modi’s ‘Billionaire Bachao’ scheme. As any other government scheme, this too had its costs. The Modi government agreed to buy a smaller number of aircraft (36) at a much higher cost, just so that Reliance could be brought into the deal. Different estimates have put the loss to government due to the Rafale deal at Rs.12,000-42,000 crore.

Unlike the one negotiated in 2012, the new Rafale deal, does not include any technology transfer to India. This is looked at by many defence analysts as a big setback for India’s efforts to become self-reliant in defence manufacturing.

One Rafale deal, no matter how much it costs the government and the people, is clearly not enough to restore the Ambani fortunes. So, apart from the Rafale deal, Modi found time to fix up at least five more deals for Anil Ambani in Sweden, Russia, Israel, the US and other countries, during his globe-trotting. Some may say that these are a less number of deals than what Modi got for Adani. But the naysayers have to accept that Modi has shown a good deal of magnanimity towards Anil Ambani who once hobnobbed with BJP’s arch enemy in Uttar Pradesh – the Samajwadi Party. By helping this billionaire rescue his fortunes, Modi proved that he is everyone’s prime minister – as long as they are rich and capable of keeping BJP flush with campaign funds.

The ‘Baba’ Billionaire
Last, but not the least, comes a most unique accomplishment of the Modi government, a combination of saffron agenda and crony capitalism, that of turning a baba into a billionaire.

If we are counting the beneficiaries of five years of BJP rule, one must not forget Baba Ramdev. Unlike others who have been billionaires before Modi came to power, the PM can claim credit for singlehandedly turning this baba in to a billionaire.

During the 2014 parliamentary elections, Ramdev was one of the most vocal non-political party campaigners for Modi. The elastic-limbed yoga guru, who had become a TV celebrity through his shows, openly exhorted and herded lakhs of his followers into voting for Modi. The fact that Ramdev’s role in BJP’ win has been crucial is accepted by no less a weighty persona than party president Amit Shah, who humbly thanked the baba after the elections, for ‘contributing significantly to the formation of the Narendra Modi government at the centre’.

This alliance of Ramdev’s spiritual Hindu nationalism with BJP’s political Hindu nationalism has been fruitful for both the parties. Modi swept to power at the Centre, while Ramdev expanded his spiritual empire into the economic realm.

The PM has shown his gratitude by employing the might of government machinery in turning the yogi baba into the frontman for a multi-billion dollar FMCG (fast moving consumer goods) empire called ‘Patanjali’.

From what one can glean from news reports, ‘Patanjali’ which was founded by Ramdev, is at the moment officially owned by his second in command and disciple ‘Acharya Balakrishna’. The actual ownership may seem a bit murky, with ‘Patanjali’ brand being controlled by some 34 companies and three trusts with large dividend payments (up to 60% of the profits) going to Ramdev’s brother and his close aide Balakrishna. Whatever may be the finer details, there is no doubt that Ramdev is the ‘super boss’ at Patanjali.

Between 2014 and 2018, Patanjali went from a relatively fringe enterprise to a billion-dollar company, placing its owner among the 20 richest people in India with a net worth of more than $6 billion. From making obscure herbal powders and jellies, the company leapfrogged into manufacturing household products like – soaps, detergents, toothpastes, kitchen supplies, baby powders, wet wipes, digestive biscuits, cookies, corn flakes, vermicelli and what not. You name it, Patanjali makes it. The Ramdev brand jeans, apparently designed with bharatiya sanskar (Indian values) in mind, are already here.

The consequence is that within a span of four years, ‘Patanjali’ ate into the market share of established FMCG giants such Hindustan Unilever, Dabur and others, which have been around for decades.

This skyrocketing growth of Patanjali happened under the benevolent gaze of PM Modi and Shah. They have leaned in with their government’s machinery and have fully supported Ramdev’s commercial endeavour.

In what can only be called a poetic gesture of gratitude, the BJP government served Patanjali products on Parliament’s dining tables. It pushed Patanjali products in government-owned Kendriya Bhandars, army canteens and fair price shops in various states ruled by BJP.

Since 2014, Patanjali has received about 2,000 acres for setting up factories and other facilities at throwaway prices. Its factories even got security at expenses of public exchequer. CISF (Central Industrial Security Force) protection, which is not usually provided to private sector, was given to the Patanjali foodpPark in Haridwar. It. was given lucrative government contracts. The list of favours goes on and on.

The government’s excuse for such disproportionate affection shown to Patanjali has been that it is trying to promote ‘swadeshi’ products in India. Yet, it is perplexing why these favours were not done to other swadeshi-owned companies like Dabur, Emami and others.

Modi gets votes of his beneficiaries
The benevolence to billionaires has not gone unrewarded. The billionaires have already voted in with their money. More than 70% of corporate donations given to national parties during Modi’s term went to BJP, not to forget the copious and completely uncritical air time Modi has been getting in the corporate-owned media.

If only ordinary Indians can stop hankering after paltry benefits like employment, minimum support prices, farm loan waiver, affordable healthcare and education, cheap electricity, cooking gas, etc. etc., under the Modi regime they have the opportunity to become billionaires one after another, if they survive long enough.

Courtesy: News Click

The post The Billionaire Beneficiaries of BJP’s Schemes appeared first on SabrangIndia.

The report compares the average consumption of different food groups by the urban population, to the scientifically calculated Required Dietary Allowance (RDA). RDA, for any food group, is the amount which a person needs to consume every day to avoid malnutrition. Upon such comparison, it was found that India’s urban population, which constitutes about more than 30% of the country’s population, consumes far lower amounts than what is required to stay healthy, of most food groups.

An average urban household consumes only 69% of the RDA for cereals and millets. This means that they fall short of the RDA by 31%. Similarly, most households consume only 81.3% of the RDA for milk and milk products and only 59.5% of RDA for green leafy vegetables.

In contrast to these shortfalls, the consumption of Roots and tubers was 188% of RDA and the consumption of oils was 159.5% of the RDA. Clearly, it shows that the families’ consumer more of the cheaper food groups.

This pattern of food consumption had a direct impact on the health and well-being of the families, with the population being deficient in most of the vital nutrients.

The average urban family was deficient in the macronutrients – protein and energy, both falling short of the RDA. The average family was also deficient in vital micronutrients. The intake of Calcium, Iron, Vitamin B1 and Vitamin B3 was significantly lower than the RDA, while the intake of Vitamin B2 and Vitamin A were abysmal at 50% and 23% of the RDA.

Families have sufficient intake of only two important nutrients, Vitamin C and Vitamin B9.

The effect of the insufficient nutrient intake has a particularly large impact on the children from urban families, with more than 25% of children below 5 years of age suffering from undernutrition. The report also indicates that children from urban poor and deprived communities are the most affected by undernutrition.

It is generally thought that malnutrition is a problem of rural India. But when we compare the present report with a similar one on rural India, brought by NNMB in 2012, the extent of undernutrition is not significantly different in urban and rural areas. For example, an average rural family, in 2012, was consuming 85% of the RDA for protein as opposed to 89% by an average urban family in 2016.

What is the reason behind the persistently high rates of undernutrition, even though India has grown at very high rates in the past decade and more?

The government claims that poverty rate in India has fallen from 45% to 21.9%, between the 1990s and the 2010s. If that is indeed the case, it is a significant reduction in poverty, by more than half. But the data on undernutrition gives a different and a less optimistic picture. Between the 1990s and 2010s, the percentage of children (under 5) who were underweight fell from 43% to 35%. A modest fall of 7 percent compared to a fall of 25 percent in the official poverty rate.
Could it be that the so-called trickle down of economic growth to the poor urban working class was not substantial enough to compensate for the gradual withdrawal of the government from the provision of affordable food in the form of Public Distribution System (PDS) and other welfare schemes?

It has been widely covered by many researchers, how a shift to a targeted form of PDS, where families were arbitrarily classified as below poverty line (BPL) and Above Poverty Line (APL) deprived many families of affordable rations, thereby negatively affecting the nutritional status of these families. The results are clear to see in the data above. Undernutrition persists despite the decline in official poverty figures.

The poor coverage of ICDS (Integrated Child Development Services) in the urban areas, could also be a significant reason behind the dismal nutritional indicators of children in urban areas. Even though urban population constitutes 31% of India’s total population, only 10% of the ICDS projects are allotted to urban areas and only 8% of all Anganwadi centres are situated in urban areas.

A significant part of urban working families, who live in unregistered slums, by the same reason are denied access to ICDS. Similarly, the poorest of the urban families which tend to migrate to different regions, depending on the availability of work, loose access to ICDS. As a result, children and pregnant women who are most vulnerable to undernutrition in urban areas, are not served by ICDS. These same factors also affect the access of the urban poor to PDS, which has already been diluted through targeting.

One hopes that the NNMB report will open the eyes of the establishment towards the need for a universal public distribution system. Considering the under consumption of a wide variety of essential nutrients government must include a larger range of food groups to be covered under the PDS. It is also the need of the hour to expand ICDS infrastructure in the urban areas, to serve the needs of the most vulnerable of the urban poor.

Courtesy: Newsclick.in
 

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In a landmark case, the European Commission has imposed a fine of €2.42 billion on Google for abusing its dominance in the search engine market, by giving undue advantage to its ‘comparison shopping service’ and illegally suppressing its competitors.

Apart from the fine, the Commission has given Google 90 days to change its algorithms in compliance with the order, failing which the company will have to pay a penalty equivalent to 5% of the average daily earnings of its parent company, Alphabet.

Google has a near absolute monopoly over the search engine market with more than 90% market share in most countries. This gives it a considerable say in deciding what consumers view on the internet. Using this to its advantage, Google gave prominence to its own comparison shopping service in search results which appear when consumers search for a particular product.

Comparison shopping service is any website where consumers can compare the prices offered by competing online retailers for a product. Retailers pay the comparison shopping service to display their items and their prices on the service’s website.

More traffic to the website would mean that more retailers would be willing to pay for listing their items on the site.

When consumers use Google search to find a product, the first items displayed are those listed with Google’s own comparison shopping service. Rival comparison service providers, even those with very high ranking, were not displayed in the first page of the search results. According to the European Commission, the highly ranked rival services were pushed to the fourth page. This meant that they get hardly 1% of the total clicks.

The European Commission found fault in the fact that Google’s comparison service is not subject to Google’s own generic search algorithm. It was never demoted in search results, irrespective of its relevance.

This led the Commission to rule that Google deliberately and illegally demoted rivals in the search results, thereby restricting competition and abusing its monopoly power.

The numbers given by the Commission show the extent of the adverse impact that Google’s anti-trust behaviour had on its competitors. To quote from the Commission’s press release, “Since the beginning of each abuse, Google's comparison shopping service has increased its traffic 45-fold in the United Kingdom, 35-fold in Germany, 19-fold in France, 29-fold in the Netherlands, 17-fold in Spain and 14-fold in Italy”.

Correspondingly, traffic to rival comparison shopping services has fallen rapidly. There were “sudden drops of traffic to certain rival websites of 85% in the United Kingdom, up to 92% in Germany and 80% in France.”

This is not the first time Google has been in news for its monopolistic practices, though this is the first time such a huge fine has been imposed on it.  The European Commission’s order is an important, if a very small, step towards controlling the misuse of market power by digital monopolies.

In India too, Google resorts to similar monopolistic practices, without facing any disciplinary action. The Director General (DG) of the Competition Commission of India (CCI), whose mandate is the preventing of anti-competitive behavior of firms, came out with a report on Google’s questionable market behaviour in September 2015.

As in the European Commission’s case, the CCI too found that in Google’s universal search its own services are unfairly promoted at the expense of its competitors. For example, when people search for addresses, Google Maps and Google Places appear at the top of the search results. This has a serious adverse impact on the visibility of competing online map services, considering the fact the topmost search result gets 35% of all the clicks and all the results in the first page together get 95% of the clicks. Even if a competitor provides a better service, the customer might simply remain unaware. This is not only bad for competitors, but also for consumers.

The CCI report compiled many other such practices of Google that unfairly and adversely impact its competitors, and thereby constitute anti-trust behaviour. The report states that Google’s behaviour violates sections 4(2)(a)(i), 4(2)(b)(ii), 4(2)(c) and 4(2)(e) of the Competition Act of 2002.

It was estimated by many that Google could be fined up to six billion dollars if CCI accepts the DG’s report and rules against Google. But two years have passed since the report was submitted, and there has been no news of any action taken.

Meanwhile the monopoly practices of the digital giant continue unhindered. The BJP government which has been making much noise about Startup India has taken little notice of this issue. After all, such anti-trust behaviour will have an adverse impact on start-ups, most of which are coming up in the digital sphere. Unless the government wakes up from its slumber and places checks on digital giants like Google and Facebook, Startup India will never reach the finishing line.

Courtesy: Newsclick.in
 

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Image Courtesy: Welthungerhilfe

After consecutive years of drought, the Farmers in different states were looking forward to a profitable agricultural year in 2016-17. Though their hopes of good crops have materialised, the prices have fallen so low that in many places farmers are leaving their unsold harvest on the roads. In some cases they are simply leaving the crop un-harvested.

The post It is Demonetisation that has Crippled Indian Agriculture, Let’s Admit It appeared first on SabrangIndia.

India’s banking system, which was robust enough to withstand the financial crisis of 2008, is facing a crisis today. The banks, particularly the public sector ones, are burdened with huge amounts of non performing assets (NPAs), which are threatening the viability of the banking sector.
In the last three years, under BJP rule at the center, the NPAs of the banks have tripled – from Rs. 2.3 lakh crores to Rs. 6.8 lakh crores. Currently, the NPAs of public sector banks stand as high as 11% of their total advances.

Non-repayment of loans by some of India’s biggest corporate houses is the major cause of this huge accumulation of NPAs. According to the chairman of Parliamentary Accounts Committee, K V Thomas, a handful of big corporate houses account for 70% of the NPAs of the banks.

The Finance Minister Mr. Arun Jaitly, tried to absolve himself and his government of all the blame, claiming that the NPAs are a legacy problem. According to him the loans that were given during UPA government have turned bad and are accumulating as NPAs today.

While it is true that the UPA government compelled the public sector banks to dole out loans worth lakhs of crores to a handful of corporates, the BJP government is not far behind. It is helping the same corporates in continuing to default on the repayments – with the aid of loan refinancing and restructuring schemes introduced by the Reserve Bank.
In the last three Modi years, public sector banks have been pressured to restructure bad loans (under various schemes of RBI) worth Rs. 3.5 lakh crores belonging to the corporate houses.. These restructuring deals simply meant that the companies get new loans to pay off their old loans, which they have already defaulted on. These schemes also involve changing the terms of payments in favour of the defaulting corporates.

The infamous case of Vijay Mallya defrauding the public sector banks, is all too well known. Less publicised are those of Modi’s own crony capitalists. It is estimated that companies controlled by Adani, owe a debt of Rs. 72,000 crores mostly to public sector banks.
Since 2014, two power companies controlled by Adani’s firms have been extended loan refinance worth Rs. 15,000 crore by the public sector banks. This was done when both the companies’ earnings -before tax- were not even enough to cover the interest cost on the loans they have taken. In this sweetheart deal, the previous defaulted loans were replaced with new loans and loan repayment date was extended by one more decade. Additionally, a moratorium on interest payments was given for a considerable period, meaning that in this period these two firms need not pay even the interest amount.

Similarly, after Modi came to power, Mr. Mukesh Ambani’s Reliance Gas Transport Infrastructure Ltd. (RGTIL), was given a loan refinance of Rs. 4,500 crores and an extension of payment period by more than a decade.           

According to Arun Jaitly, most of the NPAs and bad loans are due to projects in power, infrastructure, mining and steel sectors – which are owned by the large corporates like Reliance, Adani and Vedanta. Let us not forget, these are the same companies (remember Vedanta’s land grab in Orissa), whose factories and plants were set up by grabbing thousands of acres of land belonging to famers and tribals.

These billionaire promoters and owners of the companies should have been compelled to transfer the shares (equity) of these companies, to the public sector banks, in lieu of the unpaid loans. Or, they should have been made to inject fresh capital in to the defaulting companies. Refinancing of the loans, extension of payment schedules and moratoriums on interest payments – without placing any responsibility on those who control the companies are bound to bring even heavier losses to the banks in the coming days.

The government seems to think that Mukesh Ambani, with net worth of more than Rs. 1.5 lakh crore rupees needs assistance in paying back the loans of his companies, while the farmers of this country are given no recourse after severe droughts and crop losses. Desperate after years of draught, farmers from Tamil Nadu and elsewhere have been agitating for months for loan waivers. Their appeals to the central government have fallen on deaf ears. Modi government steadfastly refused to provide any assistance to the debt ridden farmers. Are the farmer’s making ridiculous demands? Consider this – The entire amount of crop loans in India is worth Rs. 75,000 crore, while Mr. Adani’s firms alone owes Rs. 72,000 crores to the banking system. Adani gets a generous restructuring on the defaulted loans, while the farmers get tough love.

While the corporates are being given a free pass, Mr. Modi’s pets in RBI are baying for the blood of public sector banks. Recently, RBI’s deputy chairman Viral Aacharya suggested that the solution to the NPA crisis is re-privatisation of some of the public sector banks and some divestment of government’s stake in others, in favour of private players. RBI Chairman, Mr. Urjit Patel was not far behind, with suggestion that small banks afflicted with NPA problems should be allowed to perish naturally. The RBI satraps seem to be forgetting that it is the bulwark of public sector banks that protected India’s financial system from the crisis of 2008.

For Mr. Modi it is not enough, that Indian corporates have defrauded banks of the public money, they are now being offered the ownership of these banks.
Concession after concession given to corporates is what marks Mr. Modi’s 3 years at the helm and there is no indication of change in course away from this. Mr. Modi is making sure that those whose money purses have brought him power are going to stay safe and sound from the consequences of their own financial and business follies. Now that he has passed a law allowing corporates to make anonymous donations to political parties, grateful corporates will no doubt be flooding him with gratitude funds for his never ending election campaigns.

Courtesy: Newsclick

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Armed with these claims, the BJP has been promoting hysteria among its supporters against minorities and dalits, who are involved in transportation of cattle. Propelled by their ‘love’ for the mother cow, self-proclaimed ‘gau-rakshaks’ frequently beat up and lynch Muslims with tacit support from the police. Prime Minister Modi adds fuel to this fire, by frequently alluding to ‘the pink revolution’ – referring to beef consumption and exports.
What are the facts? Is India’s cattle at risk due to beef consumption or export?

While it is true that, India’s bovine meat (buffalo and cattle meat) exports have been increasing over the years – It has not caused any decrease in India’s bovine (cattle and buffalo) population.  In fact, India’s bovine population has increased – from 2.89 crore to 3 crore (1992 to 2012), as has per capita milk production, from 55 million tonnes to 155 million tonnes (1992 – 2016).

data source: Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, GoI

Within the total bovine population, the number of buffalos has been steadily increasing , while the number of cattle (cows and bullocks) has declined. Considering that buffalo meat is also exported despite which their number has been increasing, meat exports alone can not be the reason for the decline in the cattle population.

If we look closer, we see that with in the cattle population – the number of cows (female cattle) has not declined at all, but rising steadily – from 1.03 crore to 1.23 crore (1992 and 2012). It is the steep fall in the number of bullocks from 1.02 crore to 0.68 crore – which is the reason behind the fall in the cattle population. If the increase in demand for the beef is the reason for declining cattle numbers, then it should have effected the cow population as well, which clearly is not the case. What is the reason for decline in the number of bullocks?

Traditionally in the rural areas, cows and bullocks were equally preferred – the former for milk and the later as draught animals. So, we see that in 1992, the number of cows and bullocks was more or less equal. But, in the case of buffalos, only the females were preferred by the farmers.  Since male buffalos are of no great use as draught animals, farmers usually sold them to slaughter houses. This is clear from the fact that number of female buffalos has always been 4 to 5 times more than that of the male buffalos. Today, similar trend is seen in the cattle population as well, with the bullock population declining to half that of the cows, in the last 25 years.

The advent of green revolution and the subsequent mechanisation of agricultural operations has increasingly made the bullock redundant in rural areas. Various agricultural operations – ploughing, levelling, transportation of agricultural product etc., which have been performed with bullocks – are today being performed by the tractors. So, just like the male buffalo, bullock too has very little role to play in today’s agriculture, resulting in decline of it’s numbers.
The bullock  still plays the role of a buffer for the farmer during droughts. For a small farmer, sale of his cattle, particularly the bullocks, is like an insurance during the drought years. He call sell it in the market during a drought.

The cow vigilantes, with beating up and killing those who sell and purchase cattle, are in fact hurting the small farmer, who is central to the cattle economy. In drought hit regions, one of which is the BJP ruled Mahararshtra, the cow vigilantism has led to a fall in cattle prices, causing a great distress to farmers, who are unable to sell their cattle.

The truth is that in India the livestock economy has been doing well, providing a much needed additional source of income for the small farmer. Per capita milk production has been steadily increasing, as has the meat production. These have been accompanied by a rise in the cattle population. But, the repeated attacks of gau-rakshaks on farmers, cattle traders, slaughter houses and meat consumer are going to damage the livelihoods of small famers. The vigilantism, will force the farmers to retain unproductive cattle – resulting in considerable increase in the costs of maintaining live stock. India’s small peasant, who is already suffering under frequent droughts and large debts, will be pushed to the brink, thanks to the saffron government’s cattle politics.

Disclaimer: The views expressed here are the author's personal views, and do not necessarily represent the views of Sabrangindia.

Courtesy: Newsclick.in
 

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In December, RBI began releasing data on return of the old demonetised notes to the banking system, and also publishing data on the number and value of fresh notes issued to replace the old notes.

In a press note released on December 7th, (Interestingly, RBI's 7th December's press release has now been taken down) the RBI gives a break-up of the currency notes made available to the public between November 10th and December 5th. According to this, currency worth a total of Rs. 3.8 lakh crore has been issued out in this period. Rs.1.06 lakh crore was in notes of smaller denominations – the total number of these notes is 19.1 billion. The remaining amount comprised of Rs. 2000 and Rs. 500.

Again, on December 22nd, RBI released a press note , with a new set of figures.  According to the December 22nd note, between November 10th and December 19th, the central bank – the RBI — released currency worth total of Rs. 5.93 lakh crore to the public. The new press note also said that this amount was made up of 20.2 billion currency notes of smaller denominations, and 2.2 billion notes of higher denominations.

This means that, after December 7th, RBI gave out an additional 1.1 billion currency notes of smaller denomination (20.2 billion minus 19.1 billion). Even if, we were to assume that all these additional notes are in denomination of Rs.100, this would mean and addition of Rs. 0.11 lakh crore. This works out to a total worth of all smaller denomination notes issued as on December 22nd as Rs. 1.17 lakh crore: Rs. 1.06 lakh crore as per December 7th press note plus Rs. 0.11 lakh crore.

Out of the Rs. 5.9 lakh crore that RBI claims to have issued till December 19th, if Rs. 1.17 lakh crore is of smaller denominations, then Rs. 4.73 lakh crore would need to be in notes of higher denominations (Rs. 5.9 lakh crore minus Rs.1.17 crore).

RBI's December 22nd press note states that it released 2.2 billion currency notes in high denominations. Even if all these notes were released in only Rs. 2,000 denomination, it totals up to only Rs. 4.4 lakh crore;  Rs. 33,000 crore remains unaccounted (Rs.4.73 lakh crore minus Rs. 4.4 lakh crore)
In fact, the missing money is likely to be much higher. We know that RBI has been releasing Rs. 500 notes along with Rs. 2,000 notes – even if in smaller amounts. In response to an unstarred question raised in Rajya Sabha on the composition of newly printed notes, the Minister of State for Finance, Arjun Ram Meghwal, on 6th December in a written answer provided figures that indicate that about 9% (in numbers, not values) of the newly printed notes supplied up to 29th November were in 500s, the rest in 2000s.

If we consider that 10% of the new notes of high denomination are now Rs. 500, and 90% are Rs. 2,000,  this works out to 0.2 billion as the number of Rs. 500 notes and 2 billion as the number of Rs.2,000 notes. This makes for a total of value of these notes to be Rs. 4.1 lakh crore: Rs. 4 lakh crore in 2000s and Rs. 0.1 crore in 500s.

The big question is, what happened to the remaining Rs. 63 thousand crore (Rs 4.73 lakh crore minus Rs. 4.1 lakh crore), which RBI claims to have issued to the public?

Is RBI trying to deceive people by claiming to print more notes than it did?  

Or is the RBI, under the new governor, too inept to get its facts and figures right?

Courtesy: Newsclick.in
 

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